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COMPANY OVERVIEW
JUNE 2012
DISCLAIMER
2
Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Zee Entertainment Enterprises Limited (ZEE) about its business and the industry and markets in which it operates.
These forward-looking statements include, without limitation, statements relating to revenues and earnings.
The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project” and similar expressions are also intended to identify forward looking statements.
These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. ZEEL does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
ZEE ENTERTAINMENT
Hindi Entertainment
Sports Channels
Regional Entertainment
English Entertainment
Music & Lifestyle
3 Largest Indian TV Network in the World
Leading Hindi Entertainment Network
Leading Sports Network
Leading Regional Entertainment Network
English Entertainment
Indian Music & Lifestyle Network
OUR GROWTH JOURNEY
1992
1995
1998
1999
• Flagship channel - Zee TV launched
• IPO of Zee Telefilms Limited
• Zee TV goes global
• Zee Network launched in UK
• Another major international foray
• Zee Network launched in USA
• Zee buys out News Corp‘s 50% stake in its television
broadcasting business
9
1995
1999
1992
2002
2007
2010
2011
• Distribution partnership with Turner, a Time Warner
subsidiary
• Demerger of Zee into four separate listed companies
• Zee acquires 50% stake in Ten Sports
• Zee acquires the regional entertainment networks
• Zee acquires another 45% stake in Ten Sports
• Zee, Star, Turner & Den form a distribution alliance –
Media Pro Enterprise India.
OUR GROWTH JOURNEY
10
• M&E industry size estimated at Rs 728 bn in 2011
• Television sector estimated at Rs 329 bn, constituting 45% of the industry
• Television industry recorded growth of 11% in 2011
INDIAN MEDIA SECTOR
Source: FICCI-KPMG Report 2012 Source: Worldwide Media and Marketing Forecasts, Group M, Summer 2011
11
0.33%
0.85% 0.97%
0.76% 0.86%
0.76%
India UK US China Japan World
Media Spend as % of GDP
71 82 88 103 116 130
140 158 169
194
214
250
15%
14%
7%
16%
11% 15%
2007 2008 2009 2010 2011 2012P
Television Industry Revenues (Rs bn)
Ad revenues Sub revenues TV growth rate (%)
INDIAN TV HH'S AT A GLANCE
Digital
26 Mn
C&S HHlds
116 Mn
TV Owning
Households
142 Mn
Total Households
231 Mn
Digital
42 Mn
C&S HHlds
126 Mn
TV Owning
Households
148 Mn
Total Households
231 Mn
Growth
+4 %
+9 %
+63 %
2011 2012
Source: TAM TV Universe Update 2012
All India Household figures in million
12
INDIA – RAPID DIGITISATION
Source: FICCI-KPMG Report 2012
13
• DTH industry saw a growth of over 30% in 2011
• Industry is adding almost a million subscribers each month
• Digitization Act passed by the Govt. likely to give a further push to the
digitization wave
69 68 68 59 50 32
12 4
4 5 6 19 32 49
67 75
16 28 37
46 53 64 78 86
6 7
8 8
8 8
8 8
0 0
0 0
1 2
2 3
2009 2010 2011 2012P 2013P 2014P 2015P 2016P
No. Of Subscriber (In Millions)
Analog Cable Digital Cable DTH DD Direct IPTV
14
PRODUCT OFFERING
HINDI ENTERTAINMENT
HINDI MOVIES
REGIONAL LANGUAGE ENTERTAINMENT (R-GEC)
15
ENGLISH ENTERTAINMENT & MOVIES
PRODUCT OFFERING
SPORTS
MUSIC & LIFESTYLE
16
HD
INTERNATIONAL ALTERNATE LIFESTYLE
Advertising, 52%
Subscription Domestic, 30%
Subscription International, 13%
Others, 4%
Advertising Subscription Domestic Subscription International Others
REVENUE PIE
17
FY2012 Revenues: Rs 30,406 million
BUSINESS
PERFORMANCE
HINDI ENTERTAINMENT CHANNELS
• Zee TV is the largest Hindi entertainment channel of the world
19
HINDI MOVIE CHANNELS
20
Source: TAM Media Research;
Period: April to March 2012
TG: CS 4+, HSM;
MAX ratings- non-cricket
Zee’s Cinema Channels - Zee Cinema, Zee Premier, Zee Action, Zee Classic
Relative Viewership Share
Zee's Cinema Channels, 30.8%
Star Gold, 29.2%
MAX, 23.5%
UTV, 12.3%
Filmy, 4.2%
STRONG MOVIE LIBRARY
21
Largest Hindi Movie Library in the World
22
SPORTS CHANNELS – KEY PROPERTIES
23
CRICKET, SOCCER, TENNIS & MORE
• Ten Sports, Ten Action, Ten Cricket, Ten Golf - The leading sports network of
the country
• Key properties in FY13:
• Cricket: India vs Sri Lanka, South Africa vs New Zealand, Pakistan vs Sri
Lanka, South Africa vs Pakistan, Zimbabwe vs South africa
• Others: WWE, UEFA Champions League, Europa League, US Open, ATP
events, Moto GP, Tour De France, US PGA, European PGA
24
ENGLISH & NICHE CHANNELS
• Tie-ups with leading studios across the world
25
ZEE MARATHI - HIGHLIGHTS
• Leading GEC in Maharashtra
• Library of over 9,000 hours & rights to over 400 movie titles
• Key properties: Eka Lagnachi Dusari Goshta, Uncha Maza Zoka, Fu Bai Fu
26
Source: TAM, Period: April to March 2012, CS 4+, All Maharashtra
Relative Viewership Share
ETV Marathi, 31.1%
Star Pravah, 30.6%
Zee Marathi, 27.7%
Mi Marathi, 4.6%
DD10 Sahyadri,
3.5%
Saam TV, 2.5%
Star Jalsha, 41.5%
Zee Bangla, 35.8%
ETV Bangla, 12.9%
Rupashi Bangla, 4.8%
Aakaash Bangla, 2.9%
Mahua Bangla, 2.1%
ZEE BANGLA - HIGHLIGHTS
• Leading GEC in West Bengal with dominant share in non-fiction programming
• Library of over 9,000 hours & rights to over 600 movie titles
• Key properties: Didi No. 1, Dadagiri Unlimited II, Rashi, Keya Patar Nouko
27
Source: TAM, Period: April to March 2012, CS 4+, All WB
Relative Viewership Share
Gemini TV, 39.4%
Maa Telugu, 22.8%
ETV Telugu, 19.7%
Zee Telugu, 18.1%
ZEE TELUGU - HIGHLIGHTS
• Leading GEC in Andhra Pradesh
• Library of over 7,000 hours & rights to over 575 movie titles
• Key properties: Chinna Kodalu, Muddubidda, Pasupu Kumkuma, Luckku
Kickku
28
Source: TAM, Period: April to March 2012, CS 4+, All AP
Relative Viewership Share
ZEE KANNADA - HIGHLIGHTS
• Zee Kannada - Steadily gaining market share
• Library of over 6,500 hours & rights to over 150 movie titles
• Key properties: Radha Kalayana, Devi, Chi Sou Savitri, Yariguntu Yarigilla
29
Source: TAM, Period: April to March 2012, CS 4+, All Karnataka
Relative Viewership Share
Udaya TV, 42.1%
Suvarna, 23.4%
Zee Kannada,
20.1%
ETV Kannada,
14.3%
• Presence across 5 continents
through over 22 beams
• Catering to both South Asian as well
as non South Asian communities
• Recent local language launches in
Russia, South East Asia, Saudi Arabia
• International subscription
contributed 13% of company top line
in FY2012
• Renewed focus on advertising as a
source of revenues
INTERNATIONAL OPERATIONS
30
STRENGTHENING PAY REVENUES
• Zee Turner is a 74:26 joint venture between ZEE and Turner currently distributing
ZEE channels, Zee News Channels and Turner Channels
• Star-Den is a 50:50 JV between Star India and DEN for distribution of Star
channels, Fox channels and third party channels like NDTV Channels
• Media Pro distributes all the channels which were earlier distributed by Zee-Turner
and Star Den
31
50% 50%
DIGITIZATION: POTENTIAL GAME CHANGER
32
Underpenetrated TV market Low ARPUs
Additional business models emerging Mandatory digitization hugely beneficial
India TV market expected to reach ~180mn HHs by
2016
Alternate distribution platforms to augment
revenue streams
Market TV ARPU
(USD) Movie Ticket (ATP in USD)
TV ARPU as a multiple of ATP
USA 56.9 7.9 7.2
UK 45.4 9.0 5.1
Malaysia 20.0 3.9 5.1
India 3.5 2.8 1.2
If pay TV ARPU reaches upto 3x of a multiplex ticket
price, it will reach a healthy 8-10 USD
Source: PwC Media Report (2011) + IDFC research report
Source: FICCI KPMG Report 2012
Markets Deadline for digitization
Delhi, Mumbai, Kolkata, Chennai 30th June, 2012
Cities with population of 1mn+ 31st March, 2013
All urban areas 30th September, 2014
Rest of the country 31st December, 2014
98% 97% 90% 78%
61%
China Germany Brazil Indonesia India
TV HH's penetration-2011(%)
FY2012 RESULTS
FINANCIAL RESULTS
34
*Note: Operating revenues for FY11 include a non-recurring one time fees of Rs 700 million for
premature termination of sporting events rights.
Operating Revenues* 30,088 30,406 1%
Expenditure 21,870 23,010 5%
Operating Profit (EBITDA) 8,219 7,396 -10%
EBITDA Margin 27.3% 24.3%
PBT before exceptional items 8,725 8,407 -4%
Less: Provision for Tax 2,671 2,500 -6%
PAT before exceptional items 6,054 5,907 -2%
Add: Exceptional Items 197 -
PAT after exceptional items 6,251 5907 -6%
Less: Minority Interest / Share
of Associates -118 16
(Rs million) FY11 FY12 Growth
BALANCE SHEET
35
• Debt free balance
sheet
• Strong net cash
position
• Return on Avg.
Capital Employed
of 22%
Equity & Liabilities
Shareholder's Funds 30,983 34,355
Non Curremt Liabilities 122 240
Current Liabilities
a) Trade Payables 4,717 5,844
b) Others 3,031 2,745
Total - Equity and Liabilities 38,853 43,184
Assets
Non Currrent Assets
a) Fixed Assets 2,042 2,506
b) Goodwill on Consolidation 6,064 6,894
c) LT Loans & Advances 1,057 857
d) Others 1,113 1,327
Currrent Assets
a) Current Investments 6,341 7,324
b) Inventories 5,396 7,339
c) Trade Receivables 8,704 8,690
d) Cash & Bank Balance 3,856 3,283
e) Others 4,162 4,930
Minority Interest 118 32
Total Assets 38,853 43,184
(Rs million)As on 31st
March, 2011
As on 31st
March, 2012
18,354
21,773 21,998
30,088 30,406
5,423 5,480 6,135 8,219 7,396
2008 2009 2010 2011 2012
Revenues and Operating Profit (Rs in million)
Revenue Operating profit (EBITDA)
CONSISTENT PROFITABLE GROWTH
36
Consistent dividend payout since 1994
Revenue CAGR: 13.5%
OUTLOOK AND STRATEGY
37
Revenues
• Digitization: Big
pay opportunity
• Advertising:
Continued growth
• New streams:
Digital media,
syndication
Content
• Innovation &
quality
• Regional
revolution
• Niche content
• Broadcast to
narrowcast
Our Strategy
Enhance our leadership position in the genres we compete
Continue to run our business as best in class
Deploy strong cash flows to improve returns to shareholders
Returns
• Consolidation
• Collaboration
• Disciplined
investments
38
Pioneer in several entertainment genres
World’s leading Indian TV network with 600 million households in over 168 countries
Consistent performer since inception; Shareholder value CAGR of >30% since listing
The global force in entertainment