2002 Annual Results 2002 Annual Results PresentationPresentation

Clear Media

AgendaAgenda

• HighlightsHighlights

• Review of FinancialsReview of Financials

• Review of Strategy & ExecutionReview of Strategy & Execution

55thth Year of Growth Year of Growth2002

HK$’000 % Change

Revenue 426,917 +20%

EBITDA 180,222 +17%

Net Profit 71,106 +21%

EPS 14.2cents +21%

2002 EBITDA Margin 42% Net Profit Margin 17%

Five Consecutive Years of GrowthFive Consecutive Years of Growth

0

50

100

150

200

250

300

350

400

450

1998 1999 2000 2001 2002

Th

ou

sa

nd

s

Revenue EBITDA Net Profit

‘000

Sustainable Margin

EBITDA 42% Net Profit 17%

Revenue 403,774 +18%

EBITDA 194,021 +22%

Net Profit 90,420 +33%

Bus SheltersBus Shelters

Revenue 16,220 +382%

EBITDA 4,419 +517%

Net Profit 1,936 +367%

Point-of-SalePoint-of-Sale

2002 HK$’000 % Change

Profit from Core ProductsProfit from Core Products

Focus on Growth Driver: “ “

RevenueRevenue ” ” 2002 YOY%

Guangzhou +37%

Shenzhen +29%

Chengdu +53%

Xian +46%

Hangzhou +27%

Shenyang +84%

Cheungchun +24%

Total +20%

Focus on Growth Driver:

““OccupancyOccupancy ”” 2001 2002

Beijing 69% 86%

Shenzhen 77% 87%

Chengdu 71% 85%

Hangzhou 80% 84%

Nanjing 64% 71%

Chongqing 68% 79%

Focus on Growth Driver: ““Pricing Pricing PowerPower ””

Market ShareMarket Share

% of Panels % of AD$

Beijing 41% 60%

Premium pricing VS local competitors

• Network expansion

29 cities 30 cities

12,000 17,000 panels

• Strengthen sales force

Add 83 professionals

6 new sales centres

• Broaden point-of-sale network

Invest for the FutureInvest for the Future

2003 Growth Drivers2003 Growth Drivers

External:External:

• WTO … Olympic … Shanghai EXPO …

• Brand(s) Consumers(s)

Internal:Internal:

• Innovative “packages” Advertisers’ needs

• Broaden product portfolio

• Improve asset yields

Review of FinancialsReview of Financials

Performance by All ActivitiesPerformance by All Activities

Bus Shelter

POS

Billboard

HQ

Total

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Revenue 403,774 16,220 6,922 426,916

EBITDA 194,021 4,419 (2,275) (15,943) 180,222

Net Profit 89,643 1,936 (4,530) (15,943) 71,106

Performance by ActivityPerformance by Activity

2001 2002

Total Total % Change

Revenue 342,181 403,774 +18%

EBITDA 159,588 194,021 +22%

Net Profit 68,152 89,643 +33%

Bus Shelters Growth Albeit Bus Shelters Growth Albeit LoweringLowering Receivables Receivables

EBITDA Margin 47% 48% Net Profit Margin 20% 22%

Revenue By LocationRevenue By Location

2001 2002

Beijing 20%

Guangzhou 13%

Shanghai19%Shenzhen

6%

Others 42%

Beijing 19%

Guangzhou 15%

Shanghai14%

Shenzhen 7%

Others 45%

Market Share in Top Ten CitiesMarket Share in Top Ten Cities

2001 2002

Shanghai 97% 98%

Guangzhou 54% 96%

Beijing 51% 41%

Shenzhen 43% 43%

Chengdu 45% 68%

Nanjing 76% 90%

Xian 97% 100%

Hangzhou 94% 95%

Wuhan 44% 59%

Kunming 85% 78%

Based on the number of panels

Market Shares Increased in Key CitiesMarket Shares Increased in Key Cities

Turnover By IndustryTurnover By Industry2001 2002

Telecom 20% 24%Beverages 10% 18%Consumer Products 16% 14%Tobacco 13% 7%OTC Pharmaceutical 10% 6%Leisure 3% 6%Finance 4% 3%Food 3% 3%IT 6% 3%Home Appliances 7% 2%

Cost BreakdownCost Breakdown % of Revenue

2001 2002

Direct operating costs- Rent - Maintenance- Electricity- Sales and culture taxes

Total

18%

7%

5%

8%

38%

19%

7%

6%

4%

36%

Amortization of concession rights & point-of-sale

18% 21%

Selling, general & administrative expenses

Depreciation of fixed assets

19%

1%

22%

1%

Total Expenses 76% 80%

Accounts Receivable Back on Accounts Receivable Back on TrackTrack

2001 1H2002 2002

3rd Party

Receivables

(HK$’000)

85,493 102,236 113,612

Turnover Day 147 193 143

Due from WHA

(HK$’000)

52,581 98,920 49,804

% of sales from WHA

25% 16%

Cash Flow DataCash Flow Data2001

HK$’0002002

HK$’000

Cash flows from Operating Activities

- Cash generated from operations 247,894 100,575

- Interest paid (21,757) (8,625)

- Income taxes paid (1,631) (7,624)

224,506 84,326

Cash flows from Investing Activities

- Purchase of fixed assets (19,896) (17,280)

- Additions to concession rights (226,199) (353,819)

- Interest received 5,165 11,807

(240,930) (359,292)

Cash flows from Financing Activities 758,433 (267,287)

Net (decrease)/increase in cash & cash equivalents 742,009 (543,638)

Net cash & cash equivalents at beginning of year 67,402 809,411

Net cash & cash equivalents at end of year 809,411 267,158

Balance Sheet HighlightsBalance Sheet Highlights

2001

HK$’000

2002

HK$’000

Cash and cash equivalents

809,411 267,158

Total assets 1,846,593 1,525,052

Total debt1 255,947 10,794

Total shareholders’ equity

1,129,798 1,209,750

1Net of pledged time deposits

Review of Strategy & ExReview of Strategy & Executionecution

Investing for Future GrowthInvesting for Future Growth

• Total number of panels increased to 17,210

• Total number of panels added in 2002

Tier 1 cities +1,666 +36%

Mid Tier cities +3,846 +55%

Total +5,512

• Continue to increase 2,000 panels in 2003

2001 2002 % Change

Capex (HK$’000) 271,300 309,227 +14%

Bus SheltersBus Shelters

New Sales Initiatives..New Sales Initiatives..

1. 5 new sales centers to further penetrate market

2. New sales organization to strengthen sales

force, & improve efficiency

3. New interactive pricing system to offer

flexibility to advertisers

4. Innovative sales packages to satisfy

advertisers’ needs

Proactive Initiatives …Proactive Initiatives …

Sales CentreRegional Centre

Shenyang

Beijing

Xian

Chengdu Wuhan Shanghai

Guangzhou

Shenzhen

New Sales Centers to Enhance Customer New Sales Centers to Enhance Customer SupportsSupports

QingdaoQingdao

• Continue to negotiate with authorities to reduce costs

• Replace with cost-effective quality panel materials

• Further improve cash collection

• Benchmark SG & A expenses

Continue to Improve Operating Continue to Improve Operating EfficiencyEfficiency

• Complementary to bus shelter advertising

• Increased 48% advertising space to 4,200M

• Built: 400 panels in Lian Hua supermarket stores

175 panels in Jie Qiang supermarket stores

• In negotiation with supermarket chains for additional space

2001 2002Capex (HK$’000) 22,438 8,336

2

Investing for Future GrowthInvesting for Future GrowthPoint-of-SalePoint-of-Sale

2003 Going Forward …2003 Going Forward …

Thank you!Thank you!

Clear Media