ZON OPTIMUS MR 9M13 ENGLISH.Pdf
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ZON OPTIMUS, SGPS, S.A Table of Contents 1 - ZON OPTIMUS in Numbers 2 2 - Highlights 5 3 - Governing Bodies 6 4 - Corporate Developments 8 5 - Subsequent Events 9 6 - Management Report 11 7 - Consolidated Financial Statements 28 1 9M13 Consolidated Management Report ZON OPTIMUS, SGPS, S.A 1 ZON OPTIMUS in Numbers Financial Indicators (in millions of Euros): The Statutory Accounts reflect the financial consolidation of 9 months of ZON and just 1 month of OPTIMUS given that the merger by incorporation of OPTIMUS into ZON, that led to the creation of ZON OPTIMUS, was completed on 27 August 2013. Operating Revenues: EBITDA (EBITDA margin as % of Revenues): +7.8% +11.5% 300 100% 636.4 257.9 90% 590.5 250 231.2 80% 70% 200 60% 150 50% 40.5% 40% 100 39.2% 30% 20% 50 10% 0 0% 9M12 9M13 9M12 9M13 Consolidated Net Income: Net Financial Debt: (23.7)% +62.3% 31.3 1,200 05x 05x 1,000 957.2 04x 23.9 04x 800 589.9 03x 600 03x 02x 400 02x 01x 200 01x 0 00x 9M12 9M13 9M12 9M13 9M13 Consolidated Management report 2 ZON OPTIMUS, SGPS, S.A Business Indicators (in thousands): 3&4P Subscribers, Ex-ZON: 3&4P Penetration in Cable Customer Base (%),Ex-ZON: +5.4% +4.1pp 65.3% 66.5% 792 63.9% 64.6% 773 781 786 62.4% 752 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 Basic Subscribers, Ex-ZON: Broadband Subscribers, Ex-ZON: (3.3)% +5.9% 812 1,574 1,570 1,559 1,543 790 800 805 1,523 766 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 Fixed Voice Subscribers, Ex-ZON: Blended ARPU, Ex-ZON: +3.7% +0.5% 986 990 995 35.4 34.9 960 976 34.7 34.4 34.7 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 3 9M13 Consolidated Management Report ZON OPTIMUS, SGPS, S.A Mobile Customers, Ex-OPTIMUS: Mobile ARPU, Ex-OPTIMUS: (3.5)% (7.7)% 11.7 3,566 3,569 3,507 3,435 3,443 10.8 10.8 10.4 10.8 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 Wireline Total Accesses, Ex-OPTIMUS: Wireline ARPU Per Access, Retail, Ex-OPTIMUS: (1.9)% (2.1)% 344.6 339.3 21.4 21.6 334.9 330.0 338.0 20.9 21.0 20.5 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 9M13 Consolidated Management report 4 ZON OPTIMUS, SGPS, S.A 2 Highlights Highlights of 9M13Results 9M12 9M13 9M13 / 9M12 Operating Highlights (000') Ex-ZON (1) RGUs 3,438.7 3,485.7 1.4% IRIS Subscribers 193.0 390.3 102.2% 3&4P Customers 751.7 792.5 5.4% Fixed Broadband Subscribers 766.2 811.7 5.9% Fixed Voice Subscribers 960.2 995.4 3.7% Blended ARPU (euros) 35.1 35.0 (0.2%) Ex-OPTIMUS - Mobile Customers (EOP) 3,566.3 3,442.6 (3.5%) ARPU (euros) 11.6 10.6 (8.2%) Ex-OPTIMUS - Wireline Total Accesses (EOP) 344.6 338.0 (1.9%) ARPU per Access - Retail (euros) 21.8 21.2 (2.9%) ZON OPTIMUS Pro-Forma Financial Highlights (Millions of Euros) Operating Revenues 1,114.9 1,083.9 (2.8%) EBITDA 413.5 418.3 1.2% CAPEX 216.5 188.8 (12.8%) EBITDA - Recurrent CAPEX 197.0 234.0 18.8% (1) Portuguese Operations. Completion of Merger on 27 August and election of new Management team on 1 October; Creation of a larger, stronger and more competitive Telco group with a state-of-the-art NGN and 4G network and coverage in Portugal: . 7.3 million RGUs . Pro-forma Consolidated Revenues of 1.1 billion euros in 9M13 . Pro-forma Consolidated EBITDA margin over 38% in 9M13 The integration project is well underway and on track to capture synergies. The launch of ZON4i on 22 October, the first integrated communications and entertainment offer by ZON OPTIMUS, only a few weeks after the merger was completed, is already a reflection of how the new teams are well integrated and working together as a single company. Continued strong operating and financial performance with growth in convergent solutions, resilience in Telco revenues despite the still challenging macro environment and continuing focus on efficiency and cost control with margins in excess of 38%; Increase in Pro-Forma Operating Cash Flow of 11.2% to 167,8 million euros and increase in Pro- Forma Recurrent FCF to 92.4 million euros. 5 9M13 Consolidated Management Report ZON OPTIMUS, SGPS, S.A 3 Governing Bodies As of 30 September 2013, the Governing Bodies of ZON OPTIMUS had the following composition: Board of Directors Chairman of the Board of Directors Daniel Proença de Carvalho Chairman of the Executive Committee Rodrigo Jorge de Araújo Costa Members of the Executive Committee José Pedro Faria Pereira da Costa Luís Miguel Gonçalves Lopes Duarte Maria de Almeida e Vasconcelos Calheiros Members Fernando Fortuny Martorell António Domingues Joaquim Francisco Alves Ferreira de Oliveira Mário Filipe Moreira Leite da Silva Isabel dos Santos Catarina Eufémia Amorim da Luz Tavira László Istvan Hubay Cebrian Miguel Filipe Veiga Martins André Palmeiro Ribeiro Chairman of the Audit Committee Vitor Fernando da Conceição Gonçalves Members of the Audit Committee Nuno João Francisco Soares de Oliveira Sílvério Marques Paulo Cardoso Correia da Mota Pinto Officials of the General Meeting of Shareholders President Júlio de Castro Caldas Secretary Maria Fernanda Carqueija Alves de Ribeirinho Beato 9M13 Consolidated Management report 6 ZON OPTIMUS, SGPS, S.A Statutory Auditor In Office Oliveira, Reis & Associados, SROC, Lda., representada por José Vieira dos Reis Alternate Fernando Marques Oliveira 7 9M13 Consolidated Management Report ZON OPTIMUS, SGPS, S.A 4 Corporate Developments On 26 August, the Competition Authority announced their non-opposition to the merger process between ZON and OPTIMUS and, on 27 August, all legal and administrative procedures were implemented to conclude the process. The Merger assumed the form of a merger by incorporation, which implied the transfer of all of OPTIMUS’ assets and liabilities, as the as the absorbed company, into ZON – now ZON OPTIMUS – as the absorbing company. Following the merger, the corresponding share capital increase of ZON OPTIMUS took place. Its share capital is now 5,151,613.80 euros, represented by a total of 515,161,380 shares, with a nominal value of 0.01 euros each (206,064,552 new shares were issued as a result of the share capital increase). A request was submitted to Euronext Lisbon – Sociedade Gestora de Mercados Regulamentados, S.A.for these New Shares to be listed on the Euronext Lisbon regulated market, which happened on 9 September 2013. 9M13 Consolidated Management report 8 ZON OPTIMUS, SGPS, S.A 5 Subsequent Events An Extraordinary General Shareholders’ Meeting of ZON OPTIMUS, SGPS, SA was held on 1 October 2013. The proposals concerning the items of the agenda were all approved as follows: Approval of the change, by modification, suppression, and / or supplement of all the articles of ZON Optimus’ Articles of Association, except for articles nr. 1, 5, 6 and 8; Approval of the election of the company’s Corporate Bodies, including the Statutory Auditor, for the term of office of 2013/2015, as follows: Board of Directors Chairman of the Board of Directors Jorge Manuel de Brito Pereira Chairman of the Executive Committee Miguel Nuno Santos Almeida Vice-Chairman of the Executive Committee Luís Miguel Gonçalves Lopes Members of the Executive Committee Ana Paula Garrido de Pina Marques André Nuno Malheiro dos Santos Almeida José Pedro Faria Pereira da Costa Manuel Ramalho Eanes Miguel Filipe Veiga Martins Members Ângelo Gabriel Ribeirinho dos Santos Paupério António Bernardo Aranha da Gama Lobo Xavier António Domingues Catarina Eufémia Amorim da Luz Tavira Fernando Fortuny Martorell Isabel dos Santos Joaquim Francisco Alves Ferreira de Oliveira Lorena Solange Fernandes da Silva Fernandes Maria Cláudia Teixeira de Azevedo Mário Filipe Moreira Leite da Silva Rodrigo Jorge de Araújo Costa 9 9M13 Consolidated Management Report ZON OPTIMUS, SGPS, S.A Chairman of the Fiscal Board Paulo Cardoso Correia da Mota Pinto Members of the Fiscal Board Eugénio Luís Lopes Franco Ferreira Nuno Tiago Bandeira de Sousa Pereira Luís Filipe da Silva Ferreira (Alternate) Officials of the General Meeting of Shareholders President Pedro Canastra de Azevedo Maia Secretary Tiago Antunes da Cunha Ferreira de Lemos Statutory Auditor In Office PriceWaterhouseCoopers & Associados, SROC, Lda., representada por (i) Abdul Nasser Abdul Sattar, ou (ii) Paulo Alexandre Martins Quintas Paixão Alternate José Manuel Henriques Bernardo Approval of the appointment of the Remuneration Committee for the term of office 2013/2015, as follows: Chairman: Ângelo Gabriel Ribeirinho dos Santos Paupério Member: Mário Filipe Moreira Leite da Silva 9M13 Consolidated Management report 10 ZON OPTIMUS, SGPS, S.A 6 Management Report 6.1 Business Review Business Indicators ('000) 9M12 9M13 9M13 / 9M12 Ex-ZON (1) Homes Passed 3,224.5 3,286.1 1.9% RGUs (2) 3,438.7 3,485.7 1.4% Cable RGUs per Subscriber (units) (3) 2.42 2.51 3.5% Basic Subscribers (4) 1,574.4 1,522.6 (3.3%) o.w. Cable Subscribers 1,204.3 1,191.8 (1.0%) IRIS Subscribers 193.0 390.3 102.2% % IRIS 3&4P Subscribers 25.7% 49.2% 23.6pp 3&4P Customers 751.7 792.5 5.4% % 3&4P Cable Customers 62.4% 66.5% 4.1pp o.w. DTH Subscribers 370.1 330.8 (10.6%) Fixed Broadband Subscribers 766.2 811.7 5.9% Fixed Voice Subscribers 960.2 995.4 3.7% Mobile Subscribers 138.0 156.0 13.1% Blended ARPU ( Euros ) 35.1 35.0 (0.2%) Ex-OPTIMUS Mobile Customers (EOP) 3,566.3 3,442.6 (3.5%) Pre-Paid Customers 2,367.3 2,315.6 (2.2%) Post-Paid Customers 1,199.0 1,127.0 (6.0%) Data as % of Service Revenues 33.3% 33.5% 0.1pp Non SMS Data as % Data Revenues 76.4% 79.5% 3.1pp Total #SMS/month/user 41.5 39.3 (5.1%) MOU (min.) 122.7 122.6 (0.1%) ARPU (euros) 11.6 10.6 (8.2%) Customer Monthly Bill 10.1 9.6 (5.5%) Interconnection 1.5 1.1 (27.0%) ARPM (Euros) 0.0945 0.0868 (8.1%) Ex-OPTIMUS Wireline Total Accesses (EOP) 344.6 338.0 (1.9%) Corporates and SMEs 156.9 159.0 1.4% PTSN/RDIS 113.2 114.9 1.5% Broadband 31.7 29.9 (5.5%) Other & Data 12.1 14.2 17.6% Residential 187.7 179.0 (4.7%) PTSN/RDIS 79.5 67.0 (15.7%) Broadband 71.2 75.4 5.9% TV 37.0 36.5 (1.3%) ARPU per access - Retail 21.8 21.2 (2.9%) Cinema (1) Revenue per Ticket (Euros) 4.9 4.7 (3.8%) Tickets Sold 5,822.1 5,956.3 2.3% Screens (units) 210 209 (0.5%) (1) Portuguese Operations (2) Total RGUs reported reflect the sum of Pay TV, Fixed Broadband, Fixed Voice and M obile subscribers.