Investor Presentation

Transcription

1 Investor Presentation Bharti Airtel Limited Aug 2010

2 Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end. This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision. The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted. Investor Relations :- For any queries, write to: ir@bharti.in

3 Emerging Market Characteristics India Africa Population (mm) 1200 mm 465mm GDP Growth (Real) % 8.6% 3.1% GDP Size, (PPP adjusted) US$ 3,530 bn US$ 6,90 bn Telecom Penetration 56.83% ( mn telecom subs) 32% Broadband Penetration 0.80% (9.45 mn) NA Note: (1) *Telecom and Broadband penetration for India as on June 30 th 2010 as per TRAI press release. (2) Data pertaining to the 15 African countries where Zain Africa has operations (Source: IMF, Global Insight, Economist Intelligence Unit,CIA World Factbook, World Resource Institute.) 3

4 The Company...Bharti Airtel An Integrated Telco Wireless Services 2G/3G Rural Market Sri Lanka Bangladesh Africa Telemedia Services Enterprise Services Carriers Corporate Passive Infrastructure Services Fixed Line Broadband IPTV (Media) Fully integrated telecom player offering end to end solutions 4

5 Bharti a growth journey No. of circles Today countries DELHI

6 Bharti Airtel - positioning in the world and India 3 rd LARGEST wireless operator in the world 1 LARGEST private INTEGRATED telecom company in India 5 th LARGEST INTEGRATED telecom operator in the world LARGEST WIRELESS operator in India LARGEST private FIXED LINE operator in India LARGEST operator in NLD, ILD and VSAT business LARGEST TELECOM company listed on Indian Stock Exchanges Note: (1) 3 rd largest wireless operator in the world refers to in-country (single country) operator based on the number of subscribers. 6

7 Latest Results Q1 FY10/11 Key operating and financial metrics Q1 FY 11 Y-on-Y Customers mn 71.0% Revenue $ 2,625 mn 17.4% EBITDA $ 947 mn 3.0% Cash Profit $ 857 mn -10.0% Net Income $ 361 mn -32.0% Continued Strong Performance Wireless Customer market share leadership at 21.5%. Total minutes on network carried in Q bn Total employee strength 24,843 Balance sheet strength: Assets $ 31 billion Net debt $ 12.9 billion Net debt to EBITDA (Annualised) 2.9 Times Continues to be FCF positive on a standalone basis EBITDA Margin 36.9% Net Profit Margin 13.7% ROCE 18.4% ROE 21.3% The company recommended a dividend of Rs.1 per equity share of Rs. 5 each (20% of face value for the year ) This is subject to approval by shareholders at the ensuing AGM to be held on September 1, Note: (1) Wireless customer market share of India. (2) The recommended dividend is for the shareholders in India. 7

8 Segment contribution Rev, EBITDA and Investment REVENUE EBITDA 17% 2% 16% -7% 8% 6% 7% 80% 9% 78% INVESTMENTS 9% 3% 17% 2% 89% Infratel Services Others Note: (1) Revenue and EBITDA is gross of inter segment eliminations.(2) Investments are on gross basis. 8

9 Performance dashboard - 3 line graph Gross Revenue (USD Mn) 115, , , ,000 95,000 90, ,725 69% 66% 63% 63% 65% 107, , , , % 38.4% 39.9% 40.9% 40.6% 80% 70% 60% 50% 40% 30% 85,000 20% 80,000 Q110 Q210 Q310 Q410 Q111 10% Gross Revenue (USD Mn) (LHS) Opex to Gross Rev (RHS) Revenue (annualized) to Gross Cummulative Capex (RHS) Productivity Indicators = growing revenues + cost efficiencies + capital productivity Note: (1) The graph shown above is based on Bharti Airtel (India & South Asia), excluding Bharti Airtel African Operations as it is for less than one month in this quarter 9

10 Wireless Services 10

11 Indian Wireless Market KPIs JK Sub Base : mn PB HP second largest market Wireless Penetration: 53.77% HAR UP(W) lowest in the world GUJ RAJ DEL DELHI UP(E) MADHYA MP PRADESH` BH WB AS NE HHI Index: very high one of the most competitive market Prepaid Base: 96% one of the highest in the world Usage per sub per month: MUM MAH OR Kol Metros Minutes: 480 one of the highest ARPU: ~ US$ 4.6 KK AP A Cat. one of the lowest Rate per minute: ~ US$ 0.01 KER TN CHN B Cat. C Cat. one of the lowest in the world VAS: ~ 11.6% One of the lowest Note: (1) Subscriber numbers and wireless penetration numbers as on June 30, 2010 are as per TRAI release (2) Other indicators on the slide are based on Global Wireless Matrix 2Q10 dated 9 th July 10 by Merrill Lynch, and reflective of Industry numbers. 11

12 Rapidly Growing Indian Wireless Market Net Adds in Jun 18.0 Mn greater than over last 2 months average run rate of 16.6 Mn S-curve triggered Closing Subs Net Adds % 80% 70% 60% 50% 40% 30% 20% 10% 0% Fastest Growing Market in the World Note: (1) Actual Data as per Industry Association Releases and Industry Estimates in India. 12

13 Wireless Market Structure in India Subscriber Trends Customer Market Share CMS (%) (mn) % 23% 21% 19% 17% 15% 13% 11% 9% 7% 21% 24% 17% 19 % 17% 18 % 12 % 14 % 11% 10 % 11% 9% 9% 7% - 5% Airtel Reliance Vodafone BSNL+MTNL Idea Tata Others Airtel Reliance Vodafone BSNL+MTNL Idea Tata Others Jun-10 Jun-09 Net adds during the year CMS(Jun'10) CMS(Jun'09) Airtel continuously consolidating its market leadership position despite intense competition Airtel current monthly net adds at 3.0 million vs. 2.8 million a year ago Airtel ranks 1& 2 in 17 circles in terms of number of subscribers Over 59% of net adds coming from B&C circles (rural India) Airtel Continues to lead on Revenue Market Share 13

14 Company Highlights on Wireless Services 14

15 Performance Indicators - Financial Revenues (INR mn) EBITDA (INR mn) & Margin (%) 90,000 88, ,000 84,301 82,902 83,174 35,000 30,000 34,106 33,310 30,400 30,237 31,710 82,000 80,898 25,000 78,000 20,000 15, ,000 10, ,000 70,000 Q110 Q210 Q310 Q410 Q111 0 Q110 Q210 Q310 Q410 Q111 EBITDA 15

16 Performance Indicators - Operational Customers & Market Share Prepaid/Postpaid % 23.5% 22.7% 21.8% 21.5% 26% 24% 23% 10 5% 10 0 % 95% 97.9% 92.3% 99.6% 98.4% 93.5% 92.9% % % 100.4% 94.7% 95.2% 94.2% 97.5% 95.3% % 99.2% 95.8% 96.0% % 90% 0 Q110 Q210 Q310 Q410 Q111 20% 85% Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 1Q11 Customers (mn) CM S (%) Prepaid Subs Prepaid Net Adds ARPU & RPM MoU/Sub/Month & MON Q110 Q210 Q310 Q410 Q , , , , , Q110 Q210 Q310 Q410 Q , , ,000 0 RPM (Rs.) ARPU (INR) MoU/ Sub (Min) Tot al minut es on Net work (Mn Min) 16

17 Africa Wireless Market KPIs Customer Base : Mn Performace Indicators: Revenue: 9,583 Mn EBITDA: 2,635 Mn Prepaid Base: 99.3% one of the highest in the world Usage per sub per month: 103 Minutes one of the lowest ARPU: ~ US$ 7.4 one of the competitive market Rate per minute: ~ US 7.2 one of the highest in the world VAS: ~ 7.9% One of the lowest 17

18 Current positioning and way forward Leadership Positioning Growth strategy and plans Revenue Revenue size (>$ 9 Bn) Revenue Market Share New Revenue Streams Changing face of growth through M-Com, M-entertainment & 3G Non financial vitals Brand Distribution Churn lower than industry Spectrum Mix (900/1800 MHz) Cost Improving cost efficiencies Lowest cost GSM network Maximizing usage Increasing the usage through U&R drive Wallet share Net Adds Driven by rural strategy 18

19 Telemedia Services 19

20 A snapshot Largest private operator having presence in the voice, broadband, IPTV and data. Focus on SMB segment & Broadband at Homes Key Performance Indicators 1. Voice (wire-line) and Data (DSL) Presence in 88 top cities of India. 2. Target Segment : Retail and Small and Medium Enterprises. 3. Customer base: 3.15 million (end June2010) 4. Broadband (DSL with speeds>256 kbps) penetration at 42.6% of customer base. 5. Average ARPU for Quarter ended Jun 10 $ 20.6 per month. 6. Segment contributing to 7% of overall revenues of the company. 7. EBITDA margin of over 44.0%. Broadband revolution to follow wireless revolution in India SMB opportunity across ICT stream 20

21 Telemedia Services Business Units SMBs Homes Products Voice Data Mobile Services Applications SaaS Broadband Voice IPTV Goal One-Stop Shop for All Airtel Services and Solutions to SMBs Dominant Broadband & Fixed Voice share of the affluent in targeted 95 cities Strategies Data Products: Internet, MPLS etc. Integrated Solutions to drive share of wallet like hosted e mail, online desktop etc. Strategic Alliances Indirect Channel to Drive Penetration Deeper & Not Wider: 95 Cities Enhancing Broadband experience : Speed on Demand, Games on Demand & VAS Vertical & Not Horizontal: Hi-Rise Drive Triple Play Drive Higher spends for better customer experience 21

22 Product Portfolio 22

23 Performance Indicators Revenues (INR mn) EBITDA (INR Mn) & Margin (%) 9,100 8,960 4, ,933 3,938 8,800 8,500 8,200 7,900 8,551 8,543 8,549 8,511 3,800 3,600 3,400 3,466 3,646 3,684 7,600 7,300 3,200 7,000 Q110 Q210 Q310 Q410 Q111 3,000 Q110 Q2 10 Q3 10 Q4 10 Q111 Customers (overall & DSL) ARPU (INR) 3,250 3,000 2,828 2,928 2,989 3,067 3,153 2,000 1, ,150 2,750 2,500 2,250 2,000 1,750 1,50 0 1,2 50 1,241 1, ,18 7 1,13 8 Q110 Q2 10 Q3 10 Q4 10 Q111 Fixed Line Customers ('000) DSL Cust. ('000) 1,50 0 1, ,10 0 1,0 50 1, , Q110 Q2 10 Q3 10 Q4 10 Q111 23

24 Enterprise Services 24

25 A snapshot Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers Corporates: Single point of contact for all telecommunication needs for Top 2500 corporate customers, providing full suite of voice, data, and managed communications solutions Carriers: Wholesale voice and data services to over 130 domestic and 450 international telecommunications carriers, as well as ILD and NLD carriage for Airtel s own customers Extensive national and international infrastructure Pan-India network with 129,244 Route kms of optical fiber, over 4,150 MPLS and SDH POPs Access network (terrestrial) in 88 cities, Wimax network in 143 cities, and over 1,500 local POIs International network with 225,000 Route Kms, connecting over 50 countries and 5 Continents. Key Performance Indicators (Q1 11) NLD Minutes Carried: 17.3 Billion ; ILD Minutes Carried: 3.0 Billion Revenue: Rs.10,186 Million (8 % Segment Contribution Share) EBITDA: Rs. 2,497 Million (24.5% EBITA Margin) 25

26 Highlights # 1 Operator in India in terms of: NLD Revenue (Voice & Data) ILD Revenue (Voice & Data) Private Fixed Line Operator Corporate Internet Provider VSAT Provider (installed base) 26

27 What We Offer Wholesale Voice - Domestic & International Voice Carriage Services - International & Domestic Toll Free services - International Calling Services - Signaling Based Services - Global Wholesale Voice (Hubbing & Transit) Wholesale Data - Transport Services - Access Services Terrestrial/WiMax in India - Managed Network Services - Internet Access Services - Hosting & Services for Carrier PoPs - Carrier Outsourcing & Content Distribution Retail Voice - Mobility Solutions - Corporate Mobile Ser Voice Services - Mobile Data (Blackberry, Data card, applications) - SMS-Based Tools & Bulk SMS Solutions - Workforce Mobility Solutions (Vehicle Tracking, etc.) - Fixed line Solutions - Fixed Line/ PRI/ Centrex Services - Domestic Toll Free Service - Hosted Contact Centre Services - Premium International Toll Free Service Retail Data - Internet Services &Managed MPLS Services - Domestic and Int l Private Leased Lines - Data Center & Managed Services - Digital Media & Teleport Services - Audio and Video Conferencing Solutions 27

28 Performance Indicators Enterprise Services Revenues (INR mn) EBITDA (INR mn) & Margin (%) 4, ,000 11, ,000 11, , ,048 10, ,18 6 3,500 3,000 2,500 2,942 3,141 3,274 3,221 2,497 9,000 2,000 8,000 1,50 0 7,000 1, , ,000 Q110 Q2 10 Q3 10 Q4 10 Q111 0 Q110 Q210 Q310 Q410 Q111 Voice Minutes on Network 18, , , , , , , , ,000 6,000 3,000 2,869 3,181 3,100 3,173 3,044 0 Q110 Q2 10 Q3 10 Q4 10 Q111 NLD M inutes (mn) ILD M inutes (mn) 28

29 Passive Infrastructure Services 29

30 A snapshot Bharti Infratel operates in 11 circles. Indus Tower operates in 15 circles. Standard Master Services Agreement with competitive rates already in place. Key focus areas: To increase sharing factor (tenancy) from current levels of 1.65 for Infratel and 1.75 for Indus. Provide energy optimization solutions and other network management services. Evaluate other revenue streams. Key performance Indicators (Infratel): Total Towers: 31,196 (nos) Sharing Factor: 1.65 Sharing Revenue per sharing operator per month at Rs. 36,290. EBITDA margin: 35.5% Key performance Indicators (Indus): Total Towers: 104,901 (nos) Sharing Factor: 1.75 Sharing Revenue per sharing operator per month at Rs. 30,379. Aim to be the preferred choice of vendor for all existing and new operators 30

31 Performance Indicators - Bharti Infratel Revenues (INR mn) EBITDA (INR mn) & Margin (%) 22,000 20,000 18, , ,937 17, , , ,412 7,500 7,000 6, ,224 7,240 6,267 14, ,000 5,831 12, ,0 0 0 Q110 Q210 Q310 Q410 Q111 5,500 5,000 5,201 Q110 Q2 10 Q3 10 Q4 10 Q111 Towers (nos) & Sharing Factor Sharing Revenue per Sharing Operator per Month (Rs) 32,000 31,000 30,000 29,000 28,000 27,000 26, ,078 29,112 29,806 30,568 31,196 Q1 10 Q2 10 Q3 10 Q410 Q ,000 37,000 33,000 29,000 25,000 38,107 36,420 36,696 36,878 36,290 Q1 10 Q2 10 Q3 10 Q410 Q111 No of towers Sharing Factor Sharing Revenue per Sharing Operator per month 31

32 Indus Towers Roof Top Tower 10 5, , , , , , , ,000 97,000 95,000 97, ,000 Q110 Q210 Q310 Q410 Q No of towers Sharing Factor Ground Based Tower First of its kind deal Bharti (42%), Voda (42%) & Idea (16%) Largest independent tower company in the world ~ 100,000 towers under its management Benefits from captive tenancy as well as external tenants Incremental investment in towers to come from new operators / subscriber growth / 3G 32

33 Recent Honours 33

34 Bharti Airtel Leadership in business Recent Honours Rated as the Powerful Brand in the Economic Times- Brand Finance Brand Power (the only corporate brand to be awarded the AAA rating) Best Cellular Service Provider and Best VSAT & NLD player Service Provider at the 2009 Voice & Data 100 Awards Best Global Wholesale Carrier for 2009 at the Telecoms World Awards Middle East. Adjudged Wireless Service Provider of the Year Frost & Sullivan Asia Pacific ICT Awards ( in recognition of innovation, vision, strategy and profitability) Voted as the India s Most Innovative company in a survey conducted by Wall Street Journal Rated as India's Best Enterprise Services Provider for 2009 at the annual Users Choice Awards instituted by PC Quest. Adjudged Most Preferred Cellular Service Provider Brand award at the 2010 CNBC Awaaz Consumer Awards Bharti Airtel won tele.net Telecom Operator awards in 6 out of total 14 categories including Most Admired Company, Best National Mobile operator, Best Internet and Broadband operator, Best Operator in Rural Market, Best Enterprise Services Sunil Bharti Mittal, Chairman & Group CEO Honorary degree of Doctor of Laws by University of Leeds (UK) in 2009 Tenth Lal Bahadur Shastri National Award by the Hon ble President of India in 2009 Akhil Gupta, Deputy Group CEO & MD CA Business Achiever Award by Institute of Chartered Accountants of India. Manoj Kohli, CEO( International) & Joint MD Telecom Man of the year by Tele.net in Apr 10 34

35 Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end. This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision. The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted. Investor Relations :- For any queries, write to: ir@bharti.in