darren throop, ceo morgan cazenove media ceo conference, 24 june 2014 eone is a leading global...
TRANSCRIPT
eOne is a leading global entertainment company
1 Underlying EBITDA is profit before tax, before one-off items, share-based payment charges, net finance charges, depreciation and amortisation of acquired intangible assets
For the purposes of this analysis, ‘pro forma’ includes the results of Alliance, which was acquired on 8 January 2013, as if this business had been acquired on 1 April 2012
Group overview
► Entertainment One Ltd. is listed in London, a constituent of the FTSE 250 Index capitalised at around £850m
► Produces and acquires entertainment content rights for exploitation across all consumer media globally
► Owns a substantial content library: 35,000+ film and TV titles, 2,800+ hours of TV programming and 45,000+ music
tracks, valued at $650m+
Film Television
► Acquire
► Produce
► Market
► Distribute
► Produce
► Acquire
► Distribute
► License
FY2014 pro forma underlying EBITDA
FY2014 pro forma revenue
Film 80%
TV 20%
Film 75%
TV 25%
Our strategy
2
Grow content
portfolio
Create future value by growing a
diversified film and TV rights
portfolio
Extend global
content reach
Expand reach of content by both
geography and content platform
Enhance
investment
returns
Use size and scale to drive improved
financial returns
Long-term
financial
goals
• EPS growth
• Return on capital
employed
• Cash
conversion
Substantial content library, low-risk portfolio approach
3
Investment in…
► Portfolio approach
► Not reliant on “hits”
► Large proportion of revenues
derived from prior year
investments (i.e. library titles)
► Delivering consistent
portfolio return on
investment
…content portfolio… …mitigates individual
title risk
FILM
35,000+ film and
TV titles
TELEVISION
2,800+ hours of
TV programming
FILM
270+ theatrical
releases per year
TELEVISION
300+ half-hours of
production per year
Revenue1
£m
Financial snapshot
4
Investment in content and productions £m
Underlying EBITDA2
£m Library value3
$USm
175 220
250
385
650
2009 2010 2011 2012 2013
1 Pro forma/constant currency financials adjusted for the results of Alliance Films Holdings Inc. (‘Alliance’), which was acquired on 8 January 2013, as if that business had been acquired on the first day of
the comparative period. Constant currencies have been calculated by retranslating the comparative figures using monthly average exchange rates for the year to 31 March 2014. 2 Underlying EBITDA is profit before tax, before operating one-off items, share-based payment charges, net finance charges, depreciation and amortisation of acquired intangible assets. 3 2014 independent library valuation is currently being finalised.
25.3
35.3 42.5
52.6
62.5
74.6
92.3
2009R 2010R 2011R 2012R 2013R 2013P 2014R
324.6
419.0 469.7
502.7
629.1
800.7 819.6
2009R 2010R 2011R 2012R 2013R 2013P 2014R
47.8
74.7 91.3
135.8
175.0
214.2
271.2
2009R 2010R 2011R 2012R 2013R 2013P 2014R
eOne’s is the world’s largest indie movie distributor
6
Film distribution Film production
US
Majo
rs
Ind
ep
en
den
ts
Key Film industry trends
7
Indie content
in demand
International
markets
Scale drives improved content purchasing
power and incremental margin
Indie producers are seeking overseas
markets for growth, but lack distribution
infrastructure
Indie producers stepping into the gap,
with eOne distributing high quality titles
for them
eOne provides the route into international
markets for indie producers
eOne’s EBITDA margins will continue to
expand as economies of scale achieved
Key trend Opportunity for eOne
Hollywood major studios focusing more on
blockbusters, avoiding ‘smaller’ releases
Size and
scale
eOne Film outlook and growth opportunities
8
Grow
content
portfolio
• Investment in Film content set to grow to over £200m in FY2015
• Over 275 movies planned for release during FY2015
• Continued expansion of movies from eOne Film Production
Enhance
investment
returns
• eOne’s leading position in its core markets underpins scale
• Drive economies of scale and increase EBITDA margins further
Extend global
content reach
• Grow presence in digital markets
• Expand geographic activities through growth in International Film
and Film Production activities
Key Television industry trends
10
Changing
viewing
habits
Incumbent pay-TV networks fearful of cord
cutting subscribers migrating to digital
Growth in digital content being powered by
online content platforms
Strong demand for content to satisfy this
consumption
As these platforms expand globally, eOne
is well-placed to provide the content for
their services
eOne can develop high quality content for
these platforms too
Key trend Opportunity for eOne
More content, consumed by more viewers
on more platforms than ever before
Cord cutting
Digital
explosion
eOne’s TV model: driving return on investment
11
Ultimate revenues
• Primary broadcast
licence
• International TV
sales
Global ancillary
revenues
• DVD/VOD
• Pay-TV/SVOD
• Free to air TV
Library deals
Syndication Output deals with cable networks
Content
access
Content
monetisation
globally
Production and acquisition Distribution Investment return
Develop and produce content
• Original development
• Co-production
• Co-development
• First-look
Beneficial funding
eOne Television outlook and growth opportunities
12
Grow
content
portfolio
• Increase investment in content
• Current year re-commissions underpin revenues
• New eOne Family programming in production
Enhance
investment
returns
• Drive operational efficiencies
• Higher margin L&M activities continue to build
• Syndication deals improve margins further
Extend global
content reach
• New output, co-production and co-development deals
• Peppa Pig launching into new markets
• Syndication opportunities
Investment summary
14
► Huge global demand for content – from existing and new platforms
► eOne is at the centre of multiple, long-term growth trends driven by digital
► Compelling, low risk growth strategy
► Significant scale advantage, few competitive peers
► Confident trading outlook, progressive dividend declared
Important Information
15
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omission of, or reasonableness, accuracy or completeness of the information or opinions in the Presentation or any other written or oral information made available to any interested
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