2013 Supplier Awards Event
WELCOME
Guy De Poortere
Vice President SCM
Supplier Day
15/10
Agenda
16 SEPTEMBER
Friday
Subject Speaker Belgacom Intro Ray Stewart CFO Facts & figures Ray Stewart CFO Innovation as a Laurent Claus driver for success VP Customer ICT Services Partnership, Dominique Leroy a way to innovate EVP CBU Duality of innovation and Bruno Chauvat sourcing in a global market EVP Strategy & Content Innovation in Supply Guy De Poortere Chain Management VP SCM
BELGACOM INTRO
Ray Stewart
Chief Financial Officer
Supplier Day
15/10
How did Belgacom perform so far in 2013 FACTS AND FIGURES
Ray Stewart
Chief Financial Officer
Supplier Day
15/10
Belgacom Performance over first half 2013
• Financial results H1 on track to meet FY guidance o Revenue -0.9% YoY o Ebitda -4.1% YoY o Capex/revenue 11.7%
• Operating conditions very challenging o Stiff competition & New Telecom law led to Mobile disruption o European regulation measures on Roaming significantly impacting
revenue & ebitda
• Belgacom well positioned to face challenging market dynamics o Successful mobile retention/acquisition actions o Solid performance of Belgacom Fixed business o Convergence strategy providing solid support
H1 2013 HR and Non-HR expenses
450 443
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
0.11
0.12
0.13
0.14
0.15
0
200
400
600
800
1,000
1,200
Ytd June 2012 Ytd June 2013
-1.5%
Non-HR expenses ( € million)
559 572
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
0.11
0.12
0.13
0.14
0.15
0
200
400
600
800
1,000
1,200
Ytd June 2012 Ytd June 2013
+2.4%
HR expenses ( € million)
• Cost evolution unbalanced versus revenue trend • Structural cost inflation turns costs management into a key challenge for
Belgacom
H1 2013 Group Revenue (mio €)
H1 2013 Group direct margin (mio €)
H1 2013 Group Ebidta (mio €)
Invest in high quality fixed and mobile network to maintain leadership in convergence
360 370
11.2%11.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
0
200
400
600
800
1,000
1,200
Ytd June 2012 Ytd June 2013
Accelerated network investments in 2013 o maintain network superiority on mobile speed and coverage, o increase the bandwidth on fixed network via DLM and vectoring technology o make operations leaner through a simplified network
H1’13 Free Cash Flow of € 136 million impacted by income tax payments and lower ebidta
409
797
980
788691
289
136
2008 2009 2010 2011 2012 Ytd June'12 Ytd June'13
Free Cash Flow (in mio € )
Lower FCF result of: • a timing difference in
income tax payments • lower EBITDA
Sound financial position with one of the lowest debt levels in European telecom sector
(1,601)136 (538)
(38) 14 (1) (2,027)
Net debtDecember 2012
FCF Dividends Non controllinginterests
Net sale oftreasury shares
Other Net debt June2013
• Net financial debt at € 2,027m • The outstanding long term financial gross debt amounted to € 2.1Bio • Credit ratings: Standard & Poor’s A; Moody’s A1 – both stable outlook
Retention actions stabilised mobile churn
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
postpaid
prepaid
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Clear effect New
telecom law
effect in EBU much less
pronounced
Consumer Mobile Churn
Enterprise Mobile Churn Focus on mobile in H1 through positioning of
Proximus network quality, proactive retention and acquisition actions
> 60% postpaid
customers on new mobile tariff plan
H1’13 Focus on mobile: retention and aquisition
45
-39
-88
-52
46
5,543 5,504 5,416 5,364 5,410
4,000
4,200
4,400
4,600
4,800
5,000
5,200
5,400
5,600
-100
-80
-60
-40
-20
0
20
40
60
80
100
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Mobile customer evolution2
net adds total
89
41
-16
61
128
-44-80 -72
-113-82
-120
-70
-20
30
80
130
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Split Postpaid - Prepaid
Net adds Postpaid Net adds Prepaid & MVNO
50
17
-37
26
93
-44
-80 -68
-108-82
-150
-100
-50
0
50
100
150
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Net adds Consumer Prepaid
Net adds Consumer Postpaid
36
2116
3033
0
5
10
15
20
25
30
35
40
45
50
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
EBU Net Adds
Mobile
market share₁
+Tango
Supported by tactical
joint offers & strong
marketing actions
40.4%
30.5%
23.6%
5.5%
Mobile offers became more abundant and simplified
Clear Postpaid ARPU impact While Prepaid ARPU remains fairly stable
Since the Telco law came into force, the Consumer
Postpaid ARPU decline clearly accelerated. Initial loss high-value postpaid customers
Re-pricing effect ( ~60% of the Postpaid customer
base has been re-priced to new tariffs)
Prepaid (lower ARPU) moving to Postpaid
In contrary, the Prepaid ARPU was not impacted by
the new Telco Law.
27.3 €28.9 €
26.6 €24.1 € 24.4 €
14.2 € 13.6 € 14.4 € 13.3 € 14.0 €
.0070 €
.0120 €
.0170 €
.0220 €
.0270 €
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Consumer blended ARPU: Split Prepaid - Postpaid
BlendedPostpaid
ARPU
BlendedPrepaid
ARPU
37.2 € 35.5 € 33.9 €31.5 € 30.8 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Enterprise blended ARPU
The Enterprise Business experiences a more general
ARPU decline driven by: Regulation
More abundant offers
Churn of high-usage customers in the last quarter of ‘12
Solid performance of fixed products
Convergence strategy: key advantage in challenging market
INNOVATION as a Driver for Success
Laurent Claus Vice President Customer ICT Services
Supplier Day
15/10
Innovation driving mobile leadership and fixed speed evolution while simplifying
—Dynamic Line Management
—Preparation for Vectoring
—Activation FTTH test-customers
—Network simplification on track
—New IT foundations on track
—Higher network & IT stability
—3G+ network upgrade
—4G network roll-out
Simplification Fixed Mobile
Innovation As Key Value Enabler What We Have Achieved In 2013
SMART
Due to pressure on our revenues, cost efficiency programs are here to stay. Hence, we need to be smarter and work more together
while still bringing better experiences.
SMART NETWORKS
1
SMART INNOVATION
2 SMART
OPERATIONS
3
Innovation as a Driver for Success Prepare for the Smart Operator Era
Smarter network investment through increased intelligence & better alignment with future
Be smarter in Fixed Be smarter in Mobile
Exponential mobile data growth demands for increased network intelligence to control required high investments in capacity
Further extension of our high-speed network footprint through maximal alignment with our envisioned future target destination
users X 2 in 1 year
+60% in 6 months
APR 2012
JUN 2013
AUG 2013 More non-linear
demand +80% in 2 years
AUG 2011
Innovation As A Driver For Success Smart Networks
Smart differentiation through new convergent innovative services on top of our networks
Be smarter in Partnerships for innovation Be smarter in new services innovation
New convergent services with a differentiating customer experience through smart combination of our networks & technologies
New type of strategic partnerships to bring innovations faster to the market
+ + MOBILE FIXED ICT SHARED
RISK SHARED VALUE
Innovation As A Driver For Success Smart Innovation In Services
Simplify for more lean operations while converging to an omni-channel experience
Smarter optimization of operational costs Towards more smarter operations
Network simplification to decrease operational costs and new IT to bring a more efficient omni-channel customer experience
Optimization of operational maintenance, support and workforce costs in line with industry reality of declining revenues
MAINTENANCE COST
WORKFORCE COST
SEAMLESS experience
LEAN Operations
SEAMLESS Platforms
+ =
Innovation As A Driver For Success Smarter Operations
Innovation As A Driver For Success Summary
SMARTER through more collaborative partnerships
The Supply Chain Awards
SUSTAINABILITY
PARTNERSHIP A way to innovate
Dominique Leroy
Executive Vice President CBU
Supplier Day
15/10
CBU strategy: 4 pillars to reach our ambitions
LEADER IN MOBILE VIA • Proximus brand Revamp
• Best network strategy
• Grow and monetization of data
• Scarlet to address price seekers
THE BEST CONVERGENCE EXPERIENCE THROUGH • Convergent devices
• Convergent network
• Convergent content
SIMPLIFICATION TO
• Boost the customer experience
• Reduce our cost
INNOVATION THROUGH PARTNERSHIPS
• Find new revenues sources
• Increase loyalty
CBU strategy : innovation pillar
Arrow 1
Better customer
experience
Faster
Simple & agile company
More efficient
Device, network and application – gradual evolution to partnership allowing :
• Belgacom to benefit from
global player expertise
• The customers to benefit from best convergent experience
Evolution from pure vendor management to partnership
Customer context: Device partnership
Growing importance of devices as enablers of our access & enabler of our convergence Benefit from global player expertise
All devices - fix & mobile - are key enablers for our new services
Music Photos
Calendar
Contacts
Mail & social network
…
Partnership expertise in portfolio - Selection of innovative products -
Partnership efficiency in organization - Collaboration process -
Partnership expertise in marketing - Synergies in communication -
Implement CPFR tools (Collaborative Planning, Forecasting and Replenishment)
• Co-development Partnership on VDSL2
System Level Vectoring technology
• Belgacom will likely to be the first to deploy it at large scale, as from early 2014
• Boost the customer experience of Belgacom Internet and TV products
Customer context: Network & partnership
• Thanks to the partnership with FON,
Belgacom was the first in Belgium and among the first TelCo in the world, to offer free global WiFi network sharing
• Every Belgacom broadband customer gets unlimited free access to all Belgacom 700k Fonspots in Belgium, and to 12 Mio FONspots around the world
Partnership to improve time to market & to increase reach
Innovator in application & content Search new revenues sources and increase loyalty
Develop a new umbrella to better protect and assist our customers starting with:
• Device insurance
• PC Security
• Home Control
Protection Entertainment
Maintain & develop ARPU in an increasing OTT context through :
• TV content
• TV Everywhere
• Music
• VOD & SVOD
Example of successful partnership : Norton They went beyond their expected role & supported us in the sales & marketing domain (training,
incentive & participation in the outbound calls campaigns)
Example of marketing/communication Win-win collaboration
Clear support to our Network Superiority claim
A tram as less “conventional” and cost efficient medium ( with local impact)
Brand visibility for both parties
Call Center Partners Customer Care and Customer Help Center
Inbound Calls Administration
Outbound Campaigns
Inbound Calls Outbound Campaigns Inbound Calls
Outbound Campaigns
Inbound Calls Administration
Outbound Campaigns Chat services
E-mail services
Inbound Calls Outbound Campaigns
E-mail services
Belgacom’s Call Center partners need to provide the necessary flexibility to reduce waiting times for customers requiring service or help, even at peak moments.
• Avoids customers calling back • Improves customer satisfaction: fast response to customer demand
Numerous success so far allowing to embody and drive convergence in the Belgian market
Partnerships are about :
• Long term vision, instead of succession of tactical actions
• Growth generation
• Global vision, all product lines
• Innovation
“STRONGER TOGETHER “
The Supply Chain Awards
QUALITY AND SECURITY OF SUPPLY
Duality of innovation and sourcing in a global
market
Bruno Chauvat Executive Vice President Strategy & Content
Supplier Day
15/10
Renewal is the 21st century model of sustainable development
Who knew Lady Gaga before 2008 ?
In 2012, we said : Future is unpredictable…but we can anticipate it
Renewal is the 21st century model of sustainable development
Hanna Montana @Disney Miley Cyrus @VMA
2009 2013
2013 : but it is always
more unpredictable…
Renewal is the 21st century model of sustainable development
Hanna Montana @Disney Miley Cyrus @VMA
2009 2013
2013 : but it is always
more unpredictable…
Early enough to lead or too late to survive ?
Innovation is the competitive advantage to survive in our industry
Innovation is the competitive advantage to grow even faster...
Early enough to lead or too late to survive ?
Innovating under different angles
- Business model discontinuity
- Innovation across the value chain and category killers
- Bring scale to reach everyone everywhere
Innovation should manage the legacy
- Simplification
- Smooth migration
- Backward compatibility
- Upward compatibility
Together we shape the future
Conclusion
The Supply Chain Awards
INNOVATION
INNOVATION in Supply Chain Management
Guy De Poortere
Vice President SCM
Supplier Day
15/10
Strategic Priorities For 2013
3 New Services
1 Customer Experience
2 Simplification
Innovation CSR Risk Mgt Time To market
Value chain
Quality Perfor-mance
Will increase focus and speed up investments in our priorities:
Enabled by our people and our suppliers
Our strategy is to be the leader in convergence
Belgacom SCM Growth Path 2012-2013
Commercial orientation
Transaction orientation
Process orientation
Supply chain orientation
Value chain orientation
Purchasing coordination
1 2 3 4 5 6
From Price to Cost focus From TCO to Value focus
Contribution to competitive advantage
Time
Availability Price Synergy XF Sourcing Integration Value
Transactionally integrated Internally integrated Externally integrated
Transaction towards value & innovation
What did we deliver and how to meet & exceed BU challenges & expectations?
Observations / Expectations
Observations Suppliers are key in innovation
SCM has a pivotal role
in...
Controlling costs & assets
Value creation & innovation
Four Rings Of Innovation
Business model
Product & services Process
Technology
Launched by M.D.I. this worlds 1st car to run on air with an air engine fixed on its back
First Ring Of Innovation Technology Innovation
WHAT?
Technology Innovation Belgacom Vectoring
100 Mhz
50 Mhz
Second Ring Of Innovation Process Innovation
5 fingers touching the factory & 5 touching the customer
Zara can design, produce & deliver in 15 days flat
Collects 85% of full price versus 65% competition
Example Fashion Retailer ZARA
Process Innovation Belgacom One Warehouse
• Serial number tracking of devices throughout the E2E Supply Chain • A formal handover is tracked when changing responsibility
• A central management system to view at all times the status of a device
Third Ring Of Innovation Product & Service Innovation
Product & Service Innovation Belgacom Easy Access
Fourth Ring Of Innovation Business Model Innovation
Business Model Innovation Belgacom 11
Business partnering model
Beyond traditional operating models
Joint business platforms
Four Key Dimensions Of Successful Supplier Interaction
Pro-activity roadmaps
Customer of choice
Cross functional
SRM
Exchange Quality of Commu-nication
We invite you…
Top Related