Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q3 2012 Earnings Presentation
21 slides from Telecom Argentina Sa Class B's earnings presentation, 2012
Slide 1: Third Quarter 2012 Earnings Results Conference Call Presentation
Third Quarter 2012 Earnings Results Conference Call Presentation Financial data prepared under IFRS
Slide 2: Disclaimer
Disclaimer This presentation is based on audited financial statements and 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, dividen
Slide 3: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 2
Slide 4: Market Overview: Uncertain in economic trends
Market Overview: Uncertain in economic trends Real GDP* Consumption Trade & Fiscal Balance Billions USD, at current prices – Last 12 months Billions USD, at current prices – Last 12 months Trade Balance (Billions USD) Last 12 months ∆ YoY - constant prices ∆ YoY - constant prices Fiscal Balance as %
Slide 5: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 4
Slide 6: Business Highlights
Business Highlights Consolidated MNP leadership, acquiring valuable customers MOBILE Optimizing frequency bandwidth usage Rationalizing SAC & SRC Data and fixed BB revenues rose +31% and +29% YoY in 3Q12 FIXED Fixed BB ARPU increased +9% QoQ and +19% YoY in 3Q12 Bundling services (ADSL+ fixed lines
Slide 7: Mobile: Value generation seen thru VAS revenues
Mobile: Value generation seen thru VAS revenues Subscriber Share Evolution Mobile KPI Million of lines +11% 58,2 55,8 +12% 52,7 +7% +5,9% 56,3 54,5 53,2 ARPU 49,8 50,9 (ARS/Month) TOU -5% -1% 36,3 35,4 +5,7% 37,4 (SMS/Month) 34,6 +5% Others* 320 304 334 329 MOU (Mins/Month) 0% +1% 16,3 +11% 18,2 17,
Slide 8: Mobile: Postpaid & VAS a growing duet
Mobile: Postpaid & VAS a growing duet Service Revenue Breakdown SAC & SRC Million ARS – Argentine Market as % of Argentine Service Revenues - Before capitalization of SAC & SRC 10.983 +29% 9.573 8.483 774 7.895 +21% Internet +98% 890 17,3% 391 SAC & 16,4% 16,2% Services 524 +70% SRC 4.482 +50% Data
Slide 9: Paraguayan Market: Growing and delivering
Paraguayan Market: Growing and delivering Subscribers Financials Thousand of lines (includes 3G modems) IFRS Million of ARS +9% 714 +14% +53% +22% 627 REVENUES 516 466 2.149 2.270 +28% 2.078 +67% 264 236 1.878 185 OPBDA 158 2010 2011 9M11 9M12 2010 2011 9M11 9M12 Margin 34% 37% 36% 38% • Postpaid1 c
Slide 10: Mobile Revenues: Value added services sustains growth
Mobile Revenues: Value added services sustains growth Evolution of revenues 9M11 – 9M12 IFRS, Million of ARS, Percentage +2.158 (+23%) 369 111 11.608 932 366 9.450 342 38 YoY Variation +12% +3% +29% +70% +36% +22% 9M11 Retail Wholesale* Data Internet Equipment Nucleo* 9M12 Revenues Voice Voice (Para
Slide 11: Broadband: ARPU expansion delivered in 3Q12
Broadband:: ARPU expansion delivered in 3Q12 Broadband Evolution of Accesses Thousand of broadband accesses +7% • Data services revenues up +31% YoY in 3Q12 +12% • ARPU rose +19% YoY in 3Q12 • FTTC network upgrade to compete with CATV • Adding value thru bundling services and video 1.550 1.505 1.612
Slide 12: Fixed voice: ARPU continue growing despite frozen tariffs
Fixed voice: ARPU continue growing despite frozen tariffs Evolution of Lines in Service Thousand of lines in service +0,8% +0,2% • Retail voice revenues increased 5% YoY due to packs of services • Increasing ARPU thanks to supplementary services and flat pricing offers 4.107 4.141 4.132 4.140 TEO AR
Slide 13: Fixed Services: Internet Revenues accelerated in 3Q12
Fixed Services: Internet Revenues accelerated in 3Q12 Evolution of revenues 9M11 – 9M12 IFRS, Million of ARS, Percentage +508 (+13%) 315 -5 4.417 112 3.909 90 -4 38% Regulated Regulated 42% YoY +27% +28% +5% -1% -8% Variation Non Non 62% Regulated 58% Regulated Revenues Retail Voice Wholesale Data I
Slide 14: Evolution of CAPEX
Evolution of CAPEX Capex Evolution PP&E Capex Breakdown Million of ARS +32% 3.192 Others IT 7% Mobile 2.424 +23% access 2.187 21% 21% 1.775 +25% 2.318 PP&E 1.852 +22% 1.545 1.262 18% 33% Fixed Intangible +53% 874 +25% 642 access Assets 572 513 Core & SAC/SRC Infraestructure1 2010 2011 9M11 9M12 % Re
Slide 15: Exploiting network resources to keep growing
Exploiting network resources to keep growing Optimizing • Migrating to 6-sector cell sites to maximize coverage and capacity • Gradual refarming spectrum allocated on 2G to the more efficient 3G • Investments to solve signaling complexity in an extensive-low weight data traffic demand. ie: status up
Slide 16: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 15
Slide 17: TEO Group: Consolidated Results
TEO Group: Consolidated Results Revenues OPBDA* IFRS, Million of ARS, Percentage IFRS, Million of ARS, 18.498 +26% +20% 16.025 14.627 13.359 5.645 5.993 +18% 3Q +23% +7% 4.775 4.726 4.867 4.401 5.254 2Q +6% 1.587 3Q +18% 1.496 4.450 +1% 1.492 2Q 1.474 +24% 5.126 4.134 1Q +15% 1.431 1.647 1Q 2010 201
Slide 18: TEO Group: Consolidated Costs
TEO Group: Consolidated Costs Consolidated Costs1 as % of Revenues Operating Costs1 9M12 Others 2 Labor Costs 67,2% 70,7% 21% 25% ITX 7,6% 8,2% Marketing & 13% 21,3% Taxes Selling 19,7% 30% expenses 11% 8,6% Taxes 9,1% Marketing & ITX costs Sales 14,0% Labor Costs 14,8% • Cost pressure in 3Q12 was p
Slide 19: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Profit Net Income attributable to Telecom IFRS, Million of ARS, Percentage D&A 9M11 9M12 ∆% IFRS, Million of ARS, Percentage PP&E 1.111 1.325 19% SAC and 429 586 37% Connection costs Other intangible 13 16 23% assets 3.857 Total 1.553 1.927 24% +22% 2.513 +3
Slide 20: TEO Group: FCF and Net Financial Position
TEO Group: FCF and Net Financial Position IFRS, Million of ARS - Last 12 months Operating Free Cash Flow 6.318 3.604 1.601 10 87 820 282 OPBDA Capex ∆ WK & 2.724 others Net Financial Position 2.697 Telecom Argentina 1.328(1) 2.025 Telecom Personal 1.471 (2) Nucleo (Paraguay) (102) Net Financial Oper
Slide 21: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 20