Investor Presentation January 2018 Disclaimer
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INVESTOR PRESENTATION JANUARY 2018 DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Mukta Arts Limited (“Mukta” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future 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 Mukta about the business, industry and markets in which Mukta 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 Mukta’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 Mukta. In particular, such statements should not be regarded as a projection of future performance of Mukta. It should be noted that the actual performance or achievements of Mukta may vary significantly from such statements. 2 DISCUSSION SUMMARY 4 COMPANY OVERVIEW 9 EXHIBITION BUSINESS 22 EDUCATION BUSINESS 26 OTHER BUSINESSES 29 CONSOLIDATED FINANCIALS 3 COMPANY OVERVIEW DIFFERENTIATED BUSINESS MODEL ACROSS ENTIRE FILM INDUSTRY VALUE CHAIN • Leading production house in India with a rewarding • Well penetrated Distribution network presents legacy of more than 30 years opportunities for other business opportunities • Pioneered by multidimensional founder and • 4 offices across India with strong presence in creative head – Mr. Subhash Ghai North India (Punjab, Delhi) • Globally recognised high quality film • Works with leading production companies library of more than 35 hit films FILM FILM – 20th Century Fox, Disney-UTV, Warner • Going forward, focus on low risk high PRODUCTION DISTRIBUTION Brothers etc. value projects leveraging our • Offers Programming service to more prestigious film content IPR than 600 screens across India • One of Asia’s largest Film, Television, • Growing chain of multiplexes operated Animation and Media School under “Mukta A2 Cinemas” brand • Spread over 5.5 acre campus, operating 8 FILM FILM • “Value for Money” – high quality movie schools in India EDUCATION EXHIBITION viewing experience at an affordable value • Significant growth from 80 students studying • Currently operate 51 screens across 20 in 8 courses in 2006 to 948 students as on Q2 FY18, properties in 16 cities & 9 states across India, studying in 14 courses at present. including a 6-screen property in Bahrain • Rated as one of the 10 best film schools in the world - by ‘The Hollywood Reporter’ magazine. • First Indian company to successfully venture into high potential GCC region with a 6 screen multiplex in 2016 5 COMPANY OVERVIEW ORGANISATIONAL STRUCTURE MUKTA ARTS LIMITED – 7 SUBSIDIARIES FILM PRODUCTION 100.00% 84.99% 55.00% 99.92% 100.00% 100.00% Mukta A2 Cinemas Whistling Woods Mukta V N Films Mukta Telemedia Coruscant Tec Mukta Creative Limited (Mumbai) International Limited Limited Limited Private Ventures Limited Mukta A2 Multiplex (Mumbai) (Mumbai) (Mumbai) Limited (Mumbai) S.P.C. (Bahrain) (Mumbai) THEATRE FILM PROGRAMMING TELEFILM MOBILE CONTENT EXHIBITION EDUCATION SERVICE PRODUCTION SOLUTIONS DIGITISATION 2.6% 5.7% 8.6% 6.7% FY14 Revenues were majorly 9.0% 1.1% H1 FY18 Revenues were majorly 11.6% 5.3% contributed by 35.2% contributed by 32.4% - Film Production business 55.6% 30.6% - Theatre Exhibition business which has volatile revenues 86.1% which presents strong growth and profitability potential and steady margins - Programming & Distribution 16.2% - Education business which gives 48.8% 53.7% 57.0% business which gives high 22.5% long term stable revenues with turnover but low margins 5.7% 5.6% healthy operating margins FY14 FY15 FY16 FY17 H1 FY18 Others Software (Production/Distribution/Programming) Education Exhibition 6 COMPANY OVERVIEW BOARD OF DIRECTORS Mr. Subhash Ghai Mr. Rahul Puri Mr. Parvez Farooqui Executive Chairman Managing Director Executive Director ▪ One of India's most prolific ▪ Joined Mukta Arts in 2003 ▪ Associated with Mukta Arts film writer, director and ▪ Head of Academics at since 1984 producer Whistling Woods ▪ Experienced in Marketing, ▪ More than 40 years of ▪ Worked with UBS, Ambit in Sales, Purchase, Accounts, experience having created Corporate Finance Taxation and Legal over 35 hit films Mr. Kewal Handa Mr. Manmohan Shetty Mrs. Paulomi Dhawan Director Director Director ▪ More than 30 years across ▪ More than 3 decades of ▪ Over 35 years experience in Finance, commercial strategy experience in media and Media, Marketing and Brand and business development entertainment business Communications functions. ▪ Responsible for ▪ Treasurer of Indian Society ▪ Visiting faculty at NMIMS conceptualizing Imagica of Advertisers (ISA) 7 COMPANY OVERVIEW MANAGEMENT Mr. Prabuddha Dasgupta Mrs. Meghna Ghai Puri Mr. Ashish Gharde CFO President, Whistling Woods COO, Mukta Arts Ltd. ▪ Chartered Accountant with ▪ Honorary Fellow of Bradford ▪ 18 years of experience in over 20 years of experience College, UK Operations and Human in finance and accounts ▪ Spearheaded the launch of 8 Resources. ▪ Worked for 16 years in schools within Whistling ▪ Previously associated with Entertainment industry Woods International TATA, Balaji Telefilms, L&T. Mr. Satwik Lele Mr. Raju Farooqui Mr. Tolu Bajaj COO, Mukta A2 Cinemas Head of Production COO, Distribution & Exhibition ▪ Worked in exhibition ▪ Joined Mr. Subhash Ghai’s ▪ In the film Production and industry for more than 15 production house as an Distribution field for more years Assistant Director in 1976 than 30 years ▪ Previously associated with ▪ Instrumental in setting-up ▪ Previously associated with E-square, Reliance Media Audeus studio Yashraj Films, Tips Films Works and INOX 8 EXHIBITION BUSINESS EXHIBITION BUSINESS INDIAN FILM EXHIBITION – LONG TERM SUSTAINABLE GROWTH OPPORTUNITY THEATRICAL MOVIE WATCHING IS THE MOST FAVOURITE ENTERTAINMENT OPTION IN INDIA INDIA RELEASES HIGHEST NUMBER OF MOVIES IN A YEAR INDIA WITNESSES 2ND HIGHEST NUMBER OF THEATRE FOOTFALLS IN A YEAR 1,602 2,178 1,930 Million Footfalls Per Year 1,364 745 554 476 279 324 241 204 182 166 208 197 176 171 169 156 146 India China Japan US France UK Germany S. Korea Spain Italy China India US France Mexico UK Japan S. Korea Germany Russia THEATRICAL MOVIE WATCHING IS THE PREFERRED OPTION INCREASING NUMBER OF MOVIES GROSSING MORE THAN RS 1 BN In Rs Bn 76% 75% 74% 73% 73% 2 159 2 2 138 2 112 125 126 9 7 5 6 5 6 85 93 94 101 116 1 1 2 2012 2013 2014 2015 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Domestic Theatrical Overseas Theatrical Home Video > Rs 1 Bn > Rs 2 Bn Cable & Satellite Rights Ancilliary Revenues 10 Source: CRISIL Report, FICCI Whitepaper on Screen Density in India, Industry EXHIBITION BUSINESS INDIAN FILM EXHIBITION – LONG TERM SUSTAINABLE GROWTH OPPORTUNITY INDIA IS LARGELY UNDERSCREENED WITH SIGNIFICANT POTENTIAL FOR NEW SCREEN ADDITIONS ACROSS TIER 2 AND TIER 3 CITIES MOVIE SCREENS IN INDIA ARE STILL THE LOWEST 125 95 80 Screens / Million population 60 57 AFFORDABLE MOVIE WATCHING EXPERIENCE TO 40 26 25 DRIVE NEW SCREENS GROWTH BEYOND METROS 16 12 10 7 • Affordable multiplexes set to gain share from declining number of US France Spain UK Germany S.Korea Japan Taiwan China Thailand Brazil India single screens in Tier 2 & Tier 3 cities across India • Positive drivers behind organic expansion of multiplexes beyond SIGNIFICANT SCOPE FOR MULTIPLEX PENETRATION IN TIER 2 & 3 CITIES metros & Tier 1 cities – • Majority of upcoming malls in Tier 2 & Tier 3 cities • Lower operating overheads including lower rentals Cities with % No. of Multiplex/ Tier No. of Cities • Improving state of regional film industry etc. Multiplex Penetration Multiplex City T1 8 8 100% 261 32.6 T2 88 78 89% 303 3.9 T3 372 94 26% 136 1.4 11 Source: CRISIL Report, FICCI Whitepaper on Screen Density in India, Ambit Capital Report, Industry EXHIBITION BUSINESS MUKTA A2 CINEMAS – UNIQUE VALUE PROPOSITION WE OFFER “VALUE FOR MONEY & HIGH QUALITY” MOVIE WATCHING EXPERIENCE IN INDIA WE LEVERAGE OUR EXPERIENCE AND CAPABILITIES WE BRING MOVIE WATCHING EXPERIENCE FOR EVERY INDIAN More than 30 years of experience in the film industry 19 MULTIPLEXES Presence across film industry value chain - spanning across production, distribution and programming functions 51 SCREENS Deep understanding of films of various genres, varying audience 16 CITIES & 9 STATES ACROSS INDIA tastes, film content preferences and spending propensities Strong relationships with various regional distributors through 1 SIX SCREEN MULTIPLEX IN BAHRAIN its programming service 12 EXHIBITION BUSINESS MUKTA A2 CINEMAS – OUR GROWING PRESENCE 25 20 20 20 13 15 11 10 4 5 0 FY14 FY15 FY16 FY17 Q2 FY18 Number of Properties 60 51 51 50 36 40 31 30 19 20 10 0 FY14 FY15 FY16 FY17 Q2 FY18 Number of Screens 234 234 195 184 187 11,912 11,912 6,748 3,700 5,718 FY14 FY15 FY16 FY17 Q2 FY18 Number of Seats Seats Per Screen NOTE: 1 Property with 6 screens in Bahrain 13 EXHIBITION BUSINESS MUKTA A2 CINEMAS – OUR PROPERTIES 14 EXHIBITION BUSINESS MUKTA A2 CINEMAS – Q2 & H1 FY18 RESULT HIGHLIGHTS In Rs. Mn Q2 FY18 YoY ANALYSIS REVENUES EBITDA and EBITDA MARGIN PBT * and PBT MARGIN 9.1% 118.4 127.4 -2.5% 10.8 -1.3% -11.2% 8 % -115 % -382 % (1.7) -3.0 -14.2 Q2 FY17 Q2 FY18 Q2 FY17