Starhub Ltd · SGX:CC3
Starhub — Q1 2018 Earnings Presentation
37 slides from Starhub's earnings presentation, May 3, 2018
Slide 1: StarHub 1Q-2018 Results
StarHub 1Q-2018 Results 3 May 2018
Slide 2: Forward-looking Statements
Forward-looking Statements The following presentation may contain forward-looking statements by StarHub Ltd (“StarHub”) relating to financial trends for future periods. Some of the statements in this presentation which are not historical facts are statements of future expectations with respect to th
Slide 3: Agenda
Agenda 1Q2018 Highlights Financial Highlights Business Highlights 2018 Outlook 3
Slide 4: Overview (1Q-2018 vs 1Q-2017)
Overview (1Q-2018 vs 1Q-2017) ➢ Service revenue decreased 1.4% ➢ 18% revenue growth in Enterprise Fixed ➢ Service EBITDA decreased 3.7% ➢ Subscriber growth in pre-paid Mobile ➢ Service EBITDA margin at 32.1% ➢ Low churn rate maintained across ➢ NPAT decreased 13.1% all businesses 4
Slide 5: Key Financial Highlights
Key Financial Highlights S$M 1Q-2018 1Q-2017 Change (restated) Total Revenue 561 589 -5% Service Revenue 451 457 -1% EBITDA 152 160 -5% Service EBITDA# 145 150 -4% Service EBITDA Margin 32.1% 32.8% -0.8%pts Taxation (13) (14) -12% Net Profit After Tax^ 63 72 -13% Capex Cash Payments 68 34 102% % of
Slide 6: Revenue Contribution
Revenue Contribution First Quarter Ending 31 March 2018 2017 Incr / (Decr) Incr / (Decr) (restated) S$m S$m S$m % Total Revenue Mobile services 205.1 220.7 (15.6) (7.1) Pay TV services 80.7 89.6 (8.9) (10.0) Broadband services 47.5 47.2 0.3 0.6 Enterprise Fixed services 117.5 99.6 18.0 18.0 Total Se
Slide 7: Revenue Mix
Revenue Mix First Quarter Ending 31 March 2018 2017 (restated) % mix % mix Total Revenue Mobile services 36.6 37.5 Pay TV services 14.4 15.2 Broadband services 8.5 8.0 Enterprise Fixed services 21.0 16.9 Total Service Revenue 80.4 77.6 Sales of Equipment 19.6 22.4 Total Revenue 100.0 100.0 • Numbers
Slide 8: Financial Highlights
1Q2018 Highlights Financial Highlights Business Highlights 2018 Outlook 8
Slide 9: EBITDA
EBITDA (S$M) 171 160 161 152 143 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 9
Slide 10: Service EBITDA & Service EBITDA Margin
Service EBITDA & Service EBITDA Margin (S$M) 32.8% 32.1% 162 150 150 145 124 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Service EBITDA Margin as % of Service Revenue *Service EBITDA = EBITDA less (Sales of Equipment – Cost of Equipment) 10 * Comparatives have been restated to take into account the retrospec
Slide 11: Cost Of Sales
Cost Of Sales (S$M) 44% 44% 329 16 260 247 31 227 225 138 26 26 28 107 118 109 111 176 122 92 103 86 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Cost of Equipment Cost of Services Traffic Expenses Cost of Sales / Revenue * Numbers may not add up due to rounding. 11
Slide 12: Other Operating Expenses
Other Operating Expenses (S$M) 42% 40% 289 255 29 236 236 26 233 24 22 25 188 155 145 146 137 67 68 75 71 70 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Depreciation Other G&A Marketing & Promotion Operating Expense / Revenue * Numbers may not add up due to rounding. 12 * Comparatives have been restated to t
Slide 13: Net Profit After Tax
Net Profit After Tax (S$M) 78 72 64 63 52 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 13
Slide 14: Capex (cash payments)
Capex (cash payments) (S$M) 12.1% 5.7% 115 95 68 52 34 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Capex / Revenue * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 14
Slide 15: Free Cash Flow
Free Cash Flow (S$M) 120 117 16 4Q2017 10 1Q2017 2Q2017 3Q2017 1Q2018 (32) 15
Slide 16: Business Highlights - Mobile
1Q2018 Highlights Financial Highlights Business Highlights - Mobile 2018 Outlook 16
Slide 17: Mobile (1Q-2018 vs 1Q-2017)
Mobile (1Q-2018 vs 1Q-2017) ➢ Total customer base decreased by 8k ➢ Pre-paid and post-paid ARPU decreased S$2 17
Slide 18: Mobile Customer Base
Mobile Customer Base (‘000) 2,291 2,290 2,256 2,307 2,283 898 905 895 938 918 40% 1,392 1,385 1,362 1,368 1,365 60% 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Post-paid Pre-paid * Numbers may not add up due to rounding. 18
Slide 19: Post-paid Average Monthly Churn Rate
Post-paid Average Monthly Churn Rate 1.6 (%) 0.6 1.1 1.0 1.0 1.0 0.9 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Including one-time termination of 23k inactive legacy data-only lines * Change in computation basis from end-subscriber base to average end-subscriber base 19
Slide 20: Mobile Revenue
Mobile Revenue (S$M) 229.1 222.9 228.1 220.7 205.1 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 20
Slide 21: Mobile ARPU
Mobile ARPU (S$ per month) Pre-paid 15 15 14 14 13 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 (S$ per month) Post-paid 45 48 47 46 43 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 21
Slide 22: Business Highlights – Pay TV
1Q2018 Highlights Financial Highlights Business Highlights – Pay TV 2018 Outlook 22
Slide 23: Pay TV (1Q-2018 vs 1Q-2017)
Pay TV (1Q-2018 vs 1Q-2017) ❖ Revenue decreased 10% ❖ ARPU at S$51 ❖ Customer base decreased 38k 23
Slide 24: Pay TV Base & Churn
Pay TV Base & Churn (‘000) Customers 487 477 467 458 449 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Average Monthly Churn Rate (%) 0.9 0.9 0.9 0.9 0.9 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Change in computation basis from end-subscriber base to average end-subscriber base 24
Slide 25: Pay TV Revenue & ARPU
Pay TV Revenue & ARPU (S$M) Revenue 89.6 89.0 86.8 88.1 80.7 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 ARPU (S$ per month) 52 51 51 51 51 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 25
Slide 26: Business Highlights - Broadband
1Q2018 Highlights Financial Highlights Business Highlights - Broadband 2018 Outlook 26
Slide 27: Broadband (1Q-2018 vs 1Q-2017)
Broadband (1Q-2018 vs 1Q-2017) ❖ Revenue stable ❖ ARPU flat at S$33 ❖ Customer base decreased by 1k 27
Slide 28: Broadband Base & Churn
Broadband Base & Churn (‘000) Customers 470 467 466 467 469 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Average Monthly Churn Rate (%) 1.0 1.1 0.9 0.9 0.9 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Change in computation basis from end-subscriber base to average end-subscriber base 28
Slide 29: Broadband Revenue & ARPU
Broadband Revenue & ARPU (S$M) Revenue 47.2 46.1 46.5 47.4 47.5 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 ARPU (S$ per month) 33 32 32 32 33 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 29
Slide 30: Business Highlights – Enterprise Fixed
1Q2018 Highlights Financial Highlights Business Highlights – Enterprise Fixed 2018 Outlook 30
Slide 31: Enterprise Fixed (1Q-2018 vs 1Q-2017)
Enterprise Fixed (1Q-2018 vs 1Q-2017) ➢ Data & Internet revenue increased 1.7% ➢ Managed services increased 124.2% ➢ Voice revenue decreased 31.4% 31
Slide 32: Enterprise Fixed Revenue
Enterprise Fixed Revenue (S$M) 130.5 117.5 110.3 99.6 100.1 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 32
Slide 33: Data & Internet/Managed services
Data & Internet/Managed services (S$M) Data & Internet 75.3 74.5 74.1 72.9 71.7 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 Managed Services (S$M) 43.3 36.8 23.4 16.4 14.6 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * The revenue for managed services has been excluded from Data & Internet and is shown as a separate i
Slide 34: Voice services
Voice services (S$M) 12.8 11.5 11.9 11.0 7.9 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 * Comparatives for Voice services have been restated to take into account the retrospective adjustments relating to SFRS(I) 15 affecting Digital Voice 34 which is part of the HomeHub bundle
Slide 35: 2018 Outlook
1Q2018 Highlights Financial Highlights Business Highlights 2018 Outlook 35
Slide 36: FY2018 Outlook
FY2018 Outlook ➢ Revenue: Maintain service revenue to be 1% to 3% lower YoY ➢ Service EBITDA*: Expect service EBITDA margin to be between 27 - 29% after adoption of SFRS(I) 15 ➢ CAPEX: Maintain cash capex to be about 11% of total revenue (excludes spectrum and building payments) ➢ Dividend: Declare
Slide 37: Investor Relations Contact
Investor Relations Contact Investor Relations Contact For IR-related queries, please email or call: Jeannie ONG Nicholas TEE Chief Strategic Partnership & IR Officer Manager, Corporate Communications & Investor Relations DID: +65 6825 5168 DID: +65 6825 5134 jeannieo@starhub.com / ir@starhub.com nic