ENIL Presentation India Conference
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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 Radio Industry: Poised for High Growth High Growth opportunity for Indian Ad Industry Indian Ad Spend: Rs.129Bn in 2006E 2.0 14% YoY Growth 1.6 1.5 1.4 1.1 1.0 1.0 0.7 0.6 0.5 0.3 0.0 Thailand New Singapore World Philipines China India Zealand Average Source: Zenith Optimedia Potential for ad industry to grow to Rs 480 billion ($11 billion) in 10 years (1) Revenue estimated based on FICCI numbers before the announcement of Phase II of Privatization 3 Radio Industry: Poised for High Growth Radio Industry Share in Ad Spend % Indian Radio Industry: Rs3.7Bn in 2006E(1) 16.0 15.3 16% YoY Growth 13.0 12.5 9.4 10.0 8.7 7.0 6.5 4.4 4.0 2.9 1.0 Philipines New Singapore World Thailand China India -2.0 Zealand Average Source: Zenith Optimedia Radio’s share depends on extent of de-regulation in radio (1) Revenue estimated based on FICCI numbers before the announcement of Phase II of Privatization 4 Radio Industry: Positive Regulatory Reforms • Fixed License Fee regime changed to OTEF + Revenue share • Annual license fee 4% of gross revenues • Bidding for OTEF • Terms of bidding: – One-step closed tender bidding – 25% of top bid is the reserve OTEF. All bids below Reserve OTEF disqualified • Provisos to Curb Speculative Bidding 5 Reforms – extensive growth in private FM • From existing 12 cities to 91 cities • From existing 21 stations to 359 stations (currently taken 300. Balance expected by June 06) • Growth opportunity for private FM: From current 3% of Rs 129 billion (Rs 3.7 billion) to 8% of Rs 480 billion (Rs 38 billion) in ten years starting FY 07 6 We Are present in all the top 13 towns (pop 20 lacs +) Delhi Jaipur Lucknow Kanpur Ahmedabad Kolkata Surat Nagpur Mumbai Pune Hyderabad Bangalore Chennai Phase I excluding Indore Phase II – A+ & A circles Only incumbent in all the four metros 7 The Mirchi Republic #1 Listenership Share Listnership in Mumbai Listnership in Delhi Lakhs Lakhs 30.0 40.0 37.5 30.0 20.0 20.0 18.4 20.2 20.0 10.9 13.3 10.0 10.0 2.4 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 7, fieldwork Nov 05 to Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 7, fieldwork Nov 05 to Jan 06. All Sec 12+) Jan 06. All Sec 12+) The Radio Station India Tunes To 9 Mirchi a “Must-Have” Media Vehicle Radio Mirchi Today Reaches More People Than The #1 TV/Print Media Brands 10 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 7 distinct markets We Are Best Positioned For Success In New Cities Across India 11 Superior Sales Capabilities • Dedicated 150 member sales team across 8 centers • Offering unique and innovative solutions to clients – Hutch ‘Pink Campaign’ • Strong emphasis on training • Mirchi Activation: Pioneers in the radio space 12 Strong & Experienced Management Team CEO AP Parigi Experience 34 years overall 51/2 years at ENIL Deputy CEO CFO Business Head VP Legal & CS EVP, VP, 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 Col. (Retd.) Nataraja Thiagarajan, Chief Technical Officer 13 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, Event Management And Out-of-home Media” 14 TIMES OOH Media: Ability to Offer Integrated Marketing Solutions • Organizing a fragmented industry • Currently manage and operate – Mumbai: Over 1,400 Bus Queue Shelters in 2 of the 3 zones of Mumbai till “Churchgate to Prabhadevi, Bandra to Dahisar” December 2008 – Delhi: 6 Metro Railway Stations in Delhi for 2 years – Kolkata: 71 hoarding sites – Metro for 3+2 years • Focus on new technology, investments, expansion “Delhi Main to Central Sectariat, Kashmere Gate, Plaza” 15 360° Entertainment: Ability to Offer Integrated Marketing Solutions • Focus on big ticket events: Conceptualizing, marketing and execution 360o – Filmfare Awards, International Film Festival of India, 2004, Femina Miss India Fashion & Lifestyle Third Party – Ability to raise sponsorships • Produce and manage • Conducted over 400 Filmfare awards & events in fiscal 2005 Femina Miss India • Focus on moving Pageant (Internal • Marquee client list: towards big events clients – Times Group) – Bennett Coleman & Co Ltd, Samsung • Recently started India Ltd., SET India Pvt Ltd, Welspun building brands / India, Deutsche Bank, Microsoft India properties such as the FDCI Fashion awards – Now focusing on “wellness” not “illness” approach 16 Board of Directors • Board of Directors: • Mr. Deepak M Satwalekar – MD & CEO ,HDFC Standard Life • Mr. N Kumar- Vice Chairman, Sanmar Group • Ms. Rama Bijapurkar, Consultant • Mr. Ravi Dhariwal – Executive Director, BCCL • Mr. A.P. Parigi – MD & CEO, ENIL Board Driven company with emphasis on best corporate governance practices 17 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 18 Emerging technologies – competition or opportunity? • Satellite Radio • Internet/Broadband Radio • IPOD and IPOD casting • Mobile/3G 19 Key Challenges facing ENIL • Rapid roll-out of stations • Talent identification, training and retention • Retaining and growing absolute listenership numbers • Cost management – especially wrt marketing and payroll • Music royalty regime – rationalization • Development of listenership research standards and spread across the country 20 Strong Financial Performance Audited Financials for ENIL (Radio Business Only) All figures in Rs. MM FY04 FY05 1HFY05 1HFY06 Increase in airtime sales Total Income 570 762 317 495 of55% in 1HFY06 over 1HFY05 License Fee 347 399 193 28 EBITDA -232 -123 -118 144 EBITDA (%) -41% -16% -37% 29% EBITDA Margins of 29% in 1HFY06 EBITDA (%) (Excl license fee) 20% 36% 24% 35% PAT -293 -179 -146 111 Share Capital 1,170 1,170 1,170 339 RoE 25% Reserves & Surplus -654 -833 -833 108 RoCE 32% Networth 516 337 337 447 Debt free company Borrowings 0 0 0 0 TIML Revenues (360° & Times OOH Media): Rs. 134 MM for 1HFY06 21 Shareholding Structure 1.1% 27.8% 71.2% Promoters Free-Float Employees 22 Radio Industry: Pending agenda • News & Current Affairs • FDI/FII cap • Multiple frequencies • Tradeability • Limitation on share transfer of main promoter for 5 years 23 .