Investor Presentation

Transcription

1 Investor Presentation RR Media (NASDAQ RRST) December 2014

2 Safe Harbor Statement Please note that this presentation and discussion held base on this presentation contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding (i) the growth of our business and the television and radio broadcasting industries, (ii) our expectation to expand our client base and sell additional services to our existing client base, (iii) our ability to successfully integrate the teleports we acquired, (iv) our ability to develop and commercialize the RRinternetTV service, (v) our expectation to extend the average length of our contracts in the future, (vi) our ability to develop, expand and commercialize our HD Platform, (vii) our ability to report future successes, (viii) our ability to expand our activity in the North American market, and (ix) our intention to distribute dividends in the future and the size of any dividends declared. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry as of the date of the presentation (November 2014). The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements, including the risks indicated in our filings with the Securities and Exchange Commission (SEC). For more details, please refer to our SEC filings and the amendments thereto, including our Annual Report on Form 20-F for the year ended December 31, 2013 and our Current Reports on Form 6-K. 2

3 Company Overview A leading provider of global digital media services Nasdaq-traded company since 2006 Over 320 employees worldwide Headquartered in Israel Subsidiaries in the US and UK Service coverage in 150+ countries worldwide LTM Revenues $130.9M (as of September 30 th, 2014) Over 650 channels distributed Over 150 channels fully managed Over 100,000 hours of live events Content delivery to over 100 VOD platforms Covering 95% of the global population 3

4 Investment Highlights Industry leader in growing market Increased demand more viewing, more channels, move to HD, multiscreen Increased outsourcing by content providers Smaller competitors are finding it increasingly difficult to compete A winning business model generating high free cash flow 85% of revenue results from recurring revenue provides strong visibility 80% contract renewal reflecting high quality of service and customer loyalty Advance payments enhance cash flow and lower bad debt risk Attractive valuation and dividend yield 6x adjusted EV/EBITDA ~4% dividend yield (7 cents per share paid quarterly) Benefits from recent acquisitions and investments in coming years 4

5 What we do Content Producers / Owners Platform Operators End User Studios TV Channels Live Events Online Content Creators Content Producers / Owners ALL Digital Media Services under one roof Cable TV Satellite IPTV Online Video Mobile 5

6 RR World Smart Global Network Optimized delivery via satellite, fiber, internet Reaching 95% of the world s population RR Play Content Management and Channel Origination Over 150 channels originated Accept content in any format Prepare for distribution to any screen Global Media Services With Local Access RR Go Online Video Solutions Reach more people, more places, more devices New audiences = new monetization options Ideal solution for converged broadcast & internet delivery RR Live Sports, News and Live Events Deliver world s most popular live events 100,000+ hours of live events annually

7 Some Of Our Customers 7

8 RR Media - A Trusted Services Partner Extensive domain knowledge & expertise Video content monetization Global content distribution network Flexibility & cost effectiveness One-stopshop for media services 24/7 Customer Service 8

9 Local Services, Global Media Services Platform Global Media Service Platform Remote Playout Master Control Remote Playout Master Control OU Master Control Metro New York Encoding, Transcoding Conversion Channel Origination Playout Master Control Restoration London Encoding, Transcoding Conversion Online Video Content Preparation OU Master Control Tel Aviv Encoding, Transcoding Conversion Online Video Content Preparation Online Video Content Preparation 9

10 Covering 95% of The World: Satellite, Fiber & Internet New York Cheyenne Los Angeles Denver Pennsylvania Newark London Madrid Amsterdam Paris Frankfurt Milan Athens St. Petersburg Moscow Budapest Belgrade Israel Gilbert Houston Atlanta Miami Taipei Singapore RR Media leases satellite and fiber capacity based on customers requirements Content delivery over satellite, fiber and the internet covering 95% of world s population Uplink and turnaround services to 45 satellites; downlink from 75 satellites Integrated fiber network connecting our teleports with major POPs interconnected with the world s major Telcos

11 Covering 95% of The World: Satellite, Fiber & Internet Satellites covering South America Satellites covering North America Satellites covering Europe Satellites covering ME & Africa Satellites covering Russia Satellites covering Asia Satellites covering Australia GALAXY 19 GALAXY 23 HISPASAT 1E INTELSAT 805 INTELSAT 21 SATMEX 6 SES 6 Los Angeles Cheyenne Gilbert Denver Houston Atlanta New York Pennsylvania Newark Miami GALAXY 19 GALAXY 23 HISPASAT 1E INTELSAT 805 INTELSAT 21 SES 6 AMOS 2 AMOS 3 EUTELSAT 7B EUTELSAT 9A EUTELSAT 10A EUTELSAT 21B EUTELSAT 36B London SES ASTRA 19.2E EXPRESS AM22 EXPRESS AM44 HELLAS SAT 2 HISPASAT 1E Madrid EUTELSAT HOTBIRD 13A/B/C EUTELSAT 16C ASTRA 4A AMOS 2 ABS 2 AMOS 3 EXPRESS AM22 AMOS 5 EUTELSAT 9A APSTAR 7 EUTELSAT 36B EUTELSAT 7 WEST A EUTELSAT HOTBIRD BADR 4 St. Petersburg 13A/B/C EUTELSAT 25A YAMAL 300K Amsterdam Moscow EXPRESS AM44 T-18 EUTELSAT HOTBIRD Frankfurt 13A/B/C Budapest EUTELSAT 21A Paris Milan Belgrad ASIASAT 5 INTELSAT Athens 20 MEASAT 3A THAICOM 5 Israel THAICOM 6 AFRICASAT ABS 2 APSTAR 7 ASIASAT 5 INTELSAT 20 INTELSAT 902 MEASAT 3A THAICOM 5 YAMAL 300K INTELSAT 20 MEASAT 3A OPTUS D2 THAICOM 5 Taipei Singapore RR Media leases satellite and fiber capacity based on customers requirements Content delivery over satellite, fiber and the internet covering 95% of world s population Uplink and turnaround services to 45 satellites; downlink from 75 satellites Integrated fiber network connecting our teleports with major POPs interconnected with the world s major Telcos

12 Global State-of-the-Art Facilities UK, US, Israel

13 Key Value Chain Partners Satellite platforms Telcos and service providers New Media platforms Technology partners 13

14 Trends In Content Consumption Preparation & origination complexities Increasing distribution options Impeccable quality requirements Growing consumer volume Growing number of screens Growing viewing alternatives Increasingly sophisticated infrastructure Content going global 14

15 Macro Market Drivers Increased viewing alternatives multiple screens Increased quality - From SD > HD > UHD/4K Expansion of sports, news & live events broadcasting globally Channels going global with multiple local versions Rapid growth in OTT & VOD services: However, majority of online video content is broadcast TV repurposed content Online and VOD service providers heavily reliant on TV repurposed content on acceptable terms (price + release window) 15

16 Growing Number Of Broadcast Channels/Improving Quality Total TV signals broadcast by satellite (in thousands) SD HD * Source: Euroconsult 16

17 Growing Numbers Of Screens/Average Time Spent Watching * Source: Neilsen 17

18 Video Ecosystem: It s All About Content Netflix Example Revenue & Content Costs $7.3B Market Value Video Production $56.3B If studios, content providers or other rights holders refuse to license streaming content or other rights upon terms acceptable to us, our business could be adversely affected (Source: Risk Factor, Netflix 10K) $4.4B $3.0B 2013 Revenue 2013 Content Additions Total Future Content Obligations * Source: Netflix 2013 Financial Statements 1 North America (2013) * Source: Euroconsult

19 Potential Addressable Market - Distribution High barrier to entry Outsourcing trends by broadcasters 38% 5% 27% Telcos Satellite Operators Service Providers Broadcasters $9.4B Relevant to RR Media 30% $2.8B Global Service Providers Arqiva Encompass Globecast RR Media ~$1.2B *Source: Euroconsult

20 Potential Addressable Market Channel Origination & Playout Global market valued at ~$8B in 2013 Management internally is still high (~59%) Outsourcing expecting to grow due to the increasing complexity of playout process: Multi-screen Localization VOD * Source: Euroconsult

21 Potential Addressable Market Online Video Platform Services Solutions are continuing to evolve Steady revenue growth is expected CAGR = 13.7% *Source: Frost & Sullivan 21

22 RR Media On The Move Distribution Media Services TV Multiple Video Viewing Experience Local Global Presence Local Access 22

23 Growth Strategy Change in customer and revenue mix Upper Tier Content Management Sports and Live Events Expand geographic presence and local solutions North America, Europe largest upper tier content Emerging markets FSU, ME, APAC, LATAM Expand and evolve our offering Closer to content Online video Cloud based solutions Targeted M&A Scale, offering, presence 23

24 Strategic Acquisitions Completed Over Past 18 Months SM2 Sports & Media Solutions ( ) JCA TV (9-2013) Premier provider of int l sports distribution and syndication services US-based, serving tier-1 customers Entry point to the lucrative North American sports/events market Fully integrated Premier provider of multi-screen content preparation and management for TV channels, VOD and OTT London UK-based, serving tier-1 customers Higher margins than RR Media's, accretive to RR Media's earnings 24

25 Global Team Douglas Parish Head of Global Online Business President RR Media America Avi Cohen Shmulik Koren Susanna Mandel Mantello Chief Executive Officer Chief Financial Officer VP Global Sports & Events UK Ziv Mor Chief Technology Officer Elad Manishviz Chief Marketing Officer US Simon Kay Head of Global Content Preparation Managing Director RR Media EU ISRAEL Shlomi Izkovitz VP Global Sales 25

26 RR Media Fundamentals Over 85% Recurring revenue Over 80% Renewal rates $86M Next 12 Month BL Strong Operating cash flow Favorable cash conversion 26

27 Revenues (in $M) $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $121.8 $112.9 $113.4 $102.0 $32.5 $28.8 $29.4 $25.8 $30.6 $28.6 $28.5 $24.7 $25.6 $28.5 $28.1 $29.5 $129M-$134M 2014 Guidance $33.1 $32.5 $20.0 $- $25.9 $26.9 $27.5 $29.3 $ Q1 Q2 Q3 Q4 Revenue in $M 27

28 Favorable Cash Conversion Cycle Deferred income represents customers advance payments and deposits approximating the last one to three months of long-term service agreements with customers 30-Sep-14 $ M Days Trade accounts receivable Trade accounts payable Deferred income Net working capital

29 Cash Flows $25.0 $21.3 $20.0 $15.0 $16.2 $15.9 $1.5 $10.4 $ Operating cash flow $21.30 $13.20 $7.80 $10.0 $9.3 $5.2 $7.8 Free cash flow $10.40 $5.20 $1.60 $5.0 $14.7 $6.6 $10.9 $8.0 $1.6 $6.2 CAPEX investment $10.90 $8 $6.20 Dividend paid $5.00 $4.50 $2.30 $ Capex Free cash flow 29

30 Financial Highlights In $ Millions Q Q Change Profit & Loss Revenues % Media & Broadcasting revenues % Gross Margin 24.5% 22.0% EBITDA (GAAP) (10.60%) Adjusted EPS (16.70%) Cash flow Operating cash flow CAPEX FCF Declared Dividend Balance sheet Cash, cash equivalents & securities Debt - - Net negative working capital (7.0) (8.7) Shareholders Equity % 62.50% 62.70% 30

31 EV Ratios Share price ($) as of October 31, Outstanding Shares (M) 17.4 Market capitalization ($M) Cash ($M) 23.5 Debt ($M) 0 Enterprise value ($M) Adjusted annualized EBITDA 17.4 EV/LTM EBITDA 6.06x LTM FCF 6.8 EV/LTM FCF 15.5x 31

32 RR Media s Fundamentals Ultimate value creation for our customers and partners Continuous innovation and development Tailored solutions to enhance customers offerings Long lasting partnerships with worldleading media entities Exceptional reputation and market standing Clear focus on growth and expansion

33 Thank you