Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q1 2010 Earnings Presentation
25 slides from Chunghwa Telecom's earnings presentation, Apr 30, 2010
Slide 1: 1Q 2010 Operating Results
1Q 2010 Operating Results April 30 , 2010
Slide 2: Disclaimer
Disclaimer Note Concerning Forward-looking Statements This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
Slide 3: Building Sustainable Value for Shareholders
Building Sustainable Value for Shareholders Differentiation Factors Extensive Extensive Leading Leading Advanced Advanced Product Product Branding Branding & & Position Position in in Network Network & & Financial Financial Portfolio Portfolio with with Scale Scale Customer Customer Technology Techn
Slide 4: Delivering Consistent Shareholder Value
Delivering Consistent Shareholder Value Consistent Return to Shareholders Cash Return • The board approved (still NT$bn 60 subject to AGM’s approval) 50 9.7 19.1 9.7 • NT$4.06 cash dividend for 40 2009 30 20 42.6 34.6 40.7 37.1 39.4 • the 4th round of capital 10 reduction, cash return 0 expected to
Slide 5: Business Overview
Business Overview
Slide 6: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market Leader in Fixed-line, Mobile Communication, and Internet Services Integrated Services Provider Revenue Breakdown with Dominant Market Positions • Domestic Fixed – #1 Local subscribers – 97.0% share (12.4 mm subs) Mobile – 88.2% share by minutes 44.8% Internet – #1 DL
Slide 7: Undisputed Leader in Fixed-Line Services
Undisputed Leader in Fixed-Line Services Maintain Stable Fixed-Line Voice Market Share 100% 97.0% 88.2% 80% 80.7% 60% 58.3% 40% 20% 0% 2006 2007 2008 2009 Feb 10 Local by subscribers Local by minutes DLD by minutes ILD by minutes © 2010 Chunghwa Telecom 6
Slide 8: Taiwan's Leading Broadband & Internet Service Provider
Taiwan’s Leading Broadband & Internet Service Provider Broadband Subscribers Strategies Thousand 4,311 4,310 4,302 4,306 4,304 4,317 • Migrate ADSL subs to FTTx to offer 17.4% 17.4% 17.1% 16.9% 16.6% quality network service and increase 17.3% 8.7% 8.0% 7.5% revenue 11.20% 10.4% 9.6% • Provide even h
Slide 9: Expanding MOD/IPTV for On-Demand Services
Expanding MOD/IPTV for On-Demand Services MOD/IPTV Subscribers Content and Service Updates Thousand HUT • Channels 700 676 686 660 668 667 665 50% ― 103 SD channels 591 and 8 HD channels on line 600 508 ― 9 new channels are under negotiation 500 • VOD 435 30% 394 ― Over 7,100 hrs SD / HD VOD on line
Slide 10: Number One Mobile Services Provider
Number One Mobile Services Provider Highest Subs Number Strategies Million 10 • Maintain mobile leadership by 9 acquiring customers, minimizing churn 8 rate, and increasing user loyalties via 7 compelling user experiences 6 • Create value via smartphone services 5 4 • Increase mobile VAS revenue by
Slide 11: Smartphone Value Driver for Mobile
Smartphone Value Driver for Mobile Performance Handset Strategies • VAS revenue account for 14.2% of • Promote smartphones with various mobile revenue in 1Q2010 applications to increase premium 14.2% customer penetration 15% 11.8% 11.7% • Platforms support iPhone OS, Android 9.7% 10% and Windows Pho
Slide 12: Meeting Customer Demand for Convergence
Meeting Customer Demand for Convergence Strategies Multi-screen Platform • Conduct cross-platform service • Live broadcasted on 3 screens operation, marketing and • IPTV advertising • Internet • Offer customer ubiquitous content • Mobile platform services via multi-screen platform – 2010 Winter Olym
Slide 13: Satisfy Corporate Business Demand for Reliability and Efficiency
Satisfy Corporate Business Demand for Reliability and Efficiency Corporate ICT Business Strategies NT$ Million 4,500 4,000 3,643 • To expand business scope and focus on ICT potential business Revenue 3,500 3,000 2,535 lines and government project 2,500 2,000 • ITS, iEN, information 1,500 1,000 908 9
Slide 14: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$bn) 35 • Future investments continue to 30 30.1 focus on core businesses and on 25 25.1 25.5 migrating mobile and data customers to higher revenue 20 platforms Capex (NT$bn) 15 – 3G / 3.5G / LTE 10 – IP-based NGN 5 4.7 4.2 – FTTx 0
Slide 15: Financials Overview
Financials Overview
Slide 16: Financials: Income Statement Highlights
Financials: Income Statement Highlights ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q1 2009 Q1 2010 Rate Net Revenues 201.67 198.36 (1.6%) 49.12 49.62 1.0% EBITDA 96.74 92.70 (4.2%) 23.36 23.56 0.9% Income from Operations 58.57 56.39 (3.7%) 14.13 14.88 5.3% Net Income 45.01 43.76 (2
Slide 17: Financials: Business Segment Revenues
Financials: Business Segment Revenues ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q1 2009 Q1 2010 Rate Domestic Fixed 73.06 71.47 (2.2%) 17.70 17.20 (2.8%) Local 34.55 33.21 (3.9%) 8.11 7.91 (2.5%) DLD 8.48 7.40 (12.7%) 1.90 1.70 (10.6%) Broadband Access 19.96 19.90 (0.3%) 5.02 5.08
Slide 18: Financials: Costs & Expenses
Financials: Costs & Expenses ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q1 2009 Q1 2010 Rate Operating Costs 113.55 112.74 (0.7%) 28.15 27.79 (1.3%) Operating Expenses 29.55 29.23 (1.1%) 6.84 6.95 1.6% Marketing 22.73 22.29 (1.9%) 5.13 5.21 1.5% General and 3.68 3.77 2.3% 0.95 0.98
Slide 19: Financials: Cash Flow Highlights
Financials: Cash Flow Highlights ROC GAAP (Consolidated) Growth Growth (NT$bn) 2008 2009 Rate Q1 2009 Q1 2010 Rate Net Cash Flows from 91.86 77.29 (15.9%) 16.05 15.69 (2.2%) Operating Activities CAPEX 30.12 25.48 (15.4%) 4.70 4.17 (11.4%) Free Cash Flow 61.74 51.81 (16.1%) 11.35 11.52 1.5% Cash and
Slide 20: Q2 2010 Forecast
Q2 2010 Forecast ROC GAAP (Parent Company Only) Growth Growth (NT$bn) Q1 2010 Q2 2010E Rate Q2 2009 Q2 2010E Rate Net Revenues 45.52 45.12 (0.9%) 45.09 45.12 0.1% EBITDA 23.12 22.41 (3.1%) 23.67 22.41 (5.3%) Income from 14.53 13.83 (4.8%) 14.62 13.83 (5.4%) Operations Net Income 12.06 11.43 (5.2%) 1
Slide 21: Outlook
Outlook
Slide 22: Mid-term Corporate Strategy
Mid-term Corporate Strategy • Strengthen advanced broadband network capabilities to facilitate business growth and transformation • Enhance competitiveness via innovative services • Focus on selected ICT services to better serve corporate clients • Explore mainland and overseas emerging markets for
Slide 23: Q&A
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Slide 24: Reference
Reference
Slide 25: Continuing Broadband Network Construction
Continuing Broadband Network Construction Thousand Port FTTH Coverage Fiber Deployment Plan FTTN/FTTB 85% 10,000 83% 90% ADSL 81.7% 9,000 Coverage 77% 78.2% 800 80% • FTTx access expected to 1100 1400 8,000 73% 201 500 exceed ADSL access by year 26 70% 2011 7,000 11 58.3% 2,791 8 3,576 4,000 4,400 6