Hutchison Telecommunications Hong Kong Holdings Limited · HKEX:215

Hutchison Telecommunications Hong Kong — H1 2017 Earnings Presentation

25 slides from Hutchison Telecommunications Hong Kong's earnings presentation, Jul 25, 2017

  1. Slide 1: 2017 Interim Results Presentation

    2017 Interim Results Presentation 25 July 2017

  2. Slide 2: Disclaimer

    Disclaimer Potential investors and shareholders (the “Potential Investors and Shareholders”) of Hutchison Telecommunications Hong Kong Holdings Limited (“the Company”) are reminded that information contained in this Presentation comprises extracts of operational data and financial information of the

  3. Slide 3: Business Performance

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  4. Slide 4: Challenging 2017 and achievements made

    Challenging 2017 and achievements made Key Challenges Our efforts and achievements • Intensified competition • Mobile Customer base grew to 3.3m • Disruptive mobile pricing • Churn improved to 1.2% • Increasing spectrum and network • Strengthened presence in gaming costs, for example, MTR fees marke

  5. Slide 5: Highlights

    Highlights • Group consolidated revenue was HK$5,069 million, with net service revenue stable at HK$3,896 million • Mobile local net service revenue remains stable at HK$1,615 million • Stable consolidated opex and capex • Consolidated EBITDA reports at HK$1,269 million • Consolidated EBIT reports a

  6. Slide 6: Mobile

    Mobile Our customers benefit from HTHKH’s style of innovation via advanced mobile networks and services delivered in customer-centric fashion. 5

  7. Slide 7: Mobile business

    Mobile business 1H 2017 1H 2016 Favourable/ (unfavourable) HK$ million HK$ million Change Total revenue 3,117 3,472 -10% - Net customer service revenue 1,944 1,973 -1% - Local service revenue 1,615 1,612 - - Roaming - Hardware service revenue revenue 329 361 1,499 -9% - Hardware revenue 1,173 1,499

  8. Slide 8: Mobile Service Revenue

    Mobile Service Revenue Total mobile service revenue 3,000 HK$ millions 1,973 1,944 1,500 0 1H 2016 1H 2017 Mobile local service revenue Mobile roaming service revenue 2,500 500 361 1,612 1,615 329 HK$ millions HK$ millions 1,250 250 0 0 1H 2016 1H 2017 1H 2016 1H 2017 7

  9. Slide 9: Mobile KPIs

    Mobile KPIs Total customers in Hong Kong and Macau Postpaid Churn 4,000 1H 2016 1H 2017 3,268 0.0% 3,078 +6% Postpaid Percentage (%) 1,486 Prepaid 1,481 2,000 1.0% 1,597 1,782 1.2% 1.3% 0 1H 2016 1H 2017 2.0% Blended data usage per 3G+4G customers Blended local postpaid net ARPU(1) and net AMPU(1) 2

  10. Slide 10: Fixed-line

    Fixed-line HTHKH enables customers with international, corporate, data centre and residential broadband services via an extensive fibre-optic network. 9

  11. Slide 11: Fixed-line business – financial highlights

    Fixed-line business – financial highlights 1H 2017 1H 2016 Favourable/ HK$ million HK$ million (unfavourable) (Restated) Change Revenue 2,167 2,112 +3% Operating expenses (1,485) (1,443) -3% Opex as % of revenue 69% 68% -1% point EBITDA 682 669 +2% EBITDA margin % 31% 32% -1% point Depreciation and

  12. Slide 12: Fixed-line business

    Fixed-line business Data centre and Others: 5% (1H 2016: 5%) • 88% fixed-line revenue contributed Residential 12% from non-residential market (1H 2016: 12%) International and Local Carrier 51% • 3% YoY growth Corporate and (1H 2016: 53%) Business 32% (1H 2016: 30%) Total Fixed-line revenue 1H 2017 :

  13. Slide 13: Fixed-line international and local carrier market

    51% Fixed-line international and local carrier market • Stable revenue stream International and local carrier Revenue • Growth potential in 5G, OTT and IoT 1,200 1,111 1,110 HK$ millions 632 620 600 479 490 0 1H 2016 1H 2017 Data IDD 12

  14. Slide 14: Fixed-line corporate and business market

    32% Fixed-line corporate and business market • 8% YoY growth driven by strong demand in Corporate and Business Revenue data • Large and diversified base of corporate and 800 688 SME customers 635 HK$ millions 118 121 • Winning vertical penetration strategy (e.g. banks, government, insurance, logisti

  15. Slide 15: Fixed-line residential market

    12% Fixed-line residential market Residential Market Revenue • Over 1.8m fibre homepass 300 • Stable broadband subscribers base with 90%+ on 100Mbps or higher HK$ millions • Strong value proposition with 1GB FTTH in offer and multi-play infotainment 150 262 250 • Steep price competition 0 1H 2016 1H

  16. Slide 16: Data Centre and others

    5% Data Centre and others Data centre and other Revenue • 48% growth in data centre revenue 150 • Acquired remaining 50% interest in 119 104 data centre business from CKHH HK$ millions Group 75 50 74 54 45 0 1H 2016 1H 2017 (Restated) Interconnection and others Data Centre 15

  17. Slide 17: Financial Overview

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  18. Slide 18: Consolidated financial highlights

    Consolidated financial highlights 2017 1H 2016 1H Favourable/ HK$ million HK$ million (Unfavourable) (Restated) Change Consolidated service revenue 3,896 3,871 +1% Consolidated hardware revenue 1,173 1,498 -22% Consolidated revenue 5,069 5,369 -6% Consolidated service EBITDA 1,252 1,255 - Consolidat

  19. Slide 19: Consolidated cost items

    Consolidated cost items • Lower customer acquisition cost with key Consolidated cost items focus in retention activities 4,000 • Higher depreciation and amortisation from 3,356 +2% 3,436 spectrum renewal of 2100MHz and 740 792 HK$ millions 22% 23% 201 6% 176 5% activation of 2300MHz 446 13% 443 13%

  20. Slide 20: Capex investment

    Capex investment Consolidated Capex 500 434 427 16% % to service revenue HK$ millions 11% 11% 250 8% 0 0% 1H 2016 1H 2017 (Restated) Mobile Capex Fixed-line Capex 300 18% 300 18% 236 230 % to service revenue % to service revenue 198 197 HK$ millions HK$ millions 150 9% 150 11% 11% 9% 10% 10% 15.5% 0

  21. Slide 21: Consolidated financial position

    Consolidated financial position Net debt Net debt/LTM EBITDA 5,000 40% 2.0 1.8 4,515 1.6 Net debt to net total capital % 4,110 HK$ millions 25% 27% 1.0 2,519 2,500 20% 1.0 17% 0 0% 0.0 As at As at As at As at As at As at 30 Jun 2016 31 Dec 2016 30 Jun 2017 30 Jun 2016 31 Dec 2016 30 Jun 2017 (Restat

  22. Slide 22: Outlook

    Outlook [27] Hutchison telecom HB tong kong Holdings

  23. Slide 23: Strategies to meet the Challenges

    Strategies to meet the Challenges Customer • Invest in customer loyalty • Reward customers for relationship Experience • Segmental and delightful customer service More • Variety of innovative products tailored to specific needs • Innovative roaming and prepaid products Revenue • Integrated solution

  24. Slide 24: Q&A

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  25. Slide 25: Thank You

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