Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q1 2013 Earnings Presentation
23 slides from Chunghwa Telecom's earnings presentation, May 2, 2013
Slide 1: Q1 2013 Operating Results
Q1 2013 Operating Results May 2, 2013 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 Dominant Market Position (a) Mobile Internet Subs Market Shares (e) 100% Domestic Fixed 6.8% 6.9% 7.4% 7.7% – #1 Local 90% 80% 29.7% • 94.9% share by subs (12.0 mn subs) 30.2% 29.3% 29.0% 70% • 87.1% share by minutes 60% – #1 DLD 50% 30.7% 30.5% 30.1% 30.0% • 75.8% share by
Slide 4: Committed to Improving Shareholder Value
Committed to Improving Shareholder Value Cash Return NT$ bn 70 Board resolved to distribute special cash dividend of NT$0.7205 per share 60 from capital surplus 19.4 50 9.7 19.1 Total payment will be NT$5.35 per 9.7 40 share or NT$41.5 billion including the 5.59 earnings distribution of NT$4.6295 pe
Slide 5: Business Overview
Business Overview
Slide 6: Number One Mobile Services Provider
Number One Mobile Services Provider Performance Strategy Increasing mobile internet subscriber share Further introducing mid to low tier from 32.3% to 33.3% in 1Q 2013 QoQ smartphones to expand mobile internet subscriber base Representing the highest mobile VAS revenue growth rate in 1Q 2013 among t
Slide 7: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Smartphone Adoption Smartphone penetration (note) 1Q 2013 smartphone sales breakdown: 49% 50% 43% – Top-tier: 56 % 35% 38% 40% 29% 32% 30% – Mid-tier: 19 % 20% – Low-tier: 25 % 10% 0% Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Dec 13 (E) Smartphone customers account 84%
Slide 8: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Promoting fiber convergence plan (fiber solution Broadband Access Revenue ARPU NT$ + MOD family package) NT$ mn 701 700 704 708 710 5,000 800 Increasing fiber network coverage, promoting 3,467 3,599 3,668 3,724 3,767 high-speed internet to f
Slide 9: MOD/IPTV Service
MOD/ IPTV Service Performance Subscriber & Usage IPTV revenue grew over 8.4% YoY in Subscriber market share (CATV+IPTV) YoY grows Q1 2013 from 17.3% to 19.3 % in Q4 2012 78.2% of IPTV subscribers sign up additional Packages IPTV advertisement revenue in 1Q 2013 – Package subscription rate YoY increa
Slide 10: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives Strategy Focus in 2013 Leverage core telecom infrastructure and services to Cloud Service: 2013 revenue expects to be doubled expand cloud services, energy saving initiatives, information security, intelligent buildings and IOT Government Cloud services Offer cl
Slide 11: Regulatory Update
ime DEBE = ‘Chunghwa’ Regulatory Update
Slide 12: Regulatory Update
Regulatory Update • Mandatory tariff reduction starting from April 1, 2013 over 4 years (Please refer to reference page 22) Tariff • NCC regulate mobile wholesale tariff to reduce retail price indirectly Regulation • NCC announced mobile interconnection rate reduction from Jan. 5, 2013 • The rate is
Slide 13: Financials Overview
Financials Overview
Slide 14: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated 2011 2012 Growth Q1 20121 Q1 20131 Growth (NT$bn) (ROC GAAP) (ROC GAAP) Rate (T-IFRSs) (T-IFRSs) Rate Net Revenues 217.49 220.13 1.2% 55.48 56.63 2.1% Operating Costs and 162.41 171.22 5.4% 44.01 45.39 3.1% Expenses Income from 55.08 48.91 (11.2%)
Slide 15: Financials: Business Segment Revenues
Financials: Business Segment Revenues Consolidated 2011 (ROC 2012 (ROC Growth Q1 20121 Q1 20131 Growth (NT$bn) GAAP) GAAP) Rate (T-IFRSs) (T-IFRSs) Rate Domestic Fixed 79.35 75.55 -4.8% 19.17 18.05 -5.9% Local 41.69 40.22 -3.5% 10.20 9.42 -7.6% DLD 5.79 3.77 -34.9% 1.00 0.85 -15.2% Broadband Access
Slide 16: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated 2011 2012 Growth Q1 20121 Q1 20131 Growth (NT$bn) (ROC GAAP) (ROC GAAP) Rate (T-IFRSs) (T-IFRSs) Rate Operating Costs 131.53 141.18 7.3% 36.58 37.44 2.3% Operating Expenses 30.88 30.04 (2.7%) 7.43 7.96 7.0% Marketing 23.17 22.32 (3.7%) 5.57 6.04 8.5% General
Slide 17: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated 2011 2012 Q1 20121 Q1 20131 (NT$bn) (ROC GAAP) (ROC GAAP) Growth Rate (T-IFRSs) (T-IFRSs) Growth Rate Net Cash Flow from 75.36 67.56 (10.3%) 13.03 8.54 (34.5%) Operating Activities CAPEX 26.88 33.28 23.8% 6.69 7.53 12.6% Free Cash Flow 48.48 34.28 (29.3%) 6.34
Slide 18: Forecast & Operating Results
Forecast & Operating Results Consolidated 20121 2013 Growth Q1 20131 Q1 2013 Achieving (NT$bn) (T-IFRSs) (T-IFRSs E) Rate (T-IFRSs) (T-IFRSs E) Rate Net Revenues 221.42 217.82 (1.6%) 56.63 53.61 105.6% Operating Costs and 171.48 172.71 0.7% 45.39 42.95 105.7% Expenses Income from 49.94 45.11 (9.7%)
Slide 19: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure NT$ bn Increase capital expenditure 33.3 37.2 – Fixed and Mobile broadband 40 17.1% 20% 12.4% 15.1% 0.8 13.3% – Cloud deployment including cloud data 12.2% 12.1% 35 0.7 2.0 center build out 5.2 10% 2.4 Capex as % of Revenue 30 26.9 24.6
Slide 20: Q&A
Q&A
Slide 21: Reference
Reference
Slide 22: 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, SMP 2017 and applied (Significan
Slide 23: Continuing Broadband Network Construction
Continuing Broadband Network Construction Fiber Deployment Plan FTTH Thousands Coverage FTTN/FTTB Port FTTx coverage (>=100M) reach 97% by ADSL 97% 97% 10,000 Coverage(≥100Mbps) 95% 100% 2016 88% 95% 97% 9,000 Coverage(≧ 50Mbps) 90% 82% 450 750 90% 1,250 1,800 Increase FTTH construction in order to