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Kuwait Telecommunications Company K.S.C.P
Investors Presentation
Table of content
Key Milestones 4
Competitive Strengths 8
Shareholders' Structure 6
VIVA’s History in Brief 3
Vision and Values 5
Market Share 9
Population & Penetration 7
Financial Results 10
Stock Performance 13
Appendix – Balance Sheet & Income Statement 14
1
Financial Highlights 11
2
VIVA’s History in Brief
2
2007 Jun 2008 Sep 2008 Dec 2008 Dec 2014 Jun 2015
Emiri decree number 187/2007 was released regarding the license of the incorporation of Kuwait Telecommunications Company.
The incorporation contract and principal law of the company was adopted by the MOC and Fatwa and Legislation Dep., and documented at the Ministry of Justice
Public placement of VIVA shares which was 2.4x oversubscribed. distributed among c. 1 million Kuwaiti shareholders
Commercial Launch of VIVA Operations in Kuwait
VIVA Stock was listed on Kuwait Stock Exchange
VIVA’s Stock under KSE15 Index
*In Compliance with the Islamic Shariah rules and principles
3
Key Milestones
3
Launches commercially
VIVA abolishes incoming calls fees and other operators follow
Expand retail network and launch joint promotions with retailers.
VIVA wins CommsMEABest Telecom Finance Deal.
VIVA launches Elite Program for loyal, VIP and high value customers.
VIVA turns into profitability during the fourth year of operation.
VIVA Starts deployment of 4G LTE network
Best Telecom Company by Arabian Business.
Member of (ITU )
Leading Corporate for IR
Business Innovation in Risk Management
Partnership with Real Madrid.
Listing on KSE
Retained earnings turned to be positive.
Ranked 2nd in terms of revenue and subscriber market share
VIVA introduces high speed Mobile Broadband in Kuwait.
VIVA launches innovative prepaid offerings and acquire 500K customers in one year.
First to introduce Apple iPhone
Strategic partnership with Manchester United.
First to introduce newest HSPA+ (42.2 Mbps) Broadband network.
Complete nationwide 4G LTE Coverage and awarded Best LTE Deployment in the Middle East.
Number Portability and VIVA acquires majority of ported numbers between operators.
The first in Kuwait to introduce the all-new (VoLTE) technology.
VIVA Branches network reached a total of 70 across Kuwait.
First to introduce the LTE Advanced
2009 2011 2013 2015
2008 2010 2012 2014 2016
4
"VIP Customer Service Award”
"2017 Speedtest Award“
"Best Operator Network"
"5G Innovator of the Year " Awards
2017
Vision and Values
4
Our vision is to provide unique services and productsthat satisfy the aspirations of our clients andaccommodate their needs, which in turn will earn ustheir trust. This is through presenting our customerswith numerous telecommunications opportunities withthe goal of boosting our relationships with them andgiving them the best experience around the clock.
Our vision is embodied in a fundamental and detailedunderstanding of the Kuwait market and focusing on theneeds of customers in everything we say and do.
We have pledged to work to enrich the lives of ourcustomers through telecommunications, entertainmentand information, and data transfer services.
EnergeticOur passion is performance, innovation, and
delivering of superior quality. We are efficient, reliable, and highly responsive to
our clients’ needs.
TransparentWe are open, trustworthy and collaborative.
EngagingAll of our activities revolve around our
customers.
FulfillingWe offer a wide range of easy to understand products. Our actions create value, helping our customers lead more rewarding and
enjoyable lives
Our Values
5
Shareholders' Structure
5
The Kuwaiti government holds 24%of VIVA through differentgovernmental entities.
Currently 2 out of 7 board membersare representing the Kuwaitigovernment bodies.
Kuwaiti Government 24%
Public Share holders consists ofcompanies, portfolios, funds andindividuals.
The public shareholders are mixbetween local, regional andinternational investors.
Independent Board member electedduring the AGM on 16th of May 2016.
Public Shareholders 24%
STC, the leading regional telecomoperator, won the bid for third mobilelicense in November 2007, and paid USD980 million for the license.
STC has a management agreement withVIVA.
STC increased its ownership percentagefrom 26% to 51.8% through a VTO at thebeginning of 2016.
Currently, 4 out of 7 board members arerepresentative of STC group.
Saudi Telecom 52%
6
Population & Penetration
6
Kuwait Population (Million Person) & Penetration Rate (%)
Kuwait population since 2010 is growing at the same level of 2.8% yearly and the growth is forecasted by IMF at 2.8% over thenext 5 years compared to almost 1% for the global population growth. This growth coupled with rising income levels will propelgrowth in consumer spending.Kuwait boasts the highest telecom penetration levels in the MENA region, which stood at the end of 2016 at 227% as reported by(ITU-D) and estimates by VIVA shows that the penetration rate in Kuwait declined to reach 200% at the end of Dec 2017.
Source of Population: IMFSource of Penetration rate : ITU
7
3.2 3.4 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.3 4.5
49% 56% 56%
92%
133%158% 157%
189%
218% 220% 227%200%
0%
50%
100%
150%
200%
250%
0.0
1.0
2.0
3.0
4.0
5.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Competitive Strengths
7
Relationship with STC
Customer-Centric
Strategy
Strong Growth & Results
Successful Branding
Modern & Scalable Network
Extensive distribution
channels
VIVA follows a customer-centric strategy, whichentails focusing on the communication needs ofcustomers and providing differentiated service. Thisstrategy positions VIVA as the only telecom providerin Kuwait that targets enhancing customerexperience.
VIVA has a proven track record of successfullyproviding high-quality product and services to itscustomers.VIVA has grown rapidly since it commencedoperations in December 2008 acquiring 2.2 millioncustomers by the end of Dec 2017, whichrepresents a market share of 32%.
Since its launch in 2008, VIVA has built a valuable brand associated with excellence.VIVA is perceived as the “challenger” bringing healthy competition to the Kuwait telecommarket. VIVA’s entry prompted the incumbent players to make several tariff changes, focuson subscriber retention and introduce new services, thereby benefiting the consumer.
VIVA benefits from having a modern and efficientnetwork that is adaptable to emerging technologies.The Network backbone is modern and has beendesigned to facilitate scalability of new operationsand the future deployment of emerging technology.
STC (the largest telecom company in the region) will continue to be a major shareholder andVIVA will continue to benefit from being a member of the STC group.Through this relationship, VIVA has access to technical support, industry best practice forprovision of telecom services, as well as stronger purchasing power benefiting from jointprocurement and coordination of regional initiatives.
VIVA has an extensive, well-developed andincreasingly sophisticated direct and indirectdistribution network covering all parts of Kuwait.VIVA Inaugurates New Branches to its networkamounting to a total of 93 branches across Kuwait
8
VIVA33%
Zain40%
Ooredoo*27%
VIVA32%
Zain38%
Ooredoo31%
Market ShareSubscriber Market Share – Dec 2017
Revenue Market Share – FY 2017
9
Total Subscriber Base in Kuwait (Mn)
Telecom Sector Revenues in Kuwait (KWD Mn)
4.55.2
5.9 6.417.6 7.7 7.7 7.2
0.8 1.1 1.6 2.2 2.4 2.5 2.4 2.30
5
10
2010 2011 2012 2013 2014 2015 2016 2017
Total Subscirbers in kuwait (Mn) VIVA Subscribers (Mn)
627 684 690 717 753 788 799 831
61 94 137 182 239 277 279 278
-
200
400
600
800
1,000
2010 2011 2012 2013 2014 2015 2016 FY-2017
Total Telecom Revenue in Kuwait (KWD Mn) VIVA's Revenue (KWD Mn)
*Ooredoo Revenues are consolidated with Fasttelco revenues.
Financial Results
9
Subscribers (Mn) Revenue (KD Mn) Net Profit (KD Mn)
10
Key Figures & Ratios FY- 2016 FY - 2017 Change Subscribers (Mn) 2.4 2.3 -4.1%Revenue (KD Mn) 279.1 277.6 -0.5%Operating Profit (KD Mn) 43.6 42.6 -2.3%Operating Profit Margin (%) 15.6% 15.4% 0.3pt.Net Profit (KD Mn) 39.8 40.1 +0.7%Net Profit Margin (%) 14.3% 14.4% 0.2pt.EPS (Fils) 79.7 80.3 +0.7%Equity (KD Mn) 132.7 167.8 +26%BVPS (Fils) 266 336 +26%
VIVA’s revenue marginally declined by0.5% in 2017 to reach KD 278 million . Onquarterly basis VIVA recorded aremarkable performance with revenuesrising by 7.2% to reach KD 73.4 millionduring Q4-2017 compared to Q4-2016.
VIVA’s customers’ reached 2.3 million byend of December 2017, increased by 3.6%as compared to the subscriber base atthe end of Sep 2017.
The net profit reached KD 40.1 million in2017, increased by 0.7%. On the otherhand, VIVA achieved a 10% growth in netprofit of KD 11.8 million during Q4-2017compared to a net profit of KD 10.8million reported during Q4-2016.
The Board of Directors hasrecommended distributing cashdividends of 30 fils among theshareholders representing 30 percent ofthe nominal share value for the yearended 2017 subject to the approval ofthe Ordinary General Assembly of thecompany.
Dec-16 Dec-17
2.4 2.3
FY-16 FY-17
279.1 277.6
FY-16 FY-17
39.8 40.1
Financial Highlights
10
Revenue (KD Million) Net Profit (KD Million)
CAPEX (KD Million)Operating Profit (KD Million)
11
239
277 279 278
200
220
240
260
280
300
2014 2015 2016 2017
40 43 40 40
0
10
20
30
40
50
2014 2015 2016 2017
45 49
44 43
19% 18% 16% 15%
0%
5%
10%
15%
20%
25%
38404244464850
2014 2015 2016 2017
Operating Profit (KWD Million) Operating Profit Margin (%)
17
39 38 33
7%
14% 14%12%
0%
5%
10%
15%
20%
25%
30%
0
15
30
45
2014 2015 2016 2017
Capex (KWD Million) Capex to Sales Ratio
Financial Highlights
10
Total Assets (KD Million) Total Debt / Equity (KD Million)
Book Value Per Share (KD)Shareholders Equity (KD Million)
12
179 214
263 267 284
0
50
100
150200
250
300
2013 2014 2015 2016 2017
66
86 72
47
9
6.9
1.70.8 0.4 0.1
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
0
20
40
60
80
100
2013 2014 2015 2016 2017
Total Debt (KWD Million) Debt to Equity Ratio (x)
10
50
93
133
168
0
20
40
60
80
100
120
140
160
180
2013 2014 2015 2016 2017
0.019
0.100
0.186
0.266
0.336
-
0.050
0.100
0.150
0.200
0.250
0.300
0.350
0.400
2013 2014 2015 2016 2017
Stock Performance
1113
Rebased Index Since VIVA’s Listing Date 14 Dec 2014 – Stock Performance vs. KSE and Telecom weighted Indices
VIVA +22.9%
KSE Weighted Index -4.7%
Telecom Weighted Index -14.2%
Closing Price (KD) 0.799
Market Cap (KD Million) 399
PE (X) 10
PB (X) 2.4Data as of 31 Dec 2017
60
80
100
120
140
160
180
Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Oct-17 Dec-17
VIVA's Stock Price (KWD) KSE Weighted Index Telecom Weighted Index
Re
bas
ed 1
00
Ind
ex
Appendix
12
Balance Sheet (2014 - 2017) Income Statement (2014 - 2017)
14
Balance Sheet (2014 –2017)
13
Balance Sheet 2014 2015 2016 2017KD Mn KD Mn KD Mn KD Mn
ASSETSProperty and equipment 113.1 125.4 137.7 145.0Intangible assets 36.3 50.6 47.5 49.1Other non-current assets 0.7 - - -Non-current assets 150.1 175.9 185.2 194.1Inventories 5.8 7.1 4.4 12.9Prepayments and other current assets 4.7 5.4 5.0 4.7Trade and other receivables 21.2 22.9 25.7 39.8Cash and cash equivalents 32.3 51.8 47.2 32.2Current assets 63.9 87.2 82.2 89.5Total assets 214.0 263.1 267.4 283.6EQUITY AND LIABILITIESShare capital 49.9 49.9 49.9 49.9 Statutory reserve 0.0 4.5 8.7 12.9 Voluntary reserve - 4.5 8.7 12.9 Retained earnings 0.0 33.9 65.4 92.0 Total equity 49.9 92.9 132.7 167.8
Employees' end of service benefits 2.6 2.8 3.2 3.6Islamic financing facilities 51.6 31.4 11.6 -Non-current liabilities 54.1 34.2 14.8 3.6Islamic financing facilities 34.0 41.0 35.5 9.0Trade and other payables 75.9 95.0 84.4 103.1Current liabilities 109.9 136.0 119.9 112.2Total liabilities 164.0 170.2 134.7 115.8Total equity and liabilities 214.0 263.1 267.4 283.6
15
Income Statement (2014–2017)
14
Income Statement 2014 2015 2016 2017KD Mn KD Mn KD Mn KD Mn
Revenue 239.0 276.9 279.1 277.6Operating expenses (126.3) (145.8) (147.0) (147.5)Depreciation and amortization (67.6) (82.2) (88.4) (87.5)Finance cost (2.2) (2.6) (1.6) (0.7)Other income / (expense) (1.8) (1.0) (0.1) 0.4 Profit before contribution to KFAS, NLST, Zakat and Board of Directors’ remuneration 41.0 45.2 41.9 42.3
KFAS (0.0) (0.4) (0.4) (0.4)NLST (0.1) (1.2) (1.1) (1.2)Zakat (0.5) (0.5) (0.4) (0.5)Board of Directors’ remuneration (0.2) (0.2) (0.2) (0.2)Net Profit for the year 40.4 43.0 39.8 40.1
Basic and diluted earnings per share (fils) 81 86 80 80
16
VIVA IR
1417
Awarded best IR Corporate in Kuwait for the year 2016 and nominated to be best IR Corporate in Kuwait for the year 2017
Proud to Serve our Investors and the Investment Community.
First company in Kuwait to launch a mobile application for investor relations During December 2016.
Revamped Investor Relations website to keep the investment community updated with all IR publications, disclosures, stock performance, events, analyst Coverage, Fact sheet and financial indicators and much more….
Thanks for all the investors and analysts who voted for us in 2016 and 2017 (Extel) and we look forward for your support in the coming years.
