June 2006 A.P.Parigi ap.parigi@timesgroup.com Prashant Panday prashant.panday@timesgroup.com
Disclaimer Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in our business segments, change in governmental policies, political instability, legal restrictions on raising capital, and unauthorized use of our intellectual property and general economic conditions affecting our industry. ENIL may, from time to time, make additional written and oral forward looking statements, including our reports to shareholders. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.
Agenda 1. Indian Economy Overview 2. Indian Media & Ad Industry 3. ENIL an Opportunity 4. Board of Directors And Management 5. Key Financials 6. Future Business Outlook
Indian Economy Overview
Indian Macro-economic Dynamics are Favourable Indian Economy exhibited strong performance in 2005-06 Gross Domestic Product (GDP) recorded 8.1% growth in 2005-06 Over the next 2-3 years, India is predicted to maintain a growth rate of 7-8% Six Infrastructure Industries record 4.9% growth in 2005-06 Major Emerging Global Market Young Population, Median age of 24.3 years Increasing urbanisation and consumerism coupled with increasing disposable income According to NCAER, the Indian middle class (household income between $ 4,500 23,000) currently at 92.0 mn, is expected to cross 153.0 mn by 2010 Favourable Conditions for Foreign Investments Foreign Exchange reserves of $157.3 Bn as on April 21, 2006 Foreign Investment of ~$17.0 Bn in FY 06, expected constant growth for next 2-3 years 1
FIIs Strong Confidence in Indian Equity Markets US$ Bn 36.0 30.0 24.0 2.1 1.4 0.7 FIIs have shown strong interest in Indian Equity Markets 18.0 12.0 6.0 - Jan-99 Dec-99 Nov-00 Oct-01 Sep-02 Aug-03 Jul-04 Jun-05 Till June 21, 06 Cumulative FIIs Investment - (0.7) (1.4) (2.1) FIIs have made net investment of: $34.0 Bn from Jan 99 $2.5 Bn in CY 06 $0.4 Bn from June 1 21, 06 Monthly net FIIs Investment Source: Money Control, data upto June 21, 2006 2
Indian Media & Ad Industry
Indian Entertainment and Media Industry on Fast Growth Path Indian Media and Entertainment Industry has out- performed the Indian Economy one of the fastest growing sectors in India Rising on the back of economic growth and rising income levels Increasing disposable incomes Sustained growth in income levels Reduction of personal income tax over the last decade The current size of the industry is estimated at $7.7 Bn Expected to grow at a CAGR of 19% $ Billion 20.0 16.0 12.0 8.0 4.0 0.0 Estimated size of Entertainment & Media Industry 19% CAGR 10.3 8.7 7.7 6.7 18.2 14.9 12.2 2004 2005E 2006F 2007F 2008F 2009F 2010F * In the news and current affairs category, such as newspapers, FDI has been allowed up to 26% Industry 2006 ($ Bn) % Share '05-10 CAGR FDI Limit Television 3.7 42% 24% 49% Filmed Entertainment 1.7 20% 18% 100% Radio 0.1 1% 32% 20% Music 0.2 2% 1% 100% Live Entertainment 0.2 2% 18% 100% Print Media* 2.6 30% 12% 100% Out-of-Home Media 0.2 3% 14% 100% Internet Advertising 0.0 0% 50% 100% Source: 2006 annual edition of the FICCI- Price Waterhouse Coopers report 3
High Growth Projected for Indian Ad Industry Ad Spent as a % of GDP Radio Industry Share in Ad Spend 2.0 16.0 15.3 1.5 1.0 0.5 1.6 1.4 1.1 1.0 0.7 0.6 0.3 13.0 10.0 7.0 4.0 12.5 9.4 8.7 6.5 4.4 2.9 0.0 Thailand New Zealand Singapore World Average Philipines China India 1.0-2.0 Philipines New Zealand Singapore World Average Thailand China India Source: Zenith Optimedia Indian Ad Spend: Potential for ad industry to grow from Rs 111 Bn ($2.4 Bn) to Rs 480 Bn ($10.4 Bn) in 10 years Radio Spend as % of Total Ad Spent: Radio Industry share is expected to grow from current 3% ($80 mn) to 8% ($832 mn) in 10 years starting FY 07 4
We are part of Times Group : India s Largest Media Conglomerate Bennett Coleman & Co Ltd Publishing Division The Times of India The Economic Times Navbharat Times Maharashtra Times Sandhya Times Entertainment & Retail Times Music Times Multimedia Planet M Entertainment Channel - Zoom Online Ventures Timesjobs.com Timesmatri.com Times Infotainment Media Limited Entertainment Network (India) Limited Times Internet Limited indiatimes.com 8888 Wallet365.com Movie Business TIMPL Radio Mirchi 360 0 Experience Times OOH Times Global Broadcasting (JV with Reuters) News Channel TIMES NOW World Wide Media (JV with BBC) Femina Filmfare Other Magazines 5
Times of India Group: Presence in almost all media segments Times of India has rich heritage of over one and a half centuries of leadership in Indian media The group is present in almost all segments of Indian Media Industry Times of India Group Mission: We are a global company with cosmic consciousness served from India aggregating audiences to network media brands, transiting through print 6
ENIL an Opportunity Our Vision is to be A Leading City-centric Media Company By Delivering Unique Audiences Through Media Vehicles Like FM Radio, Experiential Marketing And Out-of-home Media
Corporate Structure Corporate Structure Company Business Brand 7% BCCL 100% TIML 64% ENIL 100% TIMPL Flagship company of The Times of India group Holding Company and into Movies business Radio: India s largest Pvt FM network Broadcasting Activations Events and Promotion Life Style & Entertainment Trade Conferences & Exhibitions Corporate Events Out Of Home Media Street Furniture Transport LEDs ENIL is a 64.2% subsidiary of Times Infotainment Media Ltd. (TIML), 7% in ENIL is held directly by BCCL and balance by Public Times Innovative Media Private Limited (TIMPL) is 100% subsidiary of ENIL 7
Company Snapshot Headquarters: Incorporated: Listed: Subsidiary: Business: ENIL TIMPL FY06 Total Income: FY06 EBITDA: FY06 EBITDA Margin: Mumbai, India 1999 February 15, 2006 Times Innovative Media Private Limited (TIMPL), incorporated on October 27, 2005 Radio Broadcasting brand Radio Mirchi Out-of-home Media brand Times OOH; and Experiential Marketing brand 360 0 Experience Rs. 1,406.7 mn ($30.6 mn), including other income of Rs. 32.0 mn ($0.7 mn) Rs. 408.3 mn ($8.9 mn) 29.0% 8
We are present in High Growth Industry Segments Current Media Spends as % of Total Ad Spent Estimated size of Radio Industry Radio 3% TV 44% Cinema 1% Outdoor 6% Internet 0% Print 46% $ Million 300 240 180 120 60 52.2 65.2 32% CAGR 119.6 80.4 173.9 217.4 260.9 0 2004 2005E 2006F 2007F 2008F 2009F 2010F Source: Zenith Optimedia Estimated size of OOH Media Industry Estimated size of Live Events Industry $ Million 400.0 320.0 240.0 160.0 184.8 195.7 14% CAGR 228.3 260.9 293.5 337.0 380.4 $ Million 400.0 320.0 240.0 160.0 152.2 173.9 204.3 18% CAGR 239.1 282.6 347.8 391.3 80.0 80.0 0.0 2004 2005E 2006F 2007F 2008F 2009F 2010F 0.0 2004 2005E 2006F 2007F 2008F 2009F 2010F Source: 2006 annual edition of the FICCI- Price Waterhouse Coopers report 9
Business Division Snapshot Radio Mirchi: Till FY 2006 Launched in April 2006 Planned Key Customers: Times OOH: Till FY 2006 In April 2006 Key Customers: 360 0 Experience: Key Customers: 7 Stations (Delhi, Mumbai, Kolkata, Chennai, Pune, Ahmedabad and Indore) 3 Stations (Bangalore, Hyderabad and Jaipur) 22 additional Stations in next 12-18 months Hutch, HLL, Sahara, BCCL, Bharti, Pepsi, ICICI, Dabur, Set Max Mumbai (1400+ Bus Queue Shelters), Delhi Metro (13 Stations), Kolkata (80 Hoardings) Delhi Noida toll bridge (66 Displays) and LEDs Bharti, Hindustan Times, HLL, HSBC, Standard Chartered, Cadbury, Coca-Cola 600+ events including Femina, Filmfare and Pravasi Bharti in FY2006 Samsung, Set India, SBI, Mastercard, Deutsche Equities, Castrol India, Trent-Tata 10
ENIL Key Highlights We are operating in high growth industry We are well prepared and well positioned for the increasing competition We have managed to increase our market share in radio to over 50% We have maintained our number 1 status in listenership We launched 3 new radio stations in Jaipur, Bangalore and Hyderabad within 75 days of the completion of bidding process We won Out-of-Home advertising rights of Delhi Metro (13 stations), Kolkata (80 hoardings) and Delhi-Noida toll bridge (66 displays) for total license fee of Rs 340.0 mn ($ 7.4 mn) payable over a license tenure of 2-5 years Put up 1 LED screen at Sahara Mall Gurgaon Planned Rs. 350.0 mn ($7.6 mn) for LEDs over the time We have identified our challenges for next year and are working towards addressing them 11
Radio Mirchi: The Radio Station India Tunes to Widely recognized brand Presence in key markets Radio Mirchi today reaches more people than the #1 TV/Print media Brands in advertiser s target cities and adjoining areas Won 8 awards in 31 st RAPA Awards 2005 Innovative Content: Strong relationships with Hindi, Bengali and Tamil film fraternity Exclusive music breaks Mature research culture music/listenership Success in Diverse Markets Experience in establishing superior linkage between Marketing and Programming Customized content in 10 distinct markets Superior Sales Capabilities Offering unique and innovative solutions Hutch Pink Campaign Mirchi Activation 40.0 30.0 20.0 10.0 0.0 30.0 20.0 10.0 0.0 Listnership in Delhi Listnership in Mumbai 20.5 36.8 19.0 17.3 12.0 13.5 Radio Mirchi Radio City Red FM 2.5 Radio Mirchi Radio City Red FM Go Source: MRUC Survey, AC Neilson (ORG-Marg-Wave 8, fieldwork Jan 06 to Mar 06. All Sec 12+) 12
Radio Industry: Positive Regulatory Reforms Roll-out of Phase II of privatization Fixed License Fee regime changed to OTEF + Revenue share Annual license fee 4% of gross revenues FDI in Radio increased to 20% From existing 12 cities to 91 cities From existing 21 stations to approximately 300 stations From existing 7 players to 43 players Growth opportunity for private FM: From current 3% ($80 mn) to 8% ($832 mn) of total Ad industry in 10 years starting FY 07 13
FM Radio We are now present in all the top 13 towns (pop 2 mn +) Competitive Landscape: ENIL won 25 licenses in the Phase II bidding Only company to have presence in top 13 towns with population of 2 mn+ Player Total stations Of top 13 towns Adlabs 44 7 South Asia/Kaal Radio 40 10 ENIL 32 13 Radio City 20 11 Only incumbent in all the four metros Dainik Bhaskar 17 4 Bag Films 10 0 Zee/Century 8 0 Thanthi/Today/Midday 7 1/3/7 HT/Positive/Raj Pat 4 4/0/1 Red FM 3 3 14
Key Challenges facing ENIL Rapid roll-out of stations Talent identification, training and retention Retaining and growing absolute listenership numbers Cost management especially w.r.t marketing and payroll Music royalty regime rationalization Development of listenership research standards and spread across the country 15
Board of Directors And Management
Board of Directors Mr. Deepak M Satwalekar Non-Executive and Independent Director MD and CEO, HDFC Standard Life Director on the board of Infosys, Asian paints, Nicholas Piramal & others Mr. N Kumar Non-Executive and Independent Director Vice Chairman, Sanmar Group Director on the board of Bharti tele, The India Cement, MRF Ltd & others Ms. Rama Bijapurkar Non-Executive and Independent Director Marketing Consultant Director on the board of Infosys, Godrej Consumer, Crisil, UTI Bank & others Mr. Ravi Dhariwal Non-Executive Director Executive Director, BCCL Director on the board of BCCL, TIML Mr. A.P. Parigi Managing Director and Chief Executive Officer Board Driven company with emphasis on corporate governance practices 16
Strong & Experienced Management Team CEO AP Parigi Experience 34 years overall 6 years at ENIL Deputy CEO Prashant Panday CFO Harvinderjit Singh Bhatia Business Head Times OOH Farid Kureshi SVP Legal & CS Anil Fernandes EVP, Regulatory Affairs Ravi Narula SVP, People Innovation Prasad Swaminathan Experience 17 years overall 6 at ENIL Experience 17 years overall, 5 ½ at ENIL Experience 16 years overall, 4 ½ at ENIL Experience 15 years overall, 3 ½ at ENIL Experience 33 years overall 6 at ENIL Experience 10 years overall, 5 at ENIL Nandan Srinath, COO, ENIL India Sumeet Chatterjee, Senior Vice President, 360 0 experience Sharath Chandra, COO, ENIL International Tapas Sen, Executive Vice President, Programming Kaushik Ghosh, Senior Vice President, Marketing Col. (Retd.) Nataraja Thiagarajan, Chief Technical Officer 17
Key Financials FY 2006
ENIL Financials - Key Highlights Initial Public Offer of 13.2 mn shares of Rs.10/- each at a premium of Rs. 152/- aggregating issue proceeds of Rs. 2,138.4 mn ($46.5 mn) Investment of Rs. 40.0 mn ($0.9 mn) till March 31, 2006 in 100% subsidiary Times Innovative Media Pvt. Limited (TIMPL) One Time Entry Fee of Rs.1,301.0 mn ($28.3 mn) for 25 new radio licenses and Migration fee of Rs. 815.2 mn ($17.7 mn) for existing 7 stations for 10 years Amortization of annual migration fee Rs.81.5 mn ($1.8 mn) accounted in fourth quarter Posted record revenues at Rs. 1,174.1 mn ($25.5 mn) up 57% YOY; continue to lead the Radio Broadcasting Space 18
ENIL - Performance Highlights in FY 2006 Consolidated Total Income Rs. 1,406.7 mn ($ 30.6 mn) EBITDA Rs. 408.3 mn ($ 8.9 mn) EBITDA Margin 29.0% Ordinary Net Profit Rs. 212.4 mn ($ 4.6 mn) Net Profit Margin 15.1% EPS Rs. 5.9 ($ 0.13) ENIL Standalone Total Income Rs. 1,201.9 mn ($ 26.1 mn) EBITDA Rs. 381.4 mn ($ 8.3 mn) EBITDA Margin 31.7% Ordinary Net Profit Rs. 196.6 mn ($ 4.3mn) Net Profit Margin 16.4% EPS Rs. 5.5 ($ 0.12) The Company consolidated results of Times Innovative Media Private Limited (TIMPL), a wholly owned subsidiary company, for 5 months. TIMPL was incorporated on October 27, 2005 19
ENIL Standalone - Strong Financial Performance Revenue in US$ Million EBITDA in US$ Million 30.0 10.0 25.0 20.0 26.1 8.0 6.0 4.0 8.3 15.0 16.6 2.0 10.0 5.0 0.0 12.0 FY04 FY05 FY06 0.0 (2.0) (4.0) (6.0) (2.7) (5.3) FY04 FY05 FY06 20
ENIL Standalone - How did we Spend? 5% 5% 3% 3% 2% 21% 7% 19% 16% 19% 21
Future Business Outlook
Bright Future Outlook - ENIL Expand our footprint in radio broadcasting Rapid roll-out of 22 new stations Explore opportunities to become FM radio broadcasters in international markets Maintain market leadership in fast growing radio industry Continuously invest in brand building and programming innovation Launch Visual Radio through mobile phones Leverage our footprint to capture additional income Exploit additional revenue streams like Mirchi Activation 22
Bright Future Outlook - TIMPL Focus on Out-of-Home media growth Expansion of the network of out-of-home media sites managed by us Explore opportunities to lease sites on a long-term basis Introduce innovative technology and processes Establish long-term client relationships for Experiential Marketing Focus on wellness not illness approach Establish ourselves as a provider of innovative solutions Create own event properties at an appropriate time Focus on Life style, Fashion shows and Exhibitions 23
Radio Industry: Pending agenda News & Current Affairs FDI/FII cap Multiple frequencies Tradability Limitation on share transfer of main promoter for 5 years 24
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