2014 ticker 086980 ks m ediaplex i nvestor r elations 2014 © 2014 mediaplex inc. 1
TRANSCRIPT
2014Ticker 086980
KS
MEDIAPLEX
INVESTOR
RELATIONS 2014
© 2014 Mediaplex Inc.1
This presentation has been prepared by Mediaplex Inc. (“The Company”)
This presentation is being presented solely for your information and is subject to change without notice. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented. The Company, its affiliates, advisers or representatives accept no liability whatsoever for any losses arising from any information contained in the presentation.
This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company, and no part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment.
The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.
Disclaimer
© 2014 Mediaplex Inc.2
Review 2013: Total movie industry of KoreaGrowth of total
admission
Growth of Korean films’ admission
10%
13%
Share of admission
60% Movie that has more than 5million viewers
9movies
(3 in 2012)
① Korean movies play a leading role for growth of total film industry since 2012
It’s not because of structural growth such as the increase of the number of screens on theatersIt has resulted increasing the competitiveness of Korean movies contents.
② There were 9 movies which had over 5million viewers.
It is 3 times more than 2012.
③ Views per capita – 4.12 times the most watching in
the world
2 3
Increasing of content’s competitiveness of Korean Films brings about the growth of movie
industry in general
Views per capita
4.1times
(#1 in the world)
MOVIE INDUSTRY REVIEW
Average annual of admission per film
© 2014 Mediaplex Inc.3
0
50
100
150
200
250
2008Y 2009Y 2010Y 2011Y 2012Y 2013Y
Total movies
Korea movies
Foreign movies
1
210
130
Development of box office numbers
REVIEW 2013: COMPETITIVENESS COMPOSITION IN THE MARKET
① Generally, performance of NEW was remarkable in 2013
No. 1 for Korean movie market share (Total market share 18%, No. 2)Average admission per Korean movie was 4,670,000, increased by 2.7 times year on year
② Despite of failure of Mr. Go, Showbox put up a good fight in 2013Total audiences share increased by 1% year on year / Korean movie
audiences share increased by 1.5%p year on year Showbox’s average admission per Korean movie was 3,240,000 which was
50%/130% more than CJ/Lotte
③ CJ E&M was highly deprived of total market share because of frustrated result of
Korean box office
Market share of Korean film decreased by 13%(total market share decreased
by 7%)
Showbox and NEW which have an outstanding content competitiveness obtain better results than CJ and Lotte which have
their own multiplex theatre chain
MOVIE INDUSTRY REVIEW
© 2014 Mediaplex Inc.4
29%
28%
23%
13%
7%
2013 KOREAN FILM MARKET SHARE (Number of Korean Films/ Total Number of Films)
N.E.W (8/18)
CJ E&M(14/31)
Mediaplex(9/10)
Lotte(9/10)
Etc.
Korea movie Share of admission Korea movie of admission per film
Mediaplex Mediaplex
MEDIAPLEX CORE STRATEGY
© 2014 Mediaplex Inc.5
① A Market Leader in qualitative aspects, not in quantitative aspects
② A Partner who can make profits to the investors
③ A Partner who can entrust directors and productions with the projects
④ A Brand that distributes the movies which audiences can see and believe
SHOWBOX’S PURSUING VALUES
What is the SHOWBOX’s pursuing appearances as distributors?
What does SHOWBOX want to be as a market leader?
“SHOWBOX focuses more on being the most confidential partner and distribution brand to create ways of our own to achieve the best rate of
return and the most number of audiences from each projects than being a number one distributor which is distributing more films, attaining more audiences and focusing on competition for sales.
Average of Number of audience per film No.1
ROI No.1(Based on Korean films only)
© 2014 Mediaplex Inc.6
MEDIAPLEX REVIEW
© 2014 Mediaplex Inc.7
-8%
3% 8%
-25%
-41%
-44%-33%
-9%
26%
-17%
-60%
-43%
2003 2004 2005 2006 2007 2008
Korea movie ROI
Mediaplex ROI
Select Select Focus
MEDIAPLEX REVIEW
© 2014 Mediaplex Inc.8
-13% -11% -15%
13% 15%15%
-14%
-26%
38% 37%
2009 2010 2011 2012 2013
Korea movie ROI
Mediaplex ROI
Select Select Focus Select Focus
“Average number of Audiences per a movie
3.5 millions(QC, MKT’g Dating, etc, Optimizing is
possible)
2014+ core strategy : 2-WHEEL-SYSTEMMEDIAPLEX REVIEW
© 2014 Mediaplex Inc.9
DistributionInvest DistributionInvestProductior
Distribution fee + ROI & production revenue
(Synergy between selection & focus)(Strengthen Casting Infra )
2015
YOON Sung-hyun
HAN Jae-rim
The Classified File /KWAK Kyung-taek
Detective K : Secret of the Lost Island / KIM Sok-yun
An Impudent Her(w/t) / KIM A-aron
The Mood of the day(w/t) / CHO Kyu-jang
Inside Men /WOO Min-ho
Assassination / CHOI Dong-hoon
KIM Jee-woon
LEE Je-han
Summer Snow(w/t) /JEON Yun-su
King, Father, and Son(w/t) / LEE Joon-ik
YANG Hyo-joo
KIM Seong-hun
15 films and others are on stages of planning and
developing
A man and a woman(w/t) /LEE Yoon-ki
CHANG Hoon
The Huntresses
I, Frankenstein
A Hard Day
Grace of Monaco
The Divine Move
Kundo:Age of the Rampant
We are Brothers
Gangnam 1970
Sangeiwon
The Insufficient Evidence(w/t)/ YOON Jong-seok
A Violent Prosecutor(w/t) /LEE Il-young
The Escape(w/t) / KIM Yong-hwa
The Killer’s memoria technica(w/t) / WON Shin-yun
※ W/T : Working title
2014
MEDIAPLEX MOVIE INFORMATIONSHOWBOX Line-up
10 © 2014 Mediaplex Inc.
Profit Sales ProfitSales
Quantitative
growth
〉Qualitative
growth
Quantitative
growth
〈Qualitative
growth
MEDIAPLEX REVIEW
11 © 2014 Mediaplex Inc.
MEDIAPLEX REVIEW
Business structure change
ROI NO.1 M/S NO.1
Motion 101
Motion 101 liquidation
-Committee on investment establish-Risk managing intension-two Wheel system construction-Distribution prediction system construction
Source: KOFIC, Mediaplex
Entry for film business IPO
establishment
M&A restructuring
Merger DistributionBusiness be Extension of influence
Admission top increase record(3,300 Million )
production establishment
Disposalof Subsidiary
Business structure change2012~2013 OPOf Turn into profit-marking
- Human restructuring- Quality of Films management system building- Oversea market expansion policy through Foreign strategic partnership
© 2014 Mediaplex Inc.12
Review 2013: Success Movies
<2013 Korea major Distributor M/S> - A basic primary movie -
NEW 6 movies 41 million viewers
(19.5%)
SHOWBOX 4 movies 2,4 million viewers
(11.2%)
CJ E&M 2 movies 1,6 million viewers (7.7%)
LOTTE 2 movies 9 million viewers
(4.1%)
ETC 6 movies 13,1 million viewers
(57.5%)
(ETC is Foreign Distributors)
© 2014 Mediaplex Inc.
Source: CJ CGV Earning release 2014 1Q
SCLN
SHOWBOXCJ E&MLOTTENEW
N
N
N
N
N
N
S
S
S
S
C
C
L
L
MEDIAPLEX CORE STRATEGY
13
Korea movie of admission per film
AVERAGE BOX OFFICE PER KOREAN FILM BY DISTRIBUTORS
2013 FY 2014 1HAverage Box office
per Korean
film(KRW)
RankNumber of releases
Box office(KRW)
Number of releases
Box office(KRW)
NEW 12 268.3 billion 5 67.7 billion19.76
billion1
SHOWBOX
12 208.2 billion 5 42.4 billion14.74
billion2
CJ E&M 25 255.8 billion 11 107.6 billion
10.09 billion
3
LOTTE 16 119.8 billion 11 59 billion 6.62 billion 4*Conversion rate of KRW for USD 1 =1054.5 KRW (Average market rate of 2014. 10. 21)
14 © 2014 Mediaplex Inc.
2014 3Q
Average Box office per
Korean film(KRW)
AverageNumber ofAudience
Per Korean film(10
thousand)
RankNumber of
releasedBox office
(KRW)
SHOWBOX 3 68.2 billion 22.73 billion 288.6 1
CJ E&M 8 151.2 billion 18.9 billion 245.5 2
LOTTE 7 97.7 billion 13.95 billion 178.4 3
NEW 2 11.7 billion 5.85 billion 74 4
*Conversion rate of KRW for USD 1 =1054.5 KRW (Average market rate of 2014. 10. 21)
AVERAGE BOX OFFICE PER KOREAN FILM BY DISTRIBUTORS
15 © 2014 Mediaplex Inc.
Mediaplex Global New Business
© 2014 Mediaplex Inc.16
Action plan : completion the basic form of entry to Chinese market
Import and
Release
Collaboration films
Joint production
in China
Building a capacity to make 100% of Chinese movies than collaboration films• there is no meaning of export Korean films to release in China successful films in Korea such as ‘Thieves’ didn’t do well in China film
market
• It is still possible to make a Joint Korean and Chinese film. However, eventually it is very important thing to be able to plan and produce films which are 100% for Chinese audiences.
1
‘HUAYI BROTHERS” : Based on partnership with Huayi Brothers, Mediaplex strengthen the basics of entry to Chinese film market. 2
Coproduction of Chinese films planned by Showbox• Establishment a process to evaluate the
suitability of scenario and items provided by Showbox
• Coproduction between Showbox and Huayi brothers, Huayi distribute
visitors / SM dance movie projectDirector K.H. Oh’s next movie project “Rich”
• Among Showbox’s domestic line-up, possibility of determining on coproduction in planning stage / distribution in China Director Donghoon Choi, Next movie ‘assassin’ Director Jongbin Yoon, ‘Kundo’
Partial invest a product recommended by each others
• Among the line-up for the year, invite partial invest and recommend a stable project
(reinforcement the partnership)
GLOBAL BUSINESS : JOINT INVESTMENT PRODUCTION PROJECT
© 2014 Mediaplex Inc.17
Collaboration domestic projects with Chinese company /distribution
Possibility of Chinese film marketThe rapid growth of Chinese film market is rather than
attractive…
It is important that Showbox has an ability to be needed by Chinese film market
Comparison with domestic /overseas movie TOP-10 box office Chinese film TOP-10 average- 60
millions (overseas film average 81.8 million, 79% of overseas film average)
Korean film TOP-10 average- 47.5 millions (overseas film average 25.9 million,184% of overseas film average)
CHINA KOREA
GLOBAL BUSINESS : JOINT INVEST PRODUCTION PROJECT
© 2014 Mediaplex Inc.
• 2013 China box office was 3.9 trillion Won / total audiences are 0.6 billion
(Compared with korea Box office, 3time bigger / No.2 in the world)• Views per capita is 10time less than korea• Among the Chinese, only 7% is moviegoers.• In 2018, box office being expected to be 10 trillion won market (CARG 30%)
SectionBox
office Ancillary market
Screens Theatre# of movies produced
Capita per views
Native movie share
Total audiences
China 3.5 trillion 743 billion 18,195 3,200 638 0.7 58.60% 610,000,000
Korea 1.5 trillion 268 billion 2,184 333 183 4.12 59.70% 210,000,000
unit : won
18
Korean movies global inroad cases
A wedding invitation (CJ China produce / CFG distribute within China)
•Director Oh, Ki-hwan / ‘present(2001)’ Remake•Romantic movie is out of season in Korea but, It is new and fresh in China
Mr. Go (Showbox invest / Huayi distribute within China )
•Director Kim Yong-hwa joint Korean and Chinese film•The result fell short of its expectation because of issue of distribution schedule but, Chinese audiences are very positive about the movie (16.3 million dollar)
Bunshinsaba-1/2(Chinese capital invest/distribute)
•Director Ahn, Byung-Ki / ’Bunshinsaba’ remake•Ghost’ is a censored object by Chinese Government, but changing structures of storytelling builds the new trend of horror movies
Snowpiercer (CJ invest & distribute / the English-speaking world target )
•Director Bong Joon Ho / Song Kang Ho +Chris Evans•It was not able to release in the English-speaking world due to cultural differences
The Last stand (Lions Gate production/ distribution)
•Director Kim Jee-woon / Arnold Schwarzenegger •Audiences’ reaction was negative due to B movie•It was not able to collect the production cost due to a box office failure
Stalker(Fox Searchlight production/ distribution)
•Director Park Chan-wook / Nicole Kidman•Some of art film fans gave positive evaluations but, doubtful about the possibility of success as a commercial movie
Expansion to China is more successful than to American film market because China has cultural
similarities with us. Therefore it gives advantages of movie plan/production
<Chinese Market>
<American market>
GLOBAL BUSINESS : JOINT INVEST PRODUCTION PROJECT
© 2014 Mediaplex Inc.19
MEDIAPLEX INVESTMENT HIGHLIGHTS
A Friendly Government Policy on Movie Industry
Attractive Growth of Korea Film Market & Increased Fundamental
Industrial Trend maker as a leader of Film distribution market
Strong Capital Structure with Significant Liquidity & Free Cash Flow
Well-Organized Management Team and Proven Equity Holder
acquiring profitability and sales due to a successful corporate
restructuring
Oversea Expansion into Movie Business (Utilizing Global Partner
Networks)
INVESTMENT HIGHLIGHTS
© 2014 Mediaplex Inc.20
Beijing Mega Media Ltd.
Subsidiary : Supreme Star Investment Limited
Beijing Zhongguan Megabox Cinema Film Exhibtion in China
• Capital : RMB 16,800,000
• Ownership: Beijing Mega Media Ltd. 51%
Supreme Star Investment Limited 49%
• Establishment : Dec 13, 2007
• Site open
- 1st Site Beijing Zhongguancun July, 2007
- 2nd Site Beijing Sanlitun July, 2008
- 3rd Site Shenyang Wanxiangcheng June, 2011
Site 3
Location Beijing, Shenyang
■ Partner ■ Theater business
MEDIAPLEX SUBSIDIARY REVIEW
Source: Mediaplex
(Orion 62.66%, Mediaplex 11.23%)
© 2014 Mediaplex Inc.21
MEDIAPLEX FINANCIAL INFORMATION
Financial Highlights (Consolidate)
© 2014 Mediaplex Inc.
Profit and loss status 2013Y 2012Y
Net sales 1,081 882
Gross margin 156 176
Operating income 63 97
Non-operating income 3 2
Non-operating expenses 118 40
Financial income 13 12
Financial costs 0 0
Net income before income tax expenses 62 41
Net income 57 -7 [Unit O.1 Billion won]
Financial status 2013Y 2012Y
Total assets 1,674 1,813
Current assets 1,173 1,329
Non-current assets 501 484
Total liabilities 618 812
Capital stock 313 313
Capital surplus 362 352
Retained earnings 390 335
Total shareholders' equity 1,055 995 [Unit O.1 Billion won]
22
MEDIAPLEX FINANCIAL INFORMATION
Consolidated statements of comprehensive income
© 2014 Mediaplex Inc.
(KRW in Millions) 2Q’14 % QOQ 2Q’13 %
Box office
10,631 70.5% -48.5% ▼
20,653
78.0%
Copyright
4,209 27.9% -25.6% ▼
5,654
21.4%
Distribution
75 0.5% -53.1% ▼
160
0.6%
Sub Investment
44 0.3% 1,000%▲
4
0.0%
Etc. 117
0.8% -1,363% ▼ 8
0.0%
Total Revenue 15,076
100% -43.06% ▼ 26,480
100%
Cost of sales 12,773
-42.20% ▼ 22,097
G&A expenses 1,573
-35.05% ▼ 2,422
Profit before income tax 730
-62.7% ▼ 1,960
Profit for the quarter -1,829
-1406.4% ▼ 140
• Box office: Revenue of main invested films from theater (Including distribution commission)
• Copyright : Overseas secondary market sales except of additional market in 2nd quarter and 4th quarter
• Distribution : Domestic distribution charges and overseas distribution charges
• Investment : Return on investment of partial invest product 23
© 2014 Mediaplex Inc.24