Corporate Presentation July 2011 0 Disclaimer The material that - - PowerPoint PPT Presentation

July 2011

Corporate Presentation

1

Disclaimer

The material that follows is a presentation of general background information about T4F Entretenimento S.A (“T4F”) as of the date of the presentation. It is information in summary form and does not purport to be complete. This material contains confidential information regarding and may not be reproduced or circulated, partially or completely, without the prior written consent of the T4F. Any statements, projections, expectations, estimates and plans contained in this document that do not describe historical facts, and the factors or trends affecting financial condition, liquidity or results of operations, are forward-looking statements and involve several risks and uncertainties. Such statements are based on assumptions and analyses made by the Company based on its experience and the economic climate and on market conditions and expected future events, many of which are beyond the Company’s control. No investment decision should be based on validity, accuracy or completeness of the information or opinions contained in this presentation. Under no circumstances, neither the Company nor its subsidiaries, directors,

• fficers, agents or employees be liable to third parties (including investors) for any investment decision based on

information and statements in this presentation, or for any damages resulting therefrom, corresponding or specific. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.

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IPO Summary

• T4F Entretenimento S.A.

Issuer # Shares Offered

• 31,441,396 ON shares with 100% tag along (Novo Mercado)

Total Offering Size

• R$503 million (US$310 million1)

Offering Breakdown

• 37% primary / 63% secondary (Green Shoe)

Use of Proceeds

• (i) Acquisition of companies and venues, (ii) construction of venues e (iii) geographic expansion

Listing Date

• April 13th 2011

Price

• R$16.00

1: Assuming the exchange rate of US$1 = R$1.6207 as of May 12th , according to Bacen.

Bookrunners Ticker Symbol

• SHOW3

Geographic Allocation

• 60% North America; 25% Europe; 15% Brazil

Shareholding Structure

3

Shareholding Structure

5.6% 12.8% 28.1% 85.0%

Fernando Luiz Alterio

15.0% 8.0%

Free-Float

45.4%

Gávea Investimentos FA Comércio e Participações CIE International Gávea Investimentos CIE International Fernando Luiz Alterio Shareholders 12.8% 9.8% 31.9% Stake Direct + Indirect Shareholders Agreement 55.6% Free Float 45.4%

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• 1. Company Overview

Leading company in live entertainment in South America Our Presence (Net Revenue 2010) Unique Industry Knowledge High Growth and Strong Cash Generation Diversified and Verticalized Model

Company Overview

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ONE AND ONLY INVESTMENT OPPORTUNITY IN THE ENTERTAINMENT INDUSTRY IN SOUTH AMERICA

T4F is the leading live / out-of-home entertainment promoter in South America with a diversified and verticalized business model

• 3rd largest player

worldwide

• 1.1 thousand shows

promoted /2010

• 2.8 millions tickets sold /

2010

• Promotion of multi-

content events

• Venues Operation
• Food & Beverage and

Merchandising

• Ticketing Services
• Brazil

66%

• Argentina

20%

• Chile

12%

• Peru

2%

• 29 years of experience
• Pioneer in naming rights

model in 1999

• Pioneer in online

ticketing system in 2000 with Ticketmaster

• Promotion of the most

successful events in Brazil, Chile and Argentina

• Net Operation Cash

Flow = 99% of EBITDA ( ∑ 05-10)

• Net Revenues CAGR

12% (07-10)

• EBITDA CAGR

22% (07-10)

• Sustainable margins

going forward

Food & Beverage, Merchandising, and Parking Ticketing Services Sponsorships and Naming Rights Suites and Hospitality Centers Box Office Private Events

Our Business

Verticalization Revenue Sources

VENUE OPERATIONS FOOD & BEVERAGE MERCHANDISING TICKETING SERVICES

Live Music Sport Events Theatrical Production Performing Arts

U2 Aerosmith Madonna AC / DC Stock Car Mini Challenge Cats Mamma Mia The Phantom

• f the Opera

Miss Saigon Stomp Blue Man Group Cirque Du Soleil Bodies

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Copa Montana Marcas

Leadership Position in Live Entertainment Industry

Guns N’ Roses Promoted 7 out of the 10 largest shows of the tour Madonna 3 out of the 5 largest shows of the tour in 2008 Metallica 2nd largest out

• f 75 shows of the tour

AC/DC The largest show of the world tour in 2009 Bon Jovi Promoted the 2 largest shows of the 2010 world tour Coldplay Promoted the 1st and 5th largest shows of all tours 7

Leadership Position in Live Entertainment Industry

• Almost 1,000 events
• 12 cities visited
• More than 1.8 million tickets sold
• Performance was Cirque du Soleil’s

biggest box office in Sao Paulo and 6th biggest international box office in 2010

• Starting in Sep/11 in Sao Paulo

Cirque du Soleil

10 different contents The only player that ever promoted authentic Broadway productions in the region More than 3.1 million tickets sold since 1999 Les Misérables, Beauty and the Beast, Chicago, Mamma Mia, Phantom of the Opera, Miss Saigon, Cabaret, The Sound of Music, Sweet Charity, Cats.

Theatrical Plays

12 races per season in 10 different cities Third largest touring car series worldwide Broadcasted by TV Globo since 2000 Total Public: 430,000 / year

Sports Events

2006 2007/8 2009/10 8 2011/13

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• 2. Investment Highlights

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Investment Case

Live Entertainment Industry Growth Attractive Macroeconomic Environment and Robust Consumption Growth

 Superior business model: higher return with lower risk  Credibility with international and domestic agents and privileged access to high quality entertainment providers

Compelling business model and Superior Management and Expertise

 Live music: Touring became essential for artists Aggressive growth in South America in terms

• f ticket sold and

average ticket price  Massive increase in disposable income and expansion of consumer base  Expenditure of entertainment is extremely correlated to consumer spending

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Positive Trends for Expenditures with Entertainment in Emerging Markets…

Expenditures with entertainment are expected to significantly increase in emerging markets

2010E-2015E GDP Growth (1)

(1) In local currency real terms. Source: IMF – World Economic Outlook.

5 out of the 11 largest growths in GDP are in South America

France USA Japan Argentina Chile Croatia Peru Israel Portugal Colombia Brazil China India Mexico Greece New Zeland Spain Italy Venezuela UK R2 = 0.66 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 10,000 20,000 30,000 40,000 50,000 GDP per capita in 2009 (US$ '000) Expenditure with entertaiment as a % of disposable income R2 (ex Argentina) = 0.81

Source: Euromonitor.

Expenditure with Entertainment as a % of the Disposable Income vs GDP per Capita

• 0.1%

4.2% 6.0% 7.0% 7.8% 12.1% 12.1% 15.6% 15.1% 17.0% 18.4% 20.0% 24.0% 28.0% 30.8% 31.1% 32.9% 33.8% 40.8% 42.8% 61.8% 75.0%

Greece Venezuela Portugal Spain Italy France Japan Croatia UK USA New Zeland Argentina Israel Colombia Mexico Brazil Chile Singapore Peru Cambodia India China

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…Combined with Changing Demographics in Brazil

Social Classes Growth in Brazil

Note: Average Monthly Income by Class: A and B (R$4,591+), C (R$1,064-4,591), D (R$768-1,064) and E (R$0-768) Source: IBGE, PNAD 2002, PNAD 2008 and FGV-CPS

TF4’s target public

Social Classes

Demographic Shift

 Expansion of classes A, B and C is boosting consumption

• Southeast and South regions, the wealthiest of the country,

represent high growth potential

• Under penetrated North and Northeast regions are

increasingly perceived as growth opportunities 2001 2008

Source: FGV.

2001-08 Aggregate Income Growth (R$ bn) by Social Class

TF4’s target public = 46% TF4’s target public = 59%

48.4% 39.1% C A / B 8% 38% A / B C 10% 49% A / B C

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Boom of the Live Entertainment Industry

Live music has significantly increased importance in the music industry, with touring becoming essential for artists, while recorded music revenues have been shrinking

Source: Pollstar

(US$ billion)

13.6 13.1 12.5 11.0 9.0 8.0 2.8 3.1 3.6 3.9 4.2 4.6 2004 2005 2006 2007 2008 2009

(US$ million)

Total Recorded Music Revenues vs. Total Revenues with Tickets Sold in North America

12% 5% 6% 6% 9% 88% 95% 94% 94% 91% 137 105 90 86 79 U2 Bruce Springsteen Britney Spears AC/ DC Jonas Brothers Album sales Tour Gross Total

2009 Top Music Acts – Sales Breakdown

Source: Live Nation

87 106 69 84 77 72 114 86 72 69 Aerosmith Madonna AC/ DC Coldplay Metallica Average Brazil, Argentina and Chile (T4F) Global Average 27 59 58 43 37 13 53 22 22 21 Aerosmith Madonna AC/ DC Coldplay Metallica Average Brazil, Argentina and Chile (T4F) Global Average 2005 2006 2007 2008 2009 2010

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Attractive Dynamics in South America

T4F has uncontested leadership in South America…

Higher Audience Market per Concert (1)

(‘000 people) T4F Average: 45.0 Global Average: 26.0

+73%

Significant Pricing Power (1)

(Average ticket price – US$ per ticket) T4F Average: 84.7

+2.7%

(1) Selection based on concerts promoted by T4F that were part of a global tour, which worldwide statistics were available on Pollstar’s 2009 review; source: Pollstar and T4F. Global Average: 82.5

Leading Position Tickets Sold

CAGR: 3rd

Source: Pollstar, Billboard and T4F.

21st 7th 10th 4th

South America: a must-go destination for world tours

44%

• 1%

95 425

• 100

200 300 400 500 2006 2007 2008 2009 2010 World South America

Top independent promoter in 2009 and 2010 by Billboard 1st Global Rank Index 100

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Superior Business Model

High Margins

• 42% ROIC and

32% ROE in 2010

• No revenue concentration

in specific content

• Increased control over the

entertainment value chain

Verticalization

Ability to generate revenues from multiple sources in each event

High Returns Low Risk

Diversification

Multi-content platform = reduced risk

Asset Light

Maintenance capex = 1%

• f net revenues; PP&E

represent <5% of total assets

Strong Cash Flow

Low capex and negative working capital (sponsorships + tickets sold in advance)

EBITDA Margin (2010)

16.7% 12.8% 6.5%

Note(1): Largest entertainment Company in Mexico controlled by CIE

1

Strong Cash Conversion

• 99% of EBITDA between

2005 and 2010 was converted to cash

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Solid Sponsorship Revenues Flow

• Content sponsorship, priority benefit, naming

rights sold in our 5 venues

• Over

100 active clients, including major corporations

• T4F’s contents attract strong media interest,

generating a significant amount of spontaneous media (about R$500 million per year)

Current Backlog (1) and Backlog Recognition

(R$ million)

Current Backlog Backlog Recognition

(1) Sum of all sponsorship contracts held by the Company.

101 71 9 25 2011E 2012E 2013E 2014E - 2019E 2010 206

Naming Rights Largest Corporate Sponsors

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High Barriers of Entry

Potential Competitors

• Controls 5 of the most important venues in South America

Exclusive long-term access to premium venues

• Possibility to capture economies of scale on the acquisition of content, by
• perating in four countries

Multi-country

• perations
• Naming Rights: Citibank, Credicard, Abril and Caixa Econômica Federal
• Sponsorships: Bradesco, Credicard, Mastercard, American Express, Citibank,

Quilmes, General Motors and Pepsi

Long-term agreements and solid relationships with corporate sponsors

• Agreement with Cirque du Soleil valid through 2013
• Exclusivity and non-compete agreement with Live Nation valid through August

2015

Guaranteed access to premium content

• Family Entertainment: Disney, Andrew Lloyd Weber, Cameron Mackintosh and

the Blue Man Group

• Sports: Stock Car, Fórmula Montana and Mini Challenge championship
• Music Concerts: CAA, William Morris, ITB – International Talent Booking, The

Agency Group, among others

Privileged access to high- quality entertainment providers

• T4F is the most credible producer and promoter in South America, both in

execution capability and financial strength

Credibility

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Competitive Landscape

Latin Music Anglo Music Performing Arts Venues Ticketing Services Brazil T4F T4F Plan Music XYZ Live T4F Dell Arte Dançar Ake T4F HSBC Brasil Via Funchal Opus Ingresso Fácil Ingresso Rápido Ingresso.com Argentina T4F Fenix T4F Siberia Ake RGB Ake T4F Luna Park Ticket Portal Top Show Chile Fenix DG Medios RGB Arena Santiago Falabella Puntoticket

T4F has a totally integrated business model… …No other company operates in 3 countries, throughout various business lines

Piero Minardi – Member

• Senior Partner at Gávea Investimentos
• Extensive corporate finance and strategic consulting knowledge
• Former M&A director at Grupo Bunge

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Seasoned Management and Board of Directors

Fernando Alterio CEO Orlando Viscardi CFO José Muniz VP T4F USA Alexandre Faria COO Stephanie Mayorkis Theater and Expositions Director Flávio Fernandes Int’l Managing Director Francisco Goni Country head - Chile Fernando Moya Artistic Director Argentina Founder of T4F

1 12 10 10 1 9 5

Years of T4F Name/Position

Fernando Alterio – Chairman

• Founder of T4F
• 29 years of industry experience
• Previous experiences include Cosan, Palace, Banco Interatlântico

and Cruzeiro DTVM

BOARD OF DIRECTORS

Name/Position

Alejandro Soberón – Member

• Founder, CEO and president of the board of directors of CIE
• Holds a degree in Business Administration from Universidad

Iberoamericana (Mexico) Maurizio Mauro – Member

• Former CEO Grupo Abril
• Former senior partner at Booz Allen Hamilton
• Board member in several Brazilian companies

Luciano Nogueira Neto – Member

• Co-founder of T4F and 28 years of industry experience
• Previous experiences include Palace Promoções, Lojas

Pernambucanas and own ventures

• Holds degrees in business administration (FGV-EAESP) and law

(USP)

39 18 26 16 15 19 16 27

Years of Experience

Human Resources Strategy Focused in the Alignment of Interests: Strong variable component, stock options and trainee program

Grace Tourinho CEO - Brazil

3 24

José Papa Booking Director

1 13 MANAGEMENT

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• 3. Growth Strategy

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T4F’s History

Track record of success, growth and regional expansion

New Expansion Cycle Foundation Expansion Consolidation of the Business Model

1983:

• Brazil – Opening of Palace(1)

(São Paulo) 1999:

• Brazil – Opening of

Credicard Hall (São Paulo)

• First year of Broadway

promotion 2000:

• Brazil:

Start of operations of Ticketmaster system 2001:

• Brazil – Opening of Teatro Abril

venue (São Paulo)

• Brazil – Acquisition of Citibank Hall

Rio de Janeiro 2005:

• Argentina – Acquisition of Ticketek

2007:

• Acquisition of control of T4F by Fernando

Alterio and Gávea Investimentos

• Acquisition of T4F Argentina and T4F

Chile 2006:

• Brazil – Acquisition of

Vicar

• Argentina –

Acquisition of Pop Art 2008:

• Agreement

with Live Nation in South America 2010:

• New category Mini

Challenge

Note(1): Currently, Citibank Hall São Paulo

• Expansion to other cities

in Brazil and countries in the region

• Construction of venues
• Acquisition of companies

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T4F’s Drivers for Growth

T4F is the natural consolidator of the South American live entertainment industry

Strong Financial Profile

Offering Proceeds Strong Cash Generation Leverage Capacity

Total potential amount of approximately R$ 600mm

The IPO will further improve T4F leadership and capture the booming industry prospects

Acquisition of Equipment, 5% Ticketing Service, 7% Construction of Venues, 35% Geographic Expansion, 8% Acquisition Opportunities, 45%

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T4F Outdoor Venue in São Paulo

T4F outdoor venue is expected to be a reference among renowned entertainment venues

Project overview

Foro Sol – Mexico City, Mexico

Venue – São Paulo, Brazil

• Designed to fill a gap in high-level entertainment venues

in the São Paulo metropolitan area

• Naming rights revenues reaching up to R$ 8 million a

year

• Flexible in terms of capacity: events from 15,000 to

60,000 people

• Capex should reach R$100 million with expected IRR of

33%

• Control of the agenda and integrated model translate

into a strong barrier of entry

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Geographic Expansion

Main Cities in Brazil

Indicates cities in which T4F is currenlty present. Cities to which T4F plans to expand operations.

Brazil Sao Paulo Rio de Janeiro Belo Horizonte Brasília Recife Belém Campinas Curitiba Salvador Fortaleza

680 presentations/year and 1.5 mm tickets sold/year in SP and RJ

Porto Alegre Natal Manaus

Main Cities in South America

Uruguay Chile Paraguay French Guiana Suriname Guiana Venezuela Colombia Ecuador Peru Bolivia Buenos Aires Santiago Lima Caracas Bogota

300 presentations/year and 1.0 mm tickets sold/year in BA and Santiago

Argentina Cordoba Mendoza

80% of T4F’s revenues in Brazil come from SP and RJ which represent only 17% of Brazil’s GDP Still a relevant growth opportunity outside Brazil, representing 40% of South America’s GDP

New / retrofitted venues to explore

Potential of 400 presentations/year and 840 thousand tickets sold/year in other cities Potential of 200 presentations/year and 700 thousand tickets sold in other cities

Venues

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Selected Acquisition Targets

Fragmented market presents several consolidation opportunities and T4F has already screened selected acquisition targets which are complementary and synergic.

Festivals

Promotional Marketing: below the line and event companies provides strong synergies with production (team and equipments), food & beverage and venues operations

• 11 companies out of 92, aggregate sales of

R$770 mm in 2009

Marketing Promoters

+ 8 sport events companies acting in: car racing, beach volley, beach soccer, tennis and basketball + 8 companies operating in specific niches, such as: classic music, regional music and dance + 16 venues identified in 9 different states of Brazil

• Average capacity: from 5,000 to 16,000 people

+ 11 festivals in 11 different cities in Brazil

• Complementary in calendar (summer)
• Well-established brands, mostly in NE region
• Exposure to middle class

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• 4. Operational and Financial Highlights

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Solid Operational Performance

Net Revenues (R$ mm) and Gross Margin (%) EBITDA (R$ mm) and EBITDA Margin (%) Net Income (R$ mm) and Net Margin (%) Operational Cash Flow vs. EBITDA

Note: Summary of 2009 impacts

• Global crisis impact of R$16.8 mm
• Postponement impact of R$4.7 mm
• H1N1 flu impact of R$21.6 mm

CAGR: 12% CAGR: 22% CAGR: 15% 99%

5.3 58.1 110.3 210.7 256.8 351.9 36.4 105.6 188.7 214.5 246.5 347.7

2005 2006 2007 2008 2009 2010

EBITDA - Accumulated Cash Generation - Accumulated

404.2 596.6 434.6 569.2 28.2% 26.7% 24.4% 29.2% 2007 2008 2009 2010 52.1 100.4 46.1 95.1 12.9% 16.8% 10.6% 16.7% 2007 2008 2009 2010 26.3 46.9 6.0 40.3 6.5% 7.9% 1.4% 7.1% 2007 2008 2009 2010

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Historical Financial Information (cont’d)

.

ROIC, ROE and indebtness metrics

Net Debt and Net Debt / EBITDA ROE (2) Net Debt Breakdown (as of Dec 2010)

(%) (R$ million) (%) (R$ million)

(1)ROIC calculated as NOPAT / (Net PP&E + current assets non cash) (2)ROE calculated as Net Income/ Average Shareholders’ Equity.

ROIC (1)

19 29.4 131.3 120.9

Short Term Debt Long Term Debt Cash and Equivalents Net Debt

25.5% 38.3% 25.0% 42.0%

2007 2008 2009 2010

40.6% 46.0% 4.8% 31.7%

2007 2008 2009 2010

113 92 29

1.1x 2.0x 0.3x

2008 2009 2010

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Why Invest in T4F?

Unique access to high-quality content One and only investment opportunity in the entertainment industry in South America, with longstanding track-record and leadership Verticalization and diversification, resulting in high margins and low risk Asset light model, resulting in high returns and dividend payout capacity Multi-country operations, creating significant economies of scale and barriers of entry Strong conversion of EBITDA into cash flow