Growing to the next level

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| October 15, 2015 |

October 15, 2015

Growing to the next level

Capital Markets Day 2015

Jan Frouman

Content Production & Global Sales

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Red Arrow cordially welcomes you to today‘s presentation

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Red Arrow showing aggressive growth

Founded 2010

Footprint in key P7S1 territories established through targeted acquisitions and start-up investments

Since 2012

Strategic focus on mature businesses and key TV markets (USA & UK)

Since 2013

Further geographic expansion/

development through creative partnerships

2014 – 2019

Build scale through identified growth initiatives:

•

Organic growth

•

M&A to continue to build scale across key markets (US, UK)

•

Focus on English-language scripted products

•

Strategically launch and own “big swing” formats

•

Develop ancillary revenues through digital and brand monetization

External revenues (EUR m) Rec. EBITDA (EUR m)

202

124 95

38

11 19 10 4

2012

2011 2013 2014

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CMD target for 2018 already exceeded

150% of our 2018 growth target already achieved by 2015 …

Growth 2012 – H1 2015

Current 2018 growth target

vs. 2012

… hence we are raising our 2018 target by EUR 175m

New 2018 growth target

100 275

[external revenue growth, in EUR m]

Key drivers for targeted growth:

• Growing scripted IP portfolio and increasing market demand

• Creation of traveling formats, with ancillary rights potential

• Growing digital presence

• Value accretive bolt-on M&A transactions +175m

100

150

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Continuous improvement in key KPIs

Note: Shows in the catalogue and territories sold to are cumulative 2010 to H1 2015; Territories include sovereign countries and administrative territories; Returning shows with revenues booked in H1 2015

800+

vs. 600+ in H1 2014

46%

vs. 37% in H1 2014

200+

vs. 180 in H1 2014

Number of returning shows

Shows in the catalogue Returning

shows’ rate

Territories sold to

68

vs. 49 in H1 2014

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US continues to be the largest TV production market

Source: Ibisworld“Television Production in the US: Market Research Report” (August, 2015); FX/Nielsen Total est.

production revenues

USD 35bn

Production businesses

~6,700

Annual growth 2010-2015

0.8%

Outlets commissioning

scripted content

~60+

Employment

~120,000

Original scripted series on TV

in 2015

~400

Consolidation has led to more studio attention on non-scripted shows

Proliferation of giant OTT platforms drives growing demand for scripted content

Improving infrastructure and multiple distribution platforms drive digital consumption High market potential:

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USA accounts for 67% of Red Arrow’s global revenues

1) H1 2015 revenue share of Content Production & Global Sales; only relates to revenues booked in H1 2015 2) Partnerships

China

UAE IL

DK/NO

2)

UK D/AU

2) 2)

67%

USA

16%

4%

3%

10%

2)

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Red Arrow’s portfolio is in line with current US content trends …

Source: P7S1 Format Scouting (briefings at MIP, Natpe, RealScreen, etc.)

MILLENIALS

E.g.: Ctrl Freaks, My Selfie Life

SOCIAL EXPERIMENTS

E.g.: Married At First Sight, Seven Year Switch, The Day The Cash Came

PANEL

E.g.: A League Of Their Own, Fake Reaction, Safe Word

SCRIPTED

E.g.: Bosch, Odd Mom Out, Donny!, Cleverman, Partners in Crime

REAL REALITY

E.g.: Real Men, The Last Alaskans

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… catering to a large array of leading US broadcasters

Note: % of total US production revenues; Includes FY 2015 estimates for US-based production companies (Kinetic Content, Left Right, Half Yard, Fabrik Entertainment)

0% 5% 10% 15% 20% 25%

OTHER

Producing for

>30

US broadcasters

Limited dependency

on any single outlet

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Group-wide collaboration enables US rights retention

Note: Sales include format and ready-mades Denmark

130+ countries, incl.

Denmark Norway

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Key market trends

• Market consolidation continues (e.g. ITV/Talpa, Endemol/Shine)

• Larger players struggling with aging hits and organizational upheaval

• Small- to mid-size indie M&A options continue to surface in the US

• Many talented executives available for start-ups

• Scripted appetite is growing

• Distributors taking more investment risk to control IP

• Digital market highly active, yet still experimental

• Market valuations remain exceedingly high

• Monetization models remain challenging and fluid

Global scale Rights retention Digital expansion

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Our three key strategic initiatives

Global scale - Expansion of English-language scripted catalogue

• Investment in scripted IP

• Attractive home for leading US show-runners, creators and talent

• Support P7S1 channels with own produced content

Digital expansion

• Establish an L.A. based digital content production company

• Leverage available IP and talent relationships within RA and P7S1 Rights retention - Creation of traveling formats

• Value accretive M&A transactions in non-scripted genres

• Investments in non-scripted development partnerships

• Strategic deficit funding

• Development of formats with strong ancillary revenue potential

1

2

3

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Drive scale with smart US-centric M&A

1 2 3

M&A approach: Majority and minority investments with path to control and 5-7 year partnership model;

staggered management share sale model to mitigate continuity risk Bolt-on non-scripted and scripted acquisitions in key markets

(US and UK) with top creative talent who fit culturally

Deals based on accretive valuations and margins, and long-term/aligned partnership models

To the extent possible, drive genre and customer breadth

Identify succession plans for key assets in key markets

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Recent investments in English-language scripted IP

1 2 3

New high-stakes genre drama for ABC Australia and SundanceTV US

New scripted comedy series starring

real-life TV personality Donny Deutsch

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Smart format investments & rights-friendly market launches

1 2 3

Major new weight loss reality format for US network ABC

US producer Half Yard leverages

rights-friendly UK market

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Newly established US digital hub to drive RA's global digital reach

Driving Red Arrow’s digital content strategy and leveraging existing IP

Building owned and operated media brands and underlying verticals (e.g. Wedding space via Half Yard Productions)

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Unlike CDS and Studio71, Ripple Entertainment is not

an aggregator, but will complement the P7S1 digital strategy by:

Driving established and next-generation talent access

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1 2 3

Cost-effective L.A. based digital content production hub run by leading industry experts

Gayle Gilman and Jason Ziemianski

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Strong revenue and profitability growth highlight upward momentum

Group’s creative output achieving international success and creative recognition Red Arrow has become a global player with more than two-thirds of its business originating from the US

Clear and consistent strategy focused on US growth, smart M&A and expanding talent pool

Summary