INOX Leisure Limited Investor Presentation Q1 FY15 A u g u s t 2 - - PowerPoint PPT Presentation

INOX Leisure Limited

Investor Presentation Q1 FY15

A u g u s t 2 0 1 4

INOX – a dive iversif ifie ied busi siness group with ith mark rket le leadership across busi siness sses

• Diversified, privately owned, professionally managed business group
• 80 year track record of ethical business growth
• 22 companies (including two listed, 7 international subsidiaries and

5 joint ventures, of which 3 are international)

• 10 different businesses
• Gross block over Rs. 7,800 crores, Gross revenues over Rs. 5,200 crores
• 100 plus business units across India
• Employing more than 10,000 people

 Listed on BSE and NSE  India’s largest manufacturer of

refrigerants, chloromethanes & PTFE

 Carbon credit revenues utilized to

build strong businesses

 75% subsidiary of GFL  Fully integrated wind turbine

manufacturer with state of the art facilities for nacelles, blades, towers, and hubs

 India’s fastest growing and amongst

largest wind farm solutions providers

 50:50 joint venture with Air

Products and Chemicals Inc (USA), a Fortune 500 Company

 India’s largest industrial gas

manufacturer – with 40 plants across the country

 Privately held  India’s largest cryogenic

engineering company, the second largest in the world.

 Manufacturing facilities in India,

US, Canada, Brazil and China

 100% subsidiary of GFL  Wind farm operator with around

213 MW of operational wind farms.

 Listed on BSE and NSE  49% subsidiary of GFL  Currently operates 82 properties in

45 cities comprising 320 screens and 86,231 seats

Group of Companies

• currently operates 82 properties
• with 320 screens
• across 45 cities
• located in premium upscale locations
• with state of the art modern projection & acoustic systems
• interiors of international standards; luxurious seating
• wide range of local and international food & beverage offerings
• with world class service
• delivered by a young and vibrant team

INOX Leisu isure Limite ited is is India ia’s premie iere cinema operator

India ian Movie Exh xhib ibitio tion Bus usiness

Immense opportunity for large, organized players

Organized Retail on Overdrive

• Organized retail is expected to grow at a rapid rate of 19-20% CAGR over the next 5 years
• As of 2013, only 7.5% of the $520 bn retail market in India was organized
• Organized retail expected to be 10% share of total retail by 2018.
• Favorable regulatory environment – 51% FDI permitted in multi brand retail
• Real Estate sector more organized – huge development in malls and commercial properties
• Large Malls need anchor tenants – strong preference for Multiplexes

Vibrant Domestic Box Office

• Domestic theatrical accounts for 75% of total film industry revenues in 2013
• Box Office collections estimated to grow at 11.4% CAGR from Rs 93 bn in 2013 to Rs 160 bn in 2018
• Multiple drivers for box office growth –
• Digital Cinema enabled wide releases  Larger box office collections  Film Distributors enjoying

large profits  Larger investments  Quality content pipeline

• Younger demographics and increasing discretionary spends especially on entertainment
• Limited alternative entertainment options
• Movie going is a social activity

Underpenetrated multiplex market

• India is a severely under-served market with low screen density (8 screens / mn vs. 120 in US)
• Multiplex screens account for just 25% of total screens
• Latent demand in several markets for quality movie going experience

Large Movie Industry

• ~ 1000 movies released per annum
• ~ 5 billion tickets sold annually
• Quality content across genres and languages

Source: FICCI KPMG Report 2014; Pulse of Indian Retail Market - EY Report 2014; Research Reports

15 Sta t e s 4 5 4 5 Ci t i e s 82 M ul t ip l ex e s 32 0 S cre e n s 8 6 , 231 S e a t s

One ne of f the the Largest t Multiplex Chains in n Ind ndia ia

• Track record of aggressive expansion
• Pan India Presence
• Strong project pipeline

One of the Largest Multiplex Chains in India

• Unmatched service and ambience
• State of the art technology
• Premium multiplex properties
• Strong content pipeline

Unmatched Consumer Experience

• Rising footfalls
• High ticket prices
• Highly profitable F&B service
• Focus on other operating income
• By leveraging on brand partnerships

Robust Operating Performance

• Owned Properties
• E-Tax Exemption

Fillips to profitability

Key Value Driv rivers

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Track Rec ecord of f Aggressiv ive Exp xpansio ion

On average, added two properties every quarter over the last decade

2 Prop. 8 Screens 3 Prop. 12 Screens 6 Prop. 25 Screens 9 Prop. 35 Screens 14 Prop. 51 Screens 22 Prop. 76 Screens 26 Prop. 91 Screens 32 Prop. 119 Screens 63 Prop. 239 Screens 68 Prop. 257 Screens 74 Prop. 285 Screens 79 Prop. 310 Screens

SURAT VIZIANAGARAM KALKA RAIPUR JAIPUR MADURAI GREATER NOIDA KOLKATA MANIPAL HYDERABAD NAVI MUMBAI PUNE (Amanora) BHUBANESWAR UDAIPUR BHOPAL LILUAH SILIGURI (CC) Vijaywada (LEPL)

• 2 FAME

Properties VIZAG (CMR) BANGALORE (Mantri Sq) BELGAUM JAIPUR (Raja Park) KANPUR BANGALORE (J.P.Nagar)

• 25 FAME Properties

HYDERABAD SILIGURI KOLKATA (Rajarhat) INDORE (Central Mall) THANE VIZAG (Beach Road) FARIDABAD NAGPUR (Jaswant Tuli) BANGALORE (Swagath) BURDWAN BHARUCH DURGAPUR JAIPUR (Crystal Palm) LUCKNOW RAIPUR KOLKATA (Swabhumi) VIJAYWADA DARJEELING KOTA NAGPUR (Wardhaman Nagar) CHENNAI JAIPUR (Bani Park) KOLKATA (Salt Lake) GOA MUMBAI (Nariman Point) KOLKATA (Elgin Road) PUNE VODADARA BANGALORE (Magrath Road) JAIPUR (Vaishali Ngr) INDORE (Sapna Sangeeta)

IPO Acquisition

• f 89

Cinemas Acquisition

• f Fame

India

Includes 6 Managed Properties with 20 screens

GURGAON VIZAG (Chitralayaa) Jalgaon

82 Prop.

320 Screens

Pan Ind ndia ia Pres esence

18,631 34,958 19,955 12,687 East West South North 70 120 82 48 East West South North 9 17 9 10 East West South North

Cities Properties

Well distributed mix of properties

Screens Seats

18 30 20 14 East West South North

Str trong Proje

• ject Pipeline

Q1 FY15 FY15

*Management Property **Screens of Satyam Cineplexes Sl No. City

• No. of Screens

Launch Date 1 Gurgaon 3 24th Jun 2014 2 Vizag 3 4th Jul 2014 3 Jalgaon 4 27th Jul 2014 Total Screens 10 Sl No. City

• No. of Screens
• Est. Launch

1 Vizag 2 Q2FY15 2 Jamnagar 5 Q2FY15 3 Faridabad 3 Q2FY15 4 Lucknow 4 Q2FY15 5 Kurnool 3 Q3FY15 6 Pune 6 Q3FY15 7 Ajmer 3 Q3FY15 8 *Bhiwadi 3 Q3FY15 9 Goa 4 Q3FY15 10 Jaipur 4 Q4FY15 11 Kota 4 Q4FY15 12 Bangalore 5 Q4FY15 13 Vadodara 3 Q4FY15 14 Pune 5 Q4FY15 15 Kolhapur 4 Q4FY15 16 Aurangabad 3 Q4FY15 Total Screens 61 **Additional Screens 41 FY15 Total Screens 92 Post FY15

Post FY15

Unmatched Se Servi vice and nd Ambie ience

Ambience

• World class ambience
• Emphasis on safety, comfort and convenience

Video Quality

• Setup own high quality DCI Compliant 2K Digital Projection Systems across

locations to ensure world class cinematic experience

• High definition picture quality
• 3D enabled
• High frame rate (HFR) ready (can go up to 60 fps)

Audio Quality

• Early adopters of Dolby ATMOS sound technology
• Excellent acoustic systems
• Distortion free sound

Programming

• Experienced Programming Team
• Wide variety of movies catering to different genres and tastes
• Theatre management system installed in every unit allows flexibility in programming

• First multiplex chain in the country to co-develop an Integrated ERP software
• Focus on ensuring transparency to all business partners (regulatory agencies and distributors)
• End of day data availability allows for performance analysis and better management control
• Automated DCR (Daily Collection Reports) sent to regulatory agencies and distributors - no manual

intervention for report generation and hence no room for errors, complete transparency

• Setup NOC in Mumbai that enables management team to continuously monitor, control and

report information on digital systems across the country

• Real time programming changes
• Dynamic on screen ad scheduling from NOC

State te of f the the Art rt Technology

Prem emium Multi tiplex Prop

• perti

ties

PUNE AMANORA KOLKATA QUEST GREATER NOIDA BHOPAL MUMBAI INORBIT SURAT

Str trong Con

• ntent Pipeline

Expected Blockbuster Movies Expected Hit Movies

01-Aug-14 D GANGS OF MUMBAI HINDI SANJAY KAPOOR, AARYA BABBAR, MAHIMA CHOUDHARY, OM PURI, SUSHIL SINGH, JAGGU NIVHGUNA 01-Aug-14 HERCULES : THE THRACIAN WARS (3D)ENG DWAYNE JOHNSON, IAN MCSHANE, JOHN HURT 01-Aug-14 22 JUMP STREET ENG CHANNING TATUM, JONAH HILL, ICE CUBE 01-Aug-14 LUCY ENG MORGAN FREEMAN, SCARLETT JOHANSSON, 08-Aug-14 INTO THE STORM ENG RICHARD ARMITAGE 08-Aug-14 GUARDIANS OF THE GALAXY (3D) ENG ZOE SALDANA, BRADLEY COOPER, VIN DIESEL, BENECIO DEL TORO 08-Aug-14 ITS ENTERTAINMENT HINDI AKSHAY KUMAR, TAMANNAH BHATIA, PRAKASH RAJ, SONU SOOD, MITHUN CHAKRABORTY 15-Aug-14 SINGHAM RETURNS HINDI AJAY DEVGAN 15-Aug-14 SEX TAPE ENG JASON SEGEL, CAMERON DIAZ, ROB CORDDRY 22-Aug-14 MAD - MAD ABOUT DANCE HINDI SAAHIL PREM, AMRIT MAGHERA 22-Aug-14 MARDANI HINDI RANI MUKHERJEE 28-Aug-14 DESI KATTEY HINDI SUNIEL SHETTY, AKHIL KAPUR, JAY BHANUSHALI, SASHEH AAGHA, TIA BAJPAI, ASHUTOSH RANA 29-Aug-14 TEENAGE MUTANT NINJA TURTLES ENG MEGAN FOX, WHOOPI GOLDBERG, ALAN RITCHSON, WILLIAN FICTHNER 29-Aug-14 RAJA NATWARLAL HINDI EMRAAN HASHMI, PARESH RAWAL 05-Sep-14 BHAANGARH HINDI DILIP VIRENDER SOOD, AJAY G RAI, MAYANK JAIN 05-Sep-14 DAAVAT E ISHQ HINDI ADITYA ROY KAPOOR, PARINEETI CHOPRA 05-Sep-14 CHAARFUTIYA CHHOKARRE HINDI SOHA ALI KHAN, HARSH MAYAR, ZAKIR HUSSAIN, SEEMA BISWAS, MUKESH TIWARI, GOVIND NAMDEV 05-Sep-14 MARY COM HINDI PRIYANKA CHOPRA 12-Sep-14 CREATURE (3D) HINDI BIPASHA BASU, IMRAN ABBAS 12-Sep-14 FINDING FANNY HINDI ARJUN KAPOOR, DEEPIKA PADUKONE, NASEERUDIN SHAH, PANKAJ KAPOOR, DIMPLA KAPADIA 12-Sep-14 TAMANCHEY HINDI NIKHIL DWIVEDI, RICHA CHADDA 12-Sep-14 EKKEES TOPPON KI SALAMI HINDI ANUPAM KHER, NEHA DHUPIA, MANU RISHI 19-Sep-14 DOLPHIN TALE (3D) ENG MORGAN FREEMAN, ASHLEY JUDD 19-Sep-14 3:00 AM HINDI RANNVIJAY SINGH, ANINDITA NAYAR, SALIL ACHARYA, KAVIN DAVE 19-Sep-14 KHOOBSURAT HINDI SONAM KAPOOR, RATNA PATHAK, PROSENJIT CHATTERJEE, FAWAD KHAN, KIRRON KHER, AAMIR RAJA HUSSAIN 19-Sep-14 UGLY HINDI RONIT ROY, RAHUL BHATT, TEJASWANI KOLHAPURE 19-Sep-14 BALVINDER SINGH FAMOUS HO GAYA HINDI MIKA SINGH, SHAAN 19-Sep-14 THE MAZE RUNNER ENG DYLAN O BRIEN, KAYA SKODELARIO, KI HONG LI 26-Sep-14 NO GOOD DEED ENG TARAJI P.HENSON, IDRIS ELBA, LESLIE BIBB, 26-Sep-14 THIS IS WHERE I LEAVE YOU ENG ROSE BRYAN, TIMOTHY OLYMPHANT, JASON BATEMAN, ABIGAIL SPENCER 02-Oct-14 BANG BANG HINDI HRITHIK ROSHAN, KATRINA KAIF 02-Oct-14 HAIDER HINDI SHAHID KAPOOR, SHRADDHA KAPOOR, TABU, KAY KAY MENON 03-Oct-14 EQUALIZER ENG DENZEL WASHINGTON, CHLOE GRACE MORETZ, DAN BILZERIAN, 03-Oct-14 GONE GIRL ENG BEN AFFLECK, ROSAMUND PIKE 10-Oct-14 HAWAIZAADA HINDI AYUSHMANN KHURRANA, PALLAVI SHARDA 10-Oct-14 SONALI CABLE HINDI RHEA CHAKRABORTY, ALI FAZAL, ANUPAM KHER 17-Oct-14 THE BOOK OF LIFE ENG CHANNING TATUM, CHRISTINA APPLEGATE, ZOE SALDANA, RON PEARLMAN, DANNY TREJO 17-Oct-14 DRACULA ENG LUKE EVANS, DOMINIC COOPER, SARAH GADON, SAMANTHA BARKS 23-Oct-14 THE SECRET SERVICE ENG TAYLOR SWIFT, SAMUEL JACKSON, LADY GAGA 23-Oct-14 HAPPY NEW YEAR HINDI SHAH RUKH KHAN, ABHISHEK BACHCHAN, DIPIKA PADUKONE, SONU SOOD, BOMAN IRANI, VIVAN SHAH, KAREENA KAPOOR

• Convenient locations / Good catchment areas
• Good mix of Hollywood, Bollywood and Regional movies
• “Virtuous cycle” in movie business
• Quality content leading to strong box office collections
• Between Apr’14 to Jun’14 there were 3 movies over Rs.100 crs.(NBOC).
• Higher profitability enabling large investments by film producers / distributors

Risi ising Footfalls

Quality content driving Occupancy rates Expansion driving total footfalls

Note: Excludes Managed properties

25.7 30.7 35.3 38.6 * 9.9 FY11 FY12 FY13 FY14 Q1-FY15

(millions)

23% 25% 28% 28% 26% FY11 FY12 FY13 FY14 Q1-FY15

*10.3 million footfalls in Q1FY15 including managed Properties.

Hig igh Tic icket t Pric rices s (A (ATP)

ATP Trend

• Inox brand enjoys a premium positioning amongst urban consumers
• Prime locations provide strong pricing power
• Increasing contribution of 3D movies – 3D tickets are priced at a premium of 15-20 % over 2D tickets

152 156 160 156 159 FY11 FY12 FY13 FY14 Q1-FY15

Note: Excludes Managed properties

Hig ighly Profit itable F& F&B Se Serv rvice

SPH Growth – overall

• Multiple initiatives on increasing the highly profitable F&B revenues (76% Gross margins)
• Unique variety of food with choice of International, Indian and City-Centric special flavors
• No menu fatigue - Variety in menu for week days and week ends
• Season specific food festivals
• Investment in quality machines to serve best pop corn
• Contribution of F&B revenues to net revenues increased from 18% to 23% over last 4 years

Note: Excludes Managed properties

F&B Cost (% of F&B revenues)

41 44 47 49 56 FY11 FY12 FY13 FY14 Q1-FY15 32% 31% 30% 26% 24% FY11 FY12 FY13 FY14 Q1-FY15

14%

Growth in SPH

Focus on

• n Othe

ther Oper erating Income

Other operating revenues Significant scope for enhancement of high margin

• ther operating revenues
• Pan India Reach
• Premium positioning
• Good locations

Several initiatives have been taken up to focus on better monetization

Ad Revenues

• Hiked Ad rates
• Focus on high value / long term deals
• Sales to Leading corporates
• DAVP / Government Segment
• Off-screen advertising

Other Revenues

• Virtual Print Fee
• Online booking revenues
• Conducting Fee

(Rs million)

172 292 324 495 150 167 299 323 604 136 FY11 FY12 FY13 FY14 Q1-FY15 Ad Revenue Other Operating Revenue Q1FY14 vs Q1FY15

92% Growth in

Ad Revenues

By Leveraging Brand Partn tnerships

Owned Propertie ties

City / Property State Screens Seats Total Area (sft) Multiplex Area (sft) Pune Maharashtra 4 1316 140,229 53,189 Vadodara Gujarat 4 1318 109,452 48,622 Nariman Point, Mumbai Maharashtra 5 1323 40,131 40,131 Jaipur Rajasthan 2 787 26,392 26,392 Swabhumi , Kolkatta West Bengal 4 1022 46,204 46,204 Anand Gujarat 3 624 27,871 27,871 Corporate Office Maharashtra

• 16,000
• Owned properties in prime locations enable savings in lease expense, thereby boosting EBITDA

E-Tax Exem xemptio tion

E-Tax

• No. of prop

Screens Seats Average Residual Period Full Tax 60 243 64,667 Exempted 9 35 9,747 2 years Zero Tax* 7 22 6,148

• Tax incentives such as e-tax exemptions enable faster recovery of capital cost and

reduced exhibition cost

• E-tax exemption treated as capital receipt – no income tax on the amount

*Note: 5 Rajasthan properties will be paying 100% E-Tax and 2 will be paying 50% E-Tax from 1st Aug 2014

Annexure I I - Key Mana nagement t Per ersonnel

• Mr. Pavan Jain
• Mr. Vivek Jain
• Mr. Deepak Asher
• Mr. Siddharth Jain
• Mr. Haigreve Khaitan
• Mr. Kishore Biyani

Board of Directors

• Mr. Amit Jatia

Key Management Personnel

• Mr. AlokTandon

(CEO)

• Mr. Muralikrishna

(CPO)

• Mr. Rajender Singh

(VP – Programming)

• Mr. Upen Shah

(CFO)

• Mr. Harshavardhan Gangurde

(VP-Marketing)

• Mr. Uday Sakharkar

(VP – Projects)

• Mr. JitenderVerma

(CTO)

• Ms. Daizy Lal

(COO)

Annexure II I Financia ial Su Summary

Profit and Loss Statement

Rs million FY11 FY12 FY13 FY14 Q1FY14Q1FY15 Net Box Office 2269 3889 4567 4905 1332 1280 F&B Revenues 602 1139 1418 1623 451 472 Ad Revenues 172 292 324 495 78 150 Other Revenues 224 380 359 694 151 144 Total Revenues 3,267 5,700 6,668 7717 2,012 2046 Distributor Share 1029 1803 2099 2235 604 584 F&B Cost 195 349 426 466 135 122 Payroll Cost 261 394 427 495 116 137 Other Expenses 1417 2344 2700 3212 765 901 Total Expenses 2,902 4,890 5,652 6408 1,620 1744 EBITDA 365 810 1016 1309 392 302 EBITDA Margin (%) 11.17% 14.21% 15.24% 16.96% 19.48% 14.76% *Depreciation 229 375 430 507 121 181 Interest 162 243 267 276 73 64 Exceptional Items

• 56

180 25 4 5 Tax

• 1

27 109 153 55 6 Minority share in loss 19 57 PAT 50 42 185 369 143 46 Q1FY14 vs Q1FY15

92% Growth in

Ad Revenues *The Company has adopted the useful lives of various fixed assets as specified in Schedule II of the Companies Act, 2013, with effect from 1 April 2014, as against the useful lives adopted earlier as specified in Schedule XIV to the Companies Act, 1956. Consequently, depreciation charge for the quarter is higher by Rs.473 lakhs.

Annexure II Financia ial Su Summary

Shareholding Pattern Balance Sheet

Gujarat Fluorochemic als (Group), 49% Inox Benefit Trust, 21% MF/FII/Banks , 5% Corporate, 12% Others, 13%

Rs million FY11 FY12 FY13 FY14 Networth 3010 3092 3246 3909 Borrowings (LT +ST) 2109 2110 2460 2237 Net Fixed Assets 4950 4892 5950 6346 Current Assets 720 651 820 758 Current Liabilities 1864 1344 1767 1863 Non Current Assets 1563 1235 1364 1476 Non Current Liabilities 250 232 661 571

Annexure III Film Dist istrib ibutor Payout Ana nalysi sis

44.0% 44.0% 45.4% 45.7% Q1FY15 Q1FY14

Film Hire as a % of Reported NBOC Film Hire as a % of Adjusted NBOC Adjusted Net Box Office Collection (NBOC) is calculated by taking notional tax in properties where INOX has Entertainment Tax exemption

Annexure IV Ove verheads Ana nalysi sis

Expenses as a % of Total Revenues Q1FY15 Q1FY14 Employee Benefits Expense 7% 6% Property Rent and Conducting Fees 14% 13% Repairs and Maintenance 2% 2% CAM and Power&Fuel 14% 11% Other Overheads 14% 12%

Due to lower Total Revenues in Q1FY15 the ratios have increased.

THANK YOU

INOX Leisu isure Limite ited ABS BS Towers, s, Old Pad adra Road, Vad adodara, Guja jarat – 390 007