Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q1 2017 Earnings Presentation
24 slides from Telecom Argentina Sa Class B's earnings presentation, 2017
Slide 1: 1Q17 Earnings Release Conference Call Presentation
TELECOM ARGENTINA 1Q17 Earnings Release Conference Call Presentation
Slide 2: Disclaimer
Disclaimer This presentation may include statements that could constitute forward-looking statements, including, but not limited to, the Company’s and it’s management expectations for the Company’s future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity a
Slide 3: Agenda
Agenda Macro Overview Vision & Strategy Business Highlights Financials Q&A 2
Slide 4: Macro: Reserves continue to strengthen with a nominally appreciated FX rate
Macro: Reserves continue to strengthen with a nominally appreciated FX rate EXTERNAL FRONT Central Bank Reserves (Billion U$S) International Reserves showed an increase of U$S 11,7 Bn during 50.5 1Q17, mainly explained by inflows coming from sovereign, 38.8 provincial and corporate debt issuances. 3
Slide 5: Macro: Activity improves mildly while inflation gradually declines
Macro: Activity improves mildly while inflation gradually declines DOMESTIC ACTIVITY & INFLATION Household consumption Revised official figures as of 4Q16 Overall household consumption remains weak, showing some fragile signs of recovery from 4Q16 but still decreasing YoY. After 3.5% some improvemen
Slide 6: Agenda
Agenda Macro Overview Vision & Strategy Business Highlights Financials Q&A 5
Slide 7: 2017 – The transformation process continues
2017 – The transformation process continues DIGITAL ERA Innovative offer of products and services Capitalization of investments in our networks BEING A MULTIFUNCTIONAL Incorporation of new inter-functional work methodologies TEAM Challenge market practices to become more profitable 6
Slide 8: Agenda
Agenda Macro Overview Vision & Strategy Business Highlights Financials Q&A 7
Slide 9: 1Q17 Highlights
1Q17 Highlights BUSINESS FINANCIALS Mobile Sustained growth driven by Internet Service Revenues growth of 28% in Argentina, mainly driven by: -Mobile Internet (+67%) Continuous 4G rollout: -Fixed Voice + Internet (+35%) - 6.5 Million customers are enjoying 4G EBITDA increased by 36% reaching a 31% p
Slide 10: Corporate Reorganization
Corporate Reorganization CURRENT SHAREHOLDERS’ STRUCTURE Preferred B (Ordinary shares •The Reorganization is subject to the (Listed in NYSE) Sofora terms and conditions set forth in the Telecomunicaciones S.A. Preliminary Reorganization Agreement. 48.96% Econ. Int. 51.04% Econ. Int. •The main purpos
Slide 11: Group Revenues: Growth acceleration continued due to higher usage and price adjustments
Group Revenues: Growth acceleration continued due to higher usage and price adjustments GROUP REVENUE MIX RETAIL FIXED VOICE + INTERNET 18% In P$ Million In P$ Million 41% 10% Handsets 16% 50% Retail Mobile 48% 3,328 2,364 Service Revenues 1Q16 1Q17 Wholesale Mobile +27% 5% 4% 6% Data 6% MOBILE -in
Slide 12: Fixed – Consolidated growth in UBB connections
Fixed – Consolidated growth in UBB connections ULTRABROADBAND SPEEDS SUBS EVOLUTION ≥15Mb subs % of Customer Base 45% 12% 13% 231 9% 10% 11% 160 1Q16 2Q16 3Q16 4Q16 1Q17 1Q16 1Q17 Fixed Data In P$ Million BB ARPU & CHURN 64% +33% 302.9 331.3 19% 248.8 259.8 272.8 2,919 1,780 1.4% 1.7% 1.4 2.2% 1.3%
Slide 13: Fixed – ARBU increase driven by price adjustments in monthly fees
Fixed – ARBU increase driven by price adjustments in monthly fees ARBU DRIVERS OF ARBU INCREASE P$/Month Price Adjustments +66% 134.1 BUSINESS SEGMENT February 2017 From P$115 to P$140 (Δ22%) 112.4 105.1 RESIDENCIAL SEGMENT 93.7 February 2017 From P$38 to P$75 (Δ97%) 80.9 1Q16 2Q16 3Q16 4Q16 1Q17 AR
Slide 14: Mobile in Argentina: Enhancing our value proposition with improved revenue quality
Mobile in Argentina: Enhancing our value proposition with improved revenue quality DATA PENETRATION DATA USAGE SERVICE REVENUE MIX MBOU/ month Browsing Voice + Data Monthly unique users in million +79% 13% 7.6 8.6 55% 66% 1,287 1,420 918 1,122 794 45% 1Q16 1Q17 1Q16 2Q16 3Q16 4Q16 1Q17 34% CUSTOMER
Slide 15: Mobile – 4G evolution
Mobile – 4G evolution 4G Subs Evolution 6.5 5.5 4.3 2.5 3.0 2.0 1.0 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 14
Slide 16: Capex: Network deployment to improve network capacity and quality
Capex:: Network deployment to improve network capacity and quality Capex CAPEX EVOLUTION TECHNICAL CAPEX BREAKDOWN Million of P$ *Core & infrastructure refers to network related capex, including quality and innovation capex +13% -12% 11,386 10,100 35% 1,902 21% 25% 19% Spectrum 2,256 1,678 430 278 M
Slide 17: Agenda
Agenda Macro Overview Vision & Strategy Business Highlights Financials Q&A 16
Slide 18: TEO Group: Consolidated Results
TEO Group: Consolidated Results REVENUES EBITDA IFRS, Million of P$, Percentage % of Revenues IFRS, Million of P$, Percentage In Argentina: +19% +33% In Paraguay: +7% +31% 53,240 14,424 +36% 40,496 +18% 10,866 12,455 14,726 3,402 4,638 FY15 FY16 1Q16 1Q17 FY15 FY16 1Q16 1Q17 SERVICE REV GROWTH EBITD
Slide 19: TEO Group: Consolidated costs and EBITDA evolution
TEO Group: Consolidated costs and EBITDA evolution EBITDA Margin 27.3% +4.2% +0.3% -1.1% +0.3% +1.0% -0.5% +0.1% 31.5% As % of Revenues 8% 5% 19% 9% 8% 9% 10% *Others include bad debt expenses, provisions, VAS costs and others Figures may not sum up due to rounding 18
Slide 20: TEO Group: Consolidated Results
TEO Group: Consolidated Results OPERATING INCOME NET INCOME IFRS, Million of P$, Percentage (Attributable to Telecom) IFRS, Million of P$, Percentage 3G/4G Spectrum Results on write- in million of P$ 1Q17 1Q16 Δ Period D&A Total Amortization down of PP&E Operating Income $ 2,893 $ 1,997 $ 896 Financ
Slide 21: TEO Group: Net Income Evolution
TEO Group: Group: Net Income Evolution in million of P$ Net Interests 1Q16 -$ 310 1Q17 -$ 216 Gains on Mutual Funds & IFRS, Million of P$ $ 196 $ 67 other inv. FX results net of NDF -$ 420 $ 290 instruments Others -$ 23 -$ 17 Total -$ 557 $ 124 Price Effect on Financial Results NET DEBT FX Rate Avg.
Slide 22: TEO Group: FCF, Net Financial Position
TEO Group: FCF, Net Financial Position IFRS, Million of P$. Last 12 months ICC LOAN AGREEMENT On April 7, 2017, Personal and the Inter-American Investment Corporation (“IIC”), a member of the IDB Group, signed a loan agreement for an amount of US$100 million and for a six year period, payable in 8 e
Slide 23: Low leverage levels supported by sound financial strategy
Low leverage levels supported by sound financial strategy LEVERAGE Telecom Argentina has maintained low levels of 15,660 Net Debt/ EBITDA 14,424 financial leverage, thanks to its strong cash flow generation 0.4 x 0.2 x FINANCIAL STRATEGY- FUNDING SOURCES DIVERSIFICATION 5,892 3,023 Local & Internati
Slide 24: Agenda
Agenda Macro Overview Vision & Strategy Business Highlights Financials Q&A 23