Empresa Nacional De Telecomunicaciones S.a. · BCS:ENTEL
Empresa Nacional De Telecomunicaciones — Entel — Investor Day (December 2016)
39 slides from Empresa Nacional De Telecomunicaciones's investor day presentation, December 2016
Slide 1: III Entel's Investor Day
III ENTEL’S INVESTOR DAY_ Santiago – Chile December, 2016
Slide 2: Contents
CONTENTS_ 1. Entel Snapshot 2. Market Trends 3. Strategy & Execution_Key Points
Slide 3: 1. Entel Snapshot
1. ENTEL SNAPSHOT_
Slide 4: Snapshot: shareholder structure and financial figures 9M16
“Snapshot”_ SHAREHOLDER STRUCTURE FINANCIAL FIGURES 9M16 Market Capitalization(3): USD 3.2 bn Total Revenue: CLP 1,390 bn (USD 2.1 bn) Total EBITDA: CLP 313 bn (USD 476 MM, mg. 22.5%) AMP, CC & 31.4% IT Services Others (2) Altel Inversiones Ltda (1) 4.1% 1.6% Pension Funds 54.9% Others Fixed 16.0% 1
Slide 5: Snapshot: shareholder structure and figures without Entel Peru
“Snapshot”_ SHAREHOLDER STRUCTURE FINANCIAL FIGURES 9M16 Market Capitalization(3): USD 3.2 bn Revenue w/o Entel Peru: CLP 1,147 bn EBITDA w/o Entel Peru: CLP 407 bn (35.5%) AMP, CC & 31.4% IT Services Others (2) Altel Inversiones Ltda (1) 4.9% 3.0% Pension Funds 54.9% Others Fixed 13.7% 19.4% • Corp
Slide 6: Positive stock evolution after capital increase
“Snapshot”_ POSITIVE STOCK EVOLUTION AFTER CAPITAL INCREASE Share price evolution: (EBITDA-CAPEX)/Revenue Chile 9M16: 19.8% Closing price • Capital increase of CLP 357 billions (USD 516 millions). A price per share of CLP 5,400 Capital increase March, 17th CLP 5,506 was set. announcement • Wide supp
Slide 7: Main business operation figures
“Snapshot”_ September 2016 MAIN BUSINESS OPERATION FIGURES Subscribers 9M16: Total Revenue: CLP 1,390 bn (USD 2.1 bn) Mobile: 14.0 million Fixed: 482k RGUs(1) Mobile (MM Subsc.) and Mkt. Share: Mobile Revenue Distribution: 58% 34% 41% 4.5 24% 13% 3% 57% 0.5 8.0 16% 1.0 Consumer Corporate Consumer SM
Slide 8: Spectrum holdings and infrastructure
“Snapshot”_ September 2016 SPECTRUM HOLDINGS INFRASTRUCTURE Chile: 250 MHz Chile: 5,875 POPs Peru: 311 MHz Peru: 2,871 POPs Chile(1) 2012 2016 2012 2016 25.3% 5,875 4,690 3x 2,871 2012 2016 805 180 MHz 250 MHz Chile Peru • Installed base inbuilding coverage as of Sep’16: Peru(2) Chile(3): 9.5 MM m2
Slide 9: Leading positioning of brand and service in Chile and Peru
“Snapshot”_ LEADING POSITIONING OF BRAND AND SERVICE IN CHILE AND PERU Brand Preference & Top of Mind Service Satisfaction Chile - General Brand Preference as of Sep16(2): Chile Postpaid Satisfaction as of Sep’16(1): 39 61 25 24 37 28 8 Entel Company A Company B Company C Entel Company A Company B P
Slide 10: Awards and third party recognitions
“Snapshot”_ AWARDS – THIRD PARTY RECOGNITIONS ALIGNED WITH EXPERIENCE METRICS Chile Peru Service Satisfaction Best corporative reputation: 1st place in Telco industry and number 16 in general ranking Most atractive For its fourth consecutive year in the Latin (Nov’16) company to work in One of the t
Slide 11: Entel is committed to sustainability
“Snapshot”_ September 2016 ENTEL IS COMMITTED TO SUSTAINABILITY Providers_ Contributors_ Enseña Chile Infrastructure providers Public Digital Library training Providers sustainability Corporate Volunteering and segmentation Entel joins the Dow Jones Sustainability Indexes “Tengo una idea” Environmen
Slide 12: Consistent evolution in Chile
“Snapshot”_ September 2016 CONSISTENT EVOLUTION IN CHILE Despite mature market & harsh economic and competitive environment in Chile…..flat revenues and continued improvement of EBITDA and % margin 5.5% Revenue w/o Mobile TR 2.7% 1,441 1,597 1,517 1,560 -0.9% Revenue 1,157 1,147 (CLP bn) 8.4% EBITDA
Slide 13: Chile: delivering cash flow
“Snapshot”_ September 2016 CHILE_DELIVERING CASH FLOW (EBITDA-CAPEX)/Revenue Chile 9M16: 19.8% Evolution of (EBITDA-CAPEX)/Revenue: 19.8% 15.8% 11.2% 7.4% 8.8% 2012 2013 2014 2015 9M16 (EBITDA-CAPEX)/Revenue 9M16: 10bps 19.8% 18.5% 120bps (EBITDA- EBITDA CAPEX (EBITDA- CAPEX)/Revenue 9M15 CAPEX)/Rev
Slide 14: Entel is committed to a sound financing structure
“Snapshot”_ September 2016 ENTEL IS COMMITTED TO A SOUND FINANCING STRUCTURE 3.5 3.5 3.6 3.5 3.5 3.3 3.0 2.6 Net Financial 2.3 1.9 2.0 Debt / 1.7 EBITDA As Reference, NFD/EBITDA for 3Q16 (Times) w/o EBITDA Entel Peru is 2.5 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 No relevant Matu
Slide 15: Results: Entel Group's EBITDA inflection point
Results_ Entel Group’s EBITDA evindencing an inflection point since 4Q15 up to 2016 -12.1% 7.5% -25.6% -25.3% 124 21.5% -45.0% 116 119 11.2% 117 109 106 107 101 102 99 34.2% 93 89 87 79 EBITDA by quarter 59 (bn CLP) 1Q13 1Q14 1Q15 1Q16 2Q13 2Q14 2Q15 2Q16 3Q13 3Q14 3Q15 3Q16 4Q13 4Q14 4Q15 4Q16 • Q4
Slide 16: 2. Industry Trends
2. INDUSTRY TRENDS_
Slide 17: A new technological cycle
A new technological cycle_ • The digital era is giving way to the fourth industrial revolution. • One must for the industry 4.0 is to have a robust infrastructure to provide the best connectivity. • But the revolutions is much more than connectivity. It is about: • IoT or everything connected • It i
Slide 18: Market trends: consumers using more data
Market Trends_ Consumers using more data MOBILE APPS HIGH QUALITY VIDEO & NEW WAYS OF WATCHING TV • In one year, mobile data usage increased more than the • Video drives network requirements. As video improves their quality, the minutes of use, which reveals that mobile apps include new need for dat
Slide 19: Data consumption increased by rapid adoption of new technologies
Market Trends_ Data consumption is further increased by rapid adoption of new technologies and swift introduction of compatible Smartphones Mobile subscriptions by technology Smartphones by Technology (billions) (millions) 7 6 5 4 3 32 months 2 3G(1) 1 4G 0 1 13 25 37 49 61 73 85 97 12 24 36 48 60 7
Slide 20: Consumers and homes better connected
Market Trends_ Consumers and homes better connected GIGABYTES PER MONTH SPEED REQUIREMENTS EVOLUTION (per mobile user) 2x Video 8K + Internet Chile 150 Mbps 6.0x Consumer Acceso accesses Personas 4.8 HomeHogares Acceso accesses 2x Video 4K GPONv2 (ROMA) 0.8 + Internet OB 1:10 90 Mbps 2015 2020E 1 x
Slide 21: Internet of Things impact on the business and network
Market Trends: Internet of Things Impact on the Business and the Network INTERNET OF THINGS Heterogeneous ecosystem The wide array of Smart devices, and industrial Connected applications, are Manufacturing demanding wireless High security Health Coverage networks with different Helath/Goverment/ etc
Slide 22: All trends impact the enterprise and open new digital opportunities
Market Trends_ All trends Impact the Enterprise, its Organization, Business Models, Efficiency, Interaction w/the customers and will also open New Digital Business Opportunities Enabled by High Quality, Ubicuos & and Smart Connectivity Analytics ENTEL CONFIDENCIAL 22 22
Slide 23: Several operators following different paths
Market Trends_ Several operators and companies following different paths Fixed – Mobile Digital Content IoT/ICT Convergence Enablement 23 Source: Entel News Report. (1): IoT: internet of Things, ICT: Information of Comunication Technology
Slide 24: 3. Our Strategy
3. OUR STRATEGY_
Slide 25: Entel Group: Strategy
Entel Group_ Strategy Our mission is to do our best so everyone can live a better connected life, responsibly Mission contributing to transform our society. A world class service enterprise, that delivers a distinctive experience to its customers, where its people fulfill themselves. An enterprise t
Slide 26: Experience is core in our strategy
Experience is Core in Our Strategy_ It impacts across all the other objectives Network and IT Platforms Nevertheless we know that: Experience with the • Consumers expect new experiences in their daily life… Our brand experience proposal must be flexible Customer • The technology evolution continues
Slide 27: Short term evolution: better digital channels
Short Term Evolution_ Better Digital channels …Leadership in this experience $ • Mobile Apps as the main channel for digital attention • Increases the mix of digital attention • The Best Digital Experience • Advance on personalization • Surprise with WoW experiences and functionalities • Ensure serv
Slide 28: Long term: Entel's Digital Transformation Phase I
Long Term: Entel’s Digital Transformation Phase I (new IT stack)_ Strategic Priorities to 2020 What does it seek in this Phase? • Evolution towards a digital • Products and Services: Simplification and more functionalities to company in terms of: agility, ease innovation adaptability, capacity to tr
Slide 29: Even longer term: real Entel's transformation
Even Longer Term (as well as short): Real Entel’s Transformation….much further than Digital Transformation Enablers • Ensure the Entel’s Digital Transformation Great and different Experience project (IT stack, simplified products and at every stage of the service services) • Big Data Analytics • Met
Slide 30: Basics remain the same, but significant change underlying
Basics remain the same, but there is a significant change underlying Data Spectrum: (bps/Hz) • Low bands for coverage X1.4 efficiency - 700 for 4G and 900 for 3G x10 efficiency • High bands for 4G capacity - 1,900/2,600 MHz FDD Technology: changes are developing towards 4.5G and beyond, but today ca
Slide 31: 4.5G network launch in different regions
4,5G network launch in different regions of the country_ Tarapaca Region (Oct.) • Entel launched in May the first 4G+ Antofagasta Region (Oct.) network of the country. Valparaiso Region • Most modern 700 MHz band (Aug.) Metropolitan Region network in Latin America. O’Higgins Region (May) (Oct.) Bio
Slide 32: Entel in Chilean telco market: revenue share
Entel in Chilean Telco Market (not IT)_ Decline in Revenue Share explained by Mobile $ -1.8% 3.1% 4,715 4,629 4,774 2.3% Telecom 3,515 3,595 Industry Revenue (bn CLP) 34.0% 33.9% 30.8% 36.0% 35.2% 2013 2014 2015 9M15 9M16 Entel’s Telecom Revenue Share 7.3% 2.7% Mobile 2,192 2,252 1.0% Services 2,043
Slide 33: Entel Peru: strong growth in subscribers and revenue
Entel Peru_ Strong growth in subscribers and revenue 4,519 Postpaid 4,189 Prepaid 3,688 3,130 1,703 1,559 2,543 1,439 1,960 2,000 1,394 Subscribers 1,259 Evolution 990 1,083 2,815 2,249 2,630 (Thousands) 1,736 970 917 1,285 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 112 PTT (1) 102 2 96 Cellular 85 2 3 72 4
Slide 34: Entel Peru: market share and revenue share
Entel Peru_ Strong growth in subscribers and revenue 14.5% 13.2% 11.6% 12.3% 12.3% 11.9% 10.4% 9.7% Market 11.4% 10.1% Share Entel Peru 7.9% 5.9% Prepaid (%) 4.5% 4.3% Postpaid 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 15.0% 15.7% 13.8% 11.9% 10.1% Revenue 8.8% 9.3% Share Entel Peru (%) 1Q15 2Q15 3Q15 4Q15
Slide 35: Fixed business revenues: strong growth in all segments
Fixed Business Revenues_ Strong growth in all defined segments CAGR 9M13-9M16 21.7% 42 69.7% 33 Growth 22 Segments 42 10.8% 9 Revenue 34 37 Evolution 31 13.5% (bn CLP) 46 48 56 38 9M13 9M14 9M15 9M16 Home Fixed IP Connectivity SME* SME and Corporate IT * Includes NGN, Data, Trunk IP and Business Pac
Slide 36: Connectivity: SME optical fiber and IT strategy
Growth in deployment and penetration in SME Optical Fiber and strong IT strategy, both for SME and big corporations_ 9.8% 30.4% 95,134 86,653 Consultancy, Arquitecture and Desing 66,433 14.9% Managed Services Connectivity Horizontal 11.6% IT Security 8.8% and Vertical Strategy- “Business Negocios Pa
Slide 37: Fixed residential strategy: BAFI LTE and fiber
Fixed Residential Strategy _ BAFI LTE Services & FO BaFi Fiber + OTT TV • Fixed internet service, using mobile network, but with mobility control. • Solution oriented to ABC1 segment. • Address large segment of the pop. ( C3D) where fixed network is either scarce/bad • Technology with capacity and c
Slide 38: Summary and concluding remarks
Summary and Concluding Remarks • Strong Evolution in Peru • Transformations Underway: • Growth in the fixed and IT segments • Digital & Organizational • Despite Competitive Environment, in • Network & Data Capacity Chile: • Improving operating cash flow; • …which will enable Entel to: margins & EBIT
Slide 39: Antonio Büchi B.
Antonio Büchi B. December . 2016