Goldman Sachs and Gao Hua China Investment Frontier Conference 2011 1
Forward-looking statements This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Clear Media. These forward-looking statements represent Clear Media s s expectations or beliefs concerning future events and involving known and unknown risks and uncertainties which could cause actual results, performance or events to differ materially from those expressed or implied in such statements. 2
Integrating the World s Best Practice CLEARCHANNEL WORLDWIDE World's leading out-of of-home media/ entertainment company CCO: World s s largest outdoor advertiser NYSE listed 3
4
Our 13 Years Track Record 1400 Turnover (HK$ m) 1200 1000 800 600 400 200 0 1,260 1,262 1,118 997 776 675 691 488 538 427 355 260 170 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 *For six months ended 30 June 2011 * 5
Take Control of Outdoor 36% 27% Media Mix 13% 12% 5% 7% TV Newspaper/ Magazine Outdoor Internet Radio Others Data Source: SAIC 2010, Company estimates 6
Leader in China s Outdoor Advertising Standardized media network 28-city national coverage #1 in all key cities Regional Sales Center 7
Mass Medium of Choice Standardized Network Low cost-per per-thousand Highly visible always on Only sector opens to foreign investors Growing outdoor audience 8
Secure Long Term Supply National MOFCOM & SAIC approvals Long-term contracts w/ local governments Exclusive & low cost guarantee Retain 100% of ad revenues 9
Showcase Top Consumer Brands in China 10
11
REVIEW OF STRATEGY & EXECUTION 12
1H11 Highlights China economic growth continues despite tightening measures to contain inflation Domestic demand being one of the engines behind economic growth Urbanization helps fuel growth in major cities Chinese brands & local advertisers increase ad spend More advertisers expand into 2 nd & 3 rd tier cities Higher competitive pressure in Shanghai post World Expo 13
1H11 Business Performance by Location Total revenue from BJ, SH, GZ up 20% YoY to HK$352m BJ: Revenue +33% with improvement on both ASP & occupancy rate GZ: Revenue +38% with improvement on both ASP & occupancy rate SH: Revenue +42% with Shanghai World Expo in 1H10 Revenue -11% in 1H11 without major event Mid-tier cities: Revenue up 11% YoY to HK$278m 14
Revenue by Industry 1H10 1H11 Beverages 25% 25% Food 12% 13% Telecommunications 12% 11% Fashion & ornaments 4% 11% Entertainment 6% 9% Information Technology 3% 6% Realty 6% 5% Business / Consumer services 6% 5% Cosmetics & Toiletries 6% 4% Pharmaceuticals / Health products 4% 4% 15
2H11 Outlook Leverage on rising private consumption Strengthen leading position in nation-wide outdoor market Re-invest in network expansion Increase bus shelter panel number through: - organic build-out - mergers & acquisitions 16
2H11 Outlook (con td) Further optimize ASP & occupancy rate Explore alternative advertising platforms & emerging technology for display panel profitably Revenue from Shanghai post World Expo to recover 17
FINANCIAL REVIEW For the year ended 30 June 2011 18
1H11 Consolidated Income Statement (HK$ M) 1H10 10 1H11 11 YoY % Turnover 585 691 +18% Cost of sales, excluding amortization (272) (322) +19% Operating expenditure, excluding depreciation & amortization (97)* (126) +30%* EBITDA 216 243 +12% Depreciation & amortization (119) (133) +12% EBIT 97 110 +13% Net profit 77 73-6% Basic EPS (HK cents) 14.7 13.8-6% *Operating expenditure, excluding depreciation & amortization, includes the Share Option Expense Adjustment booked in 1H10 19
1H11 Consolidated Income Statement, excluding the Share Option Expense Adjustment Booked in 1H10 (HK$ M) 1H10 10 1H11 11 YoY % Turnover 585 691 +18% Cost of sales, excluding amortization (272) (322) +19% Operating expenditure, excluding depreciation & amortization (117) (126) +8% EBITDA 196 243 +24% Depreciation & amortization (119) (133) +12% EBIT 77 110 +42% Net profit 57 73 +27% 20
Performance by Activities (HK$ M) Bus Shelter Shenzhen Bus Body Other Formats HQ Total Revenue 630 60 1-691 EBITDA 253 3 - (13) 243 EBIT 120 3 - (13) 110 Net Profit/(Loss) 85 2 - (14) 73 21
Revenue by Location 1H10 1H11 11 Beijing 23% Beijing 27% Others 46% Others 44% Shanghai 17% Shanghai 13% Guangzhou 14% Guangzhou 16% 22
Costs & Expenses (HK$ M) 1H10* 1H11 Rental 151 176 Maintenance 48 59 Electricity 26 29 Sales & Cultural Tax 47 58 Direct operating costs 272 322 S, G & A & other expenses 117 126 Total costs & expenses, excluding depreciation & amortization *Exclude Share Option Expense Adjustment booked in 1H10 389 448 YoY % +17% +22% +11% +25% +19% +8% +15% 23
Trade Receivables (HK$ M) Jun 30, 2010 Dec 31, 2010 Jun 30, 2011 Current 90 days 215 221 294 91 180 days 98 135 132 Over 180 days 151 128 144 464 484 570 Less: provision for impairment (43) (39) (40) 3rd party receivables 421 445 530 Turnover days (time wt. avg.) 129 days 119 days 119 days Due from GWH 162 142 158 24
Increase in Cash Flows (HK$ M) 1H10 1H11 Net cash flows from operating activities 105 213 Net cash flows used in investing activities (141) (52) Net cash flows from financing activities 57 28 Net increase in cash & cash equivalents 21 189 Net cash & cash equivalents at the beginning of period 420 672 at the end of period 441 861 Free Cash Flow* 40 169 *Free cash flow is defined as EBITDA (before losses on disposal and write down of concession rights and other assets and equity-settled share option expenses) less cash outflow on capital expenditure, less income tax and net interest expense. 25
Appendix 26
Power of Our Network (For six months ended 30 June 2011) 1 st st tier cities Beijing Shanghai Guangzhou A.S.P. 14% 28% 13% 1% Occupancy 66% 50% 59% 60% Avg Panel No. 17% 17% 9% Sales 33% 11% 38% 20% 2 nd nd tier cities 4% 61% 1% 11% TOTAL 4% 61% 3% 16% 27