Pccw Limited · HKEX:8
Pccw — Investor Presentation (September 2012)
33 slides from Pccw's investor presentation, September 2012
Slide 1: Investor Presentation September 2012
Click to edit Master title style Investor Presentation September 2012 - 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 PCCW's future results of operations, financial condition or business prospects, are based
Slide 3: A Successful Combination – Solid Telecom Business with Media & Solutions Growth Businesses
A Successful Combination – Solid Telecom Business with Media & Solutions Growth Businesses (US$ million) Core Businesses (100%) (100%) (74.5%) Media Solutions Growth PCPD FY11 Revenue 273 FY11 Revenue 347 FY11 Revenue 283 businesses FY11 EBITDA 43 FY11 EBITDA 81 FY11 EBITDA 49 (63%) HKT Solid EBITDA
Slide 4: Sound Results Across Core Businesses – Revenue
Sound Results Across Core Businesses (US$ million) Core Business* PCPD Revenue 2,886 2,674 2,752 1,402 1,418 541 192 273 160 108 FY 2009 FY 2010 FY 2011 H1'11 H1'12 • Revenue grew across all core business segments * Core business includes HKT, Media and Solutions Businesses 3
Slide 5: Sound Results Across Core Businesses – EBITDA
Sound Results Across Core Businesses (US$ million) Core Business* PCPD EBITDA 906 930 861 453 471 Core 33% 33% 32% 32% 32% EBITDA Margin 100 37 43 31 21 FY 2009 FY 2010 FY 2011 H1'11 H1'12 • Increase in EBITDA underpinned by solid performance of HKT and moderate growth in the Media and Solutions bus
Slide 6: Media Business
Media Business 5
Slide 7: Expands ARPU and Customer Base
Expands ARPU and Customer Base (US$ million) Media Revenue Media EBITDA 347 81 301 306 152 162 30 23% 30 28 10% 19% 17% EBITDA 0% Margin 1 FY 2009 FY 2010 FY 2011 H1'11 H1'12 FY 2009 FY 2010 FY 2011 H1'11 H1'12 • Subscriber base increased to 1.17 million in H1’12 as a • Improved EBITDA and margin in
Slide 8: Steady Customer & ARPU Growth
Steady Customer & ARPU Growth • Both ARPU and customer base demonstrated good growth momentum driven by successful customer acquisition and up-selling activities surrounding exclusive premium content. 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 7
Slide 9: Compelling Content Captures Customers Who Demand Quality
Compelling Content Captures Customers Who Demand Quality Soccer Tennis Basketball Golf Others SPORTS Mainstream and niche events New* New* New* New* 3D MOVIES 22 movie channels with 1,300+ hrs on demand KIDS & EDUCATION 26 channels & on- demand learning and edutainment content 8 * Available in Aug-O
Slide 10: Original Production & Co-Production
Original Production & Co-Production Quality Chinese programs to satisfy the under-served middle and higher income segments in Hong Kong Builds up a content library for overseas distribution Star studded variety and talk shows Financial news & in-depth analysis from Hunan TV re-packaged to appeal
Slide 11: Innovative Services Extend Reach & Attract Premium Customers
Innovative Services Extend Reach & Attract Premium Customers PCCW Solutions provides the leading technology to enhance now TV’s customer experience. OTT Services HD Services • 23 HD channels & on-demand content Over 880K+ now apps downloads - attracting new • Most comprehensive in town and existin
Slide 12: Solutions Business
Solutions Business 1 = Pccw’
Slide 13: Achieves Steady Growth
Achieves Steady Growth (US$ million) Solutions Revenue Solutions EBITDA 283 261 49 230 36 140 145 26 20 22 14% 17% 15% 11% 14% EBITDA Margin FY 2009 FY 2010 FY 2011 H1'11 H1'12 FY 2009 FY 2010 FY 2011 H1'11 H1'12 • Steady growth of 3% in H1’12 with the order backlog • Continued expansion of EBITDA m
Slide 14: Unique Capabilities
Unique Capabilities Solutions • Design, Build, and Integrate systems for enterprise applications • Project based customized ICT (information communications technology) solutions • Typically large scale, high value contracts Seamless Integrated Service Operations • Maintain, and Operate application s
Slide 15: Leader in Greater China Region
Leader in Greater China Region HK Professional IT Services China and HK Professional IT Selected Awards and Market Share (2010) Services Market Share (2010) Recognition PCCW IBM 11.5% 12.2% Solutions PCCW 3.6% • #17 in Leader Category(2011) Global IBM 9.3% Solutions Outsourcing 100 Atos Accenture 3.
Slide 16: Clients Entrust Us with Their Critical IT Assets
Clients Entrust Us with Their Critical IT Assets More companies outsource their IT : reliable, cost efficient, never out-dated As a market leader in HK and China, PCCW Solutions benefits from this trend Experienced strong demand from increasingly diverse sectors Public Sector Retail & Manufact
Slide 17: Solid Business Momentum
Solid Business Momentum Total secured backlog increased to US$647M at end of June 2012, creating need for additional infrastructure and human resources Hong Kong’s data center capacity utilization increased from 86% to 95% To meet customer demand, secured 97,000 sq ft. space to build new data
Slide 18: Capture Market Opportunities with Growth Drivers
Capture Market Opportunities with 3 Growth Drivers Connecting Support large Mainland customers like to expand into China to the international markets and to enhance operation efficiency with world-class World software and MNC customers like for their China operations 193 New task force to build tail
Slide 19: Telecom Business
Telecom Business 18 = PCCW"
Slide 20: Delivers a Solid Performance
Delivers a Solid Performance (US$ million) HKT Revenue HKT EBITDA 2,542 Mobile 929 950 2,375 931 2,301 252 TSS 34 46 65 219 Others 214 728 Mobile 676 Local Data 634 Local Telephony International 436 1,223 1,246 464 479 TSS Others 511 462 44 118 145 901 897 898 28 Others Eliminations 341 369 538 476
Slide 21: Stable Fixed-line Business
Stable Fixed-line Business Solid Customer Base Maintained Since 2004 (’000) Business Lines Residential Lines 1,543 1,407 1,407 1,408 1,406 1,407 1,408 1,408 1,423 1,400 1,236 1,144 1,164 1,180 1,183 1,195 1,182 1,183 1,228 1,233 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 2012 20
Slide 22: eye Customer Base
eye Customer Base Rapid Growth of Higher ARPU eye Customer Base 242 eye Strategy 210 y eye strategy gaining traction (current penetration ~17% of residential 167 customers) y Additional revenues from email, Internet 120 browsing and now TV channel subscriptions 77 y Growing, high quality customer ba
Slide 23: Continued Growth in Broadband
Continued Growth in Broadband z Broadband continued to grow at a rate of 7% while churn was maintained at 1% z Industry dynamic has shifted from market share gain to value creation and ARPU growth 1,518 1,540 1,437 122 1,367 119 1,275 1,302 1,305 1,297 1,298 116 1,237 115 1,176 114 114 (‘000) 110 11
Slide 24: Wide Coverage of our Fiber Network
Wide Coverage of our Fiber Network FTTB (84.3%)* 1.5M or above (supporting speeds of up to 100Mbps) (98%) FTTH (70.1%)** (supporting speeds up to 1000Mbps) (as of Jul 2012) * FTTB ready means FTTH service can be available within 29 days of receiving a service order, building management access permit
Slide 25: Rapid Growth of Fiber Customers
Rapid Growth of Fiber Customers z NETVIGATOR Fiber-To-The-Home Service continued to attract new customers and existing customers for service upgrade z 240K NETVIGATOR customers enjoying FTTH service as of July 2012, grew 68% vs. Dec 2011 z Growing fiber customer base creates future upgrade opportuni
Slide 26: PCCW mobile Acquires More High-end Customers
PCCW mobile Acquires More High-end Customers z Total subscriber base reached 1.6M, up 7% yoy z Post-paid subscriber base over 1M, up 9% yoy z Post-paid exit ARPU increased 16% yoy to HK$185 from HK$160 z Approx. 70% of new customers had ARPU of over HK$200 Post-paid base z Almost half of the pre-pai
Slide 27: PCCW mobile's 4G LTE Network Launched
PCCW mobile’s 4G LTE Network Launched • Launch of 4G LTE network in May 2012 to complement existing 3G network (DC-HSPA+ 42Mbps) • Priced 4G SIM plans in line with 3G tariff pricing to encourage migration to higher speed 4G service • Re-farming the 1800 MHz spectrum and currently deploying the 1800
Slide 28: Demand-Driven Core Capex
Demand-Driven Core Capex (US$ million) Media, Solutions & Others HKT 241 228 • Capex to revenue ratio 208 36 remains within the below 21 14 10% guidance • HKT capex remains demand-driven 116 particularly to meet fiber 113 and mobile services 7 194 207 205 19 • Light capex spending required for the M
Slide 29: Strong Financial Position
Strong Financial Position Gross Debt(1) Debt Maturity Profile (US$ million) (US$ million) As at June 30, 2012 Bank Loans 4,521 4,528 US$ Bonds 3,318 3,025 706 546 3,018 (HKT) 500 500 500 266 300 2012 2013 2014 2015 2016 2022 FY 2009 FY 2010 FY 2011 H1'12 Gross Debt / 4.7x 4.8x 3.1x 3.4x • PCCW issue
Slide 30: Dividend Commitment to Reward Shareholders
Dividend Commitment to Reward Shareholders Final Dividend Interim Dividend • Maintain minimum dividend for 3 years at 2010 level (US$143m) $0.106 $0.102 • Strong cash flow from recurrent cash distribution $0.053 $0.0551 from HKT of more than $0.051 US$200m a year 2010 2011 2012 DPS (HK$) Interim $0.
Slide 31: Appendix
Appendix 30
Slide 32: Summary P&L
Summary P&L (US$ million) FY 2010 FY 2011 H1’11 H1’12 Revenue 2,944 3,159 1,562 1,526 - 2% Cost of sales (1,350) (1,461) (705) (677) Operating expenses (651) (725) (373) (357) Depreciation & Amortization (487) (506) (251) (273) Disposal loss on property, plant and equipment (6) - - - Net other gains
Slide 33: Adjusted Funds Flow
Adjusted Funds Flow Actual Actual Forecast Actual Actual (US$ million) FY10 FY11 FY12 H1’11 H1’12 EBITDA 929 950 977 464 479 Less cash outflows in respect of: Customer acquisition costs and licence fees (135) (181) (151) (79) (97) Capital expenditures (201) (201) (231) (92) (107) Adjusted Funds Flow