Empresa Nacional De Telecomunicaciones S.a. · BCS:ENTEL
Empresa Nacional De Telecomunicaciones — Entel — Investor Day (November 2015)
66 slides from Empresa Nacional De Telecomunicaciones's investor day presentation, Nov 17, 2015
Slide 1: II Entel's Investor Day
II Entel´s Investor Day Lima – Peru November 17th, 2015
Slide 2: Agenda
08:00 – 08:30 Registration 08:35 – 08:40 Welcome Address Carmen Luz de la Cerda, IRO of ENTEL Group 08:45 – 09:25 Peruvian Market Overview Agenda_ Hernán Chaparro, CEO of GfK Peru 09:30 – 09:45 Introduction Felipe Ureta , CFO of ENTEL Group 09:45 – 10:30 Strategic vision for ENTEL Group Antonio Büch
Slide 3: El nuevo consumidor peruano
EL NUEVO CONSUMIDOR PERUANO Presentación Entel – Investor Day 2015 Preparado por: GfK – Noviembre 2015 © GfK 2013 | Shopper en Provincias 3
Slide 4: ¿…y qué más está cambiando?
¿Qué está cambiando? ¿…y qué más está cambiando? ¿Cómo está cambiando el mundo TELCO? © GfK 2013 | Shopper en Provincias 4
Slide 5: Introduction
Introduction Felipe Ureta CFO Entel November, 2015
Slide 6: Chile (incl. Americatel): Delivering solid performance in a challenging year
Chile (incl. Americatel): Delivering solid performance_ in a challenging year… 3% 1,157 REVENUE 1,127 5% (CLP bn) 369 386 9M14 9M15 3Q14 3Q15 9% 397 EBITDA (CLP bn) 366 34% 13% 32% 117 132 32% 34% 9M14 9M15 3Q14 3Q15 Var % 6_ Entel November, 17, 2015 Source: Internal Data as of September 2015.
Slide 7: Chile: increasing cash generation
Chile (incl. Americatel : …increasing cash generation. ) 84% 214 EBITDA- CAPEX (CLP bn) 117 9M14 9M15 Growth in EBITDA coupled with lower CAPEX. 7_ Entel November, 17, 2015 Source: Internal Data as of September 2015. Var %
Slide 8: Entel Peru: Strategy fulfilled by solid execution
Entel Peru: …Strategy has been_ fulfilled by solid execution. “DO YOU KNOW ENTEL”? NETWORK DEPLOYMENT (IN POP) 2,342 2,085 1,892 100% 1,713 “knowledge” 84% 1,264 954 962 805 16% 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Strong Brand Awareness. 3x POP growth since December 2013. 8_ Entel November, 17,
Slide 9: Entel Peru: strong growth in customer base and revenue
Entel Peru: …strong growth in customer base and revenue. CLIENT BASE QUARTERLY REVENUE (`000) (USD mm) 96,669 2,543 83,433 78,067 2,000 67,755 1,960 60,037 1,738 58,046 1,453 1,480 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Client base Total Revenue 805 thousand net adds during 2015
Slide 10: Entel Group: Investing in Entel Peru hit short term profits
Entel Group: Investing in Entel Peru hit short term profits. -11% 311 EBITDA 277 (CLP bn) 25% -6% 21% 93 87 23% 19% 9M14 9M15 3Q14 3Q15 64 NET INCOME (CLP bn) 11 4 -5 9M14 9M15 3Q14 3Q15 10_ Entel November, 17, 2015 Source: Internal Data as of September 2015. Var %
Slide 11: Entel is committed to a sound financing structure
Entel is committed to a sound financing structure. NET FINANCIAL DEBT / EBITDA 3.51 3.52 3.01 2.62 2.28 Fitch: BBB+ neg. out. 1.97 S&P: BBB, neg. out. 1.87 1.72 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Financing Policy: “La empresa, velará por mantener índices de endeudamiento y de cobertura de gasto
Slide 12: The Company has a healthy liquidity profile
The Company has a healthy liquidity profile. MATURITIES (US$) 2013 US Bond 2014 US Bond 400 400 2014 CL Bond Bank Loan 333 333 333 Others 254 150 150 15 2 3 2 Cash as of 3Q15 was CH$ 205 billion. No relevant maturities until 2019. 12_ Entel November, 17, 2015 Source: Internal Data as of September 20
Slide 13: Strategic vision for ENTEL Group
Strategic vision for ENTEL Group Antonio Büchi CEO Entel November, 2015
Slide 14: Contents
Con_tenTs > 1_Entel Snapshot > 2_Chilean Industry > 3_Our Strategy
Slide 15: 1 Entel Snapshot
1_ Entel SnapshOt
Slide 16: Entel Snapshot: September 2015
Entel “Snapshot”_ September 2015 Shareholders Structure Financial Figures 9M15 Market Capitalization Revenue: CLP 1,319 bn USD 2.2 bn EBITDA: CLP 277 bn (21%) AMP, CC and IT Services Others 3.1% 1.7% 34.8% Fixed Altel Inversiones Ltda (1) 54.8% Pension Funds 15.6% Others 10.4% Corporate Governance P
Slide 17: Entel Snapshot: Subscribers and revenue
Entel “Snapshot”_ September 2015 Subscribers: 9M15 Total Revenue: Mobile: 12.3 million Fixed: 383k RGUs CLP 1,319 bn Source: Internal Data as of September 2015. 17_ Entel November, 17, 2015 * RGUs excludes Corporate. SME RGUs include Acceses and Service Codes: Local Voice, Trunk IP, “Pack Negocio”,
Slide 18: Entel Snapshot: Spectrum and infrastructure
Entel “Snapshot”_ September 2015 Strong Spectrum Holdings Infrastructure Chile: 150.0 MHz Chile: 5,783 POPs Peru: 156.5 MHz Peru: 2,342 POPs 2012 2015 2012 2015 Chile(1) +23% 5,783 4,690 +3x 2,342 2012 2015 805 80.0 MHz 150.0 MHz Chile Peru Installed Base Inbuilding coverage as of Oct’15: Peru(2) Ch
Slide 19: Entel Snapshot: Brand and service positioning
Entel “Snapshot”_ September 2015 Similar Positioning of Brand and Entel Service in Chile and Peru Brand Preference & Top of Mind Service Satisfaction (NPS%) Brand Preference Chile as of Sep’15(2): Chile Postpaid Satisfaction Jul-Sep’15(1): 42 59 27 26 22 3 2 Entel Company A Company B Company C Entel
Slide 20: Entel Snapshot: Sustainability
Entel “Snapshot”_ September 2015 Providers_ Contributors_ Enseña Chile Infrastructure providers training Volunteering Providers sustainability “Tengo una idea” Sustainability Environment_ Society_ “Conectando Chile” “Barrio Feliz” (730 isolated localities) Handsets recycling “Yo Leo E-waste manageme
Slide 21: Entel Snapshot: Awards
Entel “Snapshot”_ September 2015 Awards Chile Peru For its third consecutive year in the Latin America Telecommunications category First place in Mobile Telephony for the For its fourth consecutive year in the thirteenth consecutive Chilean Telecommunications Industry year (May 2015) (Aug 2015) Reco
Slide 22: Entel Snapshot: Evolution of financial figures
Entel “Snapshot”_ September 2015 Evolution Entel Financial Figures (w/o Entel Perú ) 9M 15 EBITDA mantains growth due to better margins +9% 1,432 1,585 1,517 +3% Revenue 1,090 1,244 1,127 1,157 (CLP bn) +7% 469 480 +9% EBITDA and 367 416 413 366 397 EBITDA Margin (CLP bn) 33,7% 33,5% 28,8% 29,6% 31,
Slide 23: Entel Snapshot: (EBITDA-CAPEX)/Revenue
Entel “Snapshot”_ September 2015 Financials (EBITDA-CAPEX)/Revenue Chile 9M15: 18,5% Evolution of (EBITDA-CAPEX)/Revenue: 18.5% 11.2% 7.4% 8.8% 2012 2013 2014 9M15 (EBITDA-CAPEX)/Revenue 9M15: 630bps 18,5% 10,4% 190bps (EBITDA- EBITDA CAPEX (EBITDA- CAPEX)/Revenue 9M14 CAPEX)/Revenue 9M15 23_ Entel
Slide 24: Contents
Conte_ Con_tenTs nidos > 1_Entel Snapshot Entel Snapshot > 2_Chilean Industry Industria Chile_ > 3_Our Strategy Nuestra Estrategia 24_ Entel Noviembre, 17, 2015
Slide 25: 2 Chilean Industry
2_ ChileAn Industry
Slide 26: Chile: Trends
Chile_ Mobile Data represents greater share of the Total Market Others Trends_ OPERATORS REVENUE DISTRIBUTION GTD VTR 11% 2% 13% Entel 29% Strong competitive dynamics: TELECOM+IT Total Revenue: Entry of new competitors 9M15(1) CLP $3,813 (bn) (%) Claro Portability: 15% 4.2 mm ported since implementa
Slide 27: Chile: A more mature and competitive mobile industry
Chile_ A more mature and competitive mobile industry TOTAL MOBILE 5.6% 7.3% 2.4% Industry growing at REVENUES 1,935 2,043 2,192 1,639 1,679 slower pace EXLUDING MTR AND DEVICES(1) (mm, %) 2012 2013 2014 9M14 9M15 6.9% 4.9% 5.4% Postpaid 6,520 6,841 6,761 7,129 Prepaid affected by 6,100 economy, regu
Slide 28: Chile: More mature and competitive industry
Chile_ More mature and competitive industry 2.9% 3,812 17 4 -1.9% 5.7% 48 TOTAL INDUSTRY 29 10.3% REVENUE(1) (CLP bn, %) 3,705 39 8.2% 18 13 10 -4.6% 2.4% -11.3% 4.7% 9M14 Fixed Mobile TR Mobile Mobile Broadband Pay TV Business IT 9M15 Telephony Devices Telephony Fixed Data excl. MTR and Mobile Devi
Slide 29: Contents
Con_tenTs > 1_Entel Snapshot > 2_Chilean Industry > 3_Our Strategy
Slide 30: 3 Our Strategy
3_ Our StratEgy
Slide 31: Grupo Entel: Strategic Objectives
Grupo Entel_ Strategic Objectives Maintenance of Revenue Share Data Conversion Protection - Upside Revenue Growth Entel Perú - Fixed SME - “Hogar” – IT SME and Corp. in Chile Enhancement of Margins in a Mature Market Digital Transformation of our Business Platforms New HR Model and deepening the inn
Slide 32: Growth: Fibre Optic for small and median enterprises
Growth_ Fibre Optic for small and median enterprises 2015: 50% growth generated by the fixed segment in SME +29,7% 83 FIXED 56,1% HORIZONTALS ~12% of BPs(2) used 64 AND VERTICALS BUSINESS PASSED(2) 41 (¨000) High Mobile Market Share (~50%(1)): Crosselling opportunities for fixed services to mobile c
Slide 33: Growth: Wireless solution for the residential customer
Growth_ Wireless solution for the residential customer Growth by Up Selling, Cross selling and development of rural areas: 1,14 Market of C3D homes: 3.5 mlo, of 5.8% RGU/Sub 7.9% which 1.3 mlo have type of services 11.7% 9.4% 326 345 ENTEL feasible for today wireless offer. 302 “HOGAR” 276 RGUs On t
Slide 34: Growth: IT Services in SME and Corporate Segment
Growth_ IT Services in SME and Corporate Segment Industrial Internet Road Planning Leading Supplier Smart Meters Transport Infrastructure Last Generation Infrastructure Alliances with Cloud Providers: 34_ Entel November, 17, 2015 (1): Internal Data as of September 2015.
Slide 35: Transforming the offering, protecting the base
Transforming the offering_ Protecting the base Voice reception Voice and messaging (as data) Voice TRANSFORMATION emission TO DATA Messaging 3G 4G Decrease in MTRs IP Voice Cannibalization Data Data IP Messages Cannibalization ENTEL DATA 84% 88% PLANS(1) 73% 74% Entel Postpaid Smartphone Penetration
Slide 36: Efficiency: Enhancement of margins in a mature market
Efficiency_ Enhancement of margins in a mature market 15.6% 4.1% 3.9% 13.7% 3.7% 3.7% 3.7% 3.6% 3.6% 13.1% 12.1% 11.4% 11.0% 11.3% HANDSET MOBILE AND MARGIN/ FIXED MOBILE O&M/MOBILE & REVENUE(1) (%) FIXED REVENUE(1) (%) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 36_ Entel
Slide 37: Investment in spectrum and infrastructure
Investment in spectrum and infrastructure_ Deployment of the band has started 700_MHz in Chile. Public bid 700 MHz: Entel was awarded the B Block Technical Projects: Total National 660 B Block: Obligations: Locations: 549 Routes: 6 (373 km) 30_MHz EEMS(1): 212 37_ Entel November, 17, 2015 (1): : EEM
Slide 38: The future: a blurred frontier between digital and physical worlds
The future: a blurred frontier between the digital and physical worlds Global trends: Urbanization, environmentalism, population aging, increasing growth of middle class, etc. Consumer trends: Social economy, technology adoption, increasing use of data and mobile, from local to global consumer, etc.
Slide 39: Digitalization & client oriented
Digitatization & client oriented Tde: Deploying a Business Support System (BSS) for our B2C and B2B units in both Chile and Peru. A comprehensive analysis supported by an experienced team to define the best strategy, partner and team. Main objectives: Transforming in “full digital” as many business
Slide 40: Digitalization & client oriented: experience and innovation
Digitatization & client oriented … but tde is one from a set of iniciatives experiencE A lean, agile and interactive approach to meet or exceed customer expectations. innovation Improve current processes and End to end (Journey) approach services. Create new products and to improve from client servi
Slide 41: Mobile Peru Operations
Mobile Peru Operations Sebastián Domínguez CEO Entel Perú November, 2015
Slide 42: Contents
Con_tenTs > 1_Telecom market & opportunities in Peru > 2_Strategic pillars progress
Slide 43: 1 Telecom market & opportunities in Peru
1_ Telecom market & opportunities in Peru
Slide 44: Peruvian Telecom Market
Peruvian Telecom Market_ Penetration Xx% REVENUE BY SERVICE SUBSCRIBERS BY SERVICE (S/. bn) (millions) I. Mobile Services(1) 5,9% 107 102 5,7% 31,3 33,2 14,7 15,6 Paid TV1 0,8 5% 17% Fixed Internet1 2,5 II. Fixed Voice(2) Fixed Voice1 2,2 15% 1,2% 6,0% 59% 59% 3,6 3,7 Mobile2 9,2 63% 2014 2015E III.
Slide 45: Peruvian Mobile Market
Peruvian Mobile Market_ SME Postpaid Prepaid Consumer Postpaid 2.3% -4.6% 19.4% REVENUE 1.8 1.9 4.1 (S/. bn) 3.6 3.5 3.4 Final Base (`000) FINAL 4.9% 3.3% 14.7% BASE 3.5 21.2 21.9 7.7 (`000) 3.4 6.8 2014 2015E 2014R 2015 2014 2015E 45_ Entel November, 17, 2015 (1) Sources: OVUM, Reports by operators
Slide 46: High concentration index in the Peruvian Mobile Market
High concentration index in the Peruvian Mobile Market_ MOBILE CONCENTRATION INDEX PERU MOBILE MARKET SHARE (%) (%, 2Q 2015) 55% 51% 6% Movistar 50% Others LATAM 2% Claro 44% Entel 45% 43% 39% 53% Bitel 40% 35% 35% 31% HHI (%) 30% 25% 25% 20% 15% 10% 5% 0% UK Brazil US Germany Ukraine Turkey Algeria
Slide 47: High concentration index in the Peruvian Mobile Market: third operator
High concentration index in the Peruvian Mobile Market_ REVENUE SHARE OF THE 3RD OPERATOR PERU MOBILE MARKET SHARE (%) (%, 2Q 2015) 6% Movistar 2% Claro Entel 35% 39% 53% Bitel 35% 30% 25% 19% 19% GLOBAL Ø 22% 20% LATAM 13% Ø 17% 15% 8% 10% 7% 5% 0% Germany UK Belgium Turkey Brazil US Ukraine Taiwan
Slide 48: Mobile Market in evolution
Mobile Market_in evolution Mobile industry transformation, from voice to data PERUVIAN MOBILE PENETRATION SMARTPHONE PENETRATION (%, 2Q 2015) (%, 2014) Fixed Voice 100 Norway 70% Denmark 64% Chile 37% 50 Brazil 34% Mobile Internet Peru 24% Colombia 21% 1990 1995 2000 2005 2010 2015 48_ Entel Novembe
Slide 49: Contents
Con_tenTs > 1_Telecom market & opportunities in Peru > 2_Strategic pillars progress
Slide 50: 2 Strategic pillars progress
2_ Strategic pillars progress
Slide 51: Strategic Pillars
Strategic Pillars_ Sustainable Growth Territorial deployment Consolidation of the (Point of sales and distinctive experience network) Brand development and Growth enablers offers 51_ Entel November, 17, 2015
Slide 52: Strategic Pillars
Strategic Pillars_ Sustainable Growth Territorial deployment Consolidation of the (Point of sales and distinctive experience network) Brand development and Growth enablers offers 52_ Entel November, 17, 2015
Slide 53: Consumers Market: Post-paid clients satisfaction
Consumers Market – Post-paid clients satisfaction (48% of total revenue)_ GENERAL SATISFACTION RECOMENDATION (% NET, ONLY CELLPHONES) (% NET, ONLY CELLPHONES) Entel 70% 73% 56% 61% Consolidation of the customer-centric culture. (Indicators, incentives, 39% 36% 29% 31% processes, continued improvemen
Slide 54: Strategic Pillars
Strategic pillars_ Sustainable Growth Territorial deployment Consolidation of the (Point of sales and distinctive experience network) Brand development and Growth enablers offers 54_ Entel November, 17, 2015
Slide 55: Solid Network Deployment 2G, 3G & 4G
Solid Network Deployment 2G, 3G & 4G_ MOBILE NETWORK POINTS OF PRESENCE (#) +185.6% Average: 3 new 2,342 sites per day 1,582 820 714 559 628 497 2009 2010 2011 2012 2013 2014 sep-15 Upgrade of 100% of the existing network, without afecting quality. The best 4G coverage network in Peru. Skyrocket gro
Slide 56: Increasing capillarity of POS & Customer Care
Increasing capillarity of POS & Customer Care_ Significant capillarity growth and strengthening of the sales and customer care teams. POINTS OF CARE AND SALES (#) 814 575 3,400 Prepaid POS 356 110,000 Refill Points 119 282 aug-13 aug-14 aug-15 Gross Sales (`000) 56_ Entel November, 17, 2015
Slide 57: Strategic Pillars
Strategic Pillars_ Sustainable Growth Territorial deployment Consolidation of the (Point of sales and distinctive experience network) Brand development and Growth enablers offers 57_ Entel November, 17, 2015
Slide 58: Commercial Offering Deepening
Commercial Offering Addressing all the segments, focusing on Deepening_ structures hard to be imitated by the incumbents. The best 4G network Unlimited all destinations Unlimited WhatsApp October February April May July August September iPhone for 9 soles Many more minutes Entel Chip Plans 58_ Entel
Slide 59: Tactical Actions – Brand Development: ANDA Award
Tactical Actions – Brand Development_ ANDA Award for excelence With 13 years in Peru, Premio ANDA is a distinction awarded by the National Advertisers Asociation (ANDA: Asociación Nacional de Anunciantes). The two categories with more competition are the Integrated Communication – Products and Integ
Slide 60: Tactical Actions – Brand Development: Effie Award
Tactical Actions – Brand Development_ Effie Award: Known since 1968 with presence in 42 countries. Recognize communication and marketing strategies that contribute to the brand success, taking into account communication efficiency. Entel won Effies in: Non-financial services: Silver Launching of new
Slide 61: Brand Development Business Creativity Award
Brand Development Business Creativity Award_ It is an award created 20 years ago by Universidad Peruana de Ciencias Aplicadas and Laureate International to motivate peruvian businesses to develop innovative, creative and disruptive value propositions. Entel won the 1st place in the most important ca
Slide 62: Strategic Pillars
Strategic Pillars_ Sustainable Growth Territorial deployment Consolidation of the (Point of sales and distinctive experience network) Brand development and Growth enablers offers 62_ Entel November, 17, 2015
Slide 63: Pro-competitive Regulation
Pro-competitive Regulation_ Portability in 1 day Obligation to sell unlocked handsets Automatic approval of infrastructure deployment Assymetric and immediate mobile termination rates 63_ Entel November, 17, 2015
Slide 64: New Mobile Termination Rates
New Mobile Termination Rates (US$ cents per minute)_ MTR reduction x% 13,00 12,00 -63% 4,76 -46% Historical 3,25 New MTRs 1,76 1,76 2009 2014 2008 2010 2011 2012 2013 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12,10 -31% Fundamental change in the competitive structure, reducing
Slide 65: Results of the Great Place To Work survey
Results of the Great Place To Work survey_ Highly committed and motivated team at Entel Perú. 83 87 76 “All things considered , I'd say this is a great place to work” (% agree and fully agree) 2012 2013 2014 2015 65_ Entel November, 17, 2015
Slide 66: Thank You
aie a i S[ASEMALNUNAAN EN ad Ahi ¢ Te | dues wee