Hkbn Ltd. · HKEX:1310
Hkbn — H1 FY2022 Earnings Presentation
29 slides from Hkbn's earnings presentation, Apr 21, 2022
Slide 1: FY22 Interim Results Announcement
FY22 Interim Results Announcement Presented by William Yeung, Co-Owner & Executive Vice-chairman NiQ Lai, Co-Owner & Group Chief Executive Officer 21 April 2022
Slide 2: Disclaimer
Disclaimer These materials have been prepared by HKBN Ltd. (the “Company”) solely for use at this presentation and have not been independently verified. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or
Slide 3: NiQ Lai
NiQ Lai Co-Owner & Group Chief Executive Officer 3
Slide 4: Our Business Shows Resilience in Times of Adversity
Our Business Shows Resilience in Times of Adversity and Allows Us to Go Far and Beyond • Enterprise – New initiatives & partnerships for “new normal” customer needs • Residential – Beat competitors in price war with unique bundle offers & best-in-town 5G offers • ESG – AA in both MSCI Rating & HASE
Slide 5: Resilient Performance with Steady Growth
Resilient Performance with Steady Growth Financials in HK$mn, unless otherwise stated Revenue EBITDA* AFF $6,803m $1,320m $758m YoY +9% YoY +1% YoY +94% HoH +30% HoH +5% HoH +2% DPS: 40 HK Cents YoY +2.6% * Depreciation and amortization of the Disposal Group was not recognised on consolidation level
Slide 6: Consecutive Dividend Growth Since 2015 IPO
Consecutive Dividend Growth Since 2015 IPO For >470 Co-Owners, This is our Families’ AFF 75 76.5 70 1H22: 40 HK Cents 56 (+2.6% YoY) 45 40 39 40 20 FY15 FY16 FY17 FY18 FY19 FY20 FY21 1H21 1H22 # The dividend policy of the Company is to pay dividends in an amount of not less than 90% of the Adjusted
Slide 7: Sustaining Growth in EBITDA & AFF
Sustaining Growth in EBITDA & AFF Financials in HK$mn, unless otherwise stated Revenue EBITDA# AFF YoY +9% HoH +30% 6,803 YoY +1% 6,230 HoH +5% 5,234 YoY +94% 2,390 HoH +2% 3,288 1,643 1,312 1,320 3,840 1,257 741 758 3,591 3,515 * 391 FY21 1H FY21 2H FY22 1H FY21 1H FY21 2H FY22 1H FY21 1H FY21 2H F
Slide 8: Business Resilience amid Challenging Market
Business Resilience amid Challenging Market 7.9k 106k $2,905 Enterprise Commercial Enterprise Enterprise Buildings Customers ARPU Solutions YoY +7% YoY +1% YoY -4% HoH +5% HoH -1% HoH -5% 2.5m 889k $187 Homes Broadband Residential Residential Subscriptions ARPU # Passed Solutions YoY +2% YoY +3k YoY
Slide 9: Flat Service Revenue with Product Revenue Growth
Flat Service Revenue with Product Revenue Growth Financials in HK$mn, unless otherwise stated Enterprise Revenue YoY -7% HoH +5% Enterprise 3,864 3,411 3,586 • Excluding the impact of disposal of JOS 1,248 1,295 Singapore & Malaysia and wholesale IDD, core 1,061 Enterprise revenue remained flat both
Slide 10: Fitter and Leaner for Growth
Fitter and Leaner for Growth Financials in HK$mn, unless otherwise stated Operating Expenses* Capital Expenditure 991 984 326 292 FY21 1H FY22 1H FY21 1H FY22 1H Opex to Capex to Revenue Ratio: 15.9% 14.5% Revenue Ratio: 5.2% 4.3% Headcount 5,683 4,700 *Operating Expenses excluded Depreciation, Amor
Slide 11: Manageable Debt Profile
Manageable Debt Profile Net Leverage Ratio# • Successfully refinanced ~$11 billion of debt with improved terms and 4.7x headroom • Average remaining life decreased from 4.3 years as of Aug-21 to 3.8 years as of Feb-22. Average Finance Cost 2.3% # The Group has entered into facility agreements with v
Slide 12: William Yeung
William Yeung Co-Owner & Executive Vice-chairman 12
Slide 13: Strategic Partnerships – Strong Support from Allies
Strategic Partnerships – Strong Support from Allies Cisco 3HK Microsoft StarHub Disney+ UiPath PwC 13
Slide 14: Unique Partnerships to Win Together
Unique Partnerships to Win Together Click to watch on Youtube: https://youtu.be/BWjz8WZAclU Click to watch on Tencent Video: https://bit.ly/3MOXRmy 14
Slide 15: Enterprise Solutions
Enterprise Solutions ✓ 5G Promotions – Extend to all Enterprise Customers ✓ StarHub/JOS JV – Contracted Revenue Growth ✓ Microsoft W365 – One-stop Solutions with Broadband ✓ Cisco Umbrella – Exclusive Offer with HKBN ✓ UiPath – RPA Solutions Partner 15
Slide 16: Residential Solutions
Residential Solutions Most Powerful Infinite-play in Town 16
Slide 17: Price War – Competitor’s Single Play
Price War – Competitor’s Single Play Broadband Mobile 17
Slide 18: Best-in-town Fixed Broadband
Best-in-town Fixed Broadband Actual Offers at Street HKT at Website HKT at Street i-Cable HKBN HKT HGC Monthly Fee# $68 $99 $108 $89 Speed 1000MB 1000MB 1000MB 1000MB Listed Offers at Website i-Cable HKBN HKT HGC Monthly Fee# $149 $99 $132 $99 Vs Actual Offers at Street +$81 - +$24 +$10 Speed 1000MB
Slide 19: Best-in-town 5G Offers
Best-in-town 5G Offers CMHK HKBN CSL SmarTone 5G Mobile – Low Usage Monthly Fee $68 (MNP only) $68 $78 $88 HKBN Unique Local Data 4.5G(42MB)/8GB 5G/10GB 4G(21MB)/5GB 4.5G(42MB)/8GB Bundle with 128kbps unlimited 5Mbps unlimited 128kbps unlimited 128kbps unlimited Thereafter data data data data 5G Mob
Slide 20: We Will WIN – Competitive Infinite-Play Bundle
We Will WIN – Competitive Infinite-Play Bundle New 5G Mobile offer HKBN x HOME+ $68 for 10GB / $149 for 100GB Spend $1 get $2 2 x 1G Broadband with OTT/ WiFi 6/ HOME+ Bundle 20
Slide 21: In ESG, we’re LEADING and GROWING!
In ESG, we’re LEADING and GROWING! Awarded AA in HASE Corporate Established Sustainability Index & Awarded AA in MSCI ESG Taskforce become Sector Leader* Listed in HASE Corporate Sustainability Index Listed in HKEx 2015 2016 2017 2020 2021… *Since 2016, we have been a constituent of the Hang Seng (H
Slide 22: Showcase in Trans Asia Centre: $5.5M in Energy Savings with $0 CAPEX
Showcase in Trans Asia Centre: $5.5M in Energy Savings with $0 CAPEX $7 M Contract Period Thereafter • Financier pays $1.7M CAPEX upfront • HKBN gets 100% savings $6 M • HKBN achieves $4.2M energy savings / • Forecast $4.2M energy savings 2,000 tonnes CO2-e $5 M ▪ HKBN gets 30% = $1.3M ▪ Financier g
Slide 23: CO4 Roadmap – Full Speed to GROW
CO4 Roadmap – Full Speed to GROW Co-Ownership 4 KPI 3-year cumulative HK$2.70 to HK$3.01 AFF/Share FY22 FY23 FY24 1H HK$0.40 23
Slide 24: Appendix
Appendix 24
Slide 25: Operational Highlights – Enterprise Solutions
Operational Highlights – Enterprise Solutions YoY HoH 1H2021 2H2021 1H2022 Changes Changes Commercial building coverage 7,418 7,584 7,932 7% 5% Subscriptions ('000) - Broadband 118 119 120 2% 1% - Voice 434 423 421 -3% 0% Market share - Broadband 36.7% 36.9% 37.1% +0.4pp +0.2pp - Voice 25.1% 24.9% 2
Slide 26: Operational Highlights – Residential Solutions
Operational Highlights – Residential Solutions YoY HoH 1H2021 2H2021 1H2022 Changes Changes Residential homes passed ('000) 2,438 2,466 2,489 2% 1% Subscriptions ('000) - Broadband 886 886 889 0% 0% - Voice 485 474 458 -6% -3% Market share - Broadband 34.6% 34.2% 33.8% -0.8pp -0.3pp - Voice 22.2% 22
Slide 27: Consolidated Income Statement
Consolidated Income Statement YoY HoH (HK$ million, unless otherwise stated) 1H2021 2H2021 1H2022 Changes Changes Enterprise Solutions 2,616 2,350 2,291 -12% -3% Enterprise Solutions related Product 1,248 1,061 1,295 4% 22% Residential Solutions 1,224 1,241 1,224 -0% -1% Other product 1,141 582 1,99
Slide 28: Consolidated Balance Sheet (Summary)
Consolidated Balance Sheet (Summary) (HK$ million, unless otherwise stated) At 28 February 2021 At 31 August 2021 At 28 February 2022 Non-current assets 18,624 18,152 17,687 Current assets 3,346 3,616 3,321 Current liabilities 4,439 3,864 3,517 Total assets less current liabilities 17,531 17,904 17,
Slide 29: Reconciliation of EBITDA and Adjusted Free Cash Flow
Reconciliation of EBITDA and Adjusted Free Cash Flow YoY HoH (HK$ million, unless otherwise stated) 1H2021 2H2021 1H2022 Changes Changes Profit for the year 49 158 304 >100% 92% Finance costs 325 156 106 -67% -32% Interest income -1 -1 -2 21% 28% Income tax charge/ (credit) 42 77 80 91% 4% Depreciat