Hkbn Ltd. · HKEX:1310
Hkbn — Merger or Acquisition (November 2019)
22 slides from Hkbn's merger presentation, Nov 20, 2019
Slide 1: Investor Presentation: Acquisition of JOS business
HKBN Ltd. 2013 2016 Investor Presentation Acquisition of JOS business for HKBN transformation from a telecom carrier to a full ICT solutions provider * 2018 20 November 2019 Almira Chan, Co-Owner1 and Chief Strategy Officer Billy Yeung, Co-Owner and CEO – Enterprise Solutions 2019 Note: JOS acquisit
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: Speakers Bios
Speakers Bios Billy Yeung Almira Chan Co-Owner* & Chief Executive Officer – Co-Owner* & Chief Strategy Officer Enterprise Solutions ◼ Founded Y5Zone in 2004 and steered the company to become ◼ Former CFO of WTT, Co-Head of WTT/HKBN Merger one of the largest wholesale Wi-Fi suppliers in Hong Kong Int
Slide 4: Key Updates on NWT, ICG, WTT Integrations
Key Updates on NWT, ICG, WTT Integrations ◼ Took 9 months to complete NWT integration vs. 5 months only for WTT ◼ HKBN took initiatives to cultivate Talent-oriented Co-Ownership culture that aligns risks and rewards with shareholders’, by extending the invitation to a broader ~22% of total 6,000 Tal
Slide 5: Transaction Highlights
Transaction Highlights ◼ HKBN has agreed to acquire JOS1 for an all-cash consideration of US$50mm (HK$392mm) / from Jardine Group ◼ Transaction was based on EV / 18A EBITDA of 6.5x2, which is an attractive valuation compared to HKBN’s current trading EV / PF 18A EBITDA of 13.1x3 ◼ This transaction l
Slide 6: Organic Growth x M&A Growth
Organic Growth x M&A Growth Evolution of total revenues (HK$bn unless otherwise stated) Pro forma figures for illustrative purposes (assuming no growth to historical figures) $10.3bn JOS $9.0bn Pro-rata 12 months of JOS WTT Pro-rata 8 months of JOS HKBN 3 3 3.8bn $5.1bn 2.5bn Actual 4 months of WTT
Slide 7: 1-HKBN, the Completed ICT Puzzle
1-HKBN, the Completed ICT Puzzle Vertical expansion for service capability Horizontal expansion for network and customer scale 7
Slide 8: Full Suite of ICT Solutions for Enterprise Users
Full Suite of ICT Solutions for Enterprise Users Network System Data Mobile Cloud solutions integration center (MVNO) Creating full suite Full suite of ICT and of ICT and other other services services Creating one-stop shop for enterprise customers JOS system Strengthened integration System integrat
Slide 9: Fully Integrated ICT Powerhouse
Fully Integrated ICT Powerhouse (HK$bn, unless otherwise stated) Single entity (1-HKBN) Separate entities 1 1 Service revenue 10.0 4.12 2.13 3.8 33.7 29.64 4.1 Aug 2019 (H) Latest twelve months Jun 2018 (W) Aug 2019 Jun 2018 Jun 2019 Jun 2019 Jun 2019 Jun 2019 Jun 2019 (J) Fixed System System Servic
Slide 10: Warm Customer Base to Upsell ICT Services
Warm Customer Base to Upsell ICT Services Monthly billing relationship 878,000 Residential Households 103,000 Active Enterprise Companies 1 in 3 1 in 2 10
Slide 11: JOS CI is a Leading System Integrator
JOS CI is a Leading System Integrator Company overview Service offerings ◼ Owns 60+ years of history with proven operational track records Core ◼ Feasibility studies / Project preparation ◼ JOS CI is one of Asia's leading system integrators, solutions Infrastructure ◼ Integration of systems ◼ Mainte
Slide 12: JOS CI has a Strong Presence in Hong Kong
JOS CI has a Strong Presence in Hong Kong Company overview Select customers ◼ JOS Hong Kong is the core operating segment of JOS CI, accounting for 54% of JOS CI’s total revenue in LTM Jun 19 Key highlights c.3,000 1,000+ Total customers1 Total full time HK$2.1bn employees1 LTM Jun 19 Sales 5 800+ A
Slide 13: Margin Accretion in 1-HKBN
Margin Accretion in 1-HKBN (HK$mm) Company Stock code - 354-HK 771-HK 1460-HK - Market cap - 9,134 821 256 Private Revenue1 3,8202 11,805 2,344 5493 4,093 EBITDA1 942 1,193 181 783 1,080 % EBITDA margin 2.5% 10.1% 7.7% 14.2% 26.4% Source: Company fillings, Factset as of Nov 15, 2019 Note: JOS metric
Slide 14: JOS Productisation + HKBN Scale
JOS Productisation + HKBN Scale ◼ Savings in supplier cost due to larger order volumes from combined scale / enhanced bargaining power with regard to supplier dealings Cost synergy opportunities ◼ Savings in G&A cost through optimization of combined workforce (e.g. finance, talent management, sales,
Slide 15: JOS Integration Roadmap Post Closing
JOS Integration Roadmap Post Closing ◼ HKBN looks forward to welcoming following persons as Co-Owners and pain/GAIN participants, all of whom have committed to investing more than 12 months salary as “skin in the game”: ◼ Mark Lunt (Group MD), Eric Or (MD, JOS Greater China) and Stanley Chiu (JOS Gr
Slide 16: On Our Continued Path to Make Our Hong Kong a Better Place to Live
On Our Continued Path to “Make Our Hong Kong a Better Place to Live” HKBN’s ethos 1-HKBN 16
Slide 17: Merger Integration Team v3 Overview
Merger Integration Team v3 Overview v1 for NWT, v2 for WTT, v3 for JOS 17
Slide 18: Merger Integration Team v3 Participants
Merger Integration Team v3 Participants Items HKBN JOS MIT HQ Clio/ Almira/ Doris/ Kenji/ Windy/ Connie Mark/ Eric/ Stanley/ Janet 1. Sales Process Mikron/ Adrian/ Karina/ Henry Eric/ Janet/ Ariel/ Alfred/ Ivan • VIPs, Retail/JM, Health Care & Public 2. Solutions • Managed Services Doris/ Bruce Soen
Slide 19: Day 1 – Day 100 Plan – Top 5
Day 1 – Day 100 Plan – Top 5 Align both Company Talent Benefits 01 Define Roles and Responsibilities 02 Align Branding and Related Marketing Material 03 T100 HKBN/JOS Customers Visit 04 Low Hanging Fruits (Rev. and Costs) 05 19 20
Slide 20: Sales Process
Sales Process FTNS Overall Account Project Servicing Manager Manager MVNO CLOUD CRM Security Services NOC Outsourcing Customer Account Manager WiFi Solutions IoT / Managed Services Big Data / Networking HK China Malaysia Singapore Macau 20
Slide 21: Track Record of Best of Breed Integration
Track Record of “Best of Breed” Integration Table: Profile of HKBN’s top 64 executives (top 1.4% of the Company) i.e. Associate Directors and above Company of Origin Total % of Team HKBN More than 5 years with HKBN 29 45% 5 years or less with HKBN 7 11% WTT 16 25% NWT 5 8% Y5Zone 3 5% ICG 4 6% Total
Slide 22: The End
The End 2013 2016 * 2018 2019 * JOS acquisition is subject to shareholders’ approval