Slide 1: stc group Investor Presentation Q3 2022
stc group investor presentation Investor Relations Q3 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 11 4. Strategy Overview 22 5. Business Overview 26 6. Sustainability at stc 37 7. Financial Highlights 39
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 (GDP) Growth Saudi Unemployment Rate (15+) According to estimates by GASTAT, real GDP rose by 8.6% y/y in Q3 2022. The economic GASTAT’s latest labor market release for Q2, 2022 showed that Saudi unemployment growth was mainly driven by t
Slide 5: Young and Robust Population
Investor Presentation 2022 | stc group Saudi Population Population Census Distribution by Age Group (mid year 2021) → After the population numbers increased (Mn) 3% in KSA from 34.2 mn in 2019 to 35.0 mn in 36 4.0% 2020 (midyear), 2021 (midyear) saw a 2.5% 2.4% 2.6% 2.4% 35.0 3.0% decline in the ove
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: KSA Internet & Mobile Usage
Investor Presentation 2022 | stc group Internet Use & Mobile Connectivity in KSA (as of February 2022): KSA Internet & Mobile Usage Total Number Internet Users Social Media Total Number of Of As A Percentage Users Social Media Active Internet Of Total As A Percentage Users: Users: Population: Of Tot
Slide 10: Subscriptions
Investor Presentation 2022 | stc group The Kingdom’s population is one of the most connected in the region, with the mobile penetration rate continuing to increase a pace in the first quarter of 2022 Mobile telecom subscriptions (million) 54.9 million Mobile telecom subscriptions 54.9 53.55 157% Mob
Slide 11: stc Profile
Ne are looking forward stc Profile Sic
Slide 12: stc at Glance
Investor Presentation 2022 | stc group #1 in KSA in stc is Saudi Arabia’s 10 data centers Mobile Speedtest Award across & Winner the Fixed Broadband for mobile network Kingdom subscribers coverage during + 6 planned Q1-Q2 2021 Length A- #1 in KSA in of deployed Standard & Poor's Post-paid fiber opti
Slide 13: 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 14: 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 14
Slide 15: 5G technology
Investor Presentation 2022 | stc group 5G technology 1st Launched +7,000 5G Towers IoT Technology 4th 5G Globally Commercial Network As the end of Q2 2022, the total number The company will benefit from stc group is the 4th globally in 5G stc group is the first telecom of 5G towers deployed
Slide 16: 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 17: Key Credit Strengths
Investor Presentation 2022 | stc group Largest telecom operator in the MENA region → Market cap of SAR 196.75 bn (USD 52.47 bn), and presence in 5 countries (as of 30-Sep-22). Experienced best-in-class management team Strong financial performance → Management team has significant experience ac
Slide 18: 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 19: Market Performance
Investor Presentation 2022 | stc group Share Performance Vs. Telecom & TASI Index Market Capitalization of Telecom Sector As of 30th September 2022 0.38% 12% 4.38% 10% 11.65% 8% 6% 4% 2% 0% -2% -4% -6% Market Performance 83.60% TASI Telecom stc stc Company A Company B Company C stc’s Key Metrics Mar
Slide 20: Market Performance
Investor Presentation 2022 | stc group Market Capitalization As of 30th September 2022 Among Ownership Structure As of 30th September 2022 Major Saudi Listed Companies (SAR Bn)* 282.6 266.4 203.3 196.8 36% 102.2 95.3 85.6 80.4 64% 53.2 Market Performance PIF Free Float Shares SNB SABIC Al Rajhi stc
Slide 21: Wining 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 22: Strategy Overview
Strategy Overview
Slide 23: 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 24: 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 25: 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 26: Business Overview
Business Overview
Slide 27: Subsidiaries & Global Presence
Investor Presentation 2022 | stc group Arab Satellite Offers number of services: regional telephony, Communications 36.6% television broadcasting, regional radio Organization broadcasting, restoration services…etc. Companies Associate Sales & distribution arm of stc group and one of the largest tele
Slide 28: 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 → One of the major names in the field of technical Connectivity Services Cloud Services solutions, and biggest supplie
Slide 29: 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 30: 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 31: 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 32: 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 33: Sirar by stc
Investor Presentation 2022 | stc group Subsidiary Overview Offered Services Date of → Founded in 2020 Incorporation Capital → SAR 120 million → stc Group established Advanced Technology and Cyber Security Company “sirar by stc”. Subsidiary → World-class leading edge cyber Objective capabilities to e
Slide 34: 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 35: 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 36: Saudi Technology Ventures (VC Fund)
Investor Presentation 2022 | stc group STV is an independent VC fund with a total capital of USD 500 million anchored by stc with access to its assets (e.g., network, channels, analytics, customer base…etc.) Saudi Technology Ventures (VC Fund) → Opontia acquires and grows → Vezeeta has managed 3 mil
Slide 37: Sustainability at stc
Sustainability at stc
Slide 38: 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 39: Financial Highlights
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Slide 40: 9-Month Performance
Investor Presentation 2022 | stc group Revenue EBITDA 6.5% 14.7% stc achieved an impressive performance for the 9 38.8% 25 40% 52 39% month period of 2022 as it was able to grow its 51 20 39% topline by 6.5%, supported by: 50 50.40 19.58 38% 49 15 17.07 38% → The exceptional performance of the Enter
Slide 41: Quarterly Performance
Revenue EBITDA Investor Presentation 2022 | stc group 4.7% 26.2% -2.8% 14.0% 8 60.00% 7.07 16.99 16.94 7 6.30 6.20 50.00% 6 5.61 5.77 16.47 40.00% 5 43.0% 16.09 37.1% 36.6% 4 35.6% 35.9% 30.00% 15.74 3 20.00% 2 10.00% 1 Quarterly Performance 0 0.00% Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q3-21 Q4-21 Q1-22 Q2
Slide 42: 5-Year Historical Performance
Investor Presentation 2022 | stc group Revenue EBITDA 4.6%* 4.4%* 5-Year Historical Performance 25 39.1% 40% 63.42 39% 58.95 38.2% 22.84 22.09 39% 54.37 20 51.96 21.26 50.66 19.84 38% 15 18.43 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
Slide 43: Revenue Development
Investor Presentation 2022 | stc group Revenue Segmentation Geographical Segmentation 1.48 7.8% Revenue Development 16.47 SAR 16.47 4.7% 92.2% Domestic Revenue International Revenue * Other operating segments include: Telecommunications Towers Company “TAWAL”, stc Bank, stc Kuwait, stc Bahrain, Publ
Slide 44: Solid Balance Sheet
Investor Presentation 2022 | stc group SAR billion September 2022 December 2021 Total cash* 14.81 16.23 Total assets 131.53 127.78 Total liabilities 57.00 56.39 Total equity 71.79 69.27 Solid Balance Sheet Total debt 10.21 9.30 Net Debt -4.60 -6.92 Debt/ Equity 14.2% 13.4% Debt/ Assets 7.8% 7.3% → s
Slide 45: Capital Expenditure Trend
Investor Presentation 2022 | stc group Total Capital Expenditure (Capex)* Performance Ratios 12 11.37 10.84 35.00% 16.5% 17.3% 17.2% 16.3% 16.4% ** 9.76 30.00% 10 8.21 25.00% 8 9.9% ** 20.00% 6 20.9% 4.95 9.0% 9.0% 8.9% 9.0% 18.8% 18.4% 15.00% Capital Expenditure Trend 4 12.9% 10.00% 2 9.8% 5.00% 0
Slide 46: Financial Highlight
Investor Presentation 2022 | stc group Payout Ratio Q3 2022 P/E Multiple* 11.31 12.03 95% 12 10.78 * 10.66 10.99 85% 10 75% P/E at 42.4 (Max)** 17.6 58.8% 74.2% 75.0% 65% 8 55% 36.4% P/E at 37.9 (Min)*** 15.7 6 28.3% 45% 35% 4 25% P/E at 39.35 (Closing) 16.3 2.6% 4.7% 3.6% 4.1% 15% 2 1.6% 5% 0 -5% *
Slide 47: 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 48: Stable Dividends Distribution
Dividends distribution policy Investor Presentation 2022 | stc group → stc announced that based on the BoDs’ recommendation to increase stc’s capital by 150% via granting bonus shares. Therefore, stc’s BoD recommended to the General Assembly to amend the dividends policy to reflect the new proposed
Slide 49: 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