Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q3 2013 Earnings Presentation
24 slides from Chunghwa Telecom's earnings presentation, Nov 4, 2013
Slide 1: Q3 2013 Operating Results
Q3 2013 Operating Results Europe NDR November 4-8, 2013 TSE: 2412 NYSE: CHT
Slide 2: Disclaimer
Disclaimer STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION The unaudited financial information under T-IFRSs in this presentation is preliminary and subject to adjustments and modifications. Adjustments and modifications to the financial statements may be identified during the course of the audi
Slide 3: Mobile Broadband Spectrum Auction Completed
Mobile Broadband Spectrum Auction Completed CHT Secures Broadest Bandwidth Bidding Result including most sought after slot at 1800MHz Floor Actual Band- Band Slot Price Payment Current Carrier Winner width (NT$ bn) (NT$ bn) acquiring the largest amount of A1 10M 4.6 6.415 APBW bandwidth with 2x35 MH
Slide 4: Chunghwa Telecom Overview
Chunghwa Telecom Overview Dominant Market Position (a) Highest Mobile Internet Subs Market Share(e) Domestic Fixed 35% 33.3% 33.5% 34.1% – #1 Local 30.0% 29.6% 28.8% 30% 29.0% 28.5% • 94.8% share by subs (11.62 mn subs) 27.6% • 86.4% share by minutes 25% – #1 DLD 20% • 76.4% share by minutes 15% – #
Slide 5: Committed to Improving Shareholder Value
Committed to Improving Shareholder Value Cash Return NT$ bn 70 AGM resolved to distribute special 60 cash dividend of NT$0.7205 per share from capital surplus 19.4 50 9.7 19.1 Total payment was NT$5.35 per share 9.7 40 5.59 or NT$41.5 billion including the earnings distribution of NT$4.6295 per 30 s
Slide 6: Business Overview
Business Overview
Slide 7: Number One Mobile Services Provider
Number One Mobile Services Provider Performance Highest Mobile VAS Revenue Growth % Strategy 7.37 7 6 6.01 5.90 Further introducing mid-to-low tier 5.36 5 4.57 4.67 smartphones to expand mobile internet subscriber base NT $bn 4 3 Accelerating the migration of 2G 2 customers to 3G networks 1 Promotin
Slide 8: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Smartphone Adoption Smartphone customers account 89% of the total Smartphone penetration (note) handsets CHT offered in Q3 2013 60% 47% 50% 53% 100% 50% 43% 35% 38% 27.0% 27.0% 40% 80% 30% 60% 25.0% 20% 49.0% 10% 40% 0% 48.0% Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 De
Slide 9: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Continuing to migrate customers from low Broadband Access Revenue NT$ mn 704 708 710 703 ARPU NT$ speed to high speed fiber services 698 Applying data mining capability for precision 5,000 3,819 600 3,668 3,724 3,767 3,695 marketing and netw
Slide 10: MOD/ IPTV Service
MOD/ IPTV Service Performance Subscriber & Usage Subscriber market share (CATV+IPTV) YoY grows IPTV revenue increased by over 13.1% from 18.4% to 19.5 % in Q2 2013 YoY for the first nine months of 2013 80.1% of IPTV subscribers sign up additional Packages IPTV advertisement revenue grew by 34.2% YoY
Slide 11: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives Performance Strategy Cloud service revenue doubled year on year in Q3 Leveraging core telecom infrastructure and 2013 services to expand ICT business Personal Cloud (Hami+) subscribers accumulated to Leading the cloud computing industry by taking 1.12 million adva
Slide 12: Regulatory Update
ime DEBE = ‘Chunghwa’ Regulatory Update
Slide 13: Regulatory Update
Regulatory Update • NCC released the detailed regulation for 4G technology-neutral licenses and spectrum bidding in May 2013. 4G License • NCC announced seven qualified bidders on August 13, 2013 Auction • The bidding process started from September 3, and completed on October 30, 2013 • Executive Yu
Slide 14: Financials Overview
Financials Overview
Slide 15: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated Jan-Sep Jan-Sep Q3 2012 Q3 2013 Growth Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate 2012 2013 Rate (T-IFRSs) (T-IFRSs) Revenues 55.28 56.72 2.6% 165.17 169.18 2.4% Operating Costs and 42.64 44.12 3.5% 126.39 132.67 5.0% Expenses Other Income and (0.01)
Slide 16: Financials: Business Segment Revenues
Financials: Business Segment Revenues Consolidated Jan-Sep Jan-Sep Q3 2012 Q3 2013 Growth Growth (NT$bn) 2012 2013 (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Domestic Fixed 19.06 17.97 -5.71% 56.84 54.21 -4.64% Local 10.42 9.58 -8.05% 31.03 28.59 -7.88% DLD 0.94 0.87 -7.26% 2.87 2.61 -9.03% B
Slide 17: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated Q3 2012 Q3 2013 Growth Jan-Sep 2012 Jan-Sep 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Operating Costs 34.61 35.79 3.4% 104.70 108.52 3.6% Operating Expenses 8.03 8.33 3.7% 21.69 24.15 11.3% Marketing 6.13 6.37 4.0% 15.98 18.32 14.
Slide 18: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated Q3 2012 Q3 2013 Growth Jan-Sep 2012 Jan-Sep 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Net Cash Flow from 15.08 17.10 13.4% 41.49 45.00 8.5% Operating Activities CAPEX 8.33 7.72 (7.3%) 22.56 23.31 3.3% Free Cash Flow 6.75 9.38 39.0% 1
Slide 19: Forecast & Operating Results
Forecast & Operating Results Consolidated Q3 2013 Jan-Sep Q3 2013 Achieving 2013 Achieving (NT$bn) (T-IFRSs) (T-IFRSs E) Rate 2013 (T-IFRSs E) Rate (T-IFRSs) Revenues 56.72 54.67 103.8% 169.18 217.82 77.7% Operating Costs and 44.12 42.60 103.6% 132.67 172.71 76.8% Expenses Other Income and (0.01) -
Slide 20: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure Increase capital expenditure NT$ bn – Fixed and Mobile broadband 37.2 33.3 – Cloud deployment including cloud data 40 17.1% 20% center build out 15.1% 0.8 13.7% 13.8% 12.2% 12.4% 2.0 35 0.7 10% Budgeted capex for 2013: NT$37.2 bn 5.2 Ca
Slide 21: Q&A
Q&A
Slide 22: Reference
Reference
Slide 23: Regulatory Update (2013/4/1~2017/3/31)
Regulatory Update (2013/4/1~2017/3/31) Years Target Business Applicable Services X factor in Formula : △CPI - X effect xDSL monthly fee 1. The four year FTTx monthly fee (exclude FTTH and tariff reduction 1 plan is applicable FTTB) from April 1. 2013 to March 31, SMP 2017 and applied (Significan
Slide 24: Continuing Broadband Network Construction
Continuing Broadband Network Construction Fiber Deployment Plan FTTH Thousands Coverage FTTN/FTTB Port FTTx coverage (>=100M) reach 97% by ADSL 97% 97% 10,000 Coverage(≥100Mbps) 95% 100% 2016 88% 95% 97% 9,000 Coverage(≧50Mbps) 90% 82% 450 750 90% 1,250 1,800 Increase FTTH construction in order to 1