Hellenic Telecommunications Organization SA · ATHEX:HTO
Hellenic Telecommunications Organization SA — Cosmote — FY2005 Earnings Presentation
27 slides from Hellenic Telecommunications Organization SA's earnings presentation, February 2006
Slide 1: Providing the Grounds for Ongoing Profitable Growth
PROVIDING THE GROUNDS FOR ONGOING PROFITABLE GROWTH February 2006 Visit our website: www.cosmote.com
Slide 2: 2005 Overview & Future Outlook
2005 Overview & Future Outlook
Slide 3: 2005: A milestone year
2005: A milestone year ¾ Acquisition of three fast growing operators ¾ Establishing the widest presence in SE Europe with operations in five countries ¾ Total customer base exceeding 8.3 million subscribers ¾ Improving returns in operations of Greece & Albania ¾ Turning around GLOBUL and COSMOFON ¾
Slide 4: Growth at all levels
Growth at all levels Meeting all targets 2005 2005 All amounts in million euros FY 2004 FY 2005 Guidance Results Revenue 1,588 1,798 13- 15% growth +13.2% EBITDA 675 755 > 40% margin 42% Net Income 309 340 3 - 7% growth +10% Net Debt / EBITDA 0 1.3x 1.35 - 1.45x 1.3x Capital Expenditure 218 333 (pro
Slide 5: COSMOTE Group: Sustainable growth outlook
COSMOTE Group: Sustainable growth outlook COSMOTE Increasing voice revenues through higher Greece usage & improving profitability Sustaining high profitability levels & growth, AMC through increasing penetration & usage Sustainable Expanding market share and profitability, profitable GLOBUL combined
Slide 6: COSMOTE in the Balkans: Growth opportunities
COSMOTE in the Balkans: Growth opportunities ¾ Presence in some of the fastest growing markets in Europe ¾ Fast economic growth & EU accession of Romania & Bulgaria in 2007 ¾ Strong revenue growth in all markets driven by subscriber and usage growth ¾ Ongoing profitability enhancement on an annual b
Slide 7: Looking ahead
Looking ahead ¾ Improve market position in all countries ¾ Exploit rapid penetration & usage growth ¾ Expand distribution network ¾ Maximize profitability & FCF generation by exploiting group synergies and CAPEX savings ¾ Explore potential for new investment opportunities with growth characteristics
Slide 8: Operational & Financial Review
Operational & Financial* Review * According to unaudited financial statements. The audited financial statements will be published on March 7, 2006.
Slide 9: COSMOTE footprint
COSMOTE footprint COSMOTE Greece •Turnover1: € 1,517m •EBITDA: € 639 COSMOTE Romania •EBITDA margin: 42.1% •Turnover: € 8m •Net Income: € 316m •EBITDA: € -20m •Net Debt: € 821m •Net loss: € 21m •CAPEX2: € 110m Romania •Debt: € 16 m •CAPEX: € 73m COSMOFON •Turnover: € 40m •EBITDA: € 2m •EBITDA margin
Slide 10: COSMOTE Group: FY05 Financial Results
COSMOTE Group: FY05 Financial Results 18 5 -10 1,798 130 R 138 E V 1,517 E N COSMOTE Group U E S +13.2% Greece Alb an ia Bu lg aria FYROM Roman ia Elimin ation s Con solid ated 46 1 -14 0 755 1,797.6 83 1,587.8 639 E B I T 42.5% 42.0% D +11.8% A 754.5 675.1 Greece Alb an ia Bu lg aria FYROM Roman ia
Slide 11: COSMOTE Group: Cash Flow & Balance Sheet
COSMOTE Group: Cash Flow & Balance Sheet Balance sheet Cash Flow Statement All amounts in million euros 2005 2004 All amounts in million euros 2005 2004 Total Non Current Assets 1,932.1 1,209.4 EBITDA 754.5 675.1 Cash & cash equivalents 330.1 264.4 CAPEX -259.0 -218.3 Other Current Assets 287.0 205.
Slide 12: COSMOTE Greece
COSMOTE Greece Subscriber market share FY 2005* Key Developments * Company estimates Market Developments Acquisition of 3rd & 4th operators by private equity groups 37.3% 35.7% Aggressive but stable competitive environment characterized by targeted offerings & seasonal promotions 7.5% 19.5% COSM
Slide 13: COSMOTE Greece
COSMOTE Greece Y-o-Y Q-o-Q • Voice driving revenue growth: Q4 service +3.2% 1,517.5 +6.9% 378.9 revenues +10% 1,470.7 354.6 • Q4 EBITDA adversely affected by lack of 42.1% 39.2% 41.2% 39.7% management fees 639.3 605.6 140.8 148.7 • Net income helped by re- 277.9 315.6 62.9 77.8 evaluation of depreci
Slide 14: COSMOTE Greece: Traffic patterns & Interconnection impact
COSMOTE Greece: Traffic patterns & Interconnection impact 180 45% 80% 35% 39.8% 160 € 153.3m 40% 70% 30% 29.9% € 140.5m 140 35% 60% 65.8% 66.7% 24.2% 33.7% € 128.1m 62.5% 25% € 138.7m 27.0% 120 € 110.1m 30% 56.5% 27.3% 50% 52.9% 47.1% 48.0% 20% 22.8% 100 21.2% 25% 17.1% 40% 44.9% 40.0% 13.9% 80 17.2
Slide 15: AMC
AMC Subscriber market share FY 2005* Key country facts & developments * Company estimates Country and Market Population: 3.1m GDP growth 2005: 6% 51% Inflation 2005: 2.5% 49% Fixed line penetration: 7% Low penetration picking up rapidly Primarily prepaid market Stable competitive envir
Slide 16: AMC
AMC Y-o-Y Q-o-Q • Traffic up by 15% and +13.5% +7.5% SMS, driven by 35.4 subscriber and usage 137.6 33.0 growth 121.2 60.0% 59.0% 58.5% 57.6% 82.6 20.9 • Prepaid market structure 19.3 69.8 & high % of incoming international calls 35.5 41.5 9.6 9.2 benefit profitability FY04 FY05 Q404 Q405 • No appar
Slide 17: GloBul
GloBul Subscriber market share FY 2005* Key country facts & developments * Company estimates Country and Market Population: 7.8 million GDP / capita (nominal): $ 3,402 40% GDP growth 2005e: 5.7% 58% Inflation 2005e: 6.5% 2% EU accession in 2007 or 2008 Fixed line penetration: ~40% Thir
Slide 18: GloBul
GloBul Y-o-Y Q-o-Q Significant traffic & SMS 274.1 increase (+91% & 27% yoy) 76.3 +54.4% +44.6% Q4 EBITDA margin affected by strong 177.5 52.8 subscriber intake & 34.2% promotional activities in 30.1% 93.7 30.8% 25.6% 22.9 view of 3rd entrant 16.3 45.4 26.3 1.9 4.5 Commercial initiatives -8.4
Slide 19: COSMOFON
COSMOFON Subscriber market share FY 2005* Key country facts & developments * Company estimates Country and Market Population: 2.1 million 30.5% GDP / capita (nominal): $ 2,570 GDP growth 2005e: 4% 69.5% Inflation 2005e: 1% Fixed line penetration: 29% Significant penetration growth Stab
Slide 20: COSMOFON
COSMOFON Y-o-Y Q-o-Q Usage, as measured by total minutes up by 97% +72.2% +73.5% 40.4 11.6 Increasing SMS usage 23.5 6.7 (+64% y-o-y) 5.0% Turning EBITDA positive 2.0 -8.6 -12.8 -3.5 -0.2 in 2005 -2.6 -21.6 Maximize operational -6.5 efficiencies & enhance FY04 FY05 profitability Q404 Q405 Al
Slide 21: COSMOTE Romania
COSMOTE Romania Subscriber market share FY 2005* Key country facts & developments * Company estimates Country and Market Population: 21.7 million 46% GDP / capita (nominal): $ 3,260 GDP growth 2005e: 4.0% Inflation 2005e: 8.6% 52% EU accession in 2007 or 2008 Fixed line penetration: ~21%
Slide 22: COSMOTE Romania
COSMOTE Romania Subscriber base “cleaned-up” by de-activating non-active subscribers Added over 30,000 new subscribers within first weeks of operation Priority remains on network improvements and further expansion of distribution network Gaining credibility by consistent delivery Ongoing i
Slide 23: 2006 Outlook: Accelerated Growth
2006 Outlook: Accelerated Growth
Slide 24: Group Outlook: Setting the new targets
Group Outlook: Setting the new targets 2005 Results & 2006 Group Targets 2005 Results 2006 Target Revenue Growth 13.2% c. 20% EBITDA Margin 42% c. 40% Net Income Growth 10% c. 10% Net Debt / EBITDA 1.3x < 1.2x Countries Outlook Greece Mature rate of turnover growth – Increasing CF generation & margi
Slide 25: Conclusion
Conclusion COSMOTE
Slide 26: 2006: A promising year ahead
2006: A promising year ahead ¾ Full year consolidation of GloBul, COSMOFON and COSMOTE Romania ¾ Significant revenue & profit growth potential in the Balkan markets ¾ Mature market revenue growth rate in Greece, combined with efforts for continuous margin enhancement ¾ First contribution from COSMOT
Slide 27: Note on Forward-Looking Statements
NOTE ON FORWARD-LOOKING STATEMENTS Some of the statements in this document are "forward-looking statements". Forward-looking statements are derived from information that we currently have and assumptions that we make. Words such as "believes", "anticipates", "expects", “targets”, intends","seeks", "