Apresentação barclays capital 2010 latin america regulated industries conference
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Transcript of Apresentação barclays capital 2010 latin america regulated industries conference
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Agenda
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Algar Group
Algar Telecom: overview and strategy
Business segmentation
Consolidated financial results
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Algar GroupBrazilian company
Business areas:IT/TelecomAgribusinessServicesTourism
Operates in more than1,000 towns and cities 61 offices throughout Brazil
More than 1.9 million clients
Consolidated figures
2009
Net revenue 2,709
EBITDA 537
Net Income 195
Capex 203
395
97
161
1,936
R$ million 9M10
Employees 17,000 19,657
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UniAlgar – Corporate UniversityFocus:EntrepreneurialLeadership
R$ 9.4 millioninvested in 2010
12 yearsin existence
COURSES ATENDEES
149
115
15,100
41,500
On-site attendance
E-learning
UniAlgar in numbers
2010
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Algar InstituteFocus: education of children
Target: public schools
Students: elementary
Founded: in 2002
StrategiesPartnerships with public schools
Investments in continuing educationfor teachers and students
Long-term projects of pre-established duration
Alliances with NGOs specialized in education
2010 main figures
Partner schools 100
Students 6,060
Teachers 433
Volunteers 478
States 4
MG, SP, GO, MA
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Corporate Governance Structure
Shareholders’ Meeting
Board of Directors
Auditing and Risk Management Committee
Strategy and Portfolio Committee
Corporate Governance Committee Fiscal Council
Internal Auditing External Auditing CEO
COOs of Business areas
Family Council
Corporate VP of Human Talents
Corporate VP of Mkt. and
Sustainability
Corporate VP of Finance
Corporate VP of Strategic
Development
Functional
Hierarquical
Deliberative body Executive body
Human Talents Committee
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Governance Timetable
“IBGC Corporate Governance Award” (non-listed) 2009
Shareholders Agreement revised
2008
Board of Directors Committees
2005
“Garcia Family Constitution”
2001
Board of Directors (FDC support)
1999
Advisory Board 1995
Shareholders Agreement 1991
Professional executive management
1989
External auditing (Big 5) and Internal auditing
1988
Perm
anen
t Evo
lution
“Formal Risk Management Implementation”
2010
Professional CEO
Composed of friends
Professional Board
Family Council
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Agenda
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Algar Group
Algar Telecom: overview and strategy
Business segmentation
Consolidated financial results
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Current ownership structure
Algar Telecom
Algar S.A.
CTBC Celular
Multimídia Data Net Image
Algar Tecnologia Engeset
Algar Mídia
90,21%
Operational holding Fixed telephony, broadband and data products
84,43% 72,48% 100% 84,27% 100% 99,97%
Mobile telephony Data products Internet provider
Pay TV BPO, IT and Consulting
Network maintenance
Telephone directories
Minority Shareholders
9,79%
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OverviewIntegrated telecommunications company
Fixed-line and mobile telephony, broadband internet, data, pay TV, BPO, IT services and consulting, network maintenance and telephone directo-ries.
More than1.8 million clients
11,500 kmof optical fiber network
2009
1,387 Net revenue
392 EBITDA
28 %
11,368 Employees
9M10
317
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13,137
1,110
R$ million
Consolidated figures
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Strategic guidelines
• Make a difference in the client company relationship Client-centered company
• Select geographic expansion • New services Revenue diversification
• Increase EBITDA margin Profitability
• Implement IP technology creating a new range of services IP Technology
• Optimize debt service resulting in funds available for growth Availability of funds
• Permanent focus on human resources development Human resources
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Algar Group
Algar Telecom: overview and strategy
Business segmentation
Consolidated financial results
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Business segmentation
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Business segmentation
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Market positioning
Long distance calls: ranked 1st for 11 months
Fixed-line local calls: ranked 1st for 9 consecu-tive months
Mobile calls: ranked 2nd for 7 months and ranked 1st for 2 months
To be the most effective telecom company in customer relations
2nd 1st
Performance Index in customer
attendance– IDA (ANATEL)
From nov09 to oct10
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Concession
Expansion
Started in 1954
87 communities in 4 different states (MG/SP/GO/MS)
1.5% of national GDP and GDP per capita 35% above the national average
2.9 million inhabitants
The company has authorization to provide telecom services across the country and selected primarily the attractive regions around its backbone
High growth potential - region concentrates 50% of the GDP and 60% of Brazilian telecom traffic
Areas
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Backbone
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Major guidelines for growth
Focus on convergence
Increase broadband services
Seek entertainment and communication solutions
B2C
Focus on offering customized solutions to medium and small companies
Complete provider of IT/telecom solutions
Be an alternative to the incumbents
Expand data business around backbone
B2B
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The company’scorporate clients include
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Fixed-line clientsGrowth driven by the corporate market in the expansion area
Recent customer increases in the concession area are a result of bundle offers
2007 2008 2009 Sept09 Sept10
658 684 701 682
772
Fixed lines (thousands)
622
151
Expansion Concession
587
95
599
102
611
73
631
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CAGR: 3,2% +13,2%
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Mobile clientsStrategic focus on post paid clients and on business profitability
9M10 X 9M09: 22% increase in post paid clients and 9% in pre paid33% of clients are post paid (the industry average is 19%) ARPU of R$ 42.5 –highest among all Brazilian telecoms
2007 2008 2009 Sept09 Sept10
361
447
511 491
556
Mobile clients (thousands)
374
182
Pre-paid Post-paid
342
149
350
161
309
138
234
127
CAGR: 19,0%
67%
33%
+13,3%
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Broadband clients Important component of bundles
Highest ADSL penetration among Brazilian incumbents
3G is becoming a complementary product of ADSL
2007 2008 2009 Sept09 Sept10
183
220 234 230
267
Broadband (thousands)
228
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3G ADSL
204
26
203
31
213
7
183
CAGR: 13,0% +16,3%
2007 2008 2009 Sept09 Sept10
28% 31%
29% 30% 30%
ADSL Penetration (% of fixed lines in service)
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Pay TVPay TV via DTH launched in May 2010
Service provided in the concession area of the company
2007 2008 2009 Sept09 Sept10
32 31 32 32
67 Pay TV
(thousands)
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DTH Cable
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Recent awards
2009 Modern Consumer AwardCustomer service excellence
Best companies to work for – 2010Great Place to Work Institute Época Magazine
The 70 best IT and Telecom companies to work for - 2010COMPUTERWORLD Great Place to Work Institute
2010 Best and Biggest Exame Magazine500 biggest in sales and telecom
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Business segmentation
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Algar TecnologiaThe ideal partner to design tailor-made solutions for your company.
ITO, BPO, Contact Center and Consulting Solutions
12 years of expertise
9M10 net revenue of approximately R$240 million
Over 10,000 associates (employees)
7,000 workstations for contact center and BPO operations
3 Data Centers, with over 13,000 sq.feet. (Tier 3; ISO 20.000/27.000)
3 software houses with CMMI and MPS BR certifications
2,000 servers in operation
More than 200 clients in Brazil and in the U.S
Operational and commercial presence in BrazilBelo Horizonte (MG), Brasília (DF), Campinas (SP), Rio de Janeiro (RJ), São Paulo (SP), Uberaba (MG) and Uberlândia (MG). *Sales in all Brazil
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Algar TecnologiaSolution Portfolio
Risk Management
Customer Experience Management
Agribusiness Construction Education Energy Financial Media and
entertainment
Government Sanitation Health Health Management Telecom
BPO Industries
Contact Center
Inbound and outbound sales
Back-office
Service Desk
Data
Voice
Customer Services
Information Technology
Special Projects
IT Infraestructure Services
Application Services
Managed Services
Process BPO Business BPO Customer Services
IT Telecom Consulting
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Main Clients
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Certifications and Awards
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Net revenue
13%
2%
9%
12%
2%
9%
21%
2%
10%
3% 1% 6%
90% 76% 77% 67%
9M09 9M10 2009 2008
Customer Services Consulting IT Services BPO
R$ 224.0 million R$ 273.1 million R$ 203.2 million R$ 239.8 million
2008 x 2009 9M09 x 09M10
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Contribution Margin
18%
1%
9%
18%
1%
9%
24%
2%
8%
1% 1% 7%
91% 72% 72% 66%
9M09 9M10 2009 2008
Customer Services Consulting IT Services BPO
R$ 75.0 million R$ 99.3 million R$ 74.7 million R$ 85.0 million
9M09 x 09M102008 x 2009
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Business segmentation
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Algar Group
Algar Telecom: overview and strategy
Business segmentation
Consolidated financial results
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Consolidated Revenue
Data, broadband, pay tv and BPO/IT are the main growth drivers, substituting traditional revenue
Data and broadband already represent 29% of total revenue (9M10)
2007 2008 2009 9M09 9M10
1,149
1,273
1,387
1,026 1,110
Net revenue
+ 8,2%
+ 9,0%
Gross revenue
1,337
519
193
135
234 18 186 53
502
219
150
267 19 224
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Fixed Voice
Mobile Voice
Broad band
Data
Pay TV
BPO/IT/Consulting
Other
1,431
9M09 9M10
R$ million
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EBITDA and Margin
2007 2008 2009 9M09 9M10
28% 28%
EBITDA margin
327 358 392 291 317
28% 28% 29%
Consolidated
9M09 9M10
261 277
32% 32% Telecom
9M09 9M10
26 31
13% 14%
BPO/IT and Consulting
9M09 9M10
2
Otherbusiness
7
3% 8%
R$ million
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Consolidated Net Income
9M09 vs 9M10: Strong growth of net income due to:better operational resultsbetter financial results
R$ million
2007 2008 2009 9M09 9M10
2%
5%
Net income margin
59 68
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77
26
5%
4%
7%
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Consolidated Capex
Consolidated capex in 9M10 directed to: 21% - Data and broadband 12% - NGN program 10% - Pay-tv via DTH 9% - BPO/IT 8% - Voice
2007 2008 2009 9M09 9M10
299
174
92 132
160
Capex R$ million
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Consolidated Debt
Net Debt
Dez/07 Dez/08
503
594
508 478 463
Dez/09 Jun/10 set/10
R$ million
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Consolidated Debt
Ratings “A+(brA)” stable (from Fitch ratings) “brA+” stable (from Standard and Poors)
Bonds
146
266
257
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Development banks
Domestic banks
Capital Market
Vendors
116 Over 4 years
123 From 3 to 4 years
130 From 2 to 3 yearst
140 From 1 to 2 years
170 In 1 year
Gross debt amortization Main CreditorsR$ million
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Strong points
Growth potential
Full service provider
Financial solidity
Operational efficiency
Corporate governance Customer relationship
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DisclaimerStatements in this presentation, as well as oral statements made by
the management of Algar Telecom (the “Company”), that are not
historical fact constitute “forward looking statements” that involve
factors that could cause the actual results of the Company to differ
materially from historical results or from any results expressed or
implied by such forward looking statements. The Company cautions
users of this presentation not to place undue reliance on forward
looking statements, which may be based on assumptions and
anticipated events that do not materialize.
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Investor RelationsRua José Alves Garcia, 415Bairro: Brasil38. 400 – 668/ Uberlândia – MG/ BrazilPhone: (5534) 3256 – 2978Email: [email protected]
Visit our Websitectbc.investor-relations.com.br
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