Ooredoo Q.p.s.c · QSE:ORDS
Ooredoo Q.p.s.c — Ooredoo — Investor Day (May 2015)
63 slides from Ooredoo Q.p.s.c's investor day presentation, May 25, 2015
Slide 1: Capital Markets Day 2015
Ooredoo Group Capital Markets Day 2015 25 May 2015
Slide 2: Disclaimer
Disclaimer Ooredoo (parent company Ooredoo Q.S.C.) and the group of companies which it forms part of (“Ooredoo Group”) cautions investors that certain statements contained in this document state Ooredoo Group management's intentions, hopes, beliefs, expectations, or predictions of the future and,
Slide 3: Agenda
Agenda 10:00‐10:05 Agenda Andreas Goldau – Ooredoo Group Investor Relations 10:05‐10:20 Welcome, Dr. Nasser Marafih, OG CEO 10:20‐10:40 Strategy Update, Jeremy Sell, OG CSO 10:40‐11:00 Finance Update, Ajay Bahri, OG CFO 11:00‐11:20, B2B – A growth engine for Ooredoo, Tom Craig, Senior Dire
Slide 4: 2014 Performance
2014 Performance Total customers Revenue EBITDA Net profit to ORDS (‘000) (QARm) (QARm) (QARm) 107,2 14,64 54 33,85 33,20 0 96,18 1 12,94 2,579 7 8 4 2,134 +2% -5% -8% -2% -12% +12% -17% 12M'13 12M'14 12M'13 12M'14 12M'14 12M'13 12M'14 12M'14 12M'13 12M'14 12M'14 X% 2013-2014 growth based on 2014 re
Slide 5: Recent achievements
Recent achievements Customers >111M Myanmar Launch 1st to market Brand Rollout $1.7B equity value1 B2B >9% YoY Growth of Data 30% of Group revenues Digital Value increasing Portfolio Rationalizing Source: (1) Brand Finance Ooredoo Capital Markets Day | 25 May 2015 | 5
Slide 6: Market challenges
Market challenges Data pricing Challenging Product mix still not rational competition changing Margins still too low Competitors now SMS and international Global/regional voice traffic eroded Capacity growth exponential Regulators slow to Data growing fast but to revenue growth embrace consolidation
Slide 7: We see opportunity ahead
We see opportunity ahead Telecom revenue CAGR forecast, 2014-2019 Data Growth 44.2% Operational 14% 40% Consolidation 20% 12% 10% Greater regulatory support 8% 7.5% 7.6% 6.1% 6% Convergence 4% 2.9% 3.0% 2.4% 2% 1.1% B2B, ICT 0% Algeria Indonesia Iraq Kuwait Myanmar Oman Qatar Tunisia Efficiency Note
Slide 8: Opportunities by OpCo
Opportunities by OpCo HIGH MEDIUM Algeria Indonesia Iraq Kuwait Myanmar Oman Qatar Tunisia (KEY) Data growth Data growth everywhere Operational Big and/or deep sharing consolidation being implemented Greater regulatory Tangible evidence of support regulatory support Convergence 4 active strategies S
Slide 9: Ooredoo remains a good buy for investors
Ooredoo remains a good buy for investors • Balanced portfolio of mature and emerging market presence • Relatively low smartphone penetration; data still accounts for a relatively Top Line low % of revenues; pricing rationality will improve Growth • 9m businesses are spending $10B across our footprin
Slide 10: Agenda
Agenda 10:00‐10:05 Agenda Andreas Goldau – Ooredoo Group Investor Relations 10:05‐10:20 Welcome, Dr. Nasser Marafih, OG CEO 10:20‐10:40 Strategy Update, Jeremy Sell, OG CSO 10:40‐11:00 Finance Update, Ajay Bahri, OG CFO 11:00‐11:20, B2B – A growth engine for Ooredoo, Tom Craig, Senior Dire
Slide 11: 3 years ago, we introduced the Drive strategy
3 years ago, we introduced the Drive strategy Lead on Strengthen our Accelerate new growth customer experience foundations • “Know” our customers • Work smarter and work • Grow B2B & IT services better together • Embrace customer • Move into fiber in experience mindset • Increase productivity select
Slide 12: Our portfolio focus remains the same
Our portfolio focus remains the same 3 Business Lines 3 Geographies Middle East North Africa Consumer Mobile Consumer Broadband South-East Asia Enterprise Ooredoo Capital Markets Day | 25 May 2015 | 12
Slide 13: What we have delivered…
What we have delivered… Brand Roll Out Rebranded 7 OpCos - Qatar, Algeria, the Maldives, Tunisia, Myanmar, Kuwait, Oman. • Best network: 4G+ in Qatar & Kuwait, 3G launched in Iraq and Algeria. Broadband • 4G investments in 5 of our 10 markets. Lead on Growth • 25% of data traffic on 4G in these mark
Slide 14: What we have delivered…
What we have delivered… Accelerated Technology • U900 network modernization to deliver significant cost savings across the Group. Strengthen modernization our Network • 1st phase of mobile infrastructure sharing agreement in Tunisia to be implemented Foundations sharing and before Q1’16; we are shar
Slide 15: 3 strategic priorities – no fundamental change
3 strategic priorities – no fundamental change • Bundling, churn reduction, upselling/cross-selling • Cost benefits: common infrastructure, leveraged brand and marketing Convergence • Stronger B2B offering & capabilities • Partnership for content – digital and content to differentiate • Network cons
Slide 16: Key metrics largely unchanged
Key metrics largely unchanged 2015 1• Growth (Revenue) 2• Financial Margins (EBIT) metrics 3• Return on capital (ROCE) 4• Shareholder returns (TSR) 5• Customer experience (NPS) Strategic 6• Organizational capability building metrics 7• Productivity and synergies Ooredoo Capital Markets Day | 25 May
Slide 17: Agenda
Agenda 10:00‐10:05 Agenda Andreas Goldau – Ooredoo Group Investor Relations 10:05‐10:20 Welcome, Dr. Nasser Marafih, OG CEO 10:20‐10:40 Strategy Update, Jeremy Sell, OG CSO 10:40‐11:00 Finance Update, Ajay Bahri, OG CFO 11:00‐11:20, B2B – A growth engine for Ooredoo, Tom Craig, Senior Dire
Slide 18: Group results: 2015 Q1 highlights
Group results 2015 Q1 highlights A satisfactory start to 2015 in a challenging and competitive environment • Number of customers increased by 14% to 111 million, driven by Indonesia, Algeria, and Myanmar • Q1 2015 revenue stable at QAR 8,037 million with strong performances in Qatar, Oman, Maldives
Slide 19: Group performance
Group performance Net profit attributable Customers Revenues EBITDA and to Ooredoo (in thousands) (in QAR million) EBITDA margin Shareholders +14% (% of Revenue ) (in QAR million) +7% 110,853 +3% excl. FX impact -1% excl. 96,660 FX impact 90,969 +10% - 3% - 1% 8,384 -8% -5% 887 -4% excl. 3,690 8,103
Slide 20: Group results: 2015 Q1 performance summary
Group results 2015 Q1 performance summary 3 months ended Q1 2015 / 2015 Annual QAR Millions March 2015 Q1 2014 Guidance 0 to -3% Consolidated revenue 8,037 -1% -1 to -4% EBITDA 3,205 -5% Net profit attributable to Ooredoo 501 -43% - shareholders Earnings per share 1.56 -43% - (in Qatari Riyals) Mark
Slide 21: Productivity: An integral part of Drive Strategy
Productivity : An integral part of Drive Strategy • In 2013 a OPCO benchmarking exercise was performed by ATK with estimated addressable gap of around USD 550m, USD 393m (71%) covered in 2013/14 BPO • OPCOs are incorporating the identified savings into their Cost (Business Business Plans; process fo
Slide 22: Cost Optimization: actual savings achieved 2012-2014
Cost Optimization Actual savings achieved in key OpCos 2012 -2014 71% of addressable gap of USD 550m covered in 2013/14 241 205 152 82 81 70 50 47 29 33 28 26 21 26 14 10 18 15 10 11 11 4 3 2 Iraq Tunisia Algeria Kuwait Oman Indosat Qatar Total Total for 2014 includes USD 7m from small opcos 2012 20
Slide 23: Capital expenditures: Network modernization mainly complete
Capital expenditures: Network modernization mainly complete +27% -10% +11% 9,298 -5% 8,391 7,316 6,942 6,575 26% 27% 25% 21% 22% 12M'10 12M'11 12M'12 12M'13 12M'14 Guidance for 2015: QAR 8,500-9,500m including Myanmar * In QAR mill and Capex to Sales ratio in % Ooredoo Capital Markets Day | 25 May 2
Slide 24: Technology initiatives across the Ooredoo Group
Technology initiatives across the Ooredoo Group Ooredoo-Kuwait Iraq – Asiacell 4G LTE Advanced 3G UMTS launched Indonesia – Indosat Launched Data Core Ooredoo -Tunisia Modernization 4G LTE Launched completed Network expansion Network Sharing for outside Java pilot in progress. completed
Slide 25: Smooth long-term debt profile…
Smooth long-term debt profile… 1,800 Loans Bonds Sukuk 1600 1,600 1,400 1250 1,200 1000 1000 1000 1000 1,000 800 750 600 500 500 500 400 200 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2028 2043 Total Outstanding Loans USD 2,500m Total Bonds and Sukuk USD 6,600m Total outstanding debt a
Slide 26: Key financial risk management issues are addressed…
Key financial risk management issues are addressed… Debt refinancing / liquidity risk / rating No imminent refinancing requirements in 2015 Current cash levels comfortable, smooth long term debt profile. Investment grade credit rating maintained Moody’s “A2”, outlook: negative; S&P “A-”, outlo
Slide 27: …FX transactional risks are mitigated to the extent practical
…FX transactional risks are mitigated to the extent practical ...via funding in local currency at OPCOs • Medium term transformation of USD/IDR debt mix. Indonesia • Target 75% local currency • Calling USD 650m bond in June 2015 Tunisia • 100% local currency funding in TND Algeria • Plan to increase
Slide 28: Agenda
Agenda 10:00‐10:05 Agenda Andreas Goldau – Ooredoo Group Investor Relations 10:05‐10:20 Welcome, Dr. Nasser Marafih, OG CEO 10:20‐10:40 Strategy Update, Jeremy Sell, OG CSO 10:40‐11:00 Finance Update, Ajay Bahri, OG CFO 11:00‐11:20, B2B – A growth engine for Ooredoo, Tom Craig, Senior Dire
Slide 29: Ooredoo Footprint: B2B Addressable Market of $10Bn
Ooredoo Footprint: B2B Addressable Market of $10Bn Addressable Market is calculated based on Ooredoo core countries which are: Algeria, Tunisia, Iraq, Kuwait, Qatar and Indonesia Sournce: BCG Ooredoo Capital Markets Day | 25 May 2015 | 29
Slide 30: B2B Opportunity in Footprint
B2B Opportunity in Footprint Market Opportunity in $bn Mobile Fixed B2B Revenue Grew 9.4% YoY Q1 2014-2015 Market Size Source: BCG Ooredoo Capital Markets Day | 25 May 2015 | 30
Slide 31: An Entrepreneurial Mindset – Digital Natives
An Entrepreneurial Mindset – Digital Natives Ooredoo Capital Markets Day | 25 May 2015 | 31
Slide 32: Rapid ICT Growth
Rapid ICT Growth 26.6% 15% 58.4% Ooredoo Capital Markets Day | 25 May 2015 | 32
Slide 33: Growing Economies – Triggers & Barriers
Growing Economies – Triggers & Barriers Ooredoo Capital Markets Day | 25 May 2015 | 33
Slide 34: Growing with our Customers – Building Trust
Growing with our Customers – Building Trust Customer Base 2014 Actual Growth YOY Growth Major Wins More than 25% customer Ooredoo Business Ooredoo Business is the base growth in the course growth - which is faster trusted partner of major of last year, reflecting how than the average GDP businesses
Slide 35: Our Transformation Agenda
Our Transformation Agenda Ooredoo Capital Markets Day | 25 May 2015 | 35
Slide 36: B2B Brand – Engage & Inspire
B2B Brand – Engage & Inspire Ooredoo Capital Markets Day | 25 May 2015 | 36
Slide 37: Building Customer Conversations
Building Customer Conversations Ooredoo Capital Markets Day | 25 May 2015 | 37
Slide 38: Products – Equipped to Deliver
Products – Equipped to Deliver Ooredoo Capital Markets Day | 25 May 2015 | 38
Slide 39: M2M – The First Group Product Launch
M2M – The First Group Product Launch Ooredoo addressable Key elements market to success Ooredoo Capital Markets Day | 25 May 2015 | 39
Slide 40: To Summarize
To Summarize Ooredoo Capital Markets Day | 25 May 2015 | 40
Slide 41: Agenda
Agenda 10:00‐10:05 Agenda Andreas Goldau – Ooredoo Group Investor Relations 10:05‐10:20 Welcome, Dr. Nasser Marafih, OG CEO 10:20‐10:40 Strategy Update, Jeremy Sell, OG CSO 10:40‐11:00 Finance Update, Ajay Bahri, OG CFO 11:00‐11:20, B2B – A growth engine for Ooredoo, Tom Craig, Senior Dire
Slide 42: Key results from 2014
Key results from 2014 Revenue (QR m) Mobile SIMs (‘000) +9% +6% +8% +7% +15% +11% 6,590 7,148 2,532 2,797 5,704 6,220 2,206 2,070 2011 2012 2013 2014 2011 2012 2013 2014 EBITDA (QR m) +10% +1% +5% • Financial performance 3,249 3,273 3,448 continues to exceed targets 2,948 • We continue to maintain m
Slide 43: High level comparison with competition
High level comparison with competition Revenue (QR m) Revenue Share 76% 75% 76% 76% 1,796 1,784 1,862 1,706 24% 25% 24% 24% 550 585 559 591 Q1 14 Q2 14 Q3 14 Q4 14 Q1 14 Q2 14 Q3 14 Q4 14 Mobile SIMs (‘000) Net growth (‘000) & ARPU (QR) 66% 2,692 2,797 2,593 2,645 132 129 136 131 133 124 129 121 34%
Slide 44: Customer's voice
Customer’s voice Customer Satisfaction Index Brand Equity Index B2C 85 83 83 83 6 6.4 7.4 82 83 81 82 83 83 82 81 81 81 81 81 2.7 1.9 2.4 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 2012 2013 2014 Ooredoo Vodafone Ooredoo Price Perception Network Perception 87 85 84 84 86 86 90 89 90 88 89 89 89
Slide 45: Key achievements in 2014
Key achievements in 2014 Ooredoo Capital Markets Day | 25 May 2015 | 45
Slide 46: Key achievements in 2014
Key achievements in 2014 Ooredoo Capital Markets Day | 25 May 2015 | 46
Slide 47: Data Monetization
Data Monetization Data Revenue (QR M) Data Revenue to Total % DataCAGR: revenue10% (QRM) Data revenue to total (%) 319 336 34% 32% 278 28% 252 27% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Increase data Drive usage and revenue Align demand and Create dependency & • Convert non
Slide 48: Digital Universe
Digital Universe Website Online Payments Ooredoo Community Launched on May 27th 2014 15 million Visitors 400 million QR in payments 17,000 registered users 6 million Unique Visitors 30% from mobile devices 160,000 unique visits Ooredoo App Mozaic Go Mobile Money Launched in November 2014 340,000 dow
Slide 49: Success stories
Success stories Fibre Project 4G Project 315k Homes passed 920 Base stations 205k Connections 485k Customers 91% Completed Phase 1 & 2 95% Coverage 54% On Mozaic TV 3.0 4G+ Launched 1st in Qatar Ooredoo Capital Markets Day | 25 May 2015 | 49
Slide 50: B2B: Major deals in 2014
B2B: Major deals in 2014 Emphasis on B2B • Incentivize the right sales behavior • Account Management • Recruiting skilled specialists Ooredoo Capital Markets Day | 25 May 2015 | 50
Slide 51: Key drivers in 2014
Key drivers in 2014 Shahry Smart Mobile Broadband Fibre drives Mozaic TV growth 19% increase in customers YoY 4% increase in customers YoY 19% increase in customers YoY 12% increased value YoY 18% increased value YoY 36% increased value YoY Business Connectivity Mobile Data 12% increased value YoY 3
Slide 52: Awards
Awards Company of the Year Best Customer Care Telecommunications Annual Middle East Call Centre International Business Awards 2014 “Stevies” Award New Product or Service Marketing Campaign Introduction of the Year of the Year International Business CommsMEA 2014 “Stevies” Award Best Customer Experie
Slide 53: Q1 2015
Q1 2015 Ooredoo Capital Markets Day | 25 May 2015 | 53
Slide 54: Mobile and Fixed Revenue
Mobile and Fixed Revenue Mobile revenue (QRm) Fixed revenue (QRm) 1,266 721 1,187 680 672 662 1,135 1,112 1,086 620 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Ooredoo Capital Markets Day | 25 May 2015 | 54
Slide 55: Key drivers in Q1 2015
Key drivers in Q1 2015 Consumer Mobile Services Continuous Fibre rollout 5% increase in customers QoQ 3% increase in Mozaic customers QoQ 6% increased value QoQ 4% increased value QoQ Business Connectivity Mobile Data 10% increase in value QoQ 27% increased value QoQ Ooredoo Capital Markets Day | 25
Slide 56: Agenda
Agenda 10:00‐10:05 Agenda Andreas Goldau – Ooredoo Group Investor Relations 10:05‐10:20 Welcome, Dr. Nasser Marafih, OG CEO 10:20‐10:40 Strategy Update, Jeremy Sell, OG CSO 10:40‐11:00 Finance Update, Ajay Bahri, OG CFO 11:00‐11:20, B2B – A growth engine for Ooredoo, Tom Craig, Senior Dire
Slide 57: Algeria in figures
Algeria in figures • 10th largest country in the world, the largest in Africa and within Ooredoo Group (2.4mn Km2 ~ 5 times France) • With 38.6mn people Algeria is one of the least densely populated countries in the world (15 pop/km2) • But there are big disparities of density by region: Algiers >37
Slide 58: Algerian mobile market history
Algerian mobile market history Duopoly: 3 Players 4 Brands: Market Moderate ATM Monopoly Market Creaming Market Hyper Growth Growth 1999 - 2001 2002 - 2003 2004 - 2007 2008 - 2013 Diagnosis and New • Old state-owned PTT • OTA launched under • WTA launched under Nedjma’s Strategy that led to… creates
Slide 59: Ooredoo Algeria historical performance
Ooredoo Algeria historical performance 3 Players 4 Brands: Data services Market Moderate Growth (6.7% CAGR) Market Hyper Growth take-off Government money injection to the economy Entering the mature market phase CAGR: 350 6,2% CAGR: 1,08% 298 300 CAGR: 280 267 26% 248 250 216 219 221 192 200 161 143
Slide 60: 3G launch and OA's performance
3G launch and OA’s performance Ooredoo Algeria was the first to commercially launch 3G services in the country on December 13th 2013, but OA had already taken the lead through an aggressive data pre-emption strategy which started in August 2012 stretching to the limit the EDGE technology (2.5G) MI1
Slide 61: Q1 2015 financial and operational highlights
Q1 2015 financial and operational highlights Financial KPIs in bn DZD Q1 Q1 Q4 Q1 (1 US$ = 93.1 dzd) YoY QoQ (Avg FX during Q1 2015) 2014 2015 2014 2015 Revenue 23,631 25,839 +9.3% 26,021 25,839 -0.7% EBITDA 9,140 9,337 +2.2% 2,614 9,337 +257.2% EBITDA Margin 38.7% 36.1% -2.6ppt 10.0% 36.1% +26.1ppt
Slide 62: Strategic focus
Strategic focus • Keeping mobile data market leadership in Algeria • Best data usage experience in Algeria with average data speed per customer LEAD ON far ahead of competition and substantially higher than minimum threshold set CUSTOMER out in the T&C’s of the 3G License EXPERIENCE • Boosting data
Slide 63: Thank you
Thank you Follow us Website: ooredoo.com Email: IR@ooredoo.com Twitter: @OoredooIR Upcoming 2015 1H Results – August 2015 TBD events