investor presentation - imax china holding inc. · 2018. 8. 7. · investor presentation disclaimer...
TRANSCRIPT
Investor Presentation
March 2018
Investor Presentation Disclaimer 2
DisclaimerThis document is not intended to form the basis of any investment decision in connection with IMAX China Holding, Inc. (the "Company", together with its subsidiaries, hereinafter referred to as the "Group"). It does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities, in any jurisdiction including but not limited to a jurisdiction in which the making of such offer, invitation, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction or would not otherwise be in compliance with the laws and regulations of such jurisdiction. Nothing contained in this document shall form the basis of any investment decision, contract or commitment whatsoever. The information in this document has been provided by the Company solely for your information. This document does not purport to be comprehensive or to contain all the information that a recipient may need in order to evaluate the Company and/or any of its subsidiaries. Certain factual or predictive statements in this document are derived from external sources and have not been independently verified by the Company. No representation or warranty, express or implied, is given, and so far as is permitted by law and except in the case of fraud, no responsibility or liability (in connection with negligence or otherwise) is accepted by any person or entity (for the avoidance of doubt, including but not limited to, any Group member or any of its directors, officers, employees, affiliates, advisers or representatives), with respect to the accuracy, reliability, truthfulness, fairness or completeness of this document or any of its contents or any oral or written communication in connection with any content contained in this document. In particular, but without limitation, no representation or warranty, express or implied, isgiven as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates orforecasts contained in this document. None of the Group members or its directors, officers, employees, affiliates, advisers or representatives shall have any liability in respect of the use of, or reliance upon, or any other handling of, any information contained herein by you or any person or entity to whom the information herein is disclosed in any manner. In all cases, interested parties should conduct their own investigation and analysis of the Group and the information (data or otherwise) contained in this document. In connection with this document, the Group does not undertake any obligation to provide any additional information or to update this document or any additional information or to correct any inaccuracies which may or may not become apparent. This document does not create any obligation on the Company or any of its subsidiaries to consider or make any offer.
IMAX® is a registered trademark of IMAX Corporation.
3Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
Leading Cinematic Technology Provider in Greater China
Exclusive licensee of the IMAX brand in the theatre and films business in Greater China with access to global partnerships
Sole commercial platform for the release of IMAX format films in Greater China, which is the second largest and fastest growing major cinema market in the world
Largest non-conventional theatre network in Greater China and significant ticket price premium
Unique cinematic experience and end-to-end cinematic solution
One of the strongest entertainment brands in Greater China (1)
Note: According to a survey conducted by Milward Brown Research
4
Integral Part of the Greater China Film Industry History
IMAX® is a registered trademark of IMAX Corporation.Investor Presentation
5
Long-Term Partnerships Across the Global Entertainment Ecosystem
IMAX® is a registered trademark of IMAX Corporation.Investor Presentation
6
Strong and Diversified 2017 Slate 30 Foreign Language Titles
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
7
Strong and Diversified 2017 Slate 14 Local Language Titles
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
8
Top 10 IMAX GBO Titles
1. Fast &
Furious 8
2. Transformers 5
3. Journey to the
West 2
4. Guardians of the
Galaxy Vol.2
5.
Kong: Skull
Island
6. Justice League
7. Pirates of the Caribbean 5
8. XXX
9. Thor:
Ragnarok
10.
Rogue One: A
Star Wars Story
IMAX® is a registered trademark of IMAX Corporation.Investor Presentation
9
Chinese Titles Are Becoming Increasingly Important
$203
$312 $296 $291
17%
26%
23%24%
0%
5%
10%
15%
20%
25%
30%
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
2014 2015 2016 2017
Grater China Box Office Chinese Language % in PRC
7 10 9 7
2223 27 29
6
8
1015
2014 2015 2016 2017
Local Language Films-Chinese and Non Chinese Hollywood Films HK Taiwan Only
Number of Titles Played China Box Office Contribution
35
41
46
51
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
10
Strong China Network Expansion
107 130163
204
73
102
131
195
260
134
25
46
66
80
102
2014 2015 2016 2017 Backlog
Sales Theatres Full Revenue Sharing Theatres
Hybrid Revenue Sharing Theatres
Theatre Network
15%
45%
40%
Tier 1 Tier 2 Tier 3 and lower
• The IMAX China Network spans 179 cities across Mainland China, we have a total network of 544 in Greater Chia, 527 of which are commercial theaters
• Roughly 45% of existing screens are in Tier 2 cities
• 40% of our screens are in Tier 3 cities and below, and this particular segment is expanding
• Current backlog has a comparable mix of screens across different cities
Current Network Mix
234
307
424
544
309
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
11
Robust Theatre Backlog and Continued Signings Momentum
34 29 3755
645
1
40
200
2014 2015 2016 2017
Sales Hybrid JV
2857 59 73
50
95 76
10263
63
199 134
2014 2015 2016 2017
Sales Hybrid JV
20 2533
4115
2120
1427
29
64 65
2014 2015 2016 2017
Sales Hybrid JV
Signings Backlog Installation
40
74
238
95 141
141
334309
62
75
117 120
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
The Value of Network Growth
Effect of Box Office on our ROI are vastly different under Sales, Hybrid and Full JV’s
Sales Type Hybrid Full JV
Upfront Revenue 1,100 550 0Year 1 Cost of Sales 450 510 60IMAX CAPEX 0 0 450
Exhibitor Take 0 10% 15%Studio Take 10% 10% 12%
Given exhibitors cover all of the IMAX costs, the recurring
Studio and Exhibitor revenue streams are 100% incremental,
regardless of PSAs
Company should be most discerning under the Full JV
model, given IMAX is responsible for the Capex
1) Includes $60K launch marketing expense for Hybrid JV model
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
Screen Contribution and Returns over Contract Term1
Full JV Rate: 15% ~ 17%Hybrid JV Rate: 10% ~ 12%DMR Rate: Hollywood~9.5% local language~12.5% Full JV Capex: $450K (+$60K Marketing)Full JV Depreciation Term: 10 ~ 12 yearsMaintenance Rev: $35K @ 35% Margin
1) Annual Contribution = Net Income Contribution, excluding year 1 upfront revenues of STL and Hybrids
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
14
Growth in Revenue and Margin in 2017Data in US$M
$78
$111 $119 $126
59%
65%
59%
61%
2014 2015 2016 2017
40%
45%
50%
55%
60%
65%
70%
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2014 2015 2016 2017
Total Revenue Gross Margin
Gross Revenue and Margin
$41
$65 $56 $67
52%
59%
47%
53%
0%
10%
20%
30%
40%
50%
60%
70%
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2014 2015 2016 2017
Adjusted EBITDA Adjusted EBITDA Margin
Adjusted EBITDA and Margins
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
15
Growth of Profit and Margin in 2017
$26
$43 $38
$46
33%
39%
32%
36%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
$-
$10
$20
$30
$40
$50
$60
2014 2015 2016 2017
Adjusted Profit Net Margin
Data in US$M
$10
$21
$15 $12
13%
19%
13%
10%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
$-
$5
$10
$15
$20
$25
2014 2015 2016 2017
SG&A ex SBC % of Total Revenue
2017 Adjusted Profit 2017 SG&A ex SBC
Investor Presentation IMAX® is a registered trademark of IMAX Corporation.
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Revenue Breakdown and Margin
$19 $28 $27 $27
$15
$26 $21 $19
64%
75%
64%
56%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$-
$10
$20
$30
$40
$50
$60
$70
$80
2014 2015 2016 2017
Film Business Revenue Share Margin
$34
$54$48 $46
$29 $37
$47 $56
$8
$11
$10
$7
$7
$9
$12
$15 43% 44%
55%
65%
-5%
5%
15%
25%
35%
45%
55%
65%
$-10
$10
$30
$50
$70
$90
$110
2014 2015 2016 2017
Theatre System Maintenance Revenue Sharing Upfront Fees
Sales Arrangements MarginInvestor Presentation IMAX® is a registered trademark of IMAX Corporation.
Data in US$M
PRESENTATION NAME SECTION NAME 17