Etisalat Group Q1 2013 Results Presentation · 2020-04-22 · Etisalat Group Q1 2013 Results Presentation Abu Dhabi, UAE April 24th, 2013 . April 2010 2 Emirates Telecommunications

April 2010 1

Etisalat Group

Q1 2013 Results Presentation

Abu Dhabi, UAE

April 24th, 2013

April 2010 2

Emirates Telecommunications Corporation and its subsidiaries

(“Etisalat Group”) 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.

Disclaimer

April 2010 3

Business Overview

Ahmad Julfar

Chief Executive Officer

4

Etisalat Group: Solid operational performance

8.2 8.5 9.6

50% 50% 52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Q1'12 Q4'12 Q1'13

Revenue EBITDA %

0.9

1.5

1.1

11% 17%

11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Q1'12 Q4'12 Q1'13CAPEX CAPEX/Revenue

122 139 141

Q1'12 Q4'12 Q1'13

(1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, dialup, fixed broadband and WLL lines generating revenue during the last 90 days.

(2) Subscriber numbers reported in Q1’12 has been adjusted to exclude XL Axiata operations due to the reclassification of XL Axiata investment as “other

investments available for sale” effective from September 1st , 2012.

Subscribers (1) (2)

Strong subscriber acquisition across the

footprint

Revenue & EBITDA %

Sustained revenue growth momentum and

improved profitability

Capex & Intensity Ratio %

Retained capital intensity ratio at 11% of

revenue

Y/Y

15%

Y/Y

17%

Y/Y

14%

5

Clusters: Top-line expansion and steady

operating margins

Q1 2013 UAE Egypt Africa (1) Asia(2) Associates(3)

Revenue (AED m) 6,007 1,136 694 1,629

YoY Growth

+4%

-6%

+2%

+332%

EBITDA (AED m) 3,516 402 179 507

EBITDA Margin 59% 35% 26% 31%

Net Profit 1,539 19 -38 28 139(4)

Net Profit Margin +26% +2% -6% +2%

(1) Africa cluster consists of Ivory Coast, Benin, Togo, Gabon, Niger, Central African Republic, Tanzania and Sudan operations

(2) Asia cluster consists Afghanistan, Pakistan and Sri Lanka operations

(3) Associates include KSA, Nigeria and Thuraya

(4) Etisalat share of associate results after Federal Royalty

Highlights

• Strong operational performance led by UAE operations

• Currency devaluation impacted revenue growth in Egypt Cluster

• Slower revenue growth in Africa Cluster attributed to intense competition mainly in Ivory Coast

• Asia Cluster was impacted by consolidation of Pakistan operations

• Sustained operating margins across all clusters

6

Maroc Telecom: Submission of Binding Offer

• Etisalat will submit today a Binding Offer to Vivendi Group to acquire all its shares in Itissalat Al Maghrib

(“Maroc Telecom”) representing approximately 53% of the issued share capital and voting rights

• Etisalat’s Binding Offer takes into consideration the outcomes of the due diligence exercise that was

recently completed and will be binding until the end of the second business day following the approval of

Etisalat’s Extraordinary General Meeting.

• The Offer remains subject to a number of conditions and securing required regulatory approvals in the

Kingdom of Morocco and other jurisdictions in Maroc Telecom’s footprint, as well as other approvals that

are part of Etisalat’s corporate governance.

• Market regulations in Morocco will require Etisalat to make a mandatory tender offer to the minority

shareholders, and consequently Etisalat may end up acquiring more than the 53% stake offered by

Vivendi.

• Etisalat is planning to finance the transaction with external funding and has already secured the required

funds from both local and international banks.

April 2010 7

Financial Overview

Serkan Okandan

Chief Financial Officer

8

Etisalat Group: Healthy growth and improved

operating margins

Q1’12 Q4’12 Q1’13 QoQ YoY

Aggregate Subs(1) (2) (m) 122 139 141 +2% +15%

Revenue (AED m) 8,205 8,479 9,604 +13% +17%

EBITDA (AED m) 4,094 4,279 5,035 +18% +23%

EBITDA Margin 50% 50% 52% +2pp +3pp

Net Profit (AED m) 1,809 854 1,825 +114% +1%

Net Profit Margin 22% 10% 19% +9pp -3pp

EPS (AED) 0.23 0.11 0.23 +114% +1%

Highlights

• Maintained solid subscriber growth momentum with double digit growth during the quarter

• Strong revenue growth driven by the consolidation of Pakistan operations and better performance of the

domestic operations

• Improved both EBITDA level in absolute terms and EBITDA margin mainly through revenue growth and

continued cost optimization measures despite the change in geographic mix

• Net profit margin down due to the impact of consolidation of Pakistan in the revenue line. (1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, dialup, fixed broadband and WLL lines generating revenue during the last 90 days.

(2) Subscriber number reported in Q1’12 has been adjusted to exclude XL Axiata operations due to the reclassification of XL Axiata investment as “other investments

available for sale” effective from September 1st , 2012.

Revenue (AED b) and YoY growth (%)

Sources of Revenue growth – Q1’13 vs Q1’12

9

Group Revenue: Higher revenue contribution

from domestic and Asia

8.20 8.25 8.01 8.48 9.60

2% 4% 0%

3%

17%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Revenue YoY growth %

8,205

8,425 8,355 8,371 8,388

9,621

9,604

220 70 17

1,252

19

Q1'12 UAE Egypt Africa Asia Other Q1'13

Note: “Other revenues” consist of non-telecom revenues, management fees, etc.

Highlights

• Maintained revenue growth momentum

• 17pp Y/Y increase in consolidated revenue

attributed to better performance of UAE

operations and Asia Cluster

• Revenue performance in Asia Cluster

contributed 89% to group revenue growth due

to the consolidation of Pakistan operations

• Currency devaluation negatively impacted

contribution from Egypt

+17%

EBITDA (AED b) & EBITDA Margin

Sources of EBITDA growth – Q1’13 vs Q1’12

10

Group EBITDA: Better EBITDA margins

Highlights

• EBITDA level in absolute terms increased 23% Y/Y

• EBITDA margin improvement of 3 pts to 52% Y/Y

despite the change in geographic mix

• Positive EBITDA contribution from UAE operations

mainly through revenue growth

• Negative contribution from Egypt cluster impacted by

currency devaluation

• Negative contribution from Africa cluster mainly due

to higher network costs in Ivory Coast

• Asia Cluster’s EBITDA benefited from the

consolidation of operations in Pakistan

4.09 4.26 4.22 4.28 5.03

50% 52% 53% 50% 52%

-15%

-5%

5%

15%

25%

35%

45%

55%

65%

75%

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

EBITDA EBITDA Margin

4,094

5,035

100 29 12

512

369


Note: “Other EBITDA” consist of results from non-telecom operations, management fees, etc.

+23%

CAPEX (AED b) & CAPEX/revenue %

Operating cash flow1 AED (m)

11

Group CAPEX: Improvement in operating

cash flow and capital intensity ratio

0.93 0.85 0.91

1.47

1.06

11% 10% 11%

17%

11%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13

Highlights

• Capital spending Y/Y up by 14% impacted by

operations in Pakistan that accounted for

29% of total spend.

• UAE operations contributed 45% to the

quarter capex with spending focused on

capacity and coverage.

• Operating cash flow improved to AED 2.1

billion due to better operating profits and

consolidation of Pakistan;

• Operating cash flow margins Y/Y up by 6 pts

to 22%;

(1) Operating cash flow defined as (EBITDA – CAPEX) in all subsidiaries with the exception of UAE and other in which Federal Royalty is also included in the

formula (i.e. EBITDA – CAPEX – Federal Royalty).

1,356

1,662 1,575 1,601 2,052 2,146

2,146

306 87 25

452 94


12

Group Balance Sheet & Cash Flows: Improved

liquidity and operating cash flow positions

Balance Sheet (AED m) Q4’12 Q1’13

Cash & Cash Equivalent 13,934 16,943

Total Assets 79,951 81,874

Total Debt 5,806 5,484

Net Cash 8,128 11,459

Total Equity 46,056 43,900

Net cash generated/

used (AED m) Q1’12 Q1’13

Operating 3,332 3,964

Investing (1,274) (585)

Financing (514) (249)

Net change in cash 1,544 3,130

Effect of FX rate changes 11 (122)

Ending cash balance 11,527 16,943

Highlights

• Robust liquidity position with sufficient cash

reserves to cover total debt and capital

investments

• Liquidity improvement led by better operating

cash flow

• Better operating cash flow through improved

capital efficiency and operational execution

• Final dividend payment for the year 2012 paid in

April (AED 3.6 billion)

• Royalty payment for the year 2012 will be paid in

April

13

UAE: YoY revenue growth for the second

consequtive quarter Quarterly Q1’12 Q4’12 Q1’13 QoQ YoY

Subs(1) (m) 8.7 9.0 9.3 +4% +7%

Revenue (AED m) 5,788 5,851 6,007 +3% +4%

EBITDA (AED m) 3,416 3,398 3,516 +3% +3%

EBITDA Margin 59% 58% 59% 0pp 0pp

Net Profit 1,533 1,448 1,539 +6% 0%

Net Profit Margin 26% 25% 26% +1pp -1pp

CAPEX 470 530 477 -10% +2%

CAPEX/Revenue 8% 9% 8% -1pp 0pp

Highlights

• Strong performance underpinned by growth in active subscriber base across all segments

• Strong revenue growth driven by data and wholesale segments and handset sales

• Improvement in EBITDA level attributed to improvement in revenue trends and controlled spending;

sustained EBITDA margin at 59% despite the changes in revenue mix

• Improvement in net profit despite higher depreciation and royalty expenses

• Stable capex/revenue ratio at 8% with spending focused on network quality

(1) Subscriber numbers calculated as aggregate number of GSM, fixed, dialup, fixed broadband and eLife lines generating revenue during the last 90 days.

Mobile Subs (m) & ARPU(2) (AED)

1.13 1.11 1.14

5.80 5.96 6.28

141 136 132

0

20

40

60

80

100

120

140

160

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Q1'12 Q4'12 Q1'13

Postpaid Prepaid Blended ARPU

Fixed Broadband(4) Subs (m)

Fixed Subs (m) & ARPL(3) (AED)

14

UAE: Solid Subscriber(1) growth across all

segments

1.02 1.10 1.09

128 107 110

0

50

100

150

200

250

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Q1'12 Q4'12 Q1'13

Fixed ARPL

0.77 0.81 0.84

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

Q1'12 Q4'12 Q1'13

eLife Subs – Double & Triple-Play (m)

0.41

0.51 0.56

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Q1'12 Q4'12 Q1'13

(1) Subscriber numbers are lines generating revenue during the last 90 days.

(2) Mobile ARPU calculated as total mobile voice, data and roaming revenues divided by the average mobile subscribers for the quarter.

(3) ARPL calculated as fixed line revenues divided by the average fixed subscribers for the quarter.

(4) Fixed broadband subscriber numbers calculated as total of residential DSL (Al-Shamil), corporate DSL (Business One) and E-Life subscribers.

15

Egypt: Currency devaluation impacting

growth Revenue (AED m) & EBITDA Margin

1,206 1,303

1,136

36% 47%

35%

-10%

10%

30%

50%

70%

90%

0

200

400

600

800

1,000

1,200

1,400

Q1'12 Q4'12 Q1'13

Revenue EBITDA %

CAPEX & CAPEX/Revenue ratio (%)

123

621

181

10%

48%

16%

0%

10%

20%

30%

40%

50%

60%

70%

(100)

100

300

500

Q1'12 Q4'12 Q1'13

CAPEX CAPEX/Revenue

Highlights

• Revenue growth muted by currency devaluation

• Single digit revenue growth in local currency

• Revenue growth driven by data segment

• Y/Y EBITDA margin sustained at comparable

mid 30’s level

• Y/Y capital spending increased by 48% mainly

due to network expansion

16

Asia: Sustained growth with improved margins Pakistan, Afghanistan and Sri Lanka

Highlights

• Asia Cluster was impacted by consolidation of Pakistan

operations effective from Jan 1st 2013

• Excluding Pakistan, Y/Y revenue grew would have been

5% driven by strong performance in Afghanistan

• Improvement in EBITDA margin to 31%; excluding

Pakistan, margin up by 6 pts QoQ to 21%

Revenue (AED m) / EBITDA Margin

378 396

1,629

-1% 15%

31%

-10%

0%

10%

20%

30%

40%

50%

60%

0

200

400

600

800

1,000

1,200

1,400

1,600

Q1'12 Q4'12 Q1'13

Revenue EBITDA %


Subscribers (m)

7.6 8.2

36.6

Q1'12 Q4'12 Q1'13

243

126

376

64%

32% 23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

350

400

Q1'12 Q4'12 Q1'13

CAPEX CAPEX/Revenue

(Excluding

PTCL) 21%

Highlights

• Strong Y/Y subscriber growth of 27% mainly driven by

growth in Ivory Coast, Benin, Togo and Tanzania

• Slower revenue growth Y/Y of 2% mainly impacted by

competitive environment in Ivory Coast operations

• EBITDA margin Y/Y negatively impacted due to higher

network rollout and regulatory costs

17

Africa: Fierce competitive environment

impacting revenue growth Ivory Coast, Benin, Togo, Gabon, Niger, CAR(1), Tanzania, & Sudan


678 709 694

28%

19%

26%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

100

200

300

400

500

600

700

800

Q1'12 Q4'12 Q1'13

Revenue EBITDA %


Subscribers (m)

9.7

12.2 12.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Q1'12 Q4'12 Q1'13

68

162

30 10%

23%

4% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

20

40

60

80

100

120

140

160

180

Q1'12 Q4'12 Q1'13

CAPEX CAPEX/Revenue

(1) CAR stands for Central African Republic

18

Nigeria: Steady revenue growth despite

strong competition and promotion ban

Highlights

• Steady growth in subscriber base that grew Y/Y by

25%

• Maintained revenue growth momentum with Y/Y

growth of 26%

• Improved EBITDA margin despite higher network

costs supporting network expansion

• Capex spends focused on reinforcing quality network


652

809 823

2% 6% 5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

100

200

300

400

500

600

700

800

900

Q1'12 Q4'12 Q1'13

Revenue EBITDA %


Subscribers (m)

12.1

14.9 15.1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Q1'12 Q4'12 Q1'13

377 384 357

58% 48% 43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

350

400

450

Q1'12 Q4'12 Q1'13

CAPEX CAPEX/Revenue


4,939

6,628

5,549

35% 38% 35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1'12 Q4'12 Q1'13Revenue EBITDA %

19

KSA-Mobily: Profitable growth with

quarterly dividend pay-out Highlights

• Mobily maintained its strong performance and

posted solid results during the quarter

• Dividend of AED 226 million received from Mobily

in February 2013 in addition to 10% stock

dividends

• On April 21st , declared dividend of SAR 1.15 per

share representing AED 226 million for Etisalat to

be distributed in May 2013


1,364

1,649

1,087

28% 25%

20%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q1'12 Q4'12 Q1'13

CAPEX CAPEX/Revenue

Financial Objective Actual Q1 2013

20

2013 Outlook: Management’s guidance for

the year (1)

Revenue Growth %

EBITDA Margin%

Capex / Revenue Ratio

3 – 5 %

49% - 51%

14% - 16%

Outlook 2013

2%

52%

9%

(1) All figures represent consolidated numbers and exclude potential impact of consolidation of Pakistan operations

in 2013

April 2010 21

Q&A

Etisalat Investor Relations

Email: [email protected]

Website: www.etisalat.com/html/ir

Documents

Etisalat Group Q1 2013 Results Presentation · 2020-04-22 · Etisalat Group Q1 2013 Results Presentation Abu Dhabi, UAE April 24th, 2013 . April 2010 2 Emirates Telecommunications