Management Presentation SHREE ASHTAVINAYAK CINE VISION LTD.
Table of Contents Investment Highlights  -  2 Company Overview  -  4 Industry Overview  -  15  1
Investment Highlights 2
Investment Highlights <ul><ul><li>Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8 bill...
Company Overview 4
SACVL Corporate Overview <ul><ul><li>Incorporated in Mumbai on 23rd October 2001 </li></ul></ul><ul><ul><li>Film Productio...
<ul><ul><li>Positions the Company higher on the learning curve </li></ul></ul><ul><ul><ul><li>Increased knowledge of the m...
Management Team 7
Popular Stars Signed By The Company Salman Khan Akshay Kumar Ajay Devgan Sanjay Dutt Govinda Sushmita Sen Bipasha Basu Lar...
Business Model Focus: High entertainment value and mainstream Hindi films Target audience:- All segments Repertoire: - Fam...
De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distribution Production Di...
De-Risked Model <ul><li>The recipe of entertainment: </li></ul><ul><li>Script </li></ul><ul><li>Screenplay </li></ul><ul><...
De-Risked Model De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Distribution Multiple...
De-Risked Model De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distributi...
De-Risked Model De-risked model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distributi...
Industry Overview 15
India Entertainment Industry <ul><ul><li>Media and entertainment industry is valued at USD 7.8 billion and is expected to ...
India Entertainment Industry <ul><ul><li>Government initiatives have given a boost to the Film industry </li></ul></ul><ul...
Some Projects in Pipeline Detailed Capex Spend – Production Pipeline 18 $38.6 Total   6.0 Untitled – David Dhawan 6 7.0  U...
Track Record of  Strong  & Consistent Growth Total Income  (USD million) FY2007 Revenue Composition 2005–07 CAGR: 91% Net ...
Selected Financial Data Total Income EBITDA Fiscal Year ending 31 March EBITDA Margin 6.6 15.3 EBIT EBIT Margin (US$. mm) ...
Capitalisation Actual  (as at 30 September 2007) (Rs. m) (US$ m)  (1) Total Cash 201.8 5.0 Total Shareholders' Funds 989.3...
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  1. 1. Management Presentation SHREE ASHTAVINAYAK CINE VISION LTD.
  2. 2. Table of Contents Investment Highlights - 2 Company Overview - 4 Industry Overview - 15 1
  3. 3. Investment Highlights 2
  4. 4. Investment Highlights <ul><ul><li>Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8 billion in 2010* </li></ul></ul><ul><ul><ul><li>Change in demographic profile of India </li></ul></ul></ul><ul><ul><ul><li>Increased spending on entertainment </li></ul></ul></ul><ul><ul><ul><li>Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008* </li></ul></ul></ul><ul><ul><li>Company is one of the prominent film distributors in Mumbai </li></ul></ul><ul><ul><li>Integrated presence across the value chain gives the Company a de-risked operating model </li></ul></ul><ul><ul><li>Strong track record in the production and distribution business – proven execution skills and understanding of the market </li></ul></ul><ul><ul><li>Strong pipeline of releases in FY’08 and FY’09 </li></ul></ul>*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007 3
  5. 5. Company Overview 4
  6. 6. SACVL Corporate Overview <ul><ul><li>Incorporated in Mumbai on 23rd October 2001 </li></ul></ul><ul><ul><li>Film Production </li></ul></ul><ul><ul><li>Film production is considered as the key source of revenues </li></ul></ul><ul><ul><li>Built capabilities for cost effective film production </li></ul></ul><ul><ul><li>Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya” </li></ul></ul><ul><ul><li>10 movies intended to be produced in FY’08 and FY’09 </li></ul></ul><ul><ul><li>Film Distribution </li></ul></ul><ul><ul><li>Distributed 31 movies over past three years </li></ul></ul><ul><ul><li>Distribution extends chain of integration & strengthens margins </li></ul></ul><ul><ul><li>Creates presence and increases visibility in the market </li></ul></ul><ul><ul><li>Prominent distributor in the Mumbai territory, recently entered the Delhi territory </li></ul></ul><ul><ul><li>Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus </li></ul></ul><ul><li>De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release </li></ul><ul><ul><li>Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc </li></ul></ul><ul><ul><li>Revenues generated from the Mumbai territory go directly to the bottom-line </li></ul></ul>5
  7. 7. <ul><ul><li>Positions the Company higher on the learning curve </li></ul></ul><ul><ul><ul><li>Increased knowledge of the market </li></ul></ul></ul><ul><ul><li>Presence gives it a competitive advantage over other production houses </li></ul></ul><ul><ul><li>Stronger bargaining power with the producers and exhibitors </li></ul></ul><ul><ul><ul><li>Strong and continuous presence in the market </li></ul></ul></ul>Value Chain Production <ul><li>Average operating margin of 25% </li></ul><ul><li>Segment is the key source of revenues </li></ul><ul><li>Corporate structure helps in procuring institutional funding and insurance facility </li></ul>Distribution <ul><li>Good relation with production houses ensures continuous availability of quality films </li></ul><ul><li>Distributing films from other banners, provides critical market knowledge besides revenues </li></ul>Combined Leverage 6
  8. 8. Management Team 7
  9. 9. Popular Stars Signed By The Company Salman Khan Akshay Kumar Ajay Devgan Sanjay Dutt Govinda Sushmita Sen Bipasha Basu Lara Dutta Kareena Kapoor Some directors working with the company Priyadarshan Rohit Shetty Aneez Bazmee Sanjay Gadhvi David Dhawan Abbas - Mastan <ul><li>Hera Pheri </li></ul><ul><li>Garam Masala </li></ul><ul><li>Hungama </li></ul><ul><li>Golmaal </li></ul><ul><li>Zameen </li></ul><ul><li>No entry </li></ul><ul><li>Pyar To Hona Hi Tha </li></ul><ul><li>Deewangee </li></ul><ul><li>Dhoom 2 </li></ul><ul><li>Dhoom </li></ul><ul><li>Maine Pyar Kyun Kiya? </li></ul><ul><li>Mujhse Shaadi Karogi </li></ul><ul><li>Coolie No. 1 </li></ul><ul><li>Haseena Maan Jaayegi </li></ul><ul><li>Biwi No. 1 </li></ul><ul><li>Hero No. 1 </li></ul><ul><li>Aitraaz </li></ul><ul><li>Baazigar </li></ul><ul><li>Humraaz </li></ul><ul><li>Khiladi </li></ul><ul><li>Soldier </li></ul>8
  10. 10. Business Model Focus: High entertainment value and mainstream Hindi films Target audience:- All segments Repertoire: - Family entertainers, thrillers, comedy and romantic films Movies With Mass Appeal De-risked model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distribution Production Distribution Production Distribution 9
  11. 11. De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distribution Production Distribution Production Distribution De-Risked Model <ul><li>Star cast:- Bankabality and market value of the star </li></ul><ul><li>Banner/Producer:- Adequate financial resources to complete the movie on time </li></ul><ul><li>Script/Director:- Strength of the script and track record of the director </li></ul><ul><li>Music director: - Track record of the music director </li></ul><ul><li>Marketing capability of the producer </li></ul>10
  12. 12. De-Risked Model <ul><li>The recipe of entertainment: </li></ul><ul><li>Script </li></ul><ul><li>Screenplay </li></ul><ul><li>Stars </li></ul><ul><li>Salability </li></ul>De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distribution Production Distribution 11 Production Distribution
  13. 13. De-Risked Model De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Distribution Multiple stream of revenues + Focus on cost + Bankable stars/directors + Cluster bombing Production 12
  14. 14. De-Risked Model De-Risked Model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distribution <ul><li>Pre-sells all the territories (except Mumbai) and other rights of the movie before the release </li></ul><ul><li>Recovers all costs related to movie </li></ul><ul><li>Revenues generated from Mumbai territory go directly to the bottom-line </li></ul><ul><li>Company recovers all the money invested in the project even before the movie is released </li></ul>Mumbai Territory Box Office 25-35% In-Cinema Ads 2.5% Satellite/ Cable Rights 18% Overseas Theatrical Rights 5% Music Rights 7% Video Rights 8% Box Office from other territories 25-35% Profits Cost of Production Recovered through pre-sale Revenue Pie (Production segment)* *Source: Company business model 13
  15. 15. De-Risked Model De-risked model 5 Parameter Test Movies With Mass Appeal Active Risk Diversification Production Distribution Focus on cost + cluster bombing <ul><li>Reverse calculation of revenues No of screens that movie can be screened on X Percentage occupancy X Per ticket cost X First 3 days revenues = Total revenues </li></ul><ul><li>Total revenues /1.2 = price of movie rights </li></ul><ul><li>Discounted higher if bought at an earlier stage </li></ul><ul><li>The exposure of movie would be maximum in the first week for revenue maximization </li></ul>14
  16. 16. Industry Overview 15
  17. 17. India Entertainment Industry <ul><ul><li>Media and entertainment industry is valued at USD 7.8 billion and is expected to grow at 19% </li></ul></ul><ul><ul><ul><li>By 2010, the entertainment industry is expected to reach USD 18.6 billion </li></ul></ul></ul><ul><ul><li>Indian Film industry is valued at USD 1.8 billion which is expected to double by 2010 </li></ul></ul><ul><ul><ul><li>Contributes ~20% share of the entertainment industry </li></ul></ul></ul><ul><ul><ul><li>Largest film industry in the world in terms of number of movies produced </li></ul></ul></ul><ul><ul><ul><li>Country has about has 12,000, single screen theaters </li></ul></ul></ul><ul><ul><ul><li>Multiplexes are expected to grow from 328 screens in 2005 to over 1,000 screens by 2008 </li></ul></ul></ul><ul><ul><ul><li>Digitization of movies and increase in the number of screens has enhanced the movie going experience </li></ul></ul></ul>Indian Entertainment Industry 2007 Indian Film Industry Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007 16
  18. 18. India Entertainment Industry <ul><ul><li>Government initiatives have given a boost to the Film industry </li></ul></ul><ul><ul><ul><li>Industry status granted in 2001 </li></ul></ul></ul><ul><ul><ul><li>100% FDI allowed via automatic route </li></ul></ul></ul><ul><ul><li>Industry Financing </li></ul></ul><ul><ul><ul><li>Prior to receiving industry status </li></ul></ul></ul><ul><ul><ul><ul><li>Difficult to acquire finance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Finances generally came from unorganized sector, which involved high costs </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Directors pre-sold the movie rights at ‘mhoorat’ stage, at a huge discounts </li></ul></ul></ul></ul><ul><ul><ul><li>Post receiving industry status </li></ul></ul></ul><ul><ul><ul><ul><li>Companies can go to public to raise money </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Eros International admitted to AIM in November 2006 </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Banks have started financing movies </li></ul></ul></ul></ul>17
  19. 19. Some Projects in Pipeline Detailed Capex Spend – Production Pipeline 18 $38.6 Total   6.0 Untitled – David Dhawan 6 7.0 Untitled – Priyadarshan 4 10.0 Untitled – Anthony D'souza 5 6.8 Untitled – Anees Bazmi 3 5.8 Untitled – Rohit Shetty 2 3.0 Untitled – Shivam Nair 1 US $ Million Movie Title - Director
  20. 20. Track Record of Strong & Consistent Growth Total Income (USD million) FY2007 Revenue Composition 2005–07 CAGR: 91% Net Income Margin FY2006 Revenue Composition Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus 19
  21. 21. Selected Financial Data Total Income EBITDA Fiscal Year ending 31 March EBITDA Margin 6.6 15.3 EBIT EBIT Margin (US$. mm) (2) For 6 months ending 30 September (US$ mm) (1) 0.2 2.1% 0.1 2.0% 11.3 74.1% 3.1 20.2% (US$ mm) <ul><li>Rs.40 = US $1.00 </li></ul><ul><li>Rs 44 = US $1.00 </li></ul>24.4 20.2 82.6% 5.5 22.7% 10.7 8.8 82.2% 2.1 19.7% 7.9 5.9 83.1% 2.7 37.7% Net Income Net Margin 0.1 1.0% 1.9 12.0% 3.5 15.0% 1.3 12.6% 1.7 23.9% Source: Company’s Annual Report & January 2007 IPO Prospectus 20 2005 (audited) 2006 (audited) 2007 (audited) 2006 (unaudited) 2007 (unaudited)
  22. 22. Capitalisation Actual (as at 30 September 2007) (Rs. m) (US$ m) (1) Total Cash 201.8 5.0 Total Shareholders' Funds 989.3 24.7 Total Capitalization 1,061.5 26.5 Total Debt 72.2 1.8 Unsecured Loans - Secured Loans 72.2 1.8 <ul><li>Rs.40 = US$1.00 </li></ul><ul><li>Proforma for $30mm FCCB minus 4% offering costs </li></ul>- Proforma (as at 30 September 2007) (Rs. m) (US$ m) (1) 1,352.0 33.8 989.3 24.7 2,261.5 56.5 1,272.2 31.8 1,200.0 72.2 1.8 30.0 21
  23. 23. Thank You
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