Dialog Axiata PLC Q Sri Lanka's Premier Connectivity Provider. an axiata company

Transcription

1 Dialog Axiata PLC Sri Lanka's Premier Connectivity Provider Q an axiata company

2 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance Colombo Trust Finance PLC Acquisition Update 2

3 Dialog Group Performance Highlights Q Dialog Consolidates Performance with Strong 3 rd Quarter Results Solid Growth in Q3 backed by Strong Recovery in Core Revenue Streams and Cost Initiatives Q Group Revenue at Rs24.2Bn, grew 5% QoQ. 11% YoY Q Group EBITDA at Rs9.4Bn, grew 16% QoQ, 22% YoY Q Group PAT grew significantly by 59% QoQ to reach Rs3.7Bn, up 31% YoY YTD Revenue and EBITDA improved Significantly while NPAT Impacted by Higher Non Operating Cost YTD 2017 Group Revenue at Rs69.4Bn, grew 8% YTD YTD 2017 Group EBITDA at Rs24.8Bn, up 14% YTD; Group EBITDA Margin improved to 36% YTD 2017 Group PAT declined 2% YTD to reach Rs7.6Bn Majority of Investments Focused Towards Expanding Data Network including Internet Data Centre (IDC) YTD 2017 Capex of Rs17.1Bn up 34% YTD; Capex Intensity at 25% All Business Units Continued to Consolidate Performance Amidst Aggressive Competitive Environment Dialog Mobile continued to grow underpinned by Data adoption Data Growth of 11% QoQ and 42% YTD Dialog Broadband Networks (DBN) Third consecutive quarter of positive PAT (Rs1.2Bn for YTD 2017) Dialog Television (DTV) Aggressive cost initiatives driving EBITDA growth of 84% in Q with Net Loss declining QoQ Aggressive Subscriber Growth Mobile subscriber base of 12.7Mn up 2% QoQ and 12% YTD TV subscriber base of over 926k up 2% QoQ and 17% YTD Completed the Acquisition of 80.34% of the shares in Colombo Trust Finance PLC with a View to Expand into Micro Lending and Savings. Mandatory offer closed on 2 nd November

4 Group Financial Summary Strong Q3 Performance Amidst External Challenges; YTD Revenue and EBITDA Growth of 8% and 14% Respectively while YTD PAT Impacted by Higher Non Operating Cost Rs Mn 3Q 17 QoQ YoY YTD 2017 YTD Revenue 24,218 5% 11% 69,395 8% EBITDA 9,400 16% 22% 24,751 14% PAT 3,721 59% 31% 7,614-2% PAT (Norm) 1 3,632 39% 28% 8,049 0% EBITDA Margin 38.8% 3.5pp 3.3pp 35.7% 1.6pp PAT Margin 15.4% 5.2pp 2.3pp 11.0% -1.2pp ROIC 15.0% 1.6pp -1.5pp 15.0% -1.5pp All Key Performance Indicators improved on a QoQ and YoY basis; Strong recovery in Core Revenue streams and Efficient Cost Management driving QoQ and YoY performance. However, YTD PAT continued to be impacted by increase in depreciation, net finance cost and non cash translational foreign exchange losses 1 Normalised for non-cash translational foreign exchange losses 4

5 Group Revenue Continued its Growth Trajectory, Recording a Growth of 5% QoQ, 11% YoY and 8% YTD Strong Recovery of Core Revenue Streams Driving Overall Revenue Growth +11% +8% +5% 69,395 63,970 24,218 23,012 21,748 Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 Mobile Data continued its upward trend, recording a growth of 11% QoQ, 39% YoY and 42% YTD driven by increased Smartphone penetration and improved coverage Mobile Voice grew 1% QoQ and remained flat YoY albeit declined 1% YTD International Revenue up 11% QoQ on the back growth in Hubbing Revenue while drop in termination revenue stabilised through partnerships with key International Retail Operators Aggressive customer reconnection driving Fixed Home Broadband Revenue growth of 6% QoQ, 48% YoY and 57% YTD Television Revenue growth challenged due to declining postpaid ARPU amidst affordability pressure 5

6 20,000 15,000 10,000 5, ,800 7,200 6,600 6,000 5,400 4,800 4,200 3,600 3,000 2,400 1,800 1, % 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Q3 Profitability Growth Delivered on Strong Recovery in Core Revenues and Cost Initiatives; EBITDA Margin Improved 3.5pp QoQ Strong EBITDA Growth and Improved EBITDA Margins QoQ PAT Growth Backed by EBITDA while PAT Margin Stood at 15.4% in Q3, up 5.2pp QoQ +22% +14% +31% -2% +16% 24,751 21, % 7,614 7, % 9,400 8,130 7, % 35.3% 35.5% 35.7% 34.1% Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 EBITDA EBITDA Margin 55.0% 45.0% 35.0% 25.0% 3,721 2,347 2, % 10.2% 13.0% 11.0% 12.2% Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 PAT PAT Margin Total Cost to Revenue Ratio Improved by 3.5pp QoQ Driven by Cost Improvements; Realised Cost Savings of Rs2.5Bn YTD Total Cost Q3 17 Rs14,818Mn As % of revenue 61.2% Q2 17 Rs14,882Mn As % of revenue 64.7% Q3 16 Rs14,036Mn As % of revenue 64.5% YTD 17 Rs44,644Mn As % of revenue 64.3% QoQ -0.5% YoY 5.6% YTD 5.8% Direct Expenses 25.1% 25.4% 26.1% 25.7% 4% 7% 0% Sales & Marketing 12.7% 14.2% 14.8% 14.0% -6% -4% 8% Network Cost 12.7% 12.7% 12.8% 13.0% 5% 11% 15% Staff Cost 8.5% 7.3% 8.1% 8.0% 21% 16% 11% Overheads 1.4% 3.5% 2.5% 2.6% -58% 278% 10% Bad Debt 0.8% 1.6% 0.2% 1.0% -48% -39% -11% 6

7 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, , , , , ,0 00 8,00 0 6,00 0 4,00 0 2, Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Focused Capex Investments to Support Rapid Growth in Data YTD 2017 Capex Intensity at 25% Capex Investments Directed Towards Expanding Data Network; 4G and Fixed LTE Coverage Reached 40% and 52% +17% +34% +1% 17,136 12,742 6,608 6,535 5,651 Capex Intensity 27% 28% 26% 25% 20% Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 Positive OFCF with Strong Operating Cashflows and Efficient Working Capital Management >+100% >+100% -34% 4,724 3,102 1,393 7% 4% 6% % 2% Q3 17 Q2 17 Q3 16 YTD 17 YTD16 OFCF As % of revenue * Capex excluding CPE (Customer Premises Equipment) investments 7

8 Group s Net Debt to EBITDA Remained Healthy Below 0.9x with Improved Profitability and Working Capital Management 30 Sep Jun Sep 16 Gross Debt 33,220 33,402 31,916 Net Debt 29,471 28,887 26,845 Cash and Cash Equivalents 3,751 4,515 5,072 Gross Debt / Equity (x) Gross Debt/ EBITDA (x) Net Debt/ EBITDA (x) Group continued to maintain a structurally strong balance sheet, with Net Debt to EBITDA maintained at below 0.9x Demonstrates the Group s financial strength and capacity to drive business growth via timely and aggressive investments 8

9 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance Colombo Trust Finance PLC Acquisition Update 9

10 Dialog Axiata PLC (Company) Dialog Continues to Capture Market Share; Data and Recovery in Core Revenues Diving QoQ ARPUs 60, , , , , , , , , , , , 000 8,0 00 6,0 00 4,0 00 2, Revenue Growth Driven by Data, Voice and International Revenues Data Driving ARPU Growth Supported by 4G Conversion and Coverage Expansion +10% +5% +6% 57,425 53, % 2% 4% 10% 8% 6% 4% 2% 20,055 19,036 18, % -5% % -2% -4% Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 - Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Blended ARPU Blended MOU Blended ARPU Growth -6% Aggressive Subscriber Acquisition led to the Growth in Subscribers Total subs growth +2% QoQ; +12% YTD Postpaid subs growth +3% QoQ; +9% YTD Prepaid subs growth +2% QoQ; +12% YTD 11,313 11,825 12,268 12,429 12,664 1,209 1,253 1,260 1,271 1,314 10,103 10,572 11,008 11,158 11,350 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Postpaid Subs Prepaid Subs QoQ Profitability Improved on the back of Revenue Growth and Cost Improvements Q3 17 QoQ YoY YTD 17 YTD EBITDA 7,369 14% 10% 19,557 4% PAT 3,315 41% 9% 7,399-12% EBITDA Margin % 36.7% +2.8pp +0.3pp 34.1% -0.9pp PAT Margin % 16.5% +4.2pp -0.1pp 12.9% -2.7pp 10

11 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance Colombo Trust Finance PLC Acquisition Update 11

12 5,0 00 4,5 00 4,0 00 3,5 00 3,0 00 2,5 00 2,0 00 1,5 00 1,0 00 Dialog Television Significant Improvement in QoQ EBITDA and PAT Driven by Aggressive Cost Initiatives TV Revenue Growth Continued to be Challenged with Drop in Postpaid Subscribers and ARPUs; Subscription Revenue Stable QoQ Amidst Affordability Pressure +12% +6% +1% 4,631 4,577 Prepaid Subscriber Base Continued to Register Strong Growth of 4% QoQ and 39% YTD (in 000s) 791 Total subs growth +2% QoQ; +17% YTD Postpaid subs growth -1% QoQ; -2% YTD Prepaid subs growth +4% QoQ; +39% YTD ,615 1,517 1, Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Post paid Pre Paid DTV Rebound Initiatives Continued to Gain Traction with QoQ EBITDA Improving by 84% Leading to a Decline in Net Loss by 51% QoQ Q3 17 QoQ YoY YTD 17 YTD EBITDA % >+100% % PAT % 11% % EBITDA Margin % 12.5% +5.3pp +5.8pp 8.1% +1.4pp PAT Margin % -6.5% +7.8pp +1.7pp -13.7% -6.1pp 12

13 Dialog Broadband Networks Fixed Business Revenue Growth Underpinned by Home Broadband (HBB) on the back of Network Coverage Enhancement and Aggressive Customer Reconnection Drives 10, 000 9,0 00 8,0 00 7,0 00 6,0 00 5,0 00 4,0 00 3,0 00 2,0 00 1,0 00 Strong Growth in HBB Revenue Driving QoQ and YTD Revenue improvement +31% +35% +4% 9,098 6,761 3,158 3,028 2,406 Q3 17 Q2 17 Q3 16 YTD 17 YTD 16 Third Consecutive Quarter of Positive PAT on the back of Strong Revenue Growth Q3 17 QoQ YoY YTD 17 YTD EBITDA 1,921 16% 96% 5,072 84% PAT % >+100% 1,208 >+100% EBITDA Margin % 60.8% +6.3pp +20.1pp 55.7% +14.9pp PAT Margin % 20.3% +9.3pp +21.2pp 13.3% +14.2pp Prepaid offering for Fixed HBB launched in July 2017 to expand affordability and to reach a wide spectrum of Sri Lankan Households 13

14 Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance Colombo Trust Finance PLC Acquisition Update 14

15 Colombo Trust Finance PLC (CTF) Acquisition Update The acquisition of 80.34% of the shares in Colombo Trust Finance PLC by Dialog Axiata PLC was completed on the 12 th of September Accordingly the assets and liabilities of CTF have been reflected in the consolidated balance sheet of the Dialog Group Acquisition Transaction Update Mandatory offer for the remaining 19.66% of shares were made, and the offer was closed on 2 nd November 2017 Shareholders holding 8.6Mn shares have accepted the mandatory offer which will increase Dialog s stake to 98.87%; Subject to the approval of the transfer of shares being obtained from SEC Impact on Q Financial Statements of Dialog Group CTF will not have a material impact on the earnings, gearing and Net asset of Dialog Group Goodwill arising from the acquisition amounted to Rs710Mn is classified under intangible assets Acquisition related transaction cost of Rs25.3Mn recognised P&L consolidation will be reflected from Q onwards CTF Operational Update Rs550Mn capital infusion due based on CBSL minimum capital requirement guidelines Digital Bank is expected to be operational by Q

16 Thank You 16