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Prime Focus Limited Investor Presentation 2021
61149_rns_2021-07-14_6f21d265-77f8-4a71-9c17-6c67512862fd.pdf
Investor Presentation
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BANGALORE BEIJING CAPE TOWN CHANDIGARH DELHI GOA HYDERABAD JOHANNESBURG KOLKATA LONDON LOS ANGELES MUMBAI NEW YORK SINGAPORE TORONTO VANCOUVER
July 14, 2021
To, To, The National Stock Exchange of India Limited BSE Limited Listing Department, Listing Department, Exchange Plaza, Bandra Kurla Complex Phiroze Jeejebhoy Towers, Bandra East, Dalal Street, Mumbai - 400 051 Mumbai - 400 001 Fax Nos.: 26598237/26598238 Fax Nos.: 22723121/2037/2039
Dear Sir/ Madam,
Ref.: Scrip code: BSE — 532748/NSE – PFOCUS
Sub.: Investor Presentation for the financial year 2020-21
Dear Sir / Madam,
Please find enclosed the Investor Presentation for the financial year 2020-21.
Kindly take the above on your record and acknowledge the receipt of the same.
Thanking You,
FOR PRIME FOCUS LIMITED
PARINA SHAH COMPANY SECRETARY & COMPLIANCE OFFICER
Encl.: a/a
Certain statements in this document may be forward-looking statements. Such forwardlooking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements.
Prime Focus will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
FY21 Performance
FY21 highlights – resilient performance despite COVID disruptions
DNeg won Oscar and BAFTA for TENET
This is sixth Academy award in the last 10 years
Upcoming top Hollywood & Bollywood projects
Matrix 4
1 Consolidated Income includes one time FX gain of Rs. 40.9cr, total FX gain at Rs. 57.1cr 2 Adjusted for Non-Cash ESOP charges Rs. 30.1cr
4
- Consolidated revenues fell by 13% YoY to Rs 2,610 Cr stabilisation in revenues in parts of the group as COVID impact beginning to wane but uncertainty persists. Confidence level on vaccination progress will have material impact on timing of new projects
- Adjusted EBITDA stood at Rs 687 Cr with margins at 26.0%
- EBITDA adjusted for ESOP charges of Rs.30cr
- Sequential reversal of paycuts across geographies and across companies ; continue to focus on cost rationalisation and reduction of headcount specially in the West
- Other operational costs lower by Rs.40cr on account of software expenses being capitalized ~Rs.40cr
- One time FX gain of Rs 41 cr due to redemption of OCPS in PF Mauritius
- Interest and Finance charges at Rs. 251 cr up from Rs. 231 cr in FY20 on account of one time expensing of upfront facility fee
- Includes non-cash interest on studio loan Rs. 22 cr
- Depreciation charges at Rs 422 cr up from Rs. 381 cr in FY20 on account of software capitalisation of ~Rs.40cr
- Exceptional charges in FY 21 at Rs. 23 cr on owing to capital raising expenses ; PAT at Rs. (56 cr)
Debt profile
- Consolidated Net Debt of Rs. 3,526 Cr as on 31st March 2021
- o Includes Operating Lease Liability of ~ Rs. 847 Cr added to the Balance Sheet on adoptionof IndAS 116
- LTM Net Debt / Adj EBITDA(Pre IndAS 116) continues to be at sub 4x levels
- The Company and its subsidiaries continue to consider options to raise funding through equity (including through private placement and public offering) and debt, and unlock value across the Group with a view to enhancing growth, shareholder value and the efficiency of the business
Note: Convertible Instruments of Horizon Coast and Ambit PE is not included
Malhotra family has bought out the entire stake from IDBI Trustee & ADAG group; promoters now own and control 70% of the company
Divisional Performance
Creative Services shows resilience; toughest year for the company
9
Revenues down on the back of COVID
- Business impacted by significant disruptions on customer side productions on the back of COVID; operating performance strong despite COVID headwinds
- Won the Oscar for Tenet – 5 th in 7 years; 6 in total*.* Proud to have delivered the 1 st large scale Film Animation project – Ron's Gone Wrong with bulk of work delivered from homes of artists
- Few of the other large projects worked on include Fast & Furious: 9, Dune, Shadow & Bone, etc.
- Marquee upcoming projects for FY22 include Venom 2, Matrix 4, Unchartered, Slumberland (Netflix), etc.
Adj. EBITDA at Rs.533cr
- US GAAP FY21 revenues at ~$300mn with Adj. EBITDA**2** at $79mn
- Dynamic cost management in a highly volatile business environment, proactive headcount, operational cost rationalization initiatives and government relief programs
- Order Book continues to be promising
Working on top Hollywood projects
Tech/Tech Enabled Services – turnaround story
- Fall in revenues synonymous with COVID 19 restrictions and challenges
- Share of Western revenue increased as well as added new customers in the West- Warner Bros,A&E Networks, etc. key wins
- Significant efforts made towards cutting costs across the globe shutdown of offices as well as downsizing – led to significant cash cost savings and a complete turnaround in performance at the EBITDA level
- Order Book remains promising
11
Tech/Tech Enabled Services Operational Highlights
- Proportionof annuity revenue at 90% transient increase in project-basedservices work in COVID period
- Share of India revenue at 61% proportionof West increasing
- Product share in the revenue mix at 43% for product due to comparatively higher increase in Services revenue & drop in Tech revenue
India FMS – Heavily Impacted by Covid
Figures in Rs Crore
13
Highlights:
- Studio rental and equipment rental business have shown momentum largely on the back of OTT; although recovery still far away from pre-COVID levels
- Q4 was much better performanceonly for lockdowns to re-emerge
- Most impacted business due to COVID; remain cautiously optimistic depending upon lifting of lockdowns especially in Mumbai
Annexure
Consolidated Profit & Loss Statement
| Particulars (Rs Crore) | Q4FY21 | Q4FY20 | % YoYVariance | Q3FY21 | % QoQVariance | FY21 | FY20 | % YoYVariance |
|---|---|---|---|---|---|---|---|---|
| Net sales / income from operations | 691 | 852 | (19%) | 588 | 18% | 2,536 | 2,929 | (13%) |
| Other Income | 22 | 61 | NM | 62 | NM | 74 | 84 | (12%) |
| Total Income | 714 | 913 | (22%) | 650 | 10% | 2,610 | 3,013 | (13%) |
| Total Expenditure | 511 | 679 | (25%) | 535 | (4%) | 1,923 | 2,399 | (20%) |
| Personnel Cost (including technician fees) | 436 | 552 | (21%) | 433 | 1% | 1,581 | 1,960 | (19%) |
| Other Expenditure | 75 | 127 | (40%) | 102 | (26%) | 342 | 439 | (22%) |
| Adj. EBITDA* | 202 | 234 | (14%) | 115 | NM | 687 | 614 | 12% |
| Foreign exchange (loss) | - | - | - | - | - | |||
| EBITDA (including Exch. Gain (net)) | 202 | 234 | (14%) | 115 | NM | 687 | 614 | 12% |
| Depreciation & amortization | 133 | 98 | 36% | 94 | 42% | 422 | 381 | 11% |
| ESOP Charges | 12 | 23 | (47%) | 6 | NM | 30 | 130 | NM |
| EBIT | 57 | 113 | (50%) | 15 | NM | 235 | 103 | NM |
| Interest & Finance charges | 68 | 52 | 31% | 65 | 5% | 251 | 231 | 8% |
| PBT Before Exceptional Items | (12) | 60 | NM | (50) | NM | (16) | (128) | NM |
| Exceptional Items-Expenditure/ (Income) | (0) | 68 | NM | (0) | 1% | 23 | 68 | NM |
| PBT | (12) | (7) | NM | (50) | NM | (39) | (196) | NM |
| Tax Expense | 16 | (16) | NM | (16) | NM | 18 | (42) | NM |
| PAT before Minority | (28) | 9 | NM | (34) | (18%) | (56) | (154) | NM |
| Minority Interest | (5) | (4) | 23% | (8) | (45%) | (13) | (22) | (43%) |
| PAT | (23) | 13 | NM | (26) | (9%) | (43) | (131) | NM |
| Key Ratios | Q4FY21 | Q4FY20 | Q3FY21 | FY21 | FY20 |
|---|---|---|---|---|---|
| Adjusted EBITDA Margin | 28% | 26% | 18% | 26% | 20% |
| Total Expenditure/ Revenues | 72% | 74% | 82% | 74% | 80% |
| Personnel Cost/ Total Operating Income | 63% | 65% | 74% | 62% | 67% |
| Other Expenditure/ Total Operating Income | 11% | 15% | 17% | 13% | 15% |
15
Investor Update Q4 FY21 15
FY20 – USD / INR – 74.7; GBP/INR – 92.5 FY21 – USD / INR – 73.2; GBP/INR – 100.8
Standalone Profit & Loss Statement
| Particulars (Rs Crore) | Q4FY21 | Q4FY20 | % YoYVariance | Q3FY21 | % QoQVariance | FY21 | FY20 | % YoYVariance |
|---|---|---|---|---|---|---|---|---|
| Net sales / income from operations | 25 | 26 | (4%) | 19 | 30% | 61 | 120 | (49%) |
| Other Income | 14 | 9 | NM | 10 | 45% | 44 | 33 | 33% |
| Total Income | 39 | 34 | 14% | 29 | 35% | 105 | 152 | (31%) |
| Total Expenditure | 13 | 18 | (30%) | 12 | 10% | 47 | 87 | (46%) |
| Personnel Cost (including technician fees) | 7 | 10 | (33%) | 6 | 20% | 23 | 48 | NM |
| Other Expenditure | 6 | 8 | (25%) | 6 | 1% | 24 | 39 | (39%) |
| Adj. EBITDA* | 26 | 16 | NM | 17 | NM | 58 | 66 | (11%) |
| Foreign exchange (loss) | (0) | 0 | (1) | (2) | 0 | |||
| EBITDA (including Exch. Gain (net)) | 26 | 16 | NM | 17 | NM | 56 | 66 | (14%) |
| Depreciation & amortization | 15 | 17 | (8%) | 16 | (6%) | 65 | 67 | (4%) |
| ESOP Charges | - | - | NM | - | NM | - | 1 | NM |
| EBIT | 10 | -1 | NM | 0 | NM | -9 | -3 | NM |
| Interest & Finance charges | 9 | 16 | (44%) | 19 | NM | 59 | 63 | (6%) |
| PBT Before Exceptional Items | 2 | (17) | NM | (19) | NM | (68) | (66) | 2% |
| Exceptional Items-Expenditure/ (Income) | 0 | (200) | NM | (95) | NM | (95) | (200) | NM |
| PBT | 2 | 184 | NM | 76 | NM | 27 | 134 | NM |
| Tax Expense | (0) | (44) | NM | 0 | (0) | (33) | NM | |
| PAT before Minority | 2 | 228 | NM | 76 | NM | 27 | 167 | NM |
| Minority Interest | 0 | 0 | NM | 0 | NM | 0 | 0 | NM |
| PAT | 2 | 228 | NM | 76 | NM | 27 | 167 | NM |
| Key Ratios | Q4FY21 | Q4FY20 | Q3FY21 | FY21 | FY20 |
|---|---|---|---|---|---|
| Adjusted EBITDA Margin | 67% | 46% | 59% | 56% | 43% |
| Total Expenditure/ Revenues | 33% | 54% | 41% | 44% | 57% |
| Personnel Cost/ Total Operating Income | 28% | 41% | 31% | 37% | 40% |
| Other Expenditure/ Total Operating Income | 24% | 31% | 31% | 39% | 32% |
16
Investor Update Q4 FY21 16
FY20 – USD / INR – 74.7; GBP/INR – 92.5 FY21 – USD / INR – 73.2; GBP/INR – 100.8
Balance Sheet - Assets
| Standalone | Consolidated | ||||
|---|---|---|---|---|---|
| Particulars | 31-Mar-21 | 31-Mar-20 | 31-Mar-21 | 31-Mar-20 | |
| Assets | |||||
| Non-Current Assets | |||||
| Property, Plant and Equipment | 233 | 244 | 395 | 425 | |
| Capital Work In Progress | 10 | 13 | 17 | 32 | |
| Goodwill | - | - | 1,074 | 1,083 | |
| Other Intangible assets | 0 | 1 | 513 | 491 | |
| Rights to Use Asset | 281 | 320 | 991 | 927 | |
| Intangible Assets under development | - | - | 13 | 15 | |
| Financial Assets | - | ||||
| Investments | 618 | 781 | 0 | 4 | |
| Trade Receivables | - | - | 2 | 2 | |
| Other financial assets | 5 | 5 | 321 | 108 | |
| Deferred Tax assets (net) | - | - | 118 | 117 | |
| Income Tax assets (net) | 76 | 81 | 110 | 126 | |
| Other Non-Current Assets | 3 | 3 | 37 | 49 | |
| Total Non-Current Assets | 1,227 | 1,448 | 3,591 | 3,379 | |
| - | |||||
| Current Assets | - | ||||
| Inventories | - | - | 1 | 0 | |
| Financial Assets | - | - | - | - | |
| Trade receivables | 33 | 45 | 221 | 577 | |
| Cash and cash equivalents | 22 | 0 | 367 | 256 | |
| Bank balances other than above | 0 | 0 | 11 | 4 | |
| Loans | 309 | 164 | - | - | |
| Other financial assets | 151 | 235 | 974 | 601 | |
| Income Tax Assets (Net) | - | - | 0 | - | |
| Other current assets | 82 | 73 | 198 | 197 | |
| Total current Assets | 598 | 518 | 1,772 | 1,636 | |
| Total Assets | 1,825 | 1,966 | 5,364 | 5,015 |
17
Balance Sheet – Equity & Liabilities
| Standalone | Consolidated | |||
|---|---|---|---|---|
| Particulars | 31-Mar-21 | 31-Mar-20 | 31-Mar-21 | 31-Mar-20 |
| Equity and Liabilities | ||||
| Equity | ||||
| Equity Share Capital | 30 | 30 | 30 | 30 |
| Share warrant money received | - | - | ||
| Other Equity | 1,262 | 1,235 | 237 | 363 |
| Equity attributable to equity holders of the parent | 1,292 | 1,265 | 267 | 392 |
| Non-controlling interest | - | - | 80 | 84 |
| Total Equity | 1,292 | 1,265 | 346 | 476 |
| Liabilities | ||||
| Non-Current Liabilities | ||||
| Financial Liabilities | ||||
| Borrowings | 221 | 323 | 695 | 1,074 |
| Lease Liabilities | 32 | 45 | 864 | 745 |
| Other financial liabilities | 66 | 109 | 140 | 141 |
| Provisions | 3 | 3 | 29 | 26 |
| Deferred Tax Liabilities (net) | - | - | 34 | 45 |
| Other non-current liabilities | - | - | 0 | 1 |
| Total Non-current liabilities | 322 | 480 | 1,763 | 2,032 |
| Current Liabilities | ||||
| Financial Liabilities | ||||
| Borrowings | 22 | 32 | 1,942 | 1,184 |
| Lease Liabilities | 15 | 15 | 261 | 176 |
| Trade Payables | 25 | 23 | 202 | 197 |
| Other financial liabilities | 48 | 59 | 448 | 321 |
| Other Current Liabilities | 0 | 0 | 59 | 59 |
| Provisions | 16 | 16 | 30 | 55 |
| Current Tax Liabilities | 84 | 75 | 312 | 515 |
| Total Current Liabilities | 211 | 221 | 3,254 | 2,506 |
| Total Liabilities | 532 | 701 | 5,017 | 4,538 |
| Total Equity + Liabilities | 1,825 | 1,966 | 5,364 | 5,015 |
18
FY20 – USD / INR – 70.8; GBP/INR – 90.0 FY21 – USD / INR – 74.0; GBP/INR – 96.7
Investor Update Q4 FY21 18 AVERAGE FX RATES CLOSING FX RATES
Balance Sheet – Equity & Liabilities
| Standalone | Consolidated | |||
|---|---|---|---|---|
| Particulars | 31-Mar-21 | 31-Mar-20 | 31-Mar-21 | 31-Mar-20 |
| Equity and Liabilities | ||||
| Equity | ||||
| Equity Share Capital | 30 | 30 | 30 | 30 |
| Share warrant money received | - | - | ||
| Other Equity | 1,262 | 1,235 | 237 | 363 |
| Equity attributable to equity holders of the parent | 1,292 | 1,265 | 267 | 392 |
| Non-controlling interest | - | - | 80 | 84 |
| Total Equity | 1,292 | 1,265 | 346 | 476 |
| Liabilities | ||||
| Non-Current Liabilities | ||||
| Financial Liabilities | ||||
| Borrowings | 221 | 323 | 695 | 1,074 |
| Lease Liabilities | 32 | 45 | 864 | 745 |
| Other financial liabilities | 66 | 109 | 140 | 141 |
| Provisions | 3 | 3 | 29 | 26 |
| Deferred Tax Liabilities (net) | - | - | 34 | 45 |
| Other non-current liabilities | - | - | 0 | 1 |
| Total Non-current liabilities | 322 | 480 | 1,763 | 2,032 |
| Current Liabilities | ||||
| Financial Liabilities | ||||
| Borrowings | 22 | 32 | 1,942 | 1,184 |
| Lease Liabilities | 15 | 15 | 261 | 176 |
| Trade Payables | 25 | 23 | 202 | 197 |
| Other financial liabilities | 48 | 59 | 448 | 321 |
| Other Current Liabilities | 0 | 0 | 59 | 59 |
| Provisions | 16 | 16 | 30 | 55 |
| Current Tax Liabilities | 84 | 75 | 312 | 515 |
| Total Current Liabilities | 211 | 221 | 3,254 | 2,506 |
| Total Liabilities | 532 | 701 | 5,017 | 4,538 |
| Total Equity + Liabilities | 1,825 | 1,966 | 5,364 | 5,015 |
19
Investor Update Q4 FY21 19 AVERAGE FX RATES CLOSING FX RATES
About Prime Focus Limited
Prime Focus Limited (PFL), the world's largest independent integrated media services powerhouse, employs over 8,000 professionals in 18 cities across 5 continents and 7 time zones. We provide end-to-end creative services (visual effects, stereo 3D conversion and animation), technology products & services (CLEAR™ Media ERP Suite and Cloud-enabled media services), production services (equipment rental) and postproduction services (Digital Intermediate and picture post) to the Media & Entertainment industry.
Listed on the BSE and NSE of India and recognized on the Fortune India 'Next 500' list, Prime Focus has operations in Bangalore, Chandigarh, New Delhi, Goa, Hyderabad, Kolkata, London, Los Angeles, Mumbai, New York, Johannesburg, Capetown, Abu Dhabi, Toronto, Montreal, Chennai, Sydney and Vancouver.
For more details www.primefocus.com www.primefocusindia.com www.dneg.com www.primefocustechnologies.com
© 2016 Prime Focus Limited. All Rights Reserv ed.