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VGi Global Media PCL
1Q 13/14 Earnings Presentation 1 August 2013
1Q 13/14 EARNINGS VGI BOARD OF DIRECTOR’S MEETING NO. 5/2013 30 JUNE 2013
Prepared by Investor Relations Department VGi Global Media PCL
4Q & FY 13/14 Earnings Review SET Opportunity Day – 10 June 2014
Investment involves risk. Prospective should understand the characteristics of Securities and study information about VGI Global Media Public Company Limited (“VGI” or the “Company”) before making a decision to invest in Securities.
This Presentation is not intended to provide the basis for any investment decision, nor to substitute your own analysis and investigation, and should not be considered as a recommendation to any recipient of this Presentation. Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to the Company’s corporate plans, strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward-looking terminology such as “may”, “will”, “expect” , “intend”, “estimate”, “continue”, “plan” or other similar words. The statements are based on the assumptions and beliefs of the Company’s management in light of the information currently available to the Company. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this Presentation is, or should be, relied on as promise or representation of the Company as to the future.
IR Contacts
Disclaimer
IR Department: Ms. Tisakorn Youngmod Ms. Napat Buchasuk Ms. Chama Savetbodi
Telephone: +66(0) 2273 8639 +66(0) 2273 8636
Fax: +66(0) 2273 8610
Email: [email protected]
Website: www.vgi.co.th
Agenda
SECTION 1 Industry Overview
SECTION 2 4Q & FY 13/14 Financial Performance
SECTION 3 Investment Policy
SECTION 4 Business Update
SECTION 5 2014/15 Target
VGI Key Milestones
3.5
3.7
3.9
4.2
3.0
Media Industry Overview
Section 1: Industry Overview 4
THAI ADSPEND VALUE (THB bn)
16.5
17.7 17.9
17.2
15.4
1.4
1.6 1.6 1.7
1.2 1.3
1.4 1.5 1.5
1.0
1.2
2.0
2.2 2.1
1.7
0.2 0.2 0.2 0.2 0.2
1.0 1.1 1.0 1.1 1.0
0.8 0.9 0.9 0.9
0.8
0.5
0.8 0.7
0.6
0.3
1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014
QUATERLY 4Q 12/13 3Q 13/14 4Q 13/14 QoQ (%) YoY (%)
TV 16.5 17.2 15.4 -10.4% -6.9%
Outdoor 1.0 1.1 1.0 -4.8% -1.3%
Transit 0.8 0.9 0.8 -11.4% -0.8%
In-Store 0.5 0.6 0.3 -44.1% -33.2%
Industry 26.5 29.5 24.7 -16.2% -6.8%
QUARTERLY THAI ADSPEND TREND (THB bn)
TV
Newspaper
Cinema
Radio
Magazines Outdoor
Transit
In-store
Internet
4Q 13/14 3Q 13/14 2Q 13/14 1Q 13/14 4Q 12/13
YEARLY 2012/13 2013/14 YoY (%)
TV 68.8 68.1 -0.9%
Outdoor 4.5 4.2 -7.0%
Transit 3.2 3.5 10.4%
In-Store 2.8 2.5 -11.6%
Industry 114.4 113.4 -0.9%
Note: excludes classified house ads. Source: The Nielsen Company (Thailand) Limited
A sharp decline of AdSpend in every media sector in 4Q 13/14
Media Industry Overview Top 5 AdSpend by Business Segment
5
THAI ADSPEND VALUE BY BUSINESS SEGMENTS (THB bn)
12.1 12.4
11.6
11.0
11.9 11.5
10.7 10.3
1.9
2.1
2.5
2.0
2.3
2.5
2.9
2.1 2.0
1.8
1.6
1.3 1.4
1.8 1.7
1.5
1.7 1.6
1.5
1.9
2.2
2.0
1.1 1.1
1.4
1.1 1.2 1.2 1.2
0.9
1Q 12/13 2Q 12/13 3Q 12/13 4Q 12/13 1Q 13/14 2Q 13/14 3Q 13/14 4Q 13/14
FMCG
Motor Vehicles
Government Related Communications
Leisure
4Q 13/14 OVERALL MEDIA INDUSTRY
1 FMCG 42%
2 MOTOR VEHICLES 8%
3 GOVERNMENT RELATED 6%
4 COMMUNICATIONS 6%
5 LEISURE 4%
TOP 5 66%
OTHERS 34%
4Q 13/14 VGI MASS TRANSIT
1 FMCG 39%
2 COMMUNICATIONS 11%
3 TRAVEL & TOURS 7%
4 LEISURE 5%
5 FOOD OUTLETS & RESTAURANTS 4%
TOP 5 66%
OTHERS 34%
1 FMCG 88%
2 MOTOR VEHICLE ACCESSORIES 5%
3 MOTOR VEHICLES 4%
4 FOOD OUTLETS & RESTAURANTS 1%
5 PHARMACEUTICALS 0.8%
TOP 5 98%
OTHERS 2%
4Q 13/14 VGI IN-STORE
Section 1: Industry Overview
Source: The Nielsen Company (Thailand) Limited
Modern Trade Media
18%
P&L SNAPSHOT 4Q & FY 13/14 (THB MN)
4Q & FY 13/14 Overview
(THB MN) 4Q 13/14 4Q 12/13 %YOY 3Q 13/14 % QOQ FY 13/14 FY 12/13 %YOY
Operating Revenue 641 691 -7% 806 -20% 3,149 2,838 11%
Cost of sales 315 311 1% 315 0% 1,342 1,289 4%
Gross profit 326 380 -14% 491 -34% 1,807 1,548 17%
EBITDA 260 315 -18% 416 -38% 1,510 1,289 17%
Net profit 193 225* -14% 317 -39% 1,146 902* 27%
Gross profit margin 51% 55% 61% 57% 55%
EBITDA margin 40% 46% 52% 48% 45%
Net profit margin 30% 32% 39% 36% 32%
FY 13/14 REVENUE BREAKDOWN FY 13/14 GROSS PROFIT BREAKDOWN
BTS-related Media
75%
Office Building & Other Media
7%
6%
Office Building & Other Media
53%
BTS-related Media
41%
Modern Trade Media
6
* The Company was required to restate the prior year’s financial statement for comparison purposes in order to comply with the new accounting standard on deferred tax which became effective since January 2013.
Section 2: 4Q & FY 13/14 Performance
361 440 393
1,422
1,679
4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14
182
95 84
200
137
103
190
108 95
Train Station Merchandising andOthers
4Q 12/13
3Q 13/14
4Q 13/14
MARGINS (%)
BTS-related Media
Quarterly Gross Profit (%)
48% 45% 50%
27% 31% 28% 24% 24% 23%
REVENUE (THB MN) REVENUE BREAKDOWN (THB MN)
7
82%
82%
77%
4Q 12/13
3Q 13/14
4Q 13/14
78%
81%
FY 12/13
FY 13/14
Annual Gross Profit (%)
Section 2: 4Q & FY 13/14 Performance
21%
30%
3%
4Q 12/13
3Q 13/14
4Q 13/14
232
67
243
76
167
53
Static Digital
4Q 12/13
3Q 13/14
4Q 13/14
Modern Trade Media
Quarterly Gross Profit (%) Annual Gross Profit (%)
76% 76% 78%
22% 7%
24% 24%
REVENUE (THB MN) REVENUE BREAKDOWN (THB MN)
MARGINS (%)
8
26%
25%
FY 12/13
FY 13/14
Section 2: 4Q & FY 13/14 Performance
299 319 220
1,250 1,295
4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14
30
1
34
12
28
0
Office Buildings Others
4Q 12/13
3Q 13/14
4Q 13/14
Office Building & Other Media
100% 74% 97%
3% 13%
26%
REVENUE (THB MN) REVENUE BREAKDOWN (THB MN)
MARGINS (%)
9
Quarterly Gross Profit (%) Annual Gross Profit (%)
72%
69%
FY 12/13
FY 13/14
63%
73%
56%
4Q 12/13
3Q 13/14
4Q 13/14
Section 2: 4Q & FY 13/14 Performance
31 46
28
166 175
4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14
826
1,007
331 45
111
6
Beginning cash(31/12/13)
CFO Joint Venture CapEx Interest Income Ending Cash(31/3/14)
Cash Flow & CapEx CASH FLOW MOVEMENT (31 Dec 13 – 31 Mar 14)
FY 13/14 CAPEX (THB MN)
FY 13/14
Platform Screen Door 176
BTS (Platform Truss LEDs and E-Poster) 299
Modern Trade and Others 85
Total 560
(THB mn)
CFI (150)
10 Section 2: 4Q & FY 13/14 Performance
1,821 1,953
22 26
737 762
2,579 2,741
31-Mar-13 31-Mar-14
584 1,111
1,995
1,630
2,579 2,741
31-Mar-13 31-Mar-14
Non-current liabilities
ASSETS BREAKDOWN (THB MN)
Balance Sheet LIABILITIES AND EQUITY BREAKDOWN (THB MN)
Current assets
Non-current Assets
77%
23%
59%
41%
Current liabilities
Equity
28%
71%
1%
28%
71%
1%
KEY FINANCIAL RATIOS
DEBT TO EQUITY
FY 13/14: 0.0x
FY 12/13: 0.0x
LIABILITY TO EQUITY
FY 13/14: 0.4x
FY 12/13: 0.4x
CURRENT RATIO
FY 13/14: 2.1x
FY 12/13: 2.7x
11 Section 2: 4Q & FY 13/14 Performance
Investment Policy
12
Investment policy
SECTOR: Out-of-Home media sector
STAKE: Influential or controlling
GEOGRAPHY: Thailand focus, selective ASEAN (overseas require strong local partner)
RETURN CRITERIA: Minimum IRR or payback period
RATIONALE: • Increase market share in Out-of-Home media segment (to be the leader in OHM)
• Revenue and cost synergies
Section 3: Investment Policy
Business Update Warrant Issuance
13
KEY TERMS AND CONDITIONS OF WARRANT RATIONALE
• Free warrants
• Preferential right to existing shareholders
• Funding to be used for potential acquisitions/ CaPex
TICKER VGI-W1
TERMS 4 Years
EX-RIGHTS DATE 9 July 2014
EXERCISE PERIOD Quarterly basis
WARRANT PRICE Free
ALLOCATION To existing shareholders at the ratio of 4 VGI existing shares : 1 VGI-W1
NO. OF WARRANTS
Up to 857,993,407 Units
EXERCISE RATIO 1 VGI-W1 to 1 ordinary share of VGI
EXERCISE PRICE THB 14.00
Section 4: Business Update
Matter is subject to shareholder approval of AGM on 3 July 2014
Expected maximum proceeds
THB 12,011,067,698
Business Update Dividend Payments & Phar Partnership
14 Section 4: Business Update
DIVIDEND PAYMENTS
• Interim cash dividend of THB 0.18 per share and stock dividend of 25:1 paid on 27 Dec 2013
• Final cash dividend of THB 0.13 per share (subject to AGM on 3 July 2014)
• 2013/14 dividend payout ratio is 93.4%
1.20
0.184*
1.50*
0.13**
2012/13 2013/14
Interim dividend Final dividend
1.0%
1.3%
1.1%
1.5%
Note Dividend yield is calculated using VGI closing share price one day before the date of Board of Directors meeting approving the relevant dividend *2012/13 final dividend and 2013/14 interim dividend included stock dividend of 10:1 and 25:1, respectively. **2013/14 final dividend per share is subject to shareholders’ approval at the AGM on 3 July 2014
VGI Dividend Record
Dividend yield
PHAR PARTNERSHIP
Partner Phar Partnership, Thailand (exclusive media sales agency of Air Asia)
Rights Sale agent for AirAsia planes • 1st year: 30 planes • 2nd year: 38 planes • 3rd year: 42 planes
Contract Length 3 years
635.5 732.4 724.6
98 139.5
173.8
2011 2012 2013
Operating revenue (THB mn) Net Profit (THB mn)
15
Revenue structure
2013 Dividend Yield of 5.6% (based on share price of THB 9.00)
2013 Total operating revenue: THB 724.6mn
Products Location/Area
1 Billboard Bangkok & vicinity / 170 billboard / 74,635 sqm
2 Street Furniture Bangkok / 2,217 sqm
3 Transit City grip light express, BTS walkway & Mo Chit station / 419 sqm
4 Made to order & Event
n/a
MACO space: Billboard, Street furniture and Transit Non MACO space: Made to order and Production/Printing
Billboard, 53.5%
Transit, 7.5%
Production & Event, 11.5%
Street furniture, 27.5%
Business Update Strategic Investment: 24.43% in MACO
MACO’S OVERVIEW
Share information (as of 9 May 2014)
Stock code: MACO
Market capitalisation (THB mn): 2,903.6
Outstanding shares (mn shares): 300.8
MACO’S FINANCIAL PERFORMANCE
Proven Track Record of Revenue and Net Profit
Section 4: Business Update
Business Update Strategic Investment: 24.43% in MACO
16
INVESTMENT HIGHLIGHTS BENEFITS TO VGI
Section 4: Business Update
Matter is subject to shareholder approval of AGM on 3 July 2014
VGI invested 24.43% in MACO (73.5mn shares, at THB 9.00)
Total investment value of THB 661.5mn
3 BOD representatives from VGI from a total of 9 Directors
Expand media network and market reach
Further expansion in outdoor segment
Increase long-term revenue and net profit
Steady dividend payout
Future growth
Increase product varieties
Broader client portfolio
MAJOR SHAREHOLDERS POST TRANSACTION
Major shareholder post transaction (% out of all shares)
1. VGI Pcl. 24.43%
2. Tansalarak Group 10.05%
3. Maneerattanporn Group 8.40%
4. Meeprasertsakul Group 6.51%
Total major shareholder 49.93%
SYNERGY
In short term, sale synergies can be created by bundling media packages from VGI and MACO
Knowledge sharing and transfer among highly experienced management team
2014/15 Target: Overall Business
Section 5: 2014/15 Target 17
EXPECTED REVENUE GROWTH
22-24% BTS
5 -9% Modern
Trade
7- 10% Off.
Bldg & Others 13 -17%
YoY revenue growth
EXPECTED CAPEX 2014/15
BTS Related Media THB 230 mn
Platform Screen Door THB 290 mn
Modern Trade Media THB 50 mn
Office Building & Other Media THB 30 mn
Total 2014/15 CapEx of
THB 600mn
VGI Key Milestones
VGI Key Milestones 18
5 -9% Modern
Trade
Listed on SET OCT 2012
JUN 2013 Included in MSCI
JUL 2013 Included in SET100 Index
OCT 2013 CG Scoring
JAN 2014 Included in SET50 Index
“Steps to success”
Thank you