AT&T Inc. · NYSE:T
AT&T — Investor Day (November 2018)
36 slides from AT&T's investor day presentation, Nov 1, 2018
Slide 1: AT&T Analyst Meeting
AT&T ANALYST MEETING
Slide 2: Mike Viola
Mike Viola Senior Vice President, Investor Relations, AT&T Inc.
Slide 3: Cautionary Language Concerning Forward-Looking Statements
Cautionary Language Concerning Forward-Looking Statements Information set forth in this presentation contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect futu
Slide 4: Randall Stephenson
Randall Stephenson Chairman and CEO, AT&T Inc.
Slide 5: AT&T Composition
100% 100% Latin America / Other 5% 3% 15% Entertainment Group 25% AT&T Business Wireline 15% 17% Composition WarnerMedia 16% 17% 3rd Quarter 48% Mobility 39% Note: WarnerMedia revenue shown net of eliminations REVENUE ADJ. EBITDA
Slide 6: AT&T
AT&T )))
Slide 7: John Donovan
John Donovan CEO, AT&T Communications, LLC
Slide 8: Mobility
Mobility Growing revenues and EBITDA +2.3% service revenue growth YoY1 ~50% High quality phone subscriber base +2.7mn smartphones added since 3Q17 Of AT&T’s Adj. EBITDA1 Nation’s Best Network 1 On a comparable basis; 3Q 18
Slide 9: Leading the Path to 5G
Leading the Laying 5G Exploring service Working with groundwork opportunities Developers Path to 5G
Slide 10: Business
Business Steady EBITDA over last 3 years Billions ($B) 3,600 Agencies $2.8 $2.7 $2.7 $2.7 $2.8 $2.7 $2.6 $2.6 $2.6 250,000+ Subscribers ~1/3 FirstNet square miles covered Reimbursements to come 3Q16 3Q17 3Q18 Comparable Business Wireline EBITDA
Slide 11: Entertainment Group
Entertainment Broadband growing Group Video product evolution Path to EBITDA stability
Slide 12: Entertainment Group: Path to stabilizing EBITDA
Entertainment Group Path to stabilizing EBITDA ~$0.4B ~$0.4B ~($1B) ~$10B ~($1B) ~$1B ~$0.2B ~$10B Cost Broadband OTT Initiatives Voice and Growth Video Linear Profitability Accounting Subscriber Increased Improvement ARPU growth Pressure Losses ARPU growth efficiency and 2-year price Fiber automati
Slide 13: John Stankey
John Stankey CEO, WarnerMedia
Slide 14: WarnerMedia Highlights
WarnerMedia Highlights Home Box Office Revenues & Operating Income1 23 Primetime Emmy Awards in 2018 $ in billions Over 140 million global subscribers2 12.0 10.0 Turner 8.0 CNN continues as the #1 digital news destination $7.7 $8.7 $8.1 $8.2 6.0 $7.9 3 of the top 5 ad-supported cable nets in 4.0 pri
Slide 15: The Entertainment Industry is Evolving
The Entertainment Industry is Evolving RAPIDLY SHIFTING TOWARDS DIGITAL CONSUMPTION AND SPENDING… Watching Dynamic Monetization Longform & Premium / & Mobile Models Shortform Native Digital … AND DIRECT CUSTOMER RELATIONSHIP IS CRITICAL
Slide 16: Well Positioned to Capitalize
Iconic brands Creative Strong global and franchises excellence presence Well Positioned to Capitalize Award winning Top talent content relationships
Slide 17: Direct to Consumer
Complements existing businesses Good for distribution partners Direct to Enables expanded reach and Consumer growing subscriber bases Captures data and analytics to inform new products and enable better monetization
Slide 18: Our New Direct to Consumer Offer
Our New Direct to Consumer Offer TARGET LAUNCH: 4Q 2019 BUNDLE SERVICE Entry-level Service PREMIUM Premium Service SERVICE Additional ENTRY Premium & Popular • Classics • Kids & Family • Comedy • Niche/Genre SERVICE Original Programming • Theatrical Movie-Focused Blockbuster Movies WARNERMEDIA AND L
Slide 19: Positioned for the Future
Positioned for the Future Engagement Penetration sVOD aVOD Wholesale ARPU Distribution AT&T Reach
Slide 20: Slide 20
Slide 21: Lori Lee
Lori Lee CEO, AT&T Latin America and Global Marketing Officer
Slide 22: At a Glance
At a Glance 31M • Descriptive content for stat S U 40pt. is Aleck Sans BSCRIBERS 12 COUNTRIES $8.3B 2017 REVENUE
Slide 23: Mexico
2015 2016 2017 3Q-2018 Mexico MOBILE Environment for Growth SUBS 9M 12M 15M 17M Network Investment PEOPLE Completed COVERED 44M 78M 94M ~100M The Most Reliable Network in Mexico 1 1 Claim based on a 3rd party analysis during drive-testing developed by Nielsen. The test reported that AT&T’s network l
Slide 24: Vrio
Vrio Simple free cash flow1 Sustained track record of growth and cash generation 10.8% 8.5% 8.5% Revenue growth2 Opportunity with OTT 2016 2017 3Q 2018 . 1Simple Free Cash Flow = Adjusted EBITDA less Capital Expenditures 2Revenue growth figures are on a constant currency basis, excluding Venezuela.
Slide 25: Brian Lesser
SS) AT&T Brian Lesser CEO, Xandr
Slide 26: Buying in mass buying audiences
Buying in mass buying audiences BUYING CONTEXTUALLY DIGITAL ADVERTISING IS BORN EXPLOSION OF AD TECH AND PLATFORMS AD TV AD VIEWERSHIP SUBSCRIBER DATA DATA 3RD PARTY COMEDY CENTRAL NFL NETWORK GOOGLE DATA ESPN FOX SPORTS FACEBOOK A&E LOCATION DATA NETFLIX YOUTUBE AMAZON PRIME VIDEO SITE VISIT BROWSI
Slide 27: Ad tech has brought us to a critical moment in time
Ad tech has MAJOR PLAYERS NOT ADVERTISERS NO SINGLE PLAYER brought us WELL POSITIONED IN AND AGENCIES HAS ASSEMBLED PREMIUM TV AND VIDEO ARE FRUSTRATED THE ASSETS to a critical moment in time
Slide 28: Compelling Set of Assets
Compelling Set of Assets DATA CONTENT DISTRIBUTION TECHNOLOGY
Slide 29: Our Media Sales Business and Platform Businesses Complement Each Other
Our Media Sales Business and Platform Businesses Complement Each Other to Magnify the Opportunity INVENTORY Direct Sales TV Platform AGENCIES & AUDIENCES/ ADVERTISERS Programmatic Digital Platform VIEWERS Sales 3rd party
Slide 30: Measuring Success
OUTPACE THE MARKET Measuring Success INTERNAL USE SCALE WITH OF PLATFORM 3RD PARTIES
Slide 31: John Stephens
> Sg AT&T John Stephens CFO, AT&T Inc.
Slide 32: The Integrated Growth Story
The Integrated Growth Story AT&T AT&T COMMUNICATIONS LATIN AMERICA Mobility: top and Continued solid AT&T Mexico Nearly $7B bottom line growth performance with improving annualized revenues managed growth profitability and growing Stable EBITDA in Entertainment Direct-to-consumer Sustained cash Mana
Slide 33: Merger Synergies
END OF YEAR RUN RATE RUN RATE 2019 2020 2021 TARGET Merger • Marketing COST $1.5B • Corporate overhead SYNERGIES • Procurement Synergies REVENUE • Advertising $1.0B • Churn reduction SYNERGIES • Cross selling TOTAL $2.5B ~ $0.7B ~ $2.0B ~ $2.5B SYNERGIES
Slide 34: Leverage Update 2019
Leverage Update 2019 2019 PLAN ~$6-$8B ~$12B Free cash flow after dividends Other cash ~$170B generation initiatives ~$158B ~$150B ~2.8x1 LIQUIDITY AND REFINANCING ~2.6x1 Pension plan Hedged Successfully managed ~2.5x1 essentially against rising near term maturities fully funded interest rates and r
Slide 35: Consolidated Guidance
2019 FREE CASH FLOW $26B range 2019 DIVIDEND PAYOUT High 50s % Consolidated NET DEBT TO ADJ. EBITDA 2.5x range Guidance GROSS CAPITAL INVESTMENT 1 $23B range 2 ADJ. EPS GROWTH % Low single digits 1 Excludes expected FirstNet reimbursement in the $1 billion range; includes potential vendor financing.
Slide 36: AT&T Analyst Meeting
AT&T ANALYST MEETING