Sonaecom Sgps Sa · EURONEXT:SNC
Sonaecom Sgps Sa — SonaeCom — Investor Presentation (March 2003)
48 slides from Sonaecom Sgps Sa's investor presentation, March 2003
Slide 1: SonaeCom Management Presentation March 2003
SonaeCom Management Presentation March 2003
Slide 2: Our Management Team
Our Management Team Paulo Azevedo CEO SonaeCom Antonio Casanova CEO Optimus Luis Filipe Reis CEO Novis and Matrix Chris Lawrie CFO SonaeCom Antonio Lobo Xavier Chief Regulatory and Legal Officer SonaeCom Cláudia Azevedo CEO Sonae Software & Systems Integration 2
Slide 3: About SonaeCom
About SonaeCom — SonaeCom is the leading expert alternative communications provider to Portugal Telecom. CUSTOMERS 2002 REVENUES 2002 TRAFFIC 2002 Novis 11% Novis Novis 14% Clix 4% Clix 35% 2,5 793 5% 4.485 Clix million million Publico million Optimus 9% customers Optimus euros 5% minutes 85% Public
Slide 4: About SonaeCom
About SonaeCom SonaeCom actively manages a portfolio of four main divisions and exploits Group synergies through a Shared Services division. • 22,3% market share of the Portuguese mobile market Optimus • Leads mobile data market : data is 10% of customer revenues • Leads the SME market amongst altne
Slide 5: Key Strengths
Key Strengths — Lean, streamlined management structure; — Talented, young and motivated management team with a unique combination of marketing and technical skills; — Proven ability to build leading national brands; — Strong partnerships, Sonae Group and France Telecom, that give us competititve adv
Slide 6: Shareholders and Group Structure
Shareholders and Group Structure Sonae SGPS Retail, Real Estate, Wood panels, Telecoms, Tourism Sonae SGPS : 82,79% Free Float : 17,21% Market Cap : SonaeCom 373 million euros (07/03/03) (Group 2.492 employess, SonaeCom SGPS 22 employees) Shared Services Division Single Transmission Network 46,29% (
Slide 7: Our Mission
Our Mission — SonaeCom aims to be the recognized expert leading alternative provider of communications services in Portugal to Corporate, SME and wholesale customers offering mobile, fixed and Internet access as well as applications and content. — To achieve this goal, and to secure a sustainable co
Slide 8: Key Operating Highlights
Key Operating Highlights OPERATING HIGHLIGHTS 2000 2001 2002 Optimus Mobile Subs (thousands) 1 410 1 916 2 120 ARPU euros 32, 1 28, 4 24, 1 Monthly Bill euros 17, 6 16,0 14, 4 MoU minutes 126 118 113 Data as % Customer Revenues 5% 10% 10% Novis Active customers (thousands) 51 124 112 Direct Accesses
Slide 9: Financial Flashcard
Financial Flashcard Contributions FINANCIAL HIGHLIGHTS 2000 2001 2002 2002 Consolidated Turnover 522 731 793 100% Optimus Stand-alone 458 618 612 76% Novis Stand-alone 44 104 157 11% Clix Stand-alone 4 18 36 5% Publico Stand-alone 34 35 41 5% S&SI Stand-alone 16 41 46 6% Consolidated Adjusted EBITDA
Slide 10: Mobile
Mobile Management Presentation March 2003
Slide 11: Successful 3rd operator
Successful 3rd operator — Optimus entered the market 4 years ago, 6 years later than TMN and Vodafone. Since launch it has captured 26% of new market entrants and is the most successful third operator in Europe with a market share of over 22%. Portugal - OPTIMUS Espanha - Amena Suiça - Orange França
Slide 12: Competitive Landscape
Competitive Landscape Market TMN Vodafone Optimus Launch Date - Jan '89 Oct '92 Sep '98 Penetration (Dec 2002) 93% Subscribers EoP 9.584 4.426 3.037 2.120 Market Share Overall (Dec 2002) - 46,20% 31,70% 22,10% Market Share Net Adds (2002) - 53,30% 25,60% 21,00% ARPU 2002 26,6 27,1 27,3 24,1 2
Slide 13: New voice tariffs – consumer market
New voice tariffs – consumer market In 2002, Optimus launched innovative concepts in voice tariffs for the consumer and SME markets: Boomerang Raízes Calls to Brazil, Angola, Mozambique, Cabo Verde, Venezuela, Rep of South Africa, Northern Africa, Targeting new market Ucrania, Moldova, Romania, Russ
Slide 14: New voice tariffs – SME market
New voice tariffs – SME market Office Zone facilitates mobile communications for companies. The mobile phone is transformed into a fully mobile extension of the company’s fixed network. Tarifa Optimus - Rede Fixa Comunicações Free gratuitas Communications Optimus VPN Tarifa Optimus - Optimus VPN Out
Slide 15: New data services
New data services — In 2H02, Optimus launched OPA (Optimus Personal Assistant), a new concept in mobile data communications. — OPA brings together the mobile phone and computer over the Microsoft Pocket PC operating system, with Pocket Microsoft Office and many other incorporated functionalities : •
Slide 16: Data
Data Data is a key element of Optimus’ strategy. To date, Optimus has led the market in terms of data products and revenues, mainly driven by SMS although growth is also starting to come from WAP and GPRS. Total number of SMS Data as % Service Revenues 8,7% 38,4 SMS/ 30,1 SMS/ 8,0% m onth/ user 7,5%
Slide 17: Superior Network Quality
Superior Network Quality In 2002, ANACOM once again reported in its network quality analysis that Optimus is the operator with the best mobile network in mainland Portugal. Percentage of calls with “good” Percentage of calls terminated sound quality in Portugal successfully in Continental Portugal 9
Slide 18: Key Operating Highlights
Key Operating Highlights Optimus Service Revenues 551 570 400 241 230 — High levels of market penetration have 180 led to slower growth in customer 149 155 148 149 139 revenues. 117 131 134 310 340 220 69 65 51 65 60 54 50 58 90 83 83 88 86 — Operator revenues have been 67 73 80 negatively affected
Slide 19: FCF drivers Optimus stand-alone
FCF drivers Optimus stand-alone Turnover Adjusted EBITDA 23% 617.504 612.090 143.155 13% 458.281 11% 78.154 241.706 49.123 1999 2000 2001 2002 1999 2000 2001 2002 (54.721) Optimus has increased EBITDA margins from negative values in 1999 to 23% in 2002. For the last 3 quarters of 2002, Optimus was F
Slide 20: Fixed
Fixed Management Presentation March 2003
Slide 21: Value Proposition
Value Proposition Novis Novis Value Novis Positioning Proposition Strategy Voice: The alternative for the Price Value from cost savings incumbent in the fixed Innovation partially transfered to the voice and in the client Simplicity business internet Innovative product Superior Customer
Slide 22: Novis Strategic Paths (Voice)
Novis Strategic Paths (Voice) Gain scale Indirect Provide significant platforms for eventual direct opportunities Voice Simple and effective product strategy and customer focus Benefit from scale provided by indirect voice to capitalise on existing assets: Direct backbone & service network,
Slide 23: Novis Strategic Paths (Data & Internet)
Novis Strategic Paths (Data & Internet) Strengthen brand as the “professional” internet Internet Continually fine-tune and fit offer to SME and SOHO needs & Data Leverage internet & data competencies to achieve a more ambitious internet market share Strengthen position as the quality carrier
Slide 24: Novis' Products and Services
Novis’ Products and Services Novis’ key market is the SME and SoHo market. Indirect access to the residential market is viewed as an important source of traffic generation. 9 PRI ISDN direct connection: optical fibre NW, FWA or leased lines Direct Access Voice 9 ISDN and POTS, pre-selection, full na
Slide 25: Market Share
Market Share In its strategic market segment, Novis has a clear lead amongst the remaining alternative operators with an 8,3% market share. Business Market Share Evolution 23,4 23,5 Altnets 22,7 Novis Jazztel Oni Vodafone Others 8,3 8,3 7,9 6,4 6,3 5,2 5,6 5,1 5,0 4,4 4,6 4,6 0,6 0,6 0,4 1S'00 2S'00
Slide 26: Novis Network
Novis Network Novis has developed its own network infrastructure to guarantee independence from the incumbent, assure quality of control, facilitate product and service innovation and be able to define a best-value price policy. Braga Guimarães Viana do Castelo V.N. Famalicão /S. Tirso & Porto Vila
Slide 27: Novis Operating Highlights
Novis Operating Highlights Indirect access customers Direct Accesses Installed with pre-selection 2.054 106.680 94.265 1.041 230 3.781 2000 2001 2002 2000 2001 2002 Traffic (voice + data) millions of minutes 2.491 2.193 1.435 2000 2001 2002 7
Slide 28: FCF drivers Novis stand-alone
FCF drivers Novis stand-alone Turnover Adjusted EBITDA 156.996 1999 2000 2001 2002 (1.464) 103.727 (17.153) 43.972 12.508 1999 2000 2001 2002 (43.380) (46.038) Novis has consistently improved operating profitability and reduced cash consumption. CAPEX FCF 37.805 34.852 1999 2000 2001 2002 31.035 27.
Slide 29: Internet and Media
Internet and Media Management Presentation March 2003
Slide 30: Clix
Clix Clix is the leading residential ISP in Portugal with a market share of 21,6% and has the second most visited portal. Market Share of Declared Access from the Home Cabovisão 2,50% Vizzavi (Netc)/Yorn 6,10% Oninet 6,70% Telepac/Netpac (PT) 8,90% IOL 9,40% Netcabo (PT) 13,80% Sapo (PT) 14,20% Clix
Slide 31: Clix Positioning
Clix Positioning Clix Leads the Internet residential access market by: Offering the right range of Supported by a relevant and talked Internet access solutions about Internet Portal Based on a common platform of Messenger 1
Slide 32: FCF drivers Clix stand-alone
FCF drivers Clix stand-alone Turnover Adjusted EBITDA 35.696 2000 2001 FY 2002 17.561 (4.935) 3.949 (8.662) 2000 2001 FY 2002 (11.004) Clix’ narrowband business is already an EBITDA positive business. Profitability of its broadband offer is penalized by the shortcomings of the incumbent’s wholesale
Slide 33: Público
Público Público is the leading reference daily newspaper in Portugal with a market share of audience of 15,7%, at the end of 2002, and of publicity of 17,8%, representing a “power ratio” greater than 1. Average Paid Circulation Jan/Sep 01 29% 29% 28% 27% Jan/Sep 02 16% 15% 15% 16% 10% 9% 3% 3% Diári
Slide 34: Associated Products
Associated Products — In 2002, Público repositioned its strategy to curb the continuing recession in the advertising sector launching a series of “associated products” leveraging on the Publico brand name. — The most successful initiative was the launch of a book collection called “Mil Folhas” entai
Slide 35: Associated Products
Associated Products — “Mil Folhas” was so successful that a second edition was launched in January 2003 with another 30 titles. — Other associated products have also been launched such as distribution of a DVD collection with the Thursday edition of the paper – “Série Y”. 5
Slide 36: FCF drivers Público stand-alone
FCF drivers Público stand-alone Turnover Adjusted EBITDA 41.071 2.463 33.989 34.598 1.696 1.335 2000 2001 2002 2000 2001 2002 Cost contention was a key focus of management and, in 2002, the company improved EBITDA margins to 4,1%. CAPEX in 2002 is higher than in previous periods as Público converted
Slide 37: Software and Systems Integration
Software and Systems Integration Management Presentation March 2003
Slide 38: Software & Systems Integration
Software & Systems Integration SonaeCom’s Software and Systems Integration (S&SI) division was set-up in 2002 and comprises Enabler, WeDo, NovisIT (only from a management perspective) and BizDirect. 2001 2002 S&SI Contribution to Consolidated Accounts Millions of Euros % Millions of Euros % Turnover
Slide 39: Financial Review
Financial Review Management Presentation March 2003
Slide 40: Consolidated Turnover
Consolidated Turnover Turnover (m€) 793 731 + 8% 188 193 211 202 FY 2001 1Q 02 2Q 02 3Q 02 4Q 02 FY 2002 Contributions 2001 Contributions 2002 Optimus 605 82,7% 600 76% Optimus Novis 55 7,5% 85 11% Novis Público 34 4,7% 40 5% Público Clix 17 2,4% 36 4% Clix Others 20 2,7% 33 4% Others 10
Slide 41: OPEX
OPEX OPEX OPEX Excluding COGS (m€) OPEX as % of Turnover 655 700 617 +6% 90% 86% 600 85% 84% 82,6% 500 85% 80% 79% 400 80% 300 200 75% 100 160 166 169 160 0 70% FY 2001 1Q 02 2Q 02 3Q 02 4Q 02 FY 2002 FY 2001 FY 2002 228 31% Interconnection & Leased Lines 240 30,2% 265 36% External Supplies & Servic
Slide 42: EBITDA
EBITDA EBITDA Results 2001 (m€) 109 - 143 56 -7 22 - 29 EBITDA EBITDA social Write-back of deferred Deferred costs Adjusted EBITDA ESD Capitalized Costs Cash EBITDA Cash EBITDA costs EBITDA +70% +461% +1713% EBITDA Results 2002 (m€) - 94 122 -9 123 114 94 EBITDA social Write-back of deferred Deferre
Slide 43: Results Below EBITDA
Results Below EBITDA Results Below EBITDA 2001 (m€) 56 -76 -161 -106 -145 55 -27 -12 13 EBITDA EBITDA Ammortization, EBIT EBIT Financial Results Extraordinary EBT EBT Taxation Minority Net Net Income Income Depreciation & & Net Results & Interests Provisions Associated Provisions for Companies Finan
Slide 44: CAPEX
CAPEX CAPEX (m€) 250 27% 30% CAPEX -37% CAPEX as % of Turnover 25% 200 17% 20% 17% 16% 16% 150 13% 15% 100 197 32 32 28 33 125 10% 50 5% 0 0% FY 2001 1Q 02 2Q 02 3Q 02 4Q 02 FY 2002 Contributions 2001 Contributions 2002 Optimus 132 18% 90 11% Optimus Novis 38 5% 27 3% Novis Público 2 0% 2 0% Público
Slide 45: Free Cash Flow
Free Cash Flow Free Cash Flow (m€) 27 (8) (27) (49) (56) + 79% (268) FY 2001 1Q 02 2Q 02 3Q 02 4Q 02 FY 2002 Standalone Standalone Optimus (114) (3) Optimus Novis (97) (47) Novis Público (10) (8) Público Clix (22) (5) Clix Others (25) 6 Others 5
Slide 46: Balance Sheet Capital Structure
Balance Sheet Capital Structure Consolidated Debt (m€) 2001 2002 -10 % 568 55 513 509 131 -26 % 378 Gross debt Liquidity Net debt Gross debt Liquidity Net debt Net Debt Contributions 2001 Net Debt Contributions 2002 Optimus 517 419 Optimus Novis 42 50 Novis Público 2 3 Público Clix 0 -0 Clix Others
Slide 47: Outlook
Outlook Management Presentation March 2003
Slide 48: Outlook
Outlook ¾ Continued focus on cost base and working capital management ¾ New revenue initiatives ¾ Leading to improvements in EBITDA, FCF and net results ¾ Topline growth conditioned by economic recovery and consumer confidence ¾ Urgent need for equitative regulatory environment • Internet – ADSL who