Hutchison Telecommunications Hong Kong Holdings Limited · HKEX:215
Hutchison Telecommunications Hong Kong — FY2020 Earnings Presentation
36 slides from Hutchison Telecommunications Hong Kong's earnings presentation, February 2021
Slide 1: 2020 Annual Results Presentation
2020 Annual Results Presentation
Slide 2: Disclaimer
Disclaimer The information, statements and opinions contained in this Presentation and subsequent discussion do not constitute an offer to sell or solicitation of any offer to subscribe for or purchase any securities or other financial instruments or any advice or recommendation in respect of such s
Slide 3: Agenda
Agenda 2020 Smart Journey Result Highlights Business Review & Development Financial Review Sustainability @HTHKH Outlook QR Code for HTHKH 2020 Annual Results
Slide 4: 2020 Smart Journey
2020 Smart Journey Kenny Koo Executive Director & CEO
Slide 5: Smart Journey
x Smart Meter Scheme Mar Apr May Jul Jun 2020 Smart x Journey Sep Nov Dec 4
Slide 6: Result Highlights
Result Highlights Kenny Koo Executive Director & CEO
Slide 7: Highlights: Resilient Financial Results
Highlights : Resilient Financial Results Revenue EBITDA EBIT $4,545m $1,237m $392m -19% YoY +3% YoY flat vs LY +29% vs 1H 2020 +21% vs 1H 2020 +74% vs 1H 2020 Final Full Year Dividend Dividend 5.21 cents 7.49 cents Profit EPS +39% YoY +12% vs LY (post-IFRS 16) (post-IFRS 16) $361m 7.49 cents -16
Slide 8: Service Performance: Strong Commercial Momentum
Service Performance : Strong Commercial Momentum Local service revenue grew 1% as new business operating modes led to surge Service Revenue in demand for corporate solutions & Service EBITDA $3,285m initial contribution from 5G -9% YoY -3% vs 1H 2020 $1,215m Cost efficiency enhancement +4% YoY
Slide 9: Business Review & Development
Business Review & Development Kenny Koo Executive Director & CEO
Slide 10: Business Strategies with Resilience under COVID-19
Business Strategies with Resilience under COVID-19 Best 5G Distributions Prepaid 3OneWorld 3InnoCity Network Expansion Strategy Enhanced SoSIM OneWorld Expand both Online & Non-Telecom services to New 5G solutions to enable Enhance & strengthen our Best priced local prepaid Offline reaches for induc
Slide 11: Expand Coverage for 5G Era
Expand Coverage for 5G Era Refarm 2.1GHz for comprehensive territory-wide 5G coverage Build on-top 3.5GHz for speed & capacity at high traffic sites Expand coverage by aggressive new sites rollout plan Signal Strength (strongest least strongest) Blue – Green – Yellow – Red 10
Slide 12: Enabled Territory-wide 5G Coverage
Enabled Territory-wide 5G Coverage OneWorld 2.1GHz Oct 3.5GHz Refarm 2020 11
Slide 13: Extensive Territory-wide 5G Radio Site Coverage
Extensive Territory-wide 5G Radio Site Coverage Kowloon New territories Hong Kong OneWorld New Town Plaza Good Hotspot Pacific Place Windsor House Ocean Terminal Langham Place Phase I to III Popcorn indoors & outdoors Hospitals Times Square IFC Phase II The Gateway Olympian City Maritime Square Kwai
Slide 14: Data Usage: Strong Data Growth in HK
Data Usage : Strong Data Growth in HK +27% +13% +16% +15% YoY Growth 32% 2H 2018 1H 2019 2H 2019 1H 2020 2H 2020 13
Slide 15: Opportunities in COVID-19 to enhance competitiveness
Opportunities in COVID-19 to enhance competitiveness - Transformation for Digital Brands App Website Social Posts 14
Slide 16: Driving Cost Efficiency under COVID-19
Driving Cost Efficiency under COVID-19 Go Online Distributions Digital Transformation Online Acquisition Leverage group reaches Digital Brand Distributions Online DIY Renewal Fortress coupons eCommerce MoneyBack for loyalty Partner API Library Location segmentation by CRM 15
Slide 17: SoSIM = Social SIM, So Simple
Opportunities in COVID-19 to enhance competitiveness - SoSIM = Social SIM So Simple x So Easy So Value for money So Convenient So Good for everyone 16
Slide 18: Digital Lifestyle Services Strategy
Digital Lifestyle Services Strategy Non-Telecom Services Revenue grew over100% YoY 2019 2020 17
Slide 19: Enterprise Solutions
Enterprise Solutions Business Mobile Security Smart Office Solutions revenue Messaging Solutions grew over 300% Drone Inspection Video Analytics since 2017 Business Broadband 2017 2018 2019 2020 4K Live Broadcast 5G Early Adoption Subsidy Scheme Robotics Health Smart City Retail SME FinTech Construc
Slide 20: Financial Review
Financial Review Suzanne Cheng CFO
Slide 21: Revenue: Steady Growth Momentum for Local Services
Revenue : Steady Growth Momentum for Local Services Service Revenue Dropped by 9% YoY 3,613 3,285 64% 2H 2020 72% Local Service Revenue 2H 2H $1,621m -3% vs 1H Represents 89% (2019: 80%) of service revenue 1H 1H Revenue Improved by 1% YoY mainly driven by surge in demand of Corporate Solutions 2019
Slide 22: Customers: Solid Customer Base Amid Market Condition
Customers : Solid Customer Base Amid Market Condition Prepaid Postpaid 56% 44% of total customer base (2019: 60%) of total customer base (2019: 40%) Dropped by 15% YoY mainly due to the effect of Real-Name 3,279k Dropped by 3% YoY Registration Policy enforced in Macau -10% YoY Dropped by 2% vs 1H 20
Slide 23: Postpaid ARPU & Churn
Postpaid ARPU & Churn Customer Local Gross ARPU Local Net ARPU Segmentation Effective Strategy 2019 2019 Retention $173 $144 Enhanced Programmes Customer Experience 2020 2020 $178 $153 Postpaid Churn YoY Growth YoY Growth down by 0.1% YoY 3% 6% 1.3% 1.2% 1.1% 1.1% 1.1% Gross ARPU = monthly average N
Slide 24: Key Costs: Sustainable Cost structure for Efficiency
Key Costs : Sustainable Cost structure for Efficiency Cost Efficiency Enhancement Initiatives Reduced by 15% YoY $2,509 m $2,132 m Digital Transformation Process Simplification & Automation 2019 2020 Note: Under Post-IFRS 16 basis, Key Costs (including CACs, staff costs and other operating expenses)
Slide 25: Capex: Revamped to Build the Best 5G Network
Capex : Revamped to Build the Best 5G Network Capex EBITDA less Capex Capex over (excl. spectrum licences) (excl. spectrum licences) Service Revenue $593m $644m 18% (2019: $503m ) (2019: $698m ) (2019: 14% ) Under Post-IFRS 16 basis, EBITDA less Capex was HK$1,079m (2019: HK$1,159m) +18% YoY -8% YoY
Slide 26: Net Cash: Healthy Financial Position
Net Cash : Healthy Financial Position HK$ million Facilitate network revamp in 5,416 building the best 5G network 5,251 Fulfil future operational needs 2019 2020 Support dividend payout 25
Slide 27: Sustainability @HTHKH
Sustainability @HTHKH Suzanne Cheng CFO
Slide 28: Sustainability
Sustainability Providing reliable connection & Providing a safe working environment & innovative services to transform to 5G smart city promoting employee wellbeing BUSINESS PEOPLE Encouraging a positive, dynamic Digitalising & automating processes to streamline workflow & inclusive workplace Learni
Slide 29: Outlook
Outlook Kenny Koo Executive Director & CEO
Slide 30: Outlook
Outlook Keep strengthening network coverage in building the best 5G network by June 2021, propelling our customers into a new “5G smart city” era Leverage our reduced cost structure to sustain a high-efficiency operating environment Increase market penetration by expanding distribution network
Slide 31: Thank You
oN \ os Hutchison Telecom ‘ oldings
Slide 32: Q&A
Q&A
Slide 33: Appendix
(2) hutchison telecom HEB ona kong Holdings
Slide 34: Financial Information Appendix
Financial Information Appendix HK$ million Pre-IFRS 16 basis Post-IFRS 16 basis 2020 2019 Change 2020 2019 Change Revenue 4,545 5,582 -19% 4,545 5,582 -19% Net customer service revenue 3,285 3,613 -9% 3,285 3,613 -9% • Local service revenue 2,917 2,875 +1% 2,917 2,875 +1% • Roaming service revenue 3
Slide 35: Financial Information Appendix
Financial Information Appendix HK$ million Pre-IFRS 16 basis Post-IFRS 16 basis 2020 2019 Change 2020 2019 Change Total margin 2,895 3,294 -12% 2,895 3,294 -12% CACs (525) (797) +34% (481) (744) +35% Less: Bundled sales revenue 345 472 -27% 345 472 -27% CACs (net of hardware revenue) (180) (325) +45
Slide 36: Financial Information Appendix
Financial Information Appendix HK$ million Pre-IFRS 16 basis Post-IFRS 16 basis 2020 2019 Change 2020 2019 Change EBITDA 1,237 1,201 +3% 1,672 1,662 +1% Depreciation and amortisation (845) (808) -5% (1,269) (1,253) -1% EBIT 392 393 - 403 409 -1% Service EBIT 370 365 +1% 381 381 - Net interest and
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