Emirates Integrated Telecommunications Company PJSC (“EITC”)
EMIRATES TELECOMMUNICATIONS CORPORATIONS ETISALAT€¦ · 3Q 2016 Results Presentation 27 October...
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Etisalat Group 3Q 2016 Results Presentation 27 October 2016
Transcript of EMIRATES TELECOMMUNICATIONS CORPORATIONS ETISALAT€¦ · 3Q 2016 Results Presentation 27 October...
Etisalat Group3Q 2016 Results Presentation
27 October 2016
Emirates Telecommunications Group Company PJSC and its subsidiaries (“Etisalat Group” 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.
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Disclaimer
1. Business Overview
Saleh Abdulla AlabdooliChief Executive OfficerEtisalat Group
Etisalat Group Financial Highlights
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Revenue growth in all key markets in local currencies
EBITDA growth with stable EBITDA margin
Net profit decline is attributed to one-off non-recurring item of sale of Canar; Adjusted net profit would have resulted in 16% Y/Y growth.
Consolidated capital expenditure is slightly lower with higher spending in the domestic operations
(1) Financial figures are restated to exclude the impact of discontinued operations
3Q2016 Highlights
AED Million
Revenue
EBITDA
EBITDA Margin
Net profit
Net profit Margin
Capex
Capex/Revenue
Q3 2016 GrowthYoY%
GrowthQoQ%
13,244 +3% -1%
6,816 +3% 0%
51% 0pp 0pp
1,870 -4% -19%
14% -1pp -3pp
1,789 -7% 0%
14% -1pp 0pp
9M 2016 GrowthYoY%
39,423 +2%
20,038 0%
51% -1pp
6,186 +9%
16% +1pp
5,223 -2%
13% 0pp
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Q3 2016 Highlights
Domestic Operations
Continued positive trends in subscribers acquisition
Data monetisation is driving revenue growth
Sustained Y/Y profitable growth
Investing for the future launching Etisalat Digital
InternationalOperations
Continued revenue growth and increased profitability in Maroc Telecom Group
Strong performance in Egypt and acquisition of 4G license
Enhanced results in the mobile segment in Pakistan
Strategic Priorities
On track to deliver 2016 financial guidance
One more step in completed in portfolio optimisation
Defend leadership position in key markets
Focus on cash flow generation and profitability
2. Financial Overview
Serkan OkandanChief Financial OfficerEtisalat Group
56%
25%8%
8%
3%
UAE MT Egypt Pakistan Others
60%
24%7%
5%4%
UAE MT Egypt Pakistan Others
Etisalat Group Financial Highlights
7(1) Financial figures are restated to exclude the impact of discontinued operations
Revenue Breakdown 3Q 2016 (AED m) EBITDA Breakdown 3Q 2016 (AED m)
UAE +4%
MT Group +2%
Egypt -4%
Pakistan +1%
UAE -1%
MT Group +1%
Egypt -3%
Pakistan +22%
YoY Growth YoY Growth
+3% +3%
13.2bn
6.8bn
(LC +9%)
(LC +2%)
(LC +10%)
(LC +24%)
Represents others
(LC +2%) (LC +2%)
Int’l Operations Financial Highlights 3Q 2016
8(1) Financial figures are restated to exclude the impact of discontinued operations
Revenue (AED m)/EBITDA (AED m) /EBITDA Margin (%)
YoY Growthin AEDMaroc Telecom Group
Revenue +2%3,267
EBITDA +1%1,658
EBITDA Margin 0pp51%
Etisalat Misr
Pakistan
Revenue +1%1,047
EBITDA +22%354
EBITDA Margin +6pp34%
3Q 2016
YoYGrowth in AED3Q 2016
Revenue & EBITDA (AED m) /EBITDA Margin (%) / YoY Growth %
Growth in MAD
+2%
+24%
+6pp
YoYgrowth in
PKR
Revenue -4%1,094
EBITDA -3%484
EBITDA Margin 0pp44%
YoYGrowth in AED3Q 2016
+9%
+10%
0pp
YoYgrowth in
EGP
2%
2%
0pp5,598
5,4585,604
2,473 2,459 2,542
Q3'15 Q2'16 Q3'16
Revenue EBITDA
44%
45%45%
58%
20%
19%
UAE56%
Int'l42%
Others2%
Domestic vs. Int’l
12,883 13,244
293 61
44
7 45
Q3'15 UAE MT Group Egypt Pakistan Others Q3'16
Group Revenue
9Note:(1) Financial figures are restated to exclude the impact of discontinued operations (2) “Others revenues” consist of domestic non-telecom operations, other international operations, management fees, etc.
In Q3’16 consolidated revenue increased Y/Y by 3% attributed to UAE and MT Group operations
Growth in the UAE is attributed to higher fixed and mobile broadband and wholesale revenues.
Revenues from international consolidated operations is flat, resulting in 42% contribution to Group revenues, 1 point lower than Q3’15 attributed to currency devaluation
― Growth in MT Group mainly driven by int’l operations
― Revenue growth in Egypt impacted by currency devaluation; continued to grow in local currency
― Revenue growth in Pakistan driven by mobile operations
Highlights
Revenue (AED m) and YoY growth (%) Sources of Revenue growth – Q3’16 vs Q3’15 (AED m)
Revenue by Cluster (Q3’16)
International
12,883 13,326 13,244
-1% 2% 3%
Q3'15 Q2'16 Q3'16
Revenue YoY growth %
MT58%
Egypt20%
Pakistan19%
Others3%
UAE60%
Int'l37%
Others3%
Group EBITDA
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In Q3’16 consolidated EBITDA increased Y/Y by 3% to AED 6.8 billion
EBITDA in the UAE impacted by higher cost of sales and operating expenses
EBITDA of consolidated international operations increased Y/Y by 3%, resulting in 37% contribution to Group EBITDA
― Positive contribution from Maroc Telecom Group and Pakistan
― Egypt impacted by currency devaluation; despite growth in local currency
6,631 6,799 6,816
51% 51% 51%
Q3'15 Q2'16 Q3'16
EBITDA EBITDA Margin
Highlights
EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – Q3’16 vs Q3’15 (AED m)
EBITDA by Cluster (Q3’16)
Domestic vs. Int’l International
6,631 6,816
55
23
15
64 167
Q3'15 UAE MT Group Egypt Pakistan Others Q3'16
MT65%
Egypt19%
Pakistan14%
Others2%
Note:(1) Financial figures are restated to exclude the impact of discontinued operations (2) “Others revenues” consist of domestic non-telecom operations, other international operations, management fees, etc.
UAE
52%
Int'l48%
Group CAPEX
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1,9131,795 1,789
15% 13% 14%
Q3'15 Q2'16 Q3'16
CAPEX CAPEX/Revenue
CAPEX (AED m) & CAPEX/Revenue Ratio (%)
In Q3’16 consolidated capex decreased Y/Y by 7% resulting in
Capex/ Revenue ratio of 14%.
Higher capital spend in the UAE due to acceleration in
capitalisation of projects
Capital expenditure in international operations decreased by 29%
and contributed 48% of consolidated Group Capex
― Lower capex in MT focused on enhancing networks speed in Morocco and networks expansion in Int’l operations
― Lower capex in Egypt focused on network capacity
― Lower capex in Pakistan focused on mobile network
HighlightsCAPEX by Cluster (Q3’16)
Domestic vs. Int’l International
Sources of Capex growth – Q3’16 vs Q3’15 (AED m)
1,913 1,789 203
250 40 33 4
Q3'15 UAE MT Group Egypt Pakistan Others Q3'16
MT62%
Egypt16%
Pakistan22%
Note:(1) Financial figures are restated to exclude the impact of discontinued operations (2) “Others revenues” consist of domestic non-telecom operations, other international operations, management fees, etc.
Net cash position (AED m) Sep’15 Sep’16
Operating 11,566 11,547
Investing (5,212) (4,880)
Financing (6,742) (8,403)
Net change in cash (388) (1,736)
Effect of FX rate changes 282 135
Reclassified as held for sales (1) 56
Ending cash balance 18,277 19,879
Group Balance Sheet & Cash Flows
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Balance Sheet (AED m) Dec-15 Sep-16
Cash & bank Balances 21,422 19,879
Total Assets 128,265 126,387
Total Debt 22,080 23,202
Net Cash / (Debt) (658) (3,324)
Total Equity 59,375 57,538
(1) Moody’s changed its view on the outlook of the UAE and GRE.
Investment Grade Credit Ratings
Strong liquidity position
Maintained low net debt to EBITDA level
Stable operating cash flow
Higher financing cash flow due to lower net borrowing and
higher cash dividend payment
AA-/Stable
Aa3/Negative (1)
Highlights
Debt Profile: Diversified debt portfolio
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Borrowings by Currency Q3 2016
Debt by Source Q3 2016 (AED m)
Borrowings by Operation Q3 2016 (AED m)
Repayment Schedule
15,558
4,564
1,9281,270
Group MT Group Egypt Pakistan
14,888
7,520
330 582
Bonds BankBorrowings
VendorFinancing
Others
1,067
4,720
961
16,571
2016 2017 2018 Beyond 2018
Euro
47%
USD23%
MAD15%
Others15%
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Country by Country Financial Review
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EBITDA (AED m) / EBITDA %Revenue (AED m) / YoY Growth (%)
CAPEX (AED m) & CAPEX/Revenue Ratio (%)Net Profit (AED m) / Profit Margin (%)
8%%7,168 7,718 7,461
21,868 22,469
9%
3%6%3% 4%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Revenue YoY growth %
1,825 2,057 1,942
5,496 5,884
25% 26%25%27% 26%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Net Profit Margin %
4,138 4,336 4,083
12,393 12,315
57% 55%58% 56% 55%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
EBITDA EBITDA %
737605
939
2,256
1,973
10% 9%10% 8%
13%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Capex Capex/Revenue
UAE: Growth in both top and bottom-line
1.71 1.90 1.91
7.94 8.32 8.37
117 112 112
Q3'15 Q2'16 Q3'16
Postpaid Prepaid Blended ARPU
UAE: Steady growth in subscribers base
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0.90 0.82 0.81
125
144136
Q3'15 Q2'16 Q3'16
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)
0.84 0.91 0.93
398 404 401
Q3'15 Q2'16 Q3'16
E-Life (2P & 3P) ARPL
1.04 1.08 1.10
498 500 504
Q3'15 Q2'16 Q3'16
Fixed BB ARPL
3,206 3,201 3,267
9,247 9,587
52% 51%51% 51% 51%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Revenue EBITDA % EBITDA %2
Morocco58%
Int'l42%
Morocco58%
Int'l39%
Others-3%
Maroc Telecom: Growth in Morocco and Int’l subsidiariesMorocco, Benin, Burkina Faso, CAR, CDI, Gabon, Mali, Mauritania and Togo
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Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
50.7 53.0 52.3
Q3'15 Q2'16 Q3'16
Domestic vs. Int’l
Revenue Breakdown Q3’16
Int’l
775 638
526
1,800 1,943
19% 20%24%
20%16%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
CAPEX CAPEX/Revenue
Domestic vs. Int’l
Capex Breakdown Q3’16
Int’l
Historical subsidiaries
67%
New subsidiaries
33%
Historical subsidiaries
49%
New subsidiaries
51%
21%
12%17%
176
280
136
540 569
16% 17%
15%
27%
12%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
CAPEX CAPEX/Revenue
Egypt: Strong performance in local currency muted by currency devaluation
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Total Subscribers (1) (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
1,138 1,052 1,094
3,298 3,311
39% 40%44%
40%44%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Revenue EBITDA %
Revenue growth Y/Y impacted by currency devaluation
― Maintained strong revenue growth momentum in local currency at 9% level
— Revenue growth is mainly attributed to increase in data revenues
Maintained EBITDA margin Y/Y at 44% level
Capital spending focused on network rollout
— 4G license acquisition in October 2016
Highlights
93 96 96
24% 24% 24%
Q3'15 Q2'16 Q3'16
SubscribersMarket Share
(1) Subscribers and market share data as per statistic published by the Ministry of Information and Technology
22.8 23.6
22.5
Q3'15 Q2'16 Q3'16
1,040 1,039 1,047
3,245 3,114
31%34%
28%
36% 34%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Revenue EBITDA %
218
286
185
666 683
21% 22%
21%
27%
18%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
CAPEX CAPEX/Revenue
Pakistan: Recovery in the mobile segment
19
Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
Revenue growth Y/Y driven by mobile operations partially offset by fixed segment due to price competition in
international voice segment and lower terminal sales
EBITDA in absolute terms and EBITDA margin improvements as a results of cost optimization initiatives
Lower capex spending focused on enhancing capacity of the mobile network
Highlights
23.5 22.3 22.4
Q3'15 Q2'16 Q3'16
1,057 998
662
3,123
2,742
14%12%
12% 13%
7%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
Revenue EBITDA %
545
87
40
719
175 23%
6%
52%
9%6%
Q3'15 Q2'16 Q3'16 9M'15 9M'16
CAPEX CAPEX/Revenue
Nigeria: Worsening macro conditions impacting operations
20
Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
Subscriber growth Y/Y in Q3 is impacted by subscriber disconnections in compliance with the regulatory mandatedregistration process.
— Resumed Q/Q subscriber growth since Q2
Revenue growth Y/Y impacted by lower subscriber base and lower handset sales
EBITDA in absolute term declined due to lower revenue, higher cost of sales and higher rental charges; resulting in decline in EBITDA margin
Slowing down capex spend resulted in capex intensity ratio of 6%
Highlights
2016 Actual Against Guidance: Raising the full year management guidance
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Revenue Growth %
EBITDA Margin%
CAPEX / Revenue %
Stable
~ 48% - 50%
Financial KPI
Guidance 2016
In AED
Low single digits
~ 18%
Guidance 2016
Constant Currencies (1)
(1) Constant currency: Financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for thecomparable prior-year period. In order to compute our constant currency results, we multiple or divide, as appropriate, our current AED results by the current year monthly average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior year monthly average foreign exchange rates.
around 2%
around 50%
Revised Guidance
2016In AED
3%-4%
18% - 20%
Revised Guidance
2016Constant
Currencies (1)
1.8%
50.8%
Actual
9M 2016
In AED
3.4%
13.4%
Actual 9M
2016
Constant
Currencies
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Etisalat Group Investor RelationsEmail: [email protected]
Website: www.etisalat.com/en/ir/index.jspr
