Wind Strategy Update. 17a. Milan, May 17 th 2005

Transcription

1 Wind Strategy Update 17a Milan, May 17 th 2005

2 Disclaimer THESE SLIDES HAVE BEEN PREPARED BY THE COMPANY SOLELY FOR THE USE AT THE DB PRESENTATION IN MILAN. THE INFORMATION CONTAINED HEREIN HAS NOT BEEN INDEPENDENTLY VERIFIED. NONE OF THE COMPANY OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER IN NEGLIGENCE OR OTHERWISE FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THESE SLIDES OR THEIR CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THESE SLIDES OR ANY MATERIAL DISCUSSED AT THE ANALYST PRESENTATION. THIS DOCUMENT IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON. THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED AT THE ANALYST PRESENTATION MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND THEREFORE YOU SHOULD NOT PLACE UNDUE RELIANCE ON THEM. FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THE DEVELOPMENT OF ENEL S TELECOM BUSINESS, TRENDS IN ITS CORE ENERGY BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT AND FUTURE CAPITAL EXPENDITURES. 1 / 22

3 Tommaso Pompei CEO, Wind

4 Key Milestones In 5 years of operations Wind has become a leading telecom operator Mobile / Free Internet service launched Merger with Infostrada Agreement with NTT DoCoMo to introduce i-mode in Italy UMTS launch Fixed line and GSM licences awarded Acquisition of part of Blu s assets UMTS Licence Financial independence achieved 3 / 22

5 Think Global, Act Local i-mode Starmap Alliance 4 / 22 Exclusive license agreement with NTT DoCoMo to launch i-mode in Italy i-mode alliances includes 12 operators in 16 countries Allows synergies on handsets development handsets purchase content acquisition branding Over 40 i-mode handsets (10 UMTS) Proven business model involving content providers Portal with more than 230 content sites, provided by over 150 partners Average incremental i-mode data ARPU over 5 for active users 11 operators in 14 countries International roaming preferential agreement European-wide joint corporate offer Enhanced positioning vis-à-vis corporate Synergies on handset procurement Shared R&D experiences Sharing of commercial best practice and cost benchmarking

6 2004 Highlights 2004A Revenues Fixed Line 38% 2004A EBITDA m (1) Mobile 62% Total Revenues: 4,508m (1) Growth: +2.1% % Achievements Exceeded all financial targets Achieved financial independence in 2004 on a yearly basis vs. Q previously expected Outperformed mobile subscribers targets (19% market share) Implemented successful 190m Opex reduction efficiency program (GE.CO.) / 22 (1) Net of 194m of turnover contribution

7 Jan-02 Jun-02 Nov-02 Apr-03 Sep-03 Feb-04 Jul-04 Dec-04 Jan-02 Jun-02 Nov-02 Apr-03 Sep-03 Feb-04 Jul-04 Dec-04 Traffic Growth Dynamics Mobile Voice Traffic (million min) Fixed Voice Traffic (million min) ,000 2,000-25% indirect direct 1, % 1,500 1, % +23% 1,000-34% -26% % +203% +25% - - Mobile traffic driven by market share growth and on-net strategy Fixed traffic migration to direct access voice services 6 / 22

8 Market Share Evolution Market Share Share of Gross Adds 2% 1% 4% 16% 17% 19% 2% 2% 25% 24% 13% Others (1) 29% 47% 46% 42% 40% 38% 30% 35% 36% 35% 34% 36% 28% / 22 (1) Other includes Blu in 2002, H3G in 2003 and 2004

9 Europe s Most Successful Mobile Third Entrant Wind has become the largest 3 rd mobile player in Continental Europe in just 5 years since its inception 12 (Subscribers millions) Launch Date Mar9 9 EBITDA Margin (1) 37% Jan9 9 May 94 May 96 May 98 32% 26% 30% 42% Oct 98 Mar9 9 29% 25% 8 / 22 Source: Internal elaboration on analyst reports (1) 1H 2004 except Wind based on 2004A. EBITDA on total revenues net of turnover contribution

10 Europe s largest alternative fixed line operator Alternative carriers revenues ( m) Largest alternative carrier's infrastructure in Europe ,300km of backbone optic fibre cable based on Enel Grid and Railways active ULL sites covering 27% of total market 2,700km of optic fibre MAN Wind market position NOT replicable Wind Arcor (Germany) Cegetel (France) Auna (Spain) 9 / 22 Source: Company reports

11 Three Strong Brands Third largest wireless operator Most recognised alternative fixed line operator Leading Internet brand in Italy 35% Internet narrow band market share First Internet Portal for pages viewed and second for unique users All united under the Wind umbrella 10 / 22 Note: Data as of I Quarter 2005

12 Integrated Pervasive Network Network Highlights 11bn cumulative investments to date (of which 2+ bn spent on licenses to date and 6+ bn for mobile) 18,000 km of backbone fibre optic cable 2,600 km of fibre optic MANs 488 active ULL sites, covering about 28% of the total market The GSM Network covers 99% of the population and national GPRS available overall the national territory Roll-out of UMTS network with over than 1,000 node-b Largest convergent infrastructure by an alternative operator Map of Wind Backbone S.Massenza Cordignano Chiasso (CH) Sondrio Belluno Trento Udine Varese Lecco Cimego Como Sandrigo Gorizia Verbania Gorlago Ala Treviso Pordenone Aosta Bergamo Biella Nave Dugale Salgareda Padriciano Bovis. Vicenza Divaccia (SL) Montestrutto Turb. Verona Portogruaro Trieste Ivrea Milano Brescia Novara Lodi Padova Venezia Vercelli Nogarole Rondissone Tavazz. Cremona Chivasso Tortona Villabona Rovigo Pavia Dolo Torino Alessandria Mantova Piacenza Piossasco Castelnuovo Ferrara Asti Reggio E. Parma Vignole B. Colunga Claviere (FR) Magliano A. Modena Bologna Cuneo Ravenna Genova Savona Massa Forlì Rimini Vado L. La Spezia Pistoia Lucca Prato Camporosso Pesaro Campochiesa Martignone Pisa Imperia Marg. Firenze Ancona Arezzo Broc Carros (FR) Livorno Calenz. Serra S.Q. P. Caiano Siena Macerata S. Vincenzo P. Speranza Perugia Suvereto Foligno Ascoli P. Porto d Ascoli Grosseto Orvieto Orte Teramo Terni Viterbo Villanova Pescara Alghero Oristano Sassari Cagliari Olbia Nuoro Albinia Bolzano S.Lucia Civitavecchia Cerveteri ROMA Trapani Rieti Latina Marsala Sciacca L Aquila Palermo Chieti Valmontone Larino Frosinone Isernia Ceprano Caltanisetta Campobasso Paola Rizziconi Messina Gioiosa Marea Cefalù Enna Campomarino Formia Caserta Bari Garigliano Benevento S.Maria C.V. Andria Avellino S.Sofia Pozzuoli Gioia del Colle Napoli Montecorvino Potenza Matera Caracoli T.I. Salerno Rutino Sapri Diamante Catania Foggia Barletta Laino B. Lamezia Feroleto A. Vibo Valentia Siti ADM Siti Interconn. Siti OLA Cavo 4 fibre (FS) Cavo 72 fibre (FS) Cavo 24 fibre Rotonda Rosarno Reggio C. Taranto Metaponto Galatina Sibari Cosenza Scandale Crotone Catanzaro Brindisi Lecce Otranto Aethos (GR) 11 / 22 Agrigento Gela Ragusa Siracusa

13 Network IT Wind s Convergence Strategy Infrastructure Marketing / Sales / CRM / Customer Care Customer Base Mobile Fixed Retail SME Corporate Corporate Government ENEL Enel Outsourcing contract for TLC services is the biggest in Europe Platforms and knowledge to be used for other top corporate customers 12 / 22

14 Mobile Strategy Step 1: Grow Customer Base Increase market share Noi 2 / Noi Wind to create community with lowest costs (SACs/ interconnect) Reduce churn Enhance distribution channels Achieve excellence in network quality by end of Step 2: Reduce ARPU Gap Focus on heavy users Stimulate off-net traffic Develop VAS through i-mode CRM / Loyalty programs To achieve a large high quality mobile community (> 20% share, 15m subs) by increasing customer base in the most cost effective way, to generate sustainable returns for shareholders 13 / 22

15 Advanced Mobile Data Strategy We are developing an integrated EDGE/UMTS Network Commercial focus is on service offering (i-mode) rather than technology We will utilise UMTS network to absorb excess capacity requirements on 2G network UMTS services launched commercially 14 / 22

16 Fixed Line Strategy Step 1: Grow Customer Base Increase Direct and Broadband customer base Increase ULL infrastructure to over 40% of lines Keep indirect customer base stable Step 2: Increase ARPU / Profitability Introduce high value services (Broadband, Media) Leverage on offer bundling Improve Convergent Service VoIP To be the real alternative to Telecom Italia through direct access and superior broadband solutions 15 / 22

17 Business Market Strategy Wind wants to increase focus and presence on the corporate market Positioning as a credible integrated solution provider for the whole of the market, leveraging on new technology trends and platforms VoIP Hybrid mobile handsets (GSM, Umts, Wifi) Adsl High speed IP access SLA management platforms Addressing also the most demanding Top customers, exploiting own experience on managing the impressive figures of ENEL More than 1300 Intranet sites More than M2M lines for telemeter and remote control More than calls/day handled by the Enel contact centre To become the leading fully integrated alternative solutions provider for Italian corporates with a 15% plus market share by / 22

18 Marco Alverà CFO, Wind

19 Service Revenues Composition (%) Consumer 51% 12% 6% 15% Corporate 6% Mobile 8% Fixed (Voice & VAS) 3% Internet &Data Wholesale, Enel, Other 18 / 23

20 in millions in thousands (in ) (in millions) (in ) : KPI Quarterly Evolution Mobile Customers Mobile ARPU 12,0 11,5 11,0 10,5 10,0 9,5 9,0 8,5 9,0 9,0 9,1 9,6 9,9 10,6 11,2 11,6 25,0 20,0 15,0 10,0 5,0 20,7 2,6 18,1 22,2 2,6 23,5 2,9 22,3 2,9 21,6 21,6 21,2 2,9 2,6 2,7 20,6 19,6 19,4 18,7 19,0 18,5 18,9 2,5 16,3 Data Voice 8,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Fixed Line Customers 0,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Fixed Line ARPU 4,0 3,5 3,0 3,4 3,2 3,1 3,0 VOICE 2,8 2,6 2,5 2, ,0 30,0 31,8 31,6 31,0 32,4 6,8 6,3 6,2 7,4 36,2 36,4 8,4 8,3 34,6 8,2 38,0 9,3 Internet 2,5 2,0 1,5 1,0 0,5 BROADBAND ,0 10,0 25,0 25,3 24,8 25,0 27,8 28,1 26,4 28,7 Voice 0,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q ,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q / 22

21 Cost Reduction Program ( GE.CO. ) (E-Net) % % GE.CO. achieved a 18% reduction of the targeted cost base, resulting in savings equal to 190m in 2004 Main areas of intervention: Access and Transport Network 130m, of which 58 m deriving from contribution of E-Net Provisioning and Overheads 60m Information Technology 12m 20 / 22

22 EBITDA Bridge % % (82) 160 1, ,552 1,035 (37) 998 (57) EBITDA 2003 One-off items Norm. EBITDA 2003 Fixed Contribution Margin Mobile Contribution Margin ITC Costs Commercial Push Efficiency initiatives Norm. EBITDA 2004 Turnover contribution EBITDA / 22

23 Cash Flows mln (500) (1.000) (1.500) (2.000) (853) Operating Cash Flow (1.776) Levered Free Cash Flow / 22