Singapore Telecommunications Limited · SGX:Z74
Singapore Telecommunications — FY2020 Earnings Presentation
29 slides from Singapore Telecommunications's earnings presentation, May 28, 2020
Slide 1: FY20 Financial Results Presentation
FY20 Financial Results Presentation For the financial year ended 31 March 2020 Chua Sock Koong, Group CEO 28 May 2020
Slide 2: Forward looking statement – important note
Forward looking statement – important note The following presentation contains forward-looking statements by the management of Singapore Telecommunications Limited ("Singtel"), relating to financial trends for future periods, compared to the results for previous periods. Some of the statements conta
Slide 3: Agenda
Agenda Overview ● Business units ● Focus FY21 ● Supplementary information
Slide 4: Change to half yearly reporting
Change to half yearly reporting • Following amendments to Rule 705 of the Singapore Exchange Securities Trading Limited Listing Rules, Singtel will be adopting half-yearly announcement of its financial results with effect from the financial year starting 1 April 2020 (FY2021) • To help investors ass
Slide 5: Our response to COVID-19
Our response to COVID-19 Our priorities Staff safety & Network resilience Limit disruption Enterprise & SME COVID-19 relief well-being digitalisation • Free mobile data & • Expand network • Deploy mobile • Protect our staff • Equip businesses TV content capacity technology with enhanced with digital
Slide 6: Our response to COVID-19
Our response to COVID-19 Impact of COVID-19 Accelerated digitalisation Severe reduction in roaming Lower prepaid volumes Digital channels & services (eg, remittance, payments, service apps) Lower equipment sales & supply chain disruption Cyber security E-commerce Cloud Remote working Reduced enterpr
Slide 7: FY20: Year in review
FY20: Year in review Continued investment in network despite industry structural challenges S$1.0b in mobile capex in FY201 Strong commitment to 5G S$3.2b NCS delivered strong growth NCS order book Optus recognised as strongest brand in Australia2 Achieved cost transformation & digitalisation target
Slide 8: FY20: Financial overview
FY20: Financial overview1 S$m • Declines in mobile service & equipment sales Operating Revenue 16,542 5% ( 2%2) • Weaker Australian dollar EBITDA 4,541 3% (Stable2) • Weaker performance in Australia, mitigated by higher NBN migration revenue EBIT (excluding associates) 1,961 21% ( 19%2) • Low margin
Slide 9: Financial position
Financial position Balance sheet1 Free cash flow1 S$3.8b ▲ 4%4 S$12.5b net debt2 S$m 3,781 3,650 31.8% Net debt gearing3 Singapore 1,202 ▼ S$40m Singapore 1,242 Net debt: EBITDA & share of 2.0x associates’ pre-tax profits Australia Australia 1,006 1,285 ▲ S$279m Strong credit ratings A S&P Associate
Slide 10: FY20 performance within guidance
FY20 performance within guidance Guidance1 Actual2 Revenue Decline mid-single digit ▼5% (excluding NBN migration revenue) EBITDA Decline by low teens ▼9% (excluding NBN migration revenue) Free Cash Flow (excluding spectrum payments & dividends from ~ S$2.3b S$2.5b associates) Capital Expenditure ~ S
Slide 11: Dividend
Dividend FY20: Proposed final dividend 5.45 cents (Payable in Aug 2020) Interim dividend 6.8 cents (Paid in Jan 2020) Total dividend 12.25 cents % of underlying net profit 81% Conserve financial headroom: • Uncertainties in the current COVID-19 operating environment • Capacity to invest in 5G 11
Slide 12: Agenda
Agenda Overview ● Business units ● Focus FY21 ● Supplementary information
Slide 13: Singapore Consumer
Singapore Consumer S$m 14% Mobile service revenue down 12% 539 • Roaming decline from travel restrictions • Continued voice erosion 465 • Prepaid decline due to lower foreign workers & tourist EBITDA arrivals 248 margin 218 Mobile service 31.9% 38.9% Equipment sales1 down 33% • Handset supply disr
Slide 14: Australia Consumer
Australia Consumer A$m ▼ 8% Revenue down 8% 1,964 • Lower equipment sales volume & increased mix of lower-margin 1,800 devices • Mobile service revenue declined on increased SIM-only customer EBITDA mix, lower data breakage & early impacts of COVID-19 912 margin2 863 Mobile service Mobile customers
Slide 15: Group Enterprise
Group Enterprise S$m ▼ 5% Revenue down 5% 1,632 • Continued carriage erosion 1,559 • Declines in roaming & equipment sales exacerbated by COVID-19 793 Carriage 688 13% EBITDA margin ICT up 4%1 23.2% 25.5% • Strong NCS growth & data centre sales • Higher cyber security revenues in Asia & the US ▲ 5%
Slide 16: Group Digital Life
Group Digital Life S$m ▼ 15% 274 234 Amobee revenue down 14% • Continued declines in managed media & social advertising • iTV technology contract revenue in Q4FY19 259 Amobee1 223 • Steep decline in advertising revenues from March ▼ 14% ▲ 79% EBITDA up 79% • Cost savings from Amobee 14 11 Others1 •
Slide 17: Regional Associates
Regional Associates PBT1 % Change % Change Highlights Quarter March 2020 (S$m) (S$) (constant ccy) Regional Associates 500 29% 25% • Narrower Airtel pre-tax losses Ex-Airtel 541 2% Stable • Competition outside Java & pressures on legacy Telkomsel 310 5% 3% business • India: Strong growth in 4G custo
Slide 18: Agenda
Agenda Overview ● Business units ● Focus FY21 ● Supplementary information
Slide 19: Focus FY21: Positioning our business for the longer term
Focus FY21: Positioning our business for the longer term 5G Lead with 5G Drive digital & enterprise growth with associates Scale digital ICT services & cyber security Transform operating model FY21 financial outlook to be provided when there is greater clarity in the operating environment 19
Slide 20: Agenda
Agenda Overview ● Business units ● Focus FY21 ● Supplementary information
Slide 21: Singapore Mobile
Singapore Mobile Mobile revenue S$476m Revenue Mobile customers (S$m) (m) Average quarterly smartphone data usage 7.0GB 637 • 4.7GB in Mar 2019 quarter 611 617 576 • 6.4GB in Dec 2019 quarter 476 Postpaid ARPU down 19% S$33 390 390 378 376 • Roaming revenue down 36% 329 • Decline in voice usage & hi
Slide 22: Singapore Fixed
Singapore Fixed Consumer fixed revenue1 S$142m Consumer fixed revenue Customers (S$m)1 (‘000) Singtel TV 139 140 141 141 142 • Revenue up 1% S$55m • Customer base stable QoQ 382k Singtel OTT services (CAST & Singtel TV GO) 215k • Users grew 22k QoQ 517 518 520 520 518 Residential fixed broadband • R
Slide 23: Australia Mobile
Australia Mobile Mobile revenue A$1,348m Revenue Mobile customers (A$m) (m) $1,506 $1,511 $1,467 Postpaid $1,360 $1,348 • ARPU A$37 - Down 11% YoY • Churn 1.4% $956 $897 $903 $912 $903 - Down 0.1ppt YoY & stable QoQ Prepaid 5.68 5.82 5.82 ▲ 4k QoQ 5.73 5.76 • ARPU A$18 - Down 1% YoY 3.42 3.37 3.35 3
Slide 24: Australia Fixed
Australia Fixed Retail Fixed revenue A$350m Revenue Broadband (A$m) customers $498 (‘000) Retail Fixed ARPU A$75 $462 • Up 1.6% YoY $376 $386 $350 NBN Customers 848k $283 $288 • Up 45k QoQ $275 $265 $260 1,173 1,141 1,116 1,098 1,087 TV Customers 391k 576 495 390 295 239 • Down 8k QoQ Optus Sport Cu
Slide 25: FY20: Cost savings
FY20: Cost savings Customer experience Cost of sales • Increased adoption of self-service channels Others 19% 22% • Integrate online & offline sales channels • Optimise customer acquisition costs • Renegotiation of content costs Traffic expense 4% S$444m Cost savings Network & operations 10% Selling
Slide 26: Summary Income Statement
Summary Income Statement Quarter Financial Year (S$m) Mar 20 Mar 19 YoY % Mar 20 Mar 19 YoY % Operating revenue 3,899 4,342 (10%) 16,542 17,372 (5%) EBITDA 1,032 1,166 (12%) 4,541 4,692 (3%) - margin 26.5% 26.9% - 27.5% 27.0% - EBIT (ex-associates) 371 605 (39%) 1,961 2,470 (21%) Associates pre-tax
Slide 27: Foreign exchange movements
Foreign exchange movements Quarter1 Financial Year1 (S$) Mar 20 YoY QoQ Mar 20 YoY 2 1 Australian Dollar 0.9106 (5.6%) (2.3%) 0.9351 (5.5%) 3 1 United States Dollar 1.3878 2.5% 1.7% 1.3717 1.0% Indonesian Rupiah 10,309 1.0% Stable 10,309 2.1% Indian Rupee 52.4 (0.6%) Stable 51.5 Stable Thai Baht 22.
Slide 28: Trends in constant currency terms
Trends in constant currency terms1 Q4FY20 YoY % Change YoY % Change Quarter March 2020 (reported S$m) (reported S$) (at constant currency S$) Group revenue 3,899 (10.2%) (7.7%) Group reported NPAT 574 (25.7%) (27.7%) Group underlying NPAT 594 (14.8%) (16.1%) Optus revenue 1,916 (13.8%) (8.7%) Region
Slide 29: Singtel
Singtel
Singapore Telecommunications — FY2020 Earnings Presentation on 6ix