Slide 1: stc group investor presentation Q1 2022
stc group investor presentation Investor Relations Q1 2022 1
Slide 2: Index
Index Investor Presentation 2022 | stc group 1. Saudi Arabia’s Macro-Economic Environment 3 2. KSA Telecom Market Overview 7 3. stc Profile 10 4. Strategy Overview 21 5. Business Overview 25 6. Sustainability at stc 35 7. Financial Highlights 37
Slide 3: Saudi Arabia's Macro-Economic Environment
Saudi Arabia’s Macro-Economic Environment
Slide 4: Domestic Macroeconomic Indicators
Investor Presentation 2022 | stc group Gross Domestic Product (GPD) Growth Saudi Unemployment Rate (15+) According to estimates by GASTAT, real GDP rose by 9.6% y/y in Q1 2022, achieving the GASTAT’s latest labor market release for Q4, 2021 showed that Saudi unemployment highest growth rate since 20
Slide 5: Young and Robust Population
Investor Presentation 2022 | stc group Saudi Population Population Census Distribution by Age Group (2020) (Mn) 36 6.0% → Saudi population is the largest 35.01 3% and youngest demographic in 35 34.21 5.0% 5.39% the GCC region. Young and Robust Population 34 33.41 31% 28% 4.0% 33 32.55 → 2020 GASTAT
Slide 6: Communication Sector Spending
Investor Presentation 2022 | stc group Communication Sector Spending Average Historical Communication Consumer Segmentation of Average Consumer Spending in Spending (By Total Households) 2018 (By Total Households) → Throughout the years, percentage of consumer spending on communication services slig
Slide 7: KSA Telecom Market Overview
KSA Telecom Market Overview
Slide 8: Differentiated Through Quality
Investor Presentation 2022 | stc group 4G Mobile Download Speed (Mbps) (Mbps) Differentiated Through Quality 88.2 83.4 176.8 162.3 162.3 72.8 130.8 51.4 106.2 78.2 Ookla Meqyas Q3-Q4 2019 Q1-Q2 2020 Q3-Q4 2020 Q1-Q2 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 4G Mobile Upload Speed (Mbps) (
Slide 9: Subscriptions
The Kingdom enjoys a high percentage of mobile telecom services Investor Presentation 2022 | stc group subscriptions among its population Mobile telecom subscriptions (million) 48.11 47.16 million 46.35 47.16 Mobile telecom subscriptions 45.24 44.89 44.11 134.7% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 20
Slide 10: stc Profile
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Slide 11: stc at Glance
stc is Saudi Arabia’s 10 data Investor Presentation 2022 | stc group #1 in KSA in Speedtest Award centers Mobile spread across & Winner the Fixed Broadband for mobile network Kingdom subscribers coverage during Q1-Q2 2021 + 6 planned Length A- #1 in KSA in of deployed Standard & Poor's Post-paid fib
Slide 12: Our Journey
Investor Presentation 2022 | stc group 1998 2005 2007 2009 2011 2013 2015 2017 2019 2021 Acquired 60% $5 billion international 10 million mobile Stack acquisition Company stake in Sale Acquisition of stc ranked as Launch of “Advanced subscriber mark. in MAXIS Sukuk program Incorporat
Slide 13: Our Regional Footprint
Investor Presentation 2022 | stc group Expanding our footprints across four countries has unlocked growth opportunities… Our Regional Footprint 2007 Kuwait 2009 Bahrain Kingdom of Saudi Arabia 2008 Malaysia 13
Slide 14: 5G technology
Investor Presentation 2022 | stc group 5G technology 1st Launched 6,709 5G Towers IoT Technology 4th 5G Globally Commercial Network As of 31st March-22, the total number of The company will benefit from stc group is the 4th globally in 5G stc group is the first telecom 5G towers deployed acr
Slide 15: Connectivity
Investor Presentation 2022 | stc group # stc Submarine Cable System Length (km) 1 Saudi vision cable (SVC) 1,071 2 2Africa → stc owns and operates the largest and most reliable submarine communications 45,000 3 2Africa Pearls cables in the Middle East, with more than 100 global landing points via th
Slide 16: Key Credit Strengths
Investor Presentation 2022 | stc group Largest telecom operator in the MENA region → Market cap of SAR 215.60 bn (USD 57.49 bn), and presence in 5 countries (as of 31 March 2022). Experienced best-in-class management team Strong financial performance → Management team has significant experienc
Slide 17: Diverse Board of Directors
Highly experienced executive management team and Investor Presentation 2022 | stc group board of directors Group Executive Management Team Board of Directors Eng. Olayan Mohammed Alwetaid HRH. Prince Mohammed Khalid ALFaisal Chief Executive Officer (CEO) Chairman of the Board Diverse Board of Direct
Slide 18: Market Performance
Investor Presentation 2022 | stc group Share Performance Vs. Telecom & TASI Index Market Capitalization of Telecom Sector As of 31st March 2022 0.49% 20% 4.59% 12.25% 15% 10% 5% 0% -5% Market Performance 82.66% TASI Telecom stc stc Mobily Zain Atheeb stc’s Key Metrics Market Cap % Price/ Closing pri
Slide 19: Market Performance
Investor Presentation 2022 | stc group Ownership Structure As of 31st March 2022 Market Capitalization As of 31st March 2022 Among Major Saudi Listed Companies (SAR Bn)* 401.5 393.0 317.5 36.00% 215.6 164.9 64% 112.7 110.4 81.8 51.2 Market Performance PIF Free Float Shares Al Rajhi SABIC SNB stc Maa
Slide 20: Winning Awards
Investor Presentation 2022 | stc group 2010 → Advertiser Excellence in the Middle East and North Africa by Dubai Linux. 2016 → Operational Excellence Award at the Global Forum for Communications TM Forum → Multiple creativity awards on outstanding work on the Rayi7 Rayi7, Dawri Plus, and Laywagif ca
Slide 21: Strategy Overview
Strategy Overview
Slide 22: Our vision & values
Investor Presentation 2022 | stc group drive Proactive, Inquisitive and Inventive Our vision We are a world-class digital leader providing innovative services and platforms to our customers and enabling the digital transformation of the MENA region. devotion Caring, Committed and Trustworthy Our pur
Slide 23: Our Strategy for Success: DARE 2.0
Our Strategy for Success Investor Presentation 2022 | stc group d digitize stc a Accelerate performance r reinvent experience e expand scale and scope Our Strategy for Success: DARE 2.0 Instill digital mindset Maximize shareholder Excite customers with Grow by expanding and unlock the returns by tra
Slide 24: Aligning stc Strategy with Vision 2030
Aligning stc Strategy with Saudi Arabia’s Vision 2030 Aligning stc Strategy with Vision 2030 Elements of stc Strategy: Lead market in digital services and creative solutions To raise our ranking on the E-Government Survey Index from our current Drive efficiencies through digital position of 36
Slide 25: Business Overview
Business Overview
Slide 26: Subsidiaries & Global Presence
Sales & distribution arm of stc group and one of the largest telecom Investor Presentation 2022 | stc group Channels by stc 100% distribution companies in the Middle East, with operations in Saudi Arabia, Bahrain and Oman. Arab Satellite Offers number of services: regional telephony, Communications
Slide 27: Our ICT Arm
Investor Presentation 2022 | stc group Subsidiary Overview Services Offered Date of → Founded in 2002 Incorporation System Integration IoT Digital Services Capital → SAR 1.2 billion Connectivity Services Cloud Services → One of the major names in the field of technical solutions, and biggest supplie
Slide 28: B2B IT Market
Investor Presentation 2022 | stc group KSA B2B IT Services Market by Category Size (SAR Bn) The B2B ICT market in the Kingdom is expected to grow at a CAGR of 6.7% for the period from 2018G – 2025G to reach SAR 53.1 billion. The IT services sector is expected to be the main driver of market growth w
Slide 29: Our Sales Arm
Investor Presentation 2022 | stc group 226 24,000 + Stores Merchants Subsidiary Overview Date of Incorporation → Founded in 2008 137 57,000 + Distribution Hubs POS Capital → SAR 100 million → Considered as the sales and distribution arm of stc Group. 8,000 + 15 Mn+ Agents Customers → stc Channels is
Slide 30: KSA First Tower Co.
Investor Presentation 2022 | stc group Subsidiary Overview Solutions Offered Date of → Founded in 2018 Incorporation Built-to-Suit Capital → SAR 2.5 billion Selects an optimum spot and constructs wireless communication towers, tailor-made to match the → To be responsible for owning, constructing, bu
Slide 31: Our Fintech Arm
Investor Presentation 2022 | stc group Subsidiary Overview Offered Services Date of → Founded in 2018 Incorporation Capital → SAR 2.5 billion → stcPay is a digital secure wallet that empowers individuals to take full control of their finances at their fingertips anytime anywhere. Enabling users Subs
Slide 32: AQALAT
Investor Presentation 2022 | stc group Subsidiary Overview Date of Incorporation → Founded in 2013 Capital → SAR 70 million → To develop and manage the company’s properties in all parts of the Kingdom by benefiting from the capabilities Subsidiary Objective of the Group and its applications by adopt
Slide 33: Specialized by stc
Investor Presentation 2022 | stc group Subsidiary Overview Services Offered Forun Date of → Founded in 2002 Incorporation Capital → SAR 252 million TETRA Services → The only national licensed operator providing the business sector, and the governmental, Subsidiary Mobile Telephony industrial and com
Slide 34: Saudi Technology Ventures (VC Fund)
Investor Presentation 2022 | stc group STV is an independent VC fund with a total capital of USD 500 anchored by stc with access to its assets (e.g., network, channels, analytics, customer base…etc.) Saudi Technology Ventures (VC Fund) → Vezeeta has managed 3 → Brings innovation to → Leading a SAR 7
Slide 35: Sustainability at stc
Sustainability at stc
Slide 36: Sustainability at stc
Investor Presentation 2022 | stc group Our approach to sustainability involves maximizing economic value, creating positive environmental impact and supporting progressive social development. By aligning our actions with the goals of the Saudi Vision 2030, we are helping to build a better future. We
Slide 37: Financial Highlights
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Slide 38: Quarterly Performance
Investor Presentation 2022 | stc group Revenue EBITDA 8.3% 7.8% 5.6% 9.2% stc started the year of 2022 by achieving an outstanding performance for the first 7 38.00% 16.99 37.2% Quarter as the company was able to 37.1% 7 37.50% 6 6.30 37.00% improve its topline and bottom-line by 8.3% and 2.8%, resp
Slide 39: 5-Year Historical Performance
Investor Presentation 2022 | stc group Revenue EBITDA 4.6%* 4.4%* 5-Year Historical Performance 25 39.1% 40% 63.4 39% 59.0 38.2% 22.1 22.8 39% 54.4 20 52.0 21.3 50.7 19.8 38% 15 18.4 38% 37.5% 37% 37% 10 36% 36.4% 36.0% 36% 5 35% 35% 0 34% 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 EBITDA Mar
Slide 40: Revenue Development
Investor Presentation 2022 | stc group Revenue Segmentation Geographical Segmentation 1.28 7.4% Revenue Development 16.99 SAR 16.99 8.3% 92.6% Domestic Revenue International Revenue *Other operating segments include: TAWAL, stc Bank, stc Kuwait, stc Bahrain, specialized by stc, sirar by stc, Aqalat,
Slide 41: Solid Balance Sheet
Investor Presentation 2022 | stc group SAR billion March 2022 March 2021 Total cash* 15.01 18.74 Total assets 129.63 124.46 Total liabilities 57.25 58.20 Total equity 70.37 65.07 Solid Balance Sheet Total debt 9.71 8.84 Net Debt -5.30 -9.91 Debt/ Equity 13.80% 13.58% Debt/ Assets 7.49% 7.10% → stc g
Slide 42: Capital Expenditure Trend
Investor Presentation 2022 | stc group Total Capital Expenditure (Capex)* Performance Ratios 12 11.37 10.84 25.00% 16.45% 17.27% 17.19% 16.33% ** 9.76 16.19% 10 20.00% 20.91% 8.21 8 18.78% 18.39% 15.00% 9.86% 6 9.01% 9.01% 8.85% ** 8.79% 12.95% 10.00% Capital Expenditure Trend 4 5.97% 5.00% 2 1.01 0
Slide 43: Financial Highlight
Investor Presentation 2022 | stc group Payout Ratio Q1-22 P/E Multiple* 12 74.21% * 75.05% 90% 72.73% ** 70.67% 70.18% 12 P/E at 122.0 (Max)** 21.4 11 11.31 11.39 11 10.99 60% 10.78 10.66 P/E at 107.4 (Min)*** 18.8 10 10 30% 9 P/E at 107.8 (Closing) 18.9 6.54% 3.93% 3.77% 3.56% 3.71% 9 8 0% * Last T
Slide 44: Sukuk Programs Issued by stc
Investor Presentation 2022 | stc group Item International Sukuk Program Domestic Sukuk Program Issuing Type International Sukuk (senior, unsecured sukuk) Domestic Sukuk Currency USD denominated SAR denominated Sukuk Programs Issued by stc Program Amount USD 5 Bn SAR 5 Bn → To support the execution o
Slide 45: Stable Dividends Distribution
Investor Presentation 2022 | stc group Dividends distribution policy → stc announced its new dividends distribution policy for the next three years starting from the 4th quarter 2021. → The objective of the dividend policy is to maintain a minimum level of dividend per share on quarterly basis. stc
Slide 46: Disclaimer
Disclaimer This presentation has been prepared as an informative guide that might assist interested parties in gaining an insight into the history and background of telecommunications within Saudi Arabia, as they relate to the Saudi Telecom Company (stc). Furthermore, it does not constitute an invit