Hutchison Telecommunications (Australia) Ltd
Hutchison Telecommunications (Australia) — FY2005 Earnings Presentation
21 slides from Hutchison Telecommunications (Australia)'s earnings presentation, Mar 7, 2006
Slide 1: ASX Companies Announcements cover letter
Hutchison Telecommunications (Australia) Limited ABN 15 003 677 227 A member of the Hutchison Telecommunications Group Building A, 207 Pacific Highway St Leonards NSW 2065 Tel: (02) 9964 4646 Fax: (02) 9964 4668 www.hutchison.com.au Companies Announcements Office Australian Stock Exchange Date 7 Mar
Slide 2: 2005 Full Year Results
Hutchison Telecommunications (Australia) Limited 2005 Full Year Results Kevin Russell Chief Executive Officer 7 March 2006
Slide 3: 3 and the 3G Market
3 and the 3G Market • All mobile operators have launched 3G networks • 3G handset range is broadening and costs are reducing • 3G services awareness and usage has increased • Clear endorsement of 3G as the way forward • For Hutchison, 2005 was about: – delivering growth, with improving financials –
Slide 4: Highlights
Highlights • Service revenue grew by $235.1 million or 45% to $758.2 million • Average non-voice revenue per customer per month in the 3G business increased from $13 to $19 • Average margin contribution per customer per month across the entire customer base strengthened from $45 to $48 • EBITDA loss
Slide 5: Financial Highlights
Financial Highlights Year Ended Year Ended 31 Dec 05 31 Dec 04 Change ($million) Service revenue(1) 758.2 523.1 45% Reported EBITDA (loss)(2) (180.1) (410.3) 56% NPAT (loss)(3) (547.3) (690.1) 21% CAPEX (207.1) (307.4) 33% (1) Service revenue excludes handset revenue, interest income and other incom
Slide 6: Service Revenue
Service Revenue $million 758 275 523 2G 3G 274 483 241 208 249 33 2003 2004 2005 2G revenue growth peaked – 3G market opening up 5
Slide 7: Customer Base
Customer Base Customers `000 1,035 839 381 2G 426 3G 412 654 325 413 87 2003 2004 2005 3G market provides the growth opportunity 6
Slide 8: ARPU and Margin
ARPU and Margin $70 $67 $55 ARPU $48 $45 Margin $41 2003 2004 2005 Margins continue to grow supported by increased contribution from non-voice revenue 7
Slide 9: Continued Growth in Non-Voice
Continued Growth in 3 Non-Voice • Non-voice ARPU continues to strengthen • Non-SMS services usage growing steadily • 70% of base actively using content services • 53% of base generating billable content events • 521,000 monthly subscription services at year end Yahoo IM $19 Non-SMS SMS $16 $13 $8 $1
Slide 10: Operating Expenditure
Operating Expenditure $million $762 $745 $22 $88 $70 $69 $105 $103 Other $112 Adv & Promotion $136 Employment Net Handset Costs Direct Telecommunication $435 $367 2004 2005 Cost structure allows operating leverage 9
Slide 11: Customer Acquisition Costs
3 Customer Acquisition Costs $416 $427 $402 $377 2004 2005 1H05 2H05 Improving trends in CAC 10
Slide 12: CAPEX
CAPEX $million $307 $207 2004 2005 Capex requirement is decreasing 11
Slide 13: 3 CDMA Update
3 CDMA Update • Customers are more aware of and demanding 3G services • Handset form factor and functionality equivalent to / better than GSM • 3 brand recognition is improving • Competitive 3G offerings are embryonic • Enhanced focus on one business • Improved cost efficiency The right time is now
Slide 14: What to Expect in 2006
What to Expect in 2006 • Continue to lead in setting the mobile industry trends • Successful migration of margin from 3 CDMA to 3 • Sustainable growth momentum in 3G • Profitability trends – scale benefits in margin – operating costs under control Good business momentum expected in 2006 13
Slide 15: Hutchison Telecoms
EN Hutchison Hi Telecoms
Slide 16: Chief Executive Officer's Address
Hutchison Telecommunications (Australia) Limited 2005 Full Year Results 7 March 2006 Chief Executive Officer’s Address Slide 1 – Introduction Slide 2 – 3 and the 3G market 2005 was a year where a number of significant trends became clearer, both for the mobile industry and its 3G plans, and also for
Slide 17: EBITDA loss commentary
The company recorded an EBITDA loss of $180.1 million compared to last year’s EBITDA loss of $410.3 million. The EBITDA loss improved from $122.6 million in the first half to $57.5 million in the second half. Significantly, the year on year improvement in EBITDA of $230.2 million was consistent with
Slide 18: Churn and ARPU commentary
churn, across both post-paid and pre-paid, reduced from 3% in 2004 to 2.6% in the second half of 2005, helped by the launch of new model handsets in the second half. Content subscription is also emerging as a factor contributing to the increased ‘stickiness’ of our 3G customers. There is growing evi
Slide 19: Content revenue and operating expenditure commentary
revenue. In 2005 we focused on bringing 3G customers content on a subscription basis – enabling customers to subscribe to a service for a fixed amount per month without additional data charges. For example, Big Brother at $5 per month for unlimited access to the live cam service. Because our pricing
Slide 20: 3G customer uptake commentary
65,000. Customer demand for greater certainty of technology direction, attractive handsets and plans, and the potential for using their mobile for more than just making phone calls, has driven customer uptake. The introduction of the first mass market Nokia, the 6280, on 1 February has certainly pro
Slide 21: 2006 outlook commentary
In 2006 we anticipate the start of a more rapid market migration of 2G customers to 3G networks, particularly the higher spending customers. This trend opens two key opportunities for Hutchison. Firstly, once a significant proportion of our 2G customer base has upgraded to 3G, a further rationalisat
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