Considerations around Chellomedia. May 23, 2013

Transcription

1 Considerations around Chellomedia May 23, 2013

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3 Considerations Around Chellomedia 6 Market-Facing Business Units Chellomedia is the international content division of Liberty Global It produces and markets 68 TV channels internationally and caters to close to 400 million TV households in over 124 countries and 27 languages Of these 68 TV channels, 48 channels are 100% owned with the remaining 20 as joint-ventures, with companies such as CBS, A&E, Polsat and Zon Multimedia Channels genres include sports, movies, children s entertainment, documentary and lifestyle Channels distributed through cable, satellite and IPTV networks Moreover, Chellomedia provides advanced digital services such as ad sales (At Media in CEE) and broadcast solutions to a portfolio of leading international channel operators (DMC) Also owns a 17% stake in Canal+ Cyfrowy (DTH platform in Poland) and a non-controlling interest in O3B Networks (Satellite data transmission in developing countries) although expected to be outside package for sale Channels and JVs (1) JV Partners Services Operator of global thematic channels 17 Channels (of which 8 through JVs) CBS Studios MGM Channel management and representation Largest independent channel operator in Spain & Portugal 22 Channels (of which 7 through JVs) A+E Networks Zon Multimedia MGM Channel management and representation Leading Pay-TV channels provider across the CEE region 13 Channels (of which 1 through JV) MGM OBN Channel management and representation Independent ad sales house (At Media) Provider of premium channels in the Netherlands 4 Channels Operator of Sport1 and Film1 Leading playout service provider Pan-European digital TV services (channel origination, postproduction and satellite and fiber transmission) Headquarters London Madrid Budapest Amsterdam Amsterdam Key Regions UK, EMEA, Asia (China) Spain, Portugal, Africa CEE region Netherlands EMEA, Asia Provider of Pay-TV channels in Latin America 12 Channels (of which 4 through JVs) MGM Channel management and representation Miami/Buenos Aires Latin America, Portugal, Africa FTEs Employees (2) Subscribers (3) c. 170m c.40m c. 40m <0.5m c. 125m (4) (1) Joint-ventures are 50:50 unless stated otherwise. (2) Full-time equivalent employees as of Q (3) Subscribers include all subscribers consolidated and JV channels. (4) Chellomedia LatAm assumed to be residing with the Chellomedia Group as of December Financials presented on the next page are on a pro-forma basis to include the Chellomedia Latin America business. 1

4 Selected Channels in JV Selected Fully-Owned Channels Considerations Around Chellomedia Broad Range of Thematic TV Channels Covering All Genres Genre Target Audience Geographic Reach Subscribers Q (m) 2011 Revenues ( m) Chellomedia Equity Stake Commentary Film Adults Netherlands % Sports Adults Netherlands n.a. 1.7 n.a. Film1 is a premium film package of six dedicated film channels broadcasting the latest film releases The top premium sports channel available covering Dutch and international sports Kids Children 1-6 >50 Countries in EMEA % TV channel dedicated to preschool children, and their parents and carers Sports Male >65 Countries in EMEA % Sports Channel for the world s most thrilling adventure and action sports programming Documentary Adults Hungary, Czech, Slovakia % Leading documentary channel in Central Europe covering nature, science, technology, travel, etc. Children Children 2-12 Eastern Europe % Central Europe's leading children's channel with entertainment and educational programming Film Families & Kids Spain % Canal Hollywood features the latest movies from American studios in Spanish Pay TV Cooking Adults +25 Spain / Latin America % Channel about international cuisine, travel to exotic destinations, and captivating stories Documentary Women Spain, Portugal, Africa % Shows a selection of international documentaries adapted to the tastes of Spanish audiences Film Adults Global % Channel showing offerings from international studios and distributors (incl. MGM library) Source: Company disclosure, Factiva. (1) 50%:50% joint venture in the UK/Ireland, 70% ownership in other countries. Reality All Adults EMEA 22.1 n.a. 50% / 70% (1) Real life channel featuring staple CBS content including courtroom and investigative series Drama All Women EMEA 10.7 n.a. 50% / 70% (1) Broadcasts TV series ranging from glam super soaps to murder mystery series Action All Adults EMEA 10.7 n.a. 50% / 70% (1) Main channel for action-packed American dramas, tense thrillers, sci-fi and fast paced movies Film All Adults EMEA 23.1 n.a. 50% / 70% (1) Presents independent cinema cult classics, gripping series and exclusive interviews 2

5 Drivers of Performance Organic growth of channel and service businesses M&A-led growth Other Hungary In-market consolidation Upgrade of under-performing assets De-risking through partnerships with platforms Strict cost control Historical $ growth impacted by FX headwinds Revenue Breakdown (FY12) 33% 12% 13% 22% Spain 21% Poland NL Total: $514m Considerations Around Chellomedia Chellomedia Key Financials (Consolidated) Historic Revenues ($m) A 2009A 2010A 2011A 2012A Estimated Historic OCF ($m) % margin Restated revenues as per LGI FY12 10K data (1) 18% 17% 17% 17% 17% Assets Breakdown (FY12) CZ Poland NL Spain 7% 6% <1% 24% LatAM 19% 22% 22% Hungary UK Total: $449m Source: LGI 10K reports, BofAML IBK estimates. (1) Revenues restated and pro forma for acquisition of MGM Networks A 2009A 2010A 2011E 2012E 3

6 Considerations Around Chellomedia Key Supportive Elements Key Concerns for Diligence Largest independent thematic channels and digital Lack of consistency on format / positioning services business in Europe reducing opportunities for scale efficiency / benefit High quality niche channels with strong market Limited scale in any given geography or genre positions Limited must have content Stable earnings profile due to long term carriage contracts and strict cost management Diversified revenue base across genres, Macro-exposure: Spain, Eastern Europe, Argentina Lack of global reach / scale for key channels geographies, business lines and customers Strong M&A capabilities and track-record supplementing organic growth Beneficiary of the industry-wide shift in advertising spend to multichannel television Limited dependency on LGI 4

7 Considerations Around Chellomedia Growth Through a Mix of Organic and Inorganic Growth Acquisition of Canal+(100%) premium channel operator in NL JV with MGM (50%) Launch of movie channel in CEE region (2) Acquisition of Filmmuzeum/ Paprika/Deko (100%) bouquet of lifestyle and movie channels JV with CBS (50:50) launch of thematic channels using CBS s extensive catalogue JV with Polsat (50:50) Launch of JimJam into the Polish market Acquisition of Sport 1 CEE (to 80%) leading premium sports channel in Hungary (1) Acquisition of Minimax ( to 100%) leading regional children s channel Acquisition of Teuve (100%) #2 Spanish channel operator Acquisition of a 40% stake in OBN, a free-to-air broadcasting network in Bosnia and Herzegovina Nov-05 Aug-06 Mar-07 Jun-07 Jul-07 Sep-07 Oct-07 Sep-08 Jul-09 Aug-09 Dec-09 Apr-10 Dec-10 Aug-11 Aug-12 Acquisition of Documania (100%) factual channel consolidated into Odisea Acquisition of JimJam (100%) leading EMEA children s channel JV with Scripps (20:80) launch Food Network & Fine Living Network across EMEA (3) Acquisition of MGM Networks channels in Europe, Africa and Asia as well as the remaining 50% of the JV in Latin America Acquisition of Multicanal (100%) leading Spanish independent channel operator Acquisition of Zone Media ( to 100%) further 10% stake in Zone Media (now Chello Zone) (4) Acquisition of Spektrum (100%) leading regional documentary channel in Hungary JV with Zon Multimedia/DREAMIA (50:50) creation of bouquet in movies and children s genres with leading Portuguese cable operator Sales of Buzz too THCI JV with AETN to launch C&I channel on back of migrated Buzz distribution Cornerstone Acquisitions Bolt-on Acquisitions Joint Ventures (1) Increased to 100% in February (2) Consolidated in August 2010 and acquired in August (3) Chellomedia stake diluted to 11% in August (4) Initial stake acquired in January

8 Considerations Around Chellomedia Management Team Photo Title Description Niall Curran President Susan Elkington Executive Vice President, Entertainment Development Niall Curran is President of Chellomedia, Liberty Global s international content company and has been instrumental in the division s considerable growth over the 10 year period, during which he also served as COO Niall joined the group in 2000 focusing on operational restructuring, and in 2002, he took on leadership of the media operations and was subsequently appointed COO of Chellomedia in 2003 From 1995 to 2000 Niall worked for the Walt Disney Company, leaving from the position of Executive Vice President Operations for Walt Disney Europe. Prior to that he was part of the management team responsible for the international development of Disney channels, TV investments, programme distribution and production businesses Niall received a BSc in Physics from the University of Manchester, England Susan is EVP for Entertainment Development and joined Chellomedia (UPC Media) in Prior to joining Chellomedia, Susan held posts as MD EMEA, BBC Worldwide and SVP, PolyGram TVI, Polygram Filmed Entertainment. Susan has an MA Hons in French and European history from Edinburgh University Simon Freer Chief Commercial Officer Simon heads the Corporate Development department and is the Group s Chief Commercial Officer, with specific responsibilities for developing the group s revenue through Mergers and Acquisitions, organic growth and investment. Simon joined recently from 3i where he was global Head of TMT. Simon has a BA in Economic Geography from Southampton University and has published a thesis on venture capital investment decisions Alejandro Harrison Chief Executive Officer, Chello Latin America Alejandro has been the CEO for Pramer SCA since 2005 and was recently appointed as the CEO of Chellomedia s operating business in Latin America which includes MGM Latino. Previous to joining Pramer, Alejandro was International COO at Multicanal S.A., one of Argentina s largest MSO s, controlled by Grupo Clarín. Alejandro holds a Business degree from the Universidad de Buenos Aires Facultad de Ciencias Economicas and has completed post graduate studies at IAE Business School Ron Huisman Chief Financial Officer Ron is the Group CFO. In his previous role Ron was Vice President for Merger & Acquisitions at Liberty Global, where he has worked since 2000 in Strategic Planning, Finance and M&A roles. Ron has worked on many of the transactions through which Liberty Global has expanded its business successfully over the past decade. Prior to joining Liberty Global, Ron worked for Arthur Andersen. He is a Dutch-qualified Chartered Accountant and holds a Master of Business Economics from the University of Maastricht in The Netherlands Mike Moriarty Managing Director, Chello Benelux and Chellomedia, Central Europe Rutger Andree Wiltens General Counsel Mike Moriarty heads up two of Chellomedia s European businesses, Chello Benelux and Chellomedia, Central Europe. Mike joined UGC (predecessor to LGI) in 1993 and has served in a variety of senior finance and management roles including as Managing Director of Investments and Corporate Development. Before joining UGC, he held a variety of positions at Westinghouse Broadcasting (USA) for nine years. He received his MBA from the University of Pittsburgh and is a graduate of Villanova University Rutger joined the group in 2000 and now heads the legal team of the group, with responsibility for managing the legal aspects of all of its operations and business units. Prior to that, Rutger worked at the Amsterdam and London offices for the international law firm Clifford Chance, where he trained and qualified as a solicitor, specializing in corporate law. Rutger received a first class law degree from the University of Southampton in 1994 Eduardo Zulueta Managing Director, Chello Multicanal Dermot Shortt Chief Executive Officer, Chello Zone Eduardo heads Chello Multicanal since he rejoined the company in Eduardo has held several responsibilities in the Spanish TV industry since 1989 such as MD of Molinare Spain, MD of Multicanal, Director of programming and content at DTH platform Via Digital, and MD of Fremantle Media for Spain and Portugal. Previous to his TV career, Eduardo worked for a number of years in the financial services industry at the corporate finance departments of Citibank and Bank of America in Spain. Eduardo has a Bachelor in International Economics from Georgetown University and a Master in International Finance from Columbia University Dermot is the CEO of Chello Zone and he is responsible for the development of the global thematic channel business within Chellomedia. Dermot joined Chello Zone in January 2002 and was responsible for expanding the business and guiding the company through its sale to Chellomedia in 2005 on behalf of Advent International. Prior to Chello Zone he was a founding member of Discovery Networks Europe (DNE), building the reach of the network and developing their digital channels. Prior to joining DNE, Dermot worked in Corporate Recovery and for General Electric s NBC. Dermot has a BSc in Management and is a qualified Chartered Accountant and Insolvency Practitioner 6