Telecom Egypt · EGX:ETEL
Telecom Egypt — Investor Presentation (2022)
41 slides from Telecom Egypt's investor presentation, 2022
Slide 1: 1
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Slide 2: Contents
Contents Company snapshot Macro overview Redefining our strategy — Our growth potential Financial highlights (2019-2021) 9M 2022 highlights
Slide 3: Disclaimer
Disclaimer This document has been prepared by Telecom Egypt (the “Company” or “TE”) solely for the use at the analyst/investor presentation, held in connection with the Company. The information contained in this document has not been independently verified. This document contains statements related
Slide 4: Shareholder structure
• • • • • SA 2.4% Europe ROW Government; 9.9% 2.5% Free float; Egypt 80% 20% GCC 39.1% Retail, 4% Institutional, 16% 17.2% USA 28.9%
Slide 5: Macro overview
Macro overview
Slide 6: Egypt demographics and macro indicators
104.0 102.8 2% 5% 9-0 8% 101.4 25% 19-10 99.8 29-20 10% 39-30 98.2 49-40 14% 59-50 19% 69-60 17% +70 Q3 2022 12.0% Illiterate 12% 9.6% 8.9% 3% 26% 7.5% Literate 7.3% ↓ Primary Secondary 29% 11% High school University degree 2016/17 2017/18 2018/19 2019/20 2020/21 19%
Slide 7: Macroeconomic indicators
6.6 5.5 5.0 17.9 18.0 17.6 18.6 19.2 4.4 17.1 16.6 16.2 15.8 16.0 16.0 15.8 15.8 15.7 15.8 15.8 16.2 3.5 3.3 18.0% 17.3% 16.3% 14.8% 14.6% 13.8% 13.8% 12.8% 11.8% 9.8% 9.3% 9.8% 8.9% 10.1% 8.8% 8.6% 8.3% 6.4% 6.0% 4.8% 2.6% 3.3% 3.8% 3.7% 3.8% 2.4% 1.9% 1.0%
Slide 8: Redefining our strategy
Redefining our strategy
Slide 9: Our leadership team
Our leadership team High caliber from the mobile & fixed industries with local & int'l experience dip Adel Hamed Mohamed Shamroukh Mohamed Abo-Taleb Seif Allah Mounib Managing Director & Senior Vice President Vice President Vice President Chief Executive Officer Chief Financial Officer Chief Commerc
Slide 10: Heading towards
Heading towards A telco demonstrating its ability to seize new opportunities The leading The premium Digital WE ICT provider digital hub wie Offering our customers best Expanding from an Embracing digital value, data-centric established international transformation internally to propositions route t
Slide 11: WE digital strategy & objectives
Apps & solutions Cloud platforms Complete digital Digital market inclusion World-class data center facilities disruption Internal digital transformation Network connectivity Digital team & governance WE digital strategy & Submarine cables & fiber connectivity objectives
Slide 12: Our growth potential
Our growth potential
Slide 13: Home & Consumer revenue
• • • • • • 22,833 19,818 • 16,793 11,280 FY 2018 FY 2021 9M 2021 9M 2022
Slide 14: Data traffic growth
70% 60% 50% 40% 30% 20% 10% 0% -10% Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YoY MoM Fixed data traffic Mobile data traffic
Slide 15: Widening our retail portfolio
Widening our retail portfolio Moving beyond traditional telecom services 4G mobile Prepaid Best value license mobile launch recharge acquisition platform Sep 2016 Feb 2018 ‘Level Up’ Fully convergent ("PBB revop) + PlayStation product postpaid mobile packages Indigo Plus’ launch Aug 2018 a ~~~ "WE S
Slide 16: WE SPACE
WE SPACE new shift in our fixed broadband offering Comparison of the entry level bundle A New Era of Intemet Speeds and Prices in Egypt, a= a suPER MEGA yLTRA ag Launch date April 2018 July 2019 fr Speed UPt©5 Mbps EEE §=— ‘30 Mbps ip . S4 Price EG? 110 > EGP 120 ill Quote 100 GB — 140 GB 16
Slide 17: Fixed line and broadband subscribers and ARPU
TE Fixed line Others 10,711 10,011 Broadband 8,812 8,610 7,296 8,027 43.3% 44.3% 6,535 39.3% 6,947 35.1% 5,807 32.4% 5,237 39.3% 41.6% 35.1% 29.5% 26.9% 1,866 1,983 2,101 1,297 1,489 FY 2018 FY 2019 FY 2020 FY 2021 9M 2022 FY 2018 FY 2019 FY 2020 FY 2021 9M 2022 10, 000 Subscribers ( in 000's ) Subs
Slide 18: Enterprise revenue by service
30,800 31,293 31,872 27,715 17,567 FY 2018 FY 2019 FY 2020 FY 2021 9m 2022 Managed Services Broadband 1,461 Other 1,394 25% Data 1,172 1,059 Voice 28% 1,188 787 27% 987 826 981 15,167 1,214 16,628 716 13,435 14,829 11,708 11,140 1,073 12,880 12,199 8,448 9,429 6,370 7,085 3,121 3,640 4,446 5,017 3,7
Slide 19: Mobile market subscribers
Mobile market subscribers (In 000s) Voice penetration Data penetration 102% 110% 100% 101% 105% 11,870 3,861 5,129 7,342 9,365 27,500 27,800 29,700 26,400 26,450 64% 69% 56% 28,211 29,475 28,098 27,501 26,858 39% 43% 39,647 40,028 41,183 43,753 44,583 FY 2018 FY 2019 FY 2020 FY 2021 9M 2022 FY 2018
Slide 20: Domestic wholesale revenue
• • • • • • • • 14,255 11,491 12,456 9,585 FY 2018 FY 2021 9M 2021 9M 2022
Slide 21: Cable timeline
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2028 2029 2031
Slide 22: FEA (FLAG Europe Asia) and cable systems
FEA (FLAG Europe Asia) ALETAR/BERYTAR SEA-ME-WE-3 SEA-ME-WE-4 FALCON/HAWK SEACOM TATA-TGN Eurasia TE North IMEWE GBI EIG MENA SEA-ME-WE-5 AAE-1 PEACE Equiano 2Africa Africa-1 IEXx o Medusa EMIC-1 SMW-6 Trans-border cables with Jordan, Sudan & Libya StHelena 22
Slide 23: International revenue by service
Cable Projects Ancillary Services (O&M) Capacity Sales International Customer Support International Direct Dialing (IDD) Transit 952 933 1,214 588 802 976 704 446 919 3,623 3,063 392 3,595 3,649 2,337 2,316 913 463 908 2,384 458 2,335 2,035 660 1,569 801 788 746 1,181 750 1,126 386 910 358 207 294 F
Slide 24: Mobile customers, ARPU and EBITDA
Customers Service revenue Blended ARPU EBITDA % 44,583 30,934 35,0 00 390 % 45,0 00 90. 00 26,534 26,777 85. 00 340 % 30,0 00 44,5 00 24,463 43,753 43,792 22,702 80. 00 21,538 290 % 25,0 00 44,0 00 75. 00 240 % 43,5 00 64.92 20,0 00 43,010 70. 00 42,816 61.27 190 % 65. 00 57.02 15,0 00 57.47 43,0 00
Slide 25: Segment revenue and profitability
5,064 4,045 * 1,200 427 619 FY 2018 FY 2019 FY2020 FY2021 FY2022 3,343 2,201 2,315 2,027 FY 2018 FY 2021 9M 2021 9M 2022
Slide 26: Financial highlights (2019-2021)
Financial highlights (2019-2021)
Slide 27: Revenue and EBITDA trends
37,088 14,193 32,274 13,339 31,912 11,126 25,805 26,379 10,312 5,834 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 8,386 8,273 8,417 6,385 5,897 6,098 6,170 4,850 4,399 2,549 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022
Slide 28: Revenue by segment
18,133 4,699 4,535 4,335 15,871 5,847 4,165 14,380 4,383 4,396 4,244 3,809 3,933 3,947 13,347 4,670 4,658 3,446 3,463 4,155 4,232 2,984 10,474 3,134 2,219 2019 2020 2021 9M 20219M 2022 2019 2020 2021 9M 20219M 2022 2019 2020 2021 9M 20219M 2022 2019 2020 2021 9M 20219M 2022 2019 2020 2021 9M 20219M
Slide 29: Income statement summary
Growth YoY In EGP mn 2019 2020 2021 2020 2021 Revenue 25,805 31,912 37,088 24% 16% • Home & Consumer 10,474 14,380 18,133 37% 26% Enterprise 3,809 3,933 4,699 3% 19% • Domestic Wholesale 4,155 4,670 5,847 12% 25% International Carriers 4,383 4,396 4,244 0% -3% International Customers & Networks 2,98
Slide 30: Cash, debt and leverage
Short term Long term 3,278 Cash Total debt 550 4,786 12,797 998 1,459 2,003 2,983 2,350 10,988 17,009 13,304 -13,854 11,666 -16,452 -16,321 -20,287 -20,265 7,469 5,333 Net debt 12,855 14,993 18,284 13,338 17,916 FY 2018 FY 2019 FY 2020 FY 2021 9M 2022 FY 2018 FY 2019 FY 2020 FY 2021 9M 2022 6,029 6,
Slide 31: Capex breakdown
Access Network Capex Capex/sales 12,720 14,0 00 11,898 12,0 00 Transmission 10,090 150% 10,0 00 8,499 8,00 0 International cable 100% 6,00 0 5,249 FY 2021 49% 37% 37% Customer care 50% 4,00 0 27% 2,00 0 16% - -1% Others FY 2018 FY 2019 FY 2020 FY 2021 9M 2022 Capex License Capex/sales 3,059 12,0 00
Slide 32: Free cash flow and dividends
FCFF Dividends from Vodafone 6,953 6,029 5,064 4,045 4,045 427 349 1,172 619 16,015 (1,583) (1,965) 5,199 12,235 1,704 9,770 (5,083) 1,258 8,297 3,496 2,991 FY 2018 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 FY 2018 FY 2019 FY 2020 FY 2021 9M 2021 9M 2022 FCFF / EBITDA FCFF (excl.VFE dividend) / EBITDA
Slide 33: EPS and DPS
Consolidated Consolidated Standalone Standalone 4.34 4.93 4.07 3.66 3.18 2.79 2.84 2.31 2.58 2.10 1.79 1.93 1.50 1.38 1.27 0.73 0.87 0.27 0.36 (0.11) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Consolidated 4.0 0 EPS 3.5 0 DPS 3.66 Standalone 3.0 0 236% 2.5 0 2.79
Slide 34: 9M 2022 highlights
9M 2022 highlights
Slide 35: 9M 2022 results highlights
9M 2022 results highlights Results reflect operational resilience Revenue Customers (EGP bn) (mn) Voice Data 32.3bn Fixed 11.4 8.6 22% Nov movie 11.9 +54% YoY EBITDA Net profit (EGP bn) (EGP bn) 13.3bn 6.2b6n 29% YoY 1% YoY *Adjusted 25% YoY EBITDA margin of 41%, +224 bps YoY Net profit margin of 19
Slide 36: Total revenues bridge
Total revenues 9M 2022 YoY 2,524 Infrastructure & Transmission +402 Outgoing Int'l Calls +24 Transit +376 Incoming Int'l Calls (47) Cable Projects +1,741 Ancillary (O&M) +34 Capacity +316 Int'l Customer ! Support 9M 21 Total Revenues Home & Consumer Enterprise Solutions (ES) Note: All financial figu
Slide 37: 9M 2022 income statement
In EGP mn • Revenue Home Enterprise Domestic ICA • IC&N Employee cost • Call costs CoGS* • S&D* G&A* • EBITDA Margin Other (expense) / income • Depreciation Amortization (Pro)\ Reversal of ECL provision • Operating profit Margin Income from investments • Net finance (cost) / income Net interest (exp
Slide 38: Results versus analyst consensus
Revenue EBITDA EBITDA margin Net profit In EGP million Analyst 1 11,150 4,556 40.9% 2,126 Analyst 2 10,240 3,983 38.9% 2,063 Analyst 3 10,408 3,584 34.4% 1,809 Analyst 4 11,118 4,364 39.3% 2,230 Analyst 5 11,264 4,424 39.3% 2,667 Analyst 6 11,041 4,497 40.7% 2,134 Average of estimates 10,870 4,235 3
Slide 39: Guidance and regional peers
Telecom Egypt Regional Peers’ TE Guidance Average 2022 Consensus 2022 2022 Revenue Growth 13.83% 4.5% Early double-digit EBITDA Margin 36.3% 41.3% Mid-to-high 30s ROE 16.9% 12.6% FCF Yield -0.93% 21.6% Early double-digit P/E 4.69x 19.6x EV/EBITDA 3.62x 6.1x
Slide 40: Our performance in context
Our performance in context 9M 2022 FY 2022 FY 2023 actual guidance budget Early double Early double Revenue growth YoY digit digit Mid-to-high 30s Mid-to-high 30s EBITDA margin (%) In-service: In-service: Early Mid- 20s 20s Capex/sales (%) Early double FCF/EBITDA (%) en igi Mid-20s *FCFF calculation
Slide 41: Thank You
Thank You Investor relations team Check our website investor.relations@te.eg ir.te.eg