Goldman Sachs and Gao Hua China Investment Frontier Conference 2011 - - PowerPoint PPT Presentation

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Goldman Sachs and Gao Hua China Investment Frontier Conference 2011 - - PowerPoint PPT Presentation

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Goldman Sachs and Gao Hua China Investment Frontier Conference 2011 1 Forward- -looking statements looking statements Forward This presentation and subsequent discussion may This presentation and subsequent discussion may contain certain

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Goldman Sachs and Gao Hua China Investment Frontier Conference 2011

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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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Integrating the World’s Best Practice

CLEARCHANNEL CLEARCHANNEL

WORLDWIDE WORLDWIDE

  • World's leading out

World's leading out -

  • of
  • f-
  • home media/

home media/ entertainment company entertainment company

  • CCO:

CCO: World

World’ ’s largest outdoor advertiser s largest outdoor advertiser

NYSE listed NYSE listed

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4

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170 260 355 427 488 538 675 776 997 1,260 1,118 1,262 691

200 400 600 800 1000 1200 1400 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Turnover (HK$’m)

Our 13 Years Track Record

*For six months ended 30 June 2011

*

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Take Control of Outdoor

TV TV Newspaper/ Newspaper/ Magazine Magazine Outdoor Outdoor Internet Internet Radio Radio

5% 5% 12% 12% 13% 13%

27% 27% 36% 36%

Media Mix Media Mix

Data Source: SAIC 2010, Company estimates

7% 7%

Others Others

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Leader in China’s Outdoor Advertising

  • Standardized

Standardized m m edia edia n network etwork

  • 28

28-

  • city

city n national ational c coverage

  • verage
  • # 1

# 1 in all in all k key cities ey cities

Regional Regional Sales Center Sales Center

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Mass Medium of Choice

“ “ Standardized Standardized” ” Network Network

  • Low cost

Low cost -

  • per

per-

  • thousand

thousand

  • Highly visible

Highly visible – – “ “ always on always on” ”

  • Only sector opens to foreign investors

Only sector opens to foreign investors

  • Growing outdoor audience

Growing outdoor audience

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Secure Long Term Supply

  • National MOFCOM & SAIC

National MOFCOM & SAIC a approvals pprovals

  • Long

Long-

  • term

term c contracts w/ local governments

  • ntracts w/ local governments
  • Exclusive &

Exclusive & l low

  • w c

cost

  • st g

guarantee uarantee

  • Retain 100% of ad revenues

Retain 100% of ad revenues

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Showcase Top Consumer Brands in China

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REVIEW OF STRATEGY & EXECUTION

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1H11 Highlights

  • China economic growth continues despite tightening

China economic growth continues despite tightening measures to contain inflation measures to contain inflation

  • Domestic demand being one of the engines behind

Domestic demand being one of the engines behind economic growth economic growth

  • Urbanization helps fuel growth in major cities

Urbanization helps fuel growth in major cities

  • Chinese brands & local advertisers increase ad spend

Chinese brands & local advertisers increase ad spend

  • More advertisers expand into 2

More advertisers expand into 2nd

nd & 3

& 3rd

rd tier cities

tier cities

  • Higher competitive pressure in Shanghai post World Expo

Higher competitive pressure in Shanghai post World Expo

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  • Total revenue from BJ, SH, GZ up 20%

Total revenue from BJ, SH, GZ up 20% YoY YoY to HK$352m to HK$352m

  • BJ:

BJ: Revenue +33% with improvement on both ASP & Revenue +33% with improvement on both ASP &

  • ccupancy rate
  • ccupancy rate
  • GZ: Revenue +38% with improvement on both ASP &

GZ: Revenue +38% with improvement on both ASP &

  • ccupancy rate
  • ccupancy rate
  • SH: Revenue +42% with Shanghai World Expo in 1H10

SH: Revenue +42% with Shanghai World Expo in 1H10 Revenue Revenue -

  • 11% in 1H11 without major event

11% in 1H11 without major event

  • Mid

Mid-

  • tier cities: Revenue up 11%

tier cities: Revenue up 11% YoY YoY to HK$278m to HK$278m

1H11 Business Performance by Location

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Revenue by Industry

1H10 1H10 1H11 1H11 Beverages Beverages 25% 25% 25% 25% Food Food 12% 12% 13% 13% Telecommunications Telecommunications 12% 12% 11% 11% Fashion & ornaments Fashion & ornaments 4% 4% 11% 11% Entertainment Entertainment 6% 6% 9% 9% Information Technology Information Technology 3% 3% 6% 6% Realty Realty 6% 6% 5% 5% Business / Consumer services Business / Consumer services 6% 6% 5% 5% Cosmetics & Toiletries Cosmetics & Toiletries 6% 6% 4% 4% Pharmaceuticals / Health products Pharmaceuticals / Health products 4% 4% 4% 4%

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  • Leverage on rising private consumption

Leverage on rising private consumption

  • Strengthen leading position in nation

Strengthen leading position in nation-

  • wide outdoor market

wide outdoor market

  • Re

Re-

  • invest in network expansion

invest in network expansion

  • Increase bus shelter panel number through:

Increase bus shelter panel number through:

  • organic build
  • rganic build-
  • out
  • ut
  • mergers & acquisitions

mergers & acquisitions

2H11 Outlook

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  • Further optimize ASP & occupancy rate

Further optimize ASP & occupancy rate

  • Explore alternative advertising platforms &

Explore alternative advertising platforms & emerging technology for display panel profitably emerging technology for display panel profitably

  • Revenue from Shanghai post World Expo to recover

Revenue from Shanghai post World Expo to recover

2H11 Outlook (con’td)

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FINANCIAL REVIEW

For the year ended 30 June 2011

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1H11 Consolidated Income Statement

(HK$ (HK$’ ’M M) ) 1H 1H10 10 1H 1H11 11 YoY YoY % % Turnover Turnover 585 585 691 691 +18% +18% Cost of sales, excluding amortization Cost of sales, excluding amortization (272) (272) (322) (322) +19% +19% Operating expenditure, excluding depreciation & Operating expenditure, excluding depreciation & amortization amortization (97)* (97)* (126) (126) +30%* +30%* EBITDA EBITDA 216 216 243 243 +12% +12% Depreciation & amortization Depreciation & amortization (119) (119) (133) (133) +12% +12% EBIT EBIT 97 97 110 110 +13% +13% Net profit Net profit 77 77 73 73

  • 6%

6% Basic EPS (HK cents) Basic EPS (HK cents) 14.7 14.7 13.8 13.8

  • 6%

6%

*Operating expenditure, excluding depreciation & amortization, includes the Share Option Expense Adjustment booked in 1H10

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1H11 Consolidated Income Statement,

excluding the Share Option E xpense Adjustment Booked in 1H10 (HK$ (HK$’ ’M M) ) 1H 1H10 10 1H 1H11 11 YoY YoY % % Turnover Turnover 585 585 691 691 +18% +18% Cost of sales, excluding amortization Cost of sales, excluding amortization (272) (272) (322) (322) +19% +19% Operating expenditure, excluding depreciation & Operating expenditure, excluding depreciation & amortization amortization (117) (117) (126) (126) +8% +8% EBITDA EBITDA 196 196 243 243 +24% +24% Depreciation & amortization Depreciation & amortization (119) (119) (133) (133) +12% +12% EBIT EBIT 77 77 110 110 +42% +42% Net profit Net profit 57 57 73 73 +27% +27%

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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 630 630 60 60 1 1

  • 691

691 EBITDA EBITDA 253 253 3 3

  • (13)

(13) 243 243 EBIT EBIT 120 120 3 3

  • (13)

(13) 110 110 Net Profit Net Profit/(Loss) /(Loss) 85 85 2 2

  • (14)

(14) 73 73

(HK$ (HK$’ ’M M) )

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Revenue by Location

Beijing 23% Shanghai 17% Guangzhou 14% Others 46%

1H10 1H10 1H 1H11 11

Beijing 27% Guangzhou 16% Shanghai 13% Others 44%

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Costs & E xpenses

1H10* 1H10* 1H11 1H11 Rental Rental 151 151 176 176 Maintenance Maintenance 48 48 59 59 Electricity Electricity 26 26 29 29 Sales & Cultural Tax Sales & Cultural Tax 47 47 58 58 Direct operating costs Direct operating costs 272 272 322 322 S, G & A S, G & A & other expenses & other expenses 117 117 126 126 Total costs & expenses, Total costs & expenses, excluding depreciation & amortization excluding depreciation & amortization 389 389 448 448

( (HK HK$ $’ ’M M) )

YoY YoY % % +17% +17% +22% +22% +11% +11% +25% +25% +19% +19% +8% +8% +15% +15%

*Exclude Share Option Expense Adjustment booked in 1H10

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Trade Receivables

(HK$ (HK$’ ’M) M)

Jun 30, 2010 Jun 30, 2010 Dec 31, 2010 Dec 31, 2010 Jun 30, 2011 Jun 30, 2011 Current Current – – 90 days 90 days 215 215 221 221 294 294 91 91 – – 180 days 180 days 98 98 135 135 132 132 Over 180 days Over 180 days 151 151 128 128 144 144 464 464 484 484 570 570 Less: provision for impairment Less: provision for impairment (43) (43) (39) (39) (40) (40) 3rd party receivables 3rd party receivables 421 421 445 445 530 530 Turnover days (time wt. avg.) Turnover days (time wt. avg.) 129 days 129 days 119 days 119 days 119 days 119 days Due from GWH Due from GWH 162 162 142 142 158 158

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Increase in Cash Flows

(HK$ (HK$’ ’M) M)

1H10 1H10 1H11 1H11 Net cash flows from operating activities Net cash flows from operating activities 105 105 213 213 Net cash flows used in investing activities Net cash flows used in investing activities (141) (141) (52) (52) Net cash flows from financing activities Net cash flows from financing activities 57 57 28 28 Net increase in cash & cash equivalents Net increase in cash & cash equivalents 21 21 189 189 Net cash & cash equivalents Net cash & cash equivalents at the beginning of period at the beginning of period 420 420 672 672 at the end of period at the end of period 441 441 861 861

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

Free Cash Flow* Free Cash Flow* 40 40 169 169

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Appendix Appendix

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Power of Our Network

(For six months ended 30 June 2011)

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 14% 14% ‐ ‐28 28% % 13 13% % 1 1% % 66 66% % 50 50% % 59 59% % 60 60% % ‐ ‐ 17 17% % 17 17% % 9 9% % 33 33% % ‐ ‐11 11% % 38 38% % 20 20% % 2 2nd

nd tier cities

tier cities 4 4% % 61 61% % ‐ ‐1 1% % 11 11% % TOTAL TOTAL 4% 4% 61 61% % 3 3% % 16% 16%