Investment Highlights

Transcription

1 Ðáñïõóßáóç óôçí íùóç Èåóìéêþí Åðåíäõôþí 8 ÌáÀïõ 2008

2 Investment Highlights Very Lw Bradband Penetratin Cmpared t Eurpean Average Cmpelling Cmpetitive Dynamics Grwing Custmer Base Imprving Regulatry Envirnment Favurable Cst Base Cntributing t Increased Margins Healthy ARPUs Experienced Management Team with Impressive Track Recrd 1

3 Frthnet Summary 500k subscriber lines 20% market share in bradband Fully Funded Investment Plan Strng Balance Sheet Three main pririties: Custmer Acquisitin Unbundling cverage f ver 66% f active lines in Greece Built targeted fiber infrastructure 2

4 Impressive Track Recrd Market leading psitins acrss all prducts and services Well psitined t take advantage f bradband pprtunity Intrduced the Internet t Greece Strng reputatin fr innvatin Rbust revenue grwth prfile Frthnet Frthnet Telephny Telephny Favrite Business Destinatins Smartalk Telephny Services ADSL Launch ULL Launch 2play ffer Integrated Web Applicatin Develpment e-business Prfessinal Datacenter Services LMDS Rll-ut Interactive Marketing Services Mbile Services & Applicatins Listing n ASE Spin-ff Business ISP Services Residential ISP Services VAS

5 Cmpelling Cmpetitive Dynamics The Telecm Market Substantial Rm fr Grwth Limited Cmpetitin in Lcal Market (%) ( m) , OTE Share f Market (2) 62 Incumbent EU Average f Market (3) 2,500 2,000 1,500 1, Frthnet Revenues 2,656 OTE Revenues (4) Frthnet has a strng ffering relative t Altnet cmpetitin Few players with meaningful scale Frthnet is well-capitalised fr grwth pprtunity Leadership in Key Segments (1) Few Full-Service Prviders Telecm Service Frthnet Psitin Business ISP #1 Residential/ SOHO ISP #2 Alternative Telephny #2 Internet VAS #1 Nn Airline Reservatins #1 Internet/Data Fixed Vice (1) Management estimates (2) OTE Cmpany data (2004) (3) Eurpean Cmmissin Electrnic Regulatin and Market Reprt (2004) (4) OTE Fixed Line 4

6 Very Lw Bradband Penetratin Cmpared t EU Average The Greek market is highly underpenetrated relative t Eurpean peers In 2007, the strng grwth in Bradband cntinued 35% 30% 25% 20% 15% 10% 5% 1.5% 4.4% Bradband Penetratin Rate (1) 9.2% 3.9% 4.0% 6.8% 6.8% 7.5% 7.9% 8.4% 8.4% 11.5% 13.2% 13.4% 12.9% 12.9% 11.0% 15.3% 16.6% 15.2% 17.6% 18.7% 19.4% 20.8% 23.0% 25.0% 29.4% 29.1% EU15: 16.7% EU25: 14.9% 0% GR '05 GR '06 GR '07 PL SK CY LV HU IE CZ LT SI IT ES PT MT EU DE EE AT LU FR UK BE SE FI DK NL Significant upside in verall Telecm per capita spend with grwth in cnsumer wealth Data largely expected t be the beneficiary f GDP grwth (1) Surce: Cmmunicatins Cmmittee, COCOM (2) Surce: EIU GDP per Capita Average Grwth Rate: (2) Luxemburg Ireland Greece Denmark Sweden Finland Nrway Austria Switzerland Belgium United Kingdm France Germany Netherlands Spain Italy Prtugal 0.5% 1.1% 1.0% 1.6% 1.6% 1.5% 1.5% 1.9% 1.8% 1.8% 2.2% 2.2% 2.1% 2.4% 3.0% 3.2% 3.2% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Switzerland Sweden Denmark Ireland Netherlands Belgium/Lux Austria Nrway Finland Western Eurpe Germany Italy France Spain Prtugal Greece Telecm Spending Per Capita 2006( 2) Japan UK US ,174 1,117 1,249 1, ,000 1,200 1,400 5 ( )

7 Implementing Our Cmmitment t Grwth and Prfitability Up t 265 millin f investment planned in rder t execute strategy Financing Facilities ( m) Fund WC & Other Market Share Expansin Grwth Capex Netwrk Capex : 265m Gvernment Grants Capital Increase 2006(A) 2007(A) 2008(B) 2009(B) Ttal Surces The develpments s far are ahead f expectatins The Investment Plan has been adjusted upwards fllwing the Greek Gvernment award f the bradband infrastructure develpment f tw regins in Greece 6

8 Cmpelling Cmpetitive Dynamics The Bradband Market Cmpelling Cmpetitive Dynamics Frthnet Bradband Evlutin (1) Greece is virgin territry fr bradband There is n cable infrastructure in Greece Expnential grwth evidenced as Greece s penetratin cnverges with the rest f Eurpe Bradband Subscribers ( 000) Dec Mar Jun Sep Dec Mar Jun Sep Dec % 20% 15% 10% 5% 0% Market Share Very strng Brand Name 20% market share in grwing market Bradband Subscribers ( 000) 1,200 1, Jan- 05 Greek Bradband Evlutin (1) Dec Mar- 06 Jun Sep Dec Mar Jun Sep Dec- 07 (1) Surce: NRA reprt n BB market in Greece and Frthnet estimates 7

9 Imprving Regulatry Envirnment Unbundling prices are nt a deterrent t ULL Cnsiderable disparities between Greek and Eurpean bradband penetratin remain; increasing pressure n regulatr t pen up market Cst ULL In July 07 NRA annunced further tariff reductins fr Full ULL t 8.48 per mnth and fr Partial ULL t 1.86 per mnth IT NL GR PT DK BE FR FI 2 EU 25 ES UK DE AT FI 1 SE LU NO IE Cst f Partial ULL (1) NL BE DE UK GR PT IT EU 25 FR ES DK LU AT SE FI 2 FI 1 NO IE (1) Surce: EU 12 th Implementatin Reprt 8

10 Favurable Cst Base Cntributing t Increased Margins Labur csts in Greece are lwer than the EU Average Cst f equipment cntinues t fall due t cmpetitin amng vendrs Unbundling rates are lwer than EU average Leased line csts are relatively high in Greece but by building wn infrastructure Frthnet is expected t cnsiderably reduce its csts Cst Item Labur Csts Equipment Csts Unbundling Rates Leased Line Cst f Full ULL (1) Greek Relative Advantage But dependence n Leased Lines is diminishing 9

11 Healthy ARPUs High ARPUs n accunt f high prices Effect n Ecnmics Á synthetic duble play ffer at lw speeds, csts mre than 55 per mnth (inclusive f VAT) Up-selling duble and triple play slutins will increase Frthnet s surces f revenues per mnth Incming Traffic Line Rental OTE Incming Traffic Vide nly currently available via satellite at a cst f apprximately 55 per mnth (inclusive f VAT) ADSL Retail Duble Play & Unlimited L, DL, INT In January 07 Frthnet launched the duble play ffering at per mnth (inclusive f VAT) with unlimited Natinal calls and internet speeds frm 1Mbps up t 24Mbps Duble-play n ULL custmer ARPU at 45.5 per mnth (exl VAT) CPS Calling Charge Resale Calling Charge ULL Frthnet s prtin f client s mnthly generated revenue Prices based n 2006 CPS ARPU and ADSL retail price fr 768kbps excluding VAT 10

12 Lcal Lp Access and Subscriber Migratin Targeting high line density exchanges makes ecnmics f unbundling very favurable Number f lines in Greek exchanges cnsiderably higher than Eurpean peers Lines 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 Line Density 1,000, ,000 1,500 2,000 2,500 Exchanges Migratin f existing dial-up/whlesale subscribers and acquisitin f new ADSL custmers Bundling f vice, data and VAS will increase Frthnet s share f custmer spend Imprving margins that benefit frm multiple revenue streams and lwer cst base Revenue Mving frm 2 t 5 Revenue Streams Outging Calls ISP Revenue LLU/ DSL EBITDA Margin Vice Line Mnthly Fee, Incming Traffic Revenue, Outging Calls, ISP Revenue, VAS 11

13 Backhaul Infrastructure In Prcess Internatinal Link Deplyment f fiber ptic Metr Area Netwrk (MAN) in Athens and Thessalniki t cver backhaul requirements Athens MAN Thessalniki MAN Cnsidered Trikala Larissa Xanthi Serres Thessalniki Vls Kmtini Alexandruplis Expansin f internatinal intercnnectin infrastructure Salamis Patras Crinth ATHENS Piraeus Pirgs Triplis Kalamata Impact Reduced csts and imprve service quality Iraklin 12

14 On Target With the Fiber Infrastructure Planned Cnstructed Prgress Athens MAN 185 km 251 km Cmpleted Thessalniki & Other Cities MAN 80 km 69 km In prgress Athens Thessalniki (1) 600 km 15 year IRU 2 fiber ptic pairs Activated Bulgaria link 401 km 15 year IRU 2 fiber ptic pairs Activated Thessalniki Turkey 300 km Under negtiatins (1) Includes als all the majr cities neighburing the Athens-Thessalniki mtrway 13

15 Cmmercial Netwrk Frthnet Shps Frthnet is als develping its wn Cmmercial Netwrk f shps A cmbinatin f wned, franchised and shp in a shp 60 shps t date 100 planned by the end f the year Cvering Athens, Thessalniki and all majr cities Frthnet already has presence in all majr retail chains 14

16 Unbundling f Lcal Exchanges Prgress f Unbundling in Greece Number f Unbundled OTE Exchanges % 5% % 19 21% 29 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 27% 40 43% 70 March 08: 151 exchanges c65% cverage 55% % % 70% 60% 50% 40% 30% 20% 10% 0% Line Cverage Number f Unbundled OTE Exchanges Line Cverage 15

17 Unbundling is Accelerating Frthnet activated its first ULL custmer at the end f February 07 Cumulative Active ULL Subs 100,000 80,000 60,000 40,000 20,000 0 Cumulative Active ULL Lines 76,400 42,580 15,280 1,150 Q1 '07 Q2 '07 Q3 '07 Q4 '07 The number f lines unbundled per Quarter is accelerating Vast majrity f ULL custmers (72%) pt fr the duble-play prduct New UL Subs 40,000 30,000 20,000 10,000 0 New Additins per Quarter 33,820 27,300 14,130 1,150 Q1 '07 Q2 '07 Q3 '07 Q4 '07 16

18 Unbundling Rati is Imprving Strng grwth in Bradband The demand fr Frthnet s bundled ULL prducts is strng and imprving as ULL ftprint is expanding 250, , , ,000 50,000 0 Frthnet Bradband Custmer Base Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Whlesale ULL The vast majrity f lines is still n Whlesale The unbundling rati is imprving fast n a mnth t mnth basis Unbundling as a % f Bradband Subscribers 40% 38.1% 30% 22.5% 20% 9.4% 10% 0.0% 0.9% 0% Q4 06 Q1 07 Q2 07 Q3 07 Q

19 Attractive ULL Ecnmics Revenues Lw bradband penetratin with scpe t increase t EU average Increasing number f revenue streams Bundling services t upsell duble and triple play slutins as demand develps Csts Lw line rental csts Lw labur csts Falling bradband equipment prices Capex High line density exchanges Rll ut IP infrastructure when ecnmics makes sense 18

20 Revenue Grwth is Accelerating Revenue is accelerating quarter n quarter 35% YY Quarter Revenue Grwth 32.0% This trend is expected t cntinue 30% 25% 20% 15% 11.2% 19.4% 21.8% 10% 5% 2.0% 0% Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Higher quality revenue grwth in Q4 Revenue Grwth Analysis The ULL related cntributin is still n the early stages 35% 30% 25% 20% 15% 10% 5% 0% 4.0% 27.7% 13.4% 0.1% 15.4% 11.1% 0.0% 8.4% 2.0% 4.3% Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Resale Revenue Grwth ULL Related Revenue Grwth 19

21 2007 Results Update Revenues ( m) ( m) Q4 06 Q4 07 % Vice (1) % Internet Access % 10 5 Business Services % 0 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Ttal Revenue % QQ perfrmance Cmments 2007 perfrmance characterised by strng 2Play ULL uptake YY Grup revenues increased by 21.3% t millin Reprted EBITDA negatively impacted by custmer acquisitin csts and cntinued margin squeeze n resale prducts ( m) (5.8) (7.5) (4.8) (1.9) (20) Q1 '07 Q2 '07 Q3 '07 Q4 '07 (1) Revenues EBITDA Capex 20

22 Balance Sheet & Cash Flw Net Cash psitin f 6m Un-drawn Credit Facility f up t 100m Balance Sheet as f December 31 st 2007 Cash Flw 12M 07 ( m) 266.4m 266.4m Fixed Assets 158.2m Sharehlders Equity 123.5m (11.6) Bank Lan ST 1.2m (0.2) Current Assets 52.1m Current Liabilities 89.5m 40 (45.6) Cash & Equivalent 56.1m Assets Financial Leasing 2.4m Bank Lan LT 49.8m Liabilities 20 0 Cash at the Beginning Cash frm Operatins WC Mvements Capex Payments Bank Debt Net Interest Share Capital Cash at the End f '07 21

23 Appendix 22

24 Sharehlder Structure Sharehlder Ownership Frgend Ltd 20.99% Stichting Pensienfnds ABP 10.31% CYRTE 7.47% Fundatin fr Research & Technlgy (FORTH) 6.20% Mrgan Stanley 5.00% Other Investrs 57.71% Ttal % 23

25 Greek Gvernment has Cmmitted 450m Over the Next Tw Years t Accelerate the Bradband Penetratin In September 2006, the Ministries f Finance and Telecmmunicatins annunced a jint prgram amunting 450m aiming t bst bradband penetratin in Greece % 450m m m 21m 10m 11m 36m 0 Public Sectr Bradband Access Wireless Htspt Smart Hmes Public Infrmatin Prgram Gvernment Subsidies Reginal Bradband Netwrks Other Ttal Cmmitted Funds 24

26 Greek Gvernment Subsidies: Reginal Telecm & Data Netwrks Zne Ppulatin Budget Subsidy Perid m 27.2m Up t 50% Athens & Thessalniki 0.70m 5.50m 28.4m 28.5m Up t 50% 30% Ttal 7.05m 84.1m Up t 36.4m In Dec 06, Frthnet was awarded the Bradband Develpment f tw regins (Zne 6&7) cvering Nrthern Greece and the Islands f the East Aegean. The prject includes 42.3m relating t bradband infrastructure and 13.3m relating t prmtin f Bradband use in these regins. The Gvernment subsidies amunt up t 27.8m In March 07, Frthnet was granted a Gvernment subsidy f up t 8.6m, relating t its investment plan fr Athens and Thessalniki 25

27 FORTH CRS FORTH CRS prvides infrmatin and ticketing services t cmpanies active in turism, transprt, sprt and culture Ferries Airlines Htels Rms Entertainment Sprts Cultural Events Railway Buses RentACar aggregate distribute Agencies Internet POS sell Gal t becme indispensable, multiservice, value-added intermediary between buyers and sellers Custmer Sales Agent C Netwrk System b2c Quality f service at all levels b2b Vendr Cntent 26

28 Share Infrmatin Share Inf Number f shares (millin) Reuters Cde Blmberg Cde FORr.AT FORTH GA Index Weighting Participatin Athex Cmpsite 100% 0.32% FTSE/Athex Mid 40 50% 1.61% FTSE/Athex Internatinal 50% 0.21% FTSE/Athex Technlgy 50% 20.00% MSCI Small Cap 27