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Transcript of Religare - India Select Opportunities Conference … - India Select Opportunities Conference ......
1
Religare - India Select Opportunities Conference
February 11, 2010
Mumbai
2
Certain statements in this release concerning our future growth prospects are forward-looking statements,
which involve a number of risks, and uncertainties that could cause actual results to differ materially from
those in such forward-looking statements. The risks and uncertainties relating to these statements include, but
are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth,
intense competition in our business segments, change in governmental policies, political instability, legal
restrictions on raising capital, and unauthorized use of our intellectual property and general economic
conditions affecting our industry. ENIL may, from time to time, make additional written and oral forward
looking statements, including our reports to shareholders. The Company does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf of the company.
Disclaimer
3
Presentation Path
• Times Group
• Indian Media Industry
• ENIL Overview
– Radio Mirchi
– Times OOH
– 360Degrees
• Financial Highlights
4
Times Group
5
Corporate Structure
Times Infotainment
Media Limited
Times Internet Limited
Entertainment Network (India)
Limited
Publishing Division� The Times of India
� The Economic Times� Navbharat Times
� Maharashtra Times
� Sandhya Times
� Vijay Times
ABSIL
360Degrees
� Radio Mirchi
� indiatimes.com
� 58888
� Times of Money
Entertainment & Retail
� Timesjobs.com
� SimplyMarry.com
� Magicbricks.comTIM
Times OOH
Mirchi Movies Ltd.
Times Business Solutions Ltd.
Bennett Coleman & Co. Limited
TIML Global Ltd.
Times Global Broadcasting
� News Channel –
Times Now
� Business News
– ET Now
World Wide Media
(JV with BBC)
� Femina
� Filmfare
� Top Gear
� Grazia
� Others
Zoom Entertainment
Network
� Ent. Channel – Zoom
Private Treaties
�Times Music
�Mopix Animation
�Times Wellness
�Times Multimedia
6
ENIL Overview
Our Vision is to be “A Leading City-centric Media Company By Delivering Unique
Audiences Through Media Vehicles Like FM Radio, Experiential Marketing And
Out-of-home Media”
7
Times Innovative Media Limited (TIM)
Alternate Brand Solutions (India) Limited (ABSIL)
Subsidiaries:
Radio Broadcasting brand - Radio Mirchi
Out-of-home Media brand - Times OOH
Experiential Marketing brand - 3600 Experience
Businesses:
– ENIL
– TIM
– ABSIL
Rs. 83.2 mnFY09 Consolidated EBITDA
Loss:
Rs. 4,270.9 mn, including other income of Rs. 8.6
mn
FY09 Consolidated Total
Income:
February 15, 2006Listed:
1999Incorporated:
Mumbai, IndiaHeadquarters:
Company Snapshot
8
ENIL: Building an ‘emerging media’ network
• Comprehensive emerging media
offering
– Network of emerging media (radio,
OOH & event management)
• Radio: India’s leading private FM
radio network - with 32 stations
under the Radio Mirchi brand
• OOH: Largest organized OOH
player in India with a formidable
portfolio of contracts including the
Delhi & Mumbai international
airports
• Event Management: Executing big-
ticket events; developing own events
– Ford Super Models, Smart Living
Awards, Miss Teen Diva, Mr. India
(World) etc.
Company Business Brand
64.2%
100%
BCCL
TIML
ENIL
Events and Promotion
� Life Style & Entertainment
� Conferences
� Corporate Events
Out Of Home Media
� Airports
� Street Furniture
� Billboards
Radio: India’s largest
Pvt FM network
� Broadcasting
� Activations
TIM
7%
Flagship company of
“The Times of India” group
83.45%
Company Structure
ABSIL
100%
9
Indian Media Industry
10
Radio expected to outperform ad industry growth
Source: PWC – Indian entertainment and media outlook July 2009
− Radio ad spends expected to double
− OOH media growth expected to be in line with ad industry
Rs. In Billion
Industry Segment CY08
% share in
Ad industry CY09E
% share in
Ad industry Growth
CAGR
2009-2013
Print Media 103.5 47.9% 111.5 47.3% 7.7% 8.0%
Television 84.2 39.0% 91.0 38.6% 8.1% 12.2%
Radio 8.3 3.8% 9.8 4.2% 18.1% 18.0%
OOH Media 15.0 6.9% 16.0 6.8% 6.7% 10.8%
Online Advertising 5.0 2.3% 7.5 3.2% 50.0% 32.0%
Total 216.0 100.0% 235.8 100.0% 9.2% 11.1%
11
FM Radio - Evolution
• No privatisation
• Government Run radio
Channel
Radio a “dead
industry”
Before 1999
1999-2005
• Phase – I Licensing
• Limited Private
Participation
• Strict Regulatory
norms
• Introduction of revenue
sharing in 2005
Radio in infancy
2006- 07
• Completion of Phase –
II Licensing
• Increased Competition
• Improving profitability
• Growth in radio ad
spend
Radio in growth phase
2008
• Multiple Frequency
• License Tradability
• Networking
• Radio ad spend share
- 8.5%
• Technology
developments
• Internet Radio
12
FM Radio – Draft Phase 3 Policy
• Additional channels in the same city to existing players
– At least three players excluding AIR in any city
– Maximum number of channels to a radio operator not more than 40% of total
channels in the city
• News and Current affairs on FM Radio may be permitted
• FDI /FII limit to 26% from present 20% for news radio channels and 49% to
non-news radio channels
• Change in ownership or further dilution shall be permitted after a period of
three years from the date of operationalisation
• Networking of FM radio programs across the radio network
• First Right of Refusal to existing radio operators for renewal of the radio
license
13
Radio Mirchi
14
Mirchi – Presence across Key Indian Cities
PatnaJaipur
ThiruvananthapuramNagpurJabalpur
VishakhapatnamNashikIndore
Ahmedabad Jallandhar Pune
Aurangabad Kanpur Panjim
Bangalore Kolhapur Raipur
Bhopal Kolkata Rajkot
Chennai Lucknow Surat
Coimbatore Madurai Vadodara
Delhi Mangalore Varanasi
Hyderabad Mumbai Vijayawada
Market Leader in Indian Private FM Radio Industry
15
• Innovative Content:
– Strong relationships with Hindi, Tamil , Telugu, Kannada,
Malayalam and Bengali film fraternity
– Unique shows with participation of popular filmstars
– Dedicated Bollywood shows
– Mature research culture – music/listenership
• Success in Diverse Markets
– Experience in establishing superior linkage between
Marketing and Programming
– Customized content in 10 distinct languages
• Consistent Market Share of over 40%
Innovative Content & Experience in managing diverse
markets
16
• Listeners:
– As per the Radio Audience Measurement (RAM) data, Radio Mirchi is leader in Delhi,
Mumbai, Kolkata and close #2 in Bangalore
– As per the recently published Indian Readership Survey (IRS) 2009 R2, Radio Mirchi has
emerged as a clear leader with over 41 million listeners across the country
– Radio Mirchi tops the charts with the largest cumulative listenership of 15.4 million
in the eight key cities of Mumbai, Delhi, Kolkata, Hyderabad, Bangalore, Pune and
Ahmedabad. It leads in 25 of its 32 cities across the country
• Media buyers:
– Category building initiatives
– Mirchi Music Awards
– Mirchi Kaan Awards
– Radio works
– Other innovations:
– One-sec billing
– Offering studio facilities for jingle production
• In the Pitch-IMRB survey - October 2008, Mirchi was declared #1 media brand in the country –
ahead of reputed brands like Times of India, Star Plus and Sony TV channel
• In the recent Brand Reporter issue Mirchi was declared as one of the 50 game changers along
with ICICI Bank, Pantaloon, Maruti, Reliance Communications etc
Strong Brand
17
Revenue Trends
57.261.6 60.0
50.3 50.255.9
63.3
39.5%
15.0%
(11.5%) (12.2%) (9.2%)
6.0%
(22.7%)
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10
(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Revenues (Rs. Cr.) Growth Rate (YoY)
• Revenue growth is resumed
18
Times OOH
19
Presence in Key OOH Markets
– Largest organized player
– Formidable portfolio of OOH assets
in key cities
• Mix of long and medium term lease
on tendered properties
• Includes key assets in high
traffic/footfall areas
– Customized solutions through new
technologies - video walls and
remote-access hoardings
ContractsCity
� 281 + 132 (EMR) bus queue sheltersBangalore
� 200 bus queue shelters + EMR for flyoversHyderabad
� Delhi International Airport Ltd (DIAL)� Delhi-Noida-Delhi Flyway� Delhi Metro Rail
� Mumbai International Airport Ltd (MIAL)� 1,300 bus queue shelters� Patel Bridge
Delhi
Mumbai
Presence in key geographies
Presence in all segments
Revenue Margin Capex
HighModerate Moderate
ModerateHigh High
Moderate ModerateModerate
ModerateHigh High
TransitAirports, metros,
bus-backs, taxis
Street
Furniture
Bus queue
shelters, kiosks
BillboardsStatic, digital, mobile
Alternative Others
Revenue Margin Capex
HighModerate Moderate
ModerateHigh High
Moderate ModerateModerate
ModerateHigh High
TransitAirports, metros,
bus-backs, taxis
Street
Furniture
Bus queue
shelters, kiosks
BillboardsStatic, digital, mobile
Alternative Others
20
Evolution Path
2005
TIM is
incorporated and
business is
transferred from
TIML
� Introduced LEDs in India
� Won Patel Bridge, Dwarka
Metro, DND Flyover &
Kolkata Billboards
� Won Delhi and
Mumbai Airport
� Won Pune
Billboards
� Two long tenure
contract renewals
(DND, Mumbai
BQS)
� London office
� Investment by Goldman
Sachs and Lehman
Brothers
� Expanded into Bangalore,
Hyderabad, Chandigarh &
Jaipur
� Exclusive marketing
arrangement in Bangalore,
Hyderabad and Delhi
Metro
� Renewal - Patel Bridge
Contract
� New verticals
� Trading
� Retail
Year of consolidation
2002
2006
2007
2008
2009
Foray in OOH
business with
Mumbai BQS
contract
21
Opportunity Landscape
Source GroupM data
LOW HIGH
% Growth
% s
ha
re o
f to
tal S
pe
nd
LOW
HIG
H Kolkata
Mumbai
Hyderabad
Kochi
Pune
Indore
Nagpur
Chennai
Delhi
Bangalore
Jaipur, Chandigarh
Kanpur, Vadodara,
Jallandhar, Kolhapur
Surat, Coimbatore
Ahmedabad, Lucknow
MATURE GROWTH
SLOW GROWTH EMERGING
Chennai, Delhi and Bangalore lead the growth opportunities; Tier II
cities show a lot of promise
21
22
Competitive Landscape
Jagran Engage
Clear Channel
Roshan publicity
Global players
Indian players
Pioneer
BigStreet
Competitor Property
JC Decaux BIAL, New Delhi BQS
Laqshya HIAL, Dubai BQS, Billboards
Big Street Bangalore LED & BQS
Clear Channel DMRC, Mumbai Gantries
Jindal Steel New Delhi, Amritsar BQS
Top 10 players have less than 30% market share22
23
Recent Developments
• Strong sequential revenue growth of 17.1% in Q3FY10
• BFSI remains the top client category; increased contribution from FMCG, Real Estate
and IT-ITES
• Won the court case on advertisement rights contract awarded by BEST to Times OOH
for a 15 year period in respect of approximately 1300 Bus Shelters in Mumbai & its
Suburbs
− The Hon’ble Supreme Court pronounced the judgment in favour of BEST to the
effect that Times OOH shall continue to operate the existing contracts for the
period of term of 15 years i.e. up to 2022
• Favourable structural changes augur well for the profitability of the OOH Media
business
24
360Degrees - ABSIL
25
Alternate Brand Solutions (India) Ltd.
Property Ownership
Driving Sustainability
Creative
Solutions
Innovation in
execution
“Business of Ideas”
“Preferred
Corporate Partner”
26
Event Management Industry - Segments
Industry Size of Rs.1,600 crores
27
Industry Landscape
• Highly fragmented industry – more than 5000 players
• Largely unorganized - less than 10% players have a full fledged set
up
• Very few Corporate Players : Less than 1% players are Corporate
• Diversifying revenue stream
– Creating IPRs
– TV Content Production
• Organized players’ operating history: 6 – 10 years
28
• Focus on owned properties
– Techlife Awards
– Ford Super Models, India
– Teen Diva Beauty Pageant
– Smart Living Awards
– Mr. India World pageant
– Spelling Bee
• Managing large format events
– Filmfare Awards
– Miss India Beauty Pageant
• Key strengths
– National presence
– Experienced team of professionals
– Large bouquet of in-house events
• Geared for profitable growth
360° Experience: Eventful Consumer Engagements
29
Financial Review
30
Condensed Statement Of OperationsStandalone
(Rs. Million) Q3FY10
%age of
Total Income Q3FY09
%age of
Total Income Growth (%)
Income from Operations 633.3 99.7% 597.4 99.6% 6.0%
Other Operating Income 2.0 0.3% 2.2 0.4% (11.7%)
Total Income 635.2 100.0% 599.7 100.0% 5.9%
Operating Expenditure 424.2 66.8% 416.2 69.4% 1.9%
EBITDA 211.0 33.2% 183.4 30.6% 15.0%
Depreciation 37.2 5.9% 44.1 7.4% (15.6%)
Amortisation 56.7 8.9% 56.7 9.4% 0.0%
Interest 10.9 1.7% 28.9 4.8% (62.3%)
Other Income 0.9 0.1% 0.3 0.1% 199.0%
Profit Before Tax (PBT) 107.2 16.9% 54.1 9.0% 98.1%
Less: Taxation (0.2) (0.0%) 5.5 0.9% NM
Profit After Tax (PAT) 107.4 16.9% 48.6 8.1% 120.8%
31
Condensed Statement Of OperationsStandalone
(Rs. Million) 9MFY10
%age of
Total Income 9MFY09
%age of
Total Income Growth (%)
Income from Operations 1,691.7 99.7% 1,780.7 99.6% (5.0%)
Other Operating Income 5.1 0.3% 6.6 0.4% (23.2%)
Total Income 1,696.8 100.0% 1,787.3 100.0% (5.1%)
Operating Expenditure 1,248.8 73.6% 1,414.9 79.2% (11.7%)
EBITDA 448.0 26.4% 372.4 20.8% 20.3%
Depreciation 109.5 6.5% 132.5 7.4% (17.4%)
Amortisation 169.4 10.0% 168.6 9.4% 0.4%
Interest 41.3 2.4% 78.2 4.4% (47.2%)
Other Income 2.6 0.2% 11.2 0.6% (76.7%)
Profit Before Tax (PBT) 130.5 7.7% 4.3 0.2% 2922.1%
Less: Taxation (0.6) (0.0%) (12.2) (0.7%) NM
Profit After Tax (PAT) 131.0 7.7% 16.5 0.9% 692.3%
32
Q3FY10 - Financial Performance(All comparisons with Q3FY09)
• On a sequential basis revenues grew by 13.6% and EBITDA up 45.8%
• Legacy 10 radio stations performance:
- Total Income Rs. 466.4 million, up 4.7%
- EBITDA of Rs 177.1 million, up 5.2%
- EBITDA margin stood at 38.0% vis-à-vis 37.8%
• 22 new stations’ revenues grew by 9.6%
• Admin expenses include a provision of Rs.30.8 million for Private Treaty
revenues
• Admin expenses include a one-time charge of Rs.6.1 million
33
Condensed Statement Of OperationsConsolidated
(Rs. Million) Q3FY10
%age of
Total Income Q3FY09
%age of
Total Income Growth (%)
Income from Operations 1,165.8 99.8% 1,101.2 99.8% 5.9%
Other Operating Income 2.0 0.2% 2.2 0.2% (11.7%)
Total Income 1,167.7 100.0% 1,103.5 100.0% 5.8%
Operating Expenditure 992.0 84.9% 1,044.5 94.7% (5.0%)
EBITDA 175.8 15.1% 59.0 5.3% NM
Depreciation 81.1 6.9% 76.9 7.0% 5.5%
Amortisation 56.7 4.9% 56.7 5.1% 0.0%
Interest 30.1 2.6% 48.9 4.4% (38.5%)
Other Income 1.3 0.1% 0.5 0.0% 182.7%
Profit Before Tax (PBT) 9.3 0.8% (123.0) (11.1%) NM
Less: Taxation (0.2) (0.0%) 14.5 1.3% NM
Profit After Tax (PAT) 9.4 0.8% (137.5) (12.5%) NM
Minority Interest (15.6) (1.3%) (30.7) (0.03) NM
Net Profit after Minority Interest 25.0 2.1% (106.8) (9.7%) NM
34
Condensed Statement Of OperationsConsolidated
(Rs. Million) 9MFY10
%age of
Total Income 9MFY09
%age of
Total Income Growth (%)
Income from Operations 3,020.2 99.8% 3,266.7 99.8% (7.5%)
Other Operating Income 5.1 0.2% 6.6 0.2% (23.2%)
Total Income 3,025.3 100.0% 3,273.3 100.0% (7.6%)
Operating Expenditure 2,922.2 96.6% 3,243.7 99.1% (9.9%)
EBITDA 103.1 3.4% 29.6 0.9% NM
Depreciation 237.8 7.9% 224.4 6.9% 6.0%
Amortisation 169.4 5.6% 168.6 5.2% 0.4%
Interest 92.7 3.1% 109.0 3.3% (14.9%)
Other Income 3.7 0.1% 16.7 0.5% (77.7%)
Profit Before Tax (PBT) (393.0) (13.0%) (455.7) (13.9%) NM
Less: Taxation (4.6) (0.2%) (17.3) (0.5%) NM
Profit After Tax (PAT) (388.5) (12.8%) (438.5) (13.4%) NM
Minority Interest (81.1) (2.7%) (69.6) (2.1%) NM
Net Profit after Minority Interest (307.4) (10.2%) (368.9) (11.3%) NM
35
Consolidated Financial PerformanceQ3FY10
Rs. Million ENIL TIM ABSIL
Inter Co.
Adjustments Consolidated
Income from Operations 633.3 427.6 108.3 (3.4) 1,165.8
Other Operating Income 2.0 - - - 2.0
Total Income 635.2 427.6 108.3 (3.4) 1,167.7
Expenditure
Production Expenses 54.8 23.1 64.5 (1.9) 140.5
License Fees 32.5 322.0 - - 354.5
Other Operating Expenses 336.9 114.4 47.1 (1.5) 496.9
Total Cost 424.2 459.5 111.7 (3.4) 992.0
EBITDA 211.0 (31.8) (3.4) 175.8
Margin (%) 33.2% (7.4%) (3.1%) 15.1%
Interest (Net) 10.9 19.2 (0.0) - 30.1
Depreciation & Amortisation 93.9 43.4 0.9 (0.5) 137.8
Other Non-Operating Income 0.9 0.3 0.1 - 1.3
Profit / (Loss) Before Taxation 107.2 (94.2) (4.2) 0.5 9.3
Taxation (0.2) - - - (0.2)
Profit / (Loss) Before Minority Interest 107.4 (94.2) (4.2) 0.5 9.4
Minority Interest (15.6) (15.6)
Profit / (Loss) after Minority Interest 107.4 (78.6) (4.2) 0.5 25.0
36
Consolidated Financial Performance9M FY10
Rs. Million ENIL TIM ABSIL
Inter Co.
Adjustments Consolidated
Income from Operations 1,691.7 1,101.5 241.5 (14.5) 3,020.2
Other Operating Income 5.1 0.0 - - 5.1
Total Income 1,696.8 1,101.5 241.5 (14.5) 3,025.3
Expenditure
Production Expenses 164.9 65.5 158.8 (2.1) 387.1
License Fees 87.5 1,016.1 - - 1,103.6
Other Operating Expenses 996.4 332.0 115.4 (12.4) 1,431.4
Total Cost 1,248.8 1,413.7 274.2 (14.5) 2,922.2
EBITDA 448.0 (312.1) (32.7) 103.1
Margin (%) 26.4% (28.3%) (13.5%) 3.4%
Interest (Net) 41.3 51.8 (0.3) - 92.7
Depreciation & Amortisation 278.8 126.4 3.3 (1.4) 407.1
Other Non-Operating Income 2.6 1.0 0.1 - 3.7
Profit / (Loss) Before Taxation 130.5 (489.3) (35.6) 1.4 (393.0)
Less: Taxation (0.6) 0.1 (4.1) - (4.6)
Profit / (Loss) Before Minority Interest 131.0 (489.5) (31.5) 1.4 (388.5)
Minority Interest (81.1) (81.1)
Profit / (Loss) after Minority Interest 131.0 (408.4) (31.5) 1.4 (307.4)
37
• Times OOH revenues heading towards pre-meltdown period revenues, YoY
growth of 7.5%
− Sequential revenue growth - 17.1%
• Normalised EBITDA loss down to Rs.17.2 million from Rs.141.1 million in Q2
• Event Management business revenues down 16.3%
– Revenues were down due to change in business structure
– Reported sequential growth of 63.6%
• Consolidated admin expenses include a provision of Rs.58.3 million for Private
Treaty revenues
Q3 FY10 - Consolidated Financial Performance(All comparisons with Q3FY09)
38
THANK YOU