INVESTOR PRESENTATION February 2019 Disclaimer
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INOX GT Central Jaipur INVESTOR PRESENTATION February 2019 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 upto to FY15 are shown net of entertainment tax, to be consistent with the revenues under IND-AS for FY16 onwards 2 Forum Neighbourhood Mall, Bengaluru DISCUSSION SUMMARY . INDUSTRY OVERVIEW . COMPANY OVERVIEW . COMPETITIVE ADVANTAGE & O U T L O O K . 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 .,1 .I .1 • r • India US China Japan France UK S. Korea Spain Germany Italy China India US France Mexico UK Japan S. Korea Germany Russia -400 1.• , ■ , • . • . • I, ____ .,: However, India’s Screen Density is One of the Lowest Screens / Million population 125 95 80 60 57 40 26 25 I 16 12 10 I 8 I I ,l ,I I l , I , ■ , ■ . - - r - US France Spain UK Germany South Korea Japan Taiwan China Thailand Brazil , ____India ., I Source: CRISIL Report, http://uis.unesco.org/en/news/cinema-data-release (2015) 5 Steady Performance and Resilience IN X Indian Film Industry Displays Steady Performance Trends In Rs. Billion 250 CAGR12% __________________ _ ------------► 191.7 200 ------------------ ------------------- 155.5 165.7 150 122.4 100 118.0 50 85.6 96.3 103.0 0 2016 2017 2018E 2020E ■ Domestic Theatrical ■ Overseas Theatrical Broadcast rights ■ Digital/OTT rights ■ In-cinema advertising ■ Home Video D o m e s t i c Theatricals Constitutes 62% Of Total Film Industry 5% 4% 0% ■ Domestic Theatrical 12% ■ Overseas Theatrical 2017 Broadcast rights ■ Digital/OTT rights ■ In-cinema advertising 16% 62% ■ Home Video Source: FICCI-EY 2018 Report 6 Multiplexes Witnessing Rapid Growth 16,000 FACTORS DRIVING GROWTH IN 14,000 Number of Screens MULTIPLEXES: 12,000 10,635 . Strong demographics, rising disposable 10,346 9,951 10,000 925 9,500 9,530 1,225 incomes and discretionary spends. 1,500 2,100 8,000 2,750 . Superior location, destination and 6,000 parking facilities. 9,710 9,121 4,000 8,451 7,400 6,780 . Multiple screens in one location offer a 2,000 wider variety of content to the patrons. - T T . Different screen sizes provide 2009 2011 2013 2015 2017 programming flexibility. This results in Single Screens ■ Multiplexes higher occupancy ratios. Multiplexes currently account for . State of art equipment (high quality ~ 29% market share of the screens, video and audio), superior interiors, h o w e v e r they account f o r ambience and service. ~50% of box office collections Source: FICCI-EY Report 2018 7 Increasing Number Of INR 1bn + Movies Wider Screen Releases 8,000 6,900 7,000 6,500 6,000 5,200 5,300 5,000 4,500 4,500 4,000 3,446 3,014 3,359 2,638 3,000 2,065 2,101 1,598 2,000 1,000 1,000 - 3 Idiots Dabaang Bodyguard Ek Tha Tiger Dabaang 2 Chennai Dhoom 3 Kick P.K Bajrangi Dangal Bahubali 2 - Tiger Zinda 2.0 (2018) (2009) (2010) (2011) (2012) (2012) Express (2013) (2014) (2014) Bhaijaan (2016) The Hai (2017) (2013) (2015) Conclusion (2017) INCREASING NUMBER OF Higher Number Of INR 1 Bn + Movies MOVIES ARE GENERATING 14 3 12 MORE THAN RS 1 BN IN NET 2 10 - 2 2 BOX OFFICE COLLECTIONS 8 - 1 - 2 1 1 6 1 - 1 10 DRIVEN BY WIDER SCREEN 4 9 8 1 6 7 7 1 2 - 5 5 - - 2 RELEASES AND FACILITATED BY - 1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Jan-19 DIGITISATION OF CONTENT ■ INR 1Bn to 1.99Bn ■ INR 2Bn to 2.99 Bn ■ INR 3Bn and above DELIVERY Source: Industry 8 India’s Consumption Story IN X 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 22 1,000 80 42 41 70 800 t•I = I 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: Lower Class: < Rs.90,000 , Lower Middle Class: Rs.90,000 to Rs.199,999 , Middle & Affluent Class: > Rs.200,000 Share of Population by Income Bracket (Million) %Share of Average Annual Household Consumption ■ Lower Class ■ Lower Middle Class ■ Middle & Affluent Class 1,200 ■ Necessities ■ Discretionary 281 55 600 -----. 1,000 19 800 8 167 454 39 45 550 52 61 600 70 514 i1I t--- I I 400 702 742 I 598 61 I 200 447 48 314 39 30 - 1985 1995 2005 2015 2025 1995 2005 2015 2025 Source: Mckinsey - Tracking the growth of Indias Middle Class - 2017 9 INOX Nehru Place, Delhi Company Overview 10 Track Record of Aggressive Expansion Screens Properties - 136 650 - 140 118 123 107 557 120 550 96 492 79 468 100 450 72 420 68 80 63 372 60 350 310 32 279 22 26 239 257 40 250 14 2 3 6 9 20 0 150 119 76 91 51 -20 25 35 50 8 12 I I I -40 -50 I I -60 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Feb-19 AVERAGE ADDITION OF ~8 SCREENS EVERY QUARTER SINCE INCEPTION Note: Includes Acquisition of 89 Cinemas in FY07, Fame in FY11 and Satyam in FY15 11 PAN India Presence IN X ONE OF THE LARGEST MULTIPLEX CHAIN OPERATOR IN INDIA PUNJAB | 2 Property | 10 Screens UTTAR PRADESH | 7 Properties | 27 Screens 19 States DELHI | 5 Properties | 16 Screens JHARKHAND | 1 Property | 4 Screens HARYANA | 6 Properties | 19 Screens 67 Cities RAJASTHAN | 13 Properties | 47 Screens MADHYA PRADESH | 5 Properties | 22 Screens Assam | 1 Property | 2 Screens 136 Properties GUJARAT | 18 Properties | 74 Screens WEST BENGAL | 15 Properties | 59 Screens ODISHA | 3 Property | 11 Screens MAHARASHTRA | 28 Properties | 126 Screens 557 CHHATTISGARH | 2 Properties | 8 Screens Screens GOA | 4 Properties | 14 Screens TELANGANA | 2 Properties | 11 Screens KARNATAKA |11 Properties | 45 Screens ANDHRA PRADESH | 8 Properties | 33 Screens 132,631 Seats KERALA |1 Property | 6 Screens TAMIL NADU | 4 Properties | 23 Screens * Includes 8 management properties with 29 screens and 7,370 seats 12 Atria, Worli, Mumbai 13 GVK One, Hyderabad 14 CR2, Nariman Point, Mumbai 15 Mantri Square, Bangalore 16 Quest, Kolkata 17 R-City Ghatkopar, Mumbai INSIGNIA – LUXURY MOVIE WATCHING EXPERIENCE 18 Atria, Worli, Mumbai 19 R-City, Ghatkopar, Mumbai 20 Palm Beach, Navi Mumbai 21 INOX Epicuria, Delhi 22 INOX Metro, Mumbai 23 INOX GT Central, Jaipur 24 IN LIVE l'/4MOVIE Highest Ever New First National Property Openings Chain in the in the Industry: Industry to be YTD 14 Properties Net Debt Free with 68 Screens SETTING NEW INDUSTRY Highest Ad RECORDS Revenue Growth Industry's Highest Rate in the “EBITDA to Capital Industry for 7 Invested” Ratio for consecutive Q3FY19: 6%* quarters 25 *Net Of Minority Interest STRONG ALL ROUND PERFORMANCE OF THE COMPANY LIVE l'/4MOVIE 9MFY19 Highest Ever Revenue Rs. 1,213 crs Highest Ever Advertising Revenue Rs. 134 crs Highest Ever ATP Rs. 200 ----------------Highest Ever SPH Rs. 74 ~'::.-'""" Highest Ever EBITDA Rs. 212 crs Highest Ever PAT Rs. 85 crs Long Term Rating Upgraded by Crisil to AA-/Stable 26 Revenue from Operations 500.0 450.0 400.0 350.0 33% 300.0 250.0 200.0 433.1 150.0 325.9 t 100.0 50.0 - Q3FY18 Q3FY19 1,348.1 1,160.6 1,220.7 895.4 1,400.0 762.8 1,200.0 1,000.0 18% 800.0 600.0 1,213.3 1,024.5 FY14 FY15 FY16 FY17 FY18 400.0 t 200.0 - 9MFY18 9MFY19 All figures in INR Crs., unless specified 27 Earnings Before Interest, Tax, Depreciation and Amortization [EBITDA] __ .