i-CABLE Communications Limited · HKEX:1097
i-CABLE Communications — Corporate Update (April 2016)
30 slides from i-CABLE Communications's corporate update, April 2016
Slide 1: Management Update
Management Update April 2016 1
Slide 2: i-CABLE At A Glance
i-CABLE At A Glance Integrated Triple-Play FY2015 Revenue = HK$1,510m Communications Provider Others² 32 (2%) • Integrated services provider of television, broadband and telephony services to ~1m Internet & Multimedia¹ 348 customers (23%) • Near universal Hybrid Fibre Coaxial (“HFC”) network in Hong
Slide 3: Track Record of Innovative Multimedia Offerings
Track Record of Innovative Multimedia Offerings Jan-2015 Rollout of GPON broadband Jan-2010 services Application Apr-2002 Jul-2005 for FTA license Aug-2015 Launch of fully Launch of Renewed UEFA digitised news in-train TV Jun / Nov-2010 Champions production center, service HD broadcast of 2010 Leagu
Slide 4: Overview of Business Segments
Overview of Business Segments Television Internet & Multimedia Others • TV subscription business, • Broadband Internet access • Sundream Motion Pictures advertising, channel services, VoIP telephony, Limited (“Sundream”): Movie carriage, programme and other Internet access- production and distributi
Slide 5: Financial Overview
CABLE i-CABLE i-CABLE i-CABLE 1-CABLE i-CABLE [-CABLE I-CABLE i-CABLE i-CABLE i-CABLE i-CABLE CABLE i-CABLE i-CABLE i-CABLE CABLE I-CABLE i-CABLE i-CABLE [-CABLE i-CABLE [-CARIE + “*PIE ‘CABLE |-CABLE i-CABLE I-CABLE CABLE i-CABLE I-CABLE i-CABLE CABLE i-CABLE I-CABLE i-CABLE [CABLE i-CA”” ~ SCABLE
Slide 6: Television Revenue
Television Revenue May-2013: Cessation of Barclays Premier League broadcast rights 1,749 1,757 94 94 1,546 291 324 101 1,266 285 86 1,130 (HK$m) 259 71 244 1,364 1,338 1,160 922 815 i-CABLE Communications Limited 2011 2012 2013 2014 2015 CATV Air-time Sales Others¹ • Television revenue has decreased
Slide 7: Television Key Performance Indicators
Television Key Performance Indicators ARPU (HK$/ 245 244 231 208 208 month)¹ 461 434 Subscribers 388 ('000) 338 303 i-CABLE Communications Limited 2011 2012 2013 2014 2015 • Continued, but more gradual, contraction of subscription TV customer base, amidst stabilising ARPU as BPL impact is fully abso
Slide 8: Internet & Multimedia Revenue
Internet & Multimedia Revenue 365 340 338 348 348 46 43 38 49 73 (HK$m) 305 319 310 290 267 i-CABLE Communications Limited 2011 2012 2013 2014 2015 Broadband¹ Others² • Fibre-speed broadband migration and perception of “better speed equals better quality” have put pressure on Internet & Multimedia r
Slide 9: Internet & Multimedia Key Performance Indicators
Internet & Multimedia Key Performance Indicators % of Total Revenue I&M ARPU (HK$/month)¹ 98 98 108 117 125 257 239 231 Subscribers 219 194 ('000)² 2011 2012 2013 2014 2015 I&M Churn i-CABLE Communications Limited 1.7% 2.2% 1.8% 1.5% 1.8% Rate3 • Active upselling to higher bandwidth plans upon contr
Slide 10: Others Revenue
Others Revenue 37 35 6 32 32 15 2 21 17 33 22 27 (HK$m) 14 16 12 31 31 28 15 20 (20) (21) (25) (30) (35) 2011 2012 2013 2014 2015 iDL Sundream Others Inter-Segment Elimination i-CABLE Communications Limited • iDL monetises i-CABLE’s programme library through worldwide distribution • Sundream’s reven
Slide 11: Adjusted EBITDA
Adjusted EBITDA Total Segmental Breakdown % of Total Revenue 2011 2012 2013 2014 2015 7.9% 3.5% 12.6% 12.5% 7.2% Television EBITDA 69 (30) 125 34 (46) 243 209 Adjusted 149 59 210 133 53 94 EBITDA 166 121 (HK$m) Multimedia 108 Internet & 88 75 EBITDA 127 118 125 156 143 149 128 98 88 78 Other & Inter
Slide 12: Operating Expenses by Business Segment
Operating Expenses By Business Segment Before Adjustments After Adjustments I&M Opex as % of Segment 62.8% 65.3% 64.0% 57.2% 58.9% 62.8% 65.3% 64.0% 57.2% 58.9% Revenue Television Opex 96.1% 101.7% 91.9% 97.3% 104.0% 91.5% 96.7% 86.4% 89.5% 95.3% as % of Segment Revenue 2,149 2,031 2,149 2,031 162 2
Slide 13: Operating Expenses by Category
Operating Expenses By Category Before Adjustments After Adjustments Opex as % of 96.3% 101.0% 92.3% 94.7% 101.3% 92.1% 96.5% 87.4% 87.5% 92.8% Total Revenue May-2013: Cessation of Barclays 2,149 Premier League broadcast rights 2,031 2,052 119 1,944 99 181 1,782 110 192 121 92 181 1,688 123 18 112 1,
Slide 14: Capex
Capex Capex Additions to Programming Library % of Total 10.6% 10.1% 7.6% 11.3% 13.1% 4.0% 5.0% 6.0% 8.9% 8.0% Revenue 223 215 148 197 188 116 120 115 59 106 147 55 136 (HK$m) (HK$m) 84 69 46 67 35 36 24 87 72 71 44 54 i-CABLE Communications Limited 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 F
Slide 15: Summary Financials
Summary Financials (in HK$ m) Ice Mg FYE Dec 2011A 2012A 2013A 2014A 2015A Total Revenue 2,110 2,127 1,932 1,666 1,510 Growth (%) 1% (9)% (14)% (9)% Reported EBITDA 78 (22) 149 88 (19) Margin (%) 3.7% (1.0)% 7.7% 5.3% (1.3)% Adjusted EBITDA 166 75 243 209 108 Margin (%) 7.9% 3.5% 12.6% 12.5% 7.2% Lo
Slide 16: Business Transformation Initiatives
Business Transformation Initiatives 16
Slide 17: Challenges & Strategic Focus
Challenges & Strategic Focus 1 • Service image suffering from legacy anecdotal and isolated incidences • Under-investment in brand image — In terms of re-building of image and word-of-mouth creation effort Brand Image • Under-investment in online sales / marketing and service portals / Marketing — R
Slide 18: Brand Image / Marketing: Brand Proposition
1 Brand Image / Marketing i-CABLE Brand Proposition Status Initiatives “We are the missing piece to complete your entertainment (and broadband) experience” • Build confidence in and correct misperception of i-CABLE’s brand, products and services via Increase annual advertising and mass communicati
Slide 19: Brand Image / Marketing: Service Image
1 Brand Image / Marketing Service Image Status Initiatives • i-CABLE’s service quality has progressively ISO certifications obtained in Q1 2016 improved in the last two years — ISO 9001:2008 Quality Management • Consistently exceeding broadband service System pledges and performance targets — ISO
Slide 20: Online Service & Sales Portals
1 Brand Image / Marketing Online Service & Sales Portals Status • Revamp of i-cable.com with an increased focus on generating new sales and leveraging it to become a key renewal platform — Target to progressively migrate new sales and renewal activities to the online portal, reaching ~30% by 2020 —
Slide 21: Content Experience: Current Content Offering
2 Content Experience Current Content Offering Portfolio Viewership Share Among Total 111 Channels (97SD + 14HD) Pay TV Operators News & Information 60% (20 Channels) Entertainment (36 Channels) 58% 57% 55% 51% Movies (10 Channels) Sports (12 Channels) 30% 29% Kids (7 Channels) International (9 Chann
Slide 22: Content Experience: HD Upgrade and Offering
2 Content Experience HD Upgrade and Offering Status Initiatives Active upgrade of studio production • 5 production studios facilities from SD to HD News • Largest studio is HD Ready with — First batch of HD channels rolled out Live & Recording capabilities in 2009 — Studio-1 News platform upgraded
Slide 23: FanHub and i-CABLE App
2 Content Experience FanHub and i-CABLE App ONE Box – Replace ALL Others ONE App – Serves ALL Devices FanHub + i-CABLE App – Reaches ALL Target Segments i-CABLE Communications Limited FanHub combines all features and i-CABLE App offers a multi-screen functions into one, and includes all the plat
Slide 24: FanHub
2 Content Experience FanHub • A full featured, “video-on-demand”, open Ability to raise ARPU platform and app-enabled HD set top box Enable new revenue models • Live channels and VOD content — Pay-per-view — Revenue share • Enabled to view all FTA channels, free to Enrich HD channel portfolio
Slide 25: i-CABLE App
2 Content Experience i-CABLE App Desktop/ Tablet/ • Device neutral and infrastructure neutral Platform TV Laptop Phone • Single point of content management Technology for TV (FanHub), Web (i-cable.com), STB Web App Enablement Mobile and tablet (app) • New applications for mobile and tablets as subsc
Slide 26: New 200M Offer Answers Most Of The Market Needs
3 Broadband Experience New 200M Offer Answers Most Of The Market Needs Status Initiatives Unleashes the true value of existing, near-universal HFC infrastructure for broadband service Incremental initiative targeted at customers who have issues with their existing modems Genuine alternative to
Slide 27: GPON to Fuel New Growth Momentum
3 Broadband Experience GPON to Fuel New Growth Momentum Status Initiatives Leapfrogging technology from HFC to Speed Description Limitations GPON <100 Transmits over Subject to Mbps copper telephone distance from the Limited incremental costs given overlay on HFC network xDSL lines at higher tel
Slide 28: Broadband Pricing Strategy
3 Broadband Experience Pricing Strategy Status Initiatives • i-CABLE’s ARPU still substantially below Significant potential for ARPU uplift with competition across all product offerings the right product offering and marketing • Current product offerings include: Provide service guarantees to re
Slide 29: Upside from FTA TV Roll-Out
Upside from FTA TV Roll-Out Status Initiatives • Via Fantastic TV (affiliate) Target to launch in 2H 2016 at the earliest • Applied for a FTA license in January 2010 Leverage on CABLE TV’s programming and network infrastructure and • Received in-principle approval in October capabilities 2013 by
Slide 30: Important Notice
i-CABLE Communications Limited (the “Company”) HKSE Stock Code: 1097.HK Important Notice The information set out in this Management Update does not constitute a public offer or an offer to sell or solicitation of any offer to purchase any securities, or any recommendation in respect of such securiti
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