corporación interamericana de entretenimiento, s.a. de c.v
TRANSCRIPT
Corporación Interamericana de Entretenimiento, S.A. de C.V.
Leading “out-of-home” entertainment company in Latin America, Spain and the U.S. Latin markets
51 million customers in 2003
Best of breed entertainment for every budget:
Concerts, theater, sporting, cultural, family, popular fairs and corporate events
Amusement / educational parks
Gaming: Number based games and off-track betting
Vertical Integration = multiple revenue streams and minimal risks
Significant marketing revenue from proprietary entertainment and advertising properties
Expertise organized by country and business areas = management depth
Positive free cash flow targets in place after a period of capital intensive investments for future growth
CIE today
2
A business model that adapts to various forms of “out-of-home” entertainment:
Business Model
3
ConsumerContent
Sponsors SouvenirsFood & BeverageTicket Sales
Venues
Events:
Music
Sporting
Folkloric & Popular
Family
Cultural
Theater
Mechanical games
Betting / Gaming
Animals
Horse Racing
Stadiums
Arenas
Trade & Exhibition Centers
Theme Parks
Zoos
Race Tracks
Amphitheatres
Theaters
Auditoriums
The Company has three operating divisions with the following businesses:
Live Entertainment Mexico, Argentina, Brazil, Chile, Spain,
Latin U.S.
Venue Operation
Gaming
Amusement Parks
Entertainment
Sponsorships,
Movie Theater Advertising
Billboard Advertising / Overpasses – Airports
Naming Rights
Radio,
Rotational Advertising
Food, Beverage and Merch.
Commercial
Ticketing: Mexico, Brazil, Argentina, Chile
Teleservices
Services
3 Divisions
77% 13% 10%
Revenue Contribution
Operating divisions
4
Content
Entertainment Division
Commercial Division
Services Division
Financial Results for 3Q2004
Operating Results for 3Q2004 and 2004 Outlook
5
$35 Additional Revenue StreamsUS$100 in Box Office Receipts
ExpensesUS $38
ArtistsUS $40
PromotionUS $10
Venue US $12
SponsorshipUS $27
TicketingUS $7
F&B/MerchandisingUS $1
Food & Beverages
Ticket Sales
Venue Operator
Sponsorship
Promoter+
+
+
+
0% 100%Maximum attendance required to breakeven
49%49%
51%51%
82%82%
54%54%
65%65%
Vertical integration = maximizes revenues / minimizes risks
Entertainment Division
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Breakeven point (number of tickets)
Mexico
Leading live entertainment company
Partnerships/JV with Televisa, Ticketmaster and others
3,391 live events produced in 2003; 5.6 million attendees
Operates 11 live entertainment venues
Musical, theatrical, sporting, family / cultural and corporate events
Growth Opportunities:
Utilize assets to build additional revenue streams
Sporting events: Beach Volleyball, Triathlons, etc
Strongest concert calendar in years (for 2004)
Leverage synergies afforded by Televisa relationship: Content exchange, access to advertising, etc.
Auto racing; NASCAR Mexico & Desafio Corona, Monster Trucks
Popular Fairs and Folkloric events
Entertainment Division – Live Entertainment
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Brazil
Operates 4 live entertainment venues in Sao Paulo and Rio de Janeiro
Musical, theatrical, family / cultural and corporate events
Regional tours
Strong local talent base
Growth Opportunities:
Expand local productions in the country
Argentina / Chile:
Operates Teatro Sky Opera and Obras Sanitarias in Buenos Aires
Musical and local theatrical events
Operates the Buenos Aires Zoo
Produces live events in Santiago, Chile
Growth Opportunities:
Expand local productions, evaluate international artist events
Entertainment Division – Live Entertainment
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Spain
Company’s stronges theatrical market
JV with Stage Holding, Europe’s leading theater production company
Strong widely acclaimed productions in portfolio:
Mamma Mia!, Aida, Sound of Music, 42nd Street and others
Operates 3 live entertainment venues in Madrid
Currently playing: CATS and Cabaret
U.S. Latin market
Promotes Latin talent for the U.S. market
Entertainment Division – Live Entertainment
9
52 Hectares located in exlcusive area of Mexico City
Rights obtained in 1998:
Horse race track 25 years, renewable
Surrounding areas 50 years, renewable
License to operate 45-off track betting centers / number based games
A family destination entertainment concept: Horse race track, Trade & Exhibition Center, Granja las Américas and other planned developments
Entertainment Division – Gaming
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Horse race trackTrade & Exhibition Center
Granja
Horse
Stables
Las Américas Horse Race Track:
One of the world’s longest racing season
begins late January, ends early December
Seating capacity for 7,500 visitors
More than 1,400 races in season
More than 1,500 horses in inventory
Entertainment Division – Gaming
11
The Sports Books (off-track betting) and Yaks (number based games) network began operations in 1999
Currently there are 28 units in operation
Entertainment Division – Gaming
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HermosilloChihuahuaMonterreyCiudad NezaMorelia
Mexico City: 16
• 28 units opened as of September 2004
• Additional units for 2004:
Centro Banamex is the largest and most important convention center in Mexico
•Total area over 180,000 square meters
•Exhibition area is 34,000 square meters
The leader in its marketplace, renting over 5m square meters of exhibition space
Located inside the Las Américas Complex
Bookings and capacity are over 80%
Expos include: Expo Comm, Abastur, Mexican Gift Show, etc.
Entertainment Division – Trade & Exhibition Center
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Entertainment Division – Granja Las Américas
14
1.4 Hectares and 9,000 m2 of construction; an extreme sports area and 21 theme pavillions
An investment of Ps. 82.3 million, primarily covered by sponsors
Able to receive 3,000 visitors per day in two shifts; 540,000 visitors budgeted for the first year of operations
CIE is Latin America’s leading operator / developer of amusement parks
7th largest park operator in the world
Number of attendants in 2003 reached 10 million
Operation of 11 amusement parks in 5 cities
CIE focusses on serving low/medium-level-of-income social groups
Entertainment Division – Theme Parks
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Mexico City:• Divertido Ciudad de México• La Feria de Chapultepec • Naucalli Mágico• Perimágico• Planeta Azul
Guadalajara:• Divertido Guadalajara• Selva Mágica
Acapulco• CICI
Bogotá• El Salitre Mágico• CICI Aquapark
Miami, Florida• Wannado City
Creation of unique concept for the U.S. Market: Wannado City™ What it is:
America’s first indoor role-playing theme park for kidsWhat kids do there:
Learn by having fun, through a concept called “real play”
Key Business Drivers:
Admission revenue, in-facility revenue, sponsorships
Experienced management team in place
Pricing: $24.95 age 3 –14 adults $15.95
Estimate 1M visitors in first 12 months of operations
Entertainment Division – Theme Parks
16
Entertainment Division – Theme Parks
17
Positioning Wannado City:
Disney = Magic Disney = Magic
Universal Studios = Adventure/ActionUniversal Studios = Adventure/Action
Nickelodeon = KidsNickelodeon = Kids
Cartoon Network = AnimationCartoon Network = Animation
Discovery = EducationalDiscovery = Educational
PBS = Young kids/EducationalPBS = Young kids/Educational
Wannado City = REALWannado City = REAL
Content
Entertainment Division
Commercial Division
Services Division
Financial Results for 3Q2004
Operating Results for 3Q2004 and 2004 Outlook
18
We have become an extraordinary alternative for connecting brands with segmented markets
Radio
Music
Amusement Parks
Corporate Events
Movie Theater Advertising
Ticketing
Naming Rights
Overpasses
Venues
Ability to use an advertising property to
highly target the advertising customer
Audience Measurement
Commercial Division - Advertising Properties / Sponsorships
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Airports / Skywalks
Rotational Advertising
Becoming integrated partners in brand
positioning
Commercial Division - Cineminutos
20
Advertising at Mexican Cinema theaters
Agreements with Cinepolis and Cinemark, two Mexican leading cinema operators, which amount with over 60% of total marketshare.
The advertising market at cinema theaters is valued at US$40 million:
Advertising that targets a defined customer baseNot competing against TV or radio
Rights also include:Marketing of CineminutosCommercial exploitation of all promotional
and advertisements at theatersPromotional of special events at theaters1,356 projected screens 8% higher than
2003
Commercial Division - Publitop
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Pedestrian Overpasses
Agreements with several municipalities for the installation of overpasses
In return CIE is granted the long-term advertising rights to exploit
Operations of 189 overpasses as of June 2004
Acquisition of Keenex, Mexico’s third largest pedestrian overpass operator
Publitop’s capacity increased by 43% to 218 concessions
Advertising at Airports
8-year agreement with Grupo Aeroportuario Centro Norte for the marketing of indoor advertising
Outdoor advertising: billboards on access streets, benches, parking areas and other outdoor areas
Indoor advertising: baggage claim areas, corridors, boarding areas, etc.
Annual passenger flow: approx. 11 million
Commercial Division - Unimarket
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Static-Rotational Advertising
Marketing of static-rotational advertising on the side line barriers of professional soccer fields in Mexico
Soccer is the most important popular and recreational activity in the country
Professional matches are attended by all socio-economic groups
The most important advertising presence and impact during matches is static-rotational signage
Over 300 matches are annually broadcasted by TV
Advertisement for 11 Mexican soccer teams
Commercial Division - Radio
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The Business:
Leading operator of radio stations in Argentina
Activities began in 1998 with the acquisition of R&P, owner of Radio Splendid and Rock&Pop, leading frequencies in AM and FM, respectively
Acquisition of three leading radio operators in 2000, which led to the creation of the largest radio group in the country
An extraordinary medium of communications and promotion for the different events the Company produces
FM marketshare for the company is above 45%
The market leader in invoicing volume, close to 55% of the market
Content
Entertainment Division
Commercial Division
Services Division
Financial Results for 3Q2004
Operating Results for 3Q2004 and 2004 Outlook
24
Leading ticketing business in the region, with medium- to long-term contracts with venues, promoters and events
Operations through call centers, box offices, internet and outlets in the region
More than 10.4 million tickets sold in the region in the first six months of 2004
* On-line activities are currently carried on in Mexico and Brazil.
Country Community Start-up
Mexico City *MonterreyGuadalajara *
Mexico 199219932001
Buenos Aires Argentina 1998
Santiago 1998Chile
Sao Paulo *Rio de JaneiroSalvador
200020012001
Brazil
Services Division – Ticketing
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Services Division - Teleservices
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Sitel
JV with Sitel Corp. for teleservices for large corporations in Mexico and Latin America.
Call centers in Mexico City and Monterrey, Bogotá and Panama City with in and out-bound services.
• Product orders
• Credit card activations
• Fraud protections
CIE has provided services to clients in different industries in companies which include:
•Aegon
•American Express
•America On Line
•Banamex
•Banorte
•Hewlett Packard
•Ford Insurance
•Palm
•Philip Morris
•Prodigy
•Serfin
•Telmex
•Avaya
•Comcel
•Microsoft
•TV Cable
•HSBC Bank
•Many others
Content
Entertainment Division
Commercial Division
Services Division
Financial Results for 3Q2004
Operating Results for 3Q2004 and 2004 Outlook
27
28
Operative Highlights
Events Live Racetrack (racing days)
Ticketmaster Tickets (Mil.) Mexico South America Total
Attendance (Mil. of people) Live Events Amusement Parks Las Américas Horse Racetrack
Sports Books & Yaks Per capita consumption (Ps.)
Shops Pedestrian Overpasses Structures in operation Billboards
Cineminutos Movie Theaters
1,260
43
3.71.95.6
1.93.50.2
619
21
122431
1,280
1,28039
3.51.75.2
1.52.50.3
564
28
213687
1,384
3,749
127
9.64.8
14.5
5.07.70.5
639
21
3,857
126
10.25.5
15.6
4.96.00.4
588
28
3Q03 3Q04 9M03 9M04
1.6%(9.3%)
(5.5%)(12.2%
)(7.8%)
(21.1%)
(28.6%)
50.0%
(9.0%)
33.3%
74.6%57.2%
8.1%
% Chg
2.9%(1.0%)
5.3%12.9%7.8%
(2.0%)(22.1%
)(20.0%
)
(8.1%)
33.3%
% Chg
29
Financial Highlights
Revenue
EBITDAEBITDA Margin
Operating Income
CCF
Current Assets Assets L.T. & Other AssetsTotal Assets
DebtTotal Liabilities
Stockholders’ Equity
3Q03
3Q04
9M03 9M04
% Chg
% Chg
1,772
40622.9%
285
60
4,56310,41714,980
4,6676,619
8,362
1,932
42422.0%
294
64
4,81310,31815,131
5,0407,694
7,437
9%
5%(90 pb)
3%
6%
5%(1%)
1%
8%16%
(11%)
4,934
1,13723.1%
792
151
5,533
1,23522.3%
848
287
12%
9%(80 pb)
7%
89%
Note: Figures are expressed in millions of Mexican pesos as of September 2004
30
Revenue by Division
3Q03 3Q04 9M03 9M04
EntertainmentCommercialServices
76%13%10%
77%13%10%
76%14%11%
77%13%10%
1,3541,485
234 251184 196
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
Entertainment Commercial Services
3Q03 3Q04
3,7454,236
667 723523 574
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
4,500.0
Entertainment Commercial Services
9M03 9M04
Revenue Distribution by Division
Note: Figures are expressed in millions of Mexican pesos as of September 2004
+7%+7%
+10%
+10%
+8%
+13%
* The total may not add up to 100% due to rounding
31
EBITDA and EBITDA Margin
271
253
287
312321
330322
336
353
340
363 365
430
337
394
443
366
444
424
406 22.6%22.0%
25.9%25.8%
24.8%
24.4%
24.4%
24.2%
23.5% 23.2%
23.1%23.5%
23.6%23.1%
23.1%
23.1%23.2%
22.9%
22.5%
22.4%
220
270
320
370
420
470
4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04
Mill
ions
of
peso
s as
of
Sep
.04
0%
5%
10%
15%
20%
25%
30%
EB
ITD
A M
argi
n
EBITDA EBITDA Margin
11
23
14
15
16
39
110
111
415
419
221
223
225
328
128*
Note: Effect on the reubication of the unit located at Angus Centro Historico, D.F.
Units openedUnits in operation
32
Debt Profile
By the end of 3Q04, the Group’s debt was Ps.5,040 millions; from which 79% is denominated in pesos, 14% in UDIs, and the rest in other currencies.
The annual amortization and the allocation is as follows:
151
1,063
358
2,480
625
283
46 34
0
500
1,000
1,500
2,000
2,500
3,000
2004 2005 2006 2007 2008 2009 2010 2011
Mill
ions
of
peso
s 0
4
Part. o/tot. 3% 21% 7% 49% 12% 6% 1% 1%
Total: Ps.5,040
33
Debt Profile (cont.)
Refinancing:
• Citicorp (US$20 mill.; due in 2011; LIBOR+350 pb); Proceeds were used in refinancing short-term debt incurred in the past for the construction and operation of Wannado City Miami.
• CSFB (US$30 mill.; due in 2008; LIBOR+330 pb); aimed at refinancing CIE’s short term debt to long term. Subsequently, the Company contracted a Swap secured in Mexican pesos and interest rate based on TIIE + 330 pb
Swap with CSFB to convert Ps.1,490 millions, (or 69%) of CIE’s UDI-denominated medium term note principal value into Mexican pesos, from a total of Ps. 2, 177 millions.
Debt Bank Loans Securitized Loans Total
Cash
Net Debt
Interest Paid 3Q04
Stockholders’ Equity
EBITDA 3Q04EBITDA LTM
Ratios EBITDA-to-Interest Expense Net Debt / Stockholders’ Equity Net Debt / EBITDA LTM
2,3632,6775,040
603
4,437
125
7,437
4241,680
3.51x0.60x2.64x
Sep.04
Content
Entertainment Division
Commercial Division
Services Division
Financial Results for 3Q2004
Operating Results for 3Q2004 and 2004 Outlook
34
35
CIE Entertainment
Live Events:
Strong agenda of international events, presented at Palacio de los Deportes, Teatro Metropolitán, and Salón 21; g.e. Stomp, The Cure, Kiss, Sting & Annie Lennox
New projects:
“Hermanos Rodríguez” Race Track:
Organization of ¼ mile competitions; construction of an additional part of the race track Organization of Off-road competitions.
Organization of “Feria del Fútbol” and of “CuerpoManía”
Grand Prix of Mexico 2004:
“Hermanos Rodríguez” Race Track, Nov. 5-7 25 sponsors confirmed (g.e. Telmex, Gigante, Banamex, Roshfrans, Tecate, Herdez,
Bridgestone, Comex, Telcel, Johnson Controls, Tag, Nextel, IBM, Sports City)
36
Norah Jones REM Enrique Bunbury The Doors David Byrn Yanni Pet Shop Boys G3 Juan Gabriel Chayanne Sin Bandera Rocio Durcal Oreja de Van Gogh Belinda Circo Tyani Gran Premio de México Desafio Corona 2004 Oliver Violinista en el Tejado Quiereme Mucho La Generación Atari
Fito Paez Rata Blanca Café Tacuba The Doors Catupecu Peter Pan Nuts Creamfields G3 The Wailers Kraftwork Los Ratones
Deborah Colker Alicia Keys Lulú Santos The Calling The Wailers Maria Rita Beth Carvalho Unimed The Offspring Cezario Formaturas The Doors Jota Quest Roupa Nova Bruno & Marrone Danni Carlos Arraiá do Guanabara Sandy & Junior G3 The Wailers Fábio Junior Art Braz Shangri-La Cidade Negra Jorge Ben Jor Toquinho Chrissie Hynde Vanessa da MataVanessa da Mata Gal Costa Fernanda Torres Barao Vermelho
Cabaret Cats
Agenda of upcoming events
37
CIE Amusement Parks
Wannado City Miami: The park initiated operations on August 12, 2004 at Sawgrass Mills Attendance levels (2,000 persons / day) and per capita (US$23.00) growing, according to
projections. Reinforcement of merchandising strategy Jurisdictional situation with Amazing Toys arranged
Chicago’s Wannado City Project: Park to be located at Gurnee Mills, operated by The Mills Corporation Authorization based on the results of the economic and market studies.
Valle Fantástico at Puebla:
Operation, assessment, and administration of the first amusement park in Puebla Will initiate operations on December 2004, with an attendance level of nearly 700,
000
Guadalajara’s La Granja Project: Presentation of the concept to local sponsors, who show interest for the project Planned to be located at Divertido’s lands that haven’t been used
38
CIE International
Argentina:
Positive trend on assisstance and per capitas continues at the Buenos Aires Zoo. “Peter Pan” and “Nuts”, medium format theatrical plays, registred profitable levels of
assistance and a stable trend.
Brazil:
Renovation of theatrical contents in Sao Paulo
Opening of “Chicago”, which substitutes “La flor de mi buen querer” Valuation studies for the opening of “The Phantom of the Opera” Opening of “Mademoiselle Channel”
Continues the expansion of events based on local talent, and new concepts, into the country
Spain:
Trend towards a slow recuperation in attendance at theatrical productions after March 11, 2004. “Cats” and “Cabaret”
Attendance temporarily affected because seasonality (Summer vacations on Spain)
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CIE Commercial
Publitop and Media Innovations: Digital Advertising at airports
Torreón, Coah.
Tampico, Tamps.
Acapulco, Gro.
Cd. Juárez, Chi.
Chihuahua, Chi.
Monterrey, NL.
Reynosa, Tamps.
San Luis Potosí, SLP.
Ixtapa Zihuatanejo, Gro.
Zacatecas, Zac.
Durango, Dgo.
Mazatlán, Sin.
Culiacán, Sin.
Digital boards of advertising and flights information, on the 13 airports of GACN Monterrey, Acapulco and Ixtapa are the first airports with the concept, the rest of them
will be installed on the first months of 2005.
Advertisment displayed near the information the passengers and visitors always look for. Impacts: 11.5 millions passengers, more
than 8.5 millions visitors. The concept inables the implementation
of local, regional, or national strategies.
Benefits for advertisers:
40
CIE Las Américas
Twenty eight Sports Books and Yaks units working at 3Q04; openning of Tonalá and relocation of the Centro Histórico (D.F.) unit.
Puebla Monterrey Cuatitlán Izcalli Distrito Federal Tampico
Reynosa Acapulco Coatzacoalcos Ecatepec
Three opennings programed by the end of 2004: Ciudad Neza, Hermosillo
and Morelia
Spots evaluated for initiating operations for the next year include: