Imax China Holding Inc · HKEX:1970
Imax China — Investor Presentation (August 2020)
27 slides from Imax China's investor presentation, August 2020
Slide 1: IMAX China (1970 HK) Investor Presentation
IMAX China (1970 HK) Investor Presentation August 2020 ® IMAX 1 Corp.
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 80 14.0 70 2,000 5.00 70 12.3 12.0 1,800 1,716 1,727 4.50 60 1,620 60 1,600 4.00 10.0 3.78 51 1,360 1,340 1,374 1,400 1,270 1,320 1,314 1,304 3.50 5
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 revenue Installation-based Network-based Box office-based 41.7% 39.2% 48.3% 49.8% 17.7% 18.2% 11.0% 13.3% 61% 40.6% 40.6% 42.6% 36.9% FY2016 FY2017 FY2018 FY2019 Note: Recurring revenue refers to box office and networ
Slide 9: Investment Thesis
• Ecosystem • Business Model • Investment Thesis • Financials Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 9
Slide 10: Why IMAX China is Well-Positioned as Theatres Reopen?
Why IMAX China is Well-Positioned as Theatres Reopen? Poised for recovery Benefit from Structural Tailwinds Financial Strength ❑ Trusted brand to both audience and ❑ “Blockbusterization” effect ❑ Strong, debt-free balance sheet with net exhibitors cash balance of US$73.8mn as of June 30, ❑ Local con
Slide 11: Strong IMAX DNA in Upcoming Film Slate
Strong IMAX DNA in Upcoming Film Slate Tenet Wonder Woman No Time to Die Black Widow Dune (Sept 2020) 1984 (Oct 2020) (Nov 2020) Hollywood(1) (Nov 2020) (Dec 2020) Filmed with Filmed with Filmed with Exhibited in Filmed in IMAX IMAX Cameras IMAX Cameras IMAX Cameras IMAX expanded aspect ratio2 The E
Slide 12: Blockbuster 2021 Around the Corner
Blockbuster 2021 Around the Corner SHANG-CHI THE FAST & and the GODZILLA JURASSIC Legend of ETERNALS FURIOUS 9 VS. KONG WORLD 3 the Ten Rings MISSION Top Gun: THE SPIDER-MAN VENOM 2 IMPOSSIBLE: Maverick BATMAN (Untitled) 7 Blockbuster slate extends through 2021 Note: Titles have been confirmed to be
Slide 13: Promising Pipeline of Potential Local Language Titles
Promising Pipeline of Potential Local Language Titles New Gods: Assassin in Red Fengshen Trilogy Nezha Reborn Multiple blockbuster caliber potential local language titles Note: Release schedule in China to be determined. Investor Presentation 13
Slide 14: Industry Consolidation an Opportunity, Not a Risk
Industry Consolidation an Opportunity, Not a Risk Theatre penetration in top 500 complexes in China Gross box office share in top 500 complexes in China 80% 16% 70% 68% 14% 14% 62% 14% 13% 60% 59% 12% 53% 12% 11% 50% 49% 10% 40% 8% 30% 6% 20% 20% 14% 4% 13% 3% 10% 10% 11% 10% 8% 8% 9% 2% 2% 2% 2% 6%
Slide 15: Continued Network and Partnership Expansion
Continued Network and Partnership Expansion IMAX theatre footprint Greater China backlog mix2 Backlog Full revenue sharing Hybrid revenue sharing Sales arrangement IMAX zones: 1,414 1 271 271 358 104 252 As of June 30, 2020 Note 1: As of Dec 31, 2019 Note 2: As of June 30, 2020 Source: Company Data
Slide 16: Favorable Structural Tailwind…
Favorable Structural Tailwind… Total box office of top-10 grossing movies Local content gravitating towards IMAX genres 35,000 50% 45% (in RMB millions) 45% 30,000 40% 40% 36% 25,000 35% 35% 31% 31% 31% 30% 20,000 25% 15,000 Ne Zha (July 2019) 28,605 20% The Wandering Earth (Feb 2019) 24,845 Highest
Slide 17: …and Our Refined Programming Strategy
…and 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 – third highest-grossing movie in IMAX China history • Close to 10% indexing during Chinese New Year “Ne Zha”
Slide 18: Drives a consistently High Hit-Rate…
Drives a consistently High Hit-Rate… Top 10 films, 2019 IMAX = 9 out of 10 Top 10 films, 2018 IMAX = 9 out of 10 Top 10 films, 2017 IMAX = 8 out of 10 Source: Company data Investor Presentation 18
Slide 19: Rising Box Office Contribution From Local Language Titles
Rising Box Office Contribution From Local Language Titles IMAX China box office distribution (Hollywood vs. Local) China box office distribution (Hollywood vs. Local) Hollywood box office Hollywood box office Local language box office Local language box office 40.0% 36.0% 42.0% 46.4% 70.0% 68.6% 77.
Slide 20: …And Sustainable Market Share Gain
…And Sustainable Market Share Gain IMAX China Screen Count Share IMAX China Box Office Market Share IMAX China Average Box Office Per Title* (in US$mn) 1% IMAX China screen penetration IMAX China Screen Count Share IMAX China IMAXBox Office China ShareCount Share Screen IMAX GBO IMAX % of Complex GB
Slide 21: Encouraging Performance Upon Theatre Reopening
Encouraging Performance Upon Theatre Reopening Weekly Industry Box Office IMAX Average Ticket Price Cumulative(1) Box Office Market Share 7% 6.3% vs. 4.0% on average in 2019 6% 5% 4% 3% 2% 1.1% 1% 0.3% 0% IMAX China Other branded offering #1 Other branded offering #2 Note (1): As of Aug 23, 2020 Sou
Slide 22: Financials
• Ecosystem • Business Model • Investment Thesis • Financials Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 22 22
Slide 23: Strong Financial Position with Ample Liquidity and Balance Sheet Flexibility
Strong Financial Position with Ample Liquidity and Balance Sheet Flexibility Strong fundamentals Cost control actions Financial Strength ❑ Healthy, debt-free balance sheet ❑ Three-day or four-day work week for ❑ US$73.8 million in net cash as of June majority of company since March 30, 2020 ❑ No exp
Slide 24: Key Highlights (1H20 vs. 1H19)
Key Highlights (1H20 vs. 1H19) Key Financial Highlights 1H2020 1H2019 YoY change % (in USD 000, unless otherwise stated) Greater China Box Office1 7,393 235,959 (96.9%) Theatre Network (in unit) 714 662 7.9% Total Revenue 6,662 59,256 (88.8%) - Network Business 1,120 33,730 (96.7%) Take-rate2 15.1%
Slide 25: Key Highlights (FY19 vs. FY18)
Key Highlights (FY19 vs. FY18) Key Financial Highlights FY2019 FY2018 YoY change % (in USD 000, unless otherwise stated) Greater China Box Office1 365,807 336,633 8.7% Mainland China Box Office1 (in RMB million) 2,367 2,070 14.4% Theatre Network (in unit) 717 639 12.2% Total Revenue 124,294 117,520
Slide 26: Long-term Shareholder Value Creation
Long-term Shareholder Value Creation Capital returned to shareholders Capital expenditure (in USD mn) (in USD mn) 33% 33% 30.0 21% 22% 20% 19% 33.3 25.0 17% 27.6 15% 14.1 20.0 12% 15.0 21.5 26.6 24.2 24.1 7% 10.0 19.1 19.2 2% 5.0 6.1 - -3% FY2018 FY2019 FY2016 FY2017 FY2018 FY2019 Adjusted earnings
Slide 27: Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
Investor Presentation IMAX® is a registered trademark of IMAX Corporation. 27
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