Slide 1: 4Q13 Earnings Release Conference Call Presentation
Telecom Argentina 4Q13 Earnings Release Conference Call Presentation
Slide 2: Disclaimer
Disclaimer This presentation is based on audited financial statements and may include statements that could constitute forward-looking statements, including, but not limited to, the Company’s expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividen
Slide 3: Agenda
Agenda Market Overview Business Highlights Financials Q&A Session 2
Slide 4: Market Overview: Navigating in a challenging context
Market Overview: Navigating in a challenging context Real GDP* Consumption & Wages Trade & Fiscal Balance Billion USD, at current prices – Last 12 months Billion USD, at current prices – Last 12 months Trade Balance (Billion USD) Last 12 months ∆ YoY - constant prices National Wages - ∆ % YoY Fiscal
Slide 5: Agenda
Agenda Market Overview Business Highlights Financials Q&A Session 4
Slide 6: Business Highlights
Business Highlights MOBILE 3G Customers Revenues up +26% with limited price adjustments Keeping the leadership in smartphones sellout 8.1 8.9 5.2 6.0 6.8 achieving 73% share 4Q12 1Q13 2Q13 3Q13 4Q13 Significant reduction in handset subsidies FIXED Continuous FTTx deployment to improve value FTTC pro
Slide 7: Mobile: Increasing share of multiusage customers mitigates SMS substitution effect
Mobile: Increasing share of multiusage customers mitigates SMS substitution effect Mobile Customer Evolution Million of lines / Month/million of customers AR$/Month ARPU & Mob. Internet Unique User 6.7 +9% 69.0 6.3 +16% 5.8 YoY var 63.3 5.5 5.1 Mobile Unique 27.3 Voice 27.9 -2% Internet User +6% 19.
Slide 8: 4Q13 Events on Mobile Service Revenues
4Q13 Events on Mobile Service Revenues Recurring impact Lower contribution of Content VAS to growth Content Revenue – Quarterly Trend YoY Service Revenues growth -5 pp 25% -12 pp 4Q12 1Q13 2Q13 3Q13 4Q13 13% Non-Recurring impacts Xmas Campaign Different timing 3Q13 4Q13 Promotions in Price Adjustmen
Slide 9: Mobile: Leadership in revenue share
Mobile: Leadership in revenue share Service Revenue Million ARS – Argentine Market SAC & SRC as % of Argentine Service Revenues - Before Breakdown capitalization of SAC & SRC Var. vs. FY 12 +21% +20% 16,003 -3.8pp 13,312 2,088 +67% SAC & SRC 14.2% 14.5% YoY var 1,248 12.5% +29% 10,983 +61% 10.9% 11.
Slide 10: Paraguay: Improved customer base mix and VAS pushes revenues up
Paraguay: Improved customer base mix and VAS pushes revenues up Thousand of lines VAS as % Customers YoY var of Service Revenues +5% 2,301 2,335 2,381 2,407 2,420 54% 13% 49% 50% Post 429 447 475 482 484 45% paid 1 1,872 1,888 1,906 1,925 1,936 3% Pre paid 4Q12 1Q13 2Q13 3Q13 4Q13 2010 2011 2012 201
Slide 11: Mobile Revenues: Browsing and non-P2P SMS VAS, sustaining revenues growth
Mobile Revenues: Browsing and non non--P2P SMS VAS, sustaining revenues growth Evolution of revenues FY12 – FY13 IFRS, Million of ARS, Percentage +4,187; +26% 285 20,281 1,447 840 1,211 16,094 312 92 YoY Variation +7% +5% +25% +67% +63% +33% FY12 Retail Wholesale* Data Internet Handsets Paraguay* FY
Slide 12: Fixed Broadband: Confirming positive trend in net adds
Fixed Broadband: Confirming positive trend in net adds Evolution of BB Thousand of broadband accesses, thousand of net adds ARPU & AR$/Month Accesses Churn Evolution +78k; +5% +20% 123.6 125.5 134.0 114.9 111.5 1.5% 1.6% 1.5% 1.4% 1,669 1,707 1.3% 1,629 1,626 1,634 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13
Slide 13: Fixed Voice & Data: ICT+Data contributed to growth in Fixed Revenues
Fixed Voice & Data: ICT+Data contributed to growth in Fixed Revenues IFRS Million of ARS Basic Services (excluding broadband and data) Data Revenues ARBU evolution +9% +31% 52.8 53.1 54.4 +26% 49.9 49.5 +19% 0.5% 0.6% 0.6% 0.5% 0.5% 963 735 4Q12 1Q13 2Q13 3Q13 4Q13 488 583 Evolution of Thousand of l
Slide 14: Fixed Services: BB + Data services continue to be key drivers
Fixed Services: BB + Data services continue to be key drivers Evolution of revenues FY12 – FY13 IFRS, Million of ARS, Percentage +983; +16% 528 -1 7,006 YoY var 228 6,023 181 47 Regulated 33% +4% Regulated 36% YoY Variation +7% +6% +31% +26% -1% Non Regulated 67% +22% Non Regulated 64% Revenues Reta
Slide 15: Evolution of CAPEX: Focus in Network quality upgrade
Evolution of CAPEX: Focus in Network quality upgrade Mobile Access Capex Evolution Million of ARS Network rollout Vs. Δ FY12* 4,851 +49% New Sites >65% 1,955 4Q 3,257 +28% +83% 6 Sectors >3x 1,070 +59% 1,342 3Q 3,192 842 2,493 3G Overlay >10% 655 +24% 813 2Q +7% 741 690 1Q Swap + 2010 2011 2012 2013
Slide 16: Agenda
Agenda Market Overview Business Highlights Financials Q&A Session 15
Slide 17: TEO Group: Consolidated Results
TEO Group: Consolidated Results IFRS, Million of ARS, Percentage IFRS, Million of ARS, Percentage Revenues OIBDA* 27,287 +23% 7,564 +15% 22,117 +10% 6,570 +20% 7,460 4Q 5,993 +22% +23% 2,010 4Q 18,498 +9% +26% 6,092 4,867 1,844 3Q 14,627 7,114 1,930 3Q +26% 5,645 1,587 +22% 2Q 2Q 6,649 +22% 1,825 5,
Slide 18: OIBDA Growth 4Q13 vs. 3Q13
OIBDA Growth 4Q13 vs. 3Q13 YoY OIBDA CHANGE Customer Care rate YoY Service Revenues Change 22% Recovery Area 15% 3Q13 4Q13 1Q14E ~10% +22% Slowdown in Commercial Activity 4Q12 Structural subsidy Effect of QoS policy review Regulation and starting from 2Q13 ~3% postal cost increase ~3% +9% ~3% Servic
Slide 19: TEO Group: Consolidated Costs and OIBDA evolution
TEO Group: Consolidated Costs and OIBDA evolution Operating Income Before Depreciation and Amortization FY12 – FY13 IFRS, Million of ARS +994; +15% 117% 5,154 1,068 122 883 671 250 52% 532 382 252 27% 33% YoY 25% 23% 10% 16% 7,564 Variation 7% 6,570 OIBDA Revenues & Handsets ITX Costs Labor Costs Ta
Slide 20: TEO Group: Consolidated Results
TEO Group: Consolidated Results Net Income Operating Income IFRS, Million of ARS, Percentage attributable to IFRS, Million of ARS, Percentage Telecom +14% +3% 4,518 +22% 3,857 3,966 3,202 +19% +7% 3,162 +8% 1,255 4Q +30% 2,685 1,163 2,513 878 4Q +11% +31% 1,203 3Q 1,935 794 921 870 3Q +41% +11% 945
Slide 21: TEO Group: FCF and Net Financial Position
TEO Group: FCF and Net Financial Position IFRS, Million of ARS - Last 12 months Operating free Cash Flow 7,564 4,851 1,609 1,112 201 989 739 461 OIBDA Capex Δ WK & others 3,825 Net Financial Position Telecom Argentina 1,669(1) 5,354 Telecom Personal 3,896 (2) 3,648 Nucleo (Paraguay) (211) Net Financ
Slide 22: Solid financial policies limited exposure to FX risk
Solid financial policies limited exposure to FX risk UNLEVERAGED BALANCE SHEET Often tagged as a “Sub-Optimal Capital Structure”, having no debt denominated in foreign currency, represents a strategic asset in an environment of a deteriorating Peso HEDGING U$S millions or equivalents, December 2013.
Slide 23: Agenda
Agenda Market Overview Business Highlights Financials Q&A Session 22