7/28/2019 Annual Investment Conference London March 2011
1/43
annual investors
London,
-
1
7/28/2019 Annual Investment Conference London March 2011
2/43
summary
1. general overview
2. economic environment and market overview
.
.
.
2
7/28/2019 Annual Investment Conference London March 2011
3/43
3
7/28/2019 Annual Investment Conference London March 2011
4/43
1993 1999 2004 February 2003 May 2007 November 2007
(Telecom Plus)
SonatelSonatel Sonatel Orange Orange Orange
4
100%
Multimedia
100%
Mobiles
Solutions
70%
Mali
90%
Bissau
90%
Guinea
100%
7/28/2019 Annual Investment Conference London March 2011
5/43
1.key considerations
an integrated, innovative operator, leading player in west African sub-
region
running fixed, mobile, Internet, TV and mobile payment activities
serving 11.2 million subscribers at the end of December 2010 stron mobile subscriber rowth of 27.4% in 2010 confirmed leadership in all its historical markets one of the highest profitability: Ebitda margin of 54% and net margin of 31% 42% owned by France Telecom (one of the largest worldwide operators) and backed up
listed on the Brvm in Cte dIvoire since 1998 and first value at Brvm stock exchange 70% pay-out ratio and a dividend yield of 10% for 2010
1st investor and biggest tax payer in Senegal and more than Fcfa.500 billion of Capex(over the past 5 years) in our markets (Senegal, Mali, Bissau and Guinea)
s rong grow prospec s
growth prospects thanks to new operations in Guinea and Guinea Bissau and otherregional players that could be added to Sonatels footprint
5
7/28/2019 Annual Investment Conference London March 2011
6/43
1.highlightsthe group continues to lead innovation in the subregion
Facebook version 0Pass Internet Everywhere
payment via the mobile phone prepaid Internetaccess to Facebook and Gmail via mobile phone
may june july august september october 2010
Adsl - prepaid
6
Iphone and 3G solutions promotions on
BTS area
7/28/2019 Annual Investment Conference London March 2011
7/43
1.development of data mobile and broadband offers
Internet broadband development (Wimax, Internet,prepaid, pack Internet: key + livebox)
top-of-the-range fixed and mobile handsets
(Iphone 4, Blackberry, Terminal plus)
Senegal: 3G in experimentation since 2008, fulllicense since march 2011 and since july 2010 in
7
7/28/2019 Annual Investment Conference London March 2011
8/43
1.commercial dynamism
promo flash: granted bonus
pack multimediareligious events Internet daynew offers
tombolasales promotion: new concepts
distribution: ganal, kirne mobile
offers: bonus zone, multiplay sa es: onus, om o a, sa es games, even s assoc a e games
sponsoring: wrestling matches associated to religious and cultural events
8
7/28/2019 Annual Investment Conference London March 2011
9/43
2 n mi nvir nm n nmarket overview
9
7/28/2019 Annual Investment Conference London March 2011
10/43
2.highlights
increased competition around abundance greater dynamism of the market with a penetration rate of 69% and astronger growth
Senegal 5 million Orange subscribers in spite of a market share decrease to 61% unfavourable tax and regulatory measures institution in june then suspension in november 2010 of the surtax on theentering international communications and the contract with Global Voice attribution of a license of infrastructure cables management in august 2010 increase in the Rutel tax from 2% to 5% in september 2010
Mali
maintaining leadership despite new competition maintaining 2 digit growth on turnover
improving the debt collection with competitors decline in domestic interconnection rates by 39%
improvement of debt collection with the competitor
10
7/28/2019 Annual Investment Conference London March 2011
11/43
2.highlights
normalization of the political climate
GuineaRepublic
macroeconomic environment remains difficult
improved market share (+4 points) 900 000 subscribers despite increasing competitive pressure
Bissau
consolidation of commercial dynamics driven in 2009 macroeconomic environment remains difficult improved operational performance
11
7/28/2019 Annual Investment Conference London March 2011
12/43
2.improved penetration rates and maintaining strong positions in allmarkets despite increased competitive pressure
Senegal Mali present in 18countries in AfricaGDP 5.1 %GDP 4%
inflation 2.1%
penetration 52%
position 1st/2
market share 69%
inflation 0.9%
penetration 69%
position 1st/3
market share 60%
Bissau Guinea
GDP 3%
inflation 15.4%GDP 3.5%
inflation 1.5%
position 2nd/6
market share 28%
position 2nd/3
market share 31%
activities
12
fixed line mobile internet TV adsl orange money
7/28/2019 Annual Investment Conference London March 2011
13/43
2.regulation
west african regulatory framework harmonization done in 5 countries: Burkina Faso, Sierra Leone,
Gambie, Cap Vert, Ghana and in progress in the other Ecowas members states
roadmap of telecom sector policy under study
numeric dividend: national committee be an worksho
new communication law adopted in Senegal in february 2011:
- setting up of an independent authority of regulation,
- separation of regulation and policy functions,- setting up of 2 decisional parties (collegiate management and general manager),
- , ,
- new regulatory issues: local loop unbundling, numbers portability,
- license for infrastructure.
13
7/28/2019 Annual Investment Conference London March 2011
14/43
2.wealth creation: major contributor to the economies of the countries
Sonatel group, a key driver of economic development incountries of presence:
contributes significantly to job creation: +100 000 jobs in the sub-region (card vendors, call boxes managers) with 3 000 + direct jobs contributes significantly to job creation: +100 000 jobs in the sub-region (card vendors, call boxes managers) with 3 000 + direct jobs
vvalue (Fcfaalue (Fcfa billion)billion)re a ve par n ere a ve par n e
countrycountry
contributioncontribution on countryon country127127 10.410.4%%
contributioncontribution on countryon countrybudgetarybudgetary revenuesrevenues
175175 13.813.8%%
exportsexports
9595 9.79.7%%
contribution on countrycontribution on countryGDPGDP 251251 4.04.0%%
model of the future headquarters of Sonatel
contribution on private &contribution on private &generalgeneral investmentsinvestments
6464 7.87.8%%
14
investmentsinvestments
6464 10.710.7%%
7/28/2019 Annual Investment Conference London March 2011
15/43
15
7/28/2019 Annual Investment Conference London March 2011
16/43
GuineaGuinea
3.market trends and specifications
Subsidiaries Fixed Mobile Multimedia Integration Orange Mali Orange Bissau Orange Guinea
num er ooperators
2 3 5 5 2 3 6
position 1 1 1 1 1 2 2
-
market share(subscribers)
98% 60% 95% - 69% 28% 31%
market trend (vs2009)
- strong development of multisim and abundance offers onmobile - strong
- normalization ofpolitical andeconomic
marketspecifications
- development of Internet broadband
- growth in fixed lines due to prepaid offers et development
of internet
competition
- new competitor
(Maroc Tlcom)
-the economic andsocial environment
- market share
environment
- depreciation of
the GNFtaken from leader
- strongcompetition
16
7/28/2019 Annual Investment Conference London March 2011
17/43
3.subscribers: 11.3 million including 2 million new customers in 2010
growth in subscribers on all segments: fixed lines, mobile and Internet development of broadband Internet via prepaid
number of
subscribers2008 2009 2010 09/08 10/09
240 358 258 233 282 722 7.4% 9.5%Fixed line
6 971 710 8 884 735 10 905 583 27.4% 22.7%Mobile
52 836 64 052 91 854 21.2% 43.4%Internet
7 264 904 9 207 020 11 280 159 26.7% 22.5%
17
7/28/2019 Annual Investment Conference London March 2011
18/43
3.mobile subscribers: +23%
strong growth in Mali, Guinea and Bissau thanks to commercial animation and
expansion of network coverage
mobile2008 2009 2010 09/08 10/09
subscribers
Senegal 3 536 672 4 607 891 5 089 540 30.3% 10.5%
Mali 2 757 094 3 474 952 4 716 819 26.0% 35.7%
Guinea 617 896 684 211 907 038 10.7% 32.6%
Bissau60 048 117 681 192 186 96.0% 63.3%
total 6 971 710 8 884 735 10 905 583 27.4% 22.7%
18
7/28/2019 Annual Investment Conference London March 2011
19/43
3.arpu erosion linked to the progression of subscribers, development ofthe abundance and impact of regulatory measures
decline in arpu due to the development of abundance and decline in interconnection ratesbut slowing in Senegal
improvement in arpu in Guinea result of the revaluation rates
arpu* 2008 2009 2010
09/08
10/09
fixed lines 174 193 179 10,4% -7,0%
mobile prepaid 14 10 9 -25.9% -15.6%
USD mobile postpaid 117 97 83 -17.5% -14.4%
Mali mobile prepaid 10 9 7 -14.8% -17.0%
USDmobile postpaid 162 168 170 3.3% 1.0%
Guinea mobile prepaid 5 5 6 1.4% 20.1%
USD
mobile postpaid 61 76 106 24.6% 39.8%
Bissaumobile prepaid 7 8 7 7.1% -8.9%
USD
19
*exchange rate at 31/12/2010 1 XOF = 12.16 GNF
*exchange rate at 31/12/2010 1 USD = 493.0503 XOF/**arpu on a monthly basis in USD
7/28/2019 Annual Investment Conference London March 2011
20/43
3.maintaining the dynamics of growth with strong financialperformance despite unfavourable tax and regulatory environment
millions XOF 2008 2009 2010 10/09
revenue 529 552 562 626 599 002 6.46%
Ebitda 299 063 316 108 324 242 2.57%
Ebitda margin 56.5% 56.2% 54.1%
operating profit 194 104 223 884 228 044 1.86%
o eratin mar in 36.7% 39.8% 38.1%
net profit 156 825 185 028 184 760 -0.14%
net mar in 29.6% 32.9% 30.8%
Capex 133 061 92 163 118 139 28.18%
Ca ex rate 25.1% 16.4% 19.7%
20
7/28/2019 Annual Investment Conference London March 2011
21/43
3.consolidated revenues:+6.5%
growth driven by mobile activity, international balances and Internet
decrease in domestic interconnection is related to the impact of rate reductions (34%)in Senegal and Mali
400 60.9%
61.8%
other
200
250
300
.
Internet, leased lines and data
50
100150 11.2%
6.4%
19.7%
4.2%0.8%
7.5% 6.2%
19.8%
4.8%0.9%6.3% 5%
.
5% 0.7% domestic interconnetion
international balance
0
.
mobile
-40% -30% -20% -10% 0% 10% 20% 30%
fixed lines
21
2008 2009 2010variation 10/09 variation 09/08
7/28/2019 Annual Investment Conference London March 2011
22/43
3.maintaining a high level of margins
maintainin a ood level of mar in des ite the sli ht decline
margins in 2010 impacted by the effect of the surcharge on inbound international, unfavourableregulatory and tax measures and exceptionals*
in % of revenue 2008 2009 2010
Ebitda margin 56.5% 56.2% 54.1%
operating margin 36.7% 39.8% 38.1%
. . .
* exceptional acceleration provisions in 2009 (Ebitda impact) and accelerated depreciation of certain assets following the inventory of
22
7/28/2019 Annual Investment Conference London March 2011
23/43
3.a level of sustained investment: 19.6% of sales
an ncrease carr e y e pro ec o ca es an e ex ens on o e mo e ne wor o mprovequality of service and the rural area coverage
millions XOF 2008 2009 2010 10/09
mobile networks 100 087 65 814 87 699 32.25%
% 74.8% 71.4% 74.1%
fixed lines/Internet network 18 177 15 799 20 081 27.1%
% 13.6% 17.1% 17.1%
information system 6 858 5 958 6 480 8.76%
. . .
logistics buildings and others 8 568 4 590 3 826 -16.65%
. . .
total capex 133 690 92 161 118 139 28.18%
23
. . .
7/28/2019 Annual Investment Conference London March 2011
24/43
3.a positive contribution of all entities
still predominant contribution of Senegal
improvement in the performance of both Guineas and strengthening of the weight of Mali
millions XOF enega a u nea ssau
revenue 64.6% 29.6% 4.8% 1.0%
Ebitda 61.0% 35.1% 3.4% 0.6%
operating profit 57.5% 39.7% 3.0% -0.3%
net profit 49.7% 47.8% 2.9% -0.4%
x . . . .
rowth in revenue* 3.0% 9.4% 36.8% 57.0%
24* contributive revenue
7/28/2019 Annual Investment Conference London March 2011
25/43
3.good cash generation and debt level of 9%
Free Cash Flow
166
221204
billions XOF
508557
591
40%
50%
600
700
billions XOF
33.6%
- .
9.16%
20%
30%
200
300
400
24.7%
2008 2009 2010
1351 54
2.56%
.
0%0
100
2008 2009 2010
264280 280 25300
Debtbillions XOF
20.3
15
20
150
200
250 a significant and sustained generation ofcash
13
51 54
. .
0
5
0
50
100
cash flow from operations more than 5 timesthe financial liability
25
2008 2009 2010
Cash flow Financial debt Debt coverage ratio
7/28/2019 Annual Investment Conference London March 2011
26/43
3.a stock price growth of 25%
154 000
160 000
monthly average stock price pic of the month
144 707
149 474151 118
140 000
150 000
140 000 140 000 140 000
145 000
150 000150 000
138 435
135 263136 386
134 636 133 859 134 800
139 639135 000
135 000 135 000
130 000
140 000
123 800
127 687120 000
125 000
120 000
110 000
100 000
26
3 di id d
7/28/2019 Annual Investment Conference London March 2011
27/43
3.dividend
exercices 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
share price on31/12
21 000 20 000 20 000 22 500 36 030 67 015 91 000 175 000 130 000 120 000 154 000
dividend
(millions de Fcfa)29 000 29 000 29 650 44 000 56 500 69 000 88 300 110 000 130 000 135 000 140 000
share2 610 2 610 2 668 3 960 5 085 6210 7 947 9 900 11 700 12 150 12 600
dividend 2% 0% 2% 48% 28% 22% 28% 25% 18% 3,85% 3,7%
dividend
yield12% 13% 13% 18% 14% 9% 9% 6% 9% 10% 8%
distribution rate
(%)61% 55% 57% 69% 66% 65% 68% 65% 73% 73% 74%
27
3 lth ti j t f th t l i ti t
7/28/2019 Annual Investment Conference London March 2011
28/43
3.wealth creation:major actor of the telecommunication sector
project to build new submarine cable ACE*
The submarine cable ACE (Africa Coast to Europe) will
of Africa to access the network high-speed world.
This new optic cable fiber, length 17 000 km in its currentconfiguration, will be put into service in the first half of 2012.It will serve 23 countries, either by direct access to countriesalong the coast or through a connected countryfor countries with no access to the sea.
The cable construction re resents an investment of aboutU.S. $ 690 million for the consortium, of which about 180
million U.S. dollars which should be supported by thevarious subsidiaries. For these major investments, FranceTelecom-Orange embodies two components of its strategy
broadband) in Africa where the group operates in fifteencountries and contribute to developing the quality of service.It provides connectivity to the foreground and opens a new
range of innovative services to promote economic and socialdevelopment of the continent.
28
*source: France Telecom
7/28/2019 Annual Investment Conference London March 2011
29/43
29
4 prospects
7/28/2019 Annual Investment Conference London March 2011
30/43
4.prospects
ur mar e s are s c arac er ze y ncrease compe on, eve opmen o
abundance and multisim. The group has maintained its strong position on all its markets and maintain itsmarket share value. On the new subsidiaries of Guineas, the commercial and financial performance have beengreatly improved.
Competition should remain strong but the group should maintain its strong position in its marketsby continuing its policy focused on:
providing a high quality technical service and commercial
development of innovative and appropriate offers to customer needs, easy to access and use improving customer relationship around the values of the Orange brand with the set up of our new CRM
than 2010. Tax and regulatory pressure is however an element of concern in our environment.
Our growth outlook is supported by:
development of broadband, mobile data and X play offers
development of value added services and contents
improving macroeconomic and institutional environments of our guinean subsidiaries and their commercialposition
development of the coverage of our networks to get the residual potential penetration in Mali, Guineaand Guinea Bissau
the continuation of our develo ment throu h external rowth
30
4 other issues/Brvm situation
7/28/2019 Annual Investment Conference London March 2011
31/43
4.other issues/Brvm situation
the subregion
transfer of offices and staffs of the Brvm and DC/BR in Bamako Mali due tothe situation in Ivory Cost
trading on the Brvm was closed on february 11th then opened march 1st withnew Brvm offices in Mali
31
7/28/2019 Annual Investment Conference London March 2011
32/43
appendix
32
5 Senegal
7/28/2019 Annual Investment Conference London March 2011
33/43
5.Senegal
overview of country economic evolution
- GDP 12.7 billion $, GDP growth: 3.5% (2010)
- GDP by sector: agriculture 13.8%, industry 23.3%and services 62.9%
- population below poverty line: 54%
- inflation rate 2010: 0.9%
overview of population dynamics
- population: 12.3 million, growth rate: 2.5%
- ur an popu a on: o o a , ur an za on ra e:3.1%
- literacy: 39.3% of total population
specificities of the telecom market
- fiber-optic network
- 2/3 of fixed line service connections are in Dakar
- -
- mobile-cellular service is expanding rapidly
- international: SAT-3/WASC fiber optic (Europe andAsia), Atlantis-2 (South America) and satellite earth
-
33
5 Mali
7/28/2019 Annual Investment Conference London March 2011
34/43
5.Mali
overview of country economic evolution
- GDP 8.9 billion $, GDP growth: 5.1% (2010)
- GDP by sector: agriculture 45%, industry 17% andservices 38%
- population below poverty line: 36.1%
- inflation rate 2010 : 2.1%
overview of population dynamics
- population: 13.7 million, growth rate: 2.6%
- ur an popu a on: o o a , ur an za on ra e: .
- literacy: 46.4% of total population
specificities of the telecom market
- domestic system unreliable but improving, provide onlyminimal service
- fixed lines availability is gradually increasing, number
of subscribers remains under 1 er 100 ersons
- mobile-cellular number of subscribers has increasedsharply over the last years
- international: satellite earth stations-2 intelsat (Atlantic
34
5 Guinea
7/28/2019 Annual Investment Conference London March 2011
35/43
5.Guinea
overview of country economic evolution
- GDP 4.394 billion $, GDP growth: 3% (2010)
- GDP by sector: agriculture 24.2%, industry 38.5% andservices 37.3%
- population below poverty line: 47%
- inflation rate: 15.4% .
overview of population dynamics
- population: 9 million, growth rate: 2.6%
- urban o ulation 34% of total, urbanization rate: 3.5%
- literacy: 29.5% of total population
specificities of the telecom market
- inadequate system of open-wire lines, small radiotelephonecommunication stations and new micro wave radio relaysystem
- Conakry reasonably well covered, coverage elsewhereremains inadequate
- mobile-cellular number of subscribers has increasedsharply over the two last years
- 6 competitors in mobile service
- international: Satellite earth stations-1 intelsat (Atlantic
35
Ocean)
5 Guinea Bissau
7/28/2019 Annual Investment Conference London March 2011
36/43
5.Guinea Bissau
overview of country economic evolution
- m on , grow : .
- GDP composition by sector: agriculture 62%,industry 12% and services 26%
- inflation rate 2009: 1.5%
overview of population dynamics
- population: 1.5 million, growth rate: 2%
- ur an popu a on o o a , ur an za on ra e:3.2%
- literacy: 42.4% of total population
specificities of the telecom market
- small system
- ,lines
- radiotelephone and cellular communication fixed lineteledensity under 1 per 100
36
5.board of directors
7/28/2019 Annual Investment Conference London March 2011
37/43
5.board of directors
members
Marc Rennard, Chairman
Christophe Eouzan, Administrator, FT representative
, ,
Jean Paul Cottet, Administrator, FT representative
Cheikh Sidya El Moctar Bye, Administrator representing the State of
Senegal (Department of Economics and Finances)
Thierno Ousmane Sy, Administrator representing the State of Senegal
Moustapha Sarr, Administrator representing the State of Senegal (Ministry of
the Army) Abdoulaye Camara, representing Financial Control of the State of Senegal
Ibrahima Kont, Administrator representing the staff of Sonatel
37
Victor Gorom Ndiaye, independant Administrator
7/28/2019 Annual Investment Conference London March 2011
38/43
5.Senegal - competitors
7/28/2019 Annual Investment Conference London March 2011
39/43
Sentel 3rd license in Sene al
g p
Millicom International ownership
License of 20 years in July 1998
3rd global license (fixed, mobile and
international) for Sudatel on September 2007 for
-
Parent co. etbrand
Rebranded in Tigo on December 2005
Financial data (Millicom Africa 2010)
Revenues: US 905 million
,
- US$ 105 million)
Sudatel began its operations at the beginnings
of 2009 throu h Ex resso brandEbitda margin: 39.6%
GSM Subscribers
31% market share
Subscribers
9% market shares
Financial data Africa GSM 900 Network
Operating revenues : US$ 550,340,082 2010Sentels brand
Sudatel
7 operations 5 operations
39
5.Mali - competitors
7/28/2019 Annual Investment Conference London March 2011
40/43
Ownership
State of Mali (49%) Maroc Telecom bought 51% stake in Maliphone company Sotelma for 275 millions euros
set up in 1989
Commercial launch in 1990
.8th 2009
Malitel as mobile operator (1999)
GSM subscribers
,
France's Vivendi and 30% by the MoroccanState, has expanded into Mauritania, BurkinaFaso and Gabon since 2006 throu h
o mar e s are
GSM 900 network
acquisitions
launched a 56 billion investment program inprivatization 2009 in order to renew their infrastructures.
certified ISO 9001 (2008version) the February
40
24th ,2011
5.Guinea - competitors
7/28/2019 Annual Investment Conference London March 2011
41/43
ownership
State of Guinea ownershipIntercel now owned by Expresso
30% in 30th June 2010- 100% b
(100%)
commercial launch in
MTN (75%)
commercial launch in April 2005
28th Feb 2012)
ownership Teylium (100%)
launched in 20061993
GSM subscribers
GSM subscribers
36% market share 5% market share
Privatization
forecasted and will be
MTN21 operations
directed by Gide
Loyrette Nouel law firm Cellcom
440 871 subscriberslaunched in 2008
17% market share6th operator coming
41
5.Guinea Bissau - competitors
7/28/2019 Annual Investment Conference London March 2011
42/43
Shareholding Shareholding
State of Bissau (90%)
Staff (10%)
MTN (100%)
Commercial launch in June
GSM Subscribers
4.1% market share
GSM subscribers
64.9% market share
42
7/28/2019 Annual Investment Conference London March 2011
43/43
thank ou
43
Top Related