AGM Presentation 28 April 2009 - Media Prima Berhad

MEDIA PRIMA BERHAD1ANNUAL GENERAL MEETINGFINANCIAL & BUSINESS REVIEWFor the Financial Year Ended 31 December 200828 APRIL 20091

TABLE OF CONTENT2SECTION 1OVERVIEWSECTION 2SECTION 3PERFORMANCE REVIEWTV5 PRIMEDIA, PHILIPPINESSECTION 4GROUP STRATEGYSECTION 5DIVIDENDSSECTION 6OUTLOOK & CONCLUSIONS2

3SECTION 1 : OVERVIEW3

MEDIA PRIMA BERHAD TODAY4TelevisionBroadcastingContentCreationEventsManagementPrint Radio OutdoorNewMediaInternationalDivision100.0% 100.0%43.3%100.0%90.0%100.0%Ghana100.0% 100.0% 100.0% 100.0%75.0%100.0%80.0%NetworkPortals70.0%MPBPrimediaInc.100.0% 100.0%100.0%PhilippinesFACT SHEETShare capital @ 31/12/08Issued & paid-up share capital = 853.8mESOS balance = 9.7mEnlarged share capital = 863.5mExtracts from Balance Sheet @ 31/12/08S/holders fundsTotal assetsCashGroup borrowings(excl. ICULS, Overdrafts & Hire PurchasePDS Ratings (RAM)= RM551.3m= RM1,164.7m= RM51.08m= RM365.4m= AAAbg (MTN), P1 (CP)4

ADEX BY MEDIA5FYE 2008FYE 2007RM Million Newspapers TV Radio Outdoor Others TotalFYE 2008 3,321 2,161 292 96 290* 6,160FYE 2007 3,065 1,798 241 108 251 5,463% Change 8 20 21 (11) 16 13•Note: Includes InternetSource : AC Nielsen5

MAINTAINING THE TRANSFORMATION SUCCESS6Strong revenue growth: 6-Year Compound Annual Growth Rate (CAGR) of about 21%;nearly tripled 2002 revenue levelRM’m6

7SECTION 2:PERFORMANCE REVIEW7

SECTION 2.1 : MEDIA PRIMA GROUP88

SUMMARY OF CONSOLIDATED RESULTS10NETREVENUE13%• Growth of 13% driven by strong growth from all major mediagroups: TV Networks, Outdoor and Radio grew by 6%, 54%(proforma 21%) and 37% respectively.• The growth was achieved on the back of a strong 1H08 whererevenue grew 28% whilst in the 2 nd half, contracted by about3% due to deceleration of advertising spend caused byeconomic slowdown.EBITDA3%• Direct costs grew by 29% with TV content costs increasing by15% due to higher rights fees for Euro 2008 and higher localcontent and revenue sharing costs as competition intensifies.• Despite the increase in direct costs, overheads increased onlyby 4% due to stringent cost control.• Other income is lower due to higher recoveries of prior yearsexpenses recorded in FYE 2007.10

SUMMARY OF CONSOLIDATED RESULTS11PBTBEFOREEI11%• Improvement in NSTP results by 46% as advertising and circulationrevenue continued to show positive growth especially from HarianMetro. This was partly offset by the rise in newsprint costs andchallenging conditions in 2H09.• Improvement in finance costs due to the refinancing andstreamlining of borrowings at the holding company.• Increase in depreciation arising from new transmitters and contyacquired during the year, and the new concessions by Outdoor.PATAMICONTINUINGOPS0.2%• Total EI of RM1.0 million relates to VSS costs at Group level andoffset by gain on disposal of a building as well as disposal ofproperties and a subsidiary at NSTP level.• Increase in tax charges due to higher profits at TV3, reversal ofdeferred tax asset following the disposal of Wangsa Maju land andbuilding as well as Radio due to its improved profitability.PATAMI27%• Share of losses from subsidiary acquired exclusively for salerelates to MPB’s 70% share of the losses of Primedia Philippines,the seed asset that will be injected into the Media Fund. Therecognition of losses is to comply with FRS6.• Accounting for this, PATAMI attributable to equity holders fell by27%.11

MPB GROUP RESULTS – BY MEDIA GROUP12Note: The above results shown on a marginal cost basis12

13SECTION 2.2 : TV NETWORKS13

TV NETWORKS - RESULTS BY STATION14Note: The above results shown on a marginal cost basis14

TV VIEWERSHIP SHARE (FTA & PAY TV)15Source: Nielsen Media Research15

TOP 10 CHANNELS WATCHED FYE 200816Source: Nielsen Media Research16

TV ADEX SHARE BY STATIONS : FYE 200817#* *#* ** Based on estimates# Tracked by Nielsen Media Research17

18SECTION 2.3 :RADIO NETWORKS18

LISTENERSHIP : HOTfm19Era – down to 4.5 millionlisteners10+ (000 listeners)66006000540048004200360030002400Hotfm - maintains 4.3million listenersHOT.FMNOW A STRONG#1 RADIO STATION INMALAYSIA FOR AVGAUDIENCE; #2 FOR REACH180012006000ERA HOT SINAR XFRESH SURIASurvey 2/05 Survey 1/06 Survey 2/06 Survey 1/07 Survey 2/07 Survey 1/08 Survey 2/08Nielsen Radio Audience Measurement (RAM) Survey 2, 200819

LISTENERSHIP : FLYfm20Hitz down by 0.3million listenersAll People 10+ 000's18001600140012001000800600Fly.fm down by 0.2million listenersFLY.FM ISMALAYSIA’S #3 ENGLISH RADIOSTATION BUTSTILL #2 ENGLISHFORMAT RADIO FOR AGE GROUPBELOW 34Mix up by 0.1million listeners4002000HITZ FLY MIX LITESurvey 2/05 Survey 1/06 Survey 2/06 Survey 1/07 Survey 2/07 Survey 1/08 Survey 2/08Nielsen Radio Audience Measurement (RAM) Survey 2, 2008.20

SECTION 2.4 : OUTDOOR2121

FINANCIAL RESULTS – OUTDOOR DIVISION22* Full year proforma basis22

KEY ACHIEVEMENTS23• Increase in revenue driven by a newconcession, KL Monorail, the 12 th GeneralElections and improved occupancy of thevarious business segments.• Overheads is higher due to one-off legalsettlement payment and higher overheads toaccount for increase in concessions held byOutdoor.• EI relates to gain on disposal of UPD Buildingamounting to and refund from IRB due tooverpayment of tax23

24SECTION 2.5 : NEW MEDIA24

NEW MEDIA RESULTS25Traffic on website portals have increased.However, the monetization of the increase in traffic remains a challenge.25

26SECTION 2.6 :CORPORATE & OTHER BUSINESSES26

CORPORATE & OTHER BUSINESSES2727

SUMMARY OF RESULTS : CORPORATE & OTHER BUSINESSES28• Lower PBT loss recorded due to savings on overheads andinterest savings• Higher revenue due to events such as Confederation AfricanCup of Nation.• However, lower EBITDA mainly due to higher content andoverhead costs compared to 2007 due to inflationarypressures in 1 st half 2008.• Higher LBITDA recorded as GB did not meet the target dueto lower box office takings and lack of sponsorship for itsown productions such as Antoo Fighters. Furthermore,apart from 3 Kingdoms & Long Khong 2, the box officetakings for GB’s foreign titles have also fallen short of itstargets• However, the release of Money No Enough 2 was a hugesuccess for GB and lowered the impact of the shortfall inrevenue• There were also provisions made for stock write offs anddoubtful debts.28

29SECTION 2.7:PERFORMANCE REVIEWASSOCIATE COMPANY -NSTP29

CONSOLIDATED RESULTS3030

ADVERTISING REVENUE : Y-O-Y GROWTH OF 5%319% 23% 4% 9% 16% 0.2% 23% (10)%2006 2007 200831

CIRCULATION REVENUE – GROWTH OF 5%321% 5%2006 2007 200832

NSTP- NEWSPRINT PRICE TREND331100925942850USD/MT750702729721701632630 650 625575531589495450475509574546 54246644552557040019871988198919901991199219931994199519961997199819992000200120022003200420052006200720082nd QTR 200933

34SECTION 3 : TV5 PRIMEDIA,PHILIPPINES34

INVESTMENT IN PRIMEDIA PHILIPPINES35Background• Primedia, a subsidiary of MPB, entered into a Block Airtime Agreement with ABCCorporation Philippines in 2008, the owner of a Free-to-Air TV station “ABC5”.• The Agreement allows Primedia to provide content and manage and sell the airtime ofABC.Transfer of Primedia to the Media Fund• MPB’s intention is to transfer Primedia into the Strategic Media Fund, originally slatedby 31 December 2008.• However, there was a delay in the transfer due to global financial meltdown, whichposed problems in securing investors to the Fund.• However, due to delay, and under FRS5, MPB will have to record MPB’s share of lossesas a subsidiary held for sale.• It is always envisaged that the investment would take 3 years to break-even and theMedia Fund would enable MPB to protect its P&L during the turnaround year.• Upon transfer of Primedia to the Media Fund, MPB is expected to be able to write-backthe losses incurred in 2008, subject to test of diminution according to AccountingStandards.• MPB is also exploring the option of divesting its stake should an opportunity to do soarise.35

EARLY RESULTS ARE ENCOURAGING36Significant headway in audience share especially in Mega Manila,from Pre-Launch of 1.9% to 8.3% in March36

TV5 IS NOW THE CLEAR NUMBER 3 NETWORK3737

38SECTION 4 : GROUP STRATEGY38

3 YEAR GROUP CREAM STRATEGY39HIGHImpact on Financial PositionCOMPLETE MEDIA PLATFORM REGIONALISATION• Expand Outdoor• Resolve Print• Enhance Urban Media platforms• Establish on-line advertising• Ad Networks• ClassifiedsEXPANSION INTO PAY CHANNELS• Pay TV channels• Astro• TM• PC TV (subscriptions)• Mobile TV channelsCONSUMER REVENUE BASED STRATEGY• Acquire / operate regional TV, Radio stations &Outdoor• Establish Media Fund to minimise risks• Establish and leverage on Primeworks•Channel for Export-based content• Marketing and distribution of our contentMANAGEMENT AND STRATEGICCOLLABORATION FOR CONSUMERPLATFORMS BUSINESS• Enter into new platform business• Satellite TV (with Indonesian Operator)• IPTV Operator (Broadband TV)• Digital TV• Broadband internet servicesIMPLEMENTATION PERIODLOW IMMEDIATE MEDIUM TERMWill review the CREAM strategy given the challenging environment39

40SECTION 5 : DIVIDENDS40

PROPOSED DIVIDEND FYE 200841• Proposed first and final dividend of 6.7 sen less tax of 25% for FYE 31 December 2008(subject to shareholders’ approval at this AGM)• The proforma calculation for dividend payout and yield for the purpose of illustration:41

42SECTION 6 : OUTLOOK & CONCLUSIONS42

OUTLOOK & CONCLUSIONS43• Media Prima Group performed credibly, especially in the current challenging economicenvironment and its negative impact on consumer confidence which resulted in thesoftening of the advertising market.• The Group recorded PATAMI from continuing operations of RM117.7 million, maintainingits performance against 2007. The Group managed to still record revenue growth but thiswas offset by higher direct costs, depreciation and taxation.• As required by FRS5, the Group have also absorbed RM31.68 million being its share oflosses of Primedia, an investment to be injected into the Media Fund. This resulted inPATAMI for the Group of RM86.0 million.• The Group, however, maintained a dividend payout of 50% of its annual profits.• Amidst the continuing challenges in the current economic environment, and the resultantfall in per client’s average advertising spending, the Group continues to focus onbroadening its revenue base, in addition to the continued efforts to control its operatingoverheads.• However, the Group is cognisant of the continued soft outlook of the economy and itsnegative impact on advertising spending. The first quarter of 2009 saw a contraction inexcess of 10% in Total ADEX. A contraction of such magnitude will inevitably putpressure to the Group’s earnings.• Despite the challenges, the Group is committed to maintaining its financial andoperational performance.43

44Q&ATHANK YOUFor informationwww.mediaprima.com.myInquiries, Suggestions andCommentsinvestors@mediaprima.com.my44

Key Performance Indicators – Balanced Scorecard System4545