Zee Entertainment Enterprises Limited · NSE:ZEEL
Zee Entertainment Enterprises — Q3 FY24 Earnings Presentation
24 slides from Zee Entertainment Enterprises's earnings presentation, Feb 13, 2024
Slide 1: Exchange cover letter on conference call audio recording
February 13, 2024 The Listing Department The Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Mumbai 400 001 Bandra (East), Mumbai – 400 051 BSE Scrip Code Equity: 505537 NSE Symbol: ZEEL EQ De
Slide 2: Earnings Update for Q3 FY24
Earnings Update for Q3 FY24 Zee Entertainment Enterprises Limited – 13 February 2024
Slide 3: Disclaimer
Disclaimer Safe Harbor Statement: This Release/Communication, except for the historical information, may contain statements, including the words or phrases such as ‘expects, anticipates, intends, will, would, undertakes, aims, estimates, contemplates, seeks to, objective, goal, projects, should’ and
Slide 4: Content
Content Key Performance Highlights 4 Business Performance 6 9M & Q3 FY24 Financial Performance 11 Way Forward 17
Slide 5: Key Performance Highlights (1/2)
Key Performance Highlights (1/2) Delivering growth and market share gains coupled with effective cost management 17.1% 8.2% 10.8% YTD FY24 All India TV Network Share; YTD FY24 YoY Total YTD EBITDA Margin; Up 40 bps YoY Operating Revenue growth Q3 FY24 EBITDA margins at 10.2% Healthy performance in d
Slide 6: Key Performance Highlights (2/2)
Key Performance Highlights (2/2) Driving fiscal prudence and strengthening financial position during the quarter Further reduction in ZEE5 quarterly EBITDA losses through cost optimisation YTD reduction of Rs 4.4 Bn in Content inventory, advances and deposits driven by optimised acquisition Strong F
Slide 7: Business Performance
Extraordinary Together
Slide 8: Domestic Linear: TV Landscape Continues Healthy; Network Market Share Up
Domestic Linear: TV Landscape Continue to Remains Healthy; YTD FY24 Network Market Share up 40bps YoY TV Reach and Impressions ZEE Network Share Network share 17.1% 17.9% impacted by Weekly Reach (mn) Weekly Impressions (bn) 17.0% 17.3% 17.0% Cricket 16.5% 16.5% 16.5% 16.7% 30.3 764 29.4 757 28.2 75
Slide 9: ZEE5: Strong Growth Momentum Continues; Narrower EBITDA Losses
ZEE5: Strong Growth Momentum Continues; Prudent Cost Management Further Narrows EBITDA Losses Q3 FY24 Highlights FY24 YTD revenues up 31% YoY Total Revenue (Rs Mn) Q3 FY24 revenues up 15% YoY ➢ 19 shows and movies (incl. 5 originals) released during the quarter 2,652 Q3 FY24 Impact Releases 2,200 2,
Slide 10: ZEE Studio: Hindi and Other Language Movies Released During Q3 FY24
ZEE Studio: 3 Hindi and 3 Other Language Movies Released During Q3 FY24 Distributed by Produced by Produced by Hindi ZEE Studio Distributed by ZEE Studio ZEE Studio ZEE Studio Other Movies Language Movies Produced by Produced by ZEE Studio ZEE Studio 9
Slide 11: Zee Music Company: 2nd Largest Music Label
Zee Music Company (ZMC) 2nd Largest Music Label with ~146 Mn Subscribers on YouTube All ZMC YouTube Channels Video Views & Subscribers Count 45 41 34 142 146 129 Q3 FY23 Q2 FY24 Q3 FY24 Total Subs count (Mn) Total Video Views during the Quarter (Bn) Zee Music company added 4.2 Mn subscribers during
Slide 12: 9M & Q3 FY24 Financial Performance
9M & Q3 FY24 Financial Performance 11
Slide 13: 9M FY24 Revenue Growth of 8.2%; EBITDA Margin Impacted
9M FY24 Revenue Growth of 8.2% Driven by Subscription Revenue and Other Sales & Services, EBITDA Margin Impacted by Investment in Content and ZEE5 (INR Million) 9M FY23 9M FY24 YoY Operating Revenue Breakup (Rs Mn) Operating Revenue 59,758 64,673 8.2% YoY 3% 9% 84% Expenditure -50,264 -57,704 14.8%
Slide 14: Q3 FY24 Other Sales & Services Revenue Moderates; EBITDA Margin at 10.2%
Q3 FY24 Other Sales & Services Revenue Moderates; EBITDA Margin at 10.2% Operating Revenue Breakup (Rs Mn) (INR Million) Q3 FY23 Q2 FY24 Q3 FY24 QoQ YoY QoQ 5% 4% 83% Operating Revenue 21,088 24,378 20,457 -16.1% -3.0% YoY 3% 3% 36% Expenditure -17,427 -21,050 -18,365 -12.8% 5.4% Q3 FY24 10,274 9,21
Slide 15: Q3 FY24: Soft Advertising Partially Offset by Subscription Revenue
Q3 FY24: Soft Advertising Environment Partially Offset by Pickup in Subscription Revenue ➢ Domestic Ad revenues came at Rs 9,867 Mn, QoQ up by 4.9%, YoY declined by 2.7% Advertising ➢ Domestic Ad revenue was impacted by Cricket during Q3. While Q3 saw some seasonal festive uptick, overall pace of Ad
Slide 16: Condensed Balance Sheet
Condensed Balance Sheet Assets (Rs. Mn) Mar'23 Dec'23 Liabilities (Rs. Mn) Mar'23 Dec'23 Non-Current Assets Equity Capital 1,07,219 1,08,576 Fixed assets 13,789 12,507 Non-Current Liabilities Investments 349 390 Lease Liab/Other borrowings 2,167 1,691 Other financial assets 589 596 Provisions 1,362
Slide 17: Content Inventory, Advances and Deposits Declined in Q3 FY24
Content Inventory, Advances and Deposits Declined in Q3 FY24 Driven by Optimised Acquisition Rs 64.1 Bn Rs 62.7 Bn Rs 72.5 Bn Rs 79.6 Bn Rs 79.6 Bn Rs 76.7 Bn Rs 75.2 Bn Decreased by Rs 4.4 Bn during YTD FY24 12% 8% 8% 8% 8% 17% 14% 13% 14% 14% 14% Content Advances & 9% 11% 7% Deposits 14% 13% 14% 1
Slide 18: Way Forward
Extraordinary Together
Slide 19: India is a High Growth Economy with Attractive M&E Market Opportunity
India is a High Growth Economy with Attractive M&E Market Opportunity India: Increasing Per Capita NNI M&E industry’s revenue as % of GDP (2022) 7.6% 6.3% 5.2% GDP-> $3.4 Tr $3.1 Tr $25.7 Tr 2.3% • India’s M&E industry is poised for -8.7% sustained long-term growth given rising income levels and rel
Slide 20: ZEEL is Well Positioned to Capitalize on Growth Opportunities
ZEEL is Well Position to Capitalize on Growth Opportunities India’s Homegrown Entertainment Network with Linear Business Digital Business Music Business Movies Business 30+ years • Among the most prominent of content creation • #2 TV network in India streaming service in India, offering • India 2nd
Slide 21: Current Growth Slowdown and Subdued Margin Profile Is Cyclical and Transitory
Current Growth Slowdown And Subdued Margin Profile Is Cyclical And Transitory In Nature; Not A Structural Issue Revenue Headwinds Profitability Headwinds 1 Industry-Wide Headwinds Impacting Margins 1 Advertisement Revenues • Increased competitive intensity leading to escalation in content cost • Imp
Slide 22: ZEEL Revenue Growth & Profitability Outlook
ZEEL Revenue Growth & Profitability Outlook Revenue Profitability Outlook Outlook As Ad environment stabilizes, we are confident on our ability Headroom for driving significant margin improvement to accelerate revenue growth Some of the key levers we are working with include: o Revisiting the overal
Slide 23: Journey Towards Margin Recovery
Journey Towards Margin Recovery Given our current cost baseline and lead time associated with implementing these margin improvement interventions, we do expect to take 6-8 months for these efforts to start showing up in the performance Next 3-6 • May have Pressure on margins due to incurring one-tim
Slide 24: Extraordinary Together
3 Extraordinary Together
Zee Entertainment Enterprises — Q3 FY24 Earnings Presentation on 6ix