Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q2 2008 Earnings Presentation
20 slides from Telecom Argentina Sa Class B's earnings presentation, 2008
Slide 1: First Half & Second Quarter 2008 Earnings Results
First Half & Second Quarter 2008 Earnings Results Conference Call Presentation UNAUDITED DATA
Slide 2: Disclaimer
Disclaimer This presentation may include statements that could constitute forward-looking statements, including, but not limited to, the Company’s expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; the impa
Slide 3: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 2
Slide 4: Argentine macroeconomic evolution - The economy has started a soft landing
Argentine macroeconomic evolution - The economy has started a soft landing. Real GDP Trade & Fiscal Balance Consumption Billions ARS, 1993 based Quarterly Fiscal Balance as % of GDP Billions ARS, 1993 based ∆ YoY Trade Balance (Billions USD) ∆ YoY 8,7% 8,8% 9,1% 8,4% 8,6% 8,9% 9,4% 4,4% 4,1% 4,4% 8,
Slide 5: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 4
Slide 6: Fixed Line: TEO continues to grow
Fixed Line: TEO continues to grow Millions of lines in service Despite the expansion of the cellular market, fixed lines continue to grow at a moderate pace. Evolution of Lines in Service In a scenario of regulated tariffs, ARPU was enhanced through: Offer Innovation via new handsets and equipment.
Slide 7: Broadband: The door to growth in the fixed line business
Broadband: The door to growth in the fixed line business Thousand of broadband connections TEO benefits from a strong demand of +47% 2.892 broadband services through: 2.504 Improved network coverage. +60% 1.964 Commercial promotions. Innovative portfolio of services. 1.561 1.990 ARPU increase is due
Slide 8: Mobile: Continuous growth in value
Mobile: Continuous growth in value Millions of lines TEO continued focusing its efforts by improving the network performance TEO vs. Market Growth and increasing customer caring as well as offers to stimulate consumption on existing clients. 18% 40,0 The customer base continues to expand +28% 37,8 s
Slide 9: Mobile: Growth without Dilution in Customer Value
Mobile: Growth without Dilution in Customer Value Customer base mix VAS relative participation over total Millions of ARS Millions of lines 32% 33% 34% 34% 34% Voice 967 969 990 Postpaid 897 836 VAS 391 398 68% 67% 66% 66% 277 332 392 Prepaid 66% 2Q07 3Q07 4Q07 1Q08 2Q08 VAS as % of 2Q07 3Q07 4Q07 1
Slide 10: Evolution of CAPEX
Evolution of CAPEX Argentine GAAP, Millions of ARS (excluding materials) 1H08 Mobile Capex breakdown % Revenues 14% 14% 10% 15% IT 1.302 716 14% Coverage 1.055 Quality & 44% 11% 613 Innovation 429 379 Mobile * 562 31% 202 Capacity 13% 689 493 23% 288 Fixed 13% 337 130 227 1H08 Fixed Line Capex break
Slide 11: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 10
Slide 12: TEO Group: Consolidated Results /1
TEO Group: Consolidated Results /1 Argentine GAAP, Millions of ARS, Percentage YoY Variation Revenues * OPBDA * +23% 9.074 7.372 +34% +8% 3.302 +20% 5.051 +19% 1.687 Fixed 3.053 4.202 1.414 +11% 1.764 3.052 +34% 1.589 +28% 879 5.772 2.285 1Q 688 Mobile 4.319 +26% 3.287 2.613 2Q 726 +11% 808 2006 200
Slide 13: TEO Group: Consolidated Results /2
TEO Group: Consolidated Results /2 Argentine GAAP, Millions of ARS, Percentage YoY Variation OPERATING PROFIT Net Income +83% +44% 1.049 1.636 +262% 727 +58% 613 534 +49% 1Q 358 387 +101% 272 894 884 (*) 1Q 135 2Q +40% 515 369 244 341 2Q 252 (*) +35% 2006 2007 1H07 1H08 2006 2007 1H07 1H08 O. Profit
Slide 14: TEO Group: Operating FCF and Net Debt
TEO Group: Operating FCF and Net Debt Argentine GAAP, Millions of ARS During 1H, 2008: Telecom Personal made principal payments in amount equivalent to OPERATING ARS 59 million. FREE CASH FLOW 1.684 Telecom Argentina made principal prepayment in amount equivalent 2.785 to ARS 822 million. Next sched
Slide 15: Fixed line: Revenues comparison: 1H08 – 1H07
Fixed line: Revenues comparison: 1H08 – 1H07 Argentine GAAP, Millions of ARS, Percentage YoY Variation 175 (+11%) 1Q08: 2Q08: 77 (+10%) 98 (+12%) 1.764 16 29 1589 111 27 7 -15 863 1Q 786 7% 1% -25% 34% 9% 49% 803 901 2Q Revenues 1H07 Monthly Fee Voice Measured Public Internet & Data Interconnection
Slide 16: Fixed Line: Telecom Argentina Unconsolidated P&L
Fixed Line: Telecom Argentina Unconsolidated P&L Argentine GAAP, Millions of ARS, Percentage Jun-30 In MM P$ 1H 2008 1H 2007 $ Var. % Var. 1H08 ∆ 1H07 ∆% Labor costs 433 69 19% Net Revenues 2.035 1.810 225 12% Materials and supplies 158 20 14% Operating Costs (1.207) (987) (220) 22% Advertising 59 2
Slide 17: Mobile: Evolution of revenues: 1H07-1H08
Mobile: Evolution of revenues: 1H07-1H08 Argentine GAAP, Millions of ARS, Percentage YoY Variation 674 (+26%) 1Q08: 2Q08: 345 (+27%) 329 (+25%) 3.287 1 56 38 249 2.613 117 77 136 1.617 1Q 1.272 25% 21% 22% 46% 0% 21% 21% 1.670 2Q 1.341 Revenues 1H07 Monthly Fees Prepaid Traffic TLRD & CPP VAS Others
Slide 18: Mobile: Personal Unconsolidated P&L
Mobile: Personal Unconsolidated P&L Argentine GAAP, Millions of ARS, Percentage 1Q08 2Q08 1H08 Service Revenues 1.369 1.397 2.766 In MM P$ 1H 2008 1H 2007 $ Var. % Var. P re S A C & S RC OP BD A 613 597 1. 210 M arg i n 45% 43% 44% Net Revenues 3.089 2.448 641 26% SAC & SRC -190 -232 -422 Operating
Slide 19: Mobile: Núcleo Unconsolidated P&L
Mobile: Núcleo Unconsolidated P&L Argentine GAAP, Millions of ARS, Percentage In MM P$ 1H 2008 1H 2007 $ Var. % Var. Net Revenues 215 178 37 21% Operating Costs (147) (111) (36) 32% OPBDA 68 67 1 2% Margin 32% 37% Depreciation & Amortization 48 32 16 50% OPERATING PROFIT / (LOSS) 20 35 (15) -42% Mar
Slide 20: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 19