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Contents
Macro overview 5
Redefining our strategy 8
Our growth potential 12
9M 2019 highlights 25
Company snapshot 4
Financial highlights (2016-2018) 32
2
Disclaimer
This document has been prepared by Telecom Egypt (the “Company”) solely for the use at the analyst/investor presentation, held in connection with the Company. The information
contained in this document has not been independently verified. This document contains statements related to our future business and financial performance and future events or
developments involving Telecom Egypt that may constitute forward-looking statements. Such statements are based on the current expectations and certain assumptions of
Telecom Egypt's management, of which many are beyond Telecom Egypt's control. Such assumptions are subject to a number of risks and uncertainties. Should any of these risks or
uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results may (negatively or positively) vary materially from those
described explicitly or implicitly in the relevant forward-looking statement. Telecom Egypt neither intends, nor assumes any obligation, to update or revise these forward-looking
statements in light of developments, which differ from those anticipated.
This document does not constitute an offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares of the Company and neither it nor any
part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This presentation has been made to you solely for information
purposes and is subject to amendment. This presentation (or any part of it) may not be reproduced or redistributed, passed on, or the contents otherwise divulged, directly or
indirectly, to any other person or published in whole or in part for any purpose without the prior written consent of the Company.
3
Company snapshot
Heritage transformed
4
TE’s incorporation
• Founded in 1854 with the first telegraph line in Egypt
• Incorporated in 1998 replacing the former Arab Republic of Egypt
National Telecommunication Organization (ARENTO)
• Listed in 2005 on the Egypt and London Stock Exchanges
• Acquired a 45% stake in Vodafone Egypt in 2003 to 2006
• Rebranded the retail business to WE in 2017 with the launch of
mobile services
Ownership: Highly diversified solid institutional shareholder base
Market Cap of USD 1.1bn | ETEL EY/ ETEL.CA (as of December- 2019)
Free float
composition
Breakdown of
institutions
Government,
80%
Free float,
20%
Institutional,
16%
Retail, 4%
USA34%
Europe22%
Egypt20%
GCC12%
South Africa
9%
ROW3%
Macro overview
5
26%
11%
19%
29%
3%
12%Illiterate
Literate
Primary
Secondary
High school
University degree
Demographic indicators
Young population to continue to drive growth
Illiteracy ↓ from 30% in 2016
74% of population is literate
Population (mn) Age distribution (% of population)
Educational attainment (% of population) Unemployment rate (% of population)
Source: CAPMAS 2019 censusSource: CAPMAS 2017 census
Source: CAPMAS 2017 census Source: Ministry of Finance
25%
19%
17%
15%
10%
8%
5%2%
0-9
10-19
20-29
30-39
40-49
50-59
60-69
70+
c2mn new customers in
the market every year
61% of population
below 30 years
13.0% 12.8% 12.7%12.0%
8.9%
2013/14 2014/15 2015/16 2016/17 2017/18
6
9.8%
11.3%
12.3%
15.3%
17.3%
19.3% 18.3%
17.3%16.3%
14.8%
13.8%12.8%
5.5% 7.2%
8.4%
12.4%
13.9%
25.9%
32.3%
31.9% 33.3%
19.9%
11.6%
10.9%
8.6%8.3%
8.9%
6.4%
2.6%
4.4 4.3 4.2
5.35.5
5.9 6.0
Real GDP growth (%)
Macro indicators
A broad set of healthy indicators across the year
Average USD to EGP rate
CBE discount rate Core inflation (YoY)
Source: IMF Source: Central Bank of Egypt
Source: Central Bank of Egypt Source: Central Bank of Egypt
7
7.8 7.9 8.1 8.9 8.9
14.8
17.8 18.1 17.8 17.8 17.7 17.8 17.9 18.0 17.6
17.1 16.6
Redefining our strategy
8
Adel Hamed
Managing Director &
Chief Executive Officer
Mohamed Shamroukh
Senior Vice President
Chief Financial Officer
Mohamed Abo-Taleb
Vice President
Chief Commercial Officer
Essam Abdeldayem
Vice President for Human
Resources
Seif Allah Mounib
Vice President for International
Wholesale
Our leadership team
Caliber from the mobile & fixed industries with local & int ’l experience
Antar Kandil
Vice President
Chief Information Officer
Abdelsatar Elsheikh
Vice President for Regional
Affairs
Mohamed Alfowey
Vice President for Technical
Affairs9
Heading towards…
A telco demonstrating its ability to seize new opportunities
The premium
digital hubDigital WE
The leading
ICT provider
Offering our customers the
best value data-centric
value proposition
Expanding from an
established international
route to an eminent regional
digital hub
Embracing digital
transformation internally to
empower our customers &
employees
Financial &
Operational
Excellence
Expand efficiency &
optimization measures to
enhance profitability
10
WE digital transformation
Our strategy is driven by creating a comprehensive digital ecosystem to optimize
resources and boost the ICT economy
Digital transformation ecosystem
Data centers
& cloud IOTDigital
platforms OTT
Digital transformation process
WE digital
strategy &
objectives
Digital team &
governance
Internal digital
transformation
Digital
market
disruption
Complete
digital
inclusion
Apps
& solutions
Cloud platforms
World class data center
facilities
Network connectivity
Submarine cables & fiber connectivity
‘WE Digital’
Capitalizing on our assets
11
Our growth potential
12
5,473
11,280
8,213
10,217
2015 2018 9M 2018 9M 2019
EGP 1.1bn
+39% YoY
EGP 7.1bn
+40% YoYEGP 3.1bn
+26% YoY
FY 2018
EGP 11.3bn
+36% YoY
• Underpenetrated data market leading to a
growing fixed & mobile customer base
• Improved broadband connectivity and continuous
demand for higher usage enhances ARPU
• Protocols with government entities for
digital transformation:
− NUCA
− Ministries i.e. schools project
− Connecting governorates i.e. Port
Said project
• New cities
Retail segment
Growth drivers at a glance
• Growing mobile customer base
• Growing fixed voice customers driven
by fixed broadband connectivity
Voice Data
Other
Retail revenue growth
( in EGP mn)
24%
27%
CAGR
13
Best value
recharge
platform
‘WE Internet’
(1st
FBB revamp) +
postpaid mobile
launch
Widening our retail portfolio
Moving beyond traditional telecom services
Sep 2016 Sep 2017 Feb 2018
Nov 2018 Aug 2018 Apr 2018
July 2019 Nov 2019 Coming next
4G mobile
license
acquisition
Prepaid
mobile
launch
Fully convergent
product
‘Indigo Plus’
‘Level Up’
PlayStation
packages
‘WE SPACE’
(2nd
FBB revamp)
‘WE Pay ’
WE digital wallet
‘WE IPTV’
1st
nationwide
IPTV license
14
WE SPACE
A new shift in our fixed broadband offering
Comparison of
the entry level bundle
Up to30 Mbps
EGP 120
140 GB
July 2019
Up to5 Mbps
EGP 110
100 GB
April 2018
Speed
Price
Quota
Launch date
15
3,791
4,439
5,197
6,535
7,162
2,809
3,382
4,070
5,237
5,700
982 1,057 1,127 1,297
1,463
2015 2016 2017 2018 9M 2019
TE
Others
Market fixed broadband subscribers
(in 000’s)
Market fixed voice and data household penetration
WE fixed voice
Fixed services
Growing customer base with healthy ARPU
WE fixed broadband
16
28.7%27.7%
30.0%32.4%
34.1%
16.6%19.0%
21.8%
26.9%29.1%
2015 2016 2017 2018 9M 2019
Fixed line
Broadband
6,555 6,465
7,145
7,865
8,387
31.1
28.7
29.6
30.5
31.9
27.0
29.0
31.0
33.0
35.0
37.0
39.0
0
1,0 00
2,0 00
3,0 00
4,0 00
5,0 00
6,0 00
7,0 00
8,0 00
9,0 00
2015 2016 2017 2018 9M 2019
Subscribers ( in 000's )
ARPU
2,809
3,382
4,070
5,237
5,700
76.0
83.1
98.3
103.5
110.1
70.0
80.0
90.0
100.0
110.0
120.0
130.0
0
1,0 00
2,0 00
3,0 00
4,0 00
5,0 00
6,0 00
2015 2016 2017 2018 9M 2019
Subscribers ( in 000's )
ARPU
2,408 2,244 2,462 3,108
2,290 2,668
2,625 3,631
5,049
7,085
5,110
6,816
440
741
779
1,086
812
733
2015 2016 2017 2018 9M 2018 9M 2019
Other
Data
Voice
21%
25%
36%
24%
Retail revenue growth driven by data
(in EGP mn)
Fixed services (cont ’d)
Accelerating our fiber replacement project to grasp market opportunities
70% 85%
2018a 2019e 2020f
100%
Fiber access network capacity
(in 000’ homes)
% of households reached with fiber
(excluding the last mile)
17
2,140
5,180
9,692
12,608
17,567
25,149
2014 2015 2016 2017 2018 9M 2019
2,204
3,096
4,456
6,370
4,596
6,182
421
536
593
716
514
635
2015 2016 2017 2018 9M 2018 9M 2019
Managed Services
Broadband
Data revenue
(in EGP mn)
38%
39%
40% 33%
102%
114%117%
102% 100%
33% 34%37% 39% 42%
FY 2015 FY 2016 FY 2017 FY 2018 9M 2019
Voice penetration
Data penetration
38,354 39,622 44,082 39,647 39,850
33,056 33,883 34,117
29,475 28,292
22,236
33,900 32,300
27,500 26,500
2,300
3,861 4,575
2015 2016 2017 2018 9M 2019
Mobile market subscribers
(In 000’s)
Mobile market
A growing customer base
*Etisalat restated its customer base starting FY 2016
3.3
Source: Operators’ disclosure
WE's mobile subscribers
(In 000’s)
Mobile data market subscribers
(in 000’s)
Source: MCIT & Operators’ disclosure
Mobile market voice and data penetration
18
3,589
3,861
4,247 4,260
4,575
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
26,300 28,650
32,790 35,060
38,170
3,820 3,280
3,260 3,210
3,560
FY 2015 FY 2016 FY 2017 FY 2018 9M 2019
USB
Mobile data
Source: MCIT
EGP 3.5bn
+66% YoY
EGP 4.4bn
-9% YoY
• Largest international network footprint in the
region
• Preferred East-West international route
• Positioning Telecom Egypt as an eminent digital
hub
+39% YoY
Wholesale segment
Growth drivers at a glance
• Sole provider of international calls to MNOs
• 4-5 year agreements
Domestic
International Carrier Affairs
International Cables &
Networks
• Egypt’s infrastructure builder
• 3-10 year agreements
• Indirect play on data market growth
Wholesale revenue
( in EGP mn)
EGP 3.6bn
+8% YoY
FY 2018
EGP 11.5bn
+12% YoY
6,711
11,491
9,145 8,795
2015 2018 9M 2018 9M 2019
-4%
20%
CAGR
19
*
* Including Bharti deal’s EGP 1.6bn recognized in Q3 2018
Egypt
Iraq
Indonesia
Thailand
Myanmar
Morocco
Algeria
France
Qatar
India
Pakistan
Iran
Oman
Yemen
Saudi Arabia
Turkey
Syria
Lebanon
Sudan
Ethiopia
Somalia
Libya
Mozambique
Madagascar
Tanzania
Kenya
Greece
Tunisia
Djibouti
Sri Lanka
Jordan
Maldives
Taiwan
Brunei
VietnamPhilippine
Japan
Korea
Belgium
UK
Singapore
Germany
China
Cyprus
Italy
Portugal
Eritrea
Bangladesh
Australia
U.A.E
Malaysia
SEAMEWE-3
SEAMEWE-4
FLAG
FALCON-HAWK
IMEWE
EIG
SEACOM
TATA
ALETAR/BRYTAR
TE North
GBI
Taba-Aqaba
AAE1
SEAMEWE -5
Alexandros
Trans border Terrestrial Cables with Libya & Sudan
MENA Cable
Our cable network
offers reach and reliability
20
582 410
1,099 801 619 621
2,396 2,794
3,769
3,623
2,728 2,760
2015 2016 2017 2018 9M 2018 9M 2019
International Direct Dialing (IDD)
Transit
76 41
62 45 35 36
311
277 212
204
154 162
2015 2016 2017 2018 9M 2018 9M 2019
International Direct Dialing (IDD)
Transit
47 62 338 207 207
605
165 236
368 386 280
384
467
655
961
2,316
2,124
661
128
173
439
588
435
505
2015 2016 2017 2018 9M 2018 9M 2019
Cable Projects
Ancillary Services (O&M)
Capacity Sales
International Customer Support
6 6 19 12 12
35 21 23
21 22 16
23
61 65
54
130
120
39
17 17 25
33
25
30
2015 2016 2017 2018 9M 2018 9M 2019
Cable Projects
Ancillary Services (O&M)
Capacity Sales
International Customer Support
Int’l Carriers revenue breakdown in EGP
(in mn)
International services
Growth across the majority of our business lines
Int’l Customers & Networks revenue breakdown in EGP
(in mn)
Int’l Carriers revenue breakdown in USD*
(in mn)
Int’l Customers & Networks revenue breakdown in USD*
(in mn)
* Based on full year and 9-month average USD exchange rates * Based on full year and 9-month average USD exchange rates 21
Agreements with domestic MNOs
Securing long-term revenue streams
Securing longer-term agreements with
domestic mobile operators
Boosting our wholesale revenue stream by
monetizing our infrastructure investmentsOur main goals 1 2
International Services 12bn
1.5bnTransmission Services 10.85bn
Transmission Services
International Services 3bn
3bn
1.5bn
International Services 4bn
Transmission Services 1.5bn
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2028
1.5bn
1.5bn
3bn
22
• TE reached an agreement with Vodafone to collect
EGP 5.5bn, representing +90% of its share of
Vodafone’s retained earnings as of Mar 18.
• EGP 4.8bn was received in March 2019 while the
remaining EGP 0.7bn will be received in June 2020.
• The proceeds received in March were used to settle
TE’s EGP denominated debt.
Vodafone investment pays off in 2019
Representing +90% of our share as of Mar 2018
23
1,118
2,201
1,551
2,188
2015 2018 9M 2018 9M 2019
Income from Vodafone
(EGP mn)
25%
CAGR
41%
* Including the EGP 0.5bn from the VIS sale to Vodafone group.
*
EGP 4.8bn
EGP 0.7bn
EGP 0.5bn
Dividends distribution
• TE received an extraordinary dividend of EGP
0.5bn, representing its share of the Vodafone
International Services (VIS) sale to Vodafone group.
• The proceeds were used to finance the extension
of TE’s early retirement program (ERP).
March 2019
June 2020
November 2019
2019 agreements & events
Strategic moves, paving the way for the future
Announced a change in the BoD by a decree from
the Egyptian Prime Minister.
2019 business calendar
Signed an agreement with Banque Misr to launch
‘WE Pay’. The service is designed to enable
customers to safely and securely send, receive and
store money using a smartphone application.
Announced the BoD’s approval to proceed with a
voluntary early retirement program for TE
employees.
Signed high-speed bitstream services agreement
with Orange Egypt.
Telecom Egypt’s Ordinary General Assembly (GA)
appointed its BoD for a new term of three years. It
approved the change of two independent board
members.
Signed two virtual fixed voice agreements and two
bitstream agreements with Etisalat Misr to enable it
to provide fixed voice services, utilizing Telecom
Egypt’s network, and new VDSL technology to its
customers.
Signed two 10-year transmission and infrastructure
agreements with Vodafone Egypt valued at EGP
10.85bn and reached an agreement on dividend
distribution.
Signed MOUs with Huawei, Ericsson, Nokia, CISCO
and Microsoft at MWC Barcelona 2019 to assess
and develop TE’s network.
Signed a binding letter of intent (LoI) with PEACE
and its parent HENGTONG OPTIC-ELECTRIC valued
at USD 20mn offering PEACE redundancy in
exchange for competitive pricing on fiber optic
cables.
Telecom Egypt and the Administrative Capital for
Urban Development (ACUD) signed an agreement
to build and operate telecom networks in the new
administrative capital and to provide smart and
security services networks.
Published an all-encompassing integrated annual
report about 2018 operations and strategic
directions.
Signed a landing party agreement with Pakistan &
East Africa Connecting Europe (PEACE) Cable
International Network Co. and PCCW Global valued
at USD 45mn.
Signed a strategic partnership agreement with
Cable Network Egypt (CNE) to provide Telecom
Egypt’s customers with Internet Protocol television
services (IPTV) in collaboration with various content
providers.
24
WE launched its digital wallet under the
commercial name 'WE Pay', enabling its customers
to enjoy a wide-range of electronic payment
facilities.
The company launched ‘WE SPACE’, a new shift in
its fixed broadband offering in line with its large
project to develop its network capabilities and
improve the quality of internet services in Egypt.
Jul
No
vSe
p
Ap
rM
ar
Jul
Fe
bJa
nM
ar
25
9M 2019 highlights
EBITDA margin of 19%
Adjusted margin of 27%
Net profit margin of 17%
Adjusted margin 23%
* Adjusted performance: Q2, Q3 & 9M 2019 are adjusted for ERP, Q3 & 9M 2018 are adjusted for Bharti deal.
9M 2019 results highlights
Strong top line performance
19.0bn+10% YoY
Adjusted 21%
3.7bn-31% YoY
Adjusted 5.2bn
+6% YoY
3.2bn-8% YoY
Adjusted 4.4bn
+39% YoY
Revenue
(EGP bn)
EBITDA
(EGP bn)
Customers
(mn)
Net profit
(EGP bn)
Fixed
Mobile
Voice Data
8.4+11% YoY
5.7+15% YoY
4.6+27% YoY
Consolidated revenue (excl. the Bharti deal
from 2018) climbed 21% YoY on a 35% YoY
growth in data revenue and a 23% YoY
increase in infrastructure revenue.
Customer base grew across all segments.
TE extended its early retirement program (ERP)
to 3000 employees with a total cost of EGP
1.5bn.
EBITDA margin came in at 19%, pressured by
the ERP. Excluding its cost, EBITDA would reach
EGP 5.2bn, recording a margin of 27%, in line
with our full year guidance.
Net profit landed at EGP 3.2bn, declining 8%
YoY, while adjusted net profit reached EGP
4.4bn with a margin of 23% supported by FX
gains, higher investment income from
Vodafone & enhanced underlying operational
performance.
9M 2019: monetizing our network investment
* FBB customer base cleanup started in Q2 2019 & ended in Q3 2019
26
1 Education reform program
Pha
se
1Pha
se
2
Q3 2018: Connected 2,550 schools with fiber within 2
months, recognizing EGP 482mn.
Q1 2019: Provided data SIMs for students in their first year
of high school.
2 Port Said digital transformation
Pilo
t 1
Pha
se
1
Q1 2019: Connected government service buildings in
Port Said with fiber to provide citizens with digital
services.
Connecting 5 more governorates with fiber (timeline to
be agreed upon later within the 2 year timeframe of the
protocol)
613kdata SIMs
4 daysto distribute the SIM cards
8,000
TE employees
working on the
project
670buildings
connected
service offices
included
700
further monetization
from service
subscriptions
further monetization
from connectivity
subscriptions
Projects highlights
Further steps towards nation-wide digital transformation
The offer: Data bundle price is EGP 5 for the 1st
GB then each student has to
subscribe to one of WE’s existing data bundles
EGP 86mnrecognized
revenue
27
In EGP mn 9M 2019 9M 2018 YoY Q3 2019 Q2 2019 Q3 2018 QoQ YoY
Revenue 19,012 17,358 10% 6,316 6,609 7,233 -4% -13%
Home 7,657 5,850 31% 2,717 2,539 2,085 7% 30%
Enterprise 2,560 2,363 8% 959 851 1,151 13% -17%
Domestic 3,260 2,753 18% 1,010 941 788 7% 28%
ICA 3,381 3,347 1% 1,111 1,141 1,111 -3% 0%
IC&N 2,154 3,046 -29% 519 1,137 2,099 -54% -75%
Revenue (Adj.) 19,012 15,753 21% 6,316 6,609 5,628 -4% 12%
Employee cost (6,277) (3,637) 73% (2,066) (2,587) (1,263) -20% 64%
Employee cost (Adj.) (4,801) (3,638) 32% (1,594) (1,583) (1,263) 1% 26%
Call costs (3,664) (3,172) 16% (1,306) (1,224) (1,079) 7% 21%
CoGS* (3,723) (3,807) -2% (1,352) (1,413) (2,226) -4% -39%
CoGS* (Adj.) (3,723) (2,668) 40% (1,352) (1,413) (1,087) -4% 24%
S&D* (1,157) (1,018) 14% (336) (492) (455) -32% -26%
G&A* (491) (394) 25% (192) (158) (174) 22% 10%
EBITDA 3,700 5,329 -31% 1,063 735 2,036 45% -48%
Margin 19% 31% (1,124 bps) 17% 11% 28% 572bps (1,132 bps)
EBITDA (Adj.) 5,177 4,864 6% 1,535 1,739 1,571 -12% -2%
Margin 27% 31% (365 bps) 24% 26% 28% (201 bps) (361 bps)
Other (expense) / income 195 225 -14% 132 (25) 84 620% 58%
Depreciation (2,025) (1,515) 34% (800) (577) (578) 39% 38%
Amortization (517) (446) 16% (191) (162) (146) 18% 31%
Operating profit 1,353 3,593 -62% 204 (30) 1,395 777% -85%
Margin 7% 21% (1,358 bps) 3% 0% 19% 369 bps (1,606 bps)
Income from investments 2,188 1,551 41% 1,063 478 677 122% 57%
Net finance (cost) / income 1,113 (290) 484% 355 365 (132) -3% 370%
Net interest (exp.) / income (709) (585) 21% (261) (166) (181) 57% 44%
Tax (720) (758) -5% (270) (129) (311) 109% -13%
Net Profit 3,220 3,506 -8% 1,089 516 1,448 111% -25%
Margin 17% 20% (326 bps) 17% 8% 20% 944bps (278 bps)
EPS 1.89 2.05 -8% 0.64 0.30 0.85 111% -24.8%
Income statement (9M 2019)
Re
ve
nue
EBITD
AO
the
r
OPEX
Ne
t
pro
fit
Exp
ense
s
No
n-o
pe
ratio
na
l
28
• Adjusted revenue rose by 21% YoY owing to higher data revenues, which
represented 49% of total growth.
• Adjusted wholesale revenue grew 17% YoY thanks to the cable projects
recognized in Q2 2019 and the continuous demand for infrastructure
services by the domestic operators.
• Excl. the ERP, employee costs rose on the reintroduction of the loyalty
pension fund, the bonus in Q1 and the annual increase in salaries.
• Advertising costs declined 4% YoY representing 3.5% of total revenue.
• Call costs remained relatively stable at 19% of revenue.
• Adjusted EBITDA (excl. the ERP) grew 6% YoY in line with the revenue
growth.
• Adjusted EBITDA margin came in at 27% in line with our full year
guidance.
• D&A rose 30% YoY in line with our accelerated network expansion
program.
• Income from VFE witnessed a hike due to organic growth, the reversal of
dispute related provisions and the recognition of the gain from the sale of
VIS.
• The effective interest rate continued its improvement to reach 8.1% in 9M
2019 compared to 8.9% last year.
• FX gains totaled EGP 1.3bn, which offset the 21% increase in net interest
expense.
• Excluding Bharti from 9M 2018 and ERP from 9M 2019, net profit would
have increased by 39% YoY mainly on FX gains, higher investment income
from Vodafone and enhanced operational performance.
Adj. refers to adjusted
* COGS excludes employee costs & call costs, S&D and G&A exclude employee costs & D&A
Note: All financial figures reported are based on the consolidated financials under The Egyptian Accounting Standards
Adjusted performance: Q2, Q3 & 9M 2019 are adjusted for ERP,
Q3 & 9M 2018 are adjusted for Bharti deal
9M 2019
Home & Consumer Enterprise
Domestic International Carriers Affairs
International Customers & Networks
9M 2018
3,004
3,304
3,571
2,753
3,260
2016 2017 2018 9M 2018 9M 2019
+18.8%
+8.1% +18.4%
Revenue by business unit (9M 2019)
Retail services & specifically data drive revenue growth
Home &
Consumer DomesticEnterprise
International
Carriers Affairs
International
Customers & Networks
29
3,203
4,868
4,424
3,347 3,381
2016 2017 2018 9M 2018 9M 2019
+38.1%
-9.1% +1.0%
4,228
5,662
8,064
5,850
7,657
2016 2017 2018 9M 2018 9M 2019
+90.8%
+42.4% +30.9%
2,389
2,627
3,215
2,363
2,560
2016 2017 2018 9M 2018 9M 2019
+34.6%
+22.4% +8.3%
1,126
2,106
3,496
3,046
2,154
2016 2017 2018 9M 2018 9M 2019
+210.4%
+66.0% -29.3%
2,609 3,312
6,088
8,028
6,539 5,294
1,420 780 723
21%
24%
33%35%
34%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
1,00 0
2,00 0
3,00 0
4,00 0
5,00 0
6,00 0
7,00 0
8,00 0
9,00 0
2015 2016 2017 2018 9M 2019
Capex License Capex/sales
147
(2,603) (2,456)
(5,075)(4,946)
(184)
2015 2016 2017 2018 9M 2018 9M 2019
1,597
4,338 4,649
3,496
961 1,361
1,704 860
9M 2018 9M 2019
2,221
2,665
Cash flow analysis
Cash capex
(EGP mn)
Net cash from operating activities
(EGP mn)
Note: All financial figures reported are based on consolidated financials under The Egyptian Accounting Standards.
FCFF
(EGP mn)
In-service capex
(EGP mn)
30
* **
* Including the one-off settlement payment to Etisalat of EGP 919mn and the EGP 784mn representing the
settlement of MENA cable loan
** Including ERP cost of EGP 860mn
*
** Including dividends received from Vodafone of EGP 5.25bn
* Including the one-off settlement payment to Etisalat of EGP 919mn and the EGP 1.78bn for the acquisition of MENA cable
*
**
3,159
4,731
7,336
8,499
6,276
5,294
3,340
26%
34%
40%
37%
33%
10%
20%
30%
40%
50%
60%
70%
-
1,00 0
2,00 0
3,00 0
4,00 0
5,00 0
6,00 0
7,00 0
8,00 0
9,00 0
2015 2016 2017 2018 9M 2019
Capex License Capex/sales
62
(97)
1,191
797
969
782
2015 2016 2017 2018 9M 2018 9M 2019
69%
16%
5%
5%4% 1%
Access Network
Transmission
International cable
Customer care
IT
Others
Balance sheet highlights
FCFE
(EGP mn)
Net debt
(EGP mn)
Net debt/ EBITDA
(Based on annualized EBITDA)
Breakdown of in-service capex
* Including the one-off settlement payment to Etisalat Misr of EGP 919mn
*
*
FY 2018
31
2,587 1,180
638 998 1,375
-389 -3,342 -7,293
-13,854 -15,118
-2,197 2,161 6,656 12,855 13,743
2015 2016 2017 2018 9M 2019
Net debt
Total debt Cash
-0.6x
0.6x
1.3x
2.1x 2.0x
2015 2016 2017 2018 9M 2019
*
* Normalizing EBITDA for ERP cost of EGP 1.5bn.
Financial highlights (2016-2018)
32
Revenue
(EGP mn)
EBITDA
(EGP mn)
Net profit
(EGP mn)
Operating Profit
(EGP mn)
Financial highlights
Double digit EBITDA growth helps maintain net profit in spite of heavy investments
13,950
18,567
22,771
FY 2016 FY 2017 FY 2018
+63.2%
+22.6%
3,801
5,184
6,130
FY 2016 FY 2017 FY 2018
+61.3%
+18.3%
1,991 2,023
3,560
FY 2016 FY 2017 FY 2018
+78.8%
+76.0%
2,670
3,052
3,484
FY 2016 FY 2017 FY 2018
+30.5%
+14.2%
33
* EPS after appropriations
Historical 3 year income statement summary
Note: All financial figures reported are based on the consolidated financials under the Egyptian Accounting Standards
in EGP mn 2016 2017 2018Growth y/y
2017 2018
Revenue 13,950 18,567 22,771 33% 23%
Home & Consumer 4,228 5,662 8,064 34% 42%
Enterprise 2,389 2,627 3,215 10% 22%
Domestic Wholesale 3,004 3,304 3,571 10% 8%
International Carriers 3,203 4,868 4,424 52% -9%
International Customers & Networks 1,126 2,106 3,496 87% 66%
Total employee cost (4,629) (5,061) (5,216) 9% 3%
Call costs (2,587) (4,152) (4,295) 60% 3%
COGS (excl. above expenses) (2,229) (3,138) (5,116) 41% 63%
S&D (excl. salaries, D&A) (300) (533) (1,388) 77% 161%
G&A (excl. salaries, D&A) (403) (499) (624) 24% 25%
EBITDA 3,801 5,184 6,130 36% 18%
Margin 27% 28% 27% 67 bps (100 bps)
Other (income)/expenses (275) (1,056) 147 284% -114%
Depreciation (1,458) (1,841) (2,096) 26% 14%
Amortization (77) (264) (620) 243% 135%
Operating profit 1,991 2,023 3,560 2% 76%
Margin 14% 11% 16% (338 bps) 474 bps
Income from investments 668 2,337 2,201 250% -6%
Net finance (cost)/income 574 (382) (288) -167% -25%
Net interest (expense)/income 120 (264) (1,024) -321% 288%
Tax (680) (659) (958) -3% 45%
Net profit 2,670 3,052 3,484 14% 14%
Margin 19% 16% 15% (270 bps) (114 bps)
EPS 1.20 1.38 1.61 14% 17%*
34
0.61
0.41
1.65
(0.11)
0.36
0.56
0.75
1.00
0.25 0.25
(0 .30)
(0 .10)
0.1 0
0.3 0
0.5 0
0.7 0
0.9 0
1.1 0
1.3 0
1.5 0
1.7 0
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
EPS
DPS
106%
54%
83%
18% 16%
92%
182%
60%
236%
69%
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Consolidated
Standalone
0.53
1.40
1.20
1.38
1.61
0.61
0.41
1.65
-0.11
0.36
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Consolidated
Standalone
0.83
1.76
1.56
1.79
2.04
0.89
0.74
1.99
0.27
0.73
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Consolidated
Standalone
Dividend analysis
We aim to distribute a continuous stream of dividends, balancing distribution with
the reinvestment of our cash flows in Capex, which we view as the pillar for growth
EPS after appropriations
(in EGP)
EPS before appropriations
(in EGP)
Note: All financial figures reported are based on consolidated & standalone financials under The Egyptian Accounting Standards.
Payout ratio
(%)
Dividend distribution on standalone financials (based on regulations)
(in EGP)
35
9M 2019
Adjusted
Our performance in context
Adjusted KPI’s meet our guidance
Revenue growth YoY
EBITDA margin (%)
CAPEX / sales (%)
9M 2019
actual
10%
19%
In-service: 33%
Cash: 34%
Mid to high
single digit
Mid to high 20s
In-service: 30%
21%
27%
In-service: 33%
Cash: 34%
FY 2019
guidance
2018
actual
23%
27%
In-service: 37%
Cash: 35%
36* Adjusted for the revenue growth for Bharti deal in 2018 and EBITDA margin for the early retirement program total cost of EGP 1.5bn.
*
Thank you
Investor relations team
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