EMIRATES TELECOMMUNICATIONS CORPORATIONS ETISALAT · Etisalat Group Financial Highlights 4 AED...
Transcript of EMIRATES TELECOMMUNICATIONS CORPORATIONS ETISALAT · Etisalat Group Financial Highlights 4 AED...
Etisalat Group1Q 2016 Results Presentation
26 April 2016
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.
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Disclaimer
1. Business Overview
Saleh Abdulla AlabdooliChief Executive OfficerEtisalat Group
Etisalat Group Financial Highlights
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AED Million
Revenue
EBITDA
EBITDA Margin
Net profit
Net profit Margin
Capex
Capex/Revenue
Low single digit revenue growth despite currency depreciation in international markets
Stable EBITDA margin at 50%
Net profit decline due to forex losses
Higher capex spend attributed to international operations
Q1 2016 GrowthYoY%
12,853 +1%
6,424 -2%
50% -1pp
2,001 -8%
16% -2pp
1,639 +29%
13% +3PP
(1) Financial figures are restated to exclude the impact of discontinued operations
1Q2016 Highlights
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Q1 2016 Highlights
Financial Highlights
Organic revenue growth in-line with guidance
EBITDA margin at 50% level
Higher capex spend driven by license acquisition
Domestic Operations
Continued solid trends in subscribers acquisition
Positive revenue growth
Continued to invest in network quality and new technology
InternationalOperations
Improved performance of the Int’l operations weakened by currency devaluation
Stable performance in Maroc Telecom Group
Strong performance in Egypt
Pakistan remains a challenging market
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Progressing towards 2016 Priorities
Portfolio Optimisation
Cost Improvement
Leadership position
Network
Digital / ICT
Cash flow
• On track to Optimise international portfolio
• Progress on improving cost efficiency • Further cost savings to be captured before year-end
• Improved commercial execution• Enhancing consumer offerings• Leveraging high network quality
• Delivering a differentiated network experience through continued investment in coverage and speed
• Network investment to support growth opportunities
• Seize new business opportunities, leveraging faster mobile and fixed-line communications networks
• Suitable Digital business model for corporate customers
• Improvement in operating cash flow driven by profitability and disciplined investments
2. Financial Overview
Serkan OkandanChief Financial OfficerEtisalat Group
61%
24% 6%6%
3%
57%
24%9%
8%
2%
Etisalat Group Financial Highlights
8(1) Financial figures are restated to exclude the impact of discontinued operations (Zantel & Canar)
Revenue Breakdown 1Q 2016 (AED m) EBITDA Breakdown 1Q 2016 (AED m)
UAE +1%
MT Group +7%
Egypt +9%
Pakistan -6%
UAE -4%
MT Group +2%
Egypt +8%
Pakistan -2%
YoY Growth YoY Growth
+1% -2%
12.9bn
6.4bn
(LC +16%)
(LC -3%)
(LC +14)
(LC +1%)
Represents others
(LC +10%) (LC +5)
Int’l Operations Financial Highlights 1Q 2016
9(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 +7%3,119
EBITDA +2%1,571
EBITDA Margin -3pp50%
Etisalat Misr
Pakistan
Revenue -6%1,028
EBITDA -2%347
EBITDA Margin +1pp34%
1Q 2016
YoYGrowth in AED1Q 2016
Revenue & EBITDA (AED m) /EBITDA Margin (%) / YoY Growth %
Growth in MAD
-3%
+1%
+1pp
YoYgrowth in
PKR
Revenue +9%1,165
EBITDA +8%411
EBITDA Margin 0pp35%
YoYGrowth in AED1Q 2016
+16%
+14%
0pp
YoYgrowth in
EGP
+10%
+5%
-3pp5,287
5,489 5,480
2,319 2,2072,364
Q1'15 Q4'15 Q1'16
Revenue EBITDA
44%40%
43%
57%
21%
19%
UAE57%
Int'l43%
MT57%
Egypt
21%
Pakistan19%
Others3%
Domestic vs. Int’l
12,726 12,853 69
198 95
67 169
Q1'15 UAE MT Group Egypt Pakistan Others Q1'16
Group Revenue
10Note: “Others revenues” consist of domestic non-telecom operations, other international operations, management fees, etc.
In Q1’16 consolidated revenue increased Y/Y by 1% attributed to UAE, MT Group and Egypt operations
Revenues from international consolidated operations increased by 4%, resulting in 43% contribution to Group revenues, an improvement of 2 points compared to Q1’15
― Growth in MT Group driven by int’l operations
― Revenue growth in Egypt despite currency devaluation
― Revenue growth in Pakistan continued negatively impacted by increased competition in international and mobile revenues
Highlights
Revenue (AED m) and YoY growth (%) Sources of Revenue growth – Q1’16 vs Q1’15 (AED m)
Revenue by Cluster (Q1’16)
International
12,726 12,596 12,853
30%
-3%1%
Q1'15 Q4'15 Q1'16
Revenue YoY growth %
MT66%
Egypt17%
Pakistan15%
Others2%
Group EBITDA
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In Q1’16 Consolidated EBITDA decreased Y/Y by 2% to AED 6.4 bndue to higher cost of sales, regulatory charges and one-off provisions
EBITDA in the UAE negatively impacted by higher cost of sales and network costs.
EBITDA of consolidated international operations increased Y/Y by 2%, resulting in 37% contribution to Group EBITDA, an improvement of 2 points compared to Q1’15
― Positive contribution from Maroc Telecom Group due to int’l subsidiaries
― Positive contribution from Egypt due to higher revenue
― Pakistan contribution impacted by currency devaluation while grew in local currency
6,530 6,478 6,424
51% 51% 50%
1Q'15 Q4'15 1Q'16EBITDA EBITDA Margin
Highlights
EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – Q1’16 vs Q1’15 (AED m)
EBITDA by Cluster (Q1’16)
Domestic vs. Int’l International
6,530 6,424
164
24 29
7
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Q1'15 UAE MT Group Egypt Pakistan Others Q1'16
Note: “Others EBITDA” consist of domestic non-telecom operations, other international operations, management fees, etc.
UAE61%
Int'l37%
Others2%
Group CAPEX
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1,266
4,908
1,639
10%
39%
13%
1Q'15 Q4'15 1Q'16
CAPEX CAPEX/Revenue
CAPEX (AED m) & CAPEX/Revenue Ratio (%)
In Q1’16 Consolidated Capex increased Y/Y by 29% resulting
in Capex/ Revenue ratio of 13%. This increase was driven by
international operations
Lower capital spend in the UAE
Capital expenditure in international operations increased by
87% and contributed 70% of consolidated Group Capex
― License acquisition in Ivory Coast
― Higher capex spending in Pakistan
HighlightsCAPEX by Cluster (Q1’16)
Domestic vs. Int’l International
14%
Sources of Capex growth – Q1’16 vs Q1’15 (AED m)
35%
10%
1,266
1,639
193
467
15
77 37
Q1'15 UAE MT Group Egypt Pakistan Others Q1'16
MT68%
Egypt13%
Pakistan18%
Others1%
UAE26%
Int'l70%
Others4%
Note: “Others Capex” consist of domestic non-telecom operations and other international operations
Net cash position (AED m) Mar’15 Mar’16
Operating 4,255 5,096
Investing (1,175) (1,737)
Financing (25) (243)
Net change in cash 3,054 3,116
Effect of FX rate changes 556 206
Reclassified as held for sales (6) (69)
Ending cash balance 22,148 24,676
Group Balance Sheet & Cash Flows
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Balance Sheet (AED m) Dec-15 Mar-16
Cash & Cash Equivalent (1) 21,422 24,676
Total Assets 128,265 132,139
Total Debt (1) 22,080 22,050
Net Cash / (Debt) (658) 2,626
Total Equity 59,375 57,573
Borrowings (1) by Operation Q1 2016 (AED m)
(1) Balances as of 31 December 2015 & March 2016 excludes discontinued operations
Debt (1) by Source Q1 2016 (AED m)
15,503
3,370 1,961
1,216
Group MT Group Egypt Pakistan
14,943
6,459
303 345
Bonds Bank Borrowings Vendor Financing Others
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Country by Country Financial Review
UAE: Maintained bottom-line growth
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Q1’15 Q4’15 Q1’16QoQ
GrowthYoY
Growth
Subs(1) (m) 11.4 11.6 12.0 +3% +6%
Revenue (AED m) 7,221 6,906 7,290 +6% +1%
EBITDA (AED m) 4,060 3,886 3,896 0% -4%
EBITDA Margin 56% 56% 53% -3pp -3pp
Net Profit 1,807 1,828 1,885 +3% +4%
Net Profit Margin 25% 26% 26% -1pp +1pp
CAPEX 622 2,685 428 -84% -31%
CAPEX/Revenue 9% 39% 6% -33pp -3pp
Subscriber growth Y/Y driven by mobile and eLife segments
Revenue growth Y/Y impacted by lower handset sales
Revenue growth Y/Y attributed to growth in mobile and fixed segments driven by higher data and growing subscriber base
EBITDA level weakening on higher interconnection and roaming costs, higher special project and G&A expenses
Net profit improvement Y/Y and Q/Q due to lower royalty charges partially diluted by higher depreciation expenses
Lower capital spending focused on network maintenance
(1) Subscriber numbers calculated as aggregate number of GSM, fixed, fixed broadband and eLife lines generating revenue during the last 90 days.
Highlights
1.61 1.77 1.84
7.77 7.91 8.23
114 110110
Q1'15 Q4'15 Q1'16
Postpaid Prepaid Blended ARPU
UAE: Consistent subscribers growth in mobile and eLifesegments with solid trends in postpaid segment
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0.96 0.87 0.84
132122
136
Q1'15 Q4'15 Q1'16
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)
0.80 0.87 0.89
383 407 389
Q1'15 Q4'15 Q1'16
E-Life (2P & 3P) ARPL
1.01 1.06 1.07
495 498 489
Q1'15 Q4'15 Q1'16
Fixed BB ARPL
Maroc Telecom: Growth driven by int’l subsidiariesMorocco, Benin, Burkina Faso, CAR, CDI, Gabon, Mali, Mauritania and Togo
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Subscribers (m) Revenue (AED m) (1) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
51.6 50.8 53.1
Q1'15 Q4'15 Q1'16
2,921 3,069 3,119
53%48% 50%
Q1'15 Q4'15 Q1'16
Revenue EBITDA %
Domestic vs. Int’l
Revenue Breakdown Q1’16
Int’l
313
1,497
779
11%
47%
25%
Q1'15 Q4'15 Q1'16
CAPEX CAPEX/Revenue
14%
Domestic vs. Int’l
Capex Breakdown Q1’16
Int’l
31%
Morocco55%
Int'l42%
Others-3%
Historical subsidiaries
63%
New subsidiaries
37% Morocco24%
Int'l
76%
Historical subsidiaries
31%
New subsidiaries
69%
168
340
153
16%27%
13%
Q1'15 Q4'15 Q1'16
CAPEX CAPEX/Revenue
Egypt: Double digit growth in revenue and EBITDA in local currency
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Total Subscribers (1) (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
1,070
1,246 1,165
36%32%
35%
Q1'15 Q4'15 Q1'16
Revenue EBITDA %
Strong revenue growth Y/Y despite impacted by currency devaluation
― Maintained strong revenue growth momentum in local currency at 16% level
Revenue growth is mainly attributed to continued upward trend in data revenues and higher voice contribution
EBITDA margin impacted by one-off item related to interconnection agreement with another mobile operator
Capex spending focused on network expansion
Highlights
96 94 94
23% 24% 24%
Q1'15 Q4'15 Q1'16
Subscribers Market Share
(1) Subscribers and market share data as per statistic published by the Ministry of Information and Technology
25.8
24.0 24.9
Q1'15 Q4'15 Q1'16
1,094
991 1,028
32%28%
34%
Q1'15 Q4'15 Q1'16
Revenue EBITDA %
135
362
212
12%
37%
21%
Q1'15 Q4'15 Q1'16
CAPEX CAPEX/Revenue
Pakistan: Subscriber growth amidst intense competition
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Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
Subscriber growth Q/Q confirmed for the two consecutive quarters
― Subscriber growth Y/Y impacted by regulatory mandated biometric verification measures
Revenue growth Y/Y impacted by subscriber loss in mobile segment, price competition in international and mobile
segments
EBITDA margin improvement as a results of cost optimization initiatives
Higher capex spending with intensity ratio of 21%
Highlights
22.2 22.2 21.8
Q1'15 Q4'15 Q1'16
1,040 1,106 1,083
16%
32%
14%
Q1'15 Q4'15 Q1'16
Revenue EBITDA %
140
395
47 14%
36%
4%
Q1'15 Q4'15 Q1'16
CAPEX CAPEX/Revenue
Nigeria: Growth impacted by challenging regulatory and macro economic environments
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Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
Subscriber growth in Q1 is impacted by subscriber disconnection in compliance with the regulatory mandatedregistration process
Revenue growth Y/Y in local currency of 9% driven by strong performance in data and digital services
EBITDA in absolute term is flat in local currency due to higher interconnection and termination costs, rental charges, and network costs; resulting in lower EBITDA margin
Lower capex spend Y/Y mostly due to timing of capitalisation of ongoing projects
Highlights
24%
2016 Actual Against Guidance: Confident in delivering the full year management guidance
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Revenue Growth %
EBITDA Margin%
CAPEX / Revenue %
Stable
~ 48% - 50%
Financial KPI
Guidance 2016In AED
Low single digits
~ 18%
Guidance 2016Constant
Currencies (1)
+1%
13%
ActualQ1 2016In AED
+3%
Actual Q1 2016Constant
Currencies
50%
(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.
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Etisalat Group Investor RelationsEmail: [email protected]
Website: www.etisalat.com/en/ir/index.jspr