Hutchison Telecommunications Hong Kong Holdings Limited · HKEX:215

Hutchison Telecommunications Hong Kong — FY2019 Earnings Presentation

31 slides from Hutchison Telecommunications Hong Kong's earnings presentation, 2020

  1. Slide 1: 2019 Annual Results Presentation

    2019 Annual Results Presentation

  2. Slide 2: Disclaimer

    Disclaimer The information, statements and opinions contained in this Presentation and any 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 su

  3. Slide 3: Agenda

    Agenda 2019 Milestones Financial Highlights Financial Review Business Review & Development Outlook Appendix 2

  4. Slide 4: 2019 Milestones

    2019 Milestones Revamped 3Supreme service HTHKH acquires entire 24.1% brand with aim of enriching interest in each of HTCL and privileged & quality services to H3GHK from DOCOMO for serve high-end segments US$60 Million Jan Mar May Oct Nov Unveiling "3.OneWorld" 3 Hong Kong appointed lead HTHKH wins

  5. Slide 5: 2019 Financial Highlights

    2019 Financial Highlights Revenue  EBITDA  EBIT  $5,582m $1,201m $393m -29% YoY +4% YoY +16% YoY (1H vs 2H: +22%) (1H vs 2H: +17%) (1H vs 2H: +60%) Profit  EPS Dividend  (post IFRS-16) $428m 6.68 cents +6% YoY 8.9 cents (1H vs 2H: +29%) +6% YoY +6% YoY  Following the adoption of IFRS 16 on 1 J

  6. Slide 6: Service Performance: Steady Growth

    Service Performance: Steady Growth Service Revenue  $3,613m 1H vs 2H -1% YoY +3% Service EBITDA  Service EBIT  $1,173m 1H vs 2H $365m 1H vs 2H +6% YoY +15% +26% YoY +57%  Under Post-IFRS 16 basis, Service Revenue, Service EBITDA, and Service EBIT were HK$3,613m, HK$1,634m, and HK$381m respective

  7. Slide 7: Financial Review

    Financial Review

  8. Slide 8: Revenue

    Revenue Non-data Service Revenue 30% Data 70% 1H 2019 Roaming $1,782m 20% Service 2H 2019 Hardware Revenue $5,582m Revenue $1,831m vs 1H 35% -29% YoY 65% Local 80% Non-data FY 2019 28% $3,613m Data -1% YoY 72%  Under Post-IFRS 16 basis, Revenue and service revenue were HK$5,582m and HK$3,613m respe

  9. Slide 9: Service Revenue: Local & Roaming

    Service Revenue: Local & Roaming 2019 $2,875m 2019 $738m 2018 $2,980m 2018 $682m LOCAL YoY Change: -4% vs 1H ROAMING YoY Growth: +8% vs 1H Corporate Solutions Roaming Revenue 20% of total service revenue +21% +75% $427m $517m 2018 2019 2018 2019 Data Non-data 8

  10. Slide 10: Customers

    Customers Postpaid 1,499k 1,475k 3,655k 3,276k +12% -2% 2018 2019 2018 2019 Prepaid Postpaid Postpaid 46% 40% 2,180k Prepaid Prepaid 1,777k +23% 54% 60% 2018 2019 9

  11. Slide 11: Postpaid Churn & ARPU

    Postpaid Churn & ARPU CHURN Down 0.1%-pt. Customer YoY segmentation strategy Effective Deepen retention customer programmes engagement GROSS NET 2018 2018 ARPU  2019 ARPU  2019  Gross ARPU = monthly average spending per postpaid user including handset contribution for bundled plan.  Net ARPU = m

  12. Slide 12: 4G Network Data Usage

    4G Network Data Usage YoY Growth 1H 2018 2H 2018 1H 2019 2H 2019 11

  13. Slide 13: Key Costs

    Key Costs Digitalisation Automation Operation Process Efficiency Simplification Cost Control Measures $2,627m $2,509m YoY Savings 2018 2019 12

  14. Slide 14: Capex

    Capex 4% reduction Capex over service revenue (2018: 14%) $522m $503m EBITDA less CAPEX (excl. spectrum licences) +10% YoY 2018 2019  Under Post-IFRS 16 basis, Capex was HK$503m and EBITDA less Capex was HK$1,159m in 2019. 13

  15. Slide 15: Net Cash

    Net Cash HK$ million Distribution of 2018 special interim dividend, 2018 final dividend, and 2019 interim dividend Acquisition of entire 24.1% interest in key subsidiaries from DOCOMO for US$60 million in May 2019 14

  16. Slide 16: Business Review and Development

    Business Review and Development

  17. Slide 17: Business Strategy

    Business Strategy 3.OneWorld Tri-brand Strategy OneWorld Strategy QoS as a 3InnoCity Proposition 16

  18. Slide 18: Digital and Hassle-free Lifestyle

    Digital and Hassle-free Lifestyle Travel - Getaway FinTech OneWorld % Handset Voucher Handset Switch Device Service Vouchers 17

  19. Slide 19: Tri-brand Strategy

    Tri-brand Strategy Upscale Mainstream Value-for-money Proposition Customer Engagement Bespoke Offline Digital Personal Strategy Assistants Retail Hotline My3 app / iChat Distribution 3Supreme Counters 3Shops Roadshow / Dealers Channel 18

  20. Slide 20: QoS as a Proposition

    QoS as a Proposition ➢ Differentiate Network Priority Packages ➢ Business & Consumer Demands ARPU Uplift Unlimited Data User Add-On $ Network Quality Monetisation 19

  21. Slide 21: Well Recognised 3Innocity Programme

    Well Recognised 3Innocity Programme Smart Carpark FSI Compliance Solutions Digital Transformation IoT 20

  22. Slide 22: Unleashes 5G Potential

    Unleashes 5G Potential 5G More Capability 3.3GHz Digital More Transformation Services 3.5GHz 5G Current Bands Simplified Artificial Refarm Architecture Intelligence 21

  23. Slide 23: Outlook

    Outlook

  24. Slide 24: 5G Strategy

    5G Strategy Progressive Network Rollout ARPU Uplift by Early Adopters Devices Revenue Boost Enterprise 5G Solution Revenue Streams Lead Operator of 5G Radio 5G Live tests System at HKCEC Successful Trials in 6 Residential, First 4K Live Broadcast Commercial District over 5G Network 23

  25. Slide 25: Monetising 5G with Corporate Solutions

    Monetising 5G with Corporate Solutions Smart Building Smart Office Smart Retail Exhibition & Hospitality Public Utility & Transportation Private Network 24

  26. Slide 26: Forging 3.OneWorld Portfolio

    Forging 3.OneWorld Portfolio Outpatient VAS Handset Switch Service VHIS Device Vouchers % Home Insurance FinTech OneWorld Travel - Getaway Travel Insurance 25

  27. Slide 27: Appendix

    Appendix

  28. Slide 28: Financial Information Appendix

    Financial Information Appendix HK$ million Pre-IFRS 16 basis Post-IFRS 16 basis 2019 2018 Change 2019 2018 Change Revenue 5,582 7,912 - 29% 5,582 7,912 - 29% Net customer service revenue 3,613 3,662 - 1% 3,613 3,662 - 1% • Local service revenue 2,875 2,980 - 4% 2,875 2,980 - 4% • Roaming service rev

  29. Slide 29: Financial Information Appendix

    Financial Information Appendix HK$ million Pre-IFRS 16 basis Post-IFRS 16 basis 2019 2018 Change 2019 2018 Change Total margin 3,294 3,367 - 2% 3,294 3,367 - 2% CACs (797) (959) + 17% (744) (959) + 22% Less: Bundled sales revenue 472 667 - 29% 472 667 - 29% CACs (net of hardware revenue) (325) (292)

  30. Slide 30: Financial Information Appendix

    Financial Information Appendix HK$ million Pre-IFRS 16 basis Post-IFRS 16 basis 2019 2018 Change 2019 2018 Change EBITDA 1,201 1,157 + 4% 1,662 1,157 + 44% Depreciation and amortisation  (808) (818) + 1% (1,253) (818) - 53% EBIT 393 339 + 16% 409 339 + 21% Service EBIT 365 290 + 26% 381 290 + 31% N

  31. Slide 31: Thank you

    Thank you (1 ] Hutchison Telecom Hong Kong Holdings BE Arcane s eR

Hutchison Telecommunications Hong Kong Holdings — FY2019 Earnings Presentation on 6ix