Rostelecom · RUS:RTKM
Rostelecom — 9M 2012 Earnings Presentation
28 slides from Rostelecom's earnings presentation, Nov 21, 2012
Slide 1: Financial results 9M 2012
Financial results 9M 2012 Investor conference call – 21 November, 2012 www.rt.ru
Slide 2: Disclaimer
Disclaimer By attending any meeting where this presentation is made, or by reading any part of this presentation, you acknowledge and agree to be bound by the following: This presentation has been prepared by OJSC Rostelecom (the “Company”). This presentation is strictly confidential to the recipi
Slide 3: Group corporate highlights
Group corporate highlights SIGNIFICANT EVENTS OF THE 3Q OF 2012 According to Roskomnadzor’s tender results for the allocation of LTE-standard licenses, Rostelecom was awarded licenses within the 791-798.5MHz band and 832-839.5MHz band to roll-out its LTE network, which can be further modified to p
Slide 4: Chapter 1: Operational results
Chapter 1 Operational results 4 www.rt.ru
Slide 5: Key Achievements in 9M 2012
Key Achievements in 9M 2012 Strong Revenue Growth (RUB bln) Impressive growth in Broadband … and Pay-TV (RUB bln) Growth (subs mln) Growth (subs mln) Growth rate (Y-o-Y) rate (Y-o-Y) rate (Y-o-Y) +8% +12% +11% 222 239 7,9 8,9 5,8 6,4 9M 2011 9M 2012 9M 2011 9M 2012 9M 2011 9M 2012 OIBDA Enhancement
Slide 6: Proved Market Leader
Proved Market Leader Strong Player on Telecom Market Solid Position on IPTV market No 1 in Cloud Solutions (RUB bln, Revenues in Russia) Rostelecom VimpelCom 70% 38% Rostelecom 250 239 218 47% 199 Others MTS Other 7% 30% 8% Source: J’son Consulting, iKS – Consulting, Source: Companies’ data, 9M 2012
Slide 7: Strong market position and key focus for further development
Strong market position and key focus for further development Competitive environment 1) Segment Market growth CAGR potential ‘11 – ‘16 2011- 2016 MTS VIP Megafon 2) Operational Data Backbone 500 117 111 130 16 Fixed-Line subs (000 km) (mln. subs) 27,5 6,3 n/a n/a IPTV 2 +52% Total HH passed (mln.) 3
Slide 8: Chapter 2: Cost Efficiency
Chapter 2 Cost Efficiency 8 www.rt.ru
Slide 9: Cost efficiency – areas for key focus
Cost efficiency – areas for key focus 124 bln. RUR of Rostelecom’s operational costs are manageable, 94% of them are covered by 4 processes. This is the focus of our efficiency program Rostelecom’s operation costs, Manageable costs by key processes* (bln. RUR, 2011) Network Sales and 215,5 maintenan
Slide 10: Cost efficiency – network maintenance
Cost efficiency – network maintenance There are 2 directions of network maintenance cost improvement: standardization of maintenance operations & network optimization and development Potential for Initiatives optimization • Optimization of network maintenance operational А model (grouping field staf
Slide 11: Optimization initiatives
Optimization initiatives 5 optimization initiatives for G&A functions cover all management levels of Rostelecom Rostelecom management levels Initiatives: 1 Centralization of functions Corp. 1 2 Center Elimination of duplicating & business-useless 2 Macro- functions 3 regions 4 Standardization across
Slide 12: Cost efficiency - CAPEX
Cost efficiency - CAPEX CAPEX efficiency improvement program targets increase of ROIC CAPEX efficiency improvement program covers the key stages of investment management process … Planning: Realization: Monitoring: Keeping the total CAPEX numbers Efficient price vs. quality balance Ensuring target b
Slide 13: Cost efficiency – Sales and client service
Cost efficiency – Sales and client service Our sales & client service initiatives are aiming churn reduction and active sales boost across Rostelecom Commerce function value chain Product Portfolio Sales Installation Customer care 1 2 3 4 1 2 3 5 1 2 3 Initiatives: 1 Implementing systematic and inde
Slide 14: Chapter 3: Financial results
Chapter 3 Financial results 14 www.rt.ru
Slide 15: Group Financial Highlights
Group Financial Highlights Key Financials, 3Q and 9M 2012, RUB bln. The Group continued to implement its % change, % change, strategy in margins, net income and net RUB billion 3Q 2012 3Q 2011 9M 2012 9M 2011 y-o-y y-o-y debt. Revenue 77,0 75,3 2% 238,7 221,8 8% Consolidated revenues were up 8% OI
Slide 16: Group Revenue Dynamics
Group Revenue Dynamics Revenue, RUB mln.1 In 9M 2012 the Company’s revenues increased by 8% year on year to RUB 238.7 bln. The performance reflected: Growth rate a 90% year on year increase in revenues from rent of +8% infrastructure, IT and other services, mostly driven by video surveillance proj
Slide 17: Group OIBDA Development
Group OIBDA Development OIBDA, RUB bln. For the 9M 2012 the Company reported an OIBDA of RUB OIBDA Margin 94.0 billion, with an OIBDA margin of 39.4%. 39,2% 39,4% OIBDA increased by 8% y-o-y due to increase in revenues and first results of cost cutting program. The operating expenses before deprecia
Slide 18: Group CAPEX Development
Group CAPEX Development CAPEX, RUB bln. Company capital expenditure for the 9M 2012 increased by CAPEX 49% year on year to RUB 63.5 billion, and primarily 26,6% Revenue comprised: 19,2% upgrade and build channels for the video surveillance project 63 the modernisation of broadband networks and I
Slide 19: Group Net Debt Development
Group Net Debt Development Net Debt, RUB bln. The Group’s total borrowings, including current and non- Net Debt current obligations, were up during the 9M 2012 34% y-o-y x 1,6 OIBDA to RUB 201.6 billion. x 1,3 In November 2012 the Company issued Bonds in the total amount of RUB 10 bln at 8.55% per a
Slide 20: Group Net Profit Development
Group Net Profit Development The Company reported a healthy 13% year on year increase Net Profit, RUR bln. in net income to RUB 30.6 billion for the 9M 2012: NP Margin Profit before tax grew by 11.7% year on year to RUB 39.3 bln mainly due foreign exchange gain and 12,2% 12,8% increased income fro
Slide 21: Appendix: Operational and Financial Data
Appendix Operational and Financial Data for 3Q and 9M of 2012 21 www.rt.ru
Slide 22: Key Financial and Operational data 9M 2012
Key Financial and Operational data 9M 20121 Revenue, RUB bln. OIBDA, RUB bln. Net Profit, RUR bln. Growth OIBDA Margin Net Income rate margin +8% 39,2% 39,4% 12,2% 12,8% 222 239 87 94 27 31 9M 2011 9M 2012 9M 2011 9M 2012 9M 2011 9M 2012 Local voice subscribers, mln Broadband subscribers, mln Pay-TV
Slide 23: Revenue structure dynamics
Revenue structure dynamics1 By services, 3Q 2012 By services, 9M 2012 Local Other Local Telephone 18% Telephone Other services services 23% 28% 29% Interconnect 7% Interconnect Pay-TV 6% 2% Pay-TV DLD / ILD / Broadband DLD / ILD / 3% Intra-Zonal 15% Intra-Zonal 12% Broadband 15% Mobile 15% Mobile 14
Slide 24: P&L
P&L1 Bln RUR FINANCIALS Grwoth Growth P&L 1Q 2012 2Q 2012 3Q 2012 9M 2012 9M 2011 2011 2010 rates rates Revenue (see breakdown below) 85,319 76,387 76,985 238,691 221,838 7,6% 301,494 277,497 8,6% Operating Expenses (66,992) (62,277) (63,551) (192,820) (180,059) 7,1% (241,155) (227,543) 6,0% Wages,
Slide 25: Revenue Structure
Revenue Structure1 Bln RUR FINANCIALS Grwoth Growth Revenue / Breakdown 1Q 2012 2Q 2012 3Q 2012 9M 2012 9M 2011 2011 2010 rates rates By services: Local Telephone services 21,604 21,719 21,125 64,448 66,107 -2,5% 88,011 85,393 3,1% Intra-Zonal 4,797 4,720 4,568 14,085 16,261 -13,4% 21,443 23,358 -8,
Slide 26: Balance Sheet
Balance Sheet1 Bln RUR FINANCIALS BALANCE SHEET 31.03.2012 30.06.2012 30.09.2012 31.12.2012 31.03.2011 30.06.2011 30.09.2011 31.12.2011 31.12.2010 Assets Current Assets Cash & cash equivalents 13,821 9,396 3,369 8,423 8,754 6,141 7,380 12,627 Other investments 4,159 2,939 0,656 7,938 2,364 1,455 3,9
Slide 27: Cash Flow Statement
Cash Flow Statement1 Bln RUR FINANCIALS CASH FLOW STATEMENT 1Q 2012 1H 2012 9M 2012 2 012 1Q 2011 1H 2011 9M 2011 2 011 2 010 Cash flows from operating activities Profit before income tax 17,202 27,674 39,308 12,646 23,600 35,195 53,940 40,513 Adjustments to reconcile profit before taх to cash gener
Slide 28: Contact Information Investor Relations
Contact Information Investor Relations Office +7 (499) 995 9780 Fax +7 (499) 972 8222 E-mail: [email protected] Web: www.rt.ru/en/centr-invest/info/ 28 www.rt.ru