Slide 1: 2007 Interim Results
2007 Interim Results For the period ended June 30, 2007 August 29, 2007 - Hong Kong 0
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements" that are not historical in nature. These forward-looking statements, which include, without limitation, statements regarding PCCW's future results of operations, financial condition or business prospects, are based on
Slide 3: Overview
Overview Alex Arena Group Managing Director 2
Slide 4: 2007 H1 Financial Performance
2007 H1 Financial Performance (US$ million) H1’06 H1’07 2006年 % Change Revenue 1,811 1,488 收益 Core Business* 1,135 1,219 + 7% EBITDA EBITDA 468 463 Core Business* 377 394 + 4% 股權持有人 Profit Attributable to Equity應佔溢利 Holders 102 105 + 3% * Core business includes telecom, media and ICT businesses The
Slide 5: Core Business Has Returned to Growth
Core Business Has Returned to Growth Core Business Revenue Growth Core Business EBITDA Growth 7% 3% 4% 6% 1% -1% -24% -6% H1'04 H1'05 H1'06 H1'07 H1'04 H1'05 H1'06 H1'07 4
Slide 6: Financial & Business Review
Financial & Business Review Susanna Hui Group Chief Financial Officer 5
Slide 7: Growing Core Business
Growing Core Business (US$ million) Core Business* PCPD Revenue EBITDA Profit Attributable to Equity Holders 4 % + 7% Bu siness + n ess Core Co re Busi + 23% u s iness B Core 1,219 1,135 394 377 59 54 48 676 46 91 269 69 H1’06 H1’07 H1’06 H1’07 H1’06 H1’07 * Core business includes telecom, media and
Slide 8: Core Business Revenue
Core Business Revenue (US$ million) 7 % yy--oo--yy ++ 7 % TSS 1,219 1,135 Mobile 86 + 14% 75 (1) TV & Content + 42% 92 TSS 65 PCCW Solutions 988 + 4% 949 94 106 + 12% (1) Other Businesses 21 1 21 Elimination H1’06 H1’07 (69) (74) H1’06 H1’07 (1) 2006 TV & Content restated to include the Group’s dire
Slide 9: Core Business Operating Expenses
Core Business Operating Expenses (US$ million) -- 44% % yy-o -o-y -y 356 340 TSS Mobile 247 232 - 6% (1) TV & Content PCCW Solutions - 7% Other Businesses (1) 56 51 - 9% Eliminations 27 32 + 22% 24 24 52 54 (50) (53) H1’06 H1’07 (1) 2006 TV & Content restated to include the Group’s directories busin
Slide 10: Core Business EBITDA
Core Business EBITDA (US$ million) o-y % yy--o-y ++ 44% TSS Mobile 377 394 H1’06 H1’07 TV & Content (1) 11 13 + 23% PCCW Solutions (9) (7) + 20% TSS (9) Other Businesses (1) 438 440 + 52% + 1% (20) (43) (43) H1’06 H1’07 (1) 2006 TV & Content restated to include the Group’s directories business 9
Slide 11: Group Performance
Group Performance (US$ million) H1 2006 H1 2007 % change Revenue 1,811 1,488 Core Business 1,135 1,219 up 7% Cost of sales (969) (666) Operating expenses (374) (359) down 4% EBITDA 468 463 Core Business 377 394 up 4% Depreciation and amortization (188) (206) Operating profit 280 257 Other gains, net
Slide 12: Other Expenses
Other Expenses (US$ million) -- 44% %yy-o -o-y -y 345 332 78 48 Tax 78 Net finance costs 79 Depreciation & amortization 188 206 H1'06 H1'07 11
Slide 13: Group Performance
Group Performance (US$ million) H1 2006 H1 2007 % change Revenue 1,811 1,488 Core Business 1,135 1,219 up 7% Cost of sales (969) (666) Operating expenses (374) (359) down 4% EBITDA 468 463 Core Business 377 394 up 4% Depreciation and amortization (188) (206) Operating profit 280 257 Other gains, net
Slide 14: Debt Profile
Debt Profile (US$ million) Revolving Credit Facilities Gross debt: US$3,561m US$ Bonds As of June 30, 2007 $1,301 $1,000 $500 $500 $256 Repaid US$103m in July 2007 2008 2009 2010 2011 2012 2013 2014 2015 Update y US$450m convertible bonds due 2007 and US$456m guaranteed notes due 2013 redeemed in Ja
Slide 15: Credit Fundamentals
Credit Fundamentals Gross Debt/EBITDA (1) Net Debt PCCW consolidated (US$ million) HKTC 4.4 4.3 4.2 4.3 4.5 4.1 3.5 2,790 3.2 2,638 2,529 2,498 H2 H1 H2 H1 H2 H1 H2 H1 ’05 ’06 ’07 ’05 ’06 ’07 EBITDA/Interest (2) 5.7 H2 H1 H2 H1 5.0 5.1 5.1 3.9 4.2 2005 2006 2007 3.0 2.9 Gross Debt down 9% y-o-y to U
Slide 16: Operational & Strategic Review
Operational & Strategic Review Alex Arena Group Managing Director 15
Slide 17: Quad Play Performance Update
Quad Play Performance Update Fixed-line IPTV HD Broadband Mobile 16
Slide 18: Stable Fixed-line Business
Stable Fixed-line Business Fixed Lines Solid Customer Base & ARPU (’000) Residential Lines Business Lines y Market share maintained at 67% - Monthly churn rate less than 1% 1,667 y ARPU firmed and outlook positive 1,543 1,487 1,403 1,407 1,407 y New innovative services launched 1,423 1,400 1,387 - o
Slide 19: New Multimedia Service Platform
New Multimedia Service Platform New Quadplay Platform Unique interactive multimedia y An easy to use multimedia service service platform revolutionizes platform to enjoy PCCW’s quadplay services fixed-line experience y Retrieve information, enjoy entertainment & ticketing service, and bill payment c
Slide 20: Market Leader in Broadband
Market Leader in Broadband Achievements Broadband Lines Continue to Grow --yy y Broadband lines grew 18% y-o-y with yy--oo less than 1% churn rate 8%% (’000) ++118 1,176 Wholesale 1,117 y Innovative applications and content Business 998 driving broadband demand 104 Consumer 953 99 857 − 796 94 703 7
Slide 21: Wireless Strategy
Wireless Strategy An Integrated Wireless Strategy y Integrate 3G, 7.2Mbps HSDPA and Wi-Fi with auto-selecting capability to create a powerful wireless platform y Develop best content and applications to deliver across PCCW’s fixed & wireless networks y Enable customers to enjoy PCCW’s unique content
Slide 22: Mobile Performance
Performance Improvements Growing Mobile Customer Base (’000) • Customers increased and market share rising 3G - Net gain from mobile number portability 2G Post-paid 2G Prepaid • PCCW 3G customers doubled to 119k 921 957 • ARPU increased 55 55 119 119 781 - 3G exit ARPU up 14% to $229 738 - Blended (
Slide 23: Latest Innovations
Latest Innovations on mobile y Exclusive “now SPORTS HD y Leading total messaging y First music performances on mobile” solutions provider simulcast on mobile and web - High quality H.264 standard y First-in-HK launch of with double resolution PUSH eMail on mobile phone - Live video streaming over y
Slide 24: Momentum Continues
Momentum Continues Over 850K Strong Demand for reached Drivers in Aug ‘07 y • Strongest ever content line up - 150 local & (’000) o--y Installed base yy--o international channels today Paying base 3 355% % 818 ++ - Mega Sports Pack – 14 Standard 758 Definition and Hi-Definition channels 608 549 560
Slide 25: ARPU Accelerates
ARPU Accelerates Strong Paying Base & ARPU Growth ARPU Drivers Paying base (’000) Mega Sports Paying base ARPU Pack pick-up • Highly popular Mega Sports Pack now at $218 (HK$/ month) Value packs further enhanced ARPU - Driven by premium sports content and high quality 166 production Mini Packs launc
Slide 26: Enhanced Viewing Experience
Enhanced Viewing Experience y 1st in Hong Kong to introduce High Definition TV multicast y Exclusive sports content on include: Barclays Premier League, UEFA EURO 2008TM, Italian Serie A & NHL y Other exciting content including and more to come in Q4’07 y Simulcast live matches on as many as 7 chann
Slide 27: 4-Game Split Screen
4-Game Split Screen • 1st in Hong Kong to introduce 4-game split screen for live sports coverage • Free interactive feature allowing viewers to watch 4 matches simultaneously • Commentary provided for the highlighted channel 26
Slide 28: Advanced Interactivity a Reality
Advanced Interactivity a Reality • Sports Barker – viewers can watch promotional videos of sports programming and view live match fixtures of all now SPORTS channels • Live Match Info – head-to-head statistics, team line-up, player profiles, team fixtures, live match scores of all games available at
Slide 29: Quadplay
Quadplay - Broadband Mobile Fixed Line IPTV 28
Slide 30: Appendix
Appendix 29
Slide 31: PCCW Consolidated Debt Maturity Profile
PCCW Consolidated Debt Maturity Profile (US$ million) Net Debt = 3,368 Debt3 to EBITDA = (3,816 / 842) = 4.53x Dec 2004 $1,154 $1,000 $956 $54 $450 $456 $1,100 $250 $500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 Net Debt = 2,498 Debt to EBITDA = (3,739 / 853) = 4.38x Dec 2005 $769 $1,000 $95
Slide 32: HKTC Debt Maturity Profile
(US$ million) HKTC Debt Maturity Profile Net Debt = 2,621 HKTC Debt to EBITDA = (2,656 / 889) = 2.99X Dec 2004 $1,000 $956 $450 $456 $250 $500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 Net Debt = 3,709 HKTC Debt to EBITDA = (3,739 / 876) = 4.27X Dec 2005 $769 $1,000 $956 $450 $500 $456 $64 $