Empresa Nacional De Telecomunicaciones S.a. · BCS:ENTEL
Empresa Nacional De Telecomunicaciones — Investor Presentation (October 2024)
66 slides from Empresa Nacional De Telecomunicaciones's investor presentation, October 2024
Slide 1: Corporate Presentation
Empresa Nacional de Telecomunicaciones S.A Corporate Presentation October 2024 Contact Information: Paula Raventós, Investor Relations Officer Ignacio Reyes, Investor Relations Sr. Analyst ir@entel.cl
Slide 2: Agenda
Empresa Nacional de Telecomunicaciones Agenda Corporate presentation August 2024 1. Snapshot 2. Latest Events 3. Strategy 4. Our commitment to sustainability 5. Results 6. Annexes 2
Slide 3: Entel company snapshot and history
Empresa Nacional de Telecomunicaciones Entel is a leading technology and telecommunications company founded in 1964 with operations in Chile and Peru. With an Investment grade rating by international agencies and listed on the Santiago Stock Exchange, it’s shares are part of IPSA index, with a marke
Slide 4: 60 years in Chile and 10 years in Peru
We are extremely proud to celebrate 60 years in Chile and 10 years in Peru this 2024 Year 1964 Year 2014 Incorporation of Entel Launch after Valdivia earthquake operations Chile Peru under Entel Peru Multicarrier Entel deployed 4G 60 network years First operator in Latin America to launch 3G and 10y
Slide 5: Latest Events 2023
Latests Events 2023 FNE approves fiber Partnership with 5G phase II committed Dow Jones Merco Ratings – 1° transaction Starlink project Sustainability Index Telecom in Chile The transaction was valued by Soon, millions of LTE Entel was the first operator to For the eighth consecutive In this opportu
Slide 6: Latest Events Q1-24
Latest Events Q1-24 Entel’s FTTx: Fastest mobile Recognized as Top Chile 3D: Entel, as the Sustainability “La fibra de los chilenos” network in Chile Employers most valued telco Yearbook 2024 brand After regulatory approval, According to nPerf (1) , Entel For the second year in a row, Entel was reco
Slide 7: Strong customer base growth in postpaid and fixed in both countries
Entel operational figures 60 years Strong customer base growth in postpaid and fixed in both countries Prepaid Wireless Internet Mobile Users Postpaid Fixed RGU’s (1) Fiber & TV OTT (Thousands) (Thousands) -1.5% -1.4% +4.4% +7.4% 10,467 10,657 10,594 10,453 10,305 YoY ∆ % 546 536 532 571 YoY ∆ % 526
Slide 8: YTD June 2024 distribution per business unit
YTD as of June 2024 distribution per business unit 60 years Mobile service Wholesale B2C B2B Handset Others Fixed Mobile service Fixed TI + Digital Wholesale +9.3% 1,345 9% 12% 44 1,231 40 848,8 Bn 31 35% 38 19% 229 216 Chile Revenues 65% 35% Chile Perú 260 302 10.3 Mn 91% 33% Mobile subscribers +19
Slide 9: Leadership in spectrum holdings
Leadership in spectrum holdings enabling the development of our mobile 60years proposition Spectrum Share(1) Spectrum Share(2) % % Op.3 Op. 2 Entel Chile Entel Peru spectrum holding 25,1% spectrum holding 27,6% 28,2% 700 30 MHz 700 30 MHz 32,8% 900 10 MHz 800 22,4 1900 60 MHz AWS 40 MHz 2600 40 MHz
Slide 10: Agenda
Empresa Nacional de Telecomunicaciones Agenda Corporate Presentation August 2024 1. Snapshot 2. Latest Events 3. Strategy 4. Our commitment to sustainability 5. Results 6. Annexes 10
Slide 11: Main events during the recent period
Main events during the recent period 60 years August 2023 February 2024 July 2024 Fiber Peru agreement Fiber Chile Launch Entel Chile Expenses Publication of Art 14 Entel Peru signs Entel begins its expansion Increase in energy and rental Allows adding mobile agreement with PangeaCo in fiber optic c
Slide 12: Industry in distress in Chile and Peru, Entel well positioned
Industry in distress situation in Chile and Peru, Entel well positioned. 60 years Industry EBITDA Mg. (%) Entel Perú Op.2 Peru Op.5 Chile Entel Chile Op.2 Chile 37,5% 37,8% 37,4% 34,2% 33,3% 32,1% 30,5% 27,8% 28,4% 25,4% 19,6% 19,7%19,1% 16,9% 15,3% 12,5% 14,2% 17,2% 13,8% 7,8% 11,8% 10,0% 2019 2020
Slide 13: Operators in Brazil create value through market consolidation
Operators in Brazil create value through market consolidation… 60 years Global industry consolidation Brazil case: EBITDA Mg before and after the acquisition (%) TIM, Vivo From 4 to 3 2022 Oi and Claro operators +3% From 4 to 3 2023 Vodafone Three 50% operators 47% +1% +1% From 4 to 3 39% 40% 40% 41
Slide 14: Entry price reflecting changes in the cost structure
Entry price reflecting changes in the cost structure 60 years Fixed mobile entry offer per operator in Chile (CLP) Entel Op. 4 Op. 2 Op. 3 12.990 12.990 11.990 11.990 11.990 11.990 11.990 11.990 10.990 10.990 10.990 10.990 10.990 10.990 10.990 10.990 10.990 10.990 10.990 9.990 9.990 9.990 9.990 8.99
Slide 15: Entel capturing more than half of the growth
Entel well positioned and capturing more than half of the growth 60 years Net share growth mobile postpaid Voice Connection Industry Chile Entel Op 2 Op 3 Op 4 Op 5 Op 6 (Ths) 294 263 61 133 59 143 170 90 157 72 60 21 94 52 21 33 57 103 122 149 88 85 37 94 72 28 19 23 22 -30 -47 -64 -70 -55 -55 -111
Slide 16: Agenda
Empresa Nacional de Telecomunicaciones Agenda Corporate Presentation August 2024 1. Snapshot 2. Latest Events 3. Strategy 4. Our commitment to sustainability 5. Results 6. Annexes 16
Slide 17: Entel purpose and key objectives
Entel purpose and key objectives We exist to bring closer the infinite possibilities of technology, and thus, responsibly transform society Increase Grow Peru's mobile Grow in FTTH both profitability in B2B Maintain leadership business to achieve Take Digital in Chile and Peru, businesses while in M
Slide 18: Entel purpose and key objectives
Entel purpose and key objectives We exist to bring closer the infinite possibilities of technology, and thus, responsibly transform society Increase Grow Peru's mobile Grow in FTTH both profitability in B2B Maintain leadership business to achieve Take Digital in Chile and Peru, businesses while in M
Slide 19: Entel maintains its leadership in revenue share
Entel Chile Revenue Share 60years Despite stiff competition, Entel maintains its leadership leveraged on critical factors Mobile service revenue Share(1) % Entel Op. 2 Op. 3 Op. 4 Op. 5 Leadership based in brand, network quality and revenue management 39.8% 40.5% 40.7% Several waves of competition h
Slide 20: Equation of leadership and value creation
Leadership in mobile business in Chile 60 years Equation of leadership and value creation 1 2 3 Network quality Brand Power ARPU A robust network and superior service A consistent and responsible This is reflected in an award in ARPU experience make the quality and reliability brand with high levels
Slide 21: Differentiation in network quality, brand power and satisfaction
Entel Chile Mobile Business 60 years Our differentiation in network quality, Brand Power and satisfaction Brand Power(1) Mobile network experience in Chile(3) (Points) Entel Op. 2 Op. 3 Op. 4 (No. of dimensions won over experience and consistency measured dimensions) 31 32 31 General 30 5G Experienc
Slide 22: Entel extends 5G leadership
Chile Industry - Share of mobile technologies 60 years Entel extends 5G leadership reaching 46% with 2.23 Mn users Share of 3G - 5G connections Share of mobile technologies (%) (%) 3G 4G 5G Entel Op.2 Op.3 Op.4 Op.5 Δ QoQ 34,7 33,9 34,6 +8,9 pp 4% 7% 9% 11% 13% 25,8 (+0.6pp 14% 17% +583,409 25,4 25,
Slide 23: Significant gap in ARPU and port out
Entel Chile Mobile Service ARPU 60 years … we are awarded with a significant gap in ARPU and port out Mobile service blended ARPU in Chile(1) Postpaid monthly port-out rate(2) B2C port-out self declared reasons in Chile (3) CLP % (Average 1Q24) Entel Op. 2 Op. 3 Op. 4 Entel Rest of the Industry +0.8
Slide 24: But we also want to capture some growth opportunities
Maintaining the lead in Chilean mobile business is key… but we also want to capture some growth opportunities 24
Slide 25: Entel purpose and key objectives
Entel purpose and key objectives We exist to bring closer the infinite possibilities of technology, and thus, responsibly transform society Increase Grow Peru's mobile Grow in FTTH both profitability in B2B Maintain leadership business to achieve Take Digital in Chile and Peru, businesses while in M
Slide 26: Entel Peru: keep growing service revenue share
In Entel Peru, we aim to keep growing in service revenue share, as we have done in recent years We entered in the Peruvian market in 2014 with the goal of expanding our business into a growing market, transforming status quo dominated by two players In the last 10 years Entel changed significantly t
Slide 27: Entel Peru revenue share and EBITDA margin
Entel Perú Revenue Share and Ebitda Margin 60 years Entel has consolidated as the second operator in the market in service Revenue Share, with sustained margin improvement. Mobile service revenue Share(1) Entel Peru Ebitda Mg. % Entel Op. 2 Op. 3 Op. 4 % Entel Op. 2 Op. 3 Op. 4 46,0% 46,2% 43,5% 43,
Slide 28: Growing revenue share enables better EBITDA margin
Focus to a fairly reachable scale with additional +3 pp of revenue share 60 years Growing in Revenue Share enables better EBITDA margin and sustainable FCF EBITDA margin according to revenue share of 2nd best operator Scale challenge (%) Mg EBITDA Expanding the brand In order to reduce the Gap with
Slide 29: Powerful brand power and leader in B2C satisfaction
Entel Perú brand power and satisfaction indicators 60 years Powerful brand power and leader in B2C satisfaction level Brand Power(1) B2C Postpaid – NPS (2) (Points) Entel Op. 2 Op. 3 Op. 4 (Points) Entel Op. 2 Op. 3 Op. 4 30 30 30 30 30 32 31 24 27 27 30 27 26 26 20 25 23 24 22 25 24 27 27 27 27 27
Slide 30: Entel 2nd operator in ARPU and port-out
ARPU and Port-Out rate in the mobile business 60 years Entel solidly positioned as the 2nd operator in ARPU and Port-out Mobile service ARPU blended(1) Monthly avergare Postpaid Port-Out rate(2) (USD) (%) Entel Op. 2 Op. 3 Op. 4 Entel Op. 2 Op. 3 Op. 4 3,0% 6,51 6,51 6,55 6,56 2,8% 6,41 GAP Entel -2
Slide 31: Starlink direct-to-cell alliance
Connecting people is in our DNA, that's why we go further and further to bring our commitment… everywhere! 2025 STARLINK • Soon, millions of smartphones in Chile and Peru will be able to access direct to cell (D2C) satellite coverage, provided by the commercial alliance signed between Entel and Spac
Slide 32: Entel purpose and key objectives
Entel purpose and key objectives We exist to bring closer the infinite possibilities of technology, and thus, responsibly transform society Increase Grow Peru's mobile Grow in FTTH both profitability in B2B Maintain leadership business to achieve Take Digital in Chile and Peru, businesses while in M
Slide 33: Growth opportunity in FTTx through neutral shared network
Growth opportunity in FTTx through accelerated and efficient access to nationwide footprint Protect mobile business in a competitive environment facing integrated operators Lower churn rate of integrated customers Key drivers for operating on a neutral shared FFTH network: 1 2 3 Cost sharing and Rev
Slide 34: Growing in the Home business: fiber agreements
Growing in the Home business 60 years Strategic agreements to enhance FTTx business in Chile and Peru Fiber Chile Fiber Peru FTTx coverage FTTx coverage 2022 2024 2022 2024 1.3 Mn 4.3 Mn XPs 0,2 Mn 3 Mn XPs y 5,2 Mn by 2026 Xps with own XPs with own deployment deployment Agreements allow: • To short
Slide 35: Entel accelerates FTTH growth after On*Net launch
Growing in the Home business 60 years Entel accelerates FTTH growth after launching On*Net in march 2024 Net growth RGU FTTH (ths) Entel Op.3 Op.5 Op.7 196 Op.2 Op.4 Op.6 Others 16 99 125 9 110 103 89 15 14 55 44 41 51 1 0 39 17 15 26 40 7 7 28 26 17 9 1 5 6 59 22 1 0 4 17 44 9 15 2 38 20 41 1 20 27
Slide 36: FTTH market and home internet revenue share
FTTH Market and Home Internet Revenue Share 60 years Growing in the Home business FTTH Market Share(1) Home Internet Revenue Share(2) (%) (%) Entel Op. 2 Op. 3 Op. 4 Op. 5 Op. 6 Op. 7 ENTEL Op. 2 Op. 3 Op. 5 Op. 8 Op. 6 Op. 7 Op. 4 47,7% 45,8% 44,9% 37,3% 41,5% 32,1%31,6% 30,0% 30,8% 28,4% 25,0% 25,
Slide 37: The value of an integrated trip
Growing in the Home business The value of an integrated trip $2.014 Protect our mobile base in an industry with multi-service 1 mobile line 1 mobile line fiber 15,2% operators Mobile Churn 1,9% Churn 1,2% Potential ARPU growth The home business fiber fiber 1 mobile line $1.759 generates synergies wi
Slide 38: Neutral network reaches millions of homes efficiently
Grow in the Home business 60 years Neutral Network allows us to reach millions of homes efficiently Core network Access network Drop to customer FiberCo Transport & IP Core Central Ducts Pole Cabinets Drop Home Enterprise 32% of total service failures (1) occur 65% of total service failures (1) occu
Slide 39: Leading position in brand power and satisfaction
Entel Chile B2C Fiber 60 years Leading position in Brand Power and Satisfaction Brand Power(1) FFTH Key dimensions of general satisfaction (3) (Score) (Average weight of dimensions in general satisfaction in 2024) Entel Op. 2 19,4 19,6 6,3% Others 19,0 18,8 9,7% Price & value for money 18,0 18,2 20,
Slide 40: Entel purpose and key objectives
Entel purpose and key objectives We exist to bring closer the infinite possibilities of technology, and thus, responsibly transform society Increase Grow Peru's mobile Grow in FTTH both profitability in B2B Maintain leadership business to achieve Take Digital in Chile and Peru, businesses while in M
Slide 41: B2B restructured into two business units
B2B opportunities We have restructured our approach to B2B segment, splitting into two separate business units: • Entel Digital • B2B Connectivity 41
Slide 42: B2B Digital Business Opportunity
digital B2B Digital Business Opportunity Entel Digital, a specialized digital/IT business unit focused on growth and creating cutting-edge digital solutions We strategically divest from datacenter infrastructure, to focus on new growing digital services (cybersecurity, video analytics solutions, hyb
Slide 43: Entel Digital Business Opportunity
Entel Digital Business Opportunity Expanding portfolio with solutions with high growth potential IoT - Analytics IoT – Advanced Analytics - NBIoT Monitor fleets in real time and Intelligently monitor, control and consolidate high-value metrics in one optimize natural resources. place • Comply with D
Slide 44: Agenda
Empresa Nacional de Telecomunicaciones Agenda Corporate Presentation August 2024 1. Snapshot 2. Latest Events 3. Strategy 4. Our commitment to sustainability 5. Results 6. Annexes 44
Slide 45: Our commitment to Sustainability
Our commitment to Sustainability, aligned with our purpose and embedded in our business strategy 45
Slide 46: Strategy has led us to stand out worldwide
Sustainable Profitability 60 years Our strategy has led us to stand out in the industry worldwide. Positive performance in Corporate Sustainability Assessment (CSA), S&P1 Pts. Top 20% in 2023 CSA 100 89 90 87 80 Attractive, challenging, and 76 Inclusive inclusive workspace 70 69 68 Transformation Re
Slide 47: Become a world reference in efficiency and profitability
Efficiency Plan 60 years Become a world reference in efficiency and profitability Aspiration Launched a multi–Business unit transformation to: TOTALTARGET IMPACT Opex: 70-100, Capex: 10-20 80-120 • Reinvent our core through incorporating key sustainable MM USD innovations into our day-to-day operati
Slide 48: Captivate people
Captivate people We aim to attract and captivate the best talent by offering: A fun place to grow, yet with high performance A place where people want to come to work and stay with the company With a focus on talents that are in higher relative scarcity: digital, cybersecurity, data analytics, AI, a
Slide 49: Agenda
Empresa Nacional de Telecomunicaciones Agenda Corporate Presentation August 2024 1. Snapshot 2. Latest Events 3. Strategy 4. Our commitment to sustainability 5. Results 6. Annexes 49
Slide 50: Snapshot of Entel financials, LTM June 2024
Snapshot of Entel Financials 60 years Results as of June 2024 LTM Consolidated Revenues 2,687 Chile Revenue EBITDA CAPEX Billion CLP 20 million 1,781 585 32.8% 341 19.1% ∆ %4.41) Mobile lines EBITDA of revenues Consolidated EBITDA Billion CLP Billion CLP Mg. Billion CLP 825 30.7% 10.3 million Billio
Slide 51: Consolidated results
Consolidated results 60 years Despite a challenged industry, Entel´s results were strong Revenues Ebitda & Ebitda Mg (CLP $ Billion) Other gains /loses(1) (CLP $ Billion, %) Other gains EBITDA Mg. Proforma EBITDA Mg. +10.2% +2.5% 777 665 681 +3.7% +6.8% 618 617 299 52 193 190 188 200 725 665 680 618
Slide 52: Become a world reference in efficiency and profitability
Efficiency Plan 60 years Become a world reference in efficiency and profitability Aspiration Launched a multi–Business unit transformation to: TOTALTARGET IMPACT Opex: 70-100, Capex: 10-20 80-120 • Reinvent our core through incorporating key sustainable MM USD innovations into our day-to-day operati
Slide 53: Mobile Internet Traffic continues strong growth
Mobile Internet Traffic continues strong growth 60 years Mobile Internet Traffic [Intensity, Gigabits/second] 1.053 +16% +145 Gbps 908 23,0% ✓ Strong Traffic Growth 2021 –2024, CAGR=23% (L3M by Jul) +21% +155 Gbps 5G Network (In line with international projections) • GOU + 5,5% r/2023 (26,2 MB) 753
Slide 54: Investment plan focused on maintaining top rated network
Capital Expenditures 60 years Investment plan focused on maintaining top rated network Consolidated CAPEX Consolidated CAPEX/revenue by business (CLP $ billion) Peru Mobile Chile 15.7% Home 19,5% Others 551 18,5% 476 175 118 12,1% 13,1% 358 376 3,4% 2,1% 3,3% 3,9% 2023 2024E 2023 2024E CAPEX / 18.5%
Slide 55: Net debt and leverage remained at healthy level
Consolidated debt and credit risk 60 years Net debt and leverage remained at healthy level Net financial debt NFD/LTM EBITDA(1) (CLP $ Billion) (N° of times) Including IFRS16 1,749 1,592 3.46 1,338 3.18 1,148 1,208 2.60 2.57 2.31 2.45 2.38 1.61 1.73 1.58 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24
Slide 56: Healthy debt profile and fully hedged against FX
Debt Profile 60 years Healthy debt profile and fully hedged against FX Debt Maturity Profile (USD $ Mn) International Bonds (144A) Bank Debt Entel Chile 400 400 Local Bonds Bank Debt Entel Perú 321 275 281 278 227 146 281 281 278 70 59 13 13 13 13 13 40 2024 2025 2026 2027 2028 2029 2030 2031 2032 2
Slide 57: Consolidated cash flow
Consolidates Cash Flow 60 years In a challenging environment • EBITDA: 6M2023 affected by bad debt in Perú and restructuration costs ($49.6). 6M2024 excluding Cash Flow (CLP $ M) YTD jun 23 YTD jun 24 2023 effect (+3.4%) explained by higher handset EBITDA 325,357 387,707 sales in Chile and service r
Slide 58: Agenda
Empresa Nacional de Telecomunicaciones Agenda Corporate Presentation August 2024 1. Snapshot 2. Latest Events 3. Strategy 4. Our commitment to sustainability 5. Results 6. Annexes 58
Slide 59: Despite slowdown, Entel keeps growing
Industry connections 60 years Despite slowdown in both mobile and fixed markets, Entel keeps growing Quarterly evolution of mobile subscribers Quarterly evolution of fixed internet connections (Total industry, million) Prepaid Postpaid (Total industry, million) Cable Fiber Others +4,3% -0,6% +2,1% 2
Slide 60: Steady growth in postpaid and FTTH subscribers
Entel Chile Activity 60 years Steady grow in postpaid and FTTH subscribers Mobile users (Th.) Prepaid Postpaid Postpaid Market Share1 -1.5% -1.4% 10,467 10,657 10,594 10,453 10,305 YoY ∆ % 37.0% 7,088 7,173 7,300 7,404 7,543 As of +6.4% 4Q23 63.0% Others 3,379 3,484 3,294 3,049 2,763 -18.2% 2Q23 3Q2
Slide 61: Entel Chile results
Entel Chile Results 60 years Significant increase in revenues, despite a slight decline in EBITDA Revenues Ebitda & Ebitda Mg(2) (CLP $ Billion) Other gains/loses(1) (CLP $ Billion, %) Other gains EBITDA Mg. Proforma EBITDA Mg. +6.8% -6.7% Includes proceeds from Fiber 552 network sale for CLP $ 52 4
Slide 62: Peru industry connections evolution
Peru Industry Connections Evolution 60 years Deceleration in the mobile industry, while fixed internet continues to expand, supported by fiber Quarterly evolution of mobile subscribers Quarterly evolution of fixed internet connections (Industry Total, in Mn) (Industry Total, in Mn) CAGR ∆ 24-23 3,9
Slide 63: Robust growth of mobile base in Peru
Robust growth of mobile base leverages market presence Mobile users (Th.) +15.7% Postpaid Market Share1 9,609 9,795 9,652 9,171 8,340 5,395 5,332 5,049 Prepaid 5,390 5,163 23.9% As of 76.1% Others 4Q23 CAGR 1Q20-1Q24 ∆ 1Q23-1Q24 3,782 4,214 4,464 4,603 Postpaid -0.6% -5.3% 3,177 +9.7% 3.1% 1Q20 1Q21
Slide 64: Entel Perú results
Entel Perú Results 60 years Continued positive trend in revenue and profitability Revenues Ebitda & Ebitda Mg (USD $ Million) (USD $ Million, %) EBITDA EBITDA Mg. +17.6% 223 231 232 197 212 +35.0% 55 56 61 64 47 23.9% 26.1% 24.9% 26.6% 27.5% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Key Fact
Slide 65: Entel 2nd operator in ARPU and port-out
ARPU and Port-Out rate in the mobile business 60 years Entel solidly positioned as the 2nd operator in ARPU and Port-out Mobile service ARPU blended(1) Monthly avergare Postpaid Port-Out rate(2) (USD) (%) Entel Op. 2 Op. 3 Op. 4 Entel Op. 3 Op. 3 Op. 4 3,0% 6,51 6,51 6,55 6,56 2,8% 6,41 GAP Entel -2
Slide 66: Corporate Presentation
Empresa Nacional de Telecomunicaciones S.A Corporate Presentation October 2024 Contact Information: Paula Raventós, Investor Relations Officer Ignacio Reyes, Investor Relations Sr. Analyst ir@entel.cl
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