Telecom Argentina Sa Class B · BCBA:TECO2
Telecom Argentina Sa Class B — Q1 2013 Earnings Presentation
23 slides from Telecom Argentina Sa Class B's earnings presentation, 2013
Slide 1: First Quarter 2013 Earnings Release Conference Call Presentation
First Quarter 2013 Earnings Release Conference Call Presentation
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: Soft economic conditions in 1Q13
Market Overview: Soft economic conditions in 1Q13 Real GDP* Consumption & Wages Trade & Fiscal Balance Billion USD, at current prices – Last 12 months Billion USD, at current prices – Last 12 months Trade Balance (Billion USD) Last 12 months ∆ YoY - constant prices National Wages - ∆ % YoY Fiscal Ba
Slide 5: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 4
Slide 6: Business Highlights
Business Highlights Postpaid delivered +2/3 of the quarterly net adds MOBILE Consistent VAS revenue expansion Streamlining customer acquisition and retention costs Data services to corporate clients sustains value generation FIXED Enhancing value proposition with compelling offers Upselling in broad
Slide 7: Mobile: Strong postpaid net adds drives growth
Mobile: Strong postpaid net adds drives growth Mobile Clients Evolution • +2/3 of 1Q13 net adds were postpaid, Million of lines now representing 33% of our clients YoY var 19.0 19.1 +3% • Consolidating revenue share leadership 18.5 18.7 18.9 • Average monthly MOU and TOU 5.9 6.0 6.2 6.2 6.3 +7% Post
Slide 8: Mobile: Leveraging on VAS to sustain revenue growth
Mobile: Leveraging on VAS to sustain revenue growth Service Revenue Breakdown SAC & SRC Million ARS – Argentine Market as % of Argentine Service Revenues - Before capitalization of SAC & SRC +21% 13,312 10,983 1,248 17.3% +61% SAC & 16.4% 16.2% Internet 774 SRC 14.2% 14.5% Services 5,765 +18% Agent
Slide 9: Paraguay: Mobile Internet services key to revenue growth
Paraguay: Mobile Internet services key to revenue growth Subscribers Financials Thousand of lines (includes 3G modems) YoY var IFRS Million of ARS 867 2,270 2,301 2,335 +6% +21% 2,203 2,242 714 Post 393 410 428 447 +19% 375 paid 1 REVENUES +25% 331 +32% 264 262 Pre 1,829 1,849 1,860 1,872 1,888 +3%
Slide 10: Mobile Revenues: Sustained growth thanks to VAS
Mobile Revenues: Sustained growth thanks to VAS Evolution of revenues 1Q12 – 1Q13 IFRS, Million of ARS, Percentage +743 (+20%) 113 63 4,448 115 23 292 3,705 137 YoY Variation +13% +5% +22% +42% +28% +32% 1Q12 Retail Wholesale* Data Internet Equipment Nucleo* 1Q13 Revenues Voice Voice (Paraguay) Reve
Slide 11: Broadband: Enhancing value proposition
Broadband: Enhancing value proposition • Enhancing value proposition with compelling Evolution of Accesses bundled offers: Thousand of broadband accesses Streaming services +4% +5% Bandwidth increases Commercial agreement with satellite TV provider to offer combined products. 1,629 1,626 YE Target:
Slide 12: Fixed Voice & Data: Robust data revenue expansion
Fixed Voice & Data: Robust data revenue expansion Evolution of Lines in Service Data Revenues Thousand of lines in service IFRS Million of ARS -0,3% -0,7% +26% 4,141 4,128 4,138 4,109 735 +31% 583 163 213 2011 2012 1Q12 1Q13 2011 2012 1Q12 1Q13 Market share1 47% 46% 47% 46%2 ARBU evolution (excludin
Slide 13: Fixed Services: Wireline BB + ICT services key drivers
Fixed Services: Wireline BB + ICT services key drivers Evolution of revenues 1Q12 – 1Q13 IFRS, Million of ARS, Percentage +195 (+14%) 117 -4 1,616 50 1,421 22 10 34% Regulated Regulated 39% YoY Variation +4% +6% +31% +26% -22% Non 66% Non 61% Regulated Regulated Revenues Retail Voice Wholesale Data
Slide 14: Evolution of CAPEX
Evolution of CAPEX Capex Evolution PP&E Capex Breakdown Million of ARS 3,192 +2% 3,257 Others IT 6% Mobile 17% access 23% PP&E 2,318 +4% 2,415 +7% Fixed 741 32% 690 23% access Intangible +5% Assets 874 492 519 Core & SAC/SRC -4% 842 198 +12% 222 Infraestructure1 2011 2012 1Q12 1Q13 % Revenues 17% 15
Slide 15: Capex plan focused on quality of service and customer experience
Capex plan focused on quality of service and customer experience Access Network • Migration to 6-sector cell sites to take advantage of existing infrastructure • Incremental coverage and capacity thru unconventional sites • Spectrum refarming from 2G to 3G to increase data speed and capacity • Speed
Slide 16: Main KPIs in the network evolution
Main KPIs in the network evolution Fixed access Mobile access Installed FTTx cabinets Cumulative 3G Cell Sites >5x >3x 2012 2015 2012 2015 Backhaul Transport % Sites in Ethernet International Bandwidth Capacity (in Gbps) ~90% 2x 2012 2015 2012 2015 15
Slide 17: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 16
Slide 18: TEO Group: Consolidated Results
TEO Group: Consolidated Results Revenues OIBDA* IFRS, Million of ARS, Percentage IFRS, Million of ARS, +20% 22,117 +10% 18,498 6,570 5,993 +18% +9% 5,126 6,064 1,647 1,799 2011 2012 1Q12 1Q13 2011 2012 1Q12 1Q13 Regulated OIBDA 12% 10% 11% 9% 32% 30% 32% 30% Revenues Margin . *Operating Income Befor
Slide 19: TEO Group: Consolidated Costs and OIBDA evolution
TEO Group: Consolidated Costs and OIBDA evolution Operating Income Before Depreciation and Amortization 1Q12 – 1Q13 IFRS, Million of ARS OPEX1 +152 +23% (+9%) 118% 3,483 4,274 943 76 191 140 164 1Q12 1Q13 79 71 70 YoY Variation 28% 30% 1,647 18% 19% 20% 1,799 16% 17% OIBDA Revenues & ITX Costs Labor
Slide 20: TEO Group: Consolidated Costs
TEO Group: Consolidated Costs Consolidated Costs1 as % of Revenues Operating Costs1 1Q13 VAS Costs 3% Labor Costs 70.5% Others2 68.0% 20% 23% ITX Costs 8.0% 8.0% Marketing & 14% 20.0% Taxes 20.5% Sales 29% 11% VAS costs 2.2% 1.2% 9.0% Taxes 9.9% Marketing & Sales ITX costs 13.2% Labor costs 14.3% •
Slide 21: TEO Group: Consolidated Results
TEO Group: Consolidated Results Operating Income Net Income attributable to Telecom IFRS, Million of ARS, Percentage IFRS, Million of ARS, Percentage +3% 3,966 3,857 +7% 2,685 2,513 +8% +15% 1,033 1,115 698 802 2011 2012 1Q12 1Q13 2011 2012 1Q12 1Q13 O. Income Margin 21% 18% 20% 18% 14% 12% 14% 13%
Slide 22: 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 6,722 3,308 1,769 216 333 106 830 3,198 OIBDA Capex ∆ WK & others Net Financial Position 4,020 Telecom Argentina 999(1) 2,982 Telecom Personal 3,118 (2) Nucleo (Paraguay) (97) Net Financial Opera
Slide 23: Agenda
Agenda • Market Overview • Business Highlights • Financials • Q&A Session 22