Den Networks Limited · NSE:DEN

Den Networks — Edelweiss Management Connect and Investor Meeting (June 2015)

60 slides from Den Networks's conference presentation, Jun 2, 2015

  1. Slide 1: Edelweiss Management Connect and Investor Meeting

    5 Edelweiss Management Connect and Investor Meeting 02 June 2015, Mumbai DEN Networks Ltd. © DEN Networks Ltd. © Den All Rights Networks Ltd. Reserved Investors Update – Jun’15 1 www.dennetworks.com

  2. Slide 2: Legal Disclaimer

    Legal Disclaimer These presentation materials have been prepared by DEN Networks Limited (“DEN”) solely for use at this presentation and have not been independently verified. This presentation material is highly confidential, is being presented solely for your information and may not be copied, repr

  3. Slide 3: DEN Networks: India's Largest Cable MSO

    DEN Networks: India’s Largest Cable MSO Cable Broadband TV Commerce Soccer India’s Largest Cable TV MSO True High Speed Internet 50-50 JV with Snapdeal Owners of Delhi Dynamos FC  A pan-India Subscriber  Bringing global  DEN Snapdeal TV-Shop, A  The Delhi Franchise of the Base of 13 million stan

  4. Slide 4: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable II Industry Dynamics – Broadband 12 III DEN Story 16 IV DEN Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 4 www.dennetworks.com

  5. Slide 5: Addressable Cable Opportunity in India

    Addressable Cable Opportunity in India Pay TV Subscribers 139 Million DTH Analogue 40 Million 70 Million Households TV Households 270 Million 169 Million Cable 99 Million Population 1.25 Billion Digital 29 Million Others 30 Million Source: MPA, FICCI-KPMG, Company Analysis © Den Networks Ltd. Invest

  6. Slide 6: TV Evolution in India

    TV Evolution in India (The Entry of Cable/ Satellite TV in India Became the Catalyst that Drove Expansion of TV in India) Pre-1990: Doordarshan Era Post-1990: The Satellite Era  Shift from Analogue to Terrestrial television in  Introduction of  Star, Zee, Sony and a few other players Digitization

  7. Slide 7: Cable Digitization in India

    Cable Digitization in India… Phase 3 & 4 Deadline: 31 Dec’15; (Phase3) 31 Dec’16 (Phase4) Phase 2 Opportunities Deadline: 31 Mar’13 • Den - 6.2 M Analog customers in phase 3 & 4 areas Phase 1 Deadline: • New Customers – Universe + 31 Oct’12 shift • Market share 4 Metros 38 Cities Rest of India • Bun

  8. Slide 8: Structural change in the Cable Industry

    …has led to the structural change in The Cable Industry… (Digital Cable Subscribers Share to Rise to 54% of total Pay TV Subscribers by end of 2019 from 19% in 2013) Pay TV Subscribers (Million) – Digital TV Subscribers to Grow at 2013-2023 CAGR of 26% DTH Analog Digital Cable 169 175 155 162 139 14

  9. Slide 9: Improved Industry ARPUs in DAS 1 and 2 Markets

    …and Has Led to Improved Industry ARPUs1 in DAS 1 and 2 Markets DAS 1 Markets2 ARPU DAS I1 Markets3 ARPU 85-100 50-55 10-15 10-15 Pre DAS Current Pre DAS Current 1: Net Subscription Revenue per STB Excluding Taxes 2: Phase 1 Cities of Delhi & Mumbai 3: Industry estimates – company sources © Den Netw

  10. Slide 10: DEN to Lead Consolidation Game

    DEN to Lead Consolidation Game India Likely to Follow The International Cable Markets, the Path to Last-mile Consolidation and Digitalization  Globally, the development of the cable TV business has focused on ownership of the last mile, with cable MSOs operating as B2C businesses. Successful B2C la

  11. Slide 11: Comparison of Cable vs DTH Platform

    Comparison of Cable vs DTH Platform Cable DTH Digital Transmission   Weather Proof Signal – No Rain Interruptions   Capacity (for 900 SD + 200 HD channels)   Easy Installation (No dish required)   Ability to Localise Channels/Ads   Broadband Capability   Feasibility to serve remote areas

  12. Slide 12: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband III DEN Story 16 IV Den Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 12 www.dennetworks.com

  13. Slide 13: Global Internet Markets – A Profile

    Global Internet Markets – A Profile India's ranking in the world and penetration of services Provides Huge Growth Opportunities  India: 150 Million  India: 12%  India: 1%  World: 2 Billion  World: 39%  World: 10%  Mexico: 53 Million  Mexico: 43%  Mexico: 11%  Brazil: 108 Million  Brazil:

  14. Slide 14: Fixed Broadband Contributes ~80% of Broadband Data Consumption

    Fixed Broadband Contributes ~80% of Total Broadband Data Consumption Fixed Internet has a well defined and complimentary role to Wireless Internet  While the world focuses on 3G and 4G connections, it is critical to take stock of the usage of Wi-Fi networks to access the Internet over mobile device

  15. Slide 15: Comparison of Broadband Speeds With Other Asia Pacific Countries

    Comparison of Broadband Speeds With Other Asia Pacific Countries (2014) % of Broadband connections Global rank in % of BB Country/Region Speed - Avg. Mbps Global rank in average speeds above 4 Mbps connections above 4 Mbps South Korea 25.3 1 96% 1 Hong Kong 16.3 2 89% 8 Japan 15.0 3 87% 12 Singapore

  16. Slide 16: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story IV DEN Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 16 www.dennetworks.com

  17. Slide 17: Established in 2007, DEN is the Biggest MSO

    Established in 2007, DEN is the Biggest MSO with 13 Million Cable Subscribers (>50% Digitized) With… Overview and Investment Highlights Established in 2007, Den Networks is transforming into a B2C Powerhouse and has enhanced its product portfolio offering high speed Broadband services with a vision

  18. Slide 18: Phenomenal Growth Story (Evolution and Key Milestones)

    …Phenomenal Growth Story (Evolution and Key Milestones)  Forayed into Soccer, Bought Delhi Dynamos of ISL  Commercially Rolled out Broadband Services  10 Year End-to-End Managed Services Deal with Wipro (Revolutionising Customer Experience for DEN)  Launched TV Commerce Business (JV with Snapdea

  19. Slide 19: Transformation into a B2C Powerhouse

    …Transformation Happening From Cable Only Business into a B2C Powerhouse Cable Broadband Den Networks Cable Den Networks TV Commerce Soccer 2007 2015 © Den Networks Ltd. Investors Update – Jun’15 19 www.dennetworks.com

  20. Slide 20: DEN Business Overview

    DEN Business Overview Cable Broadband TV – Commerce Soccer Biggest Cable TV MSO in Owners of Delhi Dynamos High Speed Internet JV with Snapdeal India FC Started in 2007 Launched in 2014 Started in 2014 Bought in 2014 FY’15 Revenues: 1,093 Crore FY’15 Revenues: 8 Crore FY’15 Revenues: 2 Crore FY’15 R

  21. Slide 21: Marquee Investors

    Marquee Investors Shareholding Pattern Top Shareholders (Non-Promoters) Mar’11 Mar’12 Mar’13 Mar’14 Mar’15 Affiliates of the Goldman Sachs Group 17.79% Promoters 53.73% 54.69% 53.24% 40.05% 40.05% Affiliates of IL&FS 7.50% FIIs/FPIs 12.22% 8.14% 14.72% 17.40% 20.92%* Acacia Group 6.05% DIIs# 1.73% 2

  22. Slide 22: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story – Cable IV Den Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 22 www.dennetworks.com

  23. Slide 23: Cable Business Increasing Footprint Across India

    Cable Business Increasing Footprint Across India Present  Dominant Nationwide 2007 2010  Presence Across 200+ Cities in 13 States  24 One mn+ cities 1 Million 11 Million 13 Million Subscribers Subscribers Subscribers (7 Million in Digital and 6 Million Analog) © Den Networks Ltd. Investors Update

  24. Slide 24: Cable Business Snapshot

    Cable Business Snapshot # 1 13Million 7Million 80% > 21% 100 INR INR 11 Billion 20.5% Biggest Cable MSO in Digital Cable Market Share in Average Net India (Cable India’s Digital Cable Realization Rate in EBITDA Margin Cable Subscribers Subscribers Monetized STBs Revenues for FY’15 (in DAS Markets) S

  25. Slide 25: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story - Broadband IV Den Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 25 www.dennetworks.com

  26. Slide 26: Den Broadband – Our Inspiration

    Den Broadband – Our Inspiration Company Country Video Subscribers Internet Subscribers Market Cap 22.4 Million (2014) 22.0 Million (2014) 22.8 Million (2010) 17.0 Million (2010) $142 Billion 23.4 Million (2006) 11.0 Million (2006) $23 Billion 3.8 Million (2012) 4.3 Million (2012) (Acquisition Value)

  27. Slide 27: Den Boomband Well Positioned for Broadband Demand

    Den BoomBand is Well Positioned to Meet the Emerging Demand for High-Speed Broadband in India Drivers of Broadband in India Den Boomband Migration of entertainment Compelling value proposition (70x content to web-based faster speed over competitor base plans and better value for money) Demand driver

  28. Slide 28: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story – TV shop IV Den Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 28 www.dennetworks.com

  29. Slide 29: Investors Update

    © Den Networks Ltd. Investors Update 29 www.dennetworks.com

  30. Slide 30: DEN Snapdeal TV Shop

    DEN Snapdeal TV-Shop DEN Snapdeal TV Shop – The First of its Kind 50-50 JV between an e commerce giant and a Cable/ DTH network © Den Networks Ltd. Investors Update – Jun’15 30 www.dennetworks.com

  31. Slide 31: TV Commerce Opportunity

    TV Commerce Opportunity Growth drivers of TV-Commerce Industry: a) Reach – Internet reach in India: 150 million – Pay TV reach in India: 140 million Households ( i.e. 700 million users) b) Shopper profile: – Average age of consumer buying from web: 20-25 vs 30-25 on TV Commerce – Higher purchasing p

  32. Slide 32: TV Shop – Snapshot

    TV Shop – Snapshot Investment Snapshot  50 : 50 JV between Den and Jesper Infotec  Initial Investment of INR 5 Cr each  Board Constitution – 2 members each First of Its Kind JV in India Between a Cable Company and e-commerce giant Key Brands INR 1Billion Current Annualised GMV >25Million Home Rea

  33. Slide 33: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story - Soccer IV Den Vision 38 V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 33 www.dennetworks.com

  34. Slide 34: Investors Update

    © Den Networks Ltd. Investors Update 34 www.dennetworks.com

  35. Slide 35: Delhi Dynamos and ISL

    Owns Delhi Dynamos (Delhi Soccer Team – ISL) A marketing/ branding vehicle as DEN transforms into a B2C play 429 Million TV Audience – Viewership Reach Huge viewer interest in the ISL driven by high quality football, celebrity presence & prime time telecasts Organisers 26,000+ Delhi Dynamos ISL Aver

  36. Slide 36: ISL – Season 1 – Surpassed all expectations

    ISL – Season 1 – Surpassed all expectations © Den Networks Ltd. Investors Update 36 www.dennetworks.com

  37. Slide 37: Delhi Dynamos FC Dominates Social Media

    Delhi Dynamos FC Dominates Social Media © Den Networks Ltd. Investors Update 37 www.dennetworks.com

  38. Slide 38: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story 16 IV Den Vision V FY15 - Results Presentation 42 © Den Networks Ltd. Investors Update – Jun’15 38 www.dennetworks.com

  39. Slide 39: Bold Moves

    What Are We Doing Progress Has Been Slow driven by... Bold Moves  New team  Industry structure and  Active industry collaboration collaboration  Structural game changers in cable –  Lack of consumer focus pricing, packaging, bundling, leaseback, buyouts  Internal capability  Massive internal

  40. Slide 40: Seasoned and Professional Senior Management Team

    Seasoned and Professional Senior Management Team Manish Dawar  Den Networks has highly professional and a Group CFO diverse team with over 250 years of collective experience Yogesh Sharma  The team has made several effective strategic SVP Operations moves to enhance the value of Den Networks  Suc

  41. Slide 41: Promotion Campaigns by DEN

    Promotion Campaigns by DEN © Den Networks Ltd. Investors Update – Jun’15 41 www.dennetworks.com

  42. Slide 42: Table of Contents

    Table of Contents 1 Industry Dynamics – Cable 4 II Industry Dynamics – Broadband 12 III DEN Story 16 IV Den Vision 38 V FY15 - Results Presentation © Den Networks Ltd. Investors Update – Jun’15 42 www.dennetworks.com

  43. Slide 43: Results Presentation FY 2014-15

    DEN Networks Ltd Results Presentation Financial Year 2014 -15 May 12, 2015 43

  44. Slide 44: Invested in Growth Opportunities

    Post completion of Phase I & II, the internal accruals and Cash is being ... …Invested in Growth Opportunities… ...emerging out of Phase III & IV and Soccer TV Commerce Broadband Cable overlaying connectivity of broadband 44

  45. Slide 45: Group Highlights 2015

    Group Highlights 2015  Subscription Revenues  Encouraging Early Indicators  Clocking Annualised GMV of increased 25% — 3.3 Lakh Homes Passed ₹117 Crore (based on Mar’15 GMV Booked)  Steady improvement seen in — 23k Subscribers collections  ~30% Conversion ratio (of total  60% Demo Installation

  46. Slide 46: Group Key Performance Indicators

    Group Key Performance Indicators FY’15 Additions + 1Mn +33% +0.3Mn +19k 0.33 7 23 ₹ 77 FY'14 FY'15 ₹ 58 6 4 - Digital Subscribers (Million) Blended DAS 1and 2 Subscription Homes Passed (Million) Subscribers ('000s)* Revenue Per Box Cable Segment Broadband Segment *DEN Billing Less Applicable Taxes 4

  47. Slide 47: Group 2015 Financial Highlights

    Group 2015 Financial Highlights ₹1,130Cr ₹ 92Cr ₹28 Cr 42 ₹ Cr ₹934 Cr ₹ 366Cr (₹ 1,117 Cr) (₹ 302 Cr) (₹ 148 Cr) (₹ 185 Cr) (₹ 1,216 Cr) (₹ 726 Cr) EBITDA (Excluding Cash PAT Cash and Net Current Revenues EBITDA Equivalents Activation) Assets Numbers in Brackets represent FY’14 47

  48. Slide 48: Group Business Segment Quarterly View

    Group Business Segment Quarterly View INR Crore Cable Broadband Soccer TV Commerce Distribution Consolidated Revenues Q4 FY'15 265 3 (0.0) 1.0 1.2 270 Q3 FY'15 257 2 8.1 0.6 1.3 269 Q4 FY'14 285 1 - - 16.2 302 EBITDA (Inc Activation) Q4 FY'15 15 (14) (2.3) (2.7) (1.0) (6) Q3 FY'15 49 (11) (35.2) (1.

  49. Slide 49: Group Business Segment Yearly View

    Group Business Segment Yearly View INR Crore Cable Broadband Soccer TV Commerce Distribution Consolidated I ndia’s Largest True High Speed Owners of Delhi 50-50 JV with Snapdeal Star Den^ Cable TV MSO I nternet Dynamos FC One Stop Home Ov erv iew A 24 hour home Entertainment 13 Million 0.3 Million H

  50. Slide 50: Consolidated Income Statement

    Consolidated Income Statement INR Crore Q4 FY'15 Q3 FY'15 Q4 FY'14 FY'15 FY'14 Revenues from Operational Activities 262 264 297 1,113 1,098 Other Operating Income 9 5 5 17 19 Total Revenues 270 269 302 1,130 1,117 Content Costs 139 110 101 465 372 Personnel Costs 30 26 26 111 106 Provison for Bad De

  51. Slide 51: Well Funded Balance Sheet

    Well Funded Balance Sheet Cash and Equivalents Movement in FY’15 (INR Cr) Gross Debt (INR Crore) 266 1,216 133 1,025 998 74 934 292 304 27 11 FY'14 Oper. Cash Profit Taxes Capex Debt Others FY'15 FY'14 Raised Repaid FY'15 Cash and Equivalents FY’15 Breakup (INR Cr) 2015 Debt Breakup (INR Cr) ₹ 399 ₹

  52. Slide 52: Cable 2015 Highlights

    Cable 2015 Highlights 13m 54% ₹ 1,093Cr 42% ₹ 187Cr ₹ 122Cr Subscribers Digital Customers Revenues Gross Margin EBITDA EBITDA Ex Activation (47%) (₹1,055Cr) (50%) (₹301Cr) (₹147Cr) 52

  53. Slide 53: Cable Subscribers – 13M

    Cable Subscribers – 13M Total Digital Subscribers (Million) DAS 1and 2 Markets (Million STBs) DAS 3 Markets - Analog (Million STBs) Phase 1 Phase 2 7.03 6.84 4.8 4.9 4.9 4.9 4.6 6.64 6.40 2.09 2.78 2.81 2.84 1.94 2.65 2.78 1.77 1.63 1.46 6.10 1.99 1.99 2.09 2.09 2.10 Q4 FY'14 Q1 FY'15 Q2 FY'15 Q3 FY

  54. Slide 54: Cable Revenues

    Cable Revenues Revenue By Stream* (INR Cr) Subscription Revenues* (INR Cr) Placement Revenues (INR Cr) Activation Revenues (INR Cr) ₹ 474 ₹ 459 ₹ 465 3% Higher in the earlier 6% period because of +25% Phase 2 Implementation 45% ₹ 368 46% ₹ 155 ₹ 64 Subscription Placement Activation Others FY'14 FY'1

  55. Slide 55: Revenue Per Box Across DAS Markets

    Revenue Per Box Across DAS Markets – Steady Progress (Number of Cities) Q4 FY'14 Q4 FY'15 16 26% 11 41% 8 7 5 29% 3 3 4% 1 >80 65-80 50-65 <50 >80 65-80 50-65 <50 *DEN Billing Less Applicable Taxes 55

  56. Slide 56: Broadband Highlights

    Broadband Highlights Subscribers (‘000) ARPU* INR 23 759 14 746 8 740 740 4 1Q'15 2Q'15 3Q'15 4Q'15 1Q'15 2Q'15 3Q'15 4Q'15 * Year To Date Numbers Homes Passed (‘000) Cohort Analysis 10% 12% 329 10% 272 6% 8% 5% 160 6% 4% 3% 2% 30 0% 0-3 4-6 6-9 9-12 1Q'15 2Q'15 3Q'15 4Q'15 RFS Tenor Slab (Months) 5

  57. Slide 57: TV Commerce Key Takeaways

    TV Commerce Key Takeaways ₹ 117Cr 25mn 1,312 30 % 17 % Annualised GMV Reach (Million Homes) Average Daily Conversion Ratio Repeat on Current Rate Transactions (Mar’15) of Calls Received Customers 57

  58. Slide 58: Road Ahead – Value Drivers

    Road Ahead– -Value Road Ahead Value Drivers Drivers  Improve monetisation in DAS I and II markets - Pricing, Packaging, HD, Pre-paid  Broadband execution – Multi channel sales, roll-out factory  Box seeding - phase III and IV markets  TV shop – increase the reach  IR – improve understanding & c

  59. Slide 59: DEN Operating Cycle

    DEN Operating Cycle Broadband Improve Monetization of DAS 1 and LCO Engagement Enterprise 2 Markets STB seeding in and Monetize Leverage Costs Value DAS 3 and 4 Markets  Cable Business Expansion (Increase Subscriber Base) Strengthen Cash Position  TV Commerce 17

  60. Slide 60: For Further Information Please Contact

    For Further Information Please Contact Jatin Mahajan Payal Dave/ Shogun Jain InvestorRelations@DenOnline.in dpayal@sgapl.net / shogun@sgapl.net +91 11 4052 2200 +91 98 1991 6314/ +91 77 3837 7756 DEN Networks Ltd. Strategic Growth Advisors Pvt. Ltd. (CIN No. L92490DL2007PLC165673) (CIN No. U74140MH2

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