Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — Conference Presentation (November 2016)
31 slides from Bharti Airtel's conference presentation, November 2016
Slide 1: Bharti Airtel Investor Conference Presentation – November 2016
Bharti Airtel Investor Conference Presentation – November 2016
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 3: What Guides Us
What Guides Us Customer Centricity • Win customers for life through differentiated experience, products and world class technology Performance Excellence • Growth despite challenges • Grow market share, strip out waste • Accelerate non-mobile businesses Transparency & Ethical Governance • Highest co
Slide 4: Investment Highlights
Investment Highlights 1 Large residual opportunity 2 Bulk investments already in place; good spectrum bank 3 Diversified operator with scale and dominance in marketplace 4 Demonstrated best in class execution 4
Slide 5: 1. Large Residual Opportunity
1. LARGE RESIDUAL OPPORTUNITY Voice Secularity • Under-penetrated geographies • Unique mobile users at c. 50% of total SIMs (large dual-SIM user base)1 • Declining age dependency2 • Industry consolidation, top 3 operators account for 75% RMS3 Data • India mobile broadband (3G/4G) penetration under 1
Slide 6: India: Industry Consolidation Underway via Revenue Shares
Opportunity India: Industry Consolidation Underway via Revenue Shares 10 Operators 14 Operators 12 Operators 10 Operators 27% • Industry consolidation via market share 34% 30% 36% gains, with top 3 now accounting for over 73% of the industry revenues as of FY2016 66% 70% 73% 64% iRMS • Exits by many
Slide 7: India: Transitioning to a Smartphone Market
Opportunity India: Transitioning to a Smartphone Market 9 11 14 18 24 33 46 62 80 102 35 35% 33 31 30% 30% 29 27% 25% 25% 27 22% 25 21% 20% 17% 34 14% 19% 23 13% 29 29 28 15% 28 21 27 11% 24 19 22 10% 17 20 17 15 5% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Smartphone shipments (Mn) Smartpho
Slide 8: Payments Bank – Untapped Opportunity
Opportunity Payments Bank –Untapped Opportunity There is a need to drive Financial Inclusion in India to digitize cash and bring the un- banked in the folds for organized banking sector Cash v/s non-cash transaction value Unbanked Population (Mn) PMJDY made large dent in unbanked 35% 230 557 415 65%
Slide 9: 2. Bulk Investments in Place
2. BULK INVESTMENTS IN PLACE Spectrum Bank • Successful re-farming of sub-GHz spectrum for 3G • 3G/4G coverage pan-India • Highest spectrum market share ex-MTNL/BSNL Largest network of towers and base stations • 95.1% voice population coverage • Mobile broadband towers up 57% over the last year Larg
Slide 10: India: Investments to Yield Results
Investments India: Investments to Yield Results Industry Nominal Wide Largest Prime leading value of spectrum optical fiber spectrum to revenue liberalized presence: network yield data yield/MHz at spectrum at ~20.6% amongst growth: Pan 2x avg with USD 15.5 spectrum private India 3G & same billion1
Slide 11: India: Superior Spectrum Position
Investments India: Superior Spectrum Position Spectrum Industry Industry Spectrum Bharti spectrum Band Spectrum Spectrum ex held by Bharti Market Share ex 3G sub-Ghz available in 10 circles covering ~54% (Mhz) BSNL/MTNL (MHz) BSNL/MTNL of own revenues and ~45% of industry revenue (MHz) Pan India
Slide 12: Aggressive Network Build - Monetize Spectrum
Investments Aggressive Network Build - Monetize Spectrum Mobile broadband sites (‘000) - India Total 3G Network Sites (‘000) - Africa 13.5 69% 67% 69% 70% 13.0 67% 66% 67% 140 68% 69% 65% 12.5 65% 120 63% 58% 60% 12.0 63% 100 13.3 148 55% 11.5 13.1 61% 138 61% 12.7 80 118 108 110 50% 11.0 59% 47% 99
Slide 13: Africa: Invested for Growth
Investments Africa: Invested for Growth 2010 1H’17 Capex Investments till date: $ 5.2 bn Well funded out of EBITDA: $ 6.2 bn till date Thus OFCF = $ 1 bn Further focus on business re-contouring Tower Sales in 11 countries Divestment of 2 countries to Orange Total proceeds: $ 3.25 bn Al
Slide 14: 3. Airtel: Diversified Operator with Significant Scale
3. AIRTEL: DIVERSIFIED OPERATOR WITH SIGNIFICANT SCALE Profitability and scale across diversified segments • Dominant position to capitalize with bulk investments in place • Only operator with diversified portfolio Allowing Airtel • Scale leading to operating leverage the best • Generating c. $1 bn
Slide 15: Scale brings Operating Leverage
Scale Scale brings Operating Leverage1 Overview Consolidated Revenues ($ Mn)2 Presence in 18 countries #3 Operator in the World 15,064 14,992 14,742 #1 in India & #1 or #2 in 12 countries in Africa 14,151 US$ 14.74 bn Revenue US$ 5.22 bn EBITDA 11,745 2.02 addressable population Only o
Slide 16: 4. Best in Class Execution
4. BEST IN CLASS EXECUTION Q2’17 highlights • India – Broad based revenue growth across mobile, DTH, Homes, Enterprise segments – Mobile revenue up 7.9% YoY via industry leading net subscriber additions, incremental RMS – Data volumes up 55%, Data ARPU up 4.2% YoY – Voice volumes grew 11.1% YoY, hig
Slide 17: Leader in India Revenue Market Share
Execution Leader in India Revenue Market Share1 33% 23% 19% 5% 5% 6% 6% 3% 1% Airtel Vodafone Idea (Incl Spice) Reliance BSNL+MTNL Tata Tele Aircel Uninor Others 32.7% Airtel 31.6% 31.6% Incremental 31.3% 31.3% revenue 30.4% market share 53.7% YoY Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4'16 Q1'17 1. RMS is ca
Slide 18: Increasingly gaining revenue market share
Execution Increasingly gaining revenue market share 32.7% 30.8% 31.3% 0.5% 1.4% 23.3% 23.3% 23.3% 0.1% -0.1% 19.2% 18.7% 16.2% 2.5% 0.5% Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Airtel Vodafone Idea 18
Slide 19: Strategic Pillars for execution
Execution Strategic Pillars for execution Go to Win with a Win with War on Win with Market Brilliant Valuable Waste People Excellence Network Customers Experience VibrantVibrant Digital Airtel, Brand Brand 19
Slide 20: Strategic Pillars: Go to Market Excellence
Execution Strategic Pillars: Go to Market Excellence Game changing innovations Creating opportunities • Night cash back, night plans – Reduced rates during night usage • Myplan – Customized plans as per customer usage • Family – Tailor made plan and share benefits with family • Infinity – Options wi
Slide 21: Voice: Significant growth
Execution Voice: Significant growth 314,831 36,570 313,403 307,988 34,191 33,771 33,488 290,459 32,610 282,138 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Airtel carries over 1.41 trillion minutes Significant gap b/w realized & rack rates; Volume Growth Secular volume growth 10.4% Y-
Slide 22: Fastest Growing Data Business in India
Execution Fastest Growing Data Business in India Data as a % of Mobile revenues First brand to own and launch 4G in India 3G and 4G Pan India Q2'16 5.9% 21.5% 4G at 3G prices Q3'16 5.8% 23.1% Annualized data revenues c. $2.15 bn Q4'16 5.6% 23.3% Airtel recognized as the smartphone network
Slide 23: Data Growing Exponentially in Africa
Execution Data Growing Exponentially in Africa Africa data volumes (mn MBs) Africa data revenues (USD mn1) 145.3 146.6 34,269 137.4 27,655 22,787 123.8 19,254 117.4 15,805 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q2'FY16 Q3'FY16 Q4'FY16 Q1'FY17 Q2'17 Source: Company filings 1. In Constant Currency 23
Slide 24: Strategic Pillars: Win with Brilliant Network Experience
Execution Strategic Pillars: Win with Brilliant Network Experience Eliminate frustration Invest in tools An open network Blocked calls Repeat calls Dropped calls Frustration index Capex Outflow FY’16 (mn) Guidance (bn) 1H’17 Largest capital expenditure of Rs. 60,000 crore over 3 years India & SA $
Slide 25: Strategic Pillars: Win with Valuable Customers
Execution Strategic Pillars: Win with Valuable Customers Post-Paid (as % of total Customer Base) Mobile Broadband Customer Base 1 6.4% 6.3% 45,000 17.0% 6.3% 41,335 1 40,000 6.2% 36,572 15.9% 16.0% 35,460 6.1% 35,000 1 6.1% 30,881 15.0% 30,000 6.0% 25,484 14.3% 1 6.0% 14.0% 25,000 14.1% 5.9% 5.9% 20
Slide 26: Strategic Pillars: Win with War on Waste
Execution Strategic Pillars: Win with War on Waste Opex to Total Revenues EBITDA % 1.2 44.0% 43.4% 38.4% 1 43.3% 43.0% 37.5% 0.8 41.7% 42.0% 42.0% 35.4% 0.6 41.0% 34.2% 40.0% 32.5% 0.4 40.0% 0.2 39.0% 0 38.0% Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 2014 2015 2016 1Q'17 2Q'17 Increasing Opex Productivity Smart
Slide 27: Strong Corporate Profile
2 airtel STRONG CORPORATE PROFILE
Slide 28: Financial flexibility & Balance Sheet Focus
Financial flexibility & Balance Sheet Focus Diversified debt profile; focus on deleveraging Over last 3 years: Leverage: Net Debt to EBITDA down from 3x to 2.2x Average Maturity: Average tenors pushed out from 2 years to 6 years Diversified debt mix: 100% bank to a mix of bonds, bank, ECA and DoT de
Slide 29: Highest Standards of Corporate Governance
Highest Standards of Corporate Governance Credit Rating and Information Services of India (“CRISIL”) has assigned its Governance and Value Creation rating “CRISIL GVC Level 1” to the corporate governance and value creation practices of Bharti Airtel Quarterly financials audited on Ind-AS basis IG ra
Slide 30: Summary
Summary India & Africa remain attractive markets, with large opportunities Bulk investments in place, asset restructuring in progress • Spectrum • Network • Deleveraging via asset monetization (Tower sales, sale to Orange, Bangladesh merger) We are extremely well positioned • Large customer base • O
Slide 31: Thank You
THANK YOU
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