PCCW Limited · HKEX:8
PCCW — FY2020 Earnings Presentation
33 slides from PCCW's earnings presentation, Feb 5, 2021
Slide 1: 2020 Annual Results
2020 ANNUAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2020 February 5, 2021 – Hong Kong
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain “forward-looking statements” that are not historical in nature. These forward-looking statements, which include, without limitation, statements regarding PCCW's future results of operations, financial condition or business prospects, are based
Slide 3: Overview
Overview BG Srinivas Group Managing Director 3
Slide 4: Review of 2020
Review of 2020 Global economic output contracted, Hong Kong continues to fight the recession due to COVID-19. The impact has been felt by all industries, most acutely in sectors such as travel, hospitality and retail PCCW group has ensured business continuity and delivery of high quality service
Slide 5: Expanding Our Media and Solutions Businesses Regionally
Expanding Our Media and Solutions Businesses Regionally… 15 Viu OTT markets 89 % Viu revenue 127 Active PCCW Solutions outside of HK from outside of HK customers based outside of HK in Forbes Global 2000 All data as of December 31, 2020 No.1 Quadplay No.1 IT Services service provider … And Sustainin
Slide 6: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 6
Slide 7: Financial Highlights
Financial Highlights (US$ million) 2019 2020 % change Revenue 4,810 4,878 1% Revenue 4,374 4,544 4% (Excluding Mobile Product Sales) EBITDA 1,587 1,536 (3)% Revenue (US$ million) 2019 2020 % change EBITDA (US$ million) 2019 2020 % change HKT1 3,808 3,818 0.3% HKT1 1,643 1,606 (2)% (Excluding Mobile
Slide 8: Resilient Financial Performance
Resilient Financial Performance Adjusted Funds Flow grew to US$690 million PCCW to receive a total distribution of approx. US$359 million from HKT for FY20 HKT Revenue (US$ million) HKT EBITDA (US$ million) HKT Revenue 4,244 4,152 (ex Mobile Product Sales)) 1,643 1,606 83 STABLE 22 436 334 1,079 995
Slide 9: EBITDA Steady Despite COVID Impact
EBITDA Steady Despite COVID Impact Now TV Revenue (US$ million) Now TV EBITDA (US$ million) 344 29 322 24 315 298 58 58 Others Subscription 2019 2020* 2019 2020* Revenue affected by live sport suspensions and lower commercial activity in F&B segment 17% 18% EBITDA Margin Installed base stable at 1,3
Slide 10: Pan-Regional Streaming Service Viu Experienced Strong Engagement and Revenue Growth
Pan-Regional Streaming Service Viu Experienced Strong Engagement and Revenue Growth OTT Revenue (US$ million) OTT EBITDA (US$ million) Viu Revenue 152 137 17 24 80 104 (20) (40) + 20% yoy 135 2019 2020 113 2019 2020 Music and Others Video 2019 2020 Viu subscription revenue jumped by 62%; MAU and pay
Slide 11: Expanded Viewership Drove Advertising Revenue
Expanded Viewership Drove Advertising Revenue ViuTV Revenue (US$ million) ViuTV EBITDA (US$ million) 41 6 +22% yoy 33 6 35 + 29% yoy (21) (35) 27 Others 340 2019 2020 Advertising 2019 2020 Strong content slate pulling in more viewers EBITDA loss ameliorated owing to expanded Expanded viewership attr
Slide 12: Regional Expansion in Full Swing
Regional Expansion in Full Swing Solutions Revenue (US$ million) Solutions EBITDA (US$ million) 607 +12% yoy 541 130 102 +27% yoy 323 411 94 96 Recurring 218 196 Project based 36 6 EBITDA 2019 2020 2019 2020 Margin Revenue climbed 12% driven by the strong demand for data 24% 17% Total center service
Slide 13: Disciplined Discretionary Spending
Disciplined Discretionary Spending Core Operating Expenses (US$ million) 734 24 660 17 Core opex savings of 10% year-on-year 221 195 Core opex to revenue ratio declined to 14% Cost savings initiatives across the entire 577 533 Group particularly in the discretionary areas Solutions Media of publicit
Slide 14: Targeted Capex Investments for Future Growth
Targeted Capex Investments for Future Growth Core Capex (US$ million) Capex to revenue ratio was 8.0% Mobile capex steady, as spending on the 5G rollout 412 and critical infrastructure enhancements replaced 38 371 28 the prior spending on the 4G network 45 14 TSS capex shrank reflecting the extensiv
Slide 15: Debt Maturity Profile
Debt Maturity Profile (US$ million) HKT As of December 31, 2020 1,237 563 HKT Bank Loans 750 HKT Bonds 500 346 500 500 199 340 213 300 1 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Post PERP issuance PCCW1 In Jan 2021, issued US$750 million perpetual securities (“PERP”) which were used to
Slide 16: Healthy Liquidity
Healthy Liquidity As of As of Post PERP Dec 2019 Dec 2020 Issuance Gross Cash Undrawn Gross Cash Undrawn Gross Cash Undrawn Debt Balance (3) Facilities Debt Balance (3) Facilities Debt Balance (3) Facilities US$ million HKT 5,220 372 1,178 5,448 337 1,163 5,448 337 1,163 PCCW 817 197 961 867 101 1,0
Slide 17: Shareholder Focused Dividend Policy
Shareholder Focused Dividend Policy Special Interim Dividend PCPD DIS 108 PCPD shares 31.24 32.18 for every 1,000 PCCW shares 28.33 29.75 25.00 Final Cash Dividend 23 HK cents Final 20.20 23.00 23.00 (Stable YoY) Dividend 21.18 22.33 Per Share 20.17 17.04 Interim 13.21 2020 Full-year Dividend Cash D
Slide 18: Media Business
Media Business 18
Slide 19: OTT Business
Ovivu OTT Business
Slide 20: Viu Continues to Grow in Monthly Active Users & Premium Subscriber Base
Viu Continues to Grow in Monthly Active Users & Premium Subscriber Base Supporting Ad & Subscription Revenue Growth 45 Million 5.3 Million Monthly Active Users Paid Subscribers 45.0 5.3 +29% +47% 34.9 3.6 21.6 1.4 2018 2018 2019 2019 2020 2020 2018 2018 2019 2019 2020 2020 • MAU grew 29% y-o-y and r
Slide 21: Viu Continues Growth in Revenue, Users and Engagement
Viu Continues Growth in Revenue, Users and Engagement Viu - High GROWTH in monetization 30% $ 62% Revenue Subscription Revenue Driven by Strong Market Position & Growth in Greater SE Asia HIGHEST NUMBER of users in Southeast Asia In an attractive set of markets with According to AMPD Research of Med
Slide 22: Appealing Premium Content & Award-winning Originals
Appealing Premium Content & Award-winning Originals Continued Leadership in Asian Content • Viu Original’s popularity prevails - continues to rank high among all titles on Viu Continue to be the hub of key Korean content with • Data analytics provide insights for content decisions and scaling up pro
Slide 23: Free TV & Related Business
© viuv Free TV & Related Business
Slide 24: Quality Content Drives Viewership Growth
Quality Content Drives Viewership Growth ViuTV (CH99) Strong Original Program Lineup • Increased average monthly audience reach from 3.7M in LEAP DAY FY 2019 to 4.0M in FY 20201 • Received the “Best Drama • Average TVR during prime time (18:55-24:05) increased Series (Hong Kong)” award 89% Y-o-Y in
Slide 25: Sustained Momentum in Artiste Management Business
Sustained Momentum in Artiste Management Business Increasing Popularity And Recognition Riding On Momentum To Build A Second Wave • Mirror launched their first album – “One And All” • Mirror members, Jeremy Lau and Anson Lo, awarded 1st • Gained reputation in the industry: and 3rd place respectively
Slide 26: IT Solutions Business
PCCW Solutions’ IT Solutions Business
Slide 27: Revenue by Industry & Services
Revenue by Industry & Services 2020 Revenue by Industry 2020 Revenue by Services Retail & Others Business Process Enterprise Manufacturing BFSI Outsourcing Applications Travel & 1% 2% Telecom 2% 15% Transportation 4% Technical 16% 11% Services High-Tech 39% & Media 7% 16% 31% 36% Public Sector (HK)
Slide 28: Regional Expansion
Regional Expansion Singapore Malaysia Southeast Asia Mainland China Serving majority of the Expanding the delivery center Focus on telecom, public Driving growth from digital government agencies and in Kuala Lumpur to provide sector and data center to transformation projects for telecom comp
Slide 29: Contributing to the Smart City Development and FinTech Innovation in Hong Kong
Contributing to the Smart City Development and FinTech Innovation in Hong Kong 29
Slide 30: World-class Data Center Services
World-class Data Center Services Phase 2 of SLC data center in Fo Tan will be completed by 2021 while one-third of its capacity has been pre-sold Confirmed new data center location in Tsuen Wan West in Hong Kong; target completion in late 2022 Secured contract extensions and renewals from regi
Slide 31: Industry Case Studies
Industry Case Studies Public Public Data Center The Treasury of HKSAR Government Government Agency in Singapore A Leading Hyperscale Cloud Provider Solutions Provision of total outsourcing solution to Provision of Agency Tenant Facilities Deliver highly resilient and scalable co- upgrade, enha
Slide 32: Industry Case Studies
Industry Case Studies Retail, Manufacturing and Logistics Property Banking, Financial Services & Insurance Rain Forest Retail Gammon Construction A Leading Bank Solutions Design and build a new IT platform for Design and implement ELV systems Implement a Financial Spreading System* its e-Comme
Slide 33: Summary
Summary HKT Media Solutions HKT will continue to drive 5G As the demand for quality With a strong pipeline of adoption with consumers as home entertainment soars, our secured orders, PCCW well as commercial and public OTT and Free TV businesses Solutions will solidify our sectors through innovative