TELECOM ARGENTINA S.A. Telecom Argentina
FY23 & 4Q23 Earnings Release
March 2024
DISCLAIMER | 1 | |
This presentation does not constitute an offer to sell or the solicitation of any offer to buy any securities of Telecom Argentina S.A. (the "Company"), in any jurisdiction. Securities may not be offered or sold in the United States absent registration with the U.S. Securities Exchange Commission ("SEC"), the Comisión Nacional de Valores (Argentine National Securities and Exchange Commission, or "CNV") or an exemption from such registrations.
No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness. Certain information contained in this presentation has been obtained from published sources, which may not have been independently verified or audited. No representation or warranty, express or implied, is given or will be given by or on behalf of the Company, or any of its affiliates (within the meaning of Rule 405 under the Act, "Affiliates"), members, directors, officers or employees or any other person (the "Related Parties") as to the accuracy, completeness or fairness of the information or opinions contained in this presentation or any other material discussed verbally, and any reliance you place on them will be at your sole risk. Any opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. In addition, no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company or any of its Related Parties in relation to such information or opinions or any other matter in connection with this presentation or its contents or otherwise arising in connection therewith. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to verification, completion and change without notice.
This presentation may contain statements that could constitute forward-looking statements, including, but not limited to (i) the Company's expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; (ii) the implementation of the Company's business strategy; (iii) the changing dynamics and growth in the telecommunications and cable markets in Argentina, Paraguay, Uruguay and the United States; (iv) the Company's outlook for new and enhanced technologies; (vi) the effects of operating in a competitive environment; (vii) the industry conditions; (viii) the outcome of certain legal proceedings; and (ix) regulatory and legal developments.
Forward-looking statements may be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "will," "may" and "should" or other similar expressions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate.
DISCLAIMER | 2 | |
Many factors could cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by forward-looking statements. These factors include, among others: (i) the Company's ability to successfully implement our business strategy and to achieve synergies; (ii) the Company's ability to introduce new products and services that enable business growth; (iii) the Company's ability to service our debt and fund our working capital requirements; (iv) uncertainties relating to political and economic conditions in Argentina, Paraguay, United States and Uruguay; (v) the impact of political and economic developments on demand for securities of Argentine companies; (vi) inflation, the devaluation of the Argentine Peso, the Guaraní and the Uruguayan Peso and exchange rate risks in Argentina, Paraguay and Uruguay; (vii) restrictions on the ability to exchange Argentine Pesos, Guaraníes or Uruguayan Pesos into foreign currencies and transfer funds abroad; (viii) the impact of additional currency and exchange measures or restrictions on our ability to access the international capital markets and our ability to repay our dollar-denominated indebtedness; (ix) the creditworthiness of our actual or potential customers; (x) nationalization, expropriation and/or increased government intervention in companies; (xi) technological changes; (xii) the impact of legal or regulatory matters, changes in the interpretation of current or future regulations or reform and changes in the legal or regulatory environment in which the Company operates, including regulatory developments such as sanctions regimes in other jurisdictions (e.g., the United States) which impact on the Company's suppliers; (xiii) the effects of increased competition; (xiv) reliance on content produced by third parties; (xv) increasing cost of the Company's supplies; (xvi) inability to finance on reasonable terms capital expenditures required to remain competitive; (xvii) fluctuations, whether seasonal or in response to adverse macro-economic developments, in the demand for advertising; (xviii) the Company's capacity to compete and develop our business in the future; (xix) the impact of increased national or international restrictions on the transfer or use of telecommunications technology; and (xx) the effects of a pandemic or epidemic and any measures and policies adopted by governments to combat its effects, including mandatory lockdowns and other restrictions.
Many of these factors are macroeconomic and regulatory in nature and therefore beyond the control of the Company's management. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. The Company does not intend and does not assume any obligation to update the forward-looking statements contained in this document. These forward-looking statements are based upon a number of assumptions and other important factors that could cause our actual results, performance or achievements to differ materially from our future results, performance or achievements expressed or implied by such forward-looking statements. Readers are encouraged to consult the Company's Annual Report on Form 20-F and the periodic filings made on Form 6-K, which are periodically filed with or furnished to the SEC, as well as the presentations periodically filed before the CNV and the Buenos Aires Stock Exchange (Bolsas y Mercados Argentinos), for further information concerning risks and uncertainties faced by the Company.
The Company has accounted for the effects of inflation adjustment adopted by Resolution 777/18 of the Comisión Nacional de Valores ("CNV"), which establishes that the restatement for inflation will be applied to the annual financial statements, for intermediate and special [periods ended as of December 31, 2018 inclusive]. Accordingly, the reported figures corresponding to FY23 include the effects of the adoption of inflationary accounting in accordance with IAS 29. On the other hand, in order to ease the understanding and analysis of the earnings evolution by its users, additional figures of the income statements are included, which are non-restated for inflation and which were used as the base for the information presented in constant pesos.
OVERVIEW OF OUR FY23 | Operational and Financial highlights
3
EBITDA MARGIN
FY23
28.1%
Effective cost management & better pass trough of inflation to revenues
CAPEX
FY23
U$S 598 MM
FY23 (ex-5G spectrum)
US$ 383 MM
CASH FLOW
FY23 (ex-5G spectrum)
U$S 401 MM
- 14% in constant pesos y/y
MOBILE
4Q23
- 4% y/y
Data Usage ⇧ 11%
BROADBAND
4Q23
Stable subscriber base
FTTH expansion continues
PAY TV
4Q23
Flow unique customers
- 10% y/y
PERSONAL PAY
as of December 2023
+2 MM
onboarded clients
#2 Fintech in Argentina
considering total remunerated
account balances
5G
October 2023
We acquired 5G spectrum
in the 3.5GHz band
100MHz
FINANCIAL DEBT
FY23
We refinanced all of our debt maturities during the year, while improving the average cost
of our debt.
FY23 IN FIGURES | 4 | |
REVENUES EBITDA EBITDA MARGIN
2.5 | 0.7 | 28.1% |
U$S BN* | U$S BN* |
21.0 | 3.4 |
Million mobile | Million pay TV |
subscribers in Argentina | subscribers** |
2.9 | 2.3 |
Million fixed | Million convergent |
subscribers *** | unique clients |
2.3 | 119 |
Million mobile subscribers | Thousand Pay TV |
in Paraguay | subscribers in Uruguay |
*Figures in constant pesos as of December 31, 2023 converted at the BNA ask rate as of December 31, 2023 (808.45). **Including Argentina, Paraguay and Uruguay.
*** Including IP lines
The figures in dollars included in this presentation result from converting figures in constant pesos at the close of a specific period, using the closing exchange rate of that same period. These figures are included solely for the purpose of providing a general reference and are not obtained through any form of dual currency accounting conducted by the Company.
4.1
Million broadband subscribers
46%
of broadband clients are also mobile clients
PRICE INCREASES SINCE 4Q23
MOBILE | |
Oct-23Nov-23Dec-23 | Jan-24Feb-24Mar-24 |
Prepaid | Postpaid |
PAY TV
5
Monthly price increases in line with inflation
INFLATION
FY23: 211.4% Jan-24: 20.6%
SERVICE REVENUES Δ% Y/Y
Oct-23Nov-23Dec-23Jan-24Feb-24Mar-24
Pay TV subscription services | Additional services | |
BROADBAND
Δ% Y/Y CPI*
94.8%
211.4%
Oct-23Nov-23Dec-23Jan-24Feb-24Mar-24
FIXED VOICE
-11.7%
-10.1%
Oct-23Nov-23Dec-23Jan-24Feb-24Mar-24
* Δ% Y/Y CPI : Considering interanual inflation by the end of each period.
FY22FY23
Accumulated service revenues Y/Y% variation (IAS 29)
BUSINESS EVOLUTION IN ARGENTINA | Accesses (in thousands)
6
Δ% Q/Q suscribers trend
MOBILE
Increase in total mobile subscribers.
BROADBAND
Growth in FTTH accesses is offsetting reduction in xDSL. HFC client base remains relatively steady.
Prepaid | Postpaid | Δ% Y/Y | ||||||
11,567 | 12,860 | +11.2% | ||||||
8,677 | 8,144 | |||||||
Prepaid | ||||||||
-6.1% | ||||||||
4Q22 | 4Q23 | Postpaid | ||||||
4,116 | 4,074 | |||||||
-1.0% | ||||||||
4Q22 | 4Q23 |
1.2% | 1.2% | 1.2% |
0.7% | 0.6% |
Total mobile subs.
4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
0.1% 0.2% -0.4%
-0.9%
-2.4%
4Q22 1Q23 2Q23 3Q23 4Q23
PAY TV*
3,260 | 3,145 |
-0.5%
0.3%
Stable trend in the last two quarters. Growing in Flow unique customers (10%).
-3.5% | |||
4Q22 | 4Q23 |
-1.2% 0.0%
-2.7%
4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
FIXED VOICE
Reduction in traditional copper lines, partially offset by growth in IP telephony.
3,008 | 2,887 | ||
-4.0% | |||
4Q22 | 4Q23 |
-1.4%
-0.6%-0.7%-1.0%
-1.8%
4Q22 1Q23 2Q23 3Q23 4Q23
*Includes only Argentina.
REVENUES BREAKDOWN
SERVICE REVENUES
REVENUES BREAKDOWN
7
REVENUES COMPOSITION
Million of P$
HISTORICAL FIGURES (MODELING PURPOSES)
108%
1,045,989
502,556
FY22FY23
INFLATION ADJUSTED FIGURES
2,119,319 -10% 1,905,932
Mobile 40.3%
Other
0.9%
Handsets | |
7.4% | Broadband |
Fixed & | 21.8% |
Data | |
11.9% | |
Pay TV | |
17.6% |
SPLIT BY CURRENCY
SERVICE REVENUES
Billion of P$
Other | 18 |
19 | |
Handsets | 151 |
153 | |
Fixed & | 277 |
Data | 244 |
Pay TV | 408 |
363 | |
Broadband | 504 |
450 | |
Mobile | |
Δ Y/Y
+6%
+1%
-12%
-11%
-11%
830913 -9%
1,616,763 859,943
502,556 | 1,045,989 |
FY22 IAS 29 | FY23 IAS 29 |
IAS 29 Adjustment
Figures may not add up due to rounding.
18% 82%
Revenues in U$S | Revenues in P$ | |
FX +356.3% Y/Y
Inflation +211.4% Y/Y
FY22 IAS 29 FY23 IAS 29
CORE BUSINESS
MOBILE
✓ Almost 98% 4G/LTE |
urban coverage and |
great NPS. |
✓ Positive clients inflow. |
BROADBAND
Almost 65% of Argentina's homes are passed throughout our network.
85% of clients with speeds ≥ 100 Mb
8
PAY TELEVISION
is our IP video platform, with the best experience
✓ Mobile data usage +11% |
First operator in Latam to be recognized with the fastest mobile network awardfor five years in a row
5G expansion plan
The deployment of 5G will be aimed at the
We keep improving our network's performance while increasing the deployment of FTTH
BROADBAND ACCESSES BY
NETWORK TECHNOLOGY
3.3MM mobiledevices
More than 60%
App Usability
Flow Full
NPS
+30pts
vs. Legacy HD
main high-density and large urban centers.
2020 2021 2022 2023
Δ% Y/Y | FTTH | xDSL | HFC | A meeting point for streaming entertainment | ||||
as of | + 74% | - 34% | -3% | Video | Gaming | Music | ||
4Q23 | ||||||||
REGIONAL OPERATIONS | 9 | |
Paraguay
CybersecurityChile
Uruguay
*Number of subscribers in each segment. Figures in brackets are y/y variations.
Paraguay key figures
REVENUES EBITDA EBITDA
-1.7% | -2% | Margin | |||
49% | |||||
210 | 103 | 101 | |||
206 | Net debt | ||||
to EBITDA | |||||
FY22 | FY23 | FY22 | FY23 | 0.03x | |
SUSCRIBERS* | billetera | ||||
Mobile: 2.3M(+4%) | Pay TV: 106k | personal | |||
Fintech: 288k | |||||
Broadband: 274k(+16%) | (+12%) | ||||
(-1%) | |||||
Pay TV: 119k* (-8%)
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Disclaimer
Telecom Argentina SA published this content on 12 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 14:35:07 UTC.
