Ooredoo Q.p.s.c · QSE:ORDS
Ooredoo Q.p.s.c — Ooredoo — Investor Day (December 2023)
33 slides from Ooredoo Q.p.s.c's investor day presentation, Dec 6, 2023
Slide 1: Business Overview & Strategy
BUSINESS OVERVIEW & STRATEGY | |
Slide 2: Agenda
AGENDA 1 GROUP STRATEGY 2 INDUSTRY TRENDS & OPPORTUNITIES 3 STRATEGY DELIVERY 4 OOREDOO AS AN INVESTMENT | | 2
Slide 3: Ooredoo Group Overview
OOREDOO GROUP OVERVIEW WE ARE A KEY TELCO PLAYER IN MENA WITH A PORTFOLIO EXPOSED TO MARKETS WITH GROWING GDP per CAPITA & POPULATION GROWTH FOOTPRINT WIRELESS OOREDOO TELECOM OPERATIONS POPULATION SUBSCRIBERS [Mn.] [Mn.] Ooredoo Consolidated Telecom Operations 465 Ooredoo Minorities / Affiliate Tel
Slide 4: Our Vision – Ooredoo as a Smart Telco
OUR VISION – OOREDOO AS A SMART TELCO WE STRENGTHEN ANALYTICS & API SKILLS RELATED TO A POSITION AS A SMART TELCO TO MAXIMIZE THE USE OF OUR ASSET BASE FOR OUR CONNECTIVITY BUSINESS HORIZON 3: MULTI CORE EXPANSION INTO DIGITAL ADJACENCIES HORIZON 2: SMART TELCO THROUGH OWNED STANDALONE UPGRADED TELC
Slide 5: Our Strategy - Smart Telco: 2022-2024
OUR STRATEGY - SMART TELCO: 2022-2024 WE AFFIRM OUR STRATEGY AROUND THE FIVE PILLARS WE HAVE COMMUNICATED DURING LAST YEARS CAPITAL MARKETS DAY. WE PROGRESSED SEVERAL TRANSFORMATIVE PROGRAMS FOR OOREDOO Excellence in Value Focused Portfolio Customer Experience [Reduce Asset Base With Better External
Slide 6: Agenda
AGENDA 1 GROUP STRATEGY 2 INDUSTRY TRENDS & OPPORTUNITIES 3 STRATEGY DELIVERY 4 OOREDOO AS AN INVESTMENT | | 6
Slide 7: Macro Trends Shaping Our Industry
MACRO TRENDS SHAPING OUR INDUSTRY VARIOUS TRENDS ARE UNFOLDING, PRESENTING OPPORTUNITIES BUT ALSO EXERTING PRESSURE ON OUR INDUSTRY NECESSITATING A NEED FOR CHANGE SUPPLY DEMAND TRENDS TRENDS OTT Messaging Providers About Data Generated & Transported Small Businesses Moving to Substitute A2P Revenue
Slide 8: Operating in the Telco Sector
OPERATING IN THE TELCO SECTOR. THESE TRENDS ARE IMPACTING OUR INDUSTRY THAT EXPERIENCES DECLINE IN REVENUE AND EBITDA, WITH A GROWING EMPHASIS ON PROFITABILITY AND ASSET EFFICIENCY GLOBAL INDUSTRY COMPARISON TELECOMS METRICS GLOBAL Bubble Size indicates EV in bn $US Adjacent sectors REVENUES EBITDA
Slide 9: Inflation Above Market Growth
INFLATION ABOVE MARKET GROWTH TELCOS IN OUR MARKET SO FAR DID NOT SO FAR USE PRICING POWER TO COUNTER INFLATIONARY PRESSURE ON COST STRUCTURES CPI Change Market Growth GAP Nominal -3.9pts -1.2pts -4.8pts -2.4pts -3.6pts Market Growth To CPI 5.6 5.1 3.8 3.2 1.5 0.8 0.2 -1.0 -1.0 -3.1 2019 2020 2021 2
Slide 10: Agenda
AGENDA 1 GROUP STRATEGY 2 INDUSTRY TRENDS & OPPORTUNITIES 3 STRATEGY DELIVERY 4 OOREDOO AS AN INVESTMENT | | 10
Slide 11: Our Strategy to Move to Smart Telco: 2022-2024
OUR STRATEGY TO MOVE TO SMART TELCO: 2022-2024 WE HAVE PROGRESSED OUR STRATEGIC PILLAR “VALUE FOCUSED PORTFOLIO” WITH SEVERAL STRUCTURAL MOVES Focus Areas Today Excellence in Value Focused Portfolio Customer Experience [Reduce Asset Base With Better External Use] [Protect & grow our customer asset]
Slide 12: Value Focused Portfolio – Delayering of Telco Business Model
VALUE FOCUSED PORTFOLIO-DELAYERING OF TELCO BUSINESS MODEL TELCOS ARE RESTRUCTURING TOWARD A VALUE-FOCUSED PORTFOLIO, EMPHASIZING AN ASSET-RIGHT APPROACH AND MOVING AWAY FROM OUTDATED CONCEPTS LIKE ASSET-LIGHT Components Sample Assets & Capabilities Value Chain Business Partner & Alliance Mgmt Manag
Slide 13: Value Focused Portfolio – Group Structure
VALUE FOCUSED PORTFOLIO – GROUP STRUCTURE WE ARE TRANSFORMING OOREDOO INTO A TELECOM HOLDING WITH FOUR PILLARS, EXPECTED TO CONTRIBUTE TO VALUE CRYSTALLIZATION FOR SHAREHOLDERS TELECOM DATACENTER SEACABLE TOWER FINTECH BUSINESS BUSINESS BUSINESS BUSINESS BUSINESS Typical EV 8.0 - 14.0x 4.5 – 6.0x 15
Slide 14: Portfolio Strategy – Value Focused Portfolio
PORTFOLIO STRATEGY – VALUE FOCUSED PORTFOLIO. TO BOOST ASSET RETURNS, WE FOCUS ON FOUR KEY BUILDING BLOCKS IN OOREDOO'S PORTFOLIO WE HAVE TO ALTER SUBOPTIMALLY USED ASSETS PORTFOLIO TELCO OPERATIONS TOWERS DATACENTERS ✓ ✓ ✓ HYGIENE STRATEGIC • Review operations for ability to • Carve out tower opera
Slide 15: Value Focused Portfolio – Telco Operations
VALUE FOCUSED PORTFOLIO – TELCO OPERATIONS. STRONG PERFORMANCE OF THE MERGED INDOSAT OOREDOO HUTCHISON AS #2 IN THE INDONESIAN MARKET HAS SEEN THE VALUE OF OUR STAKE SUBSTANTIALLY INCREASING MARKET CAP DEVELOPMENT INDOSAT OOREDOO HUTCHISON [Bn. USD] TELCO OPERATIONS 5.0 • Review operations for abili
Slide 16: Towers – The Largest Tower Company in MENA
TOWERS – THE LARGEST TOWER COMPANY IN MENA. WE HAVE KEPT OUR PROMISE TO CRYSTALLIZE VALUE WITH OUR TOWER TRANSACTION SIGNED THIS WEEK WITH ZAIN GROUP & TASC CORNERSTONES OF OUR TRANSACTION • We have crystallized value of our tower assets across 5 markets with more than 18 Thsd Ooredoo towers at a va
Slide 17: Datacenter – Market Opportunity MENA
Datacenters DATACENTER – MARKET OPPORTUNITY MENA. NASCENT MENA MARKET DRIVEN BY HYPERSCALER DEMAND GROWING BY A CAGR OF >20% UNTIL 2028 WHICH WILL SATISFY PENT-UP DEMAND IN THE REGION ENTERPRISE & HYPERSCALE COLOCATION DEMAND (Nitro Markets) (in MW) Hyperscaler Hyperscale demand expected to almost q
Slide 18: Datacenter – Ooredoo Assets
Datacenters DATACENTER – OOREDOO ASSETS. BULK OF OOREDOO ASSETS IN QATAR BUT WITH LARGE OPPORTUNITIES ALSO SURFACING IN OTHER MARKETS. CONNECTIVITY CAPABILITIES SUPPORT ABILITY TO EXECUTE 23 3 5 26 1.2 Active Data centers in- # of countries with IT capacity1,4 Avg. IT capacity per data centers const
Slide 19: Value Focused Portfolio – Datacenters
Datacenters VALUE FOCUSED PORTFOLIO – DATACENTERS. OOREDOO IS COMMITTED TO DEVELOP THE DATACENTER OPPORTUNITY TOGETHER WITH A STRATEGIC PARTNER AND SUBSTANTIAL JOINT INVESTMENTS OOREDOO’s DATACENTER STRATEGY OOREDOO’s MENA DATACENTER PLATFORM TARGETS [Mid-/Long-Term Targets] DATACENTERS Ooredoo Grou
Slide 20: Datacenter – Status of Carve Out & Strategic Investor
Datacenters DATACENTER – STATUS OF CARVE OUT & STRATEGIC INVESTOR. WE HAVE BIDS RECEIVED FOR OUR DATACENTER ASSETS AND INTEND TO ANNOUNCE OUR STRATEGIC PARTNER BY Q1-2024 OR EARLIER CARVE OUT PROGRESS STRATEGIC INVESTOR PROGRESS Bids Received From Multiple Parties 2023 Strategic Partners Shortlisted
Slide 21: International Connectivity – New Opportunity (I/II)
Seacable INTERNATIONAL CONNECTIVITY – NEW OPPORTUNITY (I/II) WE ARE LOOKING AT OPPORTUNITIES IN INTERNATIONAL CONNECTIVITY FOR INVESTMENTS & A FOCUSED SET-UP IN OOREDOO OOREDOO’s INTERNATIONAL CONNECTIVITY STRATEGY BANDWIDTH GROWTH IN THE REGION INTERNATIONAL Growth in our region CONNECTIVITY is hig
Slide 22: International Connectivity – New Opportunity (II/II)
Seacable INTERNATIONAL CONNECTIVITY – NEW OPPORTUNITY (II/II). A FOCUS ON INTERNATIONAL CONNECTIVITY IS COMPLEMENTARY TO OUR DATACENTER ACTIVITIES AND BENEFITS FROM SIMILAR CUSTOMER RELATIONSHIPs Relevant Hyperscalers are talking to us actively across all of these elements in combination Terrestrial
Slide 23: Our Strategy to Move to Smart Telco: 2022-2024
OUR STRATEGY TO MOVE TO SMART TELCO: 2022-2024 WE HAVE PROGRESSED OUR STRATEGIC PILLAR “VALUE FOCUSED PORTFOLIO” WITH SEVERAL STRUCTURAL MOVES Focus Areas Today Excellence in Value Focused Portfolio Customer Experience [Reduce Asset Base With Better External Use] [Protect & grow our customer asset]
Slide 24: Ooredoo's Core - Market Positions
OOREDOO‘s CORE - MARKET POSITIONS WE ARE STRONGLY POSITIONED ACROSS A BALANCED PORTFOLIO OF DIVERSE MARKETS WITH MOST OF OUR MARKETS BEING #1 or #2 Country Market Business CAPEX Intensity of Markets Position Model Mobile Fixed Wireline TOTAL CUSTOMERS Represents Revenue Size Q3-2023 YTD in QAR Wirel
Slide 25: Ooredoo's Core - Portfolio Quality
OOREDOO’s CORE - PORTFOLIO QUALITY THE PERCEPTION OF OUR PORTFOLIO APPEARS BIASED AS “HIGH RISK” DESPITE THE MAJORITY OF OUR PROFITABILITY BEING DERIVED FROM OUR OPERATIONS IN STABLE GCC COUNTRIES PORTFOLIO RISK STRUCTURAL HEALTH COMPETITIVE GROUP EBITDA COUNTRIES OF MARKET PERFORMANCE [QAR mn, Q3/2
Slide 26: Ooredoo's Core vs Peers - Organic Profitability
OOREDOO’s CORE vs PEERS - ORGANIC PROFITABILITY OOREDOO HAS A SOLID MARGIN LEVEL & TRAJECTORY COMPARED TO ITS PEERS. DESPITE HAVING A RATHER LOW MULTIPLE OOREDOO GROUP stc GROUP E& GROUP ZAIN GROUP [US$ mn] EBITDA% [US$ bn] EBITDA% [US$ mn] EBITDA% [US$ bn] EBITDA% Incl. IOH as affiliate & normalize
Slide 27: Ooredoo's Core - Operational Cash Generation Capacity
OOREDOO’s CORE - OPERATIONAL CASH GENERATION CAPACITY OUR PORTFOLIO HAS A LEADING CASH GENERATION CAPACITY. WITH OUR STRUCTURAL PORTFOLIO MOVES WE EXPECT TO GROW ROIC FURTHER TO SUSTAIN VALUE CREATION FOR SHAREHOLDERS Top60 Top60 CASH YIELD 2023E 19.8% CASH ASSET TURNS 2022A 6.6% [%, SIMPLE FCF/
Slide 28: Agenda
AGENDA 1 GROUP STRATEGY 2 INDUSTRY TRENDS & OPPORTUNITIES 3 VALUE FOCUSED PORTFOLIO - NEXT 4 OOREDOO AS AN INVESTMENT | | 28
Slide 29: Point of Departure - Share Price Evolution
POINT OF DEPARTURE - SHARE PRICE EVOLUTION [Indexed]. DESPITE A DIFFICULT EXTERNAL ENVIRONMENT, WE HAVE SEEN A SUBSTANTIAL SHARE PRICE LIFT SINCE MAY 2022 AGAINST RELEVANT INDICES OUTPERFORMING REGIONAL PEERS. SHARE PRICE DEVELOPMENT SINCE START OF TRANSFORMATION SHARE PRICE DEVELOPMENT 1 YEAR [Inde
Slide 30: TSR Outperformance
TSR OUTPERFORMANCE THE STRONG SHARE PRICE PERFORMANCE HAS MADE OOREDOO IN 2022 THE #1 PERFORMER IN TSR AMONG THE LARGEST 60 TELCOS. RECENTLY PRESSURE DUE TO PALESTINE CONFLICT Top60 Top60 Top60 TSR – 2021 10.7% TSR - 2022 -2.0% TSR – Last 12 Months 7.0% [%, 01.01.2021-31.12.2021, Dividends Rei
Slide 31: Valuation - A Pending Opportunity
VALUATION - A PENDING OPPORTUNITY OOREDOO PRESENTS A DEEP VALUE OPPORTUNITY WITH RELATIVELY LOW MULTIPLES, UNDERSCORED BY OUR ROBUST CASH GENERATION CAPABILITIES Top60 Regional Top60 EV/EBITDA 23E 7.4x 5.9x SHARE PRICE OVER SIMPLE CASH FLOW PER SHARE 8.3x [17.10.2023] [17.10.2023] PLDT 246.8 L
Slide 32: Value Focused Portfolio – Deep Value
VALUE FOCUSED PORTFOLIO – DEEP VALUE. DEEP VALUE ON MULTIPLES, CASH GENERATION CAPABILITY COMBINED WITH THE IMPACT FROM OUR STRUCTURAL MOVES – WE REPRESENT AN ATTRACTIVE INVEST OPPORTUNITY Regional SOTP – ENTERPRISE VALUE OF OOREDOO TODAY EV/EBITDA 23E 5.9x Based on 30.11.2023 – Source: Factset, O
Slide 33: Thank You
THANK YOU Upgrade your world. Upgrade your portfolio. | |