Hutchison Telecommunications Hong Kong Holdings Limited · HKEX:215
Hutchison Telecommunications Hong Kong — FY2011 Earnings Presentation
38 slides from Hutchison Telecommunications Hong Kong's earnings presentation, Mar 20, 2012
Slide 1: 2011 Annual Results Presentation
Hutchison Telecommunications Hong Kong Holdings Limited (Stock Code: 215) 2011 Annual Results Presentation 20 March 2012
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 YoY Growth Consolidated turnover HK$ 13,407m 36% Consolidated EBITDA HK$ 2,611m 19% Consolidated EBIT HK$ 1,432m 29% Net profit 1 HK$ 1,020m 35% Final: 10.70 HK cents 57% Dividend per share 2011 total: 15.86 HK cents 56% 1 Net profit attributable to shareholders 3
Slide 5: Strong stock performance
Strong stock performance 215.HK Performance 253% Share Price 3.60 2.80 2.00 1.20 0.40 May Dec Jun Dec Jun Dec Feb 2009 2009 2010 2010 2011 2011 2012 (Since listing) HSI HK HSI Performance 32,000 25% 22,000 12,000 May Dec Jun Dec Jun Dec Feb 2009 2009 2010 2010 2011 2011 2012 4
Slide 6: Turnover
Turnover Consolidated turnover Hardware: + 176% 10,000 Service: + 5% 8,088 8,468 HK$ m 4,939 5,000 1,792 Hardware revenue Service revenue 0 FY 2010 FY 2011 Mobile business turnover Fixed-line business turnover Hardware: + 176% Service: + 6% + 4% 6,000 5,467 4,000 5,158 5,158 5,467 3,403 4,939 3,286
Slide 7: Mobile
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Slide 8: Quality customer base
Quality customer base >87% postpaid customers under 3G Total subscribers* Postpaid subscribers* Total: + 10% Total: + 3% 3G: + 27% 3G: + 13% 4,000 3,505 2,400 1,998 3,199 1,938 ’000 ’000 2,061 2,614 2,000 1,200 1,536 1,739 2,014 1,761 1,519 1,138 891 402 259 0 0 FY 2010 FY 2011 FY 2010 FY 2011 3G 2G
Slide 9: Smart device trendsetter
Smart device trendsetter Smart device penetration ↑ Internal upward migration focus Smart device penetration* Smart device ownership* 2,400 1,200 100% 1,998 1,938 917 % to 3G postpaid sub Postpaid Sub ’000 616 49% 917 2,014 ’000 1,761 616 1,200 1,519 600 50% 53% 920 822 40% 402 259 0 0 0% FY 2010 FY
Slide 10: ARPU
ARPU Monthly spending ↑ VAS Popularity ↑ Postpaid ARPU Blended: +11% 3G: +8% 248 250 244 229 220 HK$ / month 200 150 FY FY 2010 FY FY 2011FY FY 2010 2011 2010 2011 3G Blended 9
Slide 11: Churn
Churn Low and stable HK Postpaid Churn 2.0% 1.7% 1.7% Percentage (%) 1.0% 0.0% FY 2010 FY 2011 10
Slide 12: Committed network excellence
Committed network excellence Drive for network quality March 2011 February 2012 Frequency Band 900MHz 2.3GHz Bandwidth 10MHz 30MHz Tailor for 3G network LTE network Consideration HK$1,077m HK$150m FY 2010 FY 2011 Mobile CAPEX HK$507m HK$619m Mobile CAPEX + Radio Spectrum HK$1,696m 11
Slide 13: Network excellence for now and future
Network excellence for now and future Largest amount of available spectrum Available Bandwidth (MHz) 2600* FDD-LTE 30.0 2300 TDD-LTE 30.0 2100 3G 34.6 1800 2G LTE 23.2 900 2G + 3G 26.6 144.4 * Shared through a JV under Genius Brand Limited 12
Slide 14: New tariff plans and FUP
New tariff plans and FUP A step forward from unlimited offer 97%* of mobile data users consume on average 5GB or less/ month Better network resources planning User-friendly monitoring applications 3% * Out of the total Hong Kong 3G postpaid data users 13
Slide 15: Fixed-line
Fixed-line
Slide 16: Robust growth in international market
Robust growth in international market Further expansion of international footprint with new destinations covering EMEA, the Americas and Greater Mekong Subregion Network outsourcing services 15
Slide 17: Strong foothold in local carrier and business market
Strong foothold in local carrier and business market Mobile Backhaul Corporate and Business • Command substantial • Accredited securities market share service vendor • Network solutions for banking, retail and governmental sectors Cloud computing & School Market data centre • Collaborate with • eduC
Slide 18: Invest in consumer market
Invest in consumer market Keen competition Cultivate growth in the long run FTTH 17
Slide 19: Profitability
Profitability
Slide 20: Profitability
Profitability Earnings upsurge Net profit +35% 1,200 1,020 HK$ m 750 755 300 FY 2010 FY 2011 19
Slide 21: Dividend
Dividend Strong dividend growth 75% payout Dividend per share Interim Dividend: +55% 12.00 Final Dividend: + 57% 10.70 HK cents 6.83 6.00 5.16 3.32 0.00 FYFY2010 2010 FYFY 2011 2011 Final dividend 1 Total dividend per share being sum of interim and final dividend per share Interim dividend 20
Slide 22: Financial Overview
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Slide 23: Financial Highlights
Financial Highlights FY 2010 FY 2011 (HK$m) (HK$m) Turnover 9,880 13,407 Cost of inventories sold (1,776) (4,663) Staff costs (646) (646) Depreciation and amortisation (1,087) (1,179) Other operating expenses (5,264) (5,487) Operating profit 1,107 1,432 Interest income 5 6 Interest and other finance
Slide 24: Turnover – mobile business
Turnover – mobile business Service revenue sustainable growth Hardware revenue benefited from popularity of smart devices Mobile service revenue Mobile hardware revenue 6,000 6,000 4,939 + 6% 5,467 5,158 HK$ m HK$ m 1.8 times 5,000 3,000 1,792 4,000 0 FY 2010 FY 2011 FY 2010 FY 2011 23
Slide 25: Turnover – mobile service revenue
Turnover – mobile service revenue 53% data revenue Total service revenue: Total service revenue: HK$5,158m HK$5,467m Local Local voice voice 31% Others1 [6]%38% Roaming – voice Roaming - voice 18% 16% Residential Residential 20% Carrier [20]% Carrier 48% Local data [48]% Local data Corporate & 46% C
Slide 26: Mobile data revenue
Mobile data revenue Robust data growth Local data Roaming data 2,700 450 + 27% 2,488 + 28% 400 HK$ m 1,960 HK$ m 313 1,800 300 900 150 FY 2010 FY 2011 FY 2010 FY 2011 25
Slide 27: Turnover - Fixed-line business
Turnover - Fixed-line business Steady growth and cushion against volatility Total revenue: Total revenue: HK$3,286m HK$3,403m Others1 Others1 6% 6% Residential Others1 6% Residential Others1 17% [6]% 20% Carrier Carrier 48% Residential 52% Residential 20% Carrier [20]% Carrier Corporate 48% Corporat
Slide 28: Key cost items
Key cost items Cost of inventories sold 5,000 4,663 80% % to turnover HK$ m 2,500 40% 1,776 34.8% 18.0% 0 0% FY 2010 FY 2011 Depreciation and amortisation Staff costs 1,500 24% 800 12% 1,179 646 646 1,087 % to turnover1 % to turnover1 1,000 16% HK$ m HK$ m 400 8.0% 7.6% 6% 13.4% 13.9% 500 8% 0 0% 0
Slide 29: Other operating expenses
Other operating expenses Cautious cost management Operating leverage ↑ Other operating expenses 6,000 5,487 100% 5,264 HK$ m % to turnover 1 65.1% 64.9%64.9% 64.8% 3,000 65.3% 50% 65.0% 0 0% FY 2010 FY 2011 1 Excluding revenue from sale of telecommunications hardware 28
Slide 30: Capex investment
Capex investment Cautious and selective Capex and % of service revenue - 2G refarm 1,200 1,148 20% 1,119 - LTE % to total service 15% HK$ m - GAN revenue 13.8% 13.6% 10% 15.3% 5% 800 0% FY 2010 FY 2011 Capex and % of service revenue (Mobile) Capex and % of service revenue (Fixed-line) 800 18% 800 30
Slide 31: Liquidity
Liquidity Strong FCF before spectrum acquisition Free cashflow (FCF) 1 1,500 + 20%2 1,375 HK$ m 1,168 1,000 951 500 FY 2009 FY 2010 FY 2011 1 Free cashflow being cashflow from operating activities less cashflow used in investing activities before payment of spectrum utilisation fee 2 Percentage repr
Slide 32: Strong financial position
Strong financial position Net debt Leverage ratio = 1.4 6,000 4,090 Gearing ratio = 35% 4,000 3,386 3,671 HK$ m Undrawn credit facility of 2,000 HK$1.1b 0 FY 2009 FY 2010 FY 2011 Net debt/ LTM EBITDA 4.0 3.0 2.0x 2.0 1.5x 1.4x 1.0 0.0 FY 2009 FY2010 FY 2011 31
Slide 33: Outlook
Outlook
Slide 34: Outlook: Sustained Growth, Value Creation
Outlook Sustained Growth Value Creation
Slide 35: Mobile targets and strategic measures
Mobile Target Strategic measures Leading mobile market Smartphone - Enriched portfolio of devices and services subscription leader - Internal upward migration - Customer services focus Demand Enrichingfor Customer better user quality experience Oriented - Extensive distribution channel - A variety o
Slide 36: Fixed-line targets and strategic measures
Fixed-line Segment Target Strategic measures # 1 Backhaul market - Footprint expansion - Co-operate with leading Customer Carrier andsegmentation # 1 Banking & finance sector - Leadership in local mobile local country-based operators International # 1 Public & Market school sectorbackhaul - GAN for
Slide 37: Q&A
Q&A
Slide 38: Thank You
Thank You
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