Corporate Presentation August 2011 0
Disclaimer The material that follows is a presentation of general background information about T4F Entretenimento S.A (“T4F”) as of the date of the presentation. It is information in summary form and does not purport to be complete. This material contains confidential information regarding and may not be reproduced or circulated, partially or completely, without the prior written consent of the T4F. Any statements, projections, expectations, estimates and plans contained in this document that do not describe historical facts, and the factors or trends affecting financial condition, liquidity or results of operations, are forward-looking statements and involve several risks and uncertainties. Such statements are based on assumptions and analyses made by the Company based on its experience and the economic climate and on market conditions and expected future events, many of which are beyond the Company’s control. No investment decision should be based on validity, accuracy or completeness of the information or opinions contained in this presentation. Under no circumstances, neither the Company nor its subsidiaries, directors, officers, agents or employees be liable to third parties (including investors) for any investment decision based on information and statements in this presentation, or for any damages resulting therefrom, corresponding or specific. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. 1
IPO Summary T4F Entretenimento S.A. Issuer Ticker Symbol SHOW3 April 13 th 2011 Listing Date Total Offering Size R$503 million (US$310 million 1 ) # Shares Offered 31,441,396 ON shares with 100% tag along ( Novo Mercado ) Price R$16.00 Offering Breakdown 37% primary / 63% secondary Geographic Allocation 60% North America; 25% Europe; 15% Brazil Use of Proceeds (i) Acquisition of companies and venues, (ii) construction of venues and (iii) geographic expansion Bookrunners 1: Assuming the exchange rate of US$1 = R$1.6207 as of May 12 th , according to Bacen. 2
Shareholding Structure Shareholding Structure CIE International Fernando Luiz Alterio Gávea Investimentos Free-Float 45.5% 12.8% 85.0% 8.0% 15.0% FA Comércio e Participações 28.1% 5.6% Stake Shareholders Direct + Indirect Fernando Luiz Alterio 31.9% 9.8% CIE International Gávea Investimentos 12.8% Shareholders’ Agreement 54.5% Free Float 45.5% 3
1. Company Overview 4
Company Overview T4F is the leading live / out-of-home entertainment promoter in South America with a diversified and verticalized business model Leading company High Growth and Our Presence Unique Industry Diversified and in live entertainment Strong Cash (Net Revenue 2010) Knowledge Verticalized Model in South America Generation 3 rd largest player 29 years of experience Net Operation Cash Promotion of multi- Brazil 66% worldwide content events Flow = 99% of Pioneer in naming rights EBITDA ( ∑ 05 -10) Argentina 20% model in 1999 Venues Operation 1.1 thousand shows Net Revenues CAGR Pioneer in online promoted /2010 12% (07-10) Food & Beverage and Chile 12% ticketing system in 2000 EBITDA CAGR with Ticketmaster Merchandising 2.8 millions tickets sold / 22% (07-10) Promotion of the most Peru 2% 2010 Ticketing Services Sustainable margins successful events in Brazil, Chile and going forward Argentina ONE AND ONLY INVESTMENT OPPORTUNITY IN THE ENTERTAINMENT INDUSTRY IN SOUTH AMERICA 5
Our Business Live Music Sport Events Theatrical Production Performing Arts U2 Madonna Cats The Phantom Stomp Cirque Du Soleil Stock Car Marcas of the Opera Metallica AC / DC Copa Montana Mini Challenge Mamma Mia Miss Saigon Blue Man Group Bodies Verticalization FOOD & BEVERAGE MERCHANDISING VENUE OPERATIONS TICKETING SERVICES Revenue Sources Food & Beverage, Sponsorships and Suites and Hospitality Private Box Office Ticketing Services Merchandising, Naming Rights Centers Events and Parking 6
Leadership Position in Live Entertainment Industry U2 Bon Jovi 3 out of the 11 largest Promoted the 2 largest shows of 360º World Tour shows of the 2010 world tour Madonna Coldplay 3 out of the 5 largest Promoted the 1 st and 5 th shows of the tour in 2008 largest shows of all tours Guns N’ Roses AC/DC Promoted 7 out of the 10 The largest largest shows of the tour show of the world tour in 2009 7
Leadership Position in Live Entertainment Industry - Almost 1,000 events 2006 - 12 cities visited - More than 1.8 million tickets sold Cirque du 2007/8 - Performance was Cirque du Soleil’s Soleil biggest box office in Sao Paulo and 6 th 2009/10 biggest international box office in 2010 2011/13 - Starting in Sep/11 in Sao Paulo Les Misérables, 10 different contents Beauty and the Beast, The only player that ever promoted Chicago, Mamma Mia, Theatrical authentic Broadway productions in the Phantom of the Opera, Plays region Miss Saigon, Cabaret, More than 3.1 million tickets sold since The Sound of Music, 1999 Sweet Charity, Cats. 12 races per season in 10 different cities Sports Third largest touring car series worldwide Events Broadcasted by TV Globo since 2000 8
Upcoming contents Live Music Roger Waters Performing Arts & Theatrical Plays The Addams Family The Witches of Eastwick 9
2. Investment Highlights 10
Investment Case Attractive Compelling business Macroeconomic model and Superior Live Entertainment Environment and Robust Management and Industry Growth Consumption Growth Expertise Massive increase in Live music: Superior business model: disposable income and higher return with lower risk Touring became expansion of consumer essential for artists base Credibility with international and domestic agents and Aggressive growth in Expenditure of privileged access to high South America in terms entertainment is extremely quality entertainment of ticket sold and correlated to consumer providers average ticket price spending 11
Positive Trends for Expenditures with Entertainment in Emerging Markets… Expenditure with Entertainment as a % of the Disposable 2010E-2015E GDP Growth (1) Income vs GDP per Capita 12.0% China 75.0% R 2 = 0.66 India 61.8% Expenditure with entertaiment as a % of disposable income R 2 (ex Argentina) = 0.81 UK Japan Cambodia 42.8% 10.0% Peru 40.8% Singapore Spain 33.8% USA Argentina Chile 32.9% New Zeland 8.0% Brazil 31.1% France Mexico Portugal 30.8% Greece Colombia 28.0% Italy 6.0% Croatia Israel 24.0% Israel Argentina 20.0% New Zeland 18.4% 4.0% 5 out of the 11 USA 17.0% Brazil UK 15.1% largest growths Mexico Croatia 15.6% in GDP are in Chile 2.0% Japan 12.1% China South America India France 12.1% Colombia Venezuela Italy 7.8% Peru 0.0% Spain 7.0% 0 10,000 20,000 30,000 40,000 50,000 Portugal 6.0% Venezuela GDP per capita in 2009 (US$ '000) 4.2% Greece -0.1% (1) In local currency real terms. Source: Euromonitor. Source: IMF – World Economic Outlook. Expenditures with entertainment are expected to significantly increase in emerging markets 12
Boom of the Live Entertainment Industry Live music has significantly increased importance in the music industry, with touring becoming essential for artists, while recorded music revenues have been shrinking Total Recorded Music Revenues vs. Total Revenues with 2009 Top Music Acts – Sales Breakdown Tickets Sold in North America (US$ billion) (US$ million) U2 12% 88% 137 13.6 13.1 12.5 Bruce 5% 95% 105 11.0 Springsteen 9.0 Album sales Britney 8.0 Tour Gross 6% 94% 90 Spears Total AC/ DC 6% 94% 86 4.6 4.2 3.9 3.6 3.1 2.8 Jonas 9% 91% 79 Brothers 2004 2005 2006 2007 2008 2009 Source: Pollstar Source: Live Nation 13
Superior Business Model EBITDA Margin (2010) Verticalization Diversification 16.7% High Ability to generate Multi-content platform revenues from multiple = reduced risk Margins 1 12.8% sources in each event 6.5% • 42% ROIC and High Returns 32% ROE in 2010 • No revenue concentration in specific content Low Risk • Increased control over the entertainment value chain Asset Light Strong Cash Flow • 99% of EBITDA between Maintenance capex = 1% Low capex and negative of net revenues; PP&E working capital Strong Cash 2005 and 2010 was represent <5% of total (sponsorships + tickets Conversion converted to cash assets sold in advance) Note(1): Largest entertainment Company in Mexico controlled by CIE 14
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