investor presentation fy 2010

8/3/2019 Investor Presentation FY 2010

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FY 2010


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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 and no representation or warranty, expressor implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions

contained herein. The information set out herein is subject to updating, completion, revision, verification and amendment and such information

may change materially. The Company is under no obligation to update or keep current the information contained in this material or in the

presentation to which it relates and any opinions expressed in them is subject to change without notice. None of the Company or any of their

respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising

from any use of this document or its contents, or otherwise arising in connection with this document.

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 your information and background 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 (excluding the relevant persons professional advisors) or published in whole or in part for any purpose without the prior written consent

of the Company.

This presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts,

statements regarding the Companys intentions, beliefs or current expectations concerning, among other things, the Companys results of

operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-

looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the

future. The Company cautions you that forward looking statements are not guarantees of future performance and that its actual results of

operations, financial condition and liquidity and the development of the industry in which the company operates may differ materially from those

made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Companys results of operations,

financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking

statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The

Company does not undertake any obligation to review or confirm analysts expectations or estimates or to release publicly any revisions to any

forward-lookingstatements to reflect events that occur or circumstances that arise after the date of this presentation.

Disclaimer


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FY2010


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6 Fact Sheet Fixed Voice & Mobile Internet & DataWholesale Submarine Cable Vodafone Egypt

Telecom Egypts Retail Business

Retention of ARPU customers:

Promotional offers & bundles

Introduction of triple play services

Interconnection cost reduction to offer more competitive rates

Defend Voice Revenue Responding To Aggressive Market Competition

1

Customers can subscribe to (Kalam 12 tariff plan) to get 120

local minutes, 80 national minutes & 10 mobile minutes in

exchange of the current subscription fees with no additional

cost. They will be billed every 3 months as usual.

Residential Customers: a total discount of 300 L.E. (250 L.E. the

installation fees & 50 L.E. the administrative fees). Business Customers: a total discount of 550 L.E. (500 L.E. the

installation fees & 50 L.E. the administrative fees).

Lowest rate to mobiles from landline.

Customers Choose the bundle that best fits their needs

Starting from 100 L.E monthly, and they get:

Extra free minutes

Extra discount on international calls

Residential Customers

From May until July TE is offering its residential customers,

three months of free minutes and exemption on installation

fees. The offer is applied fro local, long distance and fixed to

mobile calls.

Residential Customers

Lowest Minute Rate.

only 15 Pt. for mobile to fixed calls (starts from the first

minute). This offer includes current and new customers.


7/187 Fact Sheet Fixed Voice & Mobile Internet & Data

Wholesale Submarine Cable Vodafone Egypt

80.0

123.5184.7

345.2

501.5

622.3

841.7

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Internet and Data TE Data

Internet & Data Revenue Growth (In EGP Millions)

Market Share ADSL (In EGP Millions) Differentiated Service Offering

Overview TE Data

Fully owned subsidiary of Telecom Egypt

Market leader with 63% market share Product

Portfolio includes:

Switched Access Services

Broadband Access Internet Services

Managed Access Services

Extensive marketing infrastructure tailored to focuson residential and business customers.

Operations in Egypt and Jordan

IP-TV (TE VU), Prepaid International Calling Cards -(Habayebna) , WiMAX Demonstration License & DataCenter Services.

TE Data and ART Ramadan TELive service is the firstof its kind where ICT and media really merge.

TE Data and Microsoft is the first of its kindpartnership in Egypt and the middle east, and the 6thworldwide to provide new innovative services to itscustomers based on Microsoft Live platform.9.2 27.3 92.3

222.2

424.4

625.2

883.2

26.5%30.5%

44.9%

52.0%

59.0%60.9%

63.0%

0

100

200

300

400

500

600

700

800

900

1000

10%

20%

30%

40%

50%

60%

70%

80%

FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Subscribers

Market Share

Revenue CAGR (2004-2010): 48.0%




Telecom Egypts International & Wholesale Growth

National

Services

Portfolio

International

Services

Portfolio

Offers wide range of national services, including:

Infrastructure and transport

Voice and data services

Collocation and Hosting services

Enables 60 million fixed and mobile subscribers and over onemillion broadband users.

Offers wide range of international services, including:

International voice conveyance services

International connectivity and data/IP services

Expanded network reach through partnerships with Tier-1international players ( AT&T, Verizon and TATA).

32% 39% 39% 48%42%

I&W Main

Customers

Segments

Mobile Operators

Data Operators

TE Retail

Submarine Cables

Wholesale Revenue Growth (In EGP Millions)

CAGR (2006-2010): 12.8%

Percentage of TEs Total Revenue

Main Customers Segments & Service Landscape

3,053

3,852 3,9364,197

4,939

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010




Submarine Cable Opportunity

International Customers BU Growth Pillars

Project Contractual Progress (In USD Millions)

# Cable IRU Value / TETransit Corridor

Asset Transfer /TEN

1 IMEWE 36

2 Seacom/TATA 40 43

3 EIG 50

4 TE North - CYTA 50

Total 126 93

Grand Total 219

Leverage TE national backbone and international infrastructure to

support TE international business

Diversify TE International Service Portfolio

Extend TEs international service portfolio by developing new

value added services

Leverage partnerships with global operators to enhance

international brand image

Expand TE International Reach

Expand TE international footprint by deploying PoPs and

expanding customer base

Identify opportunities for new business development (e.g. TE-

North expansion or deployment of new cable system)

Seek partnerships with international carriers to enter new

markets

Enhance Sales Capabilities Develop sales capabilities and enhance international account

management

1

2

3

Position TE as a regional Asia And East Africa gateway to Europe for

traffic originating from Asian, Middle-Eastern and African countries


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10 Fact Sheet Fixed Voice & Mobile Internet & DataWholesale Submarine Cable Vodafone Egypt

Telecom Egypts Position In The Mobile Sector

31.8 mn

43.2bn

1.2mn

30.6 mn

Number of Total Closing Subs

Total Voice Minutes

Number of Postpaid Subs (4%)

Number of Prepaid Subs (96%)

EGP 9.2 bn

EGP 1.7 bn

Revenue

Capex

EGP 2.1 bnNet Profit

EGP 1.35 bn contribution to TEs net profit in FY 2010

Increase in total closing customers year-on-year36%

Growth in total voice minutes51%

Revenue increase year-on-year

SolidFinancial&Operational

Performancein9M

2010*

* Vodafone Egypts Financial Year ending 31stMarch .

Operational Highlights 9M 2010

Financial Highlights 9M 2010 1%

Customers Enjoy

receiving unlimited

roaming minutes for

only LE I per minute

anywhere.

prepaid

customers can

send free 1500

SMS to any

Vodafone number

for only LE 4.

50% discount

on the internet

monthly

subscription

fees.

Make 3 min. to any

mobile or land line

and enjoy 5

minutes to any

Vodafone number.

Upon recharging,

customers enjoy from 3

to 30 free days to any

Vodafone Number.

In Ramadan, upon

recharging, customers

have a chance to win

free calls for a day or

month or free SMSs

to all Vodafone

numbers.


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FY2010


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12Income Statement Revenue

EBITDA Balance Sheet

Summary Income Statement Full Year YoY% Change

In EGP Millions FY 2010 FY 2009

Revenue 10,318 9,960 3.59%

EBITDA 4,865 5,048 -3.63%

Margin 47% 51%

EBIT 3,577 3,515 1.76%

Margin 35% 35%

Profit Before Tax & Minority Interest 3,804 3,510 8.36%

Margin 37% 35%

Net Profit 3,309 3,051 8.45%

Margin 32% 31%

EPS 1.72 1.64 4.87%

Note:All financial figures reported are based on Consolidated financials under Egyptian Accounting Standards

Summary Income Statement

Revenue (In EGP Millions)

NPAT Growth (In EGP Millions)

2,427 2,5342,790

3,0513,309

26% 25% 28%31% 32%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

NPAT NPAT Margin

CAGR (2006-2010): 2.0%

CAGR (2006-2010): 8.1%

9,517

9,99310,117

9,960

10,318

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010


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RevenueFull Year

YoY% ChangeIn EGP Millions FY 2010 FY 2009

Retail Services

Access:

Access Revenue 1,809 2,049 -11.72%

Voice:

Voice Revenue 2,124 2,618 -18.88%

Internet & Data 810 649 24.84%

Others 637 448 42.24%

Total Retail Revenue 5,379 5,764 -6.67%

Wholesale Services

Domestic:

Domestic Revenue 1,242 1,029 20.67%

International:

International Revenue 3,697 3,168 16.70%

Total wholesale Revenue 4,939 4,197 17.68%

Total Revenues 10,318 9,960 3.59%

Revenue Breakdown

FY 2010 Revenue Analysis


Revenue Mix ( In EGP Millions)

17%

21%

36%

12%

14%

Access

Voice

Int`l WS

Domestic WS

Internet & Others

6,4646,141 6,181

5,7645,379

3,0533,852 3,936 4,197

4,939

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Retail Wholesale

52%

48%


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10.32 2.30

1.022.14

4.86

22.2%9.9%

20.7%

47.1%

Sales Revenue Personnel Cost Interconnect Cost Other Opex EBITDA

( )Margin

( )

( )

CAGR (2006-2010): -2.0%

FY 2010

In EGP Billions

(% of Sales)

EBITDA Analysis

EBITDA (In EGP Millions)

5,2775,389

5,163 5,0484,865

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

EBITDA Margin (In Percent %)

55%54%

51% 51%47%

20%

25%

30%

35%

40%

45%

50%

55%

60%

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010


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Summary Balance Sheet Full Year YoY% Change

In EGP Millions FY 2010 FY 2009

Current Assets 9,126 7,220 26.40%

Net Fixed Assets 14,528 16,086 -9.68%

Long - Term Investments 7,515 7,731 -2.79%

Other Long -Term Assets 2,035 1,424 42.88%

Total Assets 33,204 32,461 2.29%

Curent Liabilities (Exc. STD) 4,194 4,093 2.49%

Bank Short-Term Borrowings 0 7 -100.00%

CPLTD 150 179 -16.07%

Long -Term Debt 725 858 -15.46%

Other Non-Current Liabilities 146 57 158.34%

Total Liabilities 5,216 5,193 0.45%

Total Equity & Minority Interest 27,988 27,268 2.64%

Total Liabilities & Equity 33,204 32,461 2.29%

Capital Expenditure (CAPEX) ( In EGP Millions)

Summary Balance Sheet


Debt Position ( In EGP Millions)

1,937

945 919 9811,08620%

9% 9% 10%11%

0%

10%

20%

30%

-100

100

300

500

700

900

1,100

1,300

1,500

1,700

1,900

2,100

2,300

2,500

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Capex Capex/Sales

6,777

3,589

411-1,409

-4,101

712

1,397

2,7352,453

4,976

393

600

361

137

26 0

100

200

300

400

500

600

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Cash Net Debt Interest Exp.


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17

Closing Remarks

Strong Growth in Full Year Net Profit After Tax

Solid Growth in Wholesale Revenue

Robust Cash Position and Solid Balance Sheet

Ownership of Strong Performing Mobile Asset

Strong Platform of Cashflow Generation

Upside Potential from Under Penetrated Broadband Market

Ability to Capitalize on Unique Geographic Position


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Investor Relations Contacts

Mahmoud Abu TalebDirector of Investment & Investor Relations

Tel:+202 3131 5266Fax:+202 3131 6115Email: [email protected]

Mohamed Kamal

General Manager of Investor Relations & Internal Reporting

Tel:+202 3131 5219Fax:+202 3131 6115Email: [email protected]

Website:ir.telecomegypt.com.eg
mailto:[email protected]:[email protected]://www.ir.telecomegypt.com.eg/http://www.ir.telecomegypt.com.eg/mailto:[email protected]:[email protected]:[email protected]

investor presentation fy 2010

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