Interim Result s 2003 Interim Result s 2003 Clear Media
Agenda Agenda � Highlights � Highlights � Review of Financials � Review of Financials � Review of Strategy & Execution � Review of Strategy & Execution � Questions & Answers � Questions & Answers
What is Different ? What is Different ? 1H2002 1H2003 1H2002 1H2003 Panels 14,672 17,488 Panels 14,672 17,488 Occupancy 65% 67% Occupancy 65% 67% Days Days Days Days A/R * 193 154 A/R * 193 154 Corporate Income Tax Rate 7.5% 15% Corporate Income Tax Rate 7.5% 15% (158,225) 25,071 (158,225) 25,071 Free Cash Flow ( Free Cash Flow ( ‘ ‘ 000) 000) * Time weighted * Time weighted
th Consecutive Year of Growth Into our 6 th Consecutive Year of Growth Into our 6 1H 2003 1H 2003 HK$ % Change HK$ % Change Turnover 218m +11.3% Turnover 218m +11.3% EBITDA 89m +21% EBITDA 89m +21% EBIT 37m +21% EBIT 37m +21% Net Profit 27m +1% Net Profit 27m +1% EPS 5.42 cents +1% EPS 5.42 cents +1% Accelerate our Industry Leadership Accelerate our Industry Leadership … Out … Out- -perform All our Competitors perform All our Competitors
Profit from Core Products Profit from Core Products Bus Shelters Bus Shelters ’ 000 HK$ ’ 000 % Change HK$ % Change Turnover 209,919 +12% Turnover 209,919 +12% EBITDA 99,049 +21% EBITDA 99,049 +21% EBIT 50,912 +21% EBIT 50,912 +21% Net Profit 39,993 +6% Net Profit 39,993 +6% 1H2002 1H2003 1H2002 1H2003 EBITDA Margin 44% 47% EBITDA Margin 44% 47% Net Profit Margin 20% 19% Net Profit Margin 20% 19%
Revenue ” ” Focus on Growth Driver: “ “ Revenue 2003 YOY% 2003 YOY% Guangzhou 64% Guangzhou 64% Shijiazhuang 269% Shijiazhuang 269% ’ erbin Ha ’ erbin 215% Ha 215% Shenyang 116% Shenyang 116% Chengdu 51% Chengdu 51% Zhong Shan Shan 53% Zhong 53% Kunming 40% Kunming 40% Nanjing 34% Nanjing 34%
Focus on Growth Driver: “ “ Occupancy Occupancy ” ” 1H2002 1H2003 1H2002 1H2003 Shanghai 68% 73% Shanghai 68% 73% Beijing 74% 70% Beijing 74% 70% Guangzhou 62% 69% Guangzhou 62% 69% Chengdu 80% 87% Chengdu 80% 87% Hangzhou 82% 84% Hangzhou 82% 84% Nanjing 60% 83% Nanjing 60% 83% Kunming 57% 69% Kunming 57% 69% ’ erbin Ha ’ erbin 69% 92% Ha 69% 92%
Pricing ” ” Focus on Growth Driver: “ “ Pricing 1H 2003 VS 2H 2002 1H 2003 VS 2H 2002 % Change % Change Nan Chang +45% Nan Chang +45% Fuzhou +27% Fuzhou +27% Wuxi +27% Wuxi +27% Chengdu +20% Chengdu +20% Hangzhou +19% Hangzhou +19% Changsha +16% Changsha +16% Xian +5% Xian +5% Nanjing +5% Nanjing +5% Potential for Price Increase Potential for Price Increase st & Mid in select 1 st & Mid- -tier cities tier cities in select 1
Focus on Growth Driver: “ “ Market Share “ Market Share “ Dec 2002 June 2003 Dec 2002 June 2003 Beijing * 41% 74% Beijing * 41% 74% Shanghai 98% 98% Shanghai 98% 98% Guangzhou 96% 98% Guangzhou 96% 98% Hangzhou 95% 96% Hangzhou 95% 96% Kunming 78% 78% Kunming 78% 78% Nanjing 90% 90% Nanjing 90% 90% ’ an Xi ’ an 100% 100% Xi 100% 100% * 3- -Ring Ring * 3
Lead the Largest & Fastest Growing Outdoor Sector Lead the Largest & Fastest Growing Outdoor Sector Guangzhou Guangzhou 地利 地利 人和 人和 時 時 天 天 2001 2002 36% 36% 35% 35% 34% 34% 29% 29% 26% 26% 23% 23% 9% 9% 7% 7% Transit Others Transit Street Furniture Others Billboards Street Furniture Billboards
2003 Growth Drivers 2003 Growth Drivers … Positive Regulatory Momentum Continues … 天時 天時 � Positive Regulatory Momentum Continues � … Solid Economic Rebound … 地利 地利 � Solid Economic Rebound � … 90% Strong Order Book … 90% � Strong Order Book � “ Scalable ” Model Delivers Results … “ Scalable ” Model Delivers Results … � � 人和 人和 SG&A -12% 12% � SG&A - � @ Unit Direct Cost -12% 12% � @ Unit Direct Cost - � 3Q Trending 25% YOY Growth � 3Q Trending 25% YOY Growth �
Medium Term Prospects Medium Term Prospects � WTO & CEPA fuels ad spend growth WTO & CEPA fuels ad spend growth � � Beijing Olympic multi Beijing Olympic multi- -year marketing launch year marketing launch � � Positive regulatory momentum benefits Clear Media Positive regulatory momentum benefits Clear Media � � Select earning Select earning- -accretive outdoor opportunities accretive outdoor opportunities �
Review of Financials Review of Financials
Financial Performance Financial Performance 1H2002 1H2003 % Change 1H2002 1H2003 % Change Revenue 195,908 218,064 +11% Revenue 195,908 218,064 +11% EBITDA 73,304 88,646 +21% EBITDA 73,304 88,646 +21% EBIT 31,040 37,393 +21% EBIT 31,040 37,393 +21% Net Profit 27,037 27,199 +1% Net Profit 27,037 27,199 +1% 1H2002 1H2003 1H2002 1H2003 EBITDA Margin 37% 41% EBITDA Margin 37% 41% Net Profit Margin 14% 13% Net Profit Margin 14% 13%
Performance by All Activities Performance by All Activities Bus Bus POS Unipole HQ Total POS Unipole HQ Total Shelter Shelter Revenue 209,917 5,020 3,127 218,064 Revenue 209,917 5,020 3,127 218,064 EBITDA 99,049 (1,676) (1,143) (7,584) 88,646 EBITDA 99,049 (1,676) (1,143) (7,584) 88,646 EBIT 50,912 (3,232) (2,703) (7,584) 37,393 EBIT 50,912 (3,232) (2,703) (7,584) 37,393 Net Profit 39,993 (2,827) (2,383) (7,584) 27,199 Net Profit 39,993 (2,827) (2,383) (7,584) 27,199
Revenue By Products Revenue By Products 1H2002 1H2003 1H2002 1H2003 POS POS 2% 2.3% Unipole Unipole 2% 1.4% Bus Shelters Bus Shelters 96% 96.3%
Revenue By Location Revenue By Location 1H2002 1H2003 1H2002 1H2003 Beijing Beijing 18% 15.0% Shanghai Others 13.0% Others 46% 49.0% Shanghai 17% Guangzhou Guangzhou 17.0% Shenzhen 12% Shenzhen 7% 6.0%
Turnover By Industry Turnover By Industry 1H 2002 1H2003 1H 2002 1H2003 Telecom 23% 24% Telecom 23% 24% Beverage 18% 18% Beverage 18% 18% Consumer Product 15% 17% Consumer Product 15% 17% IT 3% 3% 8% IT 8% Pharmaceuticals 1% 7% Pharmaceuticals 1% 7% Finance 2% 3% Finance 2% 3% Entertainment 9% 3% Entertainment 9% 3% Electric Appliances 1% 3% Electric Appliances 1% 3% Food 3% 3% Food 3% 3% Tobacco 10% 2% Tobacco 10% 2%
Significant Cost Saving Significant Cost Saving % Turnover % Turnover 1H 2002 1H 2003 1H 2002 1H 2003 Direct Costs Direct Costs - Rental Rental 19 22 - 19 22 - Maintenance Maintenance 8 6 - 8 6 - Electricity Electricity 5 6 - 5 6 - Sales & Cultural Tax Sales & Cultural Tax 9 9 - 9 9 Subtotal 41 43 Subtotal 41 43 Amortisation + Depreciation + Depreciation 22 24 Amortisation 22 24 SG & A 21 17 SG & A 21 17 Total Expenses 84 84 Total Expenses 84 84
Accounts Receivable on Track Accounts Receivable on Track 1H 2002 1H 2003 1H 2002 1H 2003 rd Party Receivables 3 rd Party Receivables 102,236 161,291 161,291 3 102,236 Turnover Day 193 days 154days 154days Turnover Day 193 days Due from WHA 98,920 46,474 46,474 Due from WHA 98,920 % Sales from WHA 28.4% 28.4% 7.6% % Sales from WHA 7.6%
Substantial Improved Cash Flow Substantial Improved Cash Flow 1H2002 1H2003 1H2002 1H2003 Cash flow from operating activities Cash flow from operating activities Cash generated from operations 11,839 11,839 45,475 Cash generated from operations 45,475 Interest paid Interest paid (4,703) (4,703) (3,750) (3,750) Income tax paid (4,445) (4,182) Income tax paid (4,445) (4,182) Net cash from operating activities Net cash from operating activities 2,691 2,691 37,543 37,543 ( 221,714) (56,574) Cash outflows from investing activities Cash outflows from investing activities ( 221,714) (56,574) Cash outflows from financing activities (265,897) (265,897) (11,275) (11,275) Cash outflows from financing activities Net cash & cash equivalents Net cash & cash equivalents at the beginning of period 809,411 809,411 267,158 at the beginning of period 267,158 at the end of period 324,491 236,852 at the end of period 324,491 236,852
st Time Positive Free Cash Flow 1 st Time Positive Free Cash Flow 1 1H2002 1H2003 1H2002 1H2003 EBITDA 73,304 88,646 EBITDA 73,304 88,646 - CAPEX CAPEX (230,260) (56,259) - (230,260) (56,259) - Net Interest Net Interest 1,439 (1,194) - 1,439 (1,194) Income/ (Expenses) Income/ (Expenses) - Tax Tax (2,708) (6,122) - (2,708) (6,122) Free Cash Flow (158,225) 25,071 Free Cash Flow (158,225) 25,071
Strong Balance Sheet Strong Balance Sheet FY2002 1H2003 FY2002 1H2003 Cash & cash equivalents 267,158 236,852 Cash & cash equivalents 267,158 236,852 Total assets 1,525,052 1,569,806 1,569,806 Total assets 1,525,052 Total debts (net of pledged deposit) 17,435 9,423 9,423 Total debts (net of pledged deposit) 17,435 ’ equity Total shareholders ’ equity 1,209,750 1,209,750 1,236,883 1,236,883 Total shareholders
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