Mobistar Full Year results 2008 · Mobistar outperformed on all guided KPI’s. June 2008: Mobistar...
Transcript of Mobistar Full Year results 2008 · Mobistar outperformed on all guided KPI’s. June 2008: Mobistar...
5 February 2009
Mobistar Full Year results 2008
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This presentation contains forward-looking statements about Mobistar, in particular for 2009. Although Mobistar believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, the effectiveness of the mobility centric operator strategy including the success and market acceptance of the mobile voice and date abundance plans, the Mobistar brand and other strategic, operating and financial initiatives, Mobistar’s ability to adapt to the ongoing transformation of the telecommunications industry, regulatory developments and constraints and the outcome of legal proceedings, risks and uncertainties related to business activity.
Cautionary statement
3
• Business Review
• Mobistar’s unique positioning
• Mobile data uptake
• Partnerships
• Regulatory update
• Financial figures FY 2008
• Conclusions & Outlook FY 2009
Agenda
4
Business Review
5
Total Turnover
Ebitda-margin
EPS (based on # shares EOY period)
Capex/sales around 10%
between-4% & -2%
minimum 40%
between -2% & 0%
Guidance
41 %
11 %
+1.9 %
+1.5 %
Realized
In a challenging environment, Mobistar outperformed on all guided KPI’s
June 2008: Mobistar launches One Office Full Pack, the first global telecom solution for the professional market
Mobistar highlights and commercial innovations
Feb 2008: Board of Mobistar confirms Mobility Centric strategy and approves a total cash return of 600 Mio EUR
May 2008: Mobistar announces an exclusive agreement with Apple regarding the distribution of the iPhone3G on the Belgian market
Feb 2008: Extension of the Mobistar AtHomeproduct portfolio to 3 formulas reaching
July 2008: Extension of the mobile data offer portfolio with (Mail&Surf, abudanceoffers for iPhone, Mobistar Messenger by Windows Live)
Oct 2008: Mobistar starts selling mini PCs to liberalize the internetNov 2008: Mobistar buys the remaining 10% of Vox
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Mobistar succeeded to add 250 000 net subscribers on its network in 2008
64
249
0%
20%
40%
60%
80%
100%
120%
93,6%
Q2 2007
95
95,7%
Q3 2007
158
98,9%
Q4 2007
68
100,7%
Q12008
88
102,4%
Q22008
30
103,8%
Q3 2008
105,0%(est)
Q42008
0
1.000
200
400
600
800
Net Adds (#In K) Active Penetration**
Comp.
Mobistar*
75,2%
2003
81,3%
2004 Q1 2007
2005
240
90,3%
2006
340
83,6%
2007 2008
41
91,3%
47
98,9%
(*) incl. MVNO customers (139k net adds full 2008), excl. MATMA and VOXmobile customers
(**) Source: Mobistar estimates based on company announcements and population forecasts of Plan Bureau
8
In a postpaid driven market, Mobistar’spostpaid share outperformed
162
5.861
EB 2007
4525
232 6.093
EB Q3 20085.200
5.400
5.600
5.800
6.000
6.200
176
4.675
EB 2007
36
140
352 5.028
EB Q3 20084.200
4.400
4.600
4.800
5.000
5.200
•Prepaid market* •Postpaid market
32,7%
28,3%
39,0%
34,1%
28,0%
37,9%
11,0%
39,2%
49,9%
10,9%
39,2%
49,9%
•* Market figures have been recalculated to have active net adds, based on announced activity rate figures
Proximus
Base
Mobistar
9
Postpaid as % of customer base keeps increasing, up to 57% of customer base
Post RES
31%
2.600.181
2003
35%
2.845.762
2004
44%
2.912.806
2005
51%
2006
54%
3.489.859
2007
3.152.455
3.738.604
2008
MVNO
Prepaid
57%
Laptop cards
Postpaid % retail customer base
0
1.000.000
2.000.000
Post BUS
4.000.000
Customers on Mobistar network*
0%
100%
3.000.000
40%
60%
80%
Postpaid % of retail base**
20%
(*) excl. MATMA and VOXmobile customers
(**) excluding MVNO cards
10
Customer base management: churn evolution affected by competitive market
19,1%
27,7%29,2%
20,7%
2007
Average Churn Rate
2006
21,4%
2005 20082004
11
Excluding regulatory effects, upsellingstrategy increases the blended ARPU
FY 2005
38,8
FY 2006
34,5
FY 2007
1,0
MTR Decrease
1,4
Roaming Off & on net
4,3
Price
4,7
Usage
32,4
FY 2008
38,0•-2.4€ •+0.3€
12 Note: Traffic includes both traffic out and in
60
80
180
Q1 04
Q2 04
Q3 04
Q4 04
Q1 05
Q4 07
Q1 08
Q2 08
Voice( min/month)
SMS (/month)
-2%
Q2 05
0
100
120
140
160
Q3 08
Q3 07
Q2 07
Q1 07
Q4 06
Q3 06
Q2 06
Q1 06
Q4 08
Q4 05
Q3 05
+56%
•Average traffic per customer per month
SMS abundance and stagnation migration from prepaid to postpaid leading to stable voice traffic evolution
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Mobistar’s unique positioning
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Competitive environment shows growing need for mobility: 2 responding strategies
35%
28%
37%
Mobile only
Ready to give upfixed phone if…
Keep fixed phone
•Business•Consumer
At o
ffice
Out
of t
heof
fice
At desk
Desktop workers
Teleworkers
Away from desk
Office roamers
Workers on the road
Home centricvs.
Mobility centric
Company centricvs.
Mobility centric
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Positioning Mobistar vs competition
Technology
Budget
Individuals
Digital & Convergence
Packs &Discounts
Personalization & Mobility
Incumbent positioning
Mobistar
“Fix centric Monolite”-Discount (keep value in fix)
“Monotone”
“Family”
“Rational “
“Technology Innovation”
“Patronizing”
“Valorize Mobility “-(transfer value from fix)
“Sur mesure / choice”
“Personal”
“Emotional”
“Relevant Innovation”
“You choose”
•Source: Mobistar qualitative research via focus groups (August 2008)
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Marketing strategy
• Accelerate fix-mobile substitutionthrough launch of abundance offers (supported by ADSL)
• Increasing mobile data revenues(MOC Res, mobile TV, …)
• Leverage complementary partnerships
• For B2C market fix data and voice answer to certain consumer needs
• Push full convergence strategy
• Focus first on voice convergence (“One Office Voice Pack”), then on full
convergence (voice + data) through Business Pack offers
• Integrate services into telecommunications solutions: from network to services
Mobility Centric
Residential:Mobility Centric Substitution
Business:Mobility Centric Convergence
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In order to respond to the mobility needs,fix solutions are needed as well
Mobility Centric ≠ Mobile only
Residential:Mobility Centric Substitution
Business:Mobility Centric Convergence
35%
28%
37%
Mobile only
Ready to give upfixed phone if…
Keep fixed phone
•B2C needs
*Source : www..datanews.be 12th telecom survey 2008 with 302 telecom- en it-managers, of which 122 low SMA (100-200 FTE), 113 high SMA (200-500 FTE) and 67 CMA (+500 FTE).
In 1 year time fix voice market share went from 3% to 6%*
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Mobile data uptake
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The mobile data key drivers are in place
immediacy
coveragemobility
fast set-up
interactive
bandwidth
comprehensive & trustful pricing
devices
99% EDGE 80% HSDPA
My30 for iPhone3hr/300 SMS + 200 MB
My45 for iPhone•6hr/600 SMS + 500 MB
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Postpaid Orange World customers
0
1000
2000
3000
4000
5000
6000
7000
8000
19 22 25 28 31 34 37 40 43 46 49
Age repartition
# c
usto
mer
s (3
M a
ctiv
e)
20082007
Prepaid Orange World customers
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
1 5 9 13 17 21 25 29 33 37 41 45 49
Age repartition
# c
ust
om
ers
(3M
act
ive) 2008
2007
Move from a closed garden to an open mobile internet model increased the activity rate
Strongcustomer base
uptake
Strong customer
base uptake
Larger agerange for
teens
•Same as postpaid, uptakeof subaccounts
Probable strong increase of subcontract users
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Strong growth in mobile data revenues confirmed in 2008
• Mobile data revenues up to 22% of mobile service revenues in 2008 (from 18% in 2007)
• Non-SMS mobile data represent 23% of total mobile data revenues (vs. 18% in 2007)
• Supported by the successful uptake of • SMS abundance offers• Strong take up Internet Everywhere• Blackberry and Mobile Office Cards in the
Business market• Leader in MATMA applications with
~110,000 cards
0
50
100
150
200
250
300+19%
MATMA
FY 2008FY 2007
Other
SMS Premium
€ mio
SMS Person to Person
22
47
38
26
17
3
Q4 2007 Q1 2008 Q2 2008
+1.518%(+44)
Q3 2008 Q4 2008
Active Internet/Business Everywhere users (# k cards)
Strong growth in laptop cards confirmed during full year
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Partnerships
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Mobistar can execute best suited model for each of its partners with a state of the art network
RadioAccess
NetworkOriginating
traffic
Services Marketing &
SalesDistribution
Enhanced Service Provider
NetworkTerminating
TrafficRoaming
Basic Advanced
MNO
“MVNO Full”
Co- Marketing
Brand licensing
Agent
“MVNO Light”MVNOmodels
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Due to a targeted partnership approach, Mobistar is in a leading market position
*Source: Mobistar company data and market info (figures including all partnerships types (not only MVNO) )
Estimated customer base in K SIM cards
Mobistar
Proximus
Base
X-play
UMM
Lycatel
Euphony
Tele
net
•Transatel
•Media •Ethnic / Low cost •Distribution •Niche
•975 •545 •285 •93
•Total = 1937*
•0
•20
•40
•60
•80
•100%
Regulatory update
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Dependency towards regulated revenues continues to decrease while billed revenues increases
67%
2007
20%
11%
65%
2008
20%
Visitor roaming
4%
9%
Customer Roaming
National incoming
Billed Revenues
4%
Breakdown Mobistar Mobile service revenues
33%
67%
35%
65%
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Current regulatory challenges
• National mobile termination rates
• EU roaming regulation
• Regulation on emission rates
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10.63
9.028.5
7.2
13.34
11.43
6.0
8.0
10.0
12.0
14.0
Jan-
08
Mar
-08
May
-08
Jul-
08
Sep
-08
Nov
-08
€c/
min
M*- new Px - new Base - new
•2008 MTR evolution (EURcent/min, indexed prices)
Status on national termination
Mobistar positioning on MTR evolution
• MTR model should be cost oriented
• Asymmetric still justified given later entrance of Mobistar
• In case of symmetry, Mobistar is closer to 3rd operator in terms of customer base
MTR cost modeling exercise ongoing by BIPT, first results expected by H2 2009
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EU Roaming regulation
Roaming Voice tariffs: extension of the current regulation till 2012
Roaming SMS tariffs capped as from 01/07/2009• Wholesale SMS roaming tariff (cap: 0.04€ per SMS)
• Retail SMS roaming tariff (cap: 0.11€ per SMS)
• Roaming data tariffs• Wholesale charge cap = 1€/Mbit
• No retail regulation
0,430,40
0,340,37
0,260,23
0,200,17
7/1/09 7/1/10 7/1/11 7/1/12
Wholesale charge
Retail Calls made (excl. VAT)
Retail Calls received (excl. VAT)
0,0
0,1
0,190,2
0,5
0,3
0,16
0,100,13
0,4
•EU Roaming tariffs (EURcent/min)
•Main elements roaming regulation
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Update on regulation emission rates
• Impacts • Drastic coverage decrease • Site sharing not possible anymore
• Mobistar positioning (in alignment with 3 operators)• Call for realistic norms in light of WHO recommendation• Alignment required between the 3 regions• Accelerated procedure for building permit required
• Current situation Flanders & Walloon region
Proposal in Brussels region (as from 14/03/2009)
Max 20,7 Volts/m (cumulated per location)
(4 times stricter than WHO norm)
Max 3 Volts/m (cumulated per location)
If applied: increase #sites up to 40%
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Financial figuresFull Year 2008
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In a challenging economic and regulatory landscape, solid performance
(*) includes other revenues
Mio € FY 2008 FY 2007 %Total Statutory Revenues (*) 1,566.8 1,539.9 1.7%Total Turnover 1,532.7 1,509.6 1.5%Total Service Revenues 1,443.7 1,445.3 -0.1%Cash Expenses -975.2 -947.7 2.9%EBITDA 591.6 592.2 -0.1%In % of service revenues 41.0% 41.0%Depreciations and amortizations 173.1 164.3 5.4%EBIT 418.5 427.9 -2.2%Net financial charges -5.5 -0.1 N.R.Corporate Taxes -132.9 -137.9 -3.6%Net income 280.1 289.9 -3.4%EPS averaged 4.54 4.58 -0.9%EPS outstanding shares 4.67 4.58 1.9%
CONSOLIDATED Income Statement for the Group Mobistar
34National Incoming
29,8
1.445,3
-43
Customer roaming
16,9-9,9
Visitor roaming
6,2
15,3
Billed revenues
Vox
1.443,7
2008
21,1
2007
-38
-0,1%
-9
-26
-4
2008 gross regulatory impact amounting to 91 Mio EUR almost fully compensated
•Mio €
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Mobistar Belgium activities: maintaining a high level of profitability despite regulation and launch new fix product lines
Mio € FY 2008 FY 2007 %Total Statutory Revenues 1,531.2 1,521.9 0.6%Total Turnover 1,497.2 1,491.7 0.4%Total Service Revenues 1,411.7 1,431.0 -1.3%Cash Expenses -941.8 -929.3 1.3%EBITDA 589.4 592.6 -0.5%In % of service revenues 41.8% 41.4%Depreciations and amortizations -165.1 -160.5 2.9%EBIT 424.3 432.1 -1.8%
Mobistar BELGIUM Income Statement
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VOXmobile activities: growth confirmed in a highly regulated market and return to operating profitability
•* first 6 months 2007 Pro forma
Mio € FY 2008 FY 2007* %Total Turnover 39.6 35.6 11.2%Total Service Revenues 33.3 30.3 9.9%Cash Expenses -37.2 -36.7 1.4%EBITDA 2.4 -1.1 -319.3%In % of service revenues 7.2% -3.6%Depreciations and amortizations -8.2 -8.3 -1.2%EBIT -5.8 -9.4 -38.1%
VOXMobile Income Statement
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Despite inflation and launch of new lines of products, increase of cash expenses under control
Total cash expenses
Handset/RT Costs
437,1425,1Interconnect
& OtherSales Costs
63,3
132,7
308,2
929,3
2007
90,3
126,6
287,8
941,8
2008
HeadcountCost
Non-Headcount
Cost
18,4
975,2947,733,4Vox
Optimization of advertising / sales expenses and in property expenses
Favorable evolution of Universal Service charges and other operating income
Mobistar headcount reduction of -6% due to outsourcing and efficiency gains compensated by increase in FTE in owned shops
Cost of handsets sales in line with strong increase in handsets revenues (smart phone sales increase)
VOXmobile has been acquired mid’07
Six months of activities in 2007 compared to a full year of operations in 2008
Transfer of activities to Outsourcing partner (Ericsson) previously done by Mobistar internal resources
Increased number of ASP (Access Solutions Providers) partners for Customer Facing services and Corporate solutions
Less interconnect cost: traffic uplift (mainly SMS) is more thanoffset by regulation (Roaming/MTR)
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Acceleration of 3G network build out resulting in a higher network capex
Capex (in Mio EUR)*Capex to service revenues ratio (in %)
* excluding the proceeds from sale of equipment related to the 3G equipment renewal
165
199
171
136
0
50
100
150
200
25014%
2004
14%
2005
11%
2006
4
99
359
12%
147
2007
7
102
40
11
11%
160
2008
CAPEX/year
Vox
Network
IT
Sales and Other
CAPEX/service revenues
2003
10%
39
Focus on network outsourcing; savings are materializing in line with contract signed in 2006
Baseline Actuals 2007
CAPEX
OPEX
-27%
Actuals 2008
OPEX
-35%
CAPEX
Baseline
Before After
-54%
Before After
-37%
Before
-37%
After
•Acquisition costs/site (K€) •Building costs/site (K€) •Operations costs/site (K€)
2007 savings (May-dec)
2008 savings
40
Mio € FY 2008 FY 2007Fixed Assets 898.0 924.2Current Assets 295.5 249.9Cash and Cash equivalents 6.8 7.2TOTAL ASSETS 1,200.3 1,181.3Net Equity 452.5 768.0Provisions 15.1 13.7Long Term Debt 75.0 0.9Short Term Debt 243.3 6.1Current Liabilities 414.4 392.6TOTAL EQUITY AND LIABILITIES 1,200.3 1,181.3Net Debt / (Net Cash) -311.8 1.1
Balance sheet remains solid
•Consolidated Balance sheet
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Free cash flow evolution confirmed
•Consolidated cash flow statementMio € FY 2008 FY 2007 %EBITDA 591.6 592.2 -0.10%Change in Working Capital and not withdrawn expenses -16.5 12.1Net finance costs -5.5 0.0Corporate Taxes -132.9 -137.9 -3.63%Net cash from operating activities 436.7 466.4 -6.4%Net cash used in investing activities -159.9 -146.8 8.89%Proceeds from sale of equipment 14.7Net cash used in investing activities -145.2 -146.8 -1.1%Operating cash flow 291.5 319.5 -8.8%Acquisition of subsidiary, net cash acquired -6.7 -80.4Repayment long-term interest-bearing loans and borrowings -19.0Proceeds long-term interest-bearing loans and borrowings 3.8Proceeds from new short term borrowings 237.2Proceeds from new long term borrowings 75.0Netcash before dividend payments and capital movements 597.0 223.9 166.6%Capital increase (decrease) -248.0 0Capital and share premium -0.8 -0.8Net purchase of treasury shares -175.0 0Dividend paid -173.6 -284.9Available Cash Flow -0.4 -61.8 -99.3%
42
Summary of proposed pay-out *Ordinary dividend: € 2,90 / share (+ 4% y-o-y)
Extra ordinary dividend: € 1,65/ share
Total distribution: around € 273M or 7.8% of market capitalization
Solid financial performance allows Mobistar to maintain a high level of shareholder return
JAN FEB MARCH APRIL MAY JUNE JULY AUGUST SEPT OCT NOV DEC
Ordinary DIVIDEND 2,90 EUR per share
Extra ordinary DIVIDEND 1.65 EUR per share
•(* to be approved by the General Assembly 6/05/2009)
43
Despite € 600Mio exceptional distribution net debt/EBITDA ratio still below 1
Notes: Available credit capacity: € 250M FT LT Revolving + € 250M FT Current Account
-311
6
-400
-300
-200
-100
0
100
200
300
400
0,2
0,4
-0,2
0,0
0,8
-0,8
-0,6
0,6
-0,4
-0,01x
2007
0,53x
2008
Net debt/EBITDA
Net debt Mio EUR
44
Conclusions & Outlook FY 2009
45
Underlying assumptions of 2009 guidance
• Deteriorating economic environment • Belgian 2009 GDP-evolution expected between 0% and -1% (*)• Wage indexation of 4.51% in Jan 2009 (once a year)
• Revenues• Handset sales under pressure generating less traffic in the shops• Regulatory impact estimated to 60 Mio EUR, equally divided between national
termination and roaming impacts
• Tight cost control to free up resources to invest in network/IT innovation and new product lines
• Exceptional capex investment foreseen to save opex in coming years• Investment plan in transmission network• Building of new Mobistar offices
FOCUS #1 = Free cash flow generation
•* source: consensus form the Federal Planning Bureau
46
Conclusions and updated guidance FY 2009
• Strong ambition to further consolidate value share by increasing billed revenues
and growth in new areas in a challenging competitive and regulatory environment
Total Turnover flat revenues
Ebitda-margin close to 40%
Net results 240-260 Mio EUR
Capex/sales between 11% -12%
Thank you!