38
COMPANY OVERVIEW FEBRUARY 2012
COMPANY OVERVIEW
FEBRUARY 2012
DISCLAIMER
2
Some of the statements made in this presentation are forward-looking statements and arebased on the current beliefs, assumptions, expectations, estimates, objectives and projectionsof the directors and management of Zee Entertainment Enterprises Limited (ZEE) about itsbusiness and the industry and markets in which it operates.
These forward-looking statements include, without limitation, statements relating to revenuesand earnings.
The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project” and similarexpressions are also intended to identify forward looking statements.
These statements are not guarantees of future performance and are subject torisks, uncertainties and other factors, some of which are beyond the control of the Companyand are difficult to predict. Consequently, actual results could differ materially from thoseexpressed or forecast in the forward-looking statements as a result of, among otherfactors, changes in economic and market conditions, changes in the regulatory environmentand other business and operational risks. ZEEL does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
ZEE ENTERTAINMENT
Hindi Entertainment
Sports Channels
Regional Entertainment
English Entertainment
Music & Lifestyle
3Largest Indian TV Network in the World
Leading Hindi Entertainment Network
Leading Sports Network
Leading Regional Entertainment Network
English Entertainment
Indian Music & Lifestyle Network
OUR GROWTH JOURNEY
1992
1995
1998
1999
• Flagship channel - Zee TV launched
• IPO of Zee Telefilms Limited
• Zee TV goes global
• Zee Network launched in UK
• Another major international foray
• Zee Network launched in USA
• Zee buys out News Corp‘s 50% stake in its television
broadcasting business
9
2002
2007
2010
2011
• Distribution partnership with Turner, a Time Warner
subsidiary
• Demerger of Zee into four separate listed companies
• Zee acquires 50% stake in Ten Sports
• Zee acquires the regional entertainment networks
• Zee acquires another 45% stake in Ten Sports
• Zee, Star, Turner & Den form a distribution alliance –
Media Pro Enterprise India.
OUR GROWTH JOURNEY
10
• M&E industry size estimated at Rs 653 bn in 2010
• Television sector estimated at Rs 297 bn, constituting 45% of the industry
• Television recorded growth of 16% in 2010 ahead of industry growth of 11%
INDIAN MEDIA SECTOR
Source: FICCI-KPMG Report 2011 Source: Worldwide Media and Marketing Forecasts, Group M, Summer 2011
Media Spend as a % of GDP
11
61 71 82 88 103
118
122
140
158
169
194
223
12%
15%
14%
7%
16%
15%
2006 2007 2008 2009 2010 2011P
Television Industry Revenues (Rs bn)
Ad revenues Sub revenues Television growth rate (%)
0.33%
0.85%0.97%
0.76%0.86%
0.76%
India UK US China Japan World
INDIAN TV HH'S AT A GLANCE
Digital
26 Mn
C&S HHlds
116 Mn
TV Owning
Households
142 Mn
Total Households
231 Mn
Digital
42 Mn
C&S HHlds
126 Mn
TV Owning
Households
148 Mn
Total Households
231 Mn
Growth
+4 %
+9 %
+63 %
2011 2012
Source: TAM TV Universe Update 2012
All India Household figures in million
12
INDIA – RAPID DIGITISATION
10
16
28
38
48
56
64
71
2008 2009 2010 2011P 2012P 2013P 2014P 2015P
DTH Subscribers (Net, in Million)
Source: FICCI-KPMG Report 2011
13
• DTH industry saw a growth of 75% in 2010
• Industry adding almost a million subscribers each month
• Digitization ordinance passed by the Govt. likely to give a further push to the
digitization wave
14
PRODUCT OFFERING
HINDI ENTERTAINMENT
HINDI MOVIES
REGIONAL LANGUAGE ENTERTAINMENT (R-GEC)
15
ENGLISH ENTERTAINMENT & MOVIES
PRODUCT OFFERING
SPORTS
INTERNATIONAL
MUSIC & LIFESTYLE
16
ALTERNATE LIFESTYLE
HD
Advertising
56%
Domestic DTH
11%
Domestic Cable
13%
International
14%
Other Sales
6%
REVENUE PIE
17
Advertising Subscription Other Sales
FY2011 Revenues: Rs 30,136 million
BUSINESS
PERFORMANCE
HINDI ENTERTAINMENT CHANNELS
• Zee TV is the largest Hindi entertainment channel of the world
19
HINDI MOVIE CHANNELS
20
Source: TAM Media Research;
Period: April to December 2011
TG: CS 4+, HSM;
MAX ratings- non-cricket
Zee’s Cinema Channels - Zee Cinema, Zee Premier, Zee Action, Zee Classic
Zee's Cinema Channels, 31.3
%
Star Gold, 28.7%
MAX, 23.3%
UTV, 12.5%
Filmy, 4.1%
Relative Viewership Share
STRONG MOVIE LIBRARY
21
Largest Hindi Movie Library in the World
22
SPORTS CHANNELS – KEY PROPERTIES
23
CRICKET, SOCCER, TENNIS & MORE
• Ten Sports, Ten Action+, Ten Cricket - The leading sports network of the country
• Key properties in 2011:
• Cricket: India tour of West Indies, Sri Lanka vs Australia, South Africa vs
Australia, Pakistan vs Sri Lanka, South Africa vs Sri Lanka
• Others: WWE Wrestlemania, UEFA Champions League, US Open, ATP events,
UEFA EUROPA Cup, Moto GP, European Tour Golf
24
ENGLISH & NICHE CHANNELS
• Tie-ups with leading studios across the world
25
Star Pravah, 29.5%
Zee Marathi, 28.0%
ETV Marathi, 31.2%
Mi Marathi, 5.1%
DD10 Sahyadri, 3.6%
Saam TV, 2.5%
ZEE MARATHI - HIGHLIGHTS
• Leading GEC in Maharashtra
• Library of over 9,000 hours & rights to over 400 movie titles
• Key properties: Marathi Paul Padte Pude, Dilya Ghari Tu Sukhi Raha, Pinjara
26Source: TAM, Period: April to December 2011, CS 4+, All Maharashtra
Relative Viewership Share
Star Jalsha, 39.5%
Zee Bangla, 33.1%
ETV Bangla, 12.9%
Rupashi Bangla, 4.7%
Mahua Bangla, 2.7%
Aakaash Bangla, 2.9%
Sananda TV, 4.1%
ZEE BANGLA - HIGHLIGHTS
• Leading GEC in West Bengal with dominant share in non-fiction programming
• Library of over 9,000 hours & rights to over 600 movie titles
• Key properties: Didi No. 1, Dadagiri Unlimited, Rashi, Keya Patar Nouko
27Source: TAM, Period: April to December 2011, CS 4+, All WB
Relative Viewership Share
ZEE TELUGU - HIGHLIGHTS
• Leading GEC in Andhra Pradesh
• Library of over 7,000 hours & rights to over 575 movie titles
• Key properties: Chinna Kodalu, Muddubidda, Chittam Chittam Prayachittam
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Source: TAM, Period: April to December 2011, CS 4+, All AP
Gemini TV, 39.4%
Zee Telugu, 18.0
%
Eenadu TV, 20.0%
Maa Telugu, 22.4
%
Sitara TV, 0.2%
Relative Viewership Share
Udaya TV, 40.9%
Zee Kannada, 17.
5%
Suvarna, 20.7%
ETV Kannada, 14.
5%
Kasturi, 6.4%
ZEE KANNADA - HIGHLIGHTS
• Zee Kannada - Steadily gaining market share
• Library of over 6,500 hours & rights to over 150 movie titles
• Key properties: Radha Kalayana, Devi, Chi Sou Savitri, Yariguntu Yarigilla
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Source: TAM, Period: April to December 2011, CS 4+, All Karnataka
Relative Viewership Share
• Presence across 5 continents
through over 15 beams
• Catering to both South Asian as well
as non South Asian communities
• Recent local language launches in
Russia, South East Asia, Saudi Arabia
• International subscription
contributed 14% of company top line
in FY2011
• Renewed focus on advertising as a
source of revenues
INTERNATIONAL OPERATIONS
30
STRENGTHENING PAY REVENUES
• Zee Turner is a 74:26 joint venture between ZEE and Turner currently distributing
ZEE channels, Zee News Channels and Turner Channels
• Star-Den is a 50:50 JV between Star India and DEN for distribution of Star
channels, Fox channels and third party channels like NDTV Channels
• Media Pro will distribute all the channels which were earlier distributed by Zee-
Turner and Star Den
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50% 50%
DIGITIZATION: POTENTIAL GAME CHANGER
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Underpenetrated TV market Low ARPUs
Additional business models emergingMandatory digitization hugely beneficial
India TV market expected to reach ~180mn HHs by
2016
Alternate distribution platforms to augment
revenue streams
96 95 94 91
60
USA UK China Thailand India
TV HH's penetration-2010 (%)
MarketTV ARPU
(USD)Movie Ticket (ATP in USD)
TV ARPU as a multiple of ATP
USA 56.9 7.9 7.2
UK 45.4 9.0 5.1
Malaysia 20.0 3.9 5.1
India 3.5 2.8 1.2
If pay TV ARPU reaches upto 3x of a multiplex ticket
price, it will reach a healthy 8-10 USD
Source: PwC Media Report (2011) + IDFC research report
Source: MPA & Wikipedia for US & UK data
Markets Deadline for digitization
Delhi, Mumbai, Kolkata, Chennai 31st June, 2012
Cities with population of 1mn+ 31st March, 2013
All urban areas 30th September, 2014
Rest of the country 31st December, 2014
9M FY2012 RESULTS
April – December 2011
FINANCIAL RESULTS
34
*Notes:
1. Operating revenues and expenditure for 9M FY12 are not comparable to those for 9M FY11 because of the change in accounting treatment of
domestic subscription revenues, which are now being reported net of expenses. This change has been necessitated due to the formation of
Media Pro, a joint venture, which pays subscription revenues to ZEE, net of expenses.
2. Operating revenues and EBITDA for 9M FY2011 includes a non-recurring one time revenues of Rs 700 million for premature termination of
sporting events rights
(Rs million)
Full Year 9 Months
FY10 FY11 Growth FY11 FY12
Y-o-Y
Growth
Operating Revenues* 21,998 30,136 37%22,134 21,715 -2%
Expenditure* 15,863 21,870 38%16,138 15,920 -1%
Operating Profit (EBITDA) 6,135 8,266 35%5,997 5,795 -3%
PBT before excep items 6,739 8,725 29%6,320 6,160 -3%
Add: Exceptional Items - 197328 -
Less: Provision for Tax 573 2,671 366%2,329 1,882 -19%
Profit After Tax 6,166 6,251 1%4,319 4,277 -1%
Less: Minority Interest -195 -118(83) (13)
EBITDA Margin 27.9% 27.4% 27.1% 26.7%
BALANCE SHEET
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• Debt free balance
sheet
• Strong net cash
position
• Return on Avg.
Capital Employed
of 25%
(Rs million)As on 31
st
Mar, 2011
As on 31st
Sept, 2011
Shareholders Funds 30,948 32,976
Loan Funds 17 20
Capital Employed 30,964 32,996
Net Fixed Assets 8,464 8,791
Investments 6,964 7,903
Deferred Tax Assets 192 178
Current Assets, Loans &
Advances23,026 21,984
a) Inventories 5,396 5,940
b) Sundry Debtors 8,955 9,185
c) Cash & Bank
Balance3,858 1,651
d) Loans & Advances 4,818 5,208
Less: Current Liabilities &
Provisions7,801 5,952
Net Current Assets 15,225 16,032
Minority Interest 119 92
Miscellaneous Expenditure 0.5 0.4
Capital Deployed 30,964 32,996
CONSISTENT PROFITABLE GROWTH
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15,159
18,354
21,773 21,998
30,136
3,204
5,423 5,480
6,135
8,266
2007 2008 2009 2010 2011
Revenues and Operating Profit (Rs in mn)
Revenue Operating profit (EBITDA)
Consistent dividend payout since 1994
EBIDTA CAGR: 26.7%
Revenue CAGR: 18.7%
OUTLOOK AND STRATEGY
37
Revenues
• Digitization: Big
pay opportunity
• Advertising:
Continued growth
• New streams:
Digital
media, syndication
Content
• Innovation &
quality
• Regional
revolution
• Niche content
• Broadcast to
narrowcast
Our Strategy
Enhance our leadership position in the genres we compete
Continue to run our business as best in class
Deploy strong cash flows to improve returns to shareholders
Returns
• Consolidation
• Collaboration
• Disciplined
investments
OUTLOOK AND STRATEGY
38
Revenues
• Digitization: Big
pay opportunity
• Advertising:
Continued growth
• New streams:
Digital
media, syndication
Content
• Innovation &
quality
• Regional
revolution
• Niche content
• Broadcast to
narrowcast
Our Strategy
Enhance our leadership position in the genres we compete
Continue to run our business as best in class
Deploy strong cash flows to improve returns to shareholders
Returns
• Consolidation
• Collaboration
• Disciplined
investments
Consistent performer since inception; Shareholder value CAGR of >30% between 1992 to 2011
