Mobile Telecommunications Company K.S.C.P · KSE:ZAIN
Mobile Telecommunications Company K.S.C.P — Zain — Q3 2008 Earnings Presentation
47 slides from Mobile Telecommunications Company K.S.C.P's earnings presentation, Sep 30, 2008
Slide 1: Investor Presentation
Investor Presentation September 30, 2008 A wonderful world
Slide 2: Disclaimer
Zain Disclaimer Certain expectations and projections regarding future performance of the company referenced in this presentation may be “forward-looking” statements within the meaning of applicable securities laws and regulations. These are statements which the management believes are true at the ti
Slide 3: Zain... becoming a Global Telecoms Player
Zain... becoming a Global Telecoms Player Who we are now • Zain is an emerging telecoms player operating in 22 countries* in the Middle East and Africa, serving over 56.2 million active customers • The company is the leading mobile telecom operator in 13 of its markets, while 6 are in second positio
Slide 4: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Markets Leader Rebranded to Zain along with 4 operations Awarded 2nd GSM license Acquired the remaining 61% TM in the Kingdom of Bahrain of Mobitel (Sudan) Acquired 15 year nation-wide license in Iraq Won Bid for 3rd GSM lisence in the K
Slide 5: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Markets Leader 1983-2002 Population under license: 3.2 million Number of Operations: 1 2002-2005 Population under license: 42.8 million Number of Operations: 5 2005-2008 Population under license: 546 million Number of Operations: 22 Cust
Slide 6: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Markets Leader 6 | Zain | Q3-2008 Investor Presentation
Slide 7: Group Structure
Group Structure MTC International Burkina Faso Chad Kuwait 100% 100% 100% Congo B. D.R.C. Jordan 90% 98.5% 96.52% Gabon Kenya Our goal is to own at Bahrain 90% 80% least 50% of our 56.25% Malawi Zambia operations. In all Iraq 100% 78.88% operations we have 30% management control Niger Sierra Leone L
Slide 8: Executive Management
Executive Management Unified and Experienced Management Team Group CEO Dr. Saad Al Barrak Group CFO Group CSO Sam Deeb Haitham Al Khaled Group CCO Group CTO Group CIO Group CHRO Tito Alai Khaled Al Hajeri Mohammed Rafi Tony Tasca Group CCIO Group CRO Group CBDO Ibrahim Adel Mohammed Shabib Salah Al
Slide 9: Zain's Key Performance Indicators
Zain’s Key Performance Indicators Our Achievements Revenues (m) EBITDA (m) Net Profit (m) $5,912 $6,000 $4,500 $4,167 $3,000 $2,634 $2,003 $2,051 $1,887 $1,500 $1,112 $1,153 $1,130 $1,051 $629 $764 $604 $414 $327 $0 2004 2005 2006 2007 Q3-2008 9 | Zain | Q3-2008 Investor Presentation
Slide 10: Zain's Customers
Zain’s Customers Driven by Organic Growth Customers (m) 60 56.2 45 42.5 30 27.0 15 13.6 3.2 Customer Growth 0 Zain’s customers increase was 2004 2005 2006 2007 Q3-2008 driven organically by the high growth of the African continent 10 | Zain | Q3-2008 Investor Presentation
Slide 11: Zain's Key Performance Indicators: Synergies of Two Regions
Zain’s Key Performance Indicators Synergies of Two Regions Africa Regional Contribution Middle East Customers Revenues EBITDA Net Income 37% 46% 53% 23% 63% 54% 47% 77% Full Year 2007 Customers (m) Revenues (m) EBITDA (m) Net Income (m) Middle East 15.682 $2,748 $1,390 $874 Africa 26.819 $3,164 $1,2
Slide 12: Penetration Rates
Penetration Rates Substantial Potential for Future Growth % Niger 10% Malawi 11% Chad 12% DRC 12% Sierra Leone 16% Burkina Faso 17% 16 countries in Madagascar 18% which Zain operates Uganda 24% Sudan 25% have low penetration Zambia 26% rates Tanzania 29% Lebanon 34% Kenya 39% Nigeria 41% Congo B. 52
Slide 13: Top Companies in Middle East & Africa
Top 10 Companies in Middle East & Africa Overall and Telecoms Overall Market Cap (billion) Telecoms SABIC $64.9 STC $30.1 STC $30.1 Etisalat $22.3 Alrajhi Bank $26.3 Zain $20.2 Etisalat $22.3 MTN $19.8 Zain $20.2 Maroc Tel $17.4 MTN $19.8 Orascom Tel $6.4 NBK $18.4 Zain KSA $5.1 Maroc Tel $17.4 Q-Te
Slide 14: Moving Forward
Moving Forward Expansion IPO ACE • Acquired a 15-year nation-wide • The Zain Group is working towards a • Zain will become one of the license in Iraq; Acquired Iraqna. primary listing on the London Stock Top-10 mobile operators in the MTC-Atheer & Iraqna jointly Exchange (LSE) in the first half of 2
Slide 15: One Network
One Network Innovative Services Guaranteeing Further Competitive Advantages What is One Network? • The world’s first border-less mobile network connecting 11 countries - started in Sept. 2006, further expanded in June, November 2007 and April 2008 to cover 4 countries in the Middle East. • Includes
Slide 16: Zain's Mobile Operations
Zain’s Mobile Operations 16 | Zain Limited © | Welcome to our new identity | 08 09 2007
Slide 17: Regional Characteristics
Regional Characteristics Middle East Mature Market High ARPU Moderate Growth Africa Emerging Markets Medium ARPU Very High Growth 17 | Zain | Q3-2008 Investor Presentation
Slide 18: Zain Group Country Breakdown Q3-2008
Zain Group Country Breakdown Q3-2008 Zain Group Customers Zain Group Revenues Tanzania - 4% Bahrain - 1% Iraq - 15% Nigeria - 22% Others - 15% Zambia - 5% Jordan - 4% Kenya - 2% Others - 12% Zambia - 4.5% Kuwait - 3% Lebanon - 1% Gabon - 4% Bahrain - 3% Tanzania - 6% D.R.C. - 5% Sudan - 8% Jordan -
Slide 19: Zain Group Customer Growth Q3-2008
Zain Group Customer Growth Q3-2008 Bahrain 89% Iraq 125% Jordan 11% Kuwait 11% Group Customer Growth for Q3-2008: 54% Lebanon 24% Sudan 33% Burkina Faso 54% Chad 73% Congo B. 35% DRC 42% Gabon 18% Kenya -7% Madagascar 132% Malawi 108% Niger 60% Nigeria 61% Sierra Leone 39% Tanzania 46% Uganda 59% Za
Slide 20: Blended ARPUs Q3-2008
Blended ARPUs Q3-2008 US$ Kenya $5 Uganda $6 Madagascar $7 Sierra Leone $8 Burkina Faso $8 Tanzania $9 Nigeria $9 Malawi $10 DRC $11 Niger $11 Chad $12 Zambia $13 Iraq $13 Congo B. $14 Sudan $16 Jordan $21 Bahrain $30 Gabon $30 Kuwait $71 Note: Lebanon ARPU not included due to Management Contract 20
Slide 21: EBITDA Margins Q3-2008
EBITDA Margins Q3-2008 Q3-2008 Q3-2007 52% 51% 51% 51% 50% 50% 48% Group EBITDA Margin: 40% 46% 45% 46% 44% 41% 39% 35% 36% 33% 34% 28% 29% 30% 30% 18% 14% 12% 10% -23% Kuwait Jordan Bahrain Iraq Lebanon Sudan Nigeria Kenya DRC Tanzania Zambia Congo B. Gabon 21 | Zain | Q3-2008 Investor Presentation
Slide 22: Middle East Overview
Middle East Overview Population (000s) Customers (000s) Kuwait 3,600 1,711 Jordan 5,900 2,253 Bahrain 1,050 603 Iraq 28,900 8,522 Lebanon 4,100 761 Sudan 38,500 4,530 Total 82,050 18,380 Population Breakdown Customer Breakdown Revenues Breakdown Q3-2008 6% 1% 3% 1% 1% 7% 15% 8% 0% 1% 4% 20% 3% 1% 8%
Slide 23: Africa Overview
Africa Overview Population (000s) Customers (000s) igeria 146,200 15,905 enya 38,100 2,558 RC 59,300 3,023 anzania 40,000 3,285 ambia 11,900 2,520 ongo Brazzaville 3,800 1,246 abon 1,300 761 thers 112,075 7,630 otal 412,675 36,928 Population Breakdown Customer Breakdown Revenues Breakdown Q3-2008 29
Slide 24: Kuwait
Kuwait Contribution to Group total - Population: 1% Customers: 3% Revenues: 20% - Customer YoY Growth: 11% • Zain in Kuwait is perceived as the market leader with a 57% market share; and the most innovative mobile service company due to its successful services such as Zain Junior and Emergency Credi
Slide 25: Iraq
Iraq Contribution to Group total - Population: 6% Customers: 15% Revenues: na - Customer YoY Growth: 125% • Acquired a 15-year nationwide mobile license for US$1.25 billion in August 2007. • Acquired Iraqi mobile operator Iraqna with more than 3 million customers from Orascom for US$1.2 billion in D
Slide 26: Sudan
Sudan Contribution to Group total - Population: 8% Customers: 8% Revenues: 12% - Customer YoY Growth: 33% • Mobitel, Sudan’s first mobile operator was fully acquired by Zain (formerly MTC) in February 2006 in a deal valued at US$1.332 billion. • Zain in Sudan strong performance was driven by the lau
Slide 27: Jordan
Jordan Contribution to Group Total - Population: 1% Customers: 4% Revenues: 7% - Customer YoY Growth: 11% • Zain in Jordan is the Group’s first acquired operation, and its current stake was acquired in January 2003 for US$418.9 million. • Zain in Jordan was able to maintain its no.1 position with a
Slide 28: Zambia
Zambia Contribution to Group Total - Population: 2% Customers: 4.5% Revenues: 5% - Customer YoY Growth: 41% • One of the star performers of the Group, Zain Zambia was launched in 1998 and controls 74% of the market. • Following the successful launch of the new brand “Zain” in August 2008, Zain was a
Slide 29: Bahrain
Bahrain Contribution to Group Total - Population: 0% Customers: 1% Revenues: 3% - Customer YoY Growth: 89% • A Greenfield operation, Zain Bahrain launched its commercial services in December 2003. • Currently there is only one competitor in Bahrain ‘Batelco’ although the process of awarding a third
Slide 30: Tanzania
Tanzania Contribution to Group Total - Population: 8% Customers: 6% Revenues: 4% - Customer YoY Growth: 46% • Zain Tanzania launched its services in November 2001 and currently owns 60% while the government holds the remaining stake, • The operation is the second largest in a country boasting 4 mobi
Slide 31: Gabon
Gabon Contribution to Group Total - Population: 0% Customers: 1% Revenues: 4% - Customer YoY Growth: 18% • Zain Gabon was launched in June 2000. • The operator remains the undisputed leader with a 59% market share despite the stiff competition from its two competitors Moov and Libertis. • Gabon is u
Slide 32: Congo Brazzaville
Congo Brazzaville Contribution to Group total - Population: 1% Customers: 2% Revenues: 3% - Customer YoY Growth: 35% • Zain Congo B. launched its commercial services in December 1999. • Despite MTN’s ongoing competition and Warid’s aggressive tariff plans, Zain was able to maintain its position as t
Slide 33: Niger
Niger Contribution to Group total - Population: 3% Customers: 2% Revenues: 2% - Customer YoY Growth: 60% • Zain Niger launched its services in October 2001, and is the market leader with a 67% market share. • Niger hosts four other mobile operators, notably Orange and Moov of 10% and 13% respectivel
Slide 34: Malawi
Malawi Contribution to Group Total - Population: 3% Customers: 2% Revenues: 2% - Customer YoY Growth: 108% • Zain Malawi launched its commercial services in October 1999 and controls 74% of the market. • 15 new sites were rolled-out, bringing population coverage to 87%. • One Network continues to dr
Slide 35: Chad
Chad Contribution to Group total - Population: 2% Customers: 2% Revenues: 2% - Customer YoY Growth: 73% • Zain Chad launched services in October 2000. • Zain in Chad’s excellent performance was driven by strong customer growth and brand loyalty. • New services were rolled-out including GPRS/Internet
Slide 36: Burkina Faso
Burkina Faso Contribution to Group Total - Population: 3% Customers: 2% Revenues: 2% - Customer YoY Growth: 54% • Zain Burkina Faso began its operation in January 2001. • With Telmob’s ongoing competition and Moov’s aggressive acquisition activities, Zain in Burkina Faso’s performance was slightly a
Slide 37: Sierra Leone
Sierra Leone Contribution to Group Total - Population: 1% Customers: 1% Revenues: 1% - Customer YoY Growth: 39% • Zain Sierra Leone launched services in September 2000, and is the leading provider of telecom services in this highly penetrated market. • Zain in Sierra Leone stands as no.1 with a mark
Slide 38: Madagascar
Madagascar Contribution to Group Total - Population: 4% Customers: 2% Revenues: 1% - Customer YoY Growth: 132% • Zain Madagascar joined the Zain’s Group African portfolio in 2005. • Despite a very competitive environment, Zain was able to increase its market sahre to 36%. • Intense commercial activi
Slide 39: Nigeria
Nigeria Contribution to Group Total - Population: 29% Customers: 29% Revenues: 22% - Customer YoY Growth: 61% • In May 206, Zain acquired 65% majority stake in the Nigerian mobile operator ‘V- mobile’ for US$1.005 billion. • Nigeria is considered as Africa’s most populous nation and will soon overta
Slide 40: Uganda
Uganda Contribution to Group Total - Population: 6% Customers: 4% Revenues: 2% - Customer YoY Growth: 59% • Zain Uganda launched services in 1995 and was Zain’s (formerly Celtel) first operation in Africa. • Zain’s market share grew to 38% despite fierce competition from MTN. • Q3-2008 was marked by
Slide 41: Democratic Republic of Congo
Democratic Republic of Congo Contribution to Group Total - Population: 12% Customers: 5.5% Revenues: 5% - Customer YoY Growth: 42% • Customer numbers increased by 42% in Q3-2008 to over 3 million despite the increased competition from existing operators. • More than 74 sites were rolled-out in attem
Slide 42: Kenya
Kenya Contribution to Group Total - Population: 8% Customers: 5% Revenues: 2% - Customer YoY Growth: (7%) • Acquired in May 2004, Zain Kenya operates in a competitive market with relatively low ARPU of $5. • Zain in Kenya’s market share was under pressure by Safaricom’s attempt to defend its market
Slide 43: Lebanon
Lebanon Contribution to Group Total - Population: 1% Customers: 1% Revenues: 1% - Customer YoY Growth: 24% • Zain currently operates in Lebanon under a Management Contract that expires in 2009 after • The government has announced the privatization of Lebanon’s 2 government- owned mobile networks. •
Slide 44: Saudi Arabia: Zain's Latest Middle Eastern License Acquisition
Saudi Arabia Zain’s Latest Middle Eastern License Acquisition Zain in KSA launched its commercial services on August 26, 2008 • Zain led consortium won the US$6.1 billion bid for third mobile license in Saudi Arabia in May, 2007 and was awarded a license in July. • Zain holds a 50% interest in the c
Slide 45: Ghana: Zain's Acquisition of Westel
Ghana Zain’s Acquisition of Westel in Ghana Zain Establishes Presence in Africa’s Fourth Largest Economy • October 2007, Zain acquires 75% of Westel for USD 120 million. • Westel is Ghana’s second national operator with fixed and mobile license. • This acquisition strengthens the Group’s footprint i
Slide 46: Summary of Key Messages
Summary of Key Messages ‣ Successful execution of 3x3x3 strategy ‣ Regional powerhouse in ME and Africa ‣ Two very attractive regions: ‣ Mature high ARPU base in ME ‣ Emerging high growth markets in Africa ‣ Capture synergies and accelerated growth through integration and ACE 46 | Zain | Q3-2008 Inv
Slide 47: Thank you
Thank you For more information please contact Investor Relation Team at: IRLIST@zain.com Mohammad Abdal - +965.4644956 Yaman Aljundi - +973.36035154 Eline Hilal - +973.36035022 A wonderful world