CORPORATE PRESENTATION October 2015

Transcription

1 CORPORATE PRESENTATION October 2015

2 Executive summary Wild Bunch is a leading pan-european content gatekeeper ideally positioned to benefit from the structural growth coming from the digital revolution Founded in 2003 solely as an international sales company, it is today a unique independent player with a pan European presence and leading positons in France, Italy, Spain, Germany and Austria It recently consolidated its presence in Germany through the merger with Senator Entertainment and became a listed entity in February 2015 Since inception, it has delivered profitable growth driven by adequate capital allocation, acquisitions and a high level of creativity (specifically, FilmoTV was the first VOD/SVOD service launched in France in 2008) One of the largest independent film libraries with c. 2,200 titles (including The Artist, Drive, The King s Speech) Excellent bargaining power across the content spectrum from providers to consumers and towards major new players like Netflix or Amazon Future positioning of the company driven by: Access to complementary and attractive markets driven by high growth and pool of talents to add scale and synergies The digital revolution through the proliferation of devices to consume content anywhere at anytime, and the change in consumption patterns will benefit Wild Bunch on its own or through partnerships as it is already well positioned The Company is willing to play a pivotal role in the consolidation of the fragmented content distribution landscape and create value through accretive acquisitions Best-in-class management team coming from StudioCanal with a proven track record and capital markets experience Company presentation October

3 AGENDA COMPANY OVERVIEW BUSINESS MODEL MARKET POSITIONING AND STRATEGY FINANCIALS AND OUTLOOK Company presentation October

4 Company overview Wild Bunch is a leading European filmed entertainment content company Group overview The company covers the complete filmed entertainment value chain. Specifically It finances, co-produces and acquires filmed entertainment content It monetizes the rights on a multi domestic distribution network across Europe on all media both through traditional and innovative ways It monetizes the rights over the rest of the world It owns one of the largest film libraries (c. 2,200 titles) including The Artist, Drive, The King s Speech) In addition it co-finances and/or distributes up to 100 new independent films per year to enhance the long term value of the library Key financials 21% FY2014 revenue: 163,2m* 79% Segment Distribution Selected award winning film releases Segment International Sales * Derived from the single entity statements of Senator Entertainment AG and Wild Bunch S.A. Strategy driven by: Content growth through the acquisition of new rights for movies and other programs (TV, Web ) Increasing customer reach in new geographies and/or through new platforms Delivering value to shareholders through profitable growth and accretive acquisitions Company presentation October

5 Company overview Wild Bunch is an entrepreneurial success and an established player today Date * Direct distribution countries None France, Italy, Spain, Germany and Austria Employees Library 78 titles c. 2,200 titles with up to 100 new added annually Award-winning movies 25 5 Oscars for best movie, 5 Golden Palms, 2 Golden Lions, etc. since 2003 Sales ( m) Others, 7% Activities (by revenue) Others; 11% International sales, 21% TV, 19% Theatrical, 26% International sales; 89% Video/VoD/ SVoD, 27% * 2014 : Senator Entertainment + Wild Bunch SA Company presentation October

6 Company overview Two independent players in Europe s filmed entertainment content industry joined forces Acquisition of Wild Side, France Founding of Exception Wild Bunch (renamed Wild Bunch in 2006) Creation of Continental Films: Venture backed by Citigroup, dedicated to acquisition of feature films Acquisition of a majority stake in BIM, Italia Launch of Wild Bunch Germany Launch of VOD/SVOD service (FilmoTV) February 2015: Successful completion of Senator/Wild Bunch merger brings benefits: #2 pan-european independent film distributor Synergies to be derived from consolidated presence in Germany 1 Listing on the German stock exchange to allow for future growth through acquisitions Strong backing from key shareholder Sapinda that controls c 66% 2 Acquisition of a majority stake in Vértigo (Spain) Creation of Insiders and ecinema Berlin IPO on the Neuer Markt segment Founding of Senator Entertainment AG (1979: Senator Film Verleih GmbH) Founding of Joint Venture with Wild Bunch (Central films) HSW GmbH acquires 50.1% of the share capital after insolvency filing Successful restructuring after large impairments for 2013; start of negotiations on merger with Wild Bunch Company presentation October

7 Company overview Management Board Members Experienced management team holding c. 25% stake in Wild Bunch Vincent Grimond Brahim Chioua Vincent Maraval Markus Maximilian Sturm Since Feb CEO Entrepreneurship History Co-Founder, Chairman and CEO of Wild Bunch Senior Executive Vice President, Universal Studios Founder and Chairman and CEO of StudioCanal CFO of Cap Gemini Sogeti CFO of Club Méditerranée Expertise Outstanding knowledge and network in worldwide media business Since Feb COO Entrepreneurship History Co-Founder and COO of Wild Bunch Executive Vice President for Production and Distribution at StudioCanal COO of Le Studio Canal+ Accountant Director at La 5 Auditor at Arthur Andersen Expertise Strong media-business manager, who has worked with the most influential producers and filmmakers Since Feb CCO Entrepreneurship History Co-Founder and CCO of Wild Bunch Founded foreign sales label Wild Bunch as a department of StudioCanal UGC International Sales Executive Expertise 20 years of feature film acquisition and sales; one of the strongest acquisition and distribution professional worldwide Since March 2013 CFO Entrepreneurship History Managing Director of sports segment companies of Constantin Medien AG Executive Vice President for corporate planning and Group controlling at Constantin Medien AG Controlling and Finance Manager of Junior Web Expertise Extensive knowledge in financing and restructuring of media companies Company presentation October

8 Company overview Domestic distribution channels Established presence in most of Europe s largest markets Established presence across four of the five key European territories (France, Italy, Spain, Germany and Austria), collaborations for UK in place France Theatrical distribution via Wild Bunch Distribution Video and VOD distribution via Wild Side VOD/SVOD via FilmoTV Germany Italy Spain Wild Bunch Germany (combined German business of Senator and Wild Bunch) for direct distribution Central Film Verleih, X Verleih All direct distribution activities via BIM Distribuzione All direct distribution activities via Vértigo and VOD distribution via Filmin International Sales France Paris Berlin Germany Indirect distribution model: Wild Bunch, Elle Driver and Versatile as value-added intermediary selling rights to local distributors International sales helps to control financial risk by deciding on direct or indirect distribution Insiders is a new vehicle that allows Wild Bunch to be exposed to big-budget US movies without taking financial risk Company presentation October

9 Company overview Catalogue by number of titles Acquisition of BIM (Italy) Acquisition of Wild Side (France) Wild Bunch has an extensive and well diversified content library Acquisition of Senator (Germany) Acquisition of Vértigo (Spain) Breakdown of the catalogue by distribution territory* 5% 8% 24% 19% 44% Direct Distribution International Sales France Italy Spain Germany Breakdown of the catalogue by production date* Breakdown of the catalogue by origin* 13% 33% 16% 31% 43% 24% 14% 26% Before 60' 60'-70' 80'-90' * Excluding Senator s catalogue as of 2014 EU ROW USA/CANADA Company presentation October

10 AGENDA COMPANY OVERVIEW BUSINESS MODEL MARKET POSITIONING AND STRATEGY FINANCIALS AND OUTLOOK Company presentation October

11 Business model Filmed entertainment content and distribution are closely linked to grow and create value Content Diverse editorial policy Proven access to quality movies Growing film catalogue Content requires distribution Distribution Robust direct and multidomestic distribution network Worldwide sales capability Direct electronic distribution service Development and production Co financing and production Trading Marketing and packaging Physical and electronic delivery Distribution requires content Scale Reach Company presentation October

12 Distribution Content Business model Diverse editorial policy Access to quality movies Growing film catalogue Gatekeeper Direct network Worldwide sales capability Direct electronic distribution Wild Bunch acts as a gatekeeper within the content value chain Innovative selection of films with a clear focus on both local content for distribution in its home markets and premium independent movies Over time, the company has built a network of relationships with directors, producers and agents creating a unique ability to identify new talents Diverse library of c. 2,200 titles that include director-driven, art-house, genre and mainstream fare, as well as documentaries. It includes local, international and English language titles Wild Bunch controls, manages and optimises the entire filmed entertainment value chain from acquisition, distribution and marketing while building a catalogue of rights that can be exploited globally Increased value given that the distribution landscape is becoming more and more complex Today Wild Bunch has a unique multi domestic distribution network and is active in France, Italy, Spain, Germany and Austria Leading player in international film sales. Its market position has been strengthened by its experience with foreign distributors worldwide and creative talent It has recently launched Insiders, an international sales company based in Los Angeles dedicated to US independent movies exposure, with a budget of c. USD 25m In 2008, pre-empting the competition, Filmoline was created with a focus on the direct electronic distribution of filmed entertainment across platforms and countries In 2015, it also launched its ecinema activities Company presentation October

13 Business model A selective and efficient content acquisition process Wild Bunch has been able to create a unique network to attract projects from around the globe Local European movies: Coming from Wild Bunch distribution territories and targeting primarily domestic markets (budgets from 2m to 8m) Editorial policy Independent author movies: Director-orientated movies from all over the world for international sales and local distribution (budgets from 15m to 25m) Independent mainstream movies: From all over the world with special emphasis on the US, targeting local distribution (budgets from $ 30m to $ 70m) Genre movies: Small budget movies for segmented audiences, targeting international sales and local distribution, traditional or electronic (budgets from 0.5m to 3m) Before acquiring rights attached to a film, Wild Bunch will carefully review the financials International sales: The sales team makes estimates giving an ask and a minimum price on a country-by-country basis Acquisition process Direct distribution: Each subsidiary involved provides assessment for each medium Financial estimates: Review of the contemplated deal and financial outcome Existing commitments: Review of the consistency with the existing line-up and the existing global film exposure of Wild Bunch Company presentation October

14 Business model The filmed entertainment content distribution is organized around three main pillars Direct distribution platform International sales Direct Electronic distribution Established presence across four key European countries (France, Italy, Spain, Germany and Austria) with a pan European mind-set Well diversified revenue streams across various distribution channels: theatres, video, TV and electronic distribution Channel agnostic positioning with a proven expertise across all distribution routes to market Recognised sales expertise enables to monetise filmed entertainment content worldwide Allows Wild Bunch to realize economies of scale on distribution costs, spreading marketing and advertising expenses for the distribution of one movie across several territories Large distribution franchise gives Wild Bunch an increased bargaining power due to its geographic reach By managing the international sales process of a movie, Wild Bunch is able to mitigate its financial risk exposure Sells digital content worldwide and has specific agreements in countries where it has direct distribution (e.g. Wild Side to Netflix and to itunes) Precursor in using innovative direct distribution means since day one when allowed : day and date releases, ultra VOD* Launched ecinema distribution Established FilmoTV which acquires VOD/SVOD film rights from a number of distributors (Wild Bunch, Warner, Pathé, StudioCanal, Sony, Gaumont ) and mainly focuses on a subscription based revenue model. It is available through IPTV/cable, smart TVs and tablets accessing 80% of addressable market * When VOD is released before the cinema window starts Company presentation October

15 Business model Multi-domestic distribution presence brings strong benefits Increased bargaining power due to scale Large distribution franchise strongly established in 5 European countries Negotiating economics for the rights of a movie made easier thanks to Wild Bunch s unique geographic reach Ability to mitigate risk amongst countries Enhanced ability to source local content Capitalising on a close proximity with creative talent emerging from each geography Sourcing via day-to-day local relationships and constant contacts Distributing local content is essential in Wild Bunch s 5 home territories One-stop shop for content owners Opportunity to address the European market in multiple geographies instead of having to deal with local players in each country Attractive value proposition, especially for international producers Economies of scale on distribution costs Spreading marketing and advertising expenses for the distribution of one movie across several territories This is balanced by the need to continuously tailor distribution methods to local preferences Company presentation October

16 Business model Case study : How to acquire a movie and how to capitalize on it Acquisition of movie rights cash flow profile (for illustrative purposes only) Cumulative cashflow Cumulative EBIT + m Theatre Home entertainment Pay-TV SVOD Free TV Library - m Distribution is secured through the acquisition of rights from producers Payment of the minimum guarantee (MG) 1-2 years between the acquisition of a movie right and the theater release date Rights can be acquired for all or selected distribution channels and countries Broad range of contracts Revenue generation driven by several factors (admissions and audience recognition, quality of the film, level of MGs, competition, etc.) Cumulative cash flow usually turns positive around the time of pay TV release Targeted gross margins in excess of 20% on the portfolio of movies Company presentation October

17 AGENDA COMPANY OVERVIEW BUSINESS MODEL MARKET POSITIONING AND STRATEGY FINANCIALS AND OUTLOOK Company presentation October

18 $bn Market positioning and strategy The European filmed entertainment content market provides substantial growth potential Filmed entertainment market worldwide ( E)¹ North America Europe Electronic distribution and market opportunity 1,2 Population (m) Households (m) Broadband penetration Electronic distrib. market ($m) Avg expenditure ($) 3 US EU US EU US EU US EU US EU , % % 10,247 (1) PwC Global Entertainment and Media Outlook (2) US Census Bureau, Eurostat Wild Bunch is active in a global growth market: total worldwide revenue to exceed $100bn in 2017 Europe 2012A-16E CAGR at 3.6% with a target size of c $30 bn by 2016E Expansion being driven by growing demand in emerging markets (such as China), while mature markets (such as the US, the UK and Japan) will also continue to grow OTT/streaming services will deliver the fastest rates of growth over the next years both in mature and emerging markets In terms of potential consumers, Europe is a larger market than the already matured US, and has room for growth Wild Bunch wants to benefit from Europe s catch-up potential by providing attractive content via all distribution channels Average expenditure in the US is a more important factor than in Europe, as a result of more advanced digital penetration Company presentation October

19 Market positioning and strategy Summary China With a total population of 1.4bn, China remains a substantial source of growth opportunities China to become 3rd largest market by 2018, with total revenue of $7bn by 2018 and CAGR of 13% Wild Bunch already sold commercial-attractive films to China including March of the Penguins, Largo Winch and Wolf Totem, which already crossed the US$ 100m mark in box office there Box office booms from $3.1bn to $5.9bn by 2018 Emerging markets remain a key growth driver for the future More than 22% CAGR ( ) in terms of gross box office as well as admissions Latin America Whereas main markets (Argentina, Brazil, Mexico) show stable growth, territories such as Colombia, Chile or Peru are experiencing strong growth Latin America fastest growing region in the world with CAGR of 7% to $7.1bn in 2018 Source: PwC Global Entertainment and Media Outlook India Market currently dominated by Indian releases Wild Bunch successfully selling films since 2007 Admissions in India to grow by 4.8% up to $2.7bn in 2016 Gross box office CAGR ( ): 9.4% Company presentation October

20 Industry Technology Consumers Market positioning and strategy Industry growth ultimately sustained by key structural changes Digitisation of filmed entertainment New experiences Dematerialised content means consumers can access filmed entertainment anytime and anywhere Theatres are also taking advantage of this new environment to renew and propose a more sophisticated offering Resilience of consumer spend on films Films offer a comparatively high entertainment value for each dollar spent Proliferation of connected devices Connected devices increase the size of the installed base for consumption Continued emergence of new TV channels Progressive increase in the number of TV channels creates a new monetisation opportunity Tightening of anti-piracy laws The film industry keeps fighting against piracy with mixed effects across countries Shift in sequence of releases ( windows ) New content delivery platforms enable distributors to shift the traditional movie window to maximise the commercial success of filmed entertainment Company presentation October

21 Scale Digitalisation Quality of the content Market positioning and strategy Wild Bunch is ideally placed to benefit from industry dynamics Implications for the sector Answers from Wild Bunch Independent distributors increasingly struggle to access quality content Quality and editorialised content remain the ultimate key differentiator Wild Bunch image and reputation as a company and as a distributor make it an attractive destination for artistic and managerial talents Wild Bunch s strong relationships in the industry provide unique access to high quality content Proven ability to handle increasing complexity The combination of ease of distribution and broader consumer base increases the value of the addressable market Further investment in the expansion of e-business and FilmoTV will enable Wild Bunch to fully benefit from the digital revolution in France and to replicate its successful business model in other geographies Nimble company, channel agnostic, flexible mind-set and open to changes Scale provides distributors with higher purchasing power and access to better content Scale drives overall profitability Given its unique presence in 5 European countries, Wild Bunch has a substantial negotiating power and is able to mitigate risk across its movie portfolio Company is poised to create value through consolidation Company presentation October

22 Value delivery Customer reach Content growth Market positioning and strategy Wild Bunch to become a global player in the digital era Acquisition of rights from independent producers for new movies and TV series Increase overall volume of fresh movies, libraries as well as other content (TV, Web ) Acquisition of valuable libraries Expand into new geographies Export the proven business model to other European countries such as UK, Eastern Europe, Nordic countries Expand into fast growing markets (China, India, Latin America, etc ) Create commercial relationships and create content links with key markets such as the USA Expand into new platforms More distribution power to create the ultimate digital content gatekeeper and provider More direct distribution and marketing power: make FilmoTV a european player Profitable growth Economies of scale will bring incremental margins while new business initiatives will provide higher margins Accretive acquisitions Target companies already identified in geographies such as the UK, Australia, Canada Buy and build policy to provide operational synergies and bring complementary revenue streams Disciplined financial approach to acquisitions through strict financial metrics Company presentation October

23 Market positioning and strategy Wild Bunch to play a central role in the media economy The linear model is outdated How Wild Bunch sees the market today Since inception, Wild Bunch s business model has been based on the view that the traditional linear model is outdated Market pressure and technological changes will force a reconsideration of media chronology Identifying and controlling content remains a key differentiator Promoting and marketing content will require sophisticated skills Complexity and competition will favour large, industrial, versatile first class operations to reap revenues and margins Today, Wild Bunch is ideally positioned to maximize revenues across the value chain Company presentation October

24 AGENDA COMPANY OVERVIEW BUSINESS MODEL MARKET POSITIONING AND STRATEGY FINANCIALS AND OUTLOOK Company presentation October

25 Financials and outlook Financials Key data Stock price performance since merger 68m Revenue H m Shares outstanding 146m 1 Market cap Adj. diluted EPS 11.1m Gross profit H m Net debt H April 23: 2014FY Senator Entertainment results released August 31: 2015 H1 Wild Bunch results released 68 Revenues ( m) Gross profit ( m) ,5 11,1-0,7 H H H H (1) As of October 8 th févr avr juin 2015 août 2015 oct Wild Bunch Eurostoxx Media FTSE 350 Media Company presentation October

26 Financials and outlook Outlook Summary The 2015 fiscal year was marked by the combination of Senator Entertainment and Wild Bunch creating a new company, listed in Germany and being one of the leading pan European filmed entertainment companies This combination induced significant challenges. The group must, first of all, make significant headway in integrating the two preexisting companies, so that it is run as a single entity and takes advantage of the identified synergies. It also needs to restructure its financial resources, and clearly reverse the Senator trend in operational profitability By expanding its geographical footprint, enlarging its portfolio of content, in both cinema and television, and remaining at the forefront of digital change, Wild Bunch intends, through internal and external growth, to more than double its size over the coming five years 2015 revenues are expected to imply a multiple of 6x to 7x Senator revenues in 2014 Company presentation October

27 Financials and outlook Committed anchor investor and strong Supervisory Board Shareholder Structure Supervisory Board members Free float, 13.6% SWB Entertainment Investment BV; 45,1% Management; 24,2% Shard Capital; 3,0% Naya Capital Management; 14,2% Wolf-Dieter Gramatke (Supervisory Board Chairman) Founder and Managing Director of Great-Minds Consultants. Former executive for GST at Universal Europe. Also serves as Supervisory Board Chairman of DEAG Prof. Dr. Katja Nettesheim Founder and Managing Director of Mediate. Extensive business/investment experience as advisor. Previously held executive position at Axel Springer regional newspaper Pierre Tattevin Partner and managing director at Lazard Investment Bank with wide international experience in the field of filmed entertainment. Previous Board Member of Wild Bunch SA Benjamin Waisbren Substantial experience in advising clients in the U.S and Europe in media, especially film investments. President of LSC Fund. Executive producer of more than 25 major motion pictures distributed by Columbia Pictures and Warner Bros Hans Mahr Founder and Managing Director of mahrmedia. Former member of management at Premiere AG and RTL Group. Has in-depth knowledge of GST media markets, especially TV and VoD Tarek Malak Investment Manager at Sapinda. Extensive knowledge in the media, sports and leisure sector. Former investment banker at Deutsche Bank and Rothschild Company presentation October

28 Cautionary statements and disclaimer The information set forth and included in this presentation is not provided in connection with an offer or solicitation for the purchase or sale of a security and is intended for informational purposes only. This presentation contains forward-looking statements that are subject to risks and uncertainties. Statements contained herein that are not statements of historical fact may be deemed to be forward-looking information. When we use words such as plan, believe, expect, anticipate, intend, estimate, may or similar expressions, we are making forward-looking statements. You should not rely on forward-looking statements because they are subject to a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from those indicated. These factors include, but are not limited to, the following: market risks: consumer behavior towards movies and their consummation, dependence on success of movies, our level of debt and the ability to refinance; inflation, interest rate levels and fluctuations in exchange rates; general economic, political and business conditions and existing and future governmental regulation; and the effects of competition. Please note that we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Company presentation October