INVESTOR PRESENTATION February 2018 Disclaimer
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R-City Ghatkopar, Mumbai INVESTOR PRESENTATION February 2018 Disclaimer This presentation and the following discussion may contain “forward looking statements” by Inox Leisure Limited (“ILL” or “the Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future state of affairs, results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of ILL about the business, industry and markets in which ILL operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond ILL’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of ILL. In particular, such statements should not be regarded as a projection of future performance of ILL. It should be noted that the actual performance or achievements of ILL may vary significantly from such statements. Due to rounding-off, figures presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the rounded-off figures. All financial figures, upto and including FY15 are as per IGAAP and for FY16 and thereafter are as per IND-AS. Revenues for FY13 to FY15 are shown net of entertainment tax, to be consistent with the revenues under IND-AS for FY16 and FY17 2 Atria, Worli, Mumbai DISCUSSION SUMMARY . INDUSTRY OVERVIEW . COMPANY OVERVIEW . COMPETITIVE ADVANTAGE & OUTLOOK . ANNEXURE 3 CR2, Nariman Point, Mumbai INDUSTRY OVERVIEW 4 Strong Fundamentals & Huge Growth Potential Highest Number of Film P r o d u c e d i n t h e 2nd Highest Number Of Theatre Footfalls W o r l d in the World Footfalls in Million 2,000 2,178 2,100 1,930 1,600 1,364 1,100 791 686 581 600 300 298 269 255 226 185 208 197 176 171 169 156 146 100 India US China Japan France UK S. Korea Spain Germany Italy China India US France Mexico UK Japan S. Korea Germany Russia -400 However, India’s Screen Density is One of the Lowest Screens / Million population 125 95 80 60 57 40 26 25 16 12 10 8 US France Spain UK Germany South Korea Japan Taiwan China Thailand Brazil India Source: CRISIL Report, http://uis.unesco.org/en/news/cinema-data-release (2015) 5 Steady Performance and Resilience Indian Film Industry Displays Steady Performance Trends In Rs. Billion 250 CAGR 7.7% 206.6 191.6 200 CAGR 6.1% 178.2 166.0 155.0 138.1 142.4 150 125.3 126.4 112.4 100 131.2 106.6 111.8 117.9 124.2 50 85.1 93.4 93.5 101.4 99.8 0 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancilliary Revenue Streams D o m e s t i c Theatricals Constitutes 70% Of Total Film Industry 11% 11% Domestic Theatrical 1% Overseas Theatrical Home Video 2016 8% Cable & Satellite Rights Ancillary Revenue Streams 70% Source: FICCI-KPMG 2017 Report 6 Multiplexes Witnessing Rapid Growth FACTORS DRIVING GROWTH IN Number of Screens MULTIPLEXES: . Strong demographics, rising disposable Single Screens Multiplexes incomes and discretionary spends. 9,308 10,000 9,121 8,685 8,451 9,000 8,002 8,000 . Superior location, destination and 7,000 6,000 6,000 6,000 6,000 parking facilities. 5,000 4,000 . Multiple screens in one location offer a 2,513 3,000 2,225 2,134 1,630 1,500 1,350 2,000 1,225 1,075 wider variety of content to the patrons. 1,000 - . 2010 2011 2012 2013 2014 2015 2016 Feb18 Different screen sizes provide programming flexibility. This results in higher occupancy ratios. Multiplexes currently account for ~ 30% market share of the screens, . State of art equipment (high quality h o w e v e r they account f o r video and audio), superior interiors, m o r e t h a n 45% of box office ambience and service. collections Source: CRISIL Report, FICCI-KPMG Report 2017, Industry Sources, Internal Estimates 7 Increasing Number Of INR 1bn + Movies Wider Screen Releases 6,500 5,200 5,300 4,500 3,446 3,359 2,638 3,014 2,065 2,101 1,598 1,000 INCREASING NUMBER OF 3 Idiots Dabaang Bodyguard Ek Tha Tiger Dabaang 2 Chennai Dhoom 3 Kick P.K Bajrangi Dangal Bahubali 2 - (2009) (2010) (2011) (2012) (2012) Express (2013) (2014) (2014) Bhaijaan (2016) The MOVIES ARE GENERATING MORE (2013) (2015) Conclusion (2017) THAN RS 1 BN IN NET BOX OFFICE COLLECTIONS DRIVEN BY WIDER Higher Number Of INR 1 Bn + Movies SCREEN RELEASES AND 2 FACILITATED BY DIGITISATION OF - 1 2 3 - 1 - 2 1 CONTENT DELIVERY - 1 9 8 6 7 7 1 - 5 5 - 1- 2 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jan-17 to Feb- 18 INR 1Bn to 1.99Bn INR 2Bn to 2.99 Bn INR 3Bn and above Source: Industry 8 India’s Consumption Story 1,600 Population of India (Million) %Share of Population by Income Bracket 1,400 Lower Class Lower Middle Class Middle & Affluent Class 1,200 100 1 2 6 5 90 18 1,000 22 80 42 41 70 800 1,429 60 43 600 1,278 50 1,107 93 928 40 80 36 400 755 30 54 20 200 35 10 22 - 0 1985 1995 2005 2015 2025 1985 1995 2005 2015 2025 Based on Annual Household Income %Share of Average Annual Household Consumption • Lower Class: < Rs.90,000 • Lower Middle Class: Rs.90,000 to Rs.199,999 • Middle & Affluent Class: > Rs.200,000 Necessities Discretionary Target Audience (Middle & Affluent Class) is estimated to grow from 268 million in 2015 to 39 52 614 million in 2025 61 70 As much as 70% of household income will be spent 61 48 on discretionary spending in 2025 39 30 1995 2005 2015 2025 9 Source: Mckinsey - Tracking the growth of Indias Middle Class - 2017 Atria, Worli, Mumbai Company Overview 10 Track Record of Aggressive Expansion Screens Properties 122 600 118 130 107 96 488 110 500 468 72 79 420 90 63 68 400 372 70 310 50 32 279 300 22 26 257 14 239 30 2 3 6 9 200 10 119 76 91 -10 100 51 35 -30 8 12 25 0 -50 FY07 FY17 FY03 FY04 FY05 FY06 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Feb-18 ON AN AVERAGE ADDITION OF 3 SCREENS EVERY MONTH SINCE INCEPTION Note: Includes Acquisition of 89 Cinemas in FY07, Fame in FY11 and Satyam in FY15 11 PAN India Presence ONE OF THE LARGEST MULTIPLEX CHAIN OPERATOR IN INDIA PUNJAB | 1 Property | 6 Screens UTTAR PRADESH | 6 Properties | 24 Screens 19 States DELHI | 4 Properties | 13 Screens JHARKHAND | 1 Property | 4 Screens HARYANA | 5 Properties | 16 Screens 60 Cities RAJASTHAN | 13 Properties | 43 Screens MADHYA PRADESH | 4 Properties | 16 Screens Assam | 1 Property | 2 Screens 122 Properties GUJARAT | 16 Properties | 67 Screens WEST BENGAL | 14 Properties | 55 Screens ODISHA | 1 Property | 3 Screens MAHARASHTRA | 27 Properties | 118 Screens 488 CHHATTISGARH | 2 Properties | 8 Screens Screens GOA | 4 Properties | 14 Screens TELANGANA | 2 Properties | 11 Screens KARNATAKA |10 Properties | 40 Screens ANDHRA PRADESH | 7 Properties | 28 Screens 121,281 Seats KERALA |1 Property | 6 Screens TAMIL NADU | 3 Properties | 14 Screens * Includes 8 management properties with 29 screens and 7,370 seats 12 Introducing the ‘THEATRE OF DREAMS’… INOX INSIGNIA at Atria Mall, Worli Mumbai • Live food counter serving gourmet delights • A new level of luxury paired with bespoke interiors • Laser projection with Dolby Atmos Sound and 3D powered by Volfoni systems • Theatres with opulent recliners • Personalized ticketing and butler-on-call • Gourmet Menu curated by Celebrity Chef Vicky Ratnani • Staff Uniforms crafted by Arjun Khanna 13 Introducing the all new 7 STAR METRO INOX MUMBAI’S GREATEST LOVE STORY… • 6 Screens, 1271 seats • Mumbai’s first kids theatre - KIDDLES • Cafe UNWIND • Advanced 4K Projection • Augmented Reality • Dolby Atmos • Volfoni 3D 14 Atria, Worli, Mumbai 15 GVK One, Hyderabad 16 CR2, Nariman Point, Mumbai 17 Mantri Square, Bangalore 18 Quest, Kolkata 19 R-City Ghatkopar, Mumbai INSIGNIA – LUXURY MOVIE WATCHING EXPERIENCE 20 Atria, Worli, Mumbai 21 R-City, Ghatkopar, Mumbai 22 Mantri Square, Bangalore 23 Amanora, Pune 24 VR Surat, Surat 25 Bund Garden, Pune 26 Revenue from Operations 330.0 325.0 320.0 315.0 9% 310.0 305.0 325.9 300.0 295.0 290.0 298.0 285.0 280.0 Q3FY17 Q3FY18 1,160.6 1,220.7 895.4 762.8 1,040.0 663.2 1,020.0 1,000.0 980.0 10% 960.0 1,024.5 FY13 FY14 FY15 FY16 FY17 940.0 920.0 900.0 932.2 880.0 9MFY17 9MFY18 All figures in INR Crs., unless specified 27 Earnings Before Interest, Tax, Depreciation and Amortization [EBITDA] 18.0% 16.0% 16.3% EBITDA EBITDA Margin 14.8% 16.0% 50.0 14.2% 16.0% 45.0 13.7% 14.0% 14.0% 40.0 10.6% 46% 12.0% 35.0 10.0% 12.0% 30.0 25.0 8.0% 12.0% 20.0 46.3 6.0% 15.0 31.7 4.0% 10.0 10.0% 2.0% 5.0 - 0.0% 8.0% Q3FY17 Q3FY18 189.1 6.0% 146.1 122.0 122.7 4.0% EBITDA EBITDA Margin 98.0 16.3% 180.0 18.0% 2.0% 160.0 13.0% 38% 16.0% 140.0 14.0% 120.0 12.0% 0.0% 100.0 10.0% FY13 FY14 FY15 FY16 FY17 80.0 166.6 8.0% 60.0 121.0 6.0% 40.0 4.0% EBITDA EBITDA Margin % 20.0 2.0% - 0.0% 9MFY17 9MFY18 All figures in INR Crs., unless specified 28 Note: EBITDA excludes Other Income (non-operating) Profit after tax [PAT] 10.0% 7.0% 8.0% PAT PAT Margin 4.8% 6.0% 14.0 4.0% 4.5% 4.0% 12.0 4.0% 251% 2.8% 3.5% 2.5% 10.0 2.2% 3.0% 8.0 2.5% 2.0% 6.0 1.3% 13.2 2.0% 1.5% 4.0 1.0% 0.0% 3.8 2.0 0.5% - 0.0% -2.0% Q3FY17 Q3FY18 81.0 -4.0% -6.0% 36.9 30.6 PAT PAT Margin -8.0% 5.6% 18.5 20.0 60.0 6.0% 50.0 88% 5.0% -10.0% 40.0 3.2% 4.0% FY13 FY14 FY15 FY16 FY17 30.0 56.9 3.0% 20.0 2.0% PAT PAT Margin % 30.3 10.0 1.0% - 0.0% 9MFY17 9MFY18 All figures