October 31, 2018 To, The General Manager The Manager Corporate Relationship Department Listing Department BSE Limited National Stock Exchange of India limited Plaza, 5 th Floor, Plot no. C/1, G Block Phiroze Jeejeeboy Towers Dalal Street, Fort, Bandra Kurla Complex, Bandra (E) Mumbai- 400 001 Mumbai- 400 051 BSE Scrip Code: 532795 NSE Scrip Symbol: SITINET Kind Attn.: Corporate Relationship / Listing Department Subject : Investor Presentation in respect of Conference Call on November 1, 2018 at 2:00 p.m. to discuss the performance of the Company Dear Sir, This is in refence to our intimation dated September 29, 2018 regarding Conference Call on November 1, 2018 at 2:00 p.m. to discuss the performance of the Company post declaration of un- audited Financial Results for the 2 nd quarter of financial year 2018-19 and half year ended on September 30, 2018. In this context, we are submitting herewith Investor Presentation. You are requested to kindly take the above on record. Thanking you, Yours truly,
SITI Networks Limited Q2FY19 Investor Presentation Formerly known as SITI Cable Network Limited BSE : 532795 | NSE : SITINET | Bloomberg : SCNL:IN | Reuters : SITI.NS www.sitinetworks.com 1 SITI Networks Limited – Confidential
Disclaimer Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs, assumptions ,expectations, estimates, objectives and projections of the directors and management of SITI Networks Limited (SITI Networks) about its business and the industry and markets in which it operates. These forward-looking statements include, without limitation, statements relating to revenues and earnings. The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “project” and similar expressions are also intended to identify forward looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. SITI Networks does not undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication. 2
SITI Networks Declares Strong Q2FY19 Results 3
SITI Networks’ Robust y-o-y Performance in Q2FY19 Operating EBITDA leaps 2.52x to Rs.682 Mn • Operating EBITDA Margins jumps 2.1x to 18.2% • Subscription Revenue surges 24% to Rs.2548 Mn • Total Revenue 1 rises 20% to Rs.3748 Mn • Digital Subscriber ARPU leaps 19% • Subscription Collection efficiency surpasses 95% • 4 1. Excluding Activation
SITI registers Strong Growth over Q1FY19 Operating EBITDA leaps 1.24x • Operating EBITDA Margins jumps 150 bps • Subscription Revenue surges ~19% • Total Revenue 1 rises 14.2% • 5 1. Excluding Activation
Industry Overview 6
India Market Overview TV Households are Growing Faster than the Universe 2016 2018 1% Terrestrial 10% Analog Cable 44% Digital Cable 13% 286 Mn 297 Mn Total HH Free Dish 197 Mn TV Households 31% TV HH 183 Mn 197 Mn Paid DTH Penetration of TV HH has gone up Cable (Digital + Analog) controls from 64% in 2016 to 66% in 2018 54% of India’s TV market Universe Update BARC India July 2018 7
TV Homes Penetration Max Growth in East & South India | Small Towns & Rural are key drivers of Growth # Growth in TV Penetration # TV Owning HH (Millions) – Major Contributors 21% North East 24% Bihar / Jharkhand 12% Odisha 11% AP/Telangana 9% Karnataka Most Growth in TV Penetration in DAS Phase 3 & 4 areas Universe Update BARC India July 2018 | Growth has been measured over 2016 report 8
Company Overview 9
• India’s Leading Digital TV Network • Present in 22+ States & UT across India • Footprint across 580+ locations • Delivering content to 55 Mn+ consumers 24/7 10
SITI Networks India’s Leading Digital TV Network 3.9 Lakh 1.7 Mn 11.75 Mn 580+ High Definition Broadband Active Digital Locations Customers Home Passes Customers Footprint ~7% 1.63 Lakh 55 Mn+ TV Households Broadband Consumers in India Customers Reached Nation-wide 1 st MSO launched in 1 st MSO to give CRM 1 st MSO listed on Stock 1 st MSO to launch local Distribution India tool to Partners Exchange channels 05 24,000+strong 04 Bouquet of Local 03 01 02 SITINET listed Launched in OYC tool customer Distribution Network Channels on NSE 1994 offered to LCOs All metrics as of 30 th Sep. 2018 | Does not include Analog
SITI Networks 11.75 Mn Happy Households across the country DAS Phase 1 1 1.7 Mn DAS Phase 2 2 1.5 Mn DAS Phase 3 3 3.9 Mn DAS Phase 4 4 4.7 Mn All metrics as of 30 th Sep. 2018 | Does not include Analog
SITI Networks Present across 580+ locations Uttaranchal Punjab Uttar Pradesh Haryana Bihar Delhi Assam Nagaland Rajasthan Meghalaya Gujarat Jharkhand West Bengal Madhya Pradesh Maharashtra Odisha Chhattisgarh Telangana Karnataka Andhra Pradesh Kerala
SITI Networks On a Progressive Growth Path
SITI Networks Competitive Advantage 01 02 03 04 05 India’s largest MSO Using latest MPEG4 OYC Subscriber Provisioning of Zee5 Robust corporate STBs Management System app to SITI’s Video governance & Presence across 580 subscribers compliance locations Broadband through Conax CAS Hybrid (DOCSIS 2/3 & In discussion with Professional GPON) Network SAP Based systems various OTT service Management providers for creating Uniform commercial value adds for SITI Lean and Agile policies base Organizational Structure Value unlocking: Consolidating MSOs Country-wide Superior Systems and Strategic Efficient Access Technology Processes Alliances Execution
Promoter Group Corporate Structure • Launched in 1926, the Parent Group (“Essel Group”) completed 90 years recently; One of India's leading business houses, with a dominant vertically integrated presence in Media and entertainment • Leading producer, aggregator and distributor of Indian programming across the world; 222,000+ hours of original Content • Group Market Cap (Listed entities under the Parent Group): ~USD7 Bn Essel Infrastructure • Present in 171 countries, a reach of ~1bn+ viewers; Compelling bouquet of 75 Channels Education: Zee Learn Limited Packaging : Essel Propack DNA Dish SITI Theme Parks: Essel ZEE World and Waterpark ZEE Newspaper TV Networks Media Corp Ltd. Entertainment Precious Metals: Shirpur Gold Refinery India's Leading English broadsheet General TV Strong presence in Asia’s largest DTH One of India’s daily with presence Healthy Lifestyle & Entertainment National & Regional provider after merger leading National in major cities Network News Genre with Videocon D2H MSOs Wellness Content Distribution Print Other Business’ Exchange rate used USD1=INR74.00 Market cap as of 30 th Oct. 2018
SITI Networks Sizeable Free Float & Institutional Ownership 1.1% 3.9% Key Investors Others Mutual Funds 72.2% 5.0% Promoters Individuals Foreign 12.2% Institutions FII’s 5.6% Shareholding Pattern 872 Mn Shares Indian Companies Domestic Institutions There has been fund infusion of INR6800 Mn by Promoters through OFCDs & Convertible Warrants in Last 2.5 years As of 26 th October 2018 Others include HUF, Clearing Members, banks, trusts and NRIs
Technology Infrastructure Video & Broadband • 12 Digital Headends; Intra-city OFC and Coax Network of ~33,000 Kms covering ~ 580 locations • Transport of Digital CATV signals on 1.2 Gbps links across the country; ~350 IP Points • Hybrid (DOCSIS+ GPON) Technology to offer Cable Broadband services STB’s Chipsets Servers CAS, SMS, Connectivity Modems Digital EPG Headends
Strategy 19
• Improve operational efficiencies and SITI Networks harness inbuilt leverage • Fungible teams for Cable and Video Strategy Broadband 03 • Improve extraction from low utilized IP based locations and 04 exiting non-profitable ones Cost 02 • Increase Collection efficiency by Optimization Improve further implementing Prepaid Margins model Migrate to Prepaid 05 01 Range of STB Revenue Enhancement • Moving from SD / HD STB to • ARPU enhancement across Smart STB (Linux & Android) phases • Increase HD Subscriber base • TRAI Order Readiness • Up-sell HD, OTT and Video to customers 20
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