COMPANY OVERVIEW
OCTOBER 2011
DISCLAIMER
2
Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions, expectations, estimates, objectives and projections of the directors and management of Zee Entertainment Enterprises Limited (ZEE) about its business and the industry and markets in which it operates.
These forward-looking statements include, without limitation, statements relating to revenues and earnings.
The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project” and similar expressions are also intended to identify forward looking statements.
These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and 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
3 Largest 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 –
MediaPro 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, 2009
Media Spend as a % of GDP
India UK US China Japan World
0.4%
0.8%
1.1%
0.8%
0.9%
0.8%
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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)
Sub revenues Ad revenues Television growth rate (%)
INDIAN TV HH'S AT A GLANCE
Digital
20 Mn
C&S HHlds
103 Mn
TV Owning
Households
134 Mn
Total Households
223 Mn
Digital
26 Mn
C&S HHlds
116 Mn
TV Owning
Households
141 Mn
Total Households
231 Mn
Growth
+3 %
+6 %
+12 %
+31 %
2010 2011
Source: TAM Media Research
All India Household figures in million
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INDIA – RAPID DIGITISATION
10
16
28
38
48
56
64
71
2008 2009 2010 2011P 2012P 2013P 2014P 2015P
DTH Subscribers (Net, in Million No.s)
Source: FICCI-KPMG Report 2011
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• 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
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PRODUCT OFFERING
HINDI ENTERTAINMENT
HINDI MOVIES
REGIONAL LANGUAGE ENTERTAINMENT (R-GEC)
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PRODUCT OFFERING
SPORTS
ENGLISH ENTERTAINMENT & MOVIES
INTERNATIONAL
MUSIC & LIFESTYLE
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ALTERNATE LIFESTYLE
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
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HINDI MOVIE CHANNELS
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Source: TAM Media Research; Period: FY11; Zee’s Cinema Channels - Zee Cinema, Zee Premier, Zee Action, Zee Classic
TG: CS 4+, HSM; MAX ratings- non-cricket
MAX
28%
Filmy
5%
Zee's Cinema
Channels
34%
UTV
9%
Star Gold
24%
STRONG MOVIE LIBRARY
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Largest Hindi Movie Library in the World
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SPORTS CHANNELS – KEY PROPERTIES
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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
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ENGLISH & NICHE CHANNELS
• Tie-ups with leading studios across the world
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ZEE MARATHI - HIGHLIGHTS
• Leadership position in Marathi GEC genre
• Library of over 9,000 hours & rights to over 400 movie titles
• Key properties: Pinjara, Kunku, Fu Bai Fu, Idea Saregamapa 2011
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Source: TAM, Period: FY11, CS 4+, All Maharashtra
215
149
112
65 37
Zee Marathi ETVMarathi
Star Pravah Zee Talkies Mi Marathi
Average Weekly GRPs
Zee Bangla 57%
ETV Bangla 20%
Aakaash Bangla
8%
Star Jalsha 9%
Rupashi Bangla 4%
Mahua Bangla
2%
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: Agnipariksha, Saat Paake Bandha, Rashi, Mirakkel Akkel
Challenger 6
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Source: TAM, Period: FY11, CS 4+, All WB
Relative share in non-fiction
ZEE TELUGU - HIGHLIGHTS
• Leading GEC in AP with dominant viewership share in fiction programming
• Library of over 7,000 hours & rights to over 575 movie titles
• Key properties: Chinna Kodalu, Muddubidda, Saregamapa Li'l Champs
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Source: TAM, Period: FY11, CS 4+, All AP
Relative share in fiction
Zee Kannada 14%
ETV Kannada 16%
Kasturi 8%
Suvarna 21%
Udaya Tv 41%
ZEE KANNADA - HIGHLIGHTS
• Zee Kannada- Steadily gaining market share
• Library of over 6,500 hours & rights to over 150 movie titles
• Key properties: Devi, Chi Sou Savitri, Yariguntu Yarigilla
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Source: TAM, Period: FY11, CS 4+, All Karnataka
Relative channel share
• Presence across 5 continents
through over 15 channels
• 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
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STRENGTHENING PAY REVENUES
• Zee Turner is a 74:26 joint venture between ZEEL and Turner currently
distributing ZEEL 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 are currently being distributed
by Zee-Turner and Star Den
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50% 50%
Q2 FY2012 RESULTS
July – September 2011
FINANCIAL RESULTS
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(Rs million) Full Year Second quarter
FY10 FY11 Growth FY11 FY12 Growth
Operating Revenues* 21,998 30,136 37% 7,116 7,184 1%
Expenditure* 15,863 21,870 38% 5,231 5,108 -2%
Operating Profit (EBITDA) 6,135 8,266 35% 1,885 2,075 10%
PBT before excep items 6,739 8,725 29% 2,064 2,221 8%
Add: Exceptional Items - 197 - -
Less: Provision for Tax 573 2,671 366% 801 621 -22%
Profit After Tax 6,166 6,251 1% 1,263 1,600 27%
Less: Minority Interest (195) (118) 0.6 39.7
EBITDA margin 27.9% 27.4% 26.5% 28.9%
*Note A: Operating revenues and expenditure for Q2 FY12 are not comparable to those for Q2 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.
BALANCE SHEET
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• Debt free balance
sheet
• Net Cash of over
Rs12,500mn as
on Mar 31, 2011
• Return on Avg.
Capital Employed
of 25%
(Rs million) As on 31
st March
2010 2011
Shareholders Funds 38,300 30,948
Loan Funds 1,195 17
Capital Employed 39,495 30,965
Net Fixed Assets 19,587 8,464
Investments 3,203 6,964
Deferred Tax Assets 133 192
Current Assets, Loans & Advances 24,390 23,027
a) Inventories 4,713 5,396
b) Sundry Debtors 7,488 8,955
c) Cash & Bank Balance 5,864 3,858
d) Loans & Advances 6,325 4,818
Less: Current Liabilities & Provisions 7,840 7,801
Net Current Assets 16,550 15,226
Minority Interest 22 119
Capital Deployed 39,495 30,965
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
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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
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
Consistent performer since inception; Shareholder value CAGR of >30% between 1992 to 2011