30 slides from China Telecom Corp. Ltd. Class A's earnings presentation, Mar 20, 2013
Slide 1: 2012 Annual Results
2012 Annual Results China Telecom Corporation Limited 20 March 2013 | www.chinatelecom-h.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this document may be viewed as “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 (as amended) and Section 21E of the U.S. Securities Exchange Act of 1934 (as amended). Such forward-looking stat
Slide 3: Presentation by
Presentation by Mr. Wang Xiaochu Chairman & CEO Mr. Yang Jie President & COO Madam Wu Andi Executive Vice President & CFO 3
Slide 4: Overview, Business Review, Financial Performance
1. Overview 2. Business Review 3. Financial Performance 4
Slide 5: Highlights
Highlights Robust business development 3G traction fostered mobile optimized revenue structure & scale development & industry- drove double-digit revenue leading mobile revenue growth surpassing industry growth with enhanced average customer value Accelerated fibre deployment to Timely compl
Slide 6: Solid Revenue Growth to Foster Long-term Value Enhancement
Solid Revenue Growth to Foster Long-term Value Enhancement 2011 2012 Change (restated) Operating Revenue (RMB Mil) 245,068 283,073 15.5% Operating Revenue 231,133 258,316 11.8% (Excl. Mobile Terminal Sales) (RMB Mil) Pre-leasing fee EBITDA (RMB Mil) 94,371 96,387 2.1% EBITDA Margin 40.8% 37.3% -3.5p
Slide 7: Deepened Strategic Transformation to Accelerate Growth Momentum
Deepened Strategic Transformation to Accelerate Growth Momentum Double-digit revenue growth surpassing Robust full-services development with industry average increasing mix from growth businesses 11.4% 18.0% 24.2% 13.2% 11.8% 15.8% 10.0% Growth 17.4% 9.0% businesses accounted 47.0% for 84.7% 6.4% 45
Slide 8: Industry-leading Mobile Revenue Growth
Industry-leading Mobile Revenue Growth Mobile Subs Fully leveraged superior strengths in Mil 53.9 52.4 3G network & services to rapidly 160.62 expand mobile subscriber scale & increase customer value 126.47 69.05 36.29 Fast mobile scale expansion underpinned by peer- best 3G network coverage leadi
Slide 9: Timely Completed Mobile Network Acquisition to Drive Future Profitability
Timely Completed Mobile Network Acquisition to Drive Future Profitability Post acquisition: Leasing fee Expected future leasing fee savings Less: network maintenance & other expenses > incremental mobile network depreciation & Less: depreciation & amortization expenses (Incremental finance charges a
Slide 10: Highly Efficient Investment Boosts Network Strength
Highly Efficient Investment Boosts Network Strength Effectively support rapid business expansion CAPEX & sharpen core competence RMB Mil 75,000 Implement “Broadband China, Fibre Cities” Project 72,525 2012 broadband net add: 13.31 mil 18,794* 20,000 Broadband subs of ≥4Mbps: 73% ( 23pp yoy) 2
Slide 11: Dividend
Dividend Dividend Per Share The Board of Directors recommends to HKD the shareholders a final dividend of HKD0.085 per share for 2012 0.085 0.085 With due regards to the payment for the mobile network acquisition & shareholders’ cash return, a stable dividend is recommended for 2012 The Company
Slide 12: Riding on the Momentum to Drive Scale & Value
Riding on the Momentum to Drive Scale & Value Fabulous mobile Internet Fast proliferating smartphones applications adoption Mobile Internet Leading edges on fibre Cloud Services Corporate broadband, 3G Value networks & services Internet of Things Leader of Intelligent E-commerce Pipeline Clear & e
Slide 13: Business Review
1. Overview 2. Business Review 3. Financial Performance 13
Slide 14: Revenue Breakdown
Revenue Breakdown 2011 2012 Change RMB Mil (restated) Mobile 82,703 117,826 42.5% Service Revenue 68,248 92,803 36.0% Voice 38,628 49,166 27.3% Data 29,620 43,637 47.3% Others 14,455 25,023 73.1% Wireline 162,365 165,247 1.8% Voice 49,764 43,335 -12.9% Data 105,672 114,011 7.9% Internet Access 61,69
Slide 15: 3G Traction Driving Strong Mobile Momentum
3G Traction Driving Strong Mobile Momentum 3G Subs 69.05 Leverage superior 3G network & service Mil strengths to rapidly expand mobile scale & enhance customer value, grasping the 3G 36.29 migration opportunity Mobile ARPU rebound Fast expansion of 3G subs with increasing mix of 3G subs fostered
Slide 16: Rapidly Growing Mobile Data Revenue
Rapidly Growing Mobile Data Revenue Mobile Data Revenue Leverage data traffic operation to promote RMB Mil 43,637 rapid mobile data growth (a key revenue growth driver) 29,620 47.0% 43.4% Key initiatives Strengthened development of both self-operated & co- operated applications 2011 2012 Reinf
Slide 17: Resilient Wireline Business
Resilient Wireline Business Wireline Revenue RMB Mil Persistent strategic transformation led to increasing contribution from Wireline Data & others, effectively 165,939 162,365 165,247 driving wireline revenue growth Wireline Data & others as % of wireline revenue: 73.8% (11.5pp vs 2010) 103,44
Slide 18: Fast Growing Wireline Broadband Service Amid Mounting Competition
Fast Growing Wireline Broadband Service Amid Mounting Competition Wireline Broadband Revenue RMB Mil Leverage network strengths & unmatched 66,738 service quality to enhance customer growth 60,801 & user experience 72.2 66.6 Benefiting from rapid subscriber growth, broadband revenue maintained str
Slide 19: Robust Wireline VAS & Integrated Information Services
Robust Wireline VAS & Integrated Information Services Revenue Comprehensively proliferated RMB Mil VAS & Integrated Information Services 29,788 30,681 to nurture new growth engines & pull core businesses growth Wireline VAS & Integrated Information Services Revenue: RMB30.7 bil (3.0% yoy) IDC R
Slide 20: To Promote Profitable Scale Development
To Promote Profitable Scale Development To accelerate scale development with enhanced quality & return through dual-leadership in innovation & services Accelerating Development Enhancing Profitability Fully leverage superior strengths & differentiated Strengthen efficiently-centralized business
Slide 21: Financial Performance
1. Overview 2. Business Review 3. Financial Performance 21
Slide 22: Key Financial Information
Key Financial Information 2011 2012 Change RMB Mil (restated) Operating Revenue 245,068 283,073 15.5% Operating Expenses 220,941 261,887 18.5% Depreciation & Amortization 51,233 49,655 -3.1% Network Operations & Support 52,925 66,003 24.7% Incl.: Mobile Network Leasing 19,011 25,546 34.4% Personnel
Slide 23: Appropriate Increase in Cost Initiatives to Drive Scale Development
Appropriate Increase in Cost Initiatives to Drive Scale Development Operating Expenses as % of Grasping the scale expansion opportunity Operating Revenue with appropriate increase in cost initiatives 92.5% to promote sustainable growth 90.2% Depreciation & 17.5% Depreciation & Amortization: 3.4pp
Slide 24: Resources Allocation Tilting toward High-growth, High-value Businesses & Areas
Resources Allocation Tilting toward High-growth, High-value Businesses & Areas CAPEX Structure Reinforced network leadership & supported rapid business growth Strictly controlled investment in traditional wireline business & stepped up investment in growth businesses to enhance network servicing c
Slide 25: Solid Financial Strength to Support Sustainable Growth
Solid Financial Strength to Support Sustainable Growth Solid financial strength maintained post mobile network acquisition Total Debt / Total Capitalization Net Debt / EBITDA 27.1% 0.70 16.6% 0.24 2011 2012 2011 2012 Note: EBITDA was calculated before Mobile Network Leasing Fees 25
Slide 26: Strengthen Precision Management to Bolster Profitable Scale Development
Strengthen Precision Management to Bolster Profitable Scale Development Maximize customers’ & shareholders’ values Profitable scale development Optimizing costs & investment structure Enhancing resources utilization Committing to return-focused principle Allocating resources tilting toward h
Slide 27: Thank You!
Thank You! Institutional Investor 2012 “Grand Prix for Best “Best Managed “Best Managed “Asia’s Most Overall Investor Relations Company Company in Asia Honored in Greater China 2012” in Asia 2012” 2013” Companies 2012” For further information & enquiries, please contact our Investor Relations Depart
Slide 28: Appendix 1: Statement of Comprehensive Income
Extracted from audited consolidated statement of Appendix 1 comprehensive income for the year ended 31 December 2012 2011 2012 RMB Mil (restated) Operating Revenue 245,068 283,073 Operating Expenses (220,941) (261,887) Net Finance Costs (2,254) (1,564) Investment Income, Share of Profit from Associa
Slide 29: Appendix 2: Statement of Financial Position
Extracted from audited consolidated statement of Appendix 2 financial position as at 31 December 2012 2011.12.31 2012.12.31 RMB Mil (restated) Current Assets 59,581 65,210 Non-current Assets 359,570 479,862 Total Assets 419,151 545,072 Current Liabilities 127,262 193,461 Non-current Liabilities 34,9
Slide 30: Appendix 3: Selected Operating Metrics for 2012
Appendix 3 Selected Operating Metrics for 2012 Subscriber (Mil) 2011.12 2012.12 Mobile Subs 126.47 160.62 Incl: 3G Subs 36.29 69.05 Wireline Broadband Subs 76.81 90.12 Access Lines in Services 169.59 163.00 Incl: Household 108.01 103.49 Government & Enterprise 36.84 38.74 Public Telephone 13.86 13.2