ANNUAL RESULTS 2010 1 Forward- -looking statements looking - - PDF document

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ANNUAL RESULTS 2010

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Forward Forward-

• looking statements

looking statements

This presentation and subsequent discussion may This presentation and subsequent discussion may contain certain forward contain certain forward-

• looking statements with respect

looking statements with respect to the financial condition, results of operations and to the financial condition, results of operations and business of Clear Media. These forward business of Clear Media. These forward-

• looking

looking statements represent Clear Media statements represent Clear Media’ ’s expectations or s expectations or beliefs concerning future events and involving known beliefs concerning future events and involving known and unknown risks and uncertainties which could cause and unknown risks and uncertainties which could cause actual results, performance or events to differ materially actual results, performance or events to differ materially from those expressed or implied in such statements. from those expressed or implied in such statements.

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INTRODUCTION

William Eccleshare Deputy Chairman

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FINANCIAL REVIEW

Teo Hong Kiong CFO

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FY10 Performance

(HK$ (HK$’ ’M M) )

FY FY0 09 9 FY10 FY10 Turnover Turnover 1,118 1,118 1,262 1,262 Total costs* Total costs* 738 738 781 781

Loss on disposal & write Loss on disposal & write-

• down of

down of concession rights & other assets concession rights & other assets

87 87 8 8 EBITDA EBITDA 293 293 473 473 Amortisation Amortisation & depreciation & depreciation 236 236 246 246 EBIT EBIT 57 57 227 227 Net Profit Net Profit 31 31 166 166 EPS EPS 5.96 cents 5.96 cents 31.50 cents 31.50 cents

YOY YOY 13% 13% 6% 6% 61% 61% 4% 4% 298% 298% 431% 431% 429% 429%

*Total costs included Share Option Expense Adjustment in 2010.

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FY10 Normalised Performance

(HK$ (HK$’ ’M M) )

FY FY0 09 9 FY10 FY10 Turnover Turnover 1,118 1,118 1,262 1,262 EBITDA* EBITDA* 380 380 460 460 EBIT* EBIT* 144 144 215 215 Net Profit* Net Profit* 92 92 151 151

YOY YOY 13% 13% 21% 21% 49% 49% 64% 64%

*Excluded one-off loss on disposal & write-down of concession rights & other assets and Share Option Expense Adjustment in 2010.

FY FY0 09 9 FY10 FY10 EBITDA Margin EBITDA Margin 34% 37 34% 37% % Net Profit Margin Net Profit Margin 8% 12 8% 12% %

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Performance by Activities

Bus Bus Shelter Shelter Shenzhen Shenzhen Bus Body Bus Body Other Other Formats Formats HQ HQ* * Total Total Revenue Revenue 1,173 1,173 87 87 2 2

• 1,262

1,262 EBITDA EBITDA 492 492 (6) (6) (1) (1) (12) (12) 473 473 EBIT EBIT 247 247 (7) (7) (1) (1) (12) (12) 227 227 Net Profit Net Profit/(Loss) /(Loss) 186 186 (5) (5) (1) (1) (14) (14) 166 166

(HK$ (HK$’ ’M M) )

*Included HK$20m Share Option Expense Adjustment in 2010.

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Revenue By Location

Beijing 25% Shanghai 13% Guangzhou 16% Others 46%

FY FY20 2009 09 FY FY20 2010 10

Beijing 24% Guangzhou 15% Shanghai 15% Others 46%

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FY FY200 2009 9 FY FY20 2010 10 Beverage Beverage 24 24% % 17 17% % Food Food 9 9% % 16 16% % Telecom Telecom 17 17% % 13 13% % Entertainment Entertainment 5 5% % 8 8% % Clothes & ornaments Clothes & ornaments 3 3% % 7 7% % Business/Consumer services Business/Consumer services 6 6% % 6 6% % Realty Realty 4 4% % 6 6% % Cosmetics Cosmetics 9 9% % 6 6% % Health products Health products 4% 5% 4% 5% Alcohol Alcohol 3 3% % 3 3% %

Revenue By Industry

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Cautious Cost Control

FY09 FY09 FY10 FY10 Rental Rental 287 287 308 308 Maintenance Maintenance 86 86 100 100 Electricity Electricity 47 47 51 51 Sales & Cultural Tax Sales & Cultural Tax 85 85 101 101 Direct operating costs Direct operating costs 505 505 560 560 SG & A SG & A and other expenses and other expenses* * 233 233 241 241 Total costs* Total costs* 738 738 801 801

( (HK HK$ $’ ’M M) )

YoY YoY 7% 7% 16% 16% 7% 7% 20% 20% 11% 11% 3% 3% 9% 9%

*Excluded one-off loss on disposal & write-down of concession rights & other assets and Share Option Expense Adjustment in 2010.

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Operating Leverage

% Turnover % Turnover FY FY0 09 9 FY10 FY10 Direct Costs Direct Costs

• Rental

Rental 26 26 24 24

• Maintenance

Maintenance 8 8 8 8

• Electricity

Electricity 4 4 4 4

• Sales & Cultural Tax

Sales & Cultural Tax 8 8 8 8 Subtotal Subtotal 46 46 44 44 Amortisation Amortisation + Depreciation + Depreciation 21 21 19 19 SG & A SG & A and other expenses and other expenses* * 21 21 19 19 Total Expenses Total Expenses 88 88% % 82 82% %

*Excluded one-off loss on disposal & write-down of concession rights & other assets and Share Option Expense Adjustment in 2010.

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Dec 31, Dec 31, 200 2009 9 Dec 31, Dec 31, 20 2010 10 Current Current -

• 90 days

90 days 182 182 221 221 91 91 – – 180 days 180 days 127 127 135 135 Over 180 days Over 180 days 102 102 128 128 411 411 484 484 Less: Provision for impairment Less: Provision for impairment (37) (37) (39) (39) 3rd 3rd p party arty r receivables eceivables 374 445 374 445 Turnover days ( Turnover days (Time Time w wt.

• t. a

av vg g. .) ) 1 125 25 days days 119 119 days days Due from Due from GWH GWH 130 130 142 142

Trade Receivables

(HK$ (HK$’ ’M M) )

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Healthy Cash Flow

(HK$ (HK$’ ’M) M)

FY09 FY09 FY10 FY10 Net cash flows from operating activities Net cash flows from operating activities 382 382 478 478 Net cash flows used in investing activities Net cash flows used in investing activities (176) (176) (261) (261) Net cash flows from financing activities Net cash flows from financing activities 5 5 33 33 Net increase in cash & cash equivalents Net increase in cash & cash equivalents 211 211 250 250 Net cash & cash equivalents Net cash & cash equivalents at the beginning of year at the beginning of year 210 210 421 421 at the end of year at the end of year 421 421 671 671 Free Cash Flow* Free Cash Flow* 165 165 151 151

*Free cash flow is defined as EBITDA (before loss on disposal & write-down of concession rights & other assets and equity-settled share option expenses) less cash outflow on capital expenditure, less income tax and net interest expense.

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Strong Balance Sheet

(HK$ (HK$’ ’M) M)

Dec 31, 2009 Dec 31, 2009 Dec 31, 2010 Dec 31, 2010 Cash & cash equivalents Cash & cash equivalents 421 421 671 671 Current assets Current assets 1,263 1,263 1,554 1,554 Total assets Total assets 2,914 2,914 3,253 3,253 Current liabilities Current liabilities 359 359 406 406 Net equity Net equity 2,538 2,538 2,806 2,806

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REVIEW OF STRATEGY & EXECUTION

Han Zi Jing, CEO Harrison Zhang, COO

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2010 Highlights

• China leads the way in global economic recovery

China leads the way in global economic recovery

• Stimulating policies & acceleration of

Stimulating policies & acceleration of urbanisation urbanisation

• Domestic consumption drives China economic growth

Domestic consumption drives China economic growth

• Chinese brands & local advertisers increase ad spend

Chinese brands & local advertisers increase ad spend

• World Expo and Asian Games boost demand

World Expo and Asian Games boost demand

• Aggregate revenue from BJ, SH, GZ up 15% to HK$637m

Aggregate revenue from BJ, SH, GZ up 15% to HK$637m

• BJ:

BJ: Balancing between ASP and occupancy Balancing between ASP and occupancy

• SH: Strong performance driven by World Expo

SH: Strong performance driven by World Expo

• GZ: Asian Games in 2H 2010

GZ: Asian Games in 2H 2010

• Mid

Mid-

• tier cities: Revenue up 12% to HK$536m

tier cities: Revenue up 12% to HK$536m

• District sales offices attract local advertisers

District sales offices attract local advertisers

2010 Business Performance

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Power of our Network

(For the year ended 31 Dec 2010)

A.S.P. A.S.P. Occupancy Occupancy Avg Avg Panel Panel No. No. Sales Sales 1 1st

st tier cities

tier cities Beijing Beijing Shanghai Shanghai Guangzhou Guangzhou 2 2% % 9 9% % 8 8% % 6 6% % 62 62% % 52 52% % 61% 61% 59 59% % (4) (4)% % 14 14% % (1) (1)% % 1 1% % 9 9% % 30 30% % 11 11% % 15 15% % 2 2nd

nd tier cities

tier cities 8 8% % 62 62% % (5) (5)% % 12 12% % TOTAL TOTAL 8% 8% 61 61% % (2) (2)% % 13% 13%

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• Favourable

Favourable gov gov’ ’t t policies & economic environment policies & economic environment

• Increasing advertisers and consumer spending

Increasing advertisers and consumer spending

• China outdoor market continues to enjoy healthy growth

China outdoor market continues to enjoy healthy growth

• Competition from local & metro media operators

Competition from local & metro media operators

2011 Outlook

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2011 Action Plan

• Invest in cities with high growth potential

Invest in cities with high growth potential

• Enhance district sales

Enhance district sales centres centres to cultivate local advertisers to cultivate local advertisers

• Enhance internal management system & operation efficiency

Enhance internal management system & operation efficiency

• Maximise

Maximise yield by re yield by re-

• balancing ASP & occupancy rate

balancing ASP & occupancy rate

• Explore M&A opportunities

Explore M&A opportunities

• Maintain leading position in China outdoor market

Maintain leading position in China outdoor market

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QUESTIONS & ANSWERS