Grameenphone Ltd. First Quarter. Michael Patrick Foley, CEO

Transcription

1 Grameenphone Ltd. First Quarter Michael Patrick Foley, CEO

2 Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ( relevant persons ). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Grameenphone Ltd. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

3 Highlights Launch of 4G services Intense market competition 67.5 Mn subscribers 1.1 Mn new data subscribers

4 Set to offer best 4G experience in combination of additional spectrum and neutrality Same data portfolio for simplicity 4G SIM replacement with free 1.5 GB D2D replacement service for convenience Free replacement for high value customers Affordable 4G handset portfolio

5 Robust 4G rollout to ensure seamless experience 691 sites rollout by March sites by July 2018 All district cities under coverage

6 Network modernization to consolidate superior position Coverage and experience Capacity and future readiness Efficiency and resilience Up-gradation of all radio units Re-farming & spectrum efficiency Technology neutral equipment; Single RAN Capacity enhancement with new technology Reduced power consumption Lean site design with less footprint

7 Healthy topline growth amidst continuing competitive environment Seasonality and market competition Consolidation of voice offers Competitive pressure on data price Prolonged winter with lower activity during January Generous data offers on 4G SIM replacement and channel incentives New subscriber acquisition offer ½ paisa/second on-net offer for BDT 21 and 49 Marginal drop in APPM Positive results in revenue generating base and usage 3 new offers under contextual marketing platform New 1.5 GB offer at BDT 104 4G SIM replacement, device and service experience is key

8 Simplification journey is a strategic priority for value creation Customer processes simplification & digitalization Simplest for B2B Self-service transformation Robust IT services

9 Regulatory landscape BTRC Audit GP-Railway Fiber Contract Tower Co. licensing guideline Mobile Number Portability Services (MNPS) BTRC audit commenced on 3 Aug 2016 Received a summary of the draft audit observations on 11 Dec'17 After the submission of feedback on 18 Jan 18, a tri-party meeting was held on 18 Feb 18 regarding clarification Waiting for the final outcome of the report Fiber sub-lease option was cancelled by BTRC due to NTTN license guideline GP-BR joint committee agreed upon an arrangement and draft agreement was sent to BTRC BR will lease and GP is entitled to 63% of revenue On process of regulatory approval Licensing guideline was published on 1 Apr 18 MNOs will not be eligible to participate 4 licenses will be awarded with application deadline of 13 May 18 Industry holds its existing position on legal rights to build, maintain, operate and co-locate towers On 30 Nov 17 BTRC awarded MNP license BTRC published final process on 21 Mar 18 keeping the previous implementation deadline of 31 Mar 18 intact Revised deadline agreed with BTRC in presence of ICT adviser is 31 Jul 18

10 Grameenphone Ltd. First Quarter Karl Erik Broten, CFO

11 Healthy topline growth with stable EBITDA 5.7% Subscription and Traffic revenue growth* 57.6% EBITDA margin** 10.7% Capex/Sales*** BDT 4.74 Earnings per share *Revenues generated by own subscription (excludes interconnection) **As per IAS 18 **Capex excluding license fees; Capex/sales = moving average last 4 quarters

12 Changes in contracts and accounting practices Handset Revenue VAS Revenue Prime consideration of principal versus agent Grameenphone acts as an agent while selling handsets Revenue from sale of handset is recognized on net basis Prime consideration of principal versus agent in whole arrangement Arrangement for branded content sale is a joint operation Revenue from such joint operation is recognized on proportionate(net) basis

13 7.1% normalized subscription and traffic revenue growth* Revenue (BDT Bn) and Growth (YoY) DSTR** (BDT Mn) and Growth (YoY) % 15.5% 12.8% 8.0% 14.8% 18.0% 15.3% 12.4% 2.0% 5.7% 3.9% voice revenue growth BDT 1.3 Bn lower content and device revenue *Normalized for accounting practice changes **Daily revenues generated by own subscription (excludes interconnection)

14 28% data user and 75% volume growth Data Revenue (BDT Bn) and % of Service Revenue* Active Data Users** (Mn) and % of Sub-base % 16.5% 17.8% 17.9% 18.7% 42.2% 43.9% 46.9% 47.7% 47.8% 23.9% data revenue growth Competitive data offers driving user growth and customer experience *Revenues generated by own subscription (includes interconnection) ** Minimum 150 KB usage within last 90 days

15 6.2% service ARPU and 3.0% data ARPU drop Service ARPU, AMPU and APPM Data ARPU, AMBPU and APPMB ARPU (BDT) AMPU APPM (BDT) ARPU (BDT) AMBPU APPMB (BDT) 6.0% service AMPU decline Improving daily voice AMPU 37% AMBPU growth along with 28% user growth 29% APPMB decline from competitive offers

16 Stable EBITDA with higher investment in market Opex (BDT Bn) and Margin** EBITDA* (BDT Bn) and Margin** % YoY % QoQ % YoY % QoQ % 30.9% 33.2% 34.1% 36.9% 58.1% 61.2% 58.7% 58.8% 57.6% One off appeal deposit fee of BDT 379Mn 4G related spending and higher acquisition costs Normalized opex growth of 11.5%*** Normalized EBITDA margin of 58.8%*** *EBITDA before other items **As per IAS 18 **Normalized for appeal deposit fee and IAS 18

17 Investment mainly for network coverage and capacity Regulatory capex of BDT 17.1 Bn for 4G license, spectrum and tech-neutrality conversion fee 691 4G sites rollout after launch on 19 Feb G and 184 3G sites addition during Q1 4.5 *Capex (BDT Bn) and Capex/Sales% Total number of 2G and 3G sites stands at 13,297 and 12,516 Investment to continue to provide superior network experience % 12.4% 12.0% 11.3% 10.7% *Capex excluding license fees Capex/sales = moving average last 4 quarters

18 Marginal decline in earnings NPAT (BDT Bn) and Margin* Earnings Per Share (BDT)* 2.5% 7.0% 2.5% 7.0% YoY 6.0 QoQ YoY 4.42 QoQ % 24.4% 21.0% 18.5% 20.4% Accelerated depreciation of BDT 519 Mn for core network modernization *On reported basis

19 BDT 14.1 Bn OCF and Net debt/ebitda of 0.04 *OCF (BDT Bn) and OCF/Sales% Net debt (BDT Bn) and Net debt/ebitda** % 51.2% 52.5% 44.2% 45.2% *OCF equals EBITDA minus Capex on a reported basis **Net Debt = Short term debt + Long term debt - Cash and Cash equivalents 12 months rolling EBITDA

20 Summary Launch of 4G services with robust rollout and modernization plan Healthy topline and subscriber growth in a competitive quarter Consolidated superior network experience and market offers to drive growth *In consideration of the local regulations, Grameenphone Ltd. does not provide any forward looking statements.

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