Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — Investor Presentation (November 2015)
50 slides from Bharti Airtel's investor presentation, November 2015
Slide 1: Bharti Airtel Management Presentation – Nov 2015
Bharti Airtel Management Presentation – Nov 2015
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: Agenda
Agenda • Introduction to Bharti Airtel • Industry Themes • Bharti Airtel: Growth Opportunities • Key Performance Indicators • Other Businesses • Financial Overview • Leadership 3
Slide 4: Bharti Airtel: Who We Are
ry, airtel BHARTI AIRTEL: WHO WE ARE
Slide 5: Bharti Airtel
Bharti Airtel 2.02 bn Addressable Population 4 Present in US$15 bn 20 Countries Revenue 3 #1 Operator In India 1 #2 Operator #3 Operator In Africa 5 in the World 1 #3 in-country wireless service operator in the world 2 Source: TRAI and Informa Telecoms and Media Notes: 1. As of Mar 31, 2015 2. Based
Slide 6: Journey Through The Times
Journey Through The Times Start up (1995 - 2000) Land Grab (2001 - 2010) Multiple Plays (2011 onwards) 1998 2004 2008 2010 2010 2011 2012 2013 2014 2015 Pan India #3 data Pan India Launch Acquired First operator operator First Launch of footprint; direct to Zain; New 3G operator in the with 4G launc
Slide 7: Global Services Portfolio
Global Services Portfolio Mobile Services across 20 countries Airtel Business (Large enterprises and carriers) • Over 225,000 Rkms1 across 50 countries, 5 continents • 325 mn1 wireless subscribers globally • Over 1.23 trillion minutes of calls in FY 2015 • • Over 333 petabytes of data over the last
Slide 8: Scale and Profitability across Diversified Segments
Scale and Profitability across Diversified Segments Segment Wise Contribution to EBITDA (2QFY16) 1HFY16 63% Revenue $7.4 bn EBITDA $2.6 bn EBIT $1.3 bn 15% 8% 5% 6% 3% Capex $1.4 bn India & SA Africa Tower Infra Airtel Telemedia Digital TV Interest & Taxes $0.7 bn Wireless Wireless business Segment
Slide 9: Well Positioned in Key Growth Markets
WELL POSITIONED IN KEY GROWTH MARKETS
Slide 10: Present in Growth Markets
Present in Growth Markets 53 million new mobile subscriptions globally Central and Eastern Europe, 5 Middle East, 1 Growth markets Western Europe, 0.25 contribute over India, 12 half of new subs Noarth America, 5 - India - Bangladesh Latin America, 1 - Sri Lanka - 17 in Africa in millions APAC (ex C
Slide 11: … And Under-Penetrated Geographies
… And Under-Penetrated Geographies Airtel’s span: 1 Over 235.2 million customers in India Over 80.8 million in Africa Over 9.8 million in South Asia (Sri Lanka and Bangladesh) Source: Ericsson, as of June 2015 Notes: 1. Company filings, as of Quarter ended Sep 2015 11
Slide 12: India: Industry Consolidation Underway Through Revenue Shares
India: Industry Consolidation Underway Through Revenue Shares 8 Operators 14 Operators 10 Operators • Industry consolidation via market share gains, with top 3 now accounting for over 71% of the industry revenues • Exits by many operators post Feb 2012 SC verdict (122 licenses cancelled), many ratio
Slide 13: Africa: Then and Now
Africa: Then and Now 2010 2015 Invested for Growth in Africa 13 of 44
Slide 14: Triggers To Bolster Data Uptake
Triggers To Bolster Data Uptake Median Age Projected in 2020 (years) 1 Smartphone penetration, India (million) 2 30.5 27.9 19.4 17.8 World India Africa Nigeria Source: 1. UN Statistics; Euromonitor 2. Ericsson Mobility Report 2015 14
Slide 15: Major Momentum for Data Growth
Major Momentum for Data Growth Mobile Subscriptions, India (million) 1 Driving 2G to 3G Growth 2 India is expected to have one of the fastest growth rates in the data segment driven by low cost mobile handsets and new technologies (3G/4G) Notes: 1. Ericsson Mobility Report 2015 2. Nokia MBiT 2015 15
Slide 16: Airtel: Growth Opportunities
AIRTEL: GROWTH OPPORTUNITIES
Slide 17: Investment Highlights
Investment Highlights 1 Diversified operator with dominant position in marketplace 2 Large residual opportunity with bulk investments in place 3 Growth Strategy: Voice Secularity, Mobile Data and New Services 4 Focus on customer stickiness with increasing postpaid share 5 Focus on generating efficie
Slide 18: The Leading Indian Wireless Operator
1 The Leading Indian Wireless Operator 24% Wireless Subscriber Market Share1 31.3% Wireless Revenue Market Share2 Others, 3.6% Aircel, 5.6% Customer Market 24% 19% 16% 11% 8% 8% 6% 7% Tata, 6.8% Share 233 BSNL + MTNL, 187 4.9% Airtel, 31.3% 164 RCom, 5.6% 110 84 82 63 67 Idea, 18.7% Vodafone, 23.3%
Slide 19: Multiple Plays, Multiple Opportunities
1 Multiple Plays, Multiple Opportunities Telemedia: DTH: One of four EBIT customers positive, on Airtel, generating DSL ARPU> significant Rs 1000 OFCF Tower Co: Integrated Wireless: Consolidating the data 20 growth Telco markets growth, sharing factor>2 Airtel Airtel Business: Money: 50 countries, B
Slide 20: India: Investments To Yield Results
2 India: Investments To Yield Results Industry Prime Nominal Wide Largest leading spectrum to Value of spectrum optical fiber revenue2 yield data liberalized presence: network yield/MHz at growth: spectrum at 16.1%3 amongst 2x avg with Virtually Pan USD 12 spectrum private same India 3G & billion1 m
Slide 21: India: Strong Spectrum Position
2 India: Strong Spectrum Position Bharti Airtel’s Spectrum Position Spectrum Holdings Spectrum Industry Industry Spectrum Spectrum held Bharti spectrum Spectrum across 900/1800/2100/2300 bands, more or Band Spectrum ex BSNL/MTNL by Bharti Market Share ex less fungible across technologies (MHz) (MH
Slide 22: India: Incumbent with Growth Opportunity
2 India: Incumbent with Growth Opportunity Penetration Share < 60% No 1 Share 60% - 90% No 2 Share 90% + No 3 Share 22
Slide 23: Africa: Geographical Opportunity & Performance
2 Africa: Geographical Opportunity & Performance Mobile Penetration(%) Number of Countries < 60% 8 60% - 90% 6 > 90% 3 Market Position Number of Countries #1 8 #2 6 #3 3 Number of <=2 3 >=4 competitors No. of countries1 9 6 2 Through organic as well as in-country acquisitions we are #1 or #2 in 14 m
Slide 24: Growth Lever: Voice Secularity
3 Growth Lever: Voice Secularity Volume Growth Value Growth Carries over 1 trillion minutes Significant gap between realized and rack rates Secular Volume growth Y-o-Y 1 paisa upside adds $200 mn to top line Significant headroom for value as well as volume upside on a secular basis 24 of 44
Slide 25: Growth Lever: Data Across 2G/3G/4G
3 Growth Lever: Data Across 2G/3G/4G Converged opportunity across India’s first 4G network technologies Smartphone Network: Industry first initiatives – Unique alliances with Flipkart Infinity Plans, Wynk Music and and Samsung, Movies Home delivery of Airtel SIM Data comes at incrementally higher EB
Slide 26: Largest 3G Network In India
3 Largest 3G Network In India 3G sites up 64% YoY 1 Expected Population Coverage Growth 2 160,000 45.0% 140,000 40.0% 33.3% 41.8% 120,000 35.0% 29.3% 26.9% 35.8% 30.0% 100,000 25.0% 80,000 20.0% 60,000 15.0% 40,000 10.0% 62,447 48,825 52,886 20,000 38,055 41,850 5.0% - 0.0% Q2'15 Q3'15 Q4'15 Q1'16 Q
Slide 27: 4G Services Launched
3 4G Services Launched Key to tap into the data opportunity Launched in 334 cities in India on mobiles, mifi, dongles, home wifis 4G launch Africa in the Seychelles, Gabon, Rwanda Unmatched value Innovative Mega Airtel 4G brand and seamless alliances campaign customer experience • Airtel Challenge •
Slide 28: Growth Story: Airtel Money, Wynk, Industry First Initiatives
3 Growth Story: Airtel Money, Wynk, Industry First Initiatives • Offered in India and all 17 opcos in Africa Airtel • KPI: Africa (Q2FY16) Money • Sub base of 8.4 million (up 1.6x YoY), transaction Value: $3,762 million (up 24% YoY) Wynk • Carrier agnostic music and video apps with a curated library
Slide 29: Quality Subscriber Acquisitions
4 Quality Subscriber Acquisitions India: Churn % Africa: Churn % 6.10% 3.50% 5.80% 3.10% 3.30% 5.80% 2.70% 2.50% 5.50% 5.40% Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 • Airtel has industry wide lowest churn at 3.5% • In Africa, churn % decreased from 7% in June 2014 to 5.
Slide 30: Increasing High Value Customers
4 Increasing High Value Customers 203 198 202 198 198 5.7% 193 193 5.6% 183 5.6% • Postpaid Myplan for customers and enterprise 5.5% 173 5.4% 163 5.4% 5.4% • Extended Myplan for prepaid customers 5.3% 153 5.3% 5.2% • Expand company owned retail stores 143 5.1% 133 5.1% 5.0% • Strengthen DTH & Enterp
Slide 31: Focus On Efficient Utilization Of Opex/Capex
5 Focus On Efficient Utilization Of Opex/Capex 240,000 90.00% 76.60% 78.90% 77.40% 76.20% 238,357 238,000 80.00% 236,000 74.50% 70.00% 236,709 234,000 60.00% 232,171 • Invested for growth -> yielding results 232,000 44% 43% 43.10% 43.20% 50.00% 230,000 43.90% 40.00% • Passive Infrastructure sharing
Slide 32: Key Performance Indicators
ry, airtel KEY PERFORMANCE INDICATORS
Slide 33: India Performance Indicators
India Performance Indicators Total Subscribers (mn) Minutes on Network (mn) 11% YoY 235 7% YoY 231 290,802 226 282,138 277,869 217 267,485 212 263,905 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Voice Realization per minute (paisa) Bharti Airtel’s Data and 3G Base (mn) 41.8
Slide 34: India: Significant Upside From 'Data'
India: Significant Upside From ‘Data’ Bharti Airtel’s Non Voice Revenues as a % of Strong Volume Growth Mobile Revenues 1 70% YoY 115.0 30% 102.0 25% 86.6 77.3 20% 67.7 15% 10% 5% 0% Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Data Revenue Other Non Voice Non Data Revenue (bn MBs) Annualized data revenues ha
Slide 35: Africa Performance Indicators
Africa Performance Indicators Total Subscribers (mn) and Total Minutes (bn) Minutes of Usage per sub 100.0 78.3 35.0 140 141 145 74.6 76.3 138 137 71.4 80.8 30.0 80.0 34.6 31.0 25.0 30.4 32.8 60.0 29.0 20.0 40.0 15.0 10.0 20.0 5.0 0.0 0.0 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q2FY15 Q3FY15 Q4FY15 Q1FY1
Slide 36: Africa: Data and Mobile Money Are The Stars
Africa: Data and Mobile Money Are The Stars Data Customer Base (‘000s) Volumes up 105% YoY (Mn MBs) 29% YoY 14,292 105% YoY 13,039 16,483 12,289 11,049 11,242 13,843 11,256 9,475 8,061 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 3G sites up 41% YoY 1 Mobile Money: Transacti
Slide 37: Other Businesses
ry airtel OTHER BUSINESSES
Slide 38: Telemedia Services
Telemedia Services • 1HFY16: 6% YoY revenue growth, 24% YoY EBITDA growth • Pan-India presence of 90 cities • Operates in the entire broadband continuum - fixed line voice and high speed broadband across Homes and Office segments, broadband (via DSL), IPTV, internet leased line and MPLS services • K
Slide 39: Airtel Business
Airtel Business India’s leading and most trusted provider of ICT services • 1HFY16: 21% YoY revenue growth, 27% YoY EBITDA growth • Customer base across - enterprises, governments, carriers and small and medium business. • Diverse portfolio of services - voice, data, video, network integration, data
Slide 40: Digital TV Services
Digital TV Services • 1HFY16: 14% YoY revenue growth, 60% YoY EBITDA growth • First Company in India which provides real integration of all the three screens viz. television, mobile and computer enabling our customers to record their favorite TV programs through mobile and web • Launched “Airtel Dig
Slide 41: Tower Infrastructure
Tower Infrastructure • 1HFY16: 3% YoY revenue growth, 5% YoY EBITDA growth • Holds a 42% stake in Indus Towers, amongst 2.21 the largest tower companies in the world, 120,000 2.08 2.15 2.00 operating in 15 circles, thereby enabling the Sharing Factor (x) 100,000 1.80 87,184 Company to provide leadin
Slide 42: Financial Overview
ry, airtel FINANCIAL OVERVIEW
Slide 43: Steadily Improving Financials
Steadily Improving Financials Consolidated revenues grew 6.6% YoY1 • India – Broad based revenue growth across mobile, DTH, enterprise segments – Revenues up 13.3% YoY on underlying basis » Mobile revenues grew 12.3% YoY » DTH up 22.6% YoY » Airtel Business grew 19% YoY • Africa – Revenue growth1 5.
Slide 44: Steadily Improving Financials (Consolidated)
Steadily Improving Financials (Consolidated) 1 Total Revenues (US$bn) Cash Flow from Operations (US$bn) CAGR of 11.5% (INR) 4.7 CAGR of 3.6% ($) 15.1 4.0 4.1 4.0 14.3 14.1 14.2 3.6 13.1 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Source: Company Filings Note: 1. Africa operations consolidated
Slide 45: Driving increased Profitability
Driving increased Profitability • 190 bps expansion in EBIT margins YoY • Incremental EBITDA margins at 67.6% YoY • Scale and Profitability across diversified segments • Among Top 3 in every non-mobile segment (TowerCo, DTH, Telemedia, B2B) • 37% of consolidated EBITDA comes from businesses other th
Slide 46: Diversified debt profile; focus on deleveraging
Diversified debt profile; focus on deleveraging Over last 3 years: Leverage: Net Debt to EBITDA down from 3x to 2x 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 diversification: 75% USD to a mix
Slide 47: Leadership
ry airtel LEADERSHIP
Slide 48: Leadership in Business
Leadership in Business Amongst top 100 Estimated brand Number 1 service Top Treasury most valuable value of over USD brand in India Team, Asia; Adam brands globally 11 bn, 2012 Brand Equity’s most Smith Award, Study by Millward Published in Financial trusted brands annual EuroFinance Brown, May 2012
Slide 49: 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 50: Thank You
THANK YOU
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