Slide 1: Fourth Quarter & Fiscal Year 2012 Earnings Results Conference Call Presentation
Fourth Quarter & Fiscal Year 2012 Earnings Results Conference Call Presentation
Slide 2: Disclaimer
Disclaimer This presentation is based on audited financial statements and may include statements that could constitute forward-looking statements, including, but not limited to, the Company’s expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividen
Slide 3: Agenda
Agenda • Market Overview • Business Highlights • Financials • Guidance for 2013 • Q&A Session 2
Slide 4: Market Overview: Rebound expected after 2012 slowdown
Market Overview: Rebound expected after 2012 slowdown Real GDP* Consumption & Wages Trade & Fiscal Balance Billion USD, at current prices – Last 12 months Billion USD, at current prices – Last 12 months Trade Balance (Billion USD) Last 12 months ∆ YoY - constant prices National Wages - ∆ % YoY Fisca
Slide 5: Agenda
Agenda • Market Overview • Business Highlights • Financials • Guidance for 2013 • Q&A Session 4
Slide 6: Business Highlights
Business Highlights #1 in Revenue Share; Service Revenues up +21% YoY in 4Q12 MOBILE Postpaid leadership confirmed by high quality of port-ins & net adds Investing in mobile access to sustain VAS growth Wireline BB and Data services sustain revenue expansion FIXED Wireline Broadband ARPU rose +22% Y
Slide 7: TEO Group: 2012 Targets
TEO Group: 2012 Targets IFRS, Billion of ARS Guidance FY12 2012 Results +Positive Double Digit YoY trend Revenues +20% +20% vs vs. 2011 FY11 2011 2012 +Positive Double Digit YoY trend +10% vs. FY11 OIBDA +11% vs. FY11* *Excluding non-recurring cost 2011 2012 Capex as % of Revenues 17% 18% +2% vs. FY
Slide 8: Mobile: Consolidated revenue share leadership
Mobile: Consolidated revenue share leadership Subscriber Share Evolution Mobile KPI Million of lines +13% +12% 63,3 +7% 54,5 +4% 56,6 57,7 +7% ARPU 56,0 50,9 (ARS/Month) 51,4 47,4 TOU -4% 36,3 +4% 37,6 (SMS/Month) -2% +5% 34,6 +5% 32,9 Others* 322 309 MOU 329 322 (Mins/Month) 0% +1% 14,5 +13% 16,3 +
Slide 9: Mobile: SAC & SRC under control in MNP success
Mobile: SAC & SRC under control in MNP success Service Revenue Breakdown SAC & SRC Million ARS – Argentine Market as % of Argentine Service Revenues - +21% 13.312 Before capitalization of SAC & SRC +29% 10.983 1.248 8.483 774 +61% +24% 6.830 +98% SAC & 19,7% SRC 391 5.765 16,4% 17,3% Internet +126%
Slide 10: Paraguayan Market: Sustained value generation
Paraguayan Market: Sustained value generation Subscribers Financials Thousand of lines (includes 3G modems) IFRS Million of ARS +21% 867 +7% +14% 714 REVENUES +53% +4% +21% 466 385 2.301 +25% 331 2.149 +67% 264 1.806 1.878 +20% 132 158 OIBDA 2009 2010 2011 2012 2009 2010 2011 2012 Margin 34% 34% 37%
Slide 11: Mobile Revenues: Sustained growth thanks to VAS
Mobile Revenues: Sustained growth thanks to VAS Evolution of revenues 2011 – 2012 IFRS, Million of ARS, Percentage +2.925 (+22%) 443 153 16.094 1.283 474 13.169 460 112 YoY Variation +11% +6 % +29% +61% +30% +21% 2011 Retail Wholesale* Data Internet Equipment Nucleo* 2012 Revenues Voice Voice (Parag
Slide 12: Broadband: Sustaining growth thru adding value
Broadband: Sustaining growth thru adding value Evolution of Accesses Thousand of broadband accesses • Upselling of bandwidth upgrades and video streaming sustain growth +5% +12% • Deploying FTTC to increase bandwidth up to +14% 100 mbps • Wireline BB revenues up 29% YoY in 4Q12 • ARPU rose 22% YoY i
Slide 13: Fixed Voice: Bundling services help ARPU & churn
Fixed Voice: Bundling services help ARPU & churn Evolution of Lines in Service Thousand of lines in service • Retail voice revenues increased 5% YoY +1,2% +0,8% -0,3% due to packs of services and flat pricing • Bundled services helped to maintain churn under control TEO 4.060 4.107 4.141 4.128 • Inc
Slide 14: Fixed Services: Wireline BB + ICT services key drivers
Fixed Services: Wireline BB + ICT services key drivers Evolution of revenues 2011 – 2012 IFRS, Million of ARS, Percentage +694 (+13%) -8 6.023 152 440 5.329 118 -8 36% Regulated Regulated 41% YoY +26% +28% +5% -1% -9% Variation Non Non 64% Regulated 59% Regulated Revenues Retail Voice Wholesale Data
Slide 15: Evolution of CAPEX
Evolution of CAPEX Capex Evolution PP&E Capex Breakdown Million of ARS 3.192 +2% 3.257 +28% +18% Others 2.493 7% 2.105 Mobile IT +21% 2.318 +4% 2.415 23% 19% access +16% PP&E 1.921 1.663 19% Fixed Intangible access +53% 874 -4% 842 32% Assets 442 +29% 572 SAC/SRC Core & Infraestructure1 2009 2010 20
Slide 16: Agenda
Agenda • Market Overview • Business Highlights • Financials • Guidance for 2013 • Q&A Session 15
Slide 17: TEO Group: Consolidated Results
TEO Group: Consolidated Results Revenues OIBDA* IFRS, Million of ARS, Percentage IFRS, Million of ARS, 22.117 +20% 18.498 +26% 6.092 4Q 14.627 +19% +10% 6.570 +20% 5.139 5.993 +23% 12.170 3Q 5.645 +17% 4.867 +16% 1.844 4Q +18% 1.592 4.775 4.161 1.496 +6% 1.587 3Q 5.254 2Q 4.450 +18% +1% 1.474 1.492
Slide 18: TEO Group: Consolidated Costs
TEO Group: Consolidated Costs Consolidated Costs1 as % of Revenues Operating Costs1 2012 Labor Costs Others2 21% 70,6% 25% 67,8% 8,1% ITX Costs 7,7% 13% Taxes Marketing & 21,0% 30% 11% 20,3% Sales Marketing & ITX costs 9,1% Sales 8,6% Taxes 14,1% Labor costs 14,8% • One-off impact in expenses relate
Slide 19: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Income Net Income attributable to Telecom IFRS, Million of ARS, Percentage IFRS, Million of ARS, Percentage D&A 2011 2012 ∆% PP&E 1.538 1.792 17% SAC and Connection costs 602 797 32% Other intangible assets 18 23 28% Total 2.158 2.612 21% +3% 3.966 3.857 +22
Slide 20: TEO Group: FCF and Net Financial Position
TEO Group: FCF and Net Financial Position IFRS, Million of ARS - Last 12 months Operating Free Cash Flow 6.570 3.257 1.647 260 297 92 831 OIBDA Capex ∆ WK & 3.053 others Net Financial Position 3.648 Telecom Argentina 1.454(1) 2.684 Telecom Personal 2.295 (2) Nucleo (Paraguay) (101) Net Financial Ope
Slide 21: Agenda
Agenda • Market Overview • Business Highlights • Financials • Guidance for 2013 • Q&A Session 20
Slide 22: TEO Group: 2013 Guidance
TEO Group: 2013 Guidance Revenues OIBDA Capex +Positive Double +Positive Double Capex / Revenues Digit YoY trend Digit YoY trend growing trend 17% 15% 4,7 3,3 2012 2013 2012 2013 2012 2013 2015 • Improve customer experience • Improve QoS and customer • Focus on delivering network • Promote mobile da
Slide 23: Agenda
Agenda • Market Overview • Business Highlights • Financials • Guidance for 2013 • Q&A Session 22