Deutsche Bank European Leveraged Finance Conference

Transcription

1 Deutsche Bank European Leveraged Finance Conference London - June 13, 2013

2 WIND in a Snapshot Revenues LTM 1Q 2013 EBITDA LTM 1Q % 18% 82% 5,310 million 2,036 million 73% Fixed-line Mobile 18% 82% Leading alternative fully integrated operator in Italy consistently outperforming the market Second largest fixed-line voice and Broadband operator in Italy Third largest mobile operator in Italy after the two incumbents with a CB market share of 23.8% 38.3 % LTM EBITDA margin A full line service offering Consumer SME/SOHO/Business Mobile Fixed-line (voice & BB) Convergent 2

3 Macro and Regulatory Headwinds Persist GDP Trend* Consumer Price Index** Housing Transportation CPI Food Items (OECD) (DEF) (ISTAT) Healthcare Communications Unemployment Trend ( cents) 9.00 Mobile Termination Rate current (DEF) (OECD) (European Commission) (ISTAT) Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 TIM/Vodafone WIND H3G * Sources: OECD (May 13), European Commission (May 13), Italian Government s DEF 2013 April 2013, ** Source: ISTAT (May 13) and Web 3

4 Italian Competitive Landscape Fixed / Internet Voice Broadband Mobile Broadband Mobile Voice Telecom Italia and Vodafone competing on same segments as WIND with similar pricing All operators are increasingly moving on All Inclusive cross net bundles both on prepaid and post-paid offers (MVNO) High mobile churn for all operators due to 24 hour MNP process Potential consolidation in industry (MVNO) (MVNO) (MVNO) The penetration of smart-phones (excl. other devices such as dongles) in WIND s customer base is increasing almost reaching the average market value. (MVNO) 4

5 WIND Continues to Strengthen its Positioning Mobile Market Share (SIM)* Broadband Market Shares 22.0% 22.8% 23.3% 23.8% 10.0% 9.9% 10.3% 10.2% 14.4% 15.8% 16.3% 16.4% 6.9% 6.4% 6.1% 6.2% 12.9% 11.8% 13.1% 13.7% Others 33.8% 32.4% 31.7% 31.6% 11.9% 13.1% 12.6% 12.5% 34.2% 34.9% 34.7% 34.4% 53.9% 52.9% 51.9% 51.3% Q Q 2013 Sources: Wind internal estimates for Competitors; Infostrada referred to Wind Official results; Swisscom declaration 2/05/13, Telecom Italia declaration 9/05/13, Vodafone declaration 21/05/13 * Excluding MVNO 5

6 WIND Strategy

7 Mobile Consumer Maintain Core Segments and Expand Into New Areas A clear, simple and transparent approach to the market based on option plans concept All Inclusive bundle concept extended to pre-paid Leveraging off-net options ( Noi Tutti family) to attract new customers from competitors 79% of customer base have at least one option plan Maintaining leadership position in the ethnic segment Post-paid consumer CB reached 954K as of the end of March 2013 Three All Inclusive bundle offerings including Voice, SMS, Internet browsing and optional Smartphone Unlimited bundles introduced in the market Strong performance for SIM only version Core Offer Pre-paid Post-paid Total Customer Base (mln) Q 2013 Post-paid Consumer CB (thousands) Q

8 Fixed Consumer Focus on LLU All Inclusive Bundles and Profitability LLU Voice Subscribers Fixed Optimization (.000) +1.1% Focus on direct subscribers commercial push 2,446 2,473 Infostrada products and services increasingly sold in the WIND shops delivering channel synergies Cross-selling with mobile Q Q Infostrada Offer Drivers Harmonization of look and feel between WIND and Infostrada brands also through single testimonial Dual-play LLU Subscribers Simple and complete portfolio consistent with value for money positioning (.000) 1, % 1,871 Focus on 2P offers to leverage ADSL growing demand Bundle enhanced with mobile included Q Q * Set up call 18 cent 8

9 Broadband Exploit Mobile BB Explosion and Grow Profitably in Fixed BB Mobile Broadband Focus on Mobile Internet ( mln) 82 Revenues +29.4% 106 (thousands) 4,525 Customers +38.7% 6,277 1Q Q Q Q 2013 Fixed Broadband Revenues Customers ( mln) (thousands) +9.1% 2, % 2, Q Q Q Q 2013 Clear offer segmentation driven by device Smart choice for Mobile Internet browsing Simple portfolio mainly based on Unlimited offers with fair usage policy and no extra cap (first mover in the market) Stimulate WIND customer base in order to increase mobile internet penetration of users 9

10 Building Customer Satisfaction Leadership Through All Touch Points Quality of Service Maintain Customer Satisfaction leadership in mobile Value for money positioning compared to competitors Q 12 2Q 12 3Q 12 4Q 12 1Q 13 Innovation Mobile top-up through Facebook account in order to allow all Facebook registered people to recharge their own SIM or send a gift to a WIND customer WIND App for smart-phones and tablets, that allows WIND s customers to manage all features of their account and SIM card, downloaded by more than one million customers Brand and Advertising WIND s brand is associated with a concept of transparency and simplicity Anti-crisis positioning with minuto vero concept (pay per effective second utilized instead of 30 seconds blocks) All Inclusive umbrella proposition across all the market segments Nationwide sales and distribution footprint Focus on more efficient pull channels (points of sale, web) Focus on areas/segments where market share is below fair share: northern Italy, business segment Sales and Distribution 6,454 62% 9% 7,350 62% 11% 8,194 63% 11% 20% 18% 18% 9% 8% 8% 8,346 65% 11% 16% 8% Q 2013 POS * National Distributor Dealer Large Retail Franchising + Own shops * Point of sales 10

11 Continuing to Invest in our Network National Coverage Mobile network GSM network completed: reached 99.83% population coverage with GPRS/EDGE nationwide coverage HSPA+ network developed: 95.39% population coverage, with 21 Mbps being rolled out in all Italian cities, 42 Mbps being deployed in largest cities Fixed network 1,457 LLU sites: c. 60% direct population coverage in all major Italian cities Backbone Solid fibre optic backbone of 21,640 km, supporting both fixed and mobile businesses As of March,

12 12 Q Financial Performance

13 Revenues and EBITDA - Total Total Revenues Total Revenues Trend ( mln) 1, % 1, Other revenues + CPE 3.2% 2.5% 0.7% 2.2% 0.8% Excl MTR 1, % 1,148 TLC service revenues -0.3% -1.2% -4.8% -3.9% -8.7% Reported Q Q EBITDA / Margin ( mln/%) 36.2% 37.5% Q Q Q Q Q Total revenues in Q decline 8.7% with service revenues down 10.4% mainly due to the mobile interconnection cuts occurred in July 2012 and January 2013 for a total of 72%. Excluding the impact of MTR Total revenues grow 0.8% YoY % 461 Q Q EBITDA declines 5.4% over 1Q 2012 due to service revenues pressure partially compensated by OPEX efficiencies; excluding MTR impact EBITDA grows 2.2%. EBITDA margin increases by 1.3 p.p. to 37.5% 13

14 Revenues and EBITDA - Mobile Total Revenues ( mln) % Other rev. + CPE Total mobile revenues in Q decline 9.6% as a combined effect of: Strong growth in Internet & data revenues, % 815 TLC service rev. up 11.9%, driven by impressive performance in mobile Internet (+29.4%) and solid results in traditional data (+5.1%) ( mln / %) Q Q EBITDA 43.7% 42.5% Decline in voice revenues driven mainly by reduction of incoming revenues due to the 72% mobile termination rate cuts occurred in July 2012 and January 2013 Excluding MTR impact total mobile revenues grow 3.3% % 378 EBITDA in Q declines to 378 million mainly due to the aforementioned MTR cuts partially compensated by OPEX efficiencies Q Q

15 Revenues and EBITDA - Fixed-line Total Revenues ( mln) % Other rev. + CPE Fixed-line total revenues decline 6.0% in Q as a result of lower service revenues, down 4.5%, driven by % 332 TLC service rev. the new strategy focused on LLU subscribers with a consequential reduction in indirect customer base Q Q EBITDA ( mln/%) 15.8% 24.3% EBITDA increases 45.0% YoY to 83 mln thanks to the new LLU strategy coupled with a general reduction % 83 in OPEX, resulting in a sharp improvement in marginality Q Q

16 Capitalisation ( mln) As of December 31, 2012 As of March 31, 2013 March 31, 2013 proforma / LTM EBITDA As of March 31, 2013 proforma for the Refinancing Cash and Equivalents (131) (71) (0.0x) (60) Bank Loan 2,947 2, x 2,372 Bridge Loan (LTE) Total Bank Debt 2,817 2, x 2,312 Senior Secured Notes ,169 3, x 3,270 Senior Secured Notes 2019 Floting rate 0.1x 148 Senior Secured Notes 2020 Fixed rate * 0.2x 416 Total Bank Loan + SSN 5,986 6, x 6,146 Senior Notes ,827 2, x 2,795 Ministry LTE Liability x 331 Financial Receivables (156) (157) (0.1x) (157) Derivatives and Other x 89 Total Net Debt 9,151 9, x 9,204 LTM EBITDA 2,036 NFI WAHF Group (vs. third parties) / EBITDA LTM at 5.1x * USD tranche has been converted at CCS EUR/USD Exchange Rate 16

17 Optmized Debt Maturity Profile FY 2011 mln 2,678 2, , TLA TLB HY 2017 Senior Secured Notes LTE Bridge Loan LTE Liability to Italian State Q Pro-forma for April 2013 Refinancing mln 2, Notional amounts. USD tranche has been converted at CCS EUR/USD Exchange Rate ,015 3, TLA TLB HY 2017 Senior Secured Notes 2018 LTE Liability to Italian State Senior Secured Floating Rate Notes Senior Secured Rate Notes

18 18 Thank You!