the tom group
DESCRIPTION
The TOM Group. Y200 2 Third Quarterly Results Review. 6 th November 2002. Review of the Quarter. Close to tripling of EBITDA q-o-q 9% q-o-q growth in total revenue in line with market expectation 13% offline revenue growth, 8% narrowband revenue growth - PowerPoint PPT PresentationTRANSCRIPT
The TOM Group
Y2002 Third Quarterly Results Review
6th November 2002
2
Review of the Quarter
Close to tripling of EBITDA q-o-q
9% q-o-q growth in total revenue in line with market expectation
13% offline revenue growth, 8% narrowband revenue growth
24% growth in gross profit, with gross margin increasing from 39% to 44%
Achieved free cash flow after interest and taxes
Secured positive cash flow for the full year
Strengthened senior and divisional management teams
3
Part I
Financial Analysis
4
Q-o-Q Review:9% Revenue Growth with Significant Margin Increases
HK$'million Q2 2002 Q3 2002 % Change
Revenue 414.7 451.6 9%
Gross Profit 161.0 200.2 24%
Gross margin 39% 44%
EBITDA 12.5 33.3 1.7x
EBITDA margin 3% 7%
Depreciation & Amortisation (38.3) (45.4) 19%
Loss attributable to shareholders (49.6) (44.1) 11%
5
Y-o-Y Review:2x Revenue Growth, HK$68M EBITDA Improvement
HK$68M improveme
nt
Group Revenue Group EBITDA
HK$’million
Online36%
increase
Offline2.4x
revenue increase
159
452
HK$’million
# Q3 2001 EBITDA loss before restructuring costs
6
Q3 2002 Revenue In Line With Market Estimates
452
HK$’million
415
HK$'M Salomon BNP Cazenove TOMRevenue 441 448 450 452
Offline13%
revenue growth
OnlineEmphasis on gross profit
growth
7
8% Increase in Online Gross Profit with 8% Point Gross Margin Improvement
Online Revenue Online Gross Profit & Margin
HK$’million
Narrowband
Steady growth of
high margin businesses
BroadbandRe-organised to focus on high margin businesses
HK$’million
2527
34%42%
8
Q3 2002 EBITDA Almost Tripled
Positive EBITDA for first 9 months of 2002: HK$11M
HK$’million
HK$'M Salomon BNP Cazenove TOMEBITDA 20 28 30 33
9
Segmental Review
Q3 2002 Revenue by Type
Q3 2002 Revenue by Sector
Advertising49%
Online 14%
Publishing43%
Outdoor17%
Sports & Entertainment
26%
Q3 2002 Revenue by Region
Mainland China
47%
HK13%
Taiwan40% Non-
Advertising51%
10
Analysis of Net Loss
HK$'M Q2 2002 Q3 2002
EBITDA 12 33
Depreciation & Amortisation (38) (45)
Interest, Tax, MI (24) (32)
Loss attributable to S/H (50) (44)
Profit (Loss) if less D&A (11) 1+
Q-o-Q:
Q3 net loss entirely generated by D&A – Net profitability if D&A were
stripped out
HK$'M Q1-3 2001 Q1-3 2002 Variance
EBITDA (147) 11
Depreciation & Amortisation (80) (116) 36
Interest, Tax, MI 2 (63)
Loss attributable to S/H (225) (169) 56
Profit (Loss) if less D&A (145) (53) 92
Y-o-Y:
D&A increased by HK$36M –
Net loss would be dramatically reduced
without D&A
11
Part II
Operations Review
12
PUBLISHING: Continued Expansion into Mainland ChinaCross-fertilisation of Content among Group Publications
Business Weekly provides content to Sanlian’s flagship business monthly Advantage《競爭力》
Content Licensing to Mainland Publishers
《向左走向右走》by Grimm’s best-selling author (幾米) recorded sales of 140,000 within 6 months
A series by Red Ink’s best-selling author (痞子蔡) sold over 680,000 copies
Licensed Red Ink’s The First Intimate Contact《第一次親密接觸》 publishing and film rights
Licensed PC Home and Mom Baby simplified Chinese publishing rights – expected circulation of 150,000+ per issue
Import
Business Weekly cultivated 1,000 Mainland-based subscribers since Q2 2002
Total Content Licensing Arrangements:
135 book titles
7 magazine titles
13
OUTDOOR: Adding Value Through Integration
Integration of sales operations to drive revenue synergies
• TOM Outdoor Media Group secured HK$11.5M new sales, HK$26.5M year-to-date
• Conducted a quarterly TOM outdoor sales conference
• Aligned sales targets, strategies and service standards
• Centralised some inventory with the Group’s sales team to maximise productivity
Differentiation through value-added services
Case Study: Fench Media
Client: Hong Ta Group
Campaign: New product launch
Value-Added Services:
Market, consumer, product & competitive analysis
Comprehensive promotional strategy
Won a RMB10M nationwid
e contract
VAS Teams under Hold Co
Outdoor Media Creative Team
R&D Team (to innovate new outdoor assets & technology)
Market Intelligence Team
14
SPORTS & ENTERTAINMENT: High Margins Achieved
60+ sponsors
80+ hospitality box members
Syndicated to CCTV, Eurosport, TVB, etc.
Contribution from Salem Open & Serena Williams Live
New TV Programme: Omega Golf Magazine
Major sponsors: Omega, Farmer’s Spring Water & Vinda
Syndicated weekly to 15 TV Channels in China
New Sporting Right:
Marketing agent for Chinese Football Association (CFA) women’s soccer team
Preparing for women’s World Cup next year
15
ONLINE: Focus on Growing High Margin Businesses
SMS User & Volume Growth
Mobile / Pay E-Mail Subscriber Growth
170K
6K
68K
400K
350K
1.2M
2.1M
GP Margin:85%+
No. of SMS Users
50K
200K
1.2M
Daily No. of SMS Messages
GP Margin:85%+
MMS (Multimedia Messaging Service)
First portal to be China Mobile’s MMS content provider
http://mms.tom.com
4.7M
600K
280K
16
Building A Strong Management Team: Publishing
CEOJan Hung Tze
CEOJan Hung Tze
Senior AdvisorJames Yang
Senior AdvisorJames Yang
Finance DirectorQuincy Tang
Finance DirectorQuincy Tang
GM – Corp DevAnthony Tse
GM – Corp DevAnthony Tse
DGM – BDJason WongDGM – BD
Jason Wong
Business WeeklyJames Jin
Business WeeklyJames Jin
CiteHo Fei Peng
CiteHo Fei Peng
PC HomeLeon TungPC HomeLeon Tung
Sharp PointMichael HuangSharp Point
Michael HuangYazhou Zhoukan
Francis TiongYazhou Zhoukan
Francis Tiong
Publishing Division Management Team
Corporate – Publishing Team
SDX Joint PublishingWang Jixian
SDX Joint PublishingWang Jixian
Consulting Chief Editor (HK)
Lau Sai Leung
Consulting Chief Editor (HK)
Lau Sai Leung
Popular Computer GroupChen Zong-zhou
Popular Computer GroupChen Zong-zhou
CNPIEC JVWen Xiao-fanCNPIEC JV
Wen Xiao-fan
26 years of ad sales, circulation, editorial, BD, strategic planning & management experience with Taiwan’s United Daily News Group
Former CEO & Publisher of CUP Magazine & Managing Editor of Next Magazine
Senior management positions at HK-listed Leefung-Asco Printers Holdings for 10 years
Former President & Chief Editor of China Map Publication House
“China’s Top 100 Publisher” award*
Published over 10 books & 100 papers
* Awarded by the CPC Ministry of Propaganda, General Administration of Press & Publications, & Chinese Publishing Association
17
Building A Strong Management Team: Outdoor
PresidentRobert XiePresidentRobert Xie
Senior AdvisorXu Zhiming
Senior AdvisorXu Zhiming
VP – FinanceAlex Chu
VP – FinanceAlex Chu
VP – Media ServicesSam Lam
VP – Media ServicesSam Lam
VP – BDChristopher Tan
VP – BDChristopher Tan
Senior AdvisorTan Zhi
Senior AdvisorTan Zhi
GM – Corp DevSteven Wu
GM – Corp DevSteven Wu
GM – FinanceTerence HonGM – FinanceTerence Hon
Each of the 12 subsidiaries• General Manager
• TOM appointed Financial Controller
Each of the 12 subsidiaries• General Manager
• TOM appointed Financial Controller
Outdoor Division Management Team
China Operation Center
Corporate – Outdoor Team
10+ years with media agencies, including Zenith Media & Leo Burnett
Headed key outdoor media BD projects in Asia
Held senior positions at China Resources Group
Experienced in management & operational restructuring, turnaround management, BD & strategic planning
Held senior finance positions with Coca-Cola (China); a HK-based group with Mainland operations; & a listed Australian company
18
Business Outlook: High Organic Growth on a Controlled Operating Infrastructure & Steady Cost Base
HK$’million
Critical mass achieved