Q2 2015 Results Presentation - Etisalat€¦ · Q2 2015 Results Presentation 29th July 2015, Abu...
Transcript of Q2 2015 Results Presentation - Etisalat€¦ · Q2 2015 Results Presentation 29th July 2015, Abu...
Etisalat Group
Q2 2015 Results Presentation
29th July 2015, Abu Dhabi
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
Ahmad JulfarChief Executive OfficerEtisalat Group
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Q2 2015 Highlights
Strategic Progress
Performance
CorporateOwnership
Continued strong performance in domestic market
Launched 4G License in Morocco
Optimizing International
portfolioMaintained
Credit Ratings
Subscribers (1)
168 million
Revenue
Strong growth yoy
EBITDA
Double digit growth yoy
Capex
16% ofrevenue
Dividends
AED 3.5 billion+26% yoy
(1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, fixed broadband and WLL lines generating revenue during the last 90 days.
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Q2 2015 Highlights
Financial Performance
Ahead of our Guidance
RevenueAED 13.3 billion
EBITDAAED 6.8 billion
Net ProfitAED 1.5 billion
CapexAED 2.2 billion
EBITDA Margin51%
Profit Margin12%
Revenue Growth
8% - 10%
EBITDA Margin
47%-48%
Capex/Revenue
17%-18%
2. Financial Overview
Serkan OkandanChief Financial OfficerEtisalat Group
Etisalat Group
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Q2’14 Q1’15 Q2’15QoQ
GrowthYoY
Growth
Subs (m) (1) 182 173 168 -3% -8%
Revenue (AED m) 12,579 12,906 13,303 +3% +6%
EBITDA (AED m) 5,866 6,569 6,843 +4% +17%
EBITDA Margin 47% 51% 51% +1pp +5pp
Net Profit 2,507 2,177 1,534 -30% -39%
Net Profit Margin 20% 17% 12% -5pp -8pp
EPS (AED) 0.29 0.25 0.18 -30% -39%
Subscriber growth Y/Y impacted by cleansing of subscriber base
Robust Y/Y revenue growth led by performance of domestic operations and consolidation of Maroc Telecom
Steady improvement in EBITDA level in absolute terms due to strong performance in the UAE and consolidation of Maroc Telecom
EBITDA margin maintained at above 50% level
Net profit impacted by forex losses, lower share of results, and higher depreciation, amortization and royalty charges
(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
12,579
13,307
645
915
(119 )(199)
(513)
Q2'14 UAE MT Group Egypt Pakistan Others Q2'15
Group Revenue
8Note: “Others” consist of domestic non-telecom operations and other international operations.
In Q2’15, consolidated revenue grew Y/Y by 6% attributed to strong performance in the UAE and consolidation impact of Maroc Telecom
Revenue from international operations contributed 43% to consolidated revenues mainly due to:
― Consolidation impact of Maroc Telecom in Q2-2015 for 3-month period
― Revenue growth in Egypt impacted by currency devaluation
― Revenue growth in Pakistan impacted by stiff competition in the mobile segment
― Revenue growth in others reflects the consolidation of Atlantique Group’s operations under Maroc Telecom
Highlights
Revenue (AED m) and YoY growth (%) Sources of Revenue growth – Q2’15 vs Q2’14 (AED m)
Revenue by Cluster (Q2’15)
International
12,579 12,908 13,307
27% 30%
6%
Q2'14 Q1'15 Q2'15Revenue YoY growth %
Int'l43%UAE
57%
Egypt19%
Pakistan19%
MT Group55%
Others7%
Int'l37%
UAE61%
Others2%
Group EBITDA
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In Q2’15, consolidated EBITDA increased Y/Y by 17% to AED 6.8 bn
EBITDA margin improvement Y/Y due improved revenue trends in the domestic market and full consolidation of Maroc Telecom
EBITDA of consolidated international operations increased Y/Y by 7% resulting in 37% contribution to Group EBITDA
― Consolidation of Maroc Telecom boosted EBITDA
― Egypt impacted by currency depreciation and higher network costs
― Pakistan impacted by lower revenue due to decline in international incoming traffic
5,8666,577 6,843
47% 51% 51%
Q2'14 Q1'15 Q2'15EBITDA EBITDA Margin
Highlights
EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – Q2’15 vs Q2’14 (AED m)
EBITDA by Cluster (Q2’15)
Domestic vs. Int’l International
5,866
6,843335 435
(55) (90)
352
Q2'14 UAE MT Group Egypt Pakistan Others Q2'15
Note: “Others” consist of domestic non-telecom operations and other international operations, …etc.
Egypt17%
Pakistan15%MT
Group65%
Others3%
Group CAPEX
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3,413
1,269
2,18227%
10%
16%
Q2'14 Q1'15 Q2'15
CAPEX CAPEX/Revenue
CAPEX (AED m) & CAPEX/Revenue Ratio (%)
Capex decreased Y/Y by 36% resulting in Capex/Revenue
ratio of 16%.
Capital spending in the UAE increased by 83% representing
a 12% capex/revenue ratio. Capex spend aimed at network
modernization and enhancement of eLife product portfolio
Capital expenditure in international operations decreased
Y/Y by 55% and contributed 49% of consolidated capex
driven by 4G License acquisition in Maroc Telecom
HighlightsCAPEX by Cluster (Q2’15)
Domestic vs. Int’l International
Note: (1) Capex/revenue ratio in Q2 2014 excluding 3G license acquisition and 2G license renewal in Pakistan is 16%; Capex/revenue ratio in Q2 2015 excluding 4G license acquisition in Morocco is 14%. (2) “Others” consist of domestic non-telecom operations and other international operations, …etc.
16%
Sources of CAPEX growth – Q2’15 vs Q2’14 (AED m)
3,413
2,182
407286
(96 )
(1,680) (149)
Q2'14 UAE MT Group Egypt Pakistan Others Q2'15
Int'l59%
UAE41%
Egypt15%
Pakistan24%
MT Group56%
Others5%
14%
Net cash position (AED m) H1 ‘14 H1 ‘15
Operating 5,145 5,449
Investing (19,867) (3,292)
Financing 14,749 (2,381)
Net change in cash 24 (224)
Effect of FX rate changes 72 (40)
Ending cash balance 15,547 18,289
Group Balance Sheet & Cash Flows
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Balance Sheet (AED m) Q4’14 Q2’15
Cash & Cash Equivalent (1) 18,543 18,277
Total Assets 129,585 125,780
Total Debt (1) 22,229 23,898
Net Cash / (Debt) (3,686) (5,620)
Total Equity 60,927 58,604
(1) Balances excludes discontinued operations
Debt (1) by Source Q2’15 (AED m)
Borrowings (1) by Operation Q2’15 (AED m)
15,379
4,800
2,382 1,048
289
Group MT Egypt Pakistan Sri Lanka
14,815
8,389
362 329
Bonds Bank Borrowings Vendor Financing Others
Consistent Track Record of Shareholder Remuneration
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Interim Dividend Payout RatioInterim Dividends and Dividends Per Share
HighlightsInterim Dividend & Earnings Per Share (AED)
Etisalat’s Board approved 40 fils per share to be
distributed from 18 August 2015 to the shareholders
registered in the shareholders’ register on 9 August 2015
(1) Represents diluted earnings per share
H1'11 H1'12 H1'13 H1'14 H1'15
DPS 0.25 0.25 0.35 0.35 0.40
EPS (1) 0.43 0.46 0.48 0.52 0.43
1.98 1.98
2.77 2.77
3.48
0.25 0.250.35 0.35 0.40
2011 2012 2013 2014 2015
Interim Dividends (AED bn) DPS
57.9%53.8%
72.8%
61.1%
93.7%
2011 2012 2013 2014 H1'15
Payout Ratio
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Key Markets Financial Performance
UAE: Strong operating and financial performance
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Q2’14 Q1’15 Q2’15QoQ
GrowthYoY
Growth
Subs(1) (m) 11.3 11.4 11.3 0% 0%
Revenue (AED m) 6,834 7,221 7,479 +4% +9%
EBITDA (AED m) 3,860 4,060 4,195 +3% +9%
EBITDA Margin 56% 56% 56% 0pp 0pp
Net Profit 1,707 1,807 1,864 +3% +9%
Net Profit Margin 25% 25% 25% 0pp 0pp
CAPEX 491 622 898 +44% +83%
CAPEX/Revenue 7% 9% 12% +3pp +5pp
Subscribers growth was impacted by cleansing of subscriber base
― Double digit growth in the lucrative post-paid and eLife segments;
Revenue growth due to increase in mobile and fixed broadband and higher terminal sales;
Better EBITDA level due to higher revenue and better cost controls;
Maintained high EBITDA margin level;
Higher net profit due to higher EBITDA level that was partially offset by higher depreciation and royalty charges;
Higher capital spending with focus on network modernization and enhancement of eLife product portfolio
(1) Subscriber numbers calculated as aggregate number of GSM, fixed, fixed broadband and eLife lines generating revenue during the last 90 days.
Highlights
1.48 1.61 1.68
7.85 7.77 7.69
115 114 116
Q2'14 Q1'15 Q2'15
Postpaid Prepaid Blended ARPU
UAE: Strong customer acquisition in post-paid and eLife
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1.02 0.96 0.93
130132
133
Q2'14 Q1'15 Q2'15
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)
0.720.80 0.82
384 383404
Q2'14 Q1'15 Q2'15
E-Life (2P & 3P) ARPL
0.95 1.01 1.03
485 495 499
Q2'14 Q1'15 Q2'15
Fixed BB ARPL
Morocco
62%
Int'l41%
Others
-3%
Maroc Telecom: Capitalize on strategic investment in 4GMorocco, Benin, Burkina Faso, CAR, CDI, Gabon, Mali, Mauritania and Togo
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Subscribers (m) Revenue (AED m) (1) / EBITDA Margin Highlights
38.4
51.6 50.8
Q2'14 Q1'15 Q2'15
3,308
2,921 3,122
56% 53% 53%
Q2'14 Q1'15 Q2'15
Revenue EBITDA %
Domestic vs. Int’l
Revenue Breakdown Q2’15
Int’l
(1) Revenue figures in AED for Q2’15 & Q1’15 are not comparable to Q2’14 due to differences in accounting policies.
Completed acquisition of Atlantique Telecom’s
six operations on 26 January, 2015
Growth in subscriber base is driven by
international historical subsidiaries and new
acquired operations
Revenue growth in local currency mainly driven
by international subsidiaries and newly
acquired operations
― Like for like, revenue is flat in local
currency
Decline in EBITDA margin Y/Y is mainly due to
lower margin in Morocco and lower margin at
the newly acquired operations
Launched 4G services in Morocco in July 2015
New Subsidiaries
36%Historical
Subsidiaries64%
292
169 196
24%16% 18%
Q2'14 Q1'15 Q2'15
CAPEX CAPEX/Revenue
Egypt: Stabilizing margins despite currency devaluation and challenging regulatory measures
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Total Subscribers (1) (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
1,208
1,070 1,090
39%36% 38%
Q2'14 Q1'15 Q2'15
Revenue EBITDA %
Market subscriber growth impacted by regulatory imposed control over indirect distribution channels
Revenue growth Y/Y impacted by currency devaluation and slower subscriber acquisitions
EBITDA margin Y/Y slightly lower on higher network costs due to higher electricity and utility costs
Capital intensity ratio at 18% level with capital spending mainly focused on network rollout
Highlights
102 95 96
23% 23% 24%
Q2'14 Q1'15 Q2'15
Subscribers Market Share
(1) Subscribers and market share data as per statistic published by the Ministry of Information and Technology
27.8 25.8
22.0
Q2'14 Q1'15 Q2'15
1,310
1,094 1,111
35%32% 33%
Q2'14 Q1'15 Q2'15
Revenue EBITDA %
1,993
134 313
152%
12% 28%
Q2'14 Q1'15 Q2'15
CAPEX CAPEX/Revenue
Pakistan: Intense competition and biometric subscriber verification in mobile segment
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Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%) (1)
Subscriber growth negatively impacted by regulatory mandated biometric verification measures
Revenue growth Y/Y adversely impacted by falling international incoming traffic and stiff competition among mobile operators
EBITDA margin declined Y/Y due to lower revenue
Capital spending reduced Y/Y resulting in Capex/ revenue ratio of 28%
Highlights
42%
Note: (1) Capex/revenue ratio in Q2 2014 excluding 3G license acquisition and 2G license renewal in Pakistan is 42%;
19.4
22.2
22.9
Q2'14 Q1'15 Q2'15
1,097 1,040 1,042
15% 16%13%
Q2'14 Q1'15 Q2'15
Revenue EBITDA %
290
140
38
26%
14%
4%
Q2'14 Q1'15 Q2'15
CAPEX CAPEX/Revenue
Nigeria: Strong operational results masked by currency devaluation
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Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)
Solid subscriber acquisition with Y/Y growth of 18%
Revenue growth Y/Y impacted by currency devaluation
― Strong revenue growth Y/Y of 17% in local currency driven by higher voice and data revenues
EBITDA in absolute terms improved in local currency mainly due to higher revenue despite the increase in cost of sales and operating costs
EBITDA margin slightly lower due to higher network costs and staff costs driven by inflationary pressure
Capex spending declined Y/Y mostly due to timing of capitalisation of ongoing projects
Highlights
H1 2015 Actual Against Guidance: Confident in delivering the full year management guidance
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Revenue Growth %
EBITDA Margin%
CAPEX / Revenue Ratio
8% - 10%
47% - 48%
17% - 18%
17%
51%
13%
Financial Objective Guidance 2015 Actual 6M 2015