Portugal Telecom Investor Day 2002

Transcription

1 Portugal Telecom Investor Day 2002 Lisbon, 19 th June 2002

2 Programme Morning Session Registration 8:45 Group Overview & Strategy 9:00 Financial Overview and Outlook 9:30 TCP Rights Issue 9:50 PTC 10:00 ADSL Strategy 10:20 PT Prime 10:30 Coffee 10:50 TMN 11:15 JV 11:45 TCP and GT 12:15 Financial Outlook and Q&A s 12:45

3 Programme Afternoon Session Lunch 13:30-14:30 TV Cabo 14:30 Lusomundo 14:50 PTM.com 15:10 UOL 15:30 Financial Outlook, Q&A s and Wrap-up 16:00

4 Group Overview & Strategy Miguel Horta e Costa CEO

5 Group Overview Domestic Wireline Mobile Multimedia PTC PT Prime TMN JV TV Cabo.com Lusomundo Market leader Good track record of cost reduction Fortress Portugal Estimated cumulative cash flow of 2 bn Market leader in Portugal and Brazil 16 million controlled subscribers Strong partnership with TEF in Brazil Cash flow positive in Portugal and Brazil, 2002 onwards Market leader in Pay-TV, newspapers and cinemas Successful broadband deployment Cash flow positive by 2003

6 Progress to Date - Revenues % +13.9% % 100% 2.0 4% % 85% 0% 11% % 3% Revenues ( bn) Wireless Wireline Multimedia Other

7 Progress to Date - EBITDA EBITDA 2000 EBITDA 1Q 2002 Wireline 57.8% Other 0.7% Multimedia 2.3% Wireline 53.4% Other 0.4% Multimedia 3.2% Wireless 39.2% Wireless 43.0% Brazil 10.2% Brazil 12.1%

8 Share Price Performance 120 YTD 100 BT, KPN, 78 PT, 75 TDC, 71 TEF, 63 DJ Telecom, 59 DT, 51 VOD, FT, Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun Jun-02

9 Industry Issues Sector PT Challenges Focus on cash flow and debt News flows continue to be uninspiring Telecoms performance is linked to economic turnaround Productivity Consolidation in mobile and fixed continues to be a topic for the medium term Maintain leadership Improve margins and cash flow Reduce debt even further Next wave of cost efficiency has to come from integration Turn-around PT Multimedia Drive returns is Brazil

10 PT Group Strategy Leadership in Growth Areas Domestic Leadership and Profitability Drive Returns in Brazil Mobile Multimedia and Internet Data and Business Solutions Clear leadership in all segments Continued cost reduction Expanding scope of services Protecting cash-flows in traditional businesses Smart capital spending policy Wireless JV with Telefonica Export cellular success from Portugal to Brazil Drive synergies Aggressive reduction in Capex

11 New Corporate Governance Model New corporate governance model philosophy: Efficiency Simplicity Transparency Allowing the Executive Committee to be more operational and reinforcing its involvement in the key decisions of the Group Reducing the lead time between decision making and implementation Improving level of control over implementation of key decisions strategic and operational

12 The Team General Secretary Miguel Horta e Costa CEO Internal Audit Regulation Technology Image and Communication International Relations Zeinal Bava Carlos Vasconcellos e Cruz Iriarte Esteves Paulo Fernandes Corporate Functions Corporate Finance Planning and Control Treasurer Accounting Investor Relations Leadership Management and Human Resources Reorganisation Program Business Development M&A IT Real Estate Executive Functions Group financial holdings BES Telefónica Other Shared services Pension Fund PT Comunicações PT Prime TradeCom (B2B) Marconi Tradecom Brasil CTM TMN JV MediTelecom Other mobile operations in Africa PT SI Megamedia PT Inovação PT ACS PT Multimedia TV Cabo Lusomundo PTM.com UOL

13 Immediate Priorities 1. Increasing the targets and achievements of businesses Leveraging the present change of corporate governance model to implement structural changes in PT Revising the strategic options and goals for the business areas Rethinking the Group organization Committing human resources to process of change Business issues Organisation and human resources model

14 Initiatives Underway: Business Issues 1. Increasing the requirements of business profitability Revise Business Plans Revise Capex control procedures Launch short term cost control measures 2. Revising the strategic options and goals of business areas PTC: Workforce reduction program ADSL rollout Prioritisation of capex and maximisation of cash-flow TMN: Profitability maximisation of 2G UMTS timing and strategy PT Multimedia: Group strategy for TV Cabo Group strategy for Lusomundo Cash flow optimisation Brazil: Wireless JV Options for PrimeSys Options for the UOL holding

15 Initiatives Underway: Organisation and HR 3. Rethinking the Group organization Consolidate Group structure: Overall: Functional reporting Wireline (PTC, Prime, PrimeSys, Marconi, Telepac) Multimedia (Lusomundo, TV Cabo) Systems (PT SI, Megamedia, PT Inovação, DCSI) Horizontal commercial coordination (Residential Marketing Committee, SOHO, SME, Large Accounts Unit) Creation of shared services: Functional areas (finance, accounting, wages processing, etc.) Purchasing 4. Committing human resources on the change process Incentive employee mobility inside and between units. Hiring freeze at present Revise compensation programmes and policies Launching immediate measures for cost reductions: Freezing extraordinary work hours, wages, variable remunerations and non-automatic promotions

16 Goals / Strategic Objectives Maintain growth momentum 5-7% EBITDA CAGR TMN; TCP; PTM Reduce Capex 20% decrease Maximise cash flow to equity holders Turn-around PT Multimedia Net Debt 4.5 bn Debt/EBITDA 2:1 Cash flow positive in 2003 Drive JV in Brazil to maximise returns whilst capping investments Net Income accretive Increase dividends to shareholders Around 160 mn