Telenor Group Richard Aa, Group CFO BAML TMT Conference 4 June 2014 - - PowerPoint PPT Presentation

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Telenor Group Richard Aa, Group CFO BAML TMT Conference 4 June 2014 - - PowerPoint PPT Presentation

Telenor Group Richard Aa, Group CFO BAML TMT Conference 4 June 2014 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).


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SLIDE 1

Telenor Group

Richard Aa, Group CFO

BAML TMT Conference 4 June 2014

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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 any company within the Telenor Group. 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. This presentation contains statements regarding the future in connection with the Telenor Group’s growth initiatives, profit figures, outlook, strategies and objectives. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.

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SLIDE 3

Telenor Group

3 Norway Sweden Denmark

Europe

Hungary Serbia Montenegro Bulgaria

Asia

Thailand Malaysia Bangladesh Pakistan India Myanmar

VimpelCom Ltd.

Telenor Group holds 33.0% economic and 43.0% voting stake in VimpelCom Ltd.

172 million consolidated mobile subscribers Revenues in 2013: NOK 104 bn (USD 17 bn) Market cap: NOK 219 bn (USD 36 bn)

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SLIDE 4

Increasing cash flow and payout to shareholders

Operating cash flow defined as EBITDA before other items, less capex excl spectrum fees

Dividend per share (NOK) Operating cash flow (NOK bn)

17.6 19.1 20.5 21.3

2010 2011 2012 2013

3.8 5.0 6.0 7.0

2010 2011 2012 2013

  • Revenue growth and improved efficiency
  • Significant network investments
  • Average YoY DPS growth of 23% in

2010-2013

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SLIDE 5

A solid start to 2014

  • 6 million new mobile subscribers
  • 5% underlying mobile service revenue

growth

  • 5% organic growth in EBITDA
  • Revenue growth and implemented cost

initiatives in Norway

  • Regulatory cost savings in Thailand
  • Strong growth momentum in India

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24.7 26.5 Q1 13 Q1 14 8.4 9.3 Q1 13 Q1 14

Revenues (NOK bn) EBITDA (NOK bn)

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SLIDE 6

Organic mobile subs. & traffic revenue growth Gross profit (NOK bn)

Robust underlying mobile service revenue growth driving growth in gross profit

Organic revenue growth in fixed currency, adj. for acquisitions and disposals. Organic growth in Sweden adjusted for handset-related discount

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  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 12% 14% 16% Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q1 14 Norway Europe Asia Group

71.0 72.5 75.6 77.0

2011 2012 2013 LTM

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SLIDE 7

Good progress on NOK 5 bn gross cost saving target

Gross cost saving programme in Norway Regulatory cost savings in Thailand

7 2013 2014 2015 550 650 800 Annual targets in NOKm Implemented / decided initiatives

31% 26% ~15%

Q1 2013 Q1 2014 Target 2016 Regulatory cost as % of service revenues (excl IC)

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SLIDE 8

Capex expected to come down after significant network investments in 2013-2014

Capex and capex/sales ratio excl licence fees.

12m rolling capex/sales

  • 2.1 GHz network rollout in Thailand
  • 4G and FTTH investments in Norway
  • Networks swaps completed in most markets

– Bulgaria during 2014-2015

  • Satellite launch in 2H 2014
  • Underlying mobile capex/sales around 10%

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0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Norway dtac Sweden Hungary Denmark DiGi Q1 14 Q4 10

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SLIDE 9

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Strong growth momentum in India

  • Strong subscriber and revenue growth in Q1
  • 2.5 million new subscribers
  • 13% organic ARPU growth
  • 44% organic revenue growth
  • Acquisition of supplementary spectrum in

February, incl new circle Assam

  • Promising move into data services
  • Offset of 2008 entry fee confirmed by Indian

authorities

  • Redeployment of 5,000 sites during 2014

Operating cash flow (NOK bn)

  • 4.6
  • 5.9
  • 4.4
  • 2.1
  • 0.8

2009 2010 2011 2012 2013 Operating cash flow defined as EBITDA before other items, less capex excl spectrum fees

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SLIDE 10

Targeting service launch in Myanmar in 2H 2014

  • Licence awarded in February 2014
  • Strategy based on mass market

approach and low cost operations

  • Reuse of concepts from other Asian

markets

  • First call made on 7 April

Financial targets

  • EBITDA breakeven 3 years after licence

award

  • Peak funding of around USD 1 billion

incl licence fee of USD 500 million

Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA and EBITDA margin before other items. Capex excl licence fees

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SLIDE 11

The Internet for All

  • pportunity
  • 1.2 billion people within footprint
  • 172 million subscribers
  • 36 million active data users

Telenor mobile subscribers (million)

Million

Europe Asia

Not data users Data users 18 154

Analyst & investor seminar The Grange St Paul, London 6 June

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SLIDE 12

Summing up

  • 5% underlying mobile service revenue

growth

  • Good progress on cost saving programmes
  • Significant investment in infrastructure

2013-2014

  • NOK 28-30 bn operating cash flow target

for 2015 achievable

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EBITDA before other items 24.7 26.5 Q1 13 Q1 14 8.4 9.3 Q1 13 Q1 14

Revenues (NOK bn) EBITDA (NOK bn)

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Telenor Group

Richard Aa, Group CFO

BAML TMT Conference 4 June 2014