Annual Major Cineplex Group Plc. Results Briefing February 25, 29
Quarterly Results Briefing Contents 4Q8 P&L snapshots: Core revenue, EBITDA, & Net profit Revenue by business unit EBITDA growth analysis Pressure on bottom-line P&L snapshots: Core revenue, EBITDA, & Net profit Revenue analysis B/S snapshot Dividend id d & payout schedule FY9 Outlook FY9 films line-up Strategic intents: admission & concessions sales Blu-O New Delhi New capacities & Ratanathibate thib t update Key Takeaway Points 2
Financial Major Cineplex Group Plc. Review
4Q8 P&L snapshot Core business remains resilient 2,4 Core business Revenues Core business EBITDA Net profit 1,2 1,2 2, 1, 1, 1,6 1,331 1,382 8 8 1,2 6 6 456 8 4 28 4 4 2 2 124 43 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4
4Q8 P&L snapshot Growth BUs outpaced declining ones Admissions Sales 8 4 Concessions Sales Advertising Income Bowling & Karaoke Rental & Services Film Distribution 7 35 6 63 599 3 5 25 215 24 4 3 2 15 141 171 157 152 153 2 1 18 81 93 1 5 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 5
4Q8 P&L snapshot Strong EBITDA from growth in high-margin biz while expenses under control 1,2 1, Core business EBITDA High-margin concessions sales & higher rental & services income Improvement in film distribution margin SG&A under control 8 Admissions Sales 8 Concessions Advertising Sales Income Bowling & Karaoke Rental & Services 4 Film Distribution 6 4 2 28 456 7 35 63 599 6 5 4 3 25 2 +31% 3 15 141 18 2 1 171 157 152 153 +14% 81 93 +11% 215 24 1 5 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 4Q7 4Q8 6
4Q8 P&L snapshot Pressure on bottom line from negative equity income Net profit Gone thru restructuring 1,2 Turnaround expected with 1, new Management structure Revisit pricing structure 8 Bottom-line pressure 6 expected to alleviate from: Re-focusing on due 4 memberships sales 2 Lower interests expected 124 43 as cashflow to be used toward debt repayments 4Q7 4Q8 7
Financial Major Cineplex Group Plc. Review
P&L snapshot Softer from softer film line-up & business restructuring 7, Core business Revenues Core business EBITDA 3,5 3,5 Net profit 6, 5,85 5,328 3, 3, 5, 2,5 2,5 4, 3, 2, 1,5 1,639 1,542 2, 1,5 1,227 2 2, 1 1, 1 1, 1, 5 5 626 9
P&L snapshot Softer from softer film line-up & business restructuring 7, Core business Revenues 3,5 Core business EBITDA 3,5 Net profit 6, 5,85 5,328 3, 3, 5, 2,5 2,5 4, 3, 2, 1,5 1,639 1,542 2, 1,5 2 2, 1 1, 1 1, 1, 5 5 1
P&L snapshot: Revenue analysis Some BUs buck the trend despite less traffic from softer films Admissions Sales Concessions Sales Advertising Income Bowling &K Karaoke Rental &S Services 3, 1,25 2,89 Film Distributionib i 2,5 2,452 1, 935 2, 814 75 1,5 575 531 538 519 5 1, 383 339 619 611 5 25 11
3, 2,5 2, 1,5 1, 5 2,89 2,452 1,25 1, 75 5 25 531 538 935 814 519 575 383 339 619 611 P&L snapshot: Revenue analysis Softer admissions sales mostly from movements of mega blockbusters 3, Admissions Sales 2,89 2,5 2,452 2, 1,5 King Naresuan 1&2 and Harry Potter & the Order of the Phoenix dubbed as a Golden Year of cinema industry Delayed releases of King Naresuan 3 and dharry Potter & the Half-Blood Prince from 1, to FY9 further undermined the industry growth 5 King Naresu uan 2 King Nare esuan 1 Admissions Sales Concessions Sales Advertising Income Bowling & Karaoke Rental & Services Film Distribution 12
2,5 2, 1,5 1, 5 2,89 2,452 1,25 1, 75 5 25 531 538 935 814 519 575 383 339 619 611 P&L snapshot: Revenue analysis Concessions: Improving leverage on cinema traffic Strike rate 28.6% 29.3% Spendings/Bill (Bt.) 8.7 91.2 Concessions vs. Admissions sales 22% Improvement on both strike rate & avg per-bill spendings Wider menu variety Successful longer-run bucket set program Mystery Shopper in place 19% Admissions Concessions Advertising Bowling Sales Sales Income & Karaoke 3, Rental & Services Film Distribution 13
2,5 2, 1,5 1, 5 2,89 2,452 1,25 1, 75 5 25 531 538 935 814 519 575 383 339 619 611 P&L snapshot: Revenue analysis Ads industry doomed by many uncertainties -3% TV -3% radio +9% newspapers magazines -1% cinema -5% outdoor +41% -5% transit in-store-7% -8 ADEX growth by media type Nielsen Media Research 1,25 1, 75 5 25 Advertising Income 935 814 Lingering political activities & confrontation leading to airport closure with three prime ministers in one year! Softer film line-up Observance of the 1-day mourning period over the passing of Her Royal Highness Princess Galyani Vadhana in 1Q8 Admissions Concessions Advertising Bowling Sales Sales Income & Karaoke 3, Rental & Services Film Distribution 14
2,5 2, 1,5 1, 5 2,89 2,452 1,25 1, 75 5 25 531 538 935 814 519 575 383 339 619 611 P&L snapshot: Revenue analysis MJB bucks the trend by re-focusing the basics 1,25 1, 75 5 25 Bowling &K Karaoke 575 519 Revisit price structure Target segmentation Multi-tier pricing Day-part mgnt Growing contribution of F&B via new menu & menu rationalization with segment focus Operational Manual & Mystery Shopper Admissions Concessions Sales Sales 3, Advertising Income Bowling & Karaoke Rental & Services Film Distribution 15
B/S snapshot Financially fit for the economic turbulence Bt. Million Dec 31, 7 Dec 31, 8 %Chg Total assets 9,294 1% 9,669 1% 4% Total liabilities 3,672 4% 4,247 44% 16% Total equity 5,622 6% 5,422 56% -4% D/E ratio (TL/TE) 65.65 78.78 Net D/E ratio.3.37 12, 1.2 Interest-bearing debts Equity Net D/E 1, 8 8, 6,.86.79.87.85.67.57.61.62 1. 8.8.6 4,.28.31.31.3.24.26.34.37.4 2,.2 1Q5 2Q5 3Q5 4Q5 1Q6 2Q6 3Q6 4Q6 1Q7 2Q7 3Q7 4Q7 1Q8 2Q8 3Q8 4Q8. 16
Dividend & payout schedule EPS (Bahts) 1.42.71 DPS (Bahts) 15 1.5 64.64 Payout ratio 74% 9% 2H8 dividend of Bt.25 25/share XD: Apr 16, 29 Payout: May 4, 29 Full-year dividend of Bt.64/share 17
Major Cineplex Group Plc. Outlook
FY9 Outlook Films line-up Strong traffic expected to resume in FY9 FY9 25m* 25m* 14m* 1m* 18m* 14m* * Total industry estimates 125m* 9m* 19
FY9 Outlook Films line-up Strong traffic expected to resume in FY9 2
FY9 Outlook Strategic intent: Admissions Dynamism expected to help drive growth Managing Guest counts & admissions sales with dynamic pricing structure Higher ticket price on blockbusters during the first few weeks of releases Discounts during off-peak for certain locations with potential new market potentials Some privileges for advanced booking to help manage occupancy 21
FY9 Outlook Strategic intent: Concessions More relevant menu variety Continue driving up strike rate & avg per-bill spendings with: More relevant menu variety New sizing structure Products & flavors innovation Bucket set program planning Souvenirs & merchandizing
FY9 Outlook Blu-O New Delhi Grand opening scheduled in Mar-9 Club Fashion Bowling First locations in Delhi Delhi 24 bowling lanes Grand opening in Mar-9 One more location in Bangalore to follow in FY9
FY9 Outlook New capacities Expansion continues, but more cautiously FY9 New screens 35 3-4 BKK Srinakarin 5 Ratanathibate 16 Greater BKK Salaya 5 Korat 2 & Provincial Ayudhya 4 Additional screens Petchaboon 4 Amatanakorn 5 Navanakorn 4 Navanakorn 4 Thanyaburi 4 Banpong 5 TBA 1-15 New lanes 1 74 BKK Ratanathibate thib t 22 Greater BKK Ayudhya 1 & Provincial International New Delhi 24 Bangalore 28 As of Feb 29
FY9 Outlook Ratanathibate Ratanathibate Cineplex update Piling & foundation work completed Piling & foundation work completed Upfront leases expected to be booked in 3Q-4Q9
Key Takeaway Points Core business remains resilient in 4Q8 with growing business units outpaced declining ones Strong EBITDA in 4Q8 is from growth in high-margin biz while expenses being under control Pressure on bottom line from negative equity income should be alleviated as MPIC has gone thru restructuring while CAWOW refocusing on due memberships Strong traffic expected to resume in FY9 with stronger film line-up, both Thai & Hollywood 35 new provincial screens opened expected to capture demand for Thai film 3-4 new screens planned for FY9 with Ratanathibate Standalone Cineplex scheduled to open in 4Q9 26
Quarterly Major Cineplex Group Plc. Results Briefing THANK YOU
Appendix Detailed P&L Major Cineplex Group Public Company Limited Consolidated Statements of Income Bt. Thousand 1Q8 2Q8 3Q8 4Q8 Revenues Admissions 541,614 684,451 627,523 598,775 2,452,363 Concessions sales 112,268 142,645 142,211 141, 538,124 Advertising services income 229,215 211,755 216,197 156,895 814,62 Bowling and Karaoke services income 126,727 142,235 153,162 152,642 574,766 Rentals and services income 78,397 83,233 84,246 92,736 338,612 Sales of VCD/DVD and film rights 127,45 119,946 123,329 239,85 61,53 Fitness services income Total revenues 1,215,671 1,384,265 1,346,668 1,381,853 5,328,457 Costs Cost of film exhibition and theatre 51,25 599,53 566,436 535,574 2,22,88 Cost of concessions 45,239 56,194 56,69 55,453 213,495 Cost of advertising services 7,863 13,296 7,456 16,494 45,19 Cost of bowling and Karaoke services 89,39 93,391 97,316 15,47 384,793 Cost of rentals and services 42,79 46,81 47,771771 49,421421 186,72 Cost of sales of VCD/DVD and film rights 114,515 15,765 12,44 174,89 515,574 Cost of fitness services Total costs 8,39 914,5 895,992 936,88 3,547,762 Gross profits 415,281 469,765 45,676 444,974 1,78,696 Selling and administrative expenses 39,133 38,735 281,122122 36,295 1,25,285 285 EBIT 16,148 161,3 169,554 138,679 575,411 Disposal of investments 17,976 5,273 1,418 114,667 Profit on disposals of property and equipment -24,428-24,428 Other operating income 127,694 2,994 2,67 53,833 223,191 Operating profit 341,818 187,297 19,224 169,51 888,8484 Share of profit of investments - equity 91,128 51,285 7,113-48,762 1,764 Profit before interest and tax 432,946 238,582 197,337 12,739 989,64 Interest expense -23,245-21,39-26,15-17,531-88,235 Income tax -18,391-58,889-5,213-4,584-258,77 Profit before minorities 31,31 158,384 12,974 62,624 643,292 Profit attributable to minorities, net 122 1,148 1,423-19,629-16,936 Net profit 31,432 159,532 122,397 42,995 626,356 28