Zee Entertainment Enterprises Limited · NSE:ZEEL
Zee Entertainment Enterprises — Investor Presentation (November 2017)
44 slides from Zee Entertainment Enterprises's investor presentation, November 2017
Slide 1: Zee Entertainment
Extraordinary Together Zee Entertainment 3600 Entertainment Content Company
Slide 2: Presentation Flow
Presentation Flow India M&E Industry Domestic Broadcast Movies & Music A to ZEE of Content Digital Leadership International Live Events Financials 2
Slide 3: India Media & Entertainment Industry – An Overview
India Media & Entertainment Industry – An Overview TV INR588bn Print Others INR303bn INR139bn CY16: INR1,322bn Films Digital INR142bn INR77bn Music Live Events INR12bn INR60bn Source: FICCI KPMG M&E Report 2017 * - Others include Radio, Animation, VFX, Gaming and OOH 3
Slide 4: M&E Industry – An all-round growth story
M&E Industry – An all-round growth story Others 12% CY21e Music Category CY11-16 CAGR CY16-21e CAGR 11% CY16 Television 12.3% 14.7% Digital 6% 10% CY11 Print 7.8% 7.3% 12% 2% Films 8.9% 7.7% 13% Share of 11% 45% 47% 48% M&E Digital 37.9% 30.8% industry Music 6.3% 15.8% 9% Films 29% Others* 13.7% 16.
Slide 5: A to ZEE of Content Leadership
A to ZEE of Content Leadership Domestic Broadcast ➢ Hindi GEC ➢ Regional Entertainment ➢ Hindi Movie Cluster ➢ Niche Channels Movies & Music ➢ Zee Studios ➢ Zee Music Company Digital ➢ OZEE ➢ dittoTV ➢ India.com International ➢ America ➢ Europe ➢ MENAP & Africa ➢ APAC LIVE ➢ Zee Live ➢ Zee Theatre 5
Slide 6: Domestic Broadcast
Domestic Broadcast
Slide 7: Television expected to grow ahead of the industry
Television expected to grow ahead of the industry Television industry in a secular growth phase India’s television penetration is significantly lower than peers (INR bn) 99.4% 97.8% 96.5% TV - 14.7% CAGR 95.4% 95.0% M&E - 13.9% CAGR 88.8% 80.2% 1,166 75.0% 64.0% TV - 12.3% CAGR M&E - 11.6% CAGR 588
Slide 8: Television market – Revenue composition
Television market – Revenue composition TV Revenue (CY16) INR 588bn Advertising Revenue Subscription Revenue INR 201bn (34.2%) INR 387bn (65.8%) Broadcasters’ Share Broadcasters’ Revenue INR 95bn (24.5%) INR 296bn Distributors’ Share INR 292bn (75.5%) Source: FICCI KPMG M&E Report 2017 8
Slide 9: Advertising growth on a strong footing
Advertising growth on a strong footing Double-digit nominal GDP growth Overall Ad spends 15.3% CAGR (INR bn) Increasing 1,078 discretionary spends 12.0% CAGR Growth 528 Drivers Increasing 300 share of organized sector New CY11 CY16 CY21e categories like Source: FICCI KPMG M&E Report 2017 BFSI, Pharm
Slide 10: Strong growth in television ad spends to continue
Strong growth in television ad spends to continue Healthy growth in television ad spends to continue Television offers much wider reach than other mediums (INR bn) 14.4% CAGR (Reach in mn) 394 702 549 11.6% CAGR 450 201 282 116 CY11 CY16 CY21e Television - Television - Digital - Print - Weekly Daily
Slide 11: Television distribution value chain – A snapshot
Television distribution value chain – A snapshot PAY DTH Operator Subscribers 54mn PAY Broadcasters Local Cable MSO Subscribers 92mn Operator FTA DD Freedish Viewers 22mn Content flow Source: FICCI KPMG M&E Report 2017 Revenue flow MSOs and DTH operators make bouquets consisting of channels of diffe
Slide 12: India gradually moving towards complete digitization
India gradually moving towards complete digitization Phase I Phase II Phase III Phase IV ➢ 4 metros ➢ 38 notified cities ➢ 7,709 urban areas ➢ Rest of India ➢ C&S subs: ~14mn ➢ C&S subs: ~28mn ➢ C&S subs: ~44mn TV HH 203mn ➢ C&S subs: ~83mn ➢ Completed – Dec’12 ➢ Completed – Mar’13 ➢ Deadline – Jan’
Slide 13: Drivers in place for sustained subscription revenue growth
Drivers in place for sustained subscription revenue growth Digitization Increasing HD penetration Increase in transparency on ARPU of HD packages is account of digitization will help Broadcasters’ Subscription ~2x-3x of that of SD broadcasters in monetization revenue (INR bn) 19.3% CAGR 230 15.1% CA
Slide 14: Domestic Broadcast – A strong portfolio
Domestic Broadcast – A strong portfolio Hindi General Regional Hindi Movie Niche Channels Entertainment Entertainment Cluster 35 Channels across genres and languages 14
Slide 15: Steady improvement in viewership share
Steady improvement in viewership share Network share across broadcasters, 2QFY18 ZEEL has consistently increased its viewership share 17.1% 17.7% 16.4% 14.9% ZEEL, 18.3% 14.1% 13.1% 11.6% Others, 32.3% Star, 17.9% Viacom, 9.7% Sun, 12.1% Sony, 9.7% CY11 CY12 CY13 CY14 CY15 CY16 CY17(YTD) Network sha
Slide 16: Diversified Hindi GEC Portfolio
Diversified Hindi GEC Portfolio Pay TV Free-To-Air 16
Slide 17: Leader in Hindi speaking regional markets
Leader in Hindi speaking regional markets Marathi Bengali Odiya Bhojpuri 17
Slide 18: Strong presence in Southern markets
Strong presence in Southern markets Telugu Kannada Tamil 18
Slide 19: Largest offering in the Hindi movie space
Largest offering in the Hindi movie space Leader in Hindi Movie genre 19
Slide 20: Channels for niche audience
Channels for niche audience English Entertainment English Movies Youth & Music 20
Slide 21: ZEEL - well entrenched in content eco-system
ZEEL - well entrenched in content eco-system Independent production ~500 hours of houses original content produced every week In-house production house ZEEL has library of over 250,000+ hours of content Large number of small production houses with limited risk taking ability ZEEL engages closely wit
Slide 22: Movies and Music
Movies and Music 22
Slide 23: Indian Movie Industry – Steady Growth
Indian Movie Industry – Steady Growth India ranks first in number of movies released (CY16)… … but box office collections still a fraction of developed markets (USD bn) 1,902 11.4 944 6.6 736 610 338 2.0 1.9 1.5 India China US Japan S. Korea US/Canada China Japan India S. Korea Source: Media reports
Slide 24: Indian movie landscape changing fast
Indian movie landscape changing fast Rising penetration of multiplexes bodes well for movie Regional movies gaining traction in INR142bn Indian movie producers industry Punjabi Others Number of Multiplex Multiplex screens as % of 8% screens overall screens Bengali 2% 2% 2,500 2,300 30% Marathi 2,000
Slide 25: Zee Studios’ approach to movie production
Zee Studios’ approach to movie production SCRIPT DRIVEN ACROSS BUDGETS, ACROSS PROFIT SHARING WITH KEY LEVERAGE PRESENCE LANGUAGES TALENT ACROSS VERTICALS ➢ Strong story-line ➢ Portfolio approach to ➢ Engaging key talent on ➢ Presence in movie & ➢ Low dependence on star movie making profit sharing m
Slide 26: Two of our movies joined the INR 1bn+ club
Two of our movies joined the INR 1bn+ club Received Only Marathi National Film film to gross Award for The 1bn+ in box Best Actor office collections 26
Slide 27: Indian Music Industry – Staging a comeback
Indian Music Industry – Staging a comeback Digital consumption of music is driving music industry’s growth (INR bn) 15.8% CAGR ➢ Digital streaming has given a new lease of life to music industry 25.4 ➢ Digital now contributes upto 70% of the revenues of music labels 6.3% CAGR ➢ Improving internet in
Slide 28: Zee Music Company – rapidly building its catalogue
Zee Music Company – rapidly building its catalogue ZMC acquired 50% of rights released over the past three years Recently acquired Music titles Sony Music Others 6.3% 8.9% Zee Music 50.6% T-series 34.2% Zee Music Company (ZMC) is building a strong portfolio in regional markets like Punjabi, Telugu,
Slide 29: Digital
Digital 29
Slide 30: Digital Gaining Momentum
Digital Gaining Momentum Video advertising to contribute 25% of digital ad in 3G+4G subscribers 2021 295 (INR Bn) (mn) 470 400 320 255 77 74 132 15 14 83 46 2011 2016 2021(P) Digital Advertising Digital Video Advertising Mar-14 Mar-15 Mar-16 Mar-17 Mar-18(E) Mar-19(E) Mar-20(E) Source FICCI KPMG Rep
Slide 31: Strong presence in digital space
Strong presence in digital space ➢ Subscription based platform ➢ Live streaming of 80+ channels ➢ Aggregates content from country’s leading broadcasters ➢ Integrated with the country’s leading telecom operators’ platforms ➢ 20,000+ hours of on demand content ➢ Ad-supported free streaming service ➢ H
Slide 32: Z5 – ZEEL’s digital refresh
Z5 – ZEEL’s digital refresh ➢ Intuitive UI ➢ Digital first content ➢ Strong recommendation engine ➢ Exclusive content ➢ Strong movie library Technology Content Z5 Regional Revenue ➢ Local language UI Focus Model ➢ AVOD ➢ Regional language content ➢ SVOD ➢ TVOD Z5 to be launched during 2HFY18 DittoTV
Slide 33: International
International we wi) am
Slide 34: International – Serving diaspora and local audience
International – Serving diaspora and local audience 39 international channels with 13 channels in 9 non- Presence in 172+ countries with reach of 363mn Indian languages Serves South Asian Diaspora as well as local audience in Gradually expanding in markets with affinity for Indian select countries c
Slide 35: A strong global presence
A strong global presence 39 International Channels 13 Local Language Channels * - Logos relate to ZEEL’s channels catering to local audience 35
Slide 36: Live Events
Live Events 36
Slide 37: Live Events – A growth opportunity
Live Events – A growth opportunity Organized Event Industry market size (INR bn) 16% CAGR 57.8 49.4 42.6 37.0 CY13 CY14 CY15e CY16e Source: EY EEMA Report 2014 India is opening up to ticketed live events which presents a growth opportunity Zee Live is dedicated to all forms of live entertainment for
Slide 38: Financials
Financials 38
Slide 39: FY17 revenue and costs breakdown
FY17 revenue and costs breakdown Revenue breakdown - INR64,341mn Costs breakdown – INR45,073mn Others 6% Admin & Sports* other 10% expenses 15% A&P expenses 10% Operating Advertising costs Subscription 55% Employee 62% 29% costs 13% *ZEEL divested its sports business – Ten Sports Network, in FY17 39
Slide 40: Strong growth in advertising and subscription revenues
Strong growth in advertising and subscription revenues (INR mn) 36,735 33,652 26,603 Domestic Advertising 23,801 Subscription revenue CAGR 19,639 revenue CAGR 18.3% 18,225 14.6% 15,841 16,302 14,240 13,184 11,648 9,223 FY12 FY13 FY14 FY15 FY16 FY17 Advertising revenues Domestic Subscription revenues
Slide 41: Strong and consistent profitable growth
Strong and consistent profitable growth 34.6% 33.0% 33.5% 32.5% 30.1% 29.9% EBITDA CAGR 21.1% 29.9% 25.8% 27.2% 25.7% 26.0% 24.3% FY12 FY13 FY14 FY15 FY16 FY17 EBITDA margins EBITDA margins (ex-Sports) 41
Slide 42: Consistent payout to shareholders
Consistent payout to shareholders Consistent dividend distribution Payout to shareholders is higher than annual equity dividend FY12-17 (Cumulative) 75.3% 31.2% 30.3% 28.4% 26.6% 26.1% 25.2% 33.5% 27.7% Equity Equity + Buyback Equity + Buyback + FY12 FY13 FY14 FY15 FY16 FY17 RPS Equity Equity * Divi
Slide 43: Robust Balance sheet
Robust Balance sheet Balance Sheet - Sep'17 Assets (INR mn) Equities and Liabilities (INR mn) Non-current assets Equities Property, plant & equipment 5,789 Share capital 960 Capital work-in-progress 969 Other equity 71,812 Intangible assets 7,551 Investment property 1,611 Minority interest 151 Inves
Slide 44: Thank You
Thank You
Zee Entertainment Enterprises — Investor Presentation (November 2017) on 6ix