Siti Networks Limited has informed the Exchange regarding Investor Presentation
February 14, 2019
To,
The General Manager Corporate Relationship Department BSE Limited Phiroze Jeejeeboy Towers Dalal Street, Fort, Mumbai- 400 001 BSE Scrip Code: 532795
The Manager Listing Department National Stock Exchange of India Limited Plaza, 5th Floor, Plot no. C/1, G Block Bandra Kurla Complex, Bandra (E) Mumbai- 400 051 NSE Scrip Symbol: SITINET
Kind Attn. : Corporate Relationship Department
Dear Sir,
Sub. : Investor Presentation on Financial Results
We are submitting herewith Investor Presentation on unaudited Financial Results of the Company for 3rd quarter of FY 2018-19 and nine months ended on December 31, 2018.
You are therefore, requested to kindly take the same on record.
Thanking you,
Yours truly,
SITI Networks Limited
Q3FY19 Investor Presentation
Formerly known as SITI Cable Network Limited BSE : 532795 | NSE : SITINET | Bloomberg : SCNL:IN | Reuters : SITI.NS www.sitinetworks.com
SITI Networks Limited – Confidential
1
Disclaimer
Some of the statements made in this presentation are forward-looking statements and are based on the current beliefs,
assumptions ,expectations, estimates, objectives and projections of the directors and management of SITI Networks Limited
(SITI Networks) about its business and the industry and markets in which it operates. These forward-looking statements
include, without limitation, statements relating to revenues and earnings. The words “believe”, “anticipate”, “expect”,
“estimate”, “intend”, “project” and similar expressions are also intended to identify forward looking statements. These
statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which
are beyond the control of the Company and are difficult to predict. Consequently, actual results could differ materially from
those expressed or forecast in the forward-looking statements as a result of, among other factors, changes in economic and
market conditions, changes in the regulatory environment and other business and operational risks. SITI Networks does not
undertake to update these forward-looking statements to reflect events or circumstances that may arise after publication.
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SITI Networks Declares Strong Q3FY19 Results
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SITI Networks Declares Robust Q3FY19 Results
• Operating EBITDA leaps 1.9x y-o-y & 1.4x q-o-q to Rs.930 Mn
• Operating EBITDA Margin jumps 1.7x y-o-y & 1.3x q-o-q to 24.5%
•
•
•
•
Subscription Revenue surges 21% y-o-y to Rs.2571 Mn
Total Revenue1 rises 12% y-o-y to Rs.3790 Mn
Digital Subscriber ARPU leaps 19%
SNL Subscription Collection Efficiency @ 94%
1. Excluding Activation
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9M Performance: Growth momentum continues
• Operating EBITDA leaps 2.2x to Rs.2,161 Mn
• Operating EBITDA Margin jumps 937 bps to 20%
•
9M EBITDA surpassed FY18 performance: Driven by strong subscription growth
• Subscription Revenue surges ~24% to Rs.7,268 Mn
• Total Revenue1 rises 16% to Rs.10,820 Mn
1. Excluding Activation
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Industry Overview
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India C &S Market Overview TV Households are Growing Faster than the Universe
2016
2018
Total HH
286 Mn
297 Mn
TV HH
183 Mn
197 Mn
10% Analog Cable
13% Free Dish
31% Paid DTH
197 Mn TV Households
1% Terrestrial
44% Digital Cable
Penetration of TV HH has gone up from 64% in 2016 to 66% in 2018
Cable (Digital + Analog) controls 54% of India’s TV market
Universe Update BARC India July 2018
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TV Homes Penetration Maximum Growth in East & South India | Small Towns & Rural are key drivers of Growth
# Growth in TV Penetration – Major Contributors
24% Bihar / Jharkhand
21% North East
# TV Owning HH (Millions)
12% Odisha
11% AP/Telangana
9% Karnataka
Universe Update BARC India July 2018 | Growth has been measured over 2016 report
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Most Growth in TV Penetration in DAS Phase 3 & 4 areas
SITI Networks Well Positioned to Benefit from Tariff Order
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• Subscribers pay Phase neutral Minimum Rental of
INR130 for 100 FTA SD channels; Can take additional FTA channels in bundles of 25 channels for INR20 each
• True A-La-Carte: Discounts on Bouquets restricted to
15% of A-La-Carte price of Pay channels
• HD Channels priced at <=3 SD Price or Maximum price
of Genre
• Broadcasters to provide 20% distribution fee for
collection and remittance of subscription
• Marketing & placement fee retained • Carriage capped @ 20 paisa & @ 40 paisa / subscriber/
channel/ month for SD & HD Channels respectively • >=5% to <10% - 75% of Base to be charged. • >=10% to <15% - 50% of Base to be charged. • >=15% to <20% - 25% of Base to be charged. • >=20% - No Carriage Fee to be charged
n o i t p i r c s b u S
e g a i r r a C
01
Consumer ARPU’s to rise
Increase dependence on systems / processes
05
Increase Transparency & Adherence to Compliance
New Tariff Order
02
Content Cost linked to Subscription & Consumer Choice
Minimum Return on Capital Ensured
04
Favors Organized Entities
03
Implementation of the network distribution model will shift the balance of power in favour of DPOs
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Company Overview
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•
India’s Leading Digital TV Network
• Present in 22+ States & UT across India
• Footprint across 580+ locations
• Delivering content to 55 Mn+ consumers 24/7
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SITI Networks India’s Leading Digital TV Network
All metrics as of 31st Dec. 2018 | Does not include Analog
Launched in 199401OYCtool customer offered to LCOs02SITINET listed on NSE03Bouquet of Local Channels041stMSO launched in India1stMSO to giveCRM tool to Partners1stMSO listed on Stock Exchange1stMSO to launch local channelsNation-wideDistribution24,000+strong Distribution Network 0511.55 MnActive Digital Customers4.24LakhHigh Definition Customers580+Locations Footprint55 Mn+Consumers Reached1.7 MnBroadband Home Passes1.61LakhBroadband Customers~7%TV Households in India SITI Networks 11.55 Mn Happy Households across the country
1
2
3
4
DAS Phase 1 1.6 Mn
DAS Phase 2 1.5 Mn
DAS Phase 3 3.8 Mn
DAS Phase 4 4.7 Mn
All metrics as of 31st Dec 2018| Does not include Analog
SITI Networks Present across 580+ locations
Punjab
Haryana
Delhi
Rajasthan
Gujarat
Madhya Pradesh
Maharashtra
Karnataka
Kerala
Uttaranchal
Uttar Pradesh
Bihar
Assam
Nagaland
Meghalaya
Jharkhand
West Bengal
Odisha
Chhattisgarh
Telangana
Andhra Pradesh
SITI Networks Competitive Advantage
01
02
03
04
05
India’s largest MSO
Presence across 580 locations
Using latest MPEG4 STBs
OYC Subscriber Management System
Broadband through Hybrid (DOCSIS 2/3 & GPON) Network
Conax CAS
SAP Based systems
Uniform commercial policies
In discussion with various service providers for creating value adds for SITI base
Country-wide Access
Superior Technology
Systems and Processes
Strategic Alliances
Robust corporate governance & compliance
Professional Management
Lean and Agile Organizational Structure
Value unlocking: Consolidating MSOs
Efficient Execution
Promoter Group Corporate Structure
• Launched in 1926, the Parent Group (“Essel Group”) completed 90 years recently; One of India's leading business
houses, with a dominant vertically integrated presence in Media and entertainment
• Leading producer, aggregator and distributor of Indian programming across the world; 222,000+ hours of original Content
• Group Market Cap (Listed entities under the Parent Group): ~USD7.3 Bn
• Present in 171 countries, a reach of ~1bn+ viewers; Compelling bouquet of 75 Channels
ZEE Entertainment
India's Leading General TV Entertainment Network
ZEE Media Corp Ltd.
Dish TV
SITI Networks
DNA Newspaper
Strong presence in National & Regional News Genre
Asia’s largest DTH provider after merger with Videocon D2H
One of India’s leading National MSOs
English broadsheet daily with presence in major cities
Essel Infrastructure
Education: Zee Learn Limited
Packaging : Essel Propack
Theme Parks: Essel World and Waterpark
Precious Metals: Shirpur Gold Refinery
Healthy Lifestyle & Wellness
Content
Distribution
Other Business’
Exchange rate used USD1=INR71.00 Market cap as of 14th Feb. 2019
SITI Networks Sizeable Free Float & Institutional Ownership
1.1% Others
72.2% Promoters
Key Investors
3.9% Mutual Funds
4.9% Individuals
12.2% FII’s
5.6% Indian Companies
Shareholding Pattern 872 Mn Shares
As of 28th Dec 2018 Others include HUF, Clearing Members, banks, trusts and NRIs
Foreign Institutions
Domestic Institutions
There has been fund infusion of INR6800 Mn by Promoters through OFCDs & Convertible Warrants in Last 2.5 years
Technology Infrastructure Video & Broadband
• 11 Digital Headends; Intra-city OFC and Coax Network of ~33,000 Kms covering ~ 580 locations
• Transport of Digital CATV signals on 1.2 Gbps links across the country; ~350 IP Points
• Hybrid (DOCSIS+ GPON) Technology to offer Cable Broadband services
Digital Headends
Modems
STB’s
Chipsets
Servers
CAS, SMS, EPG
Connectivity
Strategy
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SITI Networks Video Strategy
•
•
Improve operational efficiencies and harness inbuilt leverage Fungible teams for Cable and Broadband
•
Increase Collection efficiency by implementing Prepaid further model
02
Migrate to Prepaid
01
Revenue Enhancement
• ARPU enhancement through
suggestive packs Increase HD Subscriber base TRAI Order Implementation
• • • Up-sell HD, OTT Video to
customers
03
Cost Optimization
04
Improve Margins
•
Improve extraction from low utilized IP based locations and exiting non-profitable ones
05
Range of STB
• Moving from SD / HD STB to Smart STB (Linux & Android)
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Financials & Operating Metrics
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The growth momentum continues in Q3FY19
Key Performance Indicators
Vs Q3 FY18
Subscription revenue for Q3 FY19 at Rs 2,571 mn
21% increase in Q3 FY19 (2,571mn vs 2,118mn)
Operational expenses for Q3 FY19 at Rs 2,860 mn
Expenses Flat in Q3 FY19 (2,860 mn vs 2,873 mn)
Operating EBITDA Margin improved @ 24.5%
Q3 FY19 margin Up by 1.7x (24.5 % vs 14.8%)
SNL Subscription Collection Efficiency at 94% for Q3 FY19
Maintained Collection efficiency (94% vs 95% for Q3 FY18 )
Blended ARPU at Rs 88
~19% increase in ARPU
Operating EBITDA for Q3 FY19 at Rs 930 mn
1.9 x increase in Q3 FY19 EBITDA (930 mn vs 498 mn)
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Q3 FY19 Robust Performance
# 1.9x Jump in Operating EBITDA
# 1.7x leap in Operating EBITDA Margins
2,161
24.5%
20.0%
992
930
498
FY18
FY19
Q3
9M
# 12% Jump in Total Revenue1
9,355
10,820
3,371
3,790
FY18
FY19
Q3
9M
14.8%
10.6%
FY18
FY19
Q3
9M
•
•
Q3FY19 Consolidated Revenues at Rs. 3,790 Mn
9M Operating EBITDA Margins expanded 1.9x
All Numbers in Rs. Mn unless mentioned other-wise. 1. Total Revenue excluding Activation
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Q3 FY19 : Video Business Surging Ahead
# 21% Growth in Video Subscription (INR Mn)
# Customer base stable
5,873
7,268
11.7
11.8
11.6
2,118
2,571
FY18
FY19
Q3
9M
# Phase-wise ARPU (Rs.) Increase
124
100
142
103
67
51
Q3FY18
Q3FY19
Phase 1
Phase 2
Phase 3
Phase 4
Q1FY19
Q2FY19
Q3FY19
• 9M Subscription revenue grew 24%
83
68
• ARPU increased strongly by 19% YoY
• Phase 3&4 ARPUs (73% of subscriber base)
have increased 23% and 35% YoY
• SNL Subscription collection efficiency at 94%
All Numbers in Rs. Mn unless mentioned other-wise
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Q3 FY19 : Broadband Business Stable performance
# ARPU has been relatively stable
# Average Speed per Customer is steady
606
576
568
27
27
27
DOCSIS
Q1FY19
Q2FY19
Q3FY19
Q1FY19
Q2FY19
Q3FY19
# Average Data Consumption continues to be high
102
118
108
•
•
•
Net Broadband base at 1.61 Lakhs
Blended Broadband ARPU was steady at Rs.460
~30% of the DOCSIS base converted to long-term lock-in plans
Q1FY19
Q2FY19
Q3FY19
Note: All metrics are for DOCSIS base unless otherwise stated
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Thank You
Investor Relations, SITI Networks Limited +91-120-452-6754 Ankit.Saint@siti.esselgroup.com