Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q2 2009 Earnings Presentation
20 slides from Telecom Argentina Sa Class B's earnings presentation, 2009
Slide 1: Second Quarter 2009 Earnings Results Conference Call Presentation
Second Quarter 2009 Earnings Results Conference Call Presentation UNAUDITED DATA
Slide 2: Disclaimer
Disclaimer This presentation may include statements that could constitute forward-looking statements, including, but not limited to, the Company’s expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; the impa
Slide 3: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 2
Slide 4: Argentine macroeconomic evolution – economic activity seems to be flattening in 2Q09
Argentine macroeconomic evolution – The economic activity seems to be flattening in 2Q09 Real GDP Consumption Trade & Fiscal Balance Billions ARS, 1993 based (Last 12 months) Billions ARS, 1993 based (Last 12 months) Quarterly Fiscal Balance (Last 12 Months) ∆ YoY ∆ YoY as % of GDP 8,5% 8,7% 7,8% 9,
Slide 5: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 4
Slide 6: Business Highlights
Business Highlights MOBILE FIXED • Robust mobile customer growth, well • Internet & Data main drivers of revenues. above the market (48% of flow share). • Internet ARPU shows an upside trend, • Strong VAS-growth fueled by Data & with significant churn reduction. SMS. • ADSL Flow Share reached 55% in
Slide 7: Fixed Line: TEO continues to grow bundling with ADSL
Fixed Line: TEO continues to grow bundling with ADSL Thousand of lines in service • Despite the expansion of the cellular market, fixed lines continued to grow at a moderate pace, outperforming the market. Evolution of Lines in Service • In a scenario of frozen regulated tariffs, ARPU was stable thr
Slide 8: Broadband: We continue to grow above market rates
Broadband: We continue to grow above market rates • In 1H09 broadband connections represent Thousand of broadband accesses 26% of LIS. • TEO benefits from steady demand of +19% broadband services through: ow d 3.137 • Improved network coverage. 9 Fl +33% 2.993 1H0 reache 2.632 • Commercial promotion
Slide 9: Fixed line: Revenues comparison: 1H09 – 1H08
Fixed line: Revenues comparison: 1H09 – 1H08 Argentine GAAP, Millions of ARS, Percentage YoY Variation 226 (+13%) 24 23 -2 1.990 147 1.764 24 20 -10 49% Non Regulated 43% Non Regulated +6% +3% -22% +43% +23% +12% -2% 51% Regulated Regulated 57% Revenues Monthly Fee Voice Public Internet Data Interco
Slide 10: Mobile: Strong subscriber growth, outperforming our competitors
Mobile: Strong subscriber growth, outperforming our competitors Million of lines • TEO continued to focus in network performance and value added services availability and capillarity (mainly in mobile Internet and 3G services). e TEO vs. Market Growth o w Shar • Additional customer retention actions
Slide 11: Mobile: Growth focus in Value Added Services
Mobile: Growth focus in Value Added Services Net additions +309 net adds VAS relative participation over service revenues Thousand subs 1H09 vs 1H08 Millions of ARS 2Q09 Vs. 2Q08 1.023 1.5961.3881.596 1.639 714 1.508 1.358 +18% d 1.388 us t aine ith 623 607 S th w 562 growalue 497 1.118 1.094 1.093
Slide 12: Mobile: Evolution of revenues: 1H08 – 1H09
Mobile: Evolution of revenues: 1H08 – 1H09 Argentine GAAP, Millions of ARS, Percentage YoY Variation 502 (+16%) 258 -11 16 3.574 72 8 159 3.072 +24% +16% +1% +33% -5% +5% Revenues 1H08 Monthly Fees Prepaid Traffic TLRD & CPP VAS Others Handset Sales Revenues 1H09 Service Revenues: +486 (+18%) % of t
Slide 13: Evolution of CAPEX
Evolution of CAPEX Argentine GAAP, Millions of ARS (excluding materials) 1H09 Mobile Capex breakdown % Revenues 14% 15% 14% 9% IT 1.597 3G 22% 1.302 47% 11% Quality & Innovation Mobile * 763 716 12% 8% 613 529 2G Capacity 379 231 Fixed 834 1H09 Fixed Line Capex breakdown 689 337 298 2007 2008 Others
Slide 14: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 13
Slide 15: TEO Group: Consolidated Results /1
TEO Group: Consolidated Results /1 Argentine GAAP, Millions of ARS, Percentage YoY Variation Revenues OPBDA * 10.608 +17% 3.330 9.074 3.052 +9% 8.559 5.754 +9% 1.841 +14% 1.687 7.033 5.051 Non Regulated 4.743 2Q 808 +14% 924 78% 81% 4.046 80% 82% 917 Regulated 1Q 879 +4% 2.041 2.049 22% 19% 1.005 20
Slide 16: TEO Group: Consolidated Results /2
TEO Group: Consolidated Results /2 YoY Variation Argentine GAAP, Millions of ARS, Percentage Operating Profit Net Income Amortizations Foreign rate exchanges (In million ARS) 1H08 1H09 Var. Dec-07 Jun-08 Dec-08 Jun-09 Total amortizations (638) (530) 108 ARS / U$S $ 3,15 $ 3,03 $ 3,45 $ 3,80 -TDMA te
Slide 17: TEO Group: Operating FCF and Net Debt
TEO Group: Operating FCF and Net Debt Year to Date: Argentine GAAP, Millions of ARS 1.545 Telecom Argentina made principal prepayment in an amount equivalent to U$S 29.5 million. Debt buybacks: - Telecom Argentina: € 6.97 million. 726 1.213 3.484 - Telecom Personal: U$S 8.77 million. Next principal
Slide 18: Fixed Line: Telecom Argentina Unconsolidated P&L
Fixed Line: Telecom Argentina Unconsolidated P&L Argentine GAAP, Million of ARS, Percentage 1H09 1H08 $ Var. % Var. Net Revenues 2.313 2.035 278 14% Operating Costs (1.778) (1.597) (181) 11% OPBDA * 857 828 29 4% Margin 37% 41% Depreciation & Amortization 322 390 (68) -17% Operating Profit 535 438 9
Slide 19: Mobile: Personal Unconsolidated P&L
Mobile: Personal Unconsolidated P&L Argentine GAAP, Million of ARS, Percentage 1Q09 2Q09 ∆% 1H09 1H08 $ Var. % Var. Service Revenues 1.605 1.648 -3% Net Revenues 3.592 3.089 503 16% Pre SAC & SRC OPBDA 707 723 -2% Operating Costs (2.843) (2.488) (355) 14% Margin 44% 44% OPBDA 916 788 128 16% SAC & S
Slide 20: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 19