Investors Presentation Kuwait Telecomunications Company K.S.C.P - - PowerPoint PPT Presentation
Investors Presentation Kuwait Telecomunications Company K.S.C.P Kuwait Telecommunications Company K.S.C.P. 3M- 2020 Table of content stc s History in Brief 3 Key Milestones 4 Vision, Mission & Values 5 Shareholders Structure 6
Kuwait Telecomunications Company K.S.C.P
Kuwait Telecommunications Company K.S.C.P.
3M- 2020
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Table of content
stc’s History in Brief 3 Key Milestones 4 Vision, Mission & Values 5 Shareholder’s Structure 6 Population & Penetration 7 Competitive Strengths 8 Our 2020 Strategy 9 Market Share 10 Financial Results 11 Cash Dividends 15 Stock Performance 16 Appendix 17
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Kuwait Telecommunications Company (stc) is a Kuwaiti shareholding
and deal with the third GSM versatile system in Kuwait according to Law No. 2 of 2007. Appropriately, stc propelled its tasks in December 2008 and the shares of the company were listed on Boursa Kuwait on 14 December 2014. It is a world-class computerized pioneer giving imaginative administrations and stages to clients and empowering the advanced change in Kuwait, and is an auxiliary of stc Group. stc has quickly arrived at a pioneer position in the market through its client and representative driven system. Throughout a decade of excellence in service, transparency and proactivity, and as the fastest- growing and most advanced telecom operator with the largest 5G network in Kuwait. Since 2008, stc’s accomplishments have transformed the Kuwaiti telecom market, including changing wireless pricing models and fees. In 2016, stc entered the International Telecommunications Union (ITU). In 2018, stc became the first network to offer its customers 5G service and to enable enterprises in mobility. stc has invested in building the most advanced network, and proudly
On 6 May 2019, stc has acquired 100% of the share capital of the leading Internet Service Provider in Kuwait - Quality Net General Trading and Contracting Company (Qualitynet).
stc’s History in Brief
Moving the World
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Key Milestones
commercially
incoming calls fees and other operators follow
the world to have all IP network
speed Mobile Broadband in Kuwait
innovative prepaid
acquires 500K customers in one year
network and launches joint promotions with retailers.
MEA Best Telecom Finance Deal
Apple iPhone
partnership with Manchester United
newest HSPA+ (42.2 Mbps) Broadband network
Program for loyal, VIP and high value customers
profitability during the fourth year of operation.
4G LTE network
Madrid
to be positive
revenue and subscriber market share
4G LTE Coverage and awarded Best LTE deployment in the Middle East
stc acquires majority
between operators
introduce the all-new (VoLTE) technology
reached a total of 70 across Kuwait
LTE Advanced
by Arabian Business
IR
Risk Management
Award at 5G MENA
at ME Call Centre Awards
Relations in Kuwait 2018 - third in the MEA
Creativity Award" at Arab Media Forum
Award
Award“ by Ookla company
Governance Award
Network” from telecom world Middle East
Awards
Gulf Top 10 Business Award 2018
Qualitynet
services in June 2019
MOU to develop 5G services
brand stc
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ranked the first amongst the top telecom companies in the MENA region, according to Forbe’s "Global 2000" list
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Vision
A world-class digital leader providing innovative services and platforms to
stc is keen to present its customers with numerous telecommunications
customers with the best experience around the clock which will, in turn, earn us their trust.
Mission
Our Strategy outlines the key pillars to expand stc’s topline, create value with greater efficiencies, while preparing the company for the future:
Values
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Shareholders' Structure
companies, portfolios, funds and individuals.
mix between local, regional and international investors.
Board member elected during the AGM on 16th of May 2016.
KSA, the leading regional telecom operator, won the bid for third mobile license in November 2007, and paid USD 980 million for the license.
with stc Group.
increased its
percentage from 26% to 51.8% through a VTO at the beginning of 2016.
4
7 board members are representative of stc group.
24% of stc’ capital through different governmental entities.
members are representing the Kuwaiti government bodies.
52% 24% 24%
Saudi Telecom Kuwaiti Governmental Entities Public Shareholders
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Kuwait Population (Million) & Penetration Rate (%)
Population & Penetration
Source: Population as per PACI Kuwait, Penetration Rate as per ITU till 2018, while 2019 till June 2019 are calculated by stc IR
Current Population
4.8 Million
Current Penetration
171%
3.4 3.5 3.6 3.7 3.8 3.9 4.1 4.2 4.4 4.5 4.6 4.8 57% 93% 133% 155% 152% 182% 205% 200% 194% 176% 172% 171% 0% 50% 100% 150% 200% 250% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Competitive Strengths
Relation-ship with stc group
stc (the largest telecom company in the region) will continue to be a major shareholder and will continue to benefit from being a member of stc group. Through this relationship, stc has access to technical support, industry best practice for provision of telecom services, as well as stronger purchasing power benefiting from joint procurement and coordination of regional initiatives.
Extensive distribution channels
stc has an extensive, well-developed and increasingly sophisticated direct and indirect distribution network covering all parts of Kuwait. stc Inaugurates New Branches to its network amounting to a total of 93 branches across Kuwait
Modern & Scalable Network
stc benefits from having a modern and efficient network that is adaptable to emerging technologies. stc has the widest 5G service coverage in Kuwait reaching 100% of populated areas as it was also the first company in the Middle East to launch the testing process of 5G service.
Strong Branding
Since its launch in 2008, stc has built a valuable brand associated with excellence. By the end of 2019, stc has rebranded with the intention to unify its brand with stc Group’s companies to reflect its plan in creating new
digital transformation strategy. Changing the brand name to “stc” positions the company among the most valuable brands in the Middle East.
Strong Growth & Results
stc has a proven track record of successfully providing high-quality product and services to its customers. stc’s revenue market share stood at 33%.
Customer- Centric Strategy
stc follows a customer-centric strategy, which entails focusing on the communication needs of customers and providing differentiated service. This strategy positions stc as the only telecom provider in Kuwait that targets enhancing customer experience.
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Our 2020 Strategy
…..aims to position stc at the center of Kuwait’s digital ambitions and is built upon 5 strategic pillars
Uplift and Innovate
Capture Enterprise Opportunities Transform Technology Capabilities Revamp Enabling Capabilities Enhance Employee Potential
Value growth strategy in the core Innovative service offering venturing in new services beyond the core End to end digital experience Technology as the enabler of digital transformation Corporate functions to enable the development of a sustainable business model Leveraging stc Group capabilities
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Market Share
Total Subscriber Base in Kuwait (Mn) Telecom Sector Revenues in Kuwait (KWD Mn)
28%
Subscriber Market Share
March - 2020
33%
Revenue Market Share
3M - 2020
29%
Net Profit Market Share 3M - 2020
4.5 5.2 5.9 6.41 7.6 7.7 7.7 7.2 7.1 7.4 7.0 0.8 1.1 1.6 2.2 2.4 2.5 2.4 2.3 2.2 2.0 1.9
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Mar-2020
Total Subscribers in kuwait (Mn) stc Subcribers (Mn)
627 684 690 717 753 788 799 841 860 859 208 61 94 137 182 239 277 279 288 288 294 72
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-2020
Total Telecom Revenue in Kuwait (KWD Mn) stc's Revenue (KWD Mn)
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stc’s revenues increased by 8.3% during the three months ended 31 March 2020 to reach KD 72.2 million as compared to KD 66.6 million recorded in 2019. EBITDA witnessed a decline of 9.7% to reach KD 17.0 million during the three months ended 31 March 2020 compared to KD 18.8 million in 2019 due to higher Operating expenses mainly from bad debt provisions and increase in rents. EBITDA Margin reached 24% during the three months ended 31 March 2020 compared to 28% recorded during the same period in 2019. The net profit reached to KD 6.5 million (earning per share 13 fils) during the three months ended 31 March 2020 as compared to KD 9.6 million (earning per share 19 fils) recorded for same period in 2019. Shareholders' equity reached KD 196.9 million at the end of March 2020 with a growth rate of 8% compared to KD 181.6 million at the end of March 2019. stc’s customers’ stood at 1.94 million by end of March 2020.
Financial Results
Key Figures & Ratios 3M-2019 3M-2020 Change
Subscribers (Mn) 2.04 1.94
Revenue (KD Mn) 66.6 72.2 8.3% EBITDA 18.8 17.0
EBITDA Margin (%) 28% 24%
Net Profit (KD Mn) 9.6 6.5
Net Profit Margin (%) 15% 9%
EPS (Fils) 19 13
Equity (KD Mn) 181.6 196.9 8% BVPS (Fils) 364 394 8%
2.04 1.94
Mar-19 Mar-20 Subscribers (Mn)
67 72
3M-2019 3M-2020 Revenue (KD Mn) 9.6 6.5 3M-2019 3M-2020 Net Profit (KD Mn)
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Financial Results - Highlights
Revenue (KD Million) Net Profit (KD Million) EBITDA (KD Million)
*FY 2017 and 2018 numbers are based on the IFRS 15 ‘Revenue from Contracts with Customers “and IFRS 9 “Financial Instruments” which are effective from 1st January 2018 and opted for full retrospective approach. .
277 279 288 288 294 66.6 72.2 2015 2016 2017 2018 2019 3M-19 3M-20 131 131.9 71.1 77.8 83.8 18.7 17.0 47% 47% 25% 27% 29% 28% 24% 0% 10% 20% 30% 40% 50% 2015 2016 2017 2018 2019 3M-19 3M-20 20 40 60 80 100 120 140 EBITDA (KD Million) EBITDA Margin (%) 43.0 39.8 42.8 50.4 43.6 9.6 6.5 2015 2016 2017 2018 2019 3M-19 3M-20
Annual and YTD-20
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Financial Results - Highlights
Revenue (KD Million) Net Profit (KD Million) EBITDA (KD Million)
66.6 72.9 76.1 78.1 72.2 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 18.8 19.8 21.5 23.7 17.0 28% 27% 28% 30% 24% 0% 5% 10% 15% 20% 25% 30% 35% Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 5 10 15 20 25 EBITDA (KD Million) EBITDA Margin (%) 9.6 10.3 11.7 12 6.5 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Quarterly
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Financial Results - Highlights
Total Assets (KD Million) Total Debt / Equity (KD Million) Book Value Per Share (KD) Shareholders Equity (KD Million)
*FY 2017 and 2018 numbers are based on the IFRS 15 ‘Revenue from Contracts with Customers “and IFRS 9 “Financial Instruments” which are effective from 1st January 2018 and opted for full retrospective approach. .
263 267 273 305 391 410 2015 2016 2017 2018 2019 Mar-20 0.186 0.266 0.314 0.384 0.431 0.394 2015 2016 2017 2018 2019 Mar-20 72 47 9 20 14 0.8 0.4 0.1 0.0 0.1 0.1 0.0 0.2 0.4 0.6 0.8 1.0 2015 2016 2017 2018 2019 Mar-20 10 20 30 40 50 60 70 80 Total Debt (KD Million) Debt to Equity Ratio (x) 93 133 157 192 215 197 2015 2016 2017 2018 2019 Mar-20
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Cash Dividends
10 30 40 50 2016 2017 2018 2019
Cash Dividends Per Share (Fils) Dividends Payout Ratio (%)
13% 35% 40% 57% 2016 2017 2018 2019 0.799 0.800 0.788 0.780 1.3% 3.8% 5.1% 6.4%
0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.852017 2018 2019 Mar 2020
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00%Stock Price (KD)
dividends since 2016 reaching 50 fils in 2019.
dividend payout ratio increased from 40% in 2018 to reach 57% in 2019.
payout the stock price will be yielding at 6.4%.
Stock Price vs. Dividends Yield
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Rebased Index Since stc’s Listing Date 14 Dec 2014 – Stock Performance vs. KSE and Telecom weighted Indices
Data as of 31 March 2020
Stock Performance
PE (X) 9.63 PB (X) 1.98 Dividend Yield (%) 6.4% Closing Price (KD) 0.780 Paid up Capital (KD Million) 49.9 Market Cap (KD Million) 389.5
60 80 100 120 140 160 180
Dec-14 Jul-15 Feb-16 Sep-16 Apr-17 Nov-17 Jun-18 Jan-19 Aug-19 Mar-20
STC's Stock Price (KWD) KSE Weighted Index Telecom Weighted Index
Rebased 100 Index
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Appendix
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Balance Sheet (2017– March 2020)
*FY 2017 and 2018 numbers are based on the IFRS 15 ‘Revenue from Contracts with Customers “and IFRS 9 “Financial Instruments” which are effective from 1st January 2018 and opted for full retrospective approach.
Balance Sheet 2017 2018 2019 March 2020 KD Mn KD Mn KD Mn KD Mn
ASSETS Property and equipment 145.0 150.5 193.5 201.5 Goodwill and Intangible assets
25.9 Total non-current assets 145.0 150.5 219.7 227.4 Inventories 12.9 6.9 9.1 9.2 Prepayments and other current assets 4.7 4.0 5.4 4.4 Trade and other receivables 31.2 35.8 35.8 42.4 Contracts Assets 47.2 42.5 44.4 43.8 Cash and cash equivalents 32.2 65.7 76.7 82.3 Total Current assets 128.2 154.8 171.4 182.2 Total assets 273.2 305.4 391.1 409.6 Equity And Liabilities Share capital 49.9 49.9 49.9 49.9 Statutory reserve 12.9 18.2 22.8 22.8 Voluntary reserve 12.9 18.2 22.8 22.8 Other reserves
(0.6) (0.6) Retained earnings 81.0 105.9 120.3 101.9 Total equity 156.9 192.0 215.4 196.9 Employees' end of service benefits 3.6 5.3 8.3 8.7 Islamic Financing Facilities
10.4 Trade and other payables
5.7 Total non-current liabilities 3.6 5.3 25.0 24.8 Islamic Financing Facilities 9.0
3.4 Trade and other payables 103.7 108.1 142.0 184.6 Total current liabilities 112.7 108.1 150.7 187.9 Total liabilities 116.3 113.4 175.7 212.7 Total equity and liabilities 273.2 305.4 391.1 409.6
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Income Statement (2017–3M 2020)
*FY 2017 and 2018 numbers are based on the IFRS 15 ‘Revenue from Contracts with Customers “and IFRS 9 “Financial Instruments” which are effective from 1st January 2018 and opted for full retrospective approach.
Income Statement 2017 2018 2019 3M-2019 3M-2020 KD Mn KD Mn KD Mn KD Mn KD Mn
Revenue 287.7 287.9 293.7 66.6 72.2 Operating expenses (145.5) (139.3) (148.5) (32.8) (38.3) Staff costs (20.4) (21.7) (24.6) (5.6) (6.3) Expected credit losses on trade & other receivables and contract assets (14.2) (18.2) (12.7) (3.8) (3.6) Depreciation and amortization (25.9) (25.6) (37.7) (9.1) (9.7) General and administrative expenses (38.7) (34.8) (25.3) (5.6) (7.0) Finance costs (0.7) (0.1) (1.0) (0.1) (0.2) Other income/(expenses) 2.7 4.9 2.2 0.6 (0.2) Profit before BoD Remuneration, Contribution to KFAS and Zakat 45.0 53.0 46.0 10.2 6.9 KFAS (0.4) (0.5) (0.4) (0.1) (0.1) NLST (1.2) (1.4) (1.3) (0.3) (0.2) Zakat (0.5) (0.6) (0.5) (0.1) (0.1) BOD remuneration (0.2) (0.2) (0.2) (0.0) (0.0) Net Profit and other Comprehensive Income For The Preiod 42.8 50.4 43.6 9.6 6.5 Basic and Diluted Earnings per share (Fils) 86 101 87 19 13
Investor Relations Department:
: Investor.relations@stc.com.kw : +965 5000 1911 : www.stc.com.kw
stc Kuwait Kuwait Telecommunication Company (stc) stc_Kuwait
@stc_Kuwait