Merrill Lynch Global Telco and Media Conference - Marco Patuano presentation (30/05/2012)

2,832 views
2,779 views

Published on

Merrill Lynch Global Telco and Media Conference - Marco Patuano presentation (30/05/2012)

Published in: Business, Travel
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,832
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Merrill Lynch Global Telco and Media Conference - Marco Patuano presentation (30/05/2012)

  1. 1. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference Wednesday, 30 May 2012, LondonTelecom Italia Update and Focus on UBBBofA - Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonMARCO PATUANO – Chief Operating Officer MARCO PATUANO 0
  2. 2. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonSafe HarbourThese presentations contain statements that constitute forward-looking statements within the meaning ofthe Private Securities Litigation Reform Act of 1995. These statements appear in a number of places inthis presentation and include statements regarding the intent, belief or current expectations of thecustomer base, estimates regarding future growth in the different business lines and the global business,market share, financial results and other aspects of the activities and situation relating to the Companyand the Group.Such forward looking statements are not guarantees of future performance and involve risks anduncertainties, and actual results may differ materially from those projected or implied in the forwardlooking statements as a result of various factors. Consequently, Telecom Italia S.p.A. makes norepresentation, whether expressed or implied, as to the conformity of the actual results with thoseprojected in the forward looking statement.Forward-looking information is based on certain key assumptions which we believe to be reasonable as ofthe date hereof, but forward looking information by its nature involves risks and uncertainties, which areoutside our control, and could significantly affect expected results.Analysts are cautioned not to place undue reliance on those forward looking statements, which speak onlyas of the date of this presentation. Telecom Italia S.p.A. undertakes no obligation to release publicly theresults of any revisions to these forward looking statements which may be made to reflect events andcircumstances after the date of this presentation, including, without limitation, changes in Telecom ItaliaS.p.A. business or acquisition strategy or planned capital expenditures or to reflect the occurrence ofunanticipated events. Analysts and investors are encouraged to consult the Companys Annual Report onForm 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securitiesand Exchange Commission. MARCO PATUANO 1
  3. 3. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonAgenda Group Overview Domestic Progress Report Focus on UBB MARCO PATUANO 2
  4. 4. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonTI Group Key ResultsEuro mln, Organic data, % Revenues EBITDA % on 42.0% 40.1% Revenues -1.9 p.p. +373 M€ 7,392 2,951 +15 M€ 2,966 7,019 +5.3% +0.5% 1Q11 1Q12 1Q11 1Q12 Revenues Trend YoY EBITDA-CAPEX % on 29.3% -2.1 p.p. Revenues 27.2% 5.3% 5.0% -43 M€ 3.7% 2,055 -2.1% 2,012 2.1% -0,2% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 1Q12 MARCO PATUANO 3
  5. 5. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonTI Group Key Results by Core MarketsEuro mln, Organic Data Weight on TI Group TI Group Domestic Brazil Argentina 1Q12 Δ% yoy 1Q12 Δ% yoy 1Q12 Δ% yoy 1Q12 Δ% yoyRevenues 7,392 +5.3% 4,486 -2.4% 1,928 +19.1% 901 +24.0% 60.4% 26.0% 12.2% 38.2%EBITDA 2,966 +0.5% 2,196 -3.4% 505 +13.5% 289 +16.6% 74.0% 17.0% 9.7% 26.7%EBITDA-CAPEX 2,012 -2.1% 1,607 -0.2% 271 -14.6% 168 +5.1 % ~80% ~14% ~8% MARCO PATUANO 4
  6. 6. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonTelecom Italia Group – FY 2012 and 2012-14 Plan Key Guidance Organic Data* TI Group – FY 2012 Key Guidance Revenues Stable Ebitda Broadly Stable NFP Adj.** ∼ 27.5 € bln Organic Data* TI Group – 2012-14 Plan Key Guidance ** Ebitda-Capex >22 € bln cum ’12-’14 Capex >15 € bln cum ’12-’14 FY 2012: ∼ 27.5 € bln NFP Adj. FY 2013: ∼ 25 € bln 2012-’14 From FY 2014: < 2x Net Debt/Ebitda*** *exchange rates 2011 (R$/€ 2.33; ARS/€5.74), excluding impact from non-organic items ** excluding Latam spectrum licences *** reported figure MARCO PATUANO 5
  7. 7. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonAgenda Group Overview Domestic Progress Report Focus on UBB MARCO PATUANO 6
  8. 8. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonDomestic Results: Trend still improvingEuro mln, Organic data, % Total Domestic Revenues Domestic Service Revenues -109 M€ 4,595 -2.4% 4,486 Mobile -1.7% Wireline -2.9% EBITDA EBITDA-Capex % on 49.5% -0.5 p.p. 49.0% -4 M€ Revenues 1,611 -0.2% 1,607 2,274 -78 M€ -3.4% 2,196 % on 35.1% +0.7 p.p. 35.8% Revenues MARCO PATUANO 7
  9. 9. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonDomestic Fixed: Revenue DynamicsEuro mln, Organic Data, % Total Fixed Revenues Fixed Revenues Trend – YoY % change 3,330 -2.9% Total 3,235 Equipment Services Wholesale Revenues Trend – YoY % change Retail Service Revenues Trend – YoY % change Domestic Sparkle Group* Tariff simplification process begins *Gross of Elim. & Adj. MARCO PATUANO 8
  10. 10. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonDomestic Fixed: Focus on Broadband TI Retail Broadband Accesses Broadband Retail ARPU ‘000 Total Euro/month/line Market 13,248 13,394 13,485 +0.3% TI retail accesses 7,194 7,125 7,092 -0.6% Flat (%) 87% 87% 88% M/S 54.3% 53.2% 52.6% BB Service Revenues Highlights% YoY Confirming the right direction in TI’s Value Strategy: Continued positive BB Service Revenues trend QoQ ARPU increase +1.0 p.p. of Flat offers on TI’s BB Customer Base Increasing BB penetration (+1.5 p.p.) on fixed CB, confirming the low value of TI’s line losses MARCO PATUANO 9
  11. 11. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonMobile Revenues: 1Q12 Results at a GlanceEuro mln, Organic Data Total Mobile Revenues Mobile Handsets Revenues Trend – YoY % change Normalized (*) ~-2.5% -29 Total Mobile 1,679 -1.7% 1,650 Handset revenues +71.1% Mobile Service Revenues Trend – YoY % change Service -3.7% revenues Normalized (*) ~-4.5%(*) Leap year MARCO PATUANO 10
  12. 12. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonConsumer Mobile - The Value of the Options +1.4 mln Community 5.5 mln Users (*) 4.6 mln 4.4 mln Growth 4.1 mln Continues 1Q11 2Q11 3Q11 Apr-12 Churn rate -8p.p. Increasing Loyalty ∆ Outgoing ARPU exAnte/exPost activation Avg €/month Neutralizing CB cannibalization MARCO PATUANO 11* TIMx, TIM Young and Tutto Compreso Ricaricabile
  13. 13. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonDomestic Mobile – Surfing the Data Wave Increasing Smartphone Penetration in All Segments Operating Systems on TIM ‘s Network - The Android Growth Innovation to the Smartphones increasingly Service-driven Mass Market Bringing Data Bundle users and Renewal Rate +1,9X 87%penetration on Smartphone Penetration on Customer Base Renewal rate 79% smartphone Doubling CB Number of Data connections by Device (*) +~20% May 2012 Dealer Convention 2.2mln Further room for Of which >75% 1.9mln ~1,3 mln Smartphones growth Dec’11 Jan’12 Feb’12 Mar’12 Apr’12 * Peak of traffic on the average day of the second week of each month MARCO PATUANO 12
  14. 14. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonAgenda Group Overview Domestic Progress Report Focus on UBB MARCO PATUANO 13
  15. 15. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference 2012-2014 Plan Wednesday, 30 May 2012, LondonStrengthen the Network for a Technological Leadership Capex Allocation UltraBB Roadmap Network Capex NGAN Roll-out 2014 Customer 100 Cities (including all Service Optimization & Traffic main ones) covered through Driven FTTH&Cab Technology ~¼ of Housing units Network Development Acceleration passed with >30 Mb/s Speed Network Decrease Mobile Coverage Maintainance 2014 Optimize Network Investment to maintain More than 40% of excellent quality in TLC services population covered by LTE Increase the effort in Network Development and Innovation to confirm Technological Leadership HSPDA and grant the Best Experience on the Net 42 Mbps LTE MARCO PATUANO 14 14
  16. 16. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media Conference 2012-2014 PlanWednesday, 30 May 2012, LondonMobile Technological Evolution while Protecting Profitability Strengthening Roadmap 42MB coverage HSDPA and LTE Increasing speed introduction 100 84 availability 42 3,6 7,2 14,4 Maximum speed 2009 2010 2011 2012 January June (kbps) 2013 2014 2012 2012 With PREMIUM offers Customers have The advantages Network Fiber Bakhauling Dual Carrier an effective perception of Higher of 42MB Priority Speed Network Speed Priority Quality Up to (everywhere/every Offer based on Mass Market HSDPA 14,4 NO time) Mbps the Value of the Pricing Customer Up to 42 Speed Premium HSDPA/LTE Mbps YES Quality Customers Priority 100 Mbps MARCO PATUANO 15 15
  17. 17. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonUltra Broadband in Motion Fixed Mobile 42 Mbps coverage 100- cities FTTCab Plan begins, in progress in 50 with 30 of them to be connected in cities 2012 / 1H2013. Retail commercial launch expected in 4Q Reference Offer for wholesale Ongoing trials NGAN Access Services submitted extended to Turin, to Agcom in March. Final approval Milan, Rome and expected by September Naples Maintaining a fixed & mobile coordinated approach MARCO PATUANO 16
  18. 18. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference Wednesday, 30 May 2012, London The Context European Digital Agenda Main Objectives: 0% 50% 100% Basic BB 2013 > 2 Mb/s Ultra BB 2020 100 Mb/s > 30 Mb/s Demand status in Italy: Low ICT culture Low e-Goverment level Low Broadband PenetrationPercentage of users that have never used a PC Global Rank E-Government Index Broadband penetration (as % of tot. accesses) #38 #15 #10 #9 #4 Source: Eurostat 2010 Source: ONU «E-Government Survey» 2010 Source: Eurostat 2011 MARCO PATUANO 17
  19. 19. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference Wednesday, 30 May 2012, London Specific advantages for TI from FTTC Last mile length benchmark %Improved performances 100 90 Lower Average Length of Local Loop guarantees 80 70 Italyhighest speed for a FTTC solution 60 United Kingdom 50 No impact on legacy services (no switch-off) 40 Japan France 30 Germany 20 U.S.A. 10 0 0 2 4 6 8 10 12 14 kmCapex optimization -50% / -75% Utilization of a relevant portion of existing TI’sAccess Network per line/capex Fix and Mobile UBB Synergy Leveraging on past investments Ducts/Passages already existing in large part FTTH FTTC MARCO PATUANO 18
  20. 20. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference Wednesday, 30 May 2012, London FTTC is frequently preferred by EU incumbentsBest incumbent’s choice European incumbents with a FTTC strategy(where network structure allows) Vectoring technology enhances FTTC speed up to 100Mbps in downstream and up to 15 Mbps in upstream(considerably above current market demand and existing services) xDSL still evolving (accelerated DSL includes also: Bonding,Phanthom, G.Fast) Advantages in Implementation: • Rapid Deployment • More Coverage • Lower InvasivenessMore value for money Exploiting and maximizing value of existing accessinfrastructure (copper) The cost for a FTTC solution is a fraction of FTTH’s Adequate match for expected demand «FTTH ready» on a selective basis approach (market-driven) Capex Deployment Speed per line timing MARCO PATUANO FTTH FTTC 19
  21. 21. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonTI’s 2-step strategy on NGAN Step 1: FTTCab 30 - 100 Mbps Use of existing network elements: •Cable ducts •Cabinets •Copper sub-local loop Step 2: FTTH 100 Mbps – 1 Gbps Deployment costs > 3x FTTCab Use of FTTCab primary Network New elements •Fiber secondary network •Fiber deployment in the customer’s building •New modem in the customer’s house MARCO PATUANO 20
  22. 22. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference Wednesday, 30 May 2012, London TI Fixed UBB Plan: 2012-2014 and beyond 2012-1H2013 2014 within 2020 30 cities 100 cities About 60% cities target in Driver for NGAN Plan: the North (i.e. Milan, Turin, Genoa); NewCo Density of population; Trentino NGN for Trento region Moving towards Leverage on existing About 20% cities infrastructure (i.e. ducts located in the Central already in place in most DAE Targets part of the country of 100 targeted cities) (i.e. Rome, Florence)About 20% citieslocated in the South(i.e. Naples, Bari,Palermo) MARCO PATUANO 21
  23. 23. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonTI’s Convergent Approach to Fixed and Mobile UBB The Value of our Core Asset Network Key asset both for fixed and mobile Access Huge capital and time already fruitfully invested High Capillarity Strategic asset in the economic , social & regulatory landscape Yesterday Today: Pervasive Ultra Broadband NGN UBB Fixed & Mobile Network Fixed Network Super NGAN Fttx HSPA+ LTE Internet + MARCO PATUANO 22
  24. 24. TELECOM ITALIA GROUP BofA Merrill Lynch Global Telco and Media Conference Wednesday, 30 May 2012, LondonThank you – Q&ABofA - Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonMARCO PATUANO – Chief Operating Officer MARCO PATUANO 23
  25. 25. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonRobust Liquidity Margin and Well-Distributed Debt Maturities Euro mln Bonds Loans (of which long-term rent, financial and operating lease payable € 1,497) Drawn bank facility € 6.16 bln 13,323 35,884 (*)Group Liquidity Position 2,249 + € 7.00 bln Undrawn Portion of 11,357 Facility/Committed = € 13.16 blnGroup Liquidity Margin 2,765 1,966 2,981 1,900 25,257 2,250 865 3,032 1,768 731 6,067 1,999 1,264 2,857 5,237 250 1,211 3,335 2,479 8,378 1,790 1,652 689 Within 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Beyond 2017 Total M/L Term Debt (*) € 35,884 mln is the nominal amount of oustanding medium-long term debt by adding IAS adjustments (€ 805 mln) and current liabilities (€ 824 mln), the gross debt figure of € 37,513 mln is reached. N.B. Debt maturities are net of € 646 mln (face value) of repurchased own bonds (of which € 354 mln related to bonds due in the next 24 months). MARCO PATUANO 24
  26. 26. TELECOM ITALIA GROUPBofA Merrill Lynch Global Telco and Media ConferenceWednesday, 30 May 2012, LondonWell Diversified and Hedged Debt Total Gross Debt Net of Adjustment: Euro 37,513 mln Maturities and Risk Management Euro mln Op. Leases and long rent Bank & EIB 1,512 5,734 Bank Facility Average debt maturity: 7.32 years (bond Other 4.0% 15.3% only 8.38 years) 2,248 2,498 6.7% 6.0% Fixed rate portion on gross debt Bonds approximately 72.4% 25,521 Around 47% of outstanding bonds (nominal 68.0% amount) is denominated in USD, GBP and YEN and is fully hedged Gross debt 37,513 Financial assets (7,201) of which C & CE and marketable securities Cost of debt: ∼5.5% (6,158) - C & CE (5,492) - Marketable securities (666) - Italian Government Securities (527) - Other (159) Net Financial Position 30,312N.B.The figures are net of the adjustment due to the fair value measurement of derivatives and related financial liabilities/assets, as follows: - the impact on Gross Financial Debt is equal to 2.545 €/mln (of which 789 €/mln on bonds); - the impact on Financial Assets is equal to 1.878 €/mln. Therefore, the Net Financial Indebtedness is adjusted by 667 €/mln. MARCO PATUANO 25

×