Sonaecom Sgps Sa · EURONEXT:SNC
Sonaecom Sgps Sa — Sonaecom — Q3 2003 Earnings Presentation
27 slides from Sonaecom Sgps Sa's earnings presentation, Oct 30, 2003
Slide 1: 3Q03 Consolidated Results
3Q03 Consolidated Results Paulo Azevedo CEO Sonaecom Oporto, 30 October 11:00
Slide 2: 3Q03 Overview
3Q03 Overview — Strong improvement in profitability and FCF in performance in 3Q03; — Year on year, 3Q03: • EBITDA up 88% to 45 million euros; • EBT positive for the first time; • Net Results up 85% to negative 3 million euros; • FCF positive at 9 million euros — Year-to-date September, Sonaecom rea
Slide 3: Overview
Overview — Growth initiatives announced in 2Q03 are beginning to show results: • Branding and data push at Optimus; • Customer acquisition at Novis; • Associated products at Público. — Strong quarter in roaming revenues at Optimus; Turnover up 9% to 223 million euros;
Slide 4: Overview
Overview — Strong operating and financial performance at Optimus • Turnover up 9% versus 3Q02; • Customer Revenues up by 9% versus 3Q02; • ARPU up by 12% in 3Q03 to 24,5 euros against 2Q03; • Data as % of Customer Revenues up to 11%. — Strong growth in customer acquisition and revenues at Novis: – C
Slide 5: Overview
Overview —Público delivered good results: • Turnover up 10% over 3Q02, despite advertising crisis; • Continued success of associated products; • Reinforced position as leading reference daily paper with market share of circa 15%.
Slide 6: 3Q03 Overview
3Q03 Overview —Continued improvement in capital structure and debt profile: • Net debt down 95 million euros to 368 million euros versus September 2002; • Interest cover up to 9,4x compared to 3,9 x in 3Q02; • As a result of Optimus refinancing in July, 89% of Sonaecom’s gross debt is now long term
Slide 7: Overview
Overview The good performance in 3Q03 has further strengthened Sonaecom’s competitive position as the leading alternative telecom’s operator to PT.
Slide 8: Consolidated Financial Highlights
Consolidated Financial Highlights
Slide 9: Turnover
Turnover — Consolidated Turnover • Up 9% year-on-year in 3Q03 to 223 million euros • Year-to-September up 5% to 617 million euros versus 2002. CONSOLIDATED TURNOVER + 9% 223 year-on-year mn euros 205 202 200 199 196 183 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03
Slide 10: EBITDA
EBITDA — Consolidated EBITDA • Up 88% year-on-year in 3Q03 to 45 million euros; • Consolidated EBITDA margin of 20% in the quarter. CONSOLIDATED EBITDA 60 40% + 87% 35% 50 year-on-year 45 mn euros 30% 40 34 25% 30 30 20% 24 20% 19 17% margin 15% 20 16 15% 12 10% 12% 10 9% 8% 5% 7% 0 0% 1Q02 2Q02 3Q0
Slide 11: EBITDA
EBITDA — Optimus : • 3Q03 EBITDA up 44% to 46 million euros year-on-year; • Optimus’ EBITDA margin up to 26% in 3Q03 from 20% in 3Q02. — Novis and Clix continue to reduce their negative contributions to EBITDA: • Novis’ EBITDA improved to negative1,3 million euros from negative 6,3 million euros; •
Slide 12: EBT
EBT — Positive EBT for the first time in 3Q03 at 5 million euros. CONSOLIDATED EBT 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 10 mn euros 5 5 (5) (3) (10) (8) + 126% year-on-year (15) (20) (19) (21) (25) (24) (24) (30)
Slide 13: Net Results
Net Results — Consolidated Net Results after Minority Interests • Up 85% to negative 3 million euros in 3Q03; • Consolidated Net Results before Minority Interests are close to breakeven, negative 359 thousand euros. — Optimus is the main positive contributor to Net Results: • Optimus registered net
Slide 14: FCF
FCF — During 3Q03, Sonaecom became FCF breakeven year-to-date; — Consolidated FCF in 3Q03 was 9 million euros which compares with cash consumption of 12 million euros in 3Q02; • Optimus generated FCF in 3Q03 of 13 million euros, compared to negative 3 million euros in 3Q02; • Significant reduction i
Slide 15: Financial Structure
Financial Structure — Improved Capital Structure CONSOLIDATED DEBT • Improvement in 700 profitability; mn euros Gross Debt down 650 20% 599 597 • Increased FCF generation; 600 583 year-on-year 36 42 550 • Proceeds from Optimus’ 134 509 480 and Sonaecom’s share 500 474 472 capital increase in 2002. 4
Slide 16: Financial Structure
Financial Structure — Sonaecom’s ability to meet its financial obligations has thus increased: • Net Debt / Annualised EBITDA improved from 6,3x at the end of 3Q02 to 2,5x at the end of 3Q03; • Interest coverage increased from 5x in 3Q02 to 11,5x in 3Q03. CONSOLIDATED INTEREST COVER Interest cover u
Slide 17: Optimus refinancing
Optimus refinancing — On 31July, Optimus signed a syndicated senior debt facility: • 575 million euros; • 8 years, with 3 years grace for principal repayments; • To refinance all existing debt facilities (short and long term); • To fully fund business plan over period. — Bank syndicate led by 9 MLAs
Slide 18: Key Operating Highlights
__ Key Operating Highlights
Slide 19: Operating highlights Optimus
Operating highlights Optimus — Optimus delivered strong operating performance in 3Q03: • ARPU up 12% quarter-on-quarter to 24,5 euros : • strong roaming revenues; • 3% tariff increase; • MoU up 6% against 2Q03 to 108 minutes per subscriber; • 57 thousand net new subscribers; — Growth in new data pro
Slide 20: Operating highlights Novis
Operating highlights Novis — Active customer base up 34% to 170 thousand customers against 3Q02; — Novis leads altnets in key SME and SOHO segments, 7,9% and 9,2% market shares respectively; — Telco Revenues (ex Clix and Mainroad) up 14% in 3Q03 compared with 3Q02. NOVIS TURNOVER ex CLIX 81 mn euros
Slide 21: Operating highlights Clix
Operating highlights Clix — Still leading narrowband ISP in Portugal; — Faster than expected market migration to broadband; — Lack of effective regulation; — Current pricing of PT’s wholesale ADSL offer leads to negative gross margins; — Unable to compete in broadband; — Key concern for management l
Slide 22: Operating highlights Público
Operating highlights Público — Strengthened position as leading reference daily paper in Portugal: market share of circulation of 14,6%; — Turnover is up 10% over the same quarter last year. — Success of associated products continues: Mil Folhas and Série Y into 3rd editions. — New revenue initiativ
Slide 23: Operating highlights S&SI
Operating highlights S&SI — S&SI companies won important new contracts in 3Q03 amongst which: • WeDo : Telefónica Brasil - revenue assurance project in partnership with Ericsson; • WeDo : Brazil Telecom – Collections • Enabler : AVA Germany; • BizDirect : e-procurement projects with UMIC (EBITDA bre
Slide 24: Regulation
Regulation — We continue to dedicate a significant amount of management time towards the development of a fairer regulatory environment; — Portugal is still at the tail-end of Europe in terms of Telecoms liberalization; — Amongst the regulatory issues that remain outstanding and that are of particul
Slide 25: Conclusion
_ Conclusion
Slide 26: Conclusion
Conclusion — 3Q03 was a very good quarter due to management’s determination to: • Overcome the challenging market environment; • Deliver continued improvement in profitability and FCF; • Continue to grow the business — Optimus is performing well and exceeding financial targets; — Novis has significa
Slide 27: Looking Forward
Looking Forward — Management will continue to focus on : – delivering improvements in profitability; – exploiting growth opportunities wherever they arise; – working towards improvement of the regulatory environment; — Revenues, EBITDA and FCF in 4Q03 will be lower than in 3Q03 due to lower roaming