Slide 1: 1Q15 Earnings Release Conference Call Presentation
Telecom Argentina 1Q15 Earnings Release Conference Call Presentation
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 Market Overview Business Highlights Financials Q&A 2
Slide 4: Monetary policy aimed at increasing FX reserves while reducing devaluation expectations
“Monetary policy aimed at increasing FX reserves while reducing devaluation expectations” Economic activity per sector Wages Central Bank Reserves Total Electricity, gas & water National Wages - ∆ % YoY Central Bank Reserves (Billion US$) Agriculture Construction Social services & Healthcare Minery
Slide 5: Agenda
Agenda Market Overview Business Highlights Financials Q&A 4
Slide 6: Business Highlights
Business Highlights Commercial Offer New pricing offers implementation results on: Encouraging trend in Postpaid and Prepaid segments Increasing usage of Browsing + Voice + Content Business Appropriate pricing + monetizing services Highlights Internet Internet Mobile users +12% YoY (Usage +50%, ARPU
Slide 7: Service revenue growth propped up by Data, Internet & strong improvements in voice
Service revenue growth propped up by Data, Internet & strong improvements in voice Evolution of service revenues 1Q14 – 1Q15 IFRS, Million of AR$, Percentage +1,400; +21% Positive impact of Superchip offer 58 544 40 88 350 73 247 FIXED MOBILE IN ARGENTINA NUCLEO YoY Variation +8% +28% +34% +19% +3%
Slide 8: Mobile – Post and Prepaid show encouraging results after new pricing offers
Mobile – Post and Prepaid show encouraging results after new pricing offers Postpaid Gross Adds Postpaid AR$/Month ARPU2 +11% +33% % of Postpaid of Total Service Revenues Postpaid Revenue 1Q14 1Q15 growth YoY Var 66% +26% ARPU AR$/Month 29% 33% 64% 22% 20% 17% +26% 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 1Q15
Slide 9: Mobile Argentina – ARPU & Usage uplift driven by effective internet strategy
Mobile Argentina – ARPU & Usage uplift driven by effective internet strategy Browsing ARPU* (ARS/month) USAGE +63% Data Usage (MB/month) M 51.6 +50% o 31.6 HANDSETS R 180.8 n 1Q14 1Q15 120.8 S-phone Penetration/CB e e Browsing ARPU-Postpaid* s (ARS/month) 1Q14 1Q15 t +55% 29% 38% u CUSTOMERS i 3X of
Slide 10: Mobile – 4G competitive edge
Mobile – 4G competitive edge Competitive advantage in Outstanding Results in the Strong positioning in 4g: AWS Spectrum first Launch 325k subs Initial Network Rollout Rollout:: More than 180 sites installed in: Buenos Aires Córdoba Rosario Salta Santa Fe Tucuman summer resorts Customers Can experien
Slide 11: Fixed – Revenues YoY Growth of BB thanks to service provisioning and competitive offer
Fixed – Revenues YoY Growth of BB thanks to service provisioning and competitive offer BB BB ARPU Accesses Thousand of broadband accesses, thousand of net adds & Churn AR$/Month +29% 178.5 +54k; +3% 147.9 157.8 167.3 138.0 Monthly Churn ARPU (AR$) 1,768 1,714 1.3% 1.4% 1.3% 1.3% 1.2% 1Q14 1Q15 1Q14
Slide 12: Paraguay: Focus on Postpaid and expanding Revenues trend in GUA
Paraguay:: Focus on Postpaid and expanding Revenues trend in GUA Paraguay Customers Thousand of lines YoY var DTH subs. evolution 2,413 2,509 +4% Post 489 24,774 484 1% paid 1 12,204 Pre 1,928 2,021 5% 4,728 paid 3Q14 4Q14 1Q15 1Q14 1Q15 Financials Revenues EBITDA IFRS Million of ARS DTH ARPU evolut
Slide 13: Capex - Focus on BB and UBB Fixed and Mobile
Capex - Focus on BB and UBB Fixed and Mobile Capex Evolution FTTx Rollout Million of AR$ 8,957 >2x +85% 3,530 4,851 5,427 1,062 864 1Q14 2Q14 3Q14 4Q14 1Q15 FY13 FY14 1Q14 1Q15 % Revenues 18% 27%* 14% 10% Mobile Access Network rollout Capex Breakdown Vs. Δ1Q14 Conventional +54% 32% 26% 23% 16% 6 Sec
Slide 14: Agenda
Agenda Market Overview Business Highlights Financials Q&A 13
Slide 15: TEO Group: Consolidated Results
TEO Group: Consolidated Results EBITDA Revenues IFRS, Million of AR$, Percentage IFRS, Million of AR$, Percentage % of Revenues Personal – Mobile 69% Fixed Business 15% +15% Broadband 11% Nucleo – Mobile 5% 8,702 +22% 7,564 +25% 33,341 2,112 2,634 27,287 +19% FY13 FY14 1Q14 1Q15 7,466 8,872 EBITDA M
Slide 16: Results on EBITDA: Positive margin increase by second consecutive quarter
Results on EBITDA: Positive margin increase by second consecutive quarter YoY EBITDA growth Δ YoY EBITDA margin (in p.p) 1.4 25.2% 24.7% 0.6 17.4% 10.0% 7.1% -1.4 1Q14 2Q14 3Q14 4Q14 1Q15 -2.7 -3.1 1Q14 2Q14 3Q14 4Q14 1Q15 15 15
Slide 17: TEO Group: Consolidated costs and EBITDA evolution
TEO Group: Consolidated costs and EBITDA evolution EBITDA1Q14 – 1Q15 IFRS, Million of AR$ YoY +522; +25% Variation +141 6 135 15 360 118 109 134 310 2,634 1,397 2,112 46% 30% 21% 16% 15% 18% 1% -3% -17% EBITDA 1Q14 Ss. Revenues & Handsets Handsets Costs ITX Costs Labor Costs Taxes Other Marketing Fe
Slide 18: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Net Income Income IFRS, Million of AR$, Percentage attributable to Telecom IFRS, Million of AR$, Percentage Net Financial Position Financial Results 5,080 +20% 521 1Q14 1Q15 1Q14 1Q15 -32 -89 5,443 +15% 4,518 +22% 3,673 3,202 +16% 1,680 1,377 889 1,028 FY13
Slide 19: TEO Group: FCF, Net Financial Position & Hedging Strategy
TEO Group: FCF, Net Financial Position & Hedging Strategy IFRS, Million of ARS - Last 12 months Free Cash Flow Operating free Cash Flow 1,999 2,250 9,224 5,229 1,996 5,080 3,530 166 EBITDA Capex Δ WK & others 311 1,255 521 Net Financial Position Telecom Argentina 260(1) Net Financial Operating Spect
Slide 20: Q&A
Agenda Market Overview Business Highlights Financials Q&A 19