FORWARD-LOOKING STATEMENTS This presentation and subsequent discussion contain certain forward- looking statements with respect to the financial condition, results of operations and business of Clear Media as well as our current expectations, consumptions, estimates and projections about our industry. All statements other than statements of historical fact, including the statements under the heading “Outlook”, are forward-looking statements. These forward-looking statements represent Clear Media’s current expectations or beliefs concerning future events and involve 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. We do not intend to update or otherwise revise the forward-looking statements in this presentation, whether as a result of new information, future events or otherwise. You should not place any undue reliance on any forward-looking statements.
INTRODUCTION Joseph Tcheng Chairman
INTRODUCTION Leader in bus shelter advertising industry in China Operate 47,000 panels Nationwide network in 24 cities Market share of more than 70% in key cities More than 400 sales personnel servicing both customers and their advertising agencies 4
FY16 RESULTS HIGHLIGHTS (RMB’M) FY15 FY16 YOY% Turnover 1,486 1,608 +8.2% EBITDA 644 701 +8.9% EBIT 354 376 +6.2% Net profit 228 243 +6.4% Basic EPS 0.4223 0.4484 +6.2% (RMB) Final DPS 16 17 +6.3% (HK cents) Reporting currency changed to RMB for more precise reporting Turnover grew +8.2% in challenging operating environment EBITDA margin expanded marginally to 43.6 % (2015: 43.3%) EPS grew +6.2% Final dividend of HK 17 cents (2015: HK 16 cents) 5
FINANCIAL REVIEW Teo Hong Kiong Chief Financial Officer
FY16 CONSOLIDATED INCOME STATEMENT (RMB’M) FY15 FY16 YoY% Turnover 1,486 1,608 +8.2% Cost of sales, excluding amortization (554) (586) +5.9% (289) Operating expenditure, excluding depreciation & (321) +10.9% amortization 644 EBITDA 701 +8.9% (290) Depreciation & amortization (325) 12.3% 354 EBIT 376 +6.2% 228 Net profit 243 +6.4% 0.4223 0.4484 Basic EPS (RMB) +6.2 % 16 Final DPS (HK cents) 17 +6.3 % *Reporting currency changed to RMB for more precise reporting 7
COSTS & EXPENSES ( RMB ’ M ) FY15 FY16 YoY% Rental 319 357 +11.8% Maintenance 122 120 -1.8% Electricity 59 55 -5.3% Sales & Cultural Tax 54 54 +0.2% Direct operating costs 554 586 +5.9% S, G & A & other expenses 289 321 +10.9% Total costs & expenses, excluding 843 907 +7.6% depreciation & amortization Increase in rental due to increase in panels & less rental reversal Decrease in electricity cost due to increased use of LED lighting Decrease in maintenance cost due to cost control & adjustment of subsidy ratio Increase in S, G & A expenses due to salary increase, increased office rental & higher bad debt provision 8
TRADE RECEIVABLES (RMB’M) Dec 31, 2015 Jun 30, 2016 Dec 31, 2016 Current – 90 days 290 340 291 91 – 180 days 199 189 235 Over 181 - 360 days 94 106 89 Over 360 days 19 24 34 602 659 649 Less: provision for impairment (26) (30) (37) 3rd party receivables 576 629 612 Turnover days (time wt. avg.) 117 days 120 days 119 days Due from GWH/WHA/WSI 81 days 98 days 77 days (time wt. avg.) 9
INCREASE IN CASH FLOWS (RMB’M) FY15 FY16 YoY% Net cash flows from operating activities 449 496 +10.5% Net cash flows used in investing activities (414) (300) -27.5% Net cash flows used in financing activities (303) (266) -12.0% Net decrease in cash & cash equivalents (268) (70) -73.9% Net cash & cash equivalents at the beginning of period 840 578 effect of foreign exchange rate changes, net 5 7 +28.2% at the end of year 578 514 -11.0% 10
REVIEW OF STRATEGY & EXECUTION Harrison Zhang Chief Operating Officer
FY16 HIGHLIGHTS Moderating economic growth Operating environment remained challenging & volatile Late order confirmation Last minute order cancellation Advertisers from traditional industries stayed cautious with advertising spend Growth driven by increase in bus shelter panels 12
REVENUE BY INDUSTRY FY15 FY16 IT – (smartphone: 9% / 16%) 14% 26% – (mobile apps: 5% / 10%) E-commerce 16% 23% Entertainment 12% 10% Beverages 11% 7% Food 10% 7% Realty 9% 6% Business/Consumer services 8% 4% Fashion & ornaments 6% 4% Telecommunications 5% 3% Medical institutions/Devices 4% 2% 13
KEY STRATEGIES Expand strategically and selectively Focus on customer relations management Maintain high product quality & develop innovative solutions Adhere to strict financial discipline and improve efficiencies 14
POWER OF OUR NETWORK (For the year ended 31 December 2016) Yield Avg (in RMB) Panel No. Sales Key cities +9.2% +9.7% +19.8% Mid-tier cities -10.3% +5.2% -5.9% TOTAL +1.2% +7.1% +8.2% 15
OUTLOOK Operating environment expected to remain challenging Mixed performance from customers across different industries High level of activities from the e-commerce, smartphone & mobile application Expect capital expenditure at similar scale to 2016 level Optimistic in the long-run given growth in consumer spending & continuing urbanization 16
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