The Egyptian Company for Mobile Services “Mobinil”

Transcription

The Egyptian Company for Mobile Services “Mobinil”
One on One - EFG Hermes conference
March, 2010
Disclaimer
This presentation contains “forward-looking statements” about Mobinil. Such statements are not actual
facts and include expressions about management’s opinions on the results of its strategies and
management’s expectations about new and existing programs, opportunities, technology and market
conditions.
diti
Although Mobinil believes its expectations are based on reasonable assumptions, these forward looking
statements are subject to numerous risks and uncertainties. These statements should not be regarded as a
representation that anticipated events will occur or that expected objectives will be achieved.
achieved
Important factors that could cause actual results or performance to differ materially from the results
anticipated in The forward-looking statements include, among other things, the success of the
announced plans and the,
Mobinil’s other strategic, financial and operating initiatives, changes in economic, business and
competitive market, risks and uncertainties attendant upon International operations, technological trends,
exchange rate fluctuations and market regulatory factors.
The forward-looking
forward looking statements in this presentation speak only as of the date hereof and Mobinil does
not undertake to update any forward-looking statement to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
This p
presentation does not constitute an offer or invitation to p
purchase anyy shares or other securities in
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.
Any decision to purchase shares or other securities in the Company is the sole responsibility of the
i
investors
t
who
h shall
h ll be
b responsible
ibl for
f his
hi own due
d diligence.”
dili
”
The Egyptian Company for Mobile Services (Mobinil) – One on One, EFG Hermes conference – March 2010
page 2
Agenda
1.
Economy and Market Overview
2.
Mobinil Overview
3.
Competitive Environment
4.
Regulatory Environment
5.
Operational Highlights
6.
Q&A
page 3
Economy and Market Overview
page 4
Egypt the largest market in the region in terms of population
Population: 77.6
77 6
43% urban; 57% rural
58 % < 25 years of age
Literacy rate: 57%
Area: 997,739 km2
97% off iinhabit.
h bit lilive on 4% off land
l d
2009GDP Est. : $163 Bn EGP.
GDP per capita (09 Est): $2,450
Sources: World Bank, Oct 09
page 5
Egypt update – FY2009
Key indicators
2009
2010
2011
2012
2013
Real GDP growth (%)
4.7
4.5
5
5.5
6
Consumer price inflation (avg %)
16.2
8.5
8
7.5
7
Source : International Monetary Fund, World Economic Outlook Database, October 2009
Inflation drops and global slowdown appears to stabilize
•
•
•
•
CPI declined by 1.3 %(m/m) in Dec 2009, to maintain the annual inflation rate broadly
unchanged at 13.24
13 24 %compared to 13.29
13 29 percent in Nov 2009
Dec 09 is the second consecutive month, the negative monthly inflation rate was largely due to
lower prices of fruits and vegetables which have been the key drivers of headline inflation since
Feb 2009.
In the meantime, annual core inflation inched up to 6.85 % in Dec compared to 6.59 % in
Nov.
Meanwhile, annual real GDP growth recorded 4.9 % in 2009/10 Q1. While this outturn
remains below the 7% average registered over the past three years,
years it reflects a steady
improvement in economic activity. There are encouraging signs that the global slowdown has
stabilized somewhat over recent months and the outlook for the international economy
appears to have improved as well.
Source : CBE Feb 2010
page 6
Egypt is characterized by sharp income differentials
• Egyptian market is characterized by two extremely large segments one high-end small in size yet big in value
and the other is cost conscious yet demanding lower-end segments mass market.
Egyptian market is divided:
wealthy, status conscious high-end segment
cost conscious yet demanding lower-end segments
(
(mass
market
k t & ultra-low
lt l
end)
d)
Enterprise subscribers have different requirements from
personal users, therefore, different value proposition
Ke and Large accounts
Key
acco nts
SME’s positioning
Clearly all three mobile operators are trying
to capture both value and volume,
volume by
targeting 4 segments
High value personal
Mass market
Low end
Enterprise
A
10%
Richest 10%
30% of GDP
B: 10%
Next 10%
14% of GDP
C: 20%
Second 20%
20% of GDP
D: 20%
Third
Thi
d 20%
15% of GDP
E: 20%
Fourth 20%
12% of GDP
F: 20%
Poorest 20%
9% of GDP
SEC division may not be hard & fast. Some Class B will fall under High Value, and some D will gravitate to Mass market offerings, and so on
page 7
Egyptian telecommunications market
•
Fixed line subscribers and penetration remained stable over the last years – future negative
impact due to fierce mobile competition.
The mobile market offers significant growth potential with penetration rates standing at
76.4%.
80
89 6%
89.6%
70
76.4%
60
56.6%
50
Millions
•
42.2%
40
30
20
10
0
31
15%
11
Fixed line subs
59
16%
40%
10
Mobile line
20%
13%
13%
2008
80%
60%
43
12
2007
71
100%
10
2009
Fixed line Penetration%
0%
2010
Mobile Penetration%
Source: Company estimates
page 8
Mobinil’s strategy: the challenges
Critical challenging
g g
Managing
sever
competition
that leads to
an aggressive
price war
Managing
smartlyy the
impact of the
global
financial crisis
anticipated to
continue
through 2010
Maintaining
leadership
p
position
Drive the
market with
the right plan
Quest for
new source
for value
creation
Build the right
capabilities
p
Modernizing
and
enhancing
the
infrastructure
and systems
y
Improving
and
optimizing
organization
efficiency
Closing the
service q
qualityy
gap (actual
and
perceived)
page 9
Mobinil Overview
In our vision lies our mission
Our Vision
Our Mission
To be part of people’s
To maintain our position
daily lives by providing
as the leading mobile
reliable and simple
service provider in Egypt,
services that help people providing the best quality
interact and communicate
of service for our
better.
customers, the best
working environment for
our employees,
employees top value
for our shareholders and
proudly contributing to
the development of our
community.
page 11
Ownership structure
Orascom Telecom Holding SAE 20%
ECMS
Mobinil Telecommunications 51.03%
OTH 28.75% of Mobinil
FT/Orange 71.25% of Mobinil
Free Float 28.97%
www.francetelecom.com
www.otelecom.com
36.4% of indirect ownership of ECMS
• One of the world's leading telecommunication
operators
• 189 million subscribers in 30 countries at 2009,
September 30.
• Increasing focus on transformation of the group into an
integrated operator.
34.6% of direct/indirect ownership of ECMS
• Leading international telecommunications groups
• Over 88 million subscribers as of September,
2009,operating in eleven emerging markets having a
population under license of 498 million .
• Operating GSM networks in high growth markets across
the MENA , Africa and South Asian markets.
page 12
Key strengths
10
9
8
7
Focus on the
E
Egyptian
ti mobile
bil
market – not
participating in
regional expansion
1
Leading mobile
operator in Egypt
with around 42%
market share
2
Healthy EBITDA level
Low leverage
Cost of customer
acquisition is low as
there are limited
handset subsidies
6
Significant bias to a
pre-paid subscriber
model – low
doubtful receivables
5
Strong majority
shareholders (France
Telecom and
Orascom Telecom)
3
GSM market
penetration has still
room for expanding
4
Favorable market
demographics –
young population
(60% under 25 years
of age)
Significant unrealized spending
power
page 13
Corporate priorities
structuring
the customers Data &
information
Acquire maximum
Market Share
profitably
Sustain future growth by
expanding in new
territories
A more segmented
g
approach to meet
dynamic market needs –
Customer Centric
Maintain competitive
advantage of being the
operator of choice for all
Egyptians – Customer
intimacy
Enhance
Quality and Standards
Enhance efficiency
ff
&
agility
Belong proudly to Mobinil
Subscriber
b ib Base
management
page 14
The Strategy forward
Focus to consolidate and capitalize on the position being the preferred operator,
and enhance our network and technology
High end and Low end
Customer Intimacy
• Deeper understanding of
customer needs
• Maintain the emotional bond
and relationship
p with customers
• Service excellence
Investment
Choice
Investment
Choice
IInvestment
t
t
Choice
Driver of quantitative growth
Operational
p
Excellence
• Aligning costs to value
• Continuously improve quality,
efficiency and reliability of
operational
p
p
processes
• Service adaptability
Driver of qualitative growth
Technology
• Smart investment to compete
effectively
page 15
3U’s Steer commercial priorities
The preferred brand.
Low cost to serve
• e-Recharge
• No handset subsidy
• High
Hi h CS automation
t
ti
• Low CS costs
Users
Innovative distribution channels:
• University kiosks
• Vans
Active retention
• Dedicated high value initiatives
• Handset renewal programs
• Point Scheme
Innovate mobile data
• Instant Messaging
• Internet packs
• Prepaid MBB
• Expanded use of musical apps.
apps
• WAP portal functionalities
• Business Everywhere
• Blackberry, I-phone & push email
• Streaming and WAP
Usage
Effective pricing
• On-net
On net
• Regional offers
• Simple tariffs
• Segmented usage simulation
tariff
Uses
Machine to machine
• Strong development
of GSM PoS Card
Systems
• GSM based meters
Sales Force
Automation
New technologies
• 3G
• M-Wallet
M-Banking
Banking
•M
• M-Advertising
• Mobile TV
page 16
Competitive Environment
page 17
Competitive environment (1/2)
Key milestones mark the fiercely competitive 2009
•
•
•
Steady
S
d G
Growth,
h H1 09
Series of successful promotions secured Mobinil
market leadership across all KPIs with significant
growth during H1 09 compared to H1 08.
08
Paradigm Shift, May’09
Th Cross-Net
The
C
N t door
d
opened
d “unconditioned”
“
diti
d” to
t the
th
masses with the launch of Etisalat aggressive tariff plan
“19 pt Ahlan Kol ElNas” changing market parameters.
Price War, Q3 09
To contain revenue loss and churn to competition due
to the Cross-Net move byy Etisalat,, Mobinil and
Vodafone responded first with aggressive On-Net tariff
plans followed by matching – to Etisalat – Cross-Net
plans coupled with Ramadan promo.
Mobinil 19 pt.
Etisalat 19 pt.
Vodafone 19 pt.
Khat El
Masraeyeen
Ahla Kalam
B l d t
Baladeyat
Ahla Kalam
R
Ramadan
d
Etisalat 15 pt.
R
Ramadan
d
page 18
Competitive environment (2/2)
Continued Price War (Unlimited and Prepaid Lines), Nov’09
Aggressive launches from all three operators continued; with Mobinil’s
“Khat El Masry” offering the lowest on-net rate of EGP 0.08, and
Vodafone’s Kol El Masrayeen which offers a flat rate of EGP 0.19.
g “Ahlan Kol El Nas” and adding
g an
Etisalat followed byy re-launching
extra promotion to revamp it (90 free Minutes). On the Post-Paid
World in
Your Hands
Kol El Donia
front, Etisalat was the first to launch their “Unlimited” line, and
Mobinil and Vodafone matched their offer with
ith “Star Unlimited” and
“Vodafone Line Unlimited”.
Khatt El Kol
Kh
K l El Masryeen
M
Masry
Koll ELNas
K
ELN
ReLaunch
A
Aggressive
i IInternational
t
ti
lR
Rates,
t D
Dec’09
’09
Etisalat closed the year by launching an aggressive International tariff
mid December, a EGP 1.99/minute flat rate to any destination in the
world. Vodafone matched it two weeks later. Mobinil launched a 15%
Star
Unlimited
Vodafone
Unlimited
Green Line
Unlimited
discount promotion late 2009 followed by matching to competition in
Q1 2010.
Q
page 19
Mobile broadband (1/2)
•
•
Mobinil launched a variety of Mobile Broadband offers to
suit different customer segments and address their various
needs :
– First to launch prepaid MBB in Feb-09
– Launched Student’s offer with a dedicated tariff plan
in Mar-09.
Jun-09
09 or
– Launched limited 1.5GB new tariff plan in Jun
medium to high usage customers.
– New Broadband offer in Oct-09 that features a
Compaq Mini Netbook, free data line + free 3G USB
modem all for EGP 2,222.
2 222
– Launched a Laptop financing program in Nov-09.
– New Mobinil Wi-Fi Adaptor that allows customer to
have Wi-Fi coverage without waiting for ADSL (using
the
h Wi-Fi
Wi Fi adaptor
d
and
d a Huawei
H
i USB modem
d
f
from
Mobinil)
– Launched a Mobile Broadband Unlimited tariff in
Dec-09.
– Launched prepaid blackberry in Nov-09.
In addition, Mobinil also offers customers a wide variety
of updated devices to facilitate the use of MBB and offer a
complete - easy to use - solution:
HP Mini
2140
Laptop
Financing
Compaq Mini Net
book Offer
Huawei mobile
internet router
USB modems: ZTE, Huawei, Sony Ericsson, HTC
Asus
EEEPC
Wi-Fi
Adaptor
page 20
Mobile broadband (2/2)
•
An internet Direct Marketing campaign was launched in November to promote and increase awareness about
Mobinil’s Mobile Broadband offers. Mobinil vans visited selected locations, and distributed giveaways to
potential high
high-end
end customers at exclusive holiday destinations, and residential areas in Greater Cairo that are
not served by DSL
•
Mobinil continued its aggressive “‫ ”ﻋﻴﺶ ﻋﺎﻟﻨﺖ‬internet promotions as follows:
– Offered ultra-portable hp mini Netbook + free Mobinil Internet line + free 3G USB modem on Jun-7th
– Launched on Jun-24th its MBB promotion where customers can buy the USB modem for only EGP 280
and get the Internet Line for free.
th
– Offered 50% discount on USB modems and Mobile Internet Routers on Jun-29
Jun 29th.
– Offered the USB modem for free on Oct-22nd. EGP 99 is paid upfront, and refunded to the customer
over 6 monthly instalments.
– Offered a Mobile Broadband Unlimited Bucket on Dec-12th.
‫ﻋﻴﺶ ﻋﺎﻟﻨﺖ‬
campaign
June 7th
June 24th
June 24th
June 29th
Oct 22nd
Dec 12th
page 21
Regulatory Environment
Regulatory environment
I t
Inter-connection
ti
International
Gateway
Competitive Practices
• Mobinil insists that termination rates between the 3 mobile operators should be symmetric as it
has always been.
• Mobinil is currently in dispute with Telecom Egypt in respect to mobile fixed interconnection
rates and insist on applying the original interconnection with Telecom Egypt by which
termination revenue is shared on a 60:40 basis in favour of Mobinil.
• There
e e iss actua
actuallyy in Egypt
gypt 2 international
te at o a gate
gateways:
ays o
one
e ope
operated
ated by Telecom
e eco Egypt
gypt aand
d tthee
second by Etisalat (limited to its own traffic). Both Mobinil and Vodafone Egypt route
international traffic via Telecom Egypt.
• Current outgoing and incoming international calls from Mobinil network uses TE’s gateway,
Mobinil gets discount on outgoing traffic only according to a matrix agreed upon between two
operators in the currently applied Interconnection Agreement.
• The NTRA set new rules regarding all pricing moves, including informing in advance the NTRA
of the new prices. NTRA has the right to stop any new price or promotion.
• The interconnection prices are excluded from new rules and must be approved by NTRA.
NTRA In
addition, NTRA gave itself the right to amend at any time the interconnection prices, which will
be subject to quarterly review. Mobinil objected to this decision.
• Mobinil has a 3G coverage obligation as a result of acquiring a 3G license
Minimum Investment
Obligations
– Year 1 – more than 25% of populated areas to be covered, Year 2 – more than 40% of
populated areas to be covered, Year 3 – more than 70% of populated areas to be covered,
Year 4 – more than 86% of populated areas to be covered and Year 5 – more than 97% of
populated areas covered
– Specific
S
ifi coverage requirements
i
t also
l apply
l to
t mostt highways
hi h
and
d connecting
ti roads.
d
page 23
Operational Highlights
Network rollout
2G Network Map
•
Mobinil is covering 99.66% of
the Egyptian population as of
December 2009.
•
Mobinil
provides
exclusive
coverage to major oil fields and
remote farms.
•
Mobinil has added more than
1,525 HSDPA 3G sites since 3G
Launch in Sep 08.
•
Almost 10,000 2G cells with
EDGE feature enabled.
• Mobinil covers the major touristic destinations.
• Mobinil 3G coverage is extended to almost all major
cities.
page 25
Cell site installation – FY 09
•
•
•
•
570 2G sites and 721 3G sites.
Added 74 BSCs to network representing a +20% increase to Mobinil network in one year.
Added more than 15 MBHCA capacity for switches representing a +20% increase YoY
Installed 14.8 KTRX to cater for traffic and subscribers increase representing a +22% increase
YoY.
• Added 5 new soft switches, and launching the new generation HLR (SDM) with capacity of 39M
Subs.
Subs
Cell site installation
Key facts
5,000
4,000
3 000
3,000
2,000
•
Mobinil has 4,299 2G and 1,525
•
Covering 2,600 cities, towns and
1,000
2009
2008
2007
3G
2006
2004
2G
2005
2003
2002
2001
2000
1999
-
•
3G cell sites in 2009.
villages
highways.
and
Equivalent
more
to
than
71
approximately
99.66% of Egypt’s population,
and 24.87%
24 87% geographic coverage.
coverage
page 26
Subscriber base growth
30,000
Postpaid
Prepaid
25M subscriber
milestone
Closing Base
25 000
25,000
20M subscriber
milestone
20,000
15,000
10M subscriber
milestone
10,000
756
6,474
7,231
745
7,361
8,106
701
8,566
9,267
647
10,022
10,669
606
11,295
11,901
575
13,147
13,722
555
14,563
15,118
555
15,606
16,161
586
16,933
17,518
609
18,302
18,911
639
19,477
20,115
659
20,520
21,179
667
22,187
22,853
694
23,931
24,625
686
24,668
25,354
0
915
6,050
6,965
5,000
Q1 06
* Q2 06
Q3 06
Q4 06
Q1 07
Q2 07
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
2nd growth phase
1st growth phase
The subscribers grew from 10million subs to 25million subs in 3 years.
* Reclassification of 180K from Postpaid to Prepaid
page 27
Key operational performance indicators
2009 Market Share
Global ARPU (EGP)
65
60
38.14%
48
40
155
2735
2718
2,7
725
2,490
0
125
2,64
44
1,500
2,66
64
140
2,441
1
2,000
2,254
Q4 08
Q
Q3 08
Q
Q2 08
Q
Q1 08
Q
Q4 07
Q
Q1 07
Q
2,500
2,136
40
38
37
Global AUPU
170
2,243
39
20
3,000
2,083
44
25
Global Revenue (M EGP)
1,786
47
30
19.91%
161
144
125
140
132
129
145
136
142
141
136
127
110
95
0
Q4 09
Q3 09
Q2 09
Q1 09
Q4 08
Q3 08
Q2 08
Q1 08
Q4 07
Q3 07
Q2 07
Q4 09
Q3 09
Q2 09
Q1 09
Q4 08
Q3 08
Q2 08
Q1 08
Q4 07
Q3 07
Q2 07
Q1 07
80
Q1 07
500
47
35
Etisalat
1,000
47
Q4 09
Q
45
Q3 09
Q
55
Q3 07
Q
41.95%
59
Q2 09
Q
Vodafone
59
Q2 07
Q
Mobinil
50
Q1 09
Q
55
page 28
Prepaid subscriber base
•
The Egyptian mobile market is predominantly a prepaid market – with 97% of the subscriber
•
Average revenues per user (ARPU) is taking a declining trend as new low value clients are
base being prepaid customers.
added, however total revenues have increased based on subscribers growth.
Revenue / Average Revenue Per User
Revenues without connection fees, roaming revenue and equipment sales
page 29
Post-paid subscriber base
•
•
Post paid subscribers represent a minority, accounting for some 667k of Mobinil’s total
subscriber base.
Post paid ARPU has shown a recent decline as a result of price reductions in Mobinil
Mobinil’ss offering –
this market remains somewhat price inelastic and hence price declines were not matched with
increased usage (tariff reductions were viewed to be necessary to reduce the gap between
prepaid
p
p
and p
postpaid
p
tariffs).
)
Revenue / Average Revenue Per User
Revenues without connection fees, roaming revenue and equipment sales
page 30
Summary financials – P&L
(EGP in Millions)
Total operating revenues
2005
2006
2007
2008
2009
857
1,114
1,286
1,660
1,907
5,364
Depreciation & Amortization
Other operating expenses
Operating Income
6,362
10,015
10,807
(2,610)
(3,146)
(4,548)
(5,333)
(5,686)
(85)
(138)
(92)
(554)
(641)
1,897
Other Income/expenses
8,248
2,102
2,414
3,022
3,214
Net profit before tax
1 812
1,812
1 964
1,964
2 322
2,322
2 468
2,468
2 573
2,573
Net Income for the year after tax
1,444
1,527
1,825
1,969
2,038
Earnings per share
13.14
14.11
16.93
18.16
20.27
Income tax
(368)
Minority interest
(437)
0.36
(497)
1.3
(499)
1.6
(535)
(1.2)
(0.4)
Some figures have been changed for comparative purpose
Revenue (EGPm) / Revenue Growth
25%
21%
19%
20%
6,000
4,000
8,248
8
10,015
2005
2006
2007
2008
10,807
6,362
6
0
8%
5,364
5
2,000
5,000
2009
15%
24%
4,000
25%
17%
3,000
10%
2,000
5%
1,000
0%
0
30%
20%
14%
9%
5,122
19%
30%
27%
4,681
8,000
6,000
3,673
10,000
35%
3,216
30%
2,754
12,000
EBITDA (EGPm) / EBITDA Growth
2005
2006
2007
2008
2009
15%
10%
5%
0%
page 31
Summary financials – Balance Sheet
(EGP in Millions)
Current assets
2005
2006
2007
2008
2009
5,522
6,408
8,706
12,070
12,770
4,484
5,429
6,000
923
Long term assets
968
1,347
Total assets
6 445
6,445
7 376
7,376
10 053
10,053
Long term liabilities
1,751
2,161
3,814
Current liabilities
3,157
Total liabilities
Total shareholders equity (inc minority interest)
Cash
Accounts receivable
Accounts payable
4,908
5,743
415
650
814
177
232
264
1,775
1,053
2,268
4,961
10,961
1,755
282
5,987
14 639
14,639
11,416
1,633
440
13 658
13,658
1,869
8,298
1,537
906
Borrowing (ST+LT)
3,582
1,588
2,242
253
1,271
2,087
4,129
5,550
3,679
303
2,521
4,980
Net Debt Development (EGPm) / Net Debt / EBITDA
6,000
Net Debt
Net Debt/EBITDA
4,000
1.05
0.62
0.81
100%
3,7
715
4,9
900
4,1
166
50%
1,9
987
0
1.01
1,3
335
2,000
0.48
150%
2005
2006
2007
2008
2009
0%
page 32
Summary financials – Cash Flow
(EGP in Millions)
Net Income
2005
2006
2007
2008
2009
857
1,114
1,286
1,660
1,907
1,444
Depreciation & Amortisation
Other reconciliation adjustments
j
(net)
1,527
(44)
Cash flow from operating activities
1,825
221
2,257
200
2,862
3,311
1,969
2,038
(73)
97
3,556
4,042
Capital expenditure
(1,441)
(1,959)
(2,806)
(2,671)
(2,241)
Cash flow from investing activities
(1 608)
(1,608)
(2 082)
(2,082)
(3 252)
(3,252)
(3 532)
(3,532)
(2 365)
(2,365)
2,677
1,820
750
(167)
(1,040)
(1,521)
(1,045)
(142)
440
129
45
74
(872)
Cash balance year end
0
(408)
Interest (EGPm) / (FFO/Interest Cover)
Interest Expense
40
25.1
15.9
20
6.2
5.5
129
166
124
587
724
2005
2006
2007
2008
2009
(8)
(265)
(1,197)
(932)
(417)
(1,517)
206
(1,699)
276
254
0
(83)
0
230
(21)
FFO (EGPm) / (FFO / Net Debt)
6,000
172%
4,000
2,000
0
0
FFO
FFO/Net Debt
133%
84%
74%
95%
3,945
3
Net change in cash
500
(631)
790
46
Cash flow from financing activities
17.8
(1,771)
(124)
3,630
3
Oth Fi
Other
Financing
i ((net)
t)
FFO/Interest
(1,501)
979
Repayments of borrowings
1,000
(1,915)
(861)
3,110
3
Proceeds of borrowing
(446)
2,641
2
Dividends paid
(123)
2,301
2
Other investments (net)
2005
2006
2007
2008
2009
200%
100%
0%
Funds From Operations (FFO) calculated by adding depreciation and amortization expenses to earnings.
page 33
Financial return ratios
Mobinil continues to develop strong returns for its stakeholders.
Return metrics
120%
100%
94%
93%
58%
55%
104%
88%
80%
60%
55%
43%
40%
20%
22%
21%
18%
2005
2006
2007
37%
37%
14%
14%
2008
2009
0%
ROE
ROA
ROCE
page 34
Investing into the future
Capital Expenditure / Subs Addition
Millions
C
Capex
2000
6,000
4,000
2 571
2,571
1,959
2,806
2,671
2,241
2 680
2,680
2005
2006
2007
2008
2009
0
Capex / Revenue
• Capex
expenditure in
line with
subscriber base
growth
2,000
0
Capex / Net Adds (EGP)
900
40%
800
30%
20%
5,239
4,998
1,441
1000
5,851
Subscribers Additions
8,000
,
Thousands
3000
27%
31%
801
700
34%
27%
10%
600
21%
692
635
500
558
499
400
300
0%
200
2005
2006
2007
2008
• High Capital investment to meet growing capacity
requirements
2009
2005
2006
2007
2008
2009
• Reduced Capex expenditure per new add excluding 3G
increment in 2008
page 35
Performance measures
Revenue Per Line
8,000
Line per employee
800
687
546
498
426
2005
2006
2007
2008
2009
2,000
EBITDA Margin
18.9%
%
• Commensurate with other operators Mobinil maintains
strong EBITDA margins of between 45 - 50%.
19.7%
%
2009
0.0%
22.1%
%
47.4%
2008
2009
24.0%
%
46.7%
2007
2008
26.9%
%
44.5%
10 0%
10.0%
50.5%
45 0%
45.0%
51.3%
20.0%
2006
2007
2,000
Net Income Margin
30 0%
30.0%
2005
2006
2,500
• Efficiency
ffi i
h
has shown
h
significant
i ifi
iincrease.
50.0%
40.0%
2,065
2005
• R
Revenue per line
li has
h declined
d li d as the
th subscriber
b ib base
b
h
has
increased.
55.0%
2,471
7,568
8
801
3,000
6,418
8
400
2,870
5,267
7
4,000
3,243
600
200
Employee
6,000
3,500
3,350
3 134
3,134
3,750
0
1000
Lines per Employee
2005
2006
2007
2008
2009
• Return on sales has been impacted by imputed interest, 3G
revenue sharing obligations and license amortization.
page 36
Stock performance
12.86
13.14
14.11
16.93
12 10
12.10
18.16
20.26
11.87
8.09
20.00
15 00
15.00
10.00
6.00
4.00
5.00
0.00
0.00
2.00
2005
2006
2007
2008
2009
300
Stock Price
EPS
250
200
13.14
14.11
16.93
18.16
20.26
150
0
20
10
100
50
25
15
240.5
8.00
25.00
15.25
12.00
10.00
EPS (EGP)
146.9
14.00
P/E
204.9
16.00
a cautious approach to maintain our strong Balance Sheet against market turmoil.
181.4
18.00
Mobinil will continue to focus on maximizing shareholders’ wealth via dividend distribution with
200.2
•
2005
2006
2007
2008
2009
5
0
page 37
Dividend policy
First payment declared post first half with payment made in September.
Second payment declared post 3rd quarter with payment made in December.
December
Third payment declared after annual results with payment made in March / April.
The employees profit share is 10% of the distributed profit (required under Egyptian Law) with
a maximum of annual gross salary.
Mobinil expects to maintain a degree of flexibility in dividend policy as required (this was
demonstrated in 2008 and 2009 when dividend payout was reduced to enhance cash flow
flexibility, secure capital growth, payment for 3G license and Link dot net anticipated
acquisition).
20.0
15.0
Total Dividend Payout / Dividend Per Share (EGP)
95%
99%
99%
70%
150%
100%
-
2005
2006
2007
2008
DPS
10%
2
5.0
12.7
10.0
16.7
•
–
–
–
14.0
•
Mobinil has no formal declared dividend policy, however over the past 6 years the company has
made 2 interim payments preceding the final payment per year
12.4
•
0%
50%
0%
2009
Dividends Payout Ratio
page 38
Funding and liquidity policy
•
•
•
•
Mobinil adopts a conservative funding policy which aims to minimise currency risk (borrowings
in Egyptian Pounds where possible) and match the life of assets as possible.
Mobinil maintains no exposure to banking institutions in that cash is immediately offset against
existing bank overdrafts / revolving facilities.
Mobinil’s operations generate gross monthly cash flows of between EGP700-800m.
Mobinil seeks to have funding in place at least one month prior to any known or expected
expenditure.
dit
Cash collection
• Collections against
g
post-paid invoices, Prepaid cards and sale of new lines are
made at Banks, shops, home collection, E-payment and ATM providing a wide
variety of collection sources.
• Only certified checks are accepted.
Cash concentration
• Cash deposited in interest bearing bank account on daily basis and reconciliation
is made to assure the proper recording.
• Cheques deposited at a bank that accelerates clearing process and invests
available cash in secured assets with the minimum risk.
Cash disbursements
• 60-90 days from invoices presentation via checks or wire transfers.
page 39
Local bond
On 31st of Dec 2009 ECMS published a PSN for local bond issuance with the following conditions:
Issuance type
Straight Bond Issuance (“Bond”)
Issuance size
EGP 1.5 Billion
Issuance volume
15 Million bonds.
bonds (14 Million Private placement and 1 Million public)
Bonds value
EGP 100 per bond
Issuance rating
(A), (Entity Rating A+)
Maturity and repayment
5 years Bullet repayment at Maturity
Bond status and security
y
Senior unsecured unsubordinated obligations ranking at least pari passu with all
other p
present and future senior obligations
g
of the Issuer other than obligations
g
preferred by law
Interest / Coupon rate
Fixed interest of 12.25% per annum to be paid on a semi-annual basis in arrears
Financial covenants
Net Debt /EBITDA ratio to be equal to or lower than 3.0x.
3 0x
Issuance purpose
Financing the capital expenditures, network expansion and repayment of part of
the bank’s short term facilities.
Prepayment is available for part or all of the issuance at the last 2 years of the
bond
page 40
Funding profile
•
Mobinil’s four long term bank facilities:
Facility
Size
Signed
Maturity
Facility 1
EGP1.8bn
2005
2013
Facility 2
EGP2.3bn
2007
2014
Facility 3
EGP2.2bn
2008
2015
Facility 4
EGP 610mn
2009
2014
Terms
3 year grace period, 11 semi annual payments of
EGP163.5m, final payment of EGP165m
EGP460m due after year 5, EGP690m due after year 6
and
d EGP1150m
EGP1150 due
d after
ft year 7
EGP80m due August 2010 followed by 9 semi annual
instalments of EGP 235.5m
2 years Grace period,6
period 6 semi annual payments of EGP
101.7m
Debt maturing profile – Long term debt
page 41
Leading from the top
Our driving force behind the scenes
Alex Shalaby
Chairman, Egyptian Company
for Mobile Services (ECMS) –
Mobinil Telecommunications SAE
Ahmed El Bardei
CEO REEFY Company;
p
gp
public
Representing
shareholders on ECMS BoD
Nadia Makram Ebeid
ecut e Director,
ecto , Center
Ce te for
o
Executive
Environment & Development for
the Arab Region & Europe;
representing public shareholders
on ECMS BoD
Aldo Mareuse
Group CFO, Orascom Telecom
g
Holding
Representing Orascom Telecom
Holding on ECMS BoD
Naguib Sawiris
Chairman,
C
a a ,O
Orascom
asco
Telecom Holding
Representing Mobinil
Telecommunications in the
ECMS BoD
Bertrand du Boucher
Claude Benmussa
VP Finance and Strategy for
Senior Advisor Price Water House
p and Middle East
((PWH);
);
Europe
Telecommunications on ECMS BoD Telecommunications on ECMS BoD
Olaf Swantee
Senior Executive VP, Personal
C
Communication
i i SServices
i
and
d
UK/EME Operations
Telecommunications on ECMS
BoD
Onsi Sawiris
C a a ,O
Chairman,
Orascom
asco G
Group
oup o
of
Companies; Representing as
Honorary Chairman on ECMS
BoD
David Hobley
Managing Director, Deutsche Bank
AG,, London;;
Telecommunications on ECMS BoD
Hassan Kabbani
CEO, Egyptian Company
for Mobile Services (ECMS) –
Mobinil Telecommunications SAE
Isabelle Hautot
s Isabelle
sabe e Hautot
autot iss currently
cu e t y
Mrs.
General Counsel, International
Affairs of France Telecom
Orange Group and honorary
member of the Paris Bar.
Sheikh Fahd El Shobokshi
C a a , Nile
Chairman,
eC
City
ty Investment
est e t
Representing public shareholders on
ECMS BoD
page 43
Our competent and strong executive team has positioned Mobinil
market leader
Hassan Kabbani
CEO
Audette Hanna
VP, Human Resources
Yasser Asaad Radwan
VP, Commercial
Khalid Ellaicy
VP, Finance
Rana Abbadi
VP, Quality and
Corporate Support
Magdy Gabra
VP Enterprise Market
Mohamed Nabih
VP, Corporate
Strategy and Business
Development
Marwan Hayek
VP, Technology
page 44
We will always lead and
others
th
will
ill follow…
f ll
Mobinil remains the leader
the market trend setter
page 45
Q&A

The Egyptian Company for Mobile Services “Mobinil”

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