26 slides from Telecom Argentina Sa Class B's earnings presentation, November 2020
Slide 1: Telecom Argentina Earnings Release
TELECOM ARGENTINA Earnings Release November 2020
Slide 2: Disclaimer
This presentation may contain statements that could constitute forward-looking statements, including, but not limited to (i) the Company’s expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; (ii) the continu
Slide 3: Disclaimer: inflation adjustment under Resolution 777/18
The Company has accounted for the effects of inflation adjustment adopted by Resolution 777/18 of the Comisión Nacional de Valores (“CNV”), which establishes that the restatement for inflation will be applied to the annual financial statements, for intermediate and special periods ended as of Decemb
Slide 4: Agenda
AGENDA 01 02 03 BUSINESS FINANCIALS Q&A HIGHLIGHTS 3
Slide 5: 9M20 Highlights
9M20 HIGHLIGHTS Revenues EBITDA EBITDA Margin 2.7 U$S Bn* 1.0 U$S Bn* 35.8% Million mobile 18.7 subscribers in Argentina 3.6 Million Pay TV subscribers Million Million 4.2 broadband subscribers 2.9 fixed voice subscribers Million Of broadband 1.8 convergent unique clients 43% clients with mobile bun
Slide 6: 9M20 Highlights
9M20 HIGHLIGHTS Telecom has been able to refinance and reduce an important portion of its debt. Exchanged its 2021 bond plus refinanced debt with Multilaterals. Our capital structure has been improved and our future debt maturities have been extended. OPEX have been reduced substantially and our col
Slide 7: Our Target: Digital Transformation
Our Target: Digital Transformation Creating a new ecosystem of platforms and applications that allow the generation of new services leveraged on the scalability of connectivity. Digital, more efficient and with better time to market. Collaborative DevOps & Agile Working Environment Methodology IT Tr
Slide 8: IT Transformation Projects: CRM & Digital Channel
IT TRANSFORMATION PROJECTS NEW CRM & CONVERGENT PLATFORM #Fan The 7° migration to our new CRM system was completed, adding 1.3 million lines. BSS Transformation We achieved 5 migrations during the pandemic, which were the largest in the industry. A total of 6.7 million subs can enjoy this new digita
Slide 9: IT Transformation Projects: Cloud & S/4 HANA
IT TRANSFORMATION PROJECTS PUBLIC CLOUD PLATFORM INTEGRATION Cloud Enhances the Company’s physical datacenters with higher virtual cloud capacity. Greater efficiency, Foundation process automation and business flexibility. Cloud Adoption Framework Eleven applications including a payments microsite a
Slide 10: Business Evolution in Argentina
BUSINESS EVOLUTION IN ARGENTINA Accesses (In thousands) Prepaid Postpaid Increase in +2.6% YoY 11.441 10.924 postpaid 7.533 7.730 participation -4.5% YoY 3Q19 3Q20 4.144 4.173 Steady +0.7% YoY performance 3Q19 3Q20 3.291 3.344 Recovery based +1.6% YoY on Flow over FTTH/xDSL 3Q19 3Q20 3.340 3.215 Red
Slide 11: Revenues Breakdown
REVENUES BREAKDOWN SERVICE REVENUES REVENUES BREAKDOWN Million of P$ Million of P$ -4% 5,4% 0,3% 15,3% 38,3% 204.441 197.044 19,6% 9M19 IAS 29 9M20 IAS 29 21,2% REVENUES COMPOSITION Mobile Broadband Pay TV Billion of P$ 79,7 74,9 Fixed & Data Handsets Other 49,0 45,6 44,1 40,8 32,0 34,2 11,2 13,7 0.
Slide 12: Drivers of Growth: Mobile & Broadband
DRIVERS OF GROWTH: MOBILE & BROADBAND POSITIVE CLIENTS INFLOW (9M20) MOBILE DATA USAGE In Thousand Source: ADB Postpaid Share of Total +22% 7 41% Mobile 11 14 1 Clients 40 1 9 20 22 21 24 7 22 10 7 15 -31 -36 -3 -18 -10 -14 -18 -8 -24 -23 3.4 4.1 -47 Jan-20 Feb-20 Mar-20 Abr-20 May-20 Jun-20 Jul-20
Slide 13: Drivers of Growth: Flow
DRIVERS OF GROWTH: FLOW Flow is our IP video platform with the best experience 94MM 18% Flow App Views during 3Q20 82% Flow Box 5MM 9.65 hours Connected devices Average usage per client during 3Q20 FLOW BOXES & APP In Thousand 1.048 1.078 1.202 1.170 1.307 November: 1.021 873 926 971 956 Integration
Slide 14: Drivers of Growth: Paraguay
DRIVERS OF GROWTH: PARAGUAY Revenues EBITDA Revenues Breakdown Million of U$S Million of U$S +4%* +17%* 6,9% 8,0% 12,2% Browsing 9,9% Núcleo Voice (Paraguay) Data 67.5% 136 142 53 62 TV Internet 20,5% Others 9M19 IAS 29 9M20 IAS 29 9M19 IAS 29 9M20 IAS 29 42,5% Subscribers Fixed Network Internet sub
Slide 15: Inflation Evolution
INFLATION EVOLUTION Weighing within the index Food and non-alcoholic beverages 27.0% YoY Inflation: Transport 11.0% 36.6% Clothes and Shoes 9.9% Housing water, electricity and other fuels 9.4% Restaurants and hotels 9.0% Healthcare 8.0% Recreation and culture 7.3% Quarterly Home furnishing and maint
Slide 16: Revenues and EBITDA Evolution
REVENUES EBITDA Million of P$ Million of P$ Historical Figures Inflation Adjusted Historical Figures Inflation Adjusted (modeling purposes) Figures (modeling purposes) Figures -5% +46% +2% 218,182 208,220 34,1% 36,2% 35,8% +38% 110000 33,3% 18.325 35% 80.304 72,708 74,455 90000 30% 5.792 70000 25.72
Slide 17: EBITDA Evolution & Reduction of Operating Expenses
EBITDA EVOLUTION & REDUCTION OF OPERATING EXPENSES YoY IFRS, Million of P$ Variation +P$1,747 (+2.4%) 150% 89000 130% 72.708 7.397 2.808 805 74.455 79000 1.319 1.530 2.876 705 1.682 110% 69000 2.565 3.004 90% 59000 70% 49000 50% 39000 10% 30% -4% 5% -7% -7% -8% -12% 29000 10% -19% -17% -29% 19000 -1
Slide 18: Collections and Non Performing Debt
COLLECTIONS AND NON PERFORMING DEBT COLLECTIONS PER CHANNEL 68% 65% 65% 66% 66% 67% 50% 52% 56% 67% of our clients pay on a 50% virtual basis. 48% 44% 32% 35% 35% 34% 34% 33% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Digital In Person NON PERFORMING DEBT EVOLUTION - RETAIL 3,6%
Slide 19: Consolidated Results
CONSOLIDATED RESULTS 9M18 IAS 299M19 IAS 29 ∆$ ∆% D&A $ 33,807 $ 38,820 $ 5,013 15% OPERATING INCOME NET LOSS IFRS, Million of P$, Percentage IFRS, Million of P$, Percentage Historical Figures Inflation Adjusted Historical Figures Inflation Adjusted (modeling purposes) Figures (modeling purposes) Fi
Slide 20: Capex
CAPEX CAPEX* 3Q20 HIGHLIGHTS Million of P$ -37% More than 50 new sites were deployed and more than 300 were modernized. 55.236 1,400 FTTH blocks were enabled, 34.980 reaching more than 180 thousand new HHPP during 9M20. 9M19 IAS 29 9M20 IAS 29 We continue to replace our copper TECHNICAL CAPEX BREAKD
Slide 21: Cash Flow
CASH FLOW FCF GENERATION 9M19 FCF GENERATION 9M20 Million of P$ Million of P$ 72,708 -55,236 74,455 -34,980 -691 38,784 -1,138 37,646 16,638 34,110 -1,847 32,263 EBITDA CAPEX * WK & Others OFCF Taxes FCF EBITDA CAPEX * WK & Others OFCF Taxes FCF YoY Variation IFRS, Million +P$5,383 MM U$S 423 -459 5
Slide 22: Key Figures
KEY FIGURES In P$ Million LTM Sep-20 FY19 Revenues 279,892 289,854 EBITDA 96,012 94,265 Gross Debt** 171,151 185,416 Cash & Financial Investments 39,438 33,227 Cash & cash equivalents 21,092 31,284 Fin. investments in bonds & notes 16,453 1,666 Fin. investments in local managed funds 1,109 78 Fin. i
Slide 23: Liability Management (August and September 2020)
LIABILITY MANAGEMENT (AUGUST AND SEPTEMBER 2020) • Exchanged for 32% in cash and 70% par to par Notes due 2025. • Holders validly tendered U$S362.2 MM (77.74% of the outstanding 2021 NOTES DUE 2021 Notes). • Total cash consideration paid: U$S 119.2 MM* • The Noteholders’ Meeting held on August 5 app
Slide 24: Debt Maturity Profile After Liability Management
DEBT MATURITY PROFILE AFTER LIABILITY MANAGEMENT Total (U$S) Breakdown by Instrument* 2020 2021 2022 2023 2024 2025 2026 2027 (million) Class A Notes 2021 104 104 Class 1 Notes 2026 400 400 Class 5 Notes 2025 128 128 132 389 Ve n d o r F i n a n c i n g 7 28 29 18 4 86 IFC Loan 100 85 185 IFC New Lo
Slide 25: Latest Regulatory Developments
LATEST REGULATORY DEVELOPMENTS In May, due to COVID-19 our industry has agreed jointly with ENACOM to freeze the price of our products until the end of August 2020. In August, Decree N° 690/2020 further extended said freeze until December of 2020, while also declaring ICT services as essential p
Slide 26: Investor Relations Contact
Investor Relations Contact Telephone: (5411) 4968 3628 E-mail: relinver@teco.com.ar