INVESTOR PRESENTATION August 2018 Disclaimer
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R-City, Ghatkopar, Mumbai INVESTOR PRESENTATION August 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 upto to FY15 are shown net of entertainment tax, to be consistent with the revenues under IND-AS for FY16 onwards 2 Palm Beach, Navi 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 250 191.7 200 155.5 165.7 150 122.4 100 118.0 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. - . 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 6,500 5,200 5,300 4,500 4,500 4,000 3,446 3,014 3,359 2,638 2,065 2,101 1,598 1,000 INCREASING NUMBER OF MOVIES ARE GENERATING 3 Idiots Dabaang Bodyguard Ek Tha Dabaang 2 Chennai Dhoom 3 Kick P.K Bajrangi Dangal Bahubali 2 Tiger Sanju (2009) (2010) (2011) Tiger (2012) Express (2013) (2014) (2014) Bhaijaan (2016) - The Zinda Hai (2018) (2012) (2013) (2015) Conclusion (2017) MORE THAN RS 1 BN IN NET (2017) BOX OFFICE COLLECTIONS Higher Number Of INR 1 Bn + Movies DRIVEN BY WIDER SCREEN RELEASES AND FACILITATED BY - 1 2 2 - 1 - 1 DIGITISATION OF CONTENT 2 1 2 - 1 1 DELIVERY 9 8 6 7 7 1 - 5 5 5 - 1- 2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jan to Jul 2018 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 ~280 million in 2015 to 39 52 ~600 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 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 123 127 600 118 130 107 96 492 511 110 500 468 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 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Aug-18 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 ONE OF THE LARGEST MULTIPLEX CHAIN OPERATOR IN INDIA PUNJAB | 2 Property | 10 Screens UTTAR PRADESH | 6 Properties | 24 Screens 19 States DELHI | 4 Properties | 13 Screens JHARKHAND | 1 Property | 4 Screens HARYANA | 6 Properties | 19 Screens 64 Cities RAJASTHAN | 12 Properties | 40 Screens MADHYA PRADESH | 4 Properties | 16 Screens Assam | 1 Property | 2 Screens 127 Properties GUJARAT | 17 Properties | 71 Screens WEST BENGAL | 14 Properties | 55 Screens ODISHA | 2 Property | 7 Screens MAHARASHTRA | 28 Properties | 124 Screens 511 CHHATTISGARH | 2 Properties | 8 Screens Screens GOA | 4 Properties | 14 Screens TELANGANA | 2 Properties | 11 Screens KARNATAKA |10 Properties | 40 Screens ANDHRA PRADESH | 8 Properties | 33 Screens 124,720 Seats KERALA |1 Property | 6 Screens TAMIL NADU | 3 Properties | 14 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 Mantri Square, Bangalore 21 Palm Beach, Navi Mumbai 22 Revenue from Operations 420.0 415.0 410.0 405.0 7% 400.0 395.0 390.0 414.9 385.0 380.0 387.4 375.0 370.0 Q1FY18 Q1FY19 1,348.1 1,160.6 1,220.7 895.4 1,400.0 762.8 1,350.0 10% 1,300.0 1,250.0 1,348.1 FY14 FY15 FY16 FY17 FY18 1,200.0 1,220.7 1,150.0 FY17 FY18 All figures in INR Crs., unless specified 23 Earnings Before Interest, Tax, Depreciation and Amortization [EBITDA] 20.0% EBITDA EBITDA Margin 20.1% 86.0 20.2% 18.0% 20.1% 16.3% 84.0 16.0% 20.0% 15.6% 82.0 16.0% 19.9% 80.0 19.8% 13.7% 78.0 19.6% 83.5 19.7% 14.0% 19.6% 76.0 19.5% 12.0% 74.0 75.9 19.4% 12.0% 72.0 19.3% Q1FY18 Q1FY19 10.0% 8.0% 210.4 189.1 6.0% EBITDA EBITDA Margin 146.1 250.0 15.6% 18.0% 122.0 122.7 4.0% 16.0% 200.0 44% 12.0% 10% 14.0% 2.0% 12.0% 150.0 10.0% 8.0% 100.0 210.4 0.0% 6.0% 146.1 4.0% 50.0 FY14 FY15 FY16 FY17 FY18 2.0% - 0.0% EBITDA EBITDA Margin % FY17 FY18 All figures in INR Crs., unless specified Note: EBITDA excludes Other Income (non-operating) 24 Profit after tax [PAT] 10.0% 8.5% 140.0 7.0% 8.0% PAT PAT Margin 60.0 8.9% 10.0% 8.3% 15% 120.0 6.0% 9.0% 4.8% 50.0 8.0% 40.0 7.0% 4.0% 6.0% 30.0 100.0 2.5% 2.2% 5.0% 20.0 4.0% 2.0% 32.1 37.0 3.0% 10.0 2.0% 80.0 - 1.0% 0.0% Q1FY18 Q1FY19 60.0 #114.6 -2.0% -4.0% 40.0 81.0 -6.0% PAT PAT Margin 8.5% 140.0 9.0% 20.0 36.9 8.0% 30.6 -8.0% 120.0 274% 7.0% 20.0 100.0 6.0% 80.0 - -10.0% 5.0% 60.0 2.5% 114.6 4.0% FY14 FY15 FY16 FY17 FY18 # 3.0% 40.0 2.0% 20.0 30.6 1.0% PAT PAT Margin % - 0.0% FY17 FY18 All figures in INR Crs., unless specified # Includes Tax write back pertaining to earlier years of ~Rs.54crs 25 R e v e n u e s - Segment Breakup 450.0 414.9 387.4 400.0 21.6 26.7 40.0 350.0 33.4 300.0 -18.8% 111.4 88.2 250.0 1,400.0 1,348.1 200.0 20.0% 1,220.7 101.0 1,160.6 1,200.0 150.0 92.3 138.9 91.1 239.2 26.3% 241.9 96.2 100.0 1,000.0 91.0 895.4 306.0 284.1 50.0 762.8 71.2 265.6 1.1% 800.0 60.4 81.5 0.0 49.5 191.0 Q1FY18 Q1FY19 600.0 162.3 1500.0 400.0 802.2 1348.1 712.8 748.1 1300.0 1220.7 101.0 490.5 551.6 200.0 92.3 138.9 1100.0 96.2 - 9.4% 306.0 900.0 284.1 FY14 FY15 FY16 FY17 FY18 700.0 44.4% 500.0 748.1 7.7% 802.2 300.0 NBOC F & B Advertising Others 100.0 7.2% -100.0 FY17 FY18 All figures in INR Crs., unless specified 26 Footfalls and Occupancy Rate 180 33% 170 31% 28% 800 35%