29 slides from China Telecom Corp. Ltd. Class A's earnings presentation, Aug 21, 2013
Slide 1: 2013 Interim Results
2013 Interim Results China Telecom Corporation Limited 21 Aug 2013 | www.chinatelecom-h.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this document may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 (as amended) and Section 21E of the U.S. Securities Exchange Act of 1934 (as amended). Such forward-looking stat
Slide 3: Presentation by Chairman & CEO, President & COO, EVP & CFO
Presentation by Mr. Wang Xiaochu Chairman & CEO Mr. Yang Jie President & COO Madam Wu Andi EVP & CFO 3
Slide 4: Overview, Business Review, Financial Performance
1. Overview 2. Business Review 3. Financial Performance 4
Slide 5: Highlights
Highlights Robust business development Mobile scale expansion optimized revenue structure & with industry-leading drove double-digit revenue & mobile revenue growth & net profit growth enhanced customer value Further strengthened fibre To deploy LTE trial network network & service edge to ti
Slide 6: Solid Growth Momentum
Solid Growth Momentum 1H2012 1H2013 Change Operating Revenue (RMB Mil) 138,021 157,520 14.1% Operating Revenue 126,580 139,209 10.0% (Excl. Mobile Terminal Sales) (RMB Mil) EBITDA (RMB Mil) 36,992 50,114 35.5% EBITDA Margin 29.2% 36.0% 6.8pp Net Profit (RMB Mil) 8,814 10,213 15.9% EPS (RMB) 0.109 0.
Slide 7: Deepened Strategic Transformation to Accelerate Growth Momentum
Deepened Strategic Transformation to Accelerate Growth Momentum Revenue Structure Robust full-services development with increasing mix from growth businesses Mobile Data & 22.3% Others 28.3% Operating revenue maintained double-digit growth surpassing industry average 16.9% Mobile Voice 18.0% Growt
Slide 8: Mobile Scale Expansion with Industry-leading Mobile Revenue Growth
Mobile Scale Expansion with Industry-leading Mobile Revenue Growth Mobile Service Revenue Fully leveraged superior strengths in 3G network RMB Mil +28.3% 54,600 & services to rapidly expand mobile subscriber 42,556 scale & increase customer value 26,174 19,267 35.8% Fast mobile scale expansion u
Slide 9: Proactive Investment to Bolster Future Sustainable Development & Competitiveness
Proactive Investment to Bolster Future Sustainable Development & Competitiveness CAPEX RMB Mil Investment tilts towards high-growth, 75,000 high-return businesses & areas 72,525* Continue fibre & broadband deployments, enhance 3G network coverage & quality to create superior network strengths fo
Slide 10: To Deploy LTE Trial Network Timely & Appropriately
To Deploy LTE Trial Network Timely & Appropriately One Hybrid LTE Network of integrated resources to boost future sustainable growth & return enhancement Key Benefits: Allow flexible use of more spectrum resources (TD+FDD) for LTE services to grasp rapidly growing data service opportunities Most
Slide 11: Grasp Opportunity for Breakthrough in Scale Development
Grasp Opportunity for Breakthrough in Scale Development Fast proliferating Accelerating Fabulous mobile smartphones industrialization & Internet applications adoption informatization Breaking away from constraints of traditional telecommunications operation mindset Customer Scale Development Mobil
Slide 12: Business Review
1. Overview 2. Business Review 3. Financial Performance 12
Slide 13: Revenue Breakdown
Revenue Breakdown RMB Mil 1H2012 1H2013 Change Mobile 54,128 72,911 34.7% Service Revenue 42,556 54,600 28.3% Voice 23,289 28,426 22.1% Data 19,267 26,174 35.8% Others 11,572 18,311 58.2% Wireline 83,893 84,609 0.9% Voice 22,241 19,866 -10.7% Data 57,933 60,851 5.0% Internet Access 33,978 35,694 5.1
Slide 14: 3G Traction Fostering Mobile Scale with Enhanced Customer Value
3G Traction Fostering Mobile Scale with Enhanced Customer Value 3G Subs Leverage the 3G migration opportunity 87.33 Mil 18.28 to enhance customer value & drive mobile scale ( 24.6%) 50.96 Mobile ARPU demonstrated upward trajectory 14.67 Fast expansion of 3G subs (half of mobile subs) fostered s
Slide 15: Rapidly Growing Mobile Data Traffic & Revenue
Rapidly Growing Mobile Data Traffic & Revenue Mobile data emerges as a key revenue driver Mobile Data Revenue RMB Mil leveraging solid implementation of data traffic +35.8% 26,174 operation to promote data usage growth 19,267 47.9% Key Initiatives Innovate mobile data products & packages, e.g. d
Slide 16: Resilient Wireline Performance
Resilient Wireline Performance Wireline Revenue RMB Mil +0.9% Perseverance in strategic transformation 83,893 84,609 effectively led to increased contribution from Wireline Data & Others, driving steady wireline revenue Leveraged fibre network & ICT service 61,652 5.0% strengths to accelerate
Slide 17: Sustained Solid Growth in Wireline Broadband Amid Mounting Competition
Sustained Solid Growth in Wireline Broadband Amid Mounting Competition Wireline Broadband Revenue +5.5% Leverage network strengths & unmatched service RMB Mil 35,206 quality to enhance customer growth, satisfaction & 33,369 value by promoting bandwidth upgrade with a lower 69.3 63.1 unit bandwidth p
Slide 18: Comprehensive Development of Wireline VAS & Integrated Information Services
Comprehensive Development of Wireline VAS & Integrated Information Services Revenue RMB Mil Actively expand VAS & Integrated Information Services +2.1% 16,343 16,682 to nurture new growth engines & pull core businesses growth Wireline VAS & Integrated Information Services Revenue: RMB16.7 bil (2.
Slide 19: Near-term Priorities
Near-term Priorities Step up scale development Promote market-oriented & differentiated development Leverage network strengths & service Deploy market-oriented mechanism to excellence to accelerate integrated operation enhance productivity & boost vibrancy; & scale expansion of three core servic
Slide 20: Financial Performance
1. Overview 2. Business Review 3. Financial Performance 20
Slide 21: Key Financial Information
Key Financial Information RMB Mil 1H2012 1H2013 Change Operating Revenue 138,021 157,520 14.1% Operating Expenses 125,569 142,099 13.2% Depreciation & Amortization 24,540 34,693 41.4% Network Operations & Support 31,258 23,385 -25.2% Personnel 21,453 22,306 4.0% SG&A 29,309 34,968 19.3% Incl.: Mobil
Slide 22: Stringent Cost Control to Boost Operating Efficiency
Stringent Cost Control to Boost Operating Efficiency Operating Expenses as % of Optimize resources allocation Operating Revenue to promote profitable scale development 91.0% 90.2% Depreciation & Amortization: 4.2pp (mainly due to 17.8% Depreciation & assuming depreciation & amortization of mobil
Slide 23: Highly Effective Investment to Strengthen Network Edge
Highly Effective Investment to Strengthen Network Edge CAPEX Structure Effectively support fast business expansion & sharpen core competence Further implement “Broadband China, Fibre Cities” Broadband & Internet Project 55.2% 52.7% 2011-13: Intensive phase of fibre network upgrade as planned to
Slide 24: Optimized Capital Structure to Enhance Value
Optimized Capital Structure to Enhance Value Total Debt / Total Capitalization Net Debt / Simple Annualized EBITDA 0.95 29.9% 15.2% 0.12 2012.6 2013.6 1H2012 1H2013 Leverage CDMA network acquisition at the end of 2012 to gear up & optimize capital structure for corporate value enhancement 24
Slide 25: Proactive Financial Transformation to Bolster Profitable Scale Development
Proactive Financial Transformation to Bolster Profitable Scale Development Implement “market share gain & value creation-based” resources allocation system Optimize cost & investment structure with resources tilting towards key businesses & high-value customers to enhance return Drive profitable sca
Slide 26: Thank You!
Thank You! Institutional Investor 2013 “No. 1 Overall Best “No. 1 Asia’s Overall “No. 1 Asia’s Most For further information & enquiries, Managed Company Best Managed Honored please contact our Investor Relations Department at in Asia 2013” Company 2013” Company 2013” ir@chinatelecom-h.com or visit w
Slide 27: Appendix 1: Comprehensive Income for 6 Months Ended 30 Jun 2013
Extracted from unaudited consolidated statement of Appendix 1 comprehensive income for 6 months ended 30 Jun 2013 RMB Mil 1H2012 1H2013 Operating Revenue 138,021 157,520 Operating Expenses (125,569) (142,099) Net Finance Costs (873) (2,615) Investment Income, Share of Profit from Associates 90 700 P
Slide 28: Appendix 2: Financial Position as at 30 Jun 2013
Extracted from unaudited consolidated statement of Appendix 2 financial position as at 30 Jun 2013 RMB Mil 2012.12.31 2013.06.30 Current Assets 65,210 61,285 Non-current Assets 479,862 477,657 Total Assets 545,072 538,942 Current Liabilities 193,461 183,066 Non-current Liabilities 85,581 84,791 Tota
Slide 29: Appendix 3: Selected Operating Metrics for 1H2013
Appendix 3 Selected Operating Metrics for 1H2013 Subscriber (Mil) 2012.12 2013.06 Change Mobile Subs 160.62 174.50 13.88 Incl: 3G Subs 69.05 87.33 18.28 Wireline Broadband Subs 90.12 95.82 5.70 Access Lines in Services 163.00 159.60 -3.40 Incl: Household 103.49 100.84 -2.65 Government & Enterprise 3