IR_vivacom_2018-en-01.pdf

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KPIs OUTPUTS & OUTCOMES
Total revenue: BGN 948.0
million
Adjusted EBITDA: BGN
359.8million
4G mobile network: 99.25%
coverage by population
Fiber homes passed: 1.182
million
Promoted employees: 380
Employee engagement: 59%
9 newmobile voice tariff
lines
6 newmobile data tariff
lines
5 newmobile additional
packages
5 new IPTVpackages; 1 new
DTH package
3 newfixed voice tariff lines
GHG emissions: 80,993
t CO2e
Total network waste:
1,094 t
Value distributed to
suppliers: BGN 446.9
million, of which 84% to
local suppliers
BUSINESS MODEL
Sales & distribution
Ourwide distribution network ensures that themajori
ty
of the population in Bulgaria has access to our products
and services. Deep and broad distribution channels
and segmented sales campaigns as well as consistent
service across all VIVACOM sales points allow us
to compete effectively. In addition, our distribution
channels serve as a valuable physical interaction point
with customers and provide products and services
beyond the traditional boundaries. We believe that our
nationwide footprint and distribution network provides
us with large scale cross-selling opportunities.
Customer experience
We focus onbuildingahighqualitycustomerexperience,
in order to retain customers on our network and keep
them satisfied. Our efforts are not limited only to the
en customers contact our points of sale or
instances wh
we also strive to provide a high quality
call centers but e by managing our customers
customer experienc cle’ of a customer relationship
through the entire ‘life cy ity and efficiency, at a
with competence, availabil erformance levels in
level that exceeds average p ndustry. To retain
the Bulgarian telecommunication i ent and quality
customers we need to ensure a consist s the high
customer experience which also include proves
quality of our network. Customer feedback also our
to be an important tool to assess the progress of
efforts. .
Product development and innovations
We believe that carefully considered capital
investments ensure efficient coverage, By establishing
a high quality network, VIVACOM has been able to
offer its customers a range of
innovative products and
services and has built its brand
loyalty. This stage of
the business involves continuous
innovation and deep
knowledge of the customer base. E
mployees with the
right skills are required, while a stron
g brand and solid
market share are necessary to reinforc
e the benefits of
broader product offerings. Moreover,
our innovative
capacity includes also effective relations
hips with key
business partners and suppliers. Developin
g the right
product at the right price is critical to gain
strategic
advantage and remain competitive in the long-
term.
Investments in network & people
We believe that carefully considered capital
investments ensure efficient coverage, capacity and
qualitynetworks. This considers also investmentsmade
to facilitate the expansion of new reven e
u streams,
use of new spectrum, while investment in our people
and staff members ensures we have the appropriate
skills to deliver our strategy. We also recognize that our
operations depend much on electricity and fuel use for
our vehicle fleet. Thus, with the installation of energy-
efficient solutions such as hybrid PV systems, we
ensure higher availability of our networks and reduce
our diesel costs and negative environmental effects.
CAPITAL INPUTS
Financial capital
Our financial strength is based on primary sources
of financial capital such as shareholder equity,
internally generated cash flows, and raised debt on,
i
the capital markets. These resources serve us to
maintain our network, functional units, fund expansionr
and modernization, as well as to pay dividends to
shareholders in the past.
Cash generated from operations:
BGN 309.8 million
Our services are highly dependent on our network
working well. ready for the future. Thus, constantly
ce
improving and maintaining the quality and resilien
nt
of our technological systems is the most importa
element of our use of manufactured capital.
Capital expenditures for assets acquisition:
BGN 187.5 million
Total property, plant and equipment:
BGN 757.9 million
he people and we
At the core of every business are t
Delivering great
are not exclusion to this principle.
es on highly motivated
experience to the customer reli
oyees are the primary
and talented people. Our empl
, making them the drivers
interface with our customers
perience we strive to offer.
of delivering the unique ex
Number of employees: 5,433
e development: Training and employe
BGN 1.8 million
rocedures, corporate governance, Our corporate p
systems and organizational knowledge, management
and intellectual property serve us technologies
the best solutions and to optimize the to develop
experience, as well as to provide innovative customer
s. product
stments in innovation and product development: Inve
N 4.3 million BG
We forge and maintain cooperative relationships
with our key stakeholders – customers, employees,
shareholders, business partners – through investing in
strategic partnerships, supporting community programs,
building trust with suppliers. Customer relations are at
the core of our business and we strive to exceed their
expectations.
Community investments and sponsorship:
BGN 4.3 million
Social & Relationship capital
tal Intellectual capi
Human capital
Manufactured capital
Our business is not considered resource intensive.
However, the growing customer needs for more
data at a higher speed will lead to increased
energy demand in the near future. Radio spectrum
is a finite and important resource for the digital
society that our business depends on. We use
valuable metals for our telecom equipment and
devices.
Energy consumption: 148.2 GWh
Natural capital
SOCIO-ECONOMIC & REGULATORY
ENVIRONMENT
MISSION, VISION, VALUES AND
MANAGEMENT ORGANIZATION
INVESTMENTS IN NETWORK &
PEOPLE
PRODUCT DEVELOPMENT &
INNOVATIONS
SALES &
DISTRIBUTION
CUSTOMER
EXPERIENCE
2. STRATEGY, VALUE CREATION
AND DISTRIBUTION
ANNUALREPORT
2018
INTEGRATED
Financial value
Telecommunications business is important facilitator of
economic development, especially in small settlements.
Wecontributedirectlythroughregulatoryfeesandtaxes
and indirectly by providing access to services which
keep people connected, support entrepreneurship and
economic activity. We adhere to the principles of fair
competition by contributing to the growth of economic
productivity and delivery of benefits to customers.
Human value
We aimto attract, develop and retain the best people by
defining a strong corporate identity, creating a culture
of excellence and helping employees create their best
place to work. We maintain high level of labor practices
to ensure our employees fair payment and well-being,
including health and safety related practices, flexible
working time, kindworking environment, good attitude,
andfinancial support. As one of the largest employers in
the country, VIVACOM provides continuous training to
ensure that our team feels empowered and presented
with sufficient growth opportunities.
Intellectual value
We continuously strengthen our system capabilities,
expand our digital offering and reshape our
distribution model to respond to ever changing
customer needs. We actively pursue collaboration
with external parties to extend our innovative
capabilities, share our know-how and deliver state
of the art services in other sectors.
Natural value
Efficient use of natural resources. Through our
environmental initiatives and with dedicated
expertise, we are reducing our impact, use of scarce
natural resources and waste. Besides improving
environmental performance, there is an added
benefit in lower operational costs and care of human
health beyond the Company boundaries. Our efforts
in that area help to build and sustain our reputation
for potential employees and investors.
Manufactured value
We deliver value to our customers through a stable,
secure and robust network with a high flexibility and
resilience. We are currently in the process of further
digitalization of customer centric processes, enabling
us to be more agile and ready for the future.
Social & relationship value
We engage with our key stakeholders on a regular
basis by a dialogue and pro-active behavior on the
material issues raised. This allows us to strengthen
our cooperative relationships with them and build
trust. We also invest extensively in local community
programs by triggering entrepreneurship and creating
shared value. The reputational benefit of these
relationships is important to accessing new market
niches. We also focus on the value we create for
society and on the strengthening of our reputation.
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