mediaplex review

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MEDIAPLEX
INVESTOR
RELATIONS 2014
2014
Ticker 086980 KS
1
© 2014 Mediaplex Inc.
Disclaimer
This presentation has been prepared by Mediaplex Inc. (“The Company”)
This presentation is being presented solely for your information and is subject to change without notice.
No representation or warranty, expressed or implied, is made and no reliance should be placed on the
accuracy, fairness or completeness of the information presented. The Company, its affiliates, advisers or
representatives accept no liability whatsoever for any losses arising from any information contained in the
presentation.
This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the
Company, and no part of this presentation shall form the basis of or be relied upon in connection with any
contract or commitment.
The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly,
to any other person or published, in whole or in part, for any purpose.
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© 2014 Mediaplex Inc.
MOVIE INDUSTRY REVIEW
Review 2013: Total movie industry of Korea
1
Development of box office numbers
250
Total movies
210
Korea movies
200
Growth of total
admission
Increasing of content’s competitiveness
of Korean Films brings about the
growth of movie industry in general
10%
Growth of Korean ① Korean movies play a leading role for growth of total film
industry since 2012
films’ admission
Foreign movies
150
130
 It’s not because of structural growth such as the increase
of the number of screens on theaters
It has resulted increasing the competitiveness of Korean
movies contents.
13%
100
Share of
admission
50
0
2008Y
2009Y
2010Y
2011Y
2012Y
2013Y
60%
② There were 9 movies which had over 5million viewers.
It is 3 times more than 2012.
③ Views per capita – 4.12 times  the most watching in the
world
2
Movie that has more
than 5million viewers
9movies
3
Average annual of admission per film
(3 in 2012)
Views per capita
4.1
times
(#1 in the world)
3
© 2014 Mediaplex Inc.
MOVIE INDUSTRY REVIEW
REVIEW 2013: COMPETITIVENESS COMPOSITION IN THE MARKET
Showbox and NEW which have an outstanding content competitiveness obtain
better results than CJ and Lotte which have their own multiplex theatre chain
2013 KOREAN FILM MARKET SHARE
(Number of Korean Films/Total Number of Films)
Etc.
7%
Lo tte (9/10)
13%
N. E. W (8/18)
① Generally, performance of NEW was remarkable in 2013
 No. 1 for Korean movie market share (Total market share 18%, No. 2)
Average admission per Korean movie was 4,670,000,
increased by 2.7 times year on year
② Despite of failure of Mr. Go, Showbox put up a good fight in 2013
Total audiences share increased by 1% year on year / Korean movie audiences share
29%
increased by 1.5%p year on year
Mediaplex
(9/10)
23%
Showbox’s average admission per Korean movie was 3,240,000 which was
50%/130% more than CJ/Lotte
CJ E&M
(14/31)
③ CJ E&M was highly deprived of total market share because of frustrated result of
28%
Korean box office
 Market share of Korean film decreased by 13%(total market share decreased by 7%)
Korea movie of admission per film
Korea movie Share of admission
Mediaplex
Mediaplex
4
© 2014 Mediaplex Inc.
MEDIAPLEX CORE STRATEGY
5
© 2014 Mediaplex Inc.
SHOWBOX’S PURSUING VALUES
What is the SHOWBOX’s pursuing appearances as distributors?
① A Market Leader in qualitative aspects, not in quantitative aspects
② A Partner who can make profits to the investors
③ A Partner who can entrust directors and productions with the projects
④ A Brand that distributes the movies which audiences can see and believe
What does SHOWBOX want to be as a market leader?
Average of Number of audience per film No.1
ROI No.1
(Based on Korean films only)
“SHOWBOX focuses more on being the most confidential partner and
distribution brand to create ways of our own to achieve the best rate of
return and the most number of audiences from each projects than being a
number one distributor which is distributing more films, attaining more
audiences and focusing on competition for sales.
6
© 2014 Mediaplex Inc.
MEDIAPLEX REVIEW
Korea movie ROI
Mediaplex ROI
26%
3%
2003
-8%
2004
8%
2006
2005
2007
2008
-17%
-9%
-25%
-44%
-33%
-41%
-43%
-60%
Select
Select
7
Focus
© 2014 Mediaplex Inc.
MEDIAPLEX REVIEW
Korea movie ROI
38%
Mediaplex ROI
15%
13%
2009
2010
2011
-13%
-11%
37%
15%
2012
2013
Select
Focus
-15%
-14%
-26%
Select
Select
Focus
“Average number of Audiences per a movie
3.5 millions
(QC, MKT’g Dating, etc, Optimizing is possible)
8
© 2014 Mediaplex Inc.
MEDIAPLEX REVIEW
2014+ core strategy : 2-WHEEL-SYSTEM
Invest
Productior
Distribution
Invest
Distribution
Distribution fee + ROI & production revenue
(Synergy between selection & focus)
(Strengthen Casting Infra )
9
© 2014 Mediaplex Inc.
MEDIAPLEX MOVIE INFORMATION
SHOWBOX Line-up
2014
2015
The Huntresses
Gangnam 1970
The Killer’s memoria
technica(w/t) / WON Shin-yun
I, Frankenstein
Detective K : Secret of the
Lost Island / KIM Sok-yun
The Escape(w/t) /
KIM Yong-hwa
A Hard Day
An Impudent Her(w/t) /
KIM A-aron
HAN Jae-rim
Grace of Monaco
The Mood of the day(w/t) /
CHO Kyu-jang
CHANG Hoon
The Divine Move
The Classified File /
KWAK Kyung-taek
KIM Jee-woon
Kundo:Age of the Rampant
Inside Men /
WOO Min-ho
LEE Je-han
We are Brothers
Assassination /
CHOI Dong-hoon
YOON Sung-hyun
Sangeiwon
Summer Snow(w/t) /
JEON Yun-su
YANG Hyo-joo
King, Father, and Son(w/t) /
LEE Joon-ik
KIM Seong-hun
A man and a woman(w/t) /
LEE Yoon-ki
15 films and others are on
stages of planning and
developing
A Violent Prosecutor(w/t) /
LEE Il-young
※ W/T : Working title
10
The Insufficient Evidence(w/t)/
YOON Jong-seok
© 2014 Mediaplex Inc.
MEDIAPLEX REVIEW
Sales
Quantitative
growth
Profit
〉
Sales
Qualitative
growth
Quantitative
growth
11
Profit
〈
Qualitative
growth
© 2014 Mediaplex Inc.
MEDIAPLEX REVIEW
Business structure change
Source: KOFIC, Mediaplex
Korea movie ROI
Mediaplex ROI
26%
3%
2003
-8%
2004
-9%
15%
8%
-11%
-15%
2009
2010
2011
-13%
-14%
-17%
2005
2006
2007
-43%
-41%
-25%
-33%
2008
38%
37%
13%
15%
2012
2013
-26%
-44%
-60%
Entry for film
business
ROI NO.1
Merger
establishment
Distribution
Business be
Extension of
influence
IPO
M/S NO.1
Admission top
increase record
(3,300 Million )
Motion 101
production
establishment
M&A
restructuring
Business structure change
- Human restructuring
- Quality of Films management
Motion 101
system building
liquidation
- Oversea market expansion
policy through Foreign strategic
Disposal
partnership
of Subsidiary
12
2012~2013 OP
Of Turn into profitmarking
-Committee on investment
establish
-Risk managing intension
-two Wheel system
construction
-Distribution prediction
system construction
© 2014 Mediaplex Inc.
MEDIAPLEX CORE STRATEGY
Review 2013: Success Movies
S
C
L
N
N
C
N
S
SHOWBOX
CJ E&M
LOTTE
NEW
<2013 Korea major Distributor M/S>
- A basic primary movie -
NEW
S
L
N
C
S
6 movies
41 million viewers (19.5%)
SHOWBOX 4 movies
2,4 million viewers (11.2%)
CJ E&M
2 movies
1,6 million viewers (7.7%)
LOTTE
2 movies
9 million viewers (4.1%)
ETC
6 movies
13,1 million viewers (57.5%)
(ETC is Foreign Distributors)
N
L
N
Korea movie of admission per film
N
S
Source: CJ CGV Earning release 2014 1Q
13
© 2014 Mediaplex Inc.
AVERAGE BOX OFFICE PER KOREAN FILM BY DISTRIBUTORS
2013 FY
Number of
releases
2014 1H
Box office
(KRW)
Number of
releases
Box office
(KRW)
Average
Box office
per
Korean film
(KRW)
Rank
NEW
12
268.3
billion
5
67.7
billion
19.76
billion
1
SHOWBOX
12
208.2
billion
5
42.4
billion
14.74
billion
2
CJ E&M
25
255.8
billion
11
107.6
10.09
billion
3
LOTTE
16
119.8
billion
11
59
billion
billion
6.62
billion
4
*Conversion rate of KRW for USD 1 =1054.5 KRW (Average market rate of 2014. 10. 21)
14
© 2014 Mediaplex Inc.
AVERAGE BOX OFFICE PER KOREAN FILM BY DISTRIBUTORS
2014 3Q
Number of
released
Box office
(KRW)
Average
Box office per
Korean film
(KRW)
SHOWBOX
3
68.2
CJ E&M
8
151.2
LOTTE
7
97.7
billion
13.95
NEW
2
11.7
billion
5.85
billion
billion
22.73
18.9
billion
billion
billion
billion
Average
Number of
Audience Per
Korean film
(10 thousand)
Rank
288.6
1
245.5
2
178.4
3
74
4
*Conversion rate of KRW for USD 1 =1054.5 KRW (Average market rate of 2014. 10. 21)
15
© 2014 Mediaplex Inc.
Mediaplex Global New Business
16
© 2014 Mediaplex Inc.
GLOBAL BUSINESS : JOINT INVESTMENT PRODUCTION PROJECT
Action plan : completion the basic form of entry to Chinese market
1
Building a capacity to make 100% of Chinese movies than collaboration films
Import
and
Release
2
Collaboration
films
Joint
production
in China
•
there is no meaning of export Korean films to release in China
 successful films in Korea such as ‘Thieves’ didn’t do well in China film market
•
It is still possible to make a Joint Korean and Chinese film. However, eventually
it is very important thing to be able to plan and produce films which are 100%
for Chinese audiences.
‘HUAYI BROTHERS” : Based on partnership with Huayi Brothers, Mediaplex
strengthen the basics of entry to Chinese film market.
Coproduction of Chinese films
planned by Showbox
• Establishment a process to evaluate the suitability of
scenario and items provided by Showbox
• Coproduction between Showbox and Huayi brothers,
Huayi distribute
visitors / SM dance movie project
Director K.H. Oh’s next movie project “Rich”
Collaboration domestic projects
with Chinese company /distribution
• Among Showbox’s domestic line-up, possibility of
determining on coproduction in planning stage /
distribution in China
 Director Donghoon Choi, Next movie ‘assassin’
 Director Jongbin Yoon, ‘Kundo’
Partial invest a product recommended by each others
• Among the line-up for the year, invite partial invest
and recommend a stable project
(reinforcement the partnership)
17
© 2014 Mediaplex Inc.
GLOBAL BUSINESS : JOINT INVEST PRODUCTION PROJECT
Possibility of Chinese film market
The rapid growth of Chinese film market is rather than attractive…
•
•
•
•
2013 China box office was 3.9 trillion Won / total
audiences are 0.6 billion
(Compared with korea Box office, 3time bigger
/ No.2 in the world)
Views per capita is 10time less than korea
Among the Chinese, only 7% is moviegoers.
In 2018, box office being expected to be
10 trillion won market (CARG 30%)
It is important that Showbox has an ability to be needed by Chinese film market
Comparison with domestic /
overseas movie TOP-10 box office
 Chinese film TOP-10 average- 60 millions
(overseas film average 81.8 million,
79% of overseas film average)
 Korean film TOP-10 average- 47.5 millions
(overseas film average 25.9 million,
184% of overseas film average)
Section
Box
office
Ancillary
market
Screens
Theatre
# of movies
produced
CHINA
KOREA
Market
&
Capital
Planning
ability
&
Directors/
actors
Capita
per views
Native
movie share
Total
audiences
China
3.5 trillion
743 billion
18,195
3,200
638
0.7
58.60%
610,000,000
Korea
1.5 trillion
268 billion
2,184
333
183
4.12
59.70%
210,000,000
unit : won
18
© 2014 Mediaplex Inc.
GLOBAL BUSINESS : JOINT INVEST PRODUCTION PROJECT
Korean movies global inroad cases
<American market>
<Chinese Market>
A wedding invitation (CJ China produce /
CFG distribute within China)
Snowpiercer (CJ invest & distribute / the
English-speaking world target )
•Director Oh, Ki-hwan / ‘present(2001)’ Remake
•Romantic movie is out of season in Korea but, It is
new and fresh in China
•Director Bong Joon Ho / Song Kang Ho +Chris Evans
•It was not able to release in the English-speaking
world due to cultural differences
Mr. Go (Showbox invest / Huayi distribute within
China )
The Last stand (Lions Gate production/
distribution)
•Director Kim Yong-hwa joint Korean and Chinese film
•The result fell short of its expectation because of issue
of distribution schedule but, Chinese audiences are very
positive about the movie (16.3 million dollar)
•Director Kim Jee-woon / Arnold Schwarzenegger
•Audiences’ reaction was negative due to B movie
•It was not able to collect the production cost due to
a box office failure
Bunshinsaba-1/2(Chinese capital invest/distribute)
Stalker(Fox Searchlight production/
distribution)
•Director Ahn, Byung-Ki / ’Bunshinsaba’ remake
•Ghost’ is a censored object by Chinese Government,
but changing structures of storytelling builds the new
trend of horror movies
•Director Park Chan-wook / Nicole Kidman
•Some of art film fans gave positive evaluations but,
doubtful about the possibility of success as a
commercial movie
Expansion to China is more successful than to American film
market because China has cultural similarities with us.
Therefore it gives advantages of movie plan/production
19
© 2014 Mediaplex Inc.
MEDIAPLEX INVESTMENT HIGHLIGHTS
INVESTMENT HIGHLIGHTS
 A Friendly Government Policy on Movie Industry
 Attractive Growth of Korea Film Market & Increased Fundamental
 Industrial Trend maker as a leader of Film distribution market
 Strong Capital Structure with Significant Liquidity & Free Cash Flow
 Well-Organized Management Team and Proven Equity Holder
 acquiring profitability and sales due to a successful corporate restructuring
 Oversea Expansion into Movie Business (Utilizing Global Partner Networks)
20
© 2014 Mediaplex Inc.
MEDIAPLEX SUBSIDIARY REVIEW
Subsidiary : Supreme Star Investment Limited
■ Theater business
■ Partner
Beijing Zhongguan Megabox Cinema
Beijing Mega Media Ltd.
Film Exhibtion in China
Site
3
Location
Beijing, Shenyang
• Capital : RMB 16,800,000
• Ownership: Beijing Mega Media Ltd. 51%
Supreme Star Investment Limited 49%
(Orion 62.66%, Mediaplex 11.23%)
• Establishment : Dec 13, 2007
• Site open
- 1st Site Beijing Zhongguancun July, 2007
- 2nd Site Beijing Sanlitun July, 2008
- 3rd Site Shenyang Wanxiangcheng June, 2011
Source: Mediaplex
21
© 2014 Mediaplex Inc.
MEDIAPLEX FINANCIAL INFORMATION
Financial Highlights
(Consolidate)
Profit and loss status
2013Y
2012Y
1,081
882
Gross margin
156
176
Operating income
63
97
Non-operating income
3
2
Non-operating expenses
118
40
Financial income
13
12
Financial costs
0
0
Net income before income tax expenses
62
41
Net income
57
-7
[Unit O.1 Billion
2013Y
2012Y
Total assets
1,674
1,813
Current assets
1,173
1,329
Non-current assets
501
484
Total liabilities
618
812
Capital stock
313
313
Capital surplus
362
352
Retained earnings
390
335
1,055
995
[Unit O.1 Billion
Net sales
won]
Financial status
Total shareholders' equity
won]
22
© 2014 Mediaplex Inc.
MEDIAPLEX FINANCIAL INFORMATION
Consolidated statements of comprehensive income
(KRW in Millions)
2Q’14
%
QOQ
2Q’13
%
Box office
10,631
70.5%
-48.5% ▼
20,653
78.0%
Copyright
4,209
27.9%
-25.6% ▼
5,654
21.4%
Distribution
75
0.5%
-53.1% ▼
160
0.6%
Sub Investment
44
0.3%
1,000%▲
4
0.0%
117
0.8%
-1,363% ▼
8
0.0%
Total Revenue
15,076
100%
-43.06% ▼
26,480
100%
Cost of sales
12,773
-42.20% ▼
22,097
1,573
-35.05% ▼
2,422
730
-62.7% ▼
1,960
-1,829
-1406.4% ▼
140
Etc.
G&A expenses
Profit before income tax
Profit for the quarter
• Box office: Revenue of main invested films from theater (Including distribution commission)
• Copyright : Overseas secondary market sales except of additional market in 2nd quarter and 4th quarter
• Distribution : Domestic distribution charges and overseas distribution charges
• Investment : Return on investment of partial invest product
23
© 2014 Mediaplex Inc.
Thank.
24
© 2014 Mediaplex Inc.
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