Grameenphone Ltd. – Fourth Quarter Michael Patrick Foley, CEO
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Highlights 2017 Fourth Quarter Full Year • Revenue of BDT 128.4 Bn (+12%) • Seasonality and intense market competition • EBITDA of BDT 76.2 Bn (+20%) • Revenue of BDT 32.2 Bn (+8%) • Stable SIM market share of 45.0% • EBITDA margin of 58.8% • Stable voice price & competitive pressure on • Voice revenue growth of 9% data price • Data subscriber addition of 6.6 Mn • Earnings impact from one-off items • Dividend of BDT 20.5 per share
Key success factors ● 1776 3G and 1010 2G sites roll out ● 40+ products retired or modified ● Modernization of telco core, VAS ● Reduction of RBT price points Simplified Superior and digital service platforms from 36 to 3 products and network ● Optimization of Facebook and ● Simplification of 121 IVR services experience YouTube experience ● Digitization of top 20 processes ● Migration of IT managed services ● Revamp of MyGP app ● Continued simplification of IS/IT Strengthened platforms ● 1325 GP express stores rollout physical and Efficient ● Efficiency in network operations ● 2 GP lounges for customer digital operations ● Efficiency in market spending experience of digital services distribution ● Empowerment with digital ● Organizational restructuring platforms
4Q2017: Healthy growth in a challenging quarter of seasonality and market competition Seasonality and Voice revenue Healthy data growth market competition volume growth • Heavy rainfall during Oct'17, • Stable voice price • Competitive pressure on data post effect of flood and winter price • Smartphone offer on every 33 • Continued generous offers on • Buy 2 get 1 free data campaign and 59 BDT recharge subscriber acquisition and data
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 ownership and to create resource pool BRAC trainers conducted the sessions in schools Over 400 employees participated voluntarily
No.1 brand for the second time!
Regulatory landscape 4G operating license and Mobile Number Tower Co. licensing spectrum auction & BTRC Audit Portability Services technology neutrality guideline (MNPS) guideline • MNOs applied for 4G • BTRC audit commenced • Licensing guideline has • On 30 Nov’17 BTRC operating license and on 3 Aug’2016 been approved by the awarded MNP license to spectrum auction Ministry as per media Infozillion BD Teletech • Received a summary of reports • A non-binding application Consortium Limited the draft audit (IBTCL) • MNOs will not be eligible to observations on 11 Dec'17 • Few unresolved issues are • Scheduled to be launched participate • Feedback has been duly still in discussion by Mar’18 • Industry holds its existing submitted on 18 Jan'18 • Bid earnest money deposit • Discussion ongoing position on legal rights to • Waiting for further deadline is 5 Feb'18 build, maintain, operate amongst BTRC, IBTCL consultation with regulator • Scheduled auction date is and co-locate towers and MNOs for process on 13 Feb'18 development and system integration
Priorities going forward SIMPLIFICATION GROWTH EFFICIENCY Business Environment Management Winning Team Responsible Business Conduct
Grameenphone Ltd. – Fourth Quarter Karl Erik Broten, CFO
4Q 2017 Healthy revenue growth with improved EBITDA margin 8.0% Revenue 58.8% EBITDA growth margin BDT 4.42 11.3% Capex/Sales* Earnings per share * Capex excluding license fees Capex/sales = moving average last 4 quarters
4Q 2017 8% total revenue growth along with double digit subscription and traffic revenue growth Revenue (BDT Bn) and Growth (YoY) DSTR* (BDT Mn) and Growth (YoY) 128.4 323 33.2 317 318 315 32.2 32.4 301 30.6 29.8 282 15.5% 11.8% 18.0% 12.8% 15.3% 11.1% 14.8% 11.2% 15.1% 12.4% 12.2% 8.0% 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 • 9.2% voice revenue growth • Lower device and interconnect revenue • QoQ revenue drop due to seasonality *Daily revenues generated by own subscription (excludes interconnection)
4Q 2017 27% data user growth with healthy revenue momentum Data Revenue (BDT Bn) and % of Service Revenue* Active Data Users** (Mn) and % of Sub-base +46% +27% 21.1 31.2 30.0 5.7 5.6 27.0 5.1 4.7 25.2 24.5 4.3 47.7% 46.9% 43.9% 42.2% 42.3% 17.9% 17.1% 17.8% 16.5% 15.9% 15.5% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 • Competitive data offers driving user growth • 29.1% data revenue growth • Smartphone penetration will be key going forward • 54% contribution in incremental revenue *Revenues generated by own subscription (includes interconnection) ** Minimum 150 KB usage within last 90 days Growth YoY
4Q 2017 3.1% service ARPU drop with 1.6% growth in data ARPU Service ARPU, AMPU and APPM Data ARPU, AMBPU and APPMB 267 262 261 807 257 256 247 754 651 660 171 632 170 167 166 165 621 161 63 63 61 59 60 56 0.66 0.65 0.65 0.63 0.65 0.10 0.62 0.09 0.10 0.08 0.09 0.07 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 ARPU (BDT) AMBPU APPMB (BDT) ARPU (BDT) AMPU APPM (BDT) • 28% AMBPU growth despite 27% user growth • 7.7% service AMPU decline • 20% APPMB decline from competitive offers • Declining interconnection minutes • Service ARPU growth of 2.9% for 2017
4Q 2017 EBITDA growth from higher revenue and operating efficiency Opex (BDT Bn) and Margin *EBITDA (BDT Bn) and Margin +3.4% +19.5% 2.8% 15.7% 0.2% 2.9% YoY QoQ 76.2 YoY QoQ 42.2 19.9 19.5 11.0 11.0 19.0 10.7 17.8 10.1 10.0 16.4 59.2% 32.8% 61.2% 58.7% 58.8% 58.1% 54.9% 35.7% 33.2% 34.1% 32.8% 30.9% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 • Higher opex from revenue driven costs and network • 4.0 percentage points improvement in EBITDA rollout margin • Net one-off positive effect of BDT 46 Mn * EBITDA before other items Growth YoY
4Q 2017 Investment mainly in coverage, capacity and network modernization *Capex (BDT Bn) and Capex/Sales% • BDT 14.5 bn capex in 2017 14.5 5.3 • 477 2G and 491 3G sites addition during Q4 4.7 4.5 • Capacity expansion of 3G 3.3 • Network and IT readiness for future business 11.3% 2.1 • Total number of 2G and 3G sites stands at 18.3% 13.9% 12.0% 12.4% 11.3% 12,994 and 12,332 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 * Capex excluding license fees Capex/sales = moving average last 4 quarters
4Q 2017 Earnings growth of 11% despite one-off items NPAT (BDT Bn) and Margin Earnings Per Share (BDT) 14.2% +22% +22% 14.2% 11.1% 11.1% YoY QoQ YoY QoQ 20.31 27.4 5.87 7.9 5.16 7.0 4.86 6.6 4.42 6.0 3.98 5.4 21.4% 24.4% 21.4% 21.0% 18.0% 18.5% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2017 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 • Net one-off negative adjustment of BDT 2.0 Bn • Normalized earnings growth of 32.6% Growth YoY
4Q 2017 BDT 14.3 Bn OCF and Net debt/EBITDA of 0.02 *OCF (BDT Bn) and OCF/Sales% Net debt (BDT Bn) and Net debt/EBITDA** +45% 17.5 61.7 18.7 16.6 14.3 13.3 12.2 11.1 52.5% 51.2% 47.9% 7.6 44.2% 43.4% 7.3 37.1% 0.29 0.16 1.8 0.11 0.10 0.02 2017 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 * OCF equals EBITDA minus Capex **Net Debt = Short term debt + Long term debt - Cash and Cash equivalents 12 months rolling EBITDA Growth YoY
4Q 2017 Recommended 100% final cash dividend for 2017 Earnings and Dividend per Share (BDT) Payout Ratio 20.50 EPS DPS 129% 17.50 20.31 109% 16.00 105% 101% 96% 14.00 14.00 16.68 14.67 14.59 10.89 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 • Consistent high payout ratio • Record date for entitlement is 19 February 2018 • Subject to approval in the 21st AGM on 19 April 2018
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