HT MEDIA LIMITED Investor Presentation 1
Cautionary Statements Certain statements in this presentation may be forward-looking statements. Such forward looking statements are subject to risks and uncertainties like regulatory changes, local political and economic developments, technological risks and many other factors that could cause our actual results to differ materially from those contained in the relevant forward-looking statements. HT Media Group will not, in any way, be responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. Disclaimer: All external data used in the report have been taken from publicly available sources and discrepancies, if any, are incidental and unintentional. 2
Industry 3
Growth Potential of Media & Entertainment (M&E) Industry in India Ad spend (% of GDP) 0.9% 0.7% 0.8% 0.7% 0.8% 0.4% 0.5% 0.7% 0.9% 0.4% 0.3% US Canada Australia Brazil UK Italy France Germany Japan China India Print cover price (PPP USD per month) 21 11 33 29 20 29 25 29 20 6 6 US Canada Australia Brazil UK Italy France Germany Japan China India Source: BCG-CII report, 2015 Huge scope in India backed by low penetration of advertising coupled with lower cover price and higher GDP growth forecast 4
Growth of M&E Industry in India : 2011 ~ 2021 Advertising revenue (Rs ‘000 Cr) Print ad revenue (Rs ‘000 Cr) CAGR 12.0% CAGR 15.3% CAGR 7.6% CAGR 8.0% 108 30 28 93 25 80 14 15 16 18 19 20 22 23 69 60 30 33 36 41 47 53 2011 2012 2013 2014 2015 2016 2017P 2018P 2019P 2020P 2021P 2011 2012 2013 2014 2015 2016 2017P 2018P 2019P 2020P 2021P CY CY Source: KPMG India – FICCI, Indian Media and Entertainment Industry Report, 2017 The growth trajectory of M&E is set to accelerate with print forming 27% of the advertising pie 5
Radio and Digital Ad Revenue Growth Projections : 2016 - 2021 Digital Ad revenue (Rs ‘000 Cr) Lowered Internet usage costs leading to more frequent consumption Digital 29 Developing digital infrastructure 8 CY 2016 CY 2021P Operationalization of new stations in Radio Ad revenue (Rs ‘000 Cr) existing and new cities Radio 2016 5 2 Introduction of new genres CY2016 CY 2021P Source: KPMG India – FICCI, Indian Media and Entertainment Industry Report, 2017 Exponential growth expected in Radio and Digital 6
Current Environment and Trends • GDP softened in FY’17 to 7.1% after increasing continuously for 2 years Macros • CPI inflation on a downward trajectory from double digits in FY’14 to low single digit • Gradual decline in interest rates over past 5 years • Sensex on upward trajectory from ~18k to 31k over last 5 years • • Demonetization Creation of Monetary Policy committee Reforms Recent • GST (Goods & Service Tax) • Implementation of Insolvency and • RERA Bankruptcy code Despite recent hiccups, M&E industry still poised for long term growth • Government reforms in the longer term expected to boost the growth • Lower Interest rate and lower inflation expected to continue • Favourable demographics favouring higher consumption • GST beneficial for long term • Expectations that suppressed spends on advertising in recent times will release in a big way going forward • Strong rupee helps maintaining lower input cost *Source: Bloomberg, BSE 7
Overview of HT Media Group 8
The HT Story – Enriching and Empowering India 2007 2015 2000 1924 Radio license 5 new editions 2010 acquisition in launched with Business newspaper inaugurated by phase 3 spectrum localization focus launched along with Mahatma Gandhi auction livemint.com and foray into hindustantimes.com 1960 education 2005 business; HT Mumbai Literary magazine launched launched HMVL IPO 1924 2005 2013 1992 1996 2000 2004 2015 2016 1964 2006 2013 Children’s magazine Management 2008 launched Entry into Radio 2004 1936 school business HT Media launched Ltd listed Hindi daily Job and social launched networking portals launched Our evolution is marked by building lasting and trustworthy businesses in print, radio, digital and education sectors 9
Strong Brand Portfolio across Segments Content Pan-India content distribution footprint across traditional and new age channels 10
Large Consumer Base 4.5mn in India 304k in India 14.7mn in India 250k exclusive readers 8.1mn in UP & Uttarakhand 2.3mn in Delhi NCR 4.4mn in Bihar 1.4mn in Mumbai 1.3mn in Jharkhand 100mn 18mn 50mn 8.5mn 32mn 33mn Source: IRS 2014, Google Analytics (March 2017), RAM data (Mar 2017) for 4 metros and estimates for 2 metros, radio listenership is excluding UP 11
Financial Performance: Consistent Track Record Consolidated Revenue (Rs Cr) 1,810 2,076 2,142 2,363 2,457 2,658 2,682 1,076 1,247 1,380 1,454 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 Consolidated EBITDA (Rs Cr) 528 475 479 422 376 366 362 289 214 205 102 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 Note: All figures are reported consolidated financials for HT Media Ltd 12
Key Focus: Operational Excellence to Improve Profitability Total Cost Productivity Zero Based Budgeting • Activity Based Evaluation • Costs and revenue revisited ab intio • Identification of Cost levers • Challenge all existing KPI’s • Process Efficiencies • Cost savings on Sustainable basis Yield Cost Restructuring • Close monitoring • Complete revamp of cost structure across expense • Mix management heads • Maximise returns on limited • Achievement of the optimal inventory mix Operating margin improved by 2.1% from FY’13 (17.6 %) to FY’17 (19.7 %) We have delivered margin expansion on the back of continued focus on cost and yield 13
Prudent Allocation of Capital Key Investments in Recent Past • Integrated Newsroom & Content Management System (CMS) • Capacity and quality enhancement across Hindi markets • Continued outlay on investment behind copies into relevant markets • Investment in digital assets • Deepening reach in Radio markets through fresh licences Convert profitable growth to cash efficiently and prudent allocation of capital to drive shareholder returns 14
Our Businesses 15
Our Businesses 1 2 Print Radio English #2 15 #1 #2 newspaper Hindi FM radio in Delhi for daily of in Delhi # stations 350+ India in all across India weeks * Business segments 3 4 Digital Education Job portal 6500+ 215 MN Digital News Students Management Marketing websites Education associated pageviews @ School tutorials with us Movie review Average Issue Readership (IRS 2014) * RAM data, 2017 # RAM data, Week 14,2017 @ Google Analytics, Mar 2017 16
Market Leadership across Brands 1 53% of 2 1 2 competition 1 2 3 Largest in 2 nd largest in India’s no.1 1 20% ahead of competition Delhi Mumbai Trusted 2 Punjab NCR Punjab & Media Uttarakhand 2 Chandigarh 83% of leader Chandigarh Brand* Delhi Uttar Pradesh Bihar 1 2 3 India’s no. 1 No.1 in No.1 in Jharkhand Trusted Gangetic Belt Bihar and Mumbai Media Brand* Jharkhand 1 2 46% ahead of competition 1 20% ahead of 67% competition 3 2 1 of leader Ranked no.1 51% 250k Media Brand # Old markets Readership Exclusive New markets from nccs a1 Readers Source of readership : IRS 2014, * Brand Trust Report India Story 2017, A study by TRA Research # Brand-o-meter Survey, pitch Leadership position is an enabler for yield led growth 17
Print: Focused Segment Specific Strategy 1 Focused deployment of copies to expand and Maintain copy leadership consolidate footprint Higher wallet share in key markets Persistent investment in copies in UP Continued superiority on product offerings Leveraging the #1 position in Bihar and Customized customer centric solutions Jharkhand Stature building through large brand Product excellence to drive differentiation initiatives and salience #1 in Pan India presence through Unique product proposition leading to North OneIndia alliance strong loyalty with readers #1 in Overall readership is 1.5x of East Niche product segmentation targeting next largest competitor #2 in Mumbai higher yield from customers Dominant readership across #1 in critical demographics : NCCA South Redesigned to broadsheet to gain better AB and youth revenue Source of readership : IRS 2014 18
Radio: Expanding Reach and Listenership 2 159 117 99 93 78 • 18mn Listeners in 6 Metros • Leader in Delhi, Mumbai and Kolkata FY'13 FY'14 FY'15 FY'16 FY'17 Revenue (Rs Cr) 36.1% 26.3% 25.1% 24.7% • 14.8% 8.5mn listeners in Delhi and Mumbai • First ‘Cool Retro’ Station of India with music from 70-90s FY'13 FY'14 FY'15 FY'16 FY'17 EBITDA Margin (%) Source: RAM data (Mar 2017) for 4 metros and estimates for 2 metros 19
Digital: Growing Rapidly across Media Content and Internet 3 151 140 104 76 54 FY'13 FY'14 FY'15 FY'16 FY'17 Revenue (Rs Cr) Media Content Internet • Shine is 2 nd largest Job Portal in India • 22mn candidates Digital Quotient : Social & Mobile marketing solutions 20
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