Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q2 2013 Earnings Presentation
21 slides from Telecom Argentina Sa Class B's earnings presentation, 2013
Slide 1: Second Quarter 2013 Earnings Release Conference Call Presentation
Second Quarter 2013 Earnings Release Conference Co e e ce Ca Call Presentation ese tat o
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 g • Market Overview • Business Highlights • Financials • Q&A Session 2
Slide 4: Market Overview: Improved consumption trends in 2Q13
Market Overview: Improved consumption trends in 2Q13 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 g • Market Overview • Business Highlights • Financials • Q&A Session 4
Slide 6: Business Highlights
Business Highlights Leading in revenue share and growth while optimizing commercial costs Focus in service quality improvement thru strengthening access MOBILE capacity to mitigate limited resources (spectrum and sites) 3G penetration exceeds 1/3 of subscriber base, with strong share in smartphone s
Slide 7: Mobile: Focus on high quality segment acquisitions
Mobile: Focus on high quality segment acquisitions • Postpaid segment continues delivering Mobile Customer Evolution Million of lines stable growth. YoY var • Prepaid segment regains strength with 18.9 19.0 19.1 19.3 +3% 18.7 145k net adds ~145k adds. +6% • ARPU up +21% in 2Q13 thanks to Postpaid 1
Slide 8: Mobile: Sustaining #1 in revenue share while optimizing costs
Mobile: Sustaining #1 in revenue share while optimizing costs Service Revenue Breakdown SAC & SRC Million ARS – Argentine Market as % of Argentine Service Revenues - Before capitalization of SAC & SRC +21% 13,312 10,983 17.3% Internet +61% SAC & 16.2% SRC Services 7,583 14.2% 14.5% +22% 6,222 Agent
Slide 9: Paraguay: Postpaid segment leads customer growth
Paraguay: Postpaid segment leads customer growth Customers Financials Thousand of lines YoY var IFRS Million of ARS 2,335 2,381 +6% 2,242 2,270 2,301 +21% Post 21% paid 1 REVENUES +39% +25% Pre 3% +28% paid OIBDA Margin 37% 38% 37% 34% • Addresses broadband demand acquiring 4G-LTE 4G LTE clients thr
Slide 10: Mobile Revenues: Sustained growth thanks to VAS
Mobile Revenues: Sustained growth thanks to VAS E l ti off revenues 1H12 – 1H13 Evolution IFRS, Million of ARS, Percentage +1,875 ((+25%) 25%) YoY Variation +10% +12% +28% +53% +41% +39% % of total Mobile 25% 10% 36% 9% 13% 6% Revenues Note: Wholesale voice shows Interconnection revenues (CPP, TRLD,
Slide 11: Fixed Broadband: Speeding up bandwidth upgrades
Fixed Broadband: Speeding up bandwidth upgrades Evolution of Accesses Thousand of broadband accesses • Speeding up FTTx deployment (+60% YoY growth in cabinet installation) to increase fixed broadband bandwidth and thus improve +3% +5% user value perception. • ARPU rose by 28% YoY in 2Q13 with stabl
Slide 12: Fixed Voice & Data: Return to positive net adds in 2Q13
Fixed Voice & Data: Return to positive net adds in 2Q13 Evolution of Lines in Service ARBU evolution Thousand of lines in service (excluding broadband and data) ARS +11% -0,3% -0,7% Data Revenues IFRS Million of ARS Market 47% 46% 48% 46% share1 +26% • Positive net adds in 2Q13 2Q13. +30% • More tha
Slide 13: Fixed Services: BB + Data services continue to be key drivers
Fixed Services: BB + Data services continue to be key drivers E l ti off revenues 1H12 – 1H13 Evolution IFRS, Million of ARS, Percentage +458 (+16%) 33% Regulated Regulated 38% YoY Variation +6% +5% +30% +29% -23% Non 67% Non 62% Regulated Regulated % of total Fixed Revenues 39% 11% 13% 36% 1% Note:
Slide 14: Evolution of CAPEX
Evolution of CAPEX Capex Evolution PP&E Capex Breakdown Million of ARS 3,192 +2% 3,257 Others 5% Mobile IT 17% access 21% +16% 1,554 PP&E +4% 1,345 Fixed +24% 33% 24% access Intangible Assets -4% Core & SAC/SRC -3% Infraestructure1 % Revenues 17% 15% 13% 12% • Reinforced q quality y improvement p co
Slide 15: Agenda
Agenda g • Market Overview • Business Highlights • Financials • Q&A Session 14
Slide 16: TEO Group: Consolidated Results
TEO Group: Consolidated Results Revenues OIBDA* IFRS, Million of ARS, Percentage IFRS, Million of ARS, 22,117 +20% 18,498 +10% +22% 12,713 10,380 +15% 2Q +27% +22% 2Q +18% 1Q +9% 1Q Regulated OIBDA 12% 10% 10% 9% 32% 30% 30% 29% Revenues Margin *Operating Income Before Depreciation & Amortization .
Slide 17: TEO Group: Consolidated Costs and OIBDA evolution
TEO Group: Consolidated Costs and OIBDA evolution Operating O ti Income I Before B f Depreciation D i ti and d Amortization A ti ti 1H12 – 1H13 IFRS, Million of ARS OPEX1 +485 +26% (+15%) 7,250 9,102 Y Y YoY Variation OIBDA 30.2% -0.1% -0.3% -0.8% +0.5% +0.2% -1.2% 0.0% 28.5% Margin % of 1Consolidat
Slide 18: TEO Group: Consolidated Costs
TEO Group: Consolidated Costs Consolidated Costs1 as % of Revenues Operating Costs1 1H13 VAS Costs 3% Labor Costs Others 2 21% 23% 70% 72% 7.8% ITX Costs 7 9% 7.9% 14% Taxes 29% Marketing & 20.4% 11% 20.9% Sales Marketing & ITX costs 1.2% 2.4% Sales VAS costs 9.1% 9.8% Taxes • Agreements with unions
Slide 19: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Income Net Income attributable to Telecom IFRS, Million of ARS, Percentage IFRS, Million of ARS, Percentage +3% +7% 2,513 1,882 2,0601 1,454 1,275 2Q +11% +13% 2Q +8% 1Q +15% 1Q O. Income 21% 18% 18% 16% 14% 12% 12% 11% Margin 1Includes I l d $172 Milli Mill
Slide 20: TEO Group: FCF and Net Financial Position
TEO Group: FCF and Net Financial Position IFRS, Million of ARS - Last 6 months O Operating ti Free F Cash C h Flow Fl Net Financial Position Telecom Argentina 1 1,074 074((1)) Telecom Personal 4,164 (2) Nucleo (Paraguay) (144) Net Financial Operating Net FX Dividend Repurchase Net Financial Position
Slide 21: Agenda
Agenda g • Market Overview • Business Highlights • Financials • Q&A Session 20