WIND. Pushing forward. Q Preliminary Financial Results Unaudited

Transcription

1 WIND Pushing forward Q Preliminary Financial Results Unaudited August 3,

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 H and Q data referred to in the following presentation are preliminary and unaudited. 2

3 Q Confirming the growth trend Total Revenues in quarter up 6.8% over Q Strong TLC service revenue growth +7%, notwithstanding termination rate cuts and intensifying competitive environment EBITDA up 19.4% over Q EBIT growing to 166 million, up 149% over same period of 2005 Net profit in the quarter of 3.6 million Available cash of 294 million at June 30, 2006 Rating upgrade by Moody s (Corporate & Senior Ba3, Second Lien B1, Senior Notes B2) 3

4 Q Confirming the growth trend Strong growth trend in mobile revenues and customer base with increase in ARPU, notwithstanding deflationary pressure and termination rate cuts Direct voice customer base growing 51%. Net adds growth in line with best performing competitor and double that of previous year (+152K in H1 06 vs +71K in H1 05) Broadband subscribers growth trend confirmed (+42%) with uplift in ARPU Ongoing process of rationalisation of organisation and management structure 4

5 Mobile performance 5

6 Mobile Key highlights Strong revenue growth driven by Noi success Optimisation of distribution with opening of new points of sale Strong growth in traffic volume (+18% vs Q2 05) ARPU increase on backdrop of declining ARPU trend in market 6

7 Mobile Growing CB and Usage Subscribers/market share Voice traffic volume (m) 18,5% 19,6% 19,1% 19,0% 13,7 14,3 11,6 12,9 (Bln mins) 4,0 4,6 4,8 +18% 5,2 5,4 5,8 3,5 5,1 5,9 6,7 47% () 2004 H Q Noi Market share ARPU 18,9 19,1 2,3 2,3 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 i-mode subscribers growth (000's) 691 Data + 71% 16,6 16,8 Voice 404 Q2 05 Q2 06 Q2 06 Underlying ARPU net of ITC rate cut would have been an incremental 1.4 Q2 05 Q2 06 7

8 Mobile - Enriched product portfolio Consumer Special Card Up to 600 Euro of bonus traffic based on the traffic consumed in the 30 days following activation for a fee of 7 Wind 10 Roaming 0.10 euro tariff after first minute for all calls from abroad in roaming for a monthly fee of 5 Noi Italy Up to 4 hours per month to call Wind mobiles and national fixed-line for a monthly fee of 7 Business Wind 5 All calls to mobiles and national calls at 5 euro cents for a monthly fee of 5 Roaming 50 50% discount on roaming rates after first minute on all calls from abroad for a monthly fee of 5 (+ VAT) 8

9 Fixed-line performance 9

10 Fixed Key highlights Stable voice customer base with strong increase in direct voice subscribers (+51%) Growing success of integrated offerings e.g. TuttoIncluso Broadband growth continuing (+42%) with increased flat offer penetration Experiencing certain slowdown in roll-out of fixed network with some delay in expansion process 10

11 Fixed Strong growth in Direct customers Voice subscribers Key results ('000) () Q2 05 Q2 06 CS CPS Direct Fixed line Voice ARPU 27,9 25, % Significant increase of Direct Customers over previous year as result of successful commercial effort on direct offering (e.g. TuttoIncluso) and ULL activation push which secured 76K net adds in Q2 06 (following the same number of net adds in Q1 06) Net additions in first half 2006 (+152K) in line with the non-incumbent competitor (FWB +160K) but obtained with a lower ULL coverage (28% vs 45%) Decrease of indirect customer base due to a more aggressive winback action by incumbent Voice ARPU declining vs due to reduction in tariffs not fully compensated by Q2 05 Q2 06 increase in usage 11

12 Fixed - Focus on integrated voice product offerings Fixed Mobile Noi 3 An option that provides free calls from an Infostrada fixed line towards 2 Wind mobiles for a monthly fee of 3 Infostrada Noi Wind An option that provides up to 150 minutes per month of free calls from an Infostrada fixed line towards all Wind mobiles for a monthly fee of 3 Tempo Libero Mobile An option that provides up to 100 minutes of free calls from an Infostrada fixed line towards three non-wind mobiles (TIM, VF and 3) for a monthly fee of 5 Fixed voice Internet TuttoIncluso Unlimited local and national calls plus unlimited 4Mbps Broadband for39.95 a month 12

13 Fixed Broadband driving Internet growth ('000) Broadband subscribers % 495 Q2 05 Q2 06 Broadband ARPU Key results Strong broadband growth (+42%) driven by compelling product range across all segments and price-performance proposition i.e. 12 Mbps broadband service Increasing take-up of flat pricing schemes vs pay-per-use with positive stabilization of revenue stream Confirmed success of fixed-internet bundles such as TuttoIncluso, now available also for CPS and wholesale BB Decrease in narrowband customers () 18,9 19,5 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 Q2 05 YTD Q2 06 YTD 13

14 Fixed - Segmented and integrated Internet offerings Segmented Internet Offers Libero Mega Unlimited 12Mbps broadband internet for a monthly fee of based on ADSL 2+ technology Libero Mini Unlimited 2Mbps broadband internet for a monthly fee of Libero Free Pay per use 1.2Mbps broadband internet for low users Libero on Mobile 14

15 Wind Financial Review 15

16 Strong performance in Q Revenues Normalised EBITDA / Margin (mln) % (mln) 30,2% % ,0% Q2 05 Q2 06 Q2 05 Q2 06 All figures under IFRS 16

17 Q P&L Highlights mln Q Q Change % Total Revenue ,8% Net Revenues ,4% Other income ,7% Total Costs (853) (832) 2,6% Normalized EBITDA ,6% Net unusual items 0 (9) -100,0% EBITDA ,4% EBIT ,6% Financial income and expenses (125) (113) 10,6% EBT 41 (46) N.M. Income tax (39) (48) -24,8% Net result from continuing operations 2,0 (95) N.M. Profit or loss from discontinued operations 0,0 (5) N.M. Net result (before minorities) 2,0 (100) N.M. Net result attributable to parent 3,6 (99) N.M. All figures under IFRS 17

18 Strong Revenue Growth and EBITDA in H1 (mln) Normalised* Revenues % Normalised* EBITDA / Margin (mln) 33,1% 29,7% % 804 H1 05 H1 06 H1 05 H1 06 All figures under IFRS * H Total Revenue net of unusual items (Turnover Contribution, restructuring costs); H1 05 reported Total Revenue2.374 mln, EBITDA 734 mln 18

19 H P&L Highlights mln H H Change % Total Revenue* ,6% Net Revenues ,2% Other income ,4% Total Costs (1.623) (1.632) -0,6% Normalized EBITDA ,9% Net unusual Items ,0% EBITDA ,6% EBIT ,7% Financial Income and expenses (221) (190) 16,3% EBT 72 (11) N.M. Income tax (56) (84) -33,5% Net Result from continuing operations 16 (95) N.M. Profit or loss from discontinued operations 0 (5) N.M. Net Result (before minorities) 16 (101) N.M. Net result attributable to parent 19 (96) N.M. All figures under IFRS * H Total Revenue net of unusual items (Turnover Contribution, restructuring costs); H1 05 reported Total Revenue2.374 mln, EBITDA 734 mln 19

20 EBIT and Net Profit Q2 06 Operating Income H1 06 Operating Income (mln) + 149% 166 (mln) + 64% Q2 05 Q2 06 H1 05 H1 06 Q2 06 Net Result H1 06 Net Result (mln) 3,6 (mln) 19,0 (99,0) (95,7) Q2 05 Q2 06 H1 05 H1 06 All figures under IFRS 20

21 Mobile Revenue & EBITDA growth Mobile Tlc Service Revenues Normalised Mobile EBITDA / Margin (mln) % 802 (mln) ,5% ,1% +11.7% Q2 05 Q2 06 Q2 05 Q2 06 Strong growth on revenues notwithstanding the interconnection rate decline driven by increased outgoing traffic and P2P messaging Operating leverage ensures EBITDA growth All figures under IFRS 21

22 Fixed-line Revenue and EBITDA Fixed Tlc Service Revenues Normalised Fixed EBITDA / Margin (mln) % 420 (mln) 46 10,6% +53.0% 71 16,8% Q2 05 Q2 06 Q2 05 Q2 06 Q2 06 revenue decrease driven by decline in International traffic and decrease in indirect and narrowband customer base Q2 06 EBITDA increase driven by increased operational efficiency vs previous year All figures under IFRS 22

23 Capitalisation (Wind Acquisition Finance S.p.A.) (mln) As of December 31, 2005 As of March 31, 2006 As of June 30, 2006 June 30, 2006/ Q2 06 LTM Normalised EBITDA Cash and Equivalents (163) (298) (292) (0.2x) Tellas & Other Net Debt Senior Debt 5,630 5,699 5, x Total Senior Debt 5,510 5,444 5, x Second Lien x Total Senior + Second Lien 6,198 6,127 6, x Senior Notes 1,240 1,529 1, x Hedging Derivatives (92) (161) (141) (0.1x) Other Financial Debt Net Debt 7,674* 7,495* 7, x Q LTM Normalised EBITDA Wind 1,579 mln *2005 and Q NFI has been restated to include fees to be amortised on RCF 23

24 Additional WAF S.p.A. Information (mln) As of June 30, 2006 Wind Net Interest expense WAF Net Interest expense Consolidated WAF Net Interest Expense FINANCIAL RATIOS Net Debt / LTM EBITDA LTM EBITDA / LTM Net Interest Expenditure

25 Debt Maturity Profile* mln Senior Second Lien High Yield Notes *Includes Second closing, High Yield tap issue in Feb 06 and pre-payment of 220 mln, excluding Tellas 25

26 2006 Guidance Mid to high single digit Tlc service revenue growth IFRS guidance for EBITDA YoY growth +11/13% 2006 Capex in the range mln and further capital expenditure unit cost reduction Positive cash flow generation Undrawn400m Revolving Credit Facility Strong growth in mobile business Evidence of fixed business turnaround 26