Management Presentation SHREE ASHTAVINAYAK CINE VISION LTD.
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Transcript of Management Presentation SHREE ASHTAVINAYAK CINE VISION LTD.
Management Presentation
SHREE ASHTAVINAYAKCINE VISION LTD.
Table of Contents
Investment Highlights - 2
Company Overview - 4
Industry Overview - 15
1
SHREE ASHTAVINAYAKCINE VISION LTD.
Investment Highlights
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8 billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating model
Strong track record in the production and distribution business – proven execution skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
SHREE ASHTAVINAYAKCINE VISION LTD.
Company Overview
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
Production
Average operating margin of 25%
Segment is the key source of revenues
Corporate structure helps in procuring institutional funding and insurance facility
Distribution
Good relation with production houses ensures continuous availability of quality films
Distributing films from other banners, provides critical market knowledge besides revenues
Exhibition
Forayed into exhibition to gain control of the retail end
Provides deeper understanding of the audience preferences, aiding future productions
Helps diversify revenue streams
Combined Leverage
Value Chain
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing Director
Mr. H. K. Mehta
Joint Managing Director
Mr. Dhaval Jatania
Director – Business Development
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution and Marketing
An M.B.A with a finance specialization, he is the promoter of Shree Ashtavinayak
Dhilin began his career with small budget films like Fun2ssh and Agnipankh
Presently he is working with renowned actors and technicians on the forthcoming ventures of the Company
A Commerce Graduate, he is in-charge of the Finance & Administration activities of the Company
He co-ordinates with the department of Shree Ashtavinayak for its funding requirements
Responsible for putting the Company’s financial resources into the best investment avenues to generate better returns
A Management Graduate (MBA), specialized in Marketing
Looks after Business Development and is involved with production and distribution divisions of the Company
Responsible for drawing up the strategic roadmap of the production department, being the interface between the Company and the directors, actors, script-writers and others
A Computer Engineer, specialized in Networking
Looks after the Production Division and particularly focuses on the budgeting aspect
Responsible for the finalization of the scripts, directors, cast and locations
Has been involved in all three in-house productions of the Company
A Management Graduate specialized in Marketing
Involved in the acquisition of distribution rights for films produced by other production houses
Decides the media strategy using the various channels for publicity for successful commercial exploitation of the movies
7
Popular Stars Signed By The Company
Salman Khan
Akshay Kumar
Ajay Devgan Sanjay Dutt
Govinda
Sushmita Sen
Bipasha Basu
Lara Dutta Kareena Kapoor
Some directors working with the company
Priyadarshan
Rohit Shetty
Aneez Bazmee
Sanjay Gadhvi
David Dhawan
Abbas - Mastan
Hera Pheri Garam Masala Hungama
Golmaal Zameen
No entry Pyar To Hona Hi Tha Deewangee
Dhoom 2 Dhoom
Maine Pyar Kyun Kiya? Mujhse Shaadi Karogi Coolie No. 1 Haseena Maan Jaayegi Biwi No. 1 Hero No. 1
Aitraaz Baazigar Humraaz Khiladi Soldier
8
Focus: High entertainment value and mainstream Hindi films
Target audience:- All segments Repertoire: - Family entertainers, thrillers, comedy and romantic films
Movies With Mass Appeal
De-risked model
5 Parameter TestMovies With Mass
AppealActive Risk
Diversification
Production DistributionProduction DistributionProduction Distribution
Business Model
9
De-Risked Model
5 Parameter Test Movies With Mass Appeal Active Risk Diversification
Production DistributionProduction Distribution Production Distribution
De-Risked Model
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
The recipe of entertainment: Script Screenplay Stars Salability
De-Risked Model
5 Parameter Test Movies With Mass Appeal Active Risk Diversification
Production DistributionProduction Distribution Production Distribution
De-Risked Model
11
De-Risked Model
De-Risked Model
5 Parameter Test Movies With Mass Appeal Active Risk Diversification
Distribution
Multiple stream of revenues
+ Focus on cost + Bankable
stars/directors +Cluster bombing
Production
12
De-Risked Model
5 Parameter Test Movies With Mass Appeal Active Risk Diversification
Production Distribution
Pre-sells all the territories (except Mumbai) and other rights of the movie before the release
Recovers all costs related to movie
Revenues generated from Mumbai territory go directly to the bottom-line
Company recovers all the money invested in the project even before the movie is released
De-Risked Model
Mumbai Territory
Box Office 25-35%
In-CinemaAds 2.5%
Satellite/Cable Rights
18%OverseasTheatricalRights 5%
MusicRights 7%
VideoRights 8%
Box Officefrom otherterritories25-35%
Profits
Co
st o
f P
rod
uct
ion
Rec
ove
red
th
rou
gh
pre
-sal
e
Revenue Pie (Production segment)*
*Source: Company business model
13
De-risked model
5 Parameter Test Movies With Mass Appeal Active Risk Diversification
Production Distribution
Focus on cost + cluster
bombing
Reverse calculation of revenues No of screens that movie can be screened on X Percentage occupancy X Per ticket cost X First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the first week for revenue maximization
De-Risked Model
14
SHREE ASHTAVINAYAKCINE VISION LTD.
Industry Overview
15
India Entertainment Industry
Media and entertainment industry is valued at USD 7.8 billion and is expected to grow at 19%
By 2010, the entertainment industry is expected to reach USD 18.6 billion
Indian Film industry is valued at USD 1.8 billion which is expected to double by 2010
Contributes ~20% share of the entertainment industry
Largest film industry in the world in terms of number of movies produced
Country has about has 12,000, single screen theaters
Multiplexes are expected to grow from 328 screens in 2005 to over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has enhanced the movie going experience
Indian Entertainment Industry 2007
Indian Film Industry
42.0%
2.0%19.4%
0.8%
31.0%
2.5%0.3%2.0%
Telev ision
Music
Films
Radio
Print Media
Live Entertainment
Outdoor Advertising
Internet Advertising
1,4131,700
1,9752,425
2,8253,300
3,825
0
1000
2000
3000
4000
5000
2004 2005E 2006F 2007F 2008F 2009F 2010F
US
D m
illio
nSource: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Movie Title - Director US $ Million
1 Untitled – Shivam Nair 3.0
2 Untitled – Rohit Shetty 5.8
3 Untitled – Anees Bazmi 6.8
5 Untitled – Anthony D'souza 10.0
4 Untitled – Priyadarshan 7.0
6 Untitled – David Dhawan 6.0
Total $38.6
Detailed Capex Spend – Production Pipeline
18
Track Record of Strong & Consistent Growth
Total Income (USD million) FY2007 Revenue Composition
Production 68%
Distribution
32%
Exhibition
0%
24
15
7
5
10
15
20
25
30
FY2005 FY2006 FY2007
US$
2005–07 CAGR: 91%2005–07 CAGR: 91%
15.0%12.0%
1.0%
0%
10%
20%
FY2005 FY2006 FY2007
Net Income Margin FY2006 Revenue Composition
Production
53%
Distribution
46%
Exhibition
1%
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
2005(audited)
2006(audited)
2007(audited)
Total Income
EBITDA
Fiscal Year ending31 March
EBITDA Margin
6.6 15.3
EBIT
EBIT Margin
2006(unaudited)
2007(unaudited)
(US$. mm)(2)
For 6 months ending 30 September
(US$ mm) (1)
0.2
2.1%
0.1
2.0%
11.3
74.1%
3.1
20.2%
(US$ mm)
(1) Rs.40 = US $1.00(2) Rs 44 = US $1.00
24.4
20.2
82.6%
5.5
22.7%
10.7
8.8
82.2%
2.1
19.7%
7.9
5.9
83.1%
2.7
37.7%
Net Income
Net Margin
0.1
1.0%
1.9
12.0%
3.5
15.0%
1.3
12.6%
1.7
23.9%
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Actual (as at 30 September 2007)
(Rs. m) (US$ m) (1)
Total Cash 201.8 5.0
Total Shareholders' Funds 989.3 24.7
Total Capitalization 1,061.5 26.5
Total Debt 72.2 1.8
Unsecured Loans -
Secured Loans 72.2 1.8
(1) Rs.40 = US$1.00(2) Proforma for $30mm FCCB minus 4% offering costs
Capitalisation
-
Proforma(as at 30 September 2007)
(Rs. m) (US$ m) (1)
1,352.0 33.8
989.3 24.7
2,261.5 56.5
1,272.2 31.8
1,200.0
72.2 1.8
30.0
21
SHREE ASHTAVINAYAKCINE VISION LTD.
Thank You