Singapore Telecommunications Limited · SGX:Z74
Singapore Telecommunications — H1 FY2023 Earnings Presentation
23 slides from Singapore Telecommunications's earnings presentation, Nov 10, 2022
Slide 1: Financial Results
Financial Results For the half year ended 30 September 2022 Yuen Kuan Moon, Group CEO 10 November 2022
Slide 2: Key highlights
Key highlights Scaling new growth Strong mobile service Sustained momentum engines driven by Proven capital led growth in India digitalisation recycling model Roaming recovery ARPU uplift from 4G Strong bookings & S$4.4B of cash upgrade integrating Australia generated1 Improved pricing acquisitions
Slide 3: Key financials
Key financials EBIT Operating revenue EBITDA (ex associates’ contribution) S$7,259M S$1,878M S$579M ▼ 5% (▲ 4%1 ) ▼ 3% (▲ 3%1 ) ▲ 1% (▲ 8%1 ) Regional associates’ PBT Underlying net profit Net profit S$ 1,155M S$1,005M S$1,170M ▲ 15% (▲ 18%1 ) ▲ 2% (▲ 6%1 ) ▲ 23% (▲ 26%1 ) 1. In constant currency ba
Slide 4: Exceptional items
Exceptional items Key exceptional items1 S$M H1FY23 Net gain on disposal of partial stake in Airtel 1,014 Impairment of Optus’ goodwill Dilution gain on Airtel 221 Non-cash impairment charge resulting from: Share of associates' exceptional gains 102 ▪ Rapid & successive interest rate hikes ▪ A weake
Slide 5: Optus
Optus A$M Revenue EBITDA EBIT +1% +3% +51%1 Looking ahead: 3,923 3,963 1,065 0 1,038 0 51 51 164 ▪ Move beyond short-term impact of 0 cyber attack to rebuild customer trust and brand 108 ▪ Cautiously optimistic despite macro 3,963 1,064 headwinds & weakening consumer 3,872 988 51 +2% +8% 164 sentime
Slide 6: Addressing the cyber attack
Addressing the cyber attack DOING RIGHT BY CUSTOMERS OPERATIONAL & FINANCIAL PROTECTING OUR CUSTOMERS IMPACT Independent review Impacted customers contacted S$142M1 Provision to cover costs for: Optus cyber security commitments: Rebuild trust in brand ▪ External independent review ▪ Enhance cyber ca
Slide 7: Singapore Consumer
Singapore Consumer S$M Revenue EBITDA EBIT +1% +10% +13% 867 874 328 173 298 153 Looking ahead: ▪ Further upside in roaming with Q2 roaming revenue at ~60% of pre- pandemic levels ▪ Sustained operating momentum led by roaming & 5G premium prices ▪ Continuing competitive pressure in H1FY22 H1FY23 H1F
Slide 8: Group Enterprise
Group Enterprise S$M Revenue EBITDA EBIT +2% +0.3% -1% 1,245 1,264 542 544 365 361 Looking ahead: 268 +18% 317 ICT ▪ Post-COVID growth momentum in roaming from increase in business travel -3% Carriage ▪ Continued demand for cyber security, 977 947 unified comms & SD-WAN ▪ New data centre capacity be
Slide 9: NCS
NCS S$M Revenue EBITDA EBIT +16% 1,283 -26% -49% Looking ahead: 147 105 1,107 110 ▪ Strong bookings of S$1.3B, with 53 strong pipeline of projects -16% ▪ Pursue regional projects 121 -23% 79 enterprise ▪ Drive integration & operational H1FY22 H1FY23 -12 synergies of Australian acquisitions -26 H1FY2
Slide 10: Regional Associates
Regional Associates Profit before tax S$M Telkomsel Intouch AIS Globe Airtel Looking ahead: H1FY23 456 52 139 172 336 1,155 ▪ Re-opening of economies balanced against impact of rising inflation on -4% +6% -13% -5% +129% +15% consumer sentiment ▪ Industry consolidation in Indonesia & Thailand H1FY22
Slide 11: Balance sheet well-positioned to weather volatility
Balance sheet well-positioned to weather volatility Free cash flow1 & capital recycled (S$M) S$M S$2.8B of capital recycled 0 Highlights: H1FY23 1,043 505 4,437 47 ▪ Recycled ~S$6B cumulatively 150% ▪ Reduced net debt by S$3.4B 52 ▪ S$0.7B of debt maturing in next 12 H1FY22 1,167 359 1,771 months wi
Slide 12: Growing dividends sustainably
Growing dividends sustainably Dividend per share Raise interim dividend S cents 17.5 % of underlying Strategic reset 4.6 cents 76% net profit1 12.3 Maintain ordinary dividend policy to pay 10.7 5.0 between 60% & 80% of underlying net profit 9.3 5.5 7.5 4.8 X2 2.4 Pay special dividend 6.8 6.8 5.1 4.5
Slide 13: Delivering sustainable dividends & making investments for growth
Delivering sustainable dividends & making investments for growth1 Pot 1: Operating cash underpins sustainable dividends Pot 2: Capital recycling meets investment needs S$B S$B Interim dividend Growth 0.7 76% of underlying initiatives profit ~2-3 ▪ Fund future growth Spectrum, lease opportunities & i
Slide 14: Executing to our strategic reset
Executing to our strategic reset
Slide 15: Reinvigorate the core
Reinvigorate the core DIFFERENTIATED 5G OFFERINGS FOR CONSUMERS >580K 5G subs First 5G prepaid Demonstrated network service in SG slicing at F1 >2.8M 5G connected Fastest 5G download devices speed 1 Optus Network Pulse DRIVING ENTERPRISE 5G USE CASES MEC2 incubator Smart mobility & fleet mgmt 1st to
Slide 16: Capitalise on growth trends: Regional Data Centre
Capitalise on growth trends Regional Data Centre H1FY23 Revenue H1FY23 EBITDA S$132M S$86M SINGAPORE Gaining scale Early 2025 ~120MW1 Dec 2022 Expected completion Total capacity in 3 years Submitting bid for of Tuas DC additional capacity THAILAND INDONESIA First overseas expansion Exploring opportu
Slide 17: Capitalise on growth trends: Digibank
Capitalise on growth trends Digibank LARGE & DIVERSE ECOSYSTEM >120M >12M Retail reach MSME reach CREATING A DIFFERENTIATED DIGITAL OFFERING 2023 Launched in Malaysia & Singapore Indonesia target launch GXS Savings Account FOCUS ON PROFITABILITY 2026 Target EBITDA Manageable capital breakeven contri
Slide 18: Reallocate capital, unlock value
Reallocate capital, unlock value ILLUMINATED VALUE OF ASSETS Proceeds from partial S$2.5B stake sale; effective stake down by 1.8% US$1.5B Divested 7,059 towers A$200M Sale of insurance business STRATEGIC REVIEW OF DIGITAL ASSETS US$239M Proceeds from sale of adtech business
Slide 19: Champion people & sustainability
Champion people & sustainability DECARBONISING OUR NETWORK Up to 58% 413 tCO2e/year Deploying the latest Lower energy GHG emissions avoidance energy efficient radio cells consumption on 5G1 through network optimisation in SG BUILDING A FUTURE-READY WORKFORCE S$20M 1,600 Annual investment for Partner
Slide 20: Appendix
SINGTEL ‘WATERFRONT THEATRE Appendix Singtel
Slide 21: Managing inflationary pressures
Managing inflationary pressures Operating expenses (ex Amobee) S$B Key inflation drivers & mitigation measures: 5.33 5.46 ▪ Data centres largest energy consumer 1.7% 2.2% Utility o ~70% of customers utilities consumption passed through 24% 27% Staff o All new contracts with pass through clauses o He
Slide 22: Managing forex
Managing forex Translation exposure Transactional exposure ▪ ~78% of underlying NPAT are non-SGD & hence subject to translation risk ▪ Full hedging for capex, opex, borrowings, interest ▪ Manageable currency impact due to portfolio effect : -6% to +1% in last 10 years payment & multi-year ▪ Aided by
Slide 23: Singtel
Singtel
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