Investors Presentation February 2007
1 Disclaimer
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.
2 Presentation Path
• Indian Media & Ad Industry • ENIL & TIMPL Overview • Financial Highlights • Business Outlook and Strategy
3 Indian Media & Ad Industry
4 Ad Market – A Leveraged Play on Economy
23.4% 25.0%
20.0% 14.1% 12.8% 13.7% 12.9% 15.0% 11.8% 8.7% 8.1% 9.6% 7.5% 10.0%
5.0%
0.0% 2002 2003 2004 2005 2006
GDP Growth Ad revenue Growth
• Nominal GDP expected to grow at 13% - 14% p.a.
Source: CIA – 2006, Tam Adex 5 Indian Media Sector on the fast lane
2000 2001 2002 2003 2004 2005 2006E
India 0.34 0.36 0.36 0.40 0.44 0.45 0.47
Asia-Pacific 0.85 0.82 0.80 0.82 0.82 0.82 0.82
Latin America 0.85 0.80 0.72 0.72 0.71 0.72 0.74
Europe 0.90 0.83 0.79 0.77 0.79 0.79 0.79
North America 1.52 1.39 1.37 1.33 1.32 1.28 1.27 Source: Zenith Optimedia – June 2006
Ad Spend/GDP is lowest in India but rising All media segments likely to grow faster in the next 5 years Significant CAGR likely for FM Radio
6 Ad Revenue landscape
• Ad revenue grew by 23.4% in 2006 vis-à-vis 14.1% in 2005
• Radio emerged as the fastest growing segment
7 ENIL Overview
Our Vision is to be “A Leading City-centric Media Company By Delivering Unique Audiences Through Media Vehicles Like FM Radio, Experiential Mar keting And Out-of-home Media”
8 We are part of Times Group : India’s Largest Media Conglomerate Bennett Coleman & Co Ltd
Publishing Division Times Internet Times Global Limited Broadcasting The Times of India The Economic Times Navbharat Times Times Maharashtra Times Infotainment Sandhya Times Media Limited indiatimes.com News Channel – Vijaya Times 8888 TIMES NOW Wallet365.com (JV with Reuters) Entertainment & Retail Times Music Mirchi Movies Times Multimedia Planet M Entertainment Channel World Wide - Zoom Media Entertainment (JV with BBC) Network (India) Limited Online Ventures Timesjobs.com Radio Mirchi Femina Timesmatri.com Filmfare TIMPL Other Magazines
360 degrees Times OOH 9 Company Snapshot
Headquarters: Mumbai, India
Incorporated: 1999
Listed: February 15, 2006
Subsidiary: Times Innovative Media Private Limited (TIMPL), incorporated on October 26, 2005 Business: – ENIL Radio Broadcasting brand Radio Mirchi – TIMPL Out-of-home Media brand Times OOH; and Experiential Marketing brand 360 0 Experience FY06 Total Income: Rs. 1,406.7 mn ($31.8 mn), including other income of Rs. 32.0 mn ($0.7 mn) FY06 EBITDA: Rs. 408.3 mn ($9.2 mn)
FY06 EBITDA Margin: 29.0%
10 Radio Industry: On a song
Radio Industry Share (%)
Indian Radio Industry: • Rs 5.1Bn (US$ 114 M) in 2006 16.0 15.4 • 2006- 2010E : 32% CAGR
13.0 12.0 • Share expected to touch 8%
10.0 9.5 8.5
7.0 7.0 4.9 3.8 4.0 3.1
1.0
Philipines New Singapore World Thailand ChinaUK India -2.0 Zealand Average
Source: Zenith Optimedia – June 2006, FICCI-PWC report
11 Deregulation unlocks the true potential
EXAMPLE: BELGIUM Ad spend BEF mn Benefits of FM deregulated in CAGR deregulation south Belgium; 31% 3321 Current ad • Audience north Belgium still 2,670 spend ratio – More choices as regulated • North Belgium: new radio 1,931 stations come up CAGR 1.2% 7.5% • South Belgium: • Advertisers 534 616 ~8% – More segmented 519 listeners as radio stations 1988 1989 1990 1991 1992 1993 specialise in specific formats Radio adspend increase after deregulation in other countries • UK: 3% (1992) to 5% (1997) • Sri Lanka: 7% (1992) to 15% (1997)
Source: Mediamark, McKinsey analysis 6
12 Evolution of Radio Industry
Evolution of Phase 3 radio industry “Emergence of winners”
Phase 2 “Entry of competition” • Leaders expand reach Ph ase 1 – Buying out stations – Bidding for “Public monopoly” • Private stations come frequencies up as industry is • Leaders improve deregulated profitability by sharing • Radio industry • New entrants try to gain costs across stations dominated by few early m arket share by state owned stations positioning their form ats Maturity, extent of deregulation Examples (Radio ad • Denmark (0.6) • Germ any (4.0) • Canada (12.7) Increasing spend, %) • Sweden (1.5) • France (6.0) • US (13.0) share of • Finland (3.0) • Spain (9.1) radio adspend • Mode of entry for • Extent of Key com petition coverage/networking regulatory • Fee structure allow ed lev ers • Range of allowed form ats Source: McKinsey analysis, HSBC, IREP, ZAW 7
13 Indian FM Radio Industry Transition
• Roll-out of Phase II of privatization From existing 12 cities to 87 cities • Fixed License Fee regime changed to From 21 stations to 266 OTEF / Migration Fees stations + Revenue share
• Annual license fee 4% From 7 players to 43 of gross revenues players
• FDI in Radio allowed upto 20%
14 Key Players in Indian FM Radio Industry
Category Player A+ A B C D Of top 13 towns Total
ENIL (Radio Mirchi) 4 9 11 7 1 13 32 Adlabs (Big FM) 4 4 10 24 3 8 45 Sun TV (South Asia FM) - 6 9 5 3 6 23 Sun TV (Kal Radio) 1 2 4 14 - 3 21 MBPL (Radio City) 3 8 3 6 - 11 20 Mid-Day (Radio One) 4 3 7 7 HT Media (Fever 104) 3 1 4 4 Red FM 3 3 3
Source: Ministry of I & B, Industry data ENIL won 25 licenses in the Phase II bidding
ENIL has the best footprint - only company in top 13 towns with population of 2 mn+
Revenue potential is low in ‘C’ and ‘D’ category towns
15 Radio Mirchi: The Radio Station India tunes to…
• Widely recognized brand – Presence in key markets – Radio Mirchi today reaches more people than the #1 TV/Print media Brands in Delhi and Mumbai • Innovative Content: – Strong relationships with Hindi and other film fraternities – Mature research culture – music/listenership • Success in Diverse Markets – Experience in running stations in almost all Indian languages – Customized content in 10 distinct markets • Superior Sales Capabilities – Offering unique and innovative solutions Hutch ‘Pink Campaign’ Mirchi Activation
16 Further Consolidates its Dominance #1 in Listenership Millions
Listenership in Delhi Listenership in Kolkata
5.0 4.46 4.20 3.68 3.0 2.73 4.0 2.83 3.0 2.24 2.09 2.04 1.73 2.0 2.0 1.35 1.0 0.76 0.0 1.0 0.58 Radio Mirchi Radio City Red FM
0.0 Listenership in Mumbai Radio Mirchi Red FM Amar FM 106.2
ILT Wave 10 3.0 2.60 2.21 2.05 1.90 1.73 1.89 2.0 1.58 1.66 1.20 0.94 0.97 1.0 0.25
0.0 Radio Mirchi Radio City Red FM Go/ Radio one
ILT Wave 8 ILT Wave 9 ILT Wave 10
Source: MRUC Survey, AC Neilson (ORG-Marg-Wave10, fieldwork September, 06 to November, 06. ORG-Marg-Wave 9, fieldwork July 06 to September 9, 06. ORG-Marg-Wave 8, fieldwork Jan 06 to Mar 06, All Sec 12+) 17 Other Operating Highlights
Leads content innovation
Preferred radio partners for all big banner movies released in the country eg. Vivaah, Babul, Kabul Express, Dhoom2, Guru, and Salaam-e-Ishq
Signed agreement with T-series for Music royalty
9-year agreement with T-series, the largest music company in India
18 Times OOH Media: First Organised Player In Indian OOH Media Industry
• Largely Fragmented Industry – Scope of high growth for organized players – Times OOH first media powerhouse with well known brand and Indian industry know-how • Ability to Offer Integrated Marketing Solutions – Diversified Product Mix in 3 Cities – Won advertising rights of premium OOH Properites • Focus on Innovation and Technology – Investment in LED Screens – Customized solution provider • Capacity to Handle Scale
19 Growing portfolio of premium outdoor assets
Properties Start Date End Date Length of Contract BQS Mumbai 1-Aug-05 31-Dec-08 3.50 Patel Bridge 1-Jul-06 30-Jun-09 3.00 DMRC-CP 4-Oct-05 3-Oct-07 2.00 DMRC- Dwarka 1-Apr-06 31-Mar-11 5.00 DND Flyway 1-May-06 30-Apr-08 2.00 LED 20-Mar-06 NA NA Kolkata Metro 1-Apr-06 31-Mar-11 5.00 Pune Hoardings 30-Mar-07 29-Mar-09 2.00
• Times OOH Media has been recently awarded the advertising rights license at Delhi and Mumbai Airports
• Installed two LED video matrix screens at a prime slot in Mumbai Airport
20 360°Experience: Eventful Consumer Engagements
• Managing large format events – Smart Living Awards – Habitat for Humanity’06 – Pravasi Bharatiya Diwas’06 – Filmfare Awards – Miss India Pageant – SBI Centenary celebration • Key strengths – National presence (8 branches) – Experienced team of professionals – Large bouquet of in-house events • Geared for aggressive growth – Increasing coverage of new clients and new markets – Consistently delivering innovative concepts 21 Financial Highlights
22 Q3FY2007 Performance Overview (All comparisons with Q3FY2006)
Total Income of Rs.484.1 million, growth of 30.7%
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at Rs. 176.5 million, up 20.8%
EBITDA margin stood at 36.5%
Net Profit at Rs. 124.0 million, growth of 13.9%
23 Q3FY2007 Performance Overview (Cont’d…) (All comparisons with Q3FY2006)
On a like basis (excluding 3 new stations):
Total Income of Rs. 392.1 million, growth of 5.8%
EBITDA stood at Rs. 151.1 million, up 3.4%
EBITDA margin stood at 38.5%
EBITDA margin of new stations – 28%
24 Future Outlook And Strategy
25 Future Outlook And Strategy
Ad industry is growing at 23% as per the recent Ad Ex India (a division of Tam Media Research) study. The market size in CY 2006 was Rs. 16.3 billion (Previous Year Rs. 13.2 billion)
Radio is the fastest growing media sector – grew by 58%
26 Future Outlook And Strategy
Expand our footprint in radio broadcasting – Based on the present rate of progress, rollout of the remaining 22 stations is expected to be complete by July 31, 2007 – Explore opportunities in international markets Maintain market leadership in fast growing radio industry – Development of listenership research standards and methodology; larger geographic coverage – Keep investing in brand building and programming innovation – Launch Visual Radio through mobile phones in other cities – Leverage footprint to capture additional income sources – Exploit additional revenue streams like Mirchi Activation
27 THANK YOU
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