Slide 1: Telecom Argentina 2Q15 Earnings Release Conference Call Presentation
Telecom Argentina 2Q15 Earnings Release l 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: Monetary policy to finance public sector while reducing devaluation expectations
“Monetary policy to finance public sector while reducing devaluation expectations” Economic activity per sector Wages Central Bank Reserves Total Agriculture National Wages ‐ ∆ % YoY Central Bank Reserves (Billion U$S) Construction Electricity, gas & water 43.3 Minery 24.5% 25.9% 33.7% 32.7% 27.9% 3
Slide 5: Agenda: Business Highlights
Agenda Market Overview Business Highlights Financials Q&A 4
Slide 6: Business Highlights
Highlights Commercial Offer oriented towards Data & Internet Solid market value position in 2Q15: +44% postpaid gross adds Smartphone penetration 37% in 2Q15 and Smartphone sell‐out 98% following the demand of 4G devices limited byy constrains on imports p Pricing scheme simplification with Da
Slide 7: Service revenue growth boosted up by Internet & Fixed Data
Service revenue growth boosted up by Internet & Fixed Data Evolution of service revenues 1H14 – 1H15 IFRS, Million of AR$, Percentage Service Revenues ‐ YoY Var 1Q15 2Q15 Paraguay +11.7% +3.6% Fixed Argentina +20.9% +23.8% Mobile Argentina +22.3% +19.6% +2 771; +21% +2,771; 617 ‐64 1 264 1,264 53 17
Slide 8: Mobile – 2Q15 Postpaid consolidation approaching a Data Centric offer
Mobile – 2Q15 Postpaid consolidation approaching a Data Centric offer POSTPAID GROSS ADDS C t Customer B Base (Ml ) (Mln) +44% 19.3 19.4 Postpaid 1 6,1 6,2 1Q15 2Q15 13,2 13,2 Prepaid 4G users 1Q15 2Q15 +112% Market Share 32 5% 32.5% 32 8%* 32.8%* 1Q15 2Q15 ARPU AR$/Month Postpaid p +23% +29% Offer
Slide 9: Mobile Argentina – Strategy Towards Data & Internet
Mobile Argentina – Strategy Towards Data & Internet HANDSETS CUSTOMERS USAGE Internet Users (Monthly unique users) Data Usage (MBOU/month) +76% Smph Penetration / CB +13% 37% 30% 7.8 6.9 219 152 181 124 132 2Q14 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 2Q15 Browsing ARPU * Postpaid * Based on Internet Use
Slide 10: Mobile – Speeding up the 4G deployment
Mobile – Speeding up the 4G deployment Continuing with the 4G LTE expansion Strong positioning in 4G across the country Deployed 1 Buenos Aires 7 10 2 Mar del Plata 8 11 9 3 Pinamar 14 12 4 Santa Fe 5 15 5 Rosario 6 6 Córdoba 4 13 Network Rollout: Rollout: 7 Salta 1 1 16 8 Tucumán As of July more
Slide 11: 4G Speed Snapshot
4G Speed Snapshot 4G Download speed: good performance Breakdown by type of use Download average speed; Mbps; Jun‐15 NAL BENCHMARK NTERNATION IN Singapur Chile Italy Argentina Brazil Iran TOP 10 Rank #1 #2 #13 #19 #20 #35 16x LOCAL EXPERIENCEE 6x 3G 4G UpLink (Mbps) DownLink (Mbps) International Benc
Slide 12: Fixed – UBB accesses increased significantly in 2Q15
Fixed – UBB accesses increased significantly in 2Q15 propped by competitive offer BB BB ARPU Accesses Thousand of broadband accesses, thousand of net adds & Churn AR$/Month +60k; +3% +54k; +3% +36% 201,6 157,8 167,3 178,5 147 9 147,9 1.786 1.768 1.714 1.726 1 4% 1.4% 1 3% 1.3% 1 2% 1.2% 1 3% 1.3% 1
Slide 13: Fixed – ARBU sustained thru flat pricing
Fixed – ARBU sustained thru flat pricing Lines in Service ARBU Thousand of lines AR$/Month In AR$ +14% 64 4 64.4 60.1 60.5 58.1 4,103 4,106 4,093 4,077 4,064 56.8 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 Customers Value Flat Pricing Pricing:: Market 46.2% 46.4% 46.4% 46.5% 46.5% Share Unl
Slide 14: Capex – Highlighting Mobile accesses thru network deployment
Capex – Highlighting Mobile accesses thru network deployment Capex Evolution 4G Targets Million of AR$ $ 8,957 Coverage over total population +85% +2X 3.530 4,690 +107% 5,427 2,265 2.256 Spectrum 4,851 2.434 Actual Dec‐15 FY13 FY14 1H14 1H15 4G Sites % Revenues 18% 27%* 15% 25% +3X Capex 58% Breakdo
Slide 15: Focus on Quality – Encouraging trends
Focus on Quality – Encouraging trends Mobile Quality KPI’s Fixed Quality KPI’s In days Unavailability 3G ‐ Total Medium time to repair UBB In % ‐62% ‐25% 2014 2Q15 Jun‐14 Jun‐15 Inaccessibility Voice 3G ‐ Total ‐29% Medium time installation UBB 6x ‐36% KPI TRAFFIC 2012 2Q15 Jun 14 Jun‐14 Jun 15 Jun‐
Slide 16: Agenda: Financials
Agenda Market Overview Business Highlights Financials Q&A 15
Slide 17: TEO Group: Consolidated Results
TEO Group: Consolidated Results EBITDA Revenues IFRS, Million of AR$, Percentage IFRS, Million of AR$, Percentage % of Revenues Personal – Mobile 69% Fixed Business 16% +15% Broadband 11% Nucleo – Mobile 4% 5,135 +25% 8.702 4,119 +22% 22% 7.564 2.501 2Q 18,496 2.007 +25% +19% 33.341 15,585 27 287 27
Slide 18: TEO Group: Consolidated costs and EBITDA evolution
TEO Group: Consolidated costs and EBITDA evolution EBITDA 1H14 – 1H15 IFRS Million of AR$ IFRS, +1,016; +25% YoY Variation 140 158 19 721 289 307 270 2,752 466 5,135 4,119 28% 33% 18% 21% 20% 6% 17% ‐8% ‐2% EBITDA 1H14 Ss. Revenues & Handsets Handsets Costs ITX Costs Labor Costs Taxes Other Marketin
Slide 19: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Income Net Income IFRS Milli IFRS, Million off AR$, AR$ Percentage P IFRS Million of AR$, IFRS, AR$ Percentage attributable to Telecom In Million of AR$ 1H14 1H15 2Q14 2Q15 Net Interests $ 238 ‐$ 87 $ 91 ‐$ 28 Gains on Mutual Funds & $ 147 $ 130 other invest
Slide 20: TEO Group: FCF, Net Financial Position & Hedging Strategy
TEO Group: FCF, Net Financial Position & Hedging Strategy IFRS, Million of ARS ‐ Last 12 months Free Cash Flow Operating free Cash Flow 1,850 9,718 5,596 286 3,836 5,786 196 170 1,451 EBITDA Capex Δ WK & others 3,807 ‐1,078 Net Financial Position Net Financial Net Interest Telecom Argentina 720(1) O
Slide 21: Agenda: Q&A
Agenda Market Overview Business Highlights Financials Q&A 20