Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q2 2014 Earnings Presentation
20 slides from Chunghwa Telecom's earnings presentation, Jul 30, 2014
Slide 1: Q2 2014 Operating Results
Q2 2014 Operating Results July 30, 2014 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: Business Overview
Business Overview
Slide 4: Chunghwa Telecom Overview
Chunghwa Telecom Overview Strong Market Position (a) Highest Mobile Internet Subs Market Share(e) Domestic Fixed 34.1% 34.8% 35.6% 36.4% – #1 Local 35% • 94.5% share by subs (11.46 mn subs) 30% 28.8% 27.6% 28.2% 27.2% 27.5% 26.8%26.8% 27.0% • 85.2% share by minutes 25% – #1 DLD 20% • 78.6% share by
Slide 5: Number One Mobile Services Provider
Number One Mobile Services Provider Performance VAS Performance Strategy Focusing on 4G service promotion NT$ mn 43.9% 42.6% 39.7% Expanding 4G smart device profile 35.7% 37.3% Mobile VAS Revenue % 8,000 40% 1,040 998 1,077 Continuing the migration of 2G customers to VAS revenue 6,000 1,106 30% 1,12
Slide 6: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Smartphone Adoption Smartphones accounted for 90% of the total Smartphone penetration* handsets CHT offered in Q2 2014 58% 62% 100% 53% 56% 21.0% 26.0% 60% 47% 50% 80% 27.0% 50% 47.0% 40% 60% 41.0% 30% 49.0% 49.0% 20% 40% 29.0% 10% 0% 20% 38.0% Jun 13 Sep 13 Dec
Slide 7: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Launching 300M/100M fiber service to maintain Broadband Access Revenue NT$ mn 698 703 708 707 698 ARPU NT$ leadership Continuing to migrate customers from low speed to 5,000 3,819 3,923 3,956 3,886 600 3,695 high speed fiber services 400 Exp
Slide 8: MOD/ IPTV Service
MOD/ IPTV Service Performance Subscriber & Usage Subscriber market share (CATV+IPTV) QoQ grew from IPTV revenue increased by 8.8% 19.8% to 20.1% in Q1 2014 YoY in Q2 2014 87.1% of IPTV subscribers signed up additional Packages Household TV Usage rate increased Total IPTV Subscribers & Package Subscr
Slide 9: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives Performance Strategy Cloud and information security service revenue Leveraging core telecom infrastructure and increased by 6.8% YoY in 1H 2014 services to expand ICT business Personal Cloud (Hami+) subscribers accumulated to Leading the cloud computing industry b
Slide 10: Financials Overview
Financials Overview
Slide 11: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Revenues 55.84 55.78 (0.1) 112.45 110.83 (1.4) Operating Costs and 43.19 43.45 0.6 88.55 86.59 (2.2) Expenses Income from 12.65 12.32 (2.6) 23.88 24.
Slide 12: Financials: Business Segment Revenues
Financials: Business Segment Revenues Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Domestic Fixed 18.18 17.23 (5.2) 36.23 34.38 (5.1) Local 9.58 9.00 (6.1) 19.00 17.90 (5.8) DLD 0.89 0.84 (5.7) 1.74 1.66 (4.9) Broadband Access 4.68 4.
Slide 13: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Operating Costs 35.28 34.97 (0.9) 72.73 69.97 (3.8) Operating Expenses 7.91 8.48 7.2 15.82 16.62 5.1 Marketing 5.96 6.52 9.4 11.95 12.69 6.2 General and Adminis
Slide 14: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Net Cash Flow from 19.37 14.42 (25.6) 27.90 24.03 (13.9) Operating Activities CapEx (8.05) (7.32) (9.1) (15.59) (13.09) (16.0) Free Cash Flow 11.32 7.10 (37.3) 12.
Slide 15: Forecast & Operating Results
Forecast & Operating Results Consolidated Q2 2014 Jan-Jun Q2 2014 Achieving 2014 Achieving (NT$bn) (T-IFRSs) (T-IFRSs E) % 2014 (T-IFRSs E) % (T-IFRSs) Revenues 55.78 55.88 99.8 110.83 228.23 48.6 Operating Costs and 43.45 44.20 98.3 86.59 184.70 46.9 Expenses Income from 12.32 11.69 105.4 24.22 43.
Slide 16: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure Budgeted capex for 2014: NT$40.1bn Continue to focus on core 26.9 33.3 36.4 40.1 businesses for future investments NT$ bn 50 – 4G / 3G 45 15.0% 16.0% 17.6% 13.9% 20% – FTTx 12.4% 11.8% 40 0.7 1.9 10% – Service Platforms – Cloud / IDC Ca
Slide 17: Q&A
Q&A
Slide 18: Reference
Reference
Slide 19: 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, 2017 and applied SMP 2 Domestic
Slide 20: Continuing Broadband Network Construction
Continuing Broadband Network Construction FTTH Fiber Deployment Plan Thousands FTTN/FTTB Coverage Port ADSL 97% 97% FTTx coverage (≥100Mbit/s) reach 97% 12,000 95% 100% Coverage(≥100Mbps) 97% by 2016 92.8% 95% Coverage(≥60Mbps) 90% 90% 2,494 10,000 82% 86.7% 2,014 Increase FTTH construction in order