Vodafone Idea Ltd · NSE:IDEA
Vodafone Idea — Idea Cellular — Investor Presentation (February 2014)
34 slides from Vodafone Idea's investor presentation, February 2014
Slide 1: Idea Cellular Limited Investor Presentation
IDEA CELLULAR LIMITED INVESTOR PRESENTATION
Slide 2: Disclaimer
Disclaimer This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe for or purchase a
Slide 3: Idea Cellular
Idea Cellular Pan India Pure Play Wireless Operator No.7 Ranked US$ 8.9 bn Operator in the Market World by Capitalisation(4) Subscribers (1) FY13 An Aditya Birla No. 3 Consolidated Group Company Operator in India Gross Revenue with 15.9% US$3.6 bn RMS(2) Serving 128.7 million subscribers (3) USD 1 =
Slide 4: Aditya Birla Group
Aditya Birla Group Our Businesses Our Brands Agri Business Carbon Black Acrylic Fibre Cement Chemicals Financial services Insulators IT/ITes Metals & Mining Pulp & Fibre Retail Solar Trading Textile & Apparel Telecom A leading business conglomerate and one of the India’s most respected business gr
Slide 5: India Telecom Sector Backdrop
India Telecom Sector Backdrop Growth Drivers Competition Regulatory Voice Active subscriber penetration Top 3 operators garnered 69.2%(3) Auction of 900 MHZ and 1800 MHz (measured on VLR) at 61.7% (762 of Indian Mobile revenue market concluded in Feb’14. Winners of million subscribers)(1) share (“RM
Slide 6: Indian Wireless Sector – Revenue Trend
Indian Wireless Sector – Revenue Trend Sector Quarterly Gross Revenue (INR bn) Idea – Steady Revenue Market Share (RMS) improvement 450.0 Industry Idea 401.6 Others, 84.1% 371.3 375.0 335.8 Idea, 15.9% 300.0 290.2 Q2FY14 225.0 Incremental 150.0 RMS 23.8% 75.0 Others 87.2% 63.7 46.9 53.4 37.2 - Idea,
Slide 7: Subscriber Trends
Subscriber Trends INDUSTRY Industry VLR (mn) VLR Penetration VLR Share of Top 3 Operators* 825 61.7% 65% 63% 62.2% 59.0% 62% 61.5% 762 60% 56.5% 675 723 61% 683 55% 574 60% 59.3% 50% 58.8% 525 483 59% 58.0% 48.1% 45% 58% 375 42.8% 40% 57% Sep'10 Mar'11 Mar'12 Mar'13 Dec'13 Sep'10 Mar'11 Mar'12 Mar'1
Slide 8: Declining Competitive Intensity
Declining Competitive Intensity Post Supreme Court 2012 license cancellation, Operators exit or selectively reduce India presence Cumulative Number of Operators in All Service Areas(1) Idea – ARPM (paise) 260 249 46 65 64.5 55 45 44.9 240 43.3 44 43 220 42 41 200 40 QE Dec '08 Dec '11 Dec'13 180 Ide
Slide 9: Idea – An Overview
Idea – An Overview Idea has consistently gained Revenue Wireless Business Market Share …(1) A pan India pure wireless play 2G-GSM service 15.9% provider. Third largest operator in India, by Mobility Revenues 14.4% and VLR subscribers(1) 14.0% Holds 3G Spectrum (2100 MHz) in 11 service 12.8% ar
Slide 10: 15 Service Areas – Strength
15 Service Areas – Strength 8 Established Service Areas (leadership) Owns 3G Spectrum in RMS RMS all ‘8 Leadership Service Area Rank 2 Q2FY111 Q2FY141 Service Areas’ and Kerala 29.8% 35.3% 1 40.3% of UPE, HP & J&K M.P. 29.2% 34.5% 1 India Mobility UP (W) 27.1% 29.6% 1 Revenue Maharashtra 28.5% 29.4%
Slide 11: 7 New Service Areas - Opportunity
7 New Service Areas - Opportunity Launched services during FY10; combined RMS of 4.1%1 in Q2FY14 Acquired 5 MHz spectrum in 1800 MHz frequency auction in Nov’12 (6.25 MHz in West Bengal) in these service areas (post cancellation of license by Supreme Court) Leverage synergies of pan India operations
Slide 12: Improved Spectrum Profile post Feb’14 Auction
Improved Spectrum Profile post Feb’14 Auction Current Spectrum Profile Capability to Offer Circles (Holding in MHz) 900 1800* 2100 ` GSM 3G LTE Maharashtra* 7.8 11.0 5.0 Kerala 6.2 11.8 5.0 M.P. 6.2 8.8 5.0 Andhra Pradesh 6.2 7.8 5.0 Punjab* 7.8 8.0 5.0 Haryana* 4.0 6.0
Slide 13: Idea Mobile Data – The Next Opportunity
Idea Mobile Data – The Next Opportunity Improving Data penetration Strong Data Volume Growth 35 Data Subs (mn) Data Subs as % to Total subs 30% 3G Data Usages (mn MB) 2G Data Usages (mn MB) 107.6% (YoY) 30 25% 22,000 20,840 26.4% 24.7% 17,452 9,469 18,000 25 21.6% 20% 13,791 7,578 19.8% 14,000 19.1%
Slide 14: The Indus Advantage
The Indus Advantage Provides passive infrastructure services in 15 service areas Leading independent tower company in the world with around 112,100 towers and tenancy ratio of 2.01 Indus Share Holding Combined revenue market share of three shareholders is 69.2%(1) Idea benefits by reduced capex, spe
Slide 15: Idea Brand Philosophy
Idea Brand Philosophy Transforming Indian consumers’ life through Mobile Telephony India’s No. 21 ‘Most Valuable Brand’ as per ‘Best Indian Brands 2013’ study by Interbrand, a leading global branding consultancy 15
Slide 16: Idea Revenue and Cost Per Minute
Idea Revenue and Cost Per Minute(1) Voice Pricing Power Returning as Competitive Intensity Declines 64.5 Gross Rev / Min (paise) Opex / Min (Pre-EBITDA) (paise) 65 60 55 53.0 50 44.6 45 42.4 42.6 46.4 41.5 40 40.1 35 33.8 33.1 30 31.8 32.2 25 FY 09 FY 10 FY 11 FY 12 FY 13 YTD Q3FY14 Mounting losses
Slide 17: Key Operating Trends
Key Operating Trends Minutes of Use on Network Realized Rate per Minute Paisa Billion 65.0 62.7 600 532.1 60.0 500 Tariff recovering after hyper 453.1 430.7 55.0 competitive phase 400 362.6 50.0 300 247.5 44.9 45.0 46.4 40.6 42.2 175.0 41.2 200 40.0 100 35.0 0 FY09* FY10* FY11 FY12 FY13 YTD 30.0 Q3F
Slide 18: Financial Trending (Consolidated)
Financial Trending (Consolidated) INR Bn Growth in Revenue Growth in EBITDA 240 224.6 64 31.3% 32% 195.4 194.8 56 60.0 61.0 200 50.9 30% 48 155.0 160 37.9 28% 40 27.9% 27.7% 125.0 26.1% 120 101.5 32 28.4 26.7% 26% 34.6 24.5% 80 24 24% 16 40 22% 8 0 0 20% FY09 FY10 FY11 FY12 FY13 YTD FY09 FY10 FY11 F
Slide 19: Key Financial Ratios
Key Financial Ratios (1) Investment Efficiency Steep fall in Capex (2) to Sales ratio Free Cash Flow (INR bn) (3) 17.0 47.0% 18 50% 12 7.25 40% 6 2.05 (3.72) 0 30% 24.8% 22.5% 21.4% (6) 16.6% (4.18) 20% 14.8% (12) (18) 10% FY10 was impacted due to Amalgamation of Spice into Idea (24) FY10 was impact
Slide 20: Recent Financial Trends
Recent Financial Trends INR bn Growth in Revenue INR bn Growth in EBITDA 200 70 194.8 61.0 190 60 180 50 40.9% 18.8% 43.3 170 164.0 40 160 30 150 20 $ 2,649Mn $ 3,146 Mn $ 700 Mn $ 986 Mn 140 10 YTD Q3FY13 YTD Q3FY14 YTD Q3FY13 YTD Q3FY14 Realized rate per minute Net Profits Paisa INR bn 46 14.0 13.
Slide 21: Appendix
Appendix 21
Slide 22: Idea YTD Q3FY14 Performance
Idea YTD Q3FY14 Performance YTD YTD YoY Consolidated (Rs mn) Q3FY13 Q3FY14 Growth (%) Gross Revenue 163,962 194,751 18.8% EBITDA 43,315 61,035 40.9% EBITDA Margin (%) 26.4% 31.3% Capex* 25,476 35,043 37.6% EBITDA-Capex 17,840 25,991 45.7% Gross Block+CWIP 460,304 509,904 10.8% KPI Summary Subscriber
Slide 23: Idea: Successful Growth Track-record
Idea: Successful Growth Track-record FY2007 FY2013 Comments (IPO in Q4FY07) Operation in 11 Pan India Strong Performance CMS Rank 6 in FY07(1) Company Profile circles Operations since IPO RMS Rank 3 in FY13(1) Customer Base (mm)(1) 14.0 121.6 8.7x Revenue (US$ mn) $709 $3,628 5.1x EBITDA (US$ mn) $2
Slide 24: Idea – Key Capabilities & Strengths
Idea – Key Capabilities & Strengths Wide Cellular Network o Covers ~ 75% of all India Population extended to ~340,000 Towns & Villages on GSM network. o ~ 80,000 km of Fiber & 2500 3G fibre POPs serve as data network backbone o Earnest drive to reduce carbon footprint – solar-powered cell sites, low
Slide 25: Idea – Key Capabilities & Strengths
Idea – Key Capabilities & Strengths Growing Data Business o ~ 25.5 Million data users on 2G EDGE and 3G HSPA services o ~8.7 Million subscribers use 3G services out of 128.7 Million overall subscriber base o Idea’s own current range of 6 ‘Idea Smartfones’ starting at USD 90 (INR 5400) o ~15.1 Mn Ide
Slide 26: Idea – Key Capabilities & Strengths
Idea – Key Capabilities & Strengths Strong IT Processes & Support o Modern Prepaid Vtop-Up system & Pan-India Postpaid billing system BSCS IX o Large Siebel based pan-India Prepaid and Postpaid CRM deployment o High emphasis on sales automation through advanced Dealer Sales Mgmt. application o Advan
Slide 27: Idea – Some Recent Awards & Recognitions
Idea – Some Recent Awards & Recognitions Corporate Awards o Won 3 Awards at Economic Times Telecom Awards 2012 Excellence in Marketing | Customer Experience Enhancement | Innovative Products o ‘Best Rural Service Provider of the Year’ – Amity Telecom Excellence Award 2012 o Telecom CEO of the Year –
Slide 28: Board Members
Board Members Mr. Kumar Mangalam Birla – Chairman (Non-Executive) Mr. Arun Thiagarajan – Independent Director Mr. Kumar Mangalam Birla is the Chairman of Idea and Aditya Birla Group. Mr. Arun Thiagarajan is currently a part-time Non-Executive Independent He chairs the Boards of the major Group C
Slide 29: Board Members
Board Members Mr. R.C. Bhargava – Independent Director Mr. Sanjeev Aga – Non -Executive Director Mr. R.C Bhargava served in Indian Administrative Services and has held Mr. Sanjeev Aga served as the Managing Director of Idea for the period the post of Joint Secretary in the Ministry of Energy and
Slide 30: Management Team
Management Team Chief Financial Officer, aged 50 years Deputy Managing Director, aged 57 years o CA and Licentiate CS with over 27 years of industry experience o B.Tech. from IIT Delhi and Post Graduation from Indian o Joined ABG in August 1986 at Grasim. Worked with ABG in Institute of Manageme
Slide 31: Shareholding
Shareholding As on 31 Dec’13 Indian Others 5.23% Promoter Group 45.83% Foreign Holding 48.94% PROMOTERS’ HOLDING TOP 5 PUBLIC SHAREHOLDERS TMI TMIMAURITIUS MAURITIUS 14.0% 14.01% ADITYA BIRLA NUVO LIMITED 25.24% AXIATA AXIATAINVESTMENTS INVESTMENTS2 2(INDIA) (INDIA)LTD. LTD. % 5.89% BIRLA TMT HOLDIN
Slide 32: Glossary
Glossary Definitions/ S. No. Description/Full Form Abbreviation Is Incremental Revenue Market Share (RMS), calculated as change in absolute revenue for Idea divided by change in 1 Incremental RMS absolute revenue for Industry during the relevant period Incremental VLR Is Incremental Visitor Location
Slide 33: Glossary
Glossary Definitions/ S. No. Description/Full Form Abbreviation Is calculated as total tax charged to Profit and Loss Account divided by Profit Before Tax (PBT) for the relevant 12 Effective Tax Rate period 13 EoP End of Period 33
Slide 34: Thank You
Thank You ADITYA BIRLA GROUP
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