Pccw Limited · HKEX:8

Pccw — H1 2006 Earnings Presentation

39 slides from Pccw's earnings presentation, Sep 14, 2006

  1. Slide 1: 2006 Interim Results

    2006 Interim Results For the period ended June 30, 2006 September 14, 2006 - Hong Kong 0

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation contains "forward-looking statements" that are not historical in nature. These forward-looking statements, which may include statements regarding PCCW's future results of operations, financial condition or business prospects, are based on the current beli

  3. Slide 3: 概覽

    概覽 蘇澤光 副主席 兼 集團董事總經理 2

  4. Slide 4: 2006年上半年財務表現

    2006 年上半年財務表現 （百萬美元） 05 年上半年 06 年上半年 綜合收益 1,500 1,811 綜合EBITDA 415 468 期內溢利 141 138 股權持有人 應佔溢利 122 102 董事會宣派中期股息每股港幣 6.5 分 3

  5. Slide 5: 2006年上半年業績

    2006 年上半年業績 核心電訊業務 固網電話線路數目進一步增長，市場佔有率回升至 68% 穩定 寬頻業務配合優質增值服務，亦錄得強勁增長 用戶增加，每用戶平均收益上升，推出更多頻道 電視及內容業務 全新互動服務： 增長 –提供全港最具規模的網上數碼音樂庫 成功推出 3G 試用服務 不斷創新 應用全球首項流動多媒體電視廣播(CMB)技術 推出 及 的跨平台多媒體內容 電訊盈科企業方案獲得多項大型ICT合約 其他業務拓展 萃鋒獲得區內多份網絡工程合約 客戶聯絡中心獲得多家大型機構的合約 4

  6. Slide 6: 與中國網通的合作

    與中國網通的合作 寬帶 電話指南業務（黃頁） y 已簽訂收購網通寬帶五成股權的買賣協議 y 繼續與中國網通磋商，研究與中國網通 及其他戰略合作夥伴成立合營公司，經 y 已獲准網通寬帶重組，待信息產業部批准 營網上及印刷版本的電話指南業務 ，即將與中國網通簽訂各佔五成權益的合 營協議 物業發展 y 已經就北京呼家樓地盤的發展計劃最終 定稿，包括修訂中國網通電話機樓的原 寬頻電視 本規劃。北京市政府已展開審批程序 y 萃鋒將會為中國網通提供寬頻電視顧問服務 y 完成北京市中心東四區另一個潛在發展 項目的可行性研究 y 雙方繼續進行磋商，研究由中國網通、電訊 盈科及其他戰略合作夥伴共同成立合營公司

  7. Slide 7: 展望

    展望 傳統電話服務業務保持其市場地位 核心電訊業務 業界已見整合跡象，市場零售價格改善 有穩定的現金流，為發展新業務提供資金 以創新技術在寬頻電視領域保持全球領先地位 推出更多互動及獨家節目內容，以配合持續增長 推薦 3G 試用客戶選用不同的月費計劃 流動電話業務 流動電視等創新服務將會令 脫穎而出 全面整合的「四網合一」電訊服務 萃鋒及電訊盈科企業方案帶來新的資金流 其他業務 憑藉穩定的核心電訊業務及財務實力繼往開來 6

  8. Slide 8: Overview

    Overview Jack So Deputy Chairman & Group Managing Director 7

  9. Slide 9: H1'06 Financial Performance

    H1’06 Financial Performance (US$ million) H1’05 H1’06 Consolidated Revenue 1,500 1,811 Consolidated EBITDA 415 468 Profit for the Period 141 138 Profit Attributable to Equity Holders 122 102 The Board Has Declared an Interim Dividend of 6.5 HK Cents Per Share 8

  10. Slide 10: H1'06 Achievements

    H1’06 Achievements Core Telecom Further fixed lines gain and market share returned to 68% Stabilized Strong broadband growth with high quality VAS More subscribers, higher ARPU & more channels TV & Content New interactive services: Growth – largest on-line digital music library in HK Successful 3G t

  11. Slide 11: Co-operation with China Netcom

    Co-operation with China Netcom Broadband Directories (Yellow Pages) y Continuing discussions on possibility of a y Sale & Purchase Agreement for acquisition of JV with China Netcom and other strategic 50 percent stake in CNCBB was signed partners to operate Internet and printed directories businesse

  12. Slide 12: Outlook

    Outlook Retain market position in traditional telephony services Core Telecom Signs of industry consolidation & improvements in market retail prices Stable cash flow to finance new business development Maintain worldwide IPTV leadership with innovations More interactivity & exclusive content to supp

  13. Slide 13: Financial & Business Review

    Financial & Business Review Alex Arena Executive Director & Group Chief Financial Officer 12

  14. Slide 14: Summary P&L

    Summary P&L (US$ million) H1’05 H1’06 Revenue 1,500 1,811 Cost of Sales (756) (969) General and administrative expenses (491) (562) Operating profit 253 280 Other gains, net 70 13 Finance costs, net (119) (79) Share of results of associates 13 2 Profit before taxation 217 216 Taxation (76) (78) Prof

  15. Slide 15: Revenue

    Revenue 1% y y--oo--yy (US$ million) UUpp 221% 1,811 PCPD 1,500 + 58% y-o-y 1,385 676 TSS Stable y-o-y 428 229 TV & Content + 66% y-o-y Mobile(1) 947 982 949 PCCW Solutions Other Businesses 32 39 23 77 75 Eliminations 103 100 94 51 28 47 (52) (63) (69) H1’05 H2’05 H1’06 (1) Included post-acquisition

  16. Slide 16: Cost of Sales

    Cost of Sales (US$ million) 969 756 PCPD • Booked against 586 567 higher revenues 371 Group Total 168 ex- PCPD • Relatively stable y-o-y 385 418 402 (1) (1) H1'05 H2'05 H1'06 (1) Included post-acquisition results of SUNDAY in H2’05 and H1’06 15

  17. Slide 17: Expenses

    Expenses (US$ million) 691 703 719 Tax 66 78 76 98 79 Net finance costs 119 179 188 Depreciation & 166 amortization Operating costs 330 360 374 (1) (1) H1'05 H2'05 H1'06 (1) Included post-acquisition results of SUNDAY in H2’05 and H1’06 16

  18. Slide 18: EBITDA

    EBITDA (US$ million) 1 3%% yy--oo--yy UUpp 13 468 438 PCPD 415 47 91 40 TSS PCCW Solutions Mobile(1) 458 438 439 TV & Content Other Businesses 3 6 11 (15) (21) (9) (24) (49) (55) (39) H1’05 H2’05 H1’06 (1) Included post-acquisition results of SUNDAY in H2’05 and H1’06 17

  19. Slide 19: Profit for the Period

    Profit for the Period (US$ million) 141 138 19 Minority Interests 36 98 Profit Attributable to Equity Holders 16 122 102 82 (1) (1) H1'05 H2'05 H1'06 (1) Included post-acquisition results of SUNDAY in H2’05 and H1’06 18

  20. Slide 20: Debt Profile

    Debt Profile (US$ million) Convertible Bond Revolving Credit Facilities Gross debt: US$ 3,906m US$ Bond As of June 30, 2006 Guaranteed Note $1,000 $956 $769 $500 $450 $456 $231 $500 2007 2008 2009 2010 2011 2012 2013 2014 2015 y US$450m convertible bonds due January 2007 (plus accrued interest and r

  21. Slide 21: Solid Credit Fundamentals

    Solid Credit Fundamentals Net Debt Gross Debt/ EBITDA (1) (US$ million) PCCW consolidated 4.9 4.5 HKTC only 4.3 4.4 4.3 4.3 4.5 3.2 3.0 2.8 3,788 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 3,359 2,638 2004 2005 2006 2004 2005 2006 2,498 2,288 EBITDA/ Interest (2) 8.2 8.9 7.9 H1 H2 H1 H2 H1 5.7 5.0 2004 2005 2006

  22. Slide 22: Operational & Strategic Review

    Operational & Strategic Review 21

  23. Slide 23: Recovery of Fixed Line Business

    Recovery of Fixed Line Business Continued Growth in Fixed Line Effective Retention Strategy (‘000) Net Residential Line Gain Reducing churn Net Business Line Gain 13 1.5% 37 H1 H2 H1 3 1.1% 12 0.9% -17 -31 H2 H1 -61 -36 -64 2004 2005 H1’06 -56 2004 2005 2006 • Strong brand preference built on high q

  24. Slide 24: From Stabilization to Growth

    From Stabilization to Growth 77% Market Share Fixed Lines 73% (‘000) 70% Residential Lines 68% 67% 68% 68% Business Lines H1 H2 H1 H2 H1 H2 H1 2003 2004 2005 2006 1,667 1,543 1,487 1,423 1,403 Back to Growth 1,400 1,387 y Market share returned to 68% y ARPU stabilization in H1’06 y Stable customer b

  25. Slide 25: Market Leader in Broadband

    Market Leader in Broadband Broadband Lines Continue Broadband Drivers to Grow y --y y Steady 16% growth outpacing the (’000) yy--oo 6%% Wholesale ++116 998 market at 7% Business 953 Consumer 857 y Strategy to enrich Netvigator’s 796 94 premium quality services with full range 753 88 703 of VAS & con

  26. Slide 26: Momentum Continues

    Momentum Continues Reached Reached Strong Demand for 654,000 654,000 Drivers at atend endof ofAugust August y oo--y y Quality, quantity, and variety of content: Residential Installed yy-- Pay channel customers 608 88% % 118 channels Commercial ++33 26 Installed pay 549 channel services 22 y 38 exclu

  27. Slide 27: Strategy for Higher ARPU

    Strategy for Higher ARPU ARPU Drivers Pay Channel Customers & ARPU Full range of pricing plans Steadily rising Pay channel ARPU as new y A La Carte customers content introduced as % of total Mini Packs y Mini Packs – min $138 launched installed (HK$/ month) y Value Packs – $288 and Super $388 100% 1

  28. Slide 28: New Content

    New Content on AXN- delivering B!G Buzz, B!G Thrills, B!G Action and B!G Adventure 24 hours a day UEFA Champions League About the animal kingdom and the wildlife in our world A 24-hour all French channel providing news, drama series, documentaries, sports, film Asia's Number 1, and entertainment pro

  29. Slide 29: UEFA Champions League Exclusive

    UEFA Champions League Exclusive Content on Multiple Platforms now.com.hk y Broadcasting 77 games live y Broadcasting all 125 games live y Video clips of all 125 games y Simultaneous broadcast up to y / jointly developed y Content includes preview, 4 games UEFA Champions League on-line match highligh

  30. Slide 30: New Interactive Services

    New Interactive Services on y the place to shop y Stock Market Express – Real y A selection of casual games Time Quotes for the whole family y Interactive shopping mall y Stock quotes, FX spot rates y Currently 8 games on free trial y DVDs/Books, Kids/Sports, and gold prices Leisure, PCCW Products,

  31. Slide 31: To Reiterate 2006 Targets

    To Reiterate 2006 Targets y Exceed 750,000 installed customers y Continue to enrich the user experience through more interactivity and access to more content y Further increase in ARPU and percentage of pay channel customers y Introduce HDTV y Achieve EBITDA breakeven by end 2006 30

  32. Slide 32: 2G Mobile Business Performance

    2G Mobile Business Performance Growing 2G Subscriber Base (’000) • Continued growth in 2G subscribers y--oo--yy % ++1111% y – Marketing to a wider PCCW customer base 781 738 702 – Network coverage & service quality enhanced with more cell sites • Market share rose in face of severe competition • 2G

  33. Slide 33: Migrating 3G Trial Users

    Migrating 3G Trial Users • Very valuable feedback received from 3G trial • Understanding of viewing habits and content preference • Added 3G cell sites with more comprehensive coverage • Enhanced reliability and network resilience • Opened up our 3G network to new customers in August • Migration of

  34. Slide 34: Mobile TV Exclusive Content

    on • Exclusive content made available to customers • Utilizing CMB technology, content can be broadcast more efficiently and to a large group of users • Initial programming will include local & international news, finance & sports: • Other entertainment and infotainment will be available soon: 33

  35. Slide 35: Quadruple Play

    Quadruple Play Complete Platform for Integrated Services Fixed-line Broadband y Continued line gain y 998k lines, up 16% y-o-y y Market share returned to 68% y music library launched Pay TV Mobile y 608k subscribers, up 38% y-o-y y Migrating PCCW 3G trial users y HDTV in trial y Launched Mobile TV 3

  36. Slide 36: Appendix

    Appendix 35

  37. Slide 37: New Reporting Segments

    New Reporting Segments TSS TV & Content Mobile PCCW Solutions • Local telephony • now TV • Broadband access services • 2G & 3G mobile business • PCCW ICT services & • now.com.hk solutions (HK & PRC) • IDD • Local & International data • CTJV • Sales of CPE • Technical maintenance & subcontracting • T

  38. Slide 38: PCCW Consolidated Debt Maturity Profile

    PCCW Consolidated Debt Maturity Profile (US$ million) 1 Dec 2003 Net Debt = 3,735 Debt to EBITDA = (4,424 / 948) = 4.67X $1,154 $1,000 $54 $956 $1,100 $450 $481 $385 $456 $250 $96 $500 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 Net Debt = 3,368 Debt3 to EBITDA = (3,816 / 842) = 4.53

  39. Slide 39: HKTC Debt Maturity Profile

    (US$ million) HKTC Debt Maturity Profile Net Debt =2,074 HKTC Debt to EBITDA = (2,200 / 1,047) = 2.10X Dec 2003 $1,000 $450 $500 $250 2006 2007 2008 2009 2010 2011 2012 2013 2031 Net Debt = 2,621 HKTC Debt to EBITDA = (2,656 / 889) = 2.99X Dec 2004 $1,000 $956 $450 $456 $250 $500 2006 2007 2008 2009

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