Canadian Satellite Radio Holdings Inc. and XM Canada

Transcription

1 Canadian Satellite Radio Holdings Inc. and XM Canada Annual General Meeting of Shareholders 0 John Bitove Executive Chairman 1

2 Agenda John Bitove, Executive Chairman Welcome Darren Kirkwood, Legal Counsel Formal part of the meeting John Bitove, Executive Chairman Introductory remarks Michael Moskowitz, President and CEO Strategic remarks Michael Washinushi, CFO Q financial highlights Michael Moskowitz, President and CEO Closing remarks Q&A 2 Board of Directors Pierre Boivin Marc Comeau Phil Evershed James McCutcheon Gary Parsons Bob Storey Joe Verbrugge Mat Wilcox 3

3 Darren Kirkwood Legal Counsel 4 Safe Harbour Forward-Looking Statements Certain statements included above may be forward-looking in nature. Such statements can be identified by the use of forward-looking terminology such as "expects," "may," "will," "should," "intend," "plan," or "anticipates" or the negative thereof or comparable terminology, or by discussions of strategy. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Although CSR believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. CSR's forward-looking statements are expressly qualified in their entirety by this cautionary statement. CSR makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made. Additional information identifying risks and uncertainties is contained in CSR's filings with the Canadian securities regulators, available at 5

4 John Bitove Executive Chairman 6 Rapid Progress in F2007 F2008 Off to Strong Start Building on our accomplishments Increasing subscribers and revenue Controlling costs Prudently managing our cash Continuing to develop our solid foundation of partners Making good progress towards medium and long-term goals Merger or no merger, it is business as usual for XM Canada F2008 is off to a strong start 7

5 Michael Moskowitz Chief Executive Officer & President 8 Our Mission Canada s premium digital audio entertainment and information company 9

6 Driving Shareholder Value Target 1 Million Subscribers Target $100 Million Operating Profit Key Sectors Provide Future Opportunity 1.26 Million Annual Potential Subscribers 260,000 1,000, Aftermarket Automotive 11

7 Key Drivers of Growth Automotive Retail Programming and content Strategic partnerships 12 TRIPLED Our Revenue $21.2M 3X $6.9M F2006 F

8 DOUBLED Total Subscribers 1 Million 315K 152K 2X F2006 F E 14 DOUBLED Self-Paying Subscribers 315K 152K 2X 185K 91K F2006 F2007 Other subscribers Self-paying subscribers 15

9 XM Reaches 60% Of New Vehicle Models in Canada XM now available in 150 different vehicle models! 16 Shifting Mix Towards Automotive F2006 F2007 8% 27% Aftermarket self-paying subscribers Automotive self-paying subscribers 17

10 Car Installations Growing Vehicles with Factory Installed XM Satellite Radios Cumulative vehicles on the road and on order. 480K 247K 78K F2006 F2007 F2008E 18 Showing Strength At Retail Retail Growth Radios Sold Q vs. Q % XM Canada 19

11 Expanding Retail Distribution Channels 5,500 Target 4,000 3, Superior Consumer Products $69 $179 $99 $129 $169 $239 $149 $99 $399 Grab n Go Bundles $69 $99 21

12 Leading the Canadian Satellite Radio Market Competitive Advantage in Programming Genre XM Canada Competition Advantage Pop & Hits XM Hip Hop/Urban 7 5 XM Country 7 5 XM Christian 3 1 XM Latin 4 1 XM Kids 2 1 XM Sports XM TOTAL MUSIC XM TOTAL TALK XM TOTAL CHANNELS XM 22 Scoring with NHL Exclusivity Exclusive satellite radio partner of the NHL until 2015 Comprehensive coverage with nine play-byplay channels including NHL Home Ice NHL Hour, a candid interactive talk show hosted by NHL Commissioner, Gary Bettman Already seeing positive impact of NHL exclusivity on key areas of our business: subscriber growth retail market share 23

13 Attracting New Listeners According to third party research by Hotspec: 24% of listeners want unique content 45% of listeners want a variety of content ATN-Asian Radio is North America s first continent-wide South Asian channel Innovate partnership with Asian Television Network (ATN) operator of 14 digital television channels across Canada Other multicultural partnerships under consideration Partnerships Provide 50 Million+ Points of Contact 25

14 Outpacing Growth of Satellite TV, Wireless & Cable 1,100, , ,000 42,000 15,000 Satellite Radio U.S. Satellite Radio Canada Satellite TV Wireless Cable Year 1 Subscribers Year 2 Subscribers Sources: StatsCan, CWTA, U.S. filings 26 Execution is Key to Achieving Results Revenue Fixed and Marketing Costs (1)(2)(3) $25.6M $57.2M $14.9M $10.7M $6.1M $51.1M LTM Nov/06 LTM Nov/07 LTM Nov/06 LTM Nov/07 (1) Fixed costs include customer care & billing, broadcast & operations, programming & content, general & administrative, marketing support and advertising & marketing and excludes subsidies and distributions. (2) Excludes special charges. (3) Excludes $2 million of non-cash, non-recurring advertising & marketing expenses related to the write-off of prepaid advertising costs in Q

15 Michael Washinushi Chief Financial Officer 28 Current Status Continue to pursue growth invest in XM brand promote our NHL exclusivity capitalize on our competitive advantages advance our key growth drivers Fully funded business model $48.8 million in cash-on-hand and investments multi-year plans & XM credit facility provide additional liquidity On track to achieving positive cash flow as early as Q million subscribers in 2010 $100 million operating profit in

16 Path to Cash Flow Breakeven Revenues Variable Contribution Operating Profit $ BREAKEVEN RANGE Variable SAC Fixed and Marketing Costs (at Q1 2008) 0 500,000 1,000,000 1,500,000 Subscribers 30 Total Subscribers 315, , , ,600 88, ,100 82,900 95,900 87,400 74, , , , , ,100 Q Q Q Q Q Self-Paying Other Paying OEM Promotional Rental Car Subscribers 31

17 Self-Paying Net Subscriber Additions 28, % 10,600 Q Q Revenue $8.1M 113% $3.8M Q Q

18 Driving Cash and Subscriber Retention ARPU $11.30 $11.27 Deferred Revenue $15.9M $6.0M Q Q Q Q SAC and CPGA SAC CPGA $92 $311 $46 $181 Q Q Q Q

19 Total Fixed and Marketing Costs* $14.7M 19% $11.9M Q Q * Fixed costs include: customer care & billing, broadcast & operations, programming & content, general & administrative, marketing support and advertising & marketing and excludes subsidies and distributions. 36 Adjusted Operating Loss Q Q ($12.8M) $2.3M ($10.5M) 37

20 Quarterly Cash Usage Q1* Q2 Q3 Q4 ($0.8) ($3.9) ($8.3) ($8.6) ($12.6) * Q1 08 excludes net proceeds of $19.4M from convertible debt transaction. 38 Liquidity ($ Millions) Cash and short-term investments Restricted investments Total cash and investments Senior notes XM credit facility drawn (1)(2) Convertible debentures, net proceeds (3) Total debt Available and unused credit facilities XM credit facility undrawn November 30, 2007 $ August 31, 2007 $ (1) Total amount drawn on the credit facility, including both the liability and equity components. (2) Includes accumulated interest expense on facility. (3) Includes both the liability and equity components. 39

21 Michael Moskowitz Chief Executive Officer & President 40 Strategic Tactics Build on our vision Continue developing a differentiated, higher margin position Achieve organizational alignment Deliver a superior listener experience Grow and nurture talented senior management team 41

22 Q&A 42 Canadian Satellite Radio Holdings Inc. and XM Canada Annual General Meeting of Shareholders 43