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)

June 2006

[email protected]

Prashant [email protected]

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

Print

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


4 ½ at ENIL

SVP Legal & CS

Anil Fernandes


3 ½ at ENIL

SVP, People Innovation

Prasad Swaminathan


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

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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