SG CIB Premium Review Conference

Transcription

1 SG CIB Premium Review Conference Paris, December 3 rd, 2014

2 An Overview of WIND s Performance

3 WIND in a Snapshot Revenues 9M 2014 LTM EBITDA 9M 2014 LTM 4,748 mln 27% Fixed-line 1,886 mln 20% Fixed-line Mobile 73% Mobile 80% 39.7% LTM EBITDA margin WIND Leading alternative fully integrated operator in Italy consistently outperforming the market Second largest fixed-line voice and Broadband operator in Italy Third largest mobile operator in Italy after the two incumbents with a subscriber market share of 24.7%, 28% in consumer segment almost in line with incumbents A full line service offering Consumer / SME / SOHO / Business Mobile Fixed-line (voice & BB) Convergent SOHO = Small Offices Home Offices 3

4 Operating in a Weak Macro Scenario GDP Growth* Highlights E E CSC ISTAT Unemployment Trend* CSC ISTAT E 2015E GDP trend negative in 2014 with only marginal improvement expected in 2015 Unemployment remains high at 12.6%** with youth component steadily above 40% Italian TLC market value contraction in 9M 2014 expected to continue also in 4Q but with an improving trend Main operators maintaining a less aggressive approach to promotions leading to a reduction in gross additions and in overall subscribers size but with a positive impact on churn * Source: CSC (Sep 14), ISTAT (Nov 14) ** ISTAT (Sep 14) 4

5 Protecting Cash Flow Generation Cost Efficiency Measures Insourcing - Solidarity project launched in September 2014 in order to decrease labor cost and redesign organization increasing efficiency and effectiveness. The project will provide a saving of approximately 40/50 million per year Advertising synergies and optimization across fixed and mobile with single testimonial leading to approximately 30% savings in 9M 2014 vs. 9M 2013 Increased use of more efficient pull channels, such as shops and web, for all market segments and all services Dealer commissioning optimization based on quality, elimination of MNP token to dealers, leading to lowest SAC per gross add in the market Tower Sale Project WIND intends sell a portion of its towers to a long term partner Proceeds from the transaction will be fully applied to debt repayment with a positive impact on leverage and a further reduction in interest expenses Information Memorandum has been sent out to potential bidders, non-binding offers received on November 10 th Transaction expected to close in 1Q

6 Investing in Top Quality Networks Mobile Network CAPEX* LTE available in more than 300 cities with a coverage of 24.4%. LTE plan: 35% of population coverage by the end of 2014 GSM network completed: 99.9% population coverage with GPRS/EDGE nationwide coverage HSPA+ network developed: 97.1% population coverage at 21 Mbps with 42 Mbps available for 39.3% of the population ( mln / %) 16.1% 16.6% LTM CAPEX / revenue* Fixed Network and Backbone 1,458 LLU sites: c. 60% direct population coverage in all major Italian cities Solid fiber optic backbone of 21,726 km, supporting both fixed and mobile businesses * CAPEX 2013 excludes 134mln of non-cash increase in Intangible Assets related to the contract with Terna in relation to the Right of Way of WIND s backbone Figures as of September 30 6

7 Significantly Improving the Capital Structure 2014 Refinancing Transactions In April 3.8 billion Senior Notes maturing in 2021 issued to refinance 2017 Senior Notes and together with a 500 million injection from VimpelCom to repay the WAHF PIK Notes; two years maturity extension of 1.8 billion of Term Loan approved by majority of SFA lenders In July 4.1 billion Senior Secured Notes maturing in 2020 issued to refinance 2018 Senior Secured Notes and the non-extended part of the Term Loan Q Pro-forma for April and July Refinancing Wind Acquisition Holding Finance 2017 PIK Notes 1.3 bln Wind Acquisition Holding Finance 2018 SSNs + TAP 3.2 bln 2020 New SSNs 4.1 bln Term Loan 2.4 bln 2019/2020 SSNs 0.6 bln Term Loan 1.8 bln 2019/2020 SSNs 0.6 bln LTE Debt 0.2 bln 2017 SNs 2.7 bln LTE Debt 0.2 bln 2021 SNs 3.8 bln Refinancing Outcome Interest saving of approximately 300 mln per year 7

8 Enhancing Debt Maturity Profile ( mln) 9M ,513 3,779 1, * TLA TLB LTE Liability Italian State New Senior Secured Notes 2020 Senior Secured FRN Senior Secured Notes 2020 New FRN 2020 New Senior Notes 2021 Notional amounts. USD tranche has been converted at CCS EUR/USD Exchange Rate * 81 mln LTE liability to Government was reimbursed in October

9 9M 2014 Financial Performance

10 Revenue and EBITDA Total Total Revenues Highlights ( mln) 3, % 3, Other rev. + CPE 9M14 total revenue declines 6.3% YoY on a reported basis; net of certain transactions fully accounted in 3Q 3, % 3,129 TLC service revenue but with certain commercial impact attributable in 4Q, underlying decline is -7.6% ( mln / %) EBITDA / Margin 39.5% 38.5% -4.0% 1,443 1,386 Service revenue decreases 9.5% YoY as a combined result of the rolling cannibalization effect of 2013 price competition, material decline in SMS revenue and the MTR cut affecting the first 6 month of the year; significant improvement in trend in 3Q14 EBITDA declines 4.0% YoY to 1,386 million; excluding the aforementioned transactions underlying EBITDA declines 7.5% with cost savings initiatives, which include an innovative insourcing and productivity plan, partially compensating the pressure on top line EBITDA margin at 39.5% improving 1 p.p. YoY 10

11 Revenue and EBITDA Mobile Total Revenues Highlights ( mln) 2, % 2, Other rev. + CPE Total mobile revenue declines 8.5% as a combined result of: 2, % 2,229 TLC service revenue Strong mobile Internet revenue growth, up 18.2% EBITDA / Margin Decline in voice revenue due to the intense price pressure in 2013, reduction in revenue from pay per use voice and SMS and MTR cut affecting the first 6 months of the year ( mln / %) 42.3% 42.0% 3Q service revenue -9.0% trend improving significantly vs. 2Q14 and 1Q14 (+2 p.p.) -9.0% 1,159 1,054 9M 2014 EBITDA declines 9.0% mainly due to service revenue pressure. Excluding certain transactions EBITDA declines 8.0% EBITDA Margin stable at 42% 11

12 Revenue and EBITDA Fixed-Line Total Revenues Highlights ( mln) 1,005 1, % Other rev. + CPE Total fixed-line revenue is stable YoY with the decline in service revenue mainly, due to the lower % 900 TLC service revenue fixed-line customer base and the ongoing decline in voice pay per use volumes resulting from fixed to mobile substitution, fully compensated by other revenue from certain transactions entered in the EBITDA / Margin quarter ( mln / %) 33.1% EBITDA at 332 million with an underlying 28.4% decline, net of above mentioned transactions, of 5.2% YoY % 332 EBITDA margin on an underlying basis remains stable YoY 12

13 Consistent Strategy leading to a Solid Commercial Performance

14 Strengthening WIND s market position Best Customer Relationship Maintain leadership in mobile customer satisfaction Consistent outperformer on NPS as shown in the graph below Mobile Market Share (SIM)* ~ 28% in consumer segment Player 1 Player 2 Player % 23.3% 24.3% 24.7% 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 Leading Reputation WIND was recognized as the best mobile operator in Italy by the Istituto Tedesco di finanza e qualità di Monaco, for its value for money positioning and for its communication and relationship with customers 9.9% 10.3% 10.6% 11.3% 32.4% 31.7% 31.0% 29.5% 34.9% 34.7% 34.1% 34.5% Player 4 Player 2 Player M 2014 * Source: Internal estimates, excluding MVNO 14

15 Through a Digitally Driven Organization WIND Digital WIND Digital innovative offering with customer interaction exclusively through digital channels (sale, selfcare, top-ups, etc.) Self Care Areas Access increase 94% vs. 9M 2013 Digital top ups +70% vs. 9M 2013 My WIND App My WIND App for Apple, Android and Windows Phone Customers smart-phones and tablets downloaded 5.6 million times from its launch Digital Home & Life WIND taking the lead in the Digital Home & Life concept through innovative services offered in its PoS: Wearable devices Smartwatch Wellness Music Smart Home Google Play and Windows Phone Store Revenue share model with Google play now extended also to Windows Phone Store WIND the only operator in Italy with carrier billing active on Google Play Store 15

16 Focusing on Mobile Bundle Offerings (mln) (mln) Customer Base % 21.8 Customer Base with All Inclusive 35% 44% % All Inclusive on Total CB Highlights A clear, simple and transparent approach to the market based on option plans Innovative and attractive pricing proposition Simplified options portfolio All Inclusive extended across the board 89% of customer base have at least one option plan or bundle 7,930 9,652 16

17 Leveraging on Solid Position in Fixed-Line ( 000) Unbundling Voice Customers 2, % 2,380 Infostrada Offer Drivers Fixed Optimization Focus on higher value LLU customers with acquisition shifting from quantity to quality Infostrada products and services increasingly sold in the WIND shops delivering channel synergies Defocus from most expensive push sale channels to more efficient pull sale channels and digital sale channels to achieve an increase in marginality Dual Play Unbundling Customers Simple and comprehensive portfolio consistent with value for money positioning Focus on Dual Play offers to leverage ADSL growing demand Convergent offering combining fixed services with mobile ( 000) +0.4% 1,853 1,860 17

18 Monetizing Growth from Broadband Mobile Internet Revenue Fixed-Line Broadband Revenue ( mln) ( mln) +18.2% % Mobile Internet Customer Base* Fixed-Line Broadband Customers (mln) ( 000) % % 2,191 2,147 * Mobile Internet includes customers that have performed at least one mobile Internet event in the previous month 18

19 Thank you 19