Etisalat Group. Q Results Presentation. 29th July 2015, Abu Dhabi

Transcription

1 Etisalat Group Q Results Presentation 29th July 2015, Abu Dhabi

2 Disclaimer Emirates Telecommunications Corporation and its subsidiaries ( Etisalat or the Company ) have prepared this presentation ( Presentation ) in good faith, however, no warranty or representation, express or implied is made as to the adequacy, correctness, completeness or accuracy of any numbers, statements, opinions or estimates, or other information contained in this Presentation. The information contained in this Presentation is an overview, and should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Where this Presentation contains summaries of documents, those summaries should not be relied upon and the actual documentation must be referred to for its full effect. This Presentation includes certain forward-looking statements. Such forward looking statements are not guarantees of future performance and involve risks of uncertainties. Actual results may differ materially from these forward looking statements. 2

3 1. Business Overview Ahmad Julfar Chief Executive Officer Etisalat Group

4 Q Highlights Corporate Ownership Continued strong performance in domestic market Launched 4G License in Morocco Strategic Progress Optimizing International portfolio Maintained Credit Ratings Subscribers (1) 168 million Revenue Strong growth yoy EBITDA Double digit growth yoy Performance Capex 16% of revenue Dividends AED 3.5 billion +26% yoy (1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, fixed broadband and WLL lines generating revenue during the last 90 days. 6

5 Q Highlights Revenue AED 13.3 billion EBITDA AED 6.8 billion Net Profit AED 1.5 billion Financial Performance Capex AED 2.2 billion EBITDA Margin 51% Profit Margin 12% Revenue Growth 8% - 10% EBITDA Margin 47%-48% Capex/ Revenue 17%-18% Ahead of our Guidance 6

6 2. Financial Overview Serkan Okandan Chief Financial Officer Etisalat Group

7 Etisalat Group Q2 14 Q1 15 Q2 15 QoQ Growth YoY Growth Subs (m) (1) % -8% Revenue (AED m) 12,579 12,906 13,303 +3% +6% EBITDA (AED m) 5,866 6,569 6,843 +4% +17% EBITDA Margin 47% 51% 51% +1pp +5pp Net Profit 2,507 2,177 1,534-30% -39% Net Profit Margin 20% 17% 12% -5pp -8pp EPS (AED) % -39% Highlights Subscriber growth Y/Y impacted by cleansing of subscriber base Robust Y/Y revenue growth led by performance of domestic operations and consolidation of Maroc Telecom Steady improvement in EBITDA level in absolute terms due to strong performance in the UAE and consolidation of Maroc Telecom EBITDA margin maintained at above 50% level Net profit impacted by forex losses, lower share of results, and higher depreciation, amortization and royalty charges (1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, fixed broadband and WLL lines generating revenue during the last 90 days. 7

8 Group Revenue Revenue (AED m) and YoY growth (%) Sources of Revenue growth Q2 15 vs Q2 14 (AED m) ,579 12,908 13,307 27% 30% 12, (119 ) (199) (513) 13,307 6% UAE 57% Revenue YoY growth % Domestic vs. Int l Int'l 43% Revenue by Cluster (Q2 15) International Others 7% MT Group 55% Egypt 19% Pakistan 19% Q2'14 UAE MT Group Egypt Pakistan Others Q2'15 Highlights In Q2 15, consolidated revenue grew Y/Y by 6% attributed to strong performance in the UAE and consolidation impact of Maroc Telecom Revenue from international operations contributed 43% to consolidated revenues mainly due to: Consolidation impact of Maroc Telecom in Q for 3- month period Revenue growth in Egypt impacted by currency devaluation Revenue growth in Pakistan impacted by stiff competition in the mobile segment Revenue growth in others reflects the consolidation of Atlantique Group s operations under Maroc Telecom Note: Others consist of domestic non-telecom operations and other international operations. 8

9 Group EBITDA EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth Q2 15 vs Q2 14 (AED m) 5,866 6,577 6,843 5, (55) (90) 352 6,843 47% 51% 51% EBITDA EBITDA Margin Q2'14 UAE MT Group Egypt Pakistan Others Q2'15 EBITDA by Cluster (Q2 15) Highlights UAE 61% Domestic vs. Int l Others 2% Int'l 37% International MT Group 65% Others 3% Egypt 17% Pakistan 15% In Q2 15, consolidated EBITDA increased Y/Y by 17% to AED 6.8 bn EBITDA margin improvement Y/Y due improved revenue trends in the domestic market and full consolidation of Maroc Telecom EBITDA of consolidated international operations increased Y/Y by 7% resulting in 37% contribution to Group EBITDA Consolidation of Maroc Telecom boosted EBITDA Egypt impacted by currency depreciation and higher network costs Pakistan impacted by lower revenue due to decline in international incoming traffic Note: Others consist of domestic non-telecom operations and other international operations, etc. 9

10 Group CAPEX CAPEX (AED m) & CAPEX/Revenue Ratio (%) Sources of CAPEX growth Q2 15 vs Q2 14 (AED m) 3, % 16% 1,269 2,182 16% 3,413 (96 ) (1,680) (149) 2,182 10% 14% UAE 41% CAPEX Domestic vs. Int l CAPEX/Revenue CAPEX by Cluster (Q2 15) Int'l 59% International MT Group 56% Others 5% Egypt 15% Pakistan 24% Q2'14 UAE MT Group Egypt Pakistan Others Q2'15 Highlights Capex decreased Y/Y by 36% resulting in Capex/Revenue ratio of 16%. Capital spending in the UAE increased by 83% representing a 12% capex/revenue ratio. Capex spend aimed at network modernization and enhancement of elife product portfolio Capital expenditure in international operations decreased Y/Y by 55% and contributed 49% of consolidated capex driven by 4G License acquisition in Maroc Telecom Note: (1) Capex/revenue ratio in Q excluding 3G license acquisition and 2G license renewal in Pakistan is 16%; Capex/revenue ratio in Q excluding 4G license acquisition in Morocco is 14%. (2) Others consist of domestic non-telecom operations and other international operations, etc. 10

11 Group Balance Sheet & Cash Flows Balance Sheet (AED m) Q4 14 Q2 15 Borrowings (1) by Operation Q2 15 (AED m) Cash & Cash Equivalent (1) 18,543 18,277 Total Assets 129, ,780 15,379 Total Debt (1) 22,229 23,898 Net Cash / (Debt) (3,686) (5,620) 4,800 Total Equity 60,927 58,604 2,382 1, Group MT Egypt Pakistan Sri Lanka Net cash position (AED m) H1 14 H1 15 Debt (1) by Source Q2 15 (AED m) Operating 5,145 5,449 14,815 Investing (19,867) (3,292) Financing 14,749 (2,381) Net change in cash 24 (224) 8,389 Effect of FX rate changes 72 (40) Ending cash balance 15,547 18, Bonds Bank Borrowings Vendor Financing Others (1) Balances excludes discontinued operations 11

12 Consistent Track Record of Shareholder Remuneration Interim Dividends and Dividends Per Share Interim Dividend Payout Ratio % % 53.8% 72.8% 61.1% Interim Dividends (AED bn) DPS H1'15 Payout Ratio Interim Dividend & Earnings Per Share (AED) Highlights H1'11 H1'12 H1'13 H1'14 H1'15 DPS EPS (1) Etisalat s Board approved 40 fils per share to be distributed from 18 August 2015 to the shareholders registered in the shareholders register on 9 August 2015 (1) Represents diluted earnings per share 12

13 Key Markets Financial Performance 13

14 UAE: Strong operating and financial performance Q2 14 Q1 15 Q2 15 QoQ Growth YoY Growth Subs (1) (m) % 0% Revenue (AED m) 6,834 7,221 7,479 +4% +9% EBITDA (AED m) 3,860 4,060 4,195 +3% +9% EBITDA Margin 56% 56% 56% 0pp 0pp Net Profit 1,707 1,807 1,864 +3% +9% Net Profit Margin 25% 25% 25% 0pp 0pp CAPEX % +83% CAPEX/Revenue 7% 9% 12% +3pp +5pp Highlights Subscribers growth was impacted by cleansing of subscriber base Double digit growth in the lucrative post-paid and elife segments; Revenue growth due to increase in mobile and fixed broadband and higher terminal sales; Better EBITDA level due to higher revenue and better cost controls; Maintained high EBITDA margin level; Higher net profit due to higher EBITDA level that was partially offset by higher depreciation and royalty charges; Higher capital spending with focus on network modernization and enhancement of elife product portfolio (1) Subscriber numbers calculated as aggregate number of GSM, fixed, fixed broadband and elife lines generating revenue during the last 90 days. 14

15 UAE: Strong customer acquisition in post-paid and elife Mobile Subs (m) & ARPU (1) (AED) Fixed Subs (m) & ARPL (2) (AED) Postpaid Prepaid Blended ARPU Fixed ARPL elife Subs Double & Triple-Play (m) Fixed Broadband (3) Subs (m) E-Life (2P & 3P) ARPL Fixed BB ARPL (1) Mobile ARPU ( Average Revenue Per User ) calculated as total mobile voice, data and roaming revenues divided by the average mobile subscribers. (2) ARPL ( Average Revenue Per Line ) calculated as fixed line revenues divided by the average fixed subscribers. (3) Fixed broadband subscriber numbers calculated as total of residential DSL (Al-Shamil), corporate DSL (Business One) and E-Life subscribers. 15

16 Maroc Telecom: Capitalize on strategic investment in 4G Morocco, Benin, Burkina Faso, CAR, CDI, Gabon, Mali, Mauritania and Togo Subscribers (m) Revenue (AED m) (1) / EBITDA Margin Highlights ,308 2,921 3,122 Completed acquisition of Atlantique Telecom s six operations on 26 January, % 53% 53% Growth in subscriber base is driven by international historical subsidiaries and new acquired operations Revenue EBITDA % Revenue Breakdown Q2 15 Domestic vs. Int l Int l Revenue growth in local currency mainly driven by international subsidiaries and newly acquired operations Like for like, revenue is flat in local currency Decline in EBITDA margin Y/Y is mainly due to Morocc o 62% Int'l 41% New Historical Subsidiaries Subsidiaries 36% 64% lower margin in Morocco and lower margin at the newly acquired operations Launched 4G services in Morocco in July 2015 Others -3% (1) Revenue figures in AED for Q2 15 & Q1 15 are not comparable to Q2 14 due to differences in accounting policies. 16

17 Egypt: Stabilizing margins despite currency devaluation and challenging regulatory measures Total Subscribers (1) (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%) % 23% 24% 1,208 39% 1,070 1,090 36% 38% % 16% 18% Subscribers Market Share Revenue EBITDA % CAPEX CAPEX/Revenue Highlights Market subscriber growth impacted by regulatory imposed control over indirect distribution channels Revenue growth Y/Y impacted by currency devaluation and slower subscriber acquisitions EBITDA margin Y/Y slightly lower on higher network costs due to higher electricity and utility costs Capital intensity ratio at 18% level with capital spending mainly focused on network rollout (1) Subscribers and market share data as per statistic published by the Ministry of Information and Technology 17

18 Pakistan: Intense competition and biometric subscriber verification in mobile segment Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%) (1) ,310 1,094 1,111 1, % 35% 32% 33% Revenue EBITDA % Highlights 42% % 28% CAPEX CAPEX/Revenue Subscriber growth negatively impacted by regulatory mandated biometric verification measures Revenue growth Y/Y adversely impacted by falling international incoming traffic and stiff competition among mobile operators EBITDA margin declined Y/Y due to lower revenue Capital spending reduced Y/Y resulting in Capex/ revenue ratio of 28% Note: (1) Capex/revenue ratio in Q excluding 3G license acquisition and 2G license renewal in Pakistan is 42%; 18

19 Nigeria: Strong operational results masked by currency devaluation Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%) ,097 1,040 1, % 16% 13% Revenue EBITDA % Highlights Solid subscriber acquisition with Y/Y growth of 18% % 14% 38 4% CAPEX CAPEX/Revenue Revenue growth Y/Y impacted by currency devaluation Strong revenue growth Y/Y of 17% in local currency driven by higher voice and data revenues EBITDA in absolute terms improved in local currency mainly due to higher revenue despite the increase in cost of sales and operating costs EBITDA margin slightly lower due to higher network costs and staff costs driven by inflationary pressure Capex spending declined Y/Y mostly due to timing of capitalisation of ongoing projects 19

20 H Actual Against Guidance: Confident in delivering the full year management guidance Financial Objective Guidance 2015 Actual 6M 2015 Revenue Growth % 8% - 10% 17% EBITDA Margin% 47% - 48% 51% CAPEX / Revenue Ratio 17% - 18% 13% 20

21 Etisalat Investor Relations Website: 21