Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q3 2016 Earnings Presentation
21 slides from Telecom Argentina Sa Class B's earnings presentation, 2016
Slide 1: Telecom Argentina 3Q16 Earnings Release Conference Call Presentation
Telecom Argentina 3Q16 Earnings Release Conference Call Presentation
Slide 2: Disclaimer
Disclaimer This presentation may include statements that could constitute forward-looking statements, including, but not limited to, the Company’s and it’s management expectations for the Company’s future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity a
Slide 3: Agenda
Agenda Macro Overview Business Highlights Financials Q&A 2
Slide 4: Macro: Recovery lays still ahead, while inflation begins to reduce
Macro: Recovery lays still ahead, while inflation begins to reduce External Front International Reserves showed a decrease of U$S 0,6 Bn Central Bank Reserves during 3Q16, mainly explained by net debt payments in (Billion U$S) foreign currency and a reduction of financial institutions 31.4 minimum c
Slide 5: Macro: Recovery lays still ahead, while inflation begins to reduce
Macro: Recovery lays still ahead, while inflation begins to reduce Domestic Activity & Inflation Household consumption* Overall household consumption continues to show a * Revised official figures as of 2Q16 declining trend that can be observed from early 2016, 3.6% 3.6% explained mostly by importan
Slide 6: Agenda
Agenda Macro Overview Business Highlights Financials Q&A 5
Slide 7: Highlights
Highlights BUSINESS FINANCIALS Revenues up 36% in 9M16 Mobile - Sustained growth driven by Data & Internet Service Revenues growth of 30% in Argentina, mainly driven by: Maintaining Solid position in value segments: -Mobile Internet (+77% in 3Q16: from 74% postpaid +4% YoY representing 33% of CB in
Slide 8: Group Revenues: Accelerated pace as a result of incremental usage and price adjustments
Group Revenues: Accelerated pace as a result of incremental usage and price adjustments GROUP REVENUE MIX Broadband & Fixed Data Retail Fixed Voice 40% +42% Retail Fixed Voice 8% 9% BB and Fixed Data 16% 17% 3,333 6,484 2,379 4,563 Retail Mobile 52% 49% 9M15 9M16 9M15 9M16 7% 6% Wholesale Retail Mob
Slide 9: Fixed – Upselling strategy pushes UBB connections
Fixed – Upselling strategy pushes UBB connections Most demanded Speeds +25% Thousand of clients 248.8 259.8 272.8 217.4 231.5 6Mb subs. 36% BB +156k; +29% ARPU & Churn 1.4% 1.4% 1.4% 1.7% 1.4% 691 510 519 531 535 3Q15 4Q15 1Q16 2Q16 3Q16 Monthly Churn ARPU (P$) 3Q15 4Q15 1Q16 2Q16 3Q16 Data / ICT Re
Slide 10: Fixed – Price Adjustments resulted in ARBU increase
Fixed – Price Adjustments resulted in ARBU increase ARBU Price Adjustments 2016 P$/Month Business Segment +51% 105.1 Drivers of August 2015 93.7 ARBU February 2016 Increase September 2016 80.9 76.2 Residential Segment 69.6 May 2016 3Q15 4Q15 1Q16 2Q16 3Q16 Lines in Service Thousand of lines BB Acces
Slide 11: Mobile in Argentina: Improved customer profile through growth in value customers and data centric plans
Mobile in Argentina: Improved customer profile through growth in value customers and data centric plans Browsing SMS + Content Voice Customer Base (Mill) 19.4 19.9 40% 38% Postpaid 1 6.3 6.5 Service 25% 13.2 13.4 revenue mix 33% Prepaid 9M15 9M16 37% 27% Data Usage MBOU/month Data Centric 9M15 9M16
Slide 12: Mobile – 4G Rollout and KPIs
Mobile – 4G Rollout and KPIs COVERAGE CONSUMPTION Average Gb per user COVERAGE OF THE TOTAL CAPITAL CITIES AND AMBA COVERAGE OF POPULATION IN CAPITAL CITIES Type of clients Top Sites CUSTOMERS Evolution of 4G subs 4.3 2.5 3.0 2.0 DOWNLOAD SPEED 1.0 3Q15 4Q15 1Q16 2Q16 3Q16 OF THE TOTAL AMBA(*) 24% T
Slide 13: Capex: Network deployment to increase capacity and coverage
Capex:: Network deployment to increase capacity and coverage. Capex coverage. 4G main driver of investment Capex Evolution Million of P$ +78% +13% +70% 10,100 8,957 2,256 7,699 Total Spectrum New Sites 3,530 2,256 7,844 5,427 4,535 FY14 FY15 9M15 9M16 9M15 9M16 % Revenues (without Spectrum) 16% 19%
Slide 14: Agenda
Agenda Macro Overview Business Highlights Financials Q&A 13
Slide 15: TEO Group: Consolidated Results
TEO Group: Consolidated Results Revenues IFRS, Million of P$, Percentage EBITDA IFRS, Million of P$, Percentage +36% +33% +21% +25% 38,818 10,208 28,590 13,412 3Q16 7,664 33% 3,453 3Q16 37% 10,094 2,529 40,496 10,866 33,341 35% 12,951 2Q16 34% 3,361 2Q16 8,702 2,501 9,624 8,872 40% 12,455 1Q16 2,634
Slide 16: TEO Group: Consolidated costs and EBITDA evolution
TEO Group: Consolidated costs and EBITDA evolution EBITDA Margin 26.8% -2.2% +0.4% -0.1% +0.2% +1.2% +0.8% -0.8% 26.3% As % of Revenues 12% 5% 19% 10% 9% 9% 10% Others include bad debt expenses, provisions, VAS costs and others Figures may not sum up due to rounding 15
Slide 17: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Income IFRS, Million of P$, Percentage Net Income attributable to Telecom -7% +14% +24% -10% 5,523 2,757 4,459 2,471 1,802 3Q16 37% 801 -7% 1,311 746 3Q16 6,229 3,673 3,403 5,443 1,724 1,468 17% 2Q16 928 -14% 2Q16 800 1,680 19% 1,997 1Q16 1,028 -10% 925 1Q16
Slide 18: TEO Group: Net Income Evolution
TEO Group: Group: Net Income Evolution IFRS, Million of P$ ‘Price effect’ on Financial Results NET DEBT ‘Quantity Effect’ on Financial Results Spectrum payments (700Mhz Bands, Jun-15) Dividend payments (May- 1,586 7,157 9M15 9M16 15, May -16 and Aug-16) feb-15 feb-16 ene-15 nov-15 ene-16 jun-15 jul-
Slide 19: TEO Group: FCF, Net Financial Position
TEO Group: FCF, Net Financial Position IFRS, Million of P$ - Last 12 months Free Cash Flow Operating free Cash Flow 13,410 11,008 2,970 EBITDA Capex Δ WK & others Free Cash Flow = -2,277 DIVIDENDS On Aug-16, the second cash dividend payment to shareholders was completed for an amount of P$1,300 mill
Slide 20: Financial strength: Robust cash flow generation, strong balance sheet and solid coverage ratios
Financial strength: Robust cash flow generation, strong balance sheet and solid coverage ratios Leverage Net Debt / EBITDA Interest Coverage 13,410 2013 2014 2015 2013 2014 2015 10,866 Net Debt/ EBITDA Regional Averages 7,564 8,702 USA 1.4x 2.2x 2.3x 14.3x 10.0x 10.4x 0.5 x 0.2 x 2.8x 3.5x 4.2x 5.9x
Slide 21: Agenda
Agenda Macro Overview Business Highlights Financials Q&A 20