46 slides from Mobile Telecommunications Company K.s.c.p's investor presentation, Dec 31, 2008
Slide 1: Investor Presentation
Investor Presentation December 31, 2008 A wonderful world
Slide 2: Disclaimer
Zain Disclaimer Certain expectations and projections regarding future performance of the company referenced in this presentation may be “forward-looking” statements within the meaning of applicable securities laws and regulations. These are statements which the management believes are true at the ti
Slide 3: Becoming a Global Telecoms Player
Zain... Becoming a Global Telecoms Player Who we are now • Zain is an emerging telecoms player operating in 22 countries in the Middle East and Africa, serving over 63.5 million active customers • The company is the leading mobile telecom operator in 13 of its markets, while 6 are in second position
Slide 4: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Markets Leader * * MTC Atheer & Iraqna jointly operate under the Zain brand 4 | Zain | IR Presentation 2008
Slide 5: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Markets Leader 1983-2002 Population under license: 3.2 million Number of Operations: 1 2002-2005 Population under license: 42.8 million Number of Operations: 5 2005-2008 Population under license: 560 million Number of Operations: 22 Cust
Slide 6: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Market Leader 6 | Zain | IR Presentation 2008
Slide 7: Group Structure
Group Structure MTC International Burkina Faso Chad Kuwait 100% 100% 100% Congo B. D.R.C. Jordan 90% 98.5% 96.52% Gabon Kenya Our goal is to own at Bahrain 90% 80% least 50% of our 56.25% Malawi Zambia operations. In all Iraq 100% 78.88% operations we have 71.67% management control Niger Sierra Leon
Slide 8: Executive Management
Executive Management Unified and Experienced Management Team Group CEO Dr. Saad Al Barrak Assistant Group CEO Group CSO Group CFO Barrak Al-Sabeeh Haitham Al Khaled Sam Deeb Group CRO Group CBDO Group CIO Group CHRO Mohammed Shabib Salah Al Fouzan Mohammed Rafi Tony Tasca Group CBTO Group CCO Group
Slide 9: Zain's Key Performance Indicators
Zain’s Key Performance Indicators Our Achievements Revenues (m) EBITDA (m) Net Profit (m) $8,000 $7,441 $5,912 $6,000 $4,167 $4,000 $2,776 $2,424 $2,003 $2,051 $2,000 $1,112 $1,153 $1,051 $1,130 $1,196 $604 $629 $414 $0 2004 2005 2006 2007 2008 9 | Zain | IR Presentation 2008
Slide 10: Zain's Customers
Zain’s Customers Driven by Organic Growth Customers (m) 70.0 63.5 52.5 CAGR = 101% 42.5 35.0 27.0 17.5 13.6 1.9 3.2 Customer Growth 0 Zain’s customers increase was 2003 2004 2005 2006 2007 2008 driven organically by the high growth of the African continent 10 | Zain | IR Presentation 2008
Slide 11: Penetration Rates
Penetration Rates Substantial Potential for Future Growth Niger 12% Malawi 12% Chad 13% DRC 14% Burkina Faso 18% Madagascar 20% 17 countries in Uganda 27% Sudan 29% which Zain operates Zambia 30% have low penetration Tanzania 30% rates Sierra Leone 32% Lebanon 34% Nigeria 41% Kenya 44% Ghana 47% Ira
Slide 12: Top Companies in Middle East & Africa
Top 10 Companies in Middle East & Africa Overall and Telecoms Overall Market Cap (billion) Telecoms SABIC $27.8 Etisalat $20.3 Etisalat $20.3 MTN $18.5 MTN $18.5 STC $18.0 STC $18.0 Maroc Tel $16.4 Alrajhi Bank $16.9 Zain $12.0 Maroc Tel $16.4 Mobily $6.1 Zain $12.0 Zain KSA $4.0 NBK $10.5 Q-Tel $3.
Slide 13: Moving Forward
Moving Forward Expansion IPO ACE • Acquired a 15-year nation-wide • The Zain Group is working towards a • Zain will become one of the license in Iraq; Acquired Iraqna. primary listing on the London Stock Top-10 mobile operators in the MTC-Atheer & Iraqna jointly Exchange (LSE) in 2009 world by 2011
Slide 14: One Network
One Network Innovative Services Guaranteeing Further Competitive Advantages What is One Network? • The world’s first border-less mobile network connecting 17 countries - started in Sept. 2006, further expanded in June, November 2007, April 2008, August and December 2008 to cover KSA and Ghana at lau
Slide 15: Zain's Mobile Operations
Zain’s Mobile Operations 16 | Zain Limited © |
Slide 16: Regional Characteristics
Regional Characteristics Middle East Mature Market High ARPU Moderate Growth Africa Emerging Markets Medium ARPU Very High Growth 16 | Zain | IR Presentation 2008
Slide 17: Zain Group Country Breakdown
Zain Group Country Breakdown 2008 Zain Group Customers Zain Group Revenues Bahrain - 1% Tanzania - 4% KSA - 3% Iraq - 15% Nigeria - 22% Zambia - 5% Others - 14.5% Jordan - 4% Others - 11% Kuwait - 3% Kenya - 2% Lebanon - 1% Gabon - 4% Bahrain - 3% Zambia - 4% Sudan - 8% Iraq - 3% Tanzania - 6% D.R.C
Slide 18: Zain Group Customer Growth
Zain Group Customer Growth 2008 Kuwait 12% Gabon 21% Jordan 26% Congo B. 30% Sierra Leone 32% Iraq 33% Lebanon 33% Sudan 34% Zambia 36% Group Customer Growth for 2008: 50% Burkina Faso 42% DRC 45% Uganda 45% Kenya 46% Bahrain 53% Tanzania 54% Nigeria 55% Niger 67% Chad 74% Malawi 94% Madagascar 117%
Slide 19: Blended ARPUs
Blended ARPUs 2008 US$ Kenya $6 Uganda $6 Madagascar $7 Sierra Leone $9 Burkina Faso $9 Tanzania $9 Nigeria $9 Ghana $10 Malawi $11 DRC $11 Niger $12 Zambia $12 Chad $13 Iraq $13 Congo B. $16 Sudan $16 Jordan $19 KSA $25 Bahrain $29 Gabon $31 Kuwait $69 Note: Lebanon’s ARPU not included due to Manag
Slide 20: EBITDA Margins
EBITDA Margins 2008 2008 2007 51% 50% 47% 48% 49% 48% 46% 45% 45% 44% 44% Group EBITDA Margin: 37% 43% 42% 36% 37% 37% 33% 34% 31% 32% 30% 22% 20% 17% 16% -15% Kuwait Jordan Bahrain Iraq Lebanon Sudan Nigeria Kenya DRC Tanzania Zambia Congo B. Gabon 20 | Zain | IR Presentation 2008
Slide 21: Middle East Overview
Middle East Overview Population (000s) Customers (000s) Kuwait 3,600 1,769 Jordan 6,118 2,345 Bahrain 1,050 686 Iraq 29,492 9,681 Lebanon 4,142 836 Kingdom of Saudi Arabia 25,293 2,010 Sudan 39,445 5,190 Total 109,140 22,517 Population Breakdown Customer Breakdown Revenues Breakdown 2008 5% 1% 5% 1%
Slide 22: Africa Overview
Africa Overview Population (000s) Customers (000s) Nigeria 151,478 17,197 Kenya 38,549 3,079 DRC 64,704 3,303 Tanzania 41,464 3,862 Zambia 12,154 2,669 Congo Brazzaville 3,847 1,321 Gabon 1,350 809 Ghana 23,946 270 Others 113,125 8,508 Total 137,071 41,018 Population Breakdown Customer Breakdown Rev
Slide 23: Kuwait
Kuwait Contribution to Group total - Population: 1% Customers: 3% Revenues: 19% - Customer YoY Growth: 12% • Zain in Kuwait is perceived as the market leader with a 55% market share. • Zain Kuwait is listed on the Kuwait Stock Exchange (KSE) with a 24.6% held by the Kuwait Investment Authority. • Co
Slide 24: Sudan
Sudan Contribution to Group total - Population: 7% Customers: 8% Revenues: 12% - Customer YoY Growth: 34% • Mobitel, Sudan’s first mobile operator, was fully acquired by Zain in February 2006 for a value of US$ 1.332 billion. • Relative to its 2 competitors, Zain Sudan is the market leader with a co
Slide 25: Iraq
Iraq Contribution to Group total - Population: 5% Customers: 15% Revenues: 3% - Customer YoY Growth: 33% • Acquired a 15-year nationwide mobile license for US$ 1.25 billion in August 2007, and ever since has expanded its services to cover 90% of the population. • 2008 saw the full integration betwee
Slide 26: Jordan
Jordan Contribution to Group Total - Population: 1% Customers: 4% Revenues: 6% - Customer YoY Growth: 26% • In January 2003, Zain Jordan was the Group’s first acquired operation for a value of US$ 418.9 million. • Despite the highly competitive market, Zain in Jordan had a commanding 43% market shar
Slide 27: Zambia
Zambia Contribution to Group Total - Population: 2% Customers: 4% Revenues: 5% - Customer YoY Growth: 36% • One of the key performers of the group, Zain Zambia was launched in 1998 and controls 73% of the market. • Increased network roll-out enabled the operation to increase its population coverage
Slide 28: Bahrain
Bahrain Contribution to Group Total - Population: 0% Customers: 1% Revenues: 3% - Customer YoY Growth: 53% • A Greenfield operation, Zain Bahrain launched its commercial services in December 2003. • Bahrain has the highest mobile penetration in the region with 187% and is leading the region with its
Slide 29: Tanzania
Tanzania Contribution to Group Total - Population: 7% Customers: 6% Revenues: 4% - Customer YoY Growth: 54% • Zain Tanzania launched its services in November 2001 and currently owns 60% while the government holds the remaining stake. • At year-end 2008, Zain’s market share was 36% in this highly lib
Slide 30: Congo Brazzaville
Congo Brazzaville Contribution to Group Total - Population: 1% Customers: 2% Revenues: 3% - Customer YoY Growth: 30% • Zain Congo B. launched its commercial activities in December 1999. • Despite MTN’s ongoing competition and Warid’s aggressive tariff plans, Zain was able to maintain its no.1 positi
Slide 31: Gabon
Gabon Contribution to Group total - Population: 0% Customers: 1.5% Revenues: 4% - Customer YoY Growth: 21% • Zain Gabon launched in June 2000, and has maintained its position as the market leader since 2003. • Despite the ongoing competition from its two competitors - Moov and Libertis - Zain in Gab
Slide 32: Niger
Niger Contribution to Group total - Population: 2.5% Customers: 2% Revenues: 2% - Customer YoY Growth: 67% • Zain in Niger started its commercial activities in October 2001, and since then has evolved to control 70% of the market. • To date, Niger hosts four other mobile operators, notably Orange an
Slide 33: Malawi
Malawi Contribution to Group Total - Population: 2.5% Customers: 2% Revenues: 2% - Customer YoY Growth: 94% • Zain Malawi started its operations in October 1999, and currently holds 71% of the market. • Zain in Malawi’s strong performance was driven by strong customer growth and brand loyalty. • In
Slide 34: Burkina Faso
Burkina Faso Contribution to Group total - Population: 3% Customers: 2% Revenues: 2% - Customer YoY Growth: 42% • Zain Burkina Faso commenced in January 2001, and despite being the third operator to enter the market, it has assumed its position by being the market leader with 52% market share. • New
Slide 35: Nigeria
Nigeria Contribution to Group Total - Population: 27% Customers: 27% Revenues: 22% - Customer YoY Growth: 55% • In 2001, Zain (formerly Celtel) made history by becoming the first telecom operator to launch commercial services in Nigeria. In 2006, Celtel International acquired a 65.7% majority stake.
Slide 36: Chad
Chad Contribution to Group Total - Population: 2% Customers: 2% Revenues: 1.5% - Customer YoY Growth: 74% • Zain Chad launched services in October 2000, and is currently the no.1 operator with 67% market share. • Following the rebranding to Zain in August 2008, the operation witnessed a 74% increase
Slide 37: Democratic Republic of Congo
Democratic Republic of Congo Contribution to Group Total - Population: 12% Customers: 5% Revenues: 5% - Customer YoY Growth: 45% • Zain (formerly Celtel) started its commercial services in December 2000. • Despite the fierce competition from low cost operators in the market, Zain DRC managed to main
Slide 38: Sierra Leone
Sierra Leone Contribution to Group Total - Population: 1% Customers: 1% Revenues: 0.5% - Customer YoY Growth: 32% • Zain launched services in September 2000. • Despite high competition, the operation stands as no.1 with a market share of 46% ahead of competition by offering a multitude of innovative
Slide 39: Madagascar
Madagascar Contribution to Group Total - Population: 4% Customers: 2% Revenues: 1% - Customer YoY Growth: 117% • Zain Madagascar joined the Group’s African portfolio in 2005. To date, the operation is the no.2 with a market share of 37%, an increase of five percentage points as compared to 2007. • I
Slide 40: Uganda
Uganda Contribution to Group Total - Population: 6% Customers: 3% Revenues: 2% - Customer YoY Growth: 45% • Zain Uganda launched services in 1995 and was Zain’s (formerly Celtel) first operation in Africa, as well as the first GSM network in sub-Saharan Africa. • Despite the aggressive competition i
Slide 41: Ghana
Ghana Contribution to Group Total - Population: 4% Customers: 0.5% Revenues: 0% - Customer YoY Growth: - • Zain acquired 75% of Westel for US$ 120 million in October 2007, and launched its services subsequently in December 2008. • The operation was the first telecom operator to introduce the 3.5G ne
Slide 42: Kenya
Kenya Contribution to Group Total - Population: 7% Customers: 5% Revenues: 2% - Customer YoY Growth: 46% • Acquired in 2004, Zain in Kenya faces a highly competitive market with a relatively low ARPU. • Following the rebranding to Zain, the operation witnessed a growth in its market share of more th
Slide 43: Kingdom of Saudi Arabia
Kingdom of Saudi Arabia Contribution to Group Total - Population: 4% Customers: 3% Revenues: na - Customer YoY Growth: - • Zain KSA launched commercial services on August 26, 2008, and was able to garner more than 2 million customers in the first 4 months following the launch. • The IPO of Zain KSA
Slide 44: Lebanon
Lebanon Contribution to Group Total - Population: 1% Customers: 1% Revenues: 1% - Customer YoY Growth: 33% • Zain operates in Lebanon under a Management Contract since June 2004, when it was rebranded as mtc-touch. • Q4-2008 witnessed the successful launch of the Blackberry for all customers holding
Slide 45: Summary of Key Messages
Summary of Key Messages ‣ Successful execution of 3x3x3 strategy ‣ Regional powerhouse in ME and Africa ‣ Two very attractive regions: ‣ Mature high ARPU base in ME ‣ Emerging high growth markets in Africa ‣ Capture synergies and accelerated growth through integration and ACE 45 | Zain | IR Presenta
Slide 46: Thank you
Thank you For more information please contact Investor Relation Team at: IRLIST@zain.com Mohammad Abdal - +965.4644956 Yaman Aljundi - +973.36035154 Eline Hilal - +973.36035022 Cherihan Nasr - +973.36035209 A wonderful world