VODAFONEZIGGO OPEN OFFICE - 14 MARCH 2019 - VODAFONE INVESTOR RELATIONS
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
VodafoneZiggo Open Office
14 March 2019
1
C2 General
Disclaimer
BY ATTENDING THE PRESENTATION AT WHICH THE FOLLOWING with respect to the information contained in this presentation, adverse impacts; risk involving the parties’ respective ability to realise
SLIDES ARE PRESENTED, YOU WILL BE DEEMED TO HAVE including the accuracy, sufficiency or completeness thereof. expected benefits associated with the transaction; the impact of legal
REPRESENTED AND WARRANTED THAT YOU HAVE READ AND AGREE or other proceedings; and continued growth in the market for
Except where otherwise indicated, this presentation speaks as of the
TO COMPLY WITH THE CONTENTS OF THIS NOTICE. broadband communications and mobile services and general
date hereof. Neither the JV nor any Representative shall have any
economic conditions in the relevant market(s).
This document and its contents are confidential and may not be obligation whatsoever to update or correct any of the information
reproduced, redistributed, published or passed on to any other person, contained herein. No assurances can be given that the forward-looking statements in
directly or indirectly, in whole or in part, for any purpose. If this this announcement will be realised. As a result, recipients should not
Safe Harbor Statement:
presentation has been received in error it must be returned rely on such forward-looking statements. Subject to compliance with
immediately to Vodafone Ziggo Group Holding B.V. In this Certain information contained in this investor presentation constitutes applicable law and regulations, the parties undertake no obligation to
presentation “the Company”, “we”, “us”, “our”, “the JV” or “Group” “forward-looking statements”, which can be identified by the use of update these forward-looking statements. No representation or
refer to Vodafone Ziggo Group Holding B.V. and its group companies. terms such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, warranty is made as to the reasonableness of such forward-looking
“estimate”, “intend”, “continue”, “target” or “believe” (or the negatives statements. These forward-looking statements speak only as of the
This presentation is not directed to, or intended for distribution to or
thereof) or other variations thereon or comparable terminology, or by date of this presentation.
use by, any person or entity that is a citizen or resident of, or located
discussions of strategy, plans, objectives, goals, future events or
in, any locality, state, country or other jurisdiction where such
intentions. Such statements express the intentions, opinions, or
distribution or use would be contrary to law or regulation or which
current expectations of the parties with respect to possible future
would require any registration or licensing within such jurisdiction.
events and are based on current plans, estimates and forecasts, which
No representation or warranty, express or implied, is or will be given by the parties have made to the best of their respective knowledge,
the JV or any of its officers, members, shareholders, employees, concerning, among other things, the respective business, results of
affiliates, representatives or advisers ("Representatives") or any other operations, financial position, prospects, growth and strategies of the
person as to the accuracy or completeness of the information Company. Due to various risks and uncertainties, actual events or
contained in this presentation. Without limiting the foregoing, neither results or actual performance may differ materially from those
the JV nor any Representative shall have any liability whatsoever to reflected or contemplated in such forward-looking statements.
the recipient of this presentation, any of its affiliates, or any of their
Such risks and uncertainties include, but are not limited to, regulatory
respective officers, directors, members, shareholders, managers,
approvals that may require acceptance of conditions with potential
employees, affiliates, representatives or advisers or any other person
2
C2 General
Introducing the Senior Leadership Team
Jeroen Hoencamp Ritchy Drost Marcel de Groot John van Vianen Eben Albertyn
CEO CFO Consumer Director Business Director Technology Director
Robin Clements Thomas Mulder Barbara Jongerden Marieke Dekker Robin Kroes
Customer Operations Human Resources Legal & Regulatory External Affairs Strategy & Integration
3
C2 General
Key messages
VodafoneZiggo
A converged
NGN leader
A unique asset in We have multiple We have returned We have a resilient
an attractive market growth levers to OCF growth balance sheet
4
C2 General
The Dutch market: highly advanced, evolving rapidly to NGN and Convergence
Broadband Mobile Postpaid Pay TV
7.5m customers 15.6m SIMs 7.5m customers
32% converged 23% converged 25% converged
95% 90% 95%
HH penetration Pop. penetration HH penetration
+0.5pp YoY +3.2pp YoY -1.0pp YoY
ADSL FTTH Cable Consumer Business Cable DSL FTTH Other
38% 16% 46% 71% 29% 56% 21% 16% 7%
Source: Telecompaper market reports Q3 2018
5
C2 General
Clear rationale for Vodafone and Ziggo to merge
Two strong and complementary providers… … combined to create VodafoneZiggo
+
• Nationwide 4G coverage • >90% NL fixed coverage • A leading NGN provider
• #2 mobile provider • #1 fixed broadband • Well positioned to address the growing demand
provider in Consumer for convergence
• Leading mobile brand
• Leading fixed brand • Differentiated through content
• 1 of only 4 networks in
Europe rated ‘outstanding’1 • Leading content provider • Creating significant synergies (€210m run-rate
savings)
1. Based on independent network test scores from P3
6
C2 General
VodafoneZiggo at a glance
Revenue market shares1 (%)
Q4 2018
70% of HH use 8,000 Consumer Business
at least one employees FY 2018: €7.2bn FY 2018: €2.9bn
product
8.5 9.1
9.4
5m mobile 3m broadband 2.5m fixed phone 15.8
37.8
connections connections connections
VZ #1 VZ #2 50.6
30.9
37.9
4m TV Unique Exclusive
connections sports rights rights
VZ KPN TMO incl. Tele2 Other
1. Source: Telecompaper Total Comms Q4 report & company estimates (all based on IFRS)
7
C2 General
We are a purpose led company
PURPOSE
Enjoyment and progress with every connection
PLAN
Live up to the Put the Deliver great Invest for
customer promise customer first products the future
VALUES
8
C2 General
We are the leading NGN provider…
Ziggo footprint Vodafone footprint
• 7.2m homes passed • Nationwide 4G
(~92% of NL) coverage
• 100% DOCSIS 3.0 with • Core 5G ready
>500Mbps
• 1 of only 4 networks
• c.1m homes DOCSIS 3.1 in Europe rated
ready with >1Gbps ‘outstanding’
9
C2 General
… enabling Gigabit speeds to all households by 2021
VodafoneZiggo DOCSIS 3.1 coverage FTTH build¹
(% of VodafoneZiggo footprint) (% NL households)
100%
~50%
37%
17%
Today 2021e Today 2021e
1. KPN Capital markets day 2018 presentation and company estimates
10
C2 GeneralOur convergence strategy is paying off…
Convergence penetration of BB households Convergence penetration of Postpaid SIMs
(% of VodafoneZiggo broadband customers) (% of VodafoneZiggo postpaid SIMs)
Churn down¹ Churn down¹
~50% ~70%
NPS up¹ NPS up¹
+15 +17
More than 1m converged households More than 1.5m converged SIMs
1. FMC vs non-FMC customers
11
C2 General… supported by our differentiated position
Best Network Best content Best converged
& viewing experience propositions
Home of Sports
Gigabit speeds in Ziggo Go app
fixed, co-best in
mobile Sharing benefits with
Red Together
Mediabox Next
12
C2 GeneralOur commercial performance has improved significantly post merger
Fixed broadband customer growth Postpaid customer growth
(RGU’s ‘000s) (SIMs ‘000s)
% of total market net adds % of total market net adds
Start JV Start JV
21%
78% 157
63%
22% 67
16%
51 5%
42¹
35
0%
(1%) 31
(7) 3
2015 2016 2017 2018 2015 2016 2017 2018
1. Reported broadband customer net additions +87k. Adjusted for our Q4’16 free customer upgrade campaign for both fixed telephony & TV customers which accounted for +45k net adds
13
C2 GeneralFinancial performance: all guidance metrics achieved
OCF back to growth Consistent investment Resilient balance sheet Robust distributions
OCF YoY growth (%) Capex intensity (%) Covenant leverage Total shareholder returns (€m)
Guidance range² Guidance range² Vendor financing
Guidance range²
20.6% 21.5% 20-22%
19.6% 905
1-3%
5.0
0.5% 701
4.0 Target net 400-600
covenant leverage
range (4.5-5.0x)
3.0
(5.6%) 2.0
1.0
(10.9%) 0.0
20161 2017 2018 2019e 2016 2017 2018 2019e 2016 2017 2018 2017 2018 2019e
1. Unaudited proforma growth rate
2. Per FY2018 results press release
14
C2 GeneralSynergy realisation ahead of plan
Opex and capex synergies
(€m) • Synergies achieved:
- FTE reduction
210 - Reduction in joint marketing expenditure
50% of - IT platforms combined
synergies
realised • Full run-rate synergies to be achieved in
105 2020, one year ahead of original 2021 plan
• Additional opportunities:
Digital transformation
Realised (FY 2018) Original target Radically simpler
(2021)
15
C2 GeneralWe have a resilient balance sheet
Total debt¹ to annualized L2Q OCF
(FY 2018)
• No material refinancing needs
until 2024 / 2025
6.2x
5.6x
5.0x 4.8x • Interest rates fixed, FX hedged
Target net leverage
4.5-5.0x
• High cash flow generation
• Further flexibility through:
– OCF growth
– Potential tower monetization
3rd party debt + 3rd party debt Gross covenant Net covenant leverage
– Working capital initiatives
vendor financing leverage
1. Debt is presented on a fully swapped basis and differs from reported debt
2. Covenant leverage is defined as 3rd party debt divided by the last two quarters OCF on an annualized basis, adjusted for cost synergies not yet captured, opex related integration costs and capital related shareholder charges
16
C2 GeneralKey takeaways
VodafoneZiggo
A converged
NGN leader
A unique asset in We have multiple We have returned We have a resilient
an attractive market growth levers to OCF growth balance sheet
Delivering on our promises
Integration on-track
Synergies ahead of plan
Driving convergence
17
C2 General18 C2 General
The Consumer market | leader in total comms
Fixed market share¹ Mobile postpaid market share¹ Total communications market share¹
Share Share Share
Revenue (€m) Growth Revenue (€m) Growth Revenue (€m) Growth
YoY YoY YoY
+0.3pp 0.0pp
-0.5pp
+0.2pp
+1.0pp
+1.5pp
-0.1pp
-0.9pp
-2.1pp
VZ KPN TMO incl. Tele2 Other
1. Source: Telecompaper Total Comms Q4 report & company estimates (all based on IFRS)
19
C2 General2018 | a more data driven organization, with a greater focus on convergence
Implementation of Opened new Flag Ship store Converged % of base
Fixed broadband Mobile postpaid
32% 69%¹
Advanced data analytics platform to
optimise sales and marketing Churn²
-50% -73%
• Central decisioning tool
TV streaming app available in EU
• Best/relevant offer across NPS²
channels +15 +19
• Increase in customer lifetime
value
Net adds
+18k +99k
1. Excluding hollandsnieuwe postpaid
2. FMC vs Non-FMC customers
20
C2 GeneralOur converged benefits
21
C2 GeneralConsumer growth opportunities
The new Increase household Digital
TV experience penetration VodafoneZiggo
Mediabox Next
• Seamless multi-device platform • Increase converged HH’s • Increase digital sales
• Cloud based services • Increase HH SIM penetration from 25% to 50% in 3 years
• Voice controlled, intuitive UI • Grow ARPA • Drive customer interactions
• 4K TV through digital channels
22
C2 GeneralHow we position our brands
23
C2 General24 C2 General
The Business market | VodafoneZiggo #2 in both fixed and mobile
Fixed market share¹ Mobile postpaid market share¹
Revenue (€m) Revenue (€m)
Share Share
Growth Growth
YoY YoY
-0.0pp
-0.1pp
-0.2pp +1.6pp
-1.8pp -0.4pp
VZ KPN TMO incl. Tele2 Other
1. Source: Telecompaper Total Comms Q4 report & company estimates (all based on IFRS)
25
C2 General2018 | the year of Value Added Services, fixed and convergence
Value Added Services (VAS) Fixed Converged % of base
Fixed broadband Mobile postpaid
+34% +7.5%
40%¹ 41%¹
Unified Comms Revenue growth YoY
Revenue growth YoY (SoHo +15% YoY) Churn²
-52% -62%
IoT Fixed broadband
NPS²
+12% +15% +10 +22
Customer base Customer base
growth YoY growth YoY Net adds
+32k +58k
1. Of eligible base
2. FMC vs Non-FMC customers
26
C2 GeneralGrowth opportunities
Stabilize mobile Challenger in fixed Add value through Grow VAS
converged
• Leverage Vodafone’s • Enhance VPN & SDN offers, • Introduce converged benefits • Focus on the Digital Workplace
international footprint using our HFC capabilities for other B2B segments
• Cloud solutions (supported by
• Introduce ‘Red Pro Team’ • B2B2C solutions in healthcare • Introduce flexible benefits our IBM partnership)
to better address the & hospitality
SoHo / Small customer • IoT: grow services in select
• Grow market share with verticals, beyond just
segment
SD-WAN connectivity
27
C2 GeneralIoT case study
Dikes
28
C2 General29 C2 General
Our infrastructure is Best in Class
Infrastructure key metrics
1 of only 4
452k networks in Europe
Street cabinets 4,700 rated Outstanding²
towers¹ Up to
94% of fixed traffic 1Gbps
runs via fibre Mobile speed
Best internet
provider in NL for
Up to 9 years in a row³
C.475
homes / node 500Mbps
Fixed speed
1. Of which c. 3,000 owned directly
2. P3 Benchmark, April 2018
3. Tweakers award 2019
30
C2 GeneralFull digitalization & DOCSIS 3.1 will enable Gigabit speeds on fixed
Free-up spectrum Increase capacity New technology
1,200 MHz
Analogue TV 10x DOCSIS 3.0 DOCSIS 3.1
less efficient
Maximum
200Mbps 1Gbps
1.2m analogue TV viewers upstream
speed
Maximum
800k on 2nd/3rd TV set downstream 1Gbps 5Gbps
400k on prime TV set speed
Before After
31
C2 GeneralWe will enable Gigabit speeds to all households by 2021
Speed coverage today Speed coverage by 2021
(max download speed; % of households) (max download speed; % of households)
VFZiggo DOCSIS 3.0 FTTH & DSL¹ VFZiggo DOCSIS 3.1 FTTH & DSL¹
>50Mbps
100% >50Mbps >500Mbps 100% 15%
25%
>100Mbps
37%
10%
>500Mbps >1Gbps
5% 50% >1Gbps
>150Mbps
15%
>100Mbps
20%
10% 13%
>200Mbps
>150Mbps >200Mbps
1. KPN Capital markets day 2018 presentation
32
C2 GeneralPreparing for 5G
5G launch requires spectrum and handsets… … and we will be ready
Spectrum
auction Core network
700, 1400 &
2100 MHz 100% 5G ready
In 2020
3500MHz Handsets Radio sites
Spectrum First handsets Transmission 20% 5G ready,
auction announced only 40% 5G ready initial focus on
In 2022 for 3500MHz main cities
33
C2 GeneralTechnology synergies: simplifying our business
Infrastructure Digital legacy One Business Support System
Unify
Derby Unify
3rd party Fibre Fibre
• Migrating services to own fibre • Rationalizing legacy voice • Successful upgrade of Unify for
infrastructure platforms fixed products
• Project commenced (on-track) • Full transition to the Vodafone • Next step: move Ziggo base to
platform taking place Unify
• Opportunity to remove old CPE,
set-top boxes, tariffs etc
34
C2 General35 C2 General
Revenue trends stabilising despite headwinds
Revenue
(Old GAAP)
(4%)
(1.1%)
(0.5%)
(0.6%)
(1%)
(1.5%)
+0.5%
(1.0%)
(0.4%)
(0.3%)
2016 Regulation SIM only impact B2B Underlying 2017 Regulation SIM only impact B2B Underlying 2018
(MTRs & (Consumer backbook performance (MTRs & (Consumer backbook performance
Roaming) Credit) repricing Roaming) Credit) repricing
36
C2 GeneralFinancial performance: all guidance metrics achieved
OCF back to growth Consistent investment Resilient balance sheet Robust distributions
OCF YoY growth (%) Capex intensity (%) Covenant leverage Total shareholder returns (€m)
Guidance range² Guidance range² Vendor financing
Guidance range²
20.6% 21.5% 20-22%
19.6% 905
1-3%
5.0
0.5% 701
4.0 Target net 400-600
covenant leverage
range (4.5-5.0x)
3.0
(5.6%) 2.0
1.0
(10.9%) 0.0
20161 2017 2018 2019e 2016 2017 2018 2019e 2016 2017 2018 2017 2018 2019e
1. Unaudited proforma growth rate
2. Per FY2018 results press release
37
C2 GeneralOCF growth and stable capex intensity
OCF growth (ex. integration costs) Capex intensity (ex. integration costs)
YoY growth (%) (%)
19.6% 19.5% 18.9%
1.7%
(4.3%)
(10.9%)
20161 2017 2018 2019 2016 2017 2018 2019
guidance guidance
Reported OCF Reported
(10.9%) (5.6%) 0.5% 1-3% 19.6% 20.6% 21.5% 20-22%
growth capex intensity
1. Unaudited proforma growth rate
38
C2 GeneralDebt maturity profile
Debt maturity
(€bn)
• Gross covenant debt of €9.7 billion
• Long term, fixed rate capital structure
• Average debt duration of 6.7 years
• No material maturities until 2024/2025
• Average cost of debt 4.6%
39
C2 GeneralSynergy realisation ahead of plan
Opex and capex synergies Synergies achieved
(€m)
FTE reduction Senior management & first wave in all areas
210 Marketing 17% reduction in joint marketing expenditure
50% of
synergies IT simplification First steps in IT rationalisation
realised
Ziggo MVNO migration Migration of 210k Ziggo mobile customers
105
Office rationalisation Reduction of office locations (16 to 9)
25% capex
Remaining €105m synergy opportunities
75% opex
IT simplification 40% Finalising one BSS/OSS, Office IT, B2B platforms
Realised (FY 2018) New target (FY 2020) Organisation 20% Further efficiencies in all areas
Network 15% Wholesale to own infrastructure, Core network
Marketing 15% Further efficiencies in marketing expenditure
40
C2 GeneralRegulatory developments
Spectrum auction T-Mobile/Tele2 merger Wholesale cable access
41
C2 GeneralRegulatory timeline | wholesale cable access
Projected timeline | If appeal rejected first parties expected to go live in 2020
Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3
Reference offer First version (indicative prices)
Full version published incl. tariffs, SLA & volume commitments
Timeline
(VZ view) Appeal Final verdict expected in Q4 2019
Negotiations
Implementation After contract signed
First customers connected During 2020
42
C2 General43 C2 General
You can also read
