Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q4 2013 Earnings Presentation
22 slides from Chunghwa Telecom's earnings presentation, Jan 29, 2014
Slide 1: Q4 2013 Operating Results
Q4 2013 Operating Results January 29, 2014 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: Business Overview
Business Overview
Slide 4: Chunghwa Telecom Overview
Chunghwa Telecom Overview Dominant Market Position (a) Highest Mobile Internet Subs Market Share(e) Domestic Fixed 35% 33.3% 33.5% 34.1% 34.8% – #1 Local 30.0% 29.6% 28.8% 28.2% 30% 29.0% 28.5% • 94.7% share by subs (11.57 mn subs) 27.6% 27.2% • 86.2% share by minutes 25% – #1 DLD 20% • 76.7% share
Slide 5: Number One Mobile Services Provider
Number One Mobile Services Provider Performance Highest Mobile VAS Revenue Growth % Strategy 7.71 Solidifying high-tier smartphone subscriber 7 6.20 6.23 6 5.53 base by offering quality handset models 4.88 5.01 5 Introducing mid-to-low tier smartphones to NT $bn 4 3 expand mobile internet subscriber
Slide 6: Smartphone – Value Driver for Mobile
Smartphone – Value Driver for Mobile Smartphone Adoption Smartphones accounted for 89% of the total Smartphone penetration* handsets CHT offered in Q4 2013 62% 100% 60% 50% 53% 25.0% 21.0% 43% 47% 80% 27.0% 27.0% 50% 38% 40% 19.0% 30% 60% 25.0% 41.0% 20% 49.0% 40% 10% 0% 56.0% 20% 48.0% Dec 12 Mar 1
Slide 7: Fixed Broadband and Internet Services
Fixed Broadband and Internet Services Performance Strategy Continuing to migrate customers from low Broadband Access Revenue NT$ mn 708 710 698 703 708 ARPU NT$ speed to high speed fiber services 5,000 3,724 3,767 3,695 3,819 3,923 600 Leveraging network capability to offer 400 higher-speed upload s
Slide 8: MOD/IPTV Service
MOD/ IPTV Service Performance Subscriber & Usage Subscriber market share (CATV+IPTV) YoY grew from IPTV revenue increased by 15.0% YoY 19.0% to 19.7 % in Q3 2013 in 2013 82.3% of IPTV subscribers signed up additional Packages IPTV advertisement revenue grew by 37.0% YoY in 2013 Total IPTV Subscriber
Slide 9: ICT and Cloud Computing Initiatives
ICT and Cloud Computing Initiatives Performance Strategy Cloud service revenue tripled YoY in 2013 Leveraging core telecom infrastructure and services to expand ICT business Personal Cloud (Hami+) subscribers accumulated to 1.47 million Leading the cloud computing industry by Acquired several signif
Slide 10: Regulatory Update
ime DEBE = ‘Chunghwa’ Regulatory Update
Slide 11: Regulatory Update
Regulatory Update • NCC released the detailed regulation for 4G technology-neutral licenses and spectrum bidding in May 2013. • NCC announced seven qualified bidders on August 13, 2013. 4G Spectrum Auction • The bidding process ran from September 3 to October 30, 2013. Six of qualified bidders secur
Slide 12: Financials Overview
Financials Overview
Slide 13: Financials: Income Statement Highlights
Financials: Income Statement Highlights Consolidated Q4 2012 Q4 2013 Growth 2012 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Revenues 56.25 58.82 4.6% 221.42 228.00 3.0% Operating Costs and 45.09 47.82 6.1% 171.48 180.49 5.3% Expenses Other Income and (0.30) 0.10 - (1.57) 0
Slide 14: Financials: Business Segment Revenues
Financials: Business Segment Revenues Consolidated Q4 2012 Q4 2013 Growth 2012 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Domestic Fixed 19.29 19.34 0.3% 76.13 73.55 -3.4% Local 9.83 9.23 -6.1% 40.86 37.82 -7.5% DLD 0.90 0.85 -4.8% 3.77 3.46 -8.0% Broadband Access 4.83 4.8
Slide 15: Financials: Costs & Expenses
Financials: Costs & Expenses Consolidated Q4 2012 Q4 2013 Growth 2012 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Operating Costs 36.81 38.56 4.8% 141.51 147.08 3.9% Operating Expenses 8.28 9.26 11.9% 29.97 33.41 11.5% Marketing 6.27 7.20 14.8% 22.25 25.53 14.7% General and
Slide 16: Cash Flow & EBITDA Margin
Cash Flow & EBITDA Margin Consolidated Q4 2012 Q4 2013 Growth 2012 2013 Growth (NT$bn) (T-IFRSs) (T-IFRSs) Rate (T-IFRSs) (T-IFRSs) Rate Net Cash Flow from 24.57 30.04 22.3% 66.06 75.04 13.6% Operating Activities CAPEX 10.72 13.11 22.2% 33.28 36.42 9.4% Free Cash Flow 13.85 16.93 22.3% 32.78 38.62 1
Slide 17: Forecast & Operating Results
Forecast & Operating Results Consolidated 2013 2014 Growth (NT$bn) (T-IFRSs ) (T-IFRSs E) Rate Revenues 228.00 228.23 0.1% Operating Costs and Expenses 180.49 184.70 2.4% Other Income and Expenses 0.08 - - Income from Operations 47.59 43.53 (8.5%) Net Income 39.84 35.84 (10.1%) EPS 5.14 4.62 (10.1%)
Slide 18: Effective and Efficient Capital Expenditure
Effective and Efficient Capital Expenditure Capital Expenditure Increase capital expenditure – Fixed and Mobile broadband NT$ bn – Cloud deployment including cloud data 40.1 33.3 36.4 center build out 22.3% 50 26.9 16.0% 17.6% 19.1% 20% Budgeted capex for 2014: NT$40.1bn 15.0% 45 12.4% Continue to f
Slide 19: Q&A
Q&A
Slide 20: Reference
Reference
Slide 21: 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, 2017 and applied SMP 2 Domestic
Slide 22: Continuing Broadband Network Construction
Continuing Broadband Network Construction FTTH Fiber Deployment Plan Thousands FTTN/FTTB Coverage Port ADSL 97% 97% FTTx coverage (≥100M) reach 97% by 12,000 95% 100% Coverage(≥100Mbps) 97% 2016 92.8% 95% Coverage(≥60Mbps) 90% 90% 2,494 10,000 82% 86.7% 2,014 Increase FTTH construction in order to 7