Hkbn Ltd. · HKEX:1310
Hkbn — H1 FY2020 Earnings Presentation
28 slides from Hkbn's earnings presentation, Apr 22, 2020
Slide 1: Stronger as ONE
Stronger as ONE FY20 Interim Results Presentation for 6 months ended 29 February 2020 Presentation by: William Yeung, Co-Owner & Executive Vice-chairman NiQ Lai, Co-Owner & Group Chief Executive Officer Samuel Hui, Co-Owner & Chief Transformation Officer 22 April 2020
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: Business & Financial Review
Business & Financial Review NiQ Lai Co-Owner & Group Chief Executive Officer 3
Slide 4: Massive Transformation Since IPO
Massive Transformation Since IPO 1H FY2016 – For reference only (First Interim as listed company) 1H FY2020 +YoY% Service Revenue: $1,226mn Service Revenue: $3,527mn +76% EBITDA (New*): $1,283mn +77% EBITDA: $511mn EBITDA (Old*): $1,177mn +63% AFF: $185mn AFF^: $440mn +47% DPS: 20 HK Cents DPS^: 37
Slide 5: GROWTH All Round
GROWTH All Round Enterprise Business^: Residential Business: 104k $2,775 $2,276mn 882k $190 $1,252mn Enterprise Enterprise Service Revenue Broadband Residential Service Revenue Customers ARPU subscriptions ARPU# +79% +84% +190% +2% +3% +2% ^ WTT and JOS acquisitions completed in Apr-19 and Dec-19, r
Slide 6: Sustaining Growth in EBITDA & AFF
Sustaining Growth in EBITDA & AFF Financials in HK$mn, unless otherwise stated Revenue EBITDA Adjusted Free Cash Flow +45% +30% +29% 1,709 750 5,108 >100% +77% 262 62 4,457 WTT 1,283* 708 262 578 +47% 3,949 1,180 57 836 440 509 48 1,104 2,219 723 299 1,447 688 142 4,400 578 3,949 1,180 2,219 2,517 7
Slide 7: Manageable Debt Profile
Manageable Debt Profile Debt Maturity (HK$mn) Senior Note • Refinanced 20% of senior note at in Sep-19 $4,208mn & Jan-20 New loans to fund WTT Senior Note $3,900mn redemption • The Group had undrawn revolving facility of $779mn $580mn $1,834m as of Feb-20 $540mn $545mn • The effective interest rate
Slide 8: Silo-less 1-HKBN – Co-Ownership by Positive Election
Silo-less 1-HKBN – Co-Ownership by Positive Election Total Invited for Co-Ownership Co-Ownership Seniority Co-Ownership Take-up Take-up Rate CXO Management Committee, Associate 73 73 100% Director and above Managers 405 300 74% Supervisors 1,124 562 50% Total eligible for Co-Ownership 1,602 935 58%
Slide 9: Digital Transformation
Digital Transformation Samuel Hui Co-Owner & Chief Transformation Officer 9
Slide 10: TaaS: A new way of Partnership
TaaS: A new way of Partnership Co-Growing & Co-Transforming with our Customers as 1-HKBN 1-HKBN We Eat what Skin-In- we Cook YOUR-Game Tri-Network Cloud Application Data Center / Managed Store Support Mobile Big Data & Digital & IOT Solutions Services Services Infrastructure Services Services (MVNO)
Slide 11: My HKBN: A World-Class Engagement Platform
My HKBN: A World-Class Engagement Platform Delight our customers with personalized engagements eCommerce and Promotions Account Servicing Customer Rewards >700k Accumulated users (out of 1mn households) >30k redemptions per bi-weekly engagement campaign ~2x Paying visitors coming from myHKBN since M
Slide 12: The Single Largest Customer Engagement Campaign in HKBN History
The Single Largest Customer Engagement Campaign in HKBN History #ToughTimesTogether: A Showcase of Agile Decision Making & Execution Remedy for our Customers* $100mn >900k households and companies Campaign Preparation 1 week from concept to launch Downtime 0 during campaign period Platform Visitors
Slide 13: Business Outlook
Business Outlook William Yeung Co-Owner & Executive Vice-chairman 13
Slide 14: Transformation into Telecom & Technology Powerhouse
Transformation into Telecom & Technology Powerhouse Transformation Co-Ownership III+ KPI period for cumulative CO4 and more .. HK$2.53 to HK$3.03 AFF^ FY16 FY17 FY18 FY19 FY20 FY21 FY22 Actual Actual Actual Actual Harvest JOS Integration Towards integrated Telecom Integrate Integrate Enterprise NWT
Slide 15: Big Enterprise Solutions Wins
Big Enterprise Solutions Wins >HK$1 billion Total Contract Value* HK-based mobile carrier A World-leading quick service restaurant • Next-Gen all-fibre backhaul for 5G deployment • Connectivity services and integrated solutions • Demonstrates our tri-carrier network diversity for stores • WIN-WIN fo
Slide 16: JOS
JOS Transformation into a Full-Fledged Telecom & Technology Powerhouse Revenue • Regional up-selling of T&T solutions to combined customer Upside bases Skin in the • Co-Ownership and pain/GAIN well received with high take up Game rate in senior management • In good progress to unlock cost synergies
Slide 17: #ToughTimesTogether
#ToughTimesTogether We launched a series of measures to support local families, SMEs and communities 1st Wave 1-month service fee waiver 2nd Wave Free broadband for 10,000 disadvantaged families 3rd Wave Career kickstarter programme for 100 graduates More to come! 17
Slide 18: Barter & Bundle Offer for Enterprise Customers
Barter & Bundle Offer for Enterprise Customers Flexible Arrangement to Help Slash Costs and Attract Patronage ✓ Accept merchants to offset part of their payments with their own products or services ✓ No merchant quota or pre-set restriction WIN-WIN Co-creation of Value with Business Partners 18
Slide 19: In Tough Times, We Grow Stronger
In Tough Times, We Grow Stronger HKBN’s ethos 1-HKBN 19
Slide 20: Appendix
Appendix 20
Slide 21: Operational Highlights – Enterprise Solutions
Operational Highlights – Enterprise Solutions YoY 1H2019 1H2020 Changes Commercial building coverage (‘000) 2.4 7.3 >100% Subscriptions ('000) - Broadband 58 116 >100% - Voice 144 453 >100% Market share - Broadband 19.4% 38.1% +18.7pp - Voice 7.9% 25.6% +17.7pp Enterprise customers ('000) 58 104 +79
Slide 22: Operational Highlights – Residential Solutions
Operational Highlights – Residential Solutions YoY 1H2019 1H2020 Changes Residential homes passed ('000) 2,321 2,377 +2% Subscriptions ('000) - Broadband 864 882 +2% - Voice 495 501 +1% Market share - Broadband 35.8% 35.5% -0.3pp - Voice 21.6% 22.2% +0.6pp Residential customers ('000) 1,015 1,017 +0
Slide 23: Consolidated Income Statement
Consolidated Income Statement (HK$ million, unless otherwise stated) 1H2019 1H2020 YoY Changes Enterprise Revenue 786 2,276 >100% Residential Revenue 1,223 1,252 +2% Product Revenue 210 930 >100% Turnover 2,219 4,457 >100% Other net income 11 19 +73% Network costs and cost of services (634) (1,409)
Slide 24: Consolidated Balance Sheet (Summary)
Consolidated Balance Sheet (Summary) At 28 February At 31 August At 29 February (HK$ million, unless otherwise stated) 2019 2019 2020 Non-current assets 6,427 18,635 19,480 Current assets 1,065 1,747 3,042 Current liabilities 966 1,745 3,737 Total assets less current liabilities 6,526 18,637 18,784
Slide 25: Reconciliation of EBITDA and Adjusted Free Cash Flow
Reconciliation of EBITDA and Adjusted Free Cash Flow (HK$ million, unless otherwise stated) 1H2019 1H2020 YoY Changes Profit/ (loss) for the year 199 132 -34% Finance costs 87 286 >100% Interest income (2) (2) +2% Income tax charge/ (credit) 50 (52) -100% Depreciation 214 466 >100% Amortisation of i
Slide 26: Impact of New Accounting Standard
Impact of New Accounting Standard The impact of the initial application of HKFRS 16 is summarized as follows: Presented by Presented by FY20 1H (HK$mn) old accounting new accounting Impact Remarks standard standard HKAS 17 HKFRS 16 Revenue 4,457 4,457 No impact Under HKFRS16, operating leases are ca
Slide 27: HKBN & WTT & JOS Key Financial Indicators
HKBN & WTT & JOS Key Financial Indicators YoY YoY (HK$ million, unless 1H2019 1H2020 1H2020 1H2020 1H2020 Changes Changes otherwise stated) (Reported)* (HKBN) (WTT)* (JOS)* (Reported)* (HKBN) (Reported) Enterprise Revenue 786 982 1,052 242 2,276 +25% >100% Residential Revenue 1,223 1,241 10 - 1,252
Slide 28: The End
> ait Ba or be BROADBAND NETWORK The End “oA ntatlonventelin Make our Home a eter Place to Live