Dialog Axiata PLC Sri Lanka's Premier Connectivity Provider Q4 2015 Results 17 th February 2016 an axiata company
Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance 2
Dialog Group Performance Highlights FY 2015 Improved Profitability on the back of Significant Revenue Growth and Cost Efficiencies Group Revenue at Rs73.9Bn, grew by 10% YoY and 6% QoQ Mobile, Fixed and TV revenues underpin YoY and QoQ revenue growth Group EBITDA Improvement driven by Robust Revenue Growth in combine with Operational Efficiencies centered on Cost Management Initiatives FY 2015 Group EBITDA at Rs23.8Bn, up by 14% YoY albeit decline of 11% QoQ Group EBITDA Margin at 32.2%, increased by 1.1pp YoY Group PAT impacted by the weakening of the LKR against the USD resulting in Translational Forex Losses of Rs2.2Bn in FY 2015 FY 2015 Group PAT at Rs5.2Bn, decreased by 15% YoY and 9% QoQ Group PAT post normalisation for the translational forex losses was recorded at Rs7.4Bn, an increase of 18% YoY FY 2015 Capex amounted to Rs19.6Bn, Capex Intensity of 26% Low gearing maintained with Net Debt to EBITDA at 0.78x as at end of December 2015; FY 2015 OFCF marginally negative at Rs864Mn Subsidiaries continue to consolidate performance DBN records solid EBITDA growth of 88% YoY DTV strong revenue growth of 23% YoY Aggressive Subscriber Growth Mobile subscriber base of 10.9Mn up by 14% YoY TV subscriber base of 650k with over 197k net adds during the year 3
Group Financial Summary Significant Growth in Revenue and Cost Efficiencies driving Positive Performance Rs Mn FY 2015 YoY Q4 15 QoQ Revenue 73,930 10% 20,039 6% EBITDA 23,824 14% 5,613-11% PAT 5,187-15% 620-9% Normalised PAT* 7,387 18% 1,083-49% EBITDA Margin 32.2% 1.1 pp 28.0% -5.6 pp PAT Margin 7.0% -2.1 pp 3.1% -0.5 pp Normalised PAT Margin 10.0% 0.7 pp 5.4% -5.9 pp ROIC 12.3% 2.0 pp 7.2% -7.7 pp PAT significantly impacted by forex losses; Post normalising for translational forex losses, organic PAT performance demonstrates an improvement of 18% YoY * PAT for Q4 15 and FY 2015 normalised for translational forex losses of Rs0.5Bn and Rs2.2Bn respectively 4
Group Revenue Continues Growth Momentum; Mobile, Fixed and Television Revenues drive YoY Growth of 10% Group Revenue (Rs Mn) +16% +10% +6% 73,930 67,286 17,278 17,331 17,745 18,816 20,039 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 FY 2015 FY 2014 Mobile Data revenue improved significantly by 64% YoY and 10% QoQ on the back of higher subscriber additions and increased usage Despite being impacted by 25% Bonus on Mobile Prepaid Domestic Calls, Mobile Voice revenue grew by 3% YoY in tandem with robust growth in subscriber base Fixed revenues grew by 13% YoY and 10% QoQ underpinned by growth in Fixed LTE subscriptions and Enterprise revenues Television revenue increased by 23% YoY and 4% QoQ driven by strong subscriber growth 5
25,0 00 20,0 00 15,0 00 10,0 00 5,00 0 - YoY EBITDA improvement underpinned by Growth in Revenue and Cost Efficiencies; PAT significantly impacted by Translational Forex Losses Group EBITDA and PAT (Rs Mn) +2% +14% -11% 23,824 20,895 EBITDA (Rs Mn) PAT (Rs Mn) 5,494 5,978 5,919 6,314 5613 1,478 1,982 1,907 679 620 5,187 6,098 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 FY 2015 FY 2014 EBITDA Margin % 31.8% 34.5% 33.4% 33.6% 28.0% 32.2% 31.1% PAT Margin % 8.6% 11.4% 10.7% 3.6% 3.1% 7.0% 9.1% Cost as a % of Revenue Q4 14 Q3 15 Q4 15 FY2015 FY2014 Total Group Cost 68.2% 66.4% 72.0% 67.8% 68.9% Direct Expenses 27.7% 29.0% 28.5% 28.8% 28.5% Sales & Marketing 13.5% 13.3% 15.6% 13.6% 12.8% Network Cost 12.5% 10.1% 10.5% 10.4% 12.5% Staff Cost 8.5% 7.8% 9.9% 8.5% 8.5% Bad debt 0.5% 1.0% 1.1% 1.0% 1.3% Overheads 5.4% 5.2% 6.4% 5.5% 5.3% Significant improvement in EBITDA YoY driven by increase in revenue and positive cost performance arising from cost management initiatives EBITDA and PAT contracted QoQ by 11% and 9% respectively PAT post normalisation for translational forex losses grew by 18% YoY on the back of increased EBITDA 6
20,0 00 15,0 00 10,0 00 5,00 0-200 % 150 % 100 % 50% 0% Focused Capex Investments to further strengthen the Group s Leadership in Sri Lanka s ICT sector Capex* (Rs Mn) & Capex Intensity (%) +110% +188% +44% 19,577 13,630 10,618 5,047 1,740 3,536 3,683 53% 26% 20% 29% 10% 20% 20% Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 FY 2015 FY 2014 CAPEX CAPEX Intensity FY 2015 Capex directed in the main towards, investments in high speed broadband infrastructure Extension of Optical Fibre Network (OFN) Bay of Bengal Gateway (BBG) Sub-Marine Cable project * Capex excluding CPE (Customer Premises Equipment) investments, capex for spectrum acquisition and license renewal 7
Structurally Strong Balance Sheet with Net debt to EBITDA Maintained Below 1.0x Financial Position (Rs Mn) 31 Dec 15 30 Sep 15 31 Dec 14 Cash & Cash Equivalents 4,429 8,208 8,736 Gross Debt 22,910 26,187 27,874 Gross Debt / equity (x) 0.48 0.54 0.62 Gross Debt/ EBITDA (x) 0.96 1.04 1.33 Net Debt/ EBITDA (x) 0.78 0.71 0.92 Solid balance sheet backed by low gearing; Net debt to EBITDA maintained at 0.78x YoY reduction in debt balances resulted from repayment of Axiata loan outstanding of USD40Mn and Rs3.7Bn 8
Continued Commitment to Healthy Dividend The Board of Directors of Dialog Axiata PLC, resolved to propose for consideration by the Shareholders of the Company, a cash dividend to ordinary shareholders amounting to Rs0.32 (32 cents) per share totaling to Rs2.6Bn Dividend payout increased on a per share basis from 13 cents to 32 cents: On considering investment requirements to serve the nation s demand for Mobile, Fixed, Broadband and Digital Television services Dividend payout ratio of 50% of FY 2015 Group Net Profits Dividend yield of 3.2% based on a closing share price of Rs10.0 as at 15 th February 2016 The dates of the AGM and the dividend payment will be notified in due course Dividend & DPO 39% 45% 45% 50% 35%* 3 2.5 2 1.5 1 0.5 0 Rs2.0Bn 25c/ share Rs2.7Bn 33c/ share Rs2.4Bn Rs1.1Bn Rs2.6Bn 2011 2012 2013 2014 2015 * DPO on one-off tax adjusted Profit in FY 2014 29c/ share 13c/ share 32c/ share Dividend Payout (DPO) 9
Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance 10
60,0 00 50,0 00 40,0 00 30,0 00 20,0 00 10,0 00 - Dialog Axiata PLC (Company): Key Financial Highlights Improved YoY EBITDA driven by Revenue Growth and Cost Efficiencies; PAT significantly impacted by Translational Forex losses +16% +9% +6% 62,943 57,963 Revenue (Rs Mn) EBITDA (Rs Mn) PAT (Rs Mn) 14,704 14,691 15,157 16,089 17,007 4,689 5,053 4,905 5,581 4,804 1,537 1,945 1,831 1,050 921 20,344 18,454 5,747 6,954 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 FY2015 FY2014 EBITDA Margin % 31.9% 34.4% 32.4% 34.7% 28.2% 32.3% 31.8% PAT Margin % 10.4% 13.2% 12.1% 6.5% 5.4% 9.1% 12.0% YoY and QoQ Revenue improvement driven by growth in data, voice and VAS revenues EBITDA increased by 10% YoY driven by growth in revenue coupled with positive cost performance QoQ EBITDA and PAT impacted by 14% and 13% respectively On adjusting for translational forex losses, PAT improved by 9% YoY on the back of increased EBITDA 11
10,0 00 8,00 0 6,00 0 4,00 0 2,00 0 - Mobile Subscriber Growth Continues; up 14% YoY and 5% QoQ No of Mobile Subscribers 000 Blended ARPU (Rs) & MOU Total subs growth +5% qoq; +14% yoy Postpaid subs growth +1% qoq; +6% yoy Prepaid subs growth +6% qoq; +15% yoy 10,142 10,312 9,540 9,807 1,075 1,085 1,112 1,135 10,872 1,141 356 352 346 372 378 8,464 8,722 9,030 9,177 9,731 149 144 148 148 140 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Postpaid Subs Prepaid Subs Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Blended ARPUs Blended MOUs Growth in Pre paid segment underpins the YoY subscriber growth of 14% ARPU increased by 3% YoY driven by strong contribution from data revenue 12
Dialog Group Performance Dialog Axiata Company Performance Subsidiary Performance 13
6,60 0 5,60 0 4,60 0 3,60 0 2,60 0 1,60 0 600 (4 00) Dialog Television: Key Financial Highlights Continues to Consolidate Revenue Growth with Revenue increasing by 23% YoY +16% +4% +23% 5,780 Revenue (Rs Mn) EBITDA (Rs Mn) PAT (Rs Mn) 1,302 1,456 1,345 1,463 1,516 609 173 314 202 70 23 139 (26) (9) (243) (184) (314) 4,708 863 243 No of Television Subscribers 000 Total subs growth +8% qoq; +44% yoy 452 86 Postpaid subs growth +3% qoq; +17% yoy Prepaid subs growth +20% qoq; +158% yoy 504 112 534 136 366 392 398 416 428 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 FY2015 FY2014 EBITDA Margin % 13.3% 21.6% 15.0% 4.8% 1.5% 10.5% 18.3% PAT Margin % -0.7% 9.6% -1.9% -16.6% -12.1% -5.4% 5.2% 600 650 184 222 Revenue improvement driven by strong subscriber growth Cost expansion arising from aggressive customer acquisition alongside service and product expansion activities resulted in a medium term contraction of EBITDA on both YoY and QoQ basis PAT decreased YoY on the back of decline in EBITDA, higher depreciation and forex losses 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Post paid Pre Paid 14
8,00 0 7,00 0 6,00 0 5,00 0 4,00 0 3,00 0 2,00 0 1,00 0 - (1,000) Dialog Broadband Networks: Key Financial Highlights Net Loss reduced significantly by 86% YoY on the back of Growth in Revenue and Cost Enhancements Revenue (Rs Mn) EBITDA (Rs Mn) PAT (Rs Mn) 1,660 1,733 1,791 1,815 1,969 622 600 802 655 814 (17) (80) 128 (101) (80) 7,309 2,871 (133) 6,162 1,531 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 FY2015 FY2014 EBITDA Margin % 37.5% 34.6% 44.8% 36.1% 41.4% 39.3% 24.8% PAT Margin % -1.0% -4.6% 7.1% -5.6% -4.1% -1.8% -15.3% +19% +8% +19% (941) Revenue growth driven by growth in LTE, leased line and fiber sharing revenues EBITDA grew by 88% YoY and 24% QoQ on the back of strong revenue performance and cost improvements YoY and QoQ PAT improvement backed by growth in EBITDA 15
Thank You 16