C.a. Nacional Telefonos De Venezuela Class D · BVCV:TDV.D
C.a. Nacional Telefonos De Venezuela Class D — Compañía Anónima Nacional Teléfonos de Venezuela (CANTV) — Investor Presentation (June 2005)
39 slides from C.a. Nacional Telefonos De Venezuela Class D's investor presentation, June 2005
Slide 1: Cantv Overview
Cantv Overview Presentation to the Investor Community June, 2005
Slide 2: Cantv company profile and revenue
Compañía Anónima Nacional Revenue Year-over-year Millions of US$ growth Teléfonos de Venezuela (CANTV) 9.6% 2,139 1,995 The leading telecommunications Broadband 199 243 22.1% services provider in Venezuela and Mobile 468 655 40.0% the country’s only integrated telecommunications company Fixed 1,328
Slide 3: Safe Harbor Statement
“Safe Harbor” Statement Statements in this presentation that are not strictly historical in nature are forward-looking statements. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. Actual events or results may differ
Slide 4: General Content
General Content 1. Company Snapshot 2. Operating and Financial Results 2004 and 1Q05 4 Cantv Overview - June 2005 NYSE: VNT
Slide 5: 1. Company Snapshot
1. Company Snapshot Presentation to the Investor Community June, 2005
Slide 6: Investment Thesis
Investment Thesis Strong performance and a solid financial position to support growth in an attractive market 9 A recovering economy driven by high oil revenue 9 A telecommunications market with room for profitable growth 9 Where Cantv offers: • Demonstrated ability to create and extract value in it
Slide 7: Strategy
Strategy We expand horizons for our Create Createnew newservice service ##11in inmobility mobility customers experience experience standards standards Build Buildvalue valueon on broadband broadband leadership leadership Defend Defendleadership leadershipin intraditional traditionalbusinesses busine
Slide 8: Fixed Market
Fixed Market Fixed lines penetration Cantv Fixed lines in service % of population Thousands 25% Argentina 20% Chile 15% Brazil 3,057 2,884 2,638 2,638 Mexico 10% Venezuela 5% 2000 2001 2002 2003 2004 Source: Pyramid Research. September 2004 2002 2003 2004 2005G* * Marks the middle range of guidance
Slide 9: Mobile Market
Mobile Market Mobile penetration Cantv Mobile subscribers % of population Thousands 60% 50% Chile 40% 30% Venezuela 3,416 3,106 2,561 2,681 20% Mexico Brazil Argentina 10% 2000 2001 2002 2003 2004 Source: Pyramid Research. September 2004 2002 2003 2004 2005G* * Marks the middle range of guidance Mob
Slide 10: Broadband Market
Broadband Market Broadband subscribers Subscribers % of households Thousands 12% Chile 8% Brazil 325 4% Argentina Venezuela 159 Mexico 0% 77 47 2000 2001 2002 2003 2004 Source: Pyramid Research. September 2004 2002 2003 2004 2005G* Broadband Market Share * Marks the middle range of guidance As of Ma
Slide 11: Financials
Financials In millions of US$ * 2002 2003 2004 2005G** 1Q05 Capex Revenue 1,909 1,995 2,139 2,475–2,569 517 Growth (%) 4.3 7.2 15.7 – 20.1 16.3 EBITDA 693 721 688 745–800 193 413 362 279 Growth (%) 4.0 (4.6) 8.3 – 16.3 11.4 78 Margin (%) 36 36 32 30 - 31 37 Basis points incr. - (400) (200) – (100) (
Slide 12: Capital Expenditures
Capital Expenditures % of total Capex 2004 % revenue** 2005G* Fixed Telephony 30 6.8 33 Mobile Telephony 45 19.2 48 Broadband 18 19.9 14 Others 7 NM 5 100% 13.1 100% Total Capex 279 413 * Marks the middle range of guidance ** % of corresponding 2004 revenue Capex is increasing aligned with our growi
Slide 13: Ownership and Governance
Ownership and Governance Ownership Structure Board of Directors Shareholders Shares Class % Stake as of December 31, 2004 (thousands) Appointed by: A Verizon 196,401 25.0% Telefónica 54,410 6.9% Venezuela Holding 7 All Others 367 0.05% CEO and shareholders B Bandes* 51,900 6.6% 8 principal members E
Slide 14: Risk Return Opportunity (1/2)
Risk Return Opportunity (1/2) Country risk trend Telecom markets growth 2005 - 2006 Basis points CAGR México 1,002 6% Venezuela Chile 836 Brazil 575 0% 538 446 459 430 495 Mexico 453 Brazil 421 404 421 243 189 169 157 164 188 5% 126 83 63 61 66 71 Chile Venezuela 2003 2004 Jan05 Feb05 Mar05 Apr05 7%
Slide 15: Risk Return Opportunity (2/2)
Risk Return Opportunity (2/2) Average Annual Return ’02-’04 FV/EBITDA 2004 Price As of May 31 2005 Mobile 53% AMX AMX 10.4 56.68 1% 7% TMX TMX 4.8 3% 18.66 Total 11% Dividend CTC CTC 5.7 9.83 Fixed 10% 31% TSP TSP 5.2 19.17 9% 6% BRP BRP 3.1 33.19 3% Integrated 26% TNE TNE 4.2 15.25 4% 39% VNT VNT 2
Slide 16: The Venezuela Equity Risk Balance
The Venezuela Equity Risk Balance Main risk issues raised The balancing side • The Venezuelan government has not failed to comply with Cantv’s foreign exchange requests for its business needs, its creditors and investors • Venezuela’s international reserves are at historic highs • During periods of
Slide 17: 2. 2004 and 1Q05 operating and financial results
2. 2004 and 1Q05 operating and financial results Presentation to the Investor Community June, 2005
Slide 18: Initial notes
Initial notes 9 Financial results are stated in accordance with generally Inflation Inflation accepted accounting principles in Venezuela. To maintain adjustment adjustment consistency with reports issued by the Company, some differences in adjustment dates for amounts in Bolivars are used in this p
Slide 19: Agenda
Agenda zHighlights zMacroeconomic scenario zReview of income, cash flow and balance sheet: Revenue Earnings and Expenses Cash flow Balance sheet zGuidance summary 19 Cantv Overview - June 2005 NYSE: VNT
Slide 20: Agenda
Agenda zHighlights zMacroeconomic scenario zReview of income, cash flow and balance sheet: Revenue Earnings and Expenses Cash flow Balance sheet zGuidance summary 20 Cantv Overview - June 2005 NYSE: VNT
Slide 21: Highlights
Highlights Billions of constant Bs. 9 Strong operating performance in all business lines is driving top line growth 9 1Q05 EBITDA shows a y-o-y 11% increase after a 4% reduction in 2004 9 CAPEX is been taken to levels aligned with current market opportunities and our strategies related to growth and
Slide 22: Agenda
Agenda zHighlights zMacroeconomic scenario zReview of income, cash flow and balance sheet: Revenue Earnings and Expenses Cash flow Balance sheet zGuidance summary 22 Cantv Overview - June 2005 NYSE: VNT
Slide 23: Macroeconomic scenario
Macroeconomic scenario 2005 2004 Working scenario* Political stability favored by recent GDP growth electoral processes Total 17.3% 4% - 7% Economic growth based on oil Communication 10.2% 5% - 8% Revenue and public spending with FX (Bs./US$) Government intervention through Year end 1,920 2,150
Slide 24: Agenda
Agenda zHighlights zMacroeconomic scenario zReview of income, cash flow and balance sheet: Revenue Earnings and Expenses Cash flow Balance sheet zGuidance summary 24 Cantv Overview - June 2005 NYSE: VNT
Slide 25: Revenue
Revenue Billions of constant Bs. Period-over-Period growth 1Q´05/1Q´04 Change 4,107 9.6% 16.3% 3,748 467 25.2% 30.5% Broadband 373 Mobile 880 1,257 42.9% 42.3% Fixed 2,495 2,383 (4.5%) 1.6% 1Q04 1Q05 2003 2004 Mobile and broadband growth fueled a 9.6% and 16.3% total revenue growth in 2004 and 1Q05,
Slide 26: Fixed telephony (1/2)
Fixed telephony (1/2) In thousands Period-over-Period growth Lines in Service 5-7% 9.3% 3,057 Net Adds 2004 and 1Q05 2,884 2,638 2,638 (56) 10% 302 246 (16) 55 39 1Q04 1Q05 Prepaid Postpaid Total 2002 2003 2004 2005G* G* Marks the middle range of guidance The first quarter 2005 increase lines of 10%
Slide 27: Fixed telephony (2/2)
Fixed telephony (2/2) Revenue variations ’03-’04 1Q´05/1Q´04 Change Billion of Bs. 2,495 (4.5%) (98) 1 2,383 1.6% (19) (19) 23 11.9% drop in Local revenue Vertical services and directory revenue increase of 39.4% Continued increase 2003 Local DLD ILD IX Others 2004 in traffic Revenue change (%
Slide 28: Mobile (1/2)
Mobile (1/2) Period-over-Period growth Subscribers Traffic Thousands Thousands of minutes 9-11% 3,416 15.9% 3,106 2004: Postpaid Prepaid 2,681 2,561 Unbundled (2%) 383 1,307 34% Bundled 70% NM 14.8% 671 168 Total 1,054 34% 1,475 52% 1Q04 1Q05 Total 1Q05 Change: 16% 14% * 02 03 04 G 05 20 20 20 20 1Q
Slide 29: Mobile (2/2)
Mobile (2/2) Revenue ARPU 4Q'04 Period-over-Period growth Billions of constant Bs. Thousands of constant Bs. (4.6%) 42.3% 17% 42.9% 1,257 8.7% 13.9% 141 880 1Q04 1Q05 36 45 1Q04 1Q05 2003 2004 Prepaid Postpaid Blended Special services revenue Handsets revenue Billions of constant Bs. Billions of con
Slide 30: Broadband
Broadband Period-over-Period growth ABA (ADSL) Customers Revenue Thousands 318 95-105% Billion of Bs. 467 25.2% 30.5% 106.9% 159 112.6% 77 373 132 77.0% 105.7% 47 ADSL 74 1Q04 1Q05 2002 2003 2004 2005G* ARPU ADSL Thousand of Bs. Private 334 11.7% 4.4% 299 circuits (7.3%) (2.6%) 107.7 99.8 1Q04 1Q05
Slide 31: EBITDA variation
EBITDA variation Billions of constant Bs. 1Q05 / 1Q04 Change 16% higher revenue,(243) 11.4% partially offset by: Higher labor and (91) benefits 86 15 Higher material and 1,321 (309) contractor costs 358 1Q04 1Q05 (32) (81) 1,375 (3.9%) 1,321 EBITDA '03 Labor and IX Contractors Material Op. Tax
Slide 32: Capital expenditures
Capital expenditures Period-over-Period growth % % of total Capex 2004 revenue** 2005G* Capital expenditures Fixed Telephony 30 6.8 33 Millions of USD. Voice & Verticals 3 5 Network & Maint. 5 11 42-52% Systems & OSS 18 10 Infrastructure & Adm. 4 7 Mobile Telephony 45 19.2 45 70% CDMA 34 38 TDMA 0 -
Slide 33: 2004 cash flow
2004 cash flow All figures expressed in Billions of Bs. as of December 31th 2004 (89) 2003 2003 (116) (148) 1,375 (676) Free cash flow (100) Bs.1,138 billion 931 685 Beginning cash EBITDA CAPEX Other FCF Net debt Dividend Others Ending cash 2004 (537) (190) 2004 200 1,321 (620) Free cash flow (112)
Slide 34: 1Q 2005 / 2004 cash flow
1Q 2005 / 2004 cash flow All figures expressed in Billions of Constant Bs. as of March 31, 2005 1Q04 1Q04 (109) 373 (76) (217) (12) Free cash flow Bs.188 billion 877 836 Beginning cash EBITDA CAPEX Other FCF Net debt increase Others Ending cash 1Q05 (129) 1Q05 415 (165) 22 (12) Free cash flow Bs.121
Slide 35: Balance sheet
Balance sheet Net cash Debt to equity Billions of constant Bs. March 31st, 2004 6.8% 7.4% 216 85 1Q04 1Q05 EBITDA / Interest expense 1,157 856 77x 58x Cash ST Debt LT Debt Net Cash 1Q04 1Q05 Cantv is in a strong financial position to seize growth opportunities 35 Cantv Overview - June 2005 NYSE: VNT
Slide 36: Agenda
Agenda zHighlights zMacroeconomic scenario zReview of income, cash flow and balance sheet: Revenue Earnings and Expenses Cash flow Balance sheet zGuidance summary 36 Cantv Overview - June 2005 NYSE: VNT
Slide 37: Guidance 2004 - Review
Guidance 2004 - Review Lines and subscribers Traffic Growth rate (%) Growth rate (%) Actual Actual 42 16 Guidance Guidance 12 20 4-8% 16-20% 17-19% 3-4% 6 0-7% 8 5-11% 2-6% 11-13% 3-8% Fixed Mobile Local DLD ILD Outgoing Financial Indicators for 2004 Fixed Mobile Billions of constant Bs. as of Decem
Slide 38: Guidance 2005 - Summary
Guidance 2005 - Summary Lines and subscribers Financial Indicators for 2005 Growth rate (%) Billions of constant Bs. as of December 31, 2005 318 Bs Growth (%) 3,416 Revenue 5,322 – 5,524 9 – 12 3,057 95-105% Op. expenses 3,720 – 3,804 13 –17 9-11% EBITDA 1,602 – 1,720 5–6 5-7% EBITDA margin 30% - 31
Slide 39: Cantv Overview - June 2005 NYSE: VNT
39 Cantv Overview - June 2005 NYSE: VNT
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