VGi Global Media PCL
General and Business Update Presentation
May 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 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
Key Milestones
4
1999 2003 2004 2009/10 2011/12 2005 2012/13 2013/14
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
Granted initial “Advertisement Display Concession Agreement” from Watsons
Granted initial “Advertisement Display Concession Agreement” from Tesco Lotus (non-Sales floor)
Granted initial “Advertisement Display Concession Agreement” from Big C (non-Sales floor)
Granted “Advertisement Display Concession Agreement” from Carrefour
BTSC becomes major shareholder of VGI
VGI acquired POV
Granted Advertisement Display Concession Agreement in “Sales floor” from Tesco Lotus and Big C
Amended “License to Manage Marketing Services Agreement” with BTSC
Listed on SET in Oct 2012
Included as a constituent member of SET100 Index in Jul 2013
Included as a constituent member of SET50 Index in Jan 2014
Formed a JV with Deelight Multimedia Co., Ltd.
Section 1: VGI in Brief
889 934 1,143
1,422 1,679
FY09/10 FY10/11 FY11/12 FY12/13 FY13/14
207 391
754
1,250 1,295
FY09/10 FY10/11 FY11/12 FY12/13 FY13/14
19
76 80
166 175
FY09/10 FY10/11 FY11/12 FY12/13 FY13/14
BTS Media
Office Building & Other Media
Modern Trade Media
HISTORICAL REVENUE* (THB mn)
*Excludes other income ** as of FY 2013/14
VGI Overview REVENUE
CONTRIBUTION** GROSS PROFIT
MARGIN**
53% 81%
25%
69%
41%
6%
Section 1: VGI in Brief 5
-
500
1,000
1,500
2,000
2,500
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
VGI Turnover (RHS) VGI TB SET Index (rebased)
SHARE INFORMATION (AS OF APR 2014)
KEY FIGURES
Remarks: - Exchange rate based on USD 1 = THB 32.29
• 2013/14 final dividend is subject to shareholders’ approval at the AGM on
3 Jul 2014
(FY 13/14) THB (mn) USD (mn)*
Revenue 3,149 98
EBITDA 1,510 47
Net Profit 1,146 35 Total Assets 2,741 85
Stock Code VGI
Outstanding Shares (mn) 3,432
Market Capitalisation (THB mn) 39,468
Market Capitalisation (USD mn) 1,220
Average Daily Traded Value (THB mn) 81
Average Daily Traded Value (USD mn) 3
DIVIDEND INFORMATION
VGI at a Glance
Dividend Policy Not less than 50% of net profit
2013/14 Payout Ratio* 93.4%
SHARE PRICE MOVEMENT
VGI First Day Trade Jun: MSCI
Effective
Jan: Listed in SET50
Sep: Par Split
TOP TEN SHAREHOLDERS (as of 31 Mar 2014)
THB
THB mn
THB mn
Nov: Bangkok Political Demonstration
Name (%)
BANGKOK MASS TRANSIT SYSTEM PCL 51.0
BTS GROUP HOLDINGS PCL 10.8
MR. PRACHA DUMRONGSUTHIPONG 2.7
THAI NVDR CO., LTD. 2.5
HSBC (SINGAPORE) NOMINEES PTE LTD 1.9
STATE STREET BANK EUROPE LIMITED 1.9
KRUNGSRI LONG-TERM DIVIDEND FUND 1.6
MR. NARES NGAMAPICHON 1.5
NORTRUST NOMINEES LIMITED-NTO SEC LENDING THAILAND 1.3
KRUNGSRI DIVIDEND FUND 0.9
Section 1: VGI in Brief 6
Jul: Listed in SET100
Agenda
SECTION 1 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
13/14 THAI MEDIA INDUSTRY MARKET SHARE
Media Industry Overview
Source: The Nielsen Company (Thailand) Limited
THAI MEDIA INDUSTRY ADSPEND (THB BN)
INDUSTRY, 5% CAGR
TV, 6% CAGR
TRANSIT, 19% CAGR
IN-STORE, 24% CAGR TV, 60%
Internet, 1%
In-Store, 2% Transit, 3%
Newspaper, 13%
Cinema, 7%
Radio, 5%
Magazine, 5%
Outdoor, 4%
Section 2: Advertising Industry 8
Excludes classified and house ads
90 93 104 105
114 113
52 55
63 63 69 68
1 2
2
3
3 4
0.8 1
1
2
3
2
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
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%
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%
Media Industry Overview Top 5 AdSpend by Business Segment (1Q 12/13 – 4Q 13/14)
9
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
Source: The Nielsen Company (Thailand) Limited
Section 2: Advertising Industry
Agenda
SECTION 1 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
STATIC MEDIA (ON BTS SKYTRAIN & PLATFORMS)
KEY CONCESSION TERMS DIGITAL MEDIA
Train Body Wrap
Merchandising Shop
Cladding
Platform Truss LED & Platform Screen Door
BTS MEDIA REVENUE (THB mn)
CAGR 18%
BTS Related Media
Exclusive rights for 23 stations & all BTS trains In Trains & On-Stations Merchandising Area Additional areas
RIGHTS
First right to renew contract and extend space on additional mass transit projects that BTSC is granted the rights to operate media space
18 May 2012 – 4 December 2029
EFFECTIVE PERIOD
CONCESSION FEE (PAYABLE TO BTSC)
5% - 20% of total revenues/year (an incremental increase of 5% every 5 years)
Digital Screen inside the train
MERCHANDISING
PAST SUCCESS
Merchandising Shop
Section 3: VGI by Business Units 11
272 308 406 427 468
583 734
889 934 1,143
1,422
1,679
BTS’ MEDIA NETWORK (exclusive rights for 23 stations & all trains)
BTS Related Media
16% additional train capacity in FY 14/15 • Full year effect of 35 c car trains • Full year effect of 5x4 car trains
13% additional train capacity in FY 19/20 • Expected full year effect of 7X4 car trains
TRAIN CAPACITY
Total Current Train Capacity: 52 trains/208 carriages
2014/15 BTS’ RIDERSHIP GROWTH TARGET
5-8% ridership growth
Section 3: VGI by Business Units 12
KEY CONCESSION TERMS DIGITAL MEDIA
Modern Trade Media
RIGHTS
Exclusive rights for existing and upcoming branches Tesco Lotus Big C (including former Carrefour) Watsons (digital media)
LENGTH OF CONTRACT
3-5 years on average
LICENSE FEE
Mainly based on percentage of revenue sharing and minimum guarantee
PAST SUCCESS
• 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
Radio Media in Tesco Lotus & Big C Health and Beauty Zone
STATIC MEDIA (SALES FLOOR AREA)
Shelf Divider Shelf Frame & Floor Sticker
STATIC MEDIA (NON-SALES FLOOR AREA)
Entrance Lightbox Sensormatic
Section 3: VGI by Business Units 13
Source: Tesco Lotus, Big C, and Bohdi Tree Knowledge Co., Ltd.
Modern Trade Media VGI MEDIA COVERAGE OF MODERN TRADE OUTLETS IN THAILAND*
* Data includes only large and medium formats as of 31 Mar 2014
50
19
83
23
62
57
43
16
53
18
NORTH
NORTHEAST CENTRAL
BKK EAST
SOUTH
48
16
BRANCHES: LARGE MEDIUM SMALL TOTAL
TESCO 124 223 1,409 1,756
BIG C 121 30 295 446
SAMPLE OF SALES FLOOR PLAN
Toys & Stationery Processed food, cooking, and confectionery
Chemical & Houseware
Section 3: VGI by Business Units 14
KEY CONCESSION TERMS OFFICE BUILDING MEDIA
Office Building & Other Media
PAST SUCCESS
OUTDOOR LED SCREENS
CHULALONGKORN UNIVERSITY BUS
RIGHTS AND LENGTH OF CONTRACT
Office Buildings 75 buildings in CBD, 3-5 years contract (avg.) Outdoor LED (Selling Agent) 4 locations in Bangkok 1 year contract with renewable rights Chulalongkorn University (CU) Bus 15 buses and 15 bus-stops 1 year contract with renewable rights
LICENSE FEE
Revenue sharing and fixed rates
• 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%
Digital Screen in Elevators Lift Wrap
Rama 9 Junction Victory Monument
Bus Body Wrap Bus Shelter
Section 3: VGI by Business Units 15
TOTAL GRADE A OFFICE BUILDINGS IN BANGKOK
Office Building & Other Media
approximately 120 buildings
TOTAL BANGKOK GRADE A OFFICE BUILDINGS IN VGI PORTFOLIO
75 buildings 655 Screens
Section 3: VGI by Business Units 16
Agenda
SECTION 1 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
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
Source : The Nielsen Company (Thailand) Limited
Women, housewives and families
Working people and younger generation (age 15-35)
White collar workers
(age 24-45)
• 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
Office building
BTS
Modern Trade
Section 4: Key Success Factors & Key Competitive Advantage 18
2001 2002 2003 2004 2005 2006 2007 2008 2009/10 2010/11 2011/12 2012/13 2013/14
183 317 352
482 521 651
844 1,046
1,138 1,413
2,005
2,838
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*
Uninterrupted revenue growth in every single year despite various disruptions and decline in BTS ridership, demonstrating resilience against crisis.
VGI Revenue CAGR (12 years) = 27%
Key Success Factors & Competitive Advantages Resilience & Growth
Section 4: Key Success Factors & Key Competitive Advantage 19
3,149
Political Turmoil
Agenda
SECTION 1 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
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
21
* 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 5: 4Q & FY 13/14 Performance and Business Update
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)
22
82%
82%
77%
4Q 12/13
3Q 13/14
4Q 13/14
78%
81%
FY 12/13
FY 13/14
Annual Gross Profit (%)
Section 5: 4Q & FY 13/14 Performance and Business Update
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 (%)
23
26%
25%
FY 12/13
FY 13/14
299 319 220
1,250 1,295
4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14
Section 5: 4Q & FY 13/14 Performance and Business Update
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 (%)
24
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
31 46
28
166 175
4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14
Section 5: 4Q & FY 13/14 Performance and Business Update
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)
25 Section 5: 4Q & FY 13/14 Performance and Business Update
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
26 Section 5: 4Q & FY 13/14 Performance and Business Update
Business Update Dividend Payments & Phar Partnership
27
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
Section 5: 4Q & FY 13/14 Performance and Business Update
Business Update Strategic Investment: 24.43% in MACO
28
MACO OVERVIEW
Share information (as of 9 May 2014)
Stock code: MACO
Market capitalisation (THB mn): 2,903.6
Outstanding shares (mn shares): 300.8
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%
Product Description Location/Area
1. Billboard Static billboard Bangkok & vicinity / 170 billboard / 74,635 sqm
2. Street Furniture Tri vision media on 20 BTS columns/ Siam square billboard Bangkok / 2,217 sqm
3. Transit Light box at toll booths / tri vision, light-box & poster City grip light express, BTS walkway & Mochit station / 419 sqm
4. Made to order & Event Produce and provide advertising media services n/a
Section 5: 4Q & FY 13/14 Performance and Business Update
Business Update Strategic Investment: 24.43% in MACO
29
MACO’S FINANCIAL PERFORMANCE
Revenue structure Proven Track Record of Revenue and Net profit
2013 Dividend Yield* of 5.6% 2013 Total operating revenue : THB 724.6mn
*based on share price of THB 9.00
Transit, 13.0%
Made to order, 6.9%
Event, 1.7%
Street furniture, 27.5%
Other services, 2.9%
Billboard, 53.5%
635.5
732.4 724.6
98
139.5
173.8
2011 2012 2013
Operating revenue (THB mn) Net Profit (THB mn)
MACO space: Billboard, Street furniture and Transit
Non MACO space: Made to order and Production/Printing
Section 5: 4Q & FY 13/14 Performance and Business Update
Business Update Strategic Investment: 24.43% in MACO
30
BENEFITS TO VGI
• 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’s portfolio
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
INVESTMENT HIGHLIGHTS
• VGI invested 24.43% in MACO (73.5mn shares, at THB 9.00
• Total investment value of THB 661.5mn
• 3 BOD representative from VGI from total of 9 Directors
• Accounted as equity method of consolidation. Investment income from MACO in 1Q 14/15 will be recorded proportionately according to VGI shareholding in MACO between 12 May to 30 June 2014 as follows:
BALANCE SHEET
Current assets
Cash and cash equivalents THB xxmn
Non-current assets
Investment in associates THB xxmn
P&L
Revenues
Share of profit (loss) from investment in associates
THB xxmn
Section 5: 4Q & FY 13/14 Performance and Business Update
Business Update Warrant Issuance
31
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
Matter is subject to shareholder approval of AGM on 3 July 2014
Expected maximum proceeds
THB 12,011,067,698
Section 5: 4Q & FY 13/14 Performance and Business Update
Agenda
SECTION 1 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
Acquisition/Investment Policy
33
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 6: Acquisition/Investment Policy
Agenda
SECTION 1 VGI in Brief
SECTION 2 Advertising Industry
SECTION 3 VGI by Business Units
SECTION 4 Key Success Factors & Competitive Advantage
SECTION 5 4Q & FY 13/14 Performance and Business Update
SECTION 6 Acquisition/Investment Policy
SECTION 7 FY 14/15 Target
APPENDICES
2014/15 Target: Overall Business
35
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 Section 7: FY 14/15 Target
APPENDICES
Update on Green and Pink Line Extension
BTSG is WELL POSITIONED FOR NEW CONTRACTS
Relevant expertise Financial strength Green line advantage
New contracts are expected to be on a ‘PPP GROSS COST BASIS’
Operator to invest in civil works and E&M works with repayment from government Operator given operation contract Variations will be considered
Light Rail Transport (LRT) Bang Na – Suvarnabhumi 18.3km; completed by 2017
Dark Green South Line Bearing – Samut Prakarn 12.8 km; completed by 2017
Light Green Line National Stadium – Yodse
1.0 km; completed by 2019
Dark Green North Line Mo Chit – Saphan Mai
18.2 km; completed by 2017
Pink Line Khae Rai – Min Buri 36.0 km; completed by 2017
Dark Green North Line Kukod – Lamlukka 6.5 km; completed by 2019
Dark Green North Line Saphan Mai – Kukod
7.0 km; completed by 2017
Dark Green South Line Samut Prakarn – Bang Pu
7.0 km; completed by 2017
37
Key Financial Ratios FY 13/14 FY 12/13 FY 11/12
Profitability Ratios
Gross profit (%) 57.4% 54.6% 34.5%
EBITDA (%) 47.9% 45.4% 26.6%
EBIT (%) 41.9% 21.6%
Net profit (%) 36.4% 32.0% 14.1%
Return on Equity (%) 60.7% 86.2% 78.8%
Liquidity Ratios
Current Ratio (times) 2.1x 2.7x 1.0x
Quick Ratio (times) 2.1x 2.6x 0.9x
Efficiency Ratios
Return on Assets (%) 43.1% 46.7% 21.3%
Asset turnover (times) 1.2x 1.5x 1.5x
Leverage Ratios
Liability to Equity (times) 0.4x 0.4x 3.5x
Debt to Equity (times) No leverage
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Kong Chi Keung (Director)
Keeree Kanjanapas (Chairman)
VGI Board of Directors
Kavin Kanjanapas (Director and Chairman of Executive Committee)
Surapong Laoha-Unya (Director)
Marut Arthakaivalvatee (Director and Chief Executive Officer)
Chan Kin Tak (Director & Chief Operating Officer)
Assoc.Prof.Jaruporn Viyanant (Independent Director and Chairman of Audit Committee)
Maneeporn Siriwatanawong (Independent Director and Audit Committee)
Mana Jantanayingyong (Independent Director and Audit Committee)
• Over 10 years of commitment as a role of director and management. He is one of the key persons who has steered the performance of VGI during the last decade
• His experience as Chief Operating Officer of Bangkok Mass Transit System Plc. since 2006 provides VGI with insights to BTS-related business
• Held various well-respected directorship positions in various
government-related organizations such as the Bank of Thailand, Office of the Prime Minister, the Securities and Exchange Commission, and the Stock Exchange of Thailand, etc.
• More than 35 years in the advertising & media industry with experience in multinational and domestic companies. He has worked with leading multinational and domestic companies such as McCann-Erickson Thailand, Oglivy & Mather (Thailand) and Grammy Entertainment
• Extensive experiences in the field of tax audit with the Revenue Department and Internal Auditor with the Bank of Ayudhya Plc.
• Experiences in the retail business with Watsons in Thailand and Hong Kong
• Held various management position in international media agencies such as Executive Director of Group M, Managing Director of Mediaedge: CIA and management of McCann-Erickson Thailand
• One of the most successful business person in Thailand with experiences in various industries. Khun Keeree is the one who introduced the first SkyTrain network to Thailand. He brings along valuable business experiences while providing key strategic directions to VGI
• More than 10 years of involvement with VGI as the Director
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Shareholding Structure
BTSC
BTSG
Kanjanapas Family
BTSG’s Minorities
BTSC’s Minorities
41.7% 58.3%
97.5% 2.5%
0.1%
51.0%
Public Kanjanapas
Family
39.7% 0.5%
10.8%
As of 31 Mar 2014
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THANK YOU