Analyst Presentation Half year results July 2007

Transcription

1 Analyst Presentation Half year results July 2007

2 Agenda Business Review H B. Moschéni Financial Figures H W. De Laet Outlook FY 07 & Conclusions - B. Moschéni 2

3 3 Business Review H B. Moschéni

4 In a competitive market, Mobistar realized 88K net adds in H (*) % (**) 95% Net market Growth (in K active cards) % 83.9% 81.3% H % 85% 80% 75% 70% % Active Mobile penetration Mobistar Competition Active Mobile Penetration 4 (*) including MVNO customers (**) Company estimate

5 Continued net gain MNP in H (with Mobistar still as the only net MNP winner on the market) -22, , ,897-65, , ,568 Total MNP +22,143 +2,834-19,

6 Postpaid as % of customer base further increased to 53.4% end H ,912,806 3,139,224(*) 3,199,735(*) Mobistar Customers % 51.4% 53.4% H Postpaid RES Postpaid BUS Prepaid Highest proportion of postpaid customers in the market Net growth in postpaid for almost 50% due to net growth in the business market 6 (*) Excluding MVNO customers, ~40,000 as at end H1 07; ~13,000 end 2006

7 Value share growth maintained, up to around 35% (*) 80% % % ~ 35% % % H (*) Company estimate

8 Customer base management : churn evolution under control in a competitive market 30% Evolution average churn rate (excluding migrations post- to prepaid) 25% 20% 15% 29.2% 27.7% 10% 19.1% 21.6% 19.2% 20.3% 5% 0% Q Q H

9 Regulatory and pricing impact on ARPU (*), compensated by important increase in usage 40 / month / MONTH H MTR decrease Roaming on net Rev/min Usage H (*) 12 months rolling ARPU

10 Upward trend in traffic confirmed, mainly driven by migration to postpaid and by prepaid consumption increase (*) Average traffic/customer/month 160 Average usage/month Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Voice SMS 10 (*) Traffic includes both traffic out and in

11 Strong growth in mobile data revenues Mobile Data revenues +15.7% 80 m H H SMS/MMS p-to-p premium SMS GPRS/EDGE (incl. WAP) Mobile data revenues up to 17.4% of mobile service revenues in H1 07 (from 15.4% H1 06) non-sms mobile data represent 16% of total mobile data revenues Supported by the successful uptake of Blackberry and Mobile Office Cards in the Business market Orange World usage in Residential market 11

12 Postpaid ARPU: from 59.6 to 49.5 / month H MTR H proforma roaming price rev/min (domestic) AUPU H Lower usage profile of pre- to postpaid migrations Price pressure in the business market (limited elasticity)

13 Prepaid ARPU sustained / month H MTR H proforma roaming rev/min AUPU H Usage advantage linked with re-load frequency Usage increase mainly linked with strong success of Tempo Music offer 13

14 Mobistar Strategy Mobile Centric RESIDENTIAL Fix Mobile Substitution Mobistar as a preferred mobility provider, i.e. mobile centric player BUSINESS Mobile Centric Convergence Mobistar as the total convergent mobility solutions operator, for mobile-centric organizations 14

15 Fix-to-mobile substitution in Residential market : Success the benefits of a mobile phone, better price than fix at home Customer benefits : - For all your calls: 1 phone, 1 address book - Easy to use - Save on your Belgacom fee - No clogged line at home Evidence of success contracts sold by end June 2007 (launched in March customers show 50% increase in traffic to fix phones Traffic to fix represents 30% customers (vs. 12% in total base) 15

16 Fix-mobile convergence in Business market : Success of One Office Voice Pack One Office Voice Pack :1 st bundled voice offer in the B2B market, from commercial to contract convergence Customer benefits: - Important savings on mobile and fix bills - One contract and one customer service for the mobile & fix Success of Voice Pack proves that business market wants to benefit from fix-mobile convergence advantages Strong take-up (launched in May 07): ~30% of Mobile Voice gross adds Attracting high-value customers Combining fix&mobile in a pack strengthens the positioning in the fix voice market 16

17 17 Financial Figures H W. De Laet

18 Consolidated income statement : Stable EBITDA margin and slight increase in net profit Mio H H % Total Statutory Revenues (*) % Total Turnover % Total Service Revenues % Cash Expenses % EBITDA % In % of service revenues 41.9% 41.9% Depreciations and amortizations % EBIT % Net financial charges N.A. Corporate Taxes % Net income % EPS ( ) % 18 (*) includes other revenues (14.6m EURO in H and 13.9m EURO in H1 2006)

19 Revenue evolution breakdown % -1.9% +1.7% +0.2% -2.2% H Incoming Revenues Roaming on-net Billed revenues Other H Net regulatory impact on revenues more than -4% on revenues (negative roaming on-net due to anticipative lower roaming wholesale tariffs as of Oct 06) 19

20 P&L Mobile Activities : EBITDA margin maintained Mio H H % Total Turnover (*) % Mobile Service Revenues % Cash Expenses % EBITDA % In % of service revenues 44.7% 44.4% Depreciations and amortizations % EBIT % 20 (*) includes handset sales (26.1m EURO in H and 21.3m EURO in H1 2006)

21 P&L Fix activities : Strong improvement versus H Mio H H H % (H1 07 vs. H1 06) Total Turnover % Fix Service Revenues % Cash Expenses % EBITDA N.A. In % of service revenues -1.7% -17.5% 2.3% Depreciations and amortizations EBIT

22 Details on evolution consolidated cash expenses Mio Euro H H Interconnect & other sales costs Handsets/RT costs Non-headcount costs Headcount costs Interconnect costs down to 22.5% of service revenues (from 23..2%) Mainly costs of handsets in line with revenue increase Flat sales commissions although more postpaid activations (gross adds & migrations) Effect of outsourcing contract with Ericsson Universal Services charges No Discounted Stock Purchase Plan in 2007 Effect of outsourcing contract with Ericsson implemented in May 2007 (FTE from 1,661 EOY 06 to 1,521 end H1 07) 22

23 CAPEX evolution % 16.0% % 12.6% 14.0% mio % % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% % of service revenues 0 H H H H H % CAPEX/semester Network IT other CAPEX/service revenues 23

24 Cash Flow Statement : Distribution of all cash generated Mio H H % EBITDA % CAPEX % Change in Working Capital N.A. Capital increase N.A. Purchase own stock N.A Net financial charges N.A. Corporate Taxes % Free cash flow before Dividend payments and capital movements % Dividend payments % Available Cash Flow N.A. 24

25 Balance Sheet Mio Fixed Assets Current Assets Cash and Cash equivalents TOTAL ASSETS Net Equity Provisions/long-term liabilities Long Term Debt (*) Short Term Debt Current Liabilities TOTAL EQUITY AND LIABILITIES Net Debt / (Net Cash) H , , , , (*) Revolving credit facility of 250 mio still available

26 26 Outlook FY 2007 B. Moschéni

27 Impact Roaming regulation versus estimates Original Roaming Assumptions Retail Regulation MTC as of 1 July 2007 No regulation MOC Wholesale Anticipative IOT reduction as of Oct 2006 IOT regulation as of 1 July 2007 Effective Roaming regulation Retail Regulation MTC as of Sept 2007 Regulation MOC as of Sept 2007 Wholesale Intra-group IOT further reduced as of July 2007 IOT regulation as of 1 September % Mobile service revenue growth in Belgium after regulatory impact (%/y) 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 2004(a) 2005(a) 2006(e) 2007(e) Impact MTR reduction: -5% Impact roaming -3% 27

28 Voxmobile : a success story 1/07/2003 Creation of VOXmobile GSM network Roll-out WLAN Roll-out Main challenger in the business market Take-over by Mobistar 91,000 customers (20% market share*) Commercial launch : own UMTS services GSM services based on a national roaming agreement Launch of innovative and convergent offers «Data flat fees» «All-inclusive packages» (Mobile abundance) «All in One packages» (Mobile+Fix+ADSL) 28 * Source : company data and Luxembourgian regulator annual report

29 Impressive growth and break-even after 2 yr (k Euro) Areas of cooperation Sales* % growth % % -> Develop Be-Lux large account approach with cross-border offers EBITDA > Supply, interco and roaming optimization Net Income* > Refunding via Mobistar 29 (* Excl. handset sales)

30 Conclusions and Guidance FY 2007 Strong ambition to further extend value share Mobile market value in Belgium to be negatively impacted by regulatory measures (MTR & Roaming): market value impact of around -7 to -8% Mobistar Total revenues expected to decrease by 2 to 4%, outperforming expected market evolution (-5 to -6%) Stable EBITDA margin Net income evolution in line with revenues CAPEX/sales around 11% 30

31 Thank you!