Hkbn Ltd. · HKEX:1310
Hkbn — H1 FY2023 Earnings Presentation
37 slides from Hkbn's earnings presentation, Apr 26, 2023
Slide 1: FY23 Interim Results Announcement
FY23 Interim Results Announcement Presented by William Yeung, Co-Owner & Executive Vice-chairman NiQ Lai, Co-Owner & Group Chief Executive Officer 26 April 2023 © HKBN Ltd. 2023. All Rights Reserved.
Slide 2: Disclaimer
Disclaimer These materials have been prepared by HKBN Ltd. (the “Company”) solely for use at this presentation and have not been independently verified. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or
Slide 3: NiQ Lai
NiQ Lai Co-Owner and Group Chief Executive Officer © HKBN Ltd. 2023. All Rights Reserved. 3
Slide 4: Clear 2nd Largest Carrier: Unleashing Growth
Clear 2nd Largest Carrier: Unleashing Growth • Enterprise - ICT Powerhouse with Seamless Telecom and System Integrator Capabilities • Residential - World’s 1st Money-back Dual Guarantee Speed PLUS Latency+ The Clear #2 Carrier with Annualised Revenue Scale of HK$13.4bn* * Annualised revenue of $13.4
Slide 5: Solid Trends
Solid Trends Revenue EBITDA AFF $6,707m $1,196m $368m Adjusted YoY +2%* YoY -6% YoY -49% DPS: 20 HK Cents Financials in HK$mn, unless otherwise stated * Adjusted growth is excluding the four months impact in 1HFY22 of the Disposal Group (On 3 January 2022, we completed the disposal of 60% of the iss
Slide 6: Amazing Transformation from Residential to Enterprise
Amazing Transformation from Residential to Enterprise Listed in HKEX mainboard nwt 2015 2016 2019 1H 2023 Annualised Residential Solutions >6x Revenue since 2015 Enterprise 18% Solutions 25% $13.4bn $2.3bn Enterprise 82% 75% Residential Solutions Solutions Financials in HK$mn, unless otherwise state
Slide 7: Connectivity Beyond
Connectivity Beyond • Commercialised TRUE TRI-CARRIER NETWORK advantage for Enterprise • World’s 1st MONEY-BACK Dual Guarantee = Speed + Latency# for Residential # HKBN is the first telecommunications provider in the world to offer compensation in Hong Kong dollars for the “Fibre Broadband Dual Guar
Slide 8: Clear J-Curve Turnaround
Clear J-Curve Turnaround 39% HoH Turnaround HoH Product change 6,595* 6,707 • Strong post COVID-19 activity rebound 4,823 3,162 Residential Service 3,154 113.9% • Residential service stable 1,478 1,224 1,209 1,197 -1.0% Enterprise Service • Enterprise strong HoH rebound 2,217 2,137 2,348 9.9% FY22 1
Slide 9: Enterprise Solutions
ENTERPRISE SOLUTIONS © HKBN Ltd. 2023. All Rights Reserved. 9
Slide 10: Commercialising Unique Tri-Carrier Network Power
Commercialising Unique Tri-Carrier Network Power The One-and-Only Truly Redundant Network Solution in Hong Kong ✓ True Network Resilience ✓ Multi-angle Cyber Defence ✓ Intelligent Network Management © HKBN Ltd. 2023. All Rights Reserved. 10
Slide 11: Unleash the Potential of HK$30bn Investment
Unleash the Potential of HK$30bn Investment SI-only: similar to General Practitioner medical clinic HK$30 bn Lasik Machine Low Barrier of Entry High Barrier of Entry © HKBN Ltd. 2023. All Rights Reserved. 11
Slide 12: Typical Players Traditional Segments Focus
Typical Players Traditional Segments Focus General Attributes System Integrator (SI) Down Relative Talent Barrier of Profitability Complexity Scalability Entry High: Low: Very Low: Low: ~25% Applications High complexity SI-only industry Gross Profit require high means highly Talent- tends to be due
Slide 13: Typical HKBN Large ICT Enterprise Customer
Typical HKBN Large ICT Enterprise Customer Financial Services Institution with 20 branches in HK, 1000 laptops Service Charge basis HK$ mn per Year Network Revamp - Upgrade of servers and Project based hardware and implementation mark-up PLUS ongoing HK$10-20 mn storage, on premise to cloud migratio
Slide 14: Growing Orders for Enterprise Business
Growing Orders for Enterprise Business 1,341 +33% 1,200 1,008 FY22 Q2 FY22 Q4 FY23 Q2 Financials in HK$mn, unless otherwise stated . © HKBN Ltd. 2023. All Rights Reserved. 14
Slide 15: Three-Pronged Integrated Approach to Enterprise Business Growth
Three-Pronged Integrated Approach to © HKBN Ltd. 2023. All Rights Reserved. Enterprise Business Growth MAINLAND CORE TELECOM ENTERPRISE CHINA / GBA Next Generation SI Services to End to End ICT FTNS Services Grow Wallet Solutions Share ✓ Dual Link ✓ Managed Services ✓ ICT Solutions to ✓ Redundant fo
Slide 16: Our Greater Bay Area (GBA) Growth Plan
Our Greater Bay Area (GBA) Growth Plan ⚫ Expand HKBN footprint and our conductivity via local partners and SI business from HK and across the wider Greater Bay Area (GBA) ⚫ Support HK-based retail chains to grow from HK and across the wider GBA through one-stop retail solutions ⚫ Support Mainland Ch
Slide 17: Team – Best of Breed
Mikron Ng Chief Commercial Officer Dicky Leung Business Market and Enterprise Public Sector SI Business China Business (JOS CN + MO) King Lo The New Leadership Enterprise Strategic Accounts Ben Yeung Team – Best of Breed Chief Commercial Officer Carrier Service Business Wallace Wong Major Accounts (
Slide 18: New ES Management Additions in Past 10 Months
New ES Management Additions in Past 10 Months HKBN Role Previous Experience Highlights Chief Commercial Officer - Large Enterprise Anne Yeung - HGC/Macroview, Head of SI business Assistant Vice President - Sales Engineering Alvin Chun - Imperva, HGC/Macroview Managing Director - Enterprise Public Se
Slide 19: FY23 1H Table-turning Financial and Business Performance
FY23 1H Table-turning Financial and Business Performance Core Telecom SI Services Mainland China Revenue Revenue / GBA Revenue $1,831m $456m $544m 6% 7% 2% Running 6-mth No. of $20M+ Sr. Executives Mainland China Pipeline Projects Joined in 1H Team $6,000m+ 10+ 15 1,000+ Talents 10+ offices 19 © HKB
Slide 20: William Yeung
William Yeung Co-Owner and Executive Vice-chairman © HKBN Ltd. 2023. All Rights Reserved. 20
Slide 21: Residential Solutions
RESIDENTIAL SOLUTIONS © HKBN Ltd. 2023. All Rights Reserved. 21
Slide 22: Residential Key Business Highlights
Residential Key Business Highlights Rapid Growth in Broadband Subscriptions Continuous Upgrade to Higher Bandwidth (>= 1000M) 915K 897K 549K 501K FY22 1HFY23 FY22 1HFY23 +0K +0K +3K +8K +18K +12K Stable Growth in Entertainment Subscriptions 111K 130K FY22 1HFY23 © HKBN Ltd. 2023. All Rights Reserved
Slide 23: Connectivity Beyond: World's First Dual Guarantee
Connectivity Beyond World’s First: Dual Guarantee ✓Speed + Latency Upgraded 2Gbps Always ready for gaming, multiple OTT entertainment with high-quality Wi-Fi 6 and home cybersecurity defence # HKBN is the first telecommunications provider in the world to offer compensation in Hong Kong dollars for t
Slide 24: © HKBN Ltd. 2023. All Rights Reserved.
© HKBN Ltd. 2023. All Rights Reserved. 24
Slide 25: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE © HKBN Ltd. 2023. All Rights Reserved. 25
Slide 26: ESG Performance: No. 1 in HK + Top 9% among Global Telco
ESG Performance: No. 1 in HK + Top 9% among Global Telco 1 2 Top Performer in local industry Highest AAA Grade Vs HKT: AA No. 1 in the industry (3rd Consecutive Year) Vs PCCW: AA- (HKT is not rated) 1. Disclaimer: https://reg.hkbn.net/WwwCMS/upload/pdf/en/2022_disclaimer.pdf © HKBN Ltd. 2023. All R
Slide 27: ESG-linked Executive Pain/Gain (Proposed)
ESG-linked Executive pain/GAIN (Proposed) ESG KPI FY24 ELECTRICITY 1 REDUCTION 1,2 Salaries of William Yeung, NiQ Lai, -14% =4,470 HK households' 3 annual consumption2 Danny Li (Co-Owner & Group CTO), Bonnie Chan (Co-Owner & Head of (FY22 as baseline) ESG) and Stephen Lau (Deputy CTO) linked to ESG
Slide 28: Looking Forward: Hong Kong's Best Network
Looking Forward Hong Kong’s Best Network © HKBN Ltd. 2023. All Rights Reserved. 28
Slide 29: Q&A
Q&A © HKBN Ltd. 2023. All Rights Reserved. 29
Slide 30: FY23 Interim Results Announcement
FY23 Interim Results Announcement Presented by William Yeung, Co-Owner & Executive Vice-chairman NiQ Lai, Co-Owner & Group Chief Executive Officer 26 April 2023 © HKBN Ltd. 2023. All Rights Reserved.
Slide 31: The End
FY23 Interim Results Announcement The End © HKBN Ltd. 2023. All Rights Reserved.
Slide 32: Appendix
Appendix © HKBN Ltd. 2023. All Rights Reserved. 32
Slide 33: Operational Highlights
Operational Highlights YoY HoH Enterprise Solutions 1H2022 2H2022 1H2023 Changes Changes Commercial building coverage 7,932 8,006 8,033 1% 0% Subscriptions ('000) - Broadband 120 119 119 -1% 0% - Voice 421 413 401 -5% -3% Enterprise customers ('000) 106 105 103 -3% -2% YoY HoH Residential Solutions
Slide 34: Consolidated Income Statement
Consolidated Income Statement YoY HoH (HK$ million, unless otherwise stated) 1H2022 2H2022 1H2023 Changes Changes Enterprise Solutions 2,291 2,137 2,348 2% 10% Enterprise Solutions related Product 1,295 1,056 1,040 -20% -2% Residential Solutions 1,224 1,209 1,197 -2% -1% Other product 1,993 421 2,12
Slide 35: Consolidated Balance Sheet (Summary)
Consolidated Balance Sheet (Summary) (HK$ million, unless otherwise stated) At 28 February 2022 At 31 August 2022 At 28 February 2023 Non-current assets 17,687 17,384 16,987 Current assets 3,321 3,043 2,951 Current liabilities 3,517 3,131 3,236 Total assets less current liabilities 17,490 17,296 16,
Slide 36: Reconciliation of EBITDA and Adjusted Free Cash Flow
Reconciliation of EBITDA and Adjusted Free Cash Flow YoY HoH (HK$ million, unless otherwise stated) 1H2022 2H2022 1H2023 Changes Changes Profit for the year 304 249 23 -92% -91% Finance costs 106 133 324 205% 144% Interest income -2 -1 -5 206% 256% Income tax charge/ (credit) 80 78 -12 -115% -115% D
Slide 37: Manageable Debt Profile
Manageable Debt Profile Undrawn Revolving Net Leverage Ratio^ Avg. Finance Cost Facilities 4.8x 3.9% $1.7bn (FY22: 4.6x) (FY22: 2.7%) (FY22: $1.7bn) Average remaining life is 2.8 years as of Feb 23. ^ The Group has entered into facility agreements with various international banks for a term loan of