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First Quarter 2023 Results: Empresa Nacional de Telecomunicaciones S.A
First Quarter 2023 Results: Empresa Nacional de Telecomunicaciones S.A
Telecomunicaciones S.A
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ENTEL1Q2023INVESTORCONFERENCECALL
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ir@entel.cl
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Disclaimer
This document contains certain “forward-looking statements”, which are based on management’s expectations, as well as on a number of
assumptions concerning future events resulting from currently available information. Readers are cautioned not to put undue reliance on such
forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of
which are out of Entel’s control and could cause actual results to materially differ from such statements.
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Table of Contents
1. Highlights and recent events
2. Customers base
3. Entel Group Results & financial indicators
4. Entel Chile results
5. Entel Peru results
6. ESG
7. Final remarks and QA
8. Annexes
3
Highlights 1Q2023
Entel group has recently published its third integrated report, providing a comprehensive overview of its operations,
performance, and sustainability initiatives. Available here.
FNE (Chilean Competition Agency) extends investigation into Onnet Fibra's acquisition of Entel's fiber optic
infrastructure to Phase 2.
New tariff rates have been implemented for customers to offset the impact of inflation and stabilize
ARPU, effective from January.
The company underwent an internal adjustment process to tackle future challenges and creating a
digital unit to focus on new digital business for corporate and SME customers.
Quarter results were impacted by one-time costs associated with bad debt provisions in Perú and
restructuring costs.
Fitch, ICR, and Moody's revalidated the credit rating, maintaining the classification and outlook for the company.
Total mobile customer base reached 20.321.705 customers (+2,1% YoY). Driven by the growth of postpaid customer base in
Chile and Perú, in contrast to a decreased in prepaid customer base for both countries.
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Recent Events
• The board approved the distribution of a new final dividend of $94 per share. Total dividends $664 per share from the profits of 2022. Dividend yield for 2022
equals 19%. (1)
• Maintain financing and investment policy. The financing and investment policy included, among other provisions:
• Maximum financial debt level as the higher resulting from:
• Net Financial Debt / Equity not greater than 1.7x or Net Financial Debt / LTM EBITDA not greater than 3.5x
• The company will make its best efforts to maintain reasonable debt and financial expense coverage ratios over time, considering the objective of having
an “Investment Grade” risk classification.
• The current dividend policy of distributing up to 80% of the distributable net profit has been reaffirmed.
• PWC has been assigned as external auditors for 2023.
17,0% 16,3%
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Table of Contents
1. Highlights and recent events
2. Customers base
3. Entel Group Results & financial indicators
4. Entel Chile results
5. Entel Peru results
6. ESG
7. Final remarks and QA
8. Annexes
7
Entel Group: Mobile and Fixed Customer Base
Mobile Users Fixed RGU’s (1)
(Thousands) (Thousands)
1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23
Postpaid customers generate 67% of Chilean revenue. Fiber and wireless customers generates 4% and 2% of Chilean revenue, respectively.
+1,9% -2,5%
1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23
Postpaid customers generate 77% of Perú revenue.
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Entel Group Results:
233
696 190 172
647 132
29% 34% 27% 22%
1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23
52 53
104
43
65
42
6 3
1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23
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Financial Indicators:
2.5X
1Q22 2Q22 3Q22 4Q22 1Q23 International
BBB- BBB Baa3
NFD/(Equity+min.interest)
12
Entel Chile Results:
1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23
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Entel Chile Results: Mobile Business
911 -0,4%
416 319 312
308 302 307
415 410 412 YoY %
+2.6%
Business/service views corresponds to management control allocation criteria and may differ in distribution with respect to simplified accounting views.
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Entel Chile Results: Mobile Business
Strong market presence across technologies and positive indicators
35 5G 0%
30 44% of total
30 connections
44%
(Dec-22)
25 22 Op. 3 26%
20 21 Op. 2
15 15 Op. 4 20%
10
Q122 Q222 Q322 4Q22 1Q23 4G 19%
34% of total
34%
ARPU Mobile Services connections
(Dec-22)
(CLP $) 25%
800
7,029 23%
700
5,825
3G 18%
600 Op. 2 34% of total
34%
4,896 connections
500 Op.3 (Dec-22)
23%
400
Q122 Q222 Q322 4Q22 1Q23
Undisputed leader in mobile connectivity across all
technologies.
Kantar Market research, company estimations and Subtel.
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Entel Chile Results: Fixed Business
911 -0,6%
119
416
415 410 412 108 107 109 108
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Wholesale
107 119 20 20 20 19 & Others
108 109 108 9
11 11 9 13 8 Wireless
8 13 11 Digital Business
9 15
13 14 15 16 FTTH
319 312
% of revenues 61 IT internet
308 302 307 55 53 54
52 & Data
26%
Business/service views corresponds to management control allocation criteria and may differ in distribution with respect to simplified accounting views.
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Table of Contents
1. Highlights and recent events
2. Customers base
3. Entel Group Results & financial indicators
4. Entel Chile results
5. Entel Peru results
6. ESG
7. Final remarks and QA
8. Annexes
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Entel Perú Results:
242
18% 21% 21% 9,5
4%
1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23
-39,6 • EBITDA decreased 81.8% due to higher provisions for bad debts affected by
economic situation, and restructuring expenses. Discounting the foregoing,
1Q22 2Q22 3Q22 4Q22 1Q23 EBITDA margin would reach 22%.
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Exchange Rate: Peruvian SOL/USD: 3.7628
Entel Perú Results:
285 -14,7%
10 269 275
14 247 246 254
242
15 11 228 232 235
14
124 YoY %
107 77 77
78
-38%
275 +4.9%
254
228 232 235
% of revenues 151 147 150 155 158
4.5%
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Environmental, Social and Governance
Entel continues its path into ESG performance
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Table of Contents
1. Highlights and recent events
2. Customers base
3. Entel Group Results & financial indicators
4. Entel Chile results
5. Entel Peru results
6. ESG
7. Final remarks and QA
8. Annexes
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Final Remarks
What comes next for Entel?
• Our strategic objective is to provide the best mobile network experience to our customers while deploying 5G technology in
Chile and Peru. We are committed to remaining a leader in the telecommunications industry and gain more presence in
Perú.
• In the home segment, we aim to achieve a market share of 25% to 30% in the following years, anchored in Entel’s agreement
with Onnet in Chile.
• Our digital business segment presents significant growth opportunities. Our goal is to increase its contribution to
consolidated revenues to 10% demonstrating our commitment to building a sustainable and profitable business.
• Our Capex plan for 2023 of US$670 million (US$510 million in Chile and US$162 million in Perú) is aligned with our strategic
objectives. We will focus our efforts and resources on areas such as 4G and 5G mobile networks, FTTH installation, and
digital services for B2B.
• At Entel, we are driven by a shared passion for technology and its ability to transform responsibly our society. We are
committed to creating a better future for our customers, employees, shareholders, and communities.
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Q&A
Upcoming events
Results 1Q 2023 May 9, 2023
Results 2Q 2023 August 7, 2023
Investor Day TBC
Results 3Q 2023 November 6, 2023
Results 4Q 2023 January 24, 2024
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Table of Contents
1. Highlights and recent events
2. Customers base
3. Entel Group Results , Ratios, Debt profile and
shareholders
4. Entel Chile results
5. Entel Peru results
6. ESG
7. Final remarks and QA
8. Annexes
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Annexes
Consolidated Results
Main Costs of Operations
Balance
Debt Maturities
Covenants and Financial indicators
Activity summary
B2C Segment
B2B Segment
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Consolidated Results
(CLP $ million)
Consolidated Results 1Q23 1Q22 Var.(%) 4Q22 Var.(%)
Total Revenue 613,338 649,941 -5.6% 642,606 -4.6%
Chile Mobile & Fixed Revenue 401,936 405,574 -0.9% 405,452 -0.9%
Mobile Revenue 289,616 292,493 -1.0% 288,814 0.3%
Mobile Service Revenue 216,685 212,791 1.8% 201,282 7.7%
Peru Mobile & Fixed Revenue 196,192 230,483 -14.9% 220,476 -11.0%
Mobile Revenue 187,404 222,621 -15.8% 210,878 -11.1%
Mobile Service Revenue 126,070 121,653 3.6% 141,909 -11.2%
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Main Costs of Operations
(CLP $ million)
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Balance
(CLP $ million)
ASSETS 31-03-2023 31-12-2022
Current Assets 1,348,998 1,466,539
Cash and Equivalents 101,060 186,542
Assets held for Sale 126,991 125,706
Other Current assets 1,120,947 1,154,290
Non-Current Assets 3,953,564 4,110,700
Property, plan & Equipment 1,985,279 2,017,214
Other Non-current assets 1,968,285 2,093,486
Total Assets 5,302,562 5,577,239
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Debt Maturities:
(MM$ USD)
400 400
321 330
281
270
249
224
146 281
146
103
78 15 15 15 15 15
40
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
International Bonds Local Bonds Bank Debt Chile Bank Debt Perú
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Detailed financial covenants and indicators
Other indicators
Current Assets/Current Liabilities 1.14 1.19 1.24 1.20 1.18
(NFD+IFRS16 liabilities)/EBITDA 2.55 1.61 1.65 1.72 1.82
(NFD+IFRS16 liabilities)/EBITDA* 2.61 2.63 2.85 3.00 3.28
Total Liabilities/ (Equity + Min interest) 2.50 2.65 2.67 2.59 2.55
DFN/(Equity + min interest) 0.92 0.85 0.92 1.03 1.10
Net Financial Debt (CLP $ Million) 1,429,761 1,426,045 1,528,445 1,598,452 1,649,271
Gross Debt (CLP $ Million) 2,135,719 2,509,000 2,603,480 2,220,938 2,118,008
* LTM Organic EBITDA.
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Activity Summary
ARPU (CLP) 7,029 7,037 -0.1% (9) 7,032 0.0% (3) ARPU (USD) 5.1 5.1 1.5% 0.1 4.9 4.7% 0.2
ARPU Postpaid 11,261 11,181 0.7% 80 11,083 1.6% 178 ARPU Postpaid 10.4 10.8 -2.9% (0.3) 9.7 7.2% 0.7
ARPU Prepaid 1,315 1,562 -15.8% (246) 1,392 -5.5% (77) ARPU Prepaid 1.7 1.6 6.4% 0.1 1.6 0.9% 0.0
Blended Churn % 2.31% 2.10% 10.1% N.A 1.86% 24% N.A Blended Churn % 5.91% 6.53% -9.5% N.A 5.12% 15% N.A
Churn Postpaid 1.92% 1.93% 1.76% Churn Postpaid 5.89% 4.17% 41.1% 4.03%
Churn Prepaid 6.69% 2.14% 2.32% Churn Prepaid 6.45% 6.80% -5.2% 6.24%
(44) (22) Blended MOU 332.16 344.90 -3.7% (13) 344.71 -3.6% (13)
Blended MOU 253.10 296.99 -14.8% 275.38 -8.1%
5 (0) Postpaid Effective GOU 24.83 18.69 32.9% 6 18.69 32.9% 6
Postpaid Effective GOU 27.39 22.75 20.4% 27.73 -1.2%
4G Users (Th.) * 6,762 7,167 -5.7% (405) 6,466 4.6% 296
Fixed RGU (th.) 1Q23 1Q22 Var % Var Abs 4Q22 Var % Var Abs
5G Users (Th.) * 945 213 343.9% 732 905 4.5% 40
Voice 17 25 -30.1% (7.5) 19 -7.2% (1.3)
Wireless 69 100 -30.4% (7.5) 76 -8.5% (6.4)
Fixed RGU (th.) 1Q23 1Q22 Var % Var Abs 4Q22 Var % Var Abs
Total RGU 87 125 -30.3% (37.8) 95 -8.2% (7.8)
Wireless 210 308 -31.7% (97.5) 230 -8.4% (19.3)
Fiber & OTT 347 277 24.9% 69.1 330 5.0% 16.6
Total RGU 557 586 -4.9% (28.4) 560 -0.5% (2.7)
Top 3 YoY %
-2%
(% of mobile revenue)
-2,8% 249 257 254
240 243
283
275
26 264
278
267 1 Postpaid
Services
67% +3.99%
26 24
25 24
3 Prepaid
Services
6% -20.2%
Business/service views corresponds to management control allocation criteria and may differ in distribution with respect to simplified accounting views.
33
Entel Chile Results: B2B Segment
+9%
57 57 YoY % Mobile business
52 55 54
grew 9% YoY
17 17
15 15 16 +13% explained both
by higher
39% 40% 38%
+5,1% 37%
35% handset and
140 service
128 131 39 38 39 40
124 125 37 revenues.
+7.7%
83 74
72 71 74 1Q21 2Q22 3Q22 4Q22 1Q23
29% 34% 28% 28% 21% Fixed: Revenue and EBITDA Mg
Top 3 YoY %
57 57 +2% (% of fixed revenue)
52 55 54 83
72 71 74 74
1 Data
Services
32% -4,6%
1Q22 2Q22 3Q22 4Q22 1Q23
29%
B2B increased 5,1%YoY growth in mobile business revenue 21% 21% 21% 11%
2 IT
Services
28% -5,7%
(+9.6%), higher handset revenues (+13.3%), and expansion in
Digital
digital/IT services related to cybersecurity, cloud, SaaS, IOT 3 Business
15% +28,6%
(+28.6%); which offset lower data center 1Q22 2Q22 3Q22 4Q22 1Q23
Business/service views corresponds to management control allocation criteria and may differ in distribution with respect to simplified accounting views.
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