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Investor Presentation
March 2014
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Disclaimer
This presentation contains forward-looking statements about Global Telecom Holding (“GTH”). Such
statements are not historical facts and include expressions about confidence and strategies of
management and expectations of management about new and existing programs, technology and market
conditions. Although GTH believes its expectations are based on reasonable assumptions, these forwardlooking statements are subject to numerous risks and uncertainties. These statements may not be
regarded as a representation that anticipated events will occur or that expected objectives will be
achieved. The forward-looking statements in this presentation are only valid until the date of this
document and GTH 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 presentation is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall
there be any offer or sale of securities in any jurisdiction in which such offer or sale would be unlawful
prior to registration or qualification under the securities laws of such jurisdiction.
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Investor Presentation
© Global Telecom Holding S.A.E. 2014
Agenda
3
 4Q13 Highlights
4
 Shareholder Structure
5
 Global Presence
6
 Market Position
7
 GTH Operations
8
 Appendix
22
Investor Presentation
© Global Telecom Holding S.A.E. 2014
4Q13 Highlights
Customers1&2
Total Revenues3
89
4Q12
4Q13
Djezzy1: Despite the on-going
regulatory restrictions and limitations on
2G, Djezzy increased the customer base
by 5% YoY to 17.6 million
Mobilink: Customers grew 4% YoY to
37.6 million, as a result of continued
churn management coupled with a focus
on reactivation offers, the launch of
competitive on-net bundles and data
products
banglalink: Customers’ base increased
11% YoY to 28.8 million customers,
driven by high gross additions, following
the launch of different attractive channel
and customer promotions
6%
Organic
4Q12
47.7%
46.8%
908
84
Group EBITDA3 & EBITDA
Margin
834
425
4Q13
4Q12
Group revenues were adversely impacted
by the local currency devaluation against
the USD, mainly in Pakistan and Algeria
Djezzy: Revenue decreased 3% YoY in
local currency, negatively impacted by
the restrictions on Djezzy’s commercial
activities and propositions with the
ongoing ban
3%
Organic
397
4Q13
Reported EBITDA in US dollar decreased
7% YoY to USD 397 million
Djezzy: EBITDA decreased 4% YoY in
local currency, due to the continued lack
of competitive pricing plans for B2B and
high value customers, in parallel with the
increase in network and IT costs
Mobilink: Revenue decreased 6% YoY in
local currency, adversely affected by
outages due to Mobilink’s network swap,
unstable security situation, higher
withholding taxes, and government
requested network shutdowns, and
higher power outages
Mobilink: EBITDA decreased 18% YoY in
local currency, pressure on top line,
higher tax absorption due to the
increased sales of low price SIMs,
partially offset by lower interconnect cost
due to lower outgoing traffic to other
operators as a result of attractive on-net
offers
banglalink: Revenue decreased 11%
YoY in local currency, driven by unstable
macro environment alongside the
disconnection of suspected VoIP
customers as per regulatory measures
banglalink: EBITDA decreased 20% YoY
in local currency, mostly as result of
revenue decline, higher customer
acquisition costs and dealer commission
on additions
1. As announced on July 1 2013, during an internal investigation with regards to Djezzy’s active customers, management found a technical bug that overstated Djezzy’s
customer base by 1.4 million. The customers’ base comparative figures for 4Q12 were adjusted accordingly. This event does not impact historical reported revenue or
EBITDA, but positively affect MOU and ARPU
2. Total customers in Millions
3. Group indicators in USD Millions
4
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Shareholder Structure
ALTIMO
56.2% (Economic)
33.0% (E)
10.8% (E)
47.9% (Voting)
43.0% (V)
9.2% (V)
100.0%
OJSC
VIMPELCOM
5
VIMPELCOM
FREE FLOAT
TELENOR
100.0%
KYIVSTAR
100.0%
WIND ITALY
51.9%
GTH
GTH
FREE FLOAT
48.1%
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Global Presence1
GTH serves a population of approximately 459 million with an average penetration of 57%
BANGLADESH
CANADA2
Population: 34.6 million
GDP Growth: 1.7%
GDP/Capita PPP: USD42,300
Pop. Under 15 years: 15%
Mobile Penetration: 85%
Population: 163.6 million
GDP Growth: 6.1%
GDP/Capita PPP: USD2,000
Pop. Under 15 years: 33%
Mobile Penetration: 70%
PAKISTAN
ALGERIA
Population: 38.1 million
GDP Growth: 3.3%
GDP/Capita PPP: USD7,300
Pop. Under 15 years: 28%
Mobile Penetration: 88%
ZIMBABWE
Population: 13.2 million
GDP Growth: 4.4%
GDP/Capita PPP: USD600
Pop. Under 15 years: 39%
Mobile Penetration: 71%
1. Figures from CIA factbook. Mobile Penetration are based on December 31, 2013 customers’ figures and market share
2. GTH has 65% indirect economic ownership in Globalive Investment Holding Canada, but a minority voting stake
6
Population: 193.2 million
GDP Growth: 4.4%
GDP/Capita PPP: USD3,100
Pop. Under 15 years: 34%
Mobile Penetration: 68%
BURUNDI
Population: 10.9 million
GDP Growth: 4.0%
GDP/Capita PPP: USD600
Pop. Under 15 years: 46%
Mobile Penetration: 24%
CENTRAL AFRICA
REPUBLIC
Population: 5.2 million
GDP Growth: 4.1%
GDP/Capita PPP: USD900
Pop. Under 15 years: 41%
Mobile Penetration: 18%
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Market Position
Algeria:
Despite limitations, Djezzy remains a profitable market leader with significant mobile data potential
Pakistan:
Mobilink leads the market, and has great potential for revenue growth through mobile data,
MFS and VAS
Bangladesh:
In a large market with low penetration levels, banglalink is a leading operator with strong focus on
increasing value share in a rapidly growing market
Telecel Globe:
Leading positions in markets with low penetration levels, healthy APPM, and high growth potential.
Internet is a mobile story in Africa
Canada:
WIND Mobile continues its "Value Plus" strategy execution, adding primarily postpaid subscribers
while carefully managing prepaid economics for both voice and mobile broadband customers
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Investor Presentation
© Global Telecom Holding S.A.E. 2014
Algeria
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Investor Presentation
© Global Telecom Holding S.A.E. 2014
Djezzy - Overview
Macro environment
• GDP growth for FY 2012/2013 of ~2.5%
• Government, trade and agricultural sectors
• Djezzy continues to face stringent
• 28% of the population is under 15 years old
• Presidential elections expected to
• Djezzy awarded a 3G license in December
account for over 60% of GDP
Population1: 38 million
GDP/capita1: USD 7,300
Regulatory environment
conditions from regulator commercial
activities and propositions
2013 and received an exceptional approval
from the Bank of Algeria for foreign
payments for 3G equipment
commence in April 2014
• Government plans to list 10 public
Market size2: 33.4 million
Penetration2: 88%
Market players (subs):
• Djezzy (17.6 million)
• Mobilis (8.4 million)
• Ooredoo (7.4 million)
companies on ASE, including Mobilis
• Djezzy: high brand perception with solid
market leadership with high control over
distribution
• Mobilis: incumbent operator maintained by
Market shares3
22%
Djezzy
53%
25%
Mobilis
Ooredoo
Strategic direction
Competitive landscape
the government, has a strong relationship
with the regulator and has been very active
on the commercial front lately
• Ooredoo: seen as a multimedia operator
• Launch 3G services in 2Q14 targeting high
value data users
• Maintain leadership in customer experience
and NPS
• Emphasize Djezzy as the preferred Algerian
mobile brand while launching 3G
• Maintain a solid network performance from
that offers lower prices, more promotions,
subsidies and higher incentives to the retail
channel
1. CIA factbook
2. Penetration figures are provided based on OTA closing base and our data warehouse (DWH) figures for competition
3. DWH market share
9
3G roll out and 2G network modernization
and expansion
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Djezzy - KPIs
Mobile Customers1 (Millions)
14.1
2008
14.6
2009
15.1
2010
16.2
17.6
16.7
EBITDA (DZD Billions) &
EBITDA Margin
Revenues (DZD Billions)
134.7
135.6
129.3
135.6
143.3
143.1
58.5%
2011
2012
2013
2008
2009
2010
CAPEX2 (DZD Billions) &
CAPEX/Revenue
2011
2012
2013
54.0%
53.2%
78.8
73.2
68.7
2008
2009
2010
59.3%
59.4%
58.7%
80.4
85.2
84.0
2011
2012
2013
Operating Cash Flow3 (DZD Billions)
19.0
14.0%
67.9
54.3
10.8
6.9
8.1%
5.4%
2009
2010
80.7
77.3
2011
2012
2013
61.8
6.7
2.9
2.2%
2008
77.5
2011
4.5
6.2%
3.1%
2012
2013
2008
2009
2010
Note: Foreign exchange rate DZD 79.6587/ USD 1
1. As announced on July 1 2013, during an internal investigation with regards to Djezzy’s active customers, management found a technical bug that overstated Djezzy’s customer
base by 1.4 million. The customers’ base comparative figures were adjusted accordingly. This event does not impact historical reported revenue or EBITDA, but positively affect
MOU and ARPU
2. CAPEX figures excluding license fees and may differ from previously released figures
3. Operating Cash Flow is EBITDA less CAPEX
10
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Pakistan
11
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Mobilink - Overview
Macro environment
Population1: 193 million
GDP/capita1: USD 3,100
Market size2: 132.3 million
Penetration: 68%
Market players (subs):
• Mobilink (37.7 million)
• Telenor (33.0 million)
• Ufone (25.0 million)
• Zong (23.7 million)
• Warid (12.9 million)
Mobilink
10%
18%
29%
Telenor
Ufone
Zong
19%
1. CIA factbook
25%
• GDP growth for FY 2012/2013 of ~3.7%
• New PTA chairman appointed in 4Q13
• Continued devaluation of the Rupee against
• 3G/4G auction planned in April 2014
• Government increased withholding tax on
the USD
• Power shortfalls persist
• 34% of the population under 15 years old
• New government elected and in place since
May 2013, working on achieving political
stability and economic reform
Competitive landscape
Warid
• Trends of fewer forced network shutdowns
Strategic direction
• Continued focus on network modernization
• Telenor: value-driven operator with strong
• Further enhance operational excellence
• Ufone: positive mass market perception
• Retain leadership in mobile data
• Capture market opportunity in MFS
• Enhance customer experience through
market
and aggressive pricing strategy
• Zong: aggressive on pricing and market
share gain
• Warid: conducting due diligence to exit the
market
2. Market share as provided by the regulator as of November 30, 2013
12
recharge to 15% and also increased
commercial electricity tariffs by 30%
effective October 1, 2013
• Mobilink: market leader in a five player
market position via youth, mobile data
offers and MFS
Market shares2
Regulatory environment
to achieve 3G readiness
initiatives
better quality of service
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Mobilink - KPIs
28.5
2008
30.8
2009
31.8
2010
36.1
33.4
37.6
87.8
2011
2012
EBITDA (PKR Billions) &
EBITDA Margin
Revenues (PKR Billions)
Mobile Customers (Millions)
2008
2013
86.9
2009
94.3
97.9
105.8
107.6
43.1%
40.2%
2010
CAPEX1 (PKR Billions) &
CAPEX/Revenue
2011
2012
2013
35.3
36.5%
31.7
2008
2009
39.6%
37.3
2010
18.9
23.0%
14.7%
12.9%
12.8
12.2
2009
2010
16.3%
22.6
2011
25.0
17.5
18.4%
17.2
19.8
2012
2013
Note: Foreign exchange rate PKR 101.5918/ USD 1
1. CAPEX figures excluding license fees and may differ from previously released figures
2. Operating Cash Flow is EBITDA less CAPEX
13
2011
28.4
25.2
2008
40.0
Operating Cash Flow2 (PKR Billions)
42.9%
37.7
40.9%
2008
-2.4
2009
2010
2011
2012
2013
41.6%
45.6
44.8
2012
2013
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Bangladesh
14
Investor Presentation
© Global Telecom Holding S.A.E. 2014
banglalink - Overview
Macro environment
Population1: 164 million
GDP/capita1: USD 2,000
•
•
•
•
GDP growth for FY 2012/2013 of ~6%
1%
7% 3%
BDT continued to appreciate against the
USD
22%
Grameenphone
Robi
Airtel
42%
Citycell
Teletalk
2013
300 from BDT 606 during 2Q13
Competitive landscape
• banglalink: 2nd in a six player market with
•
•
•
•
an innovative brand positioning among
youth segment
Grameenphone: largest network,
perceived as best in quality and coverage
Robi: aggressive on prices and
communication
Airtel: mainly focused on youth
CityCell: CDMA operator
TeleTalk: Run by national fixed incumbent
BTCL
1. CIA Factbook
2. Penetration figures are provided based on BTRC published figures
3. BTRC market share as at January 31, 2014
15
• banglalink launched 3G services in October
• The government reduced SIM tax to BDT
•
bangalink
25%
September 2013 during an auction for 8
blocks of spectrum, each consisting of 5
MHz (uplink and downlink). 5 of the 8
blocks were awarded
33% of the population under 15 years old
Market size3: 114.8 million
Penetration2: 70%
Market shares3
• Four 3G licenses were awarded in
The world’s highest population density
• Unstable macro environment
Market players (subs):
• GP (47.6 million)
• banglalink (28.9 million)
• Robi (25.6 million)
• Airtel (8.3 million)
• CityCell (1.4 million)
• TeleTalk (2.8 million)
Regulatory environment
Strategic direction
• Capitalize on introduction of 3G and
•
•
•
•
maximize revenue from mobile data
segment
Improve Revenue Market Share
Grow beyond the core and expand on MFS
and VAS fronts
Maintain price leadership strategy
Focus on spectrum optimization, network
sharing and modernization
Investor Presentation
© Global Telecom Holding S.A.E. 2014
banglalink - KPIs
Mobile Subscribers (Millions)
23.8
25.9
EBITDA (BDT Billions) &
EBITDA Margin
Revenues (BDT Billions)
45.4
28.8
34.2%
39.4
38.0
19.3
20.0
13.9
34.7%
29.2%
32.0
24.0
37.1%
28.1%
15.7
14.6
2012
2013
13.0
10.3
7.0
9.0
0.4
2008
2009
2010
2011
2012
2013
2008
2009
2010
CAPEX1 (BDT Billions) &
CAPEX/Revenue
2011
2012
2013
2.0%
2008 2009
2010
2011
Operating Cash Flow2 (BDT Billions)
28.6
5.5
143.0%
2008
1.1
16.4
11.9
8.7
36.3%
51.1%
2009
2010
31.3%
2011
10.2
10.3
22.6%
26.3%
2012
2013
Note: Foreign Exchange Rate BDT 78.0784/ USD 1
1. CAPEX figures excluding license fees and may differ from previously released figures
2. Operating Cash Flow is EBITDA less CAPEX
16
2008
-28.2
2009
-1.7
2010
-7.4
2011
2012
4.3
2013
Appendix
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Debt Profile
Debt by Entity
1%
Debt by Currency
Debt by Entity
1%
8%
4%
GTH
GTH
Pakistan
198
Pakistan
Bangladesh
412
Bangladesh
Algeria
47
Others
32
Algeria
87%
4,495
Total
11%
USD
Local
5,184
Others
89%
Gross & Net Debt (USD Millions)
5,184
4,757
2,838
2,026
Gross Debt
Cash
4Q13
18
2,346
2,731
Net Debt
4Q12
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Income Statement
USD thousands
Revenue
4Q13
4Q12
Change
FY13
FY12
Change
(8%)
(5%)
833,589
908,345
3,447,412
3,626,767
Other Income
12,889
16,062
23,050
33,933
Total Expense
(448,931)
(505,262)
(1,813,862)
(1,912,155)
Net unusual Items
EBITDA1
Depreciation and Amortization
-
6,358
397,547
425,503
-
6,113
1,656,600
1,754,658
(270,108)
(174,260)
(772,986)
(705,096)
2,843
(6,979)
(6,132)
(12,269)
(6,696)
(12,722)
(8,152)
(17,862)
Impairment of Non-Current Assets
Gain (Loss) on Disposal of NonCurrent Assets
Impairment of Assets Held for Sale2
(10,687)
-
Operating Income
112,899
231,542
(128,747)
(124,726)
Financial Expense
Financial Income
(7%)
n.m.
(57,964)
-
811,366
1,019,431
(503,270)
(457,858)
11,344
21,433
42,872
77,090
(23,023)
(89,471)
(269,406)
(74,139)
(38,698)
(26,234)
(139,155)
(103,279)
(625,429)
(339,126)
(625,429)
(339,126)
-
(74,399)
-
(74,399)
(691,654)
(400,981)
(57,125)
(67,925)
(748,779)
(468,906)
(748,779)
Equity Holders of the Parent5
(USD/GDR)6
Foreign Exchange Gain (Loss)3
Share of Profit (Loss) from
Associates
Impairment of Financial Assets4
Other non-operating cost
Profit Before Tax
Income Tax
Profit from Continuing
Operations
Profit for the Period
n.m.
(6%)
n.m.
(683,022)
47,720
(241,300)
(253,480)
n.m.
n.m.
(924,322)
(205,760)
n.m.
(468,906)
n.m.
(924,322)
(205,760)
n.m.
(754,048)
(473,364)
n.m.
(944,320)
(224,928)
n.m.
(0.71)
(0.45)
n.m.
n.m.
5,269
5,457
(748,779)
(468,906)
Attributable to:
Earnings Per Share
Minority Interest
Net Income
19
n.m.
(0.88)
(0.20)
19,998
19,168
(924,322)
(205,760)
n.m.
Footnotes:
1. Management presentation developed from IFRS
financials
2. GTH fully impaired its assets in Canada by USD 619
million, mainly relating to the challenges the Group
is facing in the country, which resulted in the
strategic decision to withdraw from the 700 MHz
spectrum auction and the reassessment of the
prospects for continuing operations in the country
3. Impairment of assets held for sale by USD 58
million, as to reflect the fair value of our operations
in CAR and Burundi, which amounted to USD 100
million
4. Foreign exchange loss incurred during 4Q13 is
mainly driven by the unrealized foreign exchange
losses resulting from the revaluation of the
shareholder loan from VimpelCom, due to the
appreciation of the US dollar against the Egyptian
pound, which was offset against unrealized foreign
exchange gains that resulted from the revaluation
of Globalive (WIND Mobile Canada) loan receivable
balance as of 4Q13
5. Equates to net income after minority interest.
6. Based on a weighted average for the outstanding
number of GDRs of 1,049,138,124
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Balance Sheet
USD thousands
31 December
2013
31 December
2012
Assets
Property and Equipment (net)
2,043,998
2,493,620
Intangible Assets
1,425,596
1,448,712
88,194
858,099
Total Non-Current Assets
3,557,788
4,800,431
Cash and Cash Equivalents
2,838,448
2,025,844
Trade Receivables
225,641
233,477
Assets Held for Sale
170,380
-
1,153,541
1,064,216
Total Current Assets
4,388,010
3,323,537
Total Assets
7,945,798
8,123,968
801,168
1,572,681
95,214
74,492
896,382
1,647,173
Long Term Debt
151,010
4,074,700
Other Non-Current Liabilities
189,669
232,956
340,679
4,307,656
5,033,091
682,643
Trade Payables
814,643
695,624
Other Current Liabilities
861,003
790,872
6,708,737
2,169,139
7,049,416
6,476,795
Total Liabilities and Shareholder’s Equity
7,945,798
8,123,968
Net Debt1
2,345,653
2,731,499
Other Non-Current Assets
Other Current Assets
Equity Attributable to Equity Holders of the Company
Minority Share
Total Equity
Liabilities
Total Non-Current Liabilities
Short Term Debt
Total Current Liabilities
Total Liabilities
Footnotes:
1. Net debt is calculated as a sum of short term debt, long
term debt, less cash and cash equivalents
20
Investor Presentation
© Global Telecom Holding S.A.E. 2014
Cash Flow Statement
USD thousands
31 December
2013
31 December
2012
Cash Flows from Operating Activities
Loss for the Period
(924,323)
(205,760)
Depreciation, Amortization and Impairment of Non-Current Assets
1,404,547
717,365
Income Tax Expense
Net Financial Charges
Share of Loss (Profit) of Associates
Impairment of Financial Assets
Other
Changes in Assets Carried as Working Capital
241,300
729,804
139,155
57,964
(44,236)
(241,863)
253,480
454,907
103,279
339,126
129,084
24,156
Changes in Other Liabilities Carried as Working Capital
Income Tax Paid
Interest Expense Paid
Net Cash Generated by Operating Activities
Cash Flows from Investing Activities
Cash Outflow for Investments in Property and Equipment,
Intangible Assets, and Financial Assets and Consolidated
Subsidiaries
Proceeds from Disposal of Property and Equipment, Subsidiaries
and Financial Assets
Advances and Loans made to Associates and other parties
Dividends and Interest Received
169,868
(8,748)
(252,560)
(113,495)
(500,793)
(114,911)
1,166,161
1,191,185
(547,658)
(412,481)
27,486
(16,478)
-
(161,313)
12,062
10,489
(508,110)
(579,783)
1,282,929
1,300,806
(1,152,367)
(881,948)
(2,386)
30,818
(79,429)
120,964
Net Cash generated by Financing Activities
158,994
460,393
Net Increase in Cash and Cash Equivalents
817,045
1,071,795
Cash included in Assets Held for Sale
(26,014)
(7)
21,628
(59,487)
Cash and Cash Equivalents at the Beginning of the Period
2,025,773
1,013,543
Cash and Cash Equivalents at the End of the Period
2,838,432
2,025,844
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Proceeds from loans, banks' facilities and bonds
Payments for loans, banks' facilities and bonds
Net Payments from financial liabilities
Net Change in Cash Collateral
Effect of Exchange Rate Changes on Cash and Cash Equivalents
21
Investor Presentation
Contacts
For your inquiries, please contact:
Mamdouh Abdel Wahab
Head of Investor Relations
E: [email protected]
T: +202 2461 5120/21
F: +202 2461 5055/54
W: www.gtelecom.com
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© Global Telecom Holding S.A.E. 2014