Telenor's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Telenor ASA (
))
Q4 2011 Earnings Call
February 8, 2012 12:00 pm ET
Executives
Scott Engebrigtsen - Communication Manager
Jon Fredrik Baksaas - President & CEO
Richard Olav - EVP & CFO
Analysts
Espen Torgersen - Carnegie
Arild Nysæther - Fondsfinans
Harald Øyen - Swedbank First Securities
Andy Parnis - UBS
Andrew Lee - Goldman Sachs
Dominik Klarmann - HSBC
Barry Zeitoune - Berenberg
Peter Kurt Nielsen - Cheuvreux
James Britton - Nomura
Maurice Patrick - Barclays Capital
Soomit Datta - New Street Research
Ulrich Rathe - Jefferies
Presentation
Scott Engebrigtsen
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Good morning and welcome to Telenor and the presentation of the results for the fourth quarter of 2011. My name is Scott Engebrigtsen and I have the pleasure of guiding you through the presentation this morning. We hope that everybody has the material, that you have the material that was made available that would be our press release, the quarterly report and a copy of the presentation which will be used here any minute.
You can watch this presentation live or in recording on either the internet or on a mobile phone and you may also during this transmission, send in your written questions via the internet and you will find alternatives on these options as well as the material I just mentioned on our website telenor.com.
We will have Q&A session directly after the presentation here and we will then start with the audience present and then continue with the ones participating on the phone and as we will try to end this session before 10:15 that will be quarter past 10, we kindly ask you to limit your questions to one per person and if necessary a follow-up question in the Q&A session. And after the Q&A session here, we will have the opportunity to give individual interviews with key personnel, but I also stress that these interviews will be rather short today.
To present the figures we have our CEO, Jon Fredrik Baksaas; and our CFO Richard Olav. And first, I leave the floor to you, Mr. Baksaas.
Jon Fredrik Baksaas
Thank you, Scott and welcome to this day where we are going to present the figures for 2011. Naturally though a lot of these presentation will concentrate on the last week’s events coming out of India. And I guess that is sort of the main topic, but nonetheless we have a pretty good set of figures from the full operation of both fourth quarter and the full-year 2011. So you have to bear with us to get through those before we address also many of those questions that you will be concerned about relating to India in particular.
The growth factor of the Telenor Group continued in the fourth quarter and I have to say that all-in-all, when you are looking at a quarterly growth this quarter of 6.7% and the organic revenue growth figure, this is equal to the year as such. So we both have 6.7% in the fourth quarter and in the year as such.
And this tallies well with what we achieved the year before. Because in 2010, we had a slightly lower annual growth figure on top line of Telenor. So the growth dimension that started to show in 2010 has continued into 2011. With this top line growth element, we have also achieved the cash flow margin somewhat. On an annual basis, this has grown to 19.4% which is up from 18.6% the year before. And if you add this all altogether and take a look at the quality of the balance sheet, the Board yesterday made the decision to go to the general assembly with the proposal for the dividends for the 2011 to be paid in 2012 of 5 kroner per share.
The number one growth driver in this quarter is again Asia. Asia, the four established operations in Bangladesh, Thailand, Malaysia and Pakistan relates for as much as 10.8% organic growth in fourth quarter alone, which is slightly below annual average of 12.6%.
If we include Uninor in that figure, the factors grow to 17.2% and on annual basis, 19.2%. So as you can see, the general optimism on the economies in Asia has continued and has given us strong growth momentum for the full year. We have now reached 140 million subscribers, all-in-all, for all consolidated operations.
We then move on to the Nordic market, the picture is a bit varied. We’ve continued to invest both in networks and on marketing activities. We’re seeing a significant transition from voice and SMS services to data services and we’ve taken the bite on that one and we’re moving towards a different pricing structures including bundles to a much higher extent in our pricing philosophy and I will come back to this.
I am happy to note that what we achieved in fourth quarter, when we see a customer growth of 51,000 in Norway, this stands up on what we had to register in the first quarter of 2011 when we saw a decline in the customer base. So, we feel that we have a got a good momentum back in to the game with these new price bundles. But there is a price tag attached to this and I will also come back to that.
There is a still a solid demand for smartphones in the Nordic countries and this smartphone generation which now accounts for roughly 50% of all handsets in the network in Norway and Sweden in particular whereas it is somewhat lower in Denmark. This creates a new network complexity. These machines, these handsets they put other new strains on the system and the so-called signaling volumes that this generation of handsets are creating really needs to be taken seriously. That’s the learning curve through the year and as you obviously know I am referring to what happened back in June and what we
learned afterwards on that score.
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