investor relations 2006. contents 1. kaon media overview 2. d-stb industry 3. major highlights 4....
TRANSCRIPT
INVESTOR RELATIONS 2006
Contents1. Kaon Media Overview 2. D-STB Industry3. Major Highlights4. 2006 Business Plan5. Appendix
1. Company Overview – Fast growth as a “Major Maker”
Company overview
D-STB, PVR, MHP, IP STB etcCore
Products
112 (57 R&D: 52% of all )Personnel
3,664 Million KWNTotal
Assets
May 11, 2001Foundation
Ssangyoung IT Twin Tower, A 901, Sangdaewon-dong 442-17, Jungwon-gu, Seongnam-si, Kyunggi-do
Address
Hwa-Seop LimCEO
Kaon Media is a quickly growing D-STB third generationcompany which leads time to market
Kaon Media is a quickly growing D-STB third generationcompany which leads time to market
Revenue
CAGR 82%1,107
694
118
2002 2003 2004 2005 2006
1,304
864
History
1-1. History
Kaon Media is a key player in digital convergence historyKaon Media is a key player in digital convergence history
2005 Released IP STB & next generation convergence STB
2005 Silver award as one of the 50th high growth companies in Korea
2005 IBC best design award
2002 Developed a full line-up of all digital receiver products
2002 Selected by MCIE as first class company in the DTV industry
2002 Developed PVR
2001 Foundation
2003 Developed two-way data DVB-MHP STB for broadcasting for Ministry of Information and Communication
2004 Selected as next generation growth driving industry leader in the DTV combined receiver developer by MCIE
2004 Only company awarded the Advanced Technology Center (ATC) award by the MCIE
2004 Released next generation digital convergence STB “KVR-1000”
Selected by British “What Satellite”
As “Best Buy” STB
Selected as an “excellent product” by Germany’s Satvision
2006 Ranked 53rd high growth company in the Asia Pacific region
2006 Award from the Ministry of Commerce, Industry and Energy (MCIE) as a 100 bil. dollar electronics export contributor
2006 Released Multiroom STB
1-2. Digital Broadcasting Specialist Group
Strong Skills in TechnologyStrong Skills in Technology
Growth Driver = Expertise of the digital broadcasting specialist groupGrowth Driver = Expertise of the digital broadcasting specialist group
ProductionProduction PlanningPlanning Sales & MarketingSales & Marketing
Management organized from specialists formally from S company
Digital BroadcastingSpecialist Group
Digital BroadcastingSpecialist Group
Digital Multimedia Specialist Group
Digital Multimedia Specialist Group
Embedded SolutionSpecialist Group
Embedded SolutionSpecialist Group
Consumer ElectronicsSpecialist Group
Consumer ElectronicsSpecialist Group
World First digital hybrid products / World class next generation products / Excellence in industrial design / Possession of all world D-STB formats
R&D personnel with strong expertise in digital broadcasting
Developed into a major D-STB company(Building of growth infrastructure]
Yesterday ( ~ 2005 )
1-3. No.1 Company in Global Digital Convergence
Leap to multimedia convergence specialist group
with the competitiveness of D-STB
Leap to multimedia convergence specialist group
with the competitiveness of D-STB
• Established as a major D-STB company in a short period of time
- Market adaptation based on high level of skill
- Differentiated design
- Industry’s highest profitability
• Full scale market penetration for continuous growth
- Penetration of broadcast company market
- Establishment of global operations
- Increased brand recognition
Leap to a digital convergence Value Company[Time for leap]
Today ( 2006 ~ )
•Full scale growth in digital convergence products
- Release of digital convergence products such as IP STB, DAB STB, PVR, PMP
•Technology specialized in digital broadcasting
- Obtain technology in diverse fields such as digital multimedia (H.264, MPEG 4 etc.), consumer electronics, embedded solutions
• Growth driven from high-end products
- PVR, IP STB, digital convergence products for broadcasting companies
2. Changes in D-STB Products
Network connectability
Functionality
Home security DVR STB
DAB/ MultimediaSTB
Two-way data broadcasting
MHP STB
Home network server
D-STB
PVR
DVB-HD
IP STB Solution
(IP STB, Server, Middleware)
D-STB & Kaon Media’s development strategy
D-STB developed as the key platform of future IT hardwareD-STB developed as the key platform of future IT hardware- Evolution of stronger multimedia and network functional products
Convergence process of D-STB
• Broadcasting reception
•Satellite, cable, ground wave Combo Products
•Internet capable IP STB Solutions
•Integrated Game, MP3, DVR, PVR functions
Status of STB convergence
Set-Top Box functions
Charged with role of home network server & automation gateway
CurrentCurrent
PastPast
FutureFuture
ㅋ
Progression of digital convergence- Maximization of flexibility for users
STB industry at the corner of rapid digital convergence growthSTB industry at the corner of rapid digital convergence growth
2-1. Digital Product Market Trend
Broadcasting (Digital TV)
Broadcasting (Digital TV)
Network (PC)
Network (PC)
Communication(Phone)
Communication(Phone) + +
ㅋ
Digital Broadcasting Convergence Market- Mega trend is the formation of the digital convergence market
Multimedia digital convergence(Evolution of D-STB)
•Continued growth with the acceleration of digital broadcasting switch over
• Further growth due to digital convergence
2-2. Changing D-STB Market
World D-STB market size
Enlargement of new growth opportunities due to market changesEnlargement of new growth opportunities due to market changes
Changing D-STB market
Broadcast based
Communication based
+MPEG2
centered
Changes to MPEG4, H.264
video compression
One-way broadcasting
Two-way broadcasting
T-commerce,VOD etc.
New market formation
Changes in video compression
tech. standards
Merging of broadcasting & communication
Million units
0
10
20
30
40
50
60
70
80
90
100
2000 2001 2002 2003 2004 2005
Satellite cable Terresterial IP STB
3. Major Highlights
Long-term growth and stable profit generation - Focused penetration of high-end broadcasting business market
- Focus on new broadcasting and 64 established in 40 nations
Long-term growth and stable profit generation - Focused penetration of high-end broadcasting business market
- Focus on new broadcasting and 64 established in 40 nations
Focused penetration of new broadcasting companies
Focus on PVR, Multi-Room market
Supply contracts with Sky Life MHP, PVR - Supply minimum of 100,000 MHP STB beginning in 2Q - Exclusive PVR supply beginning in 3Q - Forecast domestic sales revenue of 25 billion KWN
Oligopolistic market positioning in specific nations in satellite and broadcasting business markets - India: 1 satellite company, 2 cable companies - Indonesia: 1 ground wave plus mobile broadcasting company - Pakistan : 1 satellite company, 1 cable company, 1 ground wave company - Iceland : 1 ground wave, 1 MVDS company - Rumania: 1 satellite company
Goal to increase of revenue ratio of PVR from broadcasting markets to more than 15% → Simultaneous achievement in both stability and profitability
Through provision of differentiated functionality and convenience actively correspond to broadcasting market’s needs
Provide diverse convergence functions such as 6 channel simultaneous recording internet, PVR, DAB, DVR, MP3, Games
Defend broadcasting company market profits
Actively correspond with European World Cup with special Multiroom products
3-1. Broadcasting Business Market Penetration
Achieve 78 bil. KWN revenue in broadcasting business market in 2006Achieve 78 bil. KWN revenue in broadcasting business market in 2006
Broadcasting biz. market revenue planCAS possessed by Kaon Media
34688Number of
CAS
TH 3H 2H 1KaonCompany
60% of 2006 revenue to be made in
broadcasting
business market
Conax Cryptoworks Nagravision NDS Iredeto Viaccess ChinaCrypt TFCAS
E. Europe, Scandinavia, India
E. Europe, Turkey, Austria
W. Europe, S. America, Asia
N. America, Korea, UK, India
Europe, Africa, India, Middle East
W. Europe, Middle East, CIS
China
China
Kaon Media’s CAS Main markets
Focus marketing on broadcasting businesses market with the CASs in the industry
* Note : Based on license contracts signed (internal analysis)
780
125
350
100 Mil. KWN
2004 2005 2006(E)
Develop MPEG4, H.264 technology for entering HD quality STB market
- Conversion to digital HD broadcasting is a signal for reorganization of the industry
- Focused penetration in DVB-HD adoption areas (Europe, Asia, Africa, Australia)
Develop MPEG4, H.264 technology for entering HD quality STB market
- Conversion to digital HD broadcasting is a signal for reorganization of the industry
- Focused penetration in DVB-HD adoption areas (Europe, Asia, Africa, Australia)
3-2. Penetration of DVB–HD Market
Obtaining core technology that will lead the DVB-HD market
1. Obtain DVB-HD core technologies MPEG4, and H.264 - Develop MPEG4, H.264 chips and possess application technology
2. Obtain technology that allows commercial use of middleware applications such as MHP and PVR
3. Obtain HD based IP TV Solution topenetrate communications businessmarket
Adapted HD broadcasting formats based on region
DVB-HD
DVB-HD
DVB-HD
DVB-HD
DVB-HDDVB-HD
ATSC
ATSC
ATSC
Foundations developed for DVB-HD in Europe Turkey production plant Europe, N. America, Dubai, U.S. office and China office Logistics center in the Netherlands
Foundations developed for DVB-HD in Europe Turkey production plant Europe, N. America, Dubai, U.S. office and China office Logistics center in the Netherlands
3-2. Strong Company Brand Marketing
Company brand Revenue ratio
Policy for Kaon Media’s own brand
Reliable quality and high technology brand image
Marketing high-end products with own brands to establish premiere brand image
Harmonize growth and profits accordingly for high growth / high profit brand leverage effect
Price 10% higher than OEM products
If new market penetration and strategic market expansion are needed, follow ODM as an option
Brand policy
Using company brands for high-end / high margin product to
improve profitability and achieve long-term growth objectives
Using company brands for high-end / high margin product to
improve profitability and achieve long-term growth objectives
2945
65
3555
71
Highest percentage of own brand in the industry
2003 2004 2005
Brand
OEM
3-3. Build Global Operation and System
Netherlands (W/H)Netherlands (W/H)
1 HQ, 4 factories, overseas sales office, 1 W/H, 1 IPC1 HQ, 4 factories, overseas sales office, 1 W/H, 1 IPC
China (IPC)China (IPC)
Production Plant Incorporate independent sales offices
Logistics Center
IPC (International procurement center)
Low-end model SKD line70kAlgeria
(Algiers)
Europe, Mid. East and neighboring region export
100kTurkey
(Istanbul)
Low-end model production
50kChina (Huizhou)
PVR, CAS, COMBO350kKorea
ProductCapacity
US operator US (Irvine, CA)
Europe (with Norway)Germany (Frankfurt)
Digital cable STBChina (Beijing)
Middle East, AfricaUAE (Dubai)
Regions of operations
Main materials, equipment sourcing
China (Shenzhen)
Europe, CIS regionNetherlands (Rotterdam)
Build production, logistics and sales operations in key locationsBuild production, logistics and sales operations in key locations
Dubai officeDubai office
U.S officeU.S office
Germany officeGermany office
Korea (HQ, F)Korea (HQ, F)
China (F)China (F)
Turkey (F)Turkey (F)
Algeria (F)Algeria (F)
China officeChina office
Norway officeNorway office
3-4. Future Growth Driver (IP STB Solution)
Only company possessing IP STB Total SolutionOnly company possessing IP STB Total Solution- IP TV market expansion through IP TV chipset co-development & co-marketing with Intel- Turn-key solution for server and middleware needed for IP STB including hybrid type products- Provide total solution for increased competitiveness and high profit generation
KIP series revenue plan
Domestic : Within 1 month of IP business launch, began
supplying IP STB to “Sports Toto,” cyber apartment
complexes, and communications business partnerships
Overseas : Japan, EU, S.E. Asia – business development with hotel consortiums and backbone network companies
N. America : Preparing for home automation IP STB business
IP STB
Middleware (S/W)
Encoding Server
(H/W)Streaming Server
DRM, Authoring
(S/W)
MoviesMovies MusicMusic NewsNews GamesGamesContent
Kaon Media business range(IP STB + Server+ Middleware)
Differentiated IP STB Solution
Ordinary IP STB company business range
Ordinary IP STB company business range 150
350
600100 mil. KWN
KIP Series Revenue Forecast
2006(E) 2007(E) 2008(E)
4. 2006 business plan
Broadcasting business market penetration as
digital broadcasting expands throughout the world
Broadcasting business market penetration as
digital broadcasting expands throughout the world
• Expected consumer and broadcasting business demand
• Added profit generation through patent registration of intellectual property
Multi-room STB solution market penetration
• Develop exclusive PVR NDS XTV Middleware Product
• PVR market penetration as substitute for prior sales accounts
Expand supply of PVR for broadcasting
• Co-operation with Chinese global electronics company Highel• Penetrate new Indian broadcasting business market
Initiatives to obtain CHINDIA, NORDIC markets
• Co-development and co-marketing ITPV chipset with INTEL
• Competitiveness and profit maximization through IP STB total solution development
New product development for IPTV market
* Revenue Goal
- 130.4 billion KWN
* Profit Goal
- 13.9 billion KWN
(10. 7%)
* Stock price goal
- 20,000 KWN
* Market Cap
- 150 billion KWN
2006Business Plan
Key Executives
Appendix 1 : Major Executives
Kaon Media manpower comprised of digital broadcasting specialistsKaon Media manpower comprised of digital broadcasting specialists
CEO Hwa-Seop Lim
Kaon Media President/CEO2001
Developed European format two way digital TV2000
Developed European format digital TV (first generation)1998
Developed European format digital satellite receiver (DVB-S)1996
Developed 1st & 2nd generation US format (DSS) 1994
Developed digital camera for broadcasting and digital monitor 1992
Samsung Electronics general R&D center 1989
Professional Experience
Awards & Distinctions
Samsung Electronics color TV division
Director(Production)
Young-Ho, Lee
Samsung Electronics General R&D Center, Samsung visual display division
Director of R&D(R&D)
In-Kee, Kim
Samsung Electronics Overseas HQ, Samsung Panama sales office
Executive Director
(Overseas Sales)
Hong-Kwang, Kim
Samsung General R&C Center planning department, Samsung automotives strategic planning department
Executive Director
(Strategic Planning)
Jin-Kyo, Lee
ExperiencePosition
(Responsibility)Name
2002. 08. SMBA Kyung-gi small and medium enterprise company export award
2002. 09. SMBA export prospect company certification 2003. 10. Chairman Award from the Presidential Commission on
Small and Medium Enterprise for venture companies2003. 11. Industrial packaging award and 20 million export award
on National Trade Day2004. 02. MIC’s annual information technology business award2004. 04. Maeil Economic newspaper’s excellent venture company
award in the field of information technology2004. 11. 70 million dollar export achievement award on National
Export Day2005. 12. Silver award as one of the 50 high growth companies in Korea2006. 01. Awarded by the MICE as a 100 bil. Dollar electronics
export contributor
Appendix 2 : Balance Sheet
Million KWN
Category 2005 2004 2003 2002
Current Assets 47,809 38,445 29,409 9,590
Fixed Assets 8,116 5,316 2,655 1,172
Total Assets 55,925 43,761 32,064 10,762
Current Liabilities 8,048 16,125 16,827 6,607
Debt & other liabilities 435 883 831 17
Total liabilities 8,483 17,008 17,658 6,624
Capital stock 3,664 2,875 2,875 1,821
Capital surplus 16,154 3,311 3,311 2,371
Earned surplus 26,663 20,327 8,129 54
Capital adjustments 961 240 91 -
Total capital 47,442 26,753 14,406 4,138
Appendix 3 : Income Statement (2006)
Million KWN
Category 1Q 2Q 3Q 4Q Total
Revenue 20,361 32,085 35,224 42,754 130,424
COGS 15,945 24,890 27,743 34,346 102,925
Gross Profit 4,416 7,194 7,481 8,408 27,499
Selling&generaladministrative expenses
2,680 3,760 3,760 3,568 13,587
Operating income 1,736 3,434 3,434 4,840 13,912
Non-operating income 324 149 180 224 877
Non-operating expenses 887 165 200 249 1,502
EBIT 1,172 3,418 3,882 4,815 13,287
Net income 880 3,084 3,478 4,313 11,755
Thank youThank you