CORPORATE PRESENTATION

Transcription

1 Agenda Page CORPORATE PRESENTATION June 2014 NASDAQ: BONA NASDAQ: BONA [ C L I E N T N A M E ]

2 THE FOLLOWING PRESENTATION HAS BEEN APPROVED FOR ALL AUDIENCES WHO UNDERSTAND THE MEANING OF FORWARD-LOOKING STATEMENTS The information used in this presentation has been prepared by Bona Film Group Limited ( Bona or the Company ). This presentation is being provided for your information and may not be distributed, reproduced, re-distributed or passed on, directly or indirectly, to any person or published, in whole or in part, for any purpose. This presentation contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. All statements other than statements of historical fact in this presentation are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The information contained in this presentation does not constitute or form part of, nor should it be construed as, an offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto. By listening to this presentation, you acknowledge that you will be solely responsible for your own assessment of the Company, including its business and market, and the market position, and that you will conduct your own analysis and due diligence and be solely responsible for forming your own view of the existing and future performance of the Company s business. 1

3 Overview Snapshot NASDAQ Ticker: BONA o o Share Price (6/6/2014): US$6.74 Market Cap (6/6/2014): US$409 million o 52W range: US$3.58 (5/12/2013) US$8.92 (3/11/2014) 2013 Revenue: US$149.3 million 2014 Q1 Revenue: US$ 56.6 million, up 30.7% YOY Leading non-state-owned vertically-integrated film company in China o o Distributes & produces films annually Operates 22 movie theaters with 182 screens in 11 provinces Major Shareholders: o Founder & CEO: YU Dong 27.1% (1) o Strategic investor: 21 st Century Fox 19.9% o Strategic investor: Fosun Group 7.7% (1) Includes 3% of options 2

4 The Chinese Box Office: A Booming Industry Chinese vs. North American box office (USD bn) Chinese Box Office North American Box Office $12.0 $ $8.0 $6.0 $4.0 $2.0 $ E 2015E China s Middle Class population to grow at 11% CAGR from 2011 to 2020 (250mm to 607mn) (1) China s entertainment market to growth at 17% CAGR from 2010 to 2015 ($59bn $138bn) (1) 37% CAGR in movie attendance growth in China from 2010 to 2013 (237mn 612mn) (2) 2013 full-year China box office of US$3.6bn, up 28% Y/Y, domestic films making up 59% of box office receipts (2) Note: Estimated growth rate of China box office is approximately 28% per year from Estimated North American box offices from are approximately consistent with 2013 (1) Erst & Young Spot on China report. (2) Source: EntGroup. 3

5 : Domestic Films Gaining Momentum 59% of total Chinese box office came from domestic films in 2013, and 63% in Q o 13 films obtained over 100m box office in Q1 2014, top 3 are domestic films o Domestic films made up 7 of the top 10 grossing films in China in 2013, up from 3 in 2012 o 33 domestic films reached 100 million RMB box office mark in 2013, up from 21 in 2012 The Chinese government continues to support the film industry with favorable policies Top performing films are generating a larger percentage of box office receipts o Top 20 grossing domestic films total box office grew significantly in 2013 o The box office revenue of top films is becoming less concentrated o Highest ROI grew from ~200% to over ~2000% 2012 Box Office of Top 20 Domestic Films: 5,047 million RMB 2013 Box Office of Top 20 Domestic Films: 8,167 million RMB Source: EntGroup. 4

6 Tremendous Growth Potential Resilience Through Economic Cycles Significant Potential for Higher Film Penetration (1)(2) Year-Over-Year Growth Percentage China box office: 2014Q1: 67.86RMB 26.3% YOY For the year ended December 31, 2012 (3) China Box Office Movie Screens-China Screen Numbers-China 42.2% 30.0% 30.6% 25.6% 16.2% 16.2% 13.7% 13.3% 63.9% 32.5% 48.4% 28.4% 41.3% 30.2% 38.7% 27.5% Total box office (US$ bn) Box office per capita (US$) (4) Attendance per capita Year No. screens per million of population (4) Source: EntGroup, a PRC consulting and marketing research firm focused on media markets and a member of the ComInsight Group (1) Exchange rate is calculated as the average rate between 1/1/ /31/2012 (2) Chinese statistics are for urban areas only and China box office refers to China mainland box office only, assuming Chinese urban population of 712 million in 2012 (3) North America statistics (4) India 2010 statistics 5

7 Bona: The One-Stop Investment in the Chinese Film Market Vertically integrated business model takes full advantage of the box office growth The Chinese Film Industry Value Chain Vertically Integrated Business Model Mirrors the Flow of the Industry Value Added Tax 3% Special Government Fund 5% Film Investment & Production Distributors 4% - 6% Producers 34% - 38% Movie Theaters 50% Talent Agency Talent Agency Film Distribution Film Distribution Theater Circuits 1% - 2% Movie Theaters Movie Theaters 6

8 Over the past 13 years, all Bona films received theatrical distribution Number of Films Produced in China Industry Landscape: Distribution Quantity Domestic Films Exhibited Domestic Films Produced Bona Films Huayi Films Enlight Films Films without theatrical distribution can only aim for online / TV distribution Source: EntGroup. Note: Bona, Huayi and Enlight film numbers refer to numbers of distributed films in the respective years. 7

9 Industry Landscape: Distribution Market Share Five Year Domestic Film Distribution Market Share Comparison 33% % 22% Bona has a track record of strong distribution market share; fluctuation largely caused by financial constraints 21% 21% 17% 17% 14% 14% 14% 11% 7% 8% 10% 6% 4% 3% 5% 8% 11% 3% 6% 1% 0% China Film Group ( * SOE) Source: EntGroup * SOE - State Owned Enterprise 8

10 Industry Innovator: Bona Noah Film Investment Fund 1BN RMB film fund drastically enhances Bona s production funding in 2014 & beyond Bona Noah Film Investment Fund : 1BN RMB Bank Loans (proposed at ~RMB 500 million) Bona s Stake: 30% Outside Investor s Stake: 70% Bona is both General Partner and Limited Partner First fund of its kind and scale in the Chinese film industry Fund used to finance Bona s film productions in the next 2 years o o o Annual production budget will increase from ~200 million RMB to over 500 million RMB Bona will have IP rights to all projects backed by the fund and will receive distribution revenue from all projects Fund closed in about 3 weeks due to investor enthusiasm o First investment made in The Man From Macau, which has already generated over RMB 520 million in domestic box office receipts 9

11 Bona Business Strategy Aim to become China and World s leading content provider in Multi-Screen Era Hong Kong Productions Dominant position in Hong Kong director resources Mainland China Productions New Director, New story and New Marketing strategy Co-Productions LOI with Fox and Universal and 5 ongoing projects; News Corp. strategic investment TV Drama Rich resources and experience from film production Traditional & New Marketing Strategy Webisodes Well-know brand and film customer base Theatrical Exhibition Internet & Mobile Devices Exhibition Foreign Distribution 22 Bona theaters to date, with distribution team cover all major cities Long-time partnerships with leading online platforms and new media websites Worked with 168 foreign distributors; potential to greatly expand in North America & Europe in addition to South East Asia 10

12 Unparalleled Production Resources Master Teams Tsui Hark, The Taking of Tiger Mountain; Sword Master Derek Yee, I Am Somebody; The Sword Master Wai Keung Lau, The Man from Macau 2 Jing Wong, The Man from Macau 2 New Age Directors Hollywood Partners Cao Bao Ping, The Dead End Han Han, Duckweed Hui Min, To Lhasa 4 ongoing co-production projects with Fox International Productions and 1 with Universal Pictures & Working Title Films: Disclosed projects include Bride Wars and four other projects. 11

13 Control of IP Provides Tremendous Revenue Potential Films with over 100 titles and adding ~10+ titles / year Box Office New Media On-air Channels TV Series Webisodes New Devices (SuperTV, BesTV, Etc.) Theme Parks Games Merchandise Traditional Revenue Streams New / Future Opportunities 12

14 2014 Selected Film Slate Robust pipeline financed by Bona Noah Film Fund that also brings in distribution revenue 2014 Q Q Q Q 圣杯神器 : 骸骨之城 The Mortal Instruments: City of Bones 澳门风云 The Man From Macau $ 盗马记 Horseplay $$ Jun 窃听风云 3 Overheard 3 $$ 为奴十二年 12 Years a Slave Jul Aug Sep 大宅男 My Geeky Nerdy Buddies 空中营救 Non-stop 后会无期 Duckweed 白发魔女传之明月天国 The White-Haired Witch 庞贝末日 Pompeii $ $$ $ $$ 一代宗师 (3D 版 ) The Grandmaster 3D(North America Version) 不法之途 ( 暂 ) $ The Dead End (Tentative) $ Oct 夜半奇谭 ( 暂 ) Midnight Fantasy (Tentative) 智取威虎山 Dec The Taking of Tiger Mountain Feb Mar Apr May Jul 澳门风云 2 The Man from Macau 2 新娘大作战 Bride Wars 暴疯语 Insanity $ $ $$ $$$ $ 神秘宝藏 Secret Treasure $$ 我是路人甲 I Am Somebody $$ 三少爷的剑 The Sword Master $ Indicates budget level *All release dates are tentatively planned and are not considered as official release dates. 13

15 Movie Theaters: National Expansion Footprint National Footprint Theaters: 22 open; 18 planned Screens (12/31/2013): 182 Planned theater openings (2014): 6-10 Theaters Expected by 12/31/15: 40 Mature Theaters New Theaters Newly Signed Projects Geographic Diversification 11 out of 34 Provinces Modern Asset Base 8 Screens / Theater Avg. 100% Stadium Seating Avg. Seat Capacity ~1,100-1,200 Avg. Capex / Theater: ~RMB25mm Baotou Beijing Taiyuan Tianjin Shijiazhuang Zibo Xi An Suzhou Nanjing Shanghai Heifei Wuhan Ningbo Fenghua Chongqing Changsha Xiamen Liuzhou Dongguan Shenzhen Sanya 14

16 Talent Agency: Important Growth Opportunity Around 30 talents currently under the Bona brand name o Mostly second-/third-tier talents to fully capture future growth opportunities Wu Chenjun Liu Zhibing Important to the Bona brand name Significant synergies in film marketing and movie theater promotions Li Xinru Yuan Quan Meaningful growth opportunities going forward Qi Ji Li Fei er Huang Yi Gao Hu Lan Zhenglong Fan Yichen Yan Qikuan Nie Yuan 15

17 Financial Overview 16

18 Financial Overview: 5-Year P&L Business Diversification Expected to Support Steadier Future Growth (USD MM) Revenue Growth% % % % % % Net Income (Loss) Growth% ,275% (4.2) % (1.6) % EBITDA % Rev % (3.5) (7% ) % 4.3 3% % Adj. Net Income (Non-GAAP) Growth% % % % 3.2 (82%) % Adj. EBITDA (Non-GAAP) % Rev % % % 9.1 6% % 2012 performance impacted by release timing and performance of key films 17

19 Segment Gross Profit and Margin Segment Gross Profit Breakdown (US$ mm) and Margin (%) Film distribution 39.4% 38.9% 36.3% 37.9% % % 23.1 Film investment and production 35.9% 21.8% 20.8% 21.1% 13.2% % % of Seg, Profit 68.8% 77.8% 56.2% 62.1% 45.1% 34.0% 23.4% % of Seg, Profit 31.2% 20.4 % 16.5% 11.2% 11.5% 12.7% 57.7% Movie theater 56.1% 56.6% 53.1% 35.5 N/A N/A Talent agency N/A % of Seg, Profit N/A N/A 23.5% 24.6% 42.2% 52.4% % of Seg, Profit N/A 1.8% 3.8% 2.1% 0.9% 0.9% Source: Audited financial statements from 2008 to

20 Balance Sheet Review Balance Sheet Overview Diversified Debt Structure Maximizes Flexibility Total Amount Due by Dec 31, 2013 Due by Dec 31, 2014 Bank Borrowing US$80.7 M US$60.7 M US$20.0 M Other Borrowing US$4.1 M US$7.7 M -- (USD mm) 31-Mar Dec Sep Jun Mar-13 Cash & Cash Equivalents* Bank Borrowing Other Borrowing Total Debt Net Debt LTM Adjusted EBITDA Total Assets Total Liabilities Debt Asset ratio *Note: Include restricted cash. 19

21 2014 Q1 Financial Overview 2014 Q1 Financial Key Statistics Robust Quarterly Growth (USD MM) Revenue Growth% 2014 Q % 2013 Q (USD MM) Segment Profit As% Total Segment Segment Margin 14Q1 13Q1 14Q1 13Q1 14Q1 13Q1 Net Income (Loss) Growth% % 0.2 Film Distribution % 38.3% 23.4% 23.1% EBITDA % Rev % 2.1 Investment & Production % 5.5% 3.1% 4.8% Adj. Net Income (Non-GAAP) Growth% % 1.2 Movie Theater % 55.1% 58.1% 57.2% Adj. EBITDA (Non-GAAP) % Rev % 3.1 Talent Agency % 1.1% 100% 100% 20

22 Experienced Senior Management Team Leaders in Film and Entertainment in China and Internationally Dong Yu Founder, Chairman and CEO Jeffrey Chan Director and COO Over 16 years of experience in film distribution and entertainment The only distributor with education from Beijing Film Academy First distribution licence owner among non-state owned film companies Over 20 years of experience in the film distribution and entertainment industry Actively involved in the development of Hollywood adaptations of Chinese movies such as The Departed and Confession of Pain Amy Xu CFO Hao Zhang VP, Domestic Distribution Business Over 20 years experience in financial reporting, treasury and capital markets Former Financial Controller at Microsoft China, Autodesk, StarTV, and Head of Accounting at Hony Capital More than 8 years experience in audit and consulting with Big 4 accounting firm Over 20 years of experience in film distribution and movie theater operations Xi An Film Corporation and Xi An Chang an Cinema Chain veteran 21

23 Key Takeaways Leading vertically integrated film company in China Only U.S.-listed Chinese film producer Key player in entire industry value chain, taking full advantage of the Chinese film market boom Unparalleled industry resources across geographies - Strong working relationships with directors and production teams across Hong Kong and mainland - Unique relationship with Fox that facilitates co-production and future cooperation Well-established platform to diversify stake and consolidate resources 1BN RMB Bona Noah Film Production Fund greatly enhances production ability & reduces risks Innovative model that attracts resources and profits from distribution revenue and IP opportunities Influential strategic investors, including Fox and Fosun Group Benefiting from the best industry names in international film production and real estate Significant upside in future synergies 5 Large Market Growth Opportunities Rapidly growing film and entertainment market in China: average 30% growth per year Second largest film market worldwide: replaced Japan in 2012; expected to exceed US in

24 Connect with Us! Bona Investors WeChat Group Bona Official WeChat Group 23

25 Agenda Page THANK YOU For Additional Information, Please Contact: [ C L I E N T N A M E ] Peng Li Don Markley Bona Film Group Limited The Piacente Group Tel: ir@bonafilm.cn bona@tpg-ir.com