VGi Global Media PCL 1Q 13/14 4Q & FY Earnings 13/14 Presentation Earnings Review 21 May 2014 1 August 2013 1Q 13/14 EARNINGS VGI BOARD OF DIRECTOR S MEETING NO. 5/2013 30 JUNE 2013 Prepared by Investor Relations Department VGi Global Media PCL
IR Contacts IR Department: Ms. Tisakorn Youngmod Ms. Napat Buchasuk Ms. Chama Savetbodi Telephone: +66(0) 2273 8639 +66(0) 2273 8636 Fax: +66(0) 2273 8610 Email: Website: ir@vgi.co.th www.vgi.co.th Disclaimer Investment involves risk. Prospective should understand the characteristics of Securities and study information about VGI Global Media Public Company Limited ( VGI or the Company ) before making a decision to invest in Securities. This Presentation is not intended to provide the basis for any investment decision, nor to substitute your own analysis and investigation, and should not be considered as a recommendation to any recipient of this Presentation. Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to the Company s corporate plans, strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward-looking terminology such as may, will, expect, intend, estimate, continue, plan or other similar words. The statements are based on the assumptions and beliefs of the Company s management in light of the information currently available to the Company. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forwardlooking statements. Nothing in this Presentation is, or should be, relied on as promise or representation of the Company as to the future.
Agenda SECTION 1 Industry Overview SECTION 2 SECTION 3 SECTION 4 SECTION 5 4Q & FY 13/14 Financial Performance 2014/15 Target Business Update Investment Policy
Media Industry Overview THAI ADSPEND VALUE (THB bn) QUARTERLY THAI ADSPEND TREND (THB bn) QUATERLY 4Q 12/13 3Q 13/14 4Q 13/14 QoQ (%) YoY (%) TV 16.5 17.2 15.4-10.4% -6.9% Outdoor 1.0 1.1 1.0-4.8% -1.3% Transit 0.8 0.9 0.8-11.4% -0.8% In-Store 0.5 0.6 0.3-44.1% -33.2% Industry 26.5 29.5 24.7-16.2% -6.8% 16.5 3.5 17.7 3.7 2.0 17.9 3.9 2.2 17.2 4.2 2.1 A sharp decline of AdSpend in every media sector in 4Q 13/14 15.4 3.0 TV Newspaper YEARLY 2012/13 2013/14 YoY (%) TV 68.8 68.1-0.9% Outdoor 4.5 4.2-7.0% Transit 3.2 3.5 10.4% In-Store 2.8 2.5-11.6% Industry 114.4 113.4-0.9% Note: excludes classified house ads. Source: The Nielsen Company (Thailand) Limited 1.4 1.3 1.2 1.6 1.6 1.4 1.7 1.5 1.5 1.0 1.1 1.0 1.1 0.8 0.5 0.9 0.9 0.9 0.8 0.7 0.6 1.7 1.2 1.0 0.2 0.2 0.2 0.2 0.2 4Q 1Q 12/13 2013 1Q 2Q 13/14 2013 2Q 3Q 13/14 2013 3Q 4Q 13/14 2013 4Q 1Q 13/14 2014 0.8 0.3 Cinema Radio Magazines Outdoor Transit In-store Internet Section 1: Industry Overview 4
Media Industry Overview Top 5 AdSpend by Business Segment THAI ADSPEND VALUE BY BUSINESS SEGMENTS (THB bn) 12.4 12.1 11.9 11.6 11.5 11.0 10.7 10.3 2.9 FMCG 4Q 13/14 OVERALL MEDIA INDUSTRY 1 FMCG 42% 2 MOTOR VEHICLES 8% 3 GOVERNMENT RELATED 6% 4 COMMUNICATIONS 6% 5 LEISURE 4% TOP 5 66% OTHERS 34% 4Q 13/14 VGI MASS TRANSIT 2.0 1.9 1.7 1.1 1.1 2.5 2.1 2.0 1.8 1.6 1.6 1.4 1.5 1.3 1.1 2.5 2.3 2.2 2.1 1.9 2.0 1.8 1.7 1.5 1.4 1.2 1.2 1.2 0.9 1Q 12/13 2Q 12/13 3Q 12/13 4Q 12/13 1Q 13/14 2Q 13/14 3Q 13/14 4Q 13/14 Source: The Nielsen Company (Thailand) Limited Section 1: Industry Overview Motor Vehicles Government Related Communications Leisure 1 FMCG 39% 2 COMMUNICATIONS 11% 3 TRAVEL & TOURS 7% 4 LEISURE 5% 5 FOOD OUTLETS & RESTAURANTS 4% TOP 5 66% OTHERS 34% 4Q 13/14 VGI IN-STORE 1 FMCG 88% 2 MOTOR VEHICLE ACCESSORIES 5% 3 MOTOR VEHICLES 4% 4 FOOD OUTLETS & RESTAURANTS 1% 5 PHARMACEUTICALS 0.8% TOP 5 98% OTHERS 2% 5
4Q & FY 13/14 Overview P&L SNAPSHOT 4Q & FY 13/14 (THB MN) (THB MN) 4Q 13/14 4Q 12/13 %YOY 3Q 13/14 % QOQ FY 13/14 FY 12/13 %YOY Operating Revenue 641 691-7% 806-20% 3,149 2,838 11% Cost of sales 315 311 1% 315 0% 1,342 1,289 4% Gross profit 326 380-14% 491-34% 1,807 1,548 17% EBITDA 260 315-18% 416-38% 1,510 1,289 17% Net profit 193 225* -14% 317-39% 1,146 902* 27% Gross profit margin 51% 55% 61% 57% 55% EBITDA margin 40% 46% 52% 48% 45% Net profit margin 30% 32% 39% 36% 32% FY 13/14 REVENUE BREAKDOWN FY 13/14 GROSS PROFIT BREAKDOWN Office Building & Other Media 6% BTS-related Media 53% Modern Trade Media 41% BTS-related Media 75% Modern Trade Media 18% Office Building & Other Media 7% * The Company was required to restate the prior year s financial statement for comparison purposes in order to comply with the new accounting standard on deferred tax which became effective since January 2013. Section 2: 4Q & FY 13/14 Performance 6
BTS-related Media REVENUE (THB MN) REVENUE BREAKDOWN (THB MN) 1,422 1,679 182 200 190 4Q 12/13 3Q 13/14 4Q 13/14 50% 45% 48% 137 95 108 84 103 95 361 440 393 27% 31% 28% 23% 24% 24% 4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14 MARGINS (%) Quarterly Gross Profit (%) Train Station Merchandising and Others Annual Gross Profit (%) 4Q 13/14 77% FY 13/14 81% 3Q 13/14 82% 4Q 12/13 82% FY 12/13 78% Section 2: 4Q & FY 13/14 Performance 7
Modern Trade Media REVENUE (THB MN) REVENUE BREAKDOWN (THB MN) 4Q 12/13 1,250 1,295 232 243 3Q 13/14 4Q 13/14 167 78% 76% 76% 299 319 220 67 76 53 7% 22% 24% 24% 4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14 Static Digital MARGINS (%) Quarterly Gross Profit (%) Annual Gross Profit (%) 4Q 13/14 3% FY 13/14 25% 3Q 13/14 30% 4Q 12/13 21% FY 12/13 26% Section 2: 4Q & FY 13/14 Performance 8
Office Building & Other Media REVENUE (THB MN) REVENUE BREAKDOWN (THB MN) 166 175 30 34 28 4Q 12/13 3Q 13/14 4Q 13/14 97% 74% 100% 12 31 46 28 26% 1 3% 4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14 Office Buildings Others MARGINS (%) Quarterly Gross Profit (%) Annual Gross Profit (%) 13% 0 4Q 13/14 56% FY 13/14 69% 3Q 13/14 73% 4Q 12/13 63% FY 12/13 72% Section 2: 4Q & FY 13/14 Performance 9
Cash Flow & CapEx CASH FLOW MOVEMENT (31 Dec 13 31 Mar 14) CFI (150) (THB mn) 331 45 111 6 1,007 826 Beginning cash (31/12/13) CFO Joint Venture CapEx Interest Income Ending Cash (31/3/14) FY 13/14 CAPEX (THB MN) FY 13/14 Platform Screen Door 176 BTS (Platform Truss LEDs and E-Poster) 299 Modern Trade and Others 85 Total 560 Section 2: 4Q & FY 13/14 Performance 10
Balance Sheet ASSETS BREAKDOWN (THB MN) 2,579 2,741 LIABILITIES AND EQUITY BREAKDOWN (THB MN) 2,579 2,741 Current assets 1,995 77% 1,630 59% Current liabilities Non-current liabilities 737 22 28% 1% 762 26 28% 1% Non-current Assets 584 23% 1,111 41% Equity 1,821 71% 1,953 71% 31-Mar-13 31-Mar-14 31-Mar-13 31-Mar-14 KEY FINANCIAL RATIOS DEBT TO EQUITY LIABILITY TO EQUITY CURRENT RATIO FY 13/14: 0.0x FY 12/13: 0.0x FY 13/14: 0.4x FY 12/13: 0.4x FY 13/14: 2.1x FY 12/13: 2.7x Section 2: 4Q & FY 13/14 Performance 11
2014/15 Target: Overall Business EXPECTED REVENUE GROWTH 22-24% BTS 7-10% Off. Bldg & Others 13 5-9% Modern Trade -17% YoY revenue growth EXPECTED CAPEX 2014/15 BTS Related Media Platform Screen Door Modern Trade Media Office Building & Other Media THB 230 mn THB 290 mn THB 50 mn THB 30 mn Total 2014/15 CapEx of THB 600mn Section 3: 2014/15 Target 12
Business Update Dividend Payments & Phar Partnership DIVIDEND PAYMENTS PHAR PARTNERSHIP Interim cash dividend of THB 0.18 per share and stock dividend of 25:1 paid on 27 Dec 2013 Final cash dividend of THB 0.13 per share (subject to AGM on 3 July 2014) 2013/14 dividend payout ratio is 93.4% VGI Dividend Record Partner Rights Contract Length Phar Partnership, Thailand (exclusive media sales agency of Air Asia) Sale agent for AirAsia planes 1 st year: 30 planes 2 nd year: 38 planes 3 rd year: 42 planes 3 years 0.13** 1.1% 1.50* 1.0% 1.20 1.3% 0.184* 1.5% 2012/13 2013/14 Interim dividend Final dividend Dividend yield Note Dividend yield is calculated using VGI closing share price one day before the date of Board of Directors meeting approving the relevant dividend *2012/13 final dividend and 2013/14 interim dividend included stock dividend of 10:1 and 25:1, respectively. **2013/14 final dividend per share is subject to shareholders approval at the AGM on 3 July 2014 Section 4: Business Update 13
Business Update Strategic Investment: 24.43% in MACO MACO OVERVIEW Share information (as of 9 May 2014) Stock code: MACO Market capitalisation (THB mn): 2,903.6 Outstanding shares (mn shares): 300.8 Major shareholder post transaction (% out of all shares) 1. VGI Pcl. 24.43% 2. Tansalarak Group 10.05% 3. Maneerattanporn Group 8.40% 4. Meeprasertsakul Group 6.51% Total major shareholder 49.93% Product Description Location/Area 1. Billboard Static billboard Bangkok & vicinity / 170 billboard / 74,635 sqm 2. Street Furniture Tri vision media on 20 BTS columns/ Siam square billboard Bangkok / 2,217 sqm 3. Transit Light box at toll booths / tri vision, light-box & poster City grip light express, BTS walkway & Mochit station / 419 sqm 4. Made to order & Event Produce and provide advertising media services n/a Section 4: Business Update 14
Business Update Strategic Investment: 24.43% in MACO MACO S FINANCIAL PERFORMANCE Revenue structure 2013 Total operating revenue : THB 724.6mn Proven Track Record of Revenue and Net profit 2013 Dividend Yield* of 5.6% Event, 1.7% Other services, 2.9% Made to order, 6.9% 635.5 732.4 724.6 Transit, 13.0% 139.5 173.8 Street furniture, 27.5% Billboard, 53.5% 98 2011 2012 2013 Operating revenue (THB mn) Net Profit (THB mn) MACO space: Billboard, Street furniture and Transit *based on share price of THB 9.00 Non MACO space: Made to order and Production/Printing Section 4: Business Update 15
Business Update Strategic Investment: 24.43% in MACO INVESTMENT HIGHLIGHTS BENEFITS TO VGI VGI invested 24.43% in MACO (73.5mn shares, at THB 9.00 Total investment value of THB 661.5mn 3 BOD representative from VGI from total of 9 Directors Accounted as equity method of consolidation. Investment income from MACO in 1Q 14/15 will be recorded proportionately according to VGI shareholding in MACO between 12 May to 30 June 2014 as follows: BALANCE SHEET Current assets Cash and cash equivalents Non-current assets Investment in associates P&L Revenues Share of profit (loss) from investment in associates THB xxmn THB xxmn THB xxmn Expand media network and market reach Further expansion in outdoor segment Increase long-term revenue and net profit Steady dividend payout Future growth Increase product varieties Broader client s portfolio SYNERGY In short term, sale synergies can be created by bundling media packages from VGI and MACO. Knowledge sharing and transfer among highly experienced management team MACO will be attending Opportunity Day on 9 June 2014 Section 4: Business Update 16
Business Update Warrant Issuance KEY TERMS AND CONDITIONS OF WARRANT TICKER TERMS VGI-W1 4 Years EX-RIGHTS DATE 9 July 2014 EXERCISE PERIOD Quarterly basis WARRANT PRICE ALLOCATION NO. OF WARRANTS EXERCISE RATIO Free EXERCISE PRICE THB 14.00 To existing shareholders at the ratio of 4 VGI existing shares : 1 VGI-W1 Up to 857,993,407 Units 1 VGI-W1 to 1 ordinary share of VGI RATIONALE Free warrants Preferential right to existing shareholders Funding to be used for potential acquisitions/ CaPex Expected maximum proceeds THB 12,011,067,698 Matter is subject to shareholder approval of AGM on 3 July 2014 Section 4: Business Update 17
Acquisition/Investment Policy Investment policy SECTOR: STAKE: GEOGRAPHY: RETURN CRITERIA: Out-of-Home media sector Influential or controlling Thailand focus, selective ASEAN (overseas require strong local partner) Minimum IRR or payback period RATIONALE: Increase market share in Out-of-Home media segment (to be the leader in OHM) Revenue and cost synergies Section 5: Investment Policy 18
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