Q4 2019 Earnings Call
Hi, good morning, everyone. Thanks, much for taking time to come to off pretty results presentation, when I'm sneakers show and head of Investor Relations for <unk>.
With me today in the room, we bought the fish the balance all see chairman got caught exactly and so again kind of joints, chief operating officers and Alex Kazbegi Who's our Chief strategy Officer, if the group.
Just as we just the presentations, which they read the for what you're going to float you got she will stocks in the.
The fourth quarter results and put the results of the specialty followed by priestess. This discussion of financial performance for the quarter from Alex.
Well, then turn our attention to the key themes across them about bigger markets and corn and Suji, we'll deal with that's often that FX will come back touch a little bit on the capital allocation and not dividends and in fact, they still for closing remarks.
Always when they show that there is ample time at the inflation. So if we can say that just to the end of the presentation.
Before getting started today, if you can always taking robinson KPTV to the display but I'm just not very briefly jokes. Aside these statements lighting fought to the company's anticipated performance and gotten so 2020 future market developments and trains operational and if it developments network investments.
And the company's ability to realize its targets and commissioning strategic initiatives.
Including current and future transactions certain factors may cause actual results to differ materially from those in the forward looking statements, including the risks detailed in the company's annual report on form 20-F, and other recent public filings made by the company and they see the earnings release in any specification each of which includes reconciliations five race.
Up is that we position they can be downloaded from off from our website, but then I'm going to hand over to Ashleigh and just as it is working up we'll just not said this is gonna be the last time that you're gonna see should onstage L.C. I say, thank you very much action if everything you've done for the company of the most views you could see you guys again.
Valentine's day, how about any.
<unk>.
Not to through to be here.
Before getting started like to remind you if somebody announcements that we made earlier. Thank you Nick for for introducing me.
Thanks, all of you for being in the room and for people who are listening on the phone the thank you for.
Being a here as well.
As I said before I get too far into the numbers I'd like to just make sure into reminds you that we announced today I significant transition one is that I'll be stepping down as CEO, but more importantly that kinda answered you will be taking over as co Ceos the company and I remain as chair just would be the first time that you see them on the stage in this roles.
And I hope you spend some time excellent questions and get to know them getting to know them I've.
Known them now collectively for probably six or seven months.
They've worked together for the last four months as co Ceos, and I am very confident and they really their ability to run the company into work together for good results I'm happy that the here.
And in addition earlier today, we announced a new transition of us feel that led to service, who will step down as CEO of Russia in June.
This year.
Can we get into more details about what's happening in Russia, and the structure that he's putting in Russia, Russia. The mixture that we implement fully the already design and started to 'em turnaround plan that we have in Russia.
Let me go deeper into the overview of our business.
If you've been following us for all while you know that this is a slide that we use to kinda foundation, everyone into the business talks about our strategy and its talks a little bit about the achievements that we have in this case for the full year.
2019 and for the quarter.
First houses a business that position for growth in some of the industry's most dynamic.
Markets, which collectively present us with exciting growth opportunities in both our core services, but also in digital services and adjacent adjacent markets and 2019, we accelerated our investment activities to ensure that we capture these opportunities through the expansion of our Fourg networks.
Putting in Russia, where we deployed I'm more fourg base stations than any other operator, our during the course of the year and you'll hear in the fourth quarter <unk> fourth quarter, we installed more fourg base stations than any other quarter in the year for ourselves as well.
And the same time, we have strengthened my management structure to make sure that we can focus more locally and deeply on the markets that we are operating in and that we can actually execute.
On the gross things close to the markets have we've put in place local boards.
So did change for us local boards I wish draw on the considerable talent pools that we have in the markets.
Operating in that operate in and we include independent directors into this local board structure to make sure that we stay close to the market since closely influences of those markets.
And we also appointed <unk>, the Ceos and de Ceos will divide their attentions among key market areas and and as I said earlier I'm pretty sure they'll be able to do that extremely extremely well.
Correct.
Group continue to enjoy I'm really strong organic EBITDA growth in 2019, and it's interesting it's driven by what we called out growth markets of Pakistan's Pakistan and Ukraine in Kazakhstan.
And it offset some of the weakness that we saw in Russia.
And that those good operational performance along with cost control both at the headquarters.
We spoke about from the beginning of the year, but also throughout the operating companies has allowed us to actually generate good EBITDA and also good equities free cash flow for 2019.
Last thing, which is a big piece of news for us something that we don't spend a lot of time talking to outside but it's a big lightening of load for US is that we were able to close down both the monitors shipped extender monitorship and a deferred prosecution agreement that was on VR, we did that in third quarter fourth quarter of 2019 and its a.
It's a really important certification and recognition that we are ready for the big time in real World is managing our business or in a very compliant way as we go for it.
I tell my team this is graduation.
Graduated now we have to do it by ourselves and I'm pretty confident we can be able to able to do that.
Third.
2019 saw us continue to simplify the corporate structure when I first got here, we spent quite a bit of time in these meetings talking to buy GTH.
GTH story every quarter, Great news is that we were able to get through the I haven't T. O Twentys GTH in 2019 that transaction allows us to simplify the structure. It brings our shareholders closer to the returns and the dynamics of the market's vouch area, Bangladesh and Pakistan, which is all good for us.
Also good for our shareholders shareholders.
Also in 2019 were able to along with talent or actually lighten the load of telling what they sold out of their shares totally and the planned way whether they tell us they were going to be able to do that.
And that allowed us to bring on new shareholders and increase our fleet fell to 43.8%. So I think the basic blocking and tackling portions of structure and operations, we were able to do very very well in.
In 2019.
And fourth we continue to enhance our capital structure.
Issued about a billion dollars and not about it wasn't billion dollars and senior unsecured notes that allowed us to actually refinance some of our short term debt and borrowings helped us lower our debt cost.
And just into the process overall, we entered 2020 was a gearing ratio of one point sevenx against our two X targets, so very well in range.
And we were able to actually design the strategy and implement a strategy that allowed us significantly more flexibility. It's interesting when we look at our return on equity is not something that we speak about a lot we're going to talk about a little bit more from.
From now on we were at 27% or are we which from a market in the industry. That's not really known for high returns. This is a very very good returns for a telco business.
Our value proposition also extends to our dividend.
Our this year.
2019, well, we'll release total of 28 cents per share U.S. D 28 cents per share of dividends 15 cents.
In this in this quarter that we're announcing now it's very good dividend return it very good different Neil.
For our company so good dividend year capital structure, kinda finalized and settled down a lot of the operational execution areas kind of late late well and really really good investment trends that you'll be able to see from both kinda in surgery.
Turning to our results for the court I'll do these pretty quickly because I don't want to be repetitive, but I would say.
Good good and good so good.
Quarter for this portfolio really helped us this was a quarter that showed what a portfolio can do for you weakness in Russia offset by strength in our growth areas, an alpha frontier markets and allowed us to actually Ah report revenues that grew slightly up to 10% to 2.3 billion U.S. dollar.
Hi, good operational delivery in new frontier markets and the growth markets and a really good plan for turnaround in Russia.
Feeling confident there you'll see Pakistan always kind of comes out to look looking a little bit strangely because of the sumitomo somewhat modal effects of Pakistan was had an outstanding year.
I had a very very strong year, Ukraine had a great here.
Caustic standing in Pakistan had very good good to hear us as well I'm also going to bring out Bangladesh of all markets for me to talk about Bangladesh has its a small market for us a smaller market for us we're positioned well and our strategy for Bangladesh is good and so in the past it was a headwind for us, but notwithstanding I should be a little bit tailwind, we're pretty excited about some of the future isn't in Bangladesh.
As well.
So girls was once again driven by mobile data.
Usage and all the trends there and increased 17.7% for us.
And it's all driven by four G. and new services that we provide truck line.
This is test that we secured in managing our cost is evident in our EBITDA and EBITDA.
$935 million EBITDA, you Estee I know we are her for spaces. This 808, I'm not going to go through.
Feeding free I FRS every time I have to say it. So you can look at it and see yourself.
This represents organic growth of about 12, 12, and a half a cent.
Or 30% and finally, our group generated a billion dollars an equity free cash flow $1.36 billion.
Of equity free cash flow pre FRS and this includes the settlement that we got from.
From.
Ericsson.
Let me now talk a little bit about the full year numbers same the performance across the board good growth at the top line reasonable growth at the top line, 3.4% to 8.9 billion U.S. D.
A very pleasing organic EBITDA rose, 9.6% to 4.2 billion.
And all driven by the same thing good data usage could uses of our services.
And just implementation of Fourg and offering better services around the world to our clients.
Equity free cash flow for the year 1.36, I told you this already a $350 million from Ericsson in the first half for the year.
Cost is a big big focus for us a at the headquarters put into countries as well and it will continue to be we still have a lot lot of tailwind in this area that we can continue to kind of drive good EBITDA and good cash flow by managing our cost even better.
Taken together I'm, 27% or away.
So looking forward a we told you in 2019 that we're going to grow revenue low single a low single digits, we're gonna grow EBITDA mid single digits and it we're going to deliver a billion dollars.
Check check check.
3.4% growth, 9.6% growth and $1.004 billion and.
In a equity free cash flow.
I think was a solid here.
As we move forward into 2020, it's a new decade, and and we just have to remind ourselves that we still have a lot of work to do and a lot of opportunities. Let me remind you of those those opportunities first well positioned for growth and we have a diversified set up.
Markets most of them emerging markets very exciting demographic trends in those markets well positioned for strong organic growth, we're investing to get that growth. We're investing in networks. We're investing in people, we're investing in a key services.
To make sure that we can grab hold of.
The opportunity in front of us.
Second I groups has a solid track record of operational execution execution, and it's all built on maximizing growth and continuing to lower our cost. So focus on the places that we can get leverage and lower the cost as much as possible in it to be efficient not to be cheap.
Our biggest challenge in the near term is Russia for sure.
But I am weve dived into Russia in unbelievable detail Con will take you through it I'm more in more detail and show you. Some of it here we have a strategy is firmly in place that I think we can and implement and.
Take advantage of.
And you will see throughout our organization I talked about this when I first got up here a year ago, your and a half ago.
We have 10 countries and we have 10, great leaders have 10 countries and we've literally all Italy, there's a fit for purpose.
And we are going going to continue to make sure that they have the expertise from the center of the advice from the local advisors and instead of market conditions that allow them to actually practice.
How how good they are in front of their clients.
Feeling really good about the leadership team out in the field.
Third if we're committed to enhancing shareholder value or through capital allocation to actively managing this for us.
This means that we're going to strengthen our balance sheet that market's whenever they present us with an opportunity we're going to take advantage of that opportunity reduce our borrowing costs optimize I'm six funding. It all currencies to make sure that we are not overweight or underweight in any area that we are really flexible and viable in that area and I think Alex will get into a little bit of that for you.
It also means that we have to continue to focus on our shareholders about balancing on that focus through returning value to our shareholders with investing for the future and then finally actively managed portfolio.
Ventures is going to start to become a bigger play for us. It doesn't mean, we can take a high off of the base.
Yeah.
Construction business that we have but we have to actually put a little bit more weight.
Under sensors, and we'll be able to do that we haven't played team started when surgery, but he has a team that he is building out to him and the country basis as well that would be able to take advantage of this opportunity that at least ahead of us into venture space.
And before we move and I get it over to Alex I, just want to make sure I remind you of our or 10 countries.
As well as comprising about 10% of the world's population. It actually has an interesting a world bank statistic, we have the top we have six of the top seven unbanked highest unbanked, our nation percentages I huge opportunity for one about ventures businesses of mobile financial services.
Yes.
A lot of people turn away from this kind of a market. We look we run right into it it's a big opportunity for us, particularly in offering services that brings these brings these populations closer to the to the quote unquote first world population. It's also enables us to empower them and I said to bring them up and the gender a mix also.
It's driven it helped here as well as more women unbanked than men. So it is facing into all of the positive trends that we're seeing and in the world on that note, let me hand, it over to Alex.
Because the Becky.
He will take us through some of the detailed performance.
I think here so.
Good afternoon everybody.
Let me start with the first slide to we're just to remind everybody have a vision for the group as the portfolio over a diversified assets.
We cluster this into three different clusters, the cornerstone the growth engines and the frontier markets. None of the cornerstone, which is largely in Russia, our main and bedrock of the business markets, we had a challenging quarter. The fourth quarter was difficult as well, where we had the pricing distribution network issues, which have been affecting our performance.
We have been taking a very active or look at the market than we are taking serious measures to turn it settled con will discuss it didn't much more detail when he comes up here.
What are we have underperformed in Russia, we actually have outperformed in the other markets, namely in the girls and just the girls changes, Pakistan and Ukraine has an outstanding year double digit growth over the revenues also very strongly in Kazakhstan and it was Pakistan and here are the main of the main growth is.
Fueled by effectively data penetration and data growth.
In the frontier markets. The performance was a bit more mixed here. There's also dominated by countries like Bangladesh and Algeria. Nevertheless, they still contributes about 15% of all of a consolidated EBITDA.
What we like in this market is the long term optionality, which we see in those markets.
Now to remind you Ah why we are supposed to say this markets or.
If you're going to have also were aligning our business in jail between the connectivity the new services and the future assets. So if you look at to each of these verticals each of them gives us very exciting opportunities to see delivering growth into future for instance on that connectivity side, we have 212 million subscribers worldwide.
And only 137 of them are actually using data services ample opportunities to grow there we got into markets, where the population that is going to grow by 10% over the next decade, and if you look at the demographic profile of that population. It's also very encouraging is very much.
Supporting the so this is the digital growth of the digital prosperity those markets.
If you go into the new services, where the digital services is highly demanded the getting biology.
But by the customers to know what countries here as well, we have only 34% penetration average penetration that closed the group over the Fourg devices.
And we only have 3.3 million TV users out of again 212 million subscribers altogether.
The last verticals, which is the future assets here specifically, we're looking at the financial services and again financial services represent a very interesting vertical for us to grow pretty much in older markets will still by about Pakistan, which was specifically excited about but in general that gain here too we have only 11% dependent.
Ration Auvs in mobile financial services through our through all of a subscriber base and about 7.3 million digital subscribers more.
Moving to more if you wish operational Capex said again depicting exactly the same verticals for instance, interconnectivity business, we grow very fast the self care applications, Russia is the leader here do you live in Russia, now has more than 20% of their subscribers, which are using itself cap.
In the new services businesses content also as I said 3.3 million monthly evidence users majority of them all in Russia again nice girls here from the be line, Russia, where we saw an increase to 2.2 million subscribers for the Oh on they'd be like TV.
And the financial services here again the the.
<unk>.
So the main a component here over the girls comes from Pakistan, where as I said, we're very excited to have this unique opportunity of having a just cash which is one of the leading core leading operator of the mobile financial services in the market then they already have a 7.3 digital wallets.
Moving now to all the financials, so well so a couple of the annual financial see if you look at more detail in our fourth for the.
Fourth quarter numbers or the revenues on the report that spaces for <unk> largely flat you can see here that the biggest negative contributor to growth was Russia. However, this was offset quite nicely by our growth engines also with bungalow. This.
The two anomalous here, Pakistan, and whose bacon sandwich extra shows he has a negative contribution in reality because the countries have had introduction of the new taxes throughout the year. If you actually look at the like for like basis. The buckets I would have shown that 14% growth and it was making some will show excellent 8% girls.
Very strong gross generally so to say close the group.
Also you can see that this is probably for the first time. This year, we had a positive movement in effects and in fact sexually contributed positive to a positive 12 and numbers.
Lower side told me be does the since the the picture is very similar however, again, if you look at the Russian contribution to EBITDA. While it is negative it is actually much smaller negative then the revenues, which means that actually on the margin sides rush actually did quite well.
Also what I want to know or highlight here is the corporate costs.
It was corporates course in Q4 also have a provision severance provision or 55.5 million.
And nevertheless, the corporate costs has has had a positive contribution to our fourth <unk> fourth quarter numbers as a result of that the overall organic EBITDA grew in the fourth quarter year on the 12 and how for sense and we saw in the same quarter, a full percentage point expansion in EBITDA.
Margin.
If we look byproducts the same chart, but the products do you can see clearly that voice continues to decline and it's more than offsets what it is offset by the data and MFS girls.
On the Ebitdas side, you can see that this most fall in the service revenues have been more than offset by the cost reductions for all the group and that comes both from the operating units as well as continues a continuous reduction at the headquarters as well.
The net debt development, we're quite pleased that ER, our net debt.
Yeah on the from the Q4 18 to Q4 19 net debt to EBITDA didn't really change 1.7, having said that I have to say that if you adjust for Eric sudden which has been included in our EBITDA. They actually be dealt with it being close to 1.9, a 1.9 times net debt to EBITDA.
And if you look at our gross [laughter] girls that performance than here [laughter].
[laughter] sorry, we've been quite busy even over the last four months first we raised about 700 million 225 buttons.
In October and that's followed by another tranche of about 300 million, which raised in January sold together were raised about a billion dollar. So fresh fresh that's that's mostly to retire revolving credit facility and reduce the cost of evolving altogether.
The cost of borrowing it was indeed, a decline however, quite marginally from 7.5% last year to 7.4%. This year, but that is partially explained by the fact that in the meantime, our actually exposure to the ruble that increased from 42% of total to actually 47% of total and clearly the ruble death.
Carries higher coupon. So when you look at the weighted average numbers they are a bit hiding the reality of huish.
The maturity or would that came down from about three to about 2.2 0.4.
But what is also good that the total cash and unused committed credit lines at the end of this quarter comprised actually $3.2 billion.
Now with that I would like to invite cotton to talk in more detail of operating performance Alex. Thank you very much.
Hello, I would like to give a little bit more color about our operations in Russia, and Kazakhstan as were slow and Alex mentioned, Vietnam should they quite strong results compared to our guidance exceeding and meeting those but we are not shy of also talking about some difficulties that if you're facing and I when I give you a.
Little bit more detail about all get smoke blend in Russia, and how things are going.
So first of all if I would present a chart like this with 6% growth over 16 to 19 in a developed markets. It would have you know quite good picture.
But we don't benchmark ourselves into other markets for in emerging markets with 55 million customers, we have only 38% of them being a fourg subscribers, we have a unique opportunity in Russia, which we felt like we have been delayed in grasping.
As we set out in Q3 results our Russian operation has been underperforming based on our own expectations there are clear issues.
We have and then for quality Yep, which we had been addressing in the last six months and which will be completing all works for them next six months.
Russia overall is a very inefficient markets overall with distribution. We also suffer from the same issue and as you will see later on our focus is first digital.
And optimizing our physical distribution network in the new business model perspective.
Price.
Russia has been marked with unlimited on differentiated offers for a very long time in the past 18 months. The good news is markets is rationalizing and getting rid of these type of unlimited on differentiates it offers into much more reasonable economically sensible offers.
And nationally all these impacts has me shows its effect in our latest Q4 results as well be fell 3.3% year over year.
And clearly we are looking for.
Ways off turning this trends over the next couple of quarters.
Our total decline in mobile services revenues has been 5.9% and it's a combination of pricing as well as 1.1% decline in the subscriber base, even strong very strong business momentum on b to B business and home connectivity has done little to compensate this.
No surprise that you're exactly focusing on these issues to turn our business back into the growth mode.
Compared to a year ago today, we have 48% more base stations in Russia.
We have been accelerating closing the gap actually has worked as I mentioned, we have been number one in terms of deploying networks in Russia. This year in Fourg.
8% to 6% of the population up from 78% last year is now covered with Fourg.
The business the growth potential is clearly on the LT customers.
There is a clear differentiation of revenues per subscriber based on Twog, Threeg and Fourg, which is up 2.8 times as you can imagine as we develop more of a customer base one LT from 38% to 50 to 60, we're gonna see the impact of this important digitalization as well.
Our motto as I mentioned is digital first our industry is blessed with every single customer with the smartphones have been get shop in their pockets.
We have to leverage this.
Today, we have more than 10 million active users on our my view line application, which is 28% of our total base.
And these customers are able to be enjoying get much easier way of dealing with their internet consumptions.
We have to leave no customer behind and get this 28%, 200%. It's a very important step in terms of increasing our distribution efficiency in the markets.
Although these measures. We have also noted that we have to change our organization. So that you can't have a higher capacity to execute simplifying the organization focusing on core functions naming get chief customer experience officers to put the customer back onto the top.
Hey, Bill has being one of our priorities.
As we announced yesterday or general managers vessel lots tonnage has decided to step down.
And during the period that we will be looking for a new leader in Russia, I will be taking over the executive powers as the chairman of the local board of directors and be line Russia.
Well still will continue to support me as an advisor during the next six months.
And I really would like to underline our most critical thing is to get all net promoter scores back to the number one position step by step first and most scope than in the top 12 cities and later on in the anti Russia.
As I mentioned this exercise has been going on for the last six months.
Have already started seeing got results in terms of be catching up with investments quality of out and that's sort of improving and also civilization off the.
Pricing in the marketplace.
Russia on the other sites is a prime markets for growing ecosystem of new services just look at these three specific examples.
10.1 million active subscribers off my view line application means sales channels for cross.
Revenues is implemented.
We have an opportunity to double triple this number over the next two years and our success will heavily dependent on digitalization of our customer interface.
Be line TV has already reached 2.2 million monthly active users.
And on the mobile financial services, we have reached almost 5 million subscribers.
And all these things proves that if we are able to enhance our LT ebay subscriber base, we will be able to see the results of turning the business in the next.
By the end of this year.
So just to summarize the clear actions, we're taking in Russia.
Customers at the heart of our business.
We will be focusing on 10 commandments for best customers or service and we will be known for its over the time that we will implement all changes.
Improving network coverage is critical for our business.
We have a plan to improve and become the best network in Moscow in top 12. These over the next 12 months.
And also start complete coverage of the metro in Moscow and some pieces.
Digital channels is the fundamentals of our business and also is a way for us stepping stone for developing into adjacent markets.
We're going to be closing dog or unprofitable stores and this number will probably be reaching around 600 over the next couple of months.
Enhancing the customer value proposition.
True segmented offers but more importantly, growing the customer engagements in the new digital and adjacent markets will be our plans for improved performance.
I would like to.
Mention that our Q4 results in Russia has been kind off the end of the trends, which will see growing over the next couple of.
Quarters and in Q4, we expect to be back on the year on year growth stones.
A little bit about Kazakhstan. This is the first quarter, we are giving more light on because if you stand in terms of our disclosures beautiful markets moving from cheaply to two player environment.
Getting stability.
And also higher customer attention in the Fourg markets.
41% or for the customers are LT customers and this number has doubled over the last 12 months.
And as you can see Oh convergent products, meaning that customers that are consuming voice and data, but minimum one more subscription based service from us.
The revenues from these type of customers have been up 76 person.
Thanks to more TV subscribers, which increased 65% and also financial services subscribers, which increased 117%.
Our business here. He is also operating under the name be line.
And it is one of the most successful operations in growing its subscriber base.
Our new brands Cold easy, which is a digital only brands is it pure play case of how we can tackle customer acquisitions utilizing our digital channels.
And beyond Fourg Kazakhistan is also the markets.
We are looking for Fiveg test, but.
We have deployed one of the biggest territories almost 13 square kilometers of area lighting up with Fiveg for potential vertical based solutions.
And in this environment.
I have one gigabits per second dose feeds the test it successfully.
And as I mentioned 'cause. It's done is also an area where surgeries and my efforts of building and next generation digital operator is tested and.
I do think results.
Let me know handover to surgery for a little bit more about Pakistan and Ukraine Sergey.
Thank you again.
These maybe all told US last earnings call. It's my first one of my first earnings call. So bear with me because I'm not just to do this.
Not to talk first about Pakistan, you know, Pakistan, well, it's been a one of our because some fastest growing markets. They just through also for Q4, where we so oh revenues grew almost 16.1%, if which 40 40, 141% if we exclude the impact on of the new tax regime.
The reality is that we actually that's also in Fourg, our nickel is the fastest and most reliable one and this also translate that you know grew in our user base, where we grew up to 61 million customers. We want to use this opportunity to extend our position there and we see partnerships as a way to do it on an example is the one that we lunch with Sky catalyst you probably.
And Emeka U.S., it's a popular because of their partnership in India with reliance what we did here is to bring this a these devices to market, which has 90 million to GE handsets 90 million my portion of 200 million. We see this as a packet of Ah users that we are not a serving today. The goal here is to provide.
Cheap, but very powerful device, so people that have not using fourg compared to two fortune.
I'd also here is to expand two verticals that are two they went to coding like our ecosystem, which.
Probably you heard about that we talk about just catching the bus we mentioned it before just give us or just pass it actually 8 million wallets, which is a very nice growth there, but we want also to complement these ecosystem with more more ops one of them is just to be.
Just TV is are the largest bates streaming up in Pakistan, and I would stress that paid a component because it's a it's unlikely, but just know well known for picked up so when it comes to TV consumption will have more than a million monthly subscribers 5000 hours of a of canton life of sports like cricket, which is a I mean.
Thing in Pakistan, we're going to continue to invest in that area of doing local content and make it through a a two Pakistani experience.
The fact that the the up has been done really 4 million times in the past few months reflects the interest that engagement that our users huff with that type of brothers.
The second up that they went to talk about today, it's a the policy that we launch with bema eats a health care up.
The problem here allows you to have a teradata telemedicine.
Product 34 hours available, where you can connect with Oh, no anywhere in Pakistan. They provide advice when it comes to help but you can also order your prescriptions and getting the LIBOR to your home without rhythm that cost or the same quality, a a brilliant pharmacy, which is pretty relevant because I guess.
As you know, it's it's a very rural area. So it requires a these type of focus and so we're very proud of this too.
Yeah. He used to continue to build these echo system, so people see value on being a I Tesco somewhat but not only for just customer stadia case to also open it up to two a.
Customer sign of just.
The focus for this year as we said before it's to continue this conversion of our user base to Fourg, we see growing quite nicely, but we want to accelerate that but we.
We also want to accelerate the growth of our ecosystem I mentioned the city of that pick ups, but a there's also other areas that we are exploring there and finally doubled down with just gosh. So we can finally bullishly too.
Tools.
If I move to the Ukraine. This isn't about market, where we enjoyed a lot of growth for the past years and this is also true for for this one where we grew 16.1% our revenues, but also more importantly, or the loyalty of our customers. It's been constant we have the lowest tone in the market with 4.7 per se.
[music].
The plan here is similar to Pakistan continue to invest in the Fourg rollouts.
An ecosystem of ops, mainly financial services and content distribution and finally Oh, great. These are just consumers to 240.
And with that I'll bring it to Alex.
Thank you.
Second try.
Just be worse on the capital allocation and our priorities so going back again to our triangle, which we introduced during the capital markets day, and we discussed about the way how we look at our business, which is a interconnects to businesses of connectivity new services and the future assets so with that.
That's also defines the way how we look at our investments and our priorities of investment. So the first priority is into the connectivity, where the network and especially improving the network in Russia has the number one priority, but not only Russia, we will be investing also to expand and improve our general.
Coverage and capacity and speeds in all the Mark as we operate especially on the Fourg sites.
The second priority is to ensure that we continue to grow our ecosystem over the new services and that means investing more into digital and invest in more into any kind of adjacent services, which we see fit into our business number of them has been discussed by con and by started getting their presentation.
Third is the future assets and here, we have one specific opportunity, which is just cash just cash has a fantastic franchise in Pakistan and we believe that by putting the money now we can grow this into almost a standalone business overtime I think at the time for investment into just because she is now.
The last but not least future assets is something where we will take it more at hawk decisions or number of the projects, which we will be reviewing and we'll see how they fit and complement the overall groups ambition to continue and deliver the girls.
The purpose of all this investment is to return to the goes.
Very simple we want to grow and we want to do this by investing very specific areas.
The long term or there's always some idea here of course is to create the long the long term shareholder value.
Talking about wage or on the dividend side.
The board yesterday has approved the final dividend for the year. It is 15 cents a share which brings the total dividend for the year to 28 cents.
And that's about 70% pay out of the equity free cash flows after licenses.
If you recall, we have defined our dividend policy as.
That at a minimum paying out 50% of equity free cash flows after licenses subject to gehring not going beyond two times.
So we clearly show that we not only are capable, but we're willing to pay more than 50% if our situation.
Provides this opportunity.
The last one would be too.
Go to our guidance for 2020 and here we have the total revenues were looking at the low single digit local currency growth.
We're looking at mid single digits local currency close EBITDA. This is very similar to actually what we had already for 2019.
And the last one way actually changing a bit our guidance here, we used to guide on next to free cash flows we think it's much more relevant.
To guide on operating a capex to revenues and that will be somewhere between 21 and 22%.
I've also to say that over time this number will clearly decline.
With that I would like to turn back to slow for closing remarks.
Soon anyway.
I guess you can get them.
So thank you we're going to move into Q in April and guys can come up and we can start positioning the chair as well I'm closing.
2019 in pretty good year lots of changes inside the company.
Obviously leadership changes across.
The top of the group did change in Russia, and a big focus on Russia, and making sure that we can really get all of the engines growing we have to growth engine is growing we have to get this core market growing and continuing to move the frontier markets along for US is a big deal you saw the financial guidance.
Basically a mirror of this year.
And I I'm pretty confident that we can deliver that.
As I said, returning Russia the growth is a key priority.
Services provision through for GE through a pick up of the population and using our services and delivering them network capacity just investing for the basic business is what we're going to do and we want that to parlay itself into growth.
We talked about we no longer even spend a lot of time when the head office. It is the way. It is we continue to shrink the cost and a head office, but more importantly increase to focus to adding value to the.
Field operations, and we're going to invest or to grow the future of the business and make sure that we do that while returning value to our shareholders. So look for us in 2000, and well look for them in 2020 I'll be sitting in the audience when that comes around.
Well. Thank you now let's to go into Q snakes, I think is there anybody who's going to help us with this are we going to I'm gonna do them myself.
I'm fine with it.
And we got mikes.
Around so well.
[noise] flux other what's your current from prosperity to capital management.
Just wanted to clarify on your dividend or outlook and policy. So it sounds as though you're not quite sure what's going to happen. So youre, our you compute you'd prefer to wait and see.
Whether to maintain a the dividend and ER and so on a so maybe you can help us understand a and and and and the yet if you look at your Capex guidance.
It doesn't seem as though you are going to increase your investment in absolute terms in 2020.
And yet your leverage is still within your policy.
So what's your position on this capital allocation versus dividends, and though why and how you're not so sure about your ability to maintain dividend at this point have Alec start and then well first of all them. If you remember at the capital markets day, when we introduced the new dividend policy. The whole idea that dividend policy was to give us flexibility.
In order to choose whether we could take we don't want to miss on the opportunities which were seen in the markets.
Previous dividend policy was very restricted in terms of what we committed so to say to pay and we thought that it would be much easier for us to maintain something where it is fairly clearly defined it's at least 50% of the accident free cash flows after licenses.
But having the ability to redirect the funds to the projects, which were fine are interesting for us.
Talking about the Capex or extra Capex is gonna be in absolute terms higher this year.
So there's absolutely no doubt about as we have about 3.8 percentage points increase in the Capex spending because it's got a couple extra revenue. So this clearly more investments going on and as we define disinvest is a very targeted for the areas, where we see I didn't necessity to increase all we see the growth opportunities that's why highlighted the network.
Highlighted the Pakistan or just cash and highlight that any other so to say opportunities we might see in terms of providing the new digital services and so on and so forth.
The the last thing about maybe what you meant on dividend is that there will be only one payment of the dividend for this year and we didn't want indeed to continue giving guidance for the future you gain for the same reasons, we just want to keep the flexibility at the moment, which gives us the opportunity to make a bit more agile.
Decisions about where to invest and how to grow.
Sorry, but it's a bit confusing so your capex to revenue in 2019, it went to 3.1%, yes based on your.
A press release pitch them.
And I know youre guiding to maybe that somebody without forest adjustments. So that's I think that stuff that that should be including out for us. Okay. So pretty eye for us. It's 19.6, correct right New York.
Okay.
You are that's what I'm, saying three percentage points above what you did.
Okay, but then you also talked getting some revenue grew so it's not really.
Got it like a step up.
No there isn't a bus and because I mean were also not feeling that we need to make a signal. So we're feeling that we need to have we identified the areas, where there's extra capex required and we are directing it that way.
So what is the rates that you might want to reconsider your capex a level for 2020.
Higher or lower I, I think it's fairly where were pretty disciplined.
And and have been over the years not only this year over the quarters and over the years. Some capex I'm. So I don't I think that the outlook that we have now and maybe also it would not be right to compare when he talked about an increase from 19 to 20 because in 19, we have already taken actions fees are actually correct. So if you look too.
The trend in 17 18. This is actually really the level that we need to see the capex investments.
We're also seeing that after this year, we will see this trending down.
Rather than trending up.
Okay.
And the revenue growth was flat that would imply 15% more capex and if your revenues grain that we've got it for grain revenue that in fact, SaaS and Paas Capex is growing north of 50% year on year. So effectively out guidance is for capex to grow between 15% to 20% here on yes that so that he is.
Quite a big quite a big step up in Capex.
Okay. Okay.
Okay.
Matters could I mean from mix or.
I've a question on Russia, I'd like to understand better the issue of that network quality can you, maybe except explain in more detail.
Port issues are and actually if you're trying to take to fix them.
It's kind of timetable as well.
Sure you know, Russia, being 50% or of our business. Most schools is almost 50% of that so must go experience over the last two years. Its significance was the network from oneplus from to the other and I'd have to admit that our execution of that swap has not been up to this done this that's.
Like to see.
No the issue the good side of the issue is we know exactly what the issues are and we have put remedies already in place to improve the quality of our network.
We will not only include occurrence well deals than its work, we will enhance our network coverage in Moscow and publish the most school as well as coatings or the Metro now if you have already started covering the metro is by far so our customers are actually you know enjoying good activity also into metro and stations and it's.
On those but over the time, you'll also deployed the metro as well this will take a little bit longer one year to complete the L.P. deployment, but we have identified the pain points, which was affecting our customers and we are addressing those one by not most global be followed by some Peters brookins itself, we live in cities on top of that's and.
We are progressing with your world Rollouts. We are currently at 86% off LT coverage in Russia and expect this to reach towards the 90 ish.
Well. He started we do expect to start to see a positive impact towards the end the year or.
Some of this will take time, but.
So.
Uh huh.
Question.
We have some on the line so the operator please.
Oh excuse the questions on the conference line.
[laughter].
Hold on Sir we have to turn up the.
So operator are there any questions in a cool scope news.
Well, they're getting their act together any any questions on Oh, well take one more here.
I Love your question kind of your line is Alexander Cornell, which terminates on its capital. Please ask your question.
Yes. Good afternoon to question so from my side. So the first one is on your list and structure.
Do you have any specific lance to change. This year are you comfortable these youre Amsterdam, and U.S. leasing, which you have right now.
Do you plan to have a name matters to implement the change this wants to make that assumption what fraction.
For your investors and potentially get some inclusion.
Relevant indices, so that'll be interesting and just the second question is more like enough interest on do have any disruptions in any of the markets whether you like cooperate with regards to the supply of then smartphones because of their.
Genius a virus outbreak. Thank you.
Alex take the listing and Uh huh.
I'll take the first one or I mean, the question definitely is close to our hearts somebody we understand the issue we've been.
Looking at various a potential so to say opportunities, but we haven't made yet any final decision. So I think that the so the fair to say this was the final decisions made we will of course communicate back to the market, but were very much aware of that oh that opportunity for us.
Alex can you communicate that signing maybe then you berating communicate the decision whether you are you going to change to listen structure or not.
Or you can.
I think we'll communicate well we're ready to communicate.
We're not ready to do that cycling.
It was pretty comprehensive.
We go to the supply chain, especially about smartphones, there's no doubt that the supply chain is impacted I'll go over the current impact is limited to improving off the stock turn rates. So I'm actually happy that market's gets rehab as they did in most regions.
Regions.
Thank you.
Tell me when the phone operator tell us when the phone line is ready, but in the meantime will stay in the room.
Okay.
Could you give us.
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Chad.
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And.
Let the market.
Good.
For example growth here or.
Okay.
Oh gosh.
The.
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Together.
Second question.
Yeah.
Target for.
And.
Back for yet.
And maybe you could give us update.
You see opportunities.
How.
And.
So first I'm too just to clarify or make clear the split in the market.
These two individuals will co lead this business there's not a.
Like one Guy runs Russia, the Guy runs out there either chairs or deputy chair or what did you call them.
Happy to chairs of each of the market. So there it's not like.
You know he does does Russia. He just as Pakistan is gonna be called leadership, they have a different set of intense skills in certain areas and then what we want to do we've picked markets that need those intense skills to align with the individual so Pakistan is clearly a market that will whoa, that's operating very well and will.
Well Hum on the venture space and on the gross based after only split there was no trying to put it together in any kind of scientific way other thing other than where they like to travel, let's think about it that way, but it's not really that scientific.
And I expect them, both high and the board expects them both to co managed the markets and to bring whatever skills. They can to each of the to each of the locations you.
Second question was about.
Right, so portfolio optimization, I'll have or Alex take that one.
The complement full of course them or I'm, sorry, Russia for me is one of the markets what I expect to see most of the she them. So I'm not sharing that particular, but at that time that I spend and the focus is definitely probably that they because one of Pakistan and Ukraine. So the idea here is to leverage the best of both sides are definitely when there are some.
Think about like what optimization.
Petition to them that myself on the other way around with there's something all digital Oh, the timing and the reason why we did the co Ceos. We believe that was the first part of your question. Yeah. There's a lot of ways to run a business lot away from structured we actually had the opportunity to get 'cause comments on our board for how many months before yeah four months before.
We had the opportunity to get to.
Leaders.
And I think it's a great opportunity for me to try so we went to the board and said yeah. How about this and we can bring isn't it's 10 markets, they're very different they are moving very fast and their large and all of them. Both of them have a set of core kind of activity intensity that we have to focus on and a set of new serve.
Mrs and new offers and what generally happens in these kind of situations is that you double down on one or the other not both and what I think we can do for the next couple of years for the foreseeable future. It's kind of run this doubling down on both where we have a guy who can think about this.
While the other person is thinking about that but they have to work closely together because they are they are.
I can only coexist. So I think it's a good way to do it when you have to talent that we have then if you look around the other telcos. They tried to do some real yeah. Its.
Because they have to deal with this type of a dilemma either you focus on doubling down on connectivity or trying to become digital we've tried to do with these it's tough to people. So these where do we don't become kind of us because a friend. He can we can complement each other and it's too I guess.
Makes me excited about this joint leadership is we set the tone at the top every local operation that takes you know digital and also the telco capabilities to work together.
And you know telcos are big slow.
Animals, they can't crowd dog digital video and I think by setting the tone at all levels. We will make sure that this is a joint teamwork and the next generation telco will be about actually different skill sets working together.
And Alex.
Yeah, I didn't know what do you mean by optimizing or who were not looking to optimize we're looking to maximize maximize the returns. So question is if you answer. If your question is about do we look at any M&A possibilities well you know the the the onus on says that we always do.
But we cannot disclose those things I mean, one think which you know where look we are in the process of.
Or at least settling Armenia, and the there was a news about that so there's a.
There's a process, there's a regulatory approvals, which are still pending thats, one thing, which I can comment on but the engine.
Our capital markets day, we showed that returns on invested capital in majority of markets Rx reduced significantly above weighted average cost of capital. So if anything what were looking at is that where and how can we enhance those returns rather than rather than optimized in a sense of trimming down anything that's not the that's not agent.
Right.
Yeah.
Yes, let me take another cool. Your next question kind of sign up I, even came to some extent less capital. Please ask your question.
[laughter] Hi, I have a couple of questions. Please firstly for how long Capex will have to stay high in Russia. So she can give us some color on what happens beyond 20 sequentially.
And also what's the.
Capex in not 20 to 22 boys secondly, youre.
<unk> costs on Russia, if we exclude older one off a one down about 10% in the fourth quarter.
I'm, just wondering what's being cut so aggressively.
Next question I went through and then a question number three and the Sun as it might be very hard to.
I comment on that but any color you can give on their mobile service revenue expectations for rushing to answer to answer would be very helpful. Because I think your previous aside that.
We expect.
They turned around to happen about midyear, so where should shape.
Some better numbers and the second half 20.
That's true of a case and.
Sure, Chris you're kind of flattish service revenue or further.
Revenue in Wassas. Thank you.
So you on with the less than 40% penetration of Oh Gee, you know customer base. It's clearly shows that we are still in the ramping up phase of a deployment of LTE networks in Russia. So you should expect this trend to continue until we hit 70% on that metric and it's gonna probably take over.
18 months or so too to reach that position.
When I look two hours are trending upwards, you will see earliest you for us getting positive trends in terms of showing mid single digit growth year on year in Russia in service revenues, but of course, it will not bringing the total year to a positive trends, we will still be low single digit decline for the entire off the year. This.
<unk>.
Well I mean Capex is a you know concurrent to what a vote count said I mean, if we need to invest more we will of course.
Well of course do we have a program a as Ken said, it's probably going to last for about 18 months. So there will be a tailed maybe in 2021.
Now in terms of the Yottabyte you ask of a 2020 will be the last year. The otherwise. So clearly you are looking that for 2021, the capex intensive to decline. However, what we gave the guidance in terms of 20, 122% VW 19.6. This is like for like because clearly there was in 19 and element where we invest.
The thing to be otherwise well.
Yes.
We have two more in the call what am I get through one more of those and then we'll come back to the room.
Your next question comes on line of travel back [laughter] JP Morgan. Please ask your question.
Hi, guys. Thank you very much for the call. It can I just.
On your debt refinancing plans. It seems like you caught at around 3.7 billion enough debt coming due in the next two years.
How much of that I am looking to refinance or are you using anything else paying that down and using uncommitted facilities.
And the second one is in terms of the mix of hit that now boasts the opposed to David do you still you go like 50% of debt in rule, but it is that these I make that you're looking at or do you want to raise more local currency debt and reduce dollar debt further.
Thank you.
Well the reduction of the dollar the generally would be the purpose of course question is that are ideally what we'd like to do is to swap the debt into the other currencies. The ruble if you recall, 43% or if it comes from Russia, So clearly having 47% over the girls that exposure to ruble is actually.
Matching that exposure quite quite well.
Question becomes what is the possibilities really to swap or raise that that locally and in many countries. This is just not no no not feasible.
In terms of refinancing or retiring the that I would say refinancing will be the priority, but we wouldn't.
We we cannot give you of course any guidance in terms of how and when it's going to happen, but refinance it will be which will be okay.
Understood. Thank you.
In the room.
In the room.
We have one more on the phone.
Like that and be ready in the room for the next question. Your next question next question Kinda sign of Eco I cannot Chuck.
Correspondent Bank. Please ask your question.
Yes. Thank you very much to sit there can sort of from most combined.
I'm sorry question I was wondering if you are in relation to your decision to pay dividends. So once a year could you. Please clarify what's he thinking behind that because I mean, if you look like for like a to your peers and Russia. They clearly paying twice a year and this looks like or something that might may.
Did you sound. They appeal of this talk off those in the last August.
That's number one number so I'm a year ago when it does seem like coal he will provide im glad to have that you would expect running a sustainable running right all the free cash flow pretty licenses at about $800. So putting here does it say so I'm glad I'm still hold this is this something that you expect.
Correct.
We'll expand going forward.
Oh No question on the Street looking at your chart.
Slide number so do you want when you kind of fall show the last of spending that's about $300 here this year or could you give us some indications how what would be the sustainable.
Able to try a branch level or fly sort of spending going forward here. Thank you.
Yeah, I mean, the the question about the dividend paying paid ones I mean never say never so I think that what we are just saying is that for this year there will be one payment.
That's the decision of the board and as you know the dividends out of the prerogative of the board decision. So come next February or March board can make a different decision. So I would probably stop there secondly, the second way over the answer is the same question is that you because you mentioned there does that the decrease the appeal for the Stoke lets people to this.
Did the 12% yield increase the appeal of the so.
Maybe you know that's the that's another way of looking at it.
The thing that we will be reducing the dividend going forward, but this is also the way how we can say that we need flexibility we want to grow and I think growth is the main thing, which hopefully all of your looking from us to deliver.
Second the.
She was on.
On the on the first sustainable free cash flow a in the future a year ago, you are sort of throwing the level of approximately 800 million Dorsey here pretty lightly so you're correct. We don't guide anymore that metric and by the way if you recall that when the was based on the FX rates.
For fixed in February 2019.
But if I go back also your question about the license system in the 300 million, which Weve put there on the chart is basically 225 million, which is a deposit which we had to put a against the pending court case for the license in Pakistan you remember they all outstanding number was.
150, and we had to deposit 225 in order to then challenge the decision in the court. So that includes that number so.
The run rate if you wish more normalized rates are what we usually pay for the frequencies for the licenses without any license renewals tend to be somewhere between 75 $200 million here.
Maybe a but they are I mean, they licensed and Youre sedan not.
You cannot.
Oh it all so what would be young adults reporting the numbers going forward with approximately.
And then Youre spana.
He goes that's why we we said that we would the when we looked at our dividend policy. That's why will link the two they actually fixtures goes after license because indeed without licenses we cannot conduct the business. So that's a natural part of what we would be paying for to continue being a going concern in terms of the renewals you know you could probably.
We look through the any kind of disclosures and see where the next renewals are coming from I don't think there's much of a secret of that however in terms of the timing of those.
Payments, that's where the difficult to life as we've said for instance, the Pakistan license on body, which is the one of which has been now just put it into court has been due to review in May of last year and is actually still not settled so it's very difficult for us to give you a guy some.
Maybe I Wanna, Okay, but I'm not just one clarification, if he set apart that Pakistan starting off with regards to 2000 Twain he only.
What kind of payments a significant payments you expect to hear apart from.
Pakistan.
You were talking about the license.
Yes, yes, something my lifetime spend I don't recall, we have any other significant payments during 2000 spent.
Okay. Thank you very much wise, but I mean so.
There's not so.
And answer which is not asked yet, but I want to share with you considering the interest in Russian market.
You have felt the confidence in our business in Russia, but I would like to explain why I'm also bullish in Russia World.
The regulatory environment changing in Russia, putting more data sovereignty principles is actually a very positive thing I believe for the local development of the digital economy. If you look back 10 years ago, and compare in markets like India, and China and compared the impact of data sovereignty in the Indians.
Digital marketplace in terms of development of new enterprises, new investments and development of the overall economy.
It has been phenomenal well, India still stays as a.
Software maintenance hub actually China is a digital economy.
And I believe the actions taken in Russia in terms of data sovereignty. Russia's this thing and data being processed by Russian technology companies gives us as a telecom abrasive unique opportunities, it's up to us to grasp them and I think you know this is one area that I would like you to keep in mind looking to the Russian technology and telecoms market.
<unk>.
We have another question on the line from Bank of America, Let me take that one and then we can.
I'll take that.
Your question comes from I never if any economic please ask your question.
One is you have just recently canceled unlimited data plans in Russia into beginning of February what would be incremental impact the package, it's Mike happens a path towards returning some driving a gross.
And as a second Diwan. He's can you. Please update us on the 300 million option contract kitchen defense stake in Pakistan, and if its implementation might hold so potentially impact your dividend decisions I think.
Okay with regard to the unlimited plans as a as you know you have reprice them actually we have physically taking them off the market. They are only available based on especially request then actually they are priced in the rights and fairway.
Moving on whats the overall in the Russia. If you look to the market I would expect a normalization an increase of the prices and this is already taken place by all the movements of the players considering the higher cost of Euro what type of a project. So I think you know pricing normalization is in place and elimination of the.
Limited on differentiated tariffs is also going away.
Now with regard to today to the option price I mean, it's actually disclose the the book value carrying value of that price is about $340 million.
We have no visibility on the actions so follow a minority shareholding, Pakistan, we actually have good relationships with them. So we are of course evaluating the pros and cons of Ah that option, which in these comes due sometime in the middle of the summer, but we have no other comments to make at the moment, but indeed.
As as a as it's a discretionary spend potentially and may not be triggered by us that clearly keeps us so to say keeps additional sort of say because she gives us additional cushion to keep in mind, when we're thinking about the dividend policy and the payout this year.
Thank you.
Just had.
One follow up on the.
You mentioned.
The pricing just wanted to clarify if the pricing.
And.
Got it.
Hello.
New customers, taking the time.
<unk>.
And you have a phased execution of repricing the existing types as well in the first phase about one third of our customers will be impacted and it will be a second phase they don't coming around.
Thanks.
Two questions.
Yeah, Mark it sounds like <unk>.
He.
<unk>.
With the difficult.
And larger.
Yeah.
Okay.
Yep.
Question on the Dash, whether you see any change in opportunity at their larger fan having difficulty.
And so crushing and Josh cash if you could share some financial metric maybe can change letting you know why.
Each transaction I think most popular Oh actually makes thing.
Obama they really bullish not because our competitors are facing headwinds threeq or the market. If you look at the numbers each one of the biggest didn't grow as markets. When it comes to your population. So smartphone penetration is escalating we see opportunities in connectivity, but what's your other opportunities outside connectivity and that's how we're approaching it I see.
That government, it's been quite open in that regard on its building on what a concept. It's one of these countries that we believe that they have to reside in in the country and we're well prepared to serve that are that opportunity.
Going back to Pakistan, and just cash we don't talk and quite honestly I don't focus on the contribution yet of the that users we're focusing on growing and that's where do we spend most of the time as we said it's a closing the 8 million wallets are these phone, which is a very nice organic growth I would say, who we are planning easier to accelerate on double down.
This growth.
And that's how we see these are these type of products.
So.
Well, it's a problem so basically to speak to the bill payment and even Micrel, which is something that we're very proud with the top transactions in terms of volume we're going to expand beyond that I think this is just a they wait to provide immediate value to customers, but based on what we have also on just we'll see a lot of problems on the financials ecosystem.
For a light to our users in any of it but we're going to expanding interesting.
He said that you don't focus on the financial metrics yet focused on growing this is something that.
Split allows us to do even though I'm kinda is very experienced in this area as well in the telco provider in general they focus on financial metrics very early and they don't always look it's great as you would want them to when you make some really bad short term decisions.
When you do that so we have been taught not only by 30 and kind, but also by our board that we have to absolute digital experts on aboard who say basically focused on growth grabbing share of the uses and share of the population.
And then perfect. Your engine that's the way that this that's the way these business outside of Oh operate in the so we're going to keep looking at.
The last.
Question do we have anything on that.
Good.
No more questions.
I can take one more in the room.
It's not well done thank you very much radical.
Good thank you.
Thank you [noise].
[noise]. Thank you that this compare comfort.
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