Hutchison Telecommunications Hong Kong Holdings Limited · HKEX:215
Hutchison Telecommunications Hong Kong — FY2010 Earnings Presentation
41 slides from Hutchison Telecommunications Hong Kong's earnings presentation, Mar 21, 2011
Slide 1: Hutchison Telecommunications Hong Kong Holdings 2010 Annual Results Presentation
Hutchison Telecommunications Hong Kong Holdings Limited (Stock code: 215) 2010 Annual Results Presentation 21 March 2011
Slide 2: Disclaimer
Disclaimer These materials have been prepared by Hutchison Telecommunications Hong Kong Holdings Limited (HTHKH) 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, th
Slide 3: Business Performance
Business Performance Ll] Hutchison Telecom BEBE Hong Kong Holdings
Slide 4: Highlights
Highlights YoY Growth HK$ 9,880M 17% Consolidated Consolidated turnover turnover Turnover HK$ 6,950M 25% Mobile Mobile Data revenue HK$ 1,960M 36% Operating profit HK$ 792M 64% Turnover HK$ 3,286M 2% Fixed-line Fixed-line Operating profit HK$ 422M 6% Net Net profit profit after after MI MI HK$ 755M
Slide 5: Turnover
Turnover Consolidated turnover 12,000 + 17% 9,880 8,449 8,000 HK$ m 4,000 0 FY09 FY10 Mobile business turnover Fixed-line business turnover Handset +123% + 3%1 8,000 4,000 w th 3,221[2]% gro Service + 8% 6,950 3,286 5,578 1,792 44 802 HK$ m HK$ m 4,000 2,000 3,177 3,286 4,776 5,158 0 0 FY09 FY10 FY0
Slide 6: Mobile
Mobile Ll] Hutchison Telecom BEBE Hong Kong Holdings
Slide 7: Mobile business highlights
Mobile business highlights Clear market leadership Rebranding – 3ree Broadband Spearheading the smartphone and tablet trend Winning data services, applications and content Extensive distribution channels Superior network 6
Slide 8: Clear market leadership
Clear market leadership HK subscribers Largest Hong Kong subscriber base 3,000 2,630 2,835 63% postpaidotal: 8%↑ 1,428 1,761 '000 T %↑ 1,500 3G: 28 3G postpaid subscribers: >40% smartphone and dongle users 0 FY09 FY10 3G 2G HK postpaid subscribers 2,000 1,786 1,716 '000 1,309 1,407 1,000 0 FY09 FY10
Slide 9: ARPU
ARPU 10% YoY 3G ARPU growth Driven by robust smartphone intake HK postpaid ARPU 250 240 225 225 HK$ / month 218 209 211 213 201 200 150 '09 1H '09 2H '10 1H '10 2H 3G Blended 8
Slide 10: Rebranding – 3ree Broadband
Rebranding – 3ree Broadband Initiate a new era of fixed-mobile convergence in Hong Kong Integrate residential broadband, residential telephone lines, IDD with mobile and Wi-Fi services 9
Slide 11: Spearheading the smartphone and tablet trend
Spearheading the smartphone and tablet trend First-mover advantage in smartphone market First in HK to introduce the data roaming day pass Offer a wide array of value added services via Be3ree smartphone benefits platform 10
Slide 12: Winning data services, applications and content
Winning data services, applications and content KKBox – unlimited access of music under multiple platforms 3Book with Kobo – fully compatible with iPhone, iPad, Android and PCs 11
Slide 13: Extensive distribution channels
Extensive distribution channels > 1,000 sales personnel > 200 distribution centres Launch of 3 Concept Store – offering a whole new shopping experience 12
Slide 14: Superior network
Superior network Full optic fibre backhaul Ready for strong data demand - “Re-farming” 900MHz spectrum Mobile capex and % of revenue - - Successful bid of radio spectrum Capex and % of Turnover - Mobile - LTE infrastructure rollout 600 15% Capex / Mobile Revenue1 (%) 507 413 10% HK$ m 300 9.8% 8.6%
Slide 15: Successful bid of Frequency Band B (900MHz)
Successful bid of Frequency Band B (900MHz) Increase radio capacity Good radio propagation and better indoor coverage Insignificant equipment investment and faster rollout Frequency Band 900 1800 2100 2600 1 Bandwidth 26.6 MHz 23.2 MHz 34.6 MHz 30.0 MHz 1 Shared with PCCW by 50:50 JV with Genius Bra
Slide 16: Fixed-line
Ll] Hutchison Telecom BEBE Hong Kong Holdings Fixed-line 15
Slide 17: Fixed-line business highlights
Fixed-line business highlights Leading fibre infrastructure Global reach FTTB technology boosts up homepass rate Strong presence in high-end premium market 16
Slide 18: Leading fibre infrastructure
Leading fibre infrastructure Over 1 million km core optic fibre cabling The only operator to provide 4 direct telecom links into China Command a dominant share in the local backhaul market Ready for strong fixed and mobile broadband demand 17
Slide 19: Global reach
Global reach Global network providing robustness and resilience Key growth driver from intra-Asia traffic into Greater Meikong Subregion (GMS), and inter-region traffic into Europe, Middle East and Africa Region (EMEA) 18
Slide 20: FTTB technology boosts up homepass rate
FTTB technology boosts up homepass rate Riding on fibre infrastructure Homepass > 70%, of which 80% 100Mbps to 1Gbps 19
Slide 21: Strong presence in high-end premium market
Strong presence in high-end premium market One-stop telecommunications solution provider partner with top-tier equipment vendors Banking and Finance - Customisation of solutions to address specific needs - Dedicated network design to unify ATM and branches network Data Centre - Full range offer incl
Slide 22: Profitability
Profitability LU] Hutchison Telecom BBBB Hong Kong Holdings
Slide 23: Profitability: Net profit
Profitability Earnings upsurge 8%↑ Net profit Total: 8%↑ 3G: 2 800 755 +61% 468 HK$ m 400 0 2009 2010 22
Slide 24: Strong dividend growth
Profitability Strong dividend growth 8%↑ Dividend per share Total: 8%↑ 3G: 2 15 +39% 10.15 10 HKcents 7.28 5 0 2009 2010 23
Slide 25: Financial Overview
Financial Overview LU] Hutchison Telecom BBBB Hong Kong Holdings
Slide 26: Financial Highlights
Financial Highlights FY 09 FY 10 (HK$m) (HK$m) Turnover 8,449 9,880 Cost of inventories sold (756) (1,776) Staff costs (644) (646) Depreciation and amortisation (1,288) (1,087) Other operating expenses (4,974) (5,264) Operating profit 787 1,107 Interest income 4 5 Interest and other finance costs (1
Slide 27: Turnover – mobile business
Turnover – mobile business Mobile Service Revenue Steady growth in service revenue 6,000 +8% 5,158 4,776 Strong handset sales in line with 8%↑ HK$ m Total: 8%↑ 3,000 growing demand 3G: 2 for smartphones 0 FY09 FY10 Mobile Handset Revenue 2,000 1,792 +123% HK$ m 1,000 802 0 FY09 FY10 26
Slide 28: Turnover – mobile service revenue
Turnover – mobile service revenue Data revenue close to overtake voice Total: HK$5,158m1 Total: HK$4,776m1 Roaming Voice Voice 24% 46% 38% Roaming 24% Voice 38% Others Data 16% 38% Data 30% Data 26% FY10 FY09 1 Includes only mobile service revenue 27
Slide 29: Mobile – data growth
Mobile – data growth Data revenue Robust data revenue growth 2,400 +36% 1,960 - Smartphone intake %↑ 1,436 HK$ m otal: 8 T %↑ 3G: 28 1,200 - Introduce roaming data day pass 0 FY09 FY10 Roaming revenue - data 400 +28% 313 244 HK$ m 200 0 FY09 FY10 28
Slide 30: Turnover - Fixed-line business
Turnover - Fixed-line business Clear market leadership in carrier market Total: HK$3,286m Total: HK$3,221m Others1 Others1 7% 6% Residential Residential 20% Carrier 20% Carrier 48% 47% Corporate Corporate & & Business Business 26% 26% FY10 FY09 1 Others include revenue from interconnection charges a
Slide 31: Key cost items
Key cost items Cost Costof of inventories sold inventories sold 2,000 1,776 30% 1,500 % to turnover 20% HK$ mm 1,000 756 18.0% 10% 500 8.9% 0 0% FY09 FY10 Depreciation and Staffcosts costs Staff amortisation expenses 1,500 24% 800 12% 1,288 644 646 1,087 600 % to turnover 1 % to turnover 1 1,000 16%
Slide 32: Other operating expenses
Other operating expenses Cautious cost management Other operating expenses 6,000 100% 5,264 4,974 % to turnover 1 HK$ m 3,000 65.0% 65.1% 50% 0 0% FY09 FY10 1 Excluding revenue from sale of telecommunications products 31
Slide 33: Liquidity
Liquidity Strong FCF to meet future liquidity needs Free Cashflow (FCF) 1 +22% 1,200 1,168 951 790 HK$ m 800 400 0 FY08 FY09 FY10 1 Free cashflow being cashflow from operating activities less cashflow used in investing activities and percentage represents compound annual growth rate 32
Slide 34: Capex (Mobile and fixed-line)
Capex (Mobile and fixed-line) Consistent level of investment Mainly revenue driven Capex and % of service revenue 1,200 1,119 18% 1,035 Capex / Turnover 1 (%) 13.5% 13.8% 800 12% HK$ m 400 6% 0 FY09 FY10 1 Excluding revenue from sale of telecommunications products 33
Slide 35: Managing financial position
Managing financial position Net Debt Leverage ratio = 1.5 6,000 4,948 Gearing ratio = 35% 4,090 4,000 3,386 (HK$ mm) Undrawn credit facility of 2,000 HK$1.4 billion 0 FY08 FY09 FY10 Net Debt/ LTM EBITDA 4.0 3.0 2.6 x 2.0 x (x) 2.0 1.5 x 1.0 0.0 FY08 FY09 FY10 34
Slide 36: Outlook
LU] Hutchison Telecom BBBB Hong Kong Holdings Outlook 35
Slide 37: Outlook
Outlook OPTICAL OPTICAL FIBRE FIBRE SUPREMACY COMPETITIVE SUPREMACY OPPORTUNITY ADVANTAGES OPTICAL FIBRE UNDISPUTED RIDING THE RIDINGSUPREMACY THE STRIVING FOR EXCELLENCE TIDE TIDE OF OF DATA MOBILE MAXIMISING VALUE DATA MARKET LEADER EXPLOSION EXPLOSION PRE-EMINENCE IN FIXED-MOBILE INTEGRATION SYNE
Slide 38: Mobile NGN
Mobile NGN Increase capacity Enhance performance Increase efficiency and reduce cost Data Speed / Capacity / Performance LTE 4G P A+ G HS 3 .5 M A D WC 3G G SM 2 G Time 37
Slide 39: Fixed-line NGN – Gigabit Access Network
Fixed-line NGN – Gigabit Access Network Real time Capable of supporting Data Centre information unprecedented information flow Faster response time and resilient Financial institutions Mobile cell sites 38
Slide 40: Q&A
LU] Hutchison Telecom BBBB Hong Kong Holdings Q&A 39
Slide 41: Thank You
LU] Hutchison Telecom BBBB Hong Kong Holdings Thank You 40
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