Hutchison Telecommunications (Australia) Ltd
Hutchison Telecommunications (Australia) — FY2002 Earnings Presentation
23 slides from Hutchison Telecommunications (Australia)'s earnings presentation, Feb 18, 2003
Slide 1: Kevin Russell, Chief Executive Officer
Kevin Russell Chief Executive Officer 18 February 2003
Slide 2: Delivery of EBITDA positive and 3G leadership
- delivery of EBITDA positive in 2H • the right customers • the right customer acquisition cost • the right operating cost structure - leadership in 3G service provision • infrastructure build • product readiness and handset delivery • operational readiness • go to market 2
Slide 3: Full year financial results
$ million Full Year Full Year 31 Dec 2001 31 Dec 2002 Orange Mobile revenue 124.3 192.7 Total revenue from operating 418.6 227.3 activities EBITDA (*) Orange -112.9 -14.1 3 - -84.7 EBIT -127.6 -175.8 NPAT (**) -137.0 -197.3 (*) EBITDA includes all subscriber acquisition costs (including those subscr
Slide 4: EBITDA breakthrough after 2 years
1st half 2001 2nd half 2001 1st half 2002 2nd half 2002 $2.1m ($16.2m) ($35.4m) ($77.5m) EBITDA breakthrough after 2 years 4
Slide 5: Solid growth, slowing in 2nd half
263,501 240,110 • • 23,391 192,526 47,584 • 129,523 63,003 • 1st half 2001 2nd half 2001 1st half 2002 2nd half 2002 Solid growth, slowing in 2nd half 5
Slide 6: Focused reduction in acquisition costs
$445 $250 $195 $183 1st half 2001 2nd half 2001 1st half 2002 2nd half 2002 Focused reduction in acquisition costs SAC represents the average direct costs, including commissions and handset subsidies, if any, (before capitalisation) associated with acquiring each new subscriber for the period 6
Slide 7: Improving mix of mobility minutes
Local Zone 250 Mobility 225 166 143 206 172 99 68 44 } 18% 53 } 24% 67 } 40% 75 } 52% 1st half 2001 2nd half 2001 1st half 2002 2nd half 2002 Improving mix of mobility minutes Minutes usage per customer represents the monthly average number of outbound minutes of usage per Orange Mobile post paid su
Slide 8: ARPUs marginally lower. However....
$65 $62 $61 $60 1st half 2001 2nd half 2001 1st half 2002 2nd half 2002 ARPUs marginally lower. However…. ARPU represents the monthly average revenue per Orange Mobile post paid subscriber for the period. Prior period ARPUs restated to include all customer call credits 8
Slide 9: ....usage yield improved significantly
28 cents 24 cents 20 cents 18 cents 1st half 2001 2nd half 2001 1st half 2002 2nd half 2002 ….usage yield improved significantly 9
Slide 10: Ongoing tightening and restructuring
1,585 1,050 789 703 30 Jun 2001 31 Dec 2001 30 Jun 2002 31 Dec 2002 Ongoing tightening and restructuring 10
Slide 11: Leveraging existing capital investment
$254.2m $31.1m Full Year 2001 Full Year 2002 Leveraging existing capital investment 11
Slide 12: Positioned for cash flow and profitability
• Continue to differentiate Orange Mobile as a market leading value proposition • Continue to pursue profitable, rational growth • Ongoing cost discipline • Minimal CAPEX investment required Positioned for cash flow and profitability 12
Slide 13: Launch plan on track
• On track for launch end Q1 2003 • Australian launch to follow 3 service launch in UK/Italy • User trials start end February Launch plan on track 13
Slide 14: Network implementation well advanced
• 96% launch network built and integrated • Network optimisation underway • Switch centres in Sydney, Melbourne and Brisbane operational • Product data centre in Sydney installed and operational • Adelaide and Perth network construction underway Network implementation well advanced 14
Slide 15: High quality network
• Launch network capabilities • 70% licence area population covered by video service • national roaming coverage for voice and messaging • international voice roaming covering 90% of all Australian international roaming traffic • inter-carrier SMS between national and international roaming partners,
Slide 16: Handsets and services on track
• Handsets • a choice of handsets at launch • basic functionality includes: dual mode, point to point video, still and video camera, Mpeg4, audio and video downloads, 30 Mb user memory • Services • excellent voice quality • point-to-point video calling and video messaging working well • content base
Slide 17: Support systems on track
• Back office business support systems • Billing systems – end to end testing conducted successfully • Provisioning systems – business readiness testing underway • Customer Relation Management (CRM) systems – systems installed and initial call centre testing progressing well – integration of systems
Slide 18: Focus on market differentiation
• Strong global brand • Innovative service offerings • video calling (national and international) • video messaging • video entertainment, news and sport • Priced to stimulate usage Focus on market differentiation 18
Slide 19: Strong distribution model
• Distribution • 20 prime location company owned stores at launch • retail recruitment underway • dealership agreements to complement company stores – Letter of Intent in place with Strathfield Group • leverage existing commercial sales team and call centre capabilities Strong distribution model 19
Slide 20: CAPEX within budget
• 2002 capital expenditure of $379.4 million • $232.9 million for core network and network deployment • $92.6 million for business and operating support system • $53.9 million for products and enablers • 2003 CAPEX • payments for the completion of launch network • 2nd phase network build (Adelaide a
Slide 21: Ongoing support of Hutchison Whampoa
• Peak funding requirement of up to $3 billion • $600 million equity contributed by HTAL • $400 million equity contributed by TCNZ • up to $2 billion of peak funding required • Address further needs at the right time Ongoing support of Hutchison Whampoa 21
Slide 22: Clear window of opportunity
• Achieved twin goals • Orange EBITDA positive • 3 on track for launch • Well positioned for next wave of growth Clear window of opportunity 22
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