Presentation - Jetix Europe

Slide 1
Fox Kids Europe N.V.
Results Presentation- Six Months Ended March 31, 2004
June 10, 2004
Slide 2
Operating Review
Bruce Steinberg
Chairman & CEO
Slide 3
H1 04 Operating Highlights
Another strong set of results
‹ Strong performance on all key financial measures
‹ Subscribers up by 4.4 mil year-on-year to 37.2 mil
‹ Library expanded with acquisition of 122 new episodes
‹ Power Rangers merchandise now on sale in Disney stores
‹ Relocation of UK/French offices to Disney on schedule
‹ Successful launch of Jetix branded blocks
Slide 4
Jetix
Our aim is to create a virtuous circle with Disney
Europe
FKE
FKE
US
Latin America
Disney
Disney
FKLA
FKLA
DRIVING
DRIVING
PROGRAMMING
PROGRAMMING
WITH
WITHMARKETING
MARKETING
SUPPORT
SUPPORT
HIGHER
HIGHERRETURN
RETURN
TO
TO
SHAREHOLDERS
SHAREHOLDERS
HIGHER
HIGHER
FREE
FREE
CASH
CASH
FLOW
FLOW
HIGH
HIGH
EXPOSURE:
EXPOSURE:
FREE+PAY
FREE+PAYTV
TV
IN
INEUROPE
EUROPE
The leading global,
advertising supported
children's basic channel
HIGHER
HIGHERREVENUES:
REVENUES:
•Licence
•Licencefees
fees
•Advertising
•Advertising
•Consumer
•Consumerproducts
products
Slide 5
Jetix
Block launches are a success
‹ Jetix blocks launched on all Fox Kids channels (from April 2004)
‹ Double digit ratings growth on Jetix blocks for the UK, Denmark,
Poland and Spain
‹ Full switch from Fox Kids Channels to Jetix channels commencing
in September 04
‹ First Jetix co-production underway with Disney
‹ Company to be renamed Jetix Europe NV
Slide 6
Channels & Online
Core business continues to perform strongly
‹ Subscribers up by 2.4 mil in period; 4.4 mil y-o-y to 37.2 mil
‹ Strong channel ratings performance, particularly in the UK and
France
‹ Exclusive co-production agreement signed with Marathon
‹ Successful launch of Fox Kids interactive service on Sky Active
‹ Registered users on Fox Kids websites up by 40% to 1.9 mil
Core channel broadcasting in 57 countries in 17 languages via 13 channel feeds
Slide 7
Market Positioning
Europe & Middle East
50
45
March 31, 2004
TV Households (Million)
40
37.2
35
29.8
30
25
21.0
20
15
14.1
10
5
0
Disney *
Nickelodeon
Source: Market research and FKE estimates
*Available as a premium channel
Cartoon Network
Fox Kids
Slide 8
Channel Growth Continues
Increasing in both cable and DTH
Million
HH’s
13
40
35
GR
A
C
30
25
=
32.3
32.8
19.3
24.7
18.5
18.1
Cable
DTH
19.9
14.3
15.1
15
12.2
10.7
9.0
10
6.4
0
37.2
34.8
%
44
18.3
20
5
%
3.5
3.5
4.3
6.1
1997
1998
1999
7.7
2000
10.4
2001
14.0
2002
16.3
14.7
2003
2003
17.9
2004
Sept 30
As of May 31
As of March 31
Slide 9
Fox Kids Channel Reach
Italy and the UK lead the growth
0.3
0.3
Greece
Israel
H1 03
0.6
0.6
H1 04
1.3
1.6
Hungary /Czech/Slov
Turkey*
1.6
1.9
1.7
1.8
1.8
Germany
Spain
New
1.9
2.0
Scandinavia
1.8
Poland
Italy
0.6
feed in
Turkey
2.3
2.5
2.5
2.8
France
5.1
CEE*
4.2
6.7
6.8
Netherlands
8.3
UK & Ireland
0.0
2.0
4.0
6.0
8.0
Million HH’s
*From March 2004 a dedicated Turkish feed replaced the CEE feed covering Turkey
9.0
10.0
Slide 10
Programme Distribution
Foundations in place to ensure a sustained recovery
‹ Improvement in both quality and quantity of programming acquired
‹ 122 new episodes added
‹ 2 new co-productions commenced:
‹ Oban Star Racer (Sav! The World, Super RTL and France 3)
‹ Super Robot Monkey Team Hyperforce Go! (Walt Disney TV
Animation)
‹ New output deal concluded with CTC in Russia
‹ Power Rangers continues to rank number one amongst kids in its time slot
in almost all markets in which it airs
Slide 11
Growing Programme Library
‹ Titles delivered include:
‹
‹
‹
‹
‹
Sonic X
Tutenstein
Shaman King
What’s with Andy
RoboRoach
‹ 122 new episodes added in total
‹ A further 200 episodes in progress as at March 31, 2004 including:
‹ Tofu Family
‹ W.I.T.C.H
‹ Oban Star Racer
‹ Power Rangers Dino Thunder
‹ RoboRoach 2
‹ Super Robot Monkey Team Hyperforce Go!
Slide 12
Consumer Products
‹ Power Rangers merchandise now selling in all Disney stores throughout Europe
‹ Key new licensing rights secured including:
‹ Sonic X; Europe, ME and Latin America
‹ Oban Star Racer; Worldwide excluding Asia and France
‹ The next three series to be co-produced with Marathon; Europe
‹ Continue to leverage channel network to generate new revenue streams:
‹ Ch!pz first album achieves gold status
‹ Fox Kids magazines circulation over 600K per month
Slide 13
Financial Review
Martin Weigold
Chief Financial Officer
Slide 14
Financial Highlights
Substantial progress on all key indicators
H1
H1 04
04
H1
H1 03
03
Total Revenues
87.4
74.8
17%
EBITDA
35.4
30.1
18%
Income Before Tax
12.1
3.3
267%
EPS (cents)
11.6
1.8
544%
Operating Cash Flow
18.6
5.1
265%
(US$mil)
$1 mil of anticipated $6 mil relocation charges
were recognised in the period
Change
Slide 15
Revenue Contribution
Breakdown by LOB and geographic segment
Line
Line of
of Business
Business
Country
Country
Consumer
Products
8%
Advertising
28%
Channels
& Online
77%
Programme
Distribution
15%
Spain &
Italy 9% Portugal 9%
Nordic
Region 4%
Benelux
12%
Germany
8%
France
13%
Subscription and
Other 49%
Poland 3%
CEE 8%
UK
29%
ME 5%
Total revenues for the six months ended March 31, 2004: $87.4 mil
mil
Slide 16
Channels & Online
Core business profitability continues to grow
26
%
Financial
Financial Performance
Performance ($mil)
($mil)
67.7
H1 03
H1 04
31
%
53.8
28.5
21.7
Overview
Overview
‹ Revenues up 26% to $67.7 mil
‹ Advertising revenues up 53%; now
represents 36% of channel
revenues
‹ Strong growth in advertising
driven by UK, Dutch and Italian
channels
‹ EBITDA margin* increased from
42.4% to 43.8%
Revenues
EBITDA
*Calculated on net revenues
Slide 17
Channel & Online Revenues
Subscription
Subscription
Revenues
Revenues ($mil)
($mil)
Other
Other Revenues
Revenues
($mil)
($mil)
24.3
1.8
50
%
36.7
41.6
53
%
%
13
Advertising
Advertising Revenues
Revenues
($mil)
($mil)
15.9
H1 03
1.2
H1 04
Total channel & online revenues: $67.7 mil
Slide 18
Programme Distribution
Recovery expected in FY05
Financial
Financial Performance
Performance ($mil)
($mil)
)
0%
(2
16.2
H1 03
H1 04
(25
12.9
11.0
%)
8.3
Overview
Overview
‹ Revenues better than anticipated. Full
year guidance adjusted accordingly
‹ Main contributors were What’s with
Andy 2, Power Rangers and Sonic X
‹ Margin compression contained
through cost savings
‹ EBITDA margin of 64% within target
range for FY04 (60 - 65%)
‹ Strong growth in Iberia, Germany and
CEE offset by fall in non-European
sales
Revenues
EBITDA
Slide 19
Consumer Products
Financial
Financial Peformance
Peformance ($mil)
($mil)
Overview
Overview
‹ Revenues up 42% to $6.8 mil
H1 03
H1 04
42
%
6.8
‹ Power Rangers, Princess Sissi, Fox
Kids brand and Pucca main
contributors to growth
‹ Revenue growth helped by phasing of
Power Rangers minimum guarantee
4.8
%
94
3.3
1.7
‹ 94% increase in EBITDA to $3.3 mil
‹ Benefit from lower costs arising from
restructuring of German CP operation
last year
‹ EBITDA margin up from 35% to 49%
Revenues
EBITDA
Slide 20
Cash Flow
Continued improvement in cash flow
H1
H1 04
04
H1
H1 03
03
9.6
1.5
25.9
27.0
(13.8)
(14.6)
21.7
13.9
Working capital
(3.1)
(8.8)
OPERATING CASH FLOW
18.6
5.1
-
(20.8)
Capex
(0.7)
(0.7)
FREE CASH FLOW
17.9
(16.4)
(US$mil)
Net income/(loss)
Non-cash items
Programming
Acquisition of FKI
Slide 21
Summary
Fox Kids Europe well positioned for future growth
‹ Most widely distributed children's channel in Europe and ME
‹ One of the largest children’s programme libraries in the world
‹ Programme distribution expected to fall in FY04 less than
initially anticipated before returning to growth in FY05
‹ Free cash flow positive
‹ Strong balance sheet; $69 mil net cash balances
‹ Support from Disney, the world’s leading provider of family
entertainment
Slide 22
Q&A’s