Eros International Plc

Eros International Plc
Corporate Presentation
February 2015
Forward – Looking Statements
These materials contain statements that reflect Eros International PLC’s (the “Company”) beliefs and expectations about the future that constitute “forward – looking
statements” as defined under U.S. federal securities laws. In some cases, these forward-looking statements can be identified by the use of forward-looking
terminology, including the terms “believes”, “estimates”, “forecasts”, “plans”, “prepares”, “projects” “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in
each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These
forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include, but are not
limited to, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations,
financial condition, liquidity, prospects, growth, strategies, business development, the markets in which the Company operates, expected changes in the Company’s
margins, certain cost or expense items as a percentage of the Company’s revenues, the Company’s relationships with theater operators and industry participants,
the Company’s ability to source film content, the completion or release of the Company’s films and the popularity thereof, the Company’s ability to maintain and
acquire rights to film content, the Company’s dependence on the Indian box office success of its films, the Company’s ability to recoup box office revenues, the
Company’s ability to compete in the Indian film industry, the Company’s ability to protect its intellectual property rights and its ability to respond to technological
changes, the Company’s ability to complete the acquisition of Techzone, the Company’s contingent liabilities, general economic and political conditions in India and
globally, including fiscal policy and regulatory changes in the Indian film industry and other factors discussed in the Company’s public filings. By their nature,
forward-looking statements involve known and unknown risk and uncertainty because they relate to future events and circumstances. Forward-looking statements
speak only as of the date they are made and are not guarantees of future performance and the actual results of the Company’s operations, financial condition and
liquidity, and the development of the markets and the industry in which the Company operates may differ materially from those described in, or suggested by, the
forward-looking statements contained in these materials. The forward-looking statements in this presentation are made only as of the date hereof and the Company
undertakes no obligation to update or revise any forward-looking statement, whether as a result of current or future events or otherwise, except as required by law
or applicable rules. In addition, even if the results of operations, financial condition and liquidity, and the development of the markets and the industry in which the
Company operates are consistent with the forward-looking statements contained in these materials, those results or developments may not be indicative of results
or developments in subsequent periods. A number of factors, many of which are beyond the Company's control, could cause results and developments to differ
materially from those expressed or implied by the forward-looking statements.
The Company has filed a Registration Statement on Form F-1 with the U.S. Securities and Exchange Commission, which includes (under the caption “Risk
Factors”) information concerning the factors that could cause the Company’s results to differ materially from those contained in the forward-looking statements. You
may obtain a copy of this document by visiting EDGAR on the SEC website at www.sec.gov.
1
Company Overview
A Leading Global Indian Film Entertainment Company
A leading co-producer, acquirer and distributor of Indian language films globally
Strong Financial Track Record
($ in millions)

2,300+ films and digital rights to an additional 700 films

220+ new releases over the last 3 fiscal years

Subtitled / dubbed content in 25+ different languages
Revenue
Adj. EBITDA(2)
$235.5
$80.3

Average 3 of the top 10 releases in India each year (2010

Multi-channel global distribution in 50+ countries
–2013)(1)
$66.4
FY2007
$32.9
FY2014
FY2007
FY2014
Diversified Revenue Mix – FY2014(3)
Strong Digital Offering

Eros Now—on-demand IP portal with thousands of movies and music videos

Leverage content library through ad-supported and subscription-based offerings

Capitalizing on growing internet usage, broadband penetration and availability of 3G/4G
By Channel
Digital
20.3%
Theatrical
45.6%
Television
34.1%
(1)
(2)
(3)
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)
Adjusted EBITDA is defined as EBITDA adjusted for transaction costs, impairments of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives) and share based payments
FYE March 31, 2014
3
Pioneer and Innovator in Indian Film Entertainment
Launched Digital
distribution channels:
Began acquiring
international IP
rights for Indian
content
1977
Established global
distribution network
outside India
1981
1982 – 1998 1999
Early adopter of
VHS distribution
Launch of first
digital Bollywood
TV network(1)
Adoption of
vertically
integrated model
Launch of
Asia
Issued Sterling
denominated retail
bonds in UK
(Oct ’14)
channel
2006
First Indian media
company to list on
2007 – 2008
SVOD
agreement with
Comcast
2010 – 2014
Listed EIML
on the
and
Jul ’14
Follow-on
equity offering
Ayngaran
AIM
(1)
(2)
Tamil
acquisition
Nov ’13 (2)
Eros lists on
Eros currently has a 24% stake in B4U
Eros delisted from LSE AIM market and commenced trading its ‘A’ ordinary shares on the NYSE
4
Key Investment Highlights






(1)
A Global Leader in Indian Filmed Entertainment with Strong Box Office Market Share(1)
Large Indian Content Library of Films & Music with 2,300+ Films
Broad, Well-Established Global Distribution Network
High Growth Indian Domestic Media & Entertainment Market with Structural Upside
Portfolio Approach & Pre-Sales Strategy Diversify and Accelerate Cash Flow
New and Library Content Distributed through New Digital Platforms, Eros Now and HBO Asia
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)
5
Established Brand with Leading Market Share
Average 3 of the Top 10 Releases in India Each Year (2010 –2013)(1)
U.S. (6)
Viva Fox
8% 4%
Reliance
9%
$23.3m(2)
$25.7m(3)
$14.5m(3)
$17.4m(5)
Eros
43%
Yash Raj
17%
Leading market
share
UTV
20%
$16.5m(2)
$24.5m(3)
$20.4m(4)
$ 32.2m(5)
U.K. (6)
Fox
3%
$8.8m(2)
$19.3m(3)
$19.8m(4)
$19.9m(5)
RJ
4%
Reliance
6%
Yash Raj
19%
2010 – 2013 Box Office
(1)
(2)
(3)
(4)
(5)
(6)
Other
13%
Eros
40%
UTV
15%
No. 1 over the
last 30 years
2012 Share(6)
3 of the Top 10 grossing Hindi films in CY’10 (Source: BoxOfficeIndia.com); 4 of the Top 10 Hindi films in CY’11 (Source: BoxOfficeIndia.com); 2 of the Top 10 Hindi films in CY’12 (Source: bollywoodhungama.com); 4 out of
top 10 Hindi releases in CY’13 (Source: bollywoodhungama.com)
Rupees converted to USD at 45.72 using average exchange rate in 2010 (Source: BoxOfficeIndia.com)
Rupees converted to USD at 46.66 using average exchange rate in 2011 (Source: BoxOfficeIndia.com)
Rupees converted to USD at 53.43 using average exchange rate in 2012 (Source: BoxOfficeIndia.com)
Rupees converted to USD at 58.51 using average exchange rate in 2013 (Source: BoxOfficeIndia.com)
Represents market share of all theatrically released Indian language films in 2012 (Source: Rentrak)
6
India: High Growth with Attractive Fundamentals
One of the Fastest Growing Economies(1)
Projected GDP growth CAGR (2013 – 2018E)
7.0%
6.3%
China
India
2.9%
2.8%
2.5%
US
Brazil
UK
A Young Nation…(2)
...with Attractive Market Fundamentals
Median age (years)
40
38
37
31
Growing Middle Class
27
Increasing Discretionary
Income
UK
(1)
(2)
US
China
Brazil
India
Source: IMF World Economic Outlook as of April 2014
Source: CIA World Factbook, 2014 Estimate
7
Media & Entertainment Market Projected to Grow at 14%
‘13 – ’18
CAGR
($ in billions)
$30
$27
$5
$22
$5
18.3%
$4
$2
$20
$16
$2
$18
$3
$3
$3
$3
$6
9.0%
$6
$5
$2
$2
11.9%
$3
$5
$5
$4
$15
$7
2013A
$8
2014E
$10
2015E
Television
(1)
$11
2016E
Print
Film
$13
2017E
16.2%
2018E
Other
Source: FICCI-KPMG Report 2014; Rupees converted to USD at 59.17 as of 6/6/14.“Other” includes radio, music, out of home, animation & VFX, gaming and digital advertising segments
8
Expanding Theatrical Market Should Benefit Eros
India is a Highly
Highly Underpenetrated Market…(1)
Theater screens per million population
…Fueling Growth
Growth in the Indian Film Industry(3)
($ in billions)
Indian film industry revenue outlook
120
$4
10
US
India
…with Increasing Multiplexes & Ticket Prices(2)
$2
Number of films with box office revenue > 1bn Rs (~$15mm)
9
5
2
1
2009A
(1)
(2)
(3)
2010A
2011A
2012A
2013A
2018E
Source: “PWC Global Entertainment and Media Outlook 2014-2018”
Source: FICCI-KPMG Report 2013
Source: FICCI-KPMG Report 2014; Rupees converted to USD at 59.17 as of 6/6/14
9
Indian TV Market is Underpenetrated With Strong Potential
Current Low Television Household Penetration…
Penetration…(1)
As of 2011
…is Expected to Fuel Growth in the Indian TV Industry(2)
($ in billions)
$15
98%
90%
61%
China
(in millions)
Brazil
India
$7
$11
$5
$2
$4
2013A
2018E
Advertising Revenue
Subscription Revenue
Willingness to Pay for Content…(2)
...is Supported by Favorable Viewing Preferences(2)
Indian Pay-TV subscriber base
Percentage of viewing time spent
181
45%
139
75+%
21%
11%
2013A
(1)
(2)
2018E
Hindi GEC +
Movies
Regional
Channels
Kids + Music
7%
News
Source: FICCI-KPMG Report 2012
Source: FICCI-KPMG Report 2014; Rupees converted to USD at 59.17 as of 6/6/14
10
Opportunity to Capitalize on Indian Digital Media Market Growth
Internet Penetration is Still in Early Stages(1)
Strong Expected Internet
Internet--enabled Smartphone Growth(1)
(As of 2013)
87%
(in millions)
86%
334
267
60%
215
44%
UK
US
Brazil
161
China
115
17%
66
India
2013A
3G penetration in India on an increasing trend(1)
2014E
2015E
2016E
2017E
2018E
Expected to Lead to ee-Commerce Expansion(2)
(in millions)
Indian e-commerce market
($ in billions)
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
11
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
12
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


Film Studio Division
Theatrical
TV Syndication
Digital Division
Eros NOW
Music
Social and
mobile gaming
platforms
Eros Images

Note:
(1)
(2)
TV Division
Eros TV
Games

Ancillary (2)
2,300+ films and digital rights to an
additional 700 films
Attractive multi-platform rights
Large existing
database with
millions of
images

24 hour Hindi
film channel
- Eros content
and third party
content

24 hour Hindi
music channel
HBO JV
Companies shown above are a selection of the Company’s relationships
Typical terms for new release content
Includes in-flight entertainment, hotel pay-per view and other miscellaneous
13
Content Strategy Mitigates Risk and Maximizes Cash Flow
Disciplined
Greenlighting
Process
Digital
Distribution
Channels:
HBO Asia,
Eros Now
Content Bundling
Maximizes
Exploitation
Low P&A Costs
(1)
Co-Production &
Acquisitions
Portfolio
Approach by Film
Budget, Genre &
Language
Maximize Cash Flows &
Library Value
Pre-Sale Focus:
43% – 73% of Hindi
Film and >100% of
Tamil Direct
Production Costs(1)
For major films released in FY’14. 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 $7.0 million
14
Eros Now: Ultimate Destination for Online Indian Entertainment
Eros Now: The Netflix, Hulu and Spotify
of Indian Entertainment Content
Movies + TV + Music + Exclusive Original Content
On-Demand
Ad-Supported
All Internet –
Enabled
Devices
Full Social
Media
Integration
Content Partners
Source: Company data, across Eros Digital
15
Eros Now Outperforms other Platforms in Traffic & Features
Traffic surpasses South Asian peer group across Film and TV platforms
 Eros Now well above BigFlix (Reliance), Spuul, Box TV (Times of India) and Ditto TV (Zee TV)
Features outperform International platforms & metrics outperform South Asian peers
Metrics
Daily Time on Site per Visitor (Min)
4.0
5.5
5.0
2.1
2.2
Features
Premium Movies
Free Movies
Short-form Content
Original Content
Catch-up TV
Live Stream Events
Music Content
Source: Company data and Alexa.com
16
Techzone Transaction Will Reinforce Strategy
Executed a term sheet in June 2014 to
acquire a controlling stake in Techzone(1)
Source:
(1)
1
Mobile Value Added Services provider for telecom
operators based in India
2
Techzone is an aggregator, developer and distributor
of entertainment content via mobile platforms
3
Focused on the Bollywood films and music markets
with significant content in Tamil and Telugu
4
Platform has averaged 25 million SMS, WAP or IVR
transactions per month over the past three years
across 12 major telecom operators
5
Strong addition to Eros Now strategy—India has 870
million mobile subscribers as of 2013
Press releases
Subject to certain conditions precedent, in addition to legal, regulatory and financial requirements
17
Financial Overview
Strong Revenue Growth Accelerated by Film Mix
Strong Historical Revenue Growth
Diversified Revenue Streams – FY’14
($ in millions)
$206
$157
$113
$66
$52
$46
$215
$108
$165
$91
$150
$236
$101
Digital &
Ancillary
20.3%
$57
$50
Theatrical
45.6%
$65
$64
$53
$61
$46
$47
$47
$51
FY' 09
FY' 10
FY' 11
FY' 12
$80
$74
Television
34.1%
$21
$33
$21
$24
$28
FY' 07
FY' 08
Digital & Ancillary
Film by Budget Type(1)
High
(2)
FY’10
FY’11
2
3
3
13
11
Low
76
97
91
111
Films(2)
$48
FY' 13
FY' 14
FY’13
FY’14
Theatrical
Medium
Total
(1)
FY’09
Television
$40
FY’12
5
6
4
10
5
13
21
64
67
58
44
77
77
77
69
“High budget” films refer to Hindi films with direct production costs in excess of $8.5 million and Tamil as well as Telugu films with direct production costs in excess of $7.0 million; “Low budget” films refer to both Hindi, Tamil,
and Telugu films with less than $1.0 million in direct production costs; “Medium budget” films refer to Hindi, Tamil, and Telugu films within the remaining range of direct production costs
Total films includes regional films and films with overseas rights
19
Investment in Film Content and Film Costs
Investment in Film Content
Primary Cost Drivers
($ in millions)

Content amortization costs
$187
•
Stepped-up amortization over a 10-year period for new
content
•
Significant portion of content costs amortized in the
first year; remainder amortized equally over 9 years
$163
$149
$138
$137
$133
$124
$109
$108

Print and advertising costs (“P&A”)

Administrative costs historically 11% – 18% of revenue (1)
$82
FY' 10
FY' 11
Cash from Operations
Note:
(1)
FY' 12
FY' 13
FY' 14
Investment in Film Content
FYE March 31
Includes years FY’10 – FY’14
20
Solid Track Record of Profitability
Adjusted EBITDA(1)
Net Income(2)
($ in millions)
($ in millions)
$80
$84
$48
$67
$60
$54
$40
$41
$44
$42
$56
$54
$37
$34
$48
$33
$29
$33
FY' 07 FY' 08 FY' 09 FY' 10 FY' 11 FY' 12 FY' 13 FY' 14
% margin 49.6%
(1)
(2)
30.9%
34.2%
35.7%
36.1%
32.4%
30.3%
34.1%
LTM
FY' 07 FY' 08 FY' 09 FY' 10 FY' 11 FY' 12 FY' 13 FY' 14
LTM
32.5%
44.0%
12.9%
25.2%
26.1%
28.3%
28.9%
21.1%
15.6%
15.8%
Adjusted EBITDA is defined as EBITDA adjusted for transaction costs, impairments of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives) and share based payments
Company filings
21
Third Quarter FY2015
Financial Highlights – Three Months Ended December 31, 2014
 Revenues increased by 15.1% to $100.4 million, compared to $87.2 million in the prior year period
 Currency comparable revenues increased by 14.5%
 Adjusted EBITDA increased by 8.6% to $49.2 million, compared to $45.3 million in the prior year period
 Net income increased 32.5% to $25.3 million, compared to $19.1 million in the prior year period
Operational Highlights
 We released 13 films in the quarter including 3 high budget films, Lingaa (Tamil), Action Jackson (Hindi)
and Happy Ending (Hindi).
 Strong upcoming film slate completing Fiscal 2015 including: Badlapur (Hindi), NH 10 (Hindi) and
Uttama Villain (Tamil).
 ErosNow now has over 14 million registered users worldwide with a combination of free, transactional
and premium users, across all its platforms. Just over 10 million of these customers are mobile users in
India.
 Partnership with RailTel Corporation of India to provide ErosNow broadband streaming services to
railway passengers.
22
Conservative Balance Sheet
($ in millions)
December 31, 2014
Cash
$198
Total Debt
$320
Shareholders’ Equity
Total Capitalization
Note:
Source:
(1)
(2)
724
1,044
LTM (12/31/14) Adj. EBITDA(2)
$84
Net Debt / LTM Adj. EBITDA(2)
1.46x
Total Debt / Total Capitalization
30.7%

£50 million UK retail bond maturing in 2021

$150m unsecured RCF maturing in 2017

No significant long-term debt maturities until 2016
Numbers may not add due to rounding
Company filings
Pro-Forma Capitalization reflects the receipt of proceeds from the issuance of Sterling denominated retail bonds in U.K.
Adjusted EBITDA is defined as EBITDA adjusted for transaction costs, impairments of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives) and share based payments
23
Key Investment Highlights






(1)
A Global Leader in Indian Filmed Entertainment with Strong Box Office Market Share(1)
Large Indian Content Library of Films & Music with 2,300+ Films
Broad, Well-Established Global Distribution Network
High Growth Indian Domestic Media & Entertainment Market with Structural Upside
Portfolio Approach & Pre-Sales Strategy Diversify and Accelerate Cash Flow
New and Library Content Distributed through New Digital Platforms, Eros Now and HBO Asia
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
Appendix
Eros Management Overview
Over 80 years of combined industry and management experience
Kishore Lulla
Jyoti Deshpande
Andrew Heffernan
Mark Carbeck
Group Executive Chairman
Group Chief Executive Officer
Chief Financial Officer
Chief Corporate & Strategy Officer
Years of Experience: 30+
Years of Experience: 20+
Years of Experience: 20+
Years of Experience: 15+

Over 30 years experience in the media
and film industry

Key member of the Eros leadership
team since 2001

Founded B4U Television business in
1999

Former member of J. Walter
Thompson, India

IIFA Award in 2007 for his contribution
to Indian Cinema

Part of the team that founded B4U
Television network in the UK

Entrepreneur of the year by Asian
Business Awards in 2007

Senior media consultant with
Mindshare, UK

Executive Board member of the UCLA
school of Theater, Film and Television

Instrumental in AIM listing in 2006,
Indian subsidiary listing in 2010 and
NYSE IPO in November 2013

Qualified Chartered Accountant

Former audit manager with
Grant Thornton

Founded media consulting practice at
Grant Thornton

Former Director in Citigroup’s UK
Investment Banking Division in London
covering European media companies

Responsible for M&A, corporate
finance, investor relations and
corporate governance
26
Company structure
Founders group
and CEO
50.00%
100.00%
Eros International Plc
(Isle of Man)
50.00%
Public
100.00%
Other International
Subsidiaries
Eros Worldwide
FZ-LLC (Dubai)
99.98%
51.02%
Eros Digital Private 23.49%
Limited (India)
Eros International
Media Limited
(India)
25.49%
Public
Other
Subsidiaries
NYSE-listed entity
Note:
India-listed entity
Other subsidiaries
Company structure and holdings as of 30/09/2014
27
Adj. EBITDA Reconciliation
2014
2013
2012
2011
2010
2009
Net income
$37,144
$33,665
$43,580
$47,550
$42,395
$40,827
12,843
11,913
10,059
8,237
7,152
7,571
7,517
1,469
1,009
1,584
2,309
1,261
Depreciation
789
1,003
1,275
928
1,030
1,196
Amortization(1)
578
715
279
275
308
298
18,421
1,888
5,289
927
309
1,130
–
–
1,230
–
6
1,347
(5,177)
5,667
4,264
–
–
–
8,169
–
–
–
–
–
$80,285
$56,320
$66,985
$59,501
$53,509
$53,630
Income tax expense
Net finance costs
Share based payments(2)
Impairment of available-for-sale financial
assets
(Profit) / loss on derivatives
Transaction costs relating to equity
transactions
Adjusted EBITDA
(1)
(2)
Year Ended March 31,
EBITDA Bridge
(in $ thousands)
Includes only amortization of intangible assets other than intangible content assets
Consists of compensation costs recognized with respect to all outstanding plans and all other equity settled instruments
28