Hutchison Telecommunications Hong Kong Holdings Limited · HKEX:215
Hutchison Telecommunications Hong Kong — H1 2011 Earnings Presentation
34 slides from Hutchison Telecommunications Hong Kong's earnings presentation, Aug 1, 2011
Slide 1: Hutchison Telecommunications Hong Kong Holdings Limited 2011 Interim Results
Hutchison Telecommunications Hong Kong Holdings Limited (Stock Code: 215) 2011 Interim Results 1 August 2011
Slide 2: Disclaimer
Disclaimer These materials have been prepared by Hutchison Telecommunications Hong Kong Holdings Limited (HTHKH) solely for use at this presentation and have not been independently verified. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, th
Slide 3: Business Performance
Business Performance
Slide 4: Highlights
Highlights HoH Growth Consolidated turnover HK$ 6,018m 41% Consolidated EBITDA HK$ 1,243m 16% Consolidated EBIT HK$ 682m 25% Net profit 1 HK$ 494m 37% Interim dividend per share 5.16 HK cents 55% 1 Net profit attributable to shareholders 3
Slide 5: Turnover
Turnover Consolidated turnover 7,000 6,018 4,283 HK$ m 4,097 3,500 0 09 1H 10 1H 11 1H Mobile business turnover Fixed-line business turnover 3,000 2,679 2,679 2,000 1,630 1,653 2,521 2,521 1,623 2,331 2,331 HK$ m 1,874 HK$ m 2,000 44 1,630 1,653 1,000 1,594 1,000 316 310 0 0 09 1H 10 1H 11 1H 09 1H
Slide 6: Mobile
Mobile
Slide 7: Setting the trend of mobile development
Setting the trend of mobile development 2009 FIRST in HK and Macau iPhone 3GS 2010 1998 2008 3ree Broadband Asia’s FIRST 2006 2004 FIRST in HK FIRST in ACQUIRED Dualband LTE spectrum FIRST in HK HSDPA network Greater China GSM/PCS 3G/UMTS network iPhone 3G network 1995 World’s FIRST 2002 2005 LTE CD
Slide 8: New Data Era
New Data Era Data Usage (Gbyte) X 100 times Traffic Proportion in 3G Network 100% 80% Voice Jan-08 Jan-09 Jan-10 Jan-11 60% Data 40% 20% 0% 06' 07' 08' 09' 10' 11' 12' 13' Actual Forecast 7
Slide 9: Far sighted capacity planning
Far sighted capacity planning Own a large pool of bandwidth Increase capacity through - “Re-farming” of 2G spectrum - Rollout of the newly acquired 900MHz band - Launch of LTE in late 2011 Frequency Band Bandwidth 2G 3G LTE 900 26.6 MHz 1800 23.2 MHz 2100 34.6 MHz 2600 30.0 MHz* Total 114.4 MHz* * S
Slide 10: Clear market leadership
Clear market leadership Largest Hong Kong subscriber base in which 3G takes up 68% ~50% 3G postpaid subscribers are smartphone and dongle users HK subscribers HK postpaid subscribers Total: + 4% Total: + 10% 3G: + 9% 3G: + 22% 2,835 2,967 3,000 2,707 2,000 1,786 1,812 2,446 2,630 1,716 1,749 2,014 1
Slide 11: ARPU and Churn
ARPU and Churn Growing ARPU Stable Churn at 1.7% HK postpaid ARPU Postpaid Churn 270 240 251 2.0% 225 238 Percentage (%) 209 218 225 1.8% 1.8% 201 211 213 1.7% 1.7% 1.7% HK$ / month 180 1.5% 90 0 1.0% 09 1H 09 2H 10 1H 10 2H 11 1H 09 1H 09 2H 10 1H 10 2H 11 1H 3G Blended 10
Slide 12: Fixed-line
Fixed-line
Slide 13: Local network coverage
Local network coverage Most extensive fibre optic network in HK Circles the world for 25 times Connects 1.5m+ homepass Offers 1GB broadband services Serves 70%+ mobile cell sites in HK Close to 4,000 commercial buildings 12
Slide 14: Global network reach
Global network reach Asia, US, Europe, Middle East and Africa Serving international telecom operators, ISPs and MNCs Full range of offerings 13
Slide 15: Profitability
Profitability
Slide 16: Profitability
Profitability Earnings upsurge Net Profit +37% 494 500 361 HK$ m 250 0 10 1H 11 1H 15
Slide 17: Dividend
Dividend Strong YoY dividend growth Target 75% annual payout Dividend per share 6 +55% 5.16 4 HK cents 3.32 2 0 10 1H 11 1H 16
Slide 18: Financial Overview
milatzlaters! Overview
Slide 19: Financial Highlights
Financial Highlights 1H 2010 1H 2011 (HK$m) (HK$m) Turnover 4,283 6,018 Cost of inventories sold (298) (1,792) Staff costs (314) (307) Depreciation and amortisation (532) (561) Other operating expenses (2,595) (2,676) Operating profit 544 628 Interest income 2 2 Interest and other finance costs (64)
Slide 20: Turnover – mobile business
Turnover – mobile business Steady growth in recurring service revenue and handset sales Mobile Service Revenue Mobile Handset Revenue 3,000 2,000 1,874 2,679 2,637 1,482 2,521 6% 1,500 HK$ m HK$ m 5 times 2,250 1,000 500 310 1,500 0 10 1H 10 2H 11 1H 10 1H 10 2H 11 1H 19
Slide 21: Turnover – mobile service revenue
Turnover – mobile service revenue 52% data revenue Total: HK$2,521m1 Total: HK$2,679m1 Local voice Local voice 31% Others1 Roaming - voice [6]% 39% Roaming – voice 18% 17% Residential Residential 20% Carrier [20]% Carrier 48% [48]% Local data Local data 45% Corporate & Corporat 37% Business e& 26% B
Slide 22: Mobile – data growth
Mobile – data growth Robust data revenue growth from: - Smartphone popularity - Roaming data day pass subscriptions Local Data Roaming Data 1,400 200 + 33% 189 + 30% 1,202 142 924 HK$ m HK$ m 700 100 0 0 10 1H 11 1H 10 1H 11 1H 21
Slide 23: Turnover - Fixed-line business
Turnover - Fixed-line business Strong presence in Carrier and Corporate markets Total: HK$1,630m Total: HK$1,653m Others1 Others1 Others1 6% 6%6% Others1 [6]% Residential Residential Residential 20% Residential 18% 20% Carrier [20]% Carrier Carrier Carrier 48% 48% 51% [48]% Corporate Corporate& Corp
Slide 24: Key cost items
Key cost items Cost of inventories sold 1,792 1,800 40% 1,478 % to turnover 30% 1,200 HK$ m 29.8% 20% 26.4% 600 298 10% 7.0% 0 0% 10 1H 10 2H 11 1H Depreciation and amortisation Staff costs 800 30% 500 15% 532 555 561 332 % to turnover1 % to turnover1 307 314 20% 10% HK$ m 400 HK$ m 250 7.9% 8.1% 10
Slide 25: Other operating expenses
Other operating expenses Cautious cost management Reduced to below 65% of service revenue Other operating expenses 3,000 2,669 2,676 100% 2,595 HK$ m % to turnover 1 64.9% 64.9% 64.6% 1,500 65.3% 65.3% 50% 65.0% 0 0% 10 1H 10 2H 11 1H 1 Excluding revenue from sale of telecommunications products 24
Slide 26: Capex investment
Capex investment Continued investment Capex and % of service revenue 800 24% Mainly revenue driven 631 % to turnover1 18% 488 464 HK$ m 30.0% 400 12% 15.3% 12.3% 11.2% 6% 0 0% 10 1H 10 2H 11 1H Capex and % of service revenue (Mobile) Capex and % of service revenue (Fixed-line) 400 18% 500 40% 251 25
Slide 27: Liquidity
Liquidity Strong FCF before spectrum acquisition Free Cashflow (FCF) 1 + 53%2 1,200 1,084 862 HK$ m 800 65.3% 462 400 0 09 1H 10 1H 11 1H 1 Free cashflow being cashflow from operating activities less cashflow used in investing activities before payment of spectrum utilisation fee 2 Percentage repres
Slide 28: Strong financial position
Strong financial position Net Debt Leverage ratio = 1.6 6,000 Gearing ratio = 37% 4,000 3,529 3,386 3,709 HK$ m Undrawn credit facility of 2,000 HK$1 billion 0 10 1H 10 2H 11 1H Net Debt/ LTM EBITDA 4.0 3.0 HK$ m 1.7x 1.5x 1.6x 2.0 1.0 0.0 10 1H 10 2H 11 1H 27
Slide 29: Outlook
Outlook
Slide 30: Outlook: Sustained Growth, Value Creation
Outlook Sustained Growth Value Creation
Slide 31: Mobile
Mobile - Full range of smartphone offerings stimulate more data usage Leading mobile market Leading mobile market - Encourage internal upward migration ARPU uplift - New mobile broadband outlets Enriching Demand user Enrichingfor experience better user quality experience - Increase VAS and bundled o
Slide 32: Fixed-line
Fixed-line # #1 Backhaul market - Maintain market leadership 1 Backhaul market 1 Customer segmentation - Solution-based offerings # #1 Banking& & Banking finance finance sector sector # 1 Public & school sector - Roll out GPON & GAN Pursuing Pursuing - Increase FTTH coverage and penetration in broad
Slide 33: Q&A
Q&A
Slide 34: Thank You
Thank You
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