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The Leading Out-of-Home Entertainment Company in Latin America
Corporación Interamericana de Entretenimiento, S.A. de C.V BMV: CIE B
Citigroup / Smith Barney Latin America Conference
March 2004
- 3 --
Company Overview Company Overview (continued)(continued)
Vertical integration = multiple revenue streams and Vertical integration = multiple revenue streams and minimal risk minimal risk
Significant commercial revenue from proprietary Significant commercial revenue from proprietary entertainment and advertising propertiesentertainment and advertising properties
Expertise organized by country and business areas = high Expertise organized by country and business areas = high manager accountabilitymanager accountability
Free cash flow now increasing after a period of capital Free cash flow now increasing after a period of capital intensive growthintensive growth
- 4 --
US$100 in Box Office Receipts $35 Additional Revenue Streams
ExpensesUS $38
ArtistsUS $40
PromotionUS $10
Venue US $12
SponsorshipUS $27
TicketingUS $7
F&B/MerchandisingUS $1
Food & Beverages
Ticket Sales
Venue Operator
Sponsorship
Promoter+
+
+
+
0% 100%Maximum attendance required to breakeven
49%49%
51%51%
82%82%
54%54%
65%65%
Competitive Advantages: Competitive Advantages: Vertical IntegrationVertical Integration Enables CIE to generate US$35 in additional revenue for
every US$100 in box-office receipts
Breakeven attendance is reduced and project risk is minimized
- 5 --
13%
10%
2003 Revenue: Ps. 6,687 Million
77%
Entertainment-Live Entertainment in Mexico & Abroad-Las Americas Complex-Amusement Parks
Commercial-Commercial activities in Mexico and abroad
Services-Ticketing-Teleservices
13%
11%
2003 EBITDA Margin: Ps. 1,530 22.9%
76%
Revenue and EBITDA by SegmentRevenue and EBITDA by Segment
- 6 --
9.9%
3.5%
1.8%1.1%
0.3%
83.4%
Mexico
Brazil
Spain
Argentina
United States
Colombia
Revenue by RegionRevenue by Region
2003 Revenue: Ps. 6,687 Million
- 7 --
Growth and Operating StrategyGrowth and Operating Strategy
Expand target audiences through new entertainment forms and price niches– Mexico, Brazil, Argentina: lower priced fairs / gaming / amusement
parks
– Spain, U.S. Latin market: higher priced musical theater / “real-play” parks
Increase utilization of existing venues through new attractions and facility upgrades
Exploit proprietary Sports Book and Gaming opportunities
- 8 --
Growth and Operating Strategy Growth and Operating Strategy (continued)(continued)
Strengthen commercial sales force and expand its regional presence
Control production costs through use of local talent and production labor
Leverage strategic partner synergies to increase EBITDA and minimize project risk
Optimize project financing (debt, equity, sponsorships) to maintain healthy balance sheet
- 9 --
OCESA EntretenimientoOCESA Entretenimiento
Strategic JV with Televisa
Leading live entertainment company in Mexico
Operates 12 live entertainment venues in Mexico; installed capacity of 686,000 seats
Produces musical, theatrical, sporting, family/cultural and corporate events
3,391 live events produced in 2003; 5.6 million attendees
Ticketmaster alliance formed in 1991; 19.5 million tickets sold in 2003
Positive cash flow, low project risk due to vertical integration
- 10 --
OCESA EntretenimientoOCESA Entretenimiento
2003 Achievements
– Renewed property operating permits representing 60% of installed capacity
– Expanded target audience by entering the popular fair market
– Added premier content – Cirque du Soleil and CART Series
2004 Opportunities
– Further penetrate the popular fair market
– New sporting events – Nautical Racing, Motor Cross, Monster Trucks, Beach Volleyball, Triathlons and Marathons
– Expand car racing – CART Monterrey / Mexico City, local competitions (Mexican Series)
– Strongest concert calendar in years
– Leverage synergies afforded by Televisa relationship
- 11 --
Las Americas Las Americas ComplexComplex
Government Concession– Horse racetrack 25 years
– Surrounding areas 50 years
Horse racetrack attracted600,000 spectators in 2003
Centro Banamex, the largestexhibition and convention center in Latin America, held 47 expositions in 2003 that attracted 1.7million visitors
23 Sports Book / Yaks now open in prime retail locations in Mexico (45 licenses total)
One of the only companies in Mexico to have multiple gaming licenses
- 12 --
Las Americas ComplexLas Americas Complex
2003 Achievements
– Centro Banamex operated at 75% to 80% occupancy in first full year of operation
– Eight new Sports Books / Yaks opened throughout Mexico
– 23 Units in operation
2004 Opportunities
– Opening of La Granja Las Americas children’s park - $7.5 million projected annual revenues, $6.5 million construction cost financed 100% by sponsors
– Ten new Sports Books / Yaks (US$25 million to $30 million total investment)
- 13 --
CIE Amusement ParksCIE Amusement Parks Parks in Mexico (8) and Colombia (2) attracted 10 million visitors in 2003
Wannado© project in Florida scheduled to open July 2004
In partnership with – ZN Mexico Fund (Sam Sell)
– The Mills Corporation (largest shopping mall developer in the USA)
Wannado management / highly qualified– CEO Jane Cooper / former CEO of Paramount Parks
– CFO Andrew Barkley / former CFO of Six Flags Amusement Parks
- 14 --
CIE Amusement ParksCIE Amusement Parks
2003 Achievements
– $45 million Wannado© project 70% complete
– $30 million provided by The Mills Corporation and private equity fund ZN Mexico II
– Interest from 50+ sponsors for additional Wannado© funding
– México Mágico educational park opened in Mexico City
2004 Opportunities
– Wannado© is the first “real-play” park in the world, combining entertainment and educational experiences for children with retail, restaurant and sponsor-based attractions
– Investigating opportunities for Wannado© roll-out throughout U.S.
– Enhancing Salitre Mágico in Colombia with new attractions and sponsorships
- 15 --
CIE CommercialCIE Commercial Sponsorships of CIE live events / naming rights for CIE venues
Dynamic advertising in 1,342 movie theaters (“Cineminutos”)
475 billboard sponsorships on 132 pedestrian overpasses
Rotating advertisements for 12 Mexican soccer teams
Indoor and outdoor advertising in airports
Telemarketing services (in partnership with Sitel Corporation)
2003 Achievements– Consolidation of all commercial CIE activities into one division = market leverage
– 141 new movie theaters / 16 new overpasses (58 new billboards)
2004 Opportunities– Additional movie theaters / additional overpasses
– Advertising space on the uniforms of First Division soccer teams
– Expand airport advertising
– Promote comprehensive sponsorship packages
- 16 --
CIE InternationalCIE International Operates live entertainment venues in Brazil (6), Argentina (3) and Spain (3).
1,796 live events produced in 2003; 2.3 million people attendees
Operates the Buenos Aires Zoo and nine radio stations in Argentina
Alliance with Hauser Entertainment, the leading promoter of Latin talent in the U.S.
2003 Achievements– Formed alliance with Stage Holding in Amsterdam (theatrical rights)
– Successful local productions in medium-sized cities in Brazil and Argentina
– Healthy attendance at Buenos Aires Zoo and live events in Argentina
2004 Opportunities– Cats, Phantom of the Opera and Cabaret – major Broadway-type productions in
Madrid
– Evaluate new Spanish markets for theatrical productions
– Expand local productions in Brazil and Argentina
– Divest AM radio stations in Argentina
- 17 --
Qtr/Qtr 5.9%
Financial Performance: RevenueFinancial Performance: RevenueM
illio
ns
of
Peso
s
3,401
4,588
5,528
6,2286,687
1,808 1,914
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1999 2000 2001 2002 2003 Q402 Q403
CAGR: 18.4%
- 18 --
Financial Performance: EBITDAFinancial Performance: EBITDA
200
400
600
1999 2000 2001 2002 2003 Q402 Q403
Mill
ions
of
Peso
s
25.4%25.4%
24.8%24.8%
22.5%22.5%
23.3%23.3%22.9%22.9%
863
1,137
1,298
1,451
800
1,000
1,200
1,400
1,600
1,8001,530
23.1%23.1% 22.5%22.5%
417 430
CAGR: 15.4%
- 19 --
Debt Short-term Bank Loans Securitized Loans Long-term Bank Loans Securitized Loans Total
CashNet DebtInterest Paid
Ratios: Interest Coverage Net Debt / EBITDA Net Debt / Shareholders’ Equity
Denomination: Mexican Peso US Dollar UDI Total
Interest Rates: Fixed Variable Fixed UDIs
December 31, 2003
811311500
3,9231,7932,1304,734
7004,033
417
3.7x2.6x0.6x
54%1%
45%100%
9.5%7.0%8.3%
17%
83%
Financial Performance: DebtFinancial Performance: Debt
- 20 --
Financial Performance: Capital Financial Performance: Capital Expenditures, Free Cash FlowExpenditures, Free Cash Flow
2001 2002 2003
Resources provided by operating activities 62 261 396Capital expenditures (1,423) (1,046) (751)Investments in deferred assets - (656) (585) Free cash flow (1,927) (1,441) (940)
Financing activities 1,295 652 780
ROIC 8.8% 7.8% 8.4%WACC 14.0% 11.5% 9.7%
Year Ending December 31, 2003
Millions of pesos, except ratios
(566)
Corporación Interamericana de Entretenimiento, S.A. de C.V BMV: CIE B
The Leading Out-of-Home Entertainment Company in Latin America
March 2004
- 23 --
Senior ManagementSenior Management Alejandro Soberón Kuri Chairman of the Board and CEO
Rodrigo H. González Calvillo Vice Chairman of the Board and COO
Víctor Manuel Murillo Chief Financial Officer
George González Alvarado Managing Director of Ocesa Entretenimiento
Gabriel Lecumberri Pando Managing Director of Las Americas Complex
René Aziz Checa Managing Director of CIE Amusement Parks
Manuel Pérez Díaz Managing Director of CIE Commercial
Federico González Compeán Managing Director of CIE International
José Manuel Alavéz González Corporate Director of Development
Alejandro Garza Díaz Corporate Director of Planning and Promotion