mmicc 2010 - nus

Turning Dreams Into Reality

AGENDA

Situational Analysis

MULTISENSORYEXPERIENCE

GEOGRAPHICEXPANSION

Issues

Implementation

Financials

Introduction SituationAnalysis

GeographicExpansion

MultisensoryExperience

Financials Implementation

Valuable Resources

• Creative talents • Strong brand name

Lucrative Target Market

•Affluent & sophisticated individuals

Strong Focused Operations

• 13 Resident, 10 Touring shows• Operating mostly in North America• Partners with Casino Operators

Key Principles • Show before business • Creative challenge and control

Valuable Resources with strong focused operations


GeographicExpansion



Expression of Creativity

•Constant idea generation from cells need to materialize into shows

Internal forces

Need for expansion and maintaining creative edge


GeographicExpansion




•Constant idea generation from cells need to materialize into shows• Need for new shows

Internal forces



GeographicExpansion





Maintain creative edge •Keep creative core competency•Constantly innovate

Internal forces



GeographicExpansion



Opportunities for Expansion• Reputation for increasing partners revenues•Highly sought after

Internal forces External forces



GeographicExpansion






Opportunities for Expansion• Reputation for increasing partners revenues•Highly sought after•New partner and market opportunities

External forces



GeographicExpansion



Internal forces





External forces



GeographicExpansion



Internal forces




Increasing Competition

•Growing number of similar shows


External forces



GeographicExpansion



Internal forces





•Growing number of similar shows•Need to be at the forefront of innovation


External forces



GeographicExpansion



Internal forces





•Growing number of similar shows•Need to be at the forefront of innovation

Expand globally to capture new markets&

Deliver new forms of creativity

Where we want to beWhere we are

Strong permanent foothold in North America

Strong relationship with MGM

Provide high quality and creative entertainment

Where we want to be

Establish permanent foothold globally

Build equally strong relationship with other

partners

Leader in providing the most creative and

forefront entertainment

Issues and concerns

Enter new markets and deliver creative content


GeographicExpansion



Which show type

How to deliver new forms of creativity

Issues

•Brand dilution•Creative control

Concerns

Which markets to enter•Cannibalization•Over-saturation

Who to partner

•Creative Control•Trust•Sustainability• Profitable model with non-casino operator

• Creative talent • Financial and technical capabilities

Issues and Concerns


GeographicExpansion



High quality and creative circus entertainment

provider

Provide the cutting edge and most creative circus

entertainment

Where we are Where we want to be





partners


GEOGRAPHICEXPANSION

Strategy

Key Principles •Show before business • Creative challenge and control


GeographicExpansion



Considerations

Which type of show

Which country to enter

Who to partner with

Global Expansion Considerations


GeographicExpansion



BIG TOP RESIDENT ARENA

Allows greater technical development & creativity

Fit with brand image

Maintain creative control

Profits

CRITERION

Resident and Arena shows provide the most viable vehicles of expansion & expression of creativity

30%

30%

15%

15%

Global Expansion


GeographicExpansion



NEW YORK

Tourist Arrivals

Reception towards Performing Arts

Ease of Competition

RESIDENT CRITERION

London & Singapore are the most viable cities to expand into

50%

25%

25%

LONDON BERLIN SYDNEY SINGAPORE

Country Selection


GeographicExpansion



Why London

•High industry revenues and attendance that are continuously growing•Boost in tourism for 2012 London Olympics

Big Opportunities

•One of the world’s highest international tourism arrivals

Big Markets

Sophisticated Audience•Well established performing arts scene•Large pool of target audience

Establish a permanent foothold in London with a resident show

London


GeographicExpansion



How to Enter London

•No casinos•Find a partner with the most fit•Construct a modern theater at West End

Partnership

Society of London Theater (SOLT)

Why SOLT?•Trade association representing owners, producers and managers of London theaters•They have the expertise and fit to direct CdS’s expansion in London

London


GeographicExpansion



NEW YORK

Tourist Arrivals

Reception towards Performing Arts

Ease of Competition

RESIDENT CRITERION

London & Singapore are the most viable cities to expand into

50%

25%

25%

LONDON BERLIN SYDNEY SINGAPORE

Global Expansion


GeographicExpansion



Why Singapore

•Opening of 2 Integrated Resorts (IR) in Singapore : Resort World & Marina Bay Sands

New Opportunities

•Access to growing Asia market•One of the highest international tourist arrivals globally

New Markets

Low Risk

•Tried and tested casino model•Non-Saturated Market

Extend Partnership with Las Vegas Sands in Macao to theMarina Bay Sands IR

Singapore


GeographicExpansion



How to Enter Singapore

•Upcoming casinos and integrated resorts•Implement similar casino-operator contracts

Partnership

Marina Bay Sands

Why Marina Bay Sands?•Exisiting ZAIA show in Macao casino operated by Las Vegas Sands•Both parties benefit as the IR will enjoy increased visitations while CdS will enjoy increased box office takings

Singapore


GeographicExpansion



BIG TOP RESIDENT ARENA

Allows greater technical development & creativity

Fit with brand image

Maintain creative control

Profits

CRITERION

Resident and Arena shows provide the most viable vehicles of expansion & expression of creativity

30%

30%

15%

15%

Global Expansion


GeographicExpansion



Why Arena

•Highest revenue & growth•Larger audience

Huge Earnings

•Our research partnership into Augmented Reality requires high lead time and costs

Needed to Support Research

Low Lead Time & Cost

•Stage setup can be done in hours•Show runs last for up to a week

Arena


GeographicExpansion



Diluting of Brand

Limitation

•Better sight lines•Enhanced lighting and décor•Bigger choreography•Overall an enhanced entertainment experience

Addressing Limitations

Arena


GeographicExpansion



Considerations

Which market to enter

Which type of show

Who to partner with

Geographic Expansion

London & Singapore

Resident Shows Arena Shows

Society of London TheaterMarina Bay Sands

Global Expansion


GeographicExpansion




GEOGRAPHICEXPANSION

Multisensory Experience


GeographicExpansion



Sound

Smell Feel

Motion

Sight


Multisensory Experience


GeographicExpansion



Core Competency

Technological Opportunity

Continuous creative innovation in shows

• Motion capture sensors•Vision tracking camera•3D Modeling•Interactive interface

Create an Augmented Reality

New Interactive Platform


GeographicExpansion



Core Competency

Technological Opportunity

Continuous creative innovation in shows

• Motion capture sensors•Vision tracking camera•3D Modeling•Interactive interface

Create an Augmented Reality

RESULTAn interactive semi-virtual performance can be built to appeal

to multiple senses

IMPLICATIONHow to acquire such technology?

New Interactive Platform


GeographicExpansion



Cirque du Soleil

•A creative team to design the show

AF+RFID RESEARCH LAB

•Collaboration initiative of the Royal Academy of Art in the Hague & Delft University of Technology

•Worked with world class organizations such as Van Gogh Museum in Holland

•Specialize on Augmented Reality for art and design

•Provide research funds

Sound

Smell Feel

Motion

Sight


Technological Partnership


GeographicExpansion



Technological Complexity

High Capital Investment

Perceived threat of obsolesce by performers

Limitation

Plan longer lead time to coincide with London Theater construction

Large revenue from increased Arena shows

Include them in the development process &assure them of their required presence in live

shows

Addressing Limitations

Limitations


GeographicExpansion



Revenue from Recommendations higher

1621

2554

3331

1621

21092403

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2009E 2012E 2014E

With Recommendation W/O Recommendation

38.6% higher38.6% higher

5 Yr CAGR +15%

5 Yr CAGR +8%

Revenue

AssumptionsW/O recommendation based on increased focus on Big Top while recommendations includes focus on Arenas and Multi Sensory


GeographicExpansion



EBITDA from Recommendations higher

510

936

1273

510614

679

0

200

400

600

800

1000

1200

1400

1600

2009E 2012E 2014E

With Recommendation W/O Recommendation

80% higher80% higher

5 Yr CAGR +20%

5 Yr CAGR +6%

Revenue

AssumptionsW/O recommendation based on increased focus on Big Top while recommendations includes focus on Arenas and Multi Sensory


GeographicExpansion



Multi Sensory Approach +ve NPV

FY end 31 YearIn USDm Unit 2008 2009E 2010E 2011E 2012E 2013E 2014EEBITDA 0 0 0 39 78 117NWC 10 10 10 10 10 10Capex 20 20 38.5 15 15 15FCF -30 -30 -49 14 53 92Terminal 261FCF w Terminal -30 -30 -49 14 53 510WACC 12%NPV 368.96

Terminal369 3% 4% 5% 6% 7%

Occupancy 70% 300 300 301 302 30280% 367 368 369 370 37190% 435 436 437 438 43995% 469 470 471 472 473

WACC369 10% 11% 12% 13% 14%

Occupancy 70% 360 329 301 275 25180% 439 402 369 338 31090% 518 475 437 402 36995% 557 512 471 433 399


GeographicExpansion



Multi Sensory Approach +ve NPV

FY end 31 YearIn USDm Unit 2008 2009E 2010E 2011E 2012E 2013E 2014EEBITDA 0 0 0 39 78 117NWC 10 10 10 10 10 10Capex 20 20 38.5 15 15 15FCF -30 -30 -49 14 53 92Terminal 261FCF w Terminal -30 -30 -49 14 53 510WACC 12%NPV 368.96

Terminal369 3% 4% 5% 6% 7%

Occupancy 70% 300 300 301 302 30280% 367 368 369 370 37190% 435 436 437 438 43995% 469 470 471 472 473

WACC369 10% 11% 12% 13% 14%

Occupancy 70% 360 329 301 275 25180% 439 402 369 338 31090% 518 475 437 402 36995% 557 512 471 433 399

+NPV 368m Remains positive even when conservative sensitivity scenarios are factored in


GeographicExpansion



0

347

985

162

289

Resident Multi SensoryBig Top ArenasMerchandise

Revenue Breakdown

350

12151477

333

289


Revenue


GeographicExpansion



0

347

985

162

289


Revenue Breakdown

350

12151477

333

289


Multi Sensory and Arenas will take up a significant portion of Revenue in 2014E

Revenue


GeographicExpansion



2009 2010 2011 2012 2013

Leverage existing partnership with Sands

Multi Sensory

Expansion

Shift Touring focus towards Arenas

Begin R&D partnership

Establish relationship with SOLT

Arena

Enter the London market

Create new creative experiences for Singapore and London

2014

Singapore

London

Enter with Multi Sensory

Constantly innovate to achieve breakthrough technologies

BT Big Top will be maintained but slowly phase towards Arenas

Implementation


GeographicExpansion



High quality and creative circus entertainment

provider

Provide the cutting edge and most creative circus

entertainment

Where we are Where we want to be





partners


GEOGRAPHICEXPANSION

Implementation

Key Principles •Show before business • Creative challenge and control


GeographicExpansion



THANK YOU

Financial Assumptions:TouringTOURING

Assumptions Unit RemarksPerformances Week 9Number of weeks a year 36Capacity Occupancy

Breakeven % 65%Average % 85% Assume

CostsProduction USDm 30Equipment and Transport USDm 17Tent USDm 13Per show Operating cost USDm 36.86 0.114Rent for Arena USDm 18

115


GeographicExpansion



Why do we not implement the new technology in saturated/more mature markets?

• Prevent cannibalisation in existing markets • Existing infrastructure is not made for it – requires

overhaul that requires stopping original shows

Why multi sensory entertainment makes sense?• Aligned with your creative direction: Onedrop

foundation• We live in an experience economy – this is what

your consumers will want • New media is a current trend

In the event that the partnership does not work out

• Other available partners (Eg: institution in Nottingham institution)

• Governmental organisations are interested in such technology – gov support (eg: Singapore)

• Emergence of research labs conducting the relevant research

How is it possible in London now? • Other available partners (Eg: institution in

Nottingham institution)• Governmental organisations are interested in such

technology – gov support (eg: Singapore) • Emergence of research labs conducting the

relevant research

Completely phase out big top eventually• Big top restricts creativity• Beyond the normadic roots (known for creativity)

• 35 other big scale shows on the Vegas Strip very competitive

• We have 7 resident shows on in Vegas cannibalisation

• Ex CdS employee Franco Dragone has a similar show just next door (Le Reve- aquatic show)

• Explore new markets that are less competitive

mmicc 2010 - nus

Documents

creative control

creative contentwhere

creative challenge

creative core competency

increasing partners

bestrong permanent foothold

oversaturationwhich

type brand dilution