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1 IM Internationalmedia AG Press Conference, 18 November 2002.

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Presentation on theme: "1 IM Internationalmedia AG Press Conference, 18 November 2002."— Presentation transcript:

1 1 IM Internationalmedia AG Press Conference, 18 November 2002

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3 3 > Agenda Introducing Comments This presentation is intended as a guidance for the conference call. It focuses on the companys efforts to adapt its cost structure to the current filmed entertainments market conditions. Therefore it omits a detailed description about the companys history. An initial forecast for 2003 will also be provided. The presentation should only be interpreted with the help of oral comments from the management board. The presentation addresses the following topics: Future StrategyBusiness Outlook 2003 Market Acceptance Overhead Requisites Development Costs Film slate Revenues/Costs Cash Projection

4 4 Internationalmedia Strategy

5 5 > Internationalmedia Strategy IM Development DemandSupply IM will find a balanced market position IM is in the fortunate position to be able to cut back on film development as it already has several promising projects ready for greenlighting over the next two years IM will adapt its overhead cost structure as development and distribution face strategic operative changes, e.g. one or several domestic / foreign distribution deals Enhancing market acceptance through one or several domestic / foreign distribution deals Overhead Market Acceptance

6 6 Internationalmedia Strategy Market Acceptance

7 7 CompanyProductionFinancing DomesticForeign FeaturesStudioBank Soft Money Studio Deal Foreign Output Deals Foreign Sales Servicing Intermedia Spyglass New Regency Mandalay Beacon Revolution Distribution Strategic opportunity if closing a distribution deal Competitive Advantage: Intermedia differentiates itself through soft money (e.g. tax funds in Germany and Netherlands, Sale-and-Leasebacks and Government Subsidies in multiple foreign jurisdictions) and its foreign sales/servicing and has produced studio level films without the benefit of a studio deal Competitive Disadvantage: White spots are competitive disadvantages, especially under difficult market conditions, as it is hard to push film projects into the market. A domestic/foreign distribution deals would significantly increase its competitive position in the market > Market Acceptance

8 8 IM focuses on the profitable low and high budget films Internationalmedia will provide its distribution partners with two targeted slates of films Rationale: Films with budgets over 75 million US$ and under 25 million US$ prove to have higher profit potential than films with budgets in between Event/Tentpole Slate: Intermedia will produce two to four high concept, star driven films annually with budgets greater than 75 million US$ Genre/Concept Slate: Intermedia will produce or acquire two to four films annually with budgets less than 25 million US$, targeted by genre (Scream) or concept/demographic (American Pie) > Market Acceptance

9 9 Internationalmedias distribution strategy has three primary elements: 1.Domestic: Secure a multi-picture distribution deal for four to five films per year. The balance will be distributed on a case by case basis. 2.Foreign: Negotiate selective distribution deals in two key territories with guaranteed TV revenues 3.Foreign: Continue to pre-sell films in other territories on an individual or small package basis; alternatively, sell all foreign rights to a single studio Other elements include: IEG will produce and distribute one to two films each year Intermedia will be opportunistic in acquiring and distributing third party produced films The distribution group will service 3-5 non-Intermedia films annually Distribution strategy secures constant output > Market Acceptance

10 10 Internationalmedia Strategy Development Cost Reduction

11 11 > Development Cost Reduction 5 10 15 20 25 30 20012002200320042005 Overhead Deals Overhead producer deals will be reduced significantly. Development Projects Development spending can be reduced as a large number (over 50) of projects are already in the pipeline at an advanced stage. In million US$ Cost cutting results in 17 million US$ in yearly savings

12 12 Internationalmedia Strategy Overhead Cost Reduction

13 13 Overhead will decrease significantly Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Overheads by Quarter 0 2.000 4.000 6.000 8.000 10.000 12.000 20012002 ´000 US$ > Overhead Cost Reduction 2003

14 14 Internationalmedia Outlook 2003

15 15 > Film Outlook 2003 Major US-releases in each of the four quarters Financial Planning 2003 Revenue and Assumptions US Releases 2003 Quarter 1 National Security (Martin Lawrence, Steve Zahn)01/17/2003 Life of David Gale (Kevin Spacey, Kate Winslet)02/21/2003 Dark Blue (Kurt Russell, Ving Rhames)02/21/2003 Quarter 2 Basic (John Travolta)04/18/2003 Quarter 3 Terminator 3 (Arnold Schwarzenegger)07/02/2003 Mindhunters (Val Kilmer, Christian Slater)Summer 2003 Quarter 4 Suspect Zero (Ben Kingsley)Fall 2003

16 16 Terminator 3 with outstanding potential > Film Outlook 2003 Terminator 2 snap shot 205 m $ US B.O. + 312 m $ B.O. rev. = 517 m $ tot. B.O. *) #1 film in 1991 US Box office Film release date: 4 July 1991 Terminator 3 potential Terminator still one of the top franchise names Ancillary rights such as video games through Infogrames, theme parks, etc. IM participates 50% in worldwide theatrical and video gross revenues Current market characteristics Sequels are latest winners in US Box office No sales fading at sequels with o special effects o strong marketing campaign Old 2/3 rule of thumb not valid anymore o Rush Hour II (+21%) o Mission Impossible II (+46%) *) in 1991-dollar-value

17 17 > Revenue Outlook 2003 IM continues to drive up revenues in 2003 Production VolumeOverages and Library Production Start for 5 – 7 films Total Production Volume of approx. US$ 400m – 450m Traffic Iris The Wedding Planner Sliding Doors Largo and MEI library Financial Planning 2003 Revenue and Assumptions (T3 overages expected but not included)

18 18 225 Revenue CAGR bigger than 35% > Revenue Outlook 2003 Revenue Outlook 2003 Revenues In million Source: IM Internationalmedia AG 1997 1998 1999 2000 2001 2002e 2003e 0 50 100 150 200 250 300 350 400 150 200 250 300 375 0 100 200 300 400 500 600 700 Low Medium High Terminator 3 Potential International B.O. Domestic B.O. Box Office in million

19 19 Cash position stabilizes due to cost cutting efforts > Cash Outlook 2003 Cash position controlled in 2003 Source: IM Internationalmedia AG 55.418.1 12.8 4.0 14.0 55.4 3.5 46.0 Development Recoupment Development Spent Overhead Cash January 1, 2003 Overages, Ancillary Rights Library, Servicing Fees UPSIDE: Financing Fees

20 20 Internationalmedia will return to profitability in 2003 > Summary Outlook 2003 Profit and Loss Outlook 2003 Revenues330.0 – 350.0 million US$ Company Overhead 18.1 million US$ Development Costs11.0 – 13.0 million US$

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