Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — Investor Presentation (April 2015)
50 slides from Bharti Airtel's investor presentation, April 2015
Slide 1: Bharti Airtel Management Presentation – Apr 2015
Bharti Airtel Management Presentation – Apr 2015
Slide 2: 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 3: Agenda
Agenda • Introduction to Bharti Airtel • Industry Themes • Bharti Airtel: Growth Opportunities • Key Performance Indicators • Other Businesses • Financial Overview • Leadership 3
Slide 4: Bharti Airtel: Who We Are
2 airtel BHARTIAIRTEL: WHOWEARE {|
Slide 5: Bharti Airtel
Bharti Airtel 1.85bn Addressable Population 4 Present in US$15.1bn 20 Countries Revenue 3 #1 Operator In India 1 #2 Operator #4 Operator In Africa 5 in the World 1 #3 in-country wireless service operator in the world 2 Source: TRAI and Informa Telecoms and Media Notes: 1. As of Dec 31, 2014 2. Based
Slide 6: Journey Through The Times
Journey Through The Times Start up (1995 - 2000) Land Grab (2001 - 2010) Multiple Plays (2011 onwards) 1998 2004 2008 2010 2010 2011 2012 2013 2014 Pan India Launch Acquired First First Launch of footprint; direct to Zain; New 3G operator Crossed launched Airtel India’s home Present in brand service
Slide 7: Global Services Portfolio
Global Services Portfolio Mobile Services across 20 countries Airtel Business (Large enterprises and carriers) • Over 225,000 Rkms1 across 50 countries, 5 continents • 310.9 mn1 wireless subscribers globally • Over 1.23 trillion minutes of calls in FY 2015 • Over 333 petabytes of data over the last
Slide 8: Scale and Profitability across Diversified Segments
Scale and Profitability across Diversified Segments Segment Wise Contribution to EBITDA (FY15) FY15 YoY Growth International Revenue $15.1 bn 6.5% India Wireless Wireless Tower Infra Airtel Business Telemedia Digital TV 61% EBITDA $5.1 bn 12.0% EBIT $2.6 bn 29.0% 19% Capex $3.1 bn 8% 5% 6% 2% Intere
Slide 9: Well Positioned in Key Growth Markets
WELL POSITIONED IN KEY GROWTH MARKETS
Slide 10: Present in Growth Markets
Present in Growth Markets 105 million new mobile subscriptions globally Growth markets Central and Eastern Europe, 7 contribute over a India, 12 Western Europe, 3 third of new subs - India Latin America, 8 - Bangladesh - Sri Lanka Africa, 23 - 17 in Africa Middle East, 6 in millions Driving revenue
Slide 11: … And Under-Penetrated Geographies
… And Under-Penetrated Geographies Airtel’s span: 1 Over 226 million customers in India Over 76.3 million in Africa Over 8.6 million in South Asia (Sri Lanka and Bangladesh) Source: Ericsson, as of Q4 2014 Notes: 1. Company filings, as of Quarter ended Mar 2015 11
Slide 12: India: Industry Consolidation Underway Through Revenue Shares
India: Industry Consolidation Underway Through Revenue Shares 8 Operators 14 Operators 10 Operators • Industry consolidation via market share 34% 29% gains, with top 3 now accounting for 43% over 71% of the industry revenues • Exits by many operators post Feb 2012 SC verdict (122 licenses cancelled)
Slide 13: Africa: Then and Now
Africa: Then and Now 2010 2015 Invested for Growth in Africa 13 of 44
Slide 14: The Demographic Dividend
The Demographic Dividend Median Age Projected in 2020 (years) 1 17 mn more Indians between 15 to 44 years 1 30.5 27.9 619 19.4 17.8 602 World India Africa Nigeria 2013 2015 Source: UN Statistics; Euromonitor 14
Slide 15: Triggers To Bolster Data Uptake
Triggers To Bolster Data Uptake Smartphone penetration in Asia 1 Driving 2G to 3G Growth 2 Singapore 72% Korea 69% Japan 50% APAC Avg 39% China 30% Thailand 26% Indonesia 26% India 10% Smartphone shipments to India have doubled from 43.23 mn to 81.6 mn year over year (2014 vs 2013) India is expected
Slide 16: Airtel: Growth Opportunities
AIRTEL: GROWTH OPPORTUNITIES
Slide 17: Investment Highlights
Investment Highlights 1 Diversified operator with dominant position in marketplace 2 Large residual opportunity with bulk investments in place 3 Growth Strategy: Voice Secularity, Mobile Data and New Services 4 Focus on customer stickiness with increasing postpaid share 5 Focus on generating efficie
Slide 18: The Leading Indian Wireless Operator
1 The Leading Indian Wireless Operator 23% Wireless Subscriber Market Share1 31% Wireless Revenue Market Share2 Customer Market 23% 19% 16% 11% 9% 8% 7% 7% 3.6% 5.6% Share Bharti Airtel 220 7.2% Vodafone 30.9% 180 RCOM 153 BSNL+MTNL 17.5% Idea 107 84 Tata 80 66 63 5.6% Aircel 6.2% 23.4% Others Bhart
Slide 19: Multiple Plays, Multiple Opportunities
1 Multiple Plays, Multiple Opportunities Telemedia: DTH: One of four EBIT customers positive, on Airtel, generating DSL ARPU> significant Rs 1000 OFCF Tower Co: Integrated Wireless: Consolidating the data 20 growth Telco markets growth, sharing factor>2 Airtel Airtel Business: Money: 50 countries, B
Slide 20: India: Investments To Yield Results
2 India: Investments To Yield Results Industry Prime Nominal Wide Largest leading spectrum to Value of spectrum optical fiber revenue2 yield data liberalized presence: network yield/MHz at growth: spectrum at 16.1%3 amongst 2x avg with Virtually Pan USD 12 spectrum private same India 3G & billion1 m
Slide 21: India: Strong Spectrum Position
2 India: Strong Spectrum Position Bharti Airtel’s Spectrum Position Spectrum Holdings Spectrum Industry Industry Spectrum Spectrum held Bharti spectrum Spectrum across 900/1800/2100/2300 bands, more or Band Spectrum ex BSNL/MTNL by Bharti Market Share ex less fungible across technologies (MHz) (MH
Slide 22: India: Incumbent with Growth Opportunity
2 India: Incumbent with Growth Opportunity Penetration Share < 60% No 1 Share 60% - 90% No 2 Share 90% + No 3 Share 22
Slide 23: Africa: Geographical Opportunity & Performance
2 Africa: Geographical Opportunity & Performance Mobile Penetration(%) Number of Countries < 60% 8 60% - 90% 6 > 90% 3 Market Position Number of Countries #1 8 #2 6 #3 3 Number of <=2 3 >=4 competitors No. of countries1 9 6 2 Through organic as well as in-country acquisitions we are #1 or #2 in 14 m
Slide 24: Growth Lever: Voice Secularity
3 Growth Lever: Voice Secularity Volume Growth Value Growth Significant gap between realized and rack rates Carries over 1 trillion minutes (VRPM up 3.5% from trough of 35 paise) Secular Volume growth Y-o-Y 1 paisa upside adds $200 mn to top line Significant headroom for value as well as volume upsi
Slide 25: Growth Lever: Data Across 2G/3G/4G
3 Growth Lever: Data Across 2G/3G/4G Converged opportunity across India’s first 4G network technologies Sole operator to be part of Industry first initiatives Google’s Android One devices strategy Data comes at incrementally higher EBITDA margins as compared to voice 25 of 44
Slide 26: Largest 3G Network In India
3 Largest 3G Network In India 3G sites up 56.0% YoY 1 Expected Population Coverage Growth 2 250000 40.0% 48,825 35.0% 200000 41,850 34,564 38,055 33.3% 30.0% 31,301 29.3% 150000 26.9% 25.0% 24.7% 22.6% 20.0% 100000 15.0% 10.0% 50000 5.0% 0 0.0% Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 3G Sites Total Sites % 3G
Slide 27: 4G Services Launched
3 4G Services Launched Key to tap into the data opportunity • Launched in 19 cities in India on mobiles, mifi, dongles, home wifi routers • Africa’s first 4G service: 4G launch in the Seychelles • Partnering Nokia Networks to launch ultrafast 4G services in India’s first FDD‐LTE on 1800 MHz – India’
Slide 28: Growth Story: Airtel Money, Wynk, Industry First Initiatives
3 Growth Story: Airtel Money, Wynk, Industry First Initiatives • Offered in India and all 17 opcos in Africa Airtel • KPI: Africa (Q4FY15) Money • Sub base of 6.2 million (up 1.8x YoY), transaction Value: $2,925 million (up 31% YoY) • Carrier agnostic music app with a curated library of 1.8 million
Slide 29: Quality Subscriber Acquisitions
4 Quality Subscriber Acquisitions India: Churn % Africa: Churn % 8.50% 6.70% 6.10% 7% 6.10% 5.80% 5.50% 3.20% 3.10% 3.20% 2.40% 2.50% 2.70% Sep‐12 Feb‐13 Jul‐13 Dec‐13 May‐14 Oct‐14 Mar‐15 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 • Airtel has industry wide lowest churn at 2.5% • In Africa, churn %
Slide 30: Increasing High Value Customers
4 Increasing High Value Customers 203 5.5% 5.4% 5.4% 202 5.4% 5.3% • Postpaid Myplan for customers and enterprise 201 5.3% 200 202 5.2% 202 • Extended Myplan for prepaid customers 5.1% 199 5.1% 198 5.0% • Expand company owned retail stores 4.9% 197 198 4.9% 198 • Strengthen DTH & Enterprise business
Slide 31: Focus On Efficient Utilization Of Opex/Capex
5 Focus On Efficient Utilization Of Opex/Capex 77.7% 78.9% 76.6% 77.4% 75.6% 229,616 232,171 228,452 230,155 • Invested for growth -> yielding results 222,193 • Passive Infrastructure sharing 45.0% 44.3% 44.0% 43.9% • Divestment of towers in Africa underway 43.0% Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 T
Slide 32: Key Performance Indicators
2 airtel KEY 1 PERFORMANCE 1 INDICATORS
Slide 33: India Performance Indicators
India Performance Indicators Total Subscribers (mn) Minutes on Network (mn) 226 277,869 10% YoY 5% YoY 217 212 270,827 209 267,485 206 264,843 263,905 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Voice Realization per minute (paisa) Bharti Airtel’s Data and 3G Base (mn) Up f
Slide 34: India: Significant Upside From 'Data'
India: Significant Upside From ‘Data’ Bharti Airtel’s Non Voice Revenues as a % of Volumes doubling YoY (bn MBs) Mobile Revenues 1 82% YoY 86.6 25% 77.3 20% 67.7 15% 55.6 47.7 10% 5% 0% Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Data Revenue Other Non Voice Non Data Revenue Annualized data revenues have sur
Slide 35: Africa Performance Indicators
Africa Performance Indicators Total Subscribers (mn) and Total Minutes (bn) Minutes of Usage per sub 136 136 138 140 137 80.0 69.1 71.4 74.6 76.3 35.0 69.4 30.4 30.0 60.0 25.0 31.0 28.2 28.3 29.0 30.4 20.0 40.0 15.0 20.0 10.0 5.0 0.0 0.0 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q4FY14 Q1FY15 Q2FY15 Q3FY15
Slide 36: Africa: Data and Mobile Money Are The Stars
Africa: Data and Mobile Money Are The Stars Data Customer Base (‘000s) Volumes up 84% YoY (Mn MBs) 36% YoY 30,379 84% YoY 11,256 27,116 9,475 26,365 22,305 23,650 8,061 6,114 6,541 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 3G sites up 44% YoY 1 Mobile Money: Transactions
Slide 37: Other Businesses
2 airtel OTHER BUSINESSES
Slide 38: Telemedia Services
Telemedia Services • FY15: 13% YoY revenue growth, 22% YoY EBITDA growth • Pan-India presence of 90 cities • Operates in the entire broadband continuum - fixed line voice and high speed broadband across Homes and Office segments, broadband (via DSL), IPTV, internet leased line and MPLS services • Ke
Slide 39: Airtel Business
Airtel Business India’s leading and most trusted provider of ICT services • FY15: 6% YoY revenue growth, 1% YoY EBITDA growth • Customer base across - enterprises, governments, carriers and small and medium business. • Diverse portfolio of services - voice, data, video, network integration, data cen
Slide 40: Digital TV Services
Digital TV Services • FY15: 19% YoY revenue growth, 102% YoY EBITDA growth • First Company in India which provides real integration of all the three screens viz. television, mobile and computer enabling our customers to record their favorite TV programs through mobile and web • Launched “Airtel Digi
Slide 41: Tower Infrastructure
Tower Infrastructure • 6% YoY revenue growth, 13% YoY EBITDA growth • Holds a 42% stake in Indus Towers, amongst 2.17 the largest tower companies in the world, 120,000 2.03 2.11 2.00 operating in 15 circles, thereby enabling the Sharing Factor (x) 100,000 1.80 85,,892 Company to provide leading pan-
Slide 42: Financial Overview
2 airtel FINANCIAL OVERVIEW
Slide 43: Steadily Improving Financials (Consolidated)
Steadily Improving Financials (Consolidated) 1 note: in INR terms Continued margin improvement *Net of Mobile Termination cuts Source: Company Filings 33 Note: 1. Africa operations consolidated starting from 8th June 2010
Slide 44: Steadily Improving Financials (Consolidated)
Steadily Improving Financials (Consolidated) 1 Total Revenues (US$bn) Cash Flow from Operations (US$bn) CAGR of 11.5% (INR) 4.7 CAGR of 3.6% ($) 15.1 4.0 4.1 4.0 14.3 14.1 14.2 3.6 13.1 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Source: Company Filings Note: 44 1. Africa operations consolidat
Slide 45: Stable Margin Growth
Stable Margin Growth 35.00% 32.90% 33.70% 33.70% 33.50% 18.56% 16.10% 16.90% 17.20% 15.20% 13.50% 13.30% 7.10% 5.8% 3.6% Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 GR YoY growth % EBITDA % EBIT % Source: Company Filings Note: 45 1. Africa operations consolidated starting from 8th June 2010
Slide 46: Diversified debt profile; focus on deleveraging
Diversified debt profile; focus on deleveraging Leverage ratios improving 11.8 3 2.5 2.19 2.1 2.08 2.04 2.06 10.8 10.7 2 10.6 10.1 10.1 1.5 9.8 9.6 1 0.5 8.8 0 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Net Debt ($bn) Net Debt-EBITDA Ratio Many strategic initiatives undertaken, further deleveraging through
Slide 47: Leadership
2 airtel LEADERSHIP
Slide 48: Leadership in Business
Leadership in Business Amongst top 100 Estimated brand Number 1 service Top Treasury most valuable value of over USD brand in India Team, Asia; Adam brands globally 11 bn, 2012 Brand Equity’s most Smith Award, Study by Millward Published in Financial trusted brands annual EuroFinance Brown, May 2012
Slide 49: 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 IFRS, IGAAP basis
Slide 50: Thank You
THANK YOU