emirates telecommunications corporations etisalat · 2019-05-07 · 2.1 3.7 1.9 3.4 q2'13...

Etisalat Group

Q2 2014 Results Presentation

21st July 2014, Abu Dhabi Aspire Forward

Disclaimer

2

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.

Agenda

3

1. Business Overview – Ahmad Julfar (CEO-EG)

2. Financial Overview – Serkan Okandan (CFO-EG)

4

Business Overview

Ahmad Julfar Chief Executive Officer Etisalat Group

7.2 8.1

4.9 5.9

Q2'13 Q2'14Aggregate Consolidated

5

Aspiring to be the most admired emerging markets telecom group

Subscriber (m)

Revenue (AED bn)

EBITDA (AED bn)

Drive for operational excellence that translates to improved financial performance

Continued growth in subscriber base across our key markets resulting in 182 million subscribers

Progressing towards creation of the largest French-Speaking West African cluster with 9 countries (Benin, Burkina Faso, Central African Republic, Gabon, Ivory Coast, Mali, Mauritania, Niger, Togo)

Revenue growth momentum expected to continue as we ensure leadership in the mobile data segment and optimise ICT opportunities by leveraging our portfolio and economies of scale

+20%

+27%

+20%

+21%

Aggregate

Growth Y/Y % Consolidated

Growth Y/Y %

+27%

16.5 19.8

9.9 12.6


143

182

Q2'13 Q2'14

2.1

3.7

1.9

3.4


6

Investing in network quality and improving returns to shareholders

CapEx (AED bn) *

EPS (AED) / DPS (AED)

Improved shareholder value as earnings increase through strategic investments and improved financial performance of our core operations

35 fils per share interim dividend for the year 2014 to be paid to shareholders in August 2014

Invest in high quality networks across our footprint to ensure enhancement of customer experience and drive profitability

Continued major strategic investments for future growth ― Acquired a 3G licence in Pakistan for USD 147.5 million

+84%

Aggregate

Growth Y/Y %

Consolidated

Growth Y/Y %

0.25

0.32 0.35 0.35

Q2'13 Q2'14

EPS

* Aggregate Capex excludes Mobily

DPS

7

Update on Corporate transactions

Successful completion of the acquisition of Vivendi’s 53% shareholding in Maroc Telecom for a final

consideration of EUR 4.1 billion;

― Received dividends of ~ AED 2.5 billion for FY 2012 and FY 2013

― Etisalat commenced consolidation of Maroc Telecom and its subsidiaries effective from May 2014.

Etisalat and Maroc Telecom signed a Share Purchase Agreement for the sale of Etisalat’s shareholding in its

operations in Benin, the Central African Republic, Gabon, the Ivory Coast, Niger and Togo. Total consideration

in return for Etisalat’s equity in and receivables (including shareholder loans) from these companies amounts to

USD 650 million.

― Closing expected Q3 2014 subject to securing regulatory and competition approvals in the jurisdictions of

operating countries

Etisalat successfully issued its inaugural bond under the GMTN programme listed on the Irish Stock Exchange

and raised USD 4.2 billion.

With the proceeds from the bond issuance, syndicated bank facilities, amounting to EUR 3.2 billion, repaid.

8

Financial Overview Serkan Okandan Chief Financial Officer Etisalat Group

Etisalat Group

9

Q2’13 Q1’14 Q2’14 QoQ

Growth YoY

Growth

Subs (m) (1) 143 145 182 +25% +27%

Revenue (AED m) 9,882 9,899 12,579 +27% +27%

EBITDA (AED m) 4,867 4,939 5,866 +19% +21%

EBITDA Margin 49% 50% 47% -3pp -3pp

Net Profit 1,976 2,024 2,507 +24% +27%

Net Profit Margin 20% 20% 20% -1pp -pp

EPS (AED) 0.25 0.25 0.32 +24% +27%

Double-digit Y/Y growth in subscriber base due to consolidation of Maroc Telecom Group

Robust Y/Y revenue growth led by strong performance of UAE operations and consolidation of Maroc Telecom

Steady improvement in EBITDA level in absolute terms

Higher net profit due to higher other income

(1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, fixed broadband and WLL lines generating revenue during the last 90 days.

Highlights

Domestic vs. Int’l

Group Revenue

10

Note: “Other revenues” consist of non-telecom revenues, management fees, etc.

In Q2’14, continued revenue growth momentum and recognized revenue growth Y/Y of 27%; adjusting for Maroc Telecom (like for like) revenue would have increased by 5%. This is attributed to strong performance in the UAE, Egypt & Pakistan operations

Revenue from international operations increased Y/Y by 64% and contributed 46% of consolidated revenues mainly due to:

― First time consolidation of Maroc Telecom since May 2014

― Better performance in Egypt

― Revenue growth in Pakistan

Highlights

Revenue (AED m) and YoY growth (%) Sources of Revenue growth – Q2’14 vs Q2’13 (AED m)

Revenue by Cluster Q2’14

Int’l

9,882

5 12,579

531 53

(16)

7

Q2'13 UAE Egypt MT Asia Africa Others Q2'14

2,118

Int'l 46% UAE

54%

Others <1%

9,882 9,899

12,579

20%

3%

27%

Q2'13 Q1'14 Q2'14

Revenue YoY Growth

5%

AT 10%

Pakistan 25%

Egypt 23%

MT Group 41%

Others 1%

UAE 77%

Inter- National

21%

Int'l 41% UAE

66%

Others -(6%)

Group EBITDA

11

In Q2’14, consolidated EBITDA increased Y/Y by 27%; excluding Maroc Telecom (like for like), EBITDA would decline by 4%

EBITDA of consolidated international operations increased Y/Y by 117% resulting in 41% contribution to Group EBITDA, an improvement of 18 points compared to Q2’13

― Positive contribution from Egypt due to better revenue

― Asia cluster impacted by competitive pressure in Afghanistan and higher network and regulatory costs in Pakistan

― Slight improvement n Africa Cluster

4,867 4,939

5,866

49% 50%

47%

Q2'13 Q1'14 Q2'14EBITDA EBITDA Margin

4,867 (378)

5,867

68 (14)

15

Q2'13 UAE Egypt MT Group Asia Africa Other Q2'14

268

1,217

Note: “Other EBITDA” consist of results from non-telecom operations, management fees, etc.

Highlights

EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – Q2’14 vs Q2’13 (AED m)

EBITDA by Cluster Q2’14

Domestic vs. Int’l Int’l

AT 7%

Pakistan

19%

Egypt 20%

MT Group 51%

Others 3%

45%

Int'l 84%

UAE 14%

Others 2%

Group CAPEX

12

1,857

910

3,413

19%

9%

27%

Q2'13 Q1'14 Q2'14

CAPEX CAPEX/Revenue

15%

CAPEX (AED m) & CAPEX/Revenue Ratio (%)

Capex increased Y/Y by 84% resulting in Capex/Revenue ratio of 27%. This increase is mainly attributed to:

― 3G license acquisition and 2G license renewal in Pakistan

― Consolidation of Maroc Telecom

Adjusting for these items Capex would have been AED 1.5 billion, down by 17% and capex/revenue ratio of 15%

Capital spending in the UAE declined by 21% representing a 7% capex/revenue ratio

Capital expenditure in international operations increased by 136% and contributed 84% of consolidated capex in Q2’14:

― 2G/3G license renewal and acquisition in Pakistan

― Higher capex spend in Egypt for capacity upgrade

― First time consolidation of Maroc Telecom effective from May 2014

Highlights

CAPEX by Cluster Q2’14

Domestic vs. Int’l Int’l

Pakistan 69%

Maroc 15%

Egypt 10%

AT 5%

Others 1%

Net cash position (AED m) 6M’13 6M’14

Operating 2,633 5,145

Investing (2,277) (19,867)

Financing (3,324) 14,749

Net change in cash (2,969) 24

Effect of FX rate changes 32 72

Ending cash balance 10,997 15,547

Group Balance Sheet & Cash Flows

13

Balance Sheet (AED m) Dec-13 Jun-14

Cash & Cash Equivalent 15,450 15,547

Total Assets 85,716 123,622

Total Debt 5,872 26,350

Net Cash / (Debt) 9,579 (10,803)

Total Equity 49,593 58,065

Highlights

Maintained strong cash balance and enhanced financial

flexibility

Balance sheet impacted by the consolidation of Maroc

Telecom

Significant increase in total debt to fund the acquisition of

53% stake in Maroc Telecom resulting in net debt position for

the first time and improving the capital structure

Operating cash flow impacted by consolidation of Maroc

Telecom and other income in Q2’14

Cash flow from investing activities impacted by AED 18.7

billion cash acquisition of Maroc Telecom

Cash flow from financing increased due to the bond

issuance to finance acquisition of Maroc Telecom

Debt Profile

14

15,495

4,642

1,812 1,740 684 731 574 352 321

Group MT Egypt WestAfrica(1)

Pakistan Afghanistan EIP (2) Tanzania Sri Lanka

Borrowings by Currency Q2’14

Debt by Source Q2’14 (AED m)

Borrowings by Operation Q2’14 (AED m)

744

5,310

1,999

18,296

FY'14 FY'15 FY'16 Beyond

Repayment Schedule

15,495

9,899

311 645

Bonds Bank Borrowings Vendor Financing Others

(1) West Africa Countries are Benin, Central African Republic, Cote d’Ivoire, Gabon, Niger, Togo.

(2) Advances from non controlling interest from minority shareholders of Etisalat Pakistan International.

USD 7%

EGP 6%

EURO 65%

MAD 14%

Others, 10%

Consistent Track Record of Shareholder Remuneration

15

Interim Dividend Payout Ratio Interim Dividends and Dividends Per Share

1.98 1.98 1.98

2.77 2.77

0.25 0.25 0.25 0.35 0.35

2010 2011 2012 2013 2014

Interim Dividends (AED bn) DPS

51.1%

57.9% 53.8%

72.8%

61.1%

2010 2011 2012 2013 2014

Payout Ratio

Highlights Interim Dividend & Earnings Per Share (AED)

H1'10 H1'11 H1'12 H1'13 H1'14

DPS 0.25 0.25 0.25 0.35 0.35

EPS (1) 0.49 0.43 0.46 0.48 0.57

Etisalat’s Board approved 35 fils per share to be distributed from 13 August 2014 to the shareholders registered in the shareholders’ register on 30 July 2014

(1) Represents diluted earnings per share

16

Country by Country Financial Review

UAE: Disciplined execution drives growth in revenue and profitability

17

Q2’13 Q1’14 Q2’14 QoQ

Growth YoY

Growth

Subs(1) (m) 9.9 10.9 11.3 +4% +14%

Revenue (AED m) 6,303 6,503 6,834 +5% +8%

EBITDA (AED m) 3,593 3,715 3,860 +4% +7%

EBITDA Margin 57% 57% 56% -1pp -1pp

Net Profit 1,519 1,651 1,707 +3% +12%

Net Profit Margin 24% 25% 25% 0pp +1pp

CAPEX 625 460 491 +7% -21%

CAPEX/Revenue 10% 7% 7% 0pp -3pp

Sustained subscriber growth momentum in mobile and eLife segments

Strong revenue growth attributed to fixed and mobile data, internet and handset

Improved EBITDA level as a result of improvement in revenue trends and cost discipline

EBITDA margin slightly lower Y/Y due to higher interconnection costs and cost of devices

Net profit growth and margin expansion attributed to higher EBITDA level

Capex spend focused on network modernization

(1) Subscriber numbers calculated as aggregate number of GSM, fixed, fixed broadband and eLife lines generating revenue during the last 90 days.

Highlights

1.19 1.38 1.48

6.82 7.54 7.85

132 115 115

Q2'13 Q1'14 Q2'14

Postpaid Prepaid Blended ARPU

UAE: Continued to expand subscriber base in mobile and eLife segments

18

1.08 1.03 1.02

108 127

130

Q2'13 Q1'14 Q2'14

Fixed 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.

Mobile Subs (m) & ARPU(1) (AED)

Fixed Broadband(3) Subs (m)

Fixed Subs (m) & ARPL(2) (AED)

eLife Subs – Double & Triple-Play (m)

0.60 0.70 0.72

367 374 384

Q2'13 Q1'14 Q2'14

E-Life (2P & 3P) ARPL

0.86 0.93 0.95

450 479 485

Q2'13 Q1'14 Q1'14

Fixed BB ARPL

207

116

292

18% 10%

24%

Q2'13 Q1'14 Q2'14

CAPEX CAPEX/Revenue

Egypt: Confirmation of top-line growth and margin expansion

19

Total Subscribers (1) (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)

1,156 1,146 1,208

35% 39% 39%

Q2'13 Q1'14 Q2'14

Revenue EBITDA %

Maintained Y/Y growth in subscriber base with focus on post-paid segment

Revenue growth Y/Y attributed mainly to data segment

Strong improvement in EBITDA level in absolute terms underpinned by effective cost measures

EBITDA margin expanded by 4 points

Granting of unified license to the incumbent fixed operator delayed but expected to increase competitive pressure

for the rest of the year

Highlights

97 100 102

23% 23% 23%

Q2'13 Q1'14 Q2'14

Market Subs Market Share

(1) Subscribers and market share data as per statistic published by the Ministry of Information and Technology

1,664

1,514

1,648

32% 32% 32%

Q2'13 Q1'14 Q2'14

Revenue EBITDA %

37.6

35.7 35.8

Q2'13 Q1'14 Q2'14

412

248

2,004

25% 16%

122%

Q2'13 Q1'14 Q2'14

CAPEX CAPEX/Revenue

34%

Asia: Stable EBITDA margins with investment in 2G/3G licenses in Pakistan Afghanistan, Pakistan and Sri Lanka

20

Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)

Asia Cluster Revenue Breakdown (Q2’14)

Subscriber growth impacted by operations in Pakistan

Revenue growth Y/Y was flat due to adverse competitive

environments in Afghanistan and Sri Lanka

EBITDA margins remained stable

Increased capital spending during the quarter driven by Pakistan

operations

Highlights

Pakistan 79%

Sri Lanka

8% Afghanistan

13%

29.5

27.6 27.8

Q2'13 Q1'14 Q2'14

1,271

1,180

1,310

37% 37% 35%

Q2'13 Q1'14 Q2'14

Revenue EBITDA %

336

189

1,993

26% 16%

152%

Q2'13 Q1'14 Q2'14

CAPEX CAPEX/Revenue

Pakistan: Capitalize on strategic investments in 3G and fixed broadband

21


Subscriber growth Y/Y impacted by cleansing exercise of mobile subscriber during Q1’14;

Revenue growth Y/Y underpinned by growth in fixed data

― Ufone was first operator to launch 3G services in Pakistan

EBITDA margin impacted by higher network costs, regulatory costs and staff cost

Significant increase in capital spending due to the 3G license acquisition and 2G license renewal during Q2’14

Highlights

42%

Africa Cluster operational and financial results benefited from the

consolidation of Maroc Telecom effective from May 2014

Excluding Maroc Telecom:

― Y/Y subscriber growth is flat

― Y/Y revenue growth is 1%

― EBITDA margin is up by 2points

― Capex/revenue ratio is at 34%

694 685

2,818

23% 23%

49%

Q2'13 Q1'14 Q2'14

Revenue EBITDA %

24%

597

94

572

86%

14%

23%

Q2'13 Q1'14 Q2'14

CAPEX CAPEX/Revenue

12.4 12.0

50.4

Q2'13 Q1'14 Q2'14

Africa: Increased footprint in West Africa by 4 new countries Benin, Burkina Faso, CAR, Gabon, Ivory Coast, Mali, Mauritania, Morocco, Niger, Togo, Tanzania, & Sudan

22


Africa Cluster Revenue Breakdown (Q2’14) Highlights

AT 19%

Others 6%

MT Group 75%

11.9

21%

Maroc Telecom: Continued market leadership in all markets Burkina Faso, Gabon, Mali, Mauritania and Morocco

23


Etisalat started to consolidate the results of Maroc Telecom effective from May 2014

Strong subscriber acquisition with Y/Y growth exceeding 9%

Revenue growth Y/Y driven by strong performance of international operations

Maintained healthy EBITDA margin at 56%

Capital spending is focused on deployment of ultra-high-speed fixed broadband and mobile services

Highlights

35.2

39.2 38.4

Q2'13 Q1'14 Q2'14

3,134 3,241 3,308

57% 55% 56%

Q2'13 Q1'14 Q2'14

Revenue EBITDA %

1,183

916

19%

14%

H1'13 H1'14

CAPEX CAPEX/Revenue

15.3

18.7 19.4

Q2'13 Q1'14 Q2'14

741

1,009

1,097

2%

11% 15%

Q2'13 Q1'14 Q2'14

Revenue EBITDA %

217

437

290

29%

43%

26%

Q2'13 Q1'14 Q2'14

CAPEX CAPEX/Revenue

Nigeria: Impressive performance with solid operational execution

24


Highlights

Strong growth in subscriber base driven by new services and products launched, better quality network and MNP

Significant Y/Y revenue growth of 48% driven by improved commercial activities

Continuous increase in EBITDA margin attributed to improvement in revenue trend and operational cost control

Maintained investment in network quality

2014 Outlook : Revised Management Guidance after Maroc Telecom acquisition

25

Revenue Growth %

EBITDA Margin%

CAPEX / Revenue Ratio

25% - 27%

49% - 50%

18% - 20%

15%

48%

19%

Financial Objective Guidance 2014 Actual 6M 2014

Q&A

26

27

Etisalat Investor Relations Email: [email protected]

Website: www.etisalat.com/html/ir

emirates telecommunications corporations etisalat · 2019-05-07 · 2.1 3.7 1.9 3.4 q2'13...

Documents