VGi Global Media PCLvgi.listedcompany.com/misc/PRESN/20130521-VGI-general...2013/05/21 · (Tesco Lotus, Big C, Watsons) Office Bldg. & Other Media No. 51 buildingsof Locations 23

VGi Global Media PCL General Presentation

Prepared by Investor Relations Department VGi Global Media PCL

BTS-RELATED MEDIA

OFFICE BLDG & OTHERS

MODERN TRADE MEDIA

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.

Disclaimer

2 Prepared by Investor Relations Department VGi Global Media PCL

Agenda

3

Section 1 Who is VGI?

Section 2 Advertising Industry & VGI

Section 3 Key Success Factors & Competitive Advantages

Section 4 Growth Prospects

Appendices


1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009/10 2010/11 2011/12

Key Milestones

4 Prepared by Investor Relations Department VGi Global Media PCL Section 1: Who is VGI?

1999

Granted initial “License to Manage Marketing Services Agreement” from BTSC

Exclusive license to manage the advertising spaces and merchandising areas of 23 stations and all trains for a period of 10 years

2003

Granted initial “Advertisement Display Concession Agreement” from Watsons

2010

VGI set up VGI Ad China

2005

Granted initial “Advertisement Display Concession Agreement” from Big C (non-Sales floor)

2009

Granted “Advertisement Display Concession Agreement” from Carrefour

BTSC becomes major shareholder of VGI

VGI acquired POV

2012

2004

Granted initial “Advertisement Display Concession Agreement” from Tesco Lotus (non-Sales floor)

2011

Granted Advertisement Display Concession Agreement in “Sales floor” from Tesco Lotus and Big C

Amended “License to Manage Marketing Services Agreement” with BTSC

Listed in the Stock Exchange of Thailand

https://vip.watsons.co.th/web/Home.dohttp://www.bigc.co.th/th/

19

76 80

166

FY 09/10 FY 10/11 FY 11/12 FY 12/13

Office Bldg. & Other Media Revenue (THB mn)

207 391

754

1,250

FY 09/10 FY 10/11 FY 11/12 FY 12/13

Modern Trade Media Revenue (THB mn)

889 934 1,143

1,422

FY 09/10 FY 10/11 FY 11/12 FY 12/13

BTS Media Revenue (THB mn)

Share Information

Key Figures

(for FY 12/13)

THB (mn) USD (mn)

Revenue 2,838 95 EBITDA 1,289 43 Net profit 908 30 Total assets 2,573 86

(as of 31 Mar 2013)

Stock Code VGI Outstanding Shares (mn) 300 Market capitalisation (THB mn) 39,450

(USD mn) 1,315 Average Daily Traded Value (THB mn) 219.1 (USD mn) 7.3

VGI in Brief


Remarks: - Exchange rate based on USD 1 = THB 30

- Average Traded Value excludes first 2 days of trading

BTS Media

Office Building & Other Media

Modern Trade Media

Historical Revenue *

*Excludes other income

Section 1: Who is VGI? 5

VGI’s Media Network Broad yet targeted media reach


BTS Media Modern Trade Media (Tesco Lotus, Big C, Watsons)

Office Bldg. & Other Media

No. of Locations 23 stations & 47 trains 1,624 branches 51 buildings

Static Media > 6,000 displays In-train & on station

> 11,000 m2 (sales floor) 624 displays (non-sales floor)

-

Digital Media (screens)

80 on-station & 1,038 LCDs in-train 3,131 screens

452 in elevators & 4 Mega LED screens

Viewer Reach (per day)

>608,000 BTS Ridership

≈ 1,000,000 shoppers

250,000 building visitors

Area Coverage CBD Nationwide CBD

Target Viewers • Working people and younger generation

• age 15-35 • middle income

• Women, housewives and families

• middle-low income

• White collar workers • age 24-45 • mid-high income

Revenue Contribution

50% 44% 6%

Gross Profit Contribution

72% 21% 8%

Section 1: Who is VGI?

272 308 406 427 468

583 734 889 934

1,143 1,422

Static

Key Concession Terms

BTS Media


Multimedia

A. Rights 1) Exclusive rights for 23 stations & all BTS trains In Trains & on Stations Merchandising Area Additional areas

2) First right to renew contract and extend space on additional mass transit projects that BTSC is granted the rights to operate media space

B. Effective Period 18 May 2012 – 4 December 2029

C. License Fees 5% - 20% of total revenues/year

(an incremental increase of 5% every 5 years)

BTS SkyTrain BTS Platforms

Train Body Wrap

Digital Screen inside the train

Standard

Platform Truss

Pier Head

Past Success

Merchandising Space

Merchandising Shop

BTS Media Revenue (THB mn)

Apr - Mar Jan - Dec

CAGR (10 years) = 18.0%


Key Concession Terms

Modern Trade Media


Digital Media

A. Rights 1) Exclusive rights for existing and upcoming branches Tesco Lotus Big C (including former Carrefour) Watsons (digital media)

2) First right to extend contract

B. Length of Contract 3-5 years on average

C. License Fees Mainly based on percentage of revenue sharing and

minimum guarantee Sales Floor Area Non-Sales Floor Area

Shelf Divider

Radio Media in Tesco Lotus & Big C

Shelf Frame

& Floor Sticker

Entrance Lightbox

Sensormatic

Past Success

Health and Beauty Zone

Aisle Arch

Acquired exclusive rights to manage all advertising areas from Tesco Lotus and Big C, the top 2 players in the Modern Trade Retailer industry

Big surge in revenue (93% growth in FY 2011/12) mainly from sales floor areas, which account for over 70% of total Modern Trade Media revenue


Static Media

Outdoor LED Screens

Key Contract Terms

Office Building & Other Media


A. Rights & Length of Contract 1) Office Buildings 51 buildings in CBD, 3-5 years contract (avg.)

2) Outdoor LED (Selling Agent) 10 locations in Bangkok 1 year contract with renewable rights

3) Chulalongkorn University (CU) Bus 15 buses and 15 bus-stops 1 year contract with renewable rights

4) Airport Link (Selling Agent) 9 trains, train body wrap, LCD in-train media, and 8

stations Contract expires in October 2021

B. License Fees Revenue sharing and fixed rates

Digital Screen in Elevators Platform Banister

Rama 9 Junction

Past Success

Changed to integrated network across all office buildings, increasing sales by 50%

Bundled Office Building Media with the Company’s other media and sold as a package, increasing occupancy and driving sales by 100%

Chulalongkorn University (CU) Bus

Bus Body Wrap Bus Shelter

Wang Burapha


Airport Link Media Office Building Media

0.4%

1.5%

2.5%

4.1%

5.6%

5.6%

6.9%

13.9%

59.4%

0.5%

2.4%

2.6%

4.0%

4.7%

5.6%

7.0%

13.3%

59.9%

Internet

In-Store

Transit

Outdoor

Magazines

Cinema

Radio

Newspapers

TV

0.5%

1.7%

2.3%

4.2%

4.7%

5.9%

5.5%

14.2%

61.1%

0.8%

1.9%

2.9%

3.9%

4.5%

4.6%

5.4%

13.3%

62.7%

Internet

In-Store

Transit

Outdoor

Magazines

Cinema

Radio

Newspapers

TV

Media (bn) 2012 2011 %YoY

Industry* 113.8 104.8 8.6%

Mass Transit 3.0 2.6 12.0%

In-Store 2.7 1.6 68.8%

2012 vs. 2011 (Jan – Dec)

Industry Overview: Thai Media Market Share


Source: The Nielsen Company (Thailand) Limited

Transit

In-Store

*Note: Excludes classified and house ads. ,

Market Value (THB)

Section 2: Advertising Industry & VGI

Media (bn) 1Q13 1Q12 %YoY

Industry* 26.4 26.0 1.3%

Mass Transit 0.8 0.6 30.4%

In-Store 0.5 0.4 17.0%

Market Value (THB) Transit

In-Store

1Q13 vs. 1Q12 (Jan – Mar)

1 FMCG 93%

2 MOTOR VEHICLE ACCESSORIES 2%

3 MOTOR VEHICLES 1%

4 PHOTOGRAPHIC PRODUCTS 1%

5 COMMUNICATIONS 0.4%

6

FOOD OUTLETS & RESTAURANTS

0.3%

7 PHARMACEUTICALS 0.3%

8 REAL ESTATE 0.2%

9 LEISURE 0.2%

10

GOVERNMENT & COMMUNITY ANNOUNCEMENT

0.2%

TOP 10 99%

OTHERS 1%

Top 10 Ad Spending by Business Segments (1 Apr 2012 – 31 Mar 2013)

Industry Overview: Ad Spending by Business Segment


Source: The Nielsen Company (Thailand) Limited

OVERALL MEDIA INDUSTRY VGI MASS TRANSIT VGI IN-STORE

1 FMCG 41%

2 MOTOR VEHICLES 7%

3

GOVERNMENT & COMMUNITY ANNOUNCEMENT

6%

4 COMMUNICATIONS 5%

5 LEISURE 4%

6 RETAIL SHOPS/STORES 4%

7 BANKS 3%

8 REAL ESTATE 3%

9 INSURANCE 2%

10


2%

TOP 10 78%

OTHERS 22%

*Excludes classified and house ads.

1 FMCG 41%

2 COMMUNICATIONS 9%

3


4%

4 TRAVEL & TOURS 4%

5 REAL ESTATE 4%

6 RETAIL SHOPS/STORES 4%

7 LEISURE 4%

8 PHOTOGRAPHIC PRODUCTS 3%

9 COMPUTERS 3%

10 BANKS 3%

TOP 10 77%

OTHERS 23%

Section 2: Advertising Industry & VGI

Ability to Reach Audience

Business Strategy Cost Effectiveness

Key Success Factors & Competitive Advantages Right Place, Right Timing, and Right Targeted Viewers

BTS SkyTrain and Office Buildings

Captive media (No remote control)

High frequency

Strong impact

Modern Trade

Final Point of Sales Media, which is the last mile to purchase

Prominent locations

Nationwide viewer base Prepared by Investor Relations Department

VGi Global Media PCL 12

Source : The Nielsen Company (Thailand) Limited

Section 3: Key Success Factors & Competitive Advantages

Women, housewives and families

Working people and younger generation (age 15-35)

White collar workers

(age 24-45) Office

Building

BTS SkyTrain

Modern Trade

VGI’s cost per thousand viewers is 15-20% cheaper than TV

Nationwide Media Network 1

Strong ability to reach viewers 2

Well-Classified Target Viewers

Product Advantage

3 Product Variety

4 Product Bundling

2001 2002 2003 2004 2005 2006 2007 2008 2009/10 2010/11 2011/12 2012/13

183 317 352

482 521 651

844 1,046

1,138

1,413

2,005

2,872

Jan - Dec Apr - Mar

Floods Global financial

crisis

Coup d’Etat

Bangkok Political

Demonstration

Note: *Includes other income

Unit : THB mn

Non-BTS Revenue*

BTS Ridership Trend

BTS Revenue*


13

Uninterrupted revenue growth in every single year from both BTS revenue and non-BTS revenue despite various disruptions and decline in BTS ridership, demonstrating resilience against crisis.

VGI Revenue CAGR (11 years) = 28.5%

Section 3: Key Success Factors & Competitive Advantages

Key Success Factors & Competitive Advantages Resilience & Growth

45% 49%

6%

BTS Modern Trade Office Bldg

FY 13/14 50% 44%

6%

BTS Modern Trade Office Bldg

Target 2013/14: Overall Business


Expected Revenue Contribution by Business Units

FY 12/13

Section 4: Growth Prospects

30% YoY Revenue Growth

20% Off. Bldg & Others

40% Modern

Trade 20% BTS

Expected Revenue Growth

Platform Screen Door 160

BTS: Platform Truss LED (76 screens) & LCD in-train (120 screens for 5 trains) 300

Modern Trade and Others 80

Total 540

Expected CapEx 2013/14 (THB mn)

media capacity on non-prime stations

20% BTS Growth

Target 2013/14: Growth Drivers


23% train capacity (from 35 single-cars)

10% price adjustment on platform media

2.5x capacity increase from platform truss LED


Current Package New Package

Platform Truss (static media)

18 packages: 7% of BTS-related revenue

14 packages

On-station LCD 7% of BTS-related revenue Remove from 20 stations

Platform Truss LED (digital media)

n/a Install on 20 stations: • 4 locations on 18 stations • 2 locations on 2 stations

(Mo Chit & National Stadium)

Current Package: Platform Truss & On-station LCD New Package: Platform Truss LED

Platform Truss LED



2.5x Expected Revenue Growth from the New Package

2.5x capacity increase




40% Modern Trade Growth

Digital 50% 65% Sales Floor

40% 60%

Occupancy

70% YoY pre-booking

from top 5 customers

Customers

Double-digit revenue growth

Retailer Growth

Toys & Stationery Processed food, cooking, and confectionery

Chemical & Houseware

Sample Sales Floor Plan

Sales Floor Products 1. Aisle arch 2. Shelf frame 3. Shelf divider 4. Shelf pop-up 5. Shelf LCD 6. Shelf strip 7. Top stock 8. Chiller ads / end chiller ads 9. Freezer ads 10. Floor sticker 11. Brand spotlight 12. Message board 13. Cart ads 14. Pole wrap 15. End cap hard line

Non-Sales Floor Products 1. Entrance tri-vision 2. Entrance light box 3. Pole ad 4. Car park light box 5. Cart escalator light box 6. Escalator light box 7. Archway 8. Cart light box 9. Sensormatic 10. Table ads 11. Hall escalator light box 12. Mirror ads 13. Door ads 14. Lift ads 15. Vertical board 16. Promo table wrap 17. Motorcycle parking area


42

16

1 79

18

0

53

12

0 57

47

11

38

14

2

53

13

2 57 47 11 BKK

265 73 5 UPC

322 120 16 TOTAL

Source: Tesco Lotus, Big C, and Bohdi Tree Knowledge Co., Ltd.


Growth in revenue to reflect modern trade retailers’ expansion and its revenue growth (Big C: target of 13% YoY)

Target number of new branches for 2013 Big C:

6 Big C Hypermarkets 13 Big C Markets 150 Mini Big Cs

Tesco Lotus: 10 Tesco Lotus

Hypermarkets 20 Tesco Lotus Talad 340 Tesco Lotus Express

VGI Media Coverage of Modern Trade Outlets in Thailand*

40% Modern Trade Growth

Modern Trade Retailer Growth

18

* Data includes only large and medium formats as of 31 Mar 2013




20% Office Building and Others Growth

CU Bus

Airport Link Office Building

Outdoor LED

20% Growth

• 20% revenue increase

• 10 building expansion

• 15% occupancy increase

• Full year revenue recognition

• Full year revenue recognition


Mass Transit

Modern Trade

Office Building& Others

17% Annual Revenue Growth

10% Off. Bldg & Others

20% Mass

Transit

15% Modern

Trade

3 Years Outlook: Existing Business Growth

70%

25%

5%

2014/15 F

70%

25%

5%

2015/16 F

70%

25%

5%

2016/17 F

Excludes other income Percentages represent contributions to the parameter


20

NPAT Contribution

EBITDA Margin Revenue Growth

70%

25%

60%

Mass Transit Modern Trade Office Building & Others


Business Opportunities

11 Stations on Green Line

extension

Innovative media

applications

JV and M&A

Other mass transit lines

3 Years Outlook: Business Opportunities


21

AEC


APPENDICES


424 494 576 671

782 911

1,061

2011 2012 2013 2014 2015 2016 2017

Estimated Ridership Growth (from dark green line)

Increase in Fleet

Capacity increase of 36% with the 5 new trains


BTS’s current fleet

X12 48

Additional fleet on order

2) By end of 2013 X5 +20 +35.9%

No. of Carriages No. of Trains Capacity Increase

Source: Office of Transport and Traffic Policy and Planning

(‘000 passengers / day)

Increased BTS ridership from 35 new carriages and 5 trains pave the way for

viewership growth

X35 105

+35 +22.9% 1) By 2Q 2013/14

Appendix: BTS Expansion Plan

X47 153 Total Current Fleet

X52 208 Total Future Fleet

Future growth from existing non-prime stations


Currently 90% occupancy on 17 stations 23.5km on 23 core stations

NON-PRIME STATION

Extension Stations

WONGWIAN YAI

KRUNG THON BURI PHO NIMIT

TALAT PLU SAPHAN TAKSIN

S8 S10 S9 S7

WUTTHAKAT S11

S12

S6

BANG WA

Appendix: BTS Expansion Plan

7.5km

5.3km

Key Financial Ratios


25 Appendix: Key Financial Ratios

FY 12/13 FY 11/12 FY 10/11

Profitability Ratios

Gross profit (%) 54.6% 34.5% 35.3%

EBITDA (%) 45.4% 26.6% 25.1%

EBIT (%) 41.9% 21.6% 18.7%

Net profit (%) 32.0% 14.1% 12.3%

Return on Equity (%) 86.2% 78.8% 40.3%

Liquidity Ratios

Current Ratio (times) 2.7x 1.0x 1.1x

Quick Ratio (times) 2.6x 0.9x 1.0x

Efficiency Ratios

Return on Assets (%) 46.7% 21.3% 13.4%

Asset turnover (times) 1.5x 1.5x 1.1x

Leverage Ratios

Liability to Equity (times) 0.4x 3.5x 2.1x

Debt to Equity (times) No leverage

Shareholding Structure


BTSC

BTSG

Kanjanapas Family

BTSG’s Minorities

BTSC’s Minorities

49.1% 50.9%

97.5% 2.5%

0.1%

51.0%

Public Kanjanapas

Family

33.7% 0.6%

14.7%

(As of 2 May 2013)

Appendix: Shareholding Structure

Documents

VGi Global Media PCLvgi.listedcompany.com/misc/PRESN/20130521-VGI-general...2013/05/21 · (Tesco Lotus, Big C, Watsons) Office Bldg. & Other Media No. 51 buildingsof Locations 23