Interim Results 2003Interim Results 2003

Clear Media

üü HighlightsHighlights

üü Review of FinancialsReview of Financials

üü Review of Strategy & ExecutionReview of Strategy & Execution

üü Questions & AnswersQuestions & Answers

AgendaAgenda

1H20031H20031H20021H2002

67%67%65%65%OccupancyOccupancy17,48817,48814,67214,672PanelsPanels

* Time weighted* Time weighted

What is Different ?What is Different ?

154154193193A/R *A/R *

DaysDaysDaysDays

15%15%7.5%7.5%Corporate Income Tax RateCorporate Income Tax Rate

25,07125,071(158,225)(158,225)Free Cash FlowFree Cash Flow ((‘‘000)000)

Into our 6Into our 6thth Consecutive Year of GrowthConsecutive Year of Growth

+21%+21%37m37mEBITEBIT

+1%+1%5.42 cents5.42 centsEPSEPS+1%+1%27m27mNet ProfitNet Profit

+21%+21%89m89mEBITDAEBITDA+11.3%+11.3%218m218mTurnoverTurnover

% Change% ChangeHK$HK$1H 20031H 2003

Accelerate our Industry LeadershipAccelerate our Industry Leadership…… OutOut--perform All our Competitorsperform All our Competitors

% Change% ChangeHK$HK$’’000000

+21%+21%50,91250,912EBITEBIT+6%+6%39,99339,993Net Profit Net Profit

+12%+12%209,919209,919TurnoverTurnover

+21%+21%99,04999,049EBITDAEBITDA

Bus SheltersBus SheltersProfit from Core ProductsProfit from Core Products

1H20021H2002 1H2003 1H2003 EBITDA MarginEBITDA Margin 44%44% 47% 47% Net Profit MarginNet Profit Margin 20%20% 19%19%

Focus on Growth Driver: ““ RevenueRevenue ””

53%53%Zhong Zhong ShanShan40%40%KunmingKunming

64%64%GuangzhouGuangzhou

116%116%ShenyangShenyang

34%34%NanjingNanjing

51%51%ChengduChengdu

215%215%HaHa’’erbinerbin269%269%ShijiazhuangShijiazhuang

2003 YOY%2003 YOY%

Focus on Growth Driver: ““OccupancyOccupancy ””

92%92%69%69%HaHa’’erbinerbin69%69%57%57%KunmingKunming83%83%60%60%NanjingNanjing84%84%82%82%HangzhouHangzhou87%87%80%80%ChengduChengdu

69%69%62%62%GuangzhouGuangzhou70%70%74%74%BeijingBeijing73%73%68%68%ShanghaiShanghai1H20031H20031H20021H2002

Focus on Growth Driver: ““ PricingPricing ””

+5%+5%

+27%+27%

+45%+45%Nan ChangNan Chang% Change% Change

+5%+5%XianXianNanjingNanjing

+27%+27%FuzhouFuzhou

+19%+19%HangzhouHangzhou+16%+16%ChangshaChangsha

+20%+20%ChengduChengduWuxiWuxi

1H 2003 VS 2H 20021H 2003 VS 2H 2002

Potential for Price Increase Potential for Price Increase in select 1in select 1stst & Mid& Mid--tier citiestier cities

Focus on Growth Driver: ““Market Share Market Share ““

* 3* 3--RingRing

100%100%100%100%XiXi’’anan90%90%90%90%NanjingNanjing78%78%78%78%KunmingKunming96%96%95%95%HangzhouHangzhou

98%98%96%96%GuangzhouGuangzhou98%98%98%98%ShanghaiShanghai74%74%41%41%Beijing *Beijing *June 2003June 2003Dec 2002Dec 2002

36%36%

26%26% 29%29%

9%9%

OthersOthersBillboardsBillboards TransitTransit Street FurnitureStreet Furniture

Lead the Largest & Fastest Growing Outdoor SectorLead the Largest & Fastest Growing Outdoor Sector

34%34%

23%23%

35%35%

7%7%

2001

2002

天時天時

地利地利 人和人和

GuangzhouGuangzhou

üü Positive Regulatory Momentum Continues Positive Regulatory Momentum Continues ……

üü Solid Economic Rebound Solid Economic Rebound ……

üü Strong Order Book Strong Order Book …… 90%90%üü ““ScalableScalable”” Model Delivers Results Model Delivers Results ……

ØØ SG&ASG&A --12%12%ØØ @ Unit Direct Cost@ Unit Direct Cost --12%12%

üü 3Q Trending 25% YOY Growth 3Q Trending 25% YOY Growth

天時天時

地利地利

人和人和

2003 Growth Drivers2003 Growth Drivers

üüWTO & CEPA fuels ad spend growthWTO & CEPA fuels ad spend growth

üü Beijing Olympic multiBeijing Olympic multi--year marketing launchyear marketing launch

üü Positive regulatory momentum benefits Clear MediaPositive regulatory momentum benefits Clear Media

üü Select earningSelect earning--accretive outdoor opportunitiesaccretive outdoor opportunities

Medium Term ProspectsMedium Term Prospects

Review of FinancialsReview of Financials

Financial PerformanceFinancial Performance

+21%+21%37,39337,39331,04031,040EBITEBIT

27,03727,037

73,30473,304

195,908195,9081H20021H2002

+1%+1%27,19927,199Net ProfitNet Profit

88,64688,646

218,064218,0641H20031H2003

+21%+21%EBITDAEBITDA

+11%+11%RevenueRevenue% Change% Change

1H20021H2002 1H20031H2003EBITDA MarginEBITDA Margin 37%37% 41%41%Net Profit MarginNet Profit Margin 14%14% 13%13%

37,39337,393(7,584)(7,584)(2,703)(2,703)(3,232)(3,232)50,91250,912EBITEBIT

218,064218,0643,1273,1275,0205,020209,917209,917RevenueRevenue

27,19927,199(7,584)(7,584)(2,383)(2,383)(2,827)(2,827)39,99339,993Net ProfitNet Profit

88,64688,646(7,584)(7,584)(1,143)(1,143)(1,676)(1,676)99,04999,049EBITDAEBITDA

TotalTotalHQHQUnipoleUnipolePOSPOSBus Bus ShelterShelter

Performance by All ActivitiesPerformance by All Activities

Bus Shelters96%

POS2%

Unipole2%

Bus Shelters96.3%

POS2.3%

Unipole1.4%

1H20021H2002 1H20031H2003

Revenue By ProductsRevenue By Products

Beijing18%

Shanghai17%

Guangzhou12%Shenzhen

7%

Others46%

Beijing15.0%

Shanghai13.0%

Guangzhou17.0%

Shenzhen6.0%

Others49.0%

1H20021H2002 1H20031H2003

Revenue By LocationRevenue By Location

1H 20021H 2002 1H20031H2003Telecom Telecom 23% 23% 24%24%Beverage Beverage 18% 18% 18%18%Consumer Product Consumer Product 15% 15% 17%17%IT IT 3% 3% 8%8%PharmaceuticalsPharmaceuticals 1% 1% 7%7%FinanceFinance 2%2% 3%3%EntertainmentEntertainment 9% 9% 3%3%Electric AppliancesElectric Appliances 1%1% 3%3%FoodFood 3%3% 3%3%TobaccoTobacco 10%10% 2%2%

Turnover By IndustryTurnover By Industry

84848484Total ExpensesTotal Expenses17172121SG & ASG & A24242222Amortisation Amortisation + Depreciation+ Depreciation43434141SubtotalSubtotal9999-- Sales & Cultural TaxSales & Cultural Tax6655-- ElectricityElectricity6688-- MaintenanceMaintenance22221919-- RentalRental

Direct CostsDirect Costs1H 20031H 20031H 20021H 2002

% Turnover% TurnoverSignificant Cost SavingSignificant Cost Saving

1H 20021H 2002 1H 20031H 200333rdrd Party Receivables Party Receivables 102,236 102,236 161,291161,291Turnover Day 193 days Turnover Day 193 days 154days154days

Due from WHA Due from WHA 98,920 98,920 46,47446,474% Sales from WHA % Sales from WHA 28.4%28.4% 7.6%7.6%

Accounts Receivable on TrackAccounts Receivable on Track

1H20021H2002 1H20031H2003Cash flow from operating activitiesCash flow from operating activitiesCash generated from operations Cash generated from operations 11,839 11,839 45,47545,475Interest paid Interest paid (4,703) (4,703) (3,750) (3,750) Income tax paid Income tax paid (4,445) (4,445) (4,182)(4,182)Net cash from operating activities Net cash from operating activities 2,691 2,691 37,54337,543Cash outflows from investing activitiesCash outflows from investing activities ( 221,714) ( 221,714) (56,574) (56,574) Cash outflows from financing activitiesCash outflows from financing activities (265,897) (265,897) (11,275)(11,275)Net cash & cash equivalents Net cash & cash equivalents

at the beginning of period at the beginning of period 809,411 809,411 267,158267,158at the end of period at the end of period 324,491 324,491 236,852236,852

Substantial Improved Cash FlowSubstantial Improved Cash Flow

11stst Time Positive Free Cash FlowTime Positive Free Cash Flow

25,07125,071(158,225)(158,225)Free Cash FlowFree Cash Flow

(6,122)(6,122)(2,708)(2,708)-- TaxTax

1,4391,439(230,260)(230,260)

73,30473,3041H20021H2002

(1,194)(1,194)-- Net Interest Net Interest Income/ (Expenses)Income/ (Expenses)

(56,259)(56,259)

88,64688,6461H20031H2003

-- CAPEXCAPEX

EBITDAEBITDA

FY2002FY2002 1H20031H2003

Cash & cash equivalents Cash & cash equivalents 267,158 267,158 236,852236,852Total assets Total assets 1,525,052 1,525,052 1,569,8061,569,806

Total debts (net of pledged deposit) Total debts (net of pledged deposit) 17,435 17,435 9,4239,423Total shareholdersTotal shareholders’’ equity equity 1,209,750 1,209,750 1,236,8831,236,883

Strong Balance SheetStrong Balance Sheet

Review of Strategy & Review of Strategy & ExecutionExecution

üü Continuing 2,000 units of media resources expansion per Continuing 2,000 units of media resources expansion per yearyearØØDeveloping Taxi stands advertising in ShanghaiDeveloping Taxi stands advertising in Shanghai

üü Monitoring acquisition opportunitiesMonitoring acquisition opportunitiesØØAcquisition of bus shelters further increases market Acquisition of bus shelters further increases market

shares to 74% in Central Beijingshares to 74% in Central Beijing

üü Improving quality of network by developing key locationsImproving quality of network by developing key locations

üü Extending contract period to enhance return to shareholdersExtending contract period to enhance return to shareholdersØØRemaining contract life extended to 8.9 yearsRemaining contract life extended to 8.9 years

Securing Supply Securing Supply …… Ensuring Healthy GrowthEnsuring Healthy Growth

üü 4A Sales Center enhance professional services4A Sales Center enhance professional services

üü Sales Centers strengthen customers supportSales Centers strengthen customers support

üü New Flexible Pricing System offers visibilityNew Flexible Pricing System offers visibility

üü Develop & Improve Sales Develop & Improve Sales OrganisationOrganisation

Improving Sales & After Sales Services Improving Sales & After Sales Services ……to Facilitate Demandto Facilitate Demand

üü Sales reboundsSales rebounds

ØØ 90% of 03 sales target already booked 90% of 03 sales target already booked ……

üü Continue & streamline operations to improve Continue & streamline operations to improve efficienciesefficiencies

Looking into 2Looking into 2ndnd Half Half ……

12.8%12.8%10.0%10.0%16.4%16.4%--10.9%10.9%3.7%3.7%4.8%4.8%4.6%4.6%6.7%6.7%ROEROE

Local MediaLocal MediaGlobal PeersGlobal Peers

1.91.9

--

--

3.93.9

14.414.4

LamarLamar

5.95.9

--

--

--

--

PhoenixPhoenix

1.71.7

0.80.8

26.026.0

0.60.6

9.89.8

Clear Clear Clear MediaMediaMedia

5.25.219.919.913.413.48.28.214.814.8Est Est EV/EBITDAEV/EBITDA

1.31.31.31.30.70.73.33.31.41.4Est Est EV/EBITDA/GEV/EBITDA/G

2.42.43.53.54.14.11.91.91.81.8Price/ BookPrice/ Book

1.61.61.71.72.52.54.34.3--Est.PEGEst.PEG

19.019.035.035.024.924.932.432.434.334.3Est. PEEst. PE

ii--cablecableSCMPSCMPTVBTVBJC JC DecauxDecaux

Clear Clear ChannelChannel

Valuation Compares Favorably w/ Market PeersValuation Compares Favorably w/ Market Peers

* Based on closing prices on 25 August 03, and Bloomberg IBES es* Based on closing prices on 25 August 03, and Bloomberg IBES estimatestimates

Thank you!Thank you!