ENIL Presentation US$ - June 06 Final v1_Jun… · Chartered, Cadbury, Coca-Cola Key Customers: Mumbai (1400+ Bus Queue Shelters), Delhi Metro (13 Stations), Kolkata (80 Hoardings)
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June 2006
A.P.Parigiap.parigi@timesgroup.com
Prashant Pandayprashant.panday@timesgroup.com
Certain statements in this release concerning our future growth prospects are forward-looking statements,
which involve a number of risks, and uncertainties that could cause actual results to differ materially from
those in such forward-looking statements. The risks and uncertainties relating to these statements include,
but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth,
intense competition in our business segments, change in governmental policies, political instability, legal
restrictions on raising capital, and unauthorized use of our intellectual property and general economic
conditions affecting our industry. ENIL may, from time to time, make additional written and oral forward
looking statements, including our reports to shareholders. The Company does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf of the company.
Disclaimer
1. Indian Economy Overview
2. Indian Media & Ad Industry
3. ENIL – an Opportunity
4. Board of Directors And Management
5. Key Financials
6. Future Business Outlook
Agenda
Indian Economy Overview
Indian Macro-economic Dynamics are Favourable
• Indian Economy exhibited strong performance in 2005-06
– Gross Domestic Product (GDP) recorded 8.1% growth in 2005-06
– Over the next 2-3 years, India is predicted to maintain a growth rate of 7-8%
– Six Infrastructure Industries record 4.9% growth in 2005-06
• Major Emerging Global Market
– Young Population, Median age of 24.3 years
– Increasing urbanisation and consumerism coupled with increasing disposable income
– According to NCAER, the Indian middle class (household income between $ 4,500 –
23,000) currently at 92.0 mn, is expected to cross 153.0 mn by 2010
• Favourable Conditions for Foreign Investments
– Foreign Exchange reserves of $157.3 Bn as on April 21, 2006
– Foreign Investment of ~$17.0 Bn in FY 06, expected constant growth for next 2-3 years
1
FIIs – Strong Confidence in Indian Equity Markets
• FIIs have shown strong interest in Indian Equity Markets
• FIIs have made net investment of:– $34.0 Bn from
Jan 99– $2.5 Bn in CY
06– $0.4 Bn from
June 1 – 21, 06Cumulative FIIs Investment
Monthly net FIIs Investment
Source: Money Control, data upto June 21, 2006
US$ Bn
-
6.0
12.0
18.0
24.0
30.0
36.0
Jan-99 Dec-99 Nov-00 Oct-01 Sep-02 Aug-03 Jul-04 Jun-05 Till June 21,
06
(2.1)
(1.4)
(0.7)
-
0.7
1.4
2.1
2
Indian Media & Ad Industry
Indian Entertainment and Media Industry on Fast Growth Path
• Indian Media and Entertainment Industry has out- performed the Indian Economy
– one of the fastest growing sectors in India
• Rising on the back of economic growth and rising income levels
– Increasing disposable incomes
– Sustained growth in income levels
– Reduction of personal income tax over the last decade
• The current size of the industry is estimated at $7.7 Bn
– Expected to grow at a CAGR of 19%
6.77.7
8.710.3
12.2
14.9
18.2
0.0
4.0
8.0
12.0
16.0
20.0
$ Billion
2004 2005E 2006F 2007F 2008F 2009F 2010F
Estimated size of Entertainment & Media Industry
19% CAG
R
Industry
2006
($ Bn) % Share '05-10 CAGR FDI Limit
Television 3.7 42% 24% 49%
Filmed Entertainment 1.7 20% 18% 100%
Radio 0.1 1% 32% 20%
Music 0.2 2% 1% 100%
Live Entertainment 0.2 2% 18% 100%
Print Media* 2.6 30% 12% 100%
Out-of-Home Media 0.2 3% 14% 100%
Internet Advertising 0.0 0% 50% 100%
3
Source: 2006 annual edition of the FICCI-Price Waterhouse Coopers report * In the news and current affairs category, such as newspapers, FDI has been allowed up to 26%
High Growth Projected for Indian Ad Industry
1.6
1.4
1.11.0
0.7
0.6
0.3
0.0
0.5
1.0
1.5
2.0
Thailand New
Zealand
Singapore World
Average
Philipines China India
Ad Spent as a % of GDP Radio Industry Share in Ad Spend
15.3
12.5
9.48.7
6.5
4.4
2.9
-2.0
1.0
4.0
7.0
10.0
13.0
16.0
Philipines New
Zealand
Singapore World
Average
Thailand China India
Source: Zenith Optimedia
Indian Ad Spend:Potential for ad industry to grow from
Rs 111 Bn ($2.4 Bn) to Rs 480 Bn($10.4 Bn) in 10 years
Radio Spend as % of Total Ad Spent:Radio Industry share is expected to grow from current 3% ($80 mn) to 8% ($832 mn) in 10 years starting FY 07
4
We are part of Times Group : India’s Largest Media Conglomerate
� Movie Business
Bennett Coleman & Co Ltd
Times Infotainment Media Limited
Times Internet Limited
Entertainment Network (India)
Limited
Times Global Broadcasting(JV with Reuters)
Publishing Division� The Times of India� The Economic Times� Navbharat Times� Maharashtra Times� Sandhya Times
� 3600 Experience� Times OOH
� Radio Mirchi
� indiatimes.com� 8888
� Wallet365.com
� News Channel –TIMES NOW
Entertainment & Retail� Times Music� Times Multimedia� Planet M� Entertainment Channel - Zoom
Online Ventures� Timesjobs.com� Timesmatri.com
World Wide Media
(JV with BBC)
� Femina� Filmfare� Other Magazines
TIMPL
5
Times of India Group: Presence in almost all media segments
We are a global company with cosmic
consciousness served from India
aggregating audiences to network media
brands, transiting through print
• Times of India has rich heritage of over one and a half centuries of leadership in Indian media
• The group is present in almost all segments of Indian Media Industry
Times of India Group Mission:
6
ENIL – an Opportunity
Our Vision is to be “A Leading City-centric Media Company By Delivering Unique Audiences Through Media Vehicles Like FM Radio, Experiential Marketing And
Out-of-home Media”
Corporate Structure
• ENIL is a 64.2%
subsidiary of Times
Infotainment Media
Ltd. (TIML), 7% in
ENIL is held directly
by BCCL and
balance by Public
• Times Innovative
Media Private
Limited (TIMPL) is
100% subsidiary of
ENIL
Corporate Structure
64%
100%
BCCL
TIML
ENIL
Company Business Brand
Events and Promotion� Life Style & Entertainment
� Trade Conferences & Exhibitions
� Corporate Events
Out Of Home Media
� Street Furniture� Transport� LEDs
Radio: India’s largest Pvt FM network� Broadcasting� Activations
TIMPL
7%
Flagship company of “The Times of India”group
100%
Holding Company and into Movies business
7
Company Snapshot
Times Innovative Media Private Limited (TIMPL), incorporated on October 27, 2005
Subsidiary:
Radio Broadcasting brand Radio Mirchi
Out-of-home Media brand Times OOH; and
Experiential Marketing brand 3600 Experience
Business:
– ENIL
– TIMPL
29.0%FY06 EBITDA Margin:
Rs. 408.3 mn ($8.9 mn)FY06 EBITDA:
Rs. 1,406.7 mn ($30.6 mn), including other income of Rs. 32.0 mn ($0.7 mn)
FY06 Total Income:
February 15, 2006Listed:
1999Incorporated:
Mumbai, IndiaHeadquarters:
8
We are present in High Growth Industry Segments
52.2 65.280.4
119.6
173.9
217.4
260.9
0
60
120
180
240
300
$ Million
2004 2005E 2006F 2007F 2008F 2009F 2010F
Estimated size of Radio Industry
32% CAG
R
184.8 195.7228.3
260.9293.5
337.0380.4
0.0
80.0
160.0
240.0
320.0
400.0
$ Million
2004 2005E 2006F 2007F 2008F 2009F 2010F
Estimated size of OOH Media Industry
152.2173.9
204.3239.1
282.6
347.8
391.3
0.0
80.0
160.0
240.0
320.0
400.0
$ Million
2004 2005E 2006F 2007F 2008F 2009F 2010F
Estimated size of Live Events Industry
18% CAG
R14% CAGR
46%TV
44%
Cinema
1%
Outdoor
6%Internet
0%Radio
3%
Current Media Spends as % of Total Ad Spent
Source: Zenith Optimedia
Source: 2006 annual edition of the FICCI-Price Waterhouse Coopers report
9
Business Division Snapshot
Samsung, Set India, SBI, Mastercard, Deutsche Equities, Castrol India, Trent-Tata
Key Customers:
600+ events including Femina, Filmfare and Pravasi Bharti in FY2006
3600 Experience:
Bharti, Hindustan Times, HLL, HSBC, Standard Chartered, Cadbury, Coca-Cola
Key Customers:
Mumbai (1400+ Bus Queue Shelters), Delhi Metro (13 Stations), Kolkata (80 Hoardings)
Delhi – Noida toll bridge (66 Displays) and LEDs
Times OOH:– Till FY 2006
– In April 2006
Hutch, HLL, Sahara, BCCL, Bharti, Pepsi, ICICI, Dabur, Set Max
Key Customers:
7 Stations (Delhi, Mumbai, Kolkata, Chennai, Pune, Ahmedabad and Indore)3 Stations (Bangalore, Hyderabad and Jaipur)22 additional Stations in next 12-18 months
Radio Mirchi:– Till FY 2006
– Launched in April 2006– Planned
10
ENIL Key Highlights
• We are operating in high growth industry
• We are well prepared and well positioned for the increasing competition
• We have managed to increase our market share in radio to over 50%
• We have maintained our number 1 status in listenership
• We launched 3 new radio stations in Jaipur, Bangalore and Hyderabad within 75
days of the completion of bidding process
• We won Out-of-Home advertising rights of Delhi Metro (13 stations), Kolkata (80
hoardings) and Delhi-Noida toll bridge (66 displays) for total license fee of Rs
340.0 mn ($ 7.4 mn) payable over a license tenure of 2 - 5 years
• Put up 1 LED screen at Sahara Mall – Gurgaon
– Planned Rs. 350.0 mn ($7.6 mn) for LEDs over the time
• We have identified our challenges for next year and are working towards
addressing them
11
Radio Mirchi: The Radio Station India Tunes to…
20.519.0
12.0
2.5
0.0
10.0
20.0
30.0
Radio Mirchi Radio City Red FM Go
Listnership in Mumbai
Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 8, fieldwork Jan 06 toMar 06. All Sec 12+)
13.5
17.3
36.8
0.0
10.0
20.0
30.0
40.0
Radio Mirchi Radio City Red FM
Listnership in Delhi• Widely recognized brand– Presence in key markets
– Radio Mirchi today reaches more people than
the #1 TV/Print media Brands in advertiser’s
target cities and adjoining areas
– Won 8 awards in 31st RAPA Awards 2005
• Innovative Content:– Strong relationships with Hindi, Bengali and
Tamil film fraternity
– Exclusive music breaks
– Mature research culture – music/listenership
• Success in Diverse Markets– Experience in establishing superior linkage
between Marketing and Programming
– Customized content in 10 distinct markets
• Superior Sales Capabilities– Offering unique and innovative solutions
Hutch ‘Pink Campaign’
Mirchi Activation
12
• Roll-out of Phase II of privatization
• Fixed License Fee regime changed to OTEF + Revenue share
• Annual license fee 4% of gross revenues
• FDI in Radio increased to 20%
• From existing 12 cities to 91 cities
• From existing 21 stations to approximately 300 stations
• From existing 7 players to 43 players
Growth opportunity for private FM:
From current 3% ($80 mn) to 8% ($832 mn) of total Ad industry in 10 years starting FY 07
Radio Industry: Positive Regulatory Reforms
13
Player Total stations Of top 13 towns
• Adlabs 44 7
• South Asia/Kaal Radio 40 10
• ENIL 32 13
• Radio City 20 11
• Dainik Bhaskar 17 4
• Bag Films 10 0
• Zee/Century 8 0
• Thanthi/Today/Midday 7 1/3/7
• HT/Positive/Raj Pat 4 4/0/1
• Red FM 3 3
FM Radio – We are now present in all the top 13 towns (pop 2 mn +)
• ENIL won 25 licenses in the Phase II bidding
• Only company to have presence in top 13 towns with population of 2 mn+
• Only incumbent in all the four metros
Competitive Landscape:
14
• Rapid roll-out of stations
• Talent identification, training and retention
• Retaining and growing absolute listenership numbers
• Cost management – especially w.r.t marketing and payroll
• Music royalty regime – rationalization
• Development of listenership research standards and spread
across the country
Key Challenges facing ENIL
15
Board of Directors And Management
• Mr. Deepak M Satwalekar – Non-Executive and Independent Director
– MD and CEO , HDFC Standard Life
– Director on the board of Infosys, Asian paints, Nicholas Piramal & others
• Mr. N Kumar – Non-Executive and Independent Director
– Vice Chairman, Sanmar Group
– Director on the board of Bharti tele, The India Cement, MRF Ltd & others
• Ms. Rama Bijapurkar – Non-Executive and Independent Director
– Marketing Consultant
– Director on the board of Infosys, Godrej Consumer, Crisil, UTI Bank & others
• Mr. Ravi Dhariwal – Non-Executive Director
– Executive Director, BCCL
– Director on the board of BCCL, TIML
• Mr. A.P. Parigi – Managing Director and Chief Executive Officer
Board Driven company with emphasis on corporate governance practices
Board of Directors
16
Strong & Experienced Management Team
Kaushik Ghosh, Senior Vice President, Marketing
Sharath Chandra, COO, ENIL International
Deputy CEO
Prashant Panday
Experience 17 years overall
6 at ENIL
CFO
HarvinderjitSingh Bhatia
Experience17 years overall,
5 ½ at ENIL
Business Head Times OOH
Farid Kureshi
Experience16 years overall,
4 ½ at ENIL
SVP Legal & CS
Anil Fernandes
Experience15 years overall,
3 ½ at ENIL
SVP, People Innovation
Prasad Swaminathan
Experience10 years overall,
5 at ENIL
EVP, Regulatory Affairs
Ravi Narula
Experience33 years overall
6 at ENIL
Tapas Sen, Executive Vice President, Programming
Nandan Srinath, COO, ENIL India
CEOAP Parigi
Experience
34 years overall
6 years at ENIL
Col. (Retd.) Nataraja Thiagarajan, Chief Technical Officer
17
Sumeet Chatterjee, Senior Vice President, 3600 experience
Key Financials FY 2006
ENIL Financials - Key Highlights
• Initial Public Offer of 13.2 mn shares of Rs.10/- each at a premium of Rs. 152/-
aggregating issue proceeds of Rs. 2,138.4 mn ($46.5 mn)
• Investment of Rs. 40.0 mn ($0.9 mn) till March 31, 2006 in 100% subsidiary Times
Innovative Media Pvt. Limited (TIMPL)
• One Time Entry Fee of Rs.1,301.0 mn ($28.3 mn) for 25 new radio licenses and
Migration fee of Rs. 815.2 mn ($17.7 mn) for existing 7 stations for 10 years
– Amortization of annual migration fee Rs.81.5 mn ($1.8 mn) accounted in
fourth quarter
• Posted record revenues at Rs. 1,174.1 mn ($25.5 mn) up 57% YOY; continue to
lead the Radio Broadcasting Space
18
ENIL - Performance Highlights in FY 2006
The Company consolidated results of Times Innovative Media Private Limited (TIMPL), a wholly owned subsidiary company, for 5 months. TIMPL was incorporated on October 27, 2005
19
–Consolidated Total Income Rs. 1,406.7 mn ($ 30.6 mn)
–EBITDA Rs. 408.3 mn ($ 8.9 mn)
–EBITDA Margin 29.0%
–Ordinary Net Profit Rs. 212.4 mn ($ 4.6 mn)
–Net Profit Margin 15.1%
–EPS Rs. 5.9 ($ 0.13)
–ENIL Standalone Total Income Rs. 1,201.9 mn ($ 26.1 mn)
–EBITDA Rs. 381.4 mn ($ 8.3 mn)
–EBITDA Margin 31.7%
–Ordinary Net Profit Rs. 196.6 mn ($ 4.3mn)
–Net Profit Margin 16.4%
–EPS Rs. 5.5 ($ 0.12)
ENIL Standalone - Strong Financial Performance
12.0
16.6
26.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
FY04 FY05 FY06
Revenue in US$ Million
(5.3)
(2.7)
8.3
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
FY04 FY05 FY06
EBITDA in US$ Million
20
ENIL Standalone - How did we Spend?
21%
19%
19%
16%
7%
5%
5%3% 3% 2%
21
Future Business Outlook
• Expand our footprint in radio broadcasting
– Rapid roll-out of 22 new stations
– Explore opportunities to become FM radio broadcasters in international
markets
• Maintain market leadership in fast growing radio industry
– Continuously invest in brand building and programming innovation
– Launch Visual Radio through mobile phones
– Leverage our footprint to capture additional income
– Exploit additional revenue streams like Mirchi Activation
Bright Future Outlook - ENIL
22
• Focus on Out-of-Home media growth
– Expansion of the network of out-of-home media sites managed by us
– Explore opportunities to lease sites on a long-term basis
– Introduce innovative technology and processes
• Establish long-term client relationships for Experiential Marketing
– Focus on “wellness” not “illness” approach
– Establish ourselves as a provider of innovative solutions
– Create own event properties at an appropriate time
– Focus on Life style, Fashion shows and Exhibitions
Bright Future Outlook - TIMPL
23
• News & Current Affairs
• FDI/FII cap
• Multiple frequencies
• Tradability
• Limitation on share transfer of main promoter for 5 years
Radio Industry: Pending agenda
24
Thank You
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