Taiwan Mobile Co., Ltd. · TWSE:3045
Taiwan Mobile — Q2 2007 Earnings Presentation
17 slides from Taiwan Mobile's earnings presentation, Jul 30, 2007
Slide 1: 2Q Results Summary
Taiwan Mobile Co., Ltd. 2Q Results Summary Harvey Chang - CEO July 30, 2007
Slide 2: Disclaimer
Disclaimer The information contained in this presentation, including all forward-looking information, is subject to change without notice, whether as a result of new information, future events or otherwise, and Taiwan Mobile Co., Ltd. (the “Company”) undertakes no obligation to update or revise the
Slide 3: Outline
Outline Post TFN acquisition – 2Q P&L summary – Mobile operational analysis – 2Q balance sheet and cash flow analysis – Benefits of TFN acquisition – Financial progress – Recap of 2007 full-year forecast & implications to 2008 shareholder return Event update Key message 3
Slide 4: 2Q Result Summary
2Q Result Summary 2Q07 2Q07 % of Forecast NT$bn Actual Forecast Achieved Revenue 16.69 16.40 102% Operating Income 5.62 4.95 114% EBITDA 7.82 7.24 108% EBITDA Margin 46.88% 44.17% Pre-Tax Income 5.59 4.71 119% (Less Tax) (1.39) (1.10) 126% (Less Minority Interest) (0.01) 0.00 NM Net Income 4.19 3.62
Slide 5: Divisional Result
Divisional Result Others and 2Q07 P&L inter-company Mobile Fixed-line Cable TV Total (NT$ m) transaction adjustments Total revenue 14,805 1,920 1,007 (1,042) 16,690 Operating cost 6,295 1,710 425 (1,056) 7,374 Gross profit 8,510 210 582 15 9,316 Marketing 2,307 153 49 (71) 2,438 G&A 1,071 125 118 (5
Slide 6: Wireless Peer Comparison
Wireless Peer Comparison Service rev. CHT FET TWM Total (NT$m) 2Q07 18,657 14,605 14,731 47,994 2Q06 18,250 15,307 14,640 48,197 2Q YoY 2% -5% 1% 0% 1Q YoY 1% -6% 0% -2% Market share by service revenue Post-paid vs. Pre-paid 100% +20% YoY 6% 10% -15% YoY CHT, CHT, 37.9% 38.9% FET, FET, 94% 31.8% 30.
Slide 7: VAS and 3G
VAS and 3G CHT FET TWM NT$m VAS VAS % VAS VAS % VAS VAS % 2Q07 1,215 6.5% 1,502 10.3% 1,112 7.6% 2Q06 996 5.5% 1,429 9.3% 924 6.3% 2Q07 YoY 22% 5% 20% 1Q07 YoY 15% 2% 18% 3G Main VAS drivers 2Q07 3G Service YoY 2Q07 Growth 968K 3G SIM number IVR 14% up 1.2x YoY 12% of 3G SIMs 3G handset adoption Mob
Slide 8: Balance Sheet Analysis
Balance Sheet Analysis NT$bn 2Q07 1Q07 2Q07 1Q07 Total Assets 119.85 134.97 Current Ratio 51% 170% Current Assets 26.5 52.06 Interest 31.0 63.9 - Cash & Cash Equivalents 14.65 24.14 Coverage (x) - Available-for-Sale Financial Assets 3.31 0.36 Net Debt 51% -6% (Cash) to Equity - Financial assets at f
Slide 9: Cash Flow Analysis
Cash Flow Analysis NT$bn 2Q07 1Q07 2Q06 Operating Cash Flow 11.78 13.51 (3.00) Investing Cash Flow1 (14.55) (14.29) (1.64) Financing Cash Flow (6.73) 12.51 (2.82) Cash CAPEX (1.37) (1.76) (1.41) Free Cash Flow 10.41 11.75 (4.41) 1. Inclusive of NT$3.92bn cash assumed from TFN 9
Slide 10: Benefits of TFN Acquisition
Benefits of TFN Acquisition • TWM acquired 84.6% of TFN at a cost NT$14bn lower than its book value • The amortization of NT$14bn negative goodwill over TFN’s remaining equipment useful life translates into NT$1bn p.a. of depreciation savings for TWM. (NT$ bn) Book value Acquisition cost Negative go
Slide 11: Financing Update
Financing Update TFN Early Repayment of FuYang Loan Refinancing TIT New Loan Syndicate Loan (NT$5.3bn due by 2012) (originally due on 9/13) (S-T loan NT$16.37bn) • 5/31 repaid NT$5bn Lowering rate To change into mid-term loan by yr-end • 6/30 repaid NT$6.5bn by 73-91bps Interest savings of Interest
Slide 12: 2007 Forecast
2007 Forecast NT$bn 3Q07 4Q07 20071 Revenue 17.23 17.00 65.40 - Telecom Service Revenue 15.98 15.80 61.98 Operating Income 5.20 4.97 20.77 EBITDA 7.55 7.37 29.68 EBITDA Margin 43.78% 43.37% 45.37% Pre-Tax Income 4.77 (9.48) 5.87 (Less Tax) (1.13) 2.42 (1.26) Net Income 3.60 (7.08) 4.52 EPS (NT$)2 0.
Slide 13: Shareholder Return
Shareholder Return • On top of positive EBIT contributions from fixed-line and cable TV business combined, depreciation savings from asset write-off and negative goodwill from TFN acquisition could provide upside potential to our future reported profits and thus cash dividend. • Additionally, we sti
Slide 14: Event Update
Event Update TFN Integration – A merger resolution with TIT by TFN’s AGM was passed on June 29 which is expected to be consummated by end of this year . – The acquisition cost for 84.6% of TFN is NT$14.2bn lower than its net worth as of June 30, 2007. The amortization of the negative goodwill over T
Slide 15: Event Update (Cont'd)
Event Update (Cont’d) WiMAX Licensing Taiwan Mobile was not awarded the WiMAX license as a result of our prudent approach toward the bidding given its immature technology and business model. This outcome will not have any impact on the current operations and future developments of our wireless broad
Slide 16: Key Message
Key Message TWM consummated the tender offer of TFN in 2Q, opening the door for providing a more diverse platform of services to our customers through quadruple play. Access to growth from various avenues other than mobile services to pre-empt future competition has become accessible. Despite the ti
Slide 17: Q&A
Q&A 17