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[ C L I E N T N A M E ]
NASDAQ: BONA
December 2013
CORPORATE PRESENTATION
NASDAQ: BONA
THE FOLLOWING PRESENTATION HAS BEEN APPROVED FOR
ALL AUDIENCES
WHO UNDERTAND THE MEANING OF “FORWARD-LOOKING STATEMENTS”
The information used in this presentation has been prepared by Bona Film Group Limited (“Bona” or the “Company”). This presentation is being provided for your information and may not be distributed, reproduced, re-distributed or passed on, directly or indirectly, to any person or published, in whole or in part, for any purpose. This presentation contains certain "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, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. All statements other than statements of historical fact in this presentation are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The information contained in this presentation does not constitute or form part of, nor should it be construed as, an offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto. By listening to this presentation, you acknowledge that you will be solely responsible for your own assessment of the Company, including its business and market, and the market position, and that you will conduct your own analysis and due diligence and be solely responsible for forming your own view of the existing and future performance of the Company’s business.
1
Bona Film Group Overview
NASDAQ Ticker: BONA
Share Price (11/25/2013): US$5.25
Market Cap (11/25/2013): US$316 million
2012 Revenues: US$142.3 million
Leading non-state-owned vertically-integrated film company in China
Operates 21 movie theaters in 11 provinces
Major Shareholders: Yu Dong 24.1%, News Corporation 19.9%, Fosun Group 6.4%
Snapshot
2
Chinese Film Industry Overview
3
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E
0.1 0.1 0.1 0.1 0.2 0.3 0.3 0.4 0.6 0.9 1.5
2.0 2.7
3.5
4.6
6.0
7.7 8.4
9.2 9.2 9.4 8.8 9.2
9.7 9.6 10.6 10.6
10.2 10.8 10.8 10.8 10.8
Chinese Box Office
China’s Middle Class population to grow at 11%
CAGR from 2011 to 2020 (250mm to 607mn) (4)
China’s entertainment market to growth at 17% CAGR from 2010 to 2015
($59bn – $138bn) (4)
28% CAGR in movie attendance growth in China
from 2010 to 2012 (286mn – 467mn) (5)
2013 (9-mos) China box office of US$2.7bn, up 35%
Y/Y, domestic films making up 55% of box office receipts
4
The Chinese Box Office: A Booming Industry
Chinese vs. North American box office (USD bn)
(1) China box office grew 30.2% YOY in 2012 (2) Estimated growth rate of China box office is approximately 30% per year from 2012 - 2015 (3) Estimated North American box offices from 2013 – 2015 are approximately consistent with 2012 (4) Erst & Young “Spot on China” report. (5) Source: EntGroup.
North American Box Office
For the year ended December 31, 2012
Total box office (US$ bn)
Box office per capita (US$)
Attendance per capita
No. screens per million of population
5
Tremendous Growth Potential
Year-Over-Year Growth Percentage
Year 2006 2007 2008 2009 2010 2011 2012 2013E
2.7 1.4 2.4 1.3
10.8
3.8 1.2
19.2 26.2 31.0
Resilience Through Economic Cycles
3,034 3,527 4,097 4,723 6,2569,286
13,118~17,000
Significant Potential for Higher Film Penetration (1)(2)
30.0% 25.6%
30.6%
42.2%
63.9%
28.4% 30.2%
13.7% 16.2% 16.2%
13.3%
32.5%
48.4% 41.3%
China Box Office
Movie Screens-China
Screen Numbers-China
18 13 26 42
122
0.7
3.0
1.2
3.9 3.9 (4)
(4)
Source: EntGroup, a PRC consulting and marketing research firm focused on media markets and a member of the ComInsight Group (1) Exchange rate is calculated as the average rate between 1/1/2012 – 12/31/2012 (2) Chinese statistics are for urban areas only and China box office refers to China mainland box office only, assuming Chinese urban population of 712 million in 2012 (3) North America statistics (4) India 2010 statistics
(3)
Movie Theaters 50%
Producers 34% - 38%
Distributors 4% - 6%
Theater Circuits 1% - 2%
Business Tax 3% Special
Government Fund 5%
Bona – The One-Stop Investment in the Chinese Film Market
6
The Chinese Film Industry Value Chain The Only Vertically Integrated Chinese Film Company in China
Film Distribution
Movie Theaters
Talent Agency
Film Investment & Production
Vertically integrated business model takes full advantage of the box office growth
80 88 91
154
231
406 456 526
558
745
Domestic Films Exhibited Domestic Films Produced
2008 2009 2010 2011 2012
16 16 12
16 15
4 5 7 7 8 4
10 6 7
14
Bona Films Huayi Films Enlight Films
7
Number of Films Produced Continues to Rise
Source: EntGroup. Note: Bona, Huayi and Enlight film numbers refer to numbers of distributed films in the respective years.
Number of Films Produced in China
35%
15%
1% 4%
9% 6%
32%
14%
3% 6%
4% 4%
20%
7% 5% 6% 5% 4%
23%
17%
8% 7%
3% 2%
14%
8%
14%
7%
1%
21%
2008 2009 2010 2011 2012
Source: EntGroup * SOE - State Owned Enterprise
8
Film Distribution – A Track Record of Industry Leadership
2008 – 2012 Five Year Domestic Film Distribution Market Share Comparison
China Film Group ( * SOE)
HuaXia Film Distribution ( * SOE)
Shanghai Film Group ( * SOE)
Bona’s Business Segments
9
10
Well Positioned in the New Industry Landscape
Hong Kong Productions
Mainland China Productions Co-Productions Foreign Films
Dominant position in Hong Kong director resources
Strong emphasis to develop local directors; 4 projects lined up for 2014; a new priority going forward
LOI with Fox and Universal and 5 ongoing projects; News Corp. strategic investment
Track record of success; Red 2 and Broken City in 2013 pipeline
Unparalleled Access to Content
Fast-Expanding Audience Outreach
Theatrical Exhibition Non-Theatrical Exhibition Foreign Distribution
21 Bona theaters to date, with ~40 expected in 2014 and potential acquisition plans
Long-time partnerships with leading online platforms and new & traditional media
Worked with 133 foreign distributors; potential to greatly expand in North America & Europe in addition to South East Asia
Talent Agency business provides valuable resources to both ends
Distribution business remains Bona’s
strength and enhances profitability
Bona well positioned to benefit from the “hour-glass “ industry landscape
11
Hong Kong Mainland China U.S.
Tsui Hark, Tracks of the Snowy Forrest
Derek Yee, The Third Master’s Sword
Wai Keung Lau, From Vegas to Macau
Jing Wong, From Vegas to Macau
Unparalleled director / creative resources across geographies for upcoming projects
4 ongoing co-production projects with Fox International Productions and 1 with Universal Pictures & Working Title Films:
Disclosed projects include Moscow Mission and one romantic comedy
Potential to produce English language films using Bona’s existing film library
Baoping Cao, Sunspot
Liwen Ma, The A Test
Jiashang Chen, upcoming project
Jianxin Huang, The White-Haired Witch
Projects with other US studios currently under discussion
Extensive Creative Resources
Parks
12
Films
with Over 100 titles and
adding ~10+ titles / year
Access to Content Provides Tremendous Revenue Potential
TV Series
Foreign Box Office
Domestic Box Office
Chinese box office expected to grow at 30% each year
New distribution channels and media platforms increasingly demand content
Huge potential for Chinese language films abroad
Satellite and online sales provide rounds of revenue streams
Sequels Games
Merchandise
Additional Potential
Books
Domestic Copyright
New devices such as SuperTV and BesTV bringing content into homes
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar …
From Vegas
to Macau
13
Strong Pipeline for 2013
Chinese New Year Winter Break
International Women’s Day
International Children’s Day Summer Vacation National Day Holiday
Significantly improved pipeline and planned release windows in 2013 compared to 2012
Christmas Season
VS
Note: Schedule s temporary and up to change.
2014 New Year
Suns-pot
14
National Footprint – Theaters: 21 open; 19 planned – Screens (12/31/2013): 173 – Planned theater openings (1H13): 5 – Theaters Expected by 12/31/14: 40 Geographic Diversification – 11 out of 34 Provinces Modern Asset Base – 8 Screens / Theater Avg. – 100% Stadium Seating – Avg. Seat Capacity ~1,100-1,200
Movie Theater — National Expansion Footprint
8 new locations that started construction in 2013, including Zibo, Taiyuan, Shanghai, Ningbo, Shenzhen, Wuhan, Sanya and Liuzhou
Profitable Theaters New Theaters Newly Signed Projects
Tianjin
Shijiazhuang
Xi’An
Beijing
Chongqing
Wuhan
Changsha
Heifei Shanghai
Shenzhen
Suzhou
Taiyuan
Fenghua Ningbo
Zibo
Dongguan Liuzhou
Sanya
Xiamen
Baotou
Nanjing
15
Theater Coverage – Top 15 Markets in China
Industry BONA
Province Market Share (Opened + Planned)1 Guangdong 14% 3+4
2 Beijing 10% 5
3 Shanghai 8% 2+1
4 Jiangsu 8% 1+2
5 Zhejiang 8% 1+3
6 Sichuan 5% 0+2
7 Hubei 5% 0+1
8 Chongqing 3% 1+1
9 Shandong 3% 0+1
10 Shaanxi 2% 2
11 Hunan 2% 1+1
12 Tianjin 2% 2
13 Anhui 2% 1+2
14 Hebei 1% 1
15 Shanxi 1% 0+1
Others 26%
Top 15 Provinces
74%
Bona has and plans to establish theater coverage in 15 provinces
which account for 74% of China’s total box office receipts
Significant Market Leadership In Our Top 15 Markets
Chinese Box Office by Geography
16
Talent Agency — Important Growth Opportunity
Yuan Quan
Gao Hu
Li Fei’er
Cheng Haofeng
Li Xunru
He Jiayi
Liu Zhibing
Lan Zhenglong
Meng Qian
Lu Siyi
Qi Ji
Wu Chenjun
Wang Zizi Yang Yuyu Fan Yichen *
Qu Gaowei
Zhang Junning Huang Yi
Financial Overview
17
2010
38.4 +64%
5.5 +1,275%
6.0 16%
5.4 100%
5.9 15%
2012
142.3 +13%
(1.6)
4.3 3%
3.2 (82%)
9.1 6%
18
Revenue Growth%∆ Net Income (Loss) Growth%∆ EBITDA % Rev Adj. Net Income (Non-GAAP) Growth%∆ Adj. EBITDA (Non-GAAP) % Rev
(USD MM) 2008
23.4 N/A
0.4 N/A
1.6 7%
2.7 N/A
3.9 17%
2010
52.8 +38%
(4.2)
(3.5) (7% )
10.8 100%
11.5 22%
2011
126.2 +139%
14.6 +248%
18.0 14%
18.2 69%
21.6 17%
2012 performance impacted by release timing and performance of key films; rebound expected in 2013
Financial Overview: 5-Year P&L
Business Diversification Expected to Support Steadier Future Growth
1.01.2
0.60.2 0.2 0.2
2008 2009 2010 2011 2012 1Q2013
2Q2013
3Q2013
3.3 3.5 2.06.7
6.4 0.83.3
4.9
35.9%
21.8% 20.8% 13.2%8.7%
4.8%
43.8%36.2%
2008 2009 2010 2011 2012 1Q 2013 2Q 2013 3Q 2013
6.0 14.6
23.6
8.0 9.7 8.7
53.1%
56.1%
56.6%57.2% 57.8%
57.4%
2008 2009 2010 2011 2012 1Q 2013 2Q 2013 3Q 2013
19 19
Segment Gross Profit and Margin
Source: Audited financial statements from 2008 to 2012.
Segment Gross Profit Breakdown (US$ mm) and Margin (%)
Film distribution
Film investment and production
Movie theater Talent agency
N/A
% of Seg, Profit 31.2% 20.4 % 16.5% 11.2% 11.5% 5.5% 21.1% 24.7%
% of Seg, Profit N/A N/A 23.5% 24.6% 42.2% 55.1% 62.5% 43.5% % of Seg, Profit N/A 1.8% 3.8% 2.1% 1.1% 1.1% 1.0% 0.9%
N/A
19
% of Seg, Profit 68.8% 77.8% 56.2% 62.1% 45.1% 38.3% 15.4% 30.9%
N/A 0.3
Balance Sheet Review Balance Sheet Overview
20
Bank Borrowing US$73.5 M US$50.6 M US$22.9 M
Total Amount Due by Dec 31, 2013 Due by Dec 31, 2014
Other Borrowing US$7.7 M US$7.7 M --
(USD mm) 30-Sep-13 30-Jun-13 31-Mar-13 31-Dec-12
Cash & Cash Equivalents* 21.4 28.9 29.4 23.2
Bank Borrowing 73.5 56.5 36.2 30.6 Other Borrowing 7.7 6.3 7.9 8.7
Total Debt 81.2 62.8 44.1 39.3 Net Debt 59.8 33.9 14.7 16.1 LTM Adjusted EBITDA 11.0 8.5 7.2 9.1 Total Assets 400.8 336.4 322.8 316.6 Total Liabilities 200.4 142.2 131.8 126.9 Debt Asset ratio 0.5 0.4 0.4 0.4
Diversified Debt Structure Maximizes Flexibility
*Note: Does not include restricted cash.
21
Seasoned Senior Management Team
Leaders in Film and Entertainment in China and Internationally
Production
Distribution Theater Network
22
Key Takeaways: The Bona Advantage
Integrated business model creates substantial synergies
Significant market potential and opportunities
Unparalleled creative / production resources across geographies
Agenda
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[ C L I E N T N A M E ]
THANK YOU For Additional Information, Please Contact:
Lingzi Gui Brandi Floberg / Lee Roth
Bona Film Group Limited The Piacente Group
Tel: + 86-10-5928-3663 212-481-2050
Email: [email protected] Email: [email protected]