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2002 Annual Results 2002 Annual Results PresentationPresentation
Clear Media
AgendaAgenda
• HighlightsHighlights
• Review of FinancialsReview of Financials
• Review of Strategy & ExecutionReview of Strategy & Execution
55thth Year of Growth Year of Growth2002
HK$’000 % Change
Revenue 426,917 +20%
EBITDA 180,222 +17%
Net Profit 71,106 +21%
EPS 14.2cents +21%
2002 EBITDA Margin 42% Net Profit Margin 17%
Five Consecutive Years of GrowthFive Consecutive Years of Growth
0
50
100
150
200
250
300
350
400
450
1998 1999 2000 2001 2002
Th
ou
sa
nd
s
Revenue EBITDA Net Profit
‘000
Sustainable Margin
EBITDA 42% Net Profit 17%
Revenue 403,774 +18%
EBITDA 194,021 +22%
Net Profit 90,420 +33%
Bus SheltersBus Shelters
Revenue 16,220 +382%
EBITDA 4,419 +517%
Net Profit 1,936 +367%
Point-of-SalePoint-of-Sale
2002 HK$’000 % Change
Profit from Core ProductsProfit from Core Products
Focus on Growth Driver: “ “
RevenueRevenue ” ” 2002 YOY%
Guangzhou +37%
Shenzhen +29%
Chengdu +53%
Xian +46%
Hangzhou +27%
Shenyang +84%
Cheungchun +24%
Total +20%
Focus on Growth Driver:
““OccupancyOccupancy ”” 2001 2002
Beijing 69% 86%
Shenzhen 77% 87%
Chengdu 71% 85%
Hangzhou 80% 84%
Nanjing 64% 71%
Chongqing 68% 79%
Focus on Growth Driver: ““Pricing Pricing PowerPower ””
Market ShareMarket Share
% of Panels % of AD$
Beijing 41% 60%
Premium pricing VS local competitors
• Network expansion
29 cities 30 cities
12,000 17,000 panels
• Strengthen sales force
Add 83 professionals
6 new sales centres
• Broaden point-of-sale network
Invest for the FutureInvest for the Future
2003 Growth Drivers2003 Growth Drivers
External:External:
• WTO … Olympic … Shanghai EXPO …
• Brand(s) Consumers(s)
Internal:Internal:
• Innovative “packages” Advertisers’ needs
• Broaden product portfolio
• Improve asset yields
Review of FinancialsReview of Financials
Performance by All ActivitiesPerformance by All Activities
Bus Shelter
POS
Billboard
HQ
Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Revenue 403,774 16,220 6,922 426,916
EBITDA 194,021 4,419 (2,275) (15,943) 180,222
Net Profit 89,643 1,936 (4,530) (15,943) 71,106
Performance by ActivityPerformance by Activity
2001 2002
Total Total % Change
Revenue 342,181 403,774 +18%
EBITDA 159,588 194,021 +22%
Net Profit 68,152 89,643 +33%
Bus Shelters Growth Albeit Bus Shelters Growth Albeit LoweringLowering Receivables Receivables
EBITDA Margin 47% 48% Net Profit Margin 20% 22%
Revenue By LocationRevenue By Location
2001 2002
Beijing 20%
Guangzhou 13%
Shanghai19%Shenzhen
6%
Others 42%
Beijing 19%
Guangzhou 15%
Shanghai14%
Shenzhen 7%
Others 45%
Market Share in Top Ten CitiesMarket Share in Top Ten Cities
2001 2002
Shanghai 97% 98%
Guangzhou 54% 96%
Beijing 51% 41%
Shenzhen 43% 43%
Chengdu 45% 68%
Nanjing 76% 90%
Xian 97% 100%
Hangzhou 94% 95%
Wuhan 44% 59%
Kunming 85% 78%
Based on the number of panels
Market Shares Increased in Key CitiesMarket Shares Increased in Key Cities
Turnover By IndustryTurnover By Industry2001 2002
Telecom 20% 24%Beverages 10% 18%Consumer Products 16% 14%Tobacco 13% 7%OTC Pharmaceutical 10% 6%Leisure 3% 6%Finance 4% 3%Food 3% 3%IT 6% 3%Home Appliances 7% 2%
Cost BreakdownCost Breakdown % of Revenue
2001 2002
Direct operating costs- Rent - Maintenance- Electricity- Sales and culture taxes
Total
18%
7%
5%
8%
38%
19%
7%
6%
4%
36%
Amortization of concession rights & point-of-sale
18% 21%
Selling, general & administrative expenses
Depreciation of fixed assets
19%
1%
22%
1%
Total Expenses 76% 80%
Accounts Receivable Back on Accounts Receivable Back on TrackTrack
2001 1H2002 2002
3rd Party
Receivables
(HK$’000)
85,493 102,236 113,612
Turnover Day 147 193 143
Due from WHA
(HK$’000)
52,581 98,920 49,804
% of sales from WHA
25% 16%
Cash Flow DataCash Flow Data2001
HK$’0002002
HK$’000
Cash flows from Operating Activities
- Cash generated from operations 247,894 100,575
- Interest paid (21,757) (8,625)
- Income taxes paid (1,631) (7,624)
224,506 84,326
Cash flows from Investing Activities
- Purchase of fixed assets (19,896) (17,280)
- Additions to concession rights (226,199) (353,819)
- Interest received 5,165 11,807
(240,930) (359,292)
Cash flows from Financing Activities 758,433 (267,287)
Net (decrease)/increase in cash & cash equivalents 742,009 (543,638)
Net cash & cash equivalents at beginning of year 67,402 809,411
Net cash & cash equivalents at end of year 809,411 267,158
Balance Sheet HighlightsBalance Sheet Highlights
2001
HK$’000
2002
HK$’000
Cash and cash equivalents
809,411 267,158
Total assets 1,846,593 1,525,052
Total debt1 255,947 10,794
Total shareholders’ equity
1,129,798 1,209,750
1Net of pledged time deposits
Review of Strategy & ExReview of Strategy & Executionecution
Investing for Future GrowthInvesting for Future Growth
• Total number of panels increased to 17,210
• Total number of panels added in 2002
Tier 1 cities +1,666 +36%
Mid Tier cities +3,846 +55%
Total +5,512
• Continue to increase 2,000 panels in 2003
2001 2002 % Change
Capex (HK$’000) 271,300 309,227 +14%
Bus SheltersBus Shelters
New Sales Initiatives..New Sales Initiatives..
1. 5 new sales centers to further penetrate market
2. New sales organization to strengthen sales
force, & improve efficiency
3. New interactive pricing system to offer
flexibility to advertisers
4. Innovative sales packages to satisfy
advertisers’ needs
Proactive Initiatives …Proactive Initiatives …
Sales CentreRegional Centre
Shenyang
Beijing
Xian
Chengdu Wuhan Shanghai
Guangzhou
Shenzhen
New Sales Centers to Enhance Customer New Sales Centers to Enhance Customer SupportsSupports
QingdaoQingdao
• Continue to negotiate with authorities to reduce costs
• Replace with cost-effective quality panel materials
• Further improve cash collection
• Benchmark SG & A expenses
Continue to Improve Operating Continue to Improve Operating EfficiencyEfficiency
• Complementary to bus shelter advertising
• Increased 48% advertising space to 4,200M
• Built: 400 panels in Lian Hua supermarket stores
175 panels in Jie Qiang supermarket stores
• In negotiation with supermarket chains for additional space
2001 2002Capex (HK$’000) 22,438 8,336
2
Investing for Future GrowthInvesting for Future GrowthPoint-of-SalePoint-of-Sale
2003 Going Forward …2003 Going Forward …
Thank you!Thank you!
Clear Media