TIPS Industries Limited has informed the Exchange about Investor Presentation
July 28, 2021
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 dated July 26, 2021 on the Investor/ Analyst call scheduled on July 28, 2021 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 June 30, 2021.
The same shall be uploaded on our website www.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
Tips Industries Limited
Investor Presentation July 2021
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among others: (a) our ability to successfully implement our strategy, (b) our growth and expansion plans, (c) changes in regulatory norms applicable to the Company, (d)
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This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The
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2
Music Industry…
23 billion In 2023
15 billion In 2020
+15% CAGR
Indians love their Music
21.5hrs
India
23.9hrs
Indian youth (16-24 years age group)
Hours/week
17.8hrs
Global
#19
India’s rank in the global music market
#14
India’s rank in the global digital revenues
✔According to YouTube, musicians owned the majority of videos that have achieved more than 1 billion lifetime views and/or have made it to the top 10 most watched videos of all time
✔No. of monthly active audio-streaming users has grown from 165 million in
2019 to 200 million in 2020
✔According to an IFPI survey of 19 leading geographic markets in 2019, 54% of 35- to 64-year-olds used a streaming service to listen to music, representing an increase from 46% in 2018, which was the highest rate of growth for use of streaming services across all age groups.
✔Average monthly stream count was over 10 billion streams in first half of 2020 and crossed 11 billion streams per month during lockdown (other than YouTube)
✔Industry leaders estimated a 53% increase in music consumption during leisure
and 25% increase during fitness activities in 2020
✔Paid subscriptions generated 9.1% of the Indian music industry’s streaming revenues in 2019, is expected to grow to 31% by 2024. Paid consumers on streaming apps increased by 15% post COVID-19
✔The FICCI–EY Media & Entertainment Report 2020 expects paid subscribers for
music streaming in India to cross 5 million by 2023.
*Source: Ericsson Mobility Report November 2019 (EMR-19) & FICCI–EY Media & Entertainment (M&E) Report (2021) and RIAA, IFPI Industry report (2018, 2019 & 2020), Indian Music Industry’s (IMI) — Digital Music Study 2019
3
…is bound to grow
4Bn new connected consumer devices to be added by 2025 globally
Strong growth in India’s digital userbase with 90% of new users to have vernacular affinity and Tier-2/3/rural shoppers to be over 1.6x of Metro/Tier-1 shoppers by 2023
Devices in Billion
2.0
Users in Millions
1,050
820
1.2
1.2
528
Smart Home Devices
Consumer Electronics
Others
2018
2025
2030
Increasing usage of Smart Devices & Increasing penetration of internet users widens the target audience for music companies
Source: GSMA Mobile Economy Report, 2020 I KPMG India’s Digital Future Report, 2019 I Redseer – Vernacular in Now Report, 2019
4
Global Music Subscription Update
On Demand Audio streaming in the US was up ~17% y-o-y. 76 Mn Music services subscribers v/s 74 Mn subscribers of Netflix
Netherlands
Proportion of Streaming doubled in last 8 years & ~60% have premium subscriptions
Paid streaming contributes ~75% of revenue for Music Labels
Slightly under 1/3rd of population of France is Slightly under 1/3rd of population is using Streaming using Streaming services & off that more than services & of that more than ~62% of people are using ~62% of people using paid streaming services paid streaming services
Music revenue grew by ~50% in 2019 and streaming grew by ~76% for 2020, this was partially aided by high profile launch of Spotify
Number of paid subscribers doubled in 2 years to 60 Mn; Second highest globally but still under 5% penetration of country’s total population.
Russia
China
Listenership on audio streaming services grew by 40% Y-o-Y in first half of 2020
India
5
USA
Brazil
France
Source: MusicAlly
Music is the most valuable content
Ranking on repeated monetization
Music is now an internet business
Music
Films
Web Series
TV Serials
News
*Source: IFPI Industry report (2020)
can
be that Content monetized multiple times naturally commands greater economic value
*20%
2%
11%
2020
68%
content
Music ranks at the top of pyramid the when on repeated monetization
ranked
Internet Performance Rights
Sync *Physical
Internet platforms comprised 68% of total revenues in 2020, up from 54% in 2018, for the Global Music Industry
*Japan has the largest share. India’s share is less than 2% as more than 80% of music has been digitized
6
Digital Advertising – Key Driver of Indian Music Industry
Indian Digital Ad Industry
AD spends on Digital Media by formats & verticals
INR Crs
Social Media
Paid Search
Display Banners
Other incl. Classified
Online Video
23,673
+22%
18,938
15,782
13,683
10,859
8,202
6,228
32%
1%
3%
49%
23%
9%
21%
32%
14%
15%
26%
1%
42%
21%
10%
34%
0%
15%
24%
0%
31%
31%
0% 13%
34%
20%
41%
27%
13%
24%
17%
34%
3%
18%
26%
45%
2%
19%
16%
18%
17%
25%
15%
19%
18%
2016
2017
2018
2019
2020
2021f
2022f
FMCG
Auto
E-commerce
Retail
Telecom
BFSI
Media & Entertainment
Consumer Durables
Others
• Digital media is expected to grow at a CAGR of 22% to cross the Rs. 23,600 crores by the end of 2022
technological
• This sustained growth can be attributed to the advancements, improvements in data science & analytics, introduction of policies & regulations among others
Source: Dentsu Aegis Network Report 2021
• Advertising spends on Digital Media is led by Social Media with the largest share of 29%, contributing Rs. 4,596 crore to the Indian digital advertising pie
• Social Media is new revenue stream for
Music Industry
• On an average, Indians spend 2-3 hours on Social Media, 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
7
Ecosystem Supporting Growth
Convenience
Listeners no longer need to carry separate devices; smartphone apps make music available 24x7 with a tap and a swipe.
Rising Data Consumption
Mobile Data Traffic to grow at 21% CAGR between 2019 and 2025 in India
More Subscribers
72 crore mobile Internet subscriptions in India today & expected to touch 134 crs by 2025. Current tele-density in rural areas is only 57%
Cheap Data & Faster Network
Easy & Cheap availability of data & faster network. 58% of Indian cell phone users are on 3G or 4G networks
01
02
03
04
Smart Phone
Only 450mn smartphone connections in India so far. Increasing smartphone penetration in urban as well as rural India will lead to high data consumption for audio & video platforms
Partnerships
Multiple partnerships with various OTT & Digital platforms to provide annuity revenue stream
Rising AVOD Spends
Digital advertising growing ~30% p.a. in India. Increasing AVOD spend will further boost music & videos streaming online
Technological Advancements
Evolving technologies like AI & Data analytics will play an important role in understanding consumer preference to enhance listenership
05
06
07
08
*Source: Ericsson Mobility Report November 2019 (EMR-19) & FICCI–EY Media & Entertainment (M&E) Report (2020) and RIAA, IFPI Industry report (2018)
8
Company Overview
Collection of over 29,000 songs across all genres and major languages
Established in 1988, Tips Industries is one of the large corporate houses in the field of music and films
Consistent success in creating and acquiring high quality music I.P.R.
Since 1990, Tips has been amongst players with the highest number of gold and platinum discs to their credit
Catalogue is licensed to
• OTT platforms
• Content Aggregators
• TV Channels
• Telecom Companies
• Radio Stations,
• Advertisers
Hindi
Punjabi
Gujarati
Bhojpuri & many others…
Presence across platforms
Extensive Devotional, Pop, Remixes
catalogue
of
Film, Non-Film,
• Event Management Companies
• Hotels, Restaurants, and Others
9
Corporate Philosophy
Our Vision To maintain and grow a MUST HAVE HITS catalogue
Our Mission To create, acquire and deliver quality music to a wide range of audiences
Our Purpose Deliver Entertainment
Our Core Values
•Honesty •Commitment •Teamwork •Passion •Positive attitude
10
…generating multiple revenue streams
Large and diversified music library Our catalogue comprises film, non-film, pop, remixes devotional songs and bhajans, created by some of the leading artistes and musicians of this country.
Rich content can be leveraged to generate multiple annuity revenue streams via following
Sync Deals
Rich & Evergreen Catalogue Digitized catalogue comprises over 29,000 songs in multiple Indian languages and genres with new additions every year
29,000+ Songs
Digitally available Catalogue is available on all the leading online music stores, applications, and web platforms including YouTube, Resso, Amazon Prime, JioSaavn and Facebook
Over 54 Mn
YouTube channel subscribers/followers
Broadcast Partners
11
Two Pronged Content Acquisition Strategy
Our endeavour to add right content for larger target audience
Content Cost
Produce
Strategy
•
To introduce promising singers (TIPS) is in our DNA
• We have a strong A&R team which engages with artistes across genres and languages which allows us to present upcoming talent to our listeners.
• Our team has a deep understanding of music which allows us to create and build a repertoire of “Must Have Hits”
Purchase
Strategy
• We also engage with other producers to buy music rights to complement our repertoire
• Our understanding of music and its creative process provides us deep insights on costs and returns and therefore we remain cost always conscious while acquiring music rights
100% of Content cost is charged off to profit & loss account in the year of release, thus no Capitalization & no write-offs in the future. Company follows this policy since inception
Content acquisition cost is only funded Content acquisition cost is only funded Content acquisition cost is only funded Content acquisition cost is only funded through internal accruals through internal accruals through internal accruals through internal accruals
Strong A&R team to acquire content across languages & genres. 5 Artist signed exclusively
12
Growing listenership & Increasing Content Addition
Evergreen & Rich content of over 29,000 songs across genres, languages & decades giving us high visibility of music revenue
New Songs Added
215
61 New releases in Q1FY22
100
Existing Content + Continuous Additions : Increasing Music Revenue
FY20
FY21
Youtube Views (in. Bn)
Youtube Views (in. Bn)
+41%
26.6
38.5
19.3
+66%
9.2
9.8
11.8
12.8
+8%
7.6
7.7
5.9
FY19
FY20
FY21
Q3FY20
Q4FY20
Q1FY21
Q2FY21 Q3FY21
Q4FY21 Q1FY22
13
Financial Highlights
Segmental Performance - Music
Revenue (Rs. in Crs)
EBIT (Rs. in Crs)
EBIT Margins (%)
+88%
28.1
+91%
22.8
79.5%
80.9%
15.0
11.9
Q1FY21
Q1FY22
Q1FY21
Q1FY22
Q1FY21
Q1FY22
Revenue (Rs. in Crs)
EBIT (Rs. in Crs)
EBIT Margins (%)
+2%
27.6
28.1
-8%
24.9
22.8
89.9%
80.9%
Y - o - Y
Q - o - Q
Q4FY21
Q1FY22
Q4FY21
Q1FY22
Q4FY21
Q1FY22
15
Q1FY22 Profit & Loss Statement
Particulars (Rs. in Crs)
Revenue From Operations
Other Income
Total Income
Cost of Production / Distribution of Expenses
Employee Benefits Expenses
Other Expenses
EBITDA
EBITDA %
Depreciation and Amortisation Expense
EBIT
Finance Costs
PBT
Tax
PAT
PAT %
EPS
Q1 FY22
Q1 FY21
28.1
1.0
29.1
0.0
2.2
7.2
19.6
67.3%
0.2
19.4
0.0
19.4
4.8
14.6
50.1%
11.4
15.0
0.7
15.6
0.0
1.9
4.9
8.8
56.0%
0.2
8.6
0.0
8.6
2.5
6.1
38.9%
4.3
Y-o-Y
87.3%
122.7%
139.3%
Q4 FY21
27.6
2.9
30.5
0.0
2.2
6.4
21.9
71.9%
0.2
21.7
0.0
21.7
3.5
18.3
59.9%
14.4
Q-o-Q
1.8%
-10.5%
-20.2%
FY21
90.5
4.9
95.4
0.0
8.1
27.3
60.1
62.9%
0.8
59.2
0.0
59.2
15.8
43.5
45.6%
32.7
16
Consolidated Historical Profit & Loss Statement
Particulars (Rs. in Crs)
Revenue From Operations
Other Income
Total Income
Cost of Production / Distribution of Expenses
Employee Benefits Expenses
Other Expenses
EBITDA
EBITDA %
Depreciation and Amortisation Expense
EBIT
Finance Costs
PBT
Tax
PAT
PAT %
EPS
FY21
90.5
4.9
95.4
0.0
8.1
27.3
60.1
FY20
91.0
17.8
108.8
28.7
7.4
56.9
15.8
62.9%
14.5%
0.8
59.2
0.0
59.2
15.8
43.5
45.6%
32.7
1.2
14.6
0.3
14.4
3.0
11.3
10.4%
7.9
FY19
203.2
4.5
207.7
162.2
7.1
27.7
10.8
5.2%
1.3
9.5
2.2
7.3
4.4
2.8
1.4%
2.0
FY18
47.5
2.4
49.9
17.5
6.6
13.8
12.0
24.1%
1.4
10.6
6.6
4.0
0.9
3.1
6.3%
2.2
17
Consolidated Balance Sheet
Particulars (Rs. in Crs)
Mar-21 Mar-20 Mar-19 Mar-18
Particulars (Rs. in Crs)
Mar-21 Mar-20 Mar-19 Mar-18
ASSETS
Non-Current Assets
Property, plant and equipment
Investment Property
Financial Assets
(i) Investments
(ii) Loans
(iii) Other financial assets
Other non-current assets
Current Assets
Inventories
Financial Assets
(i) Trade receivables
(ii) Cash and cash equivalents
(iii) Bank balances other than (ii) above
(iv) Other financial assets
Current Tax (Net)
Other Current Assets
TOTAL ASSETS
2.0
12.5
18.0
5.3
0.1
4.5
1.8
12.8
5.6
5.2
0.1
6.7
2.1
13.1
0.1
5.2
0.1
12.1
1.8
21.6
0.1
5.2
3.3
9.4
-
-
28.7
57.5
15.1
31.1
2.4
0.2
1.0
55.9
18.1
26.0
0.4
0.2
4.3
8.9
10.6
8.7
0.6
0.1
3.7
9.5
9.0
5.6
2.3
0.2
1.8
84.8
Equity
Equity Share Capital
Other Equity
Total Equity
Liabilities
Non-Current Liabilities
Financial Liabilities
(i) Borrowings
(ii) Other Financial Liabilities
Deferred Tax Liabilities
Employee Benefit Obligations
Other Non-current Liabilities
Current Liabilities
Borrowings
Trade Payables
Other Financial Liabilities
Employee Benefit Obligations
Other Current Liabilities
Total Liabilities
13.0
88.3
14.3
66.1
101.3
80.4
14.3
56.4
70.7
14.3
55.4
69.7
-
0.2
2.4
0.3
37.3
-
6.3
0.1
0.0
0.5
47.0
1.9
0.2
2.7
0.3
-
-
4.3
-
0.0
0.4
9.8
2.0
0.2
2.9
0.5
-
-
17.8
-
0.0
0.5
24.0
94.7
13.7
0.2
0.0
0.3
-
5.0
4.7
17.1
0.0
91.6
132.7
202.4
18
148.2
90.2
94.7
202.4
TOTAL EQUITY AND LIABILITIES
148.2
90.2
Abridged Consolidated Cash Flow Statement
Particulars(Rs. in Crs)
Net Profit Before Tax
Adjustment for Non-Operating Items
Operating Profit/(Loss) Before Working Capital Changes
Adjustment for WC
Cash Generated From Operations
Direct Taxes Paid
Net Cash From Operating Activities
Cash Flow From Investing Activities
Cash Flow From Financing Activities
Net Increase/(Decrease) In Cash And Cash Equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the period
Mar-21
Mar-20
Mar-19
Mar-18
59.2
-0.5
58.7
-4.6
54.1
-12.9
41.2
-11.5
-24.6
5.1
26.0
31.1
14.4
14.4
28.7
5.6
34.3
-3.8
30.5
-4.7
-8.6
17.3
8.7
26.0
7.3
1.9
9.2
19.2
28.4
-3.4
25.0
9.3
4.0
8.1
12.1
30.9
43.0
0.3
43.3
0.3
-31.2
-38.8
3.1
5.6
8.7
4.8
0.8
5.6
19
Key Ratios
Cash Flow from Operations (Rs. in Crs)
Net Cash Company (Rs. in Crs)
43.3
41.2
30.5
25.0
Cash & Cash Equivalents Borrowings
51.5
31.9
18.7
8.0
9.4
2.0
1.9
0.0
Mar-18
Mar-19
Mar-20
Mar-21
Mar-18
Mar-19
Mar-20
Mar-21
ROCE (%)
ROE (%)
87.4%
42.9%
13.2%
14.9%
26.2%
14.1%
4.5%
4.0%
Mar-18
Mar-19
Mar-20
Mar-21
Mar-18
Mar-19
Mar-20
Mar-21
20
Music Industry today
Music Monetization:
Rising adoption of subscription:
Digital Piracy:
Investments in Music:
• Music labels own IPR for their repertoire for 60 years as per the Copyright Act 2012, an opportunity to monetize music rights for over half a century
•
IPR provides longevity to the repertoire
• Although there are about 4-5 active players in the Hindi Music business, each has a unique repertoire and follows a different content acquisition strategy and therefore there is little or no overlap in their offerings when viewed on title- by-title basis
• Aggressive auction type situations don’t
exist in content acquisitions
• FICCI–EY Media & Entertainment Report 2020 expects paid subscribers for music streaming in India to cross 5 million by 2022.
• According to Indian Music Industry’s (IMI) — Digital Music Study 2019, paid streaming revenues subscription account for 27% of all recorded music industry revenues in India
• Subscription streaming revenues grew 33% to Rs 292.8 crs. while ad supported streaming revenues grew 43.6% to Rs 257 crs.
• Technology has disrupted piracy the
most
• Free services such as You Tube, and other OTT platforms also provide free music listening experiences to their users
• When licensed music is available for free, the is
and data costs are negligible, economic piracy incentive miniscule
for
• Economic impact of Piracy on Music Industry has declined substantially compared to its impact during the era of physical sale
• Clearly, paid streaming has already the contributing more
to
started Industry
• Music labels acquire music rights for future growth and expense acquisition costs annually since the outcome is unknown at the beginning; Just like the Pharma its investments in R&D annually
expenses
industry
• Existing repertoire of music provides a steady cash flow stream to purchase new rights
21
Music Industry Business Model
Music Creators
Film Producer
Music Label
Streaming platforms
l e d o M s s e n i s u B
e u l a V
creators
Music include and lyricists, singers who create songs and get paid for the same
composers,
Film producers use these compositions in films and sell the music rights to music labels
Music labels owns the IPR (Intellectual Property Rights) and licence the music to various platforms
Streaming platforms licence the content and make it accessible to consumer
Producer pays the artists the value for the music that is created
label
Music the producer for the rights of the songs
pays
pay
labels
film Music producers upfront (advance) + royalty in perpetuity (post the recovery of upfront cost)
platforms
give Streaming minimum guarantee + a variable fee based on number of streams
22
Thank You
Company Details:
Tips Industries Limited
CIN: L92120MH1996PLC099359
Email id: investorrelations@tips.in
Investor Relations Advisors:
Orientcapital (a division of Link Intime India Pvt Ltd)
Ms. Payal Dave: +91 9819916314 payal.dave@linkintime.co.in
Ms. Neha Shroff: +91 7738073466
neha.shroff@linkintime.co.in