Chunghwa Telecom Co., Ltd · TWSE:2412
Chunghwa Telecom — Q1 2007 Earnings Presentation
21 slides from Chunghwa Telecom's earnings presentation, 2007
Slide 1: 1Q 2007 Operating Results
Ma J fs Cnhunc = i. 1Q 2007 Operating Results
Slide 2: Disclaimer
Disclaimer Except for statements in respect of historical matters, the statements made in this presentation contain “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking stat
Slide 3: Q1 Results Establish Solid Foundation for 2007
Q1 Results Establish Solid Foundation for 2007 Internet and data segment continues to drive revenue growth due to broadband subscriber growth and access Internet & Data Segment revenue Drives Revenue Growth Continue migrate ADSL subscribers to higher speed service, including FTTB As Taiwan’s only in
Slide 4: Financials
Financials Financials 3
Slide 5: Income Statement & Financial Indices
Financials Income Statement & Financial Indices US GAAP ROC GAAP Jan-Mar Jan-Mar Growth Jan-Mar Jan-Mar Growth (NT$bn) 2006 2007 Rate 2006 2007 Rate Revenue 45.02 45.78 1.7% 44.63 45.32 1.5% EBITDA 22.87 25.14 9.9% 24.94 24.89 (0.2%) Operating Profit 12.64 15.23 20.5% 14.61 14.90 2.0% Net income 9.3
Slide 6: Financials: Business Segment Revenues
Financials: Business Segment Revenues US GAAP ROC GAAP Jan – Mar Jan – Mar Growth Jan – Mar Jan – Mar Growth (NT$ bn) 2006 2007 Rate 2006 2007 Rate Internet 8.56 9.32 8.8 % 8.56 9.32 8.8% Data 2.62 2.86 9.1 % 2.62 2.74 4.3% Mobile 17.94 18.07 0.7 % 17.93 18.07 0.8% Fixed line 15.36 14.79 (3.7%) 14.9
Slide 7: Costs & Expenses
Financials Costs & Expenses US GAAP ROC GAAP Jan-Mar Jan-Mar Growth Jan-Mar Jan-Mar Growth (NT$ bn) 2006 2007 Rate 2006 2007 Rate Costs of Revenues 15.43 14.88 (3.5%) 12.66 13.52 6.8% Marketing Expense 5.04 4.45 (11.7%) 5.65 5.67 0.3% G&A Expense 1.04 0.69 (34.0%) 0.81 0.64 (21.9%) R&D Expense 0.65
Slide 8: Effective and Efficient Capital Expenditures
Effective and Efficient Capital Expenditures Capital Expenditure (NT$ bn) 30 27.68 Q1 Capex decreased YoY due to decline in spending 25 22.93 on Mobile by NT$1.9bn 20 Future investments will Capex (NT$bn) focus on core business and migrate mobile and 15 data customers to higher revenue platforms 10
Slide 9: Cost Reduction Efforts Aided By Early Retirement Program
Cost Reduction Efforts Aided By Early Retirement Program Early retirement program and new hiring initiatives that were enacted after privatization have begun to show progress ERP New Net Cost Accumulated acceptances employees reduction saving for cost saving recruited the year (NT$bn) (NT$bn) 2005 8
Slide 10: Business Review
Business Review Business Review 9
Slide 11: Chunghwa Telecom Overview
Chunghwa Telecom Overview Market leader for mobile communication, internet and data and fixed-line services in Taiwan Integrated Services Provider 1Q07 Revenue Breakdown with Dominant Market Shares (b) Mobile Local DLD #1 subscribers 20% 5% - 36.3% market share (c) (8.54 mm subs) Internet ILD #1 rev
Slide 12: Taiwan's leading Internet and Data Provider
Taiwan’s leading Internet and Data Provider Steadily growing broadband subscriptions and revenue Broadband Subscribers Broadband Access Revenue NT$ mn thousand 4,114 20,000 3,970 4,036 18,991 4,000 3,869 18,000 16,668 14.6% 17.6% 20.6% 23.2% 3,500 16,000 3,000 14,000 12,000 2,500 44.9% 43.2% 42.1% 4
Slide 13: Increasing Speed and Deploying Fiber
Increasing Speed and Deploying Fiber Expanding offerings at the speed of light Proven Broadband Initiatives Rising Average Bandwidth Per User Mbps Transition subscribers to higher access 3 2.56 2.58 speed and expand bandwidth 3 2.14 2 1.60 As of Mar. 2007, subscribers of 2 >8Mbps services reached 95
Slide 14: Number one mobile provider
Number one mobile provider Increasing data usage as a % of revenue Mobile Subscribers Successful Mobile VAS Rollout (thousand) Successful “emome” VAS platform 9,000 continuing to generate growth 8,487 8,557 8,416 8,500 8,291 Total VAS exhibited 13.4% growth YoY in 1Q 2007 8,000 408 597 943 1,285 Mob
Slide 15: 3G Deployment Gaining Traction
3G Deployment Gaining Traction New phones and offerings spur shift to 3G ARPU Expansion from “Upselling” Innovative 3G Strategies 1,285,238 3G subscribers as of Mar. 2007, and 45% of which are with 3G handsets Customized 3G handsets: 79% of 3G subscribers migrated from CHT9000 series Chunghwa Teleco
Slide 16: Undisputed leader in fixed-line services
Undisputed leader in fixed-line services Fixed-Line Ring-Back Tone Fixed-Line Market Share (‘000) % 180 171.5 98% 98% 97% 97% 97% 100 91% 89% 89% 89% 89% 90 140 88% 87% 86% 85% 80 84% 103.6 100 70 77.4 60 63% 60% 61% 60 56.4 58% 58% 50 2003 2004 2005 2006 Feb 2007 Local (a) Local (b) DLD (b) ILD (b)
Slide 17: Bundled Solutions for all Customer Segments
Bundled Solutions for all Customer Segments Meeting customer demand for convergence Enterprise Bundled Solutions MOD/IPTV subscribers Chi-Mei Optoelectronics- LCD field: (thousand) 300 285 Provide ICT service with IBM and Cisco 249 Farglory : 250 Digital home solution 200 Taipei Stadium total soluti
Slide 18: Business Outlook
Business Outlook Financials 17
Slide 19: Near Term Strategy Overview
Near Term Strategy Overview Strengthen data mining capabilities to offer tailored services to selective customer segments Continue to Consolidate customer service systems to enhance efficiency Improve Core Rewarding plan to increase customers’ loyalty Businesses Reinforce e- invoice service Prepare
Slide 20: Near-Term Strategy Overview
Near-Term Strategy Overview Conduct a joint market research and promotion on digital home services with Intel Business Alliances Cooperate with Google on mobile search Form a co-marketing alliance with Cathay Financials Early Retirement Program Managed CAPEX to control depreciation expense Cost Savi
Slide 21: Q&A Session
Q&A Session Q&A Session www.cht.com.tw 20