Empresa Nacional De Telecomunicaciones S.a. · BCS:ENTEL
Empresa Nacional De Telecomunicaciones — Entel — Citi 27th Annual Latin America Conference 2019
37 slides from Empresa Nacional De Telecomunicaciones's conference presentation, Mar 13, 2019
Slide 1: Citi 27th Annual Latin America Conference
Citi 27th Annual Latin America Conference March 13-14, 2019 Entel Group
Slide 2: Table Of Contents
Table Of Contents • Entel and the telecom markets • Company Overview • Entel Perú • Financial Overview Notes Financial figures reported under IFRS standards. Values in US$, exchange rate as of December 2018: $694.77
Slide 3: Entel and the telecom market
Entel and the telecom market
Slide 4: Market highlights
Market highlights_ CHILEAN TELECOM MARKET YEAR 2017 PERUVIAN TELECOM MARKET YEAR 2017 Com SME & Corp. FBB 6% Pay TV 10% 10% Local Fixed Telephony & telephony US$ 4.4 bn IP Voice US$ 9.4 bn Mobile 7% Mobile 9% 51% -1,0% vs 2016 70% +4,0% vs 2016 Fixed IT Services Broadband 10% & IT Services 13% Pay T
Slide 5: Telecom Market growth opportunities
Telecom Market_ growth opportunities Gigabytes per month Internet of Things (per mobile user)* Heterogeneous ecosystem CHILE Connected Smart Health Manufacturing 8.8x Coverage High security 7,1 Remote places Helath/Goverment/ etc Low energy High trust requierement 99.999 % 10+ years of battery 0,8 L
Slide 6: Company Overview
a ooo Ql 000 000 Se Mas) 101 ae 000] |B £QQ |? foflias) ®
Slide 7: Entel is one of the largest publicly listed companies in Chile
Entel is one of the largest publicly listed companies in Chile_ ENTEL SHAREHOLDER STRUCTURE / As of December 2018 Listed on Santiago Stock Exchange, shares part of IPSA Index. 26.8% Market Capitalization (2): US$ 3,203 MM. Average Daily Volume (3): US$ 2.76 MM. 54.9% 18.3% (1): Altel is a wholly-own
Slide 8: Entel Group: 17.0 million mobile clients in Chile and Peru
Entel Group_17,0 million mobile clients with a wide range of services in Chile and Peru Total 2018 Revenue (*): USD 2,768 MM Total 2018 EBITDA: USD 614 MM CHILE MOBILE CHILE FIXED LINE AMP & Call Center ENTEL PERU 52% of revenues 21% of revenues 2% of revenues 25% of revenues USD 1,442 MM USD 583 MM
Slide 9: Entel Snapshot
Entel “Snapshot”_ Mobile Total Revenue Mobile GOU Subscribers Share (GB per user) Mobile Revenue Share: Data traffic increasing Over 17 million 34.9% over 2x yoy (Average as of Sept. 2018) CHILE Effective GOU 17,075 (over postpaid base) 15,540 14,323 7,815 • Entel Mobile Chile: 4,809 6,543 9.1 • Rev
Slide 10: Entel Snapshot
Entel “Snapshot”_ CAPEX 2018 Spectrum Infrastructure Chile: 250MHz Chile: 5,624 POPs US$ 673 MM Peru: 289MHz Peru: 3,659 POPs +19% CAPEX/Revenue Chile(1) 5,581 Total: 22.5% 4,676 +355% 3,659 Hogar 3.1 pp 2012 2018 (Chile + Peru) 180 MHz 250 MHz 805 2012 2Q18 2012 3Q18 Chile Perú Digital Transf. 2.9
Slide 11: Entel has a leading position in the Chilean telecommunications market
Entel has a leading position in the Chilean telecommunications market… #1 COMPANY IN THE MOBILE MARKET (As of September 2018*) 2018 REVENUE DISTRIBUTION BY SERVICES Company D Others 12,6% 1,6% Entel 1% 32,7% 1% Chile 2% 0% 3% Company C 4% 22,5% 12% Company B 30,6% 52% Others: Virgin, VTR Mobile,. Av
Slide 12: Based on a strong brand, service quality, customer service
…based on a strong brand, service quality, customer service… “Best Consumer Experience” BCX award in the telecommunications category. 7th Brand Preference Chile consecutive year in Chile and 6th year in LATAM. Entel has been ranked first place in fixed services customer satisfaction index in the Pro
Slide 13: State-of-the-art network and infrastructure: mobile network
…state-of-the-art network and infrastructure… Arica mobile_ Iquique network Antofagasta 20 MHz in 900 MHz band 60 MHz in 1,900 MHz band Copiapó fiber optic 40 MHz in 2,600 MHz band 30 MHz in 700 MHz band 100 MHz in 3,500 MHz band La Serena transport 5,624 POP Vaparaíso Rancagua Santiago network Talc
Slide 14: Fixed access network with nationwide coverage
... with nationwide coverage _ Arica fixed Iquique access Antofagasta network Copiapó • IP / MPLS ACCESS NETWORK La Serena • XDSL ACCESS NETWORK Vaparaíso Santiago • GPON ACCESS NETWORK Rancagua Talca • THE LARGEST DATA CENTER INFRASTRUCTURE • NGN ACCESS Concepción PROVIDER • NATION WIDE capacity fo
Slide 15: Entel is committed to Sustainability
Entel is committed to Sustainability _ 27% and 13% of 22 Tons of carbón footprint recycled waste reduced in Chile and recolected per year Peru We develop social We seek to increase digital projects in order to help knowledge, equal opportunities and responsable transform connectivity for all. societ
Slide 16: Our value proposition
Our value proposition Deliver a simple and unique service experience, through top class mobile, fixed and digital IT infrastructure Allowing clients reach endless possibilities Entel Group_ 16
Slide 17: Business focus
Business focus_ Revenue Growth. Entel Perú; in Chile in Data & IT in SME and Corporate; Entel Hogar . Keep revenue share in mature markets. Develop digital businesses models. Cash generation. CAPEX/OPEX efficiencies in mature markets. Key enablers : New operating model– Digital transformation – leve
Slide 18: Business Segments
Business Segments All figures are expressed in Chilean Pesos and are reported according to International Financial Reporting Standards (IFRS) The exchange rate at December 31, 2018 was Ch$ 694,77/US$1
Slide 19: Mobile Services and Consumer Chile Segment
Mobile Services and Consumer Chile Segment_ Top position among high value clients MOBILE SERVICES CONSUMER SEGMENT • 60 MHz in the 1,900 MHz band, 40 MHz in the 2,600 • Leader in high value segments, with an extensive offering for band, 20 MHz in the 900 band and 30 MHz in 700 band mobile data and v
Slide 20: Growing position across all services in the Corporate & SME in Chile
Growing position across all services in the Corporate & SME in Chile_ CORPORATE & SME SEGMENT Ciudad de los Valles data center is • Integrated offerings including IT / telco; fixed & mobile connected to a network of eight data convergence; bundling of solutions over IP networks. centers • Innovative
Slide 21: Americatel Perú: Focus in SME segment in Lima
Americatel Perú_Focus in SME segment in Lima GENERAL VISION STRATEGIC FOCUS • Provide fixed services via an integrated offering • Increasing services on own networks in Lima and IT (voice, data, Internet services) in the enterprise (LTE and fiber). segment within the Lima Area over the expansion of
Slide 22: Chile: the competitive scenario remained active
Chile: the competitive scenario remained active_ (US$ Million) Cagr 16/18 -3% 2,215 2,172 2,100 2,118 REVENUES 2016 2017 2018 2018 pf -5% 692 770 739 692 EBITDA AND EBITDA MARGIN 35% 34% 33% 33% 2016 2017 2018 2018 pf -15% OPERATING 387 INCOME 340 277 277 2016 2017 2018 2018 pf 2016 figures excludes
Slide 23: Entel Perú
000 000 000 000
Slide 24: Entel Peru: Main milestones
Entel Peru : Main milestones GROWTH 2018 2017 ≈22% Revenue 2016 BCX:#1 Latam Best Share (7.8 million Customer clients) Experience PREPARATION 2015 4G Ookla: Network Great Place to Work: ≈19% Market Share 8th place in Peru Deploying fixed 2014 1st place in cataloged as the Wireless broadband services
Slide 25: Entel has consolidated a solid brand in Peru
Entel has consolidated a solid brand in Peru_ POSITIVE RESPONSE IN THE MARKET Entel Perú commitment to service excellence was recognized, by the BCX award for best customer experience in the telecommunication category. Also was awarded by PWC – Gestion Magazine as one of the ten most admired compani
Slide 26: Mobile network in Peru
Development of a “State of the Art“ network for 2G/3G/4G Voice and Data services focus on connectivity and experience… mobile_ Iquitos network Talara Piura Cajamarca Trujillo Huaraz Puerto +3,659 POP LIMA Maldonado Ica Cusco Puno Arequipa Tacna Extensive 4G network in Peru_ POP as of September 2018
Slide 27: Strong performance of key indicators
…that has led to strong performance of key indicators STRATEGIC FOCUS MARKET STRATEGIC FOCUS ON QUALITY OF SERVICE • Attractive value proposition. AND DISRUPTION • Brand awareness at high levels. • Continued strengthening its technical capabilities by expanding the network, the most modern and with
Slide 28: Entel Perú revenue growth and EBITDA room for improvement
Entel Perú has shown strong revenue growth …with an EBITDA with ample room for improvements_ (US$ Million) Cagr 16/18 Individuals statements 790 19% 745 702 529 REVENUES 2016 2017 2018 20 18 pf -80 -35 -113 EBITDA AND -180 EBITDA 33% MARGIN 2016 2017 2018 2018 pf 2016 2017 2018 2018 pf OPERATING -10
Slide 29: Summary of the Entel Perú challenges
Summary of the Entel Perú_ challenges • Consolidate Entel's position in Peru. • Continue with “Entel” Brand development: consideration / preference and top client experience. • Continue capturing market: • Growing revenue share. • Portability, Telemarketing, Up Selling, mobile data leadership. • Dep
Slide 30: Financial Overview
Financial Overview All figures are expressed in Chilean Pesos and are reported according to International Financial Reporting Standards (IFRS) The exchange rate at Dec 31, 2018 was Ch$ 694,77/US$1 Average inflation from 4Q17 to 4Q18 was 2.9% Average inflation from December 2017 to December 2018 was
Slide 31: Evolution reflects Entel Perú growth
Evolution reflect Entel Perú growth_ Cagr 16/18 CONSOLIDATED FIGURES (US$ Million) REVENUES (*) EBITDA AND EBITDA MARGIN 1% 2,716 2,814 2,768 2,827 0% 611 629 614 657 23% 22% 22% 23% 2016 2017 2018 2018 pf 2016 2017 2018 2018 pf RESULTS FROM OPERATING ACTIVITIES NET INCOME -11% 49 62 165 169 173 131
Slide 32: Historical Capex
Investment plan driven by expansion of mobile services, Data/IT and digital transformation_ CAPEX STRATEGY CAPEX BREAKDOWN AS OF DECEMBER 2017 • Historical capex investments supportive of future revenue growth. • Capex mostly driven by demand in Chile. Others 13% Entel Perú • Bulk of network and spe
Slide 33: Cash flow reflects the expansion in the mobile business in Peru
Cash flow reflects the expansion in the mobile business in Peru_ Cash_ flow (US$ Million) -36 -116 Cash Flow is defined as: -296 + EBITDA - Capex - Net financial expenses 2016 2017 2018 • During July 2016 Entel Peru was awarded a block of 30 MHz in the 700 MHz band, impacting cash flow in US$ 290.2
Slide 34: Liquidity and debt ratios trends
Liquidity and debt ratios trends reflects the expansion in Peru_ 2016 2017 2018 Liquidity Ratio (Current assets / Current liabilities) 1,33 1,19 1,23 EBITDA/Net Financial expenses (LTM)* (>2.2) 6,05 6,46 6,04 Net Debt/ EBITDA (LTM)* (<4.5) 3,23 3,30 3,84 Total liabilities /(Equity+ non controlling i
Slide 35: Entel keeps a comfortable debt maturity profile
Entel keeps a comfortable debt maturity profile. Debt maturity profile as of December 2018 Figures in US$ Million Jun-13 510 International Loans Local Loans 113 444 40 40 Local Bond 2014 Bond 144A 2014 64 43 71 Bond 144A 2013 Others 151 400 400 333 333 333 278 113 2 2 36 • Total Gross Debt = US$ 2,5
Slide 36: Recent Events
Recent Events_ • As announced by Osiptel in Peru, on January 29, 2018, new mobile termination rates were set for years 2018 through 2021. The effective mobile termination rate for 2019 will be US$ 0.30 cents per minute (a reduction of 56%) and effective January 1, 2019. • As required by the AISB, En
Slide 37: Visit our website www.entel.cl
cdelacerda@entel.cl Costanera Sur 2760, Las Condes Santiago de Chile visit our website www.entel.cl
Entel — Citi 27th Annual Latin America Conference 2019 on 6ix