Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — JPM India Investor Summit 2017
30 slides from Bharti Airtel's conference presentation, Sep 22, 2017
Slide 1: Letter to stock exchanges on investor conference participation
September 22, 2017 National Stock Exchange of India Limited Exchange Plaza, C‐1 Block G Bandra Kurla Complex, Bandra (E) Mumbai – 400051 BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai – 400001 Ref: Bharti Airtel Limited (532454 / BHARTIARTL) Sub: Participation at the Investor Conference a
Slide 2: Bharti Airtel Conference Presentation – September 2017
Bharti Airtel Conference Presentation –September 2017
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: Bharti Airtel: Who Are We
Bharti Airtel: Who Are We 3rd largest telecom operator in the world Presence in 17 countries addressing to 1.87 Bn population Serving around 380 Mn customers with ~ $ 14 Bn revenues No 1 operator in India and only integrated operator with wireless, wireline & satellite TV No 2 telecom oper
Slide 5: Investment Rationale
Investment Rationale 1 Large untapped market opportunity 2 Leading market share positions 3 The Airtel advantage 4
Slide 6: Indian Mobile Market
Untapped Opportunity Indian Mobile Market Wireless Subscribers1 Teledensity3 2nd largest telecom market in the world • 1,186 mn customers • Overall teledensity of 93.98% of which ~740 mn are unique (dual simmers) • Rural teledensity of 57.8% 2nd largest smartphone market in the world Broadband2 Smar
Slide 7: Opportunity in Telecom Sector
Untapped Opportunity Opportunity in Telecom Sector WIRELESS WIRELESS DATA PAYMENTS BANK 1.3 bn population ~28%1 Smartphone Cash based economy penetration ~0.7 bn unique 65% percent 4G handsets ~11%1 wireless customers consumer transaction Data penetration ~36%1 by value are currently (>3G+4G)
Slide 8: Leader in India Revenue and Customer Market Share
Leading Position Leader in India Revenue and Customer Market Share1 36.5% RMS ~$30 Bn Indian Telecom Industry 1.186 Bn total wireless subscribers in India 24.1% 18.9% 5.0% 4.8% 4.5% 3.3% 2.5% Airtel (1) Vodafone Idea Cellular Tata Tele- Aircel BSNL + MTNL Reliance Reliance Jio (incl. Spice) services
Slide 9: Industry consolidating to 3 players
Leading Position Industry consolidating to 3 players – Airtel, Voda & Idea merged co and new entrant Jio 40.0% 33.8% 34.2% 35.0% 32.9% 33.1% 31.3% 30.0% 77.2 % 24.1% revenue 25.0% 23.3% 23.4% 23.5% 23.7% market 18.8% 18.9% share within 20.0% 18.7% 18.7% 18.7% top 3 incumbents 15.0% Q1FY16 Q2FY16 Q3F
Slide 10: Airtel - Leading Presence in Africa
Leading Position Airtel- Leading Presence in Africa Operations in politically stable Franco and Anglophone countries 2nd Largest operator in Africa Leading operator - #1 or #2 in 12 of 15 markets Customer base of 80.1 mn - of which ~19 mn data customers 3G and Airtel Money in all 15 countries. 4G in
Slide 11: Leadership Position across African markets
Leading Position Leadership Position across African markets #1 or #2 ranking by RMS #3 or #4 ranking by RMS Kenya Ghana Nigeria Rwanda DRC Madagascar Tanzania Seychelles Congo B Bharti and Millicom International Cellular have Uganda Gabon entered into an agreement to merge their Chad respective unit
Slide 12: Airtel Consolidated Performance
Airtel Advantage Airtel Consolidated Performance Gross Revenues (INR Bn) EBITDA (INR Bn) 356.2 965.3 954.7 341.7 FY'16 FY'17 FY'16 FY'17 Operating Free Cash Flow (INR Bn) Enterprise Value (INR Bn) 2,313 157.5 135.8 2,237 FY'16 FY'17 FY'16 FY'17 Source: Company Filings, Bloomberg Note: Figures are no
Slide 13: Diversified portfolio across telecom and geography
Airtel Advantage Diversified portfolio across telecom and geography Revenue Split by segments Non-Wireless Revenues India (Rs Mn) EBITDA SA, 0.4% 232,082 EBITDA Margin Growth Y-o-Y FY’2017 Tower Co, 48% 11% As of Q1’18 60,829 Non-mobile Africa, 20.4% business comprise of Tower Co, 6.7% Airtel Wire
Slide 14: Airtel Payments Bank
Airtel Advantage Airtel Payments Bank 68% transactions in India are cash based1 Annual Retail Payments2– $ 2.5 tn Opportunity to tap 450 mn unbanked customers Leverage on Airtel’s massive retail presence Airtel Payments Bank launched in 2017 provides over 500,000 banking points in Key focus areas: D
Slide 15: Investing for growth – spectrum holding
Airtel Advantage Investing for growth – spectrum holding Band (Avg holding Airtel Competitor 1 Competitor 2 New Operator across 22 circles) 800/900Mhz Paired 5.2 3.5 2.7 4.9 1800 Mhz Paired 12.2 8.6 9.4 6.7 2100 Mhz Paired 5.7 5.2 3.6 NA 2300/2500 Mhz 25.9 9.1 9.1 27.3 Unpaired Spectrum Industry Spe
Slide 16: Aggressive Network Build - Monetize Spectrum
Airtel Advantage Aggressive Network Build - Monetize Spectrum 170 157.1 162.4 1.80 147.6 1.60 150 1.69 1.16 Total1.40 mobile 130 1.27 towers 1.20 1.00 Mobile 110 0.80 broadband 90 towers 0.60 120 MBB BTS 108 per 0.40 MBB 70 tower 0.20 50 57 0.00 Q1'16 Q1'17 Q1'18 National long distance fiber –over 2
Slide 17: Africa: Invested for Growth
Airtel Advantage Africa: Invested for Growth Spectrum holding across opcos Mobile broadband towers (‘000) – Africa1 80% Spectrum Band Avg. holding per 13.0 68.2% 70% country 66.8% 11.0 60% 800/900Mhz Paired 10.4 56% 9.0 13.1 14 50% 1800 Mhz Paired 15.3 7.0 10.7 40% 2100 Mhz Paired 13.3 5.0 30% 3.0 2
Slide 18: Financial flexibility & Balance Sheet Focus
Airtel Advantage Airtel : Financial flexibility & Balance Sheet Focus Diversified debt profile; focus on deleveraging Over last 3 years: Leverage: Net Debt (ex-DOT) to EBITDA down from 2.51x as of Mar 2013 to 1.30. Net debt to EBITDA (LTM) including DOT debt stands at 2.67 – Lowest in the industry M
Slide 19: While maintaining highest Standards of Corporate Governance
Airtel Advantage While maintaining highest Standards of Corporate Governance Won ‘Golden Peacock Award for Excellence in Corporate Governance’ for the year 2016 Ranked first in a listing of 100 emerging market multinational companies as part of a study on corporate transparency and reporting by Tran
Slide 20: India telecom market dynamics is changing
Airtel Advantage India telecom market dynamics is changing Explosion of Data – Spurt in volumes and GSM data and voice consumption is increasing smartphone shipments 884 1006 Bundled products – Voice and data bundling; 376 381 134 377 143 366 236 360 405 total customer ARPU focus 123 Dec'15 Mar'
Slide 21: Strategy - INDIA
Airtel Advantage Strategy - INDIA 5 Strategic Pillars for Execution More Brilliant More high services per customer Win with the War on ARPU customer experience Portfolio Waste customers Vibrant Win withBrand People 20
Slide 22: Increasing share of high ARPU customers
Airtel Advantage Increasing share of high ARPU customers Mobile broadband customers as a % of total customers 17% • Grab increased share of 4G 14% devices • Drive rapid data consumption Q1'17 Q1'18 leveraging capacity • Accelerate SIM consolidation Post-Paid (as % of total Customer Base) • Accelerat
Slide 23: More services per customer
Airtel Advantage More services per customer Airtel Payments Bank Customers (Mn) • Build the largest Payments 15 Bank 7 • Accelerate Airtel homes Mar'17 Aug'17 through brilliant service bundling Wynk Downloads (Mn) • Gain adoption of digital services • Drive depth of product 50.8 portfolio in B2B 22.
Slide 24: Brilliant customer experience
Airtel Advantage Brilliant customer experience Peak data speeds by Operator in India (Mbps) • Eliminate customer frustration 56.9 50.0 29.8 36.5 • Deliver a world class network experience • Digitize customer on Airtel Competitor 1 Competitor 2 Competitor 3 boarding, care and analytics Lowest Churn i
Slide 25: Win with the Portfolio
Airtel Advantage Win with the Portfolio Non mobile revenues as a % of total India Wireless 34.5% • Accelerate home broadband through rapid expansion and 29.4% speed upgrades Q1'17 Q1'18 • Accelerate B2B growth Global network – Fiber (RKms) • Accelerate DTH through driving HD upgrades 250,000 • Drive
Slide 26: War on Waste
Airtel Advantage War on Waste Underlying opex growth1 - YoY 3.7% • Drive zero based costing Q1'17 Q1'18 -6.5% • Accelerate active sharing, fiber and joint sourcing of bandwidth Mobile broadband BTS per mobile broadband tower • Optimize network investment 1.69 1.27 Q1'17 Q1'18 1. Excludes Access cost
Slide 27: Strategy - AFRICA
Airtel Advantage Strategy - AFRICA 5 Strategic Pillars for Execution Enhance customer Grow Airtel Provide Build efficient ARPU Money through excellent Build optimal network through comprehensive customer cost structure coverage relevant service offering experience pricing Vibrant Win withBrand Peopl
Slide 28: Airtel Africa Turnaround Story
Airtel Advantage Airtel Africa Turnaround Story Gross Revenues (USD Mn) EBITDA (USD Mn) and Margin (%) 29.0% 250 736 28.0% 20628.0% 27.0% 200 26.0% 151 150 25.0% 732 24.0% 100 23.0% 22.0% 50 21.0% 20.6% 20.0% 0 Q1'17 Q1'18 Q1'17 Q1'18 PBT (USD Mn) Operating Free Cash Flow (USD Mn) 49.5 157 42 Q1'17
Slide 29: Investment Summary
Investment Summary Presence in underpenetrated markets of India and Africa with large 1 residual opportunity Leading operator with scale and diversified businesses across 2 markets Bulk investments already in place; best in class spectrum bank in 3 markets of operations 4 Demonstrated superior execu
Slide 30: THANK YOU
THANK YOU