Bahrain Telecommunications Company B.S.C
20
Bahrain Telecommunications Company B.S.C Annual General Meeting
Transcript of Bahrain Telecommunications Company B.S.C
Bahrain
Telecommunications
Company B.S.CAnnual General Meeting
2
The following presentation contains forward looking statements by the Management of Bahrain
Telecommunications Company (Batelco), relating to financial trends for future periods, compared
to the results for previous periods (the statements).
The statements:
contain expressions of future expectations or opinions (including but not limited to the financial
conditions, results of operations and businesses, and related plans and objectives of Batelco),
which are based upon Batelco‟s current views and best estimation having regard to current
information, prevailing uncertainties in the market place and an ever changing regulatory
environment and other factors, many of which are outside Batelco‟s control;
are based upon information and assumptions known to date and are subject to various known and
unknown risks and uncertainties that could cause actual results, performance or events to differ
materially from those in the statements as originally made;
include projected performance targets of Batelco; and
should not be construed as a representation, forecast or projection as to future performance of
Batelco as the actual performance of Batelco may vary significantly from such targets and
consequently you should rely upon your own enquiries, evaluation, and analysis in relation to the
statements.
Where reference is made in the presentation to “BD” it means Bahraini Dinars and “USD or $” means
US dollars unless otherwise indicated. Any discrepancies between individual amounts and totals
are due to rounding.
Forward looking statement – important note
Source: Batelco
Today, Batelco Group operates….
3
Investments Associates Subsidiaries
Kuwait
KSA
Yemen
Jordan
Bahrain
India
Associate held for sale
Totals and Percentages may vary due to rounding
37% 31%International Operations Revenue EBITDA
Contribution to Group (1)
Headquarters: Hamala
(1) Before inter-company eliminations
……across multiple geographies!
Sale to be completed by Q4 2012
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2011 Group highlights
Group Revenue Net Profit Net Cash Pos.
Performance
BD 327m BD 80m BD 108m
Subscribers Mobile growth Broadband growth>11,000,000 21% 8%
Totals and Percentages may vary due to rounding
Technology/
Innovation
Corporate Governance Investment Grade
Ratings
Corporate Social
Responsibility
BD 2.1mS&P Fitch
Compliance with the
provisions of CBB‟s corporate
governance requirements
Leadership Development for Execs, Senior & Middle Management & Rising StarsEmployees Arabian Business “GCC Top 10 Employer Awards” - Ranked # 4
4G/LTE
Trials
Fiber
roll-outIPTV
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1. 2011 Results Review
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BD M
12 months
ended
Dec 2011
12 months
ended
Dec 2010
Change
FY 2011/
FY 2010
Operating Revenue 327 340 (4%)
EBITDA
- margin
12639%
14643%
(14%)
Depreciation & Amortization 38 40 (4%)
Operating Profit 88 106 (17%)
Net Profit
- margin
8024%
8726%
(8%)
EPS (fils) 55.6 60.3 (8%)
Resilient performance Year on Year
Whilst results in 2011 were impacted by competitive pressures in the local market,
EBITDA with a healthy 39% margin and Net Profit remain resilient
Totals and Percentages may vary due to rounding
Impact of New
Entrant in Bahrain
Retention of High
Value Customers
More Value to
Customers
Cost Optimization
slower than
Revenue decline
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Gross Revenue by Geography
(after inter-segment eliminations)BD M
2011 2010 Var
Bahrain 202.9 222.7
Jordan88.9 87.6
Other
Countries35.2 30.0
Total 327.0 340.3
Totals and Percentages may vary due to rounding
Profit (1) (2)
BDM
2011 2010 Var
Bahrain 67.8 86.0
Jordan 13.6 11.8
Other
Countries2.4 (7.2)
Total 83.8 90.6
Revenues diversified by segment &
internationally......
Group profitability remains strong
despite impact of competition in
Bahrain.
Revenue and Profit Contribution
9%
1%
17%
4%
21%
15%
133%
7%
(1) Total Profit refers to Profit before Non-Controlling Interest(2) India classified as Held for Sale from Q2 2011
60
70
80
90
100
110
120
2010 2011
Group
Free Cashflow (BD’M)
Continued strong cash generation….
BD91m
BD109m
75%
73%
NIL
73%High EBITDA conversion
Unlevered Balance Sheet
BD 108mNet Cash position
Debt as at end 2011
Strong Free Cash flow generation
% EBITDA Conversion
24%
Totals and Percentages may vary due to rounding
BD
M
Investment Grade rating
S&P Fitch
8
….and unlevered Balance Sheet!
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Group subscribers at record high!
YoY Mobile Growth
9
21% YoY Broadband Growth8%
89,396
25,592 40,045
114,084
-
20,000
40,000
60,000
80,000
100,000
120,000
Bahrain Jordan Kuwait Saudi
+1%
+10%
+4%
+36%Wireless Growth+51%
10,623k
8,809k
5,146k
Totals and Percentages may vary due to rounding
Subscrib
ers
(„
000)
Subscrib
ers
Recognized for excellence throughout 2011 -
Group awards and honours
World Brand Congress, Brand
Leadership Award
CommsMEA, Telecoms Technology
Award
Middle East Investor Relations Society,
Best Listed Bahrain Company for IR
Tatweej Academy, Award for Excellence
among ISO Certified Companies
LAPC Vision Awards, Silver Award for
Annual Report 2010
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HR – ongoing development of local talent
Our Commitment Awarded
Arabian Business “The GCC‟s Best Employers 2011 ” Ranked # 4
GCC HR Excellence Awards, GCC Best Talent Management
Leadership Development
32 Executives
46 Managers
31 Middle Managers
25 Rising Stars
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Commitment to CSR & the community
BD 2.1 million spent on CSR in 2011
Support for health, social, education and sports initiatives
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13
45
102.6
150.6
222.6
294.6
359.4
417
0
50
100
150
200
250
300
350
400
450
2005 2006 2007 2008 2009 2010 2011
57.6
48
72
72
64.8
57.6*
Cu
mu
lative
Ca
sh
D
ivid
en
d(B
D M
)
BD 417M in cash dividends & BD 44M equivalent face value bonus shares( for FY 2005 & 2007)
*2011 Final Dividend subject to approval by shareholders. Board has proposed to AGM a total dividend of BD57.6 million (US$152.8 million) which represents a 72%
payout of 2011 Profit at a value of 40 fils per share, of which 20 fils per share was paid in July 2011.
Sustained strong dividends
Over the last 7 years, BD 461M in total ……..
Totals and Percentages may vary due to rounding
representing an average payout of 71%!
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2. Group Strategy
Strategy Focus 2012-2015
Source: Batelco
Position in Telco
adjacent ICT space
(SME & Enterprise)
InnovationDevelopment
and Incubation
4 Strategic Priorities
New
Customers
Existing
Customers
(Bahrain,
Jordan, Kuwait,
India, Yemen,
KSA)
Solutions (Enterprise, Consumer)Connectivity
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Drive growth by strengthening current business, releasing cash, & building capabilities
Increase wireless scale in new markets
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3 4“B-Scale” KEY GROUP FOCUS
“B-Strong” KEY OPCO FOCUS
“B-Scope”“B-
Innovative”
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2012 Key initiatives
1. New Acquisition
2. India - STel:
Complete sale by Q4 2012, and
Continue to look for opportunities in the Indian telecommunications
market.
3. Jordan – Umniah: Launch 3G by Q3 2012
4. Saudi – Atheeb:
Support company transformation into B2B provider
Participate in Rights Issue
5. Bahrain – Batelco:
Focus on retention of High Value Customers – GEAR
Cost benchmarking & reduction program
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3. 2012 Guidance
2012 Guidance
Measure Guidance
Revenue Low single digit decline
EBITDA Mid single digit decline
Net ProfitDouble digit % increase reflecting one-
off gain on STel disposal (Q4 2012)
Capex to Revenue
~25% (~ 12.5% excl 3G)
FCF > USD 110m
Dividends subject to AGM
Payout consistent with past trend
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Margins under pressure from
intense competition in
Bahrain
Affected by one time investment
in 3G licence and
infrastructure in Jordan
More information
Batelco Investor
Relations
Principal Analyst, Investor
Relations Telephone +973 17884557
Fax +093 17611898
e-mail [email protected]
Batelco Media
RelationsTelephone +973 17884557
Group General
Manager Fax +973 17611898
Media Relations e-mail [email protected]
Bahrain
Telecommunications
Company B.S.CAnnual General Meeting
