VGI Global Media Plc.vgi.listedcompany.com/misc/PRESN/20120903-VGI-roadShow.pdf · Plc. since 2006...
Transcript of VGI Global Media Plc.vgi.listedcompany.com/misc/PRESN/20120903-VGI-roadShow.pdf · Plc. since 2006...
VGI Global Media Plc.
VGI Global Media Plc.
Management Roadshow Presentation August 2012
Agenda
Page 2
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
Kong Chi Keung (Director)
Keeree Kanjanapas (Chairman)
VGI Board of Directors
Page 3
Kavin Kanjanapas (Director and Chairman of Executive Committee) Surapong Laoha-Unya (Director)
Marut Arthakaivalvatee (Director and Chief Executive Officer)
Chan Kin Tak (Director & Chief Operating Officer)
Assoc.Prof.Jaruporn Viyanant (Independent Director and Chairman of Audit Committee)
Maneeporn Siriwatanawong (Independent Director and Audit Committee)
Mana Jantanayingyong (Independent Director and Audit Committee)
VGI Board of Directors
Section 1 : Company Overview
Over 10 years of commitment as a role of director and management. He is one of the key persons who has steered the performance of VGI during the last decade
His experience as Chief Operating Officer of Bangkok Mass Transit System Plc. since 2006 provides VGI with insights to BTS related business
Held various well-respected directorship positions in various
government-related organizations such as the Bank of Thailand, Office of the Prime Minister, the Securities and Exchange Commission, and the Stock Exchange of Thailand, etc.
More than 35 years in the advertising & media industry with experience in multinational and domestic companies. He has worked with leading multinational and domestic companies, namely, McCann-Erickson Thailand, Oglivy&Mather (Thailand), and Grammy Entertainment
Extensive experiences in the field of tax audit with the Revenue Department and Internal Auditor with the Bank of Ayudhya Plc.
Experiences in the retail business with Watsons in Thailand and Hong Kong Held various management position in international media agencies such
as Executive Director of Group M, Managing Director of Mediaedge: CIA, and management of McCann-Erickson Thailand
One of the most successful business person in Thailand with experiences in various industries. Khun Keeree is the one who introduced the first sky train network to Thailand. He brings along valuable business experiences while provides key strategic directions to VGI
More than 10 years of involvement with VGI as the Director
VGI Management
Page 4
1. Marut Arthakaivalvatee 2. Chan Kin Tak
5. Suparanan Tanviruch
3. Oranuch Rujirawona
6. Penjun Tangjaruwatanachai 4. Chavin Kalayanamitr
1. Marut Arthakaivalvatee (Director & Chief Executive Officer)
More than 35 years in the advertising & media industry with experience in multinational and domestic companies. He has worked with leading multinational and domestic companies, namely, McCann-Erickson Thailand, Oglivy&Mather (Thailand), and Grammy Entertainment
3. Oranuch Rujirawona (Chief Marketing Officer)
Over 25 years of experience in the sales and marketing position in the media sector. Prior to joining VGI 13 years ago, Khun Oranuch has spent 12 years at Grammy
6. Penjun Tangjaruwatanachai (Chief of Legal)
4. Chavin Kalayanamitr (Chief Technology Officer)
Expertise in the legal field with specialization in commercial contractual agreements
Over 25 years of experiences in media technologies related business both in the USA and Thailand. Khun Chavin is with VGI for 13 years
5. Suparanan Tanviruch (Chief Financial Officer)
Over 20 years of experiences in the field of financial in various listed Companies, namely Intouch, Thaicom, ITV and Siam Kraft (SCG group)
2. Chan Kin Tak (Director & Chief Operating Officer)
Experiences in the retail business with Watsons in Thailand and Hong Kong
Section 1 : Company Overview
Shareholding Structure
Page 5
VGI Current Shareholders Group Shareholding Structure
Shareholders No. of shares %
1) Bangkok Mass Transit Plc. 273,999,980 99.99
2) Mr. Keeree Kanjanapas 10 0.01
3) Mr. Surapong Laoha-Unya 10 0.01
Registered Capital: THB 400.0 mn Current Paid-up Capital: THB 274.0 mn Par value of THB 1.0 per share
Existing Shareholders (as at 30 June 2012)
Kanjanapas Family
BTSG’s Minorities
BTSC’s Minorities
49.2% 50.8%
96.4%
3.6%
100.0%
Note: BTSG = BTS Group Holdings Plc. BTSC = Bangkok Mass Transit Plc.
As at 30 June 2012
BTSC
BTSG
Section 1 : Company Overview
VGI Group Structure
Page 6
VGI Global Media Plc. (“VGI”) Provide advertising media service and commercial
space in BTS, Modern Trade and office buildings
VGI Advertising Media Co., Ltd. (“VGI Ad”) Provide advertising media in Tesco Lotus Registered & Paid up capital: THB 10.0 mn
888 Media Co., Ltd. (“888 Media”) Provides advertising media in Non-Sales Floor of
Big C and advertisement media in Watsons Registered & Paid up capital: THB 20.0 mn
999 Media Co., Ltd. (“999 Media”) Provide point of purchase radio in Modern Trade Registered & Paid up capital: THB 7.50 mn
Point of View (POV) Media Group Co., Ltd. (“POV”) Provide advertising media in office buildings Registered & Paid up capital: THB 40.0 mn
VGI Advertising China Co., Ltd. (“VGI Ad China”) Provide advertising media through point of
purchase radio in CP Lotus China Registered & Paid up capital: USD 1.40 mn (THB
44.4 mn)
VGI Multitech International Co., Ltd. (“VGI Multitech”) Provide rental digital screens to subsidiaries
within VGI Group Registered & Paid up capital: THB 22.5 mn
Note: - Company registered in Thailand Company registered in the People Republic of China
- All subsidiaries are wholly owned by VGI
Section 1 : Company Overview
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009/10 2010/11 2011/12
Key Milestones
Page 7 Section 1 : Company Overview
1999
Granted initial “License to Manage Marketing Services Agreement” from BTSC
Exclusive license to manage the advertising spaces and merchandising areas of 23 stations and all trains for a period of 10 years
2003
Granted initial “Advertisement Display Concession Agreement” from Watsons
2010
VGI set up VGI Ad China 2005
Granted initial “Advertisement Display Concession Agreement” from Big C
2009
Granted “Advertisement Display Concession Agreement” from Carrefour
BTSC becomes major shareholder of VGI
VGI acquired POV 2012
Amended “License to Manage Marketing Services Agreement” with BTSC
2004
Granted initial “Advertisement Display Concession Agreement” from Tesco Lotus
Agenda
Page 8
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
Lifestyle Media Network
Page 9
VISION “To be the Leader of innovative lifestyle
media networks and solution”
MISSION “To provide the best value with highest
impact lifestyle media networks and solution”
• The network that attract the consumers who have out going
• Time spent out of home 10 hours/day
• Time spent on public transportation more than 107.5 minutes/day
• Third destination : Hypermarket
lifestyle at the high traffic premises
Section 2 : Business Overview
470
1,640
2,603
4,272
5,708
5,928
7,224
14,558
62,238
Internet
In-Store
Mass Transit
Outdoor
Magazines
Radio
Cinema
Newspapers
TV
Unit : THB mn
Advertising Media Industry Overview
Thai media market value in 2011
TV 59.48%
Radio 5.7% Newspapers
13.91%
Magazines 5.5%
Cinema 6.9%
Outdoor 4.1%
Mass Transit 2.5% In-Store 1.6% Internet 0.5%
Calculated VGI Income and expenditure after deducting standard average discount by 40% and 45% respectively
Historical Thai Ad expenditures (THB mn)
Page 10
Source : The Nielsen Company (Thailand) Limited
Thai media market share in 2011
In-Store Media
46.4%
Mass Transit Media
20.4%
CAGR Overall Media
2.9%
Dominant market share
61.0% of Mass Transit media segment
66.0% of In- Store media segment
Total market value of advertisement industry is
THB 104,641 mn
85,602 89,734 92,033
90,122 90,341 101,011
104,641
708 994 956 1,372
1,764 2,188
2,603
114 314 570 826 819 1,121
1,640
-
20,000
40,000
60,000
80,000
100,000
-
1,000
2,000
3,000
4,000
5,000
6,000
2005 2006 2007 2008 2009 2010 2011
Advertising Industry Mass Transit Media In-Store Media
THB mn THB mn
Section 2 : Business Overview
VGI commands a majority market share
Dominant Player in Mass Transit Media
Page 11 Section 2 : Business Overview
• Reach ≈ 700,000 viewers/weekday, one of the highest viewer exposure in out-of-home sector • Long-term exclusive advertising and retail space rights
Advertising & Merchandising area on BTS SkyTrain Network
Digital Media
998 LCD screens in-train and on-station, airing from 6:00 - 24:00
Static Media Merchandising Spaces
6,000 sqm for 464 shops
527 kiosks in 23 stations
27,000 sqm. Advertising area
80
918
47 Train wraps
Plasma screens
In-trains LCD screens
As of 30 June 2012
> 6,000 displays inside and outside of the trains, at station and platform
Advertising Media in BTS Skytrain System
Page 12
Multimedia Static
Digital Screen on platforms
Digital Screen inside the train
Train Body Wrap
In-Train Media
BTS Platforms BTS Skytrain
Conventional
Unconventional
Standee Station Display
Balustrade Staircase Side Beam Pier Head
Platform Truss Platform Balustrade Escalator Graphic
Banner Standard Above the Seat
Bulkhead Wallpaper
Section 2 : Business Overview
Dominant Player in In-Store Media
Page 13
>1,600 Modern Trade
branches nationwide
Leverage on expertise accumulated from
operation in Skytrain System
3 - 5 years exclusive rights to
manage certain advertising space with
first right to renew contracts
Given our exclusive rights to manage advertising media in nation’s dominant Modern Trade Operators, VGI is able to reach broad media coverage nationwide
Digital Media
• Digital screens (22 inch to 42 inch screens) installed in high traffic areas to best create attention and impact
• 2,280 screens installed in Tesco Lotus, Big C, and Watsons
Static Media
• Various forms of static media are displayed throughout the mall, Sales Floor and Non-Sales Floor
• Examples are shelf divider, shelf pop-up, chiller ad, and entrance light box
Multimedia
POP Radio (Point of Purchase Radio)
• Exclusive rights for all branches of Tesco Lotus and Big C in Thailand and CP Lotus Shanghai in The Republic of China
• These broadcasts are aired throughout the operating hours of all branches of Tesco Lotus and Big C
Section 2 : Business Overview
Advertising Media in Modern Trade
Page 14
Digital Media Static Media
Food Court Cashier Counter
Health and Beauty Food and Beverage Digital Screen in Watsons
Multimedia
Point Of Purchase Radio: POP Radio
• Exclusive rights to provide POP Radio services for all branches of Tesco Lotus and Big C
POP Media on Sales Floor Area
Shelf Divider Aisle Arch Shelf Frame
Top Gon Chiller Ad Shelf Pop-up
Non-Sales Floor
Entrance Lightbox Trivision Entrance Sensormatic Arch Set
Section 2 : Business Overview
Dominant Player in Office Building
Page 15
• 452 digital screens installed in elevators of the office building
• These screens aired advertisements from 07:00-19:00 Monday to Friday
Abdulrahim 15 Ocean Tower II 12
Bangkok City Tower 12 Pacific Place 8
Bangna Tower 9 RS Tower 12
Chan Issara I 3 Sathorn Nakorn 10
Chan Issara II 9 Sathorn Thani 10
CP Tower 1 7 Serm-Mit Tower 14
CP Tower 2 6 Shinawatra Tower I 5
CP Tower 3 5 Shinawatra Tower II 5
ESV Tower 4 Shinawatra Tower III 16
Exchange Tower 13 Sindhorn 16
Gypsum Metropolitan 4 Sinothai 6
Harinthorn 7 Software Park 7
Interchange 14 Sorachai 7
Ital Thai 15 Srijulasup 6
JC Kevin 4 S.P. Tower 6
JP Morgan (Bubhajit) 4 Thai Summit 14
K Tower (CMIC Tower) 10 Thanapoom 12
KPN Building 7 Thaiwah 5
Lake Ratchada 14 Tisco 9
Lao Peng Nguan 6 True Tower 1 12
Liberty Square 5 True Tower 2 3
Lumpini Tower 10 TST Tower 5
Maleenont 10 UBC 2 8
Manorom 1 U-Chu-Liang 16
Mercury 8 United Center 17
Ocean Tower I 9
Building Name & Number of Screens
Exclusive rights to manage advertising spaces in a total of 51 office buildings around Bangkok
Section 2 : Business Overview
Broader Reach of Targeted Audiences
Page 16
Office Building
BTS Sky Train
Tesco Lotus Big C
Watsons
Section 2 : Business Overview
Capture all audience segment nationwide
White collar workers (age 24-45)
CBD Mid to high income
Working people and younger generation (age 15-35)
CBD Middle Income
Women, housewives and family Nationwide Middle to low income
Demographic Geographic Income Level
Source : The Nielsen Company (Thailand) Limited
Business Strategy & Key Success Factors
Page 17
Business Strategy Key Success Factors
To maintain the dominant position in lifestyle media To put the right advertisement in the right location
• Continuously expand into advertising spaces to be media contact points with ever-changing lifestyle
• Effectively manage the advertising media to best suit the needs of advertisers
• Unique combination of media locations and types • Opportunity to access broad viewer base
• Effective Customers Relationship Management (CRM) system
• Customer-centric approach of servicing
• Increase competitiveness through innovative technology and creativity
• Selecting potential advertisement locations to effectively reach the targeted viewers
• VGI’s media network franchise enables the advertisers to select a customize or broad base location landscape
• Creative and interesting advertisements
• VGI works hand in hand with advertising agencies to create creative media and place it in the right location to response to changing lifestyles of targeted viewers
Business strategy driving growth and maintaining leadership position
90.9% Average sales growth in Modern Trade (2009 – 2011)
13.3% Average sales growth in BTS system (2009 – 2011)
Section 2 : Business Overview
66.0% Market share in In-Store media segment
61.0% Market share in Mass Transit media segment
Modern trade
BTS
Agenda
Page 18
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
Revenue and Net Profit
Page 19
Q1 Revenue and Net Profit (THB mn) Annual Revenue and Net Profit (THB mn)
Section 3 : Financial Performance
42.0% Revenue Growth
61.5% Net Profit Growth
24.2%
72.5%
FY 2010/11 FY 2011/12
36.3% Revenue Growth
99.0% Net Profit Growth
1Q 2012/13
Strong growth of revenue and net profit since inception
(Unit: THB mn) (Unit: THB mn)
47.1%
60.9%
57.0%
66.2%
47.0%
33.6%
37.6%
27.7%
5.9%
5.5%
5.4%
6.2%
1Q2012/13
1Q2011/12
FY 2011/12
FY 2010/11
307.6
292.2
1,143.2
934.4
307.3
161.1
754.1
390.9
38.8
26.1
107.5
86.7
1Q2012/13
1Q2011/12
FY2011/12
FY2010/11
Revenue Breakdown
Page 20
Revenue Contribution by Business Unit (%)
BTS Modern Trade Office Building and Others
Section 3 : Financial Performance
Revenue Comparison by Business Unit (THB mn)
Revenue Growth BTS Modern Trade Office Building and Others*
FY 2011/12 22.3% 92.9% 24.0%
1Q 2012/13 5.3% 90.7% 48.4%
Note: * Includes other income
Gross Profit and EBITDA
Page 21
Annual Gross Profit and EBITDA (THB mn) Q1 Gross Profit and EBITDA (THB mn)
Section 3 : Financial Performance
37.9% Gross Profit Growth 33.3%
FY 2010/11 FY 2011/12 1Q 2012/13 New License Fee
49.4% EBITDA Growth 40.0%
370.8494.5
681.8
251.3 351.9526.0
33.3%35.3% 34.5%
22.1%24.9% 26.2%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0100200300400500600700800900
1,0001,1001,2001,3001,4001,500
FY 2009/10 FY 2010/11 FY 2011/12
Gross Profit EBITDA Gross Profit Margin EBITDA Margin
44.5% Gross Profit Growth 79.2%
25.0% EBITDA Growth 66.2%
(Gross Profit Margin old license fee rate: Gross Profit of THB 245.8 mn )
(EBITDA Margin old license fee rate: EBITDA of 178.9 mn)
1Q 2012/13 Old License Fee
64.2%
74.3%
72.3%
78.1%
26.5%
18.9%
19.7%
12.9%
9.2%
6.8%
8.0%
9.0%
1Q2012/13
1Q2011/12
FY2011/12
FY2010/11
195.7
126.4
492.8
386.0
80.9
32.1
134.4
63.9
28.2
11.6
54.6
44.7
1Q2012/13
1Q2011/12
FY2011/12
FY2010/11
Gross Profit Breakdown
Page 22
Gross Profit by Business Unit (%)
Section 3 : Financial Performance
Gross Profit by Business Unit (THB mn)
Growth (%) BTS Modern Trade Office Building and Others*
FY 2011/12 27.7% 110.4% 22.2%
1Q 2012/13 54.9% 152.0% 142.7%
Note: * Includes other income
BTS Modern Trade Office Building and Others
273.4
274.0
253.2
278.1
471.7
Balance Sheet Composition
Page 23
Liabilities and Equity Breakdown
Cash
Accounts Receivable
Equipment
Goodwill
Others
Asset Breakdown
31 March 2012
Accounts Payable
Accrued Expenses
Other Liabilities
Capital
RE and Other SE
(Unit: THB mn) (Unit: THB mn)
1,313.9
30 June 2012
1,550.4
31 March 2012 30 June 2012
Section 3 : Financial Performance
1,313.9
1,550.4
Key Financial Ratios
Page 24
Liquidity and Leverage Ratios
Key financial ratios FY 2010/11 FY 2011/12 1Q 2012/13
Liquidity ratios
Collection Period (days) 78.4 77.0 83.2
Days Payable (days) 161.1 123.2 122.1
Cash Cycle (days) (82.7) (46.2) (38.9)
Leverage ratios
Interest Bearing Debts to Equity (times) 0.1 0.0 0.0
Profitability
Key financial ratios FY 2010/11 FY 2011/12 1Q 2012/13
Gross margin 35.3% 34.5% 46.9%
EBITDA margin 24.9% 26.2% 36.4%
EBIT margin 18.7% 21.6% 32.8%
Net Profit Margin 12.2% 13.9% 24.5%
Return on Assets 13.4% 21.3% 44.7%
Return on Equity 39.8% 78.8% 152.2%
1Q 2012/13 key growth factors are:
Growth in BTS Revenue
Growth in Modern Trade Revenue
Working Capital Management
New License Fee Rate
Cash cycle is negative
VGI has no interest bearing debts
Section 3 : Financial Performance
Agenda
Page 25
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
Agreements with BTSC
Page 26
“License to Manage Marketing Services Agreement” between VGI & BTSC
Key Terms Previous New (Dated 18 May 2012)
A. Rights
1) Original rights: 23 stations & all BTS trains Advertising spaces in-train & on station Exterior Train Area Merchandising Area
2) Additional areas*
3) First right to renew contract as well as to manage the extended BTS stations
Exclusive rights
Non-exclusive rights
Only first right to renew contract
Unchanged
Exclusive Rights
First right to renew contract as well as to manage the electric train mass transit and/or any type of vehicles and/or any projects that BTSC is granted the rights under reasonable conditions
B. Effective Period Ending 17 May 2012 18 May 2012 – 4 December 2029
C. License Fees 50% of total revenues/year 5% - 20% of total revenues/year (an incremental increase of 5% every 5 years)
E. Platform Screen Doors Project None VGI will joint invest in the Platform Screen Doors with BTSC and has the rights to manage the advertising space on the Platform Screen Doors
Section 4: New Era of Performance
Note: * Additional areas are areas other than Advertising Space, Merchandising Area and Exterior Train Area that BTSC may approve as suitable for use for Advertising Space or as a Merchandising Area
Pro Forma Financial Performance
Page 27 Section 4: New Era of Performance
Concession Payment to BTSC
(Unit: THB mn)
Net Profit and Net Profit Margin
(Unit: THB mn) Net Profit Margin
16.76%
24.46%
17.51%
30.97%
Note: * Actual concession (5% concession rate since 18 May 2012)
Platform Screen Doors
Page 28
First phase of investment of THB 600 mn, expected to start in October 2012
• The preliminary estimated investment cost of Platform Screen Door Project (first phase) would be THB 600 mn for the first phase of 6 - 9 Stations* within Yr 2013
• Preliminary estimated expenses related to this project (not include
depreciation expense) are approximately 2% – 3% of total investment costs
• Depreciation expenses of the installed Platform Screen Door will be recorded in accordance with the remaining years of the License to Manage Marketing Services Agreement between VGI and BTSC
Note: * - Prioritize first 6 stations include: Siam, Asoke, Sala Daeng, Victory Monument, On Nut, and Phaya thai
- Remaining 3 stations include: Chit Lom, Phrom Phong, and Chong Nonsi
Section 4: New Era of Performance
Agenda
Page 29
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
1) Unique and Broad Coverage Media Network
Page 30
Distinctive Media Network
Highly Effective Media Network
Ability to reach well-classified target viewers
High-impact media that fuels viewers’ attentions
Captive media in BTS Sky Train System and Office Buildings (No remote control)
Point of Sales Media in Modern Trades o Final advertising touch point with shoppers just before making decision o Effective in persuading customers in making impulse purchase
Ridership ≈ 700,000 persons/weekday
Modern Trades reach nationwide
1,191 branches
202 branches
Note: Hypermarket store format of Tesco Lotus and Big C are 290 branches and 127 branches respectively
Section 5: Investment Highlights
Exclusive CBD Media Network in Office Buildings and BTS Sky Train System, the core of mass transit systems in Bangkok and Vicinity
BTS & Office
Building
Modern Trade
Exclusive Nationwide Media Network as the dominant partner with world’s leading Modern Trades, i.e. Tesco Lotus, Big C and Watsons, commanding majority of market shares in Thailand
Right Place, Right Timing, and Right Targeted Viewers 231 branches
>35 mn shoppers/month at Tesco Lotus
51 Office Buildings in Bangkok
2) Robust Business Model
Page 31
Successful Business Strategies
Synergized Media Network
Enhance VGI’s bargaining power with customers through product bundling
Agency-Driven Sales & Marketing
Strategies
Emphasize in dealing with major advertising agencies, who have portfolio of advertisers, in order to better utilize airtime reduce revenue fluctuation
Business growth requires considerably low investment
BTS: requires only initial investment of LCD screen and advertising platform
Modern Trade: Key investments in advertisement are made by customers
Return on fixed assets
≈ 322% in 1Q 2012/13
Operations does not require working capital
Accounts Payable Days >
Accounts Receivable Days
Thus, currently, no reliance on bank loans
Cash cycle of ≈ (39) days in 1Q 2012/13
Highly Creative & Adaptive
Organization
Recognizing, Creating and Adapting to changes of viewers’ lifestyle:
Initiated with media in BTS Sky Train System Modern Trade Office Buildings
Section 5: Investment Highlights
Operating growth requires low upfront investment
Value Added & Innovative Media
Not only selling media, but also tailor-made services best suited to each client without compromising VGI’s image
BTS: Exclusive and long-term contractual agreement (≈ 17 years remaining) of the only Mass Transit Network in CBD Modern Trade: Managing large-scale media network in Modern Trade nationwide, comprising media in >1,600 branches, >6,000
billboards and >3,200 digital screens, requires skills and workforce (VGI has >300 staffs throughout Thailand to manage these media network)
High Barrier to Entry
Interest Bearing Debt/Equity of
≈ 0 time in 1Q 2012/13
114 307
570
826 819
1,121
1,640
2005 2006 2007 2008 2009 2010 2011
3) Visible Concrete Growth With Exciting Upside Potential
Page 32 Section 5: Investment Highlights
Proven & Secured Source of Revenues
Avg. BTS workdays ridership (‘000 passengers)
• Continuous growth in revenues stream due to increasing ridership in BTS Sky Train System
• 17 years remaining of exclusive rights on BTS Sky Train System with first right to extend
BTS Modern Trade
No. of Hypermarket branches
Note: * No. of Carrefour’s branches are included. Source: TISCO Research
Advertisement spending in Modern Trade (THB mn)
Source: AC Nielsen Company (Thailand)
• Significant increase in advertisement spending in Modern Trade with CAGR of 46.36% (2005 – 2011)
• Exclusive rights in Modern Trade for 3 – 5 years with first right to extend
Source: BTS
227
290320
361397
438413 430 441 447
516
584
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H 2012
2005 2006 2007 2008 2009 2010 2011Tesco Lotus 53 56 65 79 84 90 99Big C* 68 73 80 96 106 105 107
0
20
40
60
80
100
120
3) Visible Concrete Growth With Exciting Upside Potential (Con’t)
Page 33 Section 5: Investment Highlights
Source: Office of Transport and Traffic Policy and Planning
1. Increase Price • Lower advertising rate comparable to other players • More eyeballs in BTS, more room to increase price
424 494 576 671 782
911 1,061 1,124 1,190 1,261 1,335 1,414 1,470 1,529 1,590 1,653 1,719 1,808 1,901
1,999
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Excited Upside Potential
Estimated BTS’s Ridership Growth (‘000 passengers / day)
2. Increase Occupancy of advertisement spaces (“same space growth”)
• Ample headroom to increase occupancy rate, particularly in Modern Trade • Anticipated increasing traffics for BTS’s non-prime stations, e.g. Thonglor,
Phra Khanong and Ratchathewi
3. Increase New Advertising Spaces (“new space growth”)
• BTS new fleet of 35 carriages by end of FY 2012 (+25% advertisement space from trains) and 20 carriages by end of 2013 as well as additional fleet of carriages in the future
• Automatic rights for advertisement spaces in new branches from Modern Trade partners
• Increase advertisement network in Office Buildings around Bangkok
4. Continue to capture the ever-changing
lifestyles (“New Opportunity”) • A successful market pioneer in mass transit and modern trade media • VGI will continue its efforts to seize future opportunity to expand the media
coverage along with the dynamic changes in people lifestyles such as online social network
BTS’s current fleet x35 105
x12 48
No. of Carriages No. of Trains
Additional fleet
+35
Total carriages
188
153
By end of FY 2012
By end of 2013
x5 +20 208
4) Professionally-run Corporate Enhanced by Corporate Governance
Page 34 Section 5: Investment Highlights
1. Outstanding team of professional management
• VGI is managed by team of highly experienced professionals with strong international and domestic working experience background
• The commitment and efforts of the management team resulted into continuous growth and market dominance
• Committed to attracts and retain qualified management & personnel
2. Emphasizing on corporate governance
• VGI pays serious attention on striving and maintaining for good corporate governance
• Audit Committee members are hands-on in setting up corporate governance policies as well as monitoring internal control system
• VGI benefits from leveraging the experienced and expertise of the Chairman of the Audit Committee who has held various positions in highly respected organizations
Selected experiences of the Audit Committee Members that will enhance the corporate governance of VGI
Director, Financial Institutions Policy Committee (Bank of Thailand)
Member of the Audit Committee, Office of the Prime Minister
Expert Director of Accounting, the Securities and Exchange Commission
Director & Chairman of the Audit Committee, The Stock Exchange of Thailand
Internal Auditor, Bank of Ayudhya Plc.
Tax Auditor Officer, The Revenue Department
Selected relevant experiences of directors and management team in media, advertising & retail businesses
Transforming Key Strengths into Peerless Financial Results
Page 35 Section 5: Investment Highlights
“High Growth”
“High Margin”
“High Return on Assets & Equity”
“High Cash Flows from Operations ”
Currently, no reliance on bank loans
Financial flexibility for future business expansion
1,137.23
1,412.01
2,004.82
99.90172.37
278.45
2001 2002 2003 2004 2005 2006 2007 2008 2009/10 2010/11 2011/12
Revenue Net Profit
36.3% Revenue Growth 42.0% FY 2011/12 1Q 2012/13
99.0% Net Profit Growth 61.5%
44.7% Return on Assets 21.3% FY 2011/12 1Q 2012/13
152.2% Return on Equity 78.8%
46.9% Gross Profit Margin 34.5% FY 2011/12 1Q 2012/13
36.4% EBITDA Margin 26.2%
24.5% Net Profit Margin 13.9%
Agenda
Page 36
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
Offering Structure: Pre- and Post- IPO
Page 37
BTSC
BTSG
VGI IPO
(New shares offered by VGI & Existing shares offered by BTSC)
Details of IPO:
Total of 88 million shares, comprising of 62 million existing shares and 26 million new shares
Kanjanapas Family BTSG’s Minorities Pre-Emptive Rights
BTSC’s Minorities
49.1% 50.9%
96.4% 3.5%
0.1%
100.0%
BTSC
BTSG
VGI
Kanjanapas Family BTSG’s Minorities
BTSC’s Minorities
49.1% 50.9%
96.4% 3.5%
0.1% 70.7%
Public Kanjanapas
Family
25.2% 4.1%
Post-IPO Pre-IPO
Section 6 : Offering Summary and Indicative Timetable
1 2
Preliminary IPO Allocation
Page 38
BTSC
VGI
IPO 88 million shares
26 million new shares
62 million existing shares
Public
Pre-emptive*
62 million shares
Institutional investors
Retail investors
Patronage
Shareholders of BTSG
Shareholders of BTSC
Kanjanapas Family
BTSG’s Minorities
Remark: * Allocate according to shareholding percentage in BTSC
BTSC’s Minorities
26 million shares
0.9 million shares
25.1 million shares
Section 6 : Offering Summary and Indicative Timetable
Potential Subsequent Steps
Page 39
BTSC
BTSG
VGI
Kanjanapas Family BTSG’s Minorities
BTSC’s Minorities
49.1% 50.9%
96.4% 3.5%
0.1% 51.0%
Public Kanjanapas Family
25.2% 4.1%
19.7%
BTSC may sell 59 million shares of VGI, equivalent to 19.7% of enlarged shares after IPO of VGI to BTSG
Subsequently, BTSG will still hold directly and indirectly 70.7% in VGI
BTSC may sell 19.67% shares of VGI to BTSG 3
Section 6 : Offering Summary and Indicative Timetable
Indicative Timetable
Page 40
Date Key Activities
21 August Analysts’ meeting
29 August Analysts submit draft research reports for TISCO’s review
31 August Issuance of research report
4 September – 2 October Research blackout period
19 September – 25 September Pre-emptive subscription period
28 September – 2 October Public Subscription Period
9 October Indicative first trading day
Section 6 : Offering Summary and Indicative Timetable
August 2012
M T W T F S S
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
September 2012
M T W T F S S
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
October 2012
M T W T F S S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31
Agenda
Page 41
Section 1 Company Overview
Section 2 Business Overview
Section 3 Financial Performance
Section 4 A New Era of Performance
Section 5 Investment Highlights
Section 6 Offering Summary and Indicative Timetable
Appendix Other Information
Agreements with Modern Trade Partners
Page 42
“Advertisement Display Concession Agreements” with Modern Trade Partners License fees mainly base on percentage of revenue sharing & minimum guarantee
Average terms of 3 – 5 years
Modern Trades Contractual Parties
Types of Media VGI Group Operator
1) Tesco Lotus* VGI Ad Ek-Chai Distribution System Sales Floor, Non-sales Floor, LCD & Radio media
2) Big C VGI Big C Supercenter Sales Floor, Non-sales Floor, LCD & Radio media
3) Big C (previously “Carrefour”)
888 Media
VGI
CenCar
CenCar
Non-sales Floor media
Sales Floor, LCD & Radio media
4) Watsons 888 Media Central Watson Digital media
5) CP Lotus (People Republic of China)
VGI Ad China Shanghai Lotus Supermarket Store
Radio media
Note: * All contracts have first right to renew for another 2 – 5 Years
Appendix: Other Information
Summary of Advertising Media in Modern Trades
Page 43
Types of Media Tesco Lotus Big C
Watsons Total Large Medium Small Large Medium Small
1) Static Media
# of branches VGI received rights
# of branches of Modern Trade (31/03/12)
# of branches VGI has already installed
All
104
104
All
186
186
250
901
250
All
112
112
All
15
15
All
75
50
-
231
-
1,624
717
2) POP Radio
# of branches VGI received rights
# of branches of Modern Trade (31/03/12)
# of branches VGI has already installed
All
104
104
All
186
186
All
901
901
All
112
112
All
15
15
All
75
75
-
231
-
1,624
1,393
3) Multimedia
# of branches VGI received rights
# of branches of Modern Trade (31/03/12)
# of branches VGI has already installed
31
104
31
-
186
-
-
901
-
All
112
15
All
15
-
All
75
-
All
231
228
1,624
274
Remark: All means existing and upcoming branches of Modern Trades
As of 30 June 2012, the number of branches VGI received rights to manage commercial spaces and the number of branches VGI has already installed advertising media are as follow.
Appendix: Other Information