Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — Conference Presentation (May 2017)
31 slides from Bharti Airtel's conference presentation, May 2017
Slide 1: Bharti Airtel Conference Presentation – May 2017
Bharti Airtel Conference Presentation – May 2017
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 3: What Guides Us
What Guides Us Customer Centricity • Win customers for life through differentiated experience, products and world class technology Performance Excellence • Growth despite challenges • Grow market share, strip out waste • Accelerate non-mobile businesses Transparency & Ethical Governance • Highest co
Slide 4: Investment Highlights
Investment Highlights 1 Large residual opportunity 2 Bulk investments already in place; good spectrum bank 3 Diversified operator with scale and dominance in marketplace 4 Demonstrated best in class execution With enabling Financial Flexibility & Balance Sheet Focus 4
Slide 5: 1. Large Residual Opportunity
1. LARGE RESIDUAL OPPORTUNITY S- Curve on Data • India mobile broadband (3G/4G) penetration at ~20%1 • Smartphone shipments show tremendous growth. Smartphone penetration at 24%2 • Data traffic to grow by a CAGR of 63% over the period 2015 - 20202 • Declining age dependency3 • Industry consolidation
Slide 6: India: Industry Consolidation Underway via Revenue Shares
Opportunity India: Industry Consolidation Underway via Revenue Shares 10 Operators 14 Operators 12 Operators 7 Operators 22% • Industry consolidation via market share gains, 34% 30% 36% with top 3 now accounting for over 78% of the industry revenues as of Dec’16 including Telenor (merger subject to
Slide 7: India: Transitioning to a Smartphone Market
Opportunity India: Transitioning to a Smartphone Market Mobile subscriptions by technology (Mn) Smartphone shipments (Mn) 140 180% 170% 125 160% 120 109 104 140% 100 120% 80 80 100% 83% 83% 80% 60 44 60% 40 48% 40% 20 16 29% 11 20% 5% 14% - 0% 2011 2012 2013 2014 2015 2016 2017E Smartphone shipments
Slide 8: Payments Bank – Untapped Opportunity
Opportunity Payments Bank –Untapped Opportunity There is a need to drive Financial Inclusion in India to digitize cash and bring the un- banked in the folds for organized banking sector Cash v/s non-cash transaction value Unbanked Population (Mn) PMJDY made large dent in unbanked 35% 230 557 415 65%
Slide 9: 2. Bulk Investments in Place
2. BULK INVESTMENTS IN PLACE Spectrum Bank • Successful re-farming of sub-GHz spectrum for 3G • 3G/4G coverage pan-India • Highest spectrum market share ex-MTNL/BSNL • Largest capacity per site Largest network of towers and base stations • 95.3% voice population coverage • Mobile broadband sites up
Slide 10: India: Investments to Yield Results
Investments India: Investments to Yield Results Industry Nominal leading Wide Largest Prime value of revenue spectrum optical fiber spectrum to liberalized yield/MHz at presence: network yield data spectrum c. 2x industry ~23%3 amongst growth: Pan USD 16 avg with spectrum private India 3G & billion1
Slide 11: India: Superior Spectrum Position
Investments India: Superior Spectrum Position Spectrum holdings across bands; % of own revenues covered1 100% 4G multi band coverage 22 22 22 20 10 8 No. of circles present in 100 100 100 94 50 45 4G (1800) 4G (2300) 4G (1800 & 2300) 3G (2100) 3G (900) 3G (900 & 2100) 3G (900/1800) xx % of own reven
Slide 12: Aggressive Network Build - Monetize Spectrum
Investments Aggressive Network Build - Monetize Spectrum Mobile broadband towers (‘000) - India Total 3G Network Sites (‘000) – Africa1 70% 13.0 68% 200 75.0% 66% 65% 180 68.4% 72.0% 11.0 65.0% 60% 160 140 9.0 55.0% 13.8 55% 117 53% 12.7 120 105 100 45.0% 7.0 50% 10.0 80 31.2% 35.0% 5.0 45% 60 46 40
Slide 13: Africa: Invested for Growth
Investments Africa: Invested for Growth 2010 4Q’17 Capex Investments till date: $ 5.4 bn Well funded out of EBITDA: $ 6.6 bn till date Thus OFCF = $ 1.2 bn Further focus on business re-contouring Tower Sales in 10 countries Divestment of 2 countries to Orange Announced merger of Ghana op
Slide 14: 3. Airtel: Diversified Operator with Significant Scale
3. AIRTEL: DIVERSIFIED OPERATOR WITH SIGNIFICANT SCALE Profitability and scale across diversified segments • Dominant position to capitalize with bulk investments in place Allowing Airtel • Only operator with diversified portfolio the best • Scale leading to operating leverage, best EBITDA margin in
Slide 15: Scale brings Operating Leverage
Scale Scale brings Operating Leverage Overview Revenue Market Share - India Presence in 17 countries #3 Operator in the World 32.7% 32.9% 33.1% #1 in India & #1 or #2 in 12 countries in Africa 31.6% 31.6% US$ 14.2 bn Revenue1 US$ 5.3 bn EBITDA1 1.87bn addressable population1 Q3FY16 Q4'16
Slide 16: 4. Strategic Pillars for Execution
4. Strategic Pillars for Execution Grow share More Win with a Accelerate of high Products Brilliant Non War on ARPU per Existing Customer Wireless Waste customers Customer Experience Businesses A B C D E Vibrant Win withBrand People 16
Slide 17: A. Grow share of high ARPU customers
Execution A. Grow share of high ARPU customers Post-Paid (as % of total Customer Base) Mobile Broadband Customer as a % of total data customers 1 6.6% 6.4% 74% 1 6.3% 6.2% 1 6.0% 69% 6.0% 66% 5.8% 1 5.6% 62% 61% 0 5.4% 5.4% 5.2% 0 5.0% 4.9% 0 4.8% Q4'14 Q4'15 Q4'16 Q4'17 Q4'16 Q1'17 Q2'17 Q3'17 Q4'1
Slide 18: Fast growing data business
Execution Fast growing data business First brand to own and launch 4G in India Mobile broadband base stations (‘000) - India 3G and 4G Pan India 20000% Rated as India’s fastest 4G network 18000% 65.0% Annual data revenues c. $2 bn (India) - 16000% 55.0% 191 45.0% from $1.2bn in 2015 14000% 1
Slide 19: B. More Products per Existing Customer
Execution B. More Products per Existing Customer Game changing innovations Creating opportunities • Unlimited voice packs, huge data benefits, no bill shocks on roaming • Simplified Pricing. From 6500 Postpaid plans to • Myplan – Customized plans as per customer usage • Infinity – Options with unlim
Slide 20: C. Win with Brilliant Network Experience
Execution C. Win with Brilliant Network Experience More than doubled mobile broadband base stations in the last 2 years compared with last 20 years! Eliminate frustration Invest in tools An open network Blocked calls Repeat calls Dropped calls Frustration index FY’18 Capex Outflow FY’17 (Bn) Guida
Slide 21: D. Accelerate Non-Mobile Businesses
Execution D. Accelerate Non-Mobile Businesses Non-Wireless Revenues India Revenue Split by segments Rs Mn SA, 0.4% EBITDA Margin EBITDA Growth FY’2017 Y-o-Y Africa, 21.2% 232,082 48% 11% Tower Co, 60,829 Tower Co, 6.7% Wireless India, 54.4% Airtel Business, Airtel Business, 109,429 31% 12% 10.8% DTH
Slide 22: Airtel launches India's first payments bank
Execution Airtel launches India’s first payments bank Highlights • Committed to an investment of Rs 3,000 crore across its national operations • Completely digital and paperless bank. Account opened within minutes using Aadhaar based e-KYC • 250,000 Airtel retail outlets will act as Banking Points a
Slide 23: E. Win with War on Waste
Execution E. Win with War on Waste Opex Growth YoY EBITDA % 37.3% 4.7% 2.8% 35.4% 34.2% 2015 2016 2017 -3.8% 2015 2016 2017 Increasing Opex Productivity Smart procurement Frugal cost structure Maximizing sharing Network re-design Divestment of towers Source: Company Filings Note: 2015 numbers are ba
Slide 24: Leader in India Revenue and Customer Market Share
Execution Leader in India Revenue and Customer Market Share1 RMS 36% 23% 19% 4% 5% 6% 6% 1% Airtel + Telenor Vodafone Idea (Incl Spice) Reliance BSNL+MTNL Tata Tele Aircel Others VLR CMS 30% 20% 19% 8% 7% 7% 6% 4% <0% 303 198 198 VLR Customers 80 68 66 (Mn) 59 42 3 Airtel + Idea Vodafone Jio BSNL+MT
Slide 25: Increasingly gaining revenue market share
Execution Increasingly gaining revenue market share Airtel Vodafone Idea Airtel + Telenor 32.9% 33.1% combined 30.8% 31.3% entity RMS is 0.5% 1.8% 35.6% as of Dec’16 23.3% 23.3% 23.4% 23.5% 0.0% 0.2% Combined V+I 18.7% 18.7% 18.7% gained 0.2% 16.2% RMS 2.5% 0.0% Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2
Slide 26: Best in Class Execution
Execution BEST IN CLASS EXECUTION Q4’17 highlights • India – Broad based revenue growth across DTH, Homes, Enterprise segments. Mobile revenues hit in the quarter due to continuation of free pricing by competitor – Continue healthy customer acquisitions in Mobile India; added 7.8 mn customers in Q4’
Slide 27: Strong Corporate Profile
2 airtel STRONG CORPORATE PROFILE
Slide 28: Financial flexibility & Balance Sheet Focus
Financial flexibility & Balance Sheet Focus Diversified debt profile; focus on deleveraging Over last 3 years: Leverage: Net Debt (ex-DOT) to EBITDA down from 2.51x as of Mar 2013 to 1.36. Net debt to EBITDA (LTM) including DOT debt stands at 2.62 Average Maturity: Average tenors pushed out from 2 y
Slide 29: Highest Standards of Corporate Governance
Highest Standards of Corporate Governance Credit Rating and Information Services of India (“CRISIL”) has assigned its Governance and Value Creation rating “CRISIL GVC Level 1” to the corporate governance and value creation practices of Bharti Airtel Quarterly financials audited on Ind-AS basis IG ra
Slide 30: Summary
Summary India & Africa remain attractive markets, with large opportunities Bulk investments in place, asset restructuring in progress • Spectrum • Network • Deleveraging via asset monetization (Tower sales in Africa, sale to Orange, Bangladesh merger, Ghana merger, monetization of stake sale in Infr
Slide 31: Thank You
THANK YOU