Ooredoo Q.p.s.c · QSE:ORDS
Ooredoo Q.p.s.c — Qtel Group — Investor Day (January 2011)
68 slides from Ooredoo Q.p.s.c's investor day presentation, Jan 31, 2011
Slide 1: Qtel Group 2011 Capital Markets Day
Welcome Qtel Group 2011 Capital Markets Day January 31, 2011 Doha Qatar
Slide 2: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 3: Disclaimer
Disclaimer • Q t Telecom Qatar T l (Qtel) (Qt l) Q.S.C. Q S C and d the th group off companies i which hi h it forms f partt off (Qtel) (Qt l) cautions ti investors i t that th t certain t i statements contained in this document state Qtel management's intentions, hopes, beliefs, expectations, or pr
Slide 4: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 5: The Qtel Group: Foundation Now in Place
The Qtel Group Foundation Now in Place - Taking the Group to the Next Level Dr. Nasser Marafih Chief Executive Officer - Qtel Group January 31, 2011
Slide 6: Today's topics and themes
Today’s topics and themes 1. Financial foundation 2. How are we extracting value 3. What are our strategies in our key markets 4. How do we see the future of the industry Help you better understand our business and where we are going
Slide 7: Where we have come from
Where we have come from 20051 20102 Revenue US$ 819m US$ 5,495m 5 495m EBITDA US$ 479m US$ 2,620m EPS QAR 9.30 QAR 16.61 Market Capitalization US$ 5,649m US$ 7,049m Ratings × A+, A, A2 Countries with Qtel Interests 1 17 Addressable population >750K >680m Qtel International × 9 2010: A year of solidi
Slide 8: Foundation now in place
Foundation now in place c Growth Group Group Financial Opportunities Innovation Synergies Structure • Organic - Tunisia • Universal Music • Frame • GMTN • Inorganic - ? • Mobile money agreements • IPOs • Social networking • SmartRoamer • State S off Qatar Q • Fibre to the • Knowledge Home transfer C
Slide 9: Key industry challenges remain
Key industry challenges remain 1. Mobile penetration level – market saturation 2 2. Broadband becoming a key driver 3. Increasing competition & players 4. Scale & cost efficiency 5. Regulatory environment 6. Political risks Challenging, but manageable with the right team and the right strategies
Slide 10: How do we see the future – key long term strategies
How do we see the future – key long term strategies Get more of what we like Look beyond Leverage mobile efficiencies Drive Group Focus on synergies Broadband Able to identify opportunities and act on them will continue to be our differentiator
Slide 11: Thank-you
Thank-you
Slide 12: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 13: The Qtel Group: Financially Focused
The Qtel Group Financially Focused Mr. Ajay Bahri Chief Financial Officer - Qtel Group January 31, 2011
Slide 14: Where we are today
Where we are today 9 Strong top line growth (9M 2010: Revenue +14% +14%, EBITDA +15%) 9 High and stable EBITDA margins (48%) 9 A strong credit rating (Moody’s “A2”, S&P “A”, Fitch “A+”) • To ensure continuous access to liquidity, key transactions were successfully executed and milestones for 2010 we
Slide 15: Key financial issues being addressed
Key financial issues being addressed Debt refinancing risk • Pre-emptive P ti b bond d iissuance iin O Octt 2010 off US$2 US$2.75bn 75b enhanced h dddebt bt maturity t it profile fil significantly; comfortable cash levels and US$2bn RCF in place. Interest rates risks – Conservatively managed • Qtel
Slide 16: Conservative debt profile with further diversified instruments
Conservative debt profile with further diversified instruments at our disposal Available options Qtel Indosat Qtel Q.S.C. debt maturity profile1 Global Gl b l DCM Bonds B d / Syndicated Loans 3,000 Local Loans / Bonds US$ Export Credit Agency 1,250 1,000 1,000 Financing 900 750 600 750 Convertible o
Slide 17: Revenue and operating highlights
Revenue and operating highlights Qtel •Market leader •Focus on customer retention •FTTH roll out Indosat Asiacell •Number 2 position, >40 million •~8 million subscribers subscribers •Revenue growth of +29% •Strong QAR revenue (+28%) and EBITDA growth (+34%) Nawras •Successful IPO Wataniya Kuwait 9M
Slide 18: Cost optimization and efficiency - philosophy and approach
Cost optimization and efficiency - philosophy and approach Our Philosophy: We believe cost optimization should be a priority for all companies regardless of the economic cycle. As competition is increasing, cost efficiency becomes vital to improve and maintain shareholder value. value We have alread
Slide 19: Cost optimization and efficiency – implementation model
Cost optimization and efficiency – implementation model Our implementation model includes: • Objective j benchmark against g peer g p group p • Transfer of best practice and knowledge management across the Group. • Group synergies through improved frame agreements • Cost optimization targets linked
Slide 20: Cost optimization and efficiency - outputs
Cost optimization and efficiency - outputs Procurement Savings g on g group pppurchases through g better negotiations Marketing Transfer of marketing knowledge for products and services, simplification p of p product p portfolio, increasing g effectiveness of marketing spend Distribution Focus/ enha
Slide 21: Thank-you
Thank-you
Slide 22: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 23: The Qtel Group: Working the assets
The Qtel Group Working the assets Mr. Jeremy Sell Chief Strategy Officer - Qtel Group January 31, 2011
Slide 24: We spoke about 3 x 3
2006 – 2009 we spoke about 3 x 3 Focused on 3 business segments … Consumer Wireless Consumer Broadband Corporate Managed Services … in 3 regions g Jan 2005 Today Qatar Asian Subcontinent Asia Pacific Jan 2007 Middle East and North Africa Oman Qatar Indonesia Singapore
Slide 25: Last year we spoke about Value Creation
…last year we spoke about Value Creation 1 3 Acquisition Returns Analysts Views •IRR •Recommendations •ROIC •Target Price consensus •ROE ROE 2 4 Total Shareholder Returns Fundamental View •Operating company business plan •Share price development DCF •Dividends •Incremental improvement
Slide 26: 2011 - Markets are maturing
2011 - Markets are maturing Penetration Plateauing (%) Net Adds Falling 202% 57% -24% 80% Qatar 2005 2010E 2006 2007 2008 2009 2010E 2011E -12% 91% 67% 21% Indonesia 2005 2010E 2006 2007 2008 2009 2010E 2011E 87% -1% -2 20% 20% Iraq 2005 2010E 2006 2007 2008 2009 2010E 2011E 95% 124% -42% 76% Kuwait
Slide 27: Share prices driven by returns more than growth
Share prices driven by returns more than growth Before (2004) Today (2010) EV/IC incl. incl goodwill EV/IC incl. incl goodwill R2 = 0.07 R2 = 0.75 ROIC incl. goodwill % ROIC incl. goodwill % Note: n= 100 telecom companies; Source: InFinancials, Bloomberg, McKinsey analysis
Slide 28: Portfolio mainly mobile; growth starting to slow; 2011 focus
• Prepay dominated • Voice dominated Portfolio mainly mobile • Mix of mature and growth • Proven ability in tough environments • Penetration slowing • Voice revenue slowing Growth starting to slow • Margin pressure • But capex also slowing • Data/Broadband in emerging market • Cost optimatization 20
Slide 29: Data growth now worldwide
1. Data growth now worldwide World Monthly Mobile Data Traffic abyte per Month Exa FACT: Oct 2010: Mount Everest covered 3.6-7.2Mbps Data Speeds Source: Ovum, Morgan Stanley Research, Company Reports, Reuters, ‘Nepal firm takes high speed Internet to Mt Everest’, Oct 2010;
Slide 30: And we have plenty of upside in our markets
And we have plenty of upside in our markets Smart Phones Share of Total Handset Shipments, by Region 52% Japan 50% 25% Smartphone Share CQ3:09 N. America 21% Smartphone Share - CQ3:08 23% W. Europe 20% % 8% EEMEA 8% 7% Asia Pacific 6% 5% Latin America 3% Note: Pure-play smart phone leaders exclude J
Slide 31: Cost models need to be optimized
2. Cost models need to be optimized Revenue per min1 Cost per min Country Operator $ cents $ cents Base 24.4 19.5 Telefonica Moviles 28 5 28.5 18.5 18 5 TMN 14.6 23.0 E-Plus 13.8 16.7 Cosmote 17 2 17.2 12 2 12.2 Indosat DTAC Telkomsel AIS China Unicom Chi Mobile China M bil Idea Airtel Note: 1 Inclu
Slide 32: CapEx Efficiency – early days
3. CapEx Efficiency – early days Savings opportunity by network element (%) Core network 25–30% 25 30% Radio (RAN) sharing 20–25% Site/mast sharing 10%-15% Note: Estimates Source: Qtel Analysis
Slide 33: B2B/ICT is an attractive parallel market
4. B2B/ICT is an attractive parallel market Worldwide MENA ($ bn) ($ bn) 3,554 , 282 3,425 3,300 258 3,178 3,063 237 2,957 2,865 2% 219 1,639 2,721 604 201 173 1,6 0 1,570 1,542 184 6% 1,512 163 1,473 168 1,418 1,345 151 153 146 137 5% 1,915 127 1,820 109 115 1,730 1,636 96 105 1,551 84 1,485 47 73
Slide 34: Qtel Group strategy - key developments update
Qtel Group strategy - key developments update Acquire/Merge Portfolio Development Manage minorities Carve-outs • Syria • Tunisiana • Zain KSA • QIA • IPOs
Slide 35: Thank-you
Thank-you
Slide 36: Markets are maturing (cntd.)
Market are maturing (cntd.) Penetration Plateauing (%) Net Adds Falling 141% 16 % -36 % 51% Oman 2005 2010E 2006 2007 2008 2009 2010E 2011E 94% -31% 41% Algeria 2005 2010E 2006 2007 2008 2009 2010E 2011E -2% -14% 96% 36% Tunisia 2005 2010E 2006 2007 2008 2009 2010E 2011E Note: For Oman, revenues of
Slide 37: Break
Break
Slide 38: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 39: The Qtel Group: Qtel Qatar
The Qtel Group Qtel Qatar Mr. Nick Dent Chief Operating Officer - Qtel QSC January 31, 2011
Slide 40: The Qatar economy and 2022 – what does it mean for Qtel?
The Qatar economy and 2022 – what does it mean for Qtel? • Return to non-hydrocarbon growth • Estimated US$100 Billion in projects and investments • ~0.5 1 0 million population increase Î 0 5 – 1.0 population of 2.5 – 3.0 million by 2022 • Evolution, not a revolution
Slide 41: Qtel Qatar strategy – what we said last year
Qtel Qatar strategy – what we said last year • Broadband 9 •#2 •Broadband leader G Grow • Entertainment 9 #2 in i TV market k t • Corporate / managed services WIP Be Lean • Cost cutting 9 •Opex reductions on track Protect • Value commitment pricing 9 •Postpaid retention • Loyalty L lt / good d servi
Slide 42: The competitive environment one year on
The competitive environment one year on – how has the market segmented? Quality/Innovation Value Price
Slide 43: Market continues to grow but at a reduced rate
Market continues to grow but at a reduced rate Qatar wireless revenue (QARm) 4+% +14% +22% +18%
Slide 44: Qatar market evolution
Qatar market evolution Change g in Share (Q1’10 ( – Q3’10)) Current Value Position Reported SIMs 4% Revenue 80% 20% Active SIMs 6% Qtel VFQ Reported Revenue 6% Gross Margin 88% 12% Gross Margin 4% SIMs (000’s) Q1’10 Q2’10 Q3’10 • Impact of VFQ’s low prices buys SIM Qtel 2,150 2,154 2,134 Reported VF
Slide 45: Broadband: what are we doing
Broadband: what are we doing • Entertainment – Enhancing TV position • FTTX – Fast development • Retention – Great service • Government – Close dialogue
Slide 46: Qtel Qatar strategy – where do we go now
Qtel Qatar strategy – where do we go now • Broadband G Grow • Entertainment • Corporate / managed services Be Lean • Cost cutting • Value commitment pricing Protect • Loyalty y y/g good service • Segmentation • Protect the whole base
Slide 47: Thank-you
Thank-you
Slide 48: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 49: PT Indosat Tbk
PT Indosat Tbk The Qtel Group Harry Sasongko President Director - Indosat January 31, 2011 Qtel Group Capital Markets Day 2011 - Indosat
Slide 50: Resilient Indonesian Economy
Resilient Indonesian Economy High Growth Economy Stable political and macro environment (2010 GDP per Capita in US$, 2010 GDP Growth Rate %) maintaining strong growth through the global 28.1% 26.4% financial crisis 8 358 8,358 19.6% 20.3% 17.1% 14.7% 13.7% 4,690 4,178 2,990 6.2% 2,048 Strong domesti
Slide 51: One of the Most Attractive Wireless Markets in the Region
One of the Most Attractive Wireless Markets in the Region Potential for Greater than Normal Growth Indonesia is one of the fastest growing wireless (Telecom Sector as % of Nominal GDP) markets with 26% subscriber growth and 2.7% 2.4% 80% penetration in 2010 2.0% 1.9% 1.7% 1.6% 1.6% 1.3% Indonesia wi
Slide 52: Indosat Overview
Indosat Overview Fully Integrated Telecommunications Network Operator Revenue by Segment (9M 2010) Others/Public Qatar Government Revenue (IDRbn) Segment Contribution (%) Telecom of Indonesia Fixed 14,843 Telecom 65% 14% 21% 11,914 8% MIDI 12% 1 118 1,118 1 811 1,811 Cellular Fixed MIDI Cellular Tot
Slide 53: Telco Market in Indonesia
Telco Market in Indonesia CDMA (in 000) CDMA, 34,984 , 15.6% Total 34,984 Subs GSM (in 000) GSM, 188,651 , 84.4% Total GSM + CDMA = 223,635 Subs. (in 000) Total 188,651 Subs Sources : Company data & Estimation Top 3-GSM Operators continue to dominate the market Qtel Group Capital Markets Day 2011 -
Slide 54: Indosat Well Positioned To Achieve Profitable Growth
Indosat Well Positioned To Achieve Profitable Growth Key Sector Trends Strategic shift to focus on higher value Price Competition customers t Remains a key sector risk Aggressive pricing by incumbent in late 2010 Strong 3.5G and data network Increasing Mobile Data Usage Pioneer in launching
Slide 55: Pricing looks cheap but a closer look reveals…
Pricing looks cheap but a closer look reveals… On net IDR 100 On-net IDR 25 looks cheaper On net IDR On-net On net IDR On-net Off-net IDR 50/3sec than Rp50… 20/min peak 24/2sec for two (1,000/ Min) On-net peak minute and off peak minutes after – tariff is IDR 25/3sec IDR 24/min for IDR 500/min eight
Slide 56: Indosat Vision and Strategy
Indosat Vision and Strategy Indosat Vision To be the customers preferred choice for all information and communication needs How do we get there? C E P A T Customers Expansion People Asset Technology Utilization Be the most admired Further enrich the Be the preferred Ensure high Offer our brand with
Slide 57: Commercial Strategy
Commercial Strategy Maximize Differentiation with Customer Insights z Expand on customer understanding with intensive Lead Product / Pricing market research and data- Rejuvenate Branding Innovation and Flexibility mining initiatives z Create compelling, p g, differentiated z Innovate on pricing and
Slide 58: From the Sell Side: Recent updates on Indosat
From the Sell Side: Recent updates on Indosat Brokerage Target Price (IDR) 7,900 7,200 6,000 7,000 7,400 Staff cuts highlight management traction on initiatives Qtel Group Capital Markets Day 2011 - Indosat
Slide 59: Performance Profile since Transformation Program Launched - Results
Performance Profile since Transformation Program Launched - Results Cellular Revenue (IDR Bn) EBITDA (IDR Bn) and EBITDA Margin YoY YoY 12.6% 16.6% 6,327 7,128 10,217 11,914 46.1% 48.0% 9M09 9M10 9M09 9M10 Indosat out-paced industry growth in the first 9M of 2010 C t efficiencies Cost ffi i i lled d
Slide 60: Anecdotal Evidence of Service Excellence
Anecdotal Evidence of Service Excellence During the US Presidential visit to Indonesia in Q4 2010, the Indosat network was chosen as the exclusive provider of ICT services for the Presidential delegation Our integrated advantage and quality of service is not just marketing spin – as evidenced by the
Slide 61: Thank-you
Thank-you Qtel Group Capital Markets Day 2011 - Indosat
Slide 62: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 63: Q&A
Q&A
Slide 64: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 65: The Qtel Group: Foundation in place for the next level
The Qtel Group • Foundation in place to take the Group to the next level • Future growth will be a mix of organic and inorganic opportunities, new technologies, efficiencies and synergies as well as looking beyond the mobile space • New investments in innovation and partnerships, with key vendors an
Slide 66: Thank-you
Thank-you
Slide 67: 2011 Qtel Group Capital Markets Day
2011 Qtel Group Capital Markets Day 10:00-10:05 Welcome - Investor Relations 10:05-10:20 Dr. Nasser Marafih, Qtel Group CEO 10:20-10:50 10:20 10:50 Mr. Ajay Bahri, Qtel Group CFO 10:50-11:10 Mr. Jeremy Sell, Qtel Group CSO 11:10-11:30 Break 11 30 11 50 11:30-11:50 M Nick Mr. Ni k D Dent, t Qtel Qt l
Slide 68: Thank-you
Th k Thank-you Qtell G Qt Group Investor I t Relations R l ti Department D t t Any further Qtel Headquarters Building – PO Box 217 questions? West Bay, Doha IR@qtel.com.qa Upcoming FY 2010 Financial Highlights – March 1, 2011 events