Hkt Trust And Hkt Ltd · HKEX:6823
Hkt Trust And Hkt — H1 2013 Earnings Presentation
34 slides from Hkt Trust And Hkt's earnings presentation, Aug 5, 2013
Slide 1: 2013 Interim Results
2013 Interim Results For the six months ended June 30, 2013 August 5, 2013 – 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 HKT’s future results of operations, financial condition or business prospects, are based
Slide 3: Overview
Overview Alex Arena Group Managing Director 2
Slide 4: Adjusted Funds Flow
(US$ million) H1’12 H1’13 % change Adjusted Funds Flow 183 190 + 4% Adjusted Funds Flow Per Share Stapled Unit 22.29 23.13 (HK cents) The Board has declared an interim distribution of 21 HK cents per Share Stapled Unit 3
Slide 5: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 4
Slide 6: Delivering Growth in AFF
Delivering Growth in AFF (US$ million) H1’12 H1’13 % change Adjusted Funds Flow 183 190 + 4% Revenue 1,246 1,419 + 14% EBITDA 479 492 + 3% Profit Attributable to Holders of 100 153 + 53% Share Stapled Units 5
Slide 7: Achieving Sustainable EBITDA Growth
Achieving Sustainable EBITDA Growth (US$ million) Revenue EBITDA 1,419 492 1,246 479 1,223 464 TSS Mobile 1,235 + 14% 1,080 Others 1,059 Eliminations 452 + 2% 434 444 118 145 174 + 20% 44 57 + 29% 61 28 2 48 41 (9) (17) (15) (27) (31) H1’11 H1’12 H1’13 H1’11 H1’12 H1’13 • TSS delivering steady growt
Slide 8: Fiber Strategy Powering TSS Ahead
Fiber Strategy Powering TSS Ahead (US$ million) TSS Revenue TSS EBITDA 1,235 1,080 452 1,059 273 + 14% 444 434 Broadband Network 239 214 130 + 0% Local Data 127 130 215 + 0% Local Telephony 212 215 413 + 47% International 281 281 Others 225 215 204 - 6% H1’11 H1’12 H1’13 H1'11 H1'12 H1'13 • Broadban
Slide 9: Focus on Premium Customers Yielding Results
Focus on Premium Customers Yielding Results (US$ million) Mobile Revenue Mobile EBITDA 174 57 145 118 44 28 30% 32% 24% EBITDA Margin H1'11 H1'12 H1'13 • Total mobile revenue up 20% on the back of strong H1'11 H1'12 H1'13 mobile data revenue growth of 29% • High value, premium customers recognizing
Slide 10: Investing Prudently for Growth
Investing Prudently for Growth (US$ million) Operating Expenses Opex to Revenue Ratio 299 277 264 23% 21% 21% H1'11 H1'12 H1'13 H1'11 H1'12 H1'13 • Opex increased by 13% in H1’13 – a combined result of the expansion in business, in particular the International business in Europe and Africa, and high
Slide 11: Demand-Driven Capex
Demand-Driven Capex (US$ million) 249 H2 • Focused on demand driven H1 205 spending for fiber upgrades and increasing mobile data 140 usage 111 • Capex to revenue ratio continues to remain within the below 10% guidance 109 130 94 2011 2012 H1'13 Capex to Revenue Ratio: 8% 9% 9% 10
Slide 12: Adjusted Funds Flow
Adjusted Funds Flow (US$ million) H1’12 H2’12 H1’13 YoY EBITDA 479 504 492 + 3% Less cash outflows in respect of: Customer acquisition costs and licence fees (97) (123) (91) Capital expenditures (107) (137) (127) Adjusted Funds Flow before tax paid, net finance costs 275 244 274 paid and changes in
Slide 13: Income Statement
Income Statement (US$ million) H1’12 H1’13 Turnover 1,246 1,419 + 14% Cost of sales (503) (628) Opex (264) (299) EBITDA 479 492 + 3% Depreciation & Amortization expenses (292) (308) Gain on disposal of fixed assets – 1 Net other gains 1 6 Net finance costs (53) (58) Share of results of an associate
Slide 14: Stable Financial Position and Leverage Level
Stable Financial Position and Leverage Level HKT Gross Debt (1),(2) BBB/Baa2 Investment Grade (US$ million) Rating with Stable Outlook 3,317 3,023 3,093 3,093 * Post Redemption of the US$500M guaranteed notes due in July 2013 2011 2012 H1'13 Jul'13 HKT Gross Debt / EBITDA(3) 3.2x 3.1x 3.3x 3.1x (1)
Slide 15: Minimal Near Term Financing Needs
Minimal Near Term Financing Needs (US$ million) Bank Loans As at June 30, 2013 US$ Bonds 706 Repaid in July 2013 500 500 500 457 500 154 2013 2014 2015 2016 2017 2018 2023 • Next debt repayment only due in 2015 • Maintain significant liquidity of US$673 million in undrawn banking facilities post the
Slide 16: Business Review
Business Review Alex Arena Group Managing Director 15
Slide 17: Stable Fixed-line Business
Stable Fixed-line Business Solid Customer Base Maintained Since 2004 (’000) Business Lines Residential Lines 1,543 1,408 1,409 1,400 1,407 1,407 1,408 1,406 1,407 1,408 1,423 1,236 1,144 1,164 1,180 1,183 1,195 1,182 1,183 1,228 1,238 1,242 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 2013 1
Slide 18: Driving further eye Penetration
Driving further eye Penetration Rapid Growth of Higher ARPU eye Customer Base eye Strategy 286 270 eye strategy delivering results 242 (current penetration ~20% of 210 residential customers) Becoming the Infotainment and 167 Edutainment companion at home 120 Launch of eye 3 on Samsung Galaxy T
Slide 19: Evolution from Voice to Multimedia Communications
Evolution from Voice to Multimedia Communications eyeX : Android-based Tablet Series Addressing Different Segments Samsung Galaxy Tab 2007 2009 2011 2013 In the Past Voice + Data Color screen eye3 Monochrome eye1.5A/2A screen Android Platform eye2/2.1 User experience as Compatible with branded d
Slide 20: Service for Business
Service for Business Extend Office Communication Functionalities to include Smartphones ● Customer can enjoy business communication services on their smartphones Office line Visual Visual Presence extension Voicemail Faxmail Management ● More value added services to meet specific industry needs Mobi
Slide 21: Launch of Service
Launch of Service Carrier-grade Cloud Service Providing a Secure and World-Class Service to Enterprises in Hong Kong Benefits for Enterprises: Carrier-grade Enterprise Cloud ● Ubiquitous and fastest-in-town broadband access to the cloud Connected platform through fixed, mobile, Wi-Fi and private net
Slide 22: Evolution from Voice to Unified Communications
Evolution from Voice to Unified Communications Enabling Unified Voice, Data, Messaging and Applications over Fixed and Mobile Integrated Network 2003 2007 2013 In the Past Voice + Data HKT Smartline and HKT Enterprise Cloud one Communications Extend office voice calls, voice mails and faxes to sma
Slide 23: Continued Growth in Broadband
Continued Growth in Broadband Broadband continued to grow at a rate of 2% while churn maintained at 1% Industry dynamic has shifted from market share gain to value creation and ARPU growth (‘000) Wholesale Business 1,540 1,567 1,567 1,518 Consumer 1,437 126 128 1,367 119 122 1,275 1,302 1,305 1,
Slide 24: Wide Coverage of our Fiber Network
Wide Coverage of our Fiber Network FTTB-ready (85.6%)* 1.5M or above (supporting speeds of up to (98%) 100Mbps) FTTH-ready (75.5%)** (supporting speeds up to 1000Mbps) (as of July 2013) * FTTB-ready means FTTH service can be available within 29 days of receiving a service order, building management
Slide 25: Rapid Growth of Fiber Customers
Rapid Growth of Fiber Customers Fiber-To-The-Home (FTTH) Service continued to attract new customers and existing customers for service upgrade 362K customers enjoying FTTH service as of Jun 2013, grew 60% vs. Jun 2012 Growing fiber customer base creates future upgrade opportunity to higher spe
Slide 26: HKT's Fiber Customers Average Peak Connection Speed
Hong Kong Becomes No.1 in the World for Internet Speed Hong Kong’s Average Peak Connection Speed reached 63.6Mbps* in Q1 2013 70 Hong Kong 400K 65 63.6Mbps Average Peak Connection Speed 60 HKT’s Fiber Customers 300K 55 Japan (in Mbps) 50Mbps 50 200K 45 S. Korea 44.8Mbps 40 35 Commercial Launch 100K
Slide 27: HKT's Fiber Customers Average Peak Connection Speed
Hong Kong Becomes No.1 in the World for Internet Speed HKT’s FTTH Customers Achieving A.P.C.S.(1) of 118Mbps(2) 120 118Mbps Average Peak Connection Speed 100 80 Hong Kong 400K (in Mbps) 63.6Mbps HKT’s Fiber Customers 60 300K 40 200K 20 100K 0 0K 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
Slide 28: Mobile Business Acquires More High-end Customers
Mobile Business Acquires More High-end Customers Total customer base reached 1.652M, up 3% yoy Post-paid customer base reached 1.017M, up 1% yoy Post-paid exit ARPU increased 13% yoy to HK$209 from HK$185 Focus on SIM only connections Post-paid 1,605 1,645 1,652 1,535 Prepaid 1,422 1,469 1,4
Slide 29: Increased Focus on SIM Only Plans
Increased Focus on SIM Only Plans Focus new activations on SIM only connections to grow post-paid base: Many new smartphones in the market but no true “hero” handset in 1st half 2013 Helps control handset subsidies and customer acquisition costs 63% 52% 48% 52% 48% 37% 1H’11 1H'11 1H’12 1H'12 1H
Slide 30: Continued Data Revenue Growth
Continued Data Revenue Growth Data revenue now accounting for 79% of service revenue Service Revenue ● Increasing mobile service revenue contributed by data revenue which grew 29% y-o-y as a result of the successful acquisition and retention of quality smart device customers 79% 73% ● Over 80% of po
Slide 31: A Comprehensive Wireless Experience
A Comprehensive Wireless Experience Ultra-fast mobile experience through integrated 4G LTE and Wi-Fi networks Launch of 4G LTE 150Mbps Network • Offer a dual-band 1800MHz and 2600MHz 4G LTE network that provides comprehensive outdoor and indoor coverage • Enhanced 4G LTE network up to 150Mbps offeri
Slide 32: Mobile Service Innovation
Mobile Service Innovation First in Hong Kong to launch NFC Mobile Payment Service • Partnered with Hang Seng Bank to be the first mobile operator in Hong Kong to launch SIM-based Near Field Communication (NFC) Mobile Payment Service Co-branded Prepaid SIM card with Hong Kong Tourism Board • Partnere
Slide 33: Comprehensive, One-Stop Mobile Solution
Comprehensive, One-Stop Mobile Solution Wide Range of Mobile Services Secure Data Transfer Service Comprehensive Secure data transfer offering including SIM only, handset service via 「天機」 subscription and makes switching to standalone handset new devices hassle- purchases free Trade-in Service Mobil
Slide 34: Recapping Our Strategy
Recapping Our Strategy A Total Value Proposition for Our Customers Step 3 Revitalizing our Distribution Channels to Enhance Overall Customer Experience Step 2 ● HKT Premier ● Showcase ● Retail Shops ● CS Portal Developing a Full Suite ● Customer Apps of Products & Services Beyond Connectivity 2012 –