Gallery Out of Home Media Ltd. Six Months Ended 30 June 2010 - - PowerPoint PPT Presentation
Gallery Out of Home Media Ltd. Six Months Ended 30 June 2010 Unaudited Financial Results 2 September 2010 About Gallery Established in 1994 Second largest OOH operator in Russia and Ukraine Over 32 cities in Russia and 14 cities in
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Revenues 46,439 59,269 28% Gross Profit 8,908 21,359 140% EBITDA (1) (2,066) 13,061 NM EBITDA margin
22% NM
(1) Before restructuring expenses
1H 2009 1H 2010 Change
Revenues 1,535 1,782 16% Gross Profit 294 642 118% EBITDA (1) (67) 392 NM EBITDA margin
22% NM
(IFRS, in thousands of USD) (IFRS, in millions of RUB)
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Revenues 26,039 32,267 24% Gross Profit 6,848 13,209 93% EBITDA (1) 1,940 9,655 398% EBITDA margin 7% 30% 23%
(1) Before restructuring expenses
2Q 2009 2Q 2010 Change
Revenues 843 974 16% Gross Profit 224 398 130% EBITDA (1) 68 290 301% EBITDA margin 7% 30% 20%
(IFRS, in thousands of USD) (IFRS, in millions of RUB)
USD per 1 RUB 0.0295 0.0310 0.0319 0.0341 0.0312 0.0335 0.0331 Q1 2009 Q2 2009 Q3 2009 Q4 2009 2009 average Q1 2010 Q2 2010
7%
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RUB per 1 USD 33.9308 32.2340 31.3272 29.3218 32.0234 29.8903 30.2430 Q1 2009 Q2 2009 Q3 2009 Q4 2009 2009 average Q1 2010 Q2 2010
7%
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1 940 4 520 8 911 3 406 9 655 20 400 26 039 27 292 31 748 27 002 32 267 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010
68 148 280 102 291 692 843 859 951 807 975 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010
EBITDA Revenues
US Dollars, thousand Russian Roubles, mln
398%
24%
301%
16%
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CCO JCDecaux CBS Outdoor Lamar Ströеr Titan
Affichage Holding Metrobus News Outdoor APN EPA Media Air Media Cemusa Wall Gallery
(2009 outdoor revenues, in million $)
Sources: Company news releases, Internet sites & JCDecaux estimates.
(4)
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Source: Association of Communication Agencies of Russia (AKAR)
2Q 2010 2Q 2009
TV 51% Print 16% Outdoor 15% Radio 4% Internet 13% Other 1% TV 54% Print 16% Outdoor 14% Radio 4% Internet 11% Other 1%
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Source: Association of Communication Agencies of Russia (AKAR)
1H 2010 1H 2009
TV 54% Print 16% Outdoor 14% Radio 4% Internet 11% Other 1% TV 55% Print 16% Outdoor 14% Radio 5% Internet 9% Other 1%
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Source: Association of Communication Agencies of Russia (AKAR)
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10 20 30 40 50 60 70 TV Radio Print Outdoor Internet Other
2007 2008 2009 2010
Source: Association of Communication Agencies of Russia (AKAR)
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5 10 15 20 25
Outdoor Gallery
2007 2008 2009 2010
+49% +16% +13%
+13%
Source: ESPAR
2Q 2010 2Q 2009
CARS 12% RETAIL 11% FINANC 11% TELECOM 11% REAL ESTATE 7% TRAVEL 8% BEER 6% SOFT DRINKS 2% FURNITURE 5% PERFUME 3% OTHER 24%
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CARS 11% RETAIL 11% FINANC 10% TELECOM 9% REAL ESTATE 7% TRAVEL 7% BEER 5% SOFT DRINKS 5% FURNITURE 4% PERFUME 3% OTHER 28%
Source: ESPAR
1H 2010 1H 2009
RETAIL 11% CARS 13% TELECOM 12% FINANC 10% TRAVEL 7% REAL ESTATE 7% SOFT DRINKS 2% FURNITURE 5% BEER 4% PERFUME 3% OTHER 26%
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RETAIL 12% CARS 11% TELECOM 10% FINANC 9% TRAVEL 7% REAL ESTATE 7% SOFT DRINKS 4% FURNITURE 4% BEER 4% PERFUME 4% OTHER 28%
News 21% Gallery 9% V.E.R.A.- Olimp 4% Anko 3% Bigboard 3% Rasvero 2% Poster 2% Small players 56%
Source: ESPAR
News 20% Gallery 8% V.E.R.A.- Olimp 5% Anko 3% Bigboard 2% Rasvero 2% Poster 2% Small players 58%
Russia, 2Q 2010 Russia, 2Q 2009 15
Source: ESPAR
NEWS 21% GALLERY 8% V.E.R.A. 5% ANKO 3% BIGBOARD 2% RASVERO 2% POSTER 3% OTHERS 56%
Russia, 1H 2010 Russia, 1H 2009 16
NEWS 21% GALLERY 9% V.E.R.A. 4% ANKO 3% BIGBOARD 3% RASVERO 2% POSTER 2% OTHERS 56%
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Moscow 69% Ekaterinburg 3% Barnaul 3% Kazan 2% Krasnoyarsk 1% Krasnodar 1% Russia Other 14% Ukraine 7% Moscow 69% Ekaterinburg 3% Barnaul 3% Kazan 2% Krasnoyarsk 1% Krasnodar 1% Russia Other 13% Ukraine 8%
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1H 2010 1H 2009
Russia Own Boards 81% Russia Media Buying 11% Ukraine Own Boards 5% Ukraine Media Buying 3% Russia Own Boards 75% Russia Media Buying 17% Ukraine Own Boards 6% Ukraine Media Buying 1%
Billboards 45% Street Furniture 32% Transport & Other 23%
1H 2010 1H 2009
Billboards 47% Street Furniture 30% Transport & Other 23%
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In thousands of USD In millions of RUB
600 421 298 217 677 433 338 334 Billboards Street Furniture Transport & Other Subcontracted Revenues
2009 2010
18 150 12 720 9 006 6 563 22 505 14 409 11 239 11 115 Billboards Street Furniture Transport & Other Subcontracted Revenues
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Cost saving, in RUB thousands
1 000 000 1 050 000 1 100 000 1 150 000 1 200 000 1 250 000 1 300 000 1 350 000 1 400 000 1 450 000
Total savings = 250 mln RUB
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Focus on Direct Clients Gallery Client Base 22 1H 2009 1H 2010
Direct Clients 46% Media Agencies 54% Direct Clients 52% Media Agencies 48%
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(in millions of Russian Roubles)
Sales 1H 2009 1H 2010 1H Pacing, % Billboards 600 677 13% Street Furniture 421 433 3% Transport & Other 298 338 13% Subcontracted revenues 217 334 54% Total 1,536 1,782 16% Sales YTD 8 months 09 YTD 8 months 10(1) YTD Pacing, % Billboards 790 953 21% Street Furniture 559 572 2% Transport & Other 395 464 18% Subcontracted revenues 304 457 50% Total 2,049 2,447 19%
(1) Contracted as of 20 August 2010
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(in thousands of US dollars)
(1) Contracted as of 20 August 2010
Sales 1H 2009 1H 2010 1H Pacing, % Billboards 18,150 22,505 24% Street Furniture 12,720 14,409 13% Transport & Other 9,006 11,239 25% Subcontracted revenues 6,563 11,115 69% Total 46,439 59,269 28% Sales YTD 8 months 09 YTD 8 months 10(1) YTD Pacing, % Billboards 24,174 31,595 31% Street Furniture 17,107 18,970 11% Transport & Other 12,096 15,397 27% Subcontracted revenues 9,325 15,146 62% Total 62,703 81,108 29%
Zenith Optimedia 2010 Espar Analyst 2010
TV
OUTDOOR
RADIO
INTERNET
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Billboards Street Furniture Transport & Other
FORMATS 31 December 2009 30 June 2010 Russia Ukraine TOTAL Russia Ukraine TOTAL Billboards 8,978 3,556 12, 534 8, 973 3, 496 12, 469 Street Furniture 17,994 2,781 20,775 16, 928 2 ,830 19, 758 Transport 12,459
13,147
Other 1,206 196 1,402 1 ,485 256 1, 741 Total 40, 637 6, 533 47 ,170 40, 533 6, 582 47, 115 Number of advertising faces 27
Occupancy rates 28 RUSSIA
2Q`08 3Q`08 4Q`08 1Q`09 2Q`09 3Q`09 4Q`09 1Q`10 2Q`10
Billboards 87% 85% 83% 57% 78% 78% 85% 76% 87% Street Furniture 75% 74% 76% 72% 75% 75% 74% 70% 74% Transport & Other n/a n/a n/a n/a n/a n/a n/a n/a n/a UKRAINE
2Q`08 3Q`08 4Q`08 1Q`09 2Q`09 3Q`09 4Q`09 1Q`10 2Q`10
Billboards 86% 83% 80% 38% 49% 50% 77% 67% 49% Street Furniture 59% 81% 39% 41% 35% 34% 55% 68% 45% Transport & Other n/a n/a n/a n/a n/a n/a n/a n/a n/a
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(in thousands of US dollars)
Capital Expenditures 2009 2010 Change 2 Quarter Billboards and ultravision 3x6 244 668 424 174% Directional signs 639 382
Other advertising formats 102 257 155 152% Other CAPEX 14 434 420 30times Total 999 1 742 770 78% Six Months Ended Billboards and ultravision 3x6 745 1 072 327 44% Directional signs 802 571 231
Other advertising formats 386 258
Other CAPEX 215 635 420 195% Total 2 148 2 537 389 18%
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(in thousands of US dollars)
Unaudited Interim Condensed Consolidated Statement of Operations
2Q 1H
2009 2010 2009 2010 Revenues $ 26,039 $ 32,267 $ 46,439 $ 59,269 Cost of revenues (19,191) (19,058) (37,531) (37,910) Gross profit 6,848 13,209 8,908 21,359 Selling, general and administrative expenses (8,649) (7,475) (17,279) (14,764) Loss on disposal of property and equipment
Gain on disposal of subsidiaries 208
226 3,380 Finance income 211 308 495 634 Finance costs (9,103) (11,754) (18,064) (22,259) Net foreign exchange gain/(loss) 11,757 (6,002) (10,804) (2,229) Other operating income 211 595 340 881 Profit before income tax 1,205 (11,584) (37,058) (13,292) Income tax (expense)/benefit 530 (1,193) 450 (1,955) Net loss $ 1,735 $ (12,777) $ (36,608) $ (15,247) Attributable to: Equity holders of the parent 1,735 (12,777) (36,608) (15,247) $ 1,735 $ (12,777) $ (36,608) $ (15,247)
31 Unaudited Interim Condensed Consolidated Balance Sheet
(in thousands of US dollars)
ASSETS Non-current assets Intangible assets $ 89,573 $ 86,522 Property and equipment 31,249 26,245 Advances issued 3,800 3,489 Total non-current assets 124,622 116,256 Current assets Trade and other receivables 16,022 17,439 Advances issued and prepaid expenses 13,763 19,964 Inventories 1,088 2,235 Other current assets 3,832 4,134 VAT receivable 200 121 Cash and cash equivalents 28,714 30,961 Total current assets 63,619 74,854 TOTAL ASSETS $ 188,241 $ 191,110 31 December 2009 30 June 2010 Audited Unaudited
32 Unaudited Interim Condensed Consolidated Balance Sheet
(in thousands of US dollars)
31 December 2009 30 June 2010 Audited Unaudited EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent Share capital $ 128 $ 128 Additional paid-in capital 107,404 107,404 Accumulated deficit (259,029) (274,276) Foreign currency translation (19,858) (21,270) TOTAL EQUITY (171,355) (188,015) LIABILITIES Non-current liabilities Loans and borrowings 135,404 148,855 Deferred income tax liabilities 12,653 13,641 Other non-current liabilities
Total non-current liabilities 148,057 162,511 Current liabilities Trade and other payables 14,399 14,625 Deferred revenues and advances from customers 13,982 13,895 Put option liability 4,000
174,808 183,547 Current portion of finance lease obligations 22 4 Taxes payable 4,232 4,367 Other current liabilities 96 175 Total current liabilities 211,539 216,614 TOTAL EQUITY AND LIABILITIES $ 188,241 $ 191,110
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Unaudited Interim Condensed Consolidated Cash Flow Statement
1H 2009 1H 2010
(in thousands of US dollars)
Cash generated from operations (1,356) 7,506 Income taxes paid (530) Imputed tax paid (1,554) Interest paid
231 420 Net cash flows from operating activities (3,209) 7,926 Cash flows from investing activities Payments for property, equipment and other assets (3,322) (2,324) Proceeds from sale of subsidiaries, net of transaction costs 1,105
(2,217) (2,324) Cash flows from financing activities Payments for restructuring (3,524) (3,155) Payments under finance leases (3,627)
(7,151) (3,155) Effect of exchange rate changes on cash & cash equivalents (493) (200) Net increase in cash and cash equivalents (13,070) 2,247 Cash and cash equivalents at 1 January 36,074 28,714 Cash and cash equivalents at 30 June $ 23,004 $ 30,961
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On 19 July 2010 Dmitry Cheltsov has been appointed by the Board of Directors to the post of Chief Executive Officer. Mr Cheltsov previously managed the
business
TNT Express Worldwide Moscow and was General Manager of the logistics company Itella. Since 2000, Mr. Cheltsov has also been holding the post
Chairman
the Committee for Transport and Customs of the Association of European Business. Dmitry Cheltsov graduated from the Military Kraznoznamenny Institute of the Ministry of Defense. He also got education at Warwick Business School in Great Britain and, prior to that, was educated at the Higher Commercial and Management School at the Russian Academy for External Trade.
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May 11, 2009 – Gallery announces appointment of advisors for potential restructuring May 15, 2009 – Gallery announces postponement of interest payment as part of a strategy to
preserve liquidity
June 16, 2009 – The constructive discussions started with the financial and legal advisors
appointed by the Ad Hoc Committee of certain Holders of Senior Secured Notes
October 6, 2009 – Principal agreement achieved with Ad Hoc Committee to restructure the financial
liabilities of the Group
May 26, 2010 – The High Court of Justice of England and Wales sanctions the Schemes of
Restructuring
August 18, 2010 –The Schemes of Restructuring were implemented and the
Restructuring was completed in full aspects. Gallery was legally structured in the New
million.
Gallery appoints
advisors for financial restructuring
Gallery
announces non- payment of interest
Ad Hoc Committee of
Senior Secured Notes Holders created. Restructuring negotiations started.
Agreement between
Gallery and Ad Hoc Committee of Senior Secured Notes Holders achieved
05.2009 10.2009 05.2010 08.2009
Federal Antimonopoly
Service of Russia approves proposed Schemes of restructuring
07.2010
High Court of England
and Wales sanctions proposed Schemes of restructuring
06.2009
Formal
completion of restructuring
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18.08.2010, Moscow – Gallery announces the successful completion today of the restructuring of the Group’s financial liabilities (the “Restructuring”) in accordance with the agreement reached on 6 October 2009 with a committee representing the majority of holders of the $175 million 10 1/8 per cent. senior secured notes due 2013 (the “Committee”). The Restructuring was implemented by way of two schemes of arrangement in the English courts (the “Schemes”). The Schemes were approved by the Scheme Creditors on 18 May 2010 and sanctioned by the High Court of Justice of England and Wales at a fairness hearing held on 26 May 2010. Under the terms of the Restructuring, the total indebtedness of the Group was reduced from $342.2 million to $100.3 million, while holders of $161.5 million face value of the senior secured notes received 68 per cent. of the equity in a new holding company, Gallery Media Holding Limited (“Newco”), and 90 per cent. of $100.3mm of 10 per cent. new notes due 2015 (the ”New Notes”). $13.5 million face value of old senior secured notes held by Group were cancelled as part of the
will continue to provide ongoing support to the new Group in return for 30% of the equity of Newco and $10.0 million of the New Notes. The Committee allocated 2 per
lead up to the Restructuring.
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