Saudi Telecom Co. · TADAWUL:7010

Saudi Telecom — Investor Presentation (2020)

49 slides from Saudi Telecom's investor presentation, 2020

  1. Slide 1: Investor Presentation 2020

    Investor Presentation Investor Relations 2020

  2. Slide 2: Index

    Investor Presentation 2020 | stc group Index I. Macro Environment 3 II. KSA Telecom Market Overview 8 III. Saudi Telecom Company Profile 14 IV. Strategy Overview 28 V. Business Overview 31 VI. Financial Highlights 40

  3. Slide 3: I. Macro Environment

    I. Macro Environment

  4. Slide 4: Domestic Macroeconomic Indicators

    Domestic Macroeconomic Indicators Investor Presentation 2020 | stc group GDP & Government Budget: Saudi Unemployment Rate (15+): Data on 2019, real GDP showed that the economy expanded by 0.3% (Y-o-Y). During GaStat’s latest labor market release for Q3 2019 shows that unemployment 2019, the oil sect

  5. Slide 5: Domestic Macroeconomic Indicators Cont.

    Domestic Macroeconomic Indicators Cont. Investor Presentation 2020 | stc group Nominal GDP of World’s Major Economy: Population: (KSA ranked #19 out of the top largest 20 economies in 2018) 33.41 (Mn) 35 32.55 10% 31.02 31.79 $ 4,971 30.77 29.20 12.65 30 11.71 12.14 10.07 10.24 9.36 7% 3,997 5.39% 2

  6. Slide 6: Domestic Macroeconomic Indicators Cont.

    Domestic Macroeconomic Indicators Cont. Investor Presentation 2020 | stc group Historical Average Communication Consumer Spending (By Segmentation of Average Consumer Spending in 2018 Total Households): (By Total Households): Throughout the years, percentage of consumer spending on communication ser

  7. Slide 7: Aligning stc Strategy with Saudi Arabia's 2020 NTP & 2030 Vision

    Aligning stc Strategy with Saudi Arabia’s 2020 NTP 2020 Investor Presentation 2020 | stc group & 2030 Vision  To raise our ranking on the E-Government Survey Index from our current position of 36 to be among the top five nations; Elements of stc Strategy:  To increase the private sector's contribu

  8. Slide 8: II. KSA Telecom Market Overview

    II. KSA Telecom Market Overview

  9. Slide 9: KSA & Telecom Industry (Q4 2019)

    KSA & Telecom Industry (Q4 2019) Investor Presentation 2020 | stc group • Saudi Aramco's world record-breaking IPO reaches $29.4 billion. • Saudi Arabia became the first Arab nation to take over the G20 presidency. It will host world leaders for a global summit in its capital on November 21- 22. Mac

  10. Slide 10: KSA Telecom Market Overview

    KSA Telecom Market Overview Investor Presentation 2020 | stc group Mobile & Fixed markets are saturated, however, this is expected to be offset by the increase in broadband subscribers Mobile Subscribers: Fixed Telephony Subscribers: (Mn) (Mn) 4 41% 171.40% 34.00% 53 180% 32.30% 35.00% 31.60% 149.40

  11. Slide 11: KSA Internet Usage

    KSA Internet Usage Investor Presentation 2020 | stc group Internet Usage: Percentage Distribution of Internet Access in In 2019, the Kingdom was ranked in the 13th place in the world’s mobile internet 2018: speed and in the 53rd place in fixed broadband speed**. (Mn) 9% 18% 30 82.10% 83.40% 90% 74.9

  12. Slide 12: KSA Internet Usage

    KSA Internet Usage Investor Presentation 2020 | stc group Internet Use Based on Device Perspective As of Jan 2019: # # Total Number of Active Internet Users As a Percentage Total Number of Active Mobile Internet Users As a Percentage Internet Users: 30.26 mn of Total Population: 89% Mobile Internet

  13. Slide 13: stc Internet Performance

    stc Internet Performance Investor Presentation 2020 | stc group 4G Mobile Download Speed: (Mbps) (Mbps) 60 60 40 40 51.4 52.7 20 20 45.4 33.0 37.9 35.4 37.2 11.4 0 0 Ookla Meqyas Q2-Q3 2017 Q3-Q4 2018 Q1-Q2 2019 Q3-Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 4G Mobile Upload Speed: (Mbps) (Mbps) 30 20 2

  14. Slide 14: III. stc Company Profile

    We are looking forward III. stc Company Profile * stc is ranked as the most valuable brand in Saudi Arabia with a total value of SAR 30.09 bn (USD 8.024 bn) as of January 2020

  15. Slide 15: stc at Glance (12M 2019)

    stc at Glance (12M 2019) Investor Presentation 2020 | stc group Balance Sheet SAR GCC Ranking** #1 in KSA in Mobile Total Assets 118.33 bn #2 & Fixed Broadband A- subscribers Total stc group Total Equity 61.76 bn #1 Standard employees 19K Total Liabilities 55.27 bn #3 & Poor's & A1 Total stc KSA Deb

  16. Slide 16: Board of Directors

    Board of Directors Investor Presentation 2020 | stc group HRH. Prince Mohammed Khalid ALFaisal Mr. Rashid Ibrahim Sharif Chairman of the Board Board Member H.E. Dr. Khaled Hussain Biyari Mr. Osama Yassin Al-Khiary Board Vice Chairman Board Member H.E. Mohammed Talal Al-Nahhas Mr. Roy Chestnutt Board

  17. Slide 17: Major Milestones

    Major Milestones Investor Presentation 2020 | stc group Since Establishment, stc has Capitalized on Major Growth Opportunities 1998 2003 2006 2008 2010 2012 2014 2016 2018  Company  Introduction of  Increased capital  Stake acquisition in  Launched Bundled  Fiber Optic in  SR 5 billion Sukuk

  18. Slide 18: Winning Awards

    Wining Awards Investor Presentation 2020 | stc group 2010: 2016:  Advertiser Excellence in the Middle East and North Africa by Dubai Linux;  Multiple creativity awards on outstanding work on the Rayi7 Rayi7, Dawri Plus, and Laywagif campaigns  Operational Excellence Award at the Global Forum for

  19. Slide 19: Expanding Footprints Across Four Countries Has Unlocked Growth Opportunities

    Expanding Footprints Across Four Countries Has Unlocked Investor Presentation 2020 | stc group Growth Opportunities 2007 Kuwait 2009 Bahrain Kingdom of Saudi Arabia 2008 Malaysia 19

  20. Slide 20: stc 5G Technology

    stc 5G Technology Investor Presentation 2020 | stc group 1st Launched 2,300 5G IoT Award Wining Commercial Towers Technology Network  stc is the first telecom company  The total number of 5G towers as end  The company also has the Internet of  stc won 3 international awards at the launching the

  21. Slide 21: 12M Revenue Breakdown

    12M Revenue Breakdown Investor Presentation 2020 | stc group stc KSA SAR 40.26 bn Channels by stc SAR 17.41 bn SAR 54.37 bn Revenue* Other Operating Segments** SAR 12.63 bn Eliminations/ Adjustments SAR (15.93) bn *As of 31 Dec. 2019 ** Other operating segments include: stc Kuwait, stc Bahrain, Solu

  22. Slide 22: Key Credit Strengths

    Key Credit Strengths Investor Presentation 2020 | stc group  Largest telecom operator in the MENA region  Market cap of SAR 203.6 bn (USD 54 bn), and presence in 4 countries (as of 31-Dec-19)  Experienced best-in-class management team  Strong financial performance  Management team has significa

  23. Slide 23: Share Information

    Share Information Investor Presentation 2020 | stc group Market Capitalization as of 31st Dec. 2019 Among Major Saudi Ownership Structure As of 31st Dec. 2019: Listed Companies : Foreign SAR Bn Ownership 281.7 4.3% 203.6 26% 163.5 147.8 84.2 72.0 71.3 64.9 70% 51.9 49.5 SABIC stc Alrajhi NCB Saudi R

  24. Slide 24: Share Information

    Share Information Investor Presentation 2020 | stc group Share Performance Vs. Telecom Index and TASI: Market Capitalization of Telecom Sector As of 31st Dec. 2019: stc established an international Q1, 2019 Sukuk Program Q2, 2019 stc won a Fin. Results Fin. Results (2300) MHz Year End spectrum 2018

  25. Slide 25: Submarine Cable Investment & Optimized Connectivity

    Submarine Cable Investment & Optimized Connectivity Investor Presentation 2020 | stc group Submarine Cables stc has given a strategic importance to establish its international network, as about 99% of the total communication # Cable System Name of Cable 99% and data transmission is carried out throu

  26. Slide 26: Submarine Cable Investment & Optimized Connectivity

    Submarine Cable Investment & Optimized Connectivity Investor Presentation 2020 | stc group Source: stc Wholesale Unit 26

  27. Slide 27: Healthy Organization – stc's OHI Success Story Continues

    Healthy Organization – stc’s OHI Success Story Continues with Hitting Investor Presentation 2020 | stc group Target Again stc OHI 2019 Entered Top Quartile 33 +6 39 +8 47 +8 55 +9 64 +7 71 +7 78 2013 2014 2015 2016 2017 2018 2019  stc Unique Success Story continues in it’s 7th year;  Ranked in the

  28. Slide 28: IV. Strategy Overview

    IV. Strategy Overview wR sen ati . Sic

  29. Slide 29: stc Vision & Values

    stc Vision & Values Investor Presentation 2020 | stc group Vision: “ We are a world-class digital leader providing innovative services and platforms to our customers in the MENA region. “ Values: 29

  30. Slide 30: stc DARE Strategy

    stc DARE Strategy Investor Presentation 2020 | stc group igitize stc ccelerate Core Asset Performance Digitally transform stc’s operational Extract more value from our core assets capabilities and traditional segments dare einvent Customer xpand Aggressively Experience At World-class Scale And Scope

  31. Slide 31: V. Business Overview

    V. Business Overview

  32. Slide 32: stc Subsidiaries, Associates & Joint Ventures

    stc Subsidiaries, Associates & Joint Ventures Investor Presentation 2020 | stc group Local Subsidiaries International Subsidiaries Associate Companies Arab Satellite Communications Channels by stc 100% stc Bahrain 100% 36.6% Organization Specialized by stc 100% stc Kuwait 51.8% Virgin Mobile KSA 10%

  33. Slide 33: Tawal

    Tawal Investor Presentation 2020 | stc group Date of Incorporation: The subsidiary was founded in Q1 2018. Invested Capital: A total of SAR 2.5 billion. Subsidiary Objective: To be responsible for owning, constructing, operating, leasing and investing in the towers. stc Ownership: Since establishmen

  34. Slide 34: Specialized by stc

    Specialized by stc Investor Presentation 2020 | stc group Date of Incorporation: The subsidiary was founded in 2002. Invested Capital: A total of SAR 252 million. Subsidiary Objective: stc Specialized, is the only national licensed operator providing the business sector, and the governmental, indust

  35. Slide 35: Channels by stc (Formerly Sale Advanced – SALECO)

    Channels by stc (Formerly Sale Advanced – SALECO) Investor Presentation 2020 | stc group Date of Incorporation: The subsidiary was founded back in 2008 Invested Capital: A total of SAR 100 million Subsidiary Objective: Considered as the sales and distribution arm of stc Group, stc Channels is the le

  36. Slide 36: Solutions by stc

    Solutions by stc Investor Presentation 2020 | stc group Date of Incorporation: The subsidiary was founded in 2002. Invested Capital: A total of SR 100 million. Subsidiary Objective:  To enable digital transformation to support government and private sector goals; spreading the benefits of Cloud com

  37. Slide 37: AQALAT

    AQALAT Investor Presentation 2020 | stc group Date of Incorporation: The subsidiary was founded in 2013. Invested Capital: A total of SAR 70 million. Subsidiary Objective: To develop and manage the company’s properties in all parts of the Kingdom by benefiting from the capabilities of the Saudi Tele

  38. Slide 38: stc pay

    stc pay Investor Presentation 2020 | stc group Date of Incorporation: The subsidiary was founded in 2018. Invested Capital: A total of SAR 400 million. Subsidiary Objective: stc Pay is a digital secure wallet that empowers individuals to take full control of their finances at their fingertips- anyti

  39. Slide 39: Saudi Technology Ventures (VC Fund)

    Saudi Technology Ventures (VC Fund) Investor Presentation 2020 | stc group STV is an independent VC fund with a total capital of USD 500 is anchored by stc with access to its assets (e.g., network, channels, analytics, customer base, etc.)  Co-leading a SAR 750 million (USD $200 million) investment

  40. Slide 40: VI. Financial Highlights

    VI. Financial Highlights Sic

  41. Slide 41: Financial Highlight

    Financial Highlight Investor Presentation 2020 | stc group Revenue EBITDA 0.4% 4.6% -7.2% 7.2% -6.0% 23 -4.5% 21.27 14.11 54.37 21 0.76 50% 13.60 51.96 5.8 5.66 49% 19 20.51 13.39 13.27 19.84 13.21 5.6 0.19 47% 42% 17 5.4 5.24 5.47 45% 5.2 5.39 5.39 15 39.1% 0.18 5.00 43% 38.2% 34% 5.0 13 5.06 0.21

  42. Slide 42: Financial Highlight Cont.

    Financial Highlight Cont. Investor Presentation 2020 | stc group Revenue EBITDA +1.4% +2.0% 54.37 21.26 52.67 19.84 51.96 19.29 50.65 50.66 18.43 18.03 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Operating Profit Net Profit +1.0% +2.9% 12.25 12.48 10.78 10.66 11.86 10.02 10.99 9.26 9.95 8.90 2

  43. Slide 43: Financial Highlight Cont.

    Financial Highlight Cont. Investor Presentation 2020 | stc group Performance: 61 95% 52.67 54.37 17.27% 50.66 51.96 15.93% 16.45% 14.85% 38.17% 39.11% 36.38% 41 65% 34.23% 9.23% 9.86% 8.74% 9.01% 21 23.57% 22.96% 35% 21.69% 18.89% 19.77% 20.74% 19.62% 16.89% 1 5% 2016 2017 2018 2019 2016 2017 2018 2

  44. Slide 44: Financial Highlight Cont.

    Financial Highlight Cont. Investor Presentation 2020 | stc group Total Capital Expenditure (Capex): CFO/ Capex Ratio: 30% 12 20 26% 2.40 10 2.01 1.96 1.83 20.91% 14 22% 1.80 8 19.03% 18.78% 15.67% 18% 8 6 1.20 0.87 4 14% 2 18.38 15.92 19.13 9.92 0.60 10.02 7.94 9.76 11.37 2 10% 2016 2017 2018 2019 2

  45. Slide 45: Financial Highlight Cont.

    Financial Highlight Cont. Investor Presentation 2020 | stc group Dividends Distribution: 14 89.89%  Recently announced, the company has approved its dividend policy for the next 79.84% three years starting from the 4th quarter 2018 (as approved by the board of 74.21%* 75.05% 90% directors); 10.02 1

  46. Slide 46: Financial Highlight Cont.

    Financial Highlight Cont. Investor Presentation 2020 | stc group Stability of Dividend Distributions: Annualized Capital Gains: Over the last five years, stc distributed a total of SAR 44 billion to investors through a stable 1 year 10.16% dividend distribution in each quarter (SAR 1/share) which in

  47. Slide 47: Sukuk Programs Issued by stc

    Sukuk Programs Issued by stc Investor Presentation 2020 | stc group Item International Sukuk Program Domestic Sukuk Program Issuing Type International Sukuk (senior, unsecured sukuk) Domestic Sukuk Currency USD denominated SAR denominated Program Amount USD 5 Bn SAR 5 Bn  To support the execution o

  48. Slide 48: Disclaimer

    Disclaimer Investor Presentation 2020 | stc group This presentation has been prepared as an informative guide that might assist interested parties in gaining an insight into the history and background of telecommunications within Saudi Arabia, as they relate to the Saudi Telecom Company (stc). Furth

  49. Slide 49: Let's create the future together

    Let`s create the future together Thank you

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