Imax China Holding Inc · HKEX:1970
Imax China — Investor Presentation (August 2019)
25 slides from Imax China's investor presentation, August 2019
Slide 1: IMAX China Investor Presentation Aug 2019
IMAX CHINA (HK: 1970) Investor Presentation Aug 2019 1
Slide 2: Disclaimer
Disclaimer This document is not intended to form or provide any basis of any decision in connection with IMAX China Holding, Inc. (the "Company") or any other entity in which it directly or indirectly holds any interest (together with the Company, hereinafter referred to as the "Group"). It does not
Slide 3: Agenda: Ecosystem, Business Model, Investment Thesis, Financials
• Ecosystem • Business Model • Investment Thesis • Financials Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 3
Slide 4: Unique Position in the Greater China Entertainment Ecosystem
Unique Position in the Greater China Entertainment Ecosystem Upstream Downstream ECOSYSTEM Filmmakers Studios Exhibitors Audience The IMAX IMAX IMAX Digital IMAX Theatre Media Experience TECHNOLOGY Camera Systems Technology Remastering Technology (DMR) “Films to the Fullest” Content Content Content
Slide 5: Chinese Film Market Sees Room for Growth From Both Demand and Supply Perspective
Chinese Film Market Sees Room for Growth From Both Demand and Supply Perspective Movie admission per capita No. of cinema screen per 100,000 population 2,000 5.00 70 14.0 1,800 1,718 4.50 60 60 12.3 12.0 1,622 1,600 3.97 4.00 51 1,360 1,340 1,374 50 10.0 1,400 1,320 1,310 1,300 3.50 1,270 1,261 1,24
Slide 6: Business Model
• Ecosystem • Business Model • Investment Thesis • Financials Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 6
Slide 7: Our Business Model - Diversifying Monetization
Our Business Model - Diversifying Monetization IMAX China business models Network business • Film revenue (from studios) Box office-based • Revenue sharing fee (from JV + revenue Hybrid exhibitors) Theatre business • Maintenance revenue (from all Network-based exhibitors) revenue • Others including
Slide 8: Our Network Effect Drives Higher Recurring Revenue Mix
Our Network Effect Drives Higher Recurring Revenue Mix Increasing mix of recurring revenue1… …with higher margin and faster growth 80.0 80% (in USD mn) 68.5 71% 71% 28% 23% 70.0 70% 61.2 63.5 48% 42% 50% 60.0 65% 60% 20% 62% 20% 50.0 56% 45.4 50% 18% 40.0 37.2 40% 11% 13% 30.0 30% 53% 57% 20.0 20% 4
Slide 9: Investment Thesis
• Ecosystem • Business Model • Investment Thesis • Financials Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 9
Slide 10: IMAX China Investment Thesis
IMAX China Investment Thesis 1 The Premium offering with proven industry-leading metrics Continued network expansion and healthy backlog supported by 2 asset-light and capital-efficient model 3 Refined programming strategy with consistently high hit-rate 4 “Blockbusterization” of the Chinese film ma
Slide 11: IMAX Outperforms Industry Across Key Metrics
IMAX Outperforms Industry Across Key Metrics Note 1: Only includes commercial theaters in operation in mainland China Source: EntGroup Investor Presentation 11
Slide 12: Unique Asset-light and Capital-efficient Model Allows Continued Network Expansion
Unique Asset-light and Capital-efficient Model Allows Continued Network Expansion Number of IMAX theatres Greater China backlog mix2 662 639 544 316 328 424 260 234 307 131 195 80 94 100 298 173 102 66 128 46 75 51 204 229 234 130 163 74 88 107 2012 2013 2014 2015 2016 2017 2018 As of 1H19 Sales arr
Slide 13: Our Refined Programming Strategy…
Our Refined Programming Strategy… “The Wandering Earth” – Feb 2019 • Milestone Chinese sci-fi movie with RMB4.66 billion GBO • First local title to break RMB300 million IMAX GBO in China – second highest-grossing movie in IMAX China history • Close to 10% indexing during Chinese New Year “Ne Zha” –
Slide 14: …And "Blockbusterization" of the Chinese Film Market
…And “Blockbusterization” of the Chinese Film Market Blockbusters1 GBO share in China US $M IMAX GBO Others Blockbusters # of Blockbusters 10 16 16 14 51% 46% 51% 68% 363 316 278 272 50% 54% 49% 32% 2016 2017 2018 TTM 2019 Note 1: Gross box office (GBO) over RMB 1 bn, excluding Hong Kong and Taiwan.
Slide 15: Drives a Consistently High Hit-Rate…
Drives a Consistently High Hit-Rate… Top 5 films, 2019 YTD IMAX = 5 out of 5 Top 10 films, 2018 IMAX = 9 out of 10 Top 10 films, 2017 IMAX = 8 out of 10 Investor Presentation 15
Slide 16: …And Improving Indexing Across Hollywood and Domestic Titles
…And Improving Indexing Across Hollywood and Domestic Titles Indexing on opening weekend, Hollywood films1 Indexing on opening weekend, local films1 12% 10% 9% 5% 5% 3% 2017 2018 1H19 2017 2018 1H19 Note 1: Gross box office (GBO) over RMB 1 bn, excluding Hong Kong and Taiwan. Source: EntGroup, inclu
Slide 17: Strong Slate to Sustain Continued Box Office Growth
Strong Slate to Sustain Continued Box Office Growth Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 17 17
Slide 18: Proven Execution in Consistent Market Share Gain
Proven Execution in Consistent Market Share Gain IMAX China Screen Count Share IMAX China Box Office Share IMAX GBO % of Complex GBO 27.7% 1.00% 7.8% 0.97% 0.97% 6.8% 0.96% 21.2% 5.8% 5.2% 3.5% 3.7% 2.4% 1.8% 1.6% 2016 2017 2018 1H2019 2017 2018 1H2019 2017 2018 1H2019 2017 2018 1H2019 1H2018 1H2019
Slide 19: Financials
• Ecosystem • Business Model • Investment Thesis • Financials Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 1 19 9
Slide 20: Strategic Steps Taken Result in Positive Returns…
Strategic Steps Taken Result in Positive Returns… Strategic actions taken… …driving record performance YTD across KPIs Revenue +15% Multi-film Strategy Greater China Box Office +24% Mainland China Box Office +35% (RMB) Core Local Attribute – Technology Enhancement Greater China Network +16% Language
Slide 21: …And Outperforming Box Office Growth
…And Outperforming Box Office Growth IMAX Mainland China box office trend IMAX Greater China box office trend 2.5 70.0% (in USD mn) (in RMB bn) 336.6 2.2 59.6% 312.4 60.0% 295.7 1.9 290.8 2.0 52.1% 1.8 1.8 50.0% 43.2% 236.0 1.5 1.5 40.0% • Upfront 203.1 fee (from sales arrangement + 189.6 29.7% 1.1
Slide 22: Sustaining Stable Growth Through Diversified Revenue Streams
Sustaining Stable Growth Through Diversified Revenue Streams Network business Theatre business 79.7 (in USD mn) (in USD mn) 48.1 47.7 70.2 69.6 46.6 15.1 11.7 6.8 19.2 21.5 19.2 21.6 33.7 9.9 27.2 6.6 15.8 12.2 24.2 25.4 56.2 47.4 42.5 26.7 27.4 26.1 9.6 10.9 14.9 17.9 3.5 13.2 10.4 2016 2017 2018 1
Slide 23: Delivering Profitable Growth With Cost Discipline and Network Effect
Delivering Profitable Growth With Cost Discipline and Network Effect Adjusted net profit Margin profile 45.9 44.3 (in USD mn) 72% 37.6 69% 64% 61% 58% 24.9 21.3 41%+ • Upfront fee (from sales arrangement 42% 36% 38% Hybrid exhibitors) 32% 2016 2017 2018 1H18 1H19 2016 2017 2018 1H18 1H19 Adjusted ne
Slide 24: Strong Cash Flow Generation Drives Shareholder Value Creation
Strong Cash Flow Generation Drives Shareholder Value Creation Operating cash flow Capital expenditure (in USD mn) 56.4 30.0 (in USD mn) 30% 29.0 28.8 46.7 28.0 25% 35.3 27.0 24% 21% 31.3 20% 28.8 25.1 26.0 20% 24.9 25.1 24.9 17.9 25.0 10.4 24.0 15% 23.0 22.0 10% 2016 2017 2018 •2016Upfront fee (from
Slide 25: Investor Presentation
Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 25
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