Analyst Presentation
Analyst Presentation 31 March 2012
Welcome
► ►
Financial results Business overview
Giles Willits Darren Throop
CFO CEO
“No.1 independent multi-territory distributor” Analyst Presentation 2012
1
FINANCIAL RESULTS
Giles Willits, CFO Analyst Presentation 2012
2
Financial Highlights
1 2 3 4
FY12
FY11
Change
Revenue
£502.7m
£469.7m
+7.0%
Underlying EBITDA1
£52.6m
£42.5m
+23.8%
Adjusted Profit Before Tax2
£43.0m
£32.3m
+33.1%
Adjusted diluted EPS3
15.4p
13.0p
+18.5%
Investment in Content
£135.8m
£91.3m
+48.7%
Adjusted net debt4
£44.1m
£38.6m
+14.2%
Underlying EBITDA is operating profit before one-off items, share-based payment charges, depreciation and amortisation of intangible assets. Adjusted profit before tax is profit before tax from continuing operations before operating one-off items, share-based payment charges, one-off items within net finance charges, depreciation and amortisation of aquired intangible assets. Adjusted diluted earnings per share is adjusted for operating one-off items, share-based payment charges, amortisation of acquired intangible assets, one-off items within net finance charges and taxation. Adjusted net debt includes net borrowings under the Group’s senior debt facility.
Analyst Presentation 2012
3
Operating Business results - Film Revenue £m
Financial Highlights Revenue of £273.3 million, up 13% driven by continuing growth in the UK and strong performance in Australia ► Investment in content increased by 17% to £64.2m (2011:£55.0m) ► Underlying EBITDA up 41% at £34.9 million reflecting strong improvement in operating margins from mix of revenues across all windows ►
280 270
273.3
260 250 240 242.7 230 220 2011
2012
Underlying EBITDA £m 40 30 20
34.9 24.7
10 0 2011
2012
In order to provide like for like comparisons, this and the slides that follow include the results and prior year figures on a proforma and constant currency basis. ‘Proforma’ includes the results of Hopscotch, which was acquired on 13 May 2011, as if that business had been acquired on the first day of the comparative period. Constant currencies have been calculated by retranslating the comparative figures using weighted average exchange rates for the period to 31 March 2012. The impact of currency movements has had an immaterial impact on revenue and underlying EBITDA in the period.
Analyst Presentation 2012
4
Operating Business results - Television Revenue £m 120 100 96.5
80 60
67.9
40 20 0 2011
2012
Underlying EBITDA £m 20.0
Financial Highlights ► Revenue of £96.5 million, up 42% due to good progress in commissioning new programmes and renewing existing shows ► Investment in content and programmes increased by 83% to £72.0 million ► Contracted sales not yet recognised at the year end relating to work in progress was £47 million (2011: £21 million) ► Underlying EBITDA up 40% at £15.4 million reflecting revenue increases, margins broadly flat ► Family delivered £16.4 million (2011: £14.1 million) of revenues and £5.9 million (2011: £5.2 million) of underlying EBITDA
15.0 15.4 10.0
11.0
5.0 0.0 2011
2012 Analyst Presentation 2012
5
Operating Business results - Distribution Financial Highlights
Revenue £m 220
Overall revenue at £189.8 million was 16% lower than the prior year following challenging market conditions in Canada ► EBITDA declined by 50% to £6.5 million ► The US business performance was broadly flat year on year ►
230 225.2
210 200 190 189.8
180 170 2011
2012
Underlying EBITDA £m 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
12.9
6.5
2011
2012 Analyst Presentation 2012
6
Revenue and Earnings Underlying EBITDA - 2011 £m
Underlying EBITDA - 2012 £m 11%
26% 27%
51% 62%
23%
Film
Film
Television
Television
Distribution
Distribution
Quality of earnings continues to improve with Film and Television accounting for 89% of Group EBITDA in 2012 (2011: 74%) Analyst Presentation 2012
7
One-off items
One-off items
FY12
FY11
£3.8m
£2.7m
•
FY12 includes costs relating to the strategic review and to the acquisition of Hopscotch
•
FY11 includes final charge for step up to Main Market and corporate acquisition costs
Analyst Presentation 2012
8
Finance charges FY12
FY11
£6.4m
£8.9m
-
(£1.8m)
Mark to market
£0.7m
£0.7m
Adjusted finance charges
£7.1m
£7.8m
Net finance charges One-off financing charges
•
Adjusted finance charges down reflecting lower average net debt year on year
•
Cash interest cover up to 9.2x (2011: 8.2x)
Analyst Presentation 2012
9
Earnings Per Share
Adjusted PBT Adjusted Diluted EPS
FY12
FY11
Change
£43.0m
£32.3m
+33.1%
15.4p
13.0p
+18.5%
•
Adjusted PBT increase reflects the increased operating profit and lower finance charges
•
EPS improvement reflects improved adjusted PBT and decreased effective tax rate to 26.0% (2011: 27.2%) partially offset by increased number of fully diluted shares ► 183.8m shares in issue (2011:163.9m) – increase reflecting full year effect of February 2011 raise and Hopscotch consideration shares ► 22.6m dilution from options and MPS scheme (2011:16.2m) – increase mainly reflecting the impact of the higher average share price in FY12 on MPS shares
Analyst Presentation 2012
10
Cashflow Senior Debt FY12
TV Prod’n FY12
Total Group FY12
Senior Debt FY11
TV Prod’n FY11
Total Group FY11
Operating cash inflow
£74.6m
£49.5m
£124.1m
£66.0m
£38.9m
£104.9m
Investment in content
(£66.2m)
(£69.6m)
(£135.8m)
(£53.7m)
(£37.6m)
(£91.3m)
Other capex
(£1.9m)
(£0.1m)
(£2.0m)
(£1.5m)
(£0.1m)
(£1.6m)
£6.5m
(£20.2m)
(£13.7m)
£10.8m
£1.2m
£12.0m
Free cash flow •
Cash flows from operating activities at £124.1 million were 18.3% ahead reflecting strong growth across the Group
•
In Television Production, investment in programmes increased 85.1% resulting in negative free cash flow supported by increased interim production financing debt
•
Elsewhere the Group was free cash flow positive despite a 23.3% increase in cash investment in content spend, as a result of strong operating cash inflows Analyst Presentation 2012
11
Net Debt FY12
FY11
Adjusted net debt
£44.1m
£38.6m
Television Production Debt
£46.1m
£22.1m
Net Debt
£90.2m
£60.7m
•
The increase in net debt comprises an increase in adjusted net debt of £5.5 million and increase of £24.0 million in net debt in the Television Production business
•
Adjusted net debt leverage further reduced year on year to 0.8 times (2011: 0.9 times)
•
Television Production net debt increased by £24.0 million year on year reflecting the large number of high value productions in progress at the year end Analyst Presentation 2012
12
Summary (reported) Revenue* £m
Investment in content and programmes £m
600 500 469.7
400
502.7
419.0 300 312.7 200
234.2
100 0 2008
2009
2010
2011
2012
Underlying EBITDA* £m
135.8 91.3 74.7 47.8 17.4 2008
2009
2010
2011
2012
Library value $USm
60
400
50
52.6
40
350
300
42.5
30
250
200
35.3
20 10
160 140 120 100 80 60 40 20 0
25.4
100
18.7
220 175
0
0 2008
2009
2010
2011
2009
2012
2010
2011
2012
* Continuing operations
Analyst Presentation 2012
13
BUSINESS REVIEW
Darren Throop, CEO Analyst Presentation 2012
14
Overview •
Business Update • Another strong year for the Company with significant developments across all parts of the business
•
Strategy • The performance of the business in 2012 confirms the success of the Group’s strategy to invest in Film and Television content rights to create long term shareholder value for investors
•
Acquisitions • Opportunities exist across all areas of the business
Analyst Presentation 2012
15
Business Update
Analyst Presentation 2012
16
Film •
Significant progress during the year underpins our market leading position • • • •
•
Increase in investment in content in 2012, plan to invest more in 2013 Hopscotch acquisition and integration completed – outperforming expectations Digital growing significantly, content is critical for development of new digital consumer platforms New initiatives launched to provide further growth • US ~ 10 limited release theatrical titles planned for 2013 • International ~ represented two films at 2012 Cannes Festival Strong pipeline of content for 2013 and beyond supported by successful Cannes Festival
Analyst Presentation 2012
17
Film – selection of 2012/13 releases
Seeking a Friend for the End of the World
Cosmopolis
Virginia
Killer Joe
Looper
The Host
Moonrise Kingdom
The Sapphires
The Angels’ Share
Investor Presentation 2012
Beasts of the Southern Wild
The Twilight Saga: Breaking Dawn – Part 2
Marley 18
Television •
Television has cemented its position as one of the leading independent studios in North America • Strong year of new commissions and renewals with 237 half hours of production • Increasing balance to the roster of programming 2012 30% 43%
2011 Series 2 Series 3 Series 4+ New Commission
17% 10%
• •
International sales business growth - extending acquisitions of third party TV series to complement our TV production slate Significant pipeline of new productions for 2013 from existing production partners and international co-production deals • Saving Hope and Rogue in addition to anticipated renewals Analyst Presentation 2012
19
Strong development slate to complement existing series renewals Factual programmes
Development slate
Primetime programmes Key titles
Format
Port Hope
Broadcaster
Key titles
Format
One hour series
The Sheards
One hour reality
Black & Blue
One hour series
Twin Life (The Hogan Twins)
One hour factual
Wondrous Strange
One hour series
Great White Bear
One hour docu-soap
Deep
One hour series
Martian War
90 min
The Almighty Johnsons
One hour series
Victoria Secret Treasure
Half hour reality
The Reel
One hour series
Top Dawgs
Half hour reality / game show
Upstate
One hour series
Ancient Sin Cities
Half hour factual
Commissioned
20
Family •
The Family business had another good year with strong licence renewals and the continued success of Peppa Pig
•
Peppa Pig still No.1 in the UK and continues to expand well internationally US – on track for nationwide launch in Autumn 2012 International – significant success in broadcast
• • • •
• •
Ben & Holly’s Little Kingdom Continues to generate strong ratings in the UK with year on year L&M growth, new episodes due for delivery in 2012 New Developments Expect to commence production on two new series by the end of the year
Analyst Presentation 2012
21
Peppa Pig international platforms for broadcast and L&M are rapidly expanding
Europe
Television platform
Nordic
RoW
Americas
CEE
Latin America
L&M platforms Key toy partner
Licensing programme
five / Nick Jr.
Character Options
65+ licensees
France 5 / TiJi
In development
In development
Nickelodeon
In development
In development
Clan (RTVE) / Disney
Bandai
10+ licences
Yoyo (RAI) / Disney
Advanced negotiations
In development
WDR / Kika
Opportunity
Opportunity
Nickelodeon / DR / NRK / YLE
Advanced negotiations
In development
Minimax
Bansai / Tesco
Opportunity
In negotiation
Rossman
Opportunity
Nick Jr.
Fisher Price
3+ licensees
Treehouse / TVO
Opportunity
Opportunity
Opportunity
Opportunity
Opportunity
ABC
Big Balloon
10+ licensees
Opportunity
Opportunity
In development
ETV
Prima Toys
Opportunity
eOne broadcast partners
Geography
Shows and frequency All existing and future seasons airing 7 days a week All existing and future seasons airing 7 days a week Scheduling being finalised All existing and future seasons airing 7 days a week All existing seasons 5 days a week All existing seasons 5 days a week All existing seasons 5 days a week All existing and future seasons airing 7 days a week
22
Extensive development, with support from major international broadcasters Selection of Projects Title
Genre
Format
Action adventure / Pre-school (boys)
52 x 11'
Pre-school
52 x 11'
Winston Steinburger
6-10 comedy
52 x 11'
Mong & Oose
6-10 comedy
52 x 11'
Family television movie
1 x 90'
6-10 comedy
26 x 22'
Action adventure / Pre-school (boys)
52 x 11'
6-10 comedy
52 x 11'
PJ Masks PJ Masks
Oscar & Hoo
Store Wars Mong & Oose
So Mortified! Ninja Cowboy Bear Zapper Jack
Zapper Jack
Broadcaster
Ninja Cowboy Bear
Oscar & Hoo
Winston Steinburger
• New production strategy based on diversification and accessing Canadian and European funding opportunities 23
Distribution •
Difficult year for distribution driven by challenging market conditions in Canada
•
Canada • DVD market experienced double digit decline • Changes to the US Majors’ Canadian operations • Going forward focused on consolidation opportunities, expanding into new categories and cost management
•
US • Steady year despite challenging retail conditions • US Film initiative set to drive growth in future years
Analyst Presentation 2012
24
Strategy Overview
Analyst Presentation 2012
25
A clear strategy for growth ‘Entertainment One’s goal is to become the world’s leading independent entertainment company through the ownership and distribution of Film and Television content rights across all media throughout the world’ Strategic priorities 1
Investment in Content and programming 2
Maximise rights ownership 3
Expand global presence
26
Film
2015 target
Investment in Film content over next 3 years of £300m+
Maximise value from digital rights as market develops
Preferred relationship with all major digital providers across all territories
Drive US film expansion and international film business
15+ limited releases in the US and 6+ films internationally
Increase film investment in core territories
Strategic Growth Drivers
27
Film growth plan across all territories Canada
UK
Target c. 60-70 releases per year
Increase release slate to c.20 titles per year
Grow number of $1m+ titles
Aim to build box office share to >9%
Grow number of £1m+ titles by FY15
Target to grow to c.7–8% market share
International
Build upon existing international film sales capability
International representation of c.6 titles by 2015
US
Target a market share of 1%
Theatrically release 15+ films annually
Australia
Benelux
Maintain number of releases at c.60
Increase representation of local language content
Target number of releases to c.30
Increase box office share to c.8% by 2015, positioning business as second largest independent
28
Television
2015 target Renewals / repeat series
£200m+ investment in programmes over 3 years
c.300 half hours delivered each year
Co-production / strategic relationships
Strategic Growth Drivers New programming and formats
International sales expansion with acquisition of third party programming
29
Family 2015 target International expansion of Peppa Pig
Grow existing brands
Successful Peppa Pig L&M launch in US, Australia and Europe
Development of Ben & Holly’s Little Kingdom
expanded UK L&M programme
Increase production slate
Extend family portfolio
Ben & Holly’s Little Kingdom
5+ new projects delivered
Acquire individual properties
30
Acquisitions
Analyst Presentation 2012
31
Acquisition opportunities Film
New territories – European and Latin American focus
Consolidation opportunities in existing territories, particularly in Canada and the UK
Library acquisitions
Family
Acquisitions of kids businesses and properties
Third party rights for L&M exploitation
Television
Expansion focused on the UK and Australia
Consolidation opportunities, particularly in Canada and the US
Group
Vertical integration into broadcasting in Canada and other territories
Digital
32
Summary
Analyst Presentation 2012
33
Summary • •
Another year of strong financial performance Future looks positive with growth driven by • Organic growth • Acquisition opportunities
Analyst Presentation 2012
34
Q&A
Analyst Presentation 2012
35
Welcome
► ►
Financial results Business overview
Giles Willits Darren Throop
CFO CEO
“No.1 independent multi-territory distributor” Analyst Presentation 2012
1
FINANCIAL RESULTS
Giles Willits, CFO Analyst Presentation 2012
2
Financial Highlights
1 2 3 4
FY12
FY11
Change
Revenue
£502.7m
£469.7m
+7.0%
Underlying EBITDA1
£52.6m
£42.5m
+23.8%
Adjusted Profit Before Tax2
£43.0m
£32.3m
+33.1%
Adjusted diluted EPS3
15.4p
13.0p
+18.5%
Investment in Content
£135.8m
£91.3m
+48.7%
Adjusted net debt4
£44.1m
£38.6m
+14.2%
Underlying EBITDA is operating profit before one-off items, share-based payment charges, depreciation and amortisation of intangible assets. Adjusted profit before tax is profit before tax from continuing operations before operating one-off items, share-based payment charges, one-off items within net finance charges, depreciation and amortisation of aquired intangible assets. Adjusted diluted earnings per share is adjusted for operating one-off items, share-based payment charges, amortisation of acquired intangible assets, one-off items within net finance charges and taxation. Adjusted net debt includes net borrowings under the Group’s senior debt facility.
Analyst Presentation 2012
3
Operating Business results - Film Revenue £m
Financial Highlights Revenue of £273.3 million, up 13% driven by continuing growth in the UK and strong performance in Australia ► Investment in content increased by 17% to £64.2m (2011:£55.0m) ► Underlying EBITDA up 41% at £34.9 million reflecting strong improvement in operating margins from mix of revenues across all windows ►
280 270
273.3
260 250 240 242.7 230 220 2011
2012
Underlying EBITDA £m 40 30 20
34.9 24.7
10 0 2011
2012
In order to provide like for like comparisons, this and the slides that follow include the results and prior year figures on a proforma and constant currency basis. ‘Proforma’ includes the results of Hopscotch, which was acquired on 13 May 2011, as if that business had been acquired on the first day of the comparative period. Constant currencies have been calculated by retranslating the comparative figures using weighted average exchange rates for the period to 31 March 2012. The impact of currency movements has had an immaterial impact on revenue and underlying EBITDA in the period.
Analyst Presentation 2012
4
Operating Business results - Television Revenue £m 120 100 96.5
80 60
67.9
40 20 0 2011
2012
Underlying EBITDA £m 20.0
Financial Highlights ► Revenue of £96.5 million, up 42% due to good progress in commissioning new programmes and renewing existing shows ► Investment in content and programmes increased by 83% to £72.0 million ► Contracted sales not yet recognised at the year end relating to work in progress was £47 million (2011: £21 million) ► Underlying EBITDA up 40% at £15.4 million reflecting revenue increases, margins broadly flat ► Family delivered £16.4 million (2011: £14.1 million) of revenues and £5.9 million (2011: £5.2 million) of underlying EBITDA
15.0 15.4 10.0
11.0
5.0 0.0 2011
2012 Analyst Presentation 2012
5
Operating Business results - Distribution Financial Highlights
Revenue £m 220
Overall revenue at £189.8 million was 16% lower than the prior year following challenging market conditions in Canada ► EBITDA declined by 50% to £6.5 million ► The US business performance was broadly flat year on year ►
230 225.2
210 200 190 189.8
180 170 2011
2012
Underlying EBITDA £m 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
12.9
6.5
2011
2012 Analyst Presentation 2012
6
Revenue and Earnings Underlying EBITDA - 2011 £m
Underlying EBITDA - 2012 £m 11%
26% 27%
51% 62%
23%
Film
Film
Television
Television
Distribution
Distribution
Quality of earnings continues to improve with Film and Television accounting for 89% of Group EBITDA in 2012 (2011: 74%) Analyst Presentation 2012
7
One-off items
One-off items
FY12
FY11
£3.8m
£2.7m
•
FY12 includes costs relating to the strategic review and to the acquisition of Hopscotch
•
FY11 includes final charge for step up to Main Market and corporate acquisition costs
Analyst Presentation 2012
8
Finance charges FY12
FY11
£6.4m
£8.9m
-
(£1.8m)
Mark to market
£0.7m
£0.7m
Adjusted finance charges
£7.1m
£7.8m
Net finance charges One-off financing charges
•
Adjusted finance charges down reflecting lower average net debt year on year
•
Cash interest cover up to 9.2x (2011: 8.2x)
Analyst Presentation 2012
9
Earnings Per Share
Adjusted PBT Adjusted Diluted EPS
FY12
FY11
Change
£43.0m
£32.3m
+33.1%
15.4p
13.0p
+18.5%
•
Adjusted PBT increase reflects the increased operating profit and lower finance charges
•
EPS improvement reflects improved adjusted PBT and decreased effective tax rate to 26.0% (2011: 27.2%) partially offset by increased number of fully diluted shares ► 183.8m shares in issue (2011:163.9m) – increase reflecting full year effect of February 2011 raise and Hopscotch consideration shares ► 22.6m dilution from options and MPS scheme (2011:16.2m) – increase mainly reflecting the impact of the higher average share price in FY12 on MPS shares
Analyst Presentation 2012
10
Cashflow Senior Debt FY12
TV Prod’n FY12
Total Group FY12
Senior Debt FY11
TV Prod’n FY11
Total Group FY11
Operating cash inflow
£74.6m
£49.5m
£124.1m
£66.0m
£38.9m
£104.9m
Investment in content
(£66.2m)
(£69.6m)
(£135.8m)
(£53.7m)
(£37.6m)
(£91.3m)
Other capex
(£1.9m)
(£0.1m)
(£2.0m)
(£1.5m)
(£0.1m)
(£1.6m)
£6.5m
(£20.2m)
(£13.7m)
£10.8m
£1.2m
£12.0m
Free cash flow •
Cash flows from operating activities at £124.1 million were 18.3% ahead reflecting strong growth across the Group
•
In Television Production, investment in programmes increased 85.1% resulting in negative free cash flow supported by increased interim production financing debt
•
Elsewhere the Group was free cash flow positive despite a 23.3% increase in cash investment in content spend, as a result of strong operating cash inflows Analyst Presentation 2012
11
Net Debt FY12
FY11
Adjusted net debt
£44.1m
£38.6m
Television Production Debt
£46.1m
£22.1m
Net Debt
£90.2m
£60.7m
•
The increase in net debt comprises an increase in adjusted net debt of £5.5 million and increase of £24.0 million in net debt in the Television Production business
•
Adjusted net debt leverage further reduced year on year to 0.8 times (2011: 0.9 times)
•
Television Production net debt increased by £24.0 million year on year reflecting the large number of high value productions in progress at the year end Analyst Presentation 2012
12
Summary (reported) Revenue* £m
Investment in content and programmes £m
600 500 469.7
400
502.7
419.0 300 312.7 200
234.2
100 0 2008
2009
2010
2011
2012
Underlying EBITDA* £m
135.8 91.3 74.7 47.8 17.4 2008
2009
2010
2011
2012
Library value $USm
60
400
50
52.6
40
350
300
42.5
30
250
200
35.3
20 10
160 140 120 100 80 60 40 20 0
25.4
100
18.7
220 175
0
0 2008
2009
2010
2011
2009
2012
2010
2011
2012
* Continuing operations
Analyst Presentation 2012
13
BUSINESS REVIEW
Darren Throop, CEO Analyst Presentation 2012
14
Overview •
Business Update • Another strong year for the Company with significant developments across all parts of the business
•
Strategy • The performance of the business in 2012 confirms the success of the Group’s strategy to invest in Film and Television content rights to create long term shareholder value for investors
•
Acquisitions • Opportunities exist across all areas of the business
Analyst Presentation 2012
15
Business Update
Analyst Presentation 2012
16
Film •
Significant progress during the year underpins our market leading position • • • •
•
Increase in investment in content in 2012, plan to invest more in 2013 Hopscotch acquisition and integration completed – outperforming expectations Digital growing significantly, content is critical for development of new digital consumer platforms New initiatives launched to provide further growth • US ~ 10 limited release theatrical titles planned for 2013 • International ~ represented two films at 2012 Cannes Festival Strong pipeline of content for 2013 and beyond supported by successful Cannes Festival
Analyst Presentation 2012
17
Film – selection of 2012/13 releases
Seeking a Friend for the End of the World
Cosmopolis
Virginia
Killer Joe
Looper
The Host
Moonrise Kingdom
The Sapphires
The Angels’ Share
Investor Presentation 2012
Beasts of the Southern Wild
The Twilight Saga: Breaking Dawn – Part 2
Marley 18
Television •
Television has cemented its position as one of the leading independent studios in North America • Strong year of new commissions and renewals with 237 half hours of production • Increasing balance to the roster of programming 2012 30% 43%
2011 Series 2 Series 3 Series 4+ New Commission
17% 10%
• •
International sales business growth - extending acquisitions of third party TV series to complement our TV production slate Significant pipeline of new productions for 2013 from existing production partners and international co-production deals • Saving Hope and Rogue in addition to anticipated renewals Analyst Presentation 2012
19
Strong development slate to complement existing series renewals Factual programmes
Development slate
Primetime programmes Key titles
Format
Port Hope
Broadcaster
Key titles
Format
One hour series
The Sheards
One hour reality
Black & Blue
One hour series
Twin Life (The Hogan Twins)
One hour factual
Wondrous Strange
One hour series
Great White Bear
One hour docu-soap
Deep
One hour series
Martian War
90 min
The Almighty Johnsons
One hour series
Victoria Secret Treasure
Half hour reality
The Reel
One hour series
Top Dawgs
Half hour reality / game show
Upstate
One hour series
Ancient Sin Cities
Half hour factual
Commissioned
20
Family •
The Family business had another good year with strong licence renewals and the continued success of Peppa Pig
•
Peppa Pig still No.1 in the UK and continues to expand well internationally US – on track for nationwide launch in Autumn 2012 International – significant success in broadcast
• • • •
• •
Ben & Holly’s Little Kingdom Continues to generate strong ratings in the UK with year on year L&M growth, new episodes due for delivery in 2012 New Developments Expect to commence production on two new series by the end of the year
Analyst Presentation 2012
21
Peppa Pig international platforms for broadcast and L&M are rapidly expanding
Europe
Television platform
Nordic
RoW
Americas
CEE
Latin America
L&M platforms Key toy partner
Licensing programme
five / Nick Jr.
Character Options
65+ licensees
France 5 / TiJi
In development
In development
Nickelodeon
In development
In development
Clan (RTVE) / Disney
Bandai
10+ licences
Yoyo (RAI) / Disney
Advanced negotiations
In development
WDR / Kika
Opportunity
Opportunity
Nickelodeon / DR / NRK / YLE
Advanced negotiations
In development
Minimax
Bansai / Tesco
Opportunity
In negotiation
Rossman
Opportunity
Nick Jr.
Fisher Price
3+ licensees
Treehouse / TVO
Opportunity
Opportunity
Opportunity
Opportunity
Opportunity
ABC
Big Balloon
10+ licensees
Opportunity
Opportunity
In development
ETV
Prima Toys
Opportunity
eOne broadcast partners
Geography
Shows and frequency All existing and future seasons airing 7 days a week All existing and future seasons airing 7 days a week Scheduling being finalised All existing and future seasons airing 7 days a week All existing seasons 5 days a week All existing seasons 5 days a week All existing seasons 5 days a week All existing and future seasons airing 7 days a week
22
Extensive development, with support from major international broadcasters Selection of Projects Title
Genre
Format
Action adventure / Pre-school (boys)
52 x 11'
Pre-school
52 x 11'
Winston Steinburger
6-10 comedy
52 x 11'
Mong & Oose
6-10 comedy
52 x 11'
Family television movie
1 x 90'
6-10 comedy
26 x 22'
Action adventure / Pre-school (boys)
52 x 11'
6-10 comedy
52 x 11'
PJ Masks PJ Masks
Oscar & Hoo
Store Wars Mong & Oose
So Mortified! Ninja Cowboy Bear Zapper Jack
Zapper Jack
Broadcaster
Ninja Cowboy Bear
Oscar & Hoo
Winston Steinburger
• New production strategy based on diversification and accessing Canadian and European funding opportunities 23
Distribution •
Difficult year for distribution driven by challenging market conditions in Canada
•
Canada • DVD market experienced double digit decline • Changes to the US Majors’ Canadian operations • Going forward focused on consolidation opportunities, expanding into new categories and cost management
•
US • Steady year despite challenging retail conditions • US Film initiative set to drive growth in future years
Analyst Presentation 2012
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Strategy Overview
Analyst Presentation 2012
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A clear strategy for growth ‘Entertainment One’s goal is to become the world’s leading independent entertainment company through the ownership and distribution of Film and Television content rights across all media throughout the world’ Strategic priorities 1
Investment in Content and programming 2
Maximise rights ownership 3
Expand global presence
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Film
2015 target
Investment in Film content over next 3 years of £300m+
Maximise value from digital rights as market develops
Preferred relationship with all major digital providers across all territories
Drive US film expansion and international film business
15+ limited releases in the US and 6+ films internationally
Increase film investment in core territories
Strategic Growth Drivers
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Film growth plan across all territories Canada
UK
Target c. 60-70 releases per year
Increase release slate to c.20 titles per year
Grow number of $1m+ titles
Aim to build box office share to >9%
Grow number of £1m+ titles by FY15
Target to grow to c.7–8% market share
International
Build upon existing international film sales capability
International representation of c.6 titles by 2015
US
Target a market share of 1%
Theatrically release 15+ films annually
Australia
Benelux
Maintain number of releases at c.60
Increase representation of local language content
Target number of releases to c.30
Increase box office share to c.8% by 2015, positioning business as second largest independent
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Television
2015 target Renewals / repeat series
£200m+ investment in programmes over 3 years
c.300 half hours delivered each year
Co-production / strategic relationships
Strategic Growth Drivers New programming and formats
International sales expansion with acquisition of third party programming
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Family 2015 target International expansion of Peppa Pig
Grow existing brands
Successful Peppa Pig L&M launch in US, Australia and Europe
Development of Ben & Holly’s Little Kingdom
expanded UK L&M programme
Increase production slate
Extend family portfolio
Ben & Holly’s Little Kingdom
5+ new projects delivered
Acquire individual properties
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Acquisitions
Analyst Presentation 2012
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Acquisition opportunities Film
New territories – European and Latin American focus
Consolidation opportunities in existing territories, particularly in Canada and the UK
Library acquisitions
Family
Acquisitions of kids businesses and properties
Third party rights for L&M exploitation
Television
Expansion focused on the UK and Australia
Consolidation opportunities, particularly in Canada and the US
Group
Vertical integration into broadcasting in Canada and other territories
Digital
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Summary
Analyst Presentation 2012
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Summary • •
Another year of strong financial performance Future looks positive with growth driven by • Organic growth • Acquisition opportunities
Analyst Presentation 2012
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Q&A
Analyst Presentation 2012
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