Slide 1: FY 2012 Operating Results
FY 2012 Operating Results January 30, 2013 TSE: 2412 NYSE: CHT
Slide 2: Disclaimer
Disclaimer STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION The unaudited financial information under ROC GAAP in this presentation is preliminary and subject to adjustments and modifications. The audited financial statements and related notes with reconciliation to U.S. GAAP will be included in
Slide 3: 2012 Performance
2012 Performance Consolidated Revenue Income and EBITDA NT$ bn NT$ bn Income from Operations Net Income EBITDA 57 56.27 55.71 55.42 25 56 54.89 55 54.42 54.19 54.40 20 54 15 53 52.30 52.48 52 10 51 5 50 0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12
Slide 4: Focus on Stable Dividend
Focus on Stable Dividend Cash Return NT$ bn 70 Expect to maintain a stable dividend 60 The company’s legal reserve is 19.4 expected to amount of paid-in capital 50 after 2015 AGM 9.7 19.1 9.7 40 As a profitable company, our legal reserve and capital surplus is allowed 30 to directly distribute cash
Slide 5: Business Overview
Business Overview
Slide 6: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Highest Subs & Lowest Churn Strategy Thousand 12,000 2.5% Further introducing mid to low tier smartphones to 10,000 expand mobile internet subscriber base Subscribers 2.0% Accelerating the migration of 2G customers to 3G Churn 8,000 1.5% 6,000 network 1.0% 4,000
Slide 7: Growing Mobile Value-added Services
Growing Mobile Value-added Services VAS Performance Strategy NT$ mn Increasing mobile VAS revenue by: 28.9% 30.2% 27.9% Mobile VAS Revenue % 6,000 25.8% 30% 22.7% 334 332 – Offering promotion programs focusing on VAS revenue 341 1,178 328 1,325 4,000 338 1,333 20% 1,230 1,255 additional data plan ad
Slide 8: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Increasing fiber network coverage, promoting Broadband Access Revenue high-speed internet to further expand fiber NT$ mn 741 702 700 704 708 ARPU NT$ broadband customer base 800 5,000 3,734 Applying data mining capability for precision 3,414
Slide 9: Growing Momentum in MOD/IPTV
Growing Momentum in MOD/ IPTV Subscriber & Usage Strategy Subscriber market share (CATV+IPTV) YoY grows Continuing to enrich local content and introduce from 15.9% to 19.0 % in Q3 2012 popular channels 76.4% of IPTV subscribers sign up additional Packages Cooperating with local TV manufacturers to –
Slide 10: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives ICT Business Strategy Cloud Computing Strategy Expand business scope and focus to include: Strengthen cloud computing infrastructure - ITS, iEN, information security, IMO, call center, IDC, Cloud Provide hicloud CaaS, SaaS CRM, hicloud marketplace, Computing, ICT
Slide 11: Regulatory Update
ime DEBE = ‘Chunghwa’ Regulatory Update
Slide 12: Regulatory Update
Regulatory Update Mobile •NCC announced mobile interconnection rate reduction from Jan.2, 2013 Interconnection rate •The rate is to reduce from NT$2.15/min to NT$1.15/min in 4 years with CAGR -14.5% •Mandatory tariff reduction starting from April 1, 2013 over 4 years (Please refer to reference page
Slide 13: Financials Overview
Financials Overview
Slide 14: Financials: Income Statement Highlights
Financials: Income Statement Highlights ROC GAAP (Consolidated) Growth Growth (NT$bn) 2011 2012 Rate Q4 2011 Q4 2012 Rate Net Revenues 217.49 220.28 1.3% 54.89 56.27 2.5% Operating Costs and 162.41 171.22 5.4% 43.04 45.08 4.8% Expenses Income from 55.08 49.06 (10.9%) 11.85 11.19 (5.6%) Operations Ne
Slide 15: Financials: Business Segment Revenues
Financials: Business Segment Revenues ROC GAAP (Consolidated) Growth Growth (NT$bn) 2011 2012 Q4 2011 Q4 2012 Rate Rate Domestic Fixed 79.35 75.70 (4.6%) 19.85 19.32 (2.7%) Local 41.69 40.37 (3.2%) 10.37 9.85 (5.0%) DLD 5.79 3.77 (34.9%) 1.39 0.9 (35.3%) Broadband Access 20.42 19.18 (6.1%) 5.05 4.84
Slide 16: Financials: Costs & Expenses
Financials: Costs & Expenses ROC GAAP (Consolidated) Growth Growth (NT$bn) 2011 2012 Rate Q4 2011 Q4 2012 Rate Operating Costs 131.53 141.14 7.3% 34.77 36.77 5.8% Operating Expenses 30.88 30.08 (2.6%) 8.27 8.31 0.5% Marketing 23.17 22.41 (3.3%) 6.33 6.36 0.6% General and Administrative 4.18 4.00 (4.
Slide 17: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin ROC GAAP (Consolidated) (NT$bn) 2011 2012 Growth Rate Q4 2011 Q4 2012 Growth Rate Net Cash Flow from 75.36 67.61 (10.3%) 30.31 24.53 (19.1%) Operating Activities CAPEX 26.88 33.34 24.0% 10.29 10.78 4.7% Free Cash Flow 48.48 34.27 (29.3%) 20.02 13.75 (31.3%) Cash and Cash Eq
Slide 18: Forecast & Operating Results
Forecast & Operating Results (Consolidated) 2012 2013 Growth (NT$bn) (ROC GAAP) (T-IFRSs E) Rate Net Revenues 220.28 217.82 (1.1%) Operating Costs and Expenses 171.22 172.71 0.9% Income from Operations 49.06 45.11 (8.1%) Comprehensive Income attributable 40.07 37.59 (6.2%) to owners of the parent (N
Slide 19: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure NT$ bn 37.2 18.8% 19.2% Increase capital expenditure 40 33.3 17.1% 20% 15.1% – Fixed and Mobile broadband 0.8 12.2% 12.4% 2.0 35 – Cloud deployment including cloud data 0.7 2.4 5.2 10% center build out Capex as % of Revenue 30 26.9 3.4
Slide 20: Business Outlook for 2013 and Beyond
Business Outlook for 2013 and Beyond Focus on growth Leverage solid customer base to provide new services Enhance fixed and mobile VAS service offerings Offer ICT enabling and cloud services Increase infrastructure investment over next 2 years Expand fixed and mobile broadband networks Build out clo
Slide 21: Q&A
Q&A
Slide 22: Reference
Reference
Slide 23: 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 1 IP Peering 1. The four year tariff reduction plan is applicable 2 Domestic leased line wholesale service from April 1. 2013 to March 31, SMP 2017 and applied (Significant Fixed-li
Slide 24: 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