Date: May 17, 2006 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 1. Company Snapshot 2. Business Overview 3. Directors & Management Agenda 4. Key Financials FY 2006 5. Ownership Structure & Share Price Performance 6. Future Business Outlook
3 Company Snapshot
4 Company Snapshot
Incorporated: 1999
Listed: February 15, 2006
Subsidiary: Times Innovative Media Private Limited (TIMPL), incorporated on October 27, 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 (US$ 31.3 mn), including other income of Rs. 32.0 mn (US$ 0.7 mn) FY06 EBITDA: Rs. 408.3 mn (US$ 9.1 mn)
FY06 EBITDA Margin: 29.0%
5 ENIL: Unique Ability to Offer Integrated Media Solutions
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”
6 Business Division Snapshot
Radio Mirchi: – Till FY 2006 7 Stations (Delhi, Mumbai, Kolkata, Chennai, Pune, Ahmedabad and Indore) – Launched in April 2006 3 Stations (Bangalore, Hyderabad and Jaipur) – Planned 22 additional Stations in next 12-18 months Key Customers: Hutch, HLL, Sahara, BCCL, Bharti, Pepsi, ICICI, Dabur, Set Max Times OOH: – Till FY 2006 Mumbai (1400+ Bus Queue Shelters), Delhi Metro (13 Stations), Kolkata (80 Hoardings) – In April 2006 Delhi – Noida toll bridge (66 Displays) and LED Key Customers: Bharti, Hindustan Times, HLL, HSBC, Standard Chartered, Cadbury, Coca-Cola 360 0 Experience: 600+ events including Femina, Filmfare and Pravasi Bharti in FY2006 Key Customers: Samsung, Set India, SBI, Mastercard, Deutsche Equities, Castrol India, Trent-Tata
7 Business Overview
8 ENIL Key Highlights
• We are operating in high growth industry • We are well prepared and well positioned for the increasing competition • We exceeded our set financial goals for FY06 • 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 (US$ 7.6 mn) payable over a license tenure of 2 - 5 years • We have identified our challenges for next year and are working towards addressing them
9 High Growth Projected for Radio Industry
Ad Spent as a % of GDP Radio Industry Share in Ad Spend
2.0 16.0 15.3
1.6 13.0 12.5 1.5 1.4 9.4 1.1 10.0 8.7 1.0 1.0 6.5 0.7 7.0 0.6 4.4 0.5 0.3 4.0 2.9
1.0 0.0 Thailand New Singapore World Philipines China India Philipines New Singapore World Thailand China India Zealand Average -2.0 Zealand Average Source: Zenith Optimedia
Indian Radio Industry: Indian Ad Spend: PWC estimates radio industry to grow at Potential for ad industry to grow to Rs 480 billion ($11 billion) in 10 years CAGR of 32% in next 5 years increasing its ad share to 5% and size to Rs. 12 billion
10 Radio Industry: Positive Regulatory Reforms
• Roll-out of Phase II of • From existing 12 cities to privatization 91 cities
• Fixed License Fee regime changed to OTEF + Revenue • From existing 21 stations share to approximately 300 stations • Annual license fee 4% of gross revenues • From existing 7 players to • FDI in Radio increased to 20% 43 players
Growth opportunity for private FM: From current 3% (Rs 3.7 billion) of Rs 129 billion to 8% (Rs 38.0 billion) of Rs 480 billion in ten years starting FY 07
11 We are now present in all the top 13 towns (pop 2 mn +)
• ENIL won 25 licenses in Delhi the Phase II bidding Jaipur Lucknow Kanpur
• Only company to have Ahmedabad Kolkata Surat presence in top 13 towns Nagpur
with population of 2 mn+ Mumbai Pune
• Only incumbent in all the Hyderabad Bangalore four metros Chennai Phase I excluding Indore Phase II – A+ & A circles
12 FM Radio – Competitive landscape
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
13 #1 Listenership Share
Listnership in Mumbai Listnership in Delhi Lakhs Lakhs
30.0 40.0 36.8
20.5 30.0 20.0 19.0
20.0 17.3 12.0 13.5 10.0 10.0
2.5
0.0 0.0 Radio Mirchi Radio City Red FM Go Radio Mirchi Radio City Red FM
Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 8, fieldwork Jan 06 to Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 8, fieldwork Jan 06 to Mar 06. All Sec 12+) Mar 06. All Sec 12+)
The Radio Station India Tunes To
14 Mirchi a “Must-Have” Media Vehicle
Radio Mirchi Today Reaches More People Than The #1 TV/Print Media Brands
15 Track Record of Developing Innovative Content & Operating in Diverse Markets
• 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
We Are Best Positioned For Success In New Cities Across India
16 Superior Sales Capabilities
• Dedicated 180 member sales team across 10 centers
• Offering unique and innovative solutions to clients – Hutch ‘Pink Campaign’
• Strong emphasis on training
• Mirchi Activation: Pioneers in the radio space
17 Indian Out of Home Industry and Growth Drivers
• Tendered Properties Indian OOH Industry Growth Increasing tender of properties to Rs. In mn organized players 20000 17,500 15,500 16000 13,500 12,000 • Long term Contracts 12000 10,500 Opportunities for acquiring or taking 8,500 9,000 8000 long term rights for attractive sites in selected cities 4000
0 2004 2005 2006 2007E 2008E 2009E 2010E • Technology & Innovation Bring in technology based innovative Source: PWC report - The Indian Entertainment and Media Industry OOH solutions like Light-emitting diode (LED) screens PWC estimates Out-of-Home media industry to grow at CAGR of 14% in next 5 years increasing its ad share to 7% and size to Rs. 17.5 billion
18 Times OOH Media : Ability to Offer Integrated Marketing Solutions Multi City- Multi Mix Mumbai Must-Win Market Bus Shelters Till Dec 2008 South Mumbai & West Mumbai (except Central) : Target Quality: Affluent Population Mass 1400+Sites : Choice & Coverage
Delhi Must-Win Market Metro Stations Metro CP : 7 Stations Till 2007 Metro Dwarka : 6 Stations Till 2011 DND Flyover 66 displays : spread across flyway Till 2008
Kolkata Must- Presence Market 80+ Hoardings : spread across city Till 2011
19 Focus on new technology – LED Video Walls
• Imported 4 LED screens – Put up 1 LED screen at Sahara Mall – Gurgaon • Planned Rs. 350.0 mn (US$ 7.8 mn) over the time • Positives of LED – Dynamic - Television Outdoors, Motion and sound – Aesthetic - Superior quality of color, Weather Proof – Flexible - Scalable to any dimension – Three Revenue Streams Branding Multiple Clients Content Sales
20 360° Experience: Move towards Large Ticket Business
• Focus on big ticket events: Conceptualizing, marketing and
execution 360 o – Filmfare Awards, International Film Festival of India, 2004, Femina Miss India Fashion & Lifestyle Third Party – Ability to raise sponsorships • Produce and manage • Conducted over 600 Filmfare awards & events in fiscal 2006 • Marquee client list: Femina Miss India • Focus on moving Pageant (Internal – Bennett Coleman & Co Ltd, Samsung towards big events clients – Times Group) India Ltd., SET India Pvt Ltd, State • Recently started Bank of India, Mastercard, Deutsche building brands / Bank, Castrol India properties such as the FDCI Fashion awards
• Now focusing on “wellness” not “illness” approach
2004 2005
21 Key Challenges facing ENIL
• 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
22 Board of Directors And Management
23 Board of Directors
• 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 best corporate governance practices
24 Strong & Experienced Management Team
CEO AP Parigi Experience 34 years overall 51/2 years at ENIL
Deputy CEO CFO Business Head SVP Legal & CS EVP, SVP, People Times OOH Regulatory Affairs Innovation Prashant Harvinderjit Anil Farid Panday Singh Bhatia Fernandes Ravi Narula Prasad Kureshi Swaminathan Experience Experience Experience Experience Experience Experience 17 years overall 16 years overall, 16 years overall, 15 years overall, 33 years overall 4 at ENIL 10 years overall, 51/2 at ENIL 5 at ENIL 3 at ENIL 51/2 at ENIL 41/2 at ENIL
Nandan Srinath, COO, ENIL India
Sharath Chandra, COO, ENIL International
Tapas Sen, Executive Vice President, Programming
Kaushik Ghosh, Senior Vice President, Marketing
Col. (Retd.) Nataraja Thiagarajan, Chief Technical Officer
25 Key Financials FY 2006
26 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 • Investment of Rs. 40.0 mn in 100% subsidiary Times Innovative Media Pvt. Limited (TIMPL) • One Time Entry Fee of Rs.1,301.0 mn for 25 new radio licenses and Migration fee of Rs. 815.2 mn for existing 7 stations for 10 years – Amortization of annual migration fee Rs.81.5 mn accounted in fourth quarter • The Company granted 109,360 options at an exercise price of Rs.90/- each under ESOS • Written back provision for license fees of Rs. 98.8 mn no longer required
27 Consolidated Results in line with Analyst Expectations…
• TIMPL Actual results JMMS ENAM Actual In Rs. mn are for 5 months Total Income 1,555.0 1,667.0 1,406.7 period from October 27, 2005 to March 31, Operating Expenses 1,140.0 1,255.0 998.4 2006, as compared to annualised numbers EBITDA 415.0 412.0 408.3 in the Analyst report
Margin (%) 26.4% 24.7% 29.0% • EBITDA Margins of 29% in FY06 PAT 230.0 226.0 212.4
Margin (%) 15.0% 13.6% 15.1% • Exceptional item of Rs. 98.9 mn not included in PAT
28 ENIL Standalone - Strong Financial Performance
Revenue in Rs. Million EBITDA in Rs. Million
1400 400 381 1200 300 1202 1000 200
800 100 762 600 0 550 400 -100 -122
200 -200 -245 0 -300 FY04 FY05 FY06 FY04 FY05 FY06
29 ENIL Standalone - How did we Spend…
3% 3% 2% 5% 21% 5%
7%
19%
16% 19%
30 ENIL Standalone: Key Financials FY 2006
FYE 2005 FYE 2006 • Increase in airtime sales In Rs. mn (Audited) (Audited) of 57% in FY06 over FY05 Total Income 762.3 1,201.9 • EBITDA Margins of 32% Operating Expenses 884.8 820.5 in FY06 EBITDA (122.6) 381.4 • Exceptional item of Rs. Margin (%) (16.1%) 31.8% 98.9 mn not included in PAT PAT (179.3) 196.6
Margin (%) (23.5%) 16.4%
Recurring EPS (Rs.) (5.29) 5.48
31 Ownership Structure and Share Price Performance
32 Ownership Structure
By Category Top Shareholders
1%1% Shares % Holding 6% 2% (mn) 18% TIML 30.52 64.18% Fidelity 4.51 9.48% BCCL 3.39 7.13% 72% HSBC (ME) 1.26 2.64%
Promoters FIIs Macquarie 0.80 1.68%
Individuals Corporates Morgan Stanley 0.77 1.62% Directors & Employees Others Citigroup 0.63 1.32%
FII Holding increased from 12.45% at the time of allotment to 18.07%
1. Total Paid up capital (in no. of shares) as on 31st March, 2006 (after exercise of Green Shoe Option) is 47,563,665 2. Others include Mutual Funds, Banks, HUF, Clearing Members, NRIs and Trusts Data as of March 31, 2006
33 Share Price Performance (1)
280 8.0 • 48.6% gain against
19-Apr-06 Allotment price of Fourth quarter and annual results above 6.4 260 expectations Rs.162 per share
4.8 240 • Market Cap. : 3.2 Rs. 11,446.2 mn Price (Rs.) 220 1.6 Shares• (Million)Promoters holding :
200 - Rs. 8,162.3 mn 15-Feb 1-Mar 16-Mar 31-Mar 18-Apr 2-May 15-May
Price (15/05/06) : Rs. 240.7 Share Price All time High : Rs. 287.5 Volume All time Low : Rs. 197.0 Weighted Average : Rs. 239.8
1. Share Price as traded on National Stock Exchange till May 15, 2006
34 Media Companies Market Performance...
Allotment Price Market P / E (1) Listed On Price Capital 15/05/06 (x) (Rs.) (Rs.) (Rs. mn) Jagran Prakashan 22-Feb-06 320.0 295.2 14,820 46.3x
ENIL 15-Feb-06 162.0 240.7 11,446 38.8x
HT Media 01-Sep-05 530.0 527.7 24,720 66.3x
NDTV 19-May-04 70.0 257.2 15,640 NM
Mid-day Multimedia 04-Apr-01 70.0 84.9 3,800 46.9x
Adlabs Films 10-Jan-01 120.0 333.9 13,290 50.5x
Zee Telefilms 25-Nov-93 30.0 272.8 1,12,530 152.3x Stock Market is Valuing expected robust growth in Indian Media Industry
1. Price / earning (P / E) multiple is calculated by dividing current price with reported LTM ordinary EPS Source: Economic Times, BSE
35 Future Business Outlook
36 Bright Future Outlook - ENIL
• 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
37 Bright Future Outlook - TIMPL
• 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
– Establish ourselves as a provider of innovative solutions
– Create own event properties at an appropriate time
– Focus on Life style, Fashion shows and Exhibitions
38 Radio Industry: Pending agenda
• News & Current Affairs
• FDI/FII cap
• Multiple frequencies
• Tradability
• Limitation on share transfer of main promoter for 5 years
39 Thank You Back-ups
41 ENIL Consolidated: Key Financials FY 2006 (Above the Line Items)
FYE 2006 % of In Rs. mn (Unaudited) Revenue Airtime Sales 1,174.1 83.5% Event Income 183.6 13.0% Out of Home Media 17.0 1.2% Other Income 32.0 2.3% Total Income 1,406.7 100.0% Production Expenses: License Fee 64.3 4.6% Other Production expenses 201.5 14.3% Administration and Other Exp. 455.7 32.4% Employee Costs 276.9 19.7% Total Operating Expenses 998.4 71.0% EBITDA 408.3 29.0%
42 ENIL Consolidated: Key Financials FY 2006 (Below the Line Expenses)
FYE 2006 % of In Rs. mn (Unaudited) Revenue EBITDA 408.3 29.0% Less: Depreciation 42.7 3.0 %
Amortisation of Migration Fee 81.5 5.8%
Interest 26.1 1.9% PBT 258.0 18.3% Taxation (1) 45.6 3.2%
Effective Tax rate (%) 17.7%
PAT 212.4 15.1%
Note: 1. For ENIL tax calculated as per provisions of Section 115JB of Income Tax Act, 1961 (Minimum Alternate Tax), TIMPL tax is calculated at normal tax rates
43 ENIL: Key Financials FY 2006 (Above the Line Items)
FYE 2006 % of FYE 2005 % of Growth In Rs. mn (Audited) Revenue (Audited) Revenue (%) Revenues 1,174.1 97.7% 749.4 98.3% 56.7% Other Income 27.8 2.3% 12.8 1.7% 117.2% Total Income 1,201.9 100.0% 762.3 100.0% 57.7%
Production Expenses:
License Fee 64.3 5.3% 398.5 52.3% (83.9%) Other Production expenses 60.5 5.1% 63.6 8.3% (4.9%) Administration and Other Exp. 453.4 37.7% 262.3 34.4% 72.9% Employee Costs 242.3 20.2% 160..5 21.1% 51.0% Total Operating Expenses 820.5 68.3% 884.8 116.1% (7.3%) EBITDA 381.4 31.7% (122.5) (16.1%) NM Adjusted EBITDA (1) 381.4 31.7% 235.0 31.3% 62.3%
Note: 1. Assuming license fee for FY 2005 under revenue share regime on like basis with FY 2006
44 ENIL: Key Financials FY 2006 (Below the Line Expenses)
FYE 2006 FYE 2005 Growth In Rs. mn (Audited) (Audited) (%) EBITDA 381.4 (122.6) NM Less: Depreciation 41.8 53.4 21.7%
Amortisation of Migration Fee 81.5 NA (100%)
Interest 25.9 2.9 793.1% Preliminary Expenses w/off 0.3 (100%)
PBT 232.1 (179.2) NM
Margin (%) 19.3% (23.5%) Taxation (1) 35.5 0.1 NM
Effective Tax rate (%) 15.3% NM
PAT 196.6 (179.3) NM
Margin (%) 16.4% (23.5%) Note: 1. Tax calculated as per provisions of Section 115JB of Income Tax Act, 1961 (Minimum Alternate Tax)
45