kuwait telecommunications company k.s.c · emiri decree number 187/2007 was released regarding the...
TRANSCRIPT
Kuwait Telecommunications Company K.S.C.P
Investors Presentation
Table of content
Key Milestones 4
Competitive Strengths 8
Shareholders' Structure 6
VIVA’s History in Brief 3
Vision and Values 5
Market Share 9
Population & Penetration 7
Financial Results 10
Stock Performance 13
Appendix – Balance Sheet & Income Statement 14
1
Financial Highlights 11
2
VIVA’s History in Brief
2
2007 Jun 2008 Sep 2008 Dec 2008 Dec 2014 Jun 2015
Emiri decree number 187/2007 was released regarding the license of the incorporation of Kuwait Telecommunications Company.
The incorporation contract and principal law of the company was adopted by the MOC and Fatwa and Legislation Dep., and documented at the Ministry of Justice
Public placement of VIVA shares which was 2.4x oversubscribed. distributed among c. 1 million Kuwaiti shareholders
Commercial Launch of VIVA Operations in Kuwait
VIVA Stock was listed on Kuwait Stock Exchange
VIVA’s Stock under KSE15 Index
*In Compliance with the Islamic Shariah rules and principles
3
Key Milestones
3
Launches commerciallyunder the brand name VIVA
VIVA abolishes incomingcalls fees and otheroperators follow, bringingchange to the market.
Expand retail network andlaunch joint promotionswith retailers.
VIVA wins CommsMEA BestTelecom Finance Deal .
VIVA launches EliteProgram for loyal, VIP andhigh value customers.VIVA turns into profitabilityduring the fourth year ofoperation.VIVA Starts deployment of4G LTE network
Best Telecom Company by ArabianBusiness.VIVA Becomes a Member of Inter’lTelecommunication Union (ITU )Leading Corporate for IR in KuwaitBusiness Innovation in Risk ManagementBest Telecommunications Company ofthe year Kuwait 2016 Award by theInternational Finance
Strategic partnership withReal Madrid.Listing on KSERetained earnings turned tobe positive.Ranked 2nd in terms ofrevenue and subscribermarket share
VIVA introduces high speedMobile Broadband in Kuwait.
VIVA launches innovativeprepaid offerings andacquire 500K customers inone year.
First to introduce AppleiPhone
Strategic partnership withManchester United.
First to introduce newestHSPA+ (42.2 Mbps)Broadband network.
Complete nationwide 4GLTE Coverage and awardedBest LTE Deployment in theMiddle East.
Launch of NumberPortability and VIVAacquires majority of portednumbers betweenoperators.
The first in Kuwait tointroduce the all-new(VoLTE) technology.
VIVA Branches networkreached a total of 70 acrossKuwait.
First to introduce the LTEAdvanced
2009 2011 2013 2015
2008 2010 2012 2014 2016
4
VIVA and Zain in Kuwaitcollaborate to launch firstVoLTE interconnection inMENA region.VIVA Wins the ExcellenceAward for "VIP CustomerService”VIVA Wins "2017 SpeedtestAward"
2017
Vision and Values
4
Our vision is to provide unique services and productsthat satisfy the aspirations of our clients andaccommodate their needs, which in turn will earn ustheir trust. This is through presenting our customerswith numerous telecommunications opportunities withthe goal of boosting our relationships with them andgiving them the best experience around the clock.
Our vision is embodied in a fundamental and detailedunderstanding of the Kuwait market and focusing on theneeds of customers in everything we say and do.
We have pledged to work to enrich the lives of ourcustomers through telecommunications, entertainmentand information, and data transfer services.
EnergeticOur passion is performance, innovation, and
delivering of superior quality. We are efficient, reliable, and highly responsive to
our clients’ needs.
TransparentWe are open, trustworthy and collaborative.
EngagingAll of our activities revolve around our
customers.
FulfillingWe offer a wide range of easy to understand products. Our actions create value, helping our customers lead more rewarding and
enjoyable lives
Our Values
5
Shareholders' Structure
5
The Kuwaiti government holds 24%of VIVA through differentgovernmental entities.
Currently 2 out of 7 board membersare representing the Kuwaitigovernment bodies.
Kuwaiti Government 24%
Public Share holders consists ofcompanies, portfolios, funds andindividuals.
The public shareholders are mixbetween local, regional andinternational investors.
Independent Board member electedduring the AGM on 16th of May 2016.
Public Shareholders 24%
STC, the leading regional telecomoperator, won the bid for third mobilelicense in November 2007, and paid USD980 million for the license.
STC has a management agreement withVIVA.
STC increased its ownership percentagefrom 26% to 51.8% through a VTO at thebeginning of 2016.
Currently, 4 out of 7 board members arerepresentative of STC group.
Saudi Telecom 52%
6
Population & Penetration
6
Kuwait Population (Million Person) & Penetration Rate (%)
Kuwait population since 2010 is growing at the same level of 2.8% yearly and the growth is forecasted by IMF at 2.8% over thenext 5 years compared to almost 1% for the global population growth. This growth coupled with rising income levels will propelgrowth in consumer spending.Kuwait boasts the highest telecom penetration levels in the MENA region, which stood at the end of 2016 at 230% as reportedby (ITU-D) and estimates by VIVA shows that the penetration rate in Kuwait declined to reach 203% at the end of Sep 2017.
Source of Population: IMFSource of Penetration rate : ITU
7
3.2 3.4 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3
49% 56% 56%
92%
133%158% 157%
189%
218% 220% 230% 203%
0%
50%
100%
150%
200%
250%
0.0
1.0
2.0
3.0
4.0
5.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sep-17
Competitive Strengths
7
Relationship with STC
Customer-Centric
Strategy
Strong Growth & Results
Successful Branding
Modern & Scalable Network
Extensive distribution
channels
VIVA follows a customer-centric strategy, whichentails focusing on the communication needs ofcustomers and providing differentiated service. Thisstrategy positions VIVA as the only telecom providerin Kuwait that targets enhancing customerexperience.
VIVA has a proven track record of successfullyproviding high-quality product and services to itscustomers.VIVA has grown rapidly since it commencedoperations in December 2008 acquiring 2.2 millioncustomers by the end of 9M 2017, whichrepresents a market share of 31%.
Since its launch in 2008, VIVA has built a valuable brand associated with excellence.VIVA is perceived as the “challenger” bringing healthy competition to the Kuwait telecommarket. VIVA’s entry prompted the incumbent players to make several tariff changes, focuson subscriber retention and introduce new services, thereby benefiting the consumer.
VIVA benefits from having a modern and efficientnetwork that is adaptable to emerging technologies.The Network backbone is modern and has beendesigned to facilitate scalability of new operationsand the future deployment of emerging technology.
STC (the largest telecom company in the region) will continue to be a major shareholder andVIVA will continue to benefit from being a member of the STC group.Through this relationship, VIVA has access to technical support, industry best practice forprovision of telecom services, as well as stronger purchasing power benefiting from jointprocurement and coordination of regional initiatives.
VIVA has an extensive, well-developed andincreasingly sophisticated direct and indirectdistribution network covering all parts of Kuwait.VIVA Inaugurates New Branches to its networkamounting to a total of 73 branches across Kuwait
8
33%
41%
26%
31%
36%
33%
Market ShareSubscriber Market Share – Sep 2017
Revenue Market Share – 9M 2017
9
Total Subscriber Base in Kuwait (Mn)
Telecom Sector Revenues in Kuwait (KWD Mn)
4.55.2
5.9 6.417.6 7.7 7.7
7.0
0.8 1.1 1.6 2.2 2.4 2.5 2.4 2.20
5
10
2010 2011 2012 2013 2014 2015 2016 Sep 2017
Total Subscirbers in kuwait (Mn) VIVA Subscribers (Mn)
627 684 690 717 753 788 799
614
61 94 137 182 239 277 279 204
-
200
400
600
800
1,000
2010 2011 2012 2013 2014 2015 2016 9M-2017
Total Telecom Revenue in Kuwait (KWD Mn) VIVA's Revenue (KWD Mn)
Financial Results
9
Subscribers (Mn) Revenue (KD Mn) Net Profit (KD Mn)
10
Key Figures & Ratios 9M- 2016 9M - 2017 Change Subscribers (Mn) 2.4 2.2 -9%Revenue (KD Mn) 210.6 204.2 -3%Operating Profit (KD Mn) 31.4 30.1 -4%Operating Profit Margin (%) 15% 15% 0pt.Net Profit (KD Mn) 29.0 28.3 -3%Net Profit Margin (%) 14% 14% 0pt.EPS (Fils) 58 57 -3%Equity (KD Mn) 122.0 156.0 +28%BVPS (Fils) 244 312 +28%
VIVA’s achieved a revenue of KWD133.1 million in the first nine monthsof 2017 which resulted a net profitof KWD 28.3 million (earnings pershare of 57 fils), whereas theoperational profit has reached KWD30.1 million during the same period.
On the other hand, VIVA’sshareholders equity base increasedby 28% to reach KD 156 million at theend of Sep 2017 compared to KD 122million at the end of Sep 2016.
VIVA achieved these results due tothe superior customer experience,high quality of services, innovativepromotions and packages offered toits customers to meet their needsand expectations, inspired by ourcustomers’ confidence whichmotivates us to provide the bestservices with the highest possiblequality.
Jun-16 Jun-17
2.4 2.2
9M-16 9M-17
29.0 28.3
9M-16 9M-17
211 204
Financial Highlights
10
Revenue (KD Million) Net Profit (KD Million)
CAPEX (KD Million)Operating Profit (KD Million)
11
239277 279
211 204
0
100
200
300
2014 2015 2016 9M-2016 9M-2017
40 43 40
29 28
0
10
20
30
40
50
2014 2015 2016 9M-2016 9M-2017
45 49 44 31.4 30.1
19% 18% 16% 15% 15%
0%
5%
10%
15%
20%
25%
0
20
40
60
2014 2015 2016 9M-2016 9M-2017
Operating Profit (KWD Million) Operating Profit Margin (%)
17
39 38
27 20 7%
14% 14% 13%10%
0%
5%
10%
15%
20%
25%
30%
0
15
30
45
2014 2015 2016 9M-2016 9M-2017
Capex (KWD Million) Capex to Sales Ratio
Financial Highlights
10
Total Assets (KD Million) Total Debt / Equity (KD Million)
Book Value Per Share (KD)Shareholders Equity (KD Million)
12
179 214
263 267 293
0
50
100
150
200
250
300
350
2013 2014 2015 2016 Sep-2017
10
50
93
133
156
0
50
100
150
200
2013 2014 2015 2016 Sep-2017
0.019
0.100
0.186
0.266
0.312
-
0.050
0.100
0.150
0.200
0.250
0.300
0.350
2013 2014 2015 2016 Sep-2017
66
86 72
47 29
6.9
1.70.8 0.4 0.2
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
0
20
40
60
80
100
2013 2014 2015 2016 Sep-2017
Total Debt (KWD Million) Debt to Equity Ratio (x)
Stock Performance
1113
Rebased Index Since VIVA’s Listing Date 14 Dec 2014 – Stock Performance vs. KSE and Telecom weighted Indices
VIVA +23.2%
KSE Weighted Index +2.2%
Telecom Weighted Index -1.7%
Closing Price (KD) 0.801
Market Cap (KD Million) 400
PE (X) 10.1
PB (X) 2.6Data as of 30 Sep 2017
60
80
100
120
140
160
180
Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17
VIVA's Stock Price (KWD) KSE Weighted Index Telecom Weighted Index
Re
bas
ed 1
00
Ind
ex
Appendix
12
Balance Sheet (2014 - Sep 2017) Income Statement (2014 - Sep 2017)
14
Balance Sheet (2014 – Sep 2017)
13
Balance Sheet 2014 2015 2016 Sep 2017KD Mn KD Mn KD Mn KD Mn
ASSETSProperty and equipment 113.1 125.4 137.7 139.6Intangible assets 36.3 50.6 47.5 47.8Other non-current assets 0.7 - - -Non-current assets 150.1 175.9 185.2 187.4Inventories 5.8 7.1 4.4 11.0Prepayments and other current assets 4.7 5.4 5.0 5.6Trade and other receivables 21.2 22.9 25.7 35.6Cash and cash equivalents 32.3 51.8 47.2 53.8Current assets 63.9 87.2 82.2 106.0Total assets 214.0 263.1 267.4 293.4EQUITY AND LIABILITIESShare capital 49.9 49.9 49.9 49.9 Statutory reserve 0.0 4.5 8.7 8.7 Voluntary reserve - 4.5 8.7 8.7 Retained earnings (losses) 0.0 33.9 65.4 88.6Total equity 49.9 92.9 132.7 156.0
Employees' end of service benefits 2.6 2.8 3.2 3.6Islamic financing facilities 51.6 31.4 11.6 -Non-current liabilities 54.1 34.2 14.8 3.6Islamic financing facilities 34.0 41.0 35.5 29.4Trade and other payables 75.9 95.0 84.4 104.4Current liabilities 109.9 136.0 119.9 133.8Total liabilities 164.0 170.2 134.7 137.4Total equity and liabilities 214.0 263.1 267.4 293.4
15
Income Statement (2014–Sep 2017)
14
Income Statement 2014 2015 2016 9M-2016 9M-2017KD Mn KD Mn KD Mn KD Mn KD Mn
Revenue 239.0 276.9 279.1 210.6 204.2Operating expenses (126.3) (145.8) (147.0) (111.3) (110.1)Depreciation and amortization (67.6) (82.2) (88.4) (67.8) (64.0)Finance costs (2.2) (2.6) (1.6) (1.3) (0.7)Other income / (expense) (1.8) (1.0) (0.1) 0.3 0.3 Profit before contribution to KFAS, Zakat and Board of Directors’ remuneration 41.0 45.2 41.9 30.4 29.7
KFAS (0.0) (0.4) (0.4) (0.3) (0.3)NLST (0.1) (1.2) (1.1) (0.7) (0.9)Zakat (0.5) (0.5) (0.4) (0.3) (0.3)Board of Directors’ remuneration (0.2) (0.2) (0.2) - -Net Profit and other comprehensive income for the period 40.4 43.0 39.8 29.0 28.3
Basic and diluted earnings per share (fils) 81 86 80 58 57
16
VIVA IR
1417
Awarded best IR Corporate in Kuwait for the year 2016 and nominated to be best IR Corporate in Kuwait for the year 2017
Proud to Serve our Investors and the Investment Community.
First company in Kuwait to launch a mobile application for investor relations During December 2016.
Revamped Investor Relations website to keep the investment community updated with all IR publications, disclosures, stock performance, events, analyst Coverage, Fact sheet and financial indicators and much more….
Thanks for all the investors and analysts who voted for us in 2016 and 2017 (Extel) and we look forward for your support in the coming years.
