idea cellular limited...bajaj allianz life insurance 1.9% lic of india money plus 1.3% shareholding...
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Idea Cellular Limited
Investor Presentation
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DisclaimerDisclaimerDisclaimerDisclaimer
The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care of in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or regulations. It is advised that prior to acting upon this presentation, independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done. You may also contact us directly for any questions or clarifications.
This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our sector and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify forward looking statements.
Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation, future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive.
This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.
“The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted.”
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198
213
234238
247
263
272264 264
160
180
200
220
240
260
280
Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10
Indian Wireless Sector Indian Wireless Sector Indian Wireless Sector Indian Wireless Sector –––– Revenue TrendRevenue TrendRevenue TrendRevenue Trend
# Source: Data released by the TRAI for Sep’09 quarter; revenue for UAS and Mobile licenses only
Others,
87.9%
Idea,
12.1%
Others
91.9%
Idea
8.1%
Q2 FY08
Q2 FY10*
Sector Gross Revenue# (INR bn)Idea - Increase in Revenue Market Share
*including Spice comm.
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Idea Idea Idea Idea –––– An OverviewAn OverviewAn OverviewAn Overview
Operates on a pan India basis (including Spice)
57.6 mn subscribers as on Dec’09
Launched 7 service areas in last 9 months
4
Dec’09North East7.
Nov’09Assam6.
Oct’09Kolkata5.
Oct’09West Bengal4.
Oct’09Jammu & Kashmir3.
May’09Tamil Nadu2.
Apr’09Orissa1.
Launch MonthService AreaS. No.
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2.6%2.6%2.6%2.6%
5.0%5.0%5.0%5.0% 5.1%5.1%5.1%5.1% 5.1%5.1%5.1%5.1%5.8%5.8%5.8%5.8%
6.9%6.9%6.9%6.9%
8.9%8.9%8.9%8.9% 9.1%9.1%9.1%9.1%
10.7%10.7%10.7%10.7%
0%0%0%0%
2%2%2%2%
4%4%4%4%
6%6%6%6%
8%8%8%8%
10%10%10%10%
12%12%12%12%
Har . Har . Har . Har . Pun. Pun. Pun. Pun. UPW UPW UPW UPW M.P . M.P . M.P . M.P . Ker .Ker .Ker .Ker . Guj . Guj . Guj . Guj . Kar .Kar .Kar .Kar . Maha.Maha.Maha.Maha. A .P .A .P .A .P .A .P .
900 MHz spectrum band provides capex/opex advantage, compared to 1800 MHz
900 MHz spectrum also accompanied by early mover advantage
Idea holds 900 MHz spectrum in 9 service areas
~ 48% of gross revenue base (total)
~ 59% of gross revenue base (excluding metros)
Idea’s spectrum profile is very attractive across all private operators
Service areas share of gross revenue (excl. metros)
59%59%59%59%
Competitiveness Lever 1 Competitiveness Lever 1 Competitiveness Lever 1 Competitiveness Lever 1 ---- SpectrumSpectrumSpectrumSpectrum
# Source: Data released by the TRAI for Sep’09 quarter; revenue for UAS and Mobile licenses only
5
900 MHz Spectrum (incl. Spice Comm.)
1800 MHz Spectrum
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Competitiveness Lever 2 Competitiveness Lever 2 Competitiveness Lever 2 Competitiveness Lever 2 ---- Scale Scale Scale Scale
127.6%UP (W)
222220.3%20.3%20.3%20.3%TotalTotalTotalTotal
66.0%Karnataka
128.1%Kerala
17.7%
16.3%
17.7%
20.1%
29.4%
28.3%
Revenue Mkt Share Revenue Mkt Share Revenue Mkt Share Revenue Mkt Share 1111
(RMS)(RMS)(RMS)(RMS)
2M.P.
Service Area Service Area Service Area Service Area
(900 MHz)(900 MHz)(900 MHz)(900 MHz)Rank Rank Rank Rank 2222
Maharashtra 1
Haryana 2
Punjab 2
A.P 2
Gujarat 3
In 9 service areas, comprising ~ 48% of national revenue marketIn 9 service areas, comprising ~ 48% of national revenue marketIn 9 service areas, comprising ~ 48% of national revenue marketIn 9 service areas, comprising ~ 48% of national revenue market, Idea, Idea, Idea, Idea’’’’s competitiveness is intrinsically s competitiveness is intrinsically s competitiveness is intrinsically s competitiveness is intrinsically
strong based on a) quality of spectrum and b) scale of operationstrong based on a) quality of spectrum and b) scale of operationstrong based on a) quality of spectrum and b) scale of operationstrong based on a) quality of spectrum and b) scale of operationssss
1 Based on gross revenues for Sep’09 quarter, as released by TRAI
2 Based on revenue market share
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1800 MHz 1800 MHz 1800 MHz 1800 MHz NewNewNewNew LaunchesLaunchesLaunchesLaunchesFocus On Focus On Focus On Focus On OptimisationOptimisationOptimisationOptimisation, Not , Not , Not , Not MaximisationMaximisationMaximisationMaximisation
Leverage synergies of pan India
operations i.e. roaming, NLD, ad
spend, common network elements,
etc.
Infra sharing to reduce capex, and
time to market
Focus on operational and financial
goals, not league tables
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Idea Idea Idea Idea –––– Creating Long Term Shareholder ValueCreating Long Term Shareholder ValueCreating Long Term Shareholder ValueCreating Long Term Shareholder Value
Enhancing
Shareholder
Value
~48% of national revenue market
covered under 9 operating
service areas
900 MHz spectrum usually
accompanied by early mover
advantage
900 MHz spectrum provides
capex and opex advantage
No. 2 rank with Revenue market
share of 20.3% for Q2 FY10
900 MHz Service Areas( 9 Operating )
Leverage spectrum and scale advantages to enhance leadership
Pan India Footprint
Leverage synergies of scale and
wider presence
Strong presence in Delhi and
Mumbai
Calibrated Capex with infra
sharing etc
Focus on operational & financial
goals, not league tables
1800 MHz Service Areas( 13 Operating )
Sustainable and profitable growth
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30.6
23.0
26.2
28.7 28.9 28.9
26.3% 26.0%26.7%
25.3%
23.5%
25.9%
28.1%
29.4% 29.2%30.4% 30.0% 30.1%
0
4
8
12
16
20
24
28
32
Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
32.0%
Revenue EBITDA% Idea Standalone EBITDA% 11 Established Service Areas
Strong Financial PerformanceStrong Financial PerformanceStrong Financial PerformanceStrong Financial Performance
# Figures for Idea including its 100% subsidiaries and excluding Spice and Indus.
INR bn%
Revenue Distribution Q3 FY10
7.8%
92.2%
Launched Mumbai, Bihar, Orissa, Tamil Nadu, J&K, West Bengal, Kolkata, Assam and North East service areas in last 6 quarters.
EBITDA % drop of 2.8% over last 5 quarters, after absorbing start-up losses of 9 new launches, ARR reduction and Indus impact
EBIDTA % of 11 service areas has improved by 2.0%, over last 5 quarters
85%
15%
11 Established Service Areas
New Service Areas
9
Investment Distribution as on Dec'09
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The Indus AdvantageThe Indus AdvantageThe Indus AdvantageThe Indus Advantage
Indus Service Areas
Indus Share Holding
Provides passive infrastructure services in 15 service areas
Largest independent tower company in the world - ~ 103,000 towers under its management
Indus benefits from assured tenancy from promoters, and from other operators
Idea benefits by reduced capex, speed to market, and embedded value of shareholding
Idea Cellular
Ltd* 16%Vodafone
Essar Ltd
42%
Bharti Infratel
Ltd 42%
Indus Share Holding
*through Aditya Birla Telecom Ltd.
10
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Strong Balance Sheet to Drive Strategic IntentStrong Balance Sheet to Drive Strategic IntentStrong Balance Sheet to Drive Strategic IntentStrong Balance Sheet to Drive Strategic Intent
1 Figures for Idea including its 100% subsidiaries and excluding Spice and Indus.
2 Price to Earning/Cash Earning is based on annualised PAT/ Cash profit and closing price of respective quarter
Financial Ratios Financial Ratios Financial Ratios Financial Ratios 1111
Balance Sheet Balance Sheet Balance Sheet Balance Sheet 1111
INR bnINR bnQ4 Q4 Q4 Q4
FY08FY08FY08FY08
Q1 Q1 Q1 Q1
FY09FY09FY09FY09
Q2 Q2 Q2 Q2
FY09FY09FY09FY09
Q3 Q3 Q3 Q3
FY09FY09FY09FY09
Q4 Q4 Q4 Q4
FY09FY09FY09FY09
Gross debtGross debtGross debtGross debt 65.2 97.4 97.3 99.2 77.6
Cash & Cash equivalentCash & Cash equivalentCash & Cash equivalentCash & Cash equivalent 10.5 9.2 66.9 79.6 49.6
Net DebtNet DebtNet DebtNet Debt 54.6 88.3 30.4 19.6 28.0
Net WorthNet WorthNet WorthNet Worth 35.4 38.1 107.0 130.6 133.4
Cash Profit Cash Profit Cash Profit Cash Profit 1111 5.5 5.7 4.6 6.2 6.9
Net Debt to Net WorthNet Debt to Net WorthNet Debt to Net WorthNet Debt to Net Worth 1.54 2.32 0.28 0.15 0.21
Net Debt to Annualised EBITDANet Debt to Annualised EBITDANet Debt to Annualised EBITDANet Debt to Annualised EBITDA 2.03 3.06 1.25 0.72 0.94
ROCEROCEROCEROCE 17.9% 14.7% 9.4% 9.1% 8.8%
Q1 Q1 Q1 Q1
FY10FY10FY10FY10
60.9
26.6
34.3
136.5
7.3
0.25
1.11
9.3%
Q2 Q2 Q2 Q2
FY10FY10FY10FY10
59.2
23.1
36.1
139.0
7.1
0.26
1.23
7.7%
Price to Earning Price to Earning Price to Earning Price to Earning 2222 24.5 23.3 38.9 15.9 13.7 18.0 23.3
Price to Cash Earning Price to Cash Earning Price to Cash Earning Price to Cash Earning 2222 12.3 10.9 12.7 6.6 5.6 7.6 8.3
11
Q3 Q3 Q3 Q3
FY10FY10FY10FY10
57.5
20.0
37.5
141.2
7.0
0.27
1.30
6.4%
23.0
6.4
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Idea Idea Idea Idea –––– A Power BrandA Power BrandA Power BrandA Power Brand
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Foreign
Holding
37.8%
AV Birla
Group 49.0%
Indian
Others
13.2%
Post Spice merger*
As on 31st Dec‘09
* assuming no change in other shareholding
TOP 5 shareholders
(excluding Promoters)
TOP 5 shareholders
(excluding Promoters)
TMI MAURITITUS 15.0%
P5 ASIA INVESMENT 10.6%
MONET LIMITED 2.9%
BAJAJ ALLIANZ LIFE INSURANCE 2.0%
LIC OF INDIA MONEY PLUS 1.4%
TMI MAURITITUS 20.0%
P5 ASIA INVESMENT 10.0%
MONET LIMITED 2.7%
BAJAJ ALLIANZ LIFE INSURANCE 1.9%
LIC OF INDIA MONEY PLUS 1.3%
ShareholdingShareholdingShareholdingShareholding
Foreign
Holding
41.8%
Indian
Others
12.5%
AV Birla
Group 46.1%
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Appendix
14
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Key Trends (Idea)Key Trends (Idea)Key Trends (Idea)Key Trends (Idea)
50.3
57.8
48.744.2
40.3
0
10
20
30
40
50
60
Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10
VAS as a % of Revenue
Realized rate per minute
0.64
0.63
0.58
0.56
0.51
0.00 0.15 0.30 0.45 0.60 0.75
Q3 FY09
Q4 FY09
Q1 FY10
Q2 FY10
Q3 FY10
INR
Minutes of use on Network (QoQ)
bn - Minutes
Cell Sites
50,915 55,80448,067
44,230
39,289
0
8000
16000
24000
32000
40000
48000
56000
Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10
9.5%
10.6%
11.2%
10.1%
9.5%
9.0%
9.5%
10.0%
10.5%
11.0%
11.5%
Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10
15
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Financial Matrix (Idea)Financial Matrix (Idea)Financial Matrix (Idea)Financial Matrix (Idea)
99.7
43.9
67.4
29.922.7
88.4
0
20
40
60
80
100
120
FY05 FY06 FY07 FY08 FY09 YTD Q3FY10
21.4
23.4
11.7
19.8
7.6
5.2
0
5
10
15
20
25
30
FY05 FY06 FY07 FY08 FY09 YTDQ3FY10
9.610.4
5.0
2.1
0.8
7.5
0
2
4
6
8
10
12
FY05 FY06 FY07 FY08 FY09 YTD Q3FY10
Robust Growth in Top Line
INR bn
14.9
10.9
8.4
22.7
27.5
22.2
0
5
10
15
20
25
30
FY05 FY06 FY07 FY08 FY09 YTDQ3FY10
Robust Growth in EBITDA0
INR bn
Robust Growth in Net Profits
INR bn
Robust Growth in Cash Profits
INR bn
16
Represents annualised trend based on 9 months actual figures
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Financial Matrix (Consolidated)Financial Matrix (Consolidated)Financial Matrix (Consolidated)Financial Matrix (Consolidated)
101.5
43.9
67.4
29.922.7
91.0
0
20
40
60
80
100
120
FY05 FY06 FY07 FY08 FY09 YTD Q3FY10
22.5
23.3
11.7
19.8
7.6
5.2
0
4
8
12
16
20
24
28
32
FY05 FY06 FY07 FY08 FY09 YTD Q3FY10
8.8
10.4
5.0
2.1
0.8
6.9
0
2
4
6
8
10
12
FY05 FY06 FY07 FY08 FY09 YTD Q3FY10
Robust Growth in Top Line
INR bn
14.9
10.98.4
22.7
28.4
24.8
0
5
10
15
20
25
30
35
FY05 FY06 FY07 FY08 FY09 YTDQ3FY10
Robust Growth in EBITDA
INR bn
Robust Growth in Net Profits
INR bn
Robust Growth in Cash Profits
INR bn
17
Represents annualised trend based on 9 months actual figures
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Thank You