Dish TV India LimitedInvestor Presentation
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 Dish TV India Limited
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. Dish TV India Limited does
not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
Disclaimer
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INR 733 BnTV subscription revenue
INR 407 BnTV subscription revenue
66%TV penetration (of total HHs) 64%
C&S penetration (of TV HHS)
Indian M&E Industry Snapshot
2016
2020
239 284
306
141 181 202
113 152
173
2010 2016P 2020P
Total HHs TV HHs C&S HHs
Indian television market statistics (HHs mn.)
Source: TV industry size: FICCI-KPMG 2016, Indian television market statistics & broadcasting and distribution industry : MPA Report 2016
2016 2020
Total households
84% 85%
CAGR of ~ 15.8% (2016-2020P)
306 Mn284 Mn
Total TV households 202 Mn181 Mn
Distribution industry
DTH33%
Analog Cable38%
DigitalCable29%
Broadcasting industry
Multiple broadcastersproducing content in
15 languagesacross
7 genresbeaming
~800 channels
3
194
407
733
103
210
365
2010
2016P
2020P
TV industry size (INR bn.)
Subscription revenues Advertising revenue
Distribution Industry
4
Digital Addressable Systems - DAS
Source: MPA Report 2016
Phase IDelhi, Mumbai,
Calcutta & Chennai30-June-2012
Phase II38 notified cities
31-Mar-2013
Cable Land grab seeding at throw away prices
No addressability/KYC
Working backwards to fill critical gaps; packaging-billing-dunning
DTH Seeding ground for High-Definition
Potential subscribers for upselling – high value packs
Bulk of the potential DAS converts
Limited coverage by large MSOs due to dispersed population
Very high DTH recognition
DTH best suited considering terrain
Key target markets with more than 60% incremental potential for DTH
5
Phase IVRest of India31-Dec-2016
Phase III7,709 urban areas
31-Dec-2015
Stayed by multiple High Courts
No analog switch -off on sunset date
No spike in demand around deadline
Traction seen post deadline due to industry push
Ph
ase
III
Distribution Industry - Cable
Analog signal - limited carrying capacity, broadcasters jostling for PCS
Placement & Carriage fees - bulk of MSOs top-line
Massive under declaration – ignored to maintain MSOs ‘reach.’ Reason behind LCOs prosperity
No incentive to raise ARPUs
Digital signal - fatter pipe, larger carrying capacity
Placement fees mindset
B2B Net billing
100% postpaid. Element of bad debts?
Impairment of Set-Top-Box (STB)?
Rising content cost / content negotiation bottlenecks
3 Tiered Structure
MSOs(more than 115 )
Distributors (at least 1 in each
locality)
LCOs (more than
50,000)
Pre-DAS
Post-DAS
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Dish TV:Industry pioneer. Started operations in 2003. Part of the ‘Zee’ stable, largest producer and aggregator of Hindi programming in the worldTATA Sky:
Launched in 2006. JV between the TATA Group and News Corp
Sun Direct:Launched in 2007. JV between Sun Network and Astro, Malaysia
Reliance Digital:Part of Reliance Communication Ltd, a subsidiary of Reliance ADA group Airtel Digital:
Launched in 2008. Part of the telecom major Bharti Airtel.Videocon D2h:
Launched in 2009. Part of the white goods manufacturing Videocon group
Distribution Industry - DTH
2003
2006
2007
2008
2009
100% digital
Owns last mile subscribers
Subscription driven top-line
Fully prepaid subscription; no bad debts
DTH contributes ~ 60% of the broadcaster’s domestic subscription revenue; scope for rationalization vs. cable (non-discrimination)
Heavily taxed:• License fees – 8% AGR instead of 10%
GR (TRAI recommendations on issues related to new DTH licenses – July`14)
• Entertainment tax & Service tax - to be subsumed post rollout of GST
Tax compliant
2008
7
DTH Players in India
8
Many Firsts To Its Credit
9
2007
2009
2010
2012
2012
201320142015
2003
2015
First DTH in India
First to negotiate content on a fixed fee basis
First to launch Live TV for moving vehicles
First to achieve operational break-even in the Indian DTH industry
First to launch High Definition
First to offer unlimited recording
First to be FCF positive in the Indian DTH industry
First to launch online TV for DTH viewers – ‘Dish Online
First to launch a sub-brand targeting regional language markets– ‘Zing’
First to be PAT positive in the Indian DTH industry
First to launch Home Video System–DishFlix
92%
3%
3%
1%1%
Subscription revenues
Bandwidth income
Advertising income
Lease rent
Other income
Consolidated revenues
4%
28%
5%
15%
9%
5%
Employee benefit expenses
Programming and other cost
Transponder lease
Other operating costs
Selling and distribution expenses
Other expenses
Consolidated expenses
100% prepaid
Upfront subsidy on consumer premises equipment
(CPE)
Average ARPU of Rs. 165*
Churn at 0.7% p.m.
Implied average subscriber life of 12 years
Dish TV India Limited
Business Model
10
P&L structure – FY16
EBITDA margin - 33.5%
Note: * 1QFY17 ARPU is post netting-off of entertainment tax. ARPU however would have been Rs. 174 without netting of entertainment tax.
Key Metrics - Annual
Source: Company;
Notes : * ARPU & hardware subsidy taken as Q4 data for respective years. # Market share based on gross subscribers as on 30th June, 2016 as per market estimates
(R) Restated post netting off of collection charges
132 138 150 151 157 163 172 174
0
50
100
150
200
250
300
FY09 FY10 FY11 FY12 FY13 FY14 FY15(R) FY16
ARPU* (Rs.)
26%
21%
12%5% 20%
16%
Dish TV Tata Sky Sun Direct Big TV Airtel Digital Videocon D2h
Market share #
1,465
1,153
0
400
800
1200
1600
2000
2400
FY15 FY16
Hardware subsidy* (Rs.)
4.3 5.7
8.5 9.6
10.7 11.4 12.9
14.5
0
5
10
15
20
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Net subscriber base (mn.)
11
Key Metrics - Annual
Notes: * Including deferred tax assets of Rs. (4,360) mn.
(R) FY15 Subscription revenue is restated, netting off of collection charges
(1,233)
1,117 2,380
4,960 5,794 6,240
7,331
10,249
-4000
-2000
0
2000
4000
6000
8000
10000
12000
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
EBITDA (Rs. mn.)
47%
40%35%
31% 30% 31% 30% 28%
0%
10%
20%
30%
40%
50%
60%
FY09 FY10 FY11 FY12 FY13 FY14 FY15(R) FY16
5,897 8,353
11,927
16,639 19,228
22,681 24,499
28,275
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
FY09 FY10 FY11 FY12 FY13 FY14 FY15(R) FY16
Subscription revenue (Rs. mn.)
Programming and other costs as % of revenues
(4,807) (2,622)(1,920) (1,331)
(660) (1,576)
31
6,924
-5500
-3500
-1500
500
2500
4500
6500
8500
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Net profit/(loss) (Rs. mn.)
12
*
Key Metrics - Quarterly
0.389
0.508
0.402
0
0.1
0.2
0.3
0.4
0.5
0.6
1QFY16 4QFY16 1QFY17
Net subscriber additions (mn.)
173 174
165
150
160
170
180
1QFY16 4QFY16 1QFY17
ARPU (Rs.)
6,828 7,410 7,282
0
2000
4000
6000
8000
10000
1QFY16 4QFY16 1QFY17
Subscription revenue (Rs. mn.)
2,357 2,608 2,646 32.0% 32.6%
34.0%
20.0%21.0%22.0%23.0%24.0%25.0%26.0%27.0%28.0%29.0%30.0%31.0%32.0%33.0%34.0%35.0%36.0%37.0%38.0%39.0%40.0%
0
500
1000
1500
2000
2500
3000
1QFY16 4QFY16 1QFY17
EBITDA (Rs. mn.) & EBITDA margin
542
4,828
409
0
1500
3000
4500
6000
1QFY16 4QFY16 1QFY17
Net profit (Rs. mn.)
689
1,047
627
0
300
600
900
1200
1500
1QFY16 4QFY16 1QFY17
FCF (Rs. mn.)
13Notes: * 1QFY17 ARPU is derived post netting-off of entertainment tax from subscription revenue. ARPU of Rs. 174, on a like-to-like basis.
^ Subscription revenue is post netting off of entertainment tax., On a like-to-like basis, subscription revenues were Rs. 7,669 million.
# Net profit for 4QFY16 & 1QFY17 includes deferred tax assets of Rs. 4,360 mn. & Rs. 212 mn. respectively. Net profit of 4QFY16 & 1QFY17 is post current tax of Rs. 331 mn. & Rs. 435 mn. respectively.
*^
#
#
Strategy and Outlook
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DAS Phase III & IV
Zing Digital
15
Specific vernacular markets ‘Zing’
Set-Top-Boxmatlab DishTV
Dish99Packs starting @ just ₹ 99
MANDATORY subscription to a minimum 3 of the above mentioned add-on packs on subscribing to
Dish 99
Any of the Family add-on packs @ ₹ 25 each p.m.
Any of the Sports add-on packs @ ₹ 50 each p.m.
Any of the English add-on packs @ ₹75 each p.m.
Across phase III & IV markets ‘Dish 99’
Regional first; regional language channels , regional look and feelFTA channels + any 3 of Family / Sports / English
OR
OR
Easy transition for first time digital subscribers
Value for money offering; digital quality picture at the price of cable
Customized content in digital quality
Healthy margins
+
ARPU driver
Key differentiator vis-
à-vis cable
HD ADD-ONS
Game on HD @ Rs. 165
(Sports and Hindi entertainment)
Full on HD @ Rs. 220
(Complete dose of entertainment)
Dish TV Tata Sky Videocon D2h
Sports ChannelsNew Super Family +
Game on HDDhamal Mix + HD
Access FeeGold Maxi+ HD
Access Fee
Rs. 435 Rs. 425 Rs. 455
Star Sports HD1 √ X X
Star Sports HD2 √ √ √
Star Sports HD3 √ √ X
Star Sports HD4 X X X
Sony Six HD √ X X
Ten 1 HD √ X X
High Definition
Source: Market data as on 31st March 2016
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Hindi GEC
Hindi Movies & Music
Sports HD
Infotainment, Lifestyle & Kids
English Entertainment
English Movies
HD South
Box Cost Rationalization
HI-DEFINITION SACHETS STARTING AT Rs. 75 EACH PER MONTH
42, 62%22, 33%
4, 5%
DTH revenue IPTV revenue Cable TV revenue
225
1,117
1,570
168
800
1,105
31 62 120 27 255 345
- 200 400 600 800
1,000 1,200 1,400 1,600 1,800
2010 2016P 2020P
Pay TV Subs DTH Subs Cable Subs IPTV Subs
International Expansion - Sri Lanka
Sri Lanka
Population ~ 21 million
TV penetration at 80%
High digital penetration; 95% of total Pay TV subscribers
DTH maintains dominance with ~ 72% market share. Cable, distant second despite being 4 years older
ARPU ~ USD 6 pm
Zero subsidy on CPE sales
Source: MPA 2016
Pay TV industry revenue (USD mn.)
Pay TV subscribers (000)
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Financials
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Quarter ended
Quarter ended
Rs. million June – 2015 June – 2016
Operating revenues 7,367 7,786*
Expenditure 5,009 5,139
EBITDA 2,357 2,646
EBITDA margin (%) 32.0 34.0
Other income 262 119
Depreciation 1,598 1,613
Financial expenses 480 521
Profit / (Loss) before tax 542 631
Tax expense - 223
Net Profit / (Loss) for the period 542 409
1QFY 2016 vs. 1QFY 2017Operating revenue break-up
(Rs. mn)
1QFY - 2017
Summarized Consolidated P&L - Quarterly
19
5.7
2.6
12.2
(54.7)
0.9
8.6
Variance(1QFY16 vs.1QFY17) in %
7,282
51
254 124 75
Subscriptionrevenue
Lease rentals
Bandwidthcharges
Advertisementincome
Teleportservices, CPE &Other
Notes: * Quarter ended June 2016 operating revenues, on a like-to-like basis, were Rs. 8,172 million. A growth of 10.9% Y-o-Y.
# Quarter ended June 2016 subscription revenues, on a like-to-like basis, were Rs. 7,669 million.
#
Yearended
Yearended
Rs. million Mar. – 2015 Mar. – 2016
Operating revenues 26,879 30,599
Expenditure 19,548 20,350
EBITDA 7,331 10,249
EBITDA margin (%) 27.3 33.5
Other income 635 640
Depreciation 6,138 5,907
Financial expenses 1,754 2,087
Profit / (Loss) before tax 74 2,895
Tax expense 42 331
Deferred tax assets - (4,360)
Net Profit / (Loss) for the period 31 6,924
FY 2015 vs. FY 2016Operating revenue break-up
(Rs. mn)
FY - 2016
Summarized Consolidated P&L - Annual
20
13.8
4.1
39.8
0.8
(3.8)
19.0
Variance(FY15 vs. FY16) in %
28,275
406
1,055 499
365
Subscriptionrevenue
Lease rentals
Bandwidthcharges
Advertisementincome
Teleportservices, CPE &Other
Rs. million March`2016 (Audited)
EQUITY AND LIABILITIES
Shareholders’ funds
(a) Share capital 1,066
(b) Reserves and surplus 2,741
3,807
Non-current liabilities
(a) Long-term borrowings 11,535
(b) Other long term liabilities 635
(c) Long-term provisions 173
12,343
Current liabilities
(a) Short-term borrowings 28
(b) Trade payables 2,298
(c) Other current liabilities 8,766
(d) Short-term provisions 12,151
23,243Total 39,394
Consolidated Balance Sheet
21
Rs. million March`2016 (Audited)
ASSETS
Non-current assets
(a) Fixed assets 24,201
(b) Non-current investments 1,500
(c) Deferred tax assets 4,360
(d) Long-term loans and advances 1,692
(e) Other non-current assets 27
31,780
Current assets
(a) Current investments 820
(b) Inventories 126
(c) Trade receivables 725
(d) Cash and bank balances 3,392
(e) Short-term loans and advances 2,308
(f) Other current assets 243
7,613
Total 39,394
Consolidated Balance Sheet (continued)
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Annexure
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One of India's largest vertically integrated media and entertainment group, and also one of the leading producers, content aggregators and distributors of Indian programming globally
One of the largest producers and aggregators of Hindi programming in the world
Other Businesses
Essel Group
Media
Launched in 1992
One of India’s largest media and general TV entertainment network
Launched in 1992
Strong presence in national and regional news genre
Founded by Dr. Subhash Chandra
Group Market Cap ( Listed entities under Essel Group ): Rs 645.7 bn(1)
Source: Company websites, BSE, MPA Report 2016
Note: (1) Market capitalization as on 4th August, 2016
Market Cap: Rs 467.0 bn(1) Market Cap: Rs 11.0 bn(1)
Launched in 2005
Asia’s largest DTH service provider
Launched in 2006
One of India’s largest MSO, presence across 54 cities
Daily News & Analysis
Market Cap: Rs 104.1 bn(1) Market Cap: Rs 30.3 bn(1)
Launched in 2005
English broadsheet daily with presence across Mumbai, Bangalore, Pune, Ahmedabad, Jaipur & Indore
Content Distribution
Zee Entertainment Zee Media Corp. Ltd. Dish TV SITI Cable Network
Packaging (Essel Propack)
– Market Cap: Rs 33.3 bn(1)
Theme Parks: Essel World and Water Kingdom
Playwin: India’s first and largest online gaming company
Cornership: Animation studio
Cyquator Technologies: IT Infrastructure outsourcing
Infrastructure
Education
Precious Metals
Healthy Lifestyle & Wellness
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Launched in 1976, Essel Group is one of India’s largest business houses, with a dominant presence in Media
Thank You
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