WIND. A good quarter, once again. Q Financial Results

Transcription

1 WIND A good quarter, once again Q Financial Results November 22, 2006

2 The following presentation is provided to you (each referred to hereafter as a Recipient ) for information purposes only and should not be relied upon by the Recipients and no liability, responsibility, or warranty of any kind is expressed, assumed or implied by Wind for the accuracy, inaccuracy, interpretation, misinterpretation, application, misapplication, use or misuse of any statement, claim, purported fact or financial amount, prediction or expectation (together referred to as Information ) and does not constitute an offer to sell shares or other securities or the solicitation of an offer to buy shares or other securities, nor shall there be any offer or sale of shares or other securities in any jurisdiction in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. In addition, we also draw each Recipients attention to the fact that this presentation contains forward-looking statements regarding Wind and its future business. Such statements are not historical facts and may include opinions and expectations about management s confidence and strategies as well as details of management s expectations of new and existing programs, technology and market conditions. Although Wind believes its opinions and expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, not all of which will be exhaustively explored in this presentation or elsewhere. Accordingly, the Recipients should not regard such statements as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. The Recipients are reminded that all forward-looking statements in this presentation are made so on the date hereof and for the avoidance of doubt Wind does not undertake to update any such statement made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For the avoidance of doubt, Wind does not accept any liability in respect of any such forwardlooking statements. All 9M 2006 and Q data referred to in the following presentation is unaudited.

3 Q Another strong quarter Fifth consecutive quarter of double-digit growth in EBITDA Total Revenues in Q ,270 million, up 5.6% YoY, notwithstanding termination rate cuts EBITDA at 464 million, up 18.6% over Q (Normalised EBITDA* up 15.8% YoY) EBIT growing to 202 million, more than doubling YoY (+105% vs Q3 2005) Net profit in the quarter of 37 million vs loss of 37 million in Q Available cash of 546 million at September 30, 2006 leads to early repayment request for 462 million

4 Q Strong operational performance Double digit growth in mobile revenues and 9% customer base increase YoY Increase in mobile ARPU, notwithstanding deflationary pressure and termination rate cut on July 1, 2006 Direct voice customer base reaching 773 thousand (+47% YoY), 177 thousand net adds YTD Broadband subscribers growth continuing (+28%) with uplift in ARPU driven by strong increase in ULL broadband subscribers (+89%) Rating outlook raised to Positive by Fitch in September 2006

5 9M 2006 Year to date exceeding guidance Total Revenues for 9 months to September 30 at 3,697 million, up 3.4% over same period of 2005 TLC service revenue growth +6.2%, notwithstanding double termination rate cut, +13.4% growth in mobile Normalised EBITDA 1,269 million, up 16.5% YoY (EBITDA up 12.7% over 9M 2005) EBIT growing to 495 million, up 78% over same period of 2005 Net profit in the nine months to September 2006 of 56 million vs loss of 133 million in 9M 2005

6 Mobile performance

7 Mobile Key highlights Top line growth driven by success of product portfolio and increased customer usage +219 K net adds in quarter, customer base growing to 14.5 million (vs 13.3 in Q3 2005) Strong growth in voice traffic volume (+22% vs Q3 05) Further ARPU increase notwithstanding new termination cut on July 1st and competitor ARPU decline Distribution channel strengthened with opening of approximately 40 new points of sale

8 Mobile Growing CB and Usage Subscribers/ market share Voice traffic volume (mln) 19,4% 13,3 18,6% 14,5 (Bln mins) +22% 5,9 4,8 5,6 6,9 47.7% Q Q Noi Market share ARPU i-mode subscribers growth ( ) 19,1 2,4 19,7 2,4 Data (000's) % ,7 17,3 Voice

9 Mobile Addressing all market segments Consumer Wind Family Pack 4 SIM cards with 5 of traffic each for 19, which can be combined with the Noi Italy option for free calls to Wind mobiles and national fixed-line for a monthly fee of 7 Noi Wind SMS Send up to 400 free SMS s per month towards other Wind mobiles for a monthly cost of 3 Wind Mega 300 / Mega / Mega No Limit Enjoy free data traffic to browse and surf on WAP, i-mode and Internet (GPRS, UMTS) for a fixed monthly fee Business Wind 5 for pre-paid All calls to mobiles and national calls at 5 euro cents for a monthly fee of 5, now also available for pre-paid users All Inclusive Enjoy up to 10 hours of traffic per month, 5 towards Wind mobiles and 5 towards all national fixed line and other mobile operators for a fixed monthly fee (available for postpaid)

10 Fixed-line performance

11 Fixed Key highlights Stable voice customer base with strong increase in direct voice subscribers (+47%) offsetting decrease in indirect customer base Growing success of integrated offerings e.g. TuttoIncluso and launch of new Dual-play product offerings such as Libero Absolute ADSL Broadband growth continuing (+28%) with increased flat offer penetration Strong customer acquisition, growing backlog of activations due to technical delays in expansion process of fixed network

12 Fixed Strong growth in Direct customers Voice subscribers Key results ('000) Stable overall customer base % Strong growth of Direct Customer base over previous year as result of highly appealing product portfolio (e.g. TuttoIncluso with 214K customers) and commercial push K Direct net additions in 9M 2006 CS CPS Direct (+76% vs 9M 2005) obtained with stable ULL coverage Fixed line Voice ARPU Ongoing contraction of indirect customer base due mainly driven by loss of CS ( ) 27,4 25,3 customers with low loyalty and price sensitive on a per call basis Voice ARPU declining vs due to combined effect of reduction in tariffs and wider appeal of direct voice offers

13 Fixed Broadband driving Internet growth Broadband subscribers Key results Broadband growth continuing in Q3 06 ('000) % (+28%) as a result of success of new 554 simplified product portfolio (Mega, Mini, 76% Free) and price-performance proposition Flat ay x use 56% Growing shift towards flat pricing schemes vs pay-per-use (76% vs 56% in Q3 05) driving ARPU growth and stabilizing revenue stream ( ) Broadband ARPU 18,4 19,4 Success of dual play offerings also available for customers where direct access not available (CPS voice and wholesale BB) Physiological decrease in narrowband customers Increase in BB ARPU over previous year as a result of increased penetration of flat offers vs pay-per-use which more than offsets the decline in tariffs

14 Fixed Focus on ULL and integrated offerings Happy Italy (consumer & business) Call all local and national fixed-line numbers at any time, any day of the week for just 0.12 of call set up charge and a fee of 9,95 per month and no monthly fee to the incumbent TuttoIncluso Mega (consumer & 1-2 lines) Unlimited local and national calls plus unlimited 12Mbps Broadband for a month Infostrada Noi Wind (consumer) Enjoy up to 150 minutes of free calls towards all Wind mobiles for just 3 per month Azienda Wind (business) An option that provides up to 200 free minutes towards up to 5 colleagues with Wind SIMs

15 Wind Financial Review

16 Strong revenue and margin growth in Q Revenues EBITDA / Margin mln) % ( mln) 32,5% % ,5%

17 Q P&L Highlights Q Q Change % ( mln) Total Revenue ,6% Net Revenues ,7% Other income ,5% Total Costs (806) (802) 0,5% Normalised EBITDA ,8% EBITDA ,6% EBIT ,0% Financial Income & Expense (115) (187) (38,8)% Profit (Loss) Before Tax 87 (89) N.M. Income tax (52) 54 N.M. Profit (Loss) before minorities 35 (39) N.M. Profit (Loss) attributable to parent 37 (37) N.M. Continued revenue growth notwithstanding termination rate cuts Costs under control Positive Net Income vs loss in Q3 2005

18 9M YTD performance in line with FY target Total Revenues Normalised* EBITDA / Margin mln) % ( mln) 30,4% % ,3% 9M 05 9M 06 9M 05 9M 06 All figures under IFRS

19 9M 2006 P&L Highlights ( mln) 9M M 2005 Change % Total Revenue ,4% Net Revenues ,7% Other income ,3% Total Costs (2.428) (2.488) -2,4% Normalised EBITDA ,5% EBITDA ,7% EBIT ,4% Financial income and Expense (336) (377) -11,0% Profit (Loss) Before Tax 159 (100) N.M. Income tax (108) (30) N.M. Profit (Loss) before minorities 51 (140) N.M. Profit (Loss) attributable to parent 56 (133) N.M. All figures under IFRS

20 Strong Operating Income growth and Net Profit 9M 06 Operating Income ( mln) + 78% M 05 9M 06 9M 06 Net Result ( mln) 56 (133) 9M 05 9M 06

21 Mobile Revenue & EBITDA growth delivered Mobile Tlc Service Revenues Mobile EBITDA / Margin ( mln) % 844 ( mln) 43,4% 46,1% % 338 Strong revenue growth notwithstanding effect of interconnection rate cuts driven by outgoing traffic and recurring fees; decline in incoming revenues EBITDA growth driven by increased operational efficiency coupled with growing customer base and higher usage

22 Fixed-line margin improving Fixed Tlc Service Revenues ( mln) % 380 ( mln) Fixed EBITDA / Margin 14,9% 12,6% % 53 Q3 06 revenue decrease mainly driven by decrease in indirect customer base not fully compensated by increase in revenues from growth of direct customer base and by decline in international traffic Q3 06 EBITDA increase and margin improvement driven by increased operational efficiency vs previous year and by lower commercial opex

23 *2005 NFI has been restated to include fees to be amortised on RCF Capitalisation (Wind Acquisition Finance S.p.A.) ( mln) As of December 31, 2005 As of June 30, 2006 As of September 30, 2006 September 30, 2006/ Q3 06 LTM Normalised EBITDA Cash and Equivalents (163) (292) (554) (0.3)x Tellas & Other Net Debt Senior Debt 5,630 5,568 5, x Total Senior Debt 5,510 5,324 5, x Second Lien x Total Senior + Second Lien 6,198 6,018 5, x Senior Notes 1,240 1,469 1, x Derivatives (92) (141) (133) (0.1)x Other Financial Debt Net Debt 7,674* 7,346 7, x Q LTM Normalised EBITDA Wind 1,642 mln

24 * Excluding Tellas Debt Maturity Profile* mln Repayment of 462 mln (2 Senior debt tranches) ahead of schedule Next maturity December Senior Second Lien High Yield Notes Prepaym.

25 Conclusion Strong operational and financial performance in Q Highly comfortable financial situation allows for further debt repayment ahead of schedule Year to date results ahead of guidance on both EBITDA and deleveraging