Pitch from the TMT team

1. Technology, Media and Telecom Team: Amir, Andrew, Christian, Ignas, Ollie, Yuhang

2. Media sector02
Company analysis03
Company financials04
Valuation models05
Agenda Brief Company Overview01
ESG, SWOT Investment Rationale06

3. Brief Company Overview

4. • Disney and Disney channels
• ESPN – sports streaming network
• National Geographic – history and geography documentaries
Media Networks
01
• Disney Theme Parks
• Disney Cruises and Resorts
• Disney Products, Toys, Fashion, Brands
Parks and Products
02
• Walt Disney Pictures
• Marvel and Lucasfilm
• Twentieth Century Fox
.
Studio and Entertainment
03
• Disney+
• Hulu
• ESPN+
Direct to Consumer
04
Business Segments

5. Media Sector

6. Sector Analysis
Screen
Content
Diversified
Organisations
Print
Publications
Newspapers, magazines, book publishers
1. Print publications
TV, film, screening services
2. Screen content
Diversified portfolios, interaction with other sectors
3. Diversified Organisations
Media Sector
What does the sector comprise of?

7. What factors affect companies? Sector Analysis
BUY
SELL
Product / Service
Launch
Expected uptake. Previous reaction to
similar events.
Quarterly Report Subscriber fluctuations. Sales performance –
expected vs actual.
Rival Performance
Strength of rivals. Emergence of new
competitors.

8. Competitor Analysis
202.837B market cap
1. Comcast corporation
273.356B market cap
2. AT&T (owners of WarnerMedia)
164.921B market cap
3. Netflix
Media Sector
Figures taken from Yahoo Finance 11/02
Market share Q4 2019 for
Box Office
29.89%

9. M&A Activities
Disney just purchased a boatload of movies and TV
shows, a movie studio, a bunch of TV networks, and a
controlling stake in Hulu
Fox Corp still exists, independent from Disney
We’re living in a scary new era of media consolidation
There are still so many questions going forward
Marvel once again has access to the X-Men and
Fantastic Four characters

10. Growth
Rate
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
5 Yr. 10 Yr.
EPS Dividend

11. Company Analysis

12. Segments
Media networks
Segment contains vast array television networks, cable
channels, associated production and distribution
companies. These include Disney Channel, ESPN,
ABC.
Parks, experiences and products
Business related to parks, resorts and all consumer
products (toys, books, video games, etc.). Disney
parks are the most visited amusement and theme
parks worldwide.
Direct-to-consumer & international
Segment consisting of Disney Streaming Services
(Disney+, ESPN+, Hulu), media business not located
in the US and global advertising sales. Revenues
expected to grow massively in the following years due
to Disney+ and its launch in Europe.
0.
5.
10.
15.
20.
25.
30.
Media networks Parks, experiences
and products
Studio entertainment Direct-to-consumer &
international
Revenues by segment (in billion US dollars)
Studio Entertainment
Movies, music and stage plays. Key players: The Walt
Disney Studios, Pixar, Marvel Studios, 20th Century
Studios.

13. Ownership
Investment Managers
63.85%
Brokerage Firms
2.75%
Individual Investors
)0.19%

14. Company Financials

15. KEY FIGURES
MARKET CAP
$257.44 BILL
STOCK PRICE
$141.70
BETA
0.94
P/E RATIO
24.04
EPS
5.77
.

16. Revenue Breakdown
0
10,000
20,000
30,000
40,000
50,000
60,000
United States and
Canada
Europe Asia Pacific Latin America
and other
Revenue (in million U.S dollars)
2018 2019
76%
(↑12%)
9%
(↑41%)
3%
(↑75%)
12%
(↑14%)76%
(↑14%) 9%
(↑41%)

17. Overview of Revenue

19. Stock Performance
11 Apr: Disney+ date and info announced
Disney unveils when the
streaming service is going to
be launched, what is going to
the price and what it will
include. Stock price increase
by 11% in one day.
06 Aug: Missed Profit Estimates
Lower Profit than expected combined
with overall slump in the market results
in 15.1% share value drop in August
07 Nov: Disney+ in Europe
The company announced that it would expand its new
streaming service in the Old Continent on 24 Mar and
Summer 2020
12 Nov: Disney+ is launched
More than 10million subscribers in
one day. The streaming service is well
received. Disney is in the top 4%
performers of S&P500 in November.
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2/11/19 5/11/19 8/11/19 11/11/19
Year Price Percentage Change
DIS SPX
β=1.24

23. Strong Buy6
15
6
BUY
Analysts Recommendation
Buy
Hold
Source: Thomson Reuters

24. $ 5.01 Earnings per share
• 5-year growth rate 7.93%
$ 1.76 Dividend per share
27.83% Dividend payout ratio
• 5-year growth rate 15.40%
Dividend Analysis

25. Valuations

26. Monte Carlo
Simulation
Median return 100 days 6.9%
Mean return 6%

27. Discounted Cashflow
Valuation
BUY
SELL
Perpetual growth
LU Ghosal Investment Fund
only invests in a one-year
horizon
BUT !!!
Weakness of DCF for this Stock
Underlying factors
WACC: 6.9%
Perpetual growth rate: 2%

28. ESG, SWOT, Investment
Rationale

29. Environmental, Social and Governance
Philanthropic and Environmental Mission:
“
Environmental and Social:
Disney Conservation Fund:
Aims to save wildlife and reduce damage
done to the environment
Disney Wish Granting:
Grants more than 10,000 wishes a year to
seriously ill children
Disney Volunteers
Contributed 4 million hours charitable service
since 2012
.
Governance Policies
The executive board at Disney has
established committees to facilitate the
execution of the Board’s responsibilities to
corporate governance:
• The Audit Committee
• The Compensation Committee
• The Governance and Nominating
Committee
All made up of independent members who
ensure that Disney maintain and practice
a high level of corporate governance.
“To be an honourable company that delivers
comfort to those in need and inspiration and
opportunity to those who want to improve
their world”

30. SWOT Analysis
• Increasing YoY revenue
• Brand strength and Loyalty
• Established position in the market
Strength
• Release of Disney+ in the UK
• New collaborations/ departments/ film
releases
• High growth outside US markets
Opportunities
• Overdependence on the Market – High beta
• New collaborations/ departments/ films
releases
• Hard to be successful using old shows/
products
Weaknesses
• Direct Competition from Netflix and
Comcast
• Global uncontrollable factors
• Forecasted high market saturation in 2+
years
Threats
SWOT

31. • Great opportunity to buy before Disney+
is released in the UK
• Potential for strong upside in the short
term
• Globally diversified company will offset
macro/ industry shocks
• Established position in the market
Investment Rationale

32. Thank you!
Any questions?