20140610 vgi

VGi Global Media PCL

1Q 13/14 Earnings Presentation 1 August 2013

1Q 13/14 EARNINGS VGI BOARD OF DIRECTOR’S MEETING NO. 5/2013 30 JUNE 2013

Prepared by Investor Relations Department VGi Global Media PCL

4Q & FY 13/14 Earnings Review SET Opportunity Day – 10 June 2014

Investment involves risk. Prospective should understand the characteristics of Securities and study information about VGI Global Media Public Company Limited (“VGI” or the “Company”) before making a decision to invest in Securities.

This Presentation is not intended to provide the basis for any investment decision, nor to substitute your own analysis and investigation, and should not be considered as a recommendation to any recipient of this Presentation. Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to the Company’s corporate plans, strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward-looking terminology such as “may”, “will”, “expect” , “intend”, “estimate”, “continue”, “plan” or other similar words. The statements are based on the assumptions and beliefs of the Company’s management in light of the information currently available to the Company. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this Presentation is, or should be, relied on as promise or representation of the Company as to the future.

IR Contacts

Disclaimer

IR Department: Ms. Tisakorn Youngmod Ms. Napat Buchasuk Ms. Chama Savetbodi

Telephone: +66(0) 2273 8639 +66(0) 2273 8636

Fax: +66(0) 2273 8610

Email: [email protected]

Website: www.vgi.co.th

Agenda

SECTION 1 Industry Overview

SECTION 2 4Q & FY 13/14 Financial Performance

SECTION 3 Investment Policy

SECTION 4 Business Update

SECTION 5 2014/15 Target

VGI Key Milestones

3.5

3.7

3.9

4.2

3.0

Media Industry Overview

Section 1: Industry Overview 4

THAI ADSPEND VALUE (THB bn)

16.5

17.7 17.9

17.2

15.4

1.4

1.6 1.6 1.7

1.2 1.3

1.4 1.5 1.5

1.0

1.2

2.0

2.2 2.1

1.7

0.2 0.2 0.2 0.2 0.2

1.0 1.1 1.0 1.1 1.0

0.8 0.9 0.9 0.9

0.8

0.5

0.8 0.7

0.6

0.3

1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014

QUATERLY 4Q 12/13 3Q 13/14 4Q 13/14 QoQ (%) YoY (%)

TV 16.5 17.2 15.4 -10.4% -6.9%

Outdoor 1.0 1.1 1.0 -4.8% -1.3%

Transit 0.8 0.9 0.8 -11.4% -0.8%

In-Store 0.5 0.6 0.3 -44.1% -33.2%

Industry 26.5 29.5 24.7 -16.2% -6.8%

QUARTERLY THAI ADSPEND TREND (THB bn)

TV

Newspaper

Cinema

Radio

Magazines Outdoor

Transit

In-store

Internet

4Q 13/14 3Q 13/14 2Q 13/14 1Q 13/14 4Q 12/13

YEARLY 2012/13 2013/14 YoY (%)

TV 68.8 68.1 -0.9%

Outdoor 4.5 4.2 -7.0%

Transit 3.2 3.5 10.4%

In-Store 2.8 2.5 -11.6%

Industry 114.4 113.4 -0.9%

Note: excludes classified house ads. Source: The Nielsen Company (Thailand) Limited

A sharp decline of AdSpend in every media sector in 4Q 13/14

Media Industry Overview Top 5 AdSpend by Business Segment

5

THAI ADSPEND VALUE BY BUSINESS SEGMENTS (THB bn)

12.1 12.4

11.6

11.0

11.9 11.5

10.7 10.3

1.9

2.1

2.5

2.0

2.3

2.5

2.9

2.1 2.0

1.8

1.6

1.3 1.4

1.8 1.7

1.5

1.7 1.6

1.5

1.9

2.2

2.0

1.1 1.1

1.4

1.1 1.2 1.2 1.2

0.9

1Q 12/13 2Q 12/13 3Q 12/13 4Q 12/13 1Q 13/14 2Q 13/14 3Q 13/14 4Q 13/14

FMCG

Motor Vehicles

Government Related Communications

Leisure

4Q 13/14 OVERALL MEDIA INDUSTRY

1 FMCG 42%

2 MOTOR VEHICLES 8%

3 GOVERNMENT RELATED 6%

4 COMMUNICATIONS 6%

5 LEISURE 4%

TOP 5 66%

OTHERS 34%

4Q 13/14 VGI MASS TRANSIT

1 FMCG 39%

2 COMMUNICATIONS 11%

3 TRAVEL & TOURS 7%

4 LEISURE 5%

5 FOOD OUTLETS & RESTAURANTS 4%

TOP 5 66%

OTHERS 34%

1 FMCG 88%

2 MOTOR VEHICLE ACCESSORIES 5%

3 MOTOR VEHICLES 4%

4 FOOD OUTLETS & RESTAURANTS 1%

5 PHARMACEUTICALS 0.8%

TOP 5 98%

OTHERS 2%

4Q 13/14 VGI IN-STORE

Section 1: Industry Overview

Source: The Nielsen Company (Thailand) Limited

Modern Trade Media

18%

P&L SNAPSHOT 4Q & FY 13/14 (THB MN)

4Q & FY 13/14 Overview

(THB MN) 4Q 13/14 4Q 12/13 %YOY 3Q 13/14 % QOQ FY 13/14 FY 12/13 %YOY

Operating Revenue 641 691 -7% 806 -20% 3,149 2,838 11%

Cost of sales 315 311 1% 315 0% 1,342 1,289 4%

Gross profit 326 380 -14% 491 -34% 1,807 1,548 17%

EBITDA 260 315 -18% 416 -38% 1,510 1,289 17%

Net profit 193 225* -14% 317 -39% 1,146 902* 27%

Gross profit margin 51% 55% 61% 57% 55%

EBITDA margin 40% 46% 52% 48% 45%

Net profit margin 30% 32% 39% 36% 32%

FY 13/14 REVENUE BREAKDOWN FY 13/14 GROSS PROFIT BREAKDOWN

BTS-related Media

75%

Office Building & Other Media

7%

6%


53%

BTS-related Media

41%

Modern Trade Media

6

* The Company was required to restate the prior year’s financial statement for comparison purposes in order to comply with the new accounting standard on deferred tax which became effective since January 2013.

Section 2: 4Q & FY 13/14 Performance

361 440 393

1,422

1,679

4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14

182

95 84

200

137

103

190

108 95

Train Station Merchandising andOthers

4Q 12/13

3Q 13/14

4Q 13/14

MARGINS (%)

BTS-related Media

Quarterly Gross Profit (%)

48% 45% 50%

27% 31% 28% 24% 24% 23%

REVENUE (THB MN) REVENUE BREAKDOWN (THB MN)

7

82%

82%

77%

4Q 12/13

3Q 13/14

4Q 13/14

78%

81%

FY 12/13

FY 13/14

Annual Gross Profit (%)


21%

30%

3%

4Q 12/13

3Q 13/14

4Q 13/14

232

67

243

76

167

53

Static Digital

4Q 12/13

3Q 13/14

4Q 13/14

Modern Trade Media

Quarterly Gross Profit (%) Annual Gross Profit (%)

76% 76% 78%

22% 7%

24% 24%


MARGINS (%)

8

26%

25%

FY 12/13

FY 13/14


299 319 220

1,250 1,295

4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14

30

1

34

12

28

0

Office Buildings Others

4Q 12/13

3Q 13/14

4Q 13/14


100% 74% 97%

3% 13%

26%


MARGINS (%)

9

Quarterly Gross Profit (%) Annual Gross Profit (%)

72%

69%

FY 12/13

FY 13/14

63%

73%

56%

4Q 12/13

3Q 13/14

4Q 13/14


31 46

28

166 175

4Q12/13 3Q13/14 4Q13/14 FY 12/13 FY 13/14

826

1,007

331 45

111

6

Beginning cash(31/12/13)

CFO Joint Venture CapEx Interest Income Ending Cash(31/3/14)

Cash Flow & CapEx CASH FLOW MOVEMENT (31 Dec 13 – 31 Mar 14)

FY 13/14 CAPEX (THB MN)

FY 13/14

Platform Screen Door 176

BTS (Platform Truss LEDs and E-Poster) 299

Modern Trade and Others 85

Total 560

(THB mn)

CFI (150)

10 Section 2: 4Q & FY 13/14 Performance

1,821 1,953

22 26

737 762

2,579 2,741

31-Mar-13 31-Mar-14

584 1,111

1,995

1,630

2,579 2,741

31-Mar-13 31-Mar-14

Non-current liabilities

ASSETS BREAKDOWN (THB MN)

Balance Sheet LIABILITIES AND EQUITY BREAKDOWN (THB MN)

Current assets

Non-current Assets

77%

23%

59%

41%

Current liabilities

Equity

28%

71%

1%

28%

71%

1%

KEY FINANCIAL RATIOS

DEBT TO EQUITY

FY 13/14: 0.0x

FY 12/13: 0.0x

LIABILITY TO EQUITY

FY 13/14: 0.4x

FY 12/13: 0.4x

CURRENT RATIO

FY 13/14: 2.1x

FY 12/13: 2.7x

11 Section 2: 4Q & FY 13/14 Performance

Investment Policy

12

Investment policy

SECTOR: Out-of-Home media sector

STAKE: Influential or controlling

GEOGRAPHY: Thailand focus, selective ASEAN (overseas require strong local partner)

RETURN CRITERIA: Minimum IRR or payback period

RATIONALE: • Increase market share in Out-of-Home media segment (to be the leader in OHM)

• Revenue and cost synergies

Section 3: Investment Policy

Business Update Warrant Issuance

13

KEY TERMS AND CONDITIONS OF WARRANT RATIONALE

• Free warrants

• Preferential right to existing shareholders

• Funding to be used for potential acquisitions/ CaPex

TICKER VGI-W1

TERMS 4 Years

EX-RIGHTS DATE 9 July 2014

EXERCISE PERIOD Quarterly basis

WARRANT PRICE Free

ALLOCATION To existing shareholders at the ratio of 4 VGI existing shares : 1 VGI-W1

NO. OF WARRANTS

Up to 857,993,407 Units

EXERCISE RATIO 1 VGI-W1 to 1 ordinary share of VGI

EXERCISE PRICE THB 14.00

Section 4: Business Update

Matter is subject to shareholder approval of AGM on 3 July 2014

Expected maximum proceeds

THB 12,011,067,698

Business Update Dividend Payments & Phar Partnership

14 Section 4: Business Update

DIVIDEND PAYMENTS

• Interim cash dividend of THB 0.18 per share and stock dividend of 25:1 paid on 27 Dec 2013

• Final cash dividend of THB 0.13 per share (subject to AGM on 3 July 2014)

• 2013/14 dividend payout ratio is 93.4%

1.20

0.184*

1.50*

0.13**

2012/13 2013/14

Interim dividend Final dividend

1.0%

1.3%

1.1%

1.5%

Note Dividend yield is calculated using VGI closing share price one day before the date of Board of Directors meeting approving the relevant dividend *2012/13 final dividend and 2013/14 interim dividend included stock dividend of 10:1 and 25:1, respectively. **2013/14 final dividend per share is subject to shareholders’ approval at the AGM on 3 July 2014

VGI Dividend Record

Dividend yield

PHAR PARTNERSHIP

Partner Phar Partnership, Thailand (exclusive media sales agency of Air Asia)

Rights Sale agent for AirAsia planes • 1st year: 30 planes • 2nd year: 38 planes • 3rd year: 42 planes

Contract Length 3 years

635.5 732.4 724.6

98 139.5

173.8

2011 2012 2013

Operating revenue (THB mn) Net Profit (THB mn)

15

Revenue structure

2013 Dividend Yield of 5.6% (based on share price of THB 9.00)

2013 Total operating revenue: THB 724.6mn

Products Location/Area

1 Billboard Bangkok & vicinity / 170 billboard / 74,635 sqm

2 Street Furniture Bangkok / 2,217 sqm

3 Transit City grip light express, BTS walkway & Mo Chit station / 419 sqm

4 Made to order & Event

n/a

MACO space: Billboard, Street furniture and Transit Non MACO space: Made to order and Production/Printing

Billboard, 53.5%

Transit, 7.5%

Production & Event, 11.5%

Street furniture, 27.5%

Business Update Strategic Investment: 24.43% in MACO

MACO’S OVERVIEW

Share information (as of 9 May 2014)

Stock code: MACO

Market capitalisation (THB mn): 2,903.6

Outstanding shares (mn shares): 300.8

MACO’S FINANCIAL PERFORMANCE

Proven Track Record of Revenue and Net Profit


Business Update Strategic Investment: 24.43% in MACO

16

INVESTMENT HIGHLIGHTS BENEFITS TO VGI


Matter is subject to shareholder approval of AGM on 3 July 2014

VGI invested 24.43% in MACO (73.5mn shares, at THB 9.00)

Total investment value of THB 661.5mn

3 BOD representatives from VGI from a total of 9 Directors

Expand media network and market reach

Further expansion in outdoor segment

Increase long-term revenue and net profit

Steady dividend payout

Future growth

Increase product varieties

Broader client portfolio

MAJOR SHAREHOLDERS POST TRANSACTION

Major shareholder post transaction (% out of all shares)

1. VGI Pcl. 24.43%

2. Tansalarak Group 10.05%

3. Maneerattanporn Group 8.40%

4. Meeprasertsakul Group 6.51%

Total major shareholder 49.93%

SYNERGY

In short term, sale synergies can be created by bundling media packages from VGI and MACO

Knowledge sharing and transfer among highly experienced management team

2014/15 Target: Overall Business

Section 5: 2014/15 Target 17

EXPECTED REVENUE GROWTH

22-24% BTS

5 -9% Modern

Trade

7- 10% Off.

Bldg & Others 13 -17%

YoY revenue growth

EXPECTED CAPEX 2014/15

BTS Related Media THB 230 mn

Platform Screen Door THB 290 mn

Modern Trade Media THB 50 mn

Office Building & Other Media THB 30 mn

Total 2014/15 CapEx of

THB 600mn

VGI Key Milestones

VGI Key Milestones 18

5 -9% Modern

Trade

Listed on SET OCT 2012

JUN 2013 Included in MSCI

JUL 2013 Included in SET100 Index

OCT 2013 CG Scoring

JAN 2014 Included in SET50 Index

“Steps to success”

Thank you