Hkt Trust And Hkt Ltd · HKEX:6823
Hkt Trust And Hkt — FY2019 Earnings Presentation
27 slides from Hkt Trust And Hkt's earnings presentation, Feb 12, 2020
Slide 1: 2019 Annual Results
2019 Annual Results For the year ended December 31, 2019 February 12, 2020 – Hong Kong
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain "forward-looking statements" that are not historical in nature. These forward-looking statements, which include, without limitation, statements regarding HKT’s future results of operations, financial condition or business prospects, are based
Slide 3: Business Review
Business Review Susanna Hui Group Managing Director 3
Slide 4: Highlights
Highlights HKT delivered another solid operating and financial performance in 2019 amidst a very challenging environment Consumer broadband and mobile businesses remain resilient; Enterprise business continued to benefit from the growing digital economy Usher in the 5G era with unparalleled network
Slide 5: Sustained Growth and Shareholder Return
Sustained Growth and Shareholder Return Final Distribution of 40.37 HK cents per Share Stapled Unit HK Cents 2019 Dividend Yield : 5.94% * Interim Distribution 30.01 Final Distribution 40.37 Total Distribution 70.38 3% yoy (US$ million) 2018 2019 % change Revenue (excl. Mobile Product Sales) 3,773 3
Slide 6: Consumer Broadband Resilient
Consumer Broadband Resilient Growing High-speed Broadband Adoption Continued Expansion in Customer Base Supported by our FTTH Network and Home Wi-Fi and Smart Living Solutions via Multi-Brand Strategy 997 940 159 164 VDSL FTTH FTTH Sustained Low Churn Rate (’000) 781 833 +7% YoY 1,450 1,445 0.8% 0.8
Slide 7: Unparalleled Network as the Backbone for the Digital Economy
Unparalleled Network as the Backbone for the Digital Economy Extensive fiber coverage providing resilience and high availability 4 international submarine cable landing stations providing superior overseas coverage and capacity Fully resilient global internet network with a diverse internation
Slide 8: High Resilience of International Network Infrastructure
High Resilience of International Network Infrastructure Tier 1 Global IP Network Undersea Cable Transmission Systems Under Management MEDEX IACS JUPITER PLCN RNAL PEACE WACS AAE-1 ASE/APG HKT is one of the top carriers of IP traffic globally consistently being MARS in the top 10 Our internationa
Slide 9: Empowering Digital Transformation
Empowering Digital Transformation Public Services Utilities New Generation Parking Meter System Digital Platform for Power Companies An integrated and mobile-connected parking meter solution Energy platform reliability for smart on-street parking experience and effective city Multiple levels o
Slide 10: Driving Mobile Growth through High ARPU Segment
Driving Mobile Growth through High ARPU Segment Expanded Customer Base in Post-paid and Premium Segment Low Churn Reflects Success of Retention Efforts Post-paid Customer Base Post-paid Churn Rate Post-paid Exit ARPU 1O1O Customers 3,250 Held Steady 3,247 200 198 1.0% 1.0% (’000) (HK$) 2018 2019 201
Slide 11: Wide Range of Mobile Value Added Services
Wide Range of Mobile Value Added Services Post-paid Exit ARPU 200 198 (HK$) 2018 2019 11
Slide 12: See the World Differently. csl 5G
See the World Differently. csl 5G Total 400 MHz of spectrum High Band Supports Ultra High Speed up to 4Gbps# (1Gbps*) (28GHz) For traffic hotspots and private campus solutions Total 120 MHz of spectrum Supports High Speed up to 2Gbps# (200 Mbps*) Mid Band Providing good outdoor coverage
Slide 13: Exciting 5G Product Line-Up
Exciting 5G Product Line-Up Consumer Enterprise Applications Applications Smart City Utilities Virtual Reality (VR) Entertainment o 4K/8K content with 360 • VR broadcasting and immersive experience multi-view content Healthcare Augmented Reality (AR) • Remote tele-medicine Retail AR experience w
Slide 14: Digitalization to Improve Operating Efficiencies
Digitalization to Improve Operating Efficiencies Digital Channels Retail Shop Consolidation Data Analytics Customer engagement through Driving productivity gains and cost Optimizing and improving sales digital sales channels has increased savings via retail shop consolidation and service chann
Slide 15: Expanding and Deepening The Club Ecosystem
Expanding and Deepening The Club Ecosystem Deepening the Relationship with our Customers Enhancing Customer Retention and Increasing Engagement through New Service Offerings Over 2.95 million + 8% YoY Members Coalition and Redemption Partners 800+ Redemption Items 4,300+ A Loyalty and Reward Platfor
Slide 16: Financial Services to Enhance Customer Engagement
Financial Services to Enhance Customer Engagement Consumer Merchant 2.5 Million Account in Service as of Dec 2019 Over 1,000 mobile POS terminals subscribed as of Dec 2019 (since launch in Jun 2019) Customer Customer Other Engagement Other Engagement Financial Services Financial Services Analyti
Slide 17: Financial Review
Financial Review Evan Wong Chief Financial Officer 17
Slide 18: HKT Sustains Market Leadership
HKT Sustains Market Leadership Consistent Growth Driven by Solid Underlying Performance (US$ million) 2018 2019 % change Adjusted Funds Flow 663 683 + 3% Revenue (excl. Mobile Product Sales) 3,773 3,808 + 1% Revenue 4,511 4,244 - 6% EBITDA 1,610 1,643 + 2% EBITDA Margin (excl. Mobile Product Sales)
Slide 19: TSS Continues Steady Growth Trajectory
TSS Continues Steady Growth Trajectory TSS Revenue (US$ million) TSS EBITDA (US$ million) 2,792 2,814 + 1% yoy 1,052 1,072 + 2% yoy Broadband Network 630 643 + 2% yoy Local Data 315 355 + 13% yoy International 958 942 - 2% yoy Local Telephony 429 418 - 2% yoy Others 460 456 - 1% yoy 2018 2019 2018 2
Slide 20: Mobile Consolidates Market Leadership
Mobile Consolidates Market Leadership Mobile Revenue (US$ million) Mobile EBITDA (US$ million) 1,796 1,515 650 + 2% yoy 636 Mobile Services + 2% yoy 646 654 Mobile Services Mobile 1,079 Mobile 1,058 + 1% yoy Services Services 738 EBITDA 61% 61% Mobile Product Margin 436 Sales (10) (4) 2018 2019 2018
Slide 21: Continued Focus to Drive Operating Efficiencies
Continued Focus to Drive Operating Efficiencies Operating Expenses (US$ million) Opex savings of 3% in 2019, benefiting from our continued focus on maximizing 596 577 - 3% yoy efficiencies across all lines of core business: Enhanced staff efficiency through 181 178 business automation/digitaliza
Slide 22: Disciplined Capital Investments while Investing for the Future
Disciplined Capital Investments while Investing for the Future Capex (US$ million) Capex to revenue ratio was 8.2%, 332 346 + 4% yoy within stated guidance 113 Mobile spending focused on critical 112 infrastructure enhancements, network capacity expansion and preparation for 5G rollout 202 215 M
Slide 23: Adjusted Funds Flow (US$ million)
Adjusted Funds Flow (US$ million) 2018 2019 YoY Better/ (Worse) EBITDA 1,610 1,643 + 2% Less cash outflows in respect of capital expenditures, customer acquisition costs and licence fees: Capital expenditures (325) (339) Customer acquisition costs and licence fees (160) (153) Fulfillment costs (48)
Slide 24: Income Statement (US$ million)
Income Statement (US$ million) 2018 2019 YoY Better/ (Worse) Revenue 4,511 4,244 (6)% Revenue (excluding Mobile product sales) 3,773 3,808 + 1% Cost of sales (2,305) (2,024) + 12% Opex (596) (577) + 3% EBITDA 1,610 1,643 + 2% Depreciation & amortization expenses (685) (657) Net finance costs (173) (
Slide 25: Solid Financial Position, Investment Grade Credit Ratings
Solid Financial Position Investment Grade Credit Ratings BBB/Baa2 As of As of Investment (US$ million) Dec 2018 Dec 2019 Grade Rating Gross Debt (1) 5,178 5,220 Gross Debt to EBITDA (2) 3.22x 3.18x Cash Balance (3) 392 372 (4) Undrawn Facilities 849 1,178 Total 1,241 1,550 (1) Gross debt refers to t
Slide 26: Debt Maturity Profile
Debt Maturity Profile As of December 31, 2019 (US$ million) Bank Loans Bonds 1,168 New Issue in September 2019 669 750 500 500 500 262 358 300 213 2020 2021 2022 2023 2024 2025 2026 2027 2029 2030 Raised US$500 million 10-year bonds at a coupon rate of 3.25% at a favorable market window Current
Slide 27: Highlights
Highlights HKT delivered another solid operating and financial performance in 2019 amidst a very challenging environment Consumer broadband and mobile businesses remain resilient; Enterprise business continued to benefit from the growing digital economy Usher in the 5G era with unparalleled network