Eros International Media Ltd

Eros International Media Ltd
Corporate Presentation
February 2015
A Leading Global Indian Film Entertainment Company
220+ new releases over the last 3 fiscal years

Subtitled / dubbed content in 25+ different languages

Average 3 of the top 10 releases in India each year (2010 –
2013)(1)

Multi-channel global distribution in 50+ countries
Key Digital Initiatives


FY09
FY14
FY09
FY14
Diversified Revenue Mix FY2014(2)
Eros Now—on-demand IP portal with over 1,000 movies and 6,500 music videos

Leverage content library through ad-supported and subscription-based offerings

Capitalizing on growing internet usage, broadband penetration and availability of 3G/4G
PAT
1,997

Revenue
748
1,200+ films and digital rights to an additional 700 films
(Rs. in million)
11,396

Strong Financial Track Record
6,278
Leading co-producer, acquirer and distributor of Indian language
films globally
Overseas,
26%
Theatrical,
42%
HBO Asia—Exclusive collaboration for two premium digital TV channels in India

Created new pay TV window immediately post-theatrical release
Others,
32%
(1)
(2)
3 of the Top 10 grossing Hindi films in CY’10 (Source: BoxOfficeIndia.com); 4 of the Top 10 Hindi films in CY’11 (Source: BoxOfficeIndia.com); 2 of the Top 10 Hindi films in CY’12 (Source:
bollywoodhungama.com); 4 out of top 10 Hindi releases in CY’13 (Source: bollywoodhungama.com)
Fiscal year ended March 31
1
Pioneer and Innovator in Indian Film Entertainment
Established global
distribution network
outside India
Began acquiring
international IP
rights for Indian
content
1977
1981
Early adopter of
VHS distribution
1982 – 1998
Launch of first
digital Bollywood
TV network(1)
Launch of
Adoption of
vertically
integrated mode
channel
2006
2007 – 2008
First Indian media
company to list on
AIM
(1)
(2)
Launched Digital
distribution
channels:
Announced
Techzone
acquisition
Asia
SVOD
agreement with
Comcast
Ayngaran
2010 – 2014
Listed EIML
on the
Listed Eros
PLC on
and
Tamil
acquisition
Eros PLC currently has a 24% stake in B4U
Eros PLC delisted from LSE AIM market and commenced trading its ‘A’ ordinary shares on the NYSE
2
Established Brand with Leading Market Share
Average 3 of the Top 10 Releases in India Each Year (2010 –2013)(1)
U.S. (6)
Fox, 4%
Viva, 8%
Reliance,
9%
Eros, 43
%
$23.3m(2)
$25.7m(3)
$14.5m(3)
$17.4m(5)
Yash
Raj, 17%
Leading market
share
UTV, 20
%
$16.5m(2)
$24.5m(3)
$20.4m(4)
$ 32.2m(5)
U.K. (6)
Others, 1
3%
Fox, 3%
$8.8m(2)
$19.3m(3)
$19.8m(4)
$19.9m(5)
RJ, 4%
Reliance,
6%
Eros, 40
%
Yash
Raj, 19%
UTV, 15
%
2010 – 2013 Box Office
(1)
(2)
(3)
(4)
(5)
(6)
No. 1 over the
last 30 years
2012 Share(6)
3 of the Top 10 grossing Hindi films in CY’10 (Source: BoxOfficeIndia.com); 4 of the Top 10 Hindi films in CY’11 (Source: BoxOfficeIndia.com); 2 of the Top 10 Hindi films in CY’12 (Source: bollywoodhungama.com); 4 out of
top 10 Hindi releases in CY’13 (Source: bollywoodhungama.com)
Rupees converted to USD at 45.72 using average exchange rate in 2010 (Source: BoxOfficeIndia.com)
Rupees converted to USD at 46.66 using average exchange rate in 2011 (Source: BoxOfficeIndia.com)
Rupees converted to USD at 53.43 using average exchange rate in 2012 (Source: BoxOfficeIndia.com)
Rupees converted to USD at 58.51 using average exchange rate in 2013 (Source: BoxOfficeIndia.com)
Represents market share of all theatrically released Indian language films in 2012 (Source: Rentrak)
3
India: High Growth with Attractive Fundamentals
One of the Fastest Growing Economies(1)
Projected GDP growth CAGR (2013 – 2018E)
7.0%
6.3%
China
India
2.9%
2.8%
2.5%
US
Brazil
UK
A Young Nation…(2)
...with Attractive Market Fundamentals
Median age (years)
40
UK
(1)
(2)
38
US
37
China
31
Brazil
27
Growing Middle Class
India
Increasing Discretionary
Income
Source: IMF World Economic Outlook as of April 2014
Source: CIA World Factbook, 2014 Estimate
4
Media & Entertainment Market Projected to Grow at 14.2%
'13 – '18
CAGR
(Rs. in billion)
1,786
1,580
1,390
1,201
306.9
18.3%
219.8
11.9%
374.0
9.0%
885.0
16.2%
264.6
223.1
200.0
918
132.5
1,039
188.1
157.6
158.3
181.3
343.0
313.0
138.0
125.3
287.0
264.0
243.1
417.2
478.9
2013A
2014P
2015P
TV
(1)
(2)
672.4
567.4
2016P
Print
Film
771.9
2017P
2018P
Other
Source: FICCI-KPMG Report 2014
“Other” includes radio, music, out of home, animation & VFX, gaming and digital advertising segments
5
Expanding Theatrical Market Should Benefit Eros
India is a Highly Underpenetrated Market…(1)
Theater screens per million population
…Fueling Growth in the Indian Film Industry(3)
(Rs.in billion)
Indian film industry revenue outlook
120
220
10
UK
India
125
…with Increasing Multiplexes & Ticket Prices(2)
Number of films with box office revenue > 1bn Rs (~$15mm)
9
5
2
1
2009A
(1)
(2)
(3)
2010A
2011A
2012A
2013A
2018E
Source: “PWC Global Entertainment and Media Outlook 2014-2018”
Source: FICCI-KPMG Report 2013
Source: FICCI-KPMG Report 2014
6
Indian TV Market is Underpenetrated With Strong Potential
Current Low Television Household Penetration…(1)
Status of Digitization in India(1)
As of 2013
98%
Phase
96%
Parliamentary approval Digital cable
Digitisation
for analogue shutdown STBs rolled out including DTH
60%
China
Brazil
India
…is Expected to Fuel Growth in the Indian TV Industry (1)
Phase 1
Jun-12
~ 8 mn
98%
Phase 2
Mar-13
~14 mn
90%
Phase 3
Jun-15
Phase 4
Dec-15
~3 mn
40-50%
...is Supported by Favorable Viewing Preferences(1)
(Rs in billion)
Percentage of viewing time spent
885
45%
75+%
417
632
21%
11%
281
136
2013A
Advertising Revenue
1)
7%
253
2018A
Subscription Revenue
Hindi GEC +
Movies
Regional
Channels
Kids + Music
News
Source: FICCI-KPMG Report 2014
7
Opportunity to Capitalize on Indian Digital Media Market Growth
Strong Expected Internet-enabled Smartphone Growth(1)
Internet Penetration is Still in Early Stages(1)
87%
86%
(in million)
As of 2013
334
267
215
60%
161
44%
115
UK
US
Brazil
China
17%
66
India
2013A
2014E
2015E
2016E
2017E
2018E
Expected to Lead to e-Commerce Expansion(2)
3G penetration in India on an increasing trend(1)
Indian e-commerce market
($ in billion)
(in million)
369
16.5
284
219
146
82
3.4
42
2013A
(1)
(2)
2014E
2015E
2016E
2017E
2018E
2013
2018
Source: FICCI-KPMG Report 2014
Source: Emarketer 2014, excludes travel and event tickets, 1USD = Rs. 62
8
Eros International Market Opportunity
Attractive and Sizable International Market Across 50+ Countries(1)
196M
Select target
growth markets
Pakistan’s
population(2)


1.2B

India’s
population(2)


Established distribution markets
Developing + recently opened markets


Global Opportunity


(1)
(2)
Global demand for
Bollywood content
Large South Asian diaspora
Additional Monetization
Opportunities
Expanding International Markets



Dubbed content in 25+ languages
Significant demand in Europe and Southeast Asia
Arrangement with local distributors to target
theatrical, TV and DVD releases
Germany
Russia
China
Japan
Korea
Taiwan
Indonesia

Technology penetration and
proliferation of distribution
channels
Source: The Migration and Remittances Factbook 2011
Source: CIA World Factbook
9
Content Strategy Mitigates Risk and Maximizes Cash Flow
Disciplined
Greenlighting
Process
Content Bundling
Maximizes
Exploitation
Co-Production &
Acquisitions
Maximize Cash Flows &
Library Value
Portfolio
Approach by Film
Budget, Genre &
Language
Low P&A Costs
Pre-Sale Focus:
43% – 73% of
Hindi Film and
>100% of Tamil
Direct Production
Costs(1)
(1)
For major films released in FY14. Major (“high budget”) films refer to Hindi films with direct production costs in excess of $8.5 million and Tamil films with direct production costs in excess of $7.0
million
10
Successful Multi-Platform Content Monetization Model
New Release Content(1)


Library Content
Co-production: 20 year exclusive distribution
rights + perpetual copyrights
Acquisition: 5 – 20 year rights
Theatrical


TV Syndication
Digital
SVOD / VOD
1,200+ films and digital rights to an
additional 700 films
Attractive multi-platform rights
Music /
Publishing
Ancillary

In-flight
entertainment

DVDs
Radio
Hotels



Note:
(1)
Ringtones
Companies shown above are a selection of the Company’s relationships
Typical terms for new release content
11
Maximize Monetization Through the Release Windows




Eros generates revenues across all phases of the film release cycle
Indian theatrical and DVD release windows are short
Limited DVD market exposure
Stable sources of revenue including HBO Asia collaboration and Eros Now
Pre-Sales Window (Theatrical, TV, Music)
Digital Exploitation
DTH
Pre-Prod /
Planning /
Casting /
Scripting
Principal
Photography
PostProduction /
Completion
Theatrical
Release
(TR)
Music
Release
Satellite TV
Licensing
Eros
Library
DVD Distribution
Ancillary
18 months
before TR
12 months
before TR
6 months
before TR
3 months
before TR
TR
1 month from TR
3 months onwards
1 year onwards
12
ErosNow : Ultimate Destination for Online Indian Entertainment
Eros Now: The Netflix, Hulu and Spotify of Indian Entertainment Content
Movies + TV + Music + Exclusive Original Content
1,000’s of Video & Audio Tracks
On-Demand
Ad-Supported
All Internet –
Enabled
Devices
Full Social
Media
Integration
Content Partners
(Source: Company data, across Eros Digital
13
ErosNow Outperforms other Platforms in Traffic & Features
Traffic surpasses South Asian peer group across Film and TV platforms
 ErosNow well above BigFlix (Reliance), Spuul, Box TV (Times of India) and Ditto TV (Zee TV)
Features outperform International platforms & metrics outperform South Asian peers
Metrics
Daily Time on Site per Visitor (Min)
4.0
5.5
5.0
2.1
2.2
Features
Premium Movies
Free Movies
Short-form Content
Original Content
Catch-up TV
Live Stream Events
Music Content
Source: Company data and Alexa.com
14
Techzone Transaction Will Reinforce Strategy
Executed a term sheet in June 2014 to
acquire a controlling stake in Techzone(1)
Source:
(1)
1
Mobile Value Added Services provider for telecom
operators based in India
2
Techzone is an aggregator, developer and distributor
of entertainment content via mobile platforms
3
Focused on the Bollywood films and music markets
with significant content in Tamil and Telugu
4
Platform has averaged 25 million SMS, WAP or IVR
transactions per month over the past three years
across 12 major telecom operators
5
Strong addition to ErosNow strategy - India has over
870 million mobile subscribers as of 2013
Press releases
Subject to certain conditions precedent, in addition to legal, regulatory and financial requirements
15
Financial Overview
Key Financial Highlights

Strong Track Record of Revenue, EBIT & PAT Growth

Multi-Channel Distribution Diversifies Sources of Revenue

Conservative Balance Sheet

Impressive slate of films lined for Q4FY15 & FY16
17
Steady Revenue Growth despite economic headwinds
Diversified Revenue Streams
Strong Historical Revenue Growth
(Rs. in million)
11,396
10,744
9,632
Overseas,
26%
7,159
6,278
Theatrical,
42%
6,535
Others, 32%
Film by Budget Type(1)
FY09
FY10
FY11
FY12
FY13
FY14
FY09
FY10
FY11
FY12
FY13
FY14
High
2
3
3
5
6
4
Medium
13
11
10
5
13
21
Low
76
97
64
67
58
44
91
111
77
77
77
69
Total
(1)
Films(2)
“High budget” films refer to Hindi, Tamil, and Telugu films with direct production costs in excess of Rs. 500 million; “Low budget” films refer to both Hindi, Tamil, and Telugu films with less than Rs. 50 million in direct production
costs; “Medium budget” films refer to Hindi, Tamil, and Telugu films within the remaining range of direct production costs
18
Solid Track Record of Profitability
EBIT
PAT
(Rs. in million)
(Rs. in million)
2,997
1,997
2,257
2,262
1,491
1,182
1,613
1,100
% Margin
1,558
1,213
748
FY09
FY10
FY11
FY12
FY13
FY14
17.5
18.6
22.5
23.4
21.1
26.3
.
826
FY09
FY10
FY11
FY12
FY13
FY14
11.9
12.6
16.5
15.5
14.4
17.5
19
9M FY15 Results – Robust growth on all financial parameters
Revenue
EBIT
(Rs. in million)
PAT
(Rs. in million)
(Rs. in million)
2,787
9,754
1,953
2,317
1,583
8,293
9M FY14
% Margin
9M FY15
9M FY14
27.9
.
9M FY15
9M FY14
28.6
19.1
9M FY15
20.0
20
Conservative Balance Sheet
(Rs. in million)
Actual 9/30/14
Cash
1,631
Debt
4,862
Net Debt
3,231
Equity
13,100
Net Debt/Equity Ratio
0.25
Net Debt / EBIT Ratio
1.07

Strong liquidity

No significant long-term debt maturities until 2016
21
Significant Forthcoming Releases
Scheduled Release
(Fiscal Year)
Film Name
Star Cast / (Director)
Tanu Weds Manu Returns
R. Madhvan, Kangana Ranaut (Anand L. Rai)
FY16
Dil Dhadkne Do (Overseas)
Ranveer Singh, Farhan Akhtar, Priyanka Chopra, Anushka Sharma
(Zoya Akhtar)
FY16
Masss (Tamil)
Suriya, Nayantara, Amy Jackson (Venkat Prabhu)
FY16
Life of Josekutty (Malayalam)
Dileep, Jyothi Krishna, Rachana Narayankutty (Jetthu Joseph)
FY16
Bajrangi Bhaijaan
Salman Khan, Kareena Kapoor (Kabir Khan)
FY16
Hero
Sooraj Pancholi, Adheya Shetty (Nikhil Advani)
FY16
Rajini Murugan (Tamil)
Sivakarthikeyan (Ponram)
FY16
Bangistan (Overseas)
Riteish Deshmukh, Pulkit Samrat, Jaqueline Fernandes (Karan
Anshuman)
FY16
Bajirao Mastani
Ranveer Singh, Deepika Padukone (Sanjay Leela Bhansali)
FY16
Gabbar Singh 2 (Telugu)
Pawan Kalyan (K. S. Ravindra)
FY16
22
Significant Forthcoming Releases
Scheduled Release
(Fiscal Year)
Film Name
Star Cast / (Director)
Aligarh
Kangana Ranaut (Hansal Mehta)
FY16
Housefull 3
Akshay Kumar, Abhishekh Bachchan, Rietesh Deshmukh (Sajid-Farhad)
FY16
Shivay
Ajay Devgn (Ajay Devgn)
FY16
Untitled
Kajol (Ajay Devgan Productions)
FY16
Farzi
Shahid Kapoor, Kiriti Sanon (Raj Nidimoru and Krishna D.K.)
FY16
Banjo
Riteish Deshmukh, Nargis Fakhri (Ravi Jadhav)
FY16
Singh is Bling (Overseas)
Akshay Kumar, Kareena Kapoor, Amy Jackson (Prabhu Deva)
FY16
Gabbar (Overseas)
Akshay Kumar, Kareena Kapoor (Krish)
FY16
Untitled
Sushant Singh Rajput, Alia Bhat (Dinesh Vijayan and Homi Adjania)
FY17
23
Key Investment Highlights

(1)
Global Leader in Indian Filmed Entertainment with Leading Box Office Market Share(1)

Largest Indian Content Library of 1,200+ Films, 700+ digital rights

Unparalleled Global Distribution Network

High Growth Indian Media & Entertainment Market with Structural Upside

Portfolio Approach & Pre-Sales Strategy; Diversified and Accelerated Cash Flow

New and Library Content Distributed through New Digital Platforms
3 of the Top 10 grossing Hindi films in CY’10 (Source: BoxOfficeIndia.com); 4 of the Top 10 Hindi films in CY’11 (Source: BoxOfficeIndia.com); 2 of the Top 10 Hindi films in CY’12 (Source:
bollywoodhungama.com); 4 out of top 10 Hindi releases in CY’13 (Source: bollywoodhungama.com)
24
Thank You