Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — CLSA Investors' Forum 2014
21 slides from Chunghwa Telecom's conference presentation, Sep 15, 2014
Slide 1: Q2 2014 Operating Results
Q2 2014 Operating Results CLSA Investors’ Forum September 15~16, 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: 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% • 94.4% share by subs (11.45 mn subs) 30% 28.8% 28.2% 27.5% 27.2% 26.8%26.8% 27.6% 27.0% • 85.1% share by minutes 25% – #1 DLD 20% • 79.5% share by
Slide 4: Committed to Improving Shareholder Value
Committed to Improving Shareholder Value Cash Return NT$ bn AGM resolved to distribute NT$35.1 billion or NT$4.5251 per share to shareholders ¾ NT$2.3881 per share from earnings distribution for 2013 ¾ NT$2.137 per share from capital surplus Special dividend from capital surplus is allocated to comp
Slide 5: Business Overview
Business Overview
Slide 6: Number One Mobile Services Provider
Number One Mobile Services Provider VAS Performance Performance Strategy Focusing on 4G service promotion NT$ mn 43.9% 42.6% 35.7% 37.3% 39.7% Expanding 4G smart device profile 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 7: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Smartphone Adoption Smartphones accounted for 90% of the total handsets CHT offered in Q2 2014 100% 27.0% 21.0% 26.0% 80% 47.0% 60% 41.0% 49.0% 49.0% 40% 29.0% 20% 38.0% 24.0% 25.0% 24.0% 0% Q3 13 Q4 13 Q1 14 Q2 14 *number of smartphones (iOS/ Android/ Symbian S6
Slide 8: 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 3,923 3,956 3,886 600 3,695 3,819 high speed fiber services 400 Exp
Slide 9: 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 10: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives Performance Strategy Personal Cloud (Hami+) subscribers Leveraging core telecom infrastructure and accumulated to 2.02 million services to expand ICT business Acquired several significant ICT projects in Leading the cloud computing industry by Q2 2014 with contrac
Slide 11: Financials Overview
Financials Overview
Slide 12: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Revenues 55.84 55.78 (0.1) 112.45 110.83 (1.4) Operating Costs and 43.18 43.45 0.6 88.54 86.59 (2.2) Expenses Income from 12.65 12.33 (2.5) 23.88 24.
Slide 13: Financials: Business Segment Revenues
Financials: Business Segment Revenues Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$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 14: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Operating Costs 35.28 35.04 (0.7) 72.73 70.04 (3.7) Operating Expenses 7.90 8.41 6.4 15.81 16.55 4.7 Marketing 5.96 6.43 7.8 11.95 12.59 5.4 General and Adminis
Slide 15: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated Q2 2013 Q2 2014 Growth 1H 2013 1H 2014 Growth (NT$bn) (T-IFRSs) (T-IFRSs) % (T-IFRSs) (T-IFRSs) % Net Cash Flow from 19.34 14.42 (25.5) 27.90 24.03 (13.9) Operating Activities CapEx (8.05) (7.32) (9.1) (15.59) (13.09) (16.0) Free Cash Flow 11.29 7.10 (37.1) 12.
Slide 16: 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 43.44 44.20 98.3 86.59 184.70 46.9 Expenses Income from 12.33 11.69 105.5 24.23 43.
Slide 17: 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% 20% – FTTx 12.4% 13.9% 11.8% 40 0.7 1.9 10% – Service Platforms – Cloud / IDC 0.
Slide 18: Q&A
Q&A
Slide 19: Reference
Reference
Slide 20: 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 21: Continuing Broadband Network Construction
Continuing Broadband Network Construction Fiber Deployment Plan FTTx coverage (≥100Mbit/s) reach 97% by 2016 Increase FTTH construction in order to meet the demand of ultra fast broadband* Fiber construction plan including CAPEX will be reviewed in accordance with market demand *Note: Chunghwa Telec