Cable & Wireless Communications Plc Caribbean Investor Briefing 1 July 2011
Disclaimer This presentation contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Cable & Wireless Communications Plc‘s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are several factors that could cause actual events to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or disposals. A summary of some of the potential risks faced by Cable & Wireless Communications Plc is set out in the Company‘s most recent Annual Report. Forward-looking statements speak only as of the date they are made and Cable & Wireless Communications Plc undertakes no obligation to revise or update any forward-looking statement contained within this presentation or any other forward-looking statements it may make, regardless of whether those statements are affected as a result of new information, future events or otherwise (except as required by the UK Listing Authority, the London Stock Exchange, the City Code on Takeovers and Mergers or by law).
LIME operates across 14 different territories …we operate a unified business under ‘One Caribbean’ umbrella The Bahamas Turks & Caicos Cayman Islands British Virgin Islands Anguilla Antigua St Kitts & Nevis Jamaica & Barbuda Montserrat Dominica Barbados St Lucia St Vincent & the Grenadines Grenada 3
Overview of our business Operating in the Caribbean for 140 years Direct employment for more than 4,000 colleagues (incl. 1,200 BTC) Key financial statistics (incl. BTC) Revenue $1.2bn EBITDA $308m CAPEX $190m Customers (incl. BTC) Fixed Lines 740k Broadband 227k Mobile 1.7m 4 2010/11 financials and customer numbers include BTC figures to 31 Dec 2010
We are the only Regional full-service provider Telephony Broadband Mobile Columbus Networks Local Cable Operators 5
…and we have clear leadership in most markets Broadband market share Mobile market share Montserrat Bahamas BVI Montserrat Barbados St. Kitts Dominica Anguilla St. Vincent Barbados St. Lucia Dominica Grenada Cayman Turks & Caicos Antigua St. Kitts Turks & Caicos Anguilla St. Vincent Cayman Grenada Jamaica St. Lucia Antigua BVI Bahamas Jamaica 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% No. 1 in market No. 2 in market Market share based on management estimates 6
There is plenty of room to grow in our existing geographic markets 900 800 700 600 US$m 500 Others 400 300 200 100 0 7
Contents 1. Strategy & One Caribbean (David Shaw) 2. Financials 3. Network for the Future 4. Products and Services 5. Jamaica Turnaround 6. Bahamas
We have a clear strategy for our business 1 One Caribbean 2 Network for the Future 3 Products and Services Differentiation 4 Jamaica Turnaround 5 Geographic Expansion 9
One Caribbean is about achieving efficiencies Pre 2009 One Caribbean • 13 stand-alone business units A unified business with: • 13 sales & marketing teams • One leadership team • 13 network mgt & ops teams • 1 Service assurance function • 13 billing platforms & formats • 1 Programme management office • 13 credit & collection teams • 1 HR & 1 Finance shared service centre • 5 contact centres • 1 Procurement & supply chain function • 4 bill print vendors • 1 Regional marketing function • 3 HR platforms • 1 Customer segment function • 3 financial accounting platforms • 1 CTO Function • Separate PMO for each project • 1 Credit function 10
Network for the future is about data 3. Implement scalable 1. Discontinue costly systems: multiple Simplify legacy systems products across one set of platforms Converge Repeat 2. Migrate to all IP NGN and Systems 11
Products and services is about differentiation Products Services • • Wireless broadband Flexible appointment based scheduling of engineers – ―G -Volution ‖ / 4G • Multi-media residential – Launch of iPhone customer contact – Wi-Fi • Dedicated contact centres for • SME/Corporate and Entertainment Enterprise/Government – LIME TV & Mobile TV • Enterprise customer executive – Hospitality sector VOD sponsors • Others • Self-service – Security – M-Wallet 12
Jamaica turnaround is not only about winning the mobile war Refreshing the brand, Marketing new propositions & distribution Regulatory Leveling the regulatory playfield Investment Network coverage parity and data Leadership New management, intuitive, relationships 13
Geographic expansion is about entering new markets Leveraging the footprint including Subsea cables connecting Cuba East-West Expansion of subsea cable system and Cable license to operate in Dominican Republic Bahamas Acquisition of BTC 14
Our Journey since 2009 LIME One Caribbean Enablers for Growth and Visible to Restructure Success Efficiencies customers • Introduction of One • New Core Systems • New Products • ―One Best Way ‖ Caribbean (SAP, Peoplesoft & within LIME — Mobile & LIME TV Liberate) – LIME Brand • New Products & — M-Wallet • Shared Service Services Rolled Out – Consolidation to • New Services Centers • BTC Fully Integrated Single Regional — Customer Contact • Redesigned Platforms • Productivity and — Improved Service Processes & – Restructured Efficiencies Realised Business Controls Levels organisataion • Further Caribbean • Network • New Geographies Expansions Consolidation — BTC Acquisition • Culture of Merit and — New Cable Performance Systems: Cuba & East West Cable via DR 15
The transformation is making a big impact across all markets 16
We will continue to pursue the same strategies 1 One Caribbean 2 Network for the Future 3 Products and Services Differentiation 4 Jamaica Turnaround 5 Geographic Expansion 17
Contents 1. Strategy & One Caribbean 2. Financials (Gerard Borely) 3. Network for the Future 4. Products and Services 5. Jamaica Turnaround 6. Bahamas
It’s been a tough couple of years… $m FY 2009/10 FY 2010/11 Revenue 873 850 Mobile 321 302 Broadband & TV 99 105 Fixed 305 278 Enterprise & Data 148 165 Gross Margin 646 614 OPEX (376) (385) EBITDA 270 229 Capex (114) (140) Note the figures above exclude BTC 19
Maintaining control of our costs $m FY 2009/10 FY 2010/11 Held flat while operating in Unionised (1%) Staff Costs environment Contained through vendor negotiation & 0% Network Costs platform management structure Utility consumption reduction initiatives & Property Costs 8% property consolidation against background of 24% oil price increase Targeted increase to support new product Advertising & 29% launches (eg. Mobile TV) & improved brand Marketing perception Cost control initiatives in all areas eg. 0% Other Insurance, Bad Debt, Travel costs 376 385 TOTAL OPEX 20
Growth in mobile subscribers and emergence of mobile data revenue… 24.8 1,287 21.3 Mobile subs (k) 19.3 Mobile ARPU 1,271 1,254 2008/09 2009/10 2010/11 2008/09 2009/10 2010/11 % non-voice ARPU 13% 10% 8% 2008/09 2009/10 2010/11 Active subscribers are defined as those having performed a revenue-generating activity in the previous 60 days ARPU is average revenue per user per month, excluding equipment sales 21
Broadband revenue growth driven by increased ARPUs, churn relates to competition from cable operator… Broadband Subs (k) Broadband ARPU 211 208 199 40.1 38.6 37.6 2008/09 2009/10 2010/11 2008/09 2009/10 2010/11 Active subscribers are defined as those having performed a revenue-generating activity in the previous 60 days ARPU is average revenue per user per month, excluding equipment sales 22
The churn in fixed line has reduced. ARPU decline driven by substitution and VOIP… Fixed Line Subs (k) Fixed Line ARPU 46.0 39.0 37.0 662 637 617 2008/09 2009/10 2010/11 2008/09 2009/10 2010/11 Active subscribers are defined as those having performed a revenue-generating activity in the previous 60 days ARPU is average revenue per user per month, excluding equipment sales 23
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