Ooredoo Q.p.s.c · QSE:ORDS
Ooredoo Q.p.s.c — Ooredoo — Investor Day (September 2016)
70 slides from Ooredoo Q.p.s.c's investor day presentation, Sep 26, 2016
Slide 1: Ooredoo Group Capital Markets Day 2016
Ooredoo Group Capital Markets Day 2016 FULL PRESENTATION 26 Sept 2016 Doha, Qatar
Slide 2: Detailed agenda (1)
Detailed agenda (1) 10:00-10:05 Welcome by IR, Andreas • Meet the Ooredoo Group and OpCos (introduce Group CXO’s & OpCo CEOs) • Overview of today’s agenda 10:05-10:20 Deputy GCEO - Waleed Al Sayed • 2015 What did we do? • Looking ahead: major challenges & key opportunities • Top reasons to invest in
Slide 3: Detailed agenda (2)
Detailed agenda (2) 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO • Indonesia entering digital area/mobile first • Indosat Ooredoo is well positioned for this change • Results are showing positive progress 11:35-11:50 Myanmar update - Rene Meza, Ooredoo Myanmar CEO • There is
Slide 4: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 5: Since the last CMD, we made substantial changes to the way we operate
Since the last CMD, we made substantial changes to the way we operate New Management Refined Strategy and Operating Model New LEAD strategy New Group management team provides the right ambition New CEOs in 3 out of 10 OpCos and a framework to focus Management with significant on value creati
Slide 6: Other key achievements
Other key achievements Data Monetization Best Data Network Experience 4G+ (LTE-Advanced) in Qatar, Continued strong data growth Oman and Kuwait; 4G launched in from consumer and enterprise Indonesia, Maldives, Tunisia, New Management customers New Management Algeria and Myanmar Data revenues i
Slide 7: Becoming a pan-regional leader in B2B/ICT
Becoming a pan-regional leader in B2B/ICT Data Center Ooredoo B2B/ICT portfolio Cloud Cloud & Data Center - Cloud Services - Data Center Services Storage Unified Communication Fixed Convergence Solution Fixed Line Mobile Substitution - Collaboration & Conferencing Fixed Commercial Bundles Mobile - I
Slide 8: Challenges: We operate in tough environments
Challenges: We operate in tough environments Economic/ Competitive Changing Political Risk Markets Industry Currency volatility Tough competitors New business models & regulators (OTTs) War/ political situations New entrants New cost models Economic impact of oil prices Commoditization Standardized
Slide 9: But we are also well positioned to leverage attractive opportunities
But we are also well positioned to leverage attractive opportunities Data first Leading Data Networks Digital Services Beyond Mobile Fixed /Convergence B2B/ICT IOT & Smart Cities Group synergies Efficiencies Network Sharing Ooredoo Capital Markets Day | 26 Sept 2016 | 9
Slide 10: Five reasons to invest in Ooredoo
Five reasons to invest in Ooredoo Diversified and Balanced mix of operations in developed markets (Qatar, Kuwait, Oman) alongside markets Balanced with high growth potential (Indonesia, Myanmar, Algeria, Iraq) Portfolio Government State of Qatar is majority shareholder and appoints 5 of 10 Oored
Slide 11: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 12: The new LEAD strategy provides the right ambition and a framework to focus on value creation
The new LEAD strategy provides the right ambition and a framework to focus on value creation Market Performance Efficient Leader Culture Models • Leading network • People/Skills • Asset light • Better distribution • Organization • Optimized channels • Smart services • Governance • Group synergies Re
Slide 13: Strategic priorities going forward
Strategic priorities going forward Total focus on business performance - 2016 Net profit - Cost control - Top line growth Delivering value from Group HQ - Performance management - Procurement - Brand Strategic discipline - Focus on core business - Selective in-market developments - Prudent app
Slide 14: Strengthening leverage of Group benefits
Strengthening leverage of Group benefits Performance Procurement Brand Management Monthly performance Improved purchasing reviews processes Common identity Management Senior team Excellent execution accountability engagement Brand license fees Right people Group scale Ooredoo Capit
Slide 15: Optimizing portfolio and deleveraging
Optimizing portfolio and deleveraging Sell down/exit In-market development Network sharing Ooredoo Capital Markets Day | 26 Sept 2016 | 15
Slide 16: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 17: Group Results 2016 1H Highlights
Group Results 2016 1H Highlights Global customer Customer base increased by 14% to 130m; driven by strong growth in Indonesia and Myanmar base expanded Revenue at QAR 16Bn: local currency growth in Qatar, Oman, Indonesia, Myanmar, Algeria, Solid Kuwait, Palestine and Maldives. performance Grou
Slide 18: Successful group performance
Successful group performance Customers Revenues EBITDA and Net profit attributable (‘000) (QAR m) EBITDA margin to Ooredoo (QAR m, % of Revenue ) Shareholders +14% - 3% - 1% (QAR m) 130,424 -6% +21% 16,504 0% 16,042 15,914 6,870 1,704 +46% 113,913 6,456 6,478 1,462 +2% excl. 94,331 FX impact +3% exc
Slide 19: Group Results 2016 1H Performance Summary
Group Results 2016 1H Performance Summary % Change 2016 Annual (Results in QAR Bn) 1H 2016 1H 2016 / 1H 2015 Guidance Consolidated Revenue 15.9 -1% -1% to +2% EBITDA 6.4 0% -3% to 0% Capital Expenditure 2.4 -37% 6.5Bn to 7.5Bn 1H results in line with guidance given for 2016 Ooredoo Capital Markets D
Slide 20: Efficient Models: An integral part of our strategy
Efficient Models : An integral part of our strategy • Previous cost saving target from 2013 (USD 550M) achieved • 2015 new AT Kearney OpCo benchmarking exercise identified an addressable gap of USD 390m with USD 125m target for 2016 Cost CAPEX • Ooredoo Group and OpCos identified specific initiative
Slide 21: Group June cost optimization: 63% favorable vs. YTD target
Group June cost optimization: 63% favorable vs. YTD target EBITDA margin 3% favorable Group Cost Savings USD m Group EBITDA Margin 125 41% 40% 38% +3% 101.7 62.5 +63% 2016 Target YTD Target YTD Reported 2016 Annual YTD Target YTD Reported Savings Savings Target => Cost Optimization on track for all
Slide 22: Capital expenditures: Network modernization mainly complete
Capital expenditures: Network modernization mainly complete Total Group CAPEX (QAR m) and CAPEX/Revenue (%) +27% +4% -10% 9,298 8,391 8,762 7,316 2,411 27.0% 25.0% 27.0% 21.7% 15.0% FY'12 FY'13 FY'14 FY'15 H1'16 H2 CAPEX will accelerate due to project phasing FY 2016 Guidance remains unchanged at QA
Slide 23: Technology initiatives across Ooredoo Group 2016
Technology initiatives across Ooredoo Group 2016 Ooredoo - Kuwait Ooredoo - Oman Indosat Ooredoo - Indonesia Asiacell - Iraq 4G LTE Advanced 4G LTE Expansion 4G LTE Launched 3G UMTS Launched launched 4G LTE-A Launched RAN Sharing discussions underway RAN Sharing Converged Fixed NW
Slide 24: Long-term debt profile further improved
Long-term debt profile further improved… Debt Profile – Ooredoo Q.S.C. Level In USD m 1,800 Loans Bonds Sukuk 1600 1,600 1,400 1250 1,200 1000 1000 1000 1000 1,000 750 800 650 600 500 500 500 400 200 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2028 2043 Total Loans USD 2,650m Total Bond
Slide 25: Key financial risk management issues are addressed
Key financial risk management issues are addressed… Debt refinancing / liquidity risk / rating No imminent refinancing requirements until Dec 2018 Current cash levels adequate, smooth long term debt profile. Investment grade credit rating maintained Moody’s “A2”, outlook: stable; S&P “A-”, o
Slide 26: FX transactional risks are mitigated to extent practical
…FX transactional risks are mitigated to extent practical ...via funding in local currency at OpCos • Medium term transformation of USD/IDR debt mix completed Indonesia • More than 85% local currency debt achieved • Over the last 2 years, IDR 10t of new local currency bonds issued Tunisia • 100% loc
Slide 27: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 28: Role of Strategic Sourcing at Ooredoo
Role of Strategic Sourcing at Ooredoo Why do we do it? What does Strategic Sourcing do? How do we do it? Ooredoo Capital Markets Day | 26 Sept 2016 | 28
Slide 29: Why do we do it?
Why do we do it? Ooredoo CapEx Spend QAR Bn 9.3 8.8 6.5-7.5 X% savings opportunity from Group Strategic Sourcing 2014 2015 2016 Actual Actual Guidance Ooredoo will spend QAR 6.5-7.5Bn across the group – this can be optimized Ooredoo Capital Markets Day | 26 Sept 2016 | 29
Slide 30: What does Strategic Sourcing do?
What does Strategic Sourcing do? Group led tenders on major categories (more than 50% of Group CapEx) Run better Clear, independent & transparent tender process tenders Multi-vendor final negotiations with willingness to “disrupt” current vendor ecosystem Top management engagement and suppor
Slide 31: How do we do it?
How do we do it? • Increased visibility & transparency • Best practices • Best-in-class processes • Improved vendor performance • Group price levels across all OpCos Excellence in sourcing will support Ooredoo in staying competitive in the global environment Ooredoo Capital Markets Day | 26 Sept 201
Slide 32: Examples of activities underway - RAN, Core and transmission
Examples of activities underway - RAN, Core and transmission in selected OpCos Examples of big tenders across Ooredoo TUNISIA IRAQ • RAN prices recently • RAN tender under negotiated way • Significant price • Transport categories reductions achieved tender under way • Best prices within the Group MY
Slide 33: Savings target of $190m in 2016 through Strategic Sourcing
Savings target of $190m in 2016 through Strategic Sourcing Estimated TCO savings in 2016 • Charging and Billing (Group) • Gensets (Group) USD • RAN/Core (OT, OA, OML) • Managed Services (OA, OML) $190m • Managed Power (IO) • IT Boost (OO, OK) Note: (1) Selective, not exhaustive Ooredoo Capital Marke
Slide 34: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 35: Indonesia landscape & teledensity - 2016
Indonesia landscape & teledensity - 2016 Active Mobile Mobile Internet Population Social Accounts Penetration 259 66 25% MILLION MILLION Fixed Phone Fixed Broadband Islands Penetration Penetration 17 K 7% 2% Source: Nielsen, Roland Berger Ooredoo Capital Markets Day | 26 Sept 2016 | 35
Slide 36: Indonesia is now in a Mobile First/Digital Era
Indonesia is now in a “Mobile First”/Digital Era 49% 79M “Smart And Smarter” Mobile Active Social Devices Broadband Media Accounts Penetration Indonesia 88M 3H 30M Active Internet Digital Average Time Users Facts in Spent On Mobile Internet 2016 66M 188.5M Active Mobile Visits To Top E- Social Accou
Slide 37: Indosat Ooredoo is well positioned
Indosat Ooredoo is well positioned Indosat Ooredoo is an integrated Telco company – a strong player in consumer, B2B and digital space Providing robust infrastructure to capture value in the mobile data traffic growth Leverage IP-based Provide Seamless Develop Domestic Network to Serve Access to the
Slide 38: Indosat Ooredoo becoming increasingly relevant to customers
Indosat Ooredoo becoming increasingly relevant to customers Indosat Ooredoo Positioning We are building Indonesia's leading digital Telco, enabling access and… Liberating products & We treat our 1 services 2 A data strong network 3 customer like a friend Affordability & New Behavior & Customer- 4G L
Slide 39: Indosat Ooredoo becoming increasingly relevant to customers
Indosat Ooredoo becoming increasingly relevant to customers From High Variety package offer… ..Becoming Clear and Simple packages Ooredoo Capital Markets Day | 26 Sept 2016 | 39
Slide 40: Indosat Ooredoo becoming increasingly relevant to customers
Indosat Ooredoo becoming increasingly relevant to customers 4G now in 40 Cities covering 43m people Ooredoo Capital Markets Day | 26 Sept 2016 | 40
Slide 41: Indosat Ooredoo becoming increasingly relevant to customers
Indosat Ooredoo becoming increasingly relevant to customers Enrich customers touch points to customize to simplify experience Ooredoo Capital Markets Day | 26 Sept 2016 | 41
Slide 42: Results are progressing positively
Results are progressing positively H1 2016 vs. H1 2015 Results (Results in IDR Bn) H1 2015 H1 2016 Growth (%) Operating Revenue 12,620 13,942 10.5% EBITDA 5,362 6,040 12.6% EBITDA Margin 42.5% 43.3% +0.8 ppt Profit (Loss) attributable to -734 428 NA Owners of Parent • Double digit Revenue and EBITDA
Slide 43: And doing well versus our competition
And doing well versus our competition Total Revenue by Operator, IDR Tn EBITDA by Operator, IDR Tn 41.1 35.4 23.8 +16.1% +23.8% 19.2 +10.5% 13.9 -1.8% 12.6 +12.6% 11.1 10.9 +9.8% 5.4 6.0 3.9 4.3 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 Telkomsel
Slide 44: Looking forward
Looking forward… Slow speed of change in the regulatory environment Challenges Maintain the currently reasonable competition landscape Up-skill for the digital future Secure leadership in the digital space (revenue, customer experience and brand preference) Ambitions Achieve and exceed inv
Slide 45: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 46: Myanmar: Young population growing at ~2%
Myanmar: Young population growing at ~2%; poverty to decrease with economic growth Population forecast Population by age groups Population below poverty (Million) (%) line (%) 58.0 56.5 55.8 0-14 29% 56.0 55.2 54.5 17.8% 54.0 15-24 18% 52.7 15.4% 52.0 25-35 16% 13.0% 50.0 10.6% 35-44 14% 48.0 8.2% 4
Slide 47: Sound economic growth projected for next few years
Sound economic growth projected for next few years; inflationary pressures expected to ease Myanmar Nominal GDP Inflation (MMK tr, current prices) (%) 200 191 180 166 11% 160 145 10% 140 126 8% 8% 7% 120 109 7% 7% 6% 100 93 6% 6% 77 80 65 58 3% 3% 60 51 40 20 2016 2010 2011 2012 2013 2014 2015 2017
Slide 48: Network now covering ~80% of the population
Network now covering ~80% of the population, nearing the end of our major network rollout Ooredoo Capital Markets Day | 26 Sept 2016 | 48
Slide 49: We have a robust fiber network to support data
We have a robust fiber network to support data Ooredoo Capital Markets Day | 26 Sept 2016 | 49
Slide 50: Ooredoo and Myanmar industry-leading in smartphone adoption
Ooredoo and Myanmar hare industry-leading in smartphone adoption Smartphone adoption benchmark – 1Q16 (every dot represents a country) 90% 80% Ooredoo Smartphone adoption (% of base) 70% 60% Myanmar 50% 40% 30% 20% 10% 0% 0 2,000 4,000 6,000 8,000 10,000 GDP/Capita (PPP, USD) ~90% of the total hands
Slide 51: 4G LTE devices penetration increasing
4G LTE devices penetration increasing % of Handsets sold by Technology, Top 3 regions 2G 3G 4G 13.6 16.6 11.6 11.4 14.2 18.4 27.8 26.9 27.2 31.8 33.5 33.3 42.9 67.4 63 66.9 70.7 70.5 67.5 59.9 61.2 60.5 56.5 55.3 54.9 46.6 19.0 20.4 21.5 17.9 15.3 14.1 12.3 11.9 12.3 11.2 11.8 11.7 10.5 May-15 Jun-1
Slide 52: Ooredoo Myanmar has been the fastest growing operator
Ooredoo Myanmar has been the fastest growing operator in the last few quarters Ooredoo Myanmar Customer Base (m) Customer Market Shares by Operator in Myanmar 8.2 48.7% 46.8% 45.7% 43.2% -5.5pp 6.9 36.5% 37.4% 37.8% 5.8 38.2% 1.7pp 4.8 4.0 3.4 18.6% 15.9% 16.5% 3.8pp 14.8% 2.5 Q3-15 Q4-15 Q1-16 Q2-1
Slide 53: Robust trade marketing and brand visibility across Myanmar
Robust trade marketing and brand visibility across Myanmar Ooredoo Capital Markets Day | 26 Sept 2016 | 53
Slide 54: We were first to launch 4G LTE
We were first to launch 4G LTE, which helped us further strengthen our data leadership position Ooredoo Capital Markets Day | 26 Sept 2016 | 54
Slide 55: Every campaign talks about connect to the better future
Every campaign talks about “connect to the better future” Corporate Social Fast Ooredoo Network Ooredoo 4G Plus Responsibility Ooredoo Widest and Fastest Connect to the better future on The fastest mobile signal Network will keep you the Fastest Network in changes lives in Myanmar, connected whereve
Slide 56: Providing access to better health & education services
Connecting with people of Myanmar by providing access to better health & education services Ooredoo Capital Markets Day | 26 Sept 2016 | 56
Slide 57: Looking forward
Looking forward… ARPU erosion as penetration increasing in the rural areas of Myanmar Challenges 4th player Viettel expected to launch anytime between now and Q1 next year Local currency devaluation Continue building scale and outpace market growth Our data leadership position in the marke
Slide 58: Ooredoo Myanmar H1'16 – Financial highlights
Ooredoo Myanmar H1’16 – Financial highlights Revenue (QAR m) 41% Ooredoo Myanmar first 4G service provider in 717 Myanmar (Launch in May 2016) Continued its revenue growth performance with 510 EBITDA positively impacted by increasing scale of operations 1H'15 1H'16 Customer base more than doub
Slide 59: Agenda
Agenda 10:00-10:05 Welcome by IR, Andreas 10:05-10:20 Deputy GCEO - Waleed Al Sayed 10:20-10:40 GCSO - Hans Kuropatwa 10:40-11:00 GCFO - Ajay Bahri 11:00-11:20 Strategic Sourcing - Group Chief Procurement Officer Christian Linhart 11:20-11:35 Indosat Ooredoo update - Caba Pinter, Indosat Ooredoo CFO
Slide 60: Oman: Young, growing population in a stable economy
Oman: Young, growing population in a stable economy in process of diversification from oil • 4.5m People and a historic YoY growth >5% • 50% less than 30 years old and 45% expats mainly from south-east Asia • >300k Km2 surface and 15 people per Km2 • USD 40,539 GDP/Cap (PPP) • Annual nominal GDP Gro
Slide 61: Ooredoo Oman: Consistently beating the competition in a growing market
Ooredoo Oman: Consistently beating the competition in a growing market Total Market Revenues (OMR m) Mobile & Fixed RMS Mobile RMS ~ 40% Fixed RMS close to 20% Ooredoo Oman has captured over 40% Mobile prepaid market Optimal portfolio with TD- share of market growth since 2014 leadership LTE and Fib
Slide 62: New regulatory framework and competitive landscape
New regulatory framework and competitive landscape Awasr limited to Oman Regulatory framework Consolidation of existing Broadband Company more predictable & MVNOs (OBC) infrastructure transparent Ooredoo Capital Markets Day | 26 Sept 2016 | 62
Slide 63: Robust financial and operational evolution
Robust financial and operational evolution Revenues (OMR m) EBITDA (OMR m) Steady EBITDA profitable margin growth since improvement 2013 Customers (000) Mobile ARPU (OMR/month) Healthy customer Stable ARPU growth Ooredoo Capital Markets Day | 26 Sept 2016 | 63
Slide 64: CAPEX: Major infrastructure projects accomplished
CAPEX: Major infrastructure projects accomplished; capital intensity already reducing CAPEX (OMR m) National Fiber Backbone Excluding Spectrum 5,500km license 2 Submarine cables SEA-ME-WE 5 & AAE1 Network IT Transformation Modernization Ooredoo Capital Markets Day | 26 Sept 2016 | 64
Slide 65: Successful market segmentation and commercial edge versus competition
Successful market segmentation and commercial edge versus competition Fiber offers with Salalah Festival Special plan for Loyalty points for great value offer – tourism event youth segment High Value customers Roaming offers for Digital apps for better B2B offers targeting all Device offers frequent
Slide 66: Focused organization to drive implementation
Focused organization to drive implementation Regulatory Commercial & CXP Operational Improvement Strategy development • Robust planning Planning • Improvements for • quick decision Governance • making Execution approach (PMO) • Strategy translated into actionable projects Reporting Scorecard • Evalu
Slide 67: Successful voice to data migration
Successful voice to data migration Data Revenue Broadband Customers 50% 25% Annual Growth in of revenues MBB customers driven already coming by high smartphone from data penetration and smart pricing Ooredoo Capital Markets Day | 26 Sept 2016 | 67
Slide 68: Revenue diversification: Healthier revenue composition
Revenue diversification: Healthier revenue composition ~80% Mobile 80.4% 81.2% 80.2% 79.9% 79.2% of 2013 2014 2015 H1’15 H1’16 revenues 6.6% 8.0% 9.4% 9.0% 10.9% 21% Fixed Fixed 2013 2014 2015 H1’15 H1’16 Revenue Growth CAGR (2013-15) Ooredoo Capital Markets Day | 26 Sept 2016 | 68
Slide 69: Looking forward: Strategic focus
Looking forward: Strategic focus Market Maintain our Mobile data leadership through a convergence approach Leader Capture our fair share of new revenues streams Performance Deliver unmatched and Omni-channel customer experience Culture Develop a collaboration and transformation culture Ove
Slide 70: Thank you
Thank you ًشكرا ً جزيل Website: ooredoo.com Follow us Email: IR@ooredoo.com Twitter: @OoredooIR