Den Networks Limited · NSE:DEN
Den Networks — Q1 FY2019 Earnings Presentation
24 slides from Den Networks's earnings presentation, Aug 3, 2018
Slide 1: Investor Update Q1 FY 18-19
Investor Update Q1 FY 18-19 3rd August 2018 Den Networks Ltd. Slide 1 – Investor Update Q1 FY 18-19
Slide 2: Disclaimer
Disclaimer The information in the presentation may contain “forward-looking statements” which are statements that refer to expectations and plans for the future and include, without limitation, statements regarding Den’s future results of operations, financial condition or business prospects as well
Slide 3: Contents
Contents 1. Cable TV 2. Fixed Line Broadband 3. DEN – Financial Snapshot for Q1 FY 18-19 Slide 3 – Investor Update Q1 FY 18-19
Slide 4: TV Viewership continues to grow
TV Viewership continues to grow SOURCE 'BARC’S BROADCAST INDIA 2018 SURVEY' Slide 4 – Investor Update Q1 FY 18-19
Slide 5: Cable Monetisation has just started
Cable Monetisation has just started Cable Monetisation has just started – 2 years phenomenon post digitisation ARPU’s continues to grow year on year across phases – Phase 3 realisations are moving towards Phase 2 ARPU’s , Phase 2 realisations inching up to align with Phase 1 while Phase 1 ARPU’s con
Slide 6: High Definition Boxes – Additional opportunity for monetisation
High Definition Boxes – Additional opportunity for monetisation 172.9 Pay-TV Subs 155.0 HD Subs 129.4 Subcribers (Mn) HD HD 10.9% HD 6.8% 1.2% 19.0 10.6 1.5 Source: MPA 2012 2017 2022 HD Subscribers are expected to reach ~11% of the total Pay-TV subscribers by Year 2022. Pricing differential between
Slide 7: TRAI Tariff Order – Developments
TRAI Tariff Order – Developments Madras High court had upheld the tariff order and the interconnection regulations in May’2018 TRAI has enforced the Tariff order w.e.f 3rd July’2018, to be implemented by 30th Dec’2018 Special Leave Petition has been filed in the Supreme court on 20th July 2018 by a
Slide 8: DEN – New initiatives undertaken to suit customer preferences
DEN – New initiatives undertaken to suit customer preferences •Improved compression •Pan India Reach •Increase capacity • Normal HD + Smart HD with Wi Fi •VAS – Music, Radio, Games Dongle OTT - TV on Mobile handsets. Enabling 2nd screen using cable TV signal Home Gate way for smart Homes Slide 8 – I
Slide 9: Our Strengths
Our Strengths Only wire to the home Very strong relationship with the LCO right from the inception of the industry (nearly ~30 years), both interdependent on each other Even after delays on digitization and the entry of DTH, Cable TV still caters to ~ 70% of the households. Great products at afforda
Slide 10: Contents
Contents 1. Cable TV 2. Fixed Line Broadband 3. DEN – Financial Snapshot for Q1 FY 18-19 Slide 10 – Investor Update Q1 FY 18-19
Slide 11: India Fixed Line Broadband (FLBB) – Opportunity
India Fixed Line Broadband (FLBB) – Opportunity Only 18 Mn Indian households have FLBB connection, against this CATV already has 15X rise y-o-y in internet data traffic in Year 2017 103.5 Mn HH’s connected via existing cable/fibre - video content contributed ~65% of Wireless Internet total mobile da
Slide 12: DEN – Fixed Line Broadband (FLBB) 100 Cities Plan
DEN – Fixed Line Broadband (FLBB) 100 Cities Plan Asset lite model with India FLBB Opportunity synergies from existing set-up = improved returns DEN LMO Existing own cable universe and tie- Target existing cable subscriber ups with LMO’s base Scalable to 100 cities in Franchisee model leveraging on
Slide 13: Broadband – 100 Cities Update
Broadband – 100 Cities Update 13 # of Cities Enabled 28 Cities # of Subscribers 8,424 Monthly ARPU INR 562 Speed Offered 10 - 100 Mbps Average Data 64 GB Consumption Slide 13 – Investor Update Q1 FY 18-19
Slide 14: Contents
Contents 1. Cable TV 2. Fixed Line Broadband 3. DEN – Financial Snapshot for Q1 FY 18-19 Slide 14 – Investor Update Q1 FY 18-19
Slide 15: Consolidated P&L summary
Consolidated P&L summary Rs in crs Quarterly Gr% FY19 Q1 FY18 Q4 FY18 Q1 Q-o-Q Y-o-Y Revenue 314 316 313 -1% 0% Content cost 150 142 131 6% 15% EBITDA for FY19 Q1 at Rs 47 crs : % Revenue 48% 45% 42% Cable profitability affected due to higher content cost which is Other Opex 117 115 121 2% -3% the p
Slide 16: Cable KPIs: Quarterly
Cable KPIs: Quarterly -3% -3% Billed 7.4 7.4 7.4 7.4 7.2 ARPU Rs. +15% 0% Subscribers * (mn) 78 79 79 74 69 (*excludes Associates ~1 mn) Q1, FY18 Q2, FY18 Q3, FY18 Q4, FY18 Q1, FY19 Q1, FY18 Q2, FY18 Q3, FY18 Q4, FY18 Q1, FY19 +11% -3% Subs. Rev 174 175 93% 93% 93% 91% 164 170 Efficiency 86% 154 Rs
Slide 17: Cable ARPU (Net of tax- Ind. AS)
Cable ARPU (Net of tax- Ind. AS) ARPU (INR) +15% 0% 79 79 75 Blended 69 56 54 47 Phase 4 34 66 67 63 Phase 3 57 96 93 92 Phase 2 87 Phase 1 109 122 122 116 FY18 Q1 FY18 Q4 FY19 Q1 FY18 Slide 17 – Investor Update Q1 FY 18-19
Slide 18: Cable Income Statement
Cable Income Statement INR Crore Actuals Growth % 1Q'19 4Q'18 1Q'18 Q-o-Q (Gr%) Y-o-Y (Var%) Subscription 170 175 154 -3% 11% Placement 85 83 89 2% -5% Activation 24 24 23 2% 6% Other Operating Income 20 18 26 12% -24% Total Income post activation 299 299 291 0% 2% Content Costs 150 142 131 6% 15% P
Slide 19: Broadband ARPU (net of tax) & Subscribers development
Broadband ARPU (net of tax) & Subscribers development -24% -2% Homes passed +5% +2% ARPU (‘000) (INR) 725 899 913 927 664 879 879 579 565 552 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Subscribers 108 107 107 107 106 (000) Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19
Slide 20: Broadband Income statement
Broadband Income statement INR Crores Actuals Growth % 1Q'19 4Q'18 1Q'18 Q-o-Q (Gr%) Y-o-Y (Var%) Total income 16 17 21 -6% -26% Personnel Costs 3 3 3 -5% -11% Other Opex 13 14 17 -4% -22% Total Expenditure 17 17 20 -3% -19% EBITDA (1) (0) 1 EBITDA % -6% -3% 4% EBITDA (Pre Activation) (1) (1) 1 NA N
Slide 21: Consolidated Income statement
Consolidated Income statement Actuals Growth % INR Crores 1Q'19 4Q'18 1Q'18 Q-o-Q (Gr%) Y-o-Y (Var%) Subscription- Cable 170 175 154 -3% 11% Concerted efforts on cost continues : Subscription - Broadband 16 16 21 -5% -26% Placement 85 83 89 2% -5% Rationalization of Manpower – lower by Rs 8 Other Op
Slide 22: Consolidated EBITDA Bridge
Consolidated EBITDA Bridge EBITDA Bridge Q1FY19 Vs Q1FY18 *FY19 Q1 Consolidated EBITDA (Incl. Associates) at Rs 57 cr. 4 16 6 1 19 1 2 Rs. Crs. 61 47 EBITDA Q1 Cable Placement Other Activation Content Opex+ Broadband EBITDA Q1 FY 17-18 Subscription Operating Personnel FY 18-19* Income cost +PDD EBIT
Slide 23: Abridged Consol. Balance sheet
Abridged Consol. Balance sheet INR Crore Ind. AS June'18 Mar'18 Mar'17 Share Capital 195 195 194 June'18 Mar'18 Mar'17 Reserves & Surplus 558 589 620 Networth 754 784 813 Gearing Ratio (Net) 0.22 0.17 0.19 Minority Interest 107 104 90 Short & Long Term Debt 514 541 522 Net Debt to EBITDA 1.0 0.5 0.9
Slide 24: Contact Information
Contact Information DEN - “India’s Most Attractive Cable TV Brand – 2017” Trust Research Advisory (TRA) Jatin Mahajan Shogun Jain / Payal Dave InvestorRelations@DenOnline.in shogun.jain@sgapl.net / payal.dave@sgapl.net +91 11 4052 2200 +91 77 3837 7756 / +91 98 1991 6314 DEN Networks Ltd. Strategic