Corporación Interamericana de Entretenimiento, S.A. de C.V. - PowerPoint PPT Presentation

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Corporación Interamericana de Entretenimiento, S.A. de C.V.

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  1. Corporación Interamericana de Entretenimiento, S.A. de C.V.

  2. Content • Business Model & Strategy • Operating Divisions • Financial Results for 2Q2004 • Operating Results for 2Q2004 and 2004 Outlook 2

  3. CIE today • Leading “out-of-home” entertainment company in Latin America, Spain and the U.S. Latin markets • 51 million customers in 2003 • Best of breed entertainment for every budget: • Concerts, theater, sporting, cultural and corporate events • Amusement / educational parks • Sports Books and Gaming • Popular fairs, exhibitions and conventions • Vertical Integration = multiple revenue streams and minimal risks • Significant commercial revenue from proprietary entertainment and advertising properties • Expertise organized by country and business areas = high manager accountability • Free cash flow now increasing after a period of capital intensive growth 3

  4. Geographical expansion United States (2001) Spain (1999) Revenues 1H 2004: .5% • Live Entertainment • Advertising Sponsorships Revenues 1H 2004: 4% • Live Entertainment • Advertising Sponsorships Mexico (1990) Revenues 1H 2004: 83% • Live Entertainment • Las Americas Center • Advertising Sponsorships • Amusement Parks Colombia (1998) Revenues 1H 2004: .2% • Amusement Parks (Parque El Salitre) Argentina & Chile (1997-98) Brazil (1999) Revenues 1H 2004: 2% • Live Entertainment • Buenos Aires Zoo • Advertising Sponsorships • Radio Stations in Buenos Aires Revenues 1H 2004: 10% • Live Entertainment • Advertising Sponsorships 4

  5. US$100 in Box Office Receipts Venue US $12 Promotion US $10 Artists US $40 Expenses US $38 82% Promoter + 65% Sponsorship + 54% Venue Operator + 51% Ticket Sales + 49% Food & Beverages Maximum attendance required to breakeven 0% 100% Competitive advantages Vertical integration = maximizes revenues / minimizes risks Enables CIE to generate US$35 in additional revenue for every US$100 in box-office receipts $35 Additional Revenue Streams Sponsorship US $27 Ticketing US $7 F&B/Merchandising US $1 5

  6. Advertising properties We have become an extraordinary alternative for connecting brands such as Coca-Cola, with segmented markets Music Amusement Parks Cineminutos Audience Measurement Naming Rights Ability to use an advertising property to highly target the advertising customer Overpasses Venues Ticketing Corporate Events Radio 6

  7. Growth and operating strategy • Expand target audiences through new entertainment forms and price niches • Mexico, Brazil, Argentina: lower priced fairs / gaming / touring artists • Spain: higher priced musical theater • U.S. market: “real play” parks (introduction of Wannado City™) • Increase utilization of existing venues through new attractions and facility upgrades • Exploit proprietary Sports Book and Gaming opportunities in Mexico • Strengthen commercial sales force • Control production costs through use of local talent and production labor • Leverage strategic partner synergies to increase EBITDA and minimize project risk • Optimize project financing (debt, equity, sponsorships) to maintain healthy balance sheet 7

  8. Content • Business Model & Strategy • Operating Divisions • Financial Results for 2Q2004 • Operating Results for 2Q2004 and 2004 Outlook 8

  9. Operating divisions The Company has three operating divisions with the following businesses: 3 Divisions Entertainment Commercial Services Live Entertainment Mexico Las Américas Amusement Parks International Sponsorships Cineminutos Billboard Advertising / Overpasses Telemarketing Ticketing Mexico Ticketing Brazil Ticketing Argentina Ticketing Chile 78% 12% 10% Revenue Contr. 9

  10. Entertainment Division – Live entertainment Mexico • Strategic JV with Televisa • Partnerships/JV with renowned groups, thus securing CIE’s leading position. • Leading live entertainment company in Mexico • Operates 12 live entertainment venues in Mexico; installed capacity 686,00 seats • Musical, theatrical, sporting, family / cultural and corporate events • Diversified array of tailored productions • 3,391 live events produced in 2003; 5.6 million attendees • Opportunities: • Utilize assets to build additional revenue streams • New Sporting events: Nautical Racing, Motor Cross, Monster Trucks, Beach • Volleyball, Triathlons, etc • Strongest concert calendar in years (for 2004) • Leverage synergies afforded by Televisa relationship • Auto racing 10

  11. Entertainment Division – Las Américas • Mexican government concessions • Horse race track 25 years • Surrounding areas 50 years • License to operate 45-off track betting centers / number based games • Horse race track attracted 600,000 fans in 2003 • Centro Banamex, the largest exhibition and convention center in Latin America, held 47 expositions in 2003 that attracted over 2.0 M visitors • 28 Sports Book / Yaks now open in prime retail locations in Mexico • One of the only companies in Mexico to have multiple gaming licenses • 3,391 live events produced in 2003; 5.6 M attendees • Opportunities: • Granja Las Américas children’s park - $7.5 m projected revenues annually • Ten new Sports Books / Yaks ($25 - $30 million total investment, 2004) • Development to be supported by strategic and financial partners 11

  12. Entertainment Division – Amusement Parks • CIE is Latin America’s leading operator / developer of amusement parks • Number of attendants in 2003 reached over 10 million • Selective incorporation of amusement parks, whose facilities and price make them appropriate for low- and medium – level incomes • Operation of 10 amusement parks in 10 cities • Mexico City (5), Acapulco (1), Guadalajara (2) • Bogotá (2) • Development of Wannado City™ in Miami Florida • Opportunities: • Wannado™ is the first “real-play” park in the world, combining entertainment and educational experiences for children with retail, restaurant and sponsor-based attractions • Investigating opportunities for Wannado™ roll-out throughout U.S. • Enhancing Salitre Mágico in Colombia with new attractions and sponsorships 12

  13. Entertainment Division – International • Operates live entertainment venues in Brazil (4), Argentina (2) and Spain (3) • 1,796 live events produced in 2003; 2.3 M in attendance • Operates the Buenos Aires Zoo and eight radio stations in Argentina • Production of live events in the Latin U.S. market • Achievements: • Formed alliance with Stage Holding in Amsterdam (theatrical rights) • Successful local productions in medium-sized cities in Brazil and Argentina • Healthy attendance at Buenos Aires Zoo and live events in Argentina • Opportunities: • Cats, Phantom of the Opera and Cabaret: major Broadway-type productions • in Madrid, Spain • Evaluate new Spanish markets for theatrical productions • Expand local productions in Brazil and Argentina • Divest AM radio stations in Argentina 13

  14. Commercial Division – Advertising Properties • Sponsorships of CIE live events / naming rights for CIE venues • Dynamic advertising in 1,342 movie theaters (“Cineminutos”) • 475 Billboard sponsorships on 132 pedestrian overpasses • Rotating advertising for 12 Mexican soccer teams • Indoor and outdoor advertising at airports • Telemarketing services (in partnership with Sitel Corporation) • Achievements: • Consolidation of all commercial activities into one division= market leverage • 141 new movie theaters / 16 new overpasses (58 new billboards) • Opportunities in 2004: • Additional movie theaters / additional overpasses • Advertising space on the uniforms of First Division soccer teams • Expand airport advertising • Promote comprehensive sponsorship packages 14

  15. Services Division – Ticketing JV w/ Ticketmaster for operations in Mexico (1991), Argentina & Chile (1998) and Brazil (2000) Leading ticketing business in the region, with medium- to long-term contracts with venues, promoters and events Operations through call centers, box offices, internet and outlets in the region • Outlets: Chile Feria del Disco Multitienda Falabella Almacenes Paris Mexico MixUp Liverpool Music&More Mr.CD Farm. Ahorro Discolandia Country Community Start-up Mexico City * Monterrey Guadalajara * Mexico 1992 1993 2001 Brazil Tiendas Levis Riachuelo Librerias FNAC Librerias Saraiva Argentina 1998 Buenos Aires Chile Santiago 1998 Brazil Sao Paulo * Rio de Janeiro Salvador 2000 2001 2001 Argentina Tower Records • www.ticketmaster.com.mx • www. ticketmaster.com.br * On-line activities are currently carried on in Mexico and Brazil. 15

  16. Content • Business Model & Strategy • Operating Divisions • Financial Results for 2Q2004 • Operating Results for 2Q2004 and 2004 Outlook 16

  17. Operative Highlights %Chg 2Q03 2Q04 % Chg 1H03 1H04 3.5% (13.1%) 12.0% 29.8% 17.9% 6.1% (15.2%) (15.0%) (5.7%) Events Live Racetrack (racing days) Ticketmaster Tickets (Mil.) Mexico South America Total Attendence (Mil. of people) Live Events Amusement Parks Hipódromo de las Américas Sports Books & Yaks Per capita consumption (Ps.) Shops Pedestrian Overpasses Structures in operation Billboards Cineminutos Movie Theaters 1,329 52 3.2 1.2 4.3 1.6 2.1 0.2 613 19 123 467 1,261 1,423 39 3.1 1.4 4.5 1.9 1.9 0.1 567 28 189 667 1,356 7.1% (25.0%) (1.9%) 20.9% 4.3% 19.9% (9.0%) (24.2%) (7.6%) 47.4% 53.7% 42.8% 7.5% 2,489 84 5.9 2.9 8.8 3.1 4.2 0.3 598 2,577 73 6.6 3.8 10.4 3.3 3.6 0.3 634 17

  18. Financial Highlights 2Q03 2Q04 % Chg 1H03 1H04 % Chg Revenue EBITDA EBITDA Margin Operating Income CCF Current Assets Assets L.T. & Other Assets Total Assets Debt Total Liabilities Stockholders’ Equity 1,673 388 23.2% 273 38 4,411 10,136 14,547 4,500 6,455 8,091 1,932 437 22.6% 311 115 4,555 9,939 14,494 4,881 7,351 7,143 15.5% 12.7% (57 pb) 14.0% 204.8% 3.3% (1.9%) (0.4%) 8.8% 13.9% (11.7%) 3,109 719 23.1% 499 89 3,541 797 22.5% 545 219 13.9% 10.9% (61 pb) 9.3% 144.8% Note: Figures are expressed in millions of Mexican pesos as of June 2004 18

  19. Revenue by Division 2Q03 2Q04 1H03 1H04 Entertainment Commercial Services 75.6% 13.8% 10.5% 77.5% 12.4% 10.2% 75.6% 13.7% 10.7% 76.4% 13.1% 10.5% * The total may not add up to 100% due to rounding Revenue Distribution by Division +15% +18% +9% +3% +12% +11% Note: Figures are expressed in millions of Mexican pesos as of June 2004 19

  20. EBITDA and EBITDA Margin 470 30% 437 436 25.9% 25.8% 423 24.4% 24.2% 25% 24.8% 23.5% 23.1% 420 23.1% 23.1% 24.4% 23.2% 22.9% 22.5% 23.5% 23.6% 23.1% 23.2% 22.6% 398 22.4% 387 20% 370 360 359 357 347 EBITDA Margin 15% 334 EBITDA Margin 331 330 Millions of pesos as of Jun.04 324 317 316 320 307 10% 282 266 270 5% 249 220 0% 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Units opened Units in operation 1 1 2 3 1 4 1 5 1 6 3 9 1 10 1 11 4 15 4 19 2 21 2 23 2 25 3 28 Note: Figures are expressed in millions of Mexican pesos as of June 2004 20

  21. Debt • As of June 2004, CIE’s debt was Ps.4,881 million. Of this, 54% is in pesos, • 43% is in UDIS, and the remainder is in other currencies Jun.04 - Allocation - Debt Bank Loans Securitized Loans Total Cash Net Debt Interest Paid Stockholders’ Equity EBITDA 2Q04 EBITDA LTM Ratios EBITDA-to-Interest Expense Net Debt / Stockholders’ Equity Net Debt / EBITDA LTM 2,213 2,668 4,881 641 4,240 111 7,143 437 1,633 3.92x 0.59x 2.60x - Maturities - 21

  22. Content • Business Model & Strategy • Operating Divisions • Financial Results for 2Q2004 • Operating Results for 2Q2004 and 2004 Outlook 22

  23. Entertainment Division – Live Entertainment Mexico • Live Events : • “Vive Latino” and Latin events (p.e. Chayanne and Bosé) drive2Q04 • New family-style events (p.e. Tiany Circusand Holiday on Ice) • Repositioning of multi-annual cultural events: • “España Baila Flamenco”, “Tanguera”, “Carmina Burana” • Theater: renewal of the theatrical offering • Joseph and his Amazing Technicolor Dreamcoat premiered in April at the Centro Cultural • Telmex • Les Miserables ended its 22 month season in August; will be replaced by Fiddler on the Roof • Fairs: focused on consumption geared towards the low-income market • 2Q04: “La Feria de la Ciudad de Mexico” (April) • 3/4Q04: Pachuca and Texcoco in Sept/Oct and Oct/Nov 2004, respectively • Automotive Sports Racing: 2004 Advances • “Desafio Corona 2004”: NASCAR-style cars • Gran Premio de México Telmex Gigante (Nov. 5-7, 2004); • advanced ticket sales begin in August 23

  24. Entertainment Division - Las Américas • Books and Yaks: opening of units in Villahermosa, Querétaro and Torreón • for a total of 28 units in 2Q04; six new units in 2H04 • Chihuahua • Monterrey • Ciudad Neza • Morelia • Tonalá • Hermosillo • Granja Las Américas: recent opening (July 3, 2004) • 1.4 Hectares and 9,000 m2 of construction; an extreme sports area and 21 theme pavillions • An investment of Ps.82.3 million, primarily covered by sponsorships • Able to receive 3,000 visitors per day in two shifts; 540,000 visitors budgeted for the first year • of operations 24

  25. Entertainment Division - Amusement Parks • Wannado City™ Miami initiates operations on August 12, 2004 • Eleven confirmed sponsorships by the end of 2Q04; three more in progress. • DivertidoMexico City: closed in October 2004; • partial relocation of assets to other parks • Naucalli Mágico: negotiations for the park closing • completed • Upcoming attractions in parks in Mexico City: the • Coca-Cola Tower at La Feria, and Globo Nestlé at • Planeta Azul 25

  26. Entertainment Division - International • Argentina: • Exclusive operations for 10 years in the Obras Sanitarias • Arena(5,500seats) in Buenos Aires - Obras Sanitarias - • Brazil: • Renovation of the theatrical content with the departure of • La Flor de mi Buen Querer and the opening of Chicago in • Sao Paulo • Spain: • Trend towards a slow recuperation in attendence at theatrical productions after March • 11, 2004 • Phantom of the Opera ended its season; Cats and Cabaret continue running through • 2005; Mama Mía runs through the end of 2004 26

  27. Commercial Division - Overpasses • Acquisition of Keenneex, Mexico’s third largest pedestrian overpass operator; • Publitop ensures its position as a leader in the country • Publitop’s capacity increased 43% to 218 concessions and 189 installed • structures as of June 2004: Concessions Structures Chg. Jun.04 Dec.03 Chg. Jun.04 Dec.03 Publitop Monterrey Tlalnepantla Coacalco Nuevo Laredo Tonalá Puebla S.L.P. Mazatlán Total Keenneex Aguascalientes Cuernavaca Zapopan El Salto Chapala Total Grand Total 82 33 9 10 13 2 7 1 157 6 3 47 4 1 61 218 82 33 9 10 8 2 7 1 152 - - - - - - 152 N.A. N.A. N.A. N.A. 62.5% N.A. N.A. N.A. 3.3% N.A. N.A. N.A. N.A. N.A. N.A. 43.4% 72 33 9 8 13 2 7 1 145 1 3 35 4 1 44 189 70 29 9 8 6 2 7 1 132 - - - - - - 132 2.9% 13.8% N.A. N.A. 116.7% N.A. N.A. N.A. 9.9% N.A. N.A. N.A. N.A. N.A. N.A. 43.2% 27