Grameenphone Ltd. Fourth Quarter Michael Patrick Foley, CEO - - PowerPoint PPT Presentation

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Grameenphone Ltd. Fourth Quarter Michael Patrick Foley, CEO - - PowerPoint PPT Presentation

Nov 29, 2022 229 likes •463 views

Grameenphone Ltd. Fourth Quarter Michael Patrick Foley, CEO Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (relevant persons). Any

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Grameenphone Ltd. – Fourth Quarter

Michael Patrick Foley, CEO

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SLIDE 2

Disclaimer

The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Grameenphone

  • Ltd. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by

law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

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Highlights 2017 Fourth Quarter Full Year

  • Seasonality and intense market competition
  • Revenue of BDT 32.2 Bn (+8%)
  • EBITDA margin of 58.8%
  • Stable voice price & competitive pressure on

data price

  • Earnings impact from one-off items
  • Revenue of BDT 128.4 Bn (+12%)
  • EBITDA of BDT 76.2 Bn (+20%)
  • Stable SIM market share of 45.0%
  • Voice revenue growth of 9%
  • Data subscriber addition of 6.6 Mn
  • Dividend of BDT 20.5 per share
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SLIDE 4

Key success factors

Superior network experience Efficient

  • perations

Strengthened physical and digital distribution Simplified products and services

  • 1776 3G and 1010 2G sites roll out
  • Modernization of telco core, VAS

and digital service platforms

  • Optimization of Facebook and

YouTube experience

  • Migration of IT managed services
  • 40+ products retired or modified
  • Reduction of RBT price points

from 36 to 3

  • Simplification of 121 IVR
  • Digitization of top 20 processes
  • Continued simplification of IS/IT

platforms

  • Efficiency in network operations
  • Efficiency in market spending
  • Organizational restructuring
  • Revamp of MyGP app
  • 1325 GP express stores rollout
  • 2 GP lounges for customer

experience of digital services

  • Empowerment with digital

platforms

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SLIDE 5

4Q2017: Healthy growth in a challenging quarter of seasonality and market competition

  • Heavy rainfall during Oct'17,

post effect of flood and winter

  • Continued generous offers on

subscriber acquisition and data

Seasonality and market competition Voice revenue growth Healthy data volume growth

  • Stable voice price
  • Smartphone offer on every 33

and 59 BDT recharge

  • Competitive pressure on data

price

  • Buy 2 get 1 free data campaign
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SLIDE 6

Creating awareness on online safety among school children, guardians and teachers

Directly educated more than 52,000 students in over 250 schools of 54 districts 20 BRAC trainers were trained to ensure

  • wnership and to create resource pool

BRAC trainers conducted the sessions in schools Over 400 employees participated voluntarily

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SLIDE 7

No.1 brand for the second time!

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SLIDE 8

Regulatory landscape

  • MNOs applied for 4G
  • perating license and

spectrum auction

  • A non-binding application
  • Few unresolved issues are

still in discussion

  • Bid earnest money deposit

deadline is 5 Feb'18

  • Scheduled auction date is
  • n 13 Feb'18
  • On 30 Nov’17 BTRC

awarded MNP license to Infozillion BD Teletech Consortium Limited (IBTCL)

  • Scheduled to be launched

by Mar’18

  • Discussion ongoing

amongst BTRC, IBTCL and MNOs for process development and system integration

  • BTRC audit commenced
  • n 3 Aug’2016
  • Received a summary of

the draft audit

  • bservations on 11 Dec'17
  • Feedback has been duly

submitted on 18 Jan'18

  • Waiting for further

consultation with regulator

BTRC Audit

Tower Co. licensing guideline

4G operating license and spectrum auction & technology neutrality guideline

  • Licensing guideline has

been approved by the Ministry as per media reports

  • MNOs will not be eligible to

participate

  • Industry holds its existing

position on legal rights to build, maintain, operate and co-locate towers

Mobile Number Portability Services (MNPS)

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SLIDE 9

Priorities going forward

GROWTH EFFICIENCY SIMPLIFICATION

Winning Team Responsible Business Conduct Business Environment Management

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SLIDE 10

Grameenphone Ltd. – Fourth Quarter

Karl Erik Broten, CFO

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Healthy revenue growth with improved EBITDA margin

8.0% Revenue growth 58.8% EBITDA margin 11.3% Capex/Sales* BDT 4.42 Earnings per share

4Q 2017

*Capex excluding license fees

Capex/sales = moving average last 4 quarters

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8% total revenue growth along with double digit subscription and traffic revenue growth

4Q 2017

DSTR* (BDT Mn) and Growth (YoY) Revenue (BDT Bn) and Growth (YoY)

*Daily revenues generated by own subscription (excludes interconnection)

  • 9.2% voice revenue growth
  • Lower device and interconnect revenue
  • QoQ revenue drop due to seasonality

29.8 30.6 32.4 33.2 32.2 11.2% 11.1% 15.5% 12.8% 8.0%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

11.8% 2017

128.4

282 301 318 323 317 315 12.2% 14.8% 18.0% 15.3% 12.4% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 15.1%

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27% data user growth with healthy revenue momentum

4Q 2017

Active Data Users** (Mn) and % of Sub-base Data Revenue (BDT Bn) and % of Service Revenue*

  • Competitive data offers driving user growth
  • Smartphone penetration will be key going forward

*Revenues generated by own subscription (includes interconnection) ** Minimum 150 KB usage within last 90 days

  • 29.1% data revenue growth
  • 54% contribution in incremental revenue

4.3 4.7 5.1 5.7 5.6 15.5% 15.9% 16.5% 17.8% 17.9%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

17.1% 2017 21.1

+46%

Growth YoY

24.5 25.2 27.0 30.0 31.2 42.3% 42.2% 43.9% 46.9% 47.7%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

+27%

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632 621 660 754 807 651 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017

ARPU (BDT) AMBPU APPMB (BDT)

3.1% service ARPU drop with 1.6% growth in data ARPU

4Q 2017

59 61 63 63 60 0.09 0.10 0.10 0.08 0.09

Data ARPU, AMBPU and APPMB Service ARPU, AMPU and APPM

  • 7.7% service AMPU decline
  • Declining interconnection minutes
  • Service ARPU growth of 2.9% for 2017
  • 28% AMBPU growth despite 27% user growth
  • 20% APPMB decline from competitive offers

166 165 171 170 161 167 267 262 261 257 247 256 0.62 0.63 0.65 0.66 0.65 0.65 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 ARPU (BDT) AMPU APPM (BDT) 56 0.07

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EBITDA growth from higher revenue and operating efficiency

4Q 2017

*EBITDA (BDT Bn) and Margin Opex (BDT Bn) and Margin

  • 4.0 percentage points improvement in EBITDA

margin

  • Higher opex from revenue driven costs and network

rollout

  • Net one-off positive effect of BDT 46 Mn

* EBITDA before other items

15.7% YoY 2.9% YoY 2.8% QoQ

10.7 10.1 10.0 11.0 11.0 35.7% 32.8% 30.9% 33.2% 34.1% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

32.8% 2017 42.2

+3.4%

Growth YoY

0.2% QoQ

16.4 17.8 19.9 19.5 19.0 54.9% 58.1% 61.2% 58.7% 58.8% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

59.2% 2017 76.2

+19.5%

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Investment mainly in coverage, capacity and network modernization

4Q 2017

*Capex (BDT Bn) and Capex/Sales%

  • BDT 14.5 bn capex in 2017
  • 477 2G and 491 3G sites addition during Q4
  • Capacity expansion of 3G
  • Network and IT readiness for future business
  • Total number of 2G and 3G sites stands at

12,994 and 12,332

*Capex excluding license fees

Capex/sales = moving average last 4 quarters

5.3 4.5 3.3 2.1 4.7 18.3% 13.9% 12.4% 12.0% 11.3% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

2017 14.5 11.3%

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SLIDE 17

Earnings growth of 11% despite one-off items

4Q 2017

Earnings Per Share (BDT) NPAT (BDT Bn) and Margin

  • Net one-off negative adjustment of BDT 2.0 Bn
  • Normalized earnings growth of 32.6%

11.1% YoY 14.2% QoQ

5.4 6.6 7.9 7.0 6.0 18.0% 21.4% 24.4% 21.0% 18.5%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

21.4% 2017

+22%

27.4

3.98 4.86 5.87 5.16 4.42 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

2017 20.31

11.1% YoY 14.2% QoQ

+22%

Growth YoY

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SLIDE 18

BDT 14.3 Bn OCF and Net debt/EBITDA of 0.02

4Q 2017

Net debt (BDT Bn) and Net debt/EBITDA** *OCF (BDT Bn) and OCF/Sales%

*OCF equals EBITDA minus Capex

**Net Debt = Short term debt + Long term debt - Cash and Cash equivalents 12 months rolling EBITDA

11.1 13.3 16.6 17.5 14.3 37.1% 43.4% 51.2% 52.5% 44.2%

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

47.9% 2017

+45%

61.7

Growth YoY

18.7 7.6 7.3 12.2 1.8

0.29 0.11 0.10 0.16 0.02 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17

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Recommended 100% final cash dividend for 2017

4Q 2017

Payout Ratio Earnings and Dividend per Share (BDT)

  • Consistent high payout ratio
  • Record date for entitlement is 19 February 2018
  • Subject to approval in the 21st AGM on 19 April 2018

10.89 14.67 14.59 16.68 20.31 14.00 16.00 14.00 17.50 20.50

2013 2014 2015 2016 2017 EPS DPS 129% 109% 96% 105% 101% 2013 2014 2015 2016 2017

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New accounting standards issued under IFRS/BFRS

Leases Financial Instruments

15

9

  • Adoption using the simplified

approach under revised standard

  • Performed a detailed impact

assessment based on currently available information

  • No significant impact on financial

statements

Revenue from Contracts with Customers

  • Adoption using the modified

retrospective approach

  • No significant impact in

recognition of revenue

  • Customer acquisition cost will

have impact and result in deferment of BDT 4.2 Bn (approx.) till 31 Dec'17

  • Retained earnings will increase

by BDT 2.7 Bn

16

  • Preliminary identification of

areas of potential impact

  • Most significant impact areas

are BTS sites, site sharing contracts, GPC/office space, house rent etc.

  • Plan to apply on 1 Jan'19 using

the modified retrospective approach

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2017 Full Year

  • Strong business performance in a competitive environment through

excellent execution in the market

  • Stable SIM market share with encouraging data customer acquisition
  • Voice revenue growth with price stability
  • Solid earnings growth with high dividend payout

Summary

*In consideration of the local regulations, Grameenphone Ltd. does not provide any forward looking statements.

4th Quarter 2017

  • Healthy growth in a challenging quarter of seasonality and competition
  • Voice revenue growth & competitive pressure on data price
  • Investments in coverage, capacity and network modernization
  • Earnings impact from one-off items
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