Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — CLSA Conference 2016
31 slides from Bharti Airtel's conference presentation, Sep 22, 2016
Slide 1: Filing letter: Presentation to Analysts, CLSA Conference
bharti September 22, 2016 National Stock Exchange of India Limited Exchange Plaza, C-1 Block G Bandra Kurla Complex, Bandra (E), Mumbai-400051 BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai-400001 Ref: Bharti Airtel Limited (532454 / BHARTIARTL) Sub: Presentation to Analysts Dear Sir/ Ma
Slide 2: Bharti Airtel Investor Conference Presentation – September 2016
Bharti Airtel Investor Conference Presentation – September 2016
Slide 3: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 4: What Guides Us
What Guides Us Customer Centricity • Win customers for life through differentiated experience, products and world class technology Performance Excellence • Growth despite challenges • Grow market share, strip out waste • Accelerate non-mobile businesses Transparency & Ethical Governance • Highest co
Slide 5: Investment Highlights
Investment Highlights 1 Large residual opportunity 2 Bulk investments already in place; good spectrum bank 3 Diversified operator with scale and dominance in marketplace 4 Demonstrated best in class execution 4
Slide 6: 1. Large Residual Opportunity
1. LARGE RESIDUAL OPPORTUNITY Voice Secularity • Under-penetrated geographies • Unique mobile users at c. 50% of total SIMs (large dual-SIM user base)1 • Declining age dependency2 • Industry consolidation, top 3 operators account for 73% RMS3 Data • India mobile broadband (3G/4G) penetration under 1
Slide 7: India: Industry Consolidation Underway via Revenue Shares
Opportunity India: Industry Consolidation Underway via Revenue Shares 10 Operators 14 Operators 12 Operators 10 Operators 27% • Industry consolidation via market share 34% 30% 36% gains, with top 3 now accounting for over 73% of the industry revenues 66% 70% 73% • Exits by many operators post Feb 20
Slide 8: India: Transitioning to a Smartphone Market
Opportunity India: Transitioning to a Smartphone Market Feature phones Smartphones 7% 17% 31% 45% 59% 76% 92% 93% 83% 69% 55% 41% 24% 8% 2012 2013 2014 2015E 2016E 2017E 2018E 148M smartphones expected in 2016 - 60% would be 4G capable Source: Ericsson Mobility Report; GSMA Intelligence, IDC, JP Mor
Slide 9: Payments Bank – Untapped Opportunity
Opportunity Payments Bank –Untapped Opportunity There is a need to drive Financial Inclusion in India to digitize cash and bring the un- banked in the folds for organized banking sector Cash v/s non-cash transaction value Unbanked Population (Mn) PMJDY made large dent in unbanked 35% 230 557 415 65%
Slide 10: 2. Bulk Investments in Place
2. BULK INVESTMENTS IN PLACE Spectrum Bank • Successful re-farming of sub-GHz spectrum for 3G • 3G gap circles covered • 4G coverage pan-India Largest network of towers and base stations • 95.1% voice population coverage • Mobile broadband towers up 89% over the last year Largest network of optic fi
Slide 11: India: Investments to Yield Results
Investments India: Investments to Yield Results Industry Prime Nominal Wide Largest leading spectrum to value of spectrum optical fiber revenue yield data liberalized presence: network yield/MHz at growth: spectrum at 21.0% amongst 2x avg with Virtually Pan USD 13.4 spectrum private same India 3G &
Slide 12: India: Superior Spectrum Position
Investments India: Superior Spectrum Position Spectrum Industry Industry Spectrum Spectrum held Bharti spectrum Band Spectrum ex BSNL/MTNL by Bharti Market Share ex Pan India 4G, 3G available in 21 circles (MHz) (MHz) (MHz) BSNL/MTNL 900 421.0 282.8 110.2 39.0% 3G sub-Ghz available in 10 circles
Slide 13: Aggressive Network Build - Monetize Spectrum
Investments Aggressive Network Build - Monetize Spectrum Mobile broadband network towers - India Total 3G Network Sites - Africa 13,500 13,186 68% 13,128 67% 105,465 108,015 13,000 66% 110,000 69% 65% 100,000 68% 67% 12,500 12,262 64% 88,376 90,000 62% 12,000 62% 62% 80,000 11,457 58% 11,500 60% 70,
Slide 14: Africa: Invested for Growth
Investments Africa: Invested for Growth 2010 2016 Capex Investments till date: $ 5.1 bn Well funded out of EBITDA: $ 6.0 bn till date Thus OFCF = $ 0.9 bn Further focus on business re-contouring Tower Sales in 11 countries Divestment of 2 countries to Orange Total proceeds: $ 3.25 bn A
Slide 15: 3. Airtel: Diversified Operator with Significant Scale
3. AIRTEL: DIVERSIFIED OPERATOR WITH SIGNIFICANT SCALE Profitability and scale across diversified segments • Dominant position to capitalize with bulk investments in place • Only operator with diversified portfolio Allowing Airtel • Scale leading to operating leverage the best • Generating c. $1 bn
Slide 16: Scale brings Operating Leverage
Scale Scale brings Operating Leverage1 Overview Consolidated Revenues ($ Mn)2 15,000 14,742 Presence in 18 countries 14,500 14,056 #3 Operator in the World 14,000 13,500 #1 in India & #1 or #2 in 12 countries in Africa 13,095 13,000 US$ 14.74 bn Revenue 12,500 US$ 5.22 bn EBITDA 12,000 11,
Slide 17: 4. Best in Class Execution
4. BEST IN CLASS EXECUTION Q1’17 highlights • India – Broad based revenue growth across mobile, DTH, Homes, Enterprise segments – Mobile revenue up 9.1% YoY via industry leading net subscriber additions, incremental RMS – Data volumes up 55%, Data ARPU up 12% YoY – Voice volumes grew 8.3% YoY • Afri
Slide 18: Leader in India Revenue Market Share
Execution Leader in India Revenue Market Share1 32% 23% 19% 5% 5% 7% 6% 2% 1% Airtel Vodafone Idea (Incl Spice) Reliance BSNL+MTNL Tata Tele Aircel Uninor Others 31.6% 32% 31.3% 31.3% Airtel Incremental 30.4% revenue market share 53.4% YoY Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4'16 1. RMS is calculated on th
Slide 19: Strategic Pillars for Execution
Execution Strategic Pillars for execution Go to Win with a Win with War on Win with Market Brilliant Valuable Waste People Excellence Network Customers Experience VibrantVibrant Digital Airtel, Brand Brand 18
Slide 20: Strategic Pillars: Go to Market Excellence
Execution Strategic Pillars: Go to Market Excellence Game changing innovations Creating opportunities • Night cash back, night plans – Reduced rates during night usage • Myplan – Customized plans as per customer usage • Family – Tailor made plan and share benefits with family • Infinity – Options wi
Slide 21: Voice: Significant Growth
Execution Voice: Significant growth 314,831 35,293 34,940 307,988 34,620 33,669 32,791 290,802 290,459 282,138 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Airtel carries over 1.41 trillion minutes Significant gap b/w realized & rack rates; Volume Growth Secular volume growth 8.2% Y-o
Slide 22: Fastest Growing Data Business in India
Execution Fastest Growing Data Business in India Data as a % of Mobile revenues First brand to own and launch 4G in India 4G services Pan India post spectrum deals with Aircel Q1'16 6.10% 19.20% and Videocon Q2'16 5.90% 21.50% 4G at 3G prices Q3'16 5.80% 23.10% Annualized data revenues c. $2
Slide 23: Data Growing Exponentially in Africa
Execution Data Growing Exponentially in Africa Africa data volumes (mn MBs) Africa data revenues (USD mn1) 154.5 147.0 28,539 23,646 133.6 20,049 126.7 16,483 13,843 117.8 Q1'FY16 Q2'FY16 Q3'FY16 Q4'FY16 Q1'FY17 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Source: Company filings 1. In Constant Currency 22
Slide 24: Strategic Pillars: Win with Valuable Customers
Execution Strategic Pillars: Win with Valuable Customers 205 6.2% 6.1% 200 6.1% 195 5.9% 6.0% 6.0% 190 Airtel India: Postpaid 5.9% subscriber base inching up, 185 5.8% Data ARPU up 12% YoY 200 202 5.8% 180 196 193 5.7% 175 181 170 5.6% 5.6% 165 5.5% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Data ARPU Post Pai
Slide 25: Strategic Pillars: Win with Brilliant Network Experience
Execution Strategic Pillars: Win with Brilliant Network Experience Eliminate frustration Invest in tools An open network Blocked calls Repeat calls Dropped calls Frustration index Capex Outflow FY’16 (mn) Guidance (bn) Q1’17 Largest capital expenditure of Rs. 60,000 crore over 3 years India & SA $
Slide 26: Strategic Pillars: Win with War on Waste
Execution Strategic Pillars: Win with War on Waste 1.2 44.0% • Increasing Opex 43.5% 1 43.4% Productivity 43.3% 43.3% 43.0% 0.8 42.5% • Smart procurement 0.6 42.0% 41.70% 42.0% • Frugal cost structure 0.4 41.5% 0.2 • Maximizing sharing 41.0% 0 40.5% • Network re-design Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
Slide 27: Strong Corporate Profile
2 airtel STRONG CORPORATE PROFILE
Slide 28: Financial Flexibility & Balance Sheet Focus
Financial flexibility & Balance Sheet Focus Diversified debt profile; focus on deleveraging Over last 3 years: Leverage: Net Debt to EBITDA down from 3x to 2.4x Average Maturity: Average tenors pushed out from 2 years to 6 years Diversified debt mix: 100% bank to a mix of bonds, bank, ECA and DoT de
Slide 29: Highest Standards of Corporate Governance
Highest Standards of Corporate Governance Credit Rating and Information Services of India (“CRISIL”) has assigned its Governance and Value Creation rating “CRISIL GVC Level 1” to the corporate governance and value creation practices of Bharti Airtel Quarterly financials audited on Ind-AS basis IG ra
Slide 30: Summary
Summary India & Africa remain attractive markets, with large opportunities Bulk investments in place, asset restructuring in progress • Spectrum • Network • Deleveraging via asset monetization (Tower sales, sale to Orange, Bangladesh merger) We are extremely well positioned • Large customer base • O
Slide 31: Thank You
THANK YOU