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February 2001

February 2001. Topics. Globo Cabo Overview Operational Results Financial Performance Growth Opportunities. Why Globo Cabo ?. The Best and Highest Concentration of A & B’s HHs in Brazil (33% of A&Bs) Double Digit Growth in Pay TV Business

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February 2001

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  1. February 2001

  2. Topics • Globo Cabo Overview • Operational Results • Financial Performance • Growth Opportunities

  3. Why Globo Cabo ? • The Best and Highest Concentration of A & B’s HHs in Brazil (33% of A&Bs) • Double Digit Growth in Pay TV Business • New Value Added Services with Higher Contribution Margins • Solid Subscriber Base with Low Churn • Balance Sheet in Line with Peers • Management Committed to Long Term Value Creation • Flexible Capex • High Standards of Transparency

  4. Broadband Broadcast TV Interactive Services Pay TV Telecom Data Transmission IDTV Multi Channel NDOD/VOD VC / Voice Pay-per-view E-transactions Open TV Value Added Services = Higher Margins A Leading Provider of Multi Broadband Services Digital Infrastructure Analog Content

  5. Strategy Retail Corporate SOHO Analog Pay TV Interactive Analog Pay TV Digital Pay TV Broadband Virtual Networks Telephony Markets currently penetrated

  6. Unique Distribution Platform in Latin America 34,000 + Km. high quality cable network. More than 6MM homes passed Present at 67 cities including the main metropolitan areas Combined company creates a quasi-nationwide platform Franchise areas cover 10 million homes The operations address over 45% of Brazilian GDP North Midwest Northeast Southeast South

  7. Market Share Market Share per Technology Market Share MSOs Canbrás 4% Outras 0.4% TVFilme 3% C Band 1% MMDS 10% Independ. 9% TVA 10% Cable 52% Globo Cabo 45% Globo Cabo 58% DirecTV 13% KU Band 37% NetSat 16%

  8. Market Share Cable TV Subscribers (1.8MM) Canbrás 6% Algar 2% Others 4% TVA Sul 2% TVA 6% Globo Cabo 80%

  9. Exclusive Content • Exclusive Brazilian programming • Access to prime sport events - Soccer: World Cup & Regional Soccer - Formula One - Olympic Games - World Championship Volleyball

  10. Products • Pay TV - 5 packages • Vírtua • Residential - 7 Speed Options • SOHO - 5 Speed Options • Communities • Corporate Segment (Vicom) • Satellite Data Transmission • Leased Lines • Virtual Private Network For further details, please see attached files

  11. Complementary Shareholders Total Common Shares Shares Preferred Shares 56.7% 14.0% 8.7% 9.2% 8.0% 0.0% 3.5% 0.0% 30.8% 0.0% 6.8% 14.8% 2.6% 8.1% 36.2% 2.1% 42.1% 6.1% 7.5% 12.3% 4.9% 4.5% 21.5% 1.2% Distel Holding S.A. Bradesplan Part. Microsoft RBS BNDESPar Globopar Others Converted Debetures Total # of shares 1,211,891,443 1,579,538,407 2,791,429, 850

  12. Subscriber Evolution X Churn(in Thousand) * Subscriber Base: Dec.97 Additions: Jan.98 - Dec.99 Disconnections: Jan.98 - Dec.99 Subscriber Base: Dec.99 1,132 390 509 1,013 * excluding Net Sul

  13. Subscribers Growth 1Q00 2Q00 3Q00 4Q00 Excluding Net Sul and Unicabo Globo Cabo Subscribers 1,045 949 965 1,008 Annualized Organic Growth 5.7% 7.1% 19.1% 15.1% Including Net Sul and Unicabo Globo Cabo Subscribers 1,348 1,416 1,468 1,505 Annualized Overall Growth 4.9% 21.7% 15.5% 10.4%

  14. Subscribers Mix and ARPU 34.8 33.5 33.9 29.2

  15. ARPU - Comparison 3Q00 in US$ ARPU (Monthly Fee) ARPU (Total)* Globo Cabo 41 36 Globo Cabo + Net Sul 35 41 Latin America 28 25 USA 46 45 31 30 UK Germany 10 11 Source: Company reports (US GAAP) * Includes Hook-up fee, PPV and other revenues

  16. Consolidated Globocabo Churn Rate(Quarterly annualized)

  17. Annual Churn Rate (Pro Forma) 1998 1999 2000 Consolidated Globo Cabo (excl.Unicabo and Net Sul)

  18. Broadband Strategy • Over 2.4 MM Homes adequated by Dec’00 • A&B’s HPs in major cities • Segmenting into Residential, SOHO and Corporate • Differentiate pricing according to bandwith usage and speed • Strengthen commercial partnerships with major portals • Build intranet • Continue developing community concept (eg. Fleury, Bandeirantes School)

  19. Vírtua - Evolution 28,136 2,390 14,792 1,113 8,929 568 280 1,068 1Q00 2Q00 3Q00 4Q00 1Q00 2Q00 3Q00 4Q00 Two Way Homes Passed (in thousands) Subscribers

  20. Virtua: Developing Communities • Bandeirantes School • Fleury Laboratory • McDonald´s • Xerox • Kodak • BankBoston

  21. Broadband Experience (Broadband Subs/Total Subs Base) Source: UBS Warburg

  22. Key Indicators - US GAAP 3Q99 3Q00 9M99 9M00 Consol. (US$ million) 123.1 Net Revenue 153.8 374.7 430.4 34.9 EBITDA 37.4 101.0 93.6 28.4% 24.3% 27.0% 21.7% EBITDA margin % (58.1) Depreciation & Amortization (61.0) (177.4) (153.7) (51.9) (84.3) Net Interest Expenses (322.9) (93.1) (104.1) Income (loss) (392.5) (153.1) (72.5)

  23. EBITDA Composition US GAAP 3Q99 2Q00 3Q00 Net Revenue 100% 100% 100% Direct Operating 48.7% 49.5% 48.7% Programmers and royalties. . . . . . 28.7% 30.6% 28.6% Network expenses . . . . . . . . . . . . . 5.2% 4.4% 4.9% Customers relations. . . . . . . . . . . . 2.3% 2.6% 2.6% Payroll and benefits . . . . . . . . . . . . 6.1% 6.5% 6.4% Other costs (third parties). . . . . . . 6.4% 5.4% 6.2% Selling/ Administrative 22,9% 27.7% 27.0% Selling . . . . . . . . . . . . . . . . . . . . . . . 4.3% 7.6% 8.7% General & Administrative . . . . . . . 16.6% 16.0% 17.0% Bad debt expense. . . . . . . . . . . . . . 0.8% 1.6% 1.8% Other . . . . . . . . . . . . . . . . . . . . . . . . 1.2% 2.5% -0.5% EBITDA 28.4% 22.8% 24.3%

  24. Globo Cabo Debt Structure US GAAP 3Q99 3Q00 Consol. (US$ million) 437.1 188.9 Short Term Debt Commercial loans . . . . . . . . . . . . . . . . . . . . . 178 86.6 Current portion of long-term debt. . . . . . . . 258.9 102.4 Long Term Debt 337 597.5 Senior Guaranteed Notes - 2004. . . . . . . . . 185 185 80 Net Sul Notes. . . . . . . . . . . . . . . . . . . . . . . . . 80 91.9 84.8 BNDES (R$-denom.) . . . . . . . . . . . . . . . . . . . 0 212.1 Convertible Debentures 2006. . . . . . . . . . . 100.4 37.8 Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (258.9) (102.4) Current portion of LT debt . . . . . . . . . . . . . . 774.1 Total Debt 786.4 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 128.1 764.1 658.3 Net Debt

  25. Net Debt to Equity Value

  26. Debt - Comparable Table 3Q00 - in US$ Debt/ EBITDA Debt/ Subs. FV/ Subs. 5.3 2,372 535 Globo Cabo Cablevision (NY) 8.4 2,138 3,842 5.9 3,904 Comcast (Center/East Coast) 1,540 5.9 1,283 3,342 Cox (West Coast) 7.8 3,403 1,923 Europe Industry 703 Argentine Industry 6.3 Source: companies´annual reports (US GAAP)

  27. Amortization Schedule* Pro-forma Notes Convertible debentures FRNs-Net Sul Trade Financing 64 39 32 185 74 55 84 48 85 74 64 40 7 10 2000 2001 2002 2003 2004 2005 2006 * Includes Vicom and Net Sul Total debt: US$ 786.4 MM

  28. Capital Expenditures Breakdown * Non-audited numbers; Does not include Net Sul

  29. Financial Objectives • Minimum Cash levels: US$ 50MM in 2001-2003 • Stretch Short term obligations • Fifty percent of debt obligations in local currency • Debt/Cash Flow  5.0 and EBTIDA/Int Expenses  2 in 2003 • Hedge Short term obligations • Keep EVA positive growth trend • Work to minimize potential equity overhang • Improve transparency levels

  30. Projected Subscriber Cable TV Growth (1999-2005 annual CAGR: 13.2%) (Based on a GDP CAGR = 2%) 1999 Total: 2.973 Cable TV: 1.754 Satellite MMDS Cable TV 6.480 5.498 4.710 4.217 18.1% Number of subscribers 3.710 (in millions) 17.5% 3.378 3680 10.1% 3115 11.3% 2652 7.3% 2409 2164 2017 2000 2001 2002 2003 2004 2005 Source: Pay TV Survey nº 39

  31. Hypothetical Growth Targets Target Sep/2000 Subs. (000) Penetr. (%) Penetr %. HPs (000) Subs. (000) Segments % % % A B C Others Total 78 57 18 4 39.1 31.4 53.4 13.5 1.7 100 755 1,282 323 40 2,400 967 2,262 1,833 1,081 6,143 42.6 46.1 9.4 1.9 100 625 677 138 28 1,468 15.8 36.8 29.8 17.6 100 65 30 8 3 23.9 Total franchise covers 10 million homes

  32. Multiproducts Broadband Penetration Targets Segment A Segment B Segment C Multiproducts ARPU Options (US$) 87 65% - - All Multiproducts Package 71 All Multiproducts Package excluding Voice IP / Others - 20% 35% 42 15% - - Pay TV Digital Package 25 65% - - Pay TV Master Package 14 - - 100% Pay TV Standard Package 2000 Target ARPU (US$) ARPU(US$) 32 32 0 42 29 16 Pay TV Analog BroadBand Related Others Pay TV Digital BroadBand Related Voice IP/Others

  33. Future Revenue Mix Target Dec 2000 5% 1% Target 94% 7% 6% 58% 29% Pay TV residential Broadband Related Corporate business Other (including telephony)

  34. Interactivity: New Feature Being Introduced By Q2/01 • Globosat developing exclusive, • interactive contents - Phase I - analogic - Phase II - digital • 50% of decoders (GI, Scientific • Atlantic) already allow for interactivity - Olympic Games / Free Jazz Festival / Davis Cup - Ability to choose different programs - E-commerce (eg. buy products from soccer team)

  35. Mngt Commitment/Compensation Pacto - Annual Bonus Program • Based on achievement of operational • and financial goals • - EBITDA - # of new services subs • - # of Subs - Customer satisfaction Bravo - Long Term Incentive Plan • Based on stock value appreciation - “phantom stocks” - 3 year vesting period Pacto/Bravo represent up to 50% of total compensation

  36. Contacts - Additional Informations Leonardo Pereira leopereira@globocabo.com.br Augusto Rocha arocha@globocabo.com.br Renato Pinto Coelho rpcoelho@globocabo.com.br www.globocabo.com

  37. Forward-Looking Statements • Some information in this presentation discuss our indicative targets for the breakdown between our various lines of business, type and number of subscribers and penetration rates. This information is provided only to explain how we wish to expand our business, and we are making no projections as to our ability to meet these targets. • These targets constitute forward looking statements. Many factors could cause our actual results to differ materially from these targets, including economic and political factors in Brazil, the development of competing technologies, our access to the capital needed to meet these targets and the emergence of rigorous competition in our key markets.

  38. Attachments

  39. Products Pay TV Package Channels Installation* Monthly fee Advanced R$ 150,00 R$ 76,90 65 Not marketed 50 R$ 76,89 Plus Master 45 R$ 100,00 R$ 56,90 Standard 30 R$ 40,00 R$ 28,90 Vírtua TV 20 No fees R$ 12,33 * Prices for automated bill paying option Pay per view - 3 channels- shows, football plays, fights and movies. Channels “a la carte”- SexyHot, Playboy and PSN

  40. Products Vírtua - Residential Speed Monthly fee 128 Kbps R$ 31 192 Kbps R$ 46 256 Kbps R$ 70 320 Kbps R$ 108 384 Kbps R$ 159 448 Kbps R$ 221 512 Kbps R$ 293

  41. Products Vírtua - SOHO Virtua Professional Speed Traffic Monthly fee 64 to 256 Kbps 3 GB R$ 145 Virtua Enterprise Speed Traffic Monthly fee 320 Kbps 5 GB R$ 240 384 Kbps 10 GB R$ 399 448 Kbps 15 GB R$ 499 512 Kbps 25 GB R$ 599 Installation: R$ 279 Equipment: R$ 299 (loyalty promotion) or R$ 599 cash

  42. Products Corporate Division (Vicom) • Data Transmission • Satellite • Digital Radio • Urban and Interurban Fiber Optic Rings • IP Cable Modem Networks • Technical Support and Network Management • Consulting in Telecommunications

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