Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q2 2013 Earnings Presentation
22 slides from Chunghwa Telecom's earnings presentation, Aug 14, 2013
Slide 1: Q2 2013 Operating Results
Q2 2013 Operating Results August 14, 2013 TSE: 2412 NYSE: CHT
Slide 2: Disclaimer
Disclaimer STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION The unaudited financial information under T-IFRSs in this presentation is preliminary and subject to adjustments and modifications. Adjustments and modifications to the financial statements may be identified during the course of the audi
Slide 3: Chunghwa Telecom Overview
Chunghwa Telecom Overview Dominant Market Position (a) Highest Mobile Internet Subs Market Share(e) Domestic Fixed 35% 32.3% 33.3% 33.5% – #1 Local 30% 30.7% 30.2% 30.0% 29.0% 29.6% 28.5% • 94.8% share by subs (11.7 mn subs) • 86.7% share by minutes 25% – #1 DLD 20% • 76.4% share by minutes 15% – #1
Slide 4: Business Overview
Business Overview
Slide 5: Number One Mobile Services Provider
Number One Mobile Services Provider Performance Highest Mobile VAS Revenue Growth % Strategy 6.82 7 5.66 5.57 Further introducing mid-to-low tier 6 5.05 smartphones to expand mobile internet 5 4.30 4.32 subscriber base NT $bn 4 3 Accelerating the migration of 2G 2 customers to 3G networks 1 Promotin
Slide 6: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Smartphone Adoption Smartphone customers account 86% of the total Smartphone penetration (note) handsets CHT offered in Q2 2013 47% 49% 50% 43% 100% 35% 38% 40% 32% 25.0% 27.0% 30% 80% 20% 19.0% 60% 25.0% 10% 0% 40% Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Dec 13 (E) 5
Slide 7: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Continuing to migrate customers from low Broadband Access Revenue NT$ mn ARPU NT$ speed to high speed fiber services 700 704 708 710 698 800 5,000 Applying data mining capability for precision 3,599 3,668 3,724 3,767 3,695 600 marketing and
Slide 8: MOD/ IPTV Service
MOD/ IPTV Service Performance Subscriber & Usage IPTV revenue grew over 26.6% YoY in Subscriber market share (CATV+IPTV) YoY grows Q2 2013 from 18.4% to 19.5 % in Q2 2013 IPTV advertisement revenue in Q2 2013 79.3% of IPTV subscribers sign up additional Packages doubled Total IPTV Subscribers & Pack
Slide 9: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives Performance Strategy Cloud service revenue tripled year on year in 1H13 Leveraging core telecom infrastructure and Personal Cloud (Hami+) subscribers accumulated to services to expand ICT business 920,000 Leading the cloud computing industry by taking advantage of
Slide 10: Regulatory Update
Regulatory Update
Slide 11: Regulatory Update
Regulatory Update • NCC released the detailed regulation for 4G technology-neutral licenses and spectrum bidding in May 2013. 4G License • NCC announced seven qualified bidders on August 13, 2013 Auction • The bidding process will be held in early September and is expected to finish by the end of 20
Slide 12: Financials Overview
Financials Overview
Slide 13: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated Q2 2012 Q2 2013 Growth 1H 2012 1H 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Revenues 54.40 55.84 2.6% 109.89 112.45 2.3% Operating Costs and 39.74 43.18 8.7% 83.75 88.54 5.7% Expenses Other Income and (1.26) (0.01) - (1
Slide 14: Financials: Business Segment Revenues
Financials: Business Segment Revenues Consolidated Q2 2012 Q2 2013 Growth 1H 2012 1H 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Domestic Fixed 18.61 18.18 -2.3% 37.78 36.23 -4.1% Local 10.41 9.58 -8.0% 20.61 19.00 -7.8% DLD 0.93 0.89 -4.1% 1.93 1.74 -9.9% Broadband Access
Slide 15: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated Q2 2012 Q2 2013 Growth 1H 2012 1H 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Operating Costs 33.51 35.28 5.3% 70.09 72.73 3.8% Operating Expenses 6.23 7.90 27.0% 13.66 15.81 15.8% Marketing 4.28 5.96 39.3% 9.85 11.95 21.4% General
Slide 16: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated Q2 2012 Q2 2013 Growth 1H 2012 1H 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Net Cash Flow from 13.48 19.37 43.7% 26.41 27.90 5.6% Operating Activities CAPEX 7.54 8.05 6.8% 14.23 15.59 9.5% Free Cash Flow 5.94 11.32 90.3% 12.18 12.31
Slide 17: Forecast & Operating Results
Forecast & Operating Results Consolidated Q2 2013 Q2 2013 Achieving 1H 2013 2013 Achieving (NT$bn) (T-IFRSs) (T-IFRSs E) Rate (T-IFRSs) (T-IFRSs E) Rate Revenues 55.84 53.56 104.2% 112.45 217.82 51.6% Operating Costs and 43.18 41.64 103.7% 88.54 172.71 51.3% Expenses Other Income and (0.01) - - (0.0
Slide 18: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure Increase capital expenditure NT$ bn 33.3 37.2 – Fixed and Mobile broadband 40 17.1% 20% – Cloud deployment including cloud data 15.1% 12.2% 12.4% 0.8 2.0 12.9% 13.9% center build out 35 0.7 Capex as % of Revenue 5.2 10% 26.9 2.4 30 24.6
Slide 19: : is Q&A
: is Q&A
Slide 20: Reference
Reference
Slide 21: Regulatory Update (2013/4/1~2017/3/31)
Regulatory Update (2013/4/1~2017/3/31) Years Target Business Applicable Services X factor in Formula : △CPI - X effect xDSL monthly fee 1. The four year FTTx monthly fee (exclude FTTH and tariff reduction 1 plan is applicable FTTB) from April 1. 2013 to March 31, SMP 2017 and applied (Significan
Slide 22: Continuing Broadband Network Construction
Continuing Broadband Network Construction Fiber Deployment Plan FTTH Thousands Coverage FTTN/FTTB Port FTTx coverage (>=100M) reach 97% by ADSL 97% 97% 10,000 Coverage(≥100Mbps) 95% 100% 2016 88% 95% 97% 9,000 Coverage(≧50Mbps) 90% 82% 450 750 90% 1,250 1,800 Increase FTTH construction in order to 1