Dish TV India Limited...(Complete dose of entertainment) Dish TV Tata Sky Videocon D2h Sports...
Transcript of Dish TV India Limited...(Complete dose of entertainment) Dish TV Tata Sky Videocon D2h Sports...
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
revenues
INR 407 BnTV subscription
revenues
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
DTH
33%
Analog
Cable
38%Digital
Cable
29%
Broadcasting industry
Multiple broadcasters
producing content in
15 languages
across
7 genres
beaming
~880 channels
3
194
407
733
103
210
365
2010
2016P
2020P
TV industry size (INR bn.)
Subscription revenues Advertising revenues
Distribution Industry
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Digital Addressable Systems - DAS
Source: MPA Report 2016
Phase I
Delhi, Mumbai,
Calcutta & Chennai
30-June-2012
Phase II
38 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
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Phase IV
Rest of India
31-Dec-2016
Phase III
7,709 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 I
II
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, MalaysiaReliance 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
revenues; 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
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DTH Players in India
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Many Firsts To Its Credit
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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 costs
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. 162*
Churn at 0.8% p.m.
Implied average subscriber life of 10 years
Dish TV India Limited
Business Model
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P&L structure – FY16
EBITDA margin - 33.5%
Note: * 2Q FY17 ARPU post netting off 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 September, 2016 as per market estimates
(R) Restated post netting off 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.)
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Key Metrics - Annual
Notes: * Including deferred tax assets of Rs. (4,360) mn.
(R) FY15 Subscription revenue is restated, netting off collection charges.
(1,233)
1,117 2,380
4,960 5,794 6,240
7,331
10,249
-2000
0
2000
4000
6000
8000
10000
12000
14000
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 revenues (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.)
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*
Key Metrics - Quarterly
0.338
0.402
0.259
0
0.1
0.2
0.3
0.4
0.5
0.6
2QFY16 1QFY17 2QFY17
Net subscriber additions (mn.)
161
165 162
150
160
170
2QFY16 1QFY17 2QFY17
ARPU* (Rs.)
6,514 7,282 7,288
0
2000
4000
6000
8000
10000
2QFY16 1QFY17 2QFY17
Subscription revenues^ (Rs. mn.)
2,550 2,646 2,642
35.9%34.0% 33.9%
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%41.0%42.0%43.0%44.0%45.0%
0
500
1000
1500
2000
2500
3000
2QFY16 1QFY17 2QFY17
EBITDA (Rs. mn.) & EBITDA margin
870
409
701
0
300
600
900
2QFY16 1QFY17 2QFY17
Net profit (Rs. mn.)
849
627
791
0
300
600
900
2QFY16 1QFY17 2QFY17
FCF (Rs. mn.)
13Notes: * ARPUs are derived post netting off entertainment tax from subscription revenues.
^ Subscription revenues are post netting off entertainment tax.
# Net profits for 1Q FY17 & 2Q FY17 include deferred tax assets of Rs. 212 mn. & Rs. 319 mn. respectively. Net profits for 1Q FY17 & 2Q FY17 are post current tax of Rs. 435 mn. & Rs. 210 mn. respectively.
#
#
Strategy and Outlook
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DAS Phase III & IV
Zing Digital
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Specific vernacular markets
‘Zing’
Set-Top-Box
matlab 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 Channels
New Super Family
+ Game on HD
Dhamal Mix +
HD Access Fee
Gold 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 30st September’ 2016
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Hindi GEC Hindi Movies & Music
Sports HDInfotainment, Lifestyle
& Kids
English Entertainment English Movies
HD South
Box Cost
Rationalization
HI-DEFINITION SACHETS STARTING AT
Rs. 75 EACH PER MONTHNew High Definition connection
by just paying
Rs. 120 extraover a Standard Definition
box.
&
Financials
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Quarter ended
Quarter ended
Rs. million Sept. – 2016 Sept. – 2015
Operating revenues 7,793* 7,112*
Expenditure 5,151 4,562
EBITDA 2,642 2,550
EBITDA margin (%) 33.9 35.9
Other income 111 197
Depreciation 1,635 1,330
Financial expenses 554 548
Profit / (Loss) before tax 564 870
Tax expense (136) -
Net Profit / (Loss) for the period 701 870
2Q FY2017 vs. 2Q FY2016Operating revenues break-
up (Rs. mn)
2QFY - 2017
Summarized Consolidated P&L - Quarterly
18
9.6
12.9
3.6
(43.7)
22.9
1.2
Variance(2Q FY17 vs.2Q FY16) in %
7,288
41
244 121 98
Subscriptionrevenues
Lease rentals
Bandwidthcharges
Advertisementincome
Teleportservices, CPE& Other
Notes: * Operating revenues are post netting off entertainment tax.
# 2Q FY17 Subscription revenues are post netting off entertainment tax.
#
Yearended
Yearended
Rs. million Mar. – 2016 Mar. – 2015
Operating revenues 30,599 26,879
Expenditure 20,350 19,548
EBITDA 10,249 7,331
EBITDA margin (%) 33.5 27.3
Other income 640 635
Depreciation 5,907 6,138
Financial expenses 2,087 1,754
Profit / (Loss) before tax 2,895 74
Tax expense 331 42
Deferred tax assets (4,360) -
Net Profit / (Loss) for the period 6,924 31
FY 2016 vs. FY 2015Operating revenues break-
up (Rs. mn)
FY - 2016
Summarized Consolidated P&L - Annual
19
13.8
4.1
39.8
0.8
(3.8)
19.0
Variance(FY16 vs. FY15) in %
28,275
406
1,055
499 365
Subscriptionrevenues
Lease rentals
Bandwidthcharges
Advertisementincome
Teleportservices, CPE& Other
Rs. million Sept. 2016 (unaudited)
EQUITY AND LIABILITIES
Shareholders’ funds
(a) Share capital 1,066
(b) Reserves and surplus 3,854
4,920
Non-current liabilities
(a) Long-term borrowings 8,859
(b) Other long term liabilities 787
(c) Long-term provisions 212
9,859
Current liabilities
(a) Short-term borrowings -
(b) Trade payables 2,043
(c) Other current liabilities 11,630
(d) Short-term provisions 12,687
26,360Total 41,139
Consolidated Balance Sheet
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Rs. million Sept. 2016 (unaudited)
ASSETS
Non-current assets
(a) Fixed assets 25,030
(b) Non-current investments -
(c) Deferred tax assets 4,891
(d) Long-term loans and advances 2,053
(e) Other non-current assets 3
31,977
Current assets
(a) Current investments 2,362
(b) Inventories 128
(c) Trade receivables 681
(d) Cash and bank balances 3,283
(e) Short-term loans and advances 2,467
(f) Other current assets 241
9,162
Total 41,139
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 695.3 bn(1)
Source: Company websites, BSE, MPA Report 2016
Note: (1) Market capitalization as on 1st November, 2016
Market Cap: Rs 495.6 bn(1) Market Cap: Rs 18.5 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 105.1 bn(1) Market Cap: Rs 37.5 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 Network
Packaging (Essel Propack)
– Market Cap: Rs 38.6 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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