Post on 16-Jul-2020
EROS INTERNATIONAL MEDIA LIMITED
CORPORATE PRESENTATIONCORPORATE PRESENTATION
NOVEMBER - DECEMBER 2010
Safe Harbour
Certain statements in this document may be forward‐looking statements. Such forward‐
looking statements are subject to certain risks and uncertainties like government actions,
local political or economic developments technological risks and many other factors thatlocal political or economic developments, technological risks, and many other factors that
could cause our actual results to differ materially from those contemplated by the relevant
forward‐looking statements. Eros International Media Ltd. (Eros International) will not be in
any way responsible for any action taken based on such statements and undertakes noany way responsible for any action taken based on such statements and undertakes no
obligation to publicly update these forward‐looking statements to reflect subsequent events
or circumstances.
2
Table of Contents
Section I: Company Overview
Section II: Financial SummarySection II: Financial Summary
Section III: Q2 & H1 FY2011 Operational & Financial HighlightsHighlights
Appendix: Additional Information
Section ICompany Overview
Overview of Business
Th b i f d d b M A j
History Eros India Group Business Model
• The business was founded by Mr. ArjanLulla in 1977
• Part of Eros Group, a global player within the Indian media and entertainment
t f i t l th l t 30
SourcingContent
NewInitiatives
End‐to‐EndDistribution
sector for approximately the last 30 years
• Eros Plc (AIM listed) is one of the promoters of the company
Content Library:Hindi, Tamil
Other RegionalFilms
India
Theatrical
InternationalSales
(Licensingthrough theRelationship
EyeQube Studios (Production
Planning and VFX)
• Exclusively sources all Indian film content for the Eros Group
• Exploits and distributes the content through multiple formats
Acquisition/Output Deals
Digital New
Satellite, Terrestrial TV
& Cable
RelationshipAgreement to
Eros International
Group)
EMI tie‐up
Universal JVA
• Owns valuable library of over 1,000 films which include Hindi, Tamil and other regional language films
• Business model built around contentCo‐production/ Production
Digital New Media / Home
Entertainment
Universal JVA
Business model built around content and distribution
Music
5
Largest Indian Film Studio
Biggest and Best Bollywood Content Library Built through
Co‐production and Content AcquisitionCo production and Content Acquisition
Home TV S di iNew
Theatrical ReleaseHome
EntertainmentTV Syndication
New Media
• Single and multiplex
• DVD, Blu‐Ray • Video on Demand (VOD)
• Licensing deals with TV stations
• Mobile (ringtone, wallpaper)
Core Business
screens in India and internationally
• Subscription Video on Demand (SVOD)
• Music
- Terrestrial- Satellite- Cable
• Internet (YouTube)• Internet Portal TV (IPTV)
O t t diR f
EyeQube Music Publishing
Ancillary Business
• Outstanding Bollywood music library
• Music publishing• Access to EMI world library
• Revenue from outsourcing contracts of VFX (Visual Fixation), special effects, animation etc
library
6
Growing Addressable Market …..
Why India ‐ Entertainment & Media
• Over 1,000 movies released annually (largest in the world)
• 3.2 BN movie tickets sold annually (largest in the world)world)
• 80 Million pay‐tv homes (3rd largest in the world)
• 119 Million TV households
• Over 500 Million mobile subscribers (2nd largest in h ld)the world)
O t id f I di th C ’
Creating a global platform for Indian Films
• Outside of India, the Company’s consumers comprise other expatriate communities of South Asians
• Eros International dubs in over 27 languages to non South Asian territories such as: Germany PolandSouth Asian territories such as: Germany, Poland, Indonesia and Malaysia where the films are dubbed in their local language
7
Growing Addressable Market…
Population Distribution Across Age‐Groups Share of Wallet to Discretionary ItemsPopulation in % %
100%100%
5
6
14
1212
33
3
89
11
1117
1920
3
69
9 13
2432 65
1 74
50%
75%
100%
27 27 27 27
25 24 25 27
15 16 18 19
50%
75%
100%
5642 34
25
55103
0%
25%
1995 2005 2015F 2025FF d d B A l H i d Utiliti
34 33 30
27 27
270%
25%
2000 2005 2010 2015
Media and Entertainment Sector Poised for Growth
Source : FICCI‐KPMG Report
Food and Beverages Apparel Housing and UtilitiesHousehold Products Personal Products and Services TransportationCommunication Education and Recreation Healthcare
<15 Years 15–30 Years 30–50 Years >50 Years
• Indian media industry has been one of the fast growing sectors in the economy, on the back of:
‐ Young India’s propensity to spend on discretionary entertainment
‐ Rising per capita income levels ($442 in FY2003 to $747 in FY2008; CAGR of 7 2%)‐ Rising per capita income levels ($442 in FY2003 to $747 in FY2008; CAGR of 7.2%)
• The growing Media and Entertainment sector and improving technologies like Digital screens, VOD and Blu Ray output formats augur well for Eros InternationalSource : FICCI‐KPMG Report
8
…Leading To Strong Growth Drivers
25
Size of Indian M & E Industry$ Bn
3 0$ Bn
Content Library &1
Size of Indian Film Industry
10.0
13.111.8
13.915.9
17.8
20.4
12.6
10
15
20
25
1.8
2.42.1 2.1
2.22.4
2.7
1.9
1.5
2.0
2.5
3.0 Content Library & Distribution
Indian Box Office2
0
5
10
2006 2007 2008 2009E 2010P 2011P 2012P 2013P
0.0
0.5
1.0
2006 2007 2008 2009E 2010P 2011P 2012P 2013P
Television Syndication
Di it l N M di
3
4
1.81 7
1.82.0
2.0
2.5
1 0001,120
1,2541,4051,500
Digital New Media
Regional Opportunity5
Domestic Theatrical Market Number of Multiplex Screens$ Bn #
1.41.6 1.6
1.7
1.5
0.5
1.0
1.5
410520
747
1,000
850
500
1,000
Eyeqube VFX Studio
Eros Plc Relationship
6
7
0.0
2006 2007 2008 2009E 2010P 2011P 2012P 2013P
0
2006 2007 2008E 2009P 2010P 2011P 2012P 2013P
Eros Plc Relationship
Source : FICCI‐KPMG Report (2010)Note1. INR/USD rates are as on Dec 31st of each year2 F f ll f d d 46 8 INR/USD2. Fx rate for all future dates assumed at 46.8 INR/USD
9
Valuable & Expanding Content Library
Content Library: Key Competitive Advantage
• The film library includes:
‐ Rights to over 1000 films including Hindi, Tamil and other regional language films
• Diversified, balanced product mix of both co‐productions and acquisitions
B dli d l fl t tf li t t• Bundling model reflects portfolio strategy‐allows licensing old catalogue films with new and licensing blockbusters with less successful films
• Ability to exploit old content on new emerging platforms
• A large library provides stable, recurring cash flows and de‐risks the business modelcas o s a d de s s e bus ess ode
10
End‐to‐End Distribution
India Theatrical International Rights
• Relatively high percentage of a film’s domestic theatrical revenues come from the first week of release
• Distribution strategy
• International distribution rights transferred to Eros International Group
• Eros International Group offers advantage of experience and advantage in Indian film• Distribution strategy
‐ Sufficient prints released
‐ Increasing focus on digital prints for reach and cost advantages
experience and advantage in Indian film content distribution globally
• Sale of rights at minimum of
‐ 30% cost of film + 30% mark‐up
‐ Established relationships with all multiplex chains and single screen cinemas
• Collection of Advances and Guarantees
30% cost of film + 30% mark up
‐ Provides certainty to cash flows
• Eros International Group markets the Indian film content internationally across all formats
• Offices across key markets enable greater control over distribution
• Increased margins through self‐distribution
• Distribution network allows tailoring of• Distribution network allows tailoring of marketing arrangements for each local market
11
End‐to‐End Distribution
TV / Satellite Rights
• Syndication and licensing
Digital New Media
• Home video release after 2007 2012 ’07‐’12 CAGR
T t l TV h h ld 115 132 3%
Indian TV Market Size
of content to domestic Satellite Channels
• Focus on pre‐selling and portfolio bundled deals
4 ‐ 12 weeks of theatrical release
• Bundling model whereby it realizes better value for
Total TV households 115m 132m 3%Pay Cable households 70m 90m 5%Pay DTH households 3.5m 25m 48%
with broadcasters
Music Rights
S l ti l l it
films
• New distribution formats like Blu‐Ray / HD
• License airborne rights to
Subscription Revenues $3.4B $9.5B 23%Advertising Revenues $2B $5B 20%
• Selectively exploit or license music rights of films
• Digital exploitation th h
License airborne rights to certain airlines for in‐flight viewing
• Distribute content such as mobile ring tones,226
260250
300
Domestic Music Market ($m)
Size
through telecommunication platforms
• Licensing songs to radio d t l i i h l
as mobile ring tones, wallpapers and downloads
• DTH licensing
IPTV li i
164179
198
100
150
200
and television channels
• Collection of royalties from public performance of these songs
• IPTV licensing
• Cable licensing0
50
2009 2010E 2011E 2012E 2013E
Source: 2010 FICCI – KPMG report Note: Converted to US$ at year average exchange rates for historical
years and an exchange of US$/INR rate of 44.5450 for forecasts
12
Portfolio Approach to Film Distribution
Portfolio Approach Strategy
• Combine films across budget categories into a single portfolio and market to distribution platforms
olio
A
Bundled• Combine new releases and Eros
India Library content into a single portfolio and market to distribution platforms
Portfo B
C
BundledPortfolio
• Portfolio approach to film distribution
‐ Enables monetization of content h h di ifi d di ib i
NewR l
C
through diversified distribution platforms
‐ Reduces reliance on box‐office success of individual films
Releases
Library
Portfolio Bundled
Portfolio
‐ Enables scalability and helps diversify the revenue mix
13
Diversification into Tamil and Regional Language Films
Tamil Films : Ayngaran
• Acquired 51% stake with • Presence in other select regional
AyngaranOther Regional Language Films
Acquired 51% stake with effect from 2008
• Investment intended to accelerate Ayngaran’s
Presence in other select regionallanguage film markets
‐ Marathi
‐ Punjabi
Domestic SalesInternational
Sales
y ggrowth and consolidation of Tamil film market
• Ayngaran is an established
• Distribution of “Mee Shivaji RajeBhosle Boltoy”.
DomesticTheatrical
TV Syndication
DomesticTheatrical
TV Syndication
player in Tamil content and distribution business
• Catalogue of over 600 films Hindi23%Bhojpuri
Others11%
Home Entertainment
Home Entertainment
Market Share: No. of Releases
including “Alaipayuthey”, “KandukondainKandukondain”
Tamil13%
Malayalam8%
Marathi8%
jp6%
AyngaranInternational
(India)
AyngaranInternational
(UK &
Telugu21%
Kannada10%
(India)Mauritius)
Source : FICCI‐KPMG Report (2009)
14
New Initiatives
• Visual effects facility studio at Mumbai set‐up in2007
Eye‐Qube: VFX InitiativeDomestic Animation & VFX Market ($m)
• Creative Director is Charles Darby, VFX expert.
• Key work of EyeQube Studios include Drona,Aladin, Veer & Madras Patnam & MajorHollywood studio work.629
741
876
800
1,000
Other Initiatives
Universal
E I t ti l d U i l M i I di
413516
200
400
600
• Eros International and Universal Music Indiaentered into a 50:50 JV dated 18 Nov 2008
• Artist management company—identifying,developing and promoting TV/movie friendlymusic talent
02009 2010E 2011E 2012E 2013E
Source: 2010 FICCI KPMG report music talent
• Providing music and entertainment consultingand marketing services
EMI
Source: 2010 FICCI – KPMG report Note: Converted to US$ at year average exchange rates for historical years and an exchange of
US$/INR rate of 44.5450 for forecasts
• Eros Music UK has a strategic tie‐up with EMI
• EMI has assigned rights for administering andcollecting the music publishing royalties for EMI‘sdi l i bli hi iIndia catalogues to Eros Music Publishing Private
Limited
15
Leadership: Board of Directors
Mr. Naresh Chandra, Non‐executive Chairman and Independent Director
• A former civil servant, an IAS officer since 1956. In 1990 he became Cabinet Secretary, in 1992 he was appointed Senior Advisor to the Prime Minister of India
Mr. Kishore Lulla, Executive Director
• He has over 20 years of experience in the media and film industry. A member of the BAFTA and Young Presidents’ Organisation and also a board member of the University of California Los Angeles (“UCLA”) Has been honoured at the Asian
and served a Ambassador of India to the United States of America in 1996‐2001. He is also director of various companies including Vedanta Plc
Dr. Shankar Nath Acharya, Non‐executive and Independent Director
University of California, Los Angeles ( UCLA ). Has been honoured at the Asian Business Awards 2007 and the Indian Film Academy Awards 2007 for his contribution in taking Indian cinema global
Mr. Vijay Ahuja, Additional Executive Director
• He worked in the World Bank from 1971 ‐1982. In India, he served as economic advisor to the Union Finance Ministry from 1985–90. From 1993 to 2000 he was chief economic advisor to the Government of India. He also served as member, SEBI during 1997–2000
• He co‐founded the Eros International Group's UK business in 1988 and has since played an important role in implementing the key international strategies of the Eros International Group, helping expand the business to its present scale by making a significant contribution to developing the South East Asian markets for Eros, such as Singapore, Malaysia, Indonesia and Hong Kong.
Mr. Dhirendra Swarup, Additional Non‐executive Director
• He was a member of the Board of the SEBI, and a member of the Permanent High‐level Committee on Financial Markets between July 2005 and December 2009. A former civil servant, he retired as Secretary, Ministry of Finance, Government of
Mr. Sunil Lulla, Executive Vice‐Chairman
• He has over 20 years of experience in the media industry. He has been instrumental in developing the Eros India Group. Has valuable relationships with the talent within the Indian film industry and has been instrumental in our Company’sf , y, y f , f
India in 2005, and has approximately 42 years' experience in finance, public policy, public investments, project appraisal and programmes of the Government of India
within the Indian film industry and has been instrumental in our Company s expansion into India distribution as well as home entertainment and music
Ms. Jyoti Deshpande, Executive Director
• She has over 16 years of experience in the media and entertainment industry. HasShe has over 16 years of experience in the media and entertainment industry. Has previously worked in advertising with J. Walter Thompson, India before moving to the UK in 1997 where she was a senior consultant with MindShare. She has been with the Eros International Group since 2001 and was instrumental in helping Eros plc list on the AIM
16
Leadership: Key Management Personnel
Mr. Kamal Jain, Group Chief Financial Officer‐India
• He is a chartered accountant with 17 years of professional experience in varied industries such as media and entertainment cement chemical shipping and SAP
Mr. Ram Mirchandani, Chief Creative Officer
• He has completed his bachelors degree in science from Jai Hind College, Mumbai. He has approximately 21 years of experience in the industry. Prior to joining Eros, he was the chief creative officer of UTV Rampage Motion Pictures (UMP plc)industries such as media and entertainment, cement, chemical, shipping and SAP
consulting. Prior to joining Eros, he was working with DNA, an Essel and Bhaskargroup joint venture. He has earlier worked with Percept Group and the Swiss multinational Ciba Specialty.
he was the chief creative officer of UTV Rampage Motion Pictures (UMP plc). Prior to that, he has been business head at a JV of Modi Entertainment and BVTI (a Walt Disney company) and several positions within the Modi Group including development, co‐production and production of television shows for Doordarshan, Zee TV, Sony, Star TV, Walt Disney and Hallmark.
Mr. Rajesh Bahl, Chief Digital officer
• He completed his bachelors degree in commerce from Mumbai University, followed by a post‐graduate diploma in business administration in marketing from Somaiya Institute of Management Studies and Research, Mumbai, and has
Mr. Kumar Ahuja, Senior Vice President (Business Development)
• He has approximately 10 years of work experience. He represents Eros in all i t ti l fil f ti l d l th ’ b if y f g , ,
12 years of work experience. Prior to joining Eros, he has worked with Star India Limited, Universal Music & Sony Music Entertainment Limited.
international film festivals and also manages the company’s new business development initiatives .
Mr. Nandu Ram Ahuja, Senior Vice President (India Theatrical)
• He has approximately 29 years of work experience including prior work experience with Adlabs Films Limited and Balaji Motion Pictures Limited.
17
Major Hindi Releases FY2011‐12
Film Name Star Cast Director Tentative Release
No Problem Anil Kapoor, Sanjay Dutt, Akshaye Khanna Aneez Baazmee FY 2011
Toonpur Ka Superhero Ajay Devgan, Kajol Kireet Khurana FY 2011
Game Abhishek Bachchan, Kangana Ranaut Abhinay Deo FY 2011
Always Kabhi Kabhi Zoa Morani Roshan Abbas FY 2011
Mausam Shahid Kapoor, Sonam Kapoor Pankaj Kapur FY 2012
Chalo Dilli Lara Dutta , Vinay Pathak Prashant Shah FY 2012
RA.One Shah Rukh Khan, Kareena Kapoor, Arjun Rampal Anubhav Sinha FY 2012
Zindagi Na Milegi Hrithik Roshan, Katrina Kaif, Farhaan Akhtar, Abhay Deol Zoya Akhtar FY 2012
Dobara
18
Major Hindi Releases FY2012‐13
Film Name Star Cast Director Tentative Release
Agent Vinod Saif Ali Khan, Kareena Kapoor Sriram Raghavan FY 2012
Desi Boyz Akshay Kumar, John Abraham, Deepika Padukone,
Chitrangada Singh
Rohit Dhavan FY 2012
Rockstar Ranbir Kapoor Imtiaz Ali FY 2012
Bangkok Blues Irfan Khan , Deepal Shaw, Ranbir Shorey ‐ FY 2012
Untitled (2) (Boney ‐ ‐ FY 2012/2013
Kapoor Productions)
Untitled (Prabhu Deva) ‐ ‐ FY 2012
Untitled(Illuminati Films) Saif Ali Khan FY 2012
Untitled Arjun Rampal Vicki Singh FY 2012
Untitled (Chasing ‐ ‐ FY 2012
Ganesha Films)
19
Upcoming Regional Releases
Film Name Star Cast Director Tentative Release Kalavadiya Pozhudugal Prabhu Deva Thangar Bachan FY 2011
Tamil Film Slate
y g g
Nandalala Mysskin Mysskin FY 2011
Murattu Kaalai Sundar C, Sneha Selvabharathy FY 2011
Uthama Puthiran Dhanush Genelia D'Souza, K. Bhagyaraj Mithran Jawahar FY 2011
Krishnaleelai Jeevan, Meghana Selvan FY 2011
Engeum Kadhal Jayam Ravi and Hansika Motwani Prabhu Deva FY 2011
Yutham Sei Seran Myskin FY 2012
A A hi M R j i h FY 2012Ayyanar Aathi, Meera Rajamithran FY 2012
Poda Podi Simbu, Varalakshmi Vignesh Shiva FY 2012
Avan Ivan Vishal/Arya Bala FY 2012
Film Name Star Cast Director Tentative Release
Id Chi K l S hi A h k S f M h h K th i S hi FY 2011
Marathi Film Slate
Idea Chi Kalpana Sachin, Ashok Saraf, Mahesh Kothari Sachin FY 2011
Punha Dhakka Shivaji Satam Mahesh Manjrekar, Makrand Anaspure
FY 2012
20
Outlook and Chairman’s Message
Outlook Chairman’s Message
“We are well positioned to achieve substantial incremental growth over the
• Unparalleled new slate of films substantially funded• IPO proceeds to lock further slate of 2013 and beyond• Slate visibility converted into revenue visibility with
substantial pre sales in music & television licensing substantial incremental growth over the next few years. Our ability to lock a
strong film slate, our valuable 1,000 film library generating high margin annuity
income, our unparalleled global
substantial pre‐sales in music & television licensing• Internal Cash generation and IPO proceeds together
give strongest balance sheet in the business• Indian IPO has given Brand Eros an even bigger boost
ithi t l t d t d ll i I di distribution network and our pioneering steps in the digital domain have undoubtedly given Eros a huge
competitive advantage. Having emerged a clear market leader in Indian filmed
within talent and trade as well as consumers in India• Hindi plus regional portfolio strategy combined with
catalogue provide unique business model• Global distribution network getting stronger with
l a clear market leader in Indian filmed entertainment, with an even stronger balance sheet and a business based on strong fundamentals, we expect to scale
further and grow from strength to
strong slate• Focused on pure play of content and distribution
f g f gstrength.”
‐Kishore LullaExecutive Chairman
21
Section IIFinancial Summary
Key Financials
7500INR MM
1500 24INR MM % Margin
Total Income EBIT
2 248
4,902
6,5556,278
5000
7500
CAGR FY06‐FY10: 59%1,213
688
1,100
710
14 18 181000
1500
16
24
1,036
2,248
0
2500
FY06 FY07 FY08 FY09 FY10
76221
7
0
500
FY06 FY07 FY08 FY09 FY10
0
8
3 1973 2024000 80 11.52
10 27
1000
12
14
EBITDA(1) PAT & EPS (in Rs.)INR MM % Margin INR MM
962
2,8053,1973,202
13
43 5751 49
2000
3000
40
60
828748
10.27
5.76
400
600
800
4
6
8
10
12
13213
0
1000
FY06 FY07 FY08 FY09 FY10
0
2019 135
4271.860.27
0
200
FY06 FY07 FY08 FY09 FY10
0
2
4
NoteNote1. Amortization includes amortization of film rights
23
Profit and Loss Account Summary
Summary Profit and Loss Account
Rs. MM (unless otherwise stated)
Particulars FY 2008 FY 2009 FY 2010
Revenues 4,902 6,278 6,555
Operating Expenses 1,563 2,169 2,528 EBITDA
Employee and Admin Costs 534 907 830
EBITDA 2,805 3,202 3,197
Amortisation and Depreciation 2,117 2,102 1,984
Margin – 49%
EBIT 688 1,100 1,213
Finance Cost 28 61 89
PBT 660 1,039 1,122
T 233 291 295Taxes 233 291 295
PAT (1) 427 748 828
EPS (basic, in Rs.) 5.76 10.27 11.52
ROE 51% 46% 35%
ROCE (2) 25% 27% 27%
Note:1. Includes minority interest2. ROCE = (EBIT – Current Tax – Fringe Benefits Tax) / (Networth + Total Loan Funds) 3. Dividends = nil
24
Balance Sheet Summary
Summary Balance Sheet
Rs. MM
Particulars FY 2008 FY 2009 FY 2010
Assets
Net Fixed Assets 1,419 2,195 2,723
Investments 60 80 80
Current Assets, Loans & Advances 6,571 8,933 7,250
Total Assets 8,050 11,208 10,053Total Assets 8,050 11,208 10,053
Liabilities
Shareholders Funds (1) 814 1,580 2,375
Minority Interest 22 40 42
Loan Funds 1,239 2,118 2,175
Current Liabilities & Provisions 5,887 7,189 4,962
Others 88 281 499
Total Liabilities 8,050 11,208 10,053
Note:1. Shareholders funds = Book value = Networth
25
Cash Flows Summary
Summary Cash Flows
Rs. MM
Particulars FY 2008 FY 2009 FY 2010
Cash Flow from Operating Activities
Net Profit Before Tax 660 1,039 1,122
Adjustments 2,144 2,170 2,107
Operating Profit Before Working Capital Changes 2,804 3,210 3,229
Working Capital Changes 579 (1,844) 218
Cash Generated from Operations 3,383 1,366 3,447
Income Taxes (207) (138) (142)
Net Cash Generated from Operating Activities 3,176 1,227 3,305
Cash Flow from Investing Activities
Purchase of Film Rights (2,736) (2,702) (2,554)
Others (134) (103) (10)
Net Cash Used in Investing Activities (2,870) (2,805) (2,564)
Cash Flow from Financing Activities 523 801 (25)
Net Increase in Cash and Cash Equivalents 829 (777) 716
Cash and Cash Equivalents at Beginning of Year 331 1,182 361
Effect of Exchange Rate on Consolidation of Foreign Subsidiaries 22 (44) (5)
Cash and Cash Equivalents at the End of the Year 1,182 361 1,072
26
Section IIIQ2 & H1 FY2011 Operational & Financial Highlights
Operational Highlights
• Eros International successfully completed its IPO in October 2010– Issue Size: Rs. 3,500 million; Issue subscribed over 29 times
– Priced at Rs. 175 per share of face value Rs. 10p
– Shares listed on BSE and NSE on October 06, 2010
– Funds raised by the Company to be utilized primarily for acquiring and co‐producing Indian films includingHindi language films as well as Tamil and other regional language films
• 39 films were released in H1 FY2011 – the highest by any player in the sector
• During the quarter the Company signed a multi‐film content licensing deal worth Rs. 640 million forbroadcast on Zee Entertainment Network
– This deal involves exclusive broadcasting of a select number of Eros International’s films across ZeeEntertainment’s television network
– To date, the Company has signed Rs. 2,400 million worth television and music syndication deals that will start, p y g , yaugmenting revenues and deliver earnings that have attractive margins in FY2011 and FY2012. This alsoincludes deal with Star Network for over Rs. 1,000 million under which the Company has already deliveredfilms
– These and other deals adopt the Company’s portfolio strategy as they include a selection of catalogue filmsfrom Eros International's strong content library of over 1,000 titles, including recent blockbuster releases andyet to be released highly anticipated titles from Eros International‘s repertoire
28
Operational Highlights
• H1 FY2011 witnessed robust box office collections for several of Eros International’s Hindi and regional filmssuch as, Housefull, Anjaana Anjaani, Paathshaala and overseas release of Dabangg & Endhiran (Tamil &Telugu versions), Ravanan, Singham, Sura (in Tamil) and Haapus in Marathi
• The Company has a strong slate of movies for H2 FY2011 comprising Golmaal 3, No Problem, Game,Toonpur ka Supehero which ensure substantial revenue visibility in the coming quarters
• EyeQube, Eros International’s VFX studio, bagged prestigious Hollywood top end projects. It is also workingon select high end shots of RA.One and Desi Boyz, scheduled for a FY2012 release
• The Company has taken several pioneering initiatives under the new media segment, which includes tie‐upswith mobile operators such as Airtel, Internet monetization through YouTube, DTH platforms and cablelicensing. At the heart of this strategy is the Eros Library and the strong slate of new films
29
Financial Overview
Particulars (in Rs. million)
Q2 FY2011 Q2 FY2010 % Change H1 FY2011 H1 FY2010 % Change
Total Income 1,879.0 2,717.9 (30.9) 3,149.1 3,373.6 (6.7)
EBIT 562.7 583.1 (3.5) 809.2 672.0 20.4
EBIT Margins (%) 30 0 21 5 ‐ 25 7 19 9 ‐EBIT Margins (%) 30.0 21.5 ‐ 25.7 19.9 ‐
Profit Before Tax 528.4 569.2 (7.2) 758.5 628.2 20.7
PAT (after minority interest) 453.3 401.6 12.9 608.4 470.0 29.5PAT (after minority interest) 453.3 401.6 12.9 608.4 470.0 29.5
PAT Margins (%) 24.1 14.8 ‐ 19.3 13.9 ‐
Basic EPS (Rs.) 6.35 5.62 12.9 8.52 6.58 29.5
Note:•All figures are consolidated unless stated otherwise
30
Balance Sheet Snapshot
Particulars (in Rs. million)
30 September 2010 30 September 2009
Liabilities
Capital 714.1 51.0
Reserves & Surplus 2 358 6 1 979 3Reserves & Surplus 2,358.6 1,979.3
Loan 2,242.8 2,104.0
Total Liabilities 5,958.7 4,480.5
Assets
Fixed Assets 3,392.2 2,331.0
Investments 80.0 80.0
Net current assets 2,486.5 2,069.5
Total Assets 5,958.7 4,480.5
Note:•All figures are consolidated unless stated otherwise
31
Financial Discussion
• Operating profit during the quarter was Rs.562.7 million, with improved margins at 30%. Operating profitincreased significantly during the quarter on account of margin expansion which is broadly driven by:
ll b d l– Satellite broadcasting licensing
– Bundling new releases with films from existing catalogue
– Music and New Media Licensing
– Lower direct costs due to brand tie‐ups and increased use of digital distribution.
• The Company reported PAT of Rs. 453.3 million in Q2 FY2011, with margins at 24.1%. For H1 FY2011, PAT wasRs. 608.4 million as against Rs. 470.0 million in H2 FY2010
• The Cash and Bank position improved by 100% from Rs. 541.0 million as on 30 September 2009 to Rs. 1,095.7million as on 30 September 2010
• Net Debt lower at Rs. 1,147 million as on 30 September 2010 as compared to Rs. 1,563 million as on 30September 2009
f• Debt Equity ratio improved to 0.72 times as on 30 September 2010 from 1.04 times as on 30 September 2009
32
Appendix –Additional Information
33
Summary of Relationship Agreement
• Visibility on International Sales with Eros International Platform
– Eros International will unconditionally acquire, exclusive international distribution rights for Indian films (filmsproduced co‐produced or acquired within the territory of India Nepal and Bhutan excluding Tamil language films)produced, co produced or acquired within the territory of India, Nepal and Bhutan excluding Tamil language films)for which Eros India holds distribution rights
• Guaranteed Fee
– Minimum guarantee fee to be paid = 30% of the production/acquisition cost to Eros India + markup of 30%
• Retaining All Domestic Rights
– Indian film rights and India television rights within India shall be retained by Eros India
• Profit‐sharing agreement
– Gross proceeds (net of minimum guarantee fee, commission of 20% of gross proceeds and distribution expenses)received by Eros International will be shared between Eros International and Eros India in a 70:30 ratio
• Non‐Compete
E I t ti l ill t d d i fil i ht i I di fil d T il l fil f– Eros International will not produce, co‐produce or acquire film rights in any Indian film and Tamil language film forexploitation within India, Nepal and Bhutan without first providing Eros India the right to independently participatein or acquire such a business opportunity
• Tenure
– The Relationship Agreement may be reviewed on an annual basis, and is valid for an initial period of five years,automatically renewable for successive two year terms
34
Organizational Structure
Eros International plc (Isle of Man)
99.98%
100%
100%
100%100%100%
69.60%
Acacia Investments Holdings LimitedEros International Pte LimitedEros Network Limited Eros Worldwide FZ Llc.
99%
99.99% 99.65%100%100%
100%30.39%
Eros Digital Private Limited
Eros Music Publishing Pvt. Limited
Eyeqube Studios Private Limited Eros International Films Private Limited
Eros International Media Limited
Eros Distribution (Canada) Limited
Eros International USA Inc. Eros Pacific Limited FIJI
Eros International Limited
64%99.99%
100%100%
100%100% Big Screen Entertainment Private
Limited
Limited
Eros Animation Private Limited
Copsale LimitedEros Music GMBH
Eros Australia Pty.Limited Eros MusicPublishing Limited (UK)
51%
100%100%
Ayngaran International (UK) limited
Ayngaran International (Mauritius) Limited
Ayngaran International Ltd.,Isle of Man
100%
51%
Ayngaran International Media Private Limited
Ayngaran Anak Media Private Limited
35
Shareholding Pattern
Particulars 01 October 2010
Promoter and Promoter Group 78.12%Promoter and Promoter Group 78.12%
Indian 23.75%
Foreign 54.37%
Public 21.88%
Institutions 13.13%
• Foreign Institutional Investors 8.39%
• Mutual Funds / UTI 1.77%
• Financial Institutions / Banks, Insurance and others
2.97%
Non Institutions 8.75%
• Bodies Corporate 1.57%
• Individuals and others 7.19% ‐
Total 91,407,000
36
Thank You
For further details please contact:
Kamal JainEros International Media LtdTel: +91 22 40538500
Anoop Poojari / Urvashi BhutaniCitigate Dewe RogersonTel: +91 22 6645 1211/ 1219
For further details please contact:
Tel: +91 22 40538500Fax: +91 22 40538540E mail: kamal.jain@erosintl.com
Tel: +91 22 6645 1211/ 1219Fax: +91 22 6645 1200E mail: anoop@cdr‐india.com
urvashi@cdr‐india.com