Slide 1: 2Q/1H2020 Results
2Q/1H2020 RESULTS 7 August 2020
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS The following presentation may contain forward-looking statements by StarHub Ltd (“StarHub”) relating to financial trends for future periods. Some of the statements in this presentation which are not historical facts are statements of future expectations with respect to th
Slide 3: Key Themes
KEY THEMES 01 02 03 2Q2020 GEARING UP GUIDANCE & HIGHLIGHTS FOR 5G OUTLOOK 3
Slide 4: 2Q2020 Highlights
01 2Q2020 HIGHLIGHTS 4
Slide 5: 2Q2020 at a Glance
2Q2020 AT A GLANCE S$453.4M 18.0% YoY1 MOBILE TOTAL REVENUE 10.4% QoQ 2 S$143.4M 25.4% YoY1 S$30 23.6% YoY1 1,453K 1.6% YoY1 REVENUE ARPU SUBS 12.3% QoQ 2 (POSTPAID) 12.1% QoQ 2 (POSTPAID) 0.9% QoQ 2 S$376.2M 15.0% YoY1 SERVICE PAY TV REVENUE 7.1% QoQ 2 27.6% YoY1 10.9% YoY1 13.2% YoY1 S$46.9M S$39
Slide 6: Financial Overview
FINANCIAL OVERVIEW S#039;M 2Q2020 2Q2019 Change (%) 1H2020 1H2019 Change (%) Total Revenue 453.4 552.8 (18.0) 959.6 1,149.6 (16.5) Service Revenue 376.2 442.4 (15.0) 781.1 886.7 (11.9) Operating Expenses (418.9) (495.6) (15.5) (867.3) (1,020.3) (15.0) Other Income 17.3 0 N.M. 3 18.8 0.1 N.M. 3 EBITDA 1
Slide 7: Mobile
MOBILE YOY PERFORMANCE & COMMENTARY QOQ PERFORMANCE POSTPAID • Lower postpaid ARPU due to lower roaming, VAS and data S$40 S$30 usage revenues as a result of COVID-19 impact S$34 ARPU S$30 POSTPAID 1,477 1,453 • Average monthly churn rate in 2Q2020 was 0.8% (1Q2020: 1,466 SUBS (K) 1,453 1.0%; 4Q2019
Slide 8: Pay TV
PAY TV YOY PERFORMANCE & COMMENTARY QOQ PERFORMANCE ARPU S$44 • Lower ARPU and subscriber base due to S$39 promotional activities relating to the cable- S$38 S$39 to-fibre migration offered in FY2019 SUBS (K) 374 • 1Q2020 average monthly churn rate reduced to 0.4% (1Q2020: 0.5%; 4Q2019: 327 324 324
Slide 9: Broadband
BROADBAND YOY PERFORMANCE & COMMENTARY QOQ PERFORMANCE • Lower YoY ARPU due to promotional ARPU S$29 S$28 activities relating to the cable-to-fibre S$27 S$28 migration offered in FY2019 • 1Q2020 average monthly churn rate SUBS (K) 509 502 reduced to 0.3% (1Q2020: 0.4%; 502 502 4Q2019: 0.5%; 2Q2019:
Slide 10: Enterprise
ENTERPRISE NETWORK SOLUTIONS CYBERSECURITY SERVICES SEGMENT REVENUE Data & Internet1 SEGMENT REVENUE (S$’M) Managed Services2 (S$’M) Voice Services1 104.1 102.8 12.3 90.4 10.1 24.8 10.7 18.5 17.8 62.4 67.0 74.3 36.2 39.8 61.9 2Q2019 1Q2020 2Q2020 2Q2019 1Q2020 2Q2020 • Higher YoY Data & Internet rev
Slide 11: Operating Expenses
OPERATING EXPENSES OPERATING EXPENSES (S$’M) 1H2020 COST STRUCTURE (S$’M) Cybersecurity Expenses Other Operating Expenses 495.6 37.0 448.4 Cost of Sales 16.6% 18.1% 58.3 418.9 51.4 213 4.9% 182.3 178.6 458.5 390.1 367.5 5.5% 245.5 21.5% 207.8 188.9 0.9% 1.3% 1.3% 2Q2019 1Q2020 2Q2020 • Excluding cyb
Slide 12: D.A.R.E. Transformation Progress
D.A.R.E. TRANSFORMATION PROGRESS FY2019-2021 Potential Savings & Reinvestment SUSTAINED COMMITMENT TO Planned Reinvestment TRANSFORMATION Executed 75% Of 3-Year Cost Programme Executed 20% As at 2Q2020 >S$210M 16% DELIVERING Market-Leading Customer Experiences Workforce Operational TV Total Digitali
Slide 13: Profit Highlights
PROFIT HIGHLIGHTS EBITDA (S$’M) PROFIT FROM OPERATIONS (S$’M) (7.0) Losses from 146.4 136.2 129.3 Cybersecurity 57.3 59.3 51.8 Services 2Q2019 1Q2020 2Q2020 2Q2019 1Q2020 2Q2019 SERVICE EBITDA (S$’M) / MARGIN (%) NET PROFIT (S$’M) (ATTRIBUTABLE TO SHAREHOLDERS) 31.8% 31.5% 31.1% 140.8 125.7 118.5 39
Slide 14: Strong Balance Sheet & Cash Generation
STRONG BALANCE SHEET & CASH GENERATION Free Cash Flow (S$’M) Prudent Capital Management Net Debt To EBITDA (x) 155.5 118.9 1.51 1.40 1.29 54.5 2Q2019 1Q2020 2Q2020 4Q2019 1Q2020 2Q2020 Net Cash From Operating Activities (S$’M) • Spectrum payments likely in 3Q2020: ‒ 3.5GHz spectrum payment of S$27.5
Slide 15: Gearing Up for 5G
02 GEARING UP FOR 5G 15
Slide 16: Gearing Up for 5G
GEARING UP FOR 5G 2020 June 2020 • 5G draft licences & spectrum rights obtained • Nokia selected for JV’s 5G RAN and StarHub’s 5G core network By 2020 Commence 5G rollout Expected 5G commercial 2021 launch 2022 By End-2022 SA networks to cover at least half of Singapore Achieve nationwide coverage 2
Slide 17: An Efficient, Future-Proof Network
AN EFFICIENT, FUTURE-PROOF NETWORK Singapore’s First Shared Active Radio Network 1 ACTIVE RADIO NETWORK SHARING • Efficient use of resources; cost-efficient rollout • Combined site pool, shared 3.5GHz spectrum, antenna, radio base station equipment and transmission backhaul 2 MULTI-OPERATOR CORE NET
Slide 18: Network Collaboration
NETWORK COLLABORATION Harnessing efficiencies while retaining full service differentiation Jointly owned 3.5GHz Spectrum Jointly owned 3.5GHz Spectrum 50% ownership 50% ownership 5G Core JVCo 5G Core Shared 3.5GHz Network Existing 3G/4G JVCo owned 3.5GHz radio equipment Existing 3G/4G Spectrums and
Slide 19: Network Collaboration
NETWORK COLLABORATION JVCo Funding / Cost-Sharing 50% ownership 50% ownership Jointly owned 3.5GHz Spectrum Jointly owned 3.5GHz Spectrum 5G Core JVCo 5G Core • Standalone SPV Shared 3.5GHz Network • 85% funded by debt; 15% Existing 3G/4G equity JVCo (not3.5GHz owned expected to be radio equipment E
Slide 20: 5G Progressive Capex
5G PROGRESSIVE CAPEX NON-5G NETWORK CAPEX COMMITMENTS (S$’M) • Progressive reduction on capex spent on legacy networks over last few years 3G/4G Network Capex Commitments Total Capex Commitment Excluding 5G ‒ To maintain minimal level of Capex (regulatory obligations) required for legacy networks mo
Slide 21: Growing Momentum: 5G Devices
GROWING MOMENTUM: 5G DEVICES GLOBAL 5G PHONE SHIPMENTS2 >112 296 ~200M 5G Devices Oncoming 5G Devices Available Globally1 Announced1 19M 2019 2020 1 Source: Global Mobile Suppliers Association – “5G Devices Ecosystem: Member Report June 2020”; As at end-May 2020 2 Source: CNET, 20 February 2020 – “2
Slide 22: Empowering New Possibilities
EMPOWERING NEW POSSIBILITIES MOBILE CLOUD AR/VR FWA • Immersive experiential • Enterprise wireless GAMING events / live concerts service – quick, easy • High speed, seamless • VR gaming and secure experience • Security clearance • Stable & high-res • Low Latency = No Lag (face recognition) multi-par
Slide 23: Nurturing the 5G Ecosystem
NURTURING THE 5G ECOSYSTEM StarHub 5G Pop-Up Showcase Pilot VR and AI solutions for applications relating to construction, education, autonomous • Powered by Singapore’s first 5G COW vehicles, etc • 4 experiential areas: NYP-StarHub 5G Apex – Cloud gaming Centre focusing on – Fixed Wireless Access I
Slide 24: Guidance & Outlook
03 GUIDANCE & OUTLOOK 24
Slide 25: Guidance Checklist
GUIDANCE CHECKLIST SUSPENDED UPDATED Lower consumer revenues due to SERVICE REVENUE 1% - 3% 10% - 12% COVID-19 impact; offset by stronger YoY YoY Cybersecurity contributions SERVICE EBITDA 27% - 29% 27% - 29% No Change MARGIN1 CAPEX COMMITMENT2 6% - 7% 6% - 8% Excluding spectrum, 5G Capex and IT Tra
Slide 26: Growth Priorities
GROWTH PRIORITIES • Maximise returns from core assets • Cost transformation OPTIMISE • Digitalisation & innovation • New growth areas – e.g. 5G / emerging tech / new market GROW segments • Harness synergies from • Diversify revenue streams & acquisitions geography DIVERSIFY • Explore synergistic M&A
Slide 27: 2Q/1H2020 Results
2Q/1H2020 RESULTS 7 August 2020 Investor Relations: Amelia LEE | IR@StarHub.com