Slide 1: Telecom Argentina 1Q16 Earnings Release Conference Call Presentation
Telecom Argentina 1Q16 Earnings Release Conference Call Presentation
Slide 2: Disclaimer
Disclaimer This presentation is based on audited financial statements and may include statements that could constitute forward‐looking statements, g, but not limited to,, the Company’s including, p y expectations p for its future p performance,, revenues,, income,, earnings g p per share,, capital p
Slide 3: Agenda
Agenda Market Overview Business Highlights Financials Q&A 2
Slide 4: Macro: Taking first steps on normalization agenda, context remains challenging
Macro: Taking first steps on normalization agenda, context remains challenging. Central Bank Reserves FX Rate 14.58 Mean ‐ 1Q16 = 14.48 Central Bank Reserves (Billion U$S) Official FX Rate Blue FX Rate Closing of the gap Devaluation of Official FX 13.01 AR$/U$S (2014) 14.58 13.01 (BCRA) Jaan‐16 Jaan
Slide 5: Agenda
Agenda Market Overview Business Highlights Financials Q&A 4
Slide 6: Highlights
5 Highlights BUSINESS Mobile – Sustained growth driven by Data & Internet Solid position in value segments: postpaid gross adds +416k subs in 1Q16, 7% YoY Important delivery of handsets during 1Q16: quantities increase by 37% vs 1Q15, still with a positive margin. LTE device sell‐out 75% in orde
Slide 7: Group Revenues: Strong revenue outperformance in 1Q16
Group Revenues: Strong revenue outperformance in 1Q16 with a solid growth platform for the future AR$ AR$, Million GROUP REVENUE MIX Retail Mobile +26% Retail Fixed Voice +31% 8% 8% Retail Fixed Voice 5,986 4,735 BB and Fixed Data 16% 17% 975 1Q15 1Q16 745 1Q15 1Q16 Retail Mobile 48% 53% Broadband &
Slide 8: Fixed – UBB accesses continued increasing steadily in 1Q16
Fixed – UBB accesses continued increasing steadily in 1Q16 ≥10Mb subs. b BB Accesses 54% Thousand of broadband accesses, +41k, +2% +23k; +5% thousand of net adds 448 492 515 335 394 809 1,809 1,768 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 1Q16 ≥10Mb 19% 22% 25% 27% 28% % of CB BB ARPU & Churn Data / ICT Revenu
Slide 9: Fixed – ARBU sustained thru flat pricing + price adjustment
Fixed – ARBU sustained thru flat pricing + price adjustment in the business monthly fee ARBU AR$/Month Due to the Monthly Fee Tariff increases for Business +34% Clients in the months of: 80.9 76.2 August 2015 69.6 February 2016 64.4 60.5 Residential tariff will be increased during the month off Ma
Slide 10: Mobile: Further advances in data monetization
Mobile: Further advances in data monetization monetization.. LTE as a key lever on mobile data Customer Base (Mill) Transformation is accelerating 4G Customers In million 19.3 19.7 2.5 6.1 6.5 64% Postpaid 1 More than 2,0 M are DATA CENTRIC subs 0.4 36% Prepaid 13.2 13.2 1Q15 1Q16 Migrations Adds >
Slide 11: Mobile – Focus on 4G. Building the path
Mobile – Focus on 4G. Building the path. Fast transition from 3G to 4G COVERAGE CUSTOMERS 4G Penetration We are modernizing 100% our networks Personal’s 4G deployment keeps evolving AMBA 24% Cordoba 15% 402 Santa Fe 14% cities B Buenos Ai Aires 10% covered MILLION PROVINCIAL CAPITALS WITH COVERAGE
Slide 12: Capex: Accelerating Data Coverage
Capex:: Accelerating Data Coverage Capex Coverage.. Delivering our commitments C Capex EEvolution l ti Million of AR$ +13% 10,100 Technical Capex breakdown 8,957 2,256 Spectrum 3 530 3,530 >2x 7,844 46% 5,427 17% 24% 12% 864 1,902 Mobile Access Fixed Access Core & IT FY14 FY15 1Q15 1Q16 Infrastructu
Slide 13: Agenda
Agenda Market Overview Business Highlights Financials Q&A 12
Slide 14: TEO Group: Consolidated Results
TEO Group: Consolidated Results Service Rev growth in Argentina (Yoy) Handset d Results l ‐ Mobile bil iin Argentina i Handsets Revenues – Costs (in million of AR$) Before capitalization 2x 24% 24% 30% of SAC & SRC 22% 21% 1,431 900 561 282 FY14 FY15 1Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 Gross 18% 25%
Slide 15: TEO Group: Consolidated costs and EBITDA evolution
TEO Group: Consolidated costs and EBITDA evolution EBITDA 1Q15 – 1Q16 YoY IFRS, Million of AR$ Variation +760;+29% EBITDA Margin 29.7% ‐4.8% +0.0% ‐0.1% +0.1% +0.5% +1.2% +0.6% 27.3% As % of Revenues 12% 6% 17% 10% 9% 9% 10% Others include bad debt expenses, provisions, VAS costs and others Figures
Slide 16: TEO Group: Consolidated Results
15 TEO Group: Consolidated Results Operating Net Income Income IFRS, Million of AR$, Percentage attributable to Telecom IFRS, Million of AR$, Percentage +14% ‐7% +19% 6,229 3,673 3,403 ‐10% 5,443 1,680 1 997 1,997 1,028 925 FY14 FY15 1Q15 1Q16 FY14 FY15 1Q15 1Q16 O. Income Margin Net Income Margin 1
Slide 17: TEO Group: Net Income Evolution
TEO Group Group:: Net Income Evolution “Price effect” on Financial Results NET FINANCIAL POSITION “Quantity Effect” on Financial Results Spectrum payments 521 ((700Mhz Bands,, Jun‐15)) Dividend payments (May‐ 15) ‐3,294 1Q15 1Q16 * Total Net Income includes the part attributable to Telecom and the
Slide 18: TEO Group: FCF, Net Financial Position
TEO Group: FCF, Net Financial Position IFRS, S, Million o oof AR$ $ ‐ Last as 12 months o s RELEVANT MATTERS The Company’s BoD on April 29, 2016, decided: To withdraw the amount of P$700 million of the ‘Reserve for Future Cash Dividends’ and to distribute that amount as cash dividends, that will be
Slide 19: Agenda
Agenda Market Overview Business Highlights Financials Q&A 18