TIPS Industries Limited has informed the Exchange about Investor Presentation
October 18, 2023
To, Listing Department BSE Limited P.J Towers, Dalal Street, Fort, Mumbai – 400 001
To, Listing Department National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 050
Scrip Code: 532375
Symbol: TIPSINDLTD
Subject: Submission of Presentation of Analysts/Investors Meeting
This is further to our letter on the Investor/ Analyst call scheduled on October 18, 2023 at 4:00 p.m. (IST) and pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, we enclose herewith a copy of Investor Presentation with respect to Unaudited Financial Results of the Company for the quarter ended September 30, 2023.
The same shall be uploaded on our website https://tips.in
We request you to kindly take the above information on record.
Thanking You,
For Tips Industries Limited
Bijal R. Patel Company Secretary
Encl: a/a
Investor Presentation Q2FY24
Safe harbor
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Tips Industries Limited (the “Company’), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the Company’s ability to successfully implement its strategy, the Company's future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cashflows, the Company's market preferences and its exposure to market risks, as well as other risks. The Company's actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third-party statements and projections.
All Maps used in the Presentation are not to scale. All data, information and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness.
Company Overview
KEY FACTS
Catalogue comprises of music in over 25 languages available across multiple platforms globally
Only listed player to write off 100% of content cost in the quarter of release
Debt free company with ₹ 148.5 cr of cash & investments
Established A&R capability
85 Employees (Q2FY2024)
75% Revenue through digital platforms
25+ Partners across media business
89.7 mn subscribers on YouTube
Founded Year 1988
Website www.tips.in
Industry Media & Entertainment
Target Indian Subcontinent & Diaspora
3
Gearing Up For Larger Scale
MR. HARI NAIR Chief Executive Officer
Hari has 25 years of diverse experience in media and technology. He has worked in various roles in the music industry for the past two decades. In 2019, he joined ByteDance and led music partnerships and licensing in South Asia for them. He was instrumental in launching Resso in India, and working with apps like TikTok, Helo, and Capcut. Prior to working in the music industry, he was associated with the IT services industry.
MR. SUSHANT DALMIA Chief Financial Officer
Sushant has 18 years of diverse experience in finance, strategy, M&A, fund raising, and operations. He has been part of PwC, Citigroup, Angel One, IHH healthcare, boAt, and MakeO (Toothsi and Skinnsi) in his previous roles. His qualifications include CA and CFA. He has pursued certification courses in Artificial Intelligence from the Wharton School and IFRS from ACCA (UK).
4
What Makes Us Unique
Optimising Capital Allocation
Our Content Powers Global Platforms
Sustainably Increasing market share
Growing listenership & Increasing Content Addition
Two Pronged Content Acquisition Strategy
Snapshot of Super HITS
Optimising Capital Allocation : FY23 Payout Ratio - 60.8% (Buyback + Dividend)
Consistently rewarding shareholders through Buybacks & Dividends
(Crs)
Reducing Equity Shares*
1.73
-26%
1.60
1.54
1.43
1.30
1.28
2009
2010
2013
2016
2020
2023
200
150
100
50
-
-50
-100
-150
11
3
2
12
5
2
13
4
10
2
2
0.5
5
2
7
4
2
19
14
13
33
21
2
2
2
0.3
3
0.0
3
0.1
148.5
62
40
39
17
0.2
6
0.3
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
H1FY24
-120
Net Cash/Debt
Content Cost
Interest Cost
Dividend
Buybacks
Dividend for FY23: Rs. 0.5/share (Post-Split) Interim Dividend for H1FY24: Rs. 3.0/share
*Note : No. of shares before share split
6
Sustainably Increasing market share: Revenues Doubled in Last 2 Years
Music Sector*
Revenues
(₹ Crs)
(₹ Crs)
2,500
187
+12%
1,900
2,200
1,300
1,400
1,500
1,500
136
+34%
98
91
67
43
32
CY17
CY18
CY19
CY20
CY21
CY22
CY23E
#
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Tips Industries outperformed sectoral growth by 2.8x over the past 7 years
*Source: EY-FICCI M&E Report 2023; # EY Estimates
7
Two Pronged Content Acquisition Strategy
PRODUCE
STRATEGY o To introduce promising singers (Tips) is in our DNA
o We have a strong A&R team which engages with artistes across genres and languages which allows us to promote upcoming talent
o Our team has a deep understanding of music & a track record of creating a repertoire of “Must Have Hits”
PURCHASE
STRATEGY
o We purchase music rights from other producers when
we see profitable opportunities
o Our understanding of music and its creative process provides us deep insight on costs and returns and therefore we always maintain cost consciousness while acquiring music rights
CONTENT COST
100% of content cost is written off from profit & loss account in the quarter of release No capitalization & no pending write-offs in the future. Company has consistently followed this policy since inception
Content acquisition is entirely funded through internal accruals. No borrowings/leverage
Large A&R team to acquire content across languages, genres and to signup promising artists
8
Our Content Powers Global Platforms
Digital Partners
Sync Deals
Broadcast Partners
9
Growing listenership & Increasing Content Addition
Evergreen & Rich content of over 30,000 songs across genres, languages & decades giving us high visibility of music revenue
YouTube Views (in. Bn)
New Songs Added 130 New releases in Q2FY24
896
19.3
FY19
26.6
FY20
YouTube Views (in. Bn)
+55%
38.5
59.6
112.7
FY21
FY22
FY23
215
276
259
130
16.4
20.8
+86%
48.3
50.9
27.3
31.0
33.6
FY21
FY22
FY23
Q1FY24
Q2FY24
Q4FY22
Q1FY23
Q2FY23
Q3FY23
Q4FY23
Q1FY24
Q2FY24
Existing Content + Continuous Additions : Increasing Music Revenue
10
Blockbuster Streaming Songs
Some of our songs with more than 100 million views/streams
11
Financial Performance
Summary of Last 10 Quarters
(Crs)
70. 0
60. 0
50. 0
40. 0
30. 0
20. 0
10. 0
0.0
49.6
51.0
52.0
52.6
44.2
34.1
34.2
28.1
29.1
15.6
3.9
11.3
7.6
21.5
12.6
16.0
8.6
17.3
7.6
20.7
17.2
20.2
18.7
18.4
19.0
26.8
12.2
60.9
39.6
Cumulative (10 quarters)
Revenue 435.9
Content Cost 112.0
4.7
Profit after Tax 207.2
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Revenue
PAT
Content Cost
13
Business Performance
Revenue (Rs. in Crs)
Op. EBITDA (Rs. in Crs)
Op. EBITDA Margins (%)
+23%
60.9
49.6
+84%
49.8
27.2
2,706 bps
81.9
54.8
Q2FY23
Q2FY24
Q2FY23
Q2FY24
Q2FY23
Q2FY24
Revenue (Rs. in Crs)
Op. EBITDA (Rs. in Crs)
Op. EBITDA Margins (%)
+35%
113.5
83.8
+71%
84.8
49.5
1,556 bps
74.8
59.2
H1FY23
H1FY24
H1FY23
H1FY24
H1FY23
H1FY24
14
Industry Leading Financial Performance
(₹ Crs)
Revenue
EBIT & EBIT Margin*
84.0%
71.5%
78.9%
80.5%
63.9%
55.1%
187
+34%
136
98
91
67
43
48
36
+24%
77
73
106
89
FY18
FY19
FY20
FY21
FY22
FY23
FY18
FY19
FY20
FY21
FY22
FY23
ROIC (Post Tax) & ROE #
ROIC (Post Tax)#
ROE
318%
8% 5%
1% 4%
15%
FY18
FY19
-11%
FY20
167%
82%
48%
63%
64%
FY21
FY22
FY23
Note *Segmental EBIT before allocating corporate overheads (Upto FY21); #ROIC, ROE and EPS upto FY21 before demerger
EPS#
+93%
3.3
5.9
5.0
0.2
FY18
0.2
FY19
0.8
FY20
FY21
FY22
FY23
15
Profit & Loss Statement
Particulars (Rs. in Crs)
Revenue From Operations
Content Cost
Employee Benefits Expenses
Other Expenses
Op. EBITDA
Op. EBITDA %
Other Income
Depreciation and Amortisation Expense
Op. EBIT
Finance Costs
PBT
Tax
PAT
PAT %
EPS
Q2FY24
Q2FY23
Y-o-Y
Q1FY24
Q-o-Q
H1FY24
H1FY23
Y-o-Y
60.9
4.7
2.1
4.2
49.6
17.2
1.8
3.4
23%
-73%
52.6
12.2
1.9
3.5
16%
-62%
113.5
16.9
4.0
7.7
83.8
24.8
3.5
6.0
35%
-32%
49.8
27.2
84%
35.0
42%
84.8
49.6
71%
81.9%
54.8%
66.5%
74.8%
59.2%
3.6
0.5
53.0
0.1
52.9
13.2
39.7
1.1
0.4
27.9
0.1
27.8
7.0
20.8
65.2%
42.0%
3.09
1.61
90%
90%
91%
2.0
0.6
36.5
0.1
36.4
9.3
27.1
51.5%
2.11
45%
46%
46%
5.6
1.0
89.4
0.2
89.2
22.5
66.8
2.2
0.8
51.0
0.1
50.9
12.9
38.0
58.9%
45.4%
5.20
2.93
75%
76%
76%
Note Other comprehensive income during the quarter was Rs. 17.5 lakhs (Q2FY23 – Rs. 16.2 lakhs; Q1FY24 – Rs. 28.4 lakhs).
16
Balance Sheet
Equity & Liabilities (₹ in Cr)
Sep’23 Mar’23
Sep’22
Assets (₹ in Cr)
Sep’23 Mar’23
Sep’22
Equity Share Capital Other Equity
Total Equity
(i) Lease Liabilities Deferred Tax Liabilities, (net) Employee Benefit Obligations Other Non Current Liabilities
Total Non-Current Liabilities
Non-Current Liabilities
Current Liabilities
(i) Lease Liabilities (ii) Trade Payables (a) total outstanding dues of micro enterprises and small enterprises (b) total outstanding dues of creditors other than micro enterprises and small enterprises (iii) Other Financial Liabilities Employee benefit Obligations Current Tax Liabilities (net) Other Current Liabilities
Total Current Liabilities
Total Equity & Liabilities
12.8 170.4
183.2
12.8 123.3
136.2
13.0 124.8
137.8
2.9 0.0 0.7 4.1
7.7
1.0
3.1 0.0 0.1 0.0
3.2
0.7
3.5 0.0 0.2 13.1
16.8
0.6
0.0
0.0
0.0
11.7
0.2 0.0 4.7 16.1
33.8
16.0
0.1 0.0 0.3 36.1
53.3
15.0
0.1 0.0 0.5 19.7
35.9
Non-Current Assets
Property, plant and equipment
Investment Property
(i) Investments
(ii) Loans & Deposits
(iii) Other Financial Assets
Deferred Tax Assets
Other Non‐Current Assets
Total Non-Current Assets
Current Assets
(i) Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Bank balances other than (ii) above
(v) Loans
(vi) Other Financial Assets
Other Current Assets
Current Tax Assets (Net)
Total Current Assets
224.7
192.7
190.5
Total Assets
6.9
0.1
0.0
0.1
9.6
0.5
7.5
24.6
48.9
25.4
5.8
82.3
2.7
3.1
30.8
1.0
5.0
0.1
0.0
0.1
7.0
0.5
15.3
28.1
13.1
20.3
11.4
85.5
2.6
3.3
27.4
1.0
6.1
0.2
0.0
0.0
2.9
0.4
8.0
17.6
9.5
20.4
20.3
74.6
0.2
11.5
32.2
4.2
200.0
224.7
164.6
192.7
172.9
190.5
17
Cash Flow Statement
Cash Flow Statement (Rs. Crs.)
Cash Flow from Operating Activities
Profit before Tax
Adjustment for Non-Operating Items
Operating Profit before Working Capital Changes
Changes in Working Capital
Cash Generated from Operations
Less: Direct Taxes paid
Net Cash from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Net increase/ (decrease) in Cash & Cash equivalent
Add : Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Sep-23
Mar-23
Sep-22
89.3
-3.3
86.0
-23.0
63.0
-18.2
44.9
-30.7
-19.8
-5.6
11.4
5.8
105.6
-2.6
103.1
10.2
113.3
-31.0
82.3
-49.5
-43.5
-10.7
22.1
11.4
50.9
-1.1
49.8
6.2
56.0
-17.6
38.4
-37.6
-2.6
-1.8
22.1
20.3
18
Music – A Digital Journey
Music Is The Most Valuable Content
Music Revenue Sources
2.4%
4.3%
9.4%
NEWS
TV SERIALS
WEB SERIES
FILMS
MUSIC
48.3%
CY2022
18.7%
Content that can be monetized multiple times naturally commands greater economic value
19.2%
Music ranks at the top of the content pyramid when ranked on repeated monetization
STREAMING Streaming continued to grow strongly in 2022, up by 11.5% to US$17.5 billion. Paid streaming revenues for CY22 were US$12.7 billion
SYNCHRONISATION Use of recorded music in advertising, film, games and TV grew by 22.4% (US$640.4 million) in 2022. Revenues from synchronization accounted for 2.4% of the global market
PERFORMANCE RIGHTS Performance rights are now a US$2.5 billion revenue stream which grew 8.6% in CY2022
*Source: IFPI GMR (2023)
Subscription audio streams
Performance rights
Ad-supported streams
Physical
Synchronisation
Download & Other digital
Streaming comprised 67% of total revenues in 2022 48.3% of all streams were subscription based
20
Digital Advertising – Key Driver of Indian Music Industry
Indian Digital Ad Industry
(₹ Crs)
51,110
39,315
+29%
21,353
29,784
15,782
13,683
10,859
CY2018
CY2019
CY2020
CY2021
CY2022
CY2023E
CY2024E
The Indian digital advertising industry stood at Rs 29,784 crore by the end of 2022, up from Rs 21,353 crore in the previous year. It has grown at a rate of 39%
This swift growth can be attributed to the rapid development of digital infrastructure and the development of mass market applications of e-commerce, education, entertainment, healthcare, etc.
The highest proportion of spends on digital media is claimed by social media (30%, Rs 8,757 crore), closely followed by online Video (28%, Rs 8,319 crore). Paid search claims 23% (Rs 6,895 crore), while display banners claim 16% (Rs 4,816 crore).
Social media is expected to grow with a CAGR of 31% to have a spend share of 29% by 2024.
On average, Indians spend 2-3 hours on Social Media daily, which is at par with the global average.
73% of the audience belonging to the age group of 45 years to 54 years use YouTube to watch online content.
Source: Dentsu Aegis Network Report 2023
21
Digital Advertising will Dominate Media Spending
Advertising spends on different media
Advertising spends across various media (%) - Forecast
Radio
Cinema
OOH
2.0%
2.0% 0.3%
21.0%
Television
40.0%
35.0%
Digital
45
40
35
30
25
20
15
10
5
40
31
17
6 4 2
0 2018
39
29
20
6 4 2
42
42
26 26
3 3
1
29
23
2 2 0
40
35
21
2 2 0
40
37
19
2 2 0
45
34
Digital
Television
17
OOH
Radio
Cinema
2 2 0
2019
2020
2021
2022
2023E
2024E
The current pie of digital ad spends constitutes 35% of the advertising spends in 2022, and moving forward in 2023 and 2024, the percentage is expected to increase to 40% and 45% respectively.
Source: Dentsu Aegis Network Report 2023
22
Few Industry Reports
dentsu Digital Advertising in India
IFPI Global Music Report
FICCI
EY Media & Entertainment
Report 2023
Ericsson Mobility Report
23
Thank You
Company Details:
Tips Industries Limited
CIN: L92120MH1996PLC099359
Email id: investorrelations@tips.in
Investor Relations Advisors:
Orient Capital (a division of Link Group) Mr. Nikunj Jain | Mr. Amar Yardi +91 9769060608 | +91 7045121239 nikunj.jain@linkintime.co.in| amar.yardi@linkintime.co.in