Imax China Holding Inc · HKEX:1970
Imax China — IPO Roadshow (September 2015)
36 slides from Imax China's IPO roadshow presentation, September 2015
Slide 1: Roadshow Presentation
Roadshow Presentation September 2015
Slide 2: Disclaimer
Disclaimer This document is not for public dissemination and is for the exclusive use of the persons to whom it is addressed and their advisers in connection with IMAX China Holding, Inc. (the "Company", together with its subsidiaries, hereinafter referred to as the "Group"). It is being made availa
Slide 3: Offering Summary
Offering Summary Issuer IMAX China Holding, Inc. ("IMAX China" or the "Company") Transaction Initial Public Offering (“IPO”) Listing Exchange Stock Exchange of Hong Kong (“SEHK”) Pre-Greenshoe: 62.0MM shares (17.8MM shares primary / 44.2MM shares secondary); 17.4% pro-forma TSO Offering Size
Slide 4: Presenters
Presenters Richard Gelfond Chairman and Non-executive Director Jiande Chen Jim Athanasopoulos Chief Executive Officer Chief Financial Officer and Chief Operating Officer Mei-Hui Chou (Jessie) Don Savant Chief Marketing Officer and President, Theatre Development and Film Distribution Head of Human Re
Slide 5: Who We Are
® Section 1 Who We Are
Slide 6: IMAX Stands for
IMAX Stands for 6
Slide 7: Leading Cinematic Technology Provider in Greater China
Leading Cinematic Technology Provider in Greater China Exclusive licensee of the IMAX brand in the theatre and films business in Greater China with access to global partnerships Sole commercial platform for the release of IMAX format films in Greater China, which is the second largest and fastest gr
Slide 8: Integral Part of the Greater China Film Industry with 15-year Presence
Integral Part of the Greater China Film Industry with 15-year Presence Avatar grossed Signed agreement with Furious 7, US$24.0MM Wanda Cinema for 120 Avengers and on 14 IMAX theatre systems, Jurassic World screens representing 69% of total ranked 1st, 3rd and theatres then in operation 4th top gross
Slide 9: Unique Business Model with Strong and Successful Long-term Partnerships
Unique Business Model with Strong and Successful Long- term Partnerships 30+ Exhibitors with 10+ Year Relationships Leading Producers, Directors and Studios in Greater China Large Commercial Real Estate Developers 9
Slide 10: Complete End-to-end Cinematic Solution
Complete End-to-end Cinematic Solution Film Sourcing Enhancement Presentation Studio Capture with Proprietary Hardware & Geometry Relationships IMAX Cameras Filmmaker DMR & Real-time Relationships Post-production Marketing Quality Assurance 10
Slide 11: Industry Overview
® Section 2 Industry Overview
Slide 12: Strong and Sustainable Growth with Significant Potential for Further Penetration
Strong and Sustainable Growth with Significant Potential for Further Penetration… Number of Theatres and Screens in the PRC Per Capita Film Attendance Screens: No. of Visits per Annum Screens: 18.2% 40.4% Source: EntGroup Box Office in the PRC and the U.S. Per Capita No. of Screens US$Bn 35.2% No. o
Slide 13: Supported by Favorable Regulatory Environment
…Supported by Favorable Regulatory Environment Gradual Liberalization Chinese Language Films Box Office Revenue The film import quota increased from 20 to 34 (14 US$Bn extra films must be either 3D or IMAX format) in 2012 Import quota will be re-negotiated in 2017 Favorable Subsidies Theatres:
Slide 14: PRC Film Exhibition and the Private Label Theatre Market
PRC Film Exhibition and the Private Label Theatre Market IMAX Box Office Revenue No. of IMAX Commercial Screens in the PRC in the PRC US$MM 221 183 204 162 129 140 98 81 2012 2013 2014 1H15 2012 2013 2014 1H15 Number of Non-conventional Market Share by Box Office in Significant Premium in Per Screen
Slide 15: Hollywood Blockbusters in IMAX Format
Hollywood Blockbusters in IMAX Format 17 Out of Top 20 Highest Grossing Imported Films of All-time in the PRC (1) US$MM Furious 7 391.3 Transformers: Age of Extinction 318.8 Avengers: Age of Ultron 236.1 Jurassic World 229.0 Avatar 216.1 Transformers 3 172.9 Titanic 3D 152.6 Interstellar 125.8 Iron
Slide 16: Investment Highlights
® Section 3 Investment Highlights
Slide 17: Key Investment Highlights
Key Investment Highlights Strong Entertainment Brand in the Large and Fast-growing 1 Greater China Market Strong Slate of Hollywood Films Complemented by a Growing Portfolio 2 of Chinese Language Films (1) Unparalleled Network Supported by Strong Exhibitor Partnerships and 3 Solid Backlog Leading IM
Slide 18: Strong Entertainment Brand in the Large and Fast-growing Greater China Market
Strong Entertainment Brand in the Large and 1 Fast-growing Greater China Market Highest brand awareness as acknowledged by 100% of surveyed audience (1) High visit frequency with 76% of surveyed audience(1) in attendance in 2014 Average ticket price of US$11 (2) in 2014, a 90% price premium over ave
Slide 19: Strong Slate of Hollywood Films Complemented by Chinese Language Films
Strong Slate of Hollywood Films Complemented by a 2 Growing Portfolio of Chinese Language Films Of the 33 Hollywood films released in the PRC in Offers higher % of box office revenue and 2014, 22 were released in IMAX format supplements Hollywood films portfolio HOLLYWOOD FILMS CHINESE LANGUAGE FILM
Slide 20: Unparalleled Network and Backlog across Greater China
Unparalleled Network and Backlog across Greater China 3 Supported by Long-term Repeat Exhibitors Partnerships 251 IMAX theatres Long-term Repeat Exhibitors Partnerships in Greater China Relationship No. of IMAX Backlog Since Theatres with a further 217 theatres in our backlog(1) Wanda Cinema 2007 12
Slide 21: Leading IMAX Theatre System and Technology
Leading IMAX Theatre System and Technology Delivering a Unique 4 Cinematic Experience and an End-to-end Cinematic Solution SPECIALIZED ACOUSTICS AND SOUND SYSTEM LARGE SCREEN HIGH- RESOLUTION FOUR-FOLD IMAGE REDUCTION QUALITY IN BACKGROUND NOISE 21
Slide 22: Significant Value Creation Across the Film Industry
Significant Value Creation Across the Film Industry for 5 Exhibitors, Studios, Filmmakers and Commercial Real Estate Developers Strong Network Effect as IMAX Theatre Network Expands Theatre Exhibitors Studios and Filmmakers Immersive Motion Broad Release Premium Pricing Higher Attendance Picture Pla
Slide 23: Experienced Management Team Supported by Prominent Shareholders
Experienced Management Team Supported by Prominent 6 Shareholders Board of Directors Richard Greg Foster RuiGang Li Yue-Sai Kan John Davison Dawn Taubin Gelfond Non-executive Non-executive Independent Non- Independent Non- Independent Non- Non-executive Director Director executive executive executiv
Slide 24: Growth Strategy
® Section 4 Growth Strategy
Slide 25: Key Strategies and Goals
Key Strategies and Goals 1 2 Increase the Number of Revenue Expand the IMAX Theatre Network in Sharing Arrangements with Our the PRC Exhibitor Partners 6 3 Leverage the IMAX Brand to Develop and Invest in Complementary Strengthen Our Cooperation with Businesses and Establishment of a PRC Studios and
Slide 26: Financial Highlights
® Section 5 Financial Highlights
Slide 27: Rapid Network Expansion
Rapid Network Expansion Number of Theatres Number of Installations 2012–2014 2012–2014 CAGR 251 CAGR 62 234 31 25 188.7% 15 123.6% 186 173 45 14 10 109 102 41.4% 40 7 128 3 3 80 75 27 13.4% 51 21 24 111 18 107 20.2% 88 92 74 13 6 20 11.8% 4 16 7 14 5 2012 2013 2014 1H14 1H15 4 5 Sales Full Revenue S
Slide 28: Robust Revenue Growth
Robust Revenue Growth Theatre Business Revenue Film Business Revenue US$MM 2012–2014 US$MM CAGR 29.1% 76.7% 6.4% Number 21 28 29 16 17 Hollywood(1) of Films Chinese 4 5 6 2 2 Language Note 1. Includes Hollywood films in Hong Kong and Taiwan 28
Slide 29: Expanding Margins
Expanding Margins Gross Profit Adjusted EBITDA(1) US$MM % Margin US$MM % Margin 46.5 69.6% 64.4 40.9 61.2% 59.4% 57.6% 52.2% 53.5 53.6 32.2 30.6 29.9 52.3 49.3 28.3 24.3 23.0 17.1 14.9 2012 2013 2014 1H14 1H15 2012 2013 2014 1H14 1H15 Note 1. Adjusted EBITDA consists of profit for the year adjusted
Slide 30: Significant Operating Leverage
Significant Operating Leverage Adjusted Net Profit(1) Capital Expenditure US$MM % Margin US$MM % Revenue 41.7 34.5 33.2 30.8 32.5 30.9 28.2 22.5 19.2 26.0 17.3 16.1 15.0 18.2 18.3 9.9 13.2 8.6 2012 2013 2014 1H14 1H15 2012 2013 2014 1H15 (1) Adjusted Net Profit % Margin Note 1. Adjusted net profit c
Slide 31: ®
®
Slide 32: Extensive Backlog
Extensive Backlog 217 217 43 65 86 174 (1) 66 By Type of Arrangements (2) By Period of Installation (2) Sales Full Revenue Sharing Agreement Hybrid Revenue Sharing Agreement 2015E-2018E 2019E-2021E As of June 30, 2015, 30.2% of backlog is in Tier 1 and 2 Cities, and 30.7% in Tier 3 and 4 Cities. T
Slide 33: Top IMAX Films in the PRC
Top IMAX Films in the PRC Transformers: #1 Titanic 3D #1 Pacific Rim #1 Age of Extinction #2 Mission Impossible 4 #2 Gravity #2 Interstellar #3 Avengers #3 Iron Man 3 #3 The Monkey King Captain America: #4 The Dark Knight Rises #4 Star Trek Into Darkness #4 The Winter Soldier #5 Chinese Zodiac #5 Ma
Slide 34: Strong Support from IMAX Corporation
Strong Support from IMAX Corporation Agreement Subject Matter Term Fees Annual Caps Trademark Grant of an exclusive right to 25 years Annual fee of 2% of gross Determined by reference to the License use certain IMAX trademarks (renewable for an additional revenues of the Company formulae for determi
Slide 35: Top Exhibitor Partners
Top Exhibitor Partners Long-term Repeat Exhibitor Partnerships(1) Wanda Cinema Partnership As % of Total IMAX Largest exhibitor in the world (taken IMAX IMAX As % of Theatres in Theatres Theatres Total IMAX Operation Years of together with AMC cinemas) and in in in Theatres in and in Relationship
Slide 36: Expanding Margins
Expanding Margins Gross Profit by Operating Segments US$MM % Margin 69.6% 61.2% 59.4% 57.6% 52.2% 46.5 0.4 64.0% 40.2% 61.1% 11.9 55.0% 32.2 55.7% 76.7% 30.5 48.5% 0.5 57.9% 4.0 26.7% 2.3 0.1 24.3 8.2 56.0% 54.1% 0.1 3.0% 30.5% 8.4 11.6 3.7 3.5 59.0% 2.1 1.2 17.1 41.7% 0.1 29.3% 2.5 2.0 34.5% 4.7 46