Pccw Limited · HKEX:8
Pccw — H1 2015 Earnings Presentation
33 slides from Pccw's earnings presentation, Aug 6, 2015
Slide 1: 2015 Interim Results
Click to edit Master title style 2015 Interim Results For the six months ended June 30, 2015 August 6, 2015 - 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 2
Slide 4: Healthy Financial Performance
Healthy Financial Performance Consolidated Performance (US$ million) H1’14 H1’15 % change Revenue 1,880 2,318 + 23% EBITDA 561 729 + 30% The Board has declared an interim dividend of 7.96 HK cents per share 3
Slide 5: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 4
Slide 6: Growth Energized by Mobile and New Initiatives
Growth Energized by Mobile and New Initiatives (US$ million) Core Business* PCPD Revenue EBITDA 2,305 742 1,851 1,643 571 505 Core 32% EBITDA 31% 31% Margin 64 29 13 1 (10) (13) H1'13 H1'14 H1'15 H1'13 H1'14 H1'15 • Realization of benefits from the integration of CSL into HKT • Further growth driven
Slide 7: Profitability Driven by Core Businesses
Profitability Driven by Core Businesses Profit Attributable to Equity Holders (US$ million) Earnings Per Share : Core Business 14.39 HK cents PCPD Included one-off (H1’14: 14.57 HK cents) fair value gains on PCP Beijing by PCPD 137 The image cannot The image cannot be display ed. Your be display ed.
Slide 8: Stellar Performance Spearheaded by Mobile, International and Broadband Growth
Stellar Performance Spearheaded by Mobile, International and Broadband Growth • Adjusted Funds Flow up 23% yoy to US$250 million • Interim Distribution of 25.79 HK cents per SSU (US$ million) HKT Revenue HKT EBITDA 2,048 Mobile TSS 740 Others 1,605 775 1,419 567 373 295 229 492 124 496 International
Slide 9: Expanding into New Businesses on Back of Strong Pay TV Base
Expanding into New Businesses on Back of Strong Pay TV Base (US$ million) Media Revenue Media EBITDA 204 191 29 21 + 17% 23 23 167 18 + 10% 17 Core Media Business 29 26 + 11% 173 + 15% 183 + 6% 24 New 150 Businesses (1) (3) Core Media H1'13 H1'14 H1'15 H1'13 H1'14 H1'15 Business 19% 14% 15% EBITDA M
Slide 10: Propelling Growth on a Solid Base of Recurring Business
Propelling Growth on a Solid Base of Recurring Business (US$ million) Solutions Revenue Solutions EBITDA 187 192 179 32 30 28 65 72 77 + 9% 11 9 11 Recurring Project Based 114 115 115 21 19 19 H1'13 H1'14 H1'15 H1'13 H1'14 H1'15 EBITDA Margin 16% 16% 16% • Solidified base of recurring revenue throug
Slide 11: Opex Reflects Enlarged Mobile Business and Investment for Growth
Opex Reflects Enlarged Mobile Business and Investment for Growth (US$ million) Core Operating Expenses Core Opex to Revenue Ratio 537 20 23% 23% 22% TSS 417 57 Mobile 360 17 Media 18 47 212 Solutions 45 127 Others 85 202 214 247 H1'13 H1'14 H1'15 10 12 1 H1'13 H1'14 H1'15 • Increase in opex primaril
Slide 12: Financial Performance
Financial Performance (US$ million) H1’14 H1’15 Revenue 1,880 2,318 +23% Cost of sales (870) (1,029) Operating expenses (449) (560) Depreciation & Amortization (323) (376) Net other gains 88 8 Net finance costs (67) (93) Associates and JVs 1 2 Profit before income tax 260 270 +4% Income tax (50) (27
Slide 13: Invest for Superior Customer Experience
Invest for Superior Customer Experience (US$ million) Core Capex TSS Mobile Media 187 194 • Maintain 10% capex to Solutions 14 revenue ratio guidance 153 20 Others 6 7 11 • Continued investment to 8 40 ensure the best integrated 19 84 HKT network for customers in 168 terms of coverage, speed (87%) 1
Slide 14: Solid Financial Position
Solid Financial Position Gross Debt (1) (US$ million) 5,379 5,506 3,853 4,724 4,749 (HKT) (HKT) (HKT) (HKT) (HKT) 3,157 (HKT) (HKT) Dec 2013 Dec 2014 Jun 2015 Gross Debt / EBITDA(2) 3.74x 3.63x (3) 3.69x (1) Gross debt refers to the principal amount of short-term and long-term borrowings (2) Based o
Slide 15: Debt Maturity Profile
Debt Maturity Profile As of July 2015 (US$ million) Cash Undrawn HKT Bank Loans US$ million Balance * Facilities HKT Bonds HKT 370 770 PCCW Bank Loans PCCW 236 853 PCCW Bonds 283 PCPD 236 200 Total 842 1,823 1,500 420 New Issues in H1’15 500 500 500 100 457 300 213 334 70 300 2015 2016 2017 2018 201
Slide 16: Balanced Dividend Policy
Balanced Dividend Policy Final Dividend Interim Dividend (HK cents) • 2015 interim DPS of 7.96 HK cents 13.85 13.21 • 14% increase year-on-year 7.96 6.35 6.99 2013 2014 H1’15 DPS (HK cents) Interim 6.35 6.99 7.96 Final 13.85 13.21 Total 20.20 20.20 Payout Ratio 81% 78% (Core NPAT) 15
Slide 17: Media Business
Media Business 16 =“ PCCW’
Slide 18: Expanding into New Businesses on Back of Strong Pay TV Base
Expanding into New Businesses on Back of Strong Pay TV Base (US$ million) Media Revenue Media EBITDA 204 191 21 29 167 18 23 23 17 Core Media Business 183 29 173 26 New 150 24 Businesses (1) (3) H1'13 H1'14 H1'15 H1'13 H1'14 H1'15 Core Media Business 19% 14% 15% EBITDA Margin 17
Slide 19: Continued Market Leadership in Hong Kong Pay TV
Continued Market Leadership in Hong Kong Pay TV now TV continued to grow customer base whilst increasing ARPU through its new genre pack pricing, as well as a continued improvement of its suite of content and services Installed Base in Thousands 2007 2008 2009 2010 2011 2012 2013 2014 2015 18
Slide 20: New Commercial Model with Genre Packs
New Commercial Model with Genre Packs Introduction of simplified genre-based packs such as News, Movies, Entertainment, Knowledge, Kids and Sports Easier selling process whilst maintaining sufficient choice for customers Increase number of channels per customer to enhance viewing and stickines
Slide 21: OTT: Hong Kong
OTT: Hong Kong Expanding Reach from Households to Individuals Established OTT Platform – More than 4.5M downloads across its wide range of popular apps including news, sports and music services now TV’s companion OTT services, nowPlayer and nowPlayer Junior, has been very successful in providing
Slide 22: OTT: Regional Expansion
OTT: Regional Expansion Evolve into top digital entertainment service provider in Asia 9 Leverage successful development of its local OTT services 9 Capture opportunities created in the increasingly digital world as consumers’ media consumption behavior evolves. Over 45%* of multi-screen users’ scre
Slide 23: Free TV License Granted to HKTVE
Free TV License Granted to HKTVE In April, the Government formally granted a Domestic Free Television Programme Service License to the Group’s HK Television Entertainment Company Limited (“HKTVE 香港電視娛樂”) ¾ Only license formally granted to new applicants currently ¾ Granted for 12 year period until
Slide 24: IT Solutions Business
IT Solutions Business PCCW Solutions’ 23 =i PCCW’
Slide 25: Growth on a Solid Base of Recurring Business
Growth on a Solid Base of Recurring Business (US$ million) Solutions Revenue Solutions EBITDA 187 192 179 32 30 28 65 72 77 11 9 11 Recurring Project Based 114 115 115 21 19 19 H1'13 H1'14 H1'15 H1'13 H1'14 H1'15 EBITDA Margin 16% 16% 16% 24
Slide 26: IT Services Market Leader
IT Services Market Leader • Market leadership in Hong Kong • Continue to win significant and long-term contracts from public sector and large enterprises Notable Contract Wins in 1H 2015 • Supply of Midrange Computer Platform for a government department • Provision of SAP Implementation Services to
Slide 27: Revenue by Industry and Services
Revenue by Industry and Services 1H 2015 Revenue by Industry 1H 2015 Revenue by Services Retail and Others Manufacturing 4% 6% Business Process BFSI Outsourcing 8% Enterprise 6% Applications Telecom 25% Travel & Technical 31% Hospitality Services 8% 23% Hi-Tech and Media 11% Application Development
Slide 28: Growth Engines
Growth Engines Digital and Analytics Solutions Cloud Applications for Mid Market Enterprises Strong Partnerships with Technology and Solution Vendors Territory Expansion & Industry Solutions 27
Slide 29: Digital and Analytics Solutions
Digital and Analytics Solutions Customer Experience, Sales and Marketing focus ● Enhanced customer experience for New World First Ferry Services Ltd by launching the mobile application with all-in-one information on ferry services and outlying island tourist attractions ● Supporting Morning Star in
Slide 30: SaaS Cloud Applications
SaaS Cloud Applications Software as a Service (“SaaS”) for Enterprises ● Cost-effective, subscription-based pricing models ● Access to next generation technologies ● Provided cloud based HRM System to a Hong Kong based retail company Supporting multiple business processes ● Finance, Sales Management
Slide 31: Partnerships
Partnerships Expanding service portfolio and access to market through partnerships Enterprise Cloud • Enterprise Applications • Hybrid Cloud & Infrastructure Services Partner • Enterprise Applications and • Innovative Digital Cloud solutions Enterprise Management across HK & PRC Solutions from Mainf
Slide 32: Continued Expansion in China
Continued Expansion in China New Banking and Financial Services Applications ● Developed financing fund management, capital repository and wealth management product systems for 上海金融谷 (Shanghai Financial Valley) P2P lending business ● Developed Inventory Financing System for 長城汽車股份有限公司 (Great Wall Mo
Slide 33: Our Digital Journey
Our Digital Journey Consolidate leadership position in Hong Kong Solidify Hong Kong as a stronghold and and drive growth through new businesses expand into China Continue to invest in customer experience, Focus on high growth industries and services product differentiation and regional growth togeth