ZAIN GROUP FINANCIAL RESULTS Q1 2017

Transcription

1 ZAIN GROUP FINANCIAL RESULTS Q1 2017

2 DISCLAIMER Mobile Telecommunications Company KSCP Zain Group has prepared this presentation to the best of its abilities, however, no warranty or representation, express or implied is made as to the adequacy, correctness, completeness or accuracy of any numbers, statements, opinions, estimates, or other information contained in this presentation. Certain portions of this document contain forward-looking statements, which are based on current expectations and reasonable assumptions, we can however give no assurance they will be achieved. The information contained in this presentation is subject to change and we disclaim any obligation to update you of any such changes, particularly those pertaining to the forward-looking statements. Furthermore, it should be noted that there are a myriad potential risks, uncertainties and unforeseen factors that could cause the actual results to differ materially from the forward-looking statements made herein. Accordingly, 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 or dispose of, securities in any company within Zain Group. For further information about Zain Group, or the materials contained within this presentation, please direct your enquiries to our Investor Relations team via at IR@zain.com or visit ZAIN GROUP Q IR PRESENTATION 1

3 CONTENTS ZAIN GROUP OVERVIEW ZAIN OPERATIONS OVERVIEW FINANCIAL STATEMENTS

4 ZAIN GROUP OVERVIEW

5 Zain At A Glance Q $810 MILLION IN REVENUES AROUND 6,400 EMPLOYEES 46.1 MILLION ACTIVE CUSTOMERS MILLION CUSTOMERS IN IRAQ MARKET LEADER IN KUWAIT, IRAQ, REPUBLIC OF SUDAN, JORDAN & LEBANON 5.5 TB AVERAGE DAILY DATA VOLUME 4G LONG TERM EVOLUTION (LTE) NETWORK IN KUWAIT, SAUDI ARABIA, JORDAN, BAHRAIN, SUDAN & LEBANON 13.0 MILLION CUSTOMERS IN REPUBLIC OF SUDAN $352 MILLION IN EBITDA 43.4% EBITDA MARGIN ONE OF THE HIGHEST IN THE REGION $125 MILLION IN NET INCOME ZAIN GROUP Q IR PRESENTATION 4

6 THE WORLD OF ZAIN Q ZAIN S WORLD CATERS TO 46.1 MILLION CUSTOMERS IN 8 COUNTRIES* MOROCCO Ownership: 15.5% LEBANON Ownership: Management Contract Customers: 2.3 m Prepaid: 86% JORDAN Ownership: 96.52% Revenues: $119 m Customers: 4.3 m Prepaid: 83% Market Share: 36% SUDAN Ownership: 100% Revenues: $107 m Customers: 13.0 m Prepaid: 99% Market Share: 46% IRAQ Ownership: 76% Revenues: $253 m Customers: 12.3 m Prepaid: 99% Market Share: 39% KUWAIT Ownership: 100% Revenues: $261 m Customers: 2.8 m Prepaid: 72% Market Share: 38% BAHRAIN Ownership: 55% Revenues: $50 m Customers: 845K Prepaid: 77% * exclusive of Morocco, in which Zain has a 15.5% ownership in the mobile operator INWI SOUTH SUDAN Ownership: 100% Customers: 600K Prepaid: 99% SAUDI ARABIA Ownership: 37.05% Revenues: $530 m Customers: 10.1 m Prepaid: 82% Market Share: 23% ZAIN GROUP Q IR PRESENTATION 5

7 GROUP FINANCIAL HIGHLIGHTS Q CUSTOMERS (000) REVENUES (USDm) +1% -12% 45,495 46, Q1-16 Q1-17 Q1-16 Q1-17 EBITDA (USDm) NET INCOME (USDm) % % Margin % EPS (Cent) 43% 44% 3 3 Q1-16 Q1-17 Q1-16 Q1-17 6

8 CAPEX & CAPEX / REVENUES % -20% % 18% 15% F Capex Capex / Revenues F = Forecasted ZAIN GROUP Q IR PRESENTATION 7

9 TOTAL CAPEX Q CAPEX BREAKDOWN OPCO Q (USDm) % OF REVENUES Kuwait 1 1% Iraq 40% Kuwait 2% Iraq 29 12% Sudan 40 36% Jordan 3% *Total CAPEX $73m KSA 53 10% Republic of Sudan 55% Jordan 2 2% Others 1 N/A * Group Total Capex (excluding KSA) = USD 73 million ZAIN GROUP Q IR PRESENTATION 8

10 GROUP FINANCIAL HIGHLIGHTS Q TOTAL DEBT (USDm) NET DEBT & NET DEBT/EBITDA +7% +57% 3,300 2,594 3,517 2,706 1, , Q1-16 Q1-17 Q1-16 Q1-17 Long Term Short Term Net Debt Net Debt/EBITDA Net Debt = Total interest bearing debt (excluding letters of guarantee) after deducting cash and cash equivalents ZAIN GROUP Q IR PRESENTATION 9

11 GROUP FINANCIAL HIGHLIGHTS Q REVENUE CONTRIBUTION CUSTOMER CONTRIBUTION Iraq Bahrain 6% Republic of Sudan 13% Group Revenues $810m Jordan 15% Bahrain 2% KSA 22% Iraq 27% Group Customers 46.1m Kuwait 6% Lebanon 5% Others 3% Kuwait 32% S.Sudan 1% Jordan 9% Republic of Sudan 28% ZAIN GROUP Q IR PRESENTATION 10

12 ZAIN DIVIDENDS DIVIDEND PAYOUT RATIO DIVIDEND YIELD (%) 77% 89% 80% 76% 87% 7% 8% 8% 8% 7% DIVIDEND PER SHARE (Fils) CASH DIVIDEND (USDm) ZAIN GROUP Q IR PRESENTATION 11

13 ZAIN OPERATIONS OVERVIEW

14 ZAIN KUWAIT MARKET SHARE FINANCIALS (USDm) 1983 Year of launch 100% Ownership 188% Penetration Zain 38% m Customers $25 ARPU 39% EBITDA Margin VIVA OOREEDOO Viva ZAIN 38% Ooredoo G Technology 2,265 Number of sites 100% Coverage Q1-16 Q1-17 Revenues EBITDA Net Income Aggressive market competition in the country Stable market share at 38% Customer base dropped by 2% Strong concentration on cost optimization initiatives Data revenues (excluding SMS & VAS) formed 34% of total revenues ZAIN GROUP Q IR PRESENTATION 13

15 ZAIN IRAQ MARKET SHARE FINANCIALS (USDm) 2003 Year of acquisition 76% Ownership 86% Penetration Zain 39% m Customers 3G Technology $7 ARPU 4,398 Number of sites 34% EBITDA Margin 99% Coverage VIVA OOREEDOO Asiacell 39% ZAIN 38% Korek 22% Q1-16 Q1-17 Revenues EBITDA Net Income Worsening economic conditions and currency exchange rate Price war in Jan 2017 and accelerated OTT impact Customer base jumped by 11% due to higher acquisition in Northern region Strong focus on cost optimization Data revenues (excluding SMS & VAS) grew by 66% YoY, and formed 14% of total revenues ZAIN GROUP Q IR PRESENTATION 14

16 ZAIN SUDAN MARKET SHARE FINANCIALS (SDGm) 2006 Year of acquisition 100% Ownership 55% Penetration 1,660 Zain 46% 1, m Customers $3 ARPU 36% EBITDA Margin VIVA OOREEDOO MTN 26% ZAIN 38% Sudani 28% G Technology 2,684 Number of sites 90% Coverage Q1-16 Q1-17 Revenues EBITDA Net Income Impressive YoY growth in local currency SDG terms Revenues 38%, EBITDA 22% and Net income 32% Customers grew by 6%, to reach 13m Significant cost optimization savings Data revenues (excluding SMS & VAS) grew 66% YoY, and formed 14% of total revenues ZAIN GROUP Q IR PRESENTATION 15

17 ZAIN KSA MARKET SHARE FINANCIALS (USDm) 2008 Year of acquisition 37% Ownership 154% Penetration Zain 23% m Customers 4G Technology $17 ARPU 8,527 Number of sites 33% EBITDA Margin 95% Coverage VIVA Mobily 29% OOREEDOO ZAIN 38% STC 48% Q1-16 Q1-17 Revenues EBITDA Net Income The robust performance was triggered by: 10% YoY growth in revenues hitting a record level 49% YoY growth in EBITDA Recording first-ever quarterly net profit of USD 12 million Strong focus on cost optimization Impact License extension also contributed to the net income Data revenues (excluding SMS & VAS) grew by 46% YoY, and formed 51% of total revenues ZAIN GROUP Q IR PRESENTATION 16

18 ZAIN JORDAN MARKET SHARE FINANCIALS (USDm) 2003 Year of launch 96.52% Ownership 142% Penetration Zain 36% m Customers $9 ARPU 49% EBITDA Margin VIVA OOREEDOO Umniah 32% ZAIN 38% Orange 32% G Technology 2,442 Number of sites 100% Coverage Q1-16 Q1-17 Revenues EBITDA Net Income Healthy performance for the first quarter 2% YoY growth in revenues 5% YoY growth in EBITDA 1% YoY growth in Net income Customer base increased by 6% YoY Data revenues (excluding SMS & VAS) grew by 17% YoY, and formed 36% of total revenues ZAIN GROUP Q IR PRESENTATION 17

19 ZAIN BAHRAIN FINANCIALS (USDm) 2003 Year of launch 55% Ownership 215% Penetration K Customers $15 ARPU 30% EBITDA Margin VIVA OOREEDOO ZAIN 38% Q1-16 Q1-17 4G Technology 501 Number of sites 100% Coverage Revenues EBITDA Net Income Customer base increased by 5% YoY Data revenues (excluding SMS & VAS) grew by 33% YoY, and formed 43% of total revenues ZAIN GROUP Q IR PRESENTATION 18

20 TOUCH Management Contract MARKET SHARE 2004 Year of acquisition MC Ownership 83% Penetration touch 54% 2.3 m 1,309 99% VIVA ZAIN 38% Customers Number of sites Coverage OOREEDOO Alfa 46% 4G Technology Zain operates in Lebanon under a management contract since June 2004, when it was rebranded to mtc-touch, and subsequently to touch ZAIN GROUP Q IR PRESENTATION 19

21 FINANCIAL STATEMENTS

22 BALANCE SHEET Unaudited Audited Unaudited 31-Mar Dec Mar-16 Assets KD 000 Current assets Cash and bank balances 150, , ,091 Trade and other receivables 452, , ,740 Inventories 24,716 16,418 22,850 Investment securities at fair value through profit or loss Non-current assets 1, , , , ,743 Investment securities available for sale 18,569 22,134 25,693 Investments in associates and joint ventures 190, , ,216 Dues from associates 391, , ,721 Other assets 15,076 15,598 15,514 Property and equipment 788, , ,371 Intangible assets and goodwill 986,815 1,007,237 1,163,395 2,391,419 2,415,182 2,657,910 3,019,610 3,091,702 3,498,653 Unaudited Audited Unaudited 31-Mar Dec Mar-16 Liabilities and Equity KD 000 Current liabilities Trade and other payables 583, , ,523 Due to banks 247, , ,940 Non-current liabilities 830, ,074 1,051,463 Due to banks 824, , ,033 Other non-current liabilities 38,541 48,953 37,985 Equity Attributable to the Company s shareholders 862, , ,018 Share capital 432, , ,706 Share premium 1,707,164 1,707,164 1,707,164 Treasury shares (567,834) (567,834) (567,834) Legal reserve 216, , ,353 Foreign currency translation reserve (1,096,577) (1,100,094) (775,715) Treasury shares reserve 1,967 1,967 1,967 Investment fair valuation reserve 4,096 3,484 (666) Hedge reserve (279) (120) (617) Retained earnings 473, , ,851 1,170,781 1,265,129 1,444,209 Non-controlling interests 155, , ,963 Total equity 1,326,401 1,422,482 1,627,172 Total Liabilities and Equity 3,019,610 3,091,702 3,498,653 ZAIN GROUP Q IR PRESENTATION 21

23 INCOME STATEMENT Three months ended 31-Mar KD 000 Revenue 246, ,920 Cost of sales (67,508) (65,938) Gross profit 179, ,982 Earnings per share Three months ended 31-Mar Fils Basic Operating and administrative expenses (68,766) (86,998) Depreciation and amortization (49,917) (54,690) Provision for impairment - trade and other receivables (3,410) (1,376) Operating profit 57,340 67,918 Interest income 2,375 2,305 Investment income 253 (116) Share of results of associates and joint ventures 888 (8,486) Other income/(expense) (1,152) 1,574 Finance costs (9,464) (7,564) Loss on currency revaluation (5,841) (10,546) Profit before, contribution to KFAS, NLST, Zakat, income taxes and Board of Directors remuneration 44,399 45,085 Contribution to Kuwait Foundation for Advancement of Sciences (280) (218) National Labour Support Tax and Zakat (1,583) (1,723) Income tax expenses (3,849) (5,137) Board of Directors remuneration (69) (69) Profit for the period 38,618 37,938 Attributable to: Shareholders of the Company 38,229 37,251 Non-controlling interests ,618 37,938 ZAIN GROUP Q IR PRESENTATION 22

24 CASH FLOW STATEMENT Cash flows from operating activities Three months ended 31-Mar KD 000 Profit for the period before income tax 42,467 43,075 Adjustments for: Depreciation and amortization 49,917 54,690 Interest income (2,375) (2,305) Investment income (253) 116 Share of results of associates and joint ventures (888) 8,486 Finance costs 9,464 7,564 Loss on currency revaluation 5,841 10,546 Operating profit before working capital changes 104, ,172 (Increase)/decrease in trade and other receivables (5,205) 9,050 (Increase)/decrease in inventories (8,220) 4,727 Decrease in trade and other payables (2,191) (58,501) Cash generated from operations 88,557 77,448 Paid to Kuwait Foundation for Advancement of Sciences (250) (500) National Labour Support Tax and Zakat paid (3,341) - Income tax paid (2,302) (4,093) Net cash from operating activities 82,664 72,855 Three months ended 31-Mar KD 000 Cash flows from investing activities Deposits maturing after three months and bank balances blocked (8,221) 2,753 Purchase of investments (3,301) - Net cash outflow on purchase of non-controlling interest/ a subsidiary - (26) Proceeds from sale of investments 7,527 1,667 Acquisition of property and equipment (net) (21,864) (26,635) Acquisition of intangible assets (net) (4,365) (7,029) Interest received 3,010 2,834 Dividend received 81 - Net cash used in investing activities (27,133) (26,436) Cash flows from financing activities Proceeds from bank borrowings 156,588 63,442 Repayment of bank borrowings (132,309) (28,262) Loan to an associate (4,373) (10,051) Dividends paid to Company s shareholders (128,117) (621) Dividends paid to minority shareholders of subsidiaries (1,117) (1,267) Finance costs paid (12,910) (6,031) Net cash (used in)/from financing activities (122,238) 17,210 Net (decrease)/increase in cash and cash equivalents (66,707) 63,629 Effect of foreign currency translation 105 (6,584) Cash and cash equivalents at beginning of period 177, ,266 Cash and cash equivalents at end of period 110, ,311 ZAIN GROUP Q IR PRESENTATION 23

25 Thank You Q&A FINANCIAL STATEMENTS Zain Group Investor Relations Note: Mobile Penetration rates are sourced from WCIS as of March 2017