CMP Wonderla Holidays Rs.285 “Ride Along”mailers.sparkcapital.in/uploads/Consumer/untitled folder2...occupancy, and maximize the free cash flow” - The Dhandho Investor, Mohnish

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Wonderla Holidays CMP

Rs.285

Stock performance (%)

1m 3m 12m

WONH 4% -15% -

Sensex 1% 5% 27%

CNX Cons 3% 5% 22%

Financial summary

Year Revenues (Rs. mn) EBITDA (Rs. mn) PAT (Rs. mn) EPS (Rs.) P/E(x) EV/EBITDA(x) ROE (%) ROCE (%)

FY14 1,536 704 399 9.5 30.0 22.8 29.6% 25.7%

FY15E 1,844 840 523 9.2 30.8 17.2 20.1% 18.9%

FY16E 2,116 993 616 10.9 26.2 15.8 15.6% 15.3%

FY17E 2,940 1,321 798 14.1 20.2 12.1 17.8% 17.4%

Date April 16, 2015

Market Data

SENSEX 28800

Nifty 8750

Bloomberg WONH IN

Shares o/s 57mn

Market Cap Rs. 16bn

52-wk High-Low Rs. 356-125

3m Avg. Daily Vol Rs. 73mn

Index member BSE 500

Latest shareholding (%)

Promoters 71.0

Institutions 10.0

Public 19.0

MID@S Idea

TEJASH SHAH, [email protected] +91 22 4228 8155

GNANA SUNDAR [email protected] +91 44 4344 0062

MADHAV PVR [email protected] +91 44 4344 0061

Find Spark Research on Bloomberg (SPAK <go>),

Thomson First Call, Reuters Knowledge and Factset

“The formula is simple: fixate on keeping costs as low as possible, charge lower rates than all competitors, drive up the

occupancy, and maximize the free cash flow” - The Dhandho Investor, Mohnish Pabrai. Wonderla Holidays (WONH), one of

the early entrants in the amusement park sector has used the similar formula and built strong moats overtime. WONH’s early

mover advantage has enabled them to create an enviable asset base at a very competitive cost; this coupled with efficiencies

and vast experience in the operations which ensures competitive opex as well, has enabled WONH to create a strong brand

equity by consistent addition of quality rides and bundling value for money offerings which has led to healthy footfalls and

consequently robust cash flows. We believe WONH, one of the top players in the sector, would be an indisputable beneficiary

from the macroeconomic drivers of positive non-linear growth in disposable income, rising demographic dividend and

urbanisation in the country. WONH’s ‘value for money’ offerings, superior rides quality, rich catchment area which it has

tapped with a chain of parks (four parks operational by 2018) banking on its strong brand equity and tipping macro drivers in

addition to favourable structural levers make us positive on the prospects of WONH. At the current market price of Rs.285,

WONH is trading at 20.2x FY17E EPS and 3.4x FY17E price to book.

Key Thesis:

Early mover advantage: Being one of the early entrants, WONH benefits from a cheaper gross block and matured parks which in

addition to commanding a strong brand recall aid the company with its healthy cash flows. This ensures the company without denting

its balance sheet has recurring offers and schemes to bring in repeat customers and keep the entry tickets inexpensive ensuring

‘value for money’ offering of providing superior and more rides at attractive prices. WONH’s conservative debt policy and pragmatic

business strategy ensures that the cost of expansion doesn’t hurt the bottom-line of the company.

Strong Catchment area: WONH which currently derives its revenues from its two amusement parks at Bangalore and Kochi is

currently in expansion mode and is expected to witness opening of two new parks over the next three years. With four parks in four

capital cities of south India shortly, WONH benefits from its rich catchment area – South India, a region whose macro indicators are

far superior than the national average and whose affinity towards amusement parks is maximum in the country as reflected in the

proportion of parks set up in the area vis-a-vis other parts of India.

Incremental Revenue triggers: The two upcoming parks over the next three years are expected to more than double the revenues

and aid WONH reach the Rs.5bn revenue mark over the next five years. Given that only ~18% of revenues come from non- ticket

sales currently, we expect the same to evolve to ~30% over the medium term. This will not only aid in increasing revenues but would

do the same at no extra cost as the average revenue per customer is expected to increase significantly due to the evolving revenue

profile.

Tipping macroeconomic drivers: If international parks are any precedent, factors like non-linear increase in discretionary

consumption, urbanisation, demographic dividend and no comparable at-home experience which are emerging in the Indian context

are expected to significantly change the next wave of growth at WONH over the next decade. Further, large unused land parcel at all

its parks provide WONH with numerous industry extension opportunities to tap these macro drivers.

“Ride Along”

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Rs.285

Corporate Factsheet

Corporate Factsheet

Promoter Background

Wonderla Holidays (WONH) is promoted by Mr. Kochouseph Chittilappilly and Mr. Arun Chittilappilly who are

also promoters of V-Guard industries, which is engaged in the business of electrical and electromechanical

devices. The promoters have around one and a half decades of experience in the Indian amusement park

industry.

Presence

The company currently operates two amusement parks in Bangalore and Kochi in addition to a resort in its

Bangalore property. WONH is constructing its third amusement park at Hyderabad and is expected to also

commence construction of its fourth park at Chennai shortly.

Management depth

The top management of the company is supported by a set of professionals many of whom were brought in from

group entity V-Guard industries. Mr Sivadas M (senior general manager – operations), Mr Nandkumar T is the

vice president – finance, Ajikrishnan A G is the deputy general manager – technical.

Revenue Model (FY14) Entry Fees: ~81% of revenues; Restaurant and food: ~11% of revenues; Readymade garment: ~2.5% of

revenues; Others: ~5.5% of revenues

Capacity Both the company’s parks at Bangalore and Kochi have a capacity to accommodate 12,000 visitors per day

respectively.

Key Success Factors Healthy catchment area, Strong brand equity, consistent addition of new rides, cost efficiency, established and

well maintained amusement parks.

Credit Rating ICRA A /Stable for the long term bank facilities [June 2014]

Corporate Bankers

State Bank of Travancore

Axis Bank Limited.

Dhanalaxmi Bank Limited

HDFC Bank Limited

Indusind Bank Limited

Auditors M/S BSR & Co. LLP

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Locational advantage with healthy catchment areas

Source: Company, Spark Capital

Brief timeline of WONH since inception

Source: Company, Spark Capital

Corporate history and overview of the company

HYDERABAD

(to be operational by 2017)

BANGALORE[Park & Resort]

(opened in 2005)

CHENNAI

(to be operational by 2018)

KOCHI

(opened in 2000)

Target Catchment Areas

2013

Company was converted into a public limited company on

January 11, 2013 under the name and style of ‘Wonderla

Holidays Limited

2014

Went public, listed on both NSE and BSE; Commenced

construction of amusement park at Hyderabad

2012

Wonderla Resort was set

up in Bangalore and

began commercial

operations

Company acquired 46.17

acres of land in

Hyderabad to set up a

new amusement park

2009

Veega Holidays and Parks Private Limited’

which owned and operated ‘Veegaland’,

merged with Wonderla with effect from April 1,

2008

2008

Wonderla Kochi and Wonderla Bangalore

were certified by the Bureau Veritas

Certification (India) Private Limited for

meeting the ISO 14001:2004 standards

and the BS OHSAS 18001:2007

standards for the operation and

maintenance of land and water based

rides/attractions including related

amenities

2005

Second amusement park in Bangalore in the

year 2005, by the name ‘Wonderla’

2002

Incorporated as a private limited company in

Bangalore, Karnataka under the Companies

Act on November 18, 2002 under the name

and style of ‘Wonderla Holidays Private

Limited

2000

Promoters launched

the first amusement

park in Kochi in the

year 2000, by the

name ‘Veegaland’

under Veega

Holidays and Parks

Private Limited’

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Rs.285

Overview of the company

Bangalore Amusement

Park Kochi Amusement Park Resort Hyderabad Park

Started in

Land Area

Facilities

Visitors Annually

% of total

revenues in FY14

Entry Fee –

Normal Season

(From April 1, 2015)

Weekdays: Adult: Rs.770;

Child: Rs.600

Weekends and Holidays:

Adult:Rs.960; Child: Rs.720

Weekdays: Adult: Rs.650;

Child: Rs.530

Weekends and Holidays:

Adult:Rs.820; Child: 670

Part of Wonderla, Bangalore ~50 acres

2005 2000 2013 2017

(Under construction)

~82 acres ~93 acres

37 land rides

22 water rides

35 land rides

24 water rides

3 star leisure resort with 84

luxury room and state of art

facilities

WONH Offerings

Fast track rates (Fast track tickets double the

normal rates)

(Fast track tickets double the

normal rates)

~1.18mn

(2014)

~56% of revenues

~1.19mn

(2014)

~42% of revenues ~2% of revenues

NA

43 land and wet rides

(proposed)

Pricing expected to be inline

with Bangalore park fee

~0.5mn expected in FY17

20% of revenues in FY17

Room rates Rs.5,500 –

Rs.6,500

NA (Fast track tickets double the

normal rates)

Visitors capacity

per day ~12,000 ~12,000 NA

~10,000

[Expected capacity]

Source: Company & Company filings, Spark Capital

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Business Overview

…has led to WONH’s revenues grow at ~22% over last four years…

Source: Company Filings, Spark Capital Research

…primarily through entry fees (FY14 Revenues)


…coupled with strong pricing pricing power…


Despite subdued economic climate, healthy footfalls…


1.61 2.03

2.26 2.34 2.29

0

0.5

1

1.5

2

2.5

3

FY 10 FY 11 FY 12 FY 13 FY 14

In M

illi

on

no

s.

Number of Visitors

Entry Fee Collection,

80.5%

Soft drinks and Packaged

Foods, 4.3%

Restaurant , 3.0%

Readymade Garments, 2.5%

Cooked Food, 3.9% Others, 5.8%

427 442 501

589 671

0

100

200

300

400

500

600

700

800

FY 10 FY 11 FY 12 FY 13 FY 14

In R

s

Revenue per customer

689 896

1,131 1,379

1,536

0

200

400

600

800

1000

1200

1400

1600

1800

FY 10 FY 11 FY 12 FY 13 FY 14

In R

s.m

n

Net Revenue

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Rs.285

Investment Thesis: Macro & Structural factors + Early Mover Advantage + Dhandho ‘secret sauce’ + Medium Term Triggers

#1 Indian Per capita income to

double over next 5 years

#2 Increasing discretionary

income to lead to positively

skewed spend on leisure

and recreation

#3 Demographic dividend and

increasing urbanization

keep target segment of

amusement parks intact

#4 Healthy catchment area

# 1 Robust brand equity and top

of the mind recall

#2 Constant additions in new

rides and themes to stay

relevant

#3 Frequent campaigns to keep

‘Wonderla’ as a mind space

afresh

#4 Well equipped to tap on

industry extension and

expansion opportunities

#1 Expansion based revenue

potential

#2 Evolving Revenue profile

#1 Keeping costs low – both

capital costs and operating

costs

#2 More rides with ‘value for

money’ offering

#3 Drive up occupancy i.e.

leading to higher footfalls

#4 Maximize free cash flows

Macro & Structural

factors

Early Mover Advantage

Dhando ‘secret sauce’

Medium Term

Triggers

Inherent risks and concerns

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India’s per capita GDP to rise from US$1,522 in FY14 to US$3,000 by FY20

Source: CSO, Spark Capital Research

India, in per capita GDP, is following China with a lag of ~10 yrs

Source: IMF, Spark Capital Research

6,093

1,490

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

China India (t+9)

In terms of per capita GDP, India is

following China with a lag of 9 years.

China reached $1500 per capita GDP in

2004, while India touched it in 2013

112 234 367

466

1,167 1,522

3,000

-

500

1,000

1,500

2,000

2,500

3,000

3,500

FY

70

FY

72

FY

74

FY

76

FY

78

FY

80

FY

82

FY

84

FY

86

FY

88

FY

90

FY

92

FY

94

FY

96

FY

98

FY

00

FY

02

FY

04

FY

06

FY

08

FY

10

FY

12

FY

14

FY

16E

FY

18E

FY

20E

Per capita GDP ($)

Tipping macro drivers and favorable structural levers - #1 India’s per capita income to double over next five years

Increasing per capita income beyond an inflection point to lead to disproportionate increase in discretionary income

India Vs South India Per Capita GDP

Source: NIC , Spark Capital Research

(In Rs.) FY11 FY12 FY13

India 54,835 61,564 68,747

Tamilnadu 78,473 88,697 98,550

Andhra

Pradesh 60,703 68,970 78,117

Karnataka 62,251 68,423 77,015

Kerala 69,465 80,924 NA

China’s per capita GDP up 4x in 8 years once it reached $1500 mark

Source: IMF, Spark Capital Research

1,490

3,414

6,093

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

China's per capita GDP, $

Once China reached $1500 per

capita GDP mark in 2004, it took only

4 years to double the per capita GDP

to $3000 in 2008 and another 4 years

to double from there to $6000 in 2012

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…since household consumption growth has dipped significantly

Source: CSO, Spark Capital Research

Indian household spend on leisure and recreation has remained flat

over last five years…

Source: Euromonitor International, Spark Capital Research

Growing disposable income to lead to positively skewed spend on leisure and recreation activities

Tipping macro drivers and favorable structural levers - #2 Positively skewed spend on leisure and recreation

991 923

155 60

1000 880

255

60

0

200

400

600

800

1000

1200

1400

Brazil Russia China India

US

$ p

er

ho

us

eh

old

2008 2013

6.1 5.9

9.4 9.3

5.0 4.8

0

1

2

3

4

5

6

7

8

9

10

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

HH consumption growth, %

Avg: 4.9%

Consumption growth (discretionary+ non-discretionary)

has decelerated from 9.3% to 4.8% in FY14.

Avg: 8.4%

Avg: 4.9%

With increasing disposable income, discretionary consumption to grow at a

non-linear pace over the next decade

Source: Industry sources, Spark Capital Research

344

100

74

43

47

37

31

26

24

23

21

742

295

206

126

107

100

96

80

66

65

52

0 100 200 300 400 500 600 700 800

Foods & Beverages

Housing

Transport

Healthcare

Clothing and Footwear

Household Goods

Lesiure

Hotels

Education

Communications

Alchohol & Tobacco

In U

SD

bn

2025 2011 2.5x

2.8x

2.8x

3.1x

3.1x

2.7x

2.3x

2.9x

2.8x

3x

2.2x

Market

Size

growth

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India’s urban population is expected to rise to 36% of total pop.

Source: Census, Spark Capital Research

Increasing urbanization means more market for amusement parks in

India

Note: Among top 20 parks in India; Source: Industry sources, Spark Capital Research

Demographic dividend and increasing urbanization to drive growth of the Indian amusement park sector over next decade

Tipping macro drivers and favorable structural levers - #3 Demographic dividend and increasing urbanization

India's population pyramid: 2011 vs. 2026 - clearly showcasing amusement park industry’s target audience to outgrow over the next decade…

Source: Census, Spark Capital Research

54.6 54.2

57.8 58.8

56.5 48.7

43.2 40.9

36.8 32.7

26.7 20.8

16.6 13

10.2 7.5

5.7

61.0 59.7 61.0

63.3 62.0

53.7 46.4

40.4 36.8

33.1 27.6

22.0 16.2

12.0 8.4 5.7 3.8

-100 -50 0 50 100

1-5

10-15

20-25

30-35

40-35

50-55

60-65

70-75

80-85 Male Female

50.2 53.2 53.4 53.9 53.6

56.5 56.9

54.6 46.8

41.5 38.4

34.5 29.3

23.3 16.1

10.4 12.5

55.6 59.7 60.0 59.4 59.6 60.5

62.5 60.4

52.0 43.9

37.9 33.2

27.9 22.3

15.7 9.6 8.7

-100 -50 0 50 100

1-5

10-15

20-25

30-35

40-35

50-55

60-65

70-75

80-85 Male Female

2026 population

(Mn)

2011 population

(Mn)

62 79 109 159 218 286 377 484

17.3 18.0 19.9

23.3

25.7

27.8

31.2

36.0

15

20

25

30

35

40

0

100

200

300

400

500

600

1950 1960 1970 1980 1990 2000 2010s 2020s

Urban population, mn Urban population (% of total) - RHS

Amusement parks in urban areas, 100%

746.6mn 804.2mn

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Robust potential of catchment area as reflected in the below macro

factors

Note: ROI refers to Rest of India; Source: Census India, Spark Capital Research;

~21% of Indian population resides in the four states of South India


South India houses close to ~60% of the large parks in the country

Source: Adlabs Imagica prospectus, Spark Capital Research

WONH benefits from a healthy catchment area; being well positioned in ‘South India’

Tipping macro drivers and favorable structural levers - #4 Healthy catchment area

Location No. of Parks % of total

Delhi, Gurgoan and Noida 4 21%

Sonipat 1 5%

Mumbai 2 11%

Kolkata 1 5%

Chennai 4 21%

Bangalore 1 5%

Hyderabad 3 16%

Other South Indian cities 3 16%

41.2% 28.5% 31.2%

0%

10%

20%

30%

40%

50%

South India ROI India

Urban %

78,754 54,493 59,966

0

20,000

40,000

60,000

80,000

1,00,000


Average per capita spend (Rs. Per annum )

Tamilnadu 6.0% Andhra Pradesh

7.0%

Kerala 2.8%

Karnataka 5.0%

Rest of India 79.2%

70.1%

39.7% 47.2%

0%

20%

40%

60%

80%


Household Television ownership %

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Tipping macro drivers and favorable structural levers - #5 Competing avenues too emerging in leisure and recreation space

Source: Spark Capital Research

Target Audience

Frequency

Types/Variants

Major Players

Average Ticket

Size

People across ages

Frequency ranges

depends on the

person from once a

week to once a year.

Conventional 2D, 3D

IMAX

PVR, Inox Cinemas,

Sathyam cinemas,

Big Cinemas

Between Rs.50 to

Rs.500. Average

ticket Rs.100

People across ages

Frequency ranges

depends on the

person from once a


Retail chains, Cafes,

Malls

Host of regional real

estate players

No Entry Fee,

People across ages

Frequency ranges

depends on the

person from once a


Covers the gamut of

all outdoor sports in

addition to offerings

like paintball,

Zorbing etc

No known chains

Rs.200 to Rs.2,000

Cinema/Movie Malls/Shopping Outdoor Recreation

Activity

Indoor

Recreation Activity

Though primarily

targeted at youth,

expanding to people

across ages

Frequency ranges

depends on the

person from once a


Video game parlors,

Bowling alleys,

Galaxy

Entertainment. No

known chains

Rs.200 to Rs.1,000

Primarily targeted at

Tweens, Teens and

youth

Once or Twice a year

Amusement parks,

Thrill parks, Water

parks and Specialty

Parks

Wonderla, Adlabs

Imagica, Essel World

and host of regional

players

Rs.500 to Rs.2,000

Theme Park

While WONH faces competition from other leisure and recreation options, it would continue to benefit from rising disposable income

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The Dhandho Formula

Strong brand equity

Medium Term

triggers

Why WONH among all players in the Indian amusement park industry?

#1 Keeping costs

low

#2 More rides with

‘value for

money’

offering

#3 Drive up

occupancy i.e.

leading to

higher footfalls

#4 Maximize free

cash flows

#1 Expansion

based revenue

potential

#2 Evolving

Revenue

profile

#1 Robust brand

equity and top

of the mind

recall

#2 Well equipped

to tap on

industry

extension and

expansion

opportunities

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Medium Term Triggers: #1 Expansion based revenue potential

Brief details of Hyderabad and Chennai parks

WONH plans to open 2 new parks over the next three years. While the company

plans to open the Hyderabad park by April 2016, the Chennai park is expected to

open by October 2018.

Over 49.5 acres of land has been acquired for the Hyderabad Park and the

current Park development is on 27 acres of Land. The park is expected to

initially comprise of 43 rides (wet + dry).

All the approvals, including land acquisition, are well in place for the Hyderabad

park and construction is as per schedule according to the management. The park

is likely to become operational by April 2016 and contains the capacity to

entertain as many as 9,000-10,000 people in a single day.

The park at Chennai is expected to witness a capital outlay between Rs.2.75bn

to Rs.3bn.

With the addition of both these parks WONH’s revenues are expected to surpass

the Rs.5bn mark by 2020.


Expected revenue profile over a five year time frame


Pictures of ongoing construction in Hyderabad site


(In Rs. Mn) Hyderabad Chennai

FY17E ~588 NA

As a % of total revenues 20% NA

FY18E ~610 NA

As a % of total revenues ~17% NA

FY19E ~820 ~500

As a % of total revenues ~17% ~10%

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Medium Term Triggers: #2 Evolving revenue profile

...is expected to evolve to global revenue split up in the medium to

long term

Source: Industry Sources, Spark Capital Research

WONH’s current revenue profile…


Ticket revenue, 35%

Food & Beverages and Merchandise,

35%

Resorts and other rentals,

30%

International Parks

WONH’s revenue split has also gradually improved...


WONH currently derives around ~81% of its revenues from entry fees

and rest from F&B and Merchandise majorly. While the global

standards is about 60:40 as shown above, management is hopeful of

achieving 70:30 mix in the medium term and then possibly an optimal

60:40 over the long term.

Out of the non-ticket revenues, F&B revenues is currently ~14%. The

company does not account the entire F&B spend that happens in the

park as all except for two of the ten restaurants are run by third

parties. The management expects to take over the operations of the

restaurants gradually over the medium term. This is expected to

materially increase the proportion of non-ticket revenues going

forward.

Entry Fee Collection,

80.5%

Soft drinks and Packaged

Foods, 4.3%

Restaurant Revenue, 3.0%

Readymade Garments, 2.5%

Cooked Food, 3.9% Others, 5.8%

86.8% 86.2% 85.3% 84.8% 84.0% 84.3% 84.3% 83.3% 81.8%

13.2% 13.8% 14.7% 15.2% 16.0% 15.7% 15.7% 16.7% 18.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Ticket sales Non-Ticket sales

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High quality of rides coupled with good ambience has led to strong brand equity marked by top of the mind recall

Ranked No.1 & No.3 in India among Top 10 Amusement Parks & Water

Parks in India under Trip Advisors traveller choice awards 2014

Source: Trip advisors travellers choice awards Spark Capital Research

Wonderla Amusement Park, Bangalore

Ramoji Film City, Hyderabad

Wonderla Amusement Park, Kochi

Water Kingdom, Mumbai

Science city, Kolkata

Essel world, Mumbai

Nicco Park, Kolkata

GRS Fantasy Park, Mysore

Adventure Island, New Delhi

World of Wonder, Noida

Ranked No.7 & No.13 in Asia among the Top 25 Amusement Parks in

Asia under Trip Advisors traveller choice awards 2014

Source: Trip advisors travellers choice awards Spark Capital Research

1

2

3

4

5

6

7

8

9

10

Universal Studios, Singapore

Ocean Park, Hongkong

Tokyo Disney Sea, Japan

Tokyo Disneyland, Japan

Hongkong Disneyland, China

Universal Studios, Japan

Wonderla Amusement Park, Bangalore (India)

Vinpearl Amusement Park, Vietnam

Harbin Ice and Snow Amusement World

Ramoji Film City, India

Jawar Timur Park 2, Indonesia

Everland, South Korea

Wonderla Amusement Park, Kochi (India)

Science City, Kolkata

Fujji-Q, Japan

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Strong brand equity #1 Robust brand recall, at par with international parks

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Frequent campaigns to keep ‘WONH’ as a mind space afresh supported by high A&P Outlay

Strong brand equity #1 Robust brand recall, at par with international parks

Positioned as

entertainment

for all ages

and all

occasions

Festival

‘Fervour’

Unique

offerings and

‘value for

money’

proposition

High A&P outlay of ~11% of sales


104 115 153 169

11.6%

10.2%

11.1% 11.0%

9%

10%

10%

11%

11%

12%

12%

0

50

100

150

200

FY11 FY12 FY13 FY14

In R

s.m

n

A&P A&P as a % of Sales

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Strong brand equity #2 – Well equipped to tap into industry extension and expansion opportunities

WONH brand is well equipped to tap on industry extensions and expansion opportunities

Target

Audience

Resorts

Family,

Corporate

Tweens &

Teens, Family

Across

Demography

Across

Demography

Corporates and

Family

MICE In-house

shopping Malls

Second-gate

attractions Specialty Park Theatre/Film

Across

Demography


Examples of

Precedence in

India/World

Is Wonderla

Present?

Entry barriers

Disneyland

Yes

Minimal

Disneyland,

Kishkinta -

Snow world

Partly

Minimal

Entertainment

City (Noida) &

Adventure

Island (Delhi)

No

Moderate

Disneyland

No

Moderate

Disneyland

Partly

Minimal

NA

No

Minimal

Page 18


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…leading to healthy return ratios entrants


…with even 4 parks is significantly lower than Adlabs Imagica


Huge gross block accumulated at inexpensive cost over the years…


Lower capital costs leading to financial viability ensuring competition is at bay

‘The Dhandho Formula’ - #1 Keeping costs low

10,665

13,870 14,584

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

FY13 FY14 FY15E

In R

s.m

n

Adlabs Gross Block

WONH has over the years built a huge gross block at inexpensive

cost creating a huge entry barrier for competition to ape. Though the

gross block of Adlabs Imagica is not strictly comparable with that of

WONH, since Adlabs operates as a theme park, we believe lower the

gross block, faster is the payback period which would than result in

generating healthy cash flows for the company.

WONH capital efficiency ratios are expected to dip over the medium

term on account of its share dilution and huge capital outlay over the

next five years for the Hyderabad and Chennai parks. However, we

believe once the capex is executed and the parks stabilise, the ROE

and ROCE ratios are expected to go back to ‘steady state’ levels of

~25%.

1,689 2,061

2,403 2,534 2,885

3,645

5,494

0

1,000

2,000

3,000

4,000

5,000

6,000

FY11 FY12 FY13 FY14 FY15E FY16E FY17E

In R

s.m

n

WONH Gross Block

62%

36% 31% 30%

20% 16% 18%

59%

30% 27% 26%

19% 15% 17%

0%

10%

20%

30%

40%

50%

60%

70%

FY11 FY12 FY13 FY14 FY15E FY16E FY17E

ROE ROCE

Page 19


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…….10 new rides added in 2014-15 alone

Source: Company and Media reports, Spark Capital Research

Continuous addition in new rides over the years….


Quality of rides reflected in consistent awards from industry bodies


Constant additions in new rides and themes to stay relevant with a ‘value for money’ offering

FY11 FY12 FY13 FY14 FY15

New rides added at

Kochi 2 2 - 3 3

Rides at Kochi 54 56 56 59 62

New rides added

Bangalore - 1 - 2 4

Rides at Bangalore 52 53 53 55 59

Total Rides 104 109 109 114 119

‘The Dhandho Formula’ - #2 More rides with ‘value for money’ offering

Certifications and in-house manufacturing of rides to keep costs low

In-house R&D ensuring lower cost of new additions, reflected in healthy

return ratios and lesser capital costs.

WONH has developed 40 of its 120 rides it offers in-house, including a

roller coaster, water slide and a 5D theatre. We understand that this

nearly halves the cost, proving to be a huge saving as most rides cost

upwards of Rs.10 million.

WONH is one of the only 2 amusement parks in India to implement

OHSAS 18001:2007 safety standards.

WONH Kochi is the first park in India to get ISO14001 certificate for eco-

friendliness and OHSAS 18001 certificate for safety.


IAAPI - Highest number and

variety of rides

(2012, 2011, 2010 & 2009)

IAAPI - Highest number of

innovative rides

2012, 2011, & 2009)

IAAPI- Innovative

promotional activity through

media

(2012, 2010, 2009, & 2008)

Page 20


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Matured parks ensure the company can consistently have offers running throughout the year aimed at different target segments…….

‘The Dhandho Formula’ - #3 Drive up occupancy i.e. leading to higher footfalls

Wonderla Parks in

Bangalore and

Kochi offer up to 35%

discount on park admission

to school & PUC students.

Exclusive discount for College Student

Wonderla parks in Bangalore and Kochi offer a

20% discount on park admission to college

students. Students below the age of 22 years may

avail this offer by showing their original college ID

card with photo. This discount is valid throughout

the year.

Privilege Member Card Offer

Get a Wonderla Privilege Member

Card when you buy at least 4 tickets

without any discounts. The card will

be valid from the following day of the

activation and will remain so for 5

years as long as it is used at least

once every year.

Wonderla Parks in. Bangalore

and Kochi offer offer great

discounts and attractive

pricing for corporate groups.

…alongside increasing revenue per customer…


Ensuring healthy increase in footfalls…


1.61 2.03

2.26 2.34 2.29

0

0.5

1

1.5

2

2.5

3

FY 10 FY 11 FY 12 FY 13 FY 14

In M

illi

on

no

s.

Number of Visitors

427 442 501

589 671

0

100

200

300

400

500

600

700

800

FY 10 FY 11 FY 12 FY 13 FY 14

In R

s

Average Revenue per customer

Page 21


Rs.285

Matured parks leading to healthy free cash flows aiding the company to have recurring offers to ensure walk-ins without denting the balance sheet

‘The Dhandho Formula’ - #4 Maximize Free cash flows

Matured parks with healthy growth…

Source: Company , Spark Capital Research

…leading to robust operating…


…and free cash flows


Location Year of Commencement Year of Payback

Kochi 2000 2010

Bangalore 2005 2014

327

448 486 502

37% 40% 35% 33%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

100

200

300

400

500

600

FY 11 FY 12 FY 13 FY 14

In R

s.m

n

OCF OCF/Net Sales

378

55 112

232

42%

5%

8%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

50

100

150

200

250

300

350

400

FY11 FY12 FY13 FY14

In R

s.m

n

FCF FCF/Net Sales

Page 22


Rs.285

Additional Factors – Service tax and Macro drivers

Price of wonderla’s entry ticket in relation to other discretionary spending

options available to the consumer influences the proportion of

consumers’ expenditure that is spent on amusement parks.

Adverse changes in factors affecting discretionary consumer spending

could reduce consumer demand for WONH, resulting in a reduction of

footfalls and could have a material adverse effect on the company’s

business and operations.

The central government in the Union Budget 2015 has taken amusement

parks out of the service tax negative list, which has resulted in the levy of

service tax. This is expected to result in increase in overall ticket prices

price due to additional charge of 14% service tax which may affect the

footfalls. However, we believe the price increase on account of the

service tax might not have a significant impact on footfalls.


Attendance at parks Vs GDP growth in USA over 15 years


Deaths and geographic risks can affect footfalls

WONH like all amusement parks is vulnerable to accidents or natural

calamities which can significantly affect footfalls, resulting in lower

revenue. Accidents, in addition to leading to negative publicity and

affecting footfalls, also expose the company to possible financial liability

and legal proceedings. Since inception, there have been 9 accidents at

Wonderla’s parks, of which 2 cases are currently outstanding.

In Tamilnadu alone since 2006, a total of six persons have lost their lives

in amusement parks and umpteen number of incidents of injury have

been reported. While some of the incidents would have been prevented,

even in the safest amusement parks globally there have been various

cases of injury/deaths making cases of injury/death an inherent risk of

the amusement park business.

Any epidemics like swine flu or terrorist attacks or other issues specific to

the state or geographic region of the park’s location can also impact

footfalls.

Source: Industry sources and media reports, Spark Capital Research

Government order/injunctions can impact revenues

Footfalls in WONH had been flat during 3QFY15 due to slowdown

witnessed in the number of school children visiting parks due to

government’s stringent verification circular for school teachers and

management of educational institutions. This led to a slowdown in the

number for picnics and outings during the second half of FY15.

Temporary injunctions or government orders like these can affect the

footfalls and revenues of the company.


Inherent Business Risks and Concerns

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

US Real GDP growth Attendance growth in Parks

Page 23


Rs.285

Mr. Nandkumar T is a qualified chartered accountant. He is currently responsible for overseeing the corporate finance activities of the

company, including developing financial operating reports, preparing financial materials, building relationships with investors & analysts,

monitoring & analysing monthly operating results against the budget. He has 17 years of experience in accounts and finance, including 4

years with Group company, VGuard Industries as the CFO. Prior to joining Wonderla, Mr. Nandkumar worked in various capacities with

Dhanalakshmi Bank from April 1997 to April 2006.

He is one of the founding promoters of the company. He has 15 years’ experience in the amusement park industry. Mr. Chittilappilly has

won several awards like Young Businessman of the Year 1995 by Business Deepika, Businessman of the Year 2007 by the business

magazine ‘Dhanam’, Tourism Man of the Year Award 2011 by the Association of Tourism Trade Organisations and India and Businessman

of the Year 2011 by the Travancore Management Association, Kottayam.

He was appointed as Additional Director of the company on January 27, 2003, and later became the Director on December 22, 2003. Mr.

Arun Kochouseph Chittilappilly was promoted to Managing Director on April 1, 2012. He has more than 11 years’ experience in the

amusement park industry. He has a master’s degree in industrial engineering from Swinburne University of Technology, Victoria, Australia.

November 24, 2011, Mr. Ramachandran Panjan Moothedath was appointed as the Additional Director of the company. He was promoted

as Director on August 9, 2012. He is also the Chairman & MD of Jyothy Laboratories. Mr. Moothedath has more than 31 years of

experience. He has graduated from University of Mumbai and holds a diploma in financial management.

Mr. Nandkumar T, VP,

Finance:

Mr. Kochouseph

Chittilappilly, Non

Executive Director

Mr. Arun Kochouseph

Chittilappilly, Managing

Director

Mr. Ramachandran

Panjan Moothedath,

Non-Executive Director

(Independent):

Mr. George Joseph is the Chairman and non executive independent Director of Wonderla. He was selected as an Additional Director on

June 27, 2011, and later he was appointed as Director and Chairman on September 12, 2011. Before joining Wonderla as a board

member, Mr. Joseph was the Chairman & MD of Syndicate Bank. He has also worked in Canara Bank for over 37 years in different roles.

He is a member of Certified Associate of the Indian Institute of Bankers and Associate of the Institute of Bankers, London. He has done his

bachelor’s degree in commerce from Kerala University.

Mr. George Joseph,

Chairman and Non

Executive Director

Ms. Priya Sarah Cheeran Joseph was appointed as Non Executive Director of the company from March 01, 2013. She manages the food &

beverages and human resource departments of the company since 2005. Ms. Priya has more than 11 years’ experience in the amusement

park industry. She also looks after the corporate social responsibility of the company.

Ms. Priya Sarah

Cheeran Joseph,

Executive Director:

Management and Board of Directors Profile


Page 24


Rs.285

BOD/Top

Management

Auditors

Succession Planning

Cases against

Management/

Company

2011 2012 2013 2014

Total No. of Directors 5 5 5 5

No. of Independent Directors 2 2 2 2

No. of changes in directors over last year - - - -

Current auditors of the company M/S B S R & Co. LLP

Any change in auditors over last five years? Yes. Till FY12 M/S Varma & Varma were the auditors of

the company

The company is well managed by two generations of promoters. The promoters are ably assisted by a well

experienced second line of management who have been with the company since inception in 2000. Further, some of

the second line of management had been hand picked from group company V-guard industries, to head various

division in Wonderla when it commenced operations.

Presently the company faces three criminal cases related to accident and deaths at the company’s premises. In

addition, 7 tax cases and 2 civil litigations are pending against the company.

Corporate Governance

Contingent Liabilities

(In Rs. Mn) 2012 2013 2014

Service Tax demand on Appeal 9.9 13.7 22.1

Claims for compensation 1.7 1.7 1.7

Guarantees issued by the bank 1.0 1.1 4.9

Others 171.5 8.8 13.2

Total 184.1 25.3 41.9


Page 25


Rs.285

Corporate Governance

Holding Structure


Dividend pay out has been moderate in the range of ~20% to ~25%


BOD Remuneration as a % of PAT (FY 2014)


Well diversified board presence as per SEBI guidelines


Mr.

Kochousep

h C

Mr. Arun K

C

Mr.George

Joseph

Mr. M P

Ramachan

dran

Ms. Priya

Sarah C

Audit

Committee - Yes Yes Yes -

Remuneration

Committee - Yes Yes Yes -

Investor

Grievance

Committee - Yes Yes Yes Yes

Name Remuneration

(Rs.Mn)

Remunerati

on as % of

PAT

Position

Mr. Kochouseph C 9.35 2.3% Vice Chairman

Mr.Arun K C 6.77 1.7% Managing

Director

Ms. Priya Sarah C 4.13 1.0% Director

Mr.George Joseph 1.08 0.3% Director

Mr. M P Ramachandran 0.12 0.0 Director

Total 21.45

70.97% 70.97% 70.97% 70.98%

2.62% 2.14% 6.88% 7.88% 5.02% 8.28% 4.14% 2.10%

21.4% 18.6% 18.0% 19.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-14 Jun-14 Sep-14 Dec-14

Promoter group FII DII Others

73.2 73.7 99.2

24.8%

21.9%

24.9%

20.0%

20.5%

21.0%

21.5%

22.0%

22.5%

23.0%

23.5%

24.0%

24.5%

25.0%

25.5%

0

20

40

60

80

100

120

FY 12 FY 13 FY 14

In R

s.M

n

Dividend Dividend payout

Page 26


Rs.285

International comparison – business description Snapshot

International competitive landscape and valuation

Oriental Land

Company Cedar Fair LP

Six Flags

Entertainment Corp

Sea world

Entertainment Merlin Entertainment Walt Disney

Country and

year

commenced

Japan , 1983 USA, 1983; Listed in 1987 USA., 1962 USA,1960; Listed in 2013 UK, 1998; Listed in 2013 USA, 1923

Business

Description

The company

operates an

amusement park, a

theme park, three

hotels and two resorts

among others.

11 Best‐in‐Class Amusement

Parks

1 Amusement Park Under

Management Contract

3 Separately‐Gated Outdoor

Water Parks

5 Hotels(a) ‐ ~1,600 Rooms

5 Campgrounds, including

deluxe RV sites and

cabins

The company operates 18

parks strategically located

across North America.

Family entertainment

company operating eleven

theme parks across the

United states.

Europe’s leading and

world’s second largest

visitor attraction operator

company operates 105

attractions, 11 hotels and 3

holiday villages in 23

countries. Operates parks in

UK, North America,

Continental Europe and

Asia Pacific too.

Walt Disney Company

operates through five

primary business

segments": Studio

Entertainment, which

includes the company's film,

recording label, and

theatrical divisions; Parks

and Resorts, featuring the

company's theme parks,

cruise line, and other travel-

related assets; Disney

Consumer Products, which

produces toys, clothing, and

other merchandising Media

Networks, which includes

the company's television

properties; and Disney

Interactive, which includes

Disney's Internet, mobile,

social media, virtual worlds,

and computer games

operations

Offerings 1,700 rooms

• 2 Marinas

• 850+ Rides and Attractions

• 120+ Roller Coasters

Facilities: 800 rides and 130

coasters across all its parks

89,000 animals, 600 rides

and attractions,

45 Sea Life attractions, 18

Madame Tussauds

museums, 9 Dungeons, 11

Lego land Discovery

centre, 3 Eyes, 92 Midway

parks, 6 Lego land parks

and 7 Resort theme parks

Visitors ~27mn visitors ~23mn visitors ~26mn guests ~22.4mn visitors ~62.8 mn visitors NA

Revenue break

up

Amusement Park:

~83%, Hotels:~14%

Admission Fee: 57%

Food, Merchandise: 32%,

Accommodation: 11%

Admission Fee: 55%

Food and merchandise:

39%

Sponsorship, License: 5%,

Accommodation – 1.4%

Admission Fee: 62%, Food

and Retail: 38%

Midway attractions: 42.4%,

Lego land Parks: 31.1%,

Resort Theme parks: 26.5%

Media Network: 43%, Parks

and Resorts: 31%, Studio

entertainment: 15%,,

Consumer products: 8%,

Interactive media: 3%


Page 27


Rs.285

International comparison – Financial


Company

(USD Mn)

Sales EBITDA Margin PAT Margin CFO Free Cash Flow

FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E FY14 FY15E FY16E

Wonderla 1,536 1,844 2,116 45.8% 45.5% 46.9% 26.0% 28.4% 28.8% 502 597 722 232 (618) (2,760)

Oriental

Land

Company 4,728.7 3,867.1 4,036.3 32.0% 31.2% 32.7% 14.9% 15.2% 16.2% 1,205 885.3 959.4 1,019.3 565.9 593.3

Cedar Fair

LP 1,159.6 1,200.4 1,241.7 35.5% 37.2% 37.6% 9.0% 14.8% 15.4% NA NA NA NA 171.3 198.5

Six Flags

Entertainm. 1,175.8 1,238.3 1,293.1 28.7% 38.5% 39.3% 6.2% 11.0% 11.8% 392.3 273.0 309.4 283.7 273.4 314.8

Seaworld

Entertainm. 1,377.8 1,387.7 1,406.9 25.9% 27.5% 28.0% 5.0% 5.2% 5.8% 261.5 294.2 313.9 106.9 124.2 122.7

Merlin

Entertainm. 2,059.0 1,955.7 2,111.5 32.9% 33.1% 33.3% 13.0% 15.2% 15.5% NA NA NA NA NA NA

Songcheng

Performance

Deve-a 146.2 240.1 310.6 68.2% 59.7% 58.6% 40.1% 36.1% 36.8% NA NA NA NA NA NA

Walt Disney

Company 48,813 52,179 55,830 28.3% 29.6% 30.3% 15.6% 16.0% 16.6% 9,780 13,330 12,197 6,469.0 6,387.6 8,410.6

Source: Bloomberg, Spark Capital Research

Page 28


Rs.285

International comparison – Valuation Metrics


Company

(USD) MCap EV

PE EV/Sales EV/EBITDA Price to book

2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E 2015E 2016E 2017E

Wonderla

(In Rs.Mn) 11,970 10,496 29.8 25.2 20.2 7.4 6.3 4.3 15.6 13.0 9.4 - - -

Oriental Land

Company 29,661 28,674 44.1 39.9 35.2 7.0 6.7 6.3 22.5 20.6 18.1 5.8 5.2 4.6

Cedar Fair LP 3,173 4,552 18.8 17.0 16.6 3.8 3.7 3.6 10.3 9.9 9.4 30.6 26.8 -

Six Flags

Entertainm 4,604 6,363 34.2 29.9 24.4 5.0 4.8 4.5 13.1 12.3 11.4 10.3 9.1 -

Seaworld

Entertainm 1,741 3,300 23.9 20.9 18.0 2.4 2.4 2.3 8.8 8.5 8.2 3.3 3.0 3.9

Merlin

Entertainm 6,821 8,280 22.8 20.4 18.1 4.1 3.8 3.5 12.3 11.3 10.4 3.7 3.3 3.0

Songcheng

Performance

Deve-a 4,853 4,700 47.5 35.8 29.9 15.9 12.3 10.2 26.6 21.0 17.9 5.6 4.9 4.9

Walt Disney

Company 1,70,270 1,94,364 22.2 19.5 17.6 3.8 3.6 3.4 12.9 11.8 10.9 4.0 3.6 3.3


Page 29


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Cedair Fair has traded at a one year forward of up to ~29x


Oriental Land Company has traded at a one year forward of up to ~45x


Six Flags Entertainment has traded at a one year forward of up to ~48x


Walt Disney has traded at a one year forward of up to ~70x


International amusement and theme parks have traded a premium historically

4.0

9.0

14.0

19.0

24.0

29.0

Dec-8

7

Dec-8

8

Dec-8

9

Dec-9

0

Dec-9

1

Dec-9

2

Dec-9

3

Dec-9

4

Dec-9

5

Dec-9

6

Dec-9

7

Dec-9

8

Dec-9

9

Dec-0

0

Dec-0

1

Dec-0

2

Dec-0

3

Dec-0

4

Dec-0

5

Dec-0

6

Dec-0

7

Dec-0

8

Dec-0

9

Dec-1

0

Dec-1

1

Dec-1

2

Dec-1

3

Dec-1

4 0

10

20

30

40

50

60

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Mar-

87

Mar-

88

Mar-

89

Mar-

90

Mar-

91

Mar-

92

Mar-

93

Mar-

94

Mar-

95

Mar-

96

Mar-

97

Mar-

98

Mar-

99

Mar-

00

Mar-

01

Mar-

02

Mar-

03

Mar-

04

Mar-

05

Mar-

06

Mar-

07

Mar-

08

Mar-

09

Mar-

10

Mar-

11

Mar-

12

Mar-

13

Mar-

14

Mar-

15

Page 30


Rs.285

WONH Returns has outperformed all indices..

Source: Bloomberg, Spark Capital Research; *since listing

Relative Valuation

Valuation comparison with related peers


WONH


WONH- 12 Month Forward PE


1M return

(%)

3M return

(%) 6M return (%)

1YR return

(%)

WONH 5 -14 -7 82*

Sensex 1 2 11 29

Nifty 1 3 13 31

BSE FMCG 4 3 15 21

CNX FMCG 5 2 13 19

CNX Consumption 4 3 15 35

P/E Multiple

range No. of days traded % of no. of days

Cumulative

traded no. of

days

%of Cumulative

no. of days

15 - 17x 4 2% 4 2%

17 - 19x 8 4% 12 5%

19 - 21x 17 8% 29 13%

21 - 23x 48 22% 77 35%

23 - 25x 17 8% 94 42%

25 - 27x 9 4% 103 46%

27 - 29x 31 14% 134 60%

29 - 31x 47 21% 181 82%

31 - 33x 38 17% 219 99%

33 - 35x 3 1% 222 100%

Total 222 100%

26.0x

23.0x

20.0x

32.0x

29.0x

150

200

250

300

350

400

Company

PE EV/Sales

FY15E FY16E FY17E FY15E FY16E FY17E

Wonderla Holidays 31.0 26.3 20.8 7.81 6.66 4.55

PVR Cinemas 65.2 28.0 20.5 2.2 1.8 1.5

Delta Corporation 52.4 22.4 15.2 6.9 4.7 3.8

Page 31


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Abridged Financial Statements

Rs. mn FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E

Profit & Loss Growth Ratios (%)

Revenue 1,536 1,844 2,116 2,940 Revenues 11% 20% 15% 39%

EBIDTA 704 840 993 1,321 EBIDTA 12% 19% 18% 33%

Other Income 24 100 67 30 Normalised PAT 19% 31% 18% 29%

Depreciation 132 157 163 206 Margins (%)

EBIT 595 783 897 1,145 Gross 77.1% 76.3% 78.0% 75.0%

Interest 16 13 11 14 EBIDTA 45.8% 45.5% 46.9% 44.9%

PBT 579 770 886 1,131 Normalised PAT 26.0% 28.3% 29.1% 27.1%

Normalised PAT 399 523 616 798 Leverage Ratios (x)

Balance Sheet Debt to Equity 0.1 0.0 0.0 0.0

Net Worth 1,499 3,708 4,176 4,781 Current Ratio 1.1 7.1 2.2 1.3

Loan Funds 203 109 59 159 Return Ratios (%)

Deffered Tax Liabilities 33 33 33 33 RoCE 25.7% 18.9% 15.3% 17.4%

Sources of Funds 1,752 3,867 4,285 4,990 RoE 29.6% 20.1% 15.6% 17.8%

Net Block 1,450 1,643 2,240 3,884 Total Asset Turnover (x) 1.0 0.7 0.8 0.7

Capital WIP 201 610 1,699 1,000 Per Share

Goodwill 3 3 3 3 EPS (Rs.) 9.5 9.2 10.9 14.1

Investments 68 13 13 13 Dividend (Rs.) 1.5 1.8 2.2 2.8

Total Current Assets 280 1,857 596 380 Valuation Metrics

Total Current Liabilities 251 261 268 291 Current Market Price 285

Net Current Assets 29 1,596 328 89 Shares Outstanding (mn) 42 57 57 57

Application of Funds 1,752 3,867 4,285 4,990 Market Cap. (Rs. mn) 16,111

Cash Flow Enterprise Value (Rs. mn) 16,046 14,436 15,655 15,999

Cash Flow from Operation 502 597 722 982 EV /Sales (x) 10.4 7.8 7.4 5.4

Cash Flow from Investments (259) (605) (1,782) (1,120) Price/Earnings (x) 30.0 30.8 26.2 20.2

Free Cash Flow 232 (618) (2,760) (1,138) Price/Book (x) 10.7 4.3 3.9 3.4

Cash Flow from Financing (71) 1,579 (209) (106) EV/EBIDTA (x) 22.8 17.2 15.8 12.1

Closing Cash Balance 200 1,771 502 258 Dividend Yileld (%) 0.5% 0.6% 0.8% 1.0%

Financial Summary

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Appendix

Page 33


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USA

(GDP – $14.5 tn)

Magic Kingdom – 16.9 mn

Disney land – 15.9 mn

Universal Studio – 5.9 mn

Sea World – 5.1 mn

Brazil

(GDP – $2.1 tn)

Play Center – 1.7 mn

South Africa

(GDP – $0.4 tn)

Gold Reef City – 1 mn

Singapore

(GDP – $0.2 tn)

Sentosa – 5.2 mn

Universal Studio – 2 mn

Australia

(GDP – $0.9 tn)

Opera House – 4 mn

Dream World – 1.5 mn

Japan

(GDP – $5.5 tn)

Tokyo Disneyland – 14.5 mn

Disney Sea – 12.7 mn

Universal Studio – 8.2 mn

South Korea

(GDP – $1.01 tn)

Everland – 6.9 m

Lotte – 5.5 mn

Hong Kong

(GDP – $0.2 tn)

Disneyland – 5.2 mn

Ocean Park – 5.0 mn

China

(GDP – $5.9 tn)

Happy Valley – 3.05 m

India

(GDP – $1.6 tn)

Germany

(GDP – $3.3 tn)

Europa Park – 4.3 mn

France

(GDP – $2.5 tn)

Disney Land Paris – 15.9 mn

World

Class

Destination

AEL

Visitors

World Amusement Park overview

Source:Adlabs imagica presentation, Spark Capital Research

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World Amusement Park overview – Few factors

Amusement park industry global revenue share


Footfalls trend globally in amusement parks (MN)

Theme Parks Number of Parks 2007 2012 CAGR 2007

12 (%)

Growth rate in

CY12 (%)

Attendance per park

(CY12)

Worldwide Top 25 187.6 205.9 1.9 5.2 8.2

North America Top 20 122.8 131.6 1.4 3.6 6.6

Europe Top 20 60.9 58.0 (1.0) (0.3) 2.9

Asia Top 20 NA 108.7 3.6* 5.8 5.4

Latin America Top 20 11.3 13.2 3.2 2.6 1.3

Water Parks

Worldwide Top 20 19.4 23.6 4.0 5.4 1.2

North America Top 20 12.2 15.1 4.4 2.2 0.8

Asia Top 15 NA 14.4 NA 7.4 0.7

Source: IMaCs Report, * Taken from Top 10 parks in Asia

US, 50%

Asia Pacific, 27%

EMEA, 20%

Canada, 2% Latin America, 1%

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Indian Amusement Park over view and Players

Amusement Park City Area (in

acres)

Rides

Structure Pricing

Entry charges (INR)

Annual

footfalls

(in mn)

Revenue

(FY12 in mn) Dry Wet

Essel World and Water Kingdom Mumbai 64 Yes Yes Separate fees for land and water

park INR790-890 1.8 570*

Nicco Park Kolkata 40 Yes Yes Separate fees for land and water

park

Main park package - INR430

Water park package - INR380 1.7 311.1

Ocean Park Hyderabad 20 Yes Yes Separate fees for

land and water park INR300 NA NA

Ramoji Film City Hyderabad 1666 NA NA Single entry fees General package at INR800 1.5 NA

Kishkinta Chennai 120 Yes Yes Single entry fees INR540 NA NA

Queensland Chennai 70 Yes Yes Single entry fees INR350 NA NA

VGP Universal Chennai NA Yes Yes Single entry fees INR200 NA NA

MGM Dizzee World Chennai 27 Yes Yes Single entry fees INR500 NA NA

GRS Fantasy Park Mysore 30 Yes Yes Single entry fees INR395 NA NA

Mount Opera Hyderabad 55 Yes Yes Single entry as well as pay as you

go option INR360 NA NA

Entertainment City Noida 44** Yes Yes Single entry as wellas pay as you

go option INR450 NA NA

Black Thunder (Majorly water rides) Coimbatore 65 Yes Yes Single entry fees INR450 0.5 NA

Fun n Food Village Delhi 10 Yes Yes Single entry fees INR300 NA NA

Source: Company filings, Spark Capital Research

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Major investments upcoming in the amusement park industry in India

Upcoming project Location Promoter

Estimated Inv.

(INR

bn)

Expected

completion year

Size

(acres) Description

Sea World Singhudurg, Konkan,

Maharashtra

Proposed by GoM, will be done

on PPP basis 5-5.1 2015 150

Is a water based animal kingdom with

3000 kind of marine animals

Theme Park Nagpur, Maharashtra Landmark Entertainment 15 Planning stage 300 Theme park based on concept like

Jurassic park, Terminator and Spiderman

MGM Lavasa Hollywood

Theme Park Lavasa, Maharashtra MGM - Lavasa 4.5 NA 75 India's first hollywood theme park

Spaceworld Theme Park Lavasa, Maharashtra Space Investment Company,

Lavasa 4 NA 65 India's first edutainment theme park

Appu Ghar Gurgaon, Haryana International Amusement 4 NA 58 Will include amusement park, water park,

retail complex

Surat Theme Park Surat, Gujarat Atlanta 95-100 2016 3200 One of Asia's largest theme park

Krishna Lila Theme Park Bengaluru, Karnataka ISKCON 3.5 2016-17 28 Spritual theme park to spread awareness

of vedic heroes

Jaipur Mega Tourism City Jaipur, Rajasthan International Amusement 25 Planning stage 300 Mega Tourism City

Naya Raipur Amusement Naya Raipur, Proposed by NRDA, will be 0.23 Planning stage 40 Recreational cum amusement park

Park Chhattisgarh done on PPP basis

Adventure Island and Metro

Walk Rohini, Delhi

50:50 JV of International

Amusement and Unitech 2-3 Completed 62 Amusement park

Entertainment City Phase 1 Noida, Delhi 50:50 JV of International

Amusement and Unitech 10-11

Phase 1

completed, Phase

2 is on

147

Mega complex having amusement park,

retail space, health club, small water

park, shoping mall with a 5 s tar hotel

Source: Company filings, Spark Capital Research

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Revenue per customer has also been consistently increasing


…backed by robust footfall growth of ~17%


Bangalore park’s revenues have grown at a healthy CAGR of ~28%...


~82% of revenues currently derived from ticket sales


Location wise details – Bangalore

0.34

0.69 0.62 0.63 0.72 0.92

1.08 1.13 1.19

0

0.2

0.4

0.6

0.8

1

1.2

1.4


In M

illi

on

no

s.

Footfalls

118 306 303 326 363

478 627

739 868

0

100

200

300

400

500

600

700

800

900

1000


In R

s.m

n

Net Revenue

348 443 488 515 504 522

581 655

731

0

100

200

300

400

500

600

700

800


In R

s


87% 86% 85% 85% 84% 84% 84% 83% 82%

11% 12% 12% 13% 13% 13% 12% 13% 14%

2% 2% 2% 2% 3% 3% 4% 4% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Ticket sales Food sales Others

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Revenue per customer increased at a CAGR of ~8.6% over last decade


Footfalls at Kochi grew at a CAGR of 3.8% over the last 10 years


Kochi revenues have grown at a CAGR of ~13%


Revenue profile broadly in line with overall revenue split


Location wise details - Kochi

188 206 210 233 260 308 335

433 517

595 626

0

100

200

300

400

500

600

700

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

In R

s.m

n

Net Revenue

0.76 0.75 0.74 0.81 0.82 0.90 0.89 1.11 1.18 1.21

1.10

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40


In M

illi

on

no

s.

Footfalls

249 274 283 287 319 342 375 390 439

492 567

0

100

200

300

400

500

600


In R

s


88% 87% 88% 88% 89% 87% 87% 86% 87% 86% 84%

11% 11% 10% 10% 10% 9% 10%

10% 10% 11%

14%

1% 2% 2% 2% 1% 4% 3% 4% 3% 3% 2%

75%

80%

85%

90%

95%

100%


Ticket sales Food sales Others

Page 39


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Disclaimer

Spark Disclaimer

Spark Capital Advisors (India) Private Limited (Spark Capital) and its affiliates are engaged in investment banking, investment advisory and institutional equities and

infrastructure advisory services. Spark Capital is registered with SEBI as a Stock Broker and Category 1 Merchant Banker.

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Spark Capital has a subsidiary Spark Investment Advisors (India) Private Limited which is engaged in the services of providing investment advisory services and is registered

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Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies

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Rating

Interpretation

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horizon

ADD Stock expected to provide positive returns of >5% – <15% over a 1-year

horizon SELL Stock expected to fall >10% over a 1-year horizon

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Rs.285

Disclaimer (Cont’d)

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Disclosure of interest statement WONH

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Group/directors ownership of the subject company covered No

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products or services other than those above

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CMP Wonderla Holidays Rs.285 “Ride Along”mailers.sparkcapital.in/uploads/Consumer/untitled folder2...occupancy, and maximize the free cash flow” - The Dhandho Investor, Mohnish