Mobile Telecommunications Company K.s.c.p · KSE:ZAIN
Mobile Telecommunications Company K.s.c.p — Zain — H1 2009 Earnings Presentation
51 slides from Mobile Telecommunications Company K.s.c.p's earnings presentation, Jun 30, 2009
Slide 1: Investor Presentation
Investor Presentation June 30, 2009 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: Becoming a Global Telecoms Player
Becoming a Global Telecoms Player Who we are now • Zain is an emerging telecoms player operating in 24 countries in the Middle East and Africa, serving over 69.5 million active customers • The company is the leading mobile telecom operator in 14 of its markets, while 5 are in second position • Reven
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 Acquired 31% stake of Wana Corporate SA (Morocco) Acquired Iraqna in Iraq Launched Saudi Arabia Awarded 2nd GSM license Acquired the remaining 61% operation TM in the Kingdom of Ba
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 2005-2009 Population under license: 600 million Number of Operations: 24 Cust
Slide 6: Zain's Historical Growth
Zain’s Historical Growth From a National Player to an Emerging Market Leader 6 | Zain | IR Presentation 2009 % reflects ownership
Slide 7: Group Structure
Group Structure MTC International Kuwait 100% Burkina Faso Chad Palestine 100% 100% 56.53% Congo B. D.R.C. Jordan 90% 98.5% 56.53% Gabon Kenya Bahrain 90% 95% 56.25% Malawi Zambia Iraq 100% 78.88% 71.67% Niger Sierra Leone Lebanon 90% 100% M.C.* Tanzania Uganda Sudan 60% 100% 100% Nigeria Madagascar
Slide 8: Zain's Key Performance Indicators
Zain’s Key Performance Indicators Revenues (m) EBITDA (m) Net Profit (m) $5,000 $4,014 $3,750 $3,488 $2,500 $1,769 $1,305 $1,250 $552 $534 $0 H1-2008 H1-2009 8 | Zain | IR Presentation 2009
Slide 9: Zain's Customers
Zain’s Customers Driven by Organic Growth and M&A Customers (m) 69.5 70.0 52.5 50.7 35.0 17.5 Customer Growth Zain’s customers increase was 0 boosted by the merger of Zain H1-2008 H1-2009 Jordan and Paltel and the addition of the launch of Zain KSA. 9 | Zain | IR Presentation 2009
Slide 10: Penetration Rates
Penetration Rates Substantial Potential for Future Growth DRC 13% Niger 14% Malawi 15% Chad 18% Burkina Faso 21% Madagascar 22% 18 countries in Zambia 32% Tanzania 33% which Zain operates Uganda 34% still have large Sudan 36% Sierra Leone 36% growth potential. Palestine 37% Nigeria 44% Lebanon 47% K
Slide 11: Top Companies in Middle East & Africa
Top 10 Companies in Middle East & Africa Market Cap (Billion) SABIC $58.2 Al Rajhi Bank $27.2 STC $26.5 Zain $21.2 Etisalat $20.6 Qatar Industries $16.6 Maroc Telecom $15.7 NBK $12.2 Samba $10.9 Saudi Electricity Company $10.5 $0 $15 $30 $45 $60 As of Aug 16, 2009 Source: Reuters 11 | Zain | IR Pres
Slide 12: Top Telecom Companies in Middle East & Africa
Top 10 Telecom Companies in Middle East & Africa Market Cap (Billion) MTN $29.8 STC $26.5 Zain $21.2 Etisalat $20.6 Maroc Telecom $15.7 Mobily $7.1 Orascom $6.2 Q-Tel $5.8 Zain KSA $4.1 Du $3.0 $0 $7.5 $15.0 $22.5 $30.0 As of Aug 16, 2009 Source: Reuters 12 | Zain | IR Presentation 2009
Slide 13: Moving Forward
Moving Forward Expansion Equity Listing ACE • Zain KSA launched its • Zain Group is working towards a • Zain will become one of the commercial services in August primary listing on the London Stock Top-10 mobile operators in the 2008 Exchange (LSE) in 2010 world by 2011 • Zain Ghana launched its • Z
Slide 14: One Network
One Network Innovative Services Guaranteeing Further Competitive Advantages What is One Network? • The world’s first border-less mobile network connecting 17 countries - started in Sept. 2006, further expanded in June, November 2007, April 2008, August and December 2008 to cover KSA and Ghana at lau
Slide 15: Zain's Mobile Operations
Zain’s Mobile Operations 16 | Zain Limited © |
Slide 16: Regional Characteristics
Regional Characteristics Middle East Mature Market High ARPU Moderate Growth Africa Emerging Markets Lower ARPU Higher Growth 16 | Zain | IR Presentation 2009
Slide 17: Zain Group Country Breakdown H1-2009
Zain Group Country Breakdown H1-2009 Zain Group Customers Zain Group Revenues Kenya KSA Nigeria Zambia 3% 5% 17% 4% Kenya Tanzania 2% Gabon 3% Others 3% 17% D.R.C. Nigeria Others 4% 21% 11% Congo B 3% Bahrain 1% Bahrain 3% Palestine Sudan 2% 12% Tanzania Iraq 6% 15% Lebanon Chad 1% Iraq 2% 16% D.R.C
Slide 18: Zain Group Customer Growth
Zain Group Customer Growth June ‘09 vs. June ‘08 -1% Nigeria Kuwait 9% Group Customer Growth: +37% Gabon 15% Congo B. 20% Bahrain 20% Burkina Faso 22% Jordan 23% Zambia 23% Kenya 27% Iraq 28% DRC 29% Sierra Leone 30% Uganda 33% Sudan 46% Madagascar 56% Chad 56% Tanzania 57% Niger 58% Malawi 66% Leba
Slide 19: Blended ARPUs
Blended ARPUs H1-2009 US$ Ghana $3 Kenya $4 Uganda $4 Madagascar $5 Tanzania $6 Burkina Faso $7 Nigeria $7 Sierra Leone $7 Malawi $8 DRC $8 Zambia $8 Niger $10 Chad $10 Iraq $11 Congo B. $12 Sudan $13 Jordan $14 KSA $19 Gabon $25 Bahrain $27 Kuwait $54 Note: Lebanon’s ARPU not included due to Manage
Slide 20: EBITDA Margins H1-2009
EBITDA Margins H1-2009 H1-2009 H1-2008 56% 52% 51% 52% 50% 48% 47% 48% Group EBITDA Margin: 44% 45% 46% 43% 44% 44% 44% 42% 42% 41% 39% 39% 40% 40% 38% 38% 36% 36% 35% 31% 29% 24% 25% 22% 19% 19% 18% 17% 12% 9% 9% 0% -1% t an n q on n ia C a a B. on er i o d e a ar a w ai ai Ira da ni bi s ha on nd
Slide 21: Middle East Overview
Middle East Overview Population (000s) Customers (000s) Kuwait 3,600 1,816 Jordan 6,118 2,445 Bahrain 1,050 679 Iraq 29,492 10,195 Lebanon 4,142 1,168 Kingdom of Saudi Arabia 25,293 3,781 Sudan 39,445 6,734 Palestine 4,280 1,673 Total 113,420 28,491 Population Breakdown Customer Breakdown Revenues B
Slide 22: Africa Overview
Africa Overview Population (000s) Customers (000s) Nigeria 151,478 14,646 Kenya 38,549 2,418 DRC 64,704 3,504 Tanzania 41,464 4,435 Zambia 12,154 2,824 Congo Brazzaville 3,847 1,391 Gabon 1,350 836 Ghana 23,946 1,072 Others 113,125 9,908 Total 450,617 41,034 Population Breakdown Customer Breakdown R
Slide 23: Kuwait
Kuwait Contribution to Group total - Population: 1% Customers: 3% Revenues: 15% - Customer YoY Growth: 9% • Despite Viva’s entry in the market, Zain Kuwait still commands 51% of the market. • Zain is listed on the Kuwait Stock Exchange (KSE) with 24.6% held by the Kuwait Investment Authority. • With
Slide 24: Sudan
Sudan Contribution to Group total - Population: 7% Customers: 10% Revenues: 12% - Customer YoY Growth: 46% • In February 2006, Zain Group acquired the remaining 61% of Mobitel for US$ 1.332 billion. • Zain Sudan’s excellent performance was driven primarily by a solid customer growth (53%), resulting
Slide 25: Iraq
Iraq Contribution to Group total - Population: 5% Customers: 15% Revenues: 16% - Customer YoY Growth: 28% • After securing a 15-year license in August 2007 for US$ 1.25 billion, and following the full integration between MTC-Atheer and Iraqna, Zain managed to increase its ownership stake to 71.67% t
Slide 26: Jordan
Jordan Contribution to Group Total - Population: 1% Customers: 4% Revenues: 5% - Customer YoY Growth: 23% • Despite the highly competitive market, Zain Jordan managed to maintain its position as the market leader with a 44% market share. • The worldwide financial turmoil hit the Jordanian telecom se
Slide 27: Bahrain
Bahrain Contribution to Group Total - Population: 0% Customers: 1% Revenues: 3% - Customer YoY Growth: 20% • A Greenfield operation, Zain Bahrain entered the market as the second mobile operator in December 2003 and was able to maintain its 50% market share with its incumbent operator ‘Batelco’ foll
Slide 28: Zambia
Zambia Contribution to Group Total - Population: 2% Customers: 4% Revenues: 3% - Customer YoY Growth: 23% • One of the key performers of the Group, Zain Zambia was launched in 1998 and continues to be the preferred mobile network with 71% market share. • Given the delayed implementation of several k
Slide 29: Niger
Niger Contribution to Group total - Population: 3% Customers: 2% Revenues: 2% - Customer YoY Growth: 58% • Zain Niger started its commercial activities in October 2001 and since then has evolved to control 68% of the market. • To date, Niger hosts four other mobile operators, notably Orange and Moov
Slide 30: Gabon
Gabon Contribution to Group total - Population: 0% Customers: 1% Revenues: 3% - Customer YoY Growth: 15% • Zain Gabon launched in June 2000 and was able to maintain its position as the market leader since 2003. • Despite heavy bonus promotions and pricing activities from its competitors, Zain Gabon
Slide 31: Tanzania
Tanzania Contribution to Group Total - Population: 7% Customers: 6% Revenues: 3% - Customer YoY Growth: 57% • Zain Tanzania launched its services in November 2001 and currently owns 60% while the government holds the remaining stake. • Given the slow start in Q1-2009 marked by the economic slowdown
Slide 32: Malawi
Malawi Contribution to Group Total - Population: 2.5% Customers: 2% Revenues: 2% - Customer YoY Growth: 66% • Zain Malawi started its operation in October 1999, and currently holds 71% of the market. • With the stabilization of the global prices on crude oil and on the back of improved economic acti
Slide 33: Burkina Faso
Burkina Faso Contribution to Group total - Population: 3% Customers: 2% Revenues: 2% - Customer YoY Growth: 22% • Zain Burkina Faso commenced in January 2001, and despite being the third operator to enter the market, it quickly positioned itself from a challenger to a leader with 50% market share. •
Slide 34: Congo Brazzaville
Congo Brazzaville Contribution to Group Total - Population: 1% Customers: 2% Revenues: 3% - Customer YoY Growth: 20% • Zain Congo B. launched its commercial activities in December 1999. • Zain Congo B. ended the first half of 2009 with 55% market share, a decrease of 4% compared to year-end 2008 due
Slide 35: Chad
Chad Contribution to Group Total - Population: 2% Customers: 2% Revenues: 2% - Customer YoY Growth: 56% • Zain Chad launched services in October 2000 and is currently the no.1 operator with 69% market share. • Zain’s market share in Chad witnessed a 5% decrease since January 2009 as a result of the
Slide 36: Democratic Republic of Congo
Democratic Republic of Congo Contribution to Group Total - Population: 12% Customers: 5% Revenues: 4% - Customer YoY Growth: 29% • Zain DRC started its commercial services in December 2000 and rapidly distinguished itself in this liberalized market as the first mobile operator with 47% market share.
Slide 37: Sierra Leone
Sierra Leone Contribution to Group Total - Population: 1% Customers: 1% Revenues: 1% - Customer YoY Growth: 30% • Zain launched services in September 2000 as the first mobile operator in the country. • Zain’s quality of incoming international traffic continues to be hindered by the absence of an int
Slide 38: Uganda
Uganda Contribution to Group Total - Population: 6% Customers: 3% Revenues: 1% - Customer YoY Growth: 33% • Zain Uganda launched services in 1995 and was Zain’s first operation in Africa, as well as the first GSM network in sub-Saharan Africa. • Despite the ongoing financial turmoil which had seriou
Slide 39: Madagascar
Madagascar Contribution to Group Total - Population: 4% Customers: 2% Revenues: 1% - Customer YoY Growth: 56% • Zain Madagascar joined the Group’s African portfolio in 2005. To date, the operation is the no.2 with a market share of 39%, an increase of four percentage points as compared to H1-2008. •
Slide 40: Kenya
Kenya Contribution to Group Total - Population: 7% Customers: 3% Revenues: 2% - Customer YoY Growth: 27% • Acquired in 2004, Zain Kenya faces a highly competitive market with a relatively low ARPU. • The Kenyan economy was not an exception to the impact of the global recession; the total mobile mark
Slide 41: Ghana
Ghana Contribution to Group Total - Population: 4% Customers: 2% Revenues: 0.5% • Zain Ghana was the first telecom operator to introduce the 3.5 G network when it officially launched on December 15, 2008. • On the back of the challenging economic outlook, Zain Ghana’s market share continued to be vi
Slide 42: Nigeria
Nigeria Contribution to Group Total - Population: 27% Customers: 21% Revenues: 17% - Customer YoY Growth: -1% • In 2001, Zain made history by becoming the first telecom operator to launch commercial services in Nigeria. Following Celtel International’s acquisition of a majority stake in the company
Slide 43: Lebanon
Lebanon Contribution to Group Total - Population: 1% Customers: 2% Revenues: 1% - Customer YoY Growth: 70% • Zain operates in Lebanon under a management contract since June 2004, when it was rebranded to mtc-touch. • In January 2009, the recent successful tender allowed Zain to manage mtc-touch for
Slide 44: Kingdom of Saudi Arabia
Kingdom of Saudi Arabia Contribution to Group Total - Population: 5% Customers: 4% • Zain KSA launched commercial services in late August 2008. • Despite the fact that more than one operator offers services in the Kingdom, Zain had more than 3.7 million customers in less than a year. • Mobile broadb
Slide 45: Palestine
Palestine Contribution to Group Total - Population: 1% Customers: 2% • Paltel is currently providing mobile and fixed line services to the Palestinian population. • The merger between Zain and Paltel establishes a larger group which will consolidate Zain Jordan and Paltel by serving both strategic m
Slide 46: Summary of Key Messages
Summary of Key Messages ‣ Successful execution of 3x3x3 strategy: ‣ Launch of Drive11 to improve operating margins ‣ Two very attractive regions: ‣ Mature high ARPU base in ME ‣ Emerging high growth markets in Africa ‣ Regional powerhouse in ME and Africa ‣ Capture synergies and accelerated growth t
Slide 47: Financial Performance Financial Statements
Financial Performance Financial Statements 47 | Zain | IR Presentation 2009
Slide 48: Balance Sheet
Balance Sheet !"#$%&'(%) *$%&'(%) !"#$%&'(%) *$%&'(%) +,)-$"() +0)1(2) +,)-$"() +0)1(2) .,,/) .,,3) .,,/) .,,3) *44('4) 4&6&7(8)#"%)9:$&';) 5$66("')#44('4) <$==("')4&6&7(8) !"#$%"&'%("&)%("*"&+,#% -./0123%% -.4054/%% !"#$%&#'$&()*%"&+#,#-.%/& 012341245&& 6271889&& 67"',%"&'%89$,7%7,+,:;"(*,#%
Slide 49: Income Statement
Income Statement Six months ended June 30 2009 2008 KD’000 Revenue 1,161,423 935,802 Cost of sales (313,625) (267,018) Gross profit 847,798 668,784 Distribution, marketing & operating expenses (234,169) (221,992) General and administrative expenses (97,517) (95,631) Depreciation and amortization (19
Slide 50: Cash Flow Statement
Cash Flow Statement Six months ended June 30 Six months ended June 30 2009 2008 2009 2008 Cash flows from operating activities KD’000 Cash flows from investing activities KD‘000 Profit for the period before income tax 182,325 190,375 Purchase of investments (1,387) (2,510) Adjustments for: Investmen
Slide 51: Thank you
Thank you For more information please contact Investor Relation Team at: investor.relations@zain.com A wonderful world