Associate A 1 DISH TV INDIA LIMITED Company Presentation October 2012 5
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Associate A 1
DISH TV INDIA LIMITED
Company Presentation
October 2012
240, 103, 63
205, 205, 205
114, 114, 114
75, 172, 198
247, 150, 70
Associate A 2
Disclaimer
The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase any securities (“Securities”) of Dish TV India Limited (“Dish TV”) in India, the United States or any other jurisdiction. This presentation should not, nor should anything contained in it, form the basis of, or be relied upon in any connection with any contract or commitment whatsoever. This presentation is confidential and is intended only for the exclusive use of the recipients thereof and may not be reproduced (in whole or in part), retransmitted, summarized or distributed by them to any other persons without Dish TV’s prior written permission. This presentation may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements are based on certain assumptions and expectations of future events. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Although Dish TV believes that such forward-looking statements are based on reasonable assumptions, it can give no assurance that such expectations will be met. Representative examples of factors that could affect the accuracy of forward looking statements include (without limitation) the condition of and changes in India’s political and economic status, government policies, applicable laws, the Indian media and entertainment sectors, and international and domestic events having a bearing on Dish TV’s business and the media and entertainment sectors, particularly in regard to the progress of changes in those sectors’ regulatory regimes, and such other factors beyond our control . You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of Dish TV’s management on future events. This presentation has been prepared by Dish TV. The information in this presentation has not been independently verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of Dish TV or any of its directors, officers, employees, agents or advisers, or any of their respective affiliates, advisers or representatives, undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise and none of them shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
Associate A 3
Introduction to Dish TV
Key Investment Highlights
Company Strategy and Outlook
Questions & Answers
Agenda
Associate A 4
SECTION 1
Introduction to Dish TV India
Associate A 5
Largest DTH Provider in Asia by Gross Subscribers
#1 DTH provider in India by Market Share and Profitability
ONLY listed Indian DTH player with a Market Cap of $1.6bn(1)
Promoted by a leading Indian Media Group—Essel Group
Dish TV India
Source: MPA Report, 2012 Note: (1) Market data as of October 18, 2012; USD 1 = INR 55
Associate A 6
Essel Group Structure
One of India's largest vertically integrated media and entertainment groups, and also one of the leading producers, content aggregators and distributors of Indian programming globally
One of the largest producers and aggregators of Hindi programming in the world
Other Businesses
Essel Group
Media
Launched in 1992
One of India’s largest media and general TV entertainment network
Launched in 1992
Leading news broadcaster
Founded by Subhash Chandra
Group Market Cap: Rs 292.1 bn(1)
Source: Company websites, BSE, MPA Report 2012 Note: (1) Market data as of October 18, 2012
Packaging (Essel Propack)
– Market Cap: Rs 5.9 bn(1)
Theme Parks: Essel World and Water Kingdom
Playwin: India’s first and largest online gaming company
Cornership: Animation studio
Cyquator Technologies: IT Infrastructure outsourcing
Infrastructure
Education
Precious Metals
Healthy Lifestyle & Wellness Market Cap: Rs 186.6 bn(1) Market Cap: Rs 3.5 bn(1)
Launched in 2005
Asia’s largest DTH service provider
Launched in 2006
One of India’s largest cable distribution system, present in 54 cities
Daily News & Analysis
Market Cap: Rs 86.2 bn(1) Market Cap: Rs 9.9 bn(1)
Launched in 2005
English broadsheet daily with presence across Mumbai, Bangalore, Pune, Ahmedabad, Jaipur & Indore
Content Distribution
Launched in 1976, Essel Group is one of India’s largest business houses, with a dominant presence in Media
Zee Entertainment Zee News Ltd. Dish TV SITI Cable Network
Associate A
28.2%
18.7%
16.3%
9.5%
16.0%
11.3%
Dish TV Tata Sky Sun Direct Big TV Airtel Digital Videocon D2h
7
Launched in May 2005, Dish TV is Asia’s largest Direct To Home (DTH) multi-channel subscription television service to subscribers in India in terms of gross subscribers
Pan-India distribution network with ~114,000 dealers located across 8,500+ cities as of September 30, 2012
− Network managed by over 250 sales personnel across 8 Zonal and 14 Regional offices as of September 30, 2012
One of the leaders in product and service offerings with ~400 channels and services
Currently the only DTH provider in India to be serviced by two satellites; additional satellite to provide redundancy in case of satellite failure
Dish TV India at a Glance
Business Overview
Current Shareholding
Source: MPA Report 2012, BSE, Company data as on September 30, 2012
India’s first and Asia’s largest DTH company by gross subscriber base
63.68.0
13.7
4.5 3.7 6.5
Shareholding Pattern %
Promoters
GDR
FII
Fin. Institutions, Banks & M.F.
Indian Corporates
Other Investors
Increasing Number of Subscribers
Leading Gross Subs Market Share
6.9 7.58.3
9.410.4
11.2 11.712.5 12.9 13.4 13.9
0
2
4
6
8
10
12
14
16
Q4 FY
10
Q1 FY
11
Q2 FY
11
Q3 FY
11
Q4 FY
11
Q1 FY
12
Q2 FY
12
Q3 FY
12
Q4 FY
12
Q1
FY13
Q2
FY13
Gross Subscriber Base (mn.)
Associate A 8
Oct 03: Received license to operate DTH Services
Key Milestones and Performance
2003 2006 2007 2008 2009 2011 2010
Growth Trajectory Since Listing
Asia’s Largest DTH Provider
13.9 million
Rs 4,984 million (25.4%)
409 channels
Company Profile
Gross Customer Base
Total Revenues
EBITDA (% margin)
No. of Channels
Market Capitalization(3) ~ Rs 86.2 billion
First Indian DTH player
3.0 million
Rs 4,162 million
(Rs 2,095 million)
185 channels
~ Rs 21.1 billion
2008(1) 2012(2)
Jan 09: Rights offering of shares for ~Rs. 1,139mn
Mar 09: Gross subscriber base crosses 5 million
Records positive EBITDA for Q4 FY09
Nov 09: Raised $100mn through GDRs to Apollo for 11% ownership
Source: Company filings, Company website, BSE, NSE, MPA Report 2012 Notes: (1) 2008 reflects FY 2008 year end results (2) Total Revenues and EBITDA for 2012 reflect FY2012 year end results. Customer base and channels as of September 30, 2012 (3) 2008 market capitalization as on March 31, 2008; 2012 market capitalization as on October 18, 2012
2004 2005
May 05: Launch of DTH Services
Apr 07: Listing of Equity Shares on NSE and BSE
Gross subscriber base crosses 2 million
May 10: Launched HD services
Dec 10: Acquired additional transponders on Asiasat 5
Feb 11: Gross subscriber base crosses 10 million
Rs 19,579 million
2012
Sep 12:
Free cash flow positive for third consecutive quarter
Apr 04: Obtained teleport license from MIB
Associate A 9
SECTION 2
Investment Highlights
Associate A 10
Key Investment Highlights
1
2
3
4
5 Rapid Industry
Growth Further
Spurred by India’s
Digitization Plan
Market Leader –
Well Positioned to
Capture
Incremental Growth
Superior And
Differentiated Product
And Service Offering
Combined with
Robust Execution Significant Operating
Leverage Resulting in
Market Leading
Profitability
High Quality
Promoter Support
and Management
Team
Associate A
239.1247.0 254.7
262.3 269.7 276.9 283.9
141148
155162
169 175 181
113.4 122.5133.0 144.0 154.2
163.5171.8
80.5%82.9%
85.9%
89.0%
91.5%93.4% 94.7%
70.0%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2010 2011 2012E 2013E 2014E 2015E 2016E
(mn)
Total HHs TV HHs C&S HHs C&S Penetration
11
Television currently is and is expected to continue to remain the largest component of the Indian Media industry
Total Indian Media and Entertainment Industry Size
Source: FICCI-KPMG 2012 “Digital Dawn”, MPA Report 2012
Note: USD1 = INR 55
Key Indian Television Market Statistics Cable and DTH Revenues
Rapid Industry Growth
Composition of Indian Media Industry
6.6
9.7
1.4
4.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2011 2016 E
($bn
)
Cable Revenue DTH Revenue
8.0
13.9
13.215.0
16.919.6
22.8
26.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2011 2012E 2013E 2014E 2015E 2016E
($bn
) Television 45.2%
Print 28.7%
Film 12.8%
Others 13.4%
2011
Television 50.4%
Print 22.2%
Film 10.3%
Others 17.0%
2016E
Associate A 12
Dish TV Well Positioned to Benefit
from Digitization
Phase I Deadline:
31-Oct-2012
4 Metros: Delhi, Mumbai,
Kolkata & Chennai
38 Cities with 1mn+
population
All other urban areas
(municipal corp./
municipalities
Rest of India (mostly rural
area)
Phase II Deadline:
31-Mar-2013
Phase III Deadline:
30-Sep-2014
Phase IV Deadline:
31-Dec-2014
Coverage Key Considerations
Provides DTH players a level playing field with cable operators
Key Target Market for DTH operators
Key Target Market with significant upside potential for DTH operators
Strong reach for DTH operators vis-à-vis cable operators
Source: Ministry of Information & Broadcasting, TRAI, MPA Report 2012
Revised Schedule
31st March 2011
31st Dec. 2011
31st Dec. 2012
31st Dec. 2013
TRAI (Initial recommendation)
(Aug ‘10)
30th June 2012
31st March 2013
30th Sept. 2014
31st Dec. 2014
Final Schedule (MIB Notification)
(Nov ‘11)
100%
100%
100%
100%
100%
99%
90%
77%
57%
28%
0% 50% 100% 150%
Australia
Hong Kong
Malaysia
Singapore
New Zealand
Indonesia
Japan
Sri Lanka
Thailand
India
Digital penetration of total Pay-TV subscribers in India is amongst the lowest in Asia
Associate A 13
Dish TV: Unmatched Leadership
Dish TV is the leading player in the DTH industry in terms of gross subscribers
Dish TV—Number of Subscribers Estimated Gross Subs Market Share
Source: Company, MPA Report 2012, MPA Media Route Issue 114
Dish TV and Tata Sky duopoly in DTH market
Other competitors enter the market
205, 205, 205
114, 114, 114
6.97.5
8.3
9.4
10.4
11.211.7
12.512.9
13.413.9
0
2
4
6
8
10
12
14
16
Q4 FY 10
Q1 FY 11
Q2 FY 11
Q3 FY 11
Q4 FY 11
Q1 FY 12
Q2 FY 12
Q3 FY 12
Q4 FY 12
Q1 FY13
Q2 FY13
Gross Subscriber Base (mn.)
28.2%
18.7%
16.3%
9.5%
16.0%
11.3%
Dish TV Tata Sky Sun Direct Big TV Airtel Digital Videocon D2h
Associate A 14
Superior Product & Service Offering
More than 400 Channels and Services Including 22 Audio and 41 HD Services
Source: Company and other websites as on September 30, 2012
Associate A 15
Marquee Partnerships
Dish TV has formed strategic partnerships with industry leaders to deliver the highest quality of products and services to its customers
Transponder / Satellite
State-of-the-art fully automated Broadcast Centre
Content Security and Customer Data Management
Middleware provider
NSS-6, Asiasat 5
Associate A 16
Pan-India Distribution Network
Dish TV has a strong pan-India selling and distribution network
1,400+ distributors
~114,000 dealers across 8,500+ cities
Over 250 sales personnel
8 zonal offices
14 regional offices
REGIONAL OFFICE
ZONAL & REGIONAL OFFICE
Jammu & Kashmir
Himachai Pradesh
Punjab
Haryana
Rajasthan
Uttaranchal
Uttar Pradesh
Gujarat Madhya Pradesh
Orissa
West Bengal
Bihar
Maharashtra
Andhra Pradesh
Karnataka
Tamil Nadu
Kerala
Chhattisgarh
Jharkhand
Sikkim
Arunachal Pradesh
Assam Nagaland
Manipur
Mizoram Tripura
Delhi
MOHALI
DELHI GHAZIABAD
INDORE
KOLKATA
HYDERABAD
CHENNAI
MUMBAI
BHUBANESHWAR
PATNA
COCHIN
BANGALORE
JAIPUR
LUCKNOW
GUWAHATI
JODHPUR
AHMEDABAD
NAGPUR
Dealer/Distributor network
Modern retail outlets
Direct selling agents
Home delivery
CSD and others
CPE Distribution Through:
Source: Company as on September 30, 2012
SURAT
JALANDHAR
KARNAL
JABALPUR
Associate A
40
0
32
3 50
3 66
3 90
1
1,1
22
1,2
18
1,2
02
1,4
42
1,5
56
1,5
57
13.2%10.6%
15.4%17.7%
20.8%24.4% 25.3% 24.5%
27.5%29.9% 29.2%
0%
5%
10%
15%
20%
25%
30%
35%
0200400600800
10001200140016001800
Q4
FY
10
Q1
FY
11
Q2
FY
11
Q3
FY
11
Q4
FY
11
Q1
FY
12
Q2
FY
12
Q3
FY
12
Q4
FY1
2
Q1
FY1
3
Q2
FY1
3
-
1,000
2,000
3,000
4,000
5,000
6,000
Q4 FY 11 Q1 FY 12 Q2 FY 12 Q3 FY 12 Q4 FY12 Q1 FY13 Q2 FY13
4,329 4,604 4,822 4,905 5,247 5,200 5,336
17
Strong Financial and Operating Performance
Dish’s recent financial performance has been strong, with run rate margins tracking up robustly
Standalone EBITDA Margins—Annual(1)
Standalone Operating Revenues—Quarterly(1) Standalone EBITDA and EBITDA Margins—Quarterly(1)
Source: Company filings Note: (1) Excludes Non –Operating “Other Income”
Standalone Operating Revenues—Annual(1)
20.8 24.4
13.3
10.6
17.9
(Rs
mm
)
CAGR : 48%
Associate A
Promoted by A Leading Indian Media Group
18
High Quality Promoter Support and
Management Team
Jawahar Lal Goel
Managing Director, Dish TV India Ltd.
Subhash Chandra
Chairman, Essel Group & ZEEL
Promoter of the Essel Group of Companies Pioneer of Indian television industry Recipient of numerous honorary degrees, industry awards and civic honors
MD of Dish TV since Jan’07 Responsible for leading various initiatives resulting in Dish TV becoming the market leader in the DTH industry
Board of Directors
Subhash Chandra
Chairman
Jawahar Lal Goel
Managing Director
B.D. Narang
Independent Director
Arun Duggal
Independent Director
Ashok Kurien
Non-Executive Director
Eric L. Zinterhofer
Independent Director
Lakshmi Chand
Independent Director
Mintoo Bhandari
Non-Executive Nominee Director
Utsav Baijal
Alt. Director to Mintoo Bhandari
Experienced Management Team
R.C. Venkateish
Chief Executive Officer Joined Dish TV in July 2010 Previously MD-India & South Asia, ESPN
Salil Kapoor
Chief Operating Officer
Over 18 years experience Previously held various positions in Microsoft, Samsung, etc
Rajeev Dalmia
Chief Financial Officer
Leading finance department since 2007 Qualified Chartered Accountant
Rajiv Khattar
President – Projects
Over 20 years experience Founding member of Zee Group; Joined Dish TV in Sep-2005
Associate A 19
SECTION 3
Strategic Focus Areas
Associate A 20
Strategic Focus Areas
Maintaining Market Leadership
Sustaining share of incremental subscriber additions
Leverage opportunity presented by mandatory digitization to further increase subscriber base in urban areas and cable stronghold markets
Expand Distribution Network
Increasing the number of STB Distribution outlets
Focus on recharge distribution as a focused metric to improve efficiencies and reduce loss on account of delayed payments
Improved service and CRM infrastructure to service customers better
New Initiatives
New product development and technological innovation (SD+ & HD+ recorders launched)
Create new Value Added Services such as Dish interactive, Travel Active, etc. contributing to additional growth in the future
Enhance Product Offering
Current offering of 41 HD channels – the most in the Industry with a focus on expanding the HD channel portfolio through additions in new categories
Improved ARPUs as a result of increase in subscription tariffs
Associate A 21
APPENDIX A
DTH Regulatory Overview
Associate A 22
Regulatory Overview
Licensing and Tax
Service Quality
Interconnect/ Exclusivity
Pricing
Subscribers can be offered STBs on Rent/Hire-Purchase/Sale
Mechanism to be in place for handling customer complaints and grievances
Broadcasters have to provide content to all distribution platforms; pricing flexible
Prohibits broadcasters from seeking guarantee for minimum number of subscribers
Pricing information on content of the broadcaster
Maximum 42% of non-CAS cable rates
A-la-carte offering to be allowed
Foreign investment of up to 49% permitted under the automatic route and up to 74% permitted under the government approval route
Uplink centre to be in India
Set-top boxes to be BIS compliant
License fee at 10% of Gross revenues
Initial license validity of 10 years; renewable thereafter
Entertainment tax varying on a state-wise basis; 12.36% service tax
Associate A 23
APPENDIX B
Summary Financials
Associate A 24
Rs. million Quarter ended
Sep’12
Quarter ended
June’12
% Growth
QoQ
Gross operating revenue 5,336 5,200 2.6%
Expenditure 3,779 3,644 3.7%
EBITDA 1,557 1,556 -
EBITDA Margin (%) 29.2% 29.9%
Add: Other income 80 205* (61.0%)
Less: Depreciation 1,533 1,512 1.4%
Less: Financial expenses 317 572* (44.6%)
Profit / (Loss) before Tax (213) (323) -
Exceptional Items 764 0 -
Provision for tax 0 0 -
Profit / (Loss) after Tax 551 (323) -
Summarized P&L
Source: Company Financials * Previous quarter figures have been regrouped due to a change in accounting policy w.e.f.1 April, 2011, pursuant to a clarification dated 9 August, 2012
from the Ministry of Corporate Affairs, wherein exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost are treated as ‘foreign exchange fluctuation’ as per Indian Accounting Standard (AS) -11 instead of treating them as borrowing costs’ as per AS-16.
Associate A 25
Particulars (In Rs. million) As at 31-Mar-2011 As at 31-Mar-2012 EQUITY AND LIABILITIES
Shareholders’ Funds
Share Capital 1,063.0 1,063
Reserves and Surplus (693.0) (2,002.2)
Non Current Liabilities
Long-term borrowings 6,485.3 10,193.5
Other Long-term liabilities 2,062.7 1,798.4
Long-term provisions 84.1 105.2
Current Liabilities
Short-term borrowings - 1,950.0
Trade payables 2,497.3 794.7
Other current liabilities 12,530.1 7,543.2
Short-term provisions 3,201.6 4,893.4
TOTAL 27,231.1 26,339.8
ASSETS
Non-current assets
Fixed assets
Tangible assets 14,052.8 14,160.2
Intangible assets 384.3 43.3
Capital work-in-progress 4,420.9 3,884.1
Non-current investments 2,000.0 1,500.0
Long-term loans and advances 339.1 195.1
Other non-current assets 128.2 69.5
Current assets
Inventories 44.4 68.8
Trade receivables 226.5 286.1
Cash and bank balances 3,256.9 3,918.9
Short term loans and advances 2,347.9 2,131.0
Other current assets 30.1 82.8
TOTAL 27,231.1 26,339.8
Balance Sheet
Source: Company Financials
Associate A 26
Thank You!
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