Pccw Limited · HKEX:8
Pccw — FY2019 Earnings Presentation
39 slides from Pccw's earnings presentation, Feb 13, 2020
Slide 1: 2019 Annual Results
2019 ANNUAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2019 February 13, 2020 – Hong Kong
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain “forward-looking statements” that are not historical in nature. These forward-looking statements, which include, without limitation, statements regarding PCCW's future results of operations, financial condition or business prospects, are based
Slide 3: Overview
Overview BG Srinivas Group Managing Director 3
Slide 4: Expanding Our Reach Regionally While Sustaining Market Leadership
Expanding Our Reach Regionally . . . % Employee nationalities Countries with PCCW Group employees operations1 work outside of HK % > PCCW Solutions secured Active enterprise customers OTT markets orders from outside of in Forbes Global 2000 Hong Kong Note 1. Based on employees’ physical presence . .
Slide 5: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 5
Slide 6: Financial Highlights
Financial Highlights (US$ million) 2018 2019 % change Revenue 4,981 4,810 (3)% Revenue (Excluding Mobile Product Sales) 4,243 4,374 3% EBITDA 1,569 1,587 1% Profit Attributable to Equity Holders 115 87 (24)% HKT Revenue 3,773 3,808 1% (Excluding Mobile Product Sales) Media Revenue 509 514 1% Now TV
Slide 7: Resilient Performance
Resilient Performance Adjusted Funds Flow up 3% to US$683 million PCCW to receive a total distribution of approx. US$355 million from HKT for FY19 HKT Revenue (US$ million) HKT EBITDA (US$ million) 1,610 1,643 4,511 + 1% yoy + 2% yoy 4,244 (ex Mobile product sales) 738 436 636 650 Mobile +2% yoy 1,0
Slide 8: Improving Operational Efficiency
Improving Operational Efficiency Now TV Revenue (US$ million) Now TV EBITDA (US$ million) 366 344 34 29 332 60 58 315 Others Subscription * Included World Cup 2018* 2019 2018 2019 16% 17% EBITDA Margin Revenue steady after adjusting for World Cup impact in 2018 Continuous margin improvement from Exp
Slide 9: Continuing to Scale
Continuing to Scale OTT Revenue (US$ million) OTT EBITDA (US$ million) 137 +18% yoy 117 24 31 (43) (40) (10) (18) + 32% yoy (25) (30) 113 86 H1’18 H2’18 H1’19 H2’19 Music and Others Video 2018 2019 Strong Video revenue40 growth in Greater Southeast Asia and Benefits of scale resulted in reduced loss
Slide 10: Growing, Diverse Revenue Base
Growing, Diverse Revenue Base ViuTV Revenue (US$ million) ViuTV EBITDA (US$ million) 33 +27% yoy 6 26 2 27 + 11% yoy (35) 24 (45) Others 340 2018 2019 Advertising 2018 2019 Expanded viewership translated into 27% growth in revenue Enlarged revenue base helped narrow EBITDA Non-advertising revenue in
Slide 11: Expanding Regional Presence
Expanding Regional Presence Solutions Revenue (US$ million) Solutions EBITDA (US$ million) 525 541 +3% yoy 138 130 300 323 +8% yoy 90 94 +5% yoy Recurring Project based 225 218 Regional expansion 48 43 overheads (7) EBITDA 2018 2019 2018 2019 Margin 8% growth in recurring revenue such as cloud solut
Slide 12: Invest in Regional Expansion while Driving Operating Cost Efficiencies
Invest in Regional Expansion while Driving Operating Cost Efficiencies Core Operating Expenses (US$ million) 713 734 17 24 198 221 Core opex to revenue ratio at 16% Reduced operating costs at HKT Continued opex investment to support the Solutions 596 577 regional expansion of the Media and Media Sol
Slide 13: Capex Investment To Support Growth
Capex Investment To Support Growth Core Capex (US$ million) 396 412 Capex to revenue ratio at 8.8% 18 38 46 28 Mobile capex for critical infrastructure enhancements, network capacity expansion and 5G rollout TSS capex for investment in Ultra Express Link, customized enterprises solutions and FTTH se
Slide 14: Healthy Liquidity
Healthy Liquidity As of As of June 2019 Dec 2019 Gross Cash Undrawn Gross Cash Undrawn Debt Balance (5) Facilities Debt Balance (5) Facilities US$ million HKT 5,178 277 1,174 5,220 372 1,178 PCCW 575 77 1,280 817 197 961 Total 5,753 354 2,454 6,037 569 2,139 Core Gross Debt (1) / EBITDA (3) 3.69x 3.
Slide 15: Debt Maturity Profile
Debt Maturity Profile (US$ million) HKT As of December 31, 2019 1,168 HKT Bank Loans 669 750 HKT Bonds 500 500 500 262 358 300 213 1 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PCCW & PCPD 300 PCCW Bank Loans PCCW Bonds 630 404 PCPD Bank Loans PCPD Bonds 195 13 150 91 12 100 2020 2021 202
Slide 16: Sustained Distribution Pass-Through
Sustained Distribution Pass-Through 31.24 32.18 + 3% yoy 28.33 29.75 25.00 Yield: 6.70% 20.20 22.33 23.00 20.17 21.18 Final 17.04 Dividend 13.21 Final Dividend Interim 23 HK cents Dividend 6.99 7.96 8.16 8.57 8.91 9.18 (HK cents) 2014 2015 2016 2017 2018 2019 HKT Distribution Pass-through 71% 74% 74
Slide 17: Media Business
Media” Media Business
Slide 18: Pay TV Business
Pay TV Business 18
Slide 19: Steady Performance in 2019
Steady Performance in 2019 • Pay TV remained steady in 2019 despite uncertain market environment in 2H 2019 and impact of World Cup in 2018 • EBITDA Margin improved to 17% as a result of improved operational efficiency and content cost streamlining • Now E contributed to continued expansion of custo
Slide 20: Exclusive Broadcast of UEFA EURO 2020
Exclusive Broadcast of UEFA EURO 2020™ • EURO will be a growth driver in 2020 for both subscription and advertising • For the first time, 12 host cities across Europe will stage 51 matches among 24 top-tier European teams during 12 June to 12 July 2020 • Favorable prime-time kick-off (i.e. 8pm) for
Slide 21: Strongest Entertainment Content in Town
Strongest Entertainment Content in Town Now TV continues to be the only subscription video service in Hong Kong to offer the latest and most critically acclaimed Hollywood and Asian blockbuster movies and TV shows: Over 90% of the Top 50 world-wide highest- grossing box office receipt movies in 20
Slide 22: Immersive Viewing Experience for 5G Launch
Immersive Viewing Experience for 5G Launch Exclusive 4K and VR content offering curated popular international content with compelling live events and local productions to showcase our unique 5G capabilities. 24 bit audio Immersive Viewing Experience Professional HiFi Experience VR Local Production V
Slide 23: OTT Business
Ovivu OTT Business
Slide 24: 41 Million Highly Engaged Users and Growing
41 Million Highly Engaged Users …and Growing 41 Million Monthly Active Users 5.7 Billion Video Views Video Views (billion) MAU (million) 5.7 41.4 30.7 3.4 16.3 1.4 2017 2018 2019 2017 2018 2019 • Viu continues to lead with popular and engaging Asian • Video views grew 69% and reached 5.7 Billion dur
Slide 25: A Regional Leader in OTT Video Entertainment
A Regional Leader in OTT Video Entertainment - Dec 2019 (Greater SEA) All Data and information below has been provided and verified by App Annie Rank IAP Revenue1 Monthly Active Users2 Total Time3 Avg Time per user4 (in-app purchase) 1 Netflix Netflix Netflix Netflix 2 Viu Viu Viu Viu 3 WeTV iflix i
Slide 26: Viu Original
Viu Original Creation of original content assets show traction across markets Key Viu original titles are among the Top 5* content viewed Attracted over 40%* of viewers to watch Viu Originals Pretty Little Liars | Indonesia The Bridge 2 | Malaysia Adaptation of Globally Acclaimed • Format by Warner
Slide 27: Viu Original Awards in 2019
Viu Original Awards in 2019 Winner of 12 NRJ Egypt Radio Ramadan Drama Award 2019 Best Original by a Streamer/OTT • Best Comedy Performance • Best Drama Series • Best Comedy Programme • Best Adaptation of an Existing • Best Direction in Malaysia Format • Best Series by Juries • Best Series Viewer’s
Slide 28: Free TV Business
© viuv Free TV Business
Slide 29: Steady Growth In Revenue With Solid Programming Line-up
Steady Growth In Revenue With Solid Programming Line-up Drama Variety International Projects Till Death Do Us Apart King Maker S2 The Gutter CELEBRITIES SEQUEL • Partnered with Youku to co-produce a romantic drama • Featuring renowned artists including Bowie Lam and Catherine Chau, and led by an Lim
Slide 30: Expanding Audience Base And Reach
Expanding Audience Base And Reach International Business Talent Management Business Growth In Business From Group Synergies Accumulated a library of over 9,000 hours of self- produced scripted and non-scripted content with continual monetization Self-produced programs reached audiences in 11 markets
Slide 31: IT Solutions Business
PCCW Solutions IT Solutions Business
Slide 32: Strategic Focus
Strategic Focus Accelerating growth in Southeast Asia • Increasing market presence and expanding workforce across Southeast Asia, currently representing around 25% of our total workforce • Setting up a new development center in Malaysia as a nearshore facility • Awarded long-term managed services co
Slide 33: Driving Enterprise Digital Transformation & IP Creation
Driving Enterprise Digital Transformation & IP Creation Communications, Travel & Banking, Financial Retail, Manufacturing Media & High-tech Transportation Services & Insurance & Logistics Digital Business Enablement Track Access Management Next Generation Insurance Platform Robotic Process Automatio
Slide 34: World-class Data Center Services
World-class Data Center Services Phase 1 of the new data center in Fo Tan is completed and fully taken up by anchor clients. Phase 2 is underway with pre-sales discussions with potential customers, expect to complete construction in second half of 2020 Maintained high utilization rate across all dat
Slide 35: Revenue by Industry & Services
Revenue by Industry & Services 2019 Revenue by Industry 2019 Revenue by Services BFSI Others Business Process Outsourcing Enterprise Retail & Telecom Applications Manufacturing 5% 3% 4% 1% Technical Travel & 20% 18% Transportation 13% Services 42% 11% High-Tech 22% & Media 37% 24% Application Digita
Slide 36: Industry Case Studies
Industry Case Studies Public Travel & Transportation Data Center Government Agencies in Singapore Hong Kong International Airport One of the hyper-cloud service providers Solutions Provision of long-term managed services for Providing and upgrading the airport systems for Extending data center
Slide 37: Industry Case Studies
Industry Case Studies Healthcare Communications, Media & High-Tech Banking, Financial Services & Insurance A Health Organization A Telco Operator in Indonesia A Virtual Bank Solutions Providing public cloud services including Developing a smart mobile application for the Building a centralized
Slide 38: Market Recognition
Market Recognition China Hong Kong Philippines Singapore China Software Export and Hong Kong Awards for Asia CEO Awards 2019 CMO Asia Awards Service Outsourcing Industries • Technology Company of the • Brand Excellence in IT Sector • Top 10 China IT Outsourcing • Innovation and Creativity – Year - C
Slide 39: Summary
Summary HKT will focus on making available quality 5G services, deepening its customer engagement, providing innovative, value added services and a better user experience for customers PCCW Media will drive for deeper user engagement and further penetration in the regional markets with high quality