Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — Conference Presentation (May 2016)
30 slides from Bharti Airtel's conference presentation, May 2016
Slide 1: Bharti Airtel Investor Conference Presentation – May 2016
Bharti Airtel Investor Conference Presentation – May 2016
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 in place; good spectrum bank 3 Diversified operator with scale and dominance in marketplace 4 Best in class execution 4
Slide 5: 1. Large Residual Opportunity
1. LARGE RESIDUAL OPPORTUNITY Voice Secularity • Under-penetrated geographies • Unique mobile users at c. 50% of total SIMs (large dual-SIM user base)1 • Declining age dependency2 • Industry consolidation, top 3 operators account for 75% RMS3 Data • India mobile broadband (3G/4G) penetration under 1
Slide 6: India: Industry Consolidation Underway via Revenue Shares
Opportunities India: Industry Consolidation Underway via Revenue Shares 8 Operators 14 Operators 10 Operators 10 Operators • Industry consolidation via market share 25% 34% 32% gains, with top 3 now accounting for 43% over 75% of the industry revenues • Exits by many operators post Feb 2012 SC verdi
Slide 7: India: Transitioning to a Smartphone Market
Opportunities India: Transitioning to a Smartphone Market Feature phones Smartphones 7% 17% 31% 45% 59% 76% 92% 93% 83% 69% 55% 41% 24% 8% 2012 2013 2014 2015E 2016E 2017E 2018E 148M smartphones expected in 2016 - 60% would be 4G capable Source: Ericsson Mobility Report; GSMA Intelligence, IDC, JP M
Slide 8: Payments Bank – Untapped Opportunity
Opportunities Payments Bank – Untapped Opportunity Domestic Remittance Launched Domestic Money Transfer Build India's No 1 payments bank through a (Dec 2015) "frugal and digital" model App Released new customer app (Jan 2016) Source: Company data, Banking License granted by RBI in April 2016 8
Slide 9: 2. Bulk Investments in Place
2. BULK INVESTMENTS IN PLACE Spectrum Bank • Successful re-farming of sub-GHz spectrum for 3G • 3G gap circles covered • 4G coverage pan-India Largest network of towers and base stations • 95.6% voice population coverage • Mobile broadband towers up 2.3x over the last year Largest network of optic f
Slide 10: India: Investments to Yield Results
Investments India: Investments to Yield Results Industry Prime Nominal Wide Largest leading spectrum to value of spectrum optical fiber revenue yield data liberalized presence: network yield/MHz at growth: spectrum at 21.1% amongst 2x avg with Virtually Pan USD 13.4 spectrum private same India 3G &
Slide 11: India: Superior Spectrum Position
Investments India: Superior Spectrum Position Spectrum Industry Industry Spectrum Spectrum held Bharti spectrum Band Spectrum ex BSNL/MTNL by Bharti Market Share ex Pan India 4G, 3G available in 21 circles (MHz) (MHz) (MHz) BSNL/MTNL 900 421.0 282.8 110.2 39.0% 3G sub-Ghz available in 10 circles
Slide 12: Aggressive Network Build - Monetize Spectrum
Investments Aggressive Network Build - Monetize Spectrum Mobile broadband network towers - India Total 3G Network Sites - Africa 110,000 105,465 75% 13,500 66% 13,128 70% 100,000 68% 13,000 64% 12,262 65% 65% 88,376 12,500 90,000 62% 60% 12,000 58% 11,457 62% 80,000 55% 60% 11,500 70,178 59% 70,000
Slide 13: Africa: Invested for Growth
Investments Africa: Invested for Growth 2010 2016 Capex Investments till date: $ 5.0 bn Well funded out of EBITDA: $ 5.8 bn till date Thus OFCF = $ 0.8 bn Further focus on business re-contouring Tower Sales in 9 countries Already received: $ 1.8 bn To be closed: $ 0.5 bn - $ 0.7 bn (indu
Slide 14: 3. Airtel: Diversified with Scale Operator
3. AIRTEL: DIVERSIFIED WITH SCALE OPERATOR Profitability and scale across diversified segments • Dominant position to capitalize with bulk investments in place • Only operator with diversified portfolio • Scale leading to operating leverage • Generating c. $1 bn yearly organic free cash Leadership a
Slide 15: Scale brings Operating Leverage
Scale Scale brings Operating Leverage Overview Consolidated Revenues ($ Mn)1 15,000 14,742 Presence in 20 countries 14,500 14,056 #3 Operator in the World 14,000 13,500 #1 in India & #1 or #2 in 14 countries in Africa 13,000 13,095 US$ 14.74 bn Revenue 12,500 US$ 5.22 bn EBITDA 12,000 11,7
Slide 16: 4. Best in Class Execution
4. BEST IN CLASS EXECUTION Q4’16 highlights • India – Broad based revenue growth across mobile, DTH, Telemedia, Enterprise segments – Mobile revenue1 up 11.7% YoY via industry leading net subscriber additions, incremental RMS – Data volumes up 70%, Data ARPU up 12% YoY – Voice volumes grew 10.8% YoY
Slide 17: Leader in India Revenue Market Share
Execution Leader in India Revenue Market Share1 32% 23% 19% 5% 6% 6% 6% 2% 1% Airtel Vodafone Idea (Incl Reliance BSNL+MTNL Tata Tele Aircel Uninor Others Spice) 32.1% 31.9% 31.9% 31.7% 31.6% 31.5% Airtel 31.3% 31.1% 31.6% Incremental 31.1% revenue market share 30.9% 30.7% 55.2% YoY 30.7% 30.5% Q3FY
Slide 18: Strategic Pillars
Execution Strategic Pillars Go to Win with a Win with War on Win with Market Brilliant Valuable Waste People Excellence Network Customers Experience VibrantVibrant Digital Airtel, Brand Brand 18
Slide 19: Strategic Pillars: Go to Market Excellence
Execution Strategic Pillars: Go to Market Excellence Game changing innovations Creating opportunities • Night cash back, night plans – Reduced rates during night usage • Myplan – Customized plans as per customer usage • Family – Tailor made plan and share benefits with family • Infinity – Options wi
Slide 20: Voice: Significant Headroom
Execution Voice: Significant Headroom 307,988 34,940 34,620 33,669 290,802 290,459 32,791 282,138 31,045 277,869 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Airtel carries over 1.35 trillion minutes Significant gap b/w realized & rack rates; Volume Growth Secular volume growth 11.1%
Slide 21: Fastest Growing Data Business in India
Execution Fastest Growing Data Business in India Data as a % of Mobile revenues First brand to own and launch 4G in India 4G services Pan India post spectrum deals with Aircel Q4'15 6.10% 17.60% Other Non and Videocon Voice Non Q1'16 6.10% 19.20% Data 4G at 3G prices Q2'16 5.90% 21.50% Data %
Slide 22: Data Growing Exponentially in Africa
Execution Data Growing Exponentially in Africa Africa data volumes (mn MBs) Africa data revenues (USD mn1) 26,000 170.0 161.3 24,000 23,646 160.0 22,000 150.0 146.4 20,049 20,000 140.0 137.6 18,000 16,483 130.0 127.6 16,000 13,843 120.0 14,000 112.8 12,000 11,256 110.0 10,000 100.0 Q4'FY15 Q1'FY16 Q
Slide 23: Strategic Pillars: Win with Valuable Customers
Execution Strategic Pillars: Win with Valuable Customers 205 6.1% 6.0% 5.9% 6.0% 200 5.9% 195 5.8% 5.8% 190 5.7% Airtel India: Postpaid 185 5.6% 200 196 5.6% subscriber base inching up, 193 Data ARPU up 12% YoY 180 5.4% 5.5% 175 181 5.4% 176 170 5.3% Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Data ARPU Post Pa
Slide 24: Strategic Pillars: Win with Brilliant Network Experience
Execution Strategic Pillars: Win with Brilliant Network Experience Eliminate frustration Invest in tools An open network Blocked calls Repeat calls Dropped calls Frustration index Capex Outflow FY’16 (mn) Guidance (bn) Largest capital expenditure of Rs. 60,000 crore over 3 years India & SA $2,379
Slide 25: Strategic Pillars: Win with War on Waste
Execution Strategic Pillars: Win with War on Waste 1.2 44.30% 44.50% Opex to Total Revenues 44% 43.90% • Increasing Opex 44.00% 1 Productivity 43.50% 0.8 43.0% • Smart procurement 43.3% 43.2% 43.00% 43.1% • Frugal cost structure 0.6 42.50% 42.00% • Maximizing sharing 0.4 41.8% 41.50% • Network re-de
Slide 26: Strong Corporate Profile
2 airtel STRONG CORPORATE PROFILE
Slide 27: Balance Sheet Focus
Balance Sheet Focus Diversified debt profile; focus on deleveraging Over last 3 years: Leverage: Net Debt to EBITDA down from 3x to 2.5x Average Maturity: Average tenors pushed out from 2 years to 6 years Diversified debt mix: 100% bank to a mix of bonds, bank, ECA and DoT debt Currency diversificat
Slide 28: 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 IFRS, IGAAP basis
Slide 29: 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, sale to Orange, Bangladesh merger) We are extremely well positioned • Large customer base • O
Slide 30: Thank You
THANK YOU