Transcript BITĖ Talent Pool (BTP) 2006

BNPP High Yield Conference 2008
10 January 2008
Introduction
• Company overview
• Shareholders and Management
• Strategy
• Market position
• Financials
• Q&A
2
Bitė is a Mobile Network Operator in Lithuania
and Latvia
Bitė Group figures
Numbers in milions
Finland
Customers
Service Revenue
EBITDA
Norway
Sweden
Estonia
Russia
2006
€
€
Q4 2006 Q3 2007
1.3
1.1
154.7 € 175.8
29.8 €
36.7
Latvia
• 2.3m inhabitants
• 11.9% GDP growth 06
• GDP pr. capita € 7,070
Lithuania
Denmark
Belarus
Germany
• 3.4m inhabitants
• 7.7% GDP growth 06
• GDP pr. capita € 6,996
Poland
Source: Hansabank, Q1 2007
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Manag
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Strateg
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Market
position
Financi
als
Q&A
Bitė Business Snapshot
Key Operational Data (EoP Q3 2007)
Bite Lithuania
Start of Operations
Population Network Coverage
Subscribers ('000)
Employees (FTE's)
Key Financial Data (EURm) (Q4 2006-Q3 2007)
2005
100%
92%
1,036
93
1,129
520
98
619
9.0
51.6
Margin %
-157%
27.7
Compa
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overvie
w
Shareh
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and
Manag
ement
Strateg
y
Market
position
175.8
(14.1)
31%
CAPEX
Bite Finance
International
Group
Bite Latvia
167.2
EBITDA
4
Bite Latvia
1995
Bite Lithuania
Service Revenue
Bite Finance
International
Group
14.2
Financi
als
34.8
20%
41.9
Q&A
Mid Europa Partners has a History of Successful
Mobile Telecom Investments
•
On February 9, 2007 a wholly owned subsidiary of funds advised
by Mid Europa Partners acquired Bité from TDC
•
•
Mid Europa Partners is a leading private equity investment firm focused
on investing in large, cash generative enterprises operating primarily in
Central and Eastern Europe
Unparalleled track-record in investing in mobile telecom assets in
Central Europe. Key sector investment highlights include
1999
2001
Invested in
Oskar (No 3
mobile operator
in the
Czech Republic)
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2006
Invested in
Orange Slovakia
(No 1 mobile
operator in
Slovakia)
Shareh
olders
and
Manag
ement
Invested in
Connex
(No 1 mobile
operator
in Romania)
Strateg
y
Market
position
Invested
indirectly in
T-Mobile CZ
(Joint leader in
the
Czech Republic)
Financi
als
2007
Invested in
Bite
And One (3rd
operator in
Austria)
Q&A
Experienced Management with Telecoms
Background
•
Bruno Ducharme
Chairman of Supervisory
Board
•
•
•
James J. Jackson
Member of Supervisory Board
•
•
Kenneth Campbell
•
Chief Executive Officer and
Chairman of the Management
•
Board
•
Fred Hrenchuk
Chief Executive Officer, Bite
Latvia
•
•
Martin Amtoft Christensen •
•
Chief Financial Officer
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Manag
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Strateg
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Former President and CEO of Telesystem International Wireless
(“TIW” – parent company for MobiFon and Oskar)
Formerly non-executive director of TIM Hellas S.A.
Currently non-executive director of One GmbH
Former CFO of MobiFon S.A. from 1997 – 2005, while under TIW
and Vodafone ownership
CFO of Oskar from 1999 – 2001, involved in the build out and
service launch and early stage debt and equity financing
Non-executive director of Neo Material Technologies Inc. and
Duluth Metals Limited
Former Chief Marketing Officer with MobiFon S.A. and Vodafone
Romania and a member of the Marketing Board of the Vodafone
Group
Former Chief Commercial Officer of Orascom Telecom in Tunisia
Former Director and Vice President for Corporate Strategy and
Marketing of MobiNil in Egypt
Former Chief Technology Officer with Vodafone Czech Republic
Held various executive positions with Oskar Mobile and
MobiFon
Joined Bité as CFO in 2004
Finance Director within TDC from 2001 - 2004
Market
position
Financi
als
Q&A
Bite Strategy
Profitable growth
and cash flow generation
Lithuania (FCF growth)
Latvia (start-up)
Continue growth in post paid residential market share
Maintain strong post paid business position and grow
ARPU of existing customer base
Maintain market share and grow ARPU in pre paid
segment
Achieve parity in network quality and distribution
presence
Establish strong organization, leveraging
existing Lithuanian infrastructure
off
of
Capitalize on one of the highest tariff structures in
Europe
Common Principles
Increased revenue share through value focus while securing new growth as human penetration rises
Sound investment criteria - focus on financial return, achieving growth while controlling costs and CAPEX
Leverage best-in-class network in offering the highest quality value-added products & services including high-speed
mobile broadband to drive future ARPU growth
Continue to maintain service quality leadership and maintain leading customer satisfaction levels to further improve
customer retention and maintain lower than market churn rates
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Strateg
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Market
position
Financi
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Q&A
Key Market Drivers
Voice Traffic
Growth
• Real GDP Growth increases disposable income and
increases demand for mobile services
• MoU still low compared to price levels
Low Fixed
Penetration
• Fixed line penetration in both Latvia and Lithuania is
below CEE average
• In Lithuania 48% of households have mobile but not
fixed telephony (highest in EU)
Data Usage
• In Lithuania PC penetration went from 5% in 2000 to
37% in 2006
• Broadband penetration is growing (32% in 2006)
3 Player
Markets
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• Both markets have 3 mobile operators
• GSM spectrum is fully allocated
• MVNO and SP’s are all on Bite Network and have relative
weak position
Shareh
olders
and
Manag
ement
Strateg
y
Market
position
Financi
als
Q&A
3 mobile operators in both markets
Lithuania












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Latvia
Positioned as customer
service leader
Perceived as being the quality
alternative to Omnitel
Strong in Business segment
Aggressor in Residential
postpaid segment
Stable fair share of prepaid
market



Positioned as the largest and
strongest
Perceived as being the
incumbent
Strong in all segments



Positioned as the price leader
Perceived as being lower
quality than competitors
Low Business market share
Strong in prepaid market
Shareh
olders
and
Manag
ement
Strateg
y




Market
position
Financi
als
Positioned as the new
alternative and customer
service leader
Perceived as being lagging
behind the competition on
quality
Growing in all segments
Positioned as the largest and
strongest
Perceived as being the
incumbent
Strong in postpaid
Positioned as the price leader
Perceived as being lower
quality than competitors
Low Business market share
Strong in prepaid market
Q&A
Investment Thesis
Established
Track Record
• Revenue Growth of 20%
• EBITDA growth of 40%
• Free Cash Flow
improvements
Rising Cash
Profile
20.0
15.0
17.2
18.5
2H 2006
1H 2007
12.0
10.0
5.0
0.0
1H 2006
Customer Satisfaction Lithuania Q3 2007
• Market Share
Strong
Market Position
Bite Finance International EBITDA (EURm)
• Lithuania 30% revenue share
• Latvia ~5% SIM share
• Highest Quality Perception
• Excellent network coverage
• SAC reduction
• Margin improvement in
Lithuania
• Turnaround in Latvia
60%
57%
55%
49%
48%
Omnitel
Tele 2
50%
45%
40%
Bite
SAC in Lithuania in % of Service Revenue
14%
12%
10%
8%
6%
4%
2%
0%
12%
10%
9%
1H pr.
2006
2H Growth
2006 2003-2007E
1H 2007
GDP
Capita Average
High
Macroeconomic
Growth
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• Outstanding GDP Growth
• Lithuania 7.7% in 2006
• Latvia 11.9% in 2006
• Growing Purchasing Power
Shareh
olders
and
Manag
ement
Strateg
y
Market
position
10.4%
12%
10%
8%
8.2%
6%
4%
2%
0%
Lithuania
Financi
als
Q&A
Latvia
Differentiating through customer experience
Strong Lithuanian Position
60%
57%
55%
49%
50%
48%
45%
Network Perception is improving
10
9
8
7
6
5
4
M
ay
Ju 06
n06
Ju
lAu 06
g0
Se 6
p0
O 6
ct
-0
No 6
vDe 06
c0
Ja 6
n0
Fe 7
b0
M 7
ar
-0
Ap 7
rM 07
ay
Ju 07
n07
Ju
lAu 07
g0
Se 7
p0
O 7
ct
-0
No 7
v07
Bité has most satisfied customers
Improving Latvian Position
Bite
LMT
Tele 2
Total Awareness is growing
100%
90%
80%
40%
70%
60%
50%
40%
Q3-05
Q4-05
Q1-06
Q2-06
Bite
Q3-06
Q4-06
Q1-07
LMT
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Shareh
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and
Manag
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Strateg
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Market
position
Financi
als
Q3-07
Tele 2
Source: SKDS, Q4 2007
Compa
ny
overvie
w
Q2-07
Q&A
Q4-07
Financial performance is improving
Bité Lithuania and Bité Latvia Consolidated
SERVICE REVENUE
+28.8 €m
~
+20%
EBITDA
CAPEX
Q4 05 - Q3 06
+1.2 €m
~
+3%
175.8
+10.5 €m
~
+40%
40.7
EBITDA - CAPEX
Q4 06 - Q3 07
41.9
36.7
147.0
-5.2
26.2
+9.3 €m
Q4 05 - Q3 06
Q4 06 - Q3 07
Q4 05 - Q3 06
Q4 06 - Q3 07
Q4 05 - Q3 06
Q4 06 - Q3 07
-14.5
Figures in millions euro. The grey bubbles show the growth year over year in absolute numbers and %.
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Manag
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Strateg
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Market
position
Financi
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Q&A
Lithuania – The Profitable Growing Business
SERVICE REVENUE
EBITDA
18,000
35.0%
16,000
45,000
15,297
44,431
44,000
14,000
13,392
43,036
43,000
30.0%
14,192
25.0%
11,995
12,000
10,710
42,000
20.0%
10,000
40,813
41,000
8,000
40,201
15.0%
40,000
6,000
38,953
39,000
10.0%
4,000
38,000
5.0%
2,000
37,000
36,000
Q3 06
Q4 06
Q1 07
Q2 07
Q3 07
0
0.0%
Q3 06
Q4 06
EBITDA
Q1 07
Q2 07
EBITDA as a % of Service revenue
Figures are in thousands euro.
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and
Manag
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Strateg
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Market
position
Q3 07
Financi
als
Q&A
Latvia – The New Start Up
SERVICE REVENUE
EBITDA
3,500
Q3 06
3,241
Q4 06
Q1 07
Q2 07
Q3 07
0
3,000
-500
2,511
2,500
-1,000
2,000
-2,000
1,433
1,500
1,000
-1,500
1,828
-2,500
994
-3,000
-2,921
500
-3,500
-3,350
-3,500
-3,660
0
Q3 06
Q4 06
Q1 07
Q2 07
Q3 07
-3,621
-4,000
Figures are in thousands euro.
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Manag
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Strateg
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Market
position
Financi
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Q&A
Capital Expenditure
Bité Lithuania and Bité Latvia Consolidated
CAPEX
EBITDA - CAPEX
16,000
30.0%
20.0%
2,000
15.0%
12,000
10,092
10.0%
9,975
10,000
30.0%
2,960
25.0%
13,959
14,000
4,000
9,036
8,905
8,000
599
0
25.0%
Q3 06
5.0%
0.0%
1,201
Q4 06
-2,000
Q1 07
Q2 07
Q3 07
-1,667
-5.0%
6,000
-10.0%
-4,000
20.0%
-15.0%
4,000
-20.0%
2,000
-6,000
-25.0%
0
-30.0%
Q3 06
Q4 06
CAPEX
Q1 07
Q2 07
Q3 07
-7,100
-8,000
15.0%
CAPEX as a % of revenue
Figures are in thousands euro.
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Manag
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Strateg
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Market
position
Financi
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Q&A
Bite Finance International Group leverage
is decreasing
Net debt to Consolidated EBITDA
9.1
8.0
7.4
6.0
At acquisition
Q1
Q2
Q3
Note: "At acquisition" Net debt to Consolidated Bite Group EBITDA ratio is calculated based on actual
audited Bite Group consolidated figures for Y2006. Quarterly ratios are calculated on annualized
EBITDA for Bite Finance International Group.
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Manag
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Strateg
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Market
position
Financi
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Q&A
17