Hkbn Ltd. · HKEX:1310
Hkbn — FY2020 Earnings Presentation
29 slides from Hkbn's earnings presentation, Oct 29, 2020
Slide 1: FY20 Annual Results Presentation for 12 months ended 31 August 2020
FY20 Annual Results Presentation for 12 months ended 31 August 2020 Presentation by: William Yeung, Co-Owner & Executive Vice-chairman NiQ Lai, Co-Owner & Group Chief Executive Officer Almira Chan, Co-Owner & Chief Strategy Officer (ex-CFO of WTT) 29 October 2020
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, Co-Owner & Group Chief Executive Officer
NiQ Lai Co-Owner & Group Chief Executive Officer 33
Slide 4: #ToughTimesTogether Campaign under COVID-19
#ToughTimesTogether Campaign under COVID-19 • Passing regional governments’ subsidies Talents to all eligible Talents • Market leading WFH arrangements • 10,000 free broadband lines offers Community • 100 Career Kickstarter offers for university graduates • 1-Month fee waiver Customers • Barter & Bu
Slide 5: Solid GROWTH Amid COVID-19
Solid GROWTH Amid COVID-19 Inclusive of Proactive #ToughTimesTogether Service Revenue EBITDA^ AFF $7,155m $2,505m (HKFRS16) $1,114m YoY +49% YoY +47% YoY +49%* $2,251m (pre-HKFRS16) YoY +32% DPS : 75 HK Cents YoY +7% - WTT and JOS acquisitions completed in Apr-19 and Dec-19, respectively; FY20 resul
Slide 6: Resilient GROWTH on all Business Fronts
Resilient GROWTH on all Business Fronts 105k $2,948 $6,514m Enterprise Enterprise Enterprise Total Solutions Customers ARPU Revenue^ +2% +69% >100% 886k $190 $2,483m Residential Broadband Residential Service Solutions Subscriptions ARPU# Revenue # +1% +3% +0.4% ^ Enterprise Solutions total revenue i
Slide 7: Massive Transformation Since IPO in 2015
Massive Transformation Since IPO in 2015 1-HKBN FY15 FY20 Total Revenue $2.3B $9.5B 4.1x EBITDA^ $1.0B $2.5B 2.5x DPS $0.40* $0.75 1.8x No. of Talents 2,596 5,929 2.3x No. of Co-Owners >270 >990 3.7x * FY15 Reported DPS is $0.2 due to IPO after interim ; $0.4 DPS is pro forma full year for illustrat
Slide 8: Industry Leading Dividend GROWTH
Industry Leading Dividend GROWTH For >990 Co-Owners, This is our Families AFF FY20: 75 DPS FY19: 70 DPS (+7% YoY) (+25% YoY) FY18: 56 DPS 37 38 (+24% YoY) 36 34 FY17: 45 DPS (+13% YoY) 30 FY16: 40 DPS 26 FY15: 20 DPS 23 22 20 20 20 FY15 2H FY16 1H FY16 2H FY17 1H FY17 2H FY18 1H FY18 2H FY19 1H FY19
Slide 9: Industry Leading Total Returns
Industry Leading Total Returns (Rebased) HKBN (with dividends)2 Hang Seng Index3 Performance of HKBN vs. Hang Seng1 Regulatory Announced JOS HKBN 200 approval on HKBN- acquisition Announced HKBN-WTT WTT merger +89% 180 Announced merger NWT Launched Launched acquisition MVNO 160 OTT 87% Excess 140 re
Slide 10: Sustaining GROWTH in EBITDA & AFF
Sustaining GROWTH in EBITDA & AFF Financials in HK$mn, unless otherwise stated Revenue EBITDA Adjusted Free Cash Flow +47% +49% +32% +85% WTT 262 +45% +30% +29% 2,505 1,114 9,453 2,251 1,709 750 5,108 1,180 578 3,949 FY18 FY19 FY20 FY18 FY19 FY20 FY20 FY18 FY19 FY20 (HKFRS16) (HKAS17) - WTT and JOS
Slide 11: Manageable debt profile with NLR of 4.4x
Manageable debt profile with NLR# of 4.4x The effective interest Average weighted maturity 2.3 years^ rate of the bank loans as of 31 August 2020 is 2.70% p.a. Undrawn For WTT Senior Note Senior Note (2019: 3.25%) $1,840m redemption $4,208m $3,900m Revolving* $765m $545m $580m $540m Current Aug-2021
Slide 12: Silo-less 1-HKBN Co-Owners
Silo-less 1-HKBN Co-Owners Align Long-term Interest of Key Stakeholders 1-HKBN Total Invited for Co-Ownership Co-Ownership Seniority Co-Ownership Take-up Take-up Rate % CXO Management Committee 10 10 100% Director / Associate Director 62 62 100% Managers 428 323 75% Supervisors 1,627 597 37% Total e
Slide 13: Our Culture
Our Culture Please love it or hate it, just don’t be indifferent to it • Mass Co-Ownership for macro alignment. • Elite sports team, rather than • Specific pain/GAIN for project family. alignment. • Pay top 25% for top 10% elite • Assume “Yes” unless we say athletes. “No”. • Exit bottom 5% of salary
Slide 14: Our Core Purpose
Our Core Purpose ... Make Oup a Better Place to Live 14
Slide 15: Almira Chan, Co-Owner & Chief Strategy Officer
Almira Chan Co-Owner & Chief Strategy Officer (ex-CFO of WTT) 15
Slide 16: Successful WTT & JOS Integration into 1-HKBN
Successful WTT & JOS Integration into 1-HKBN • Integration are substantially completed and on track to deliver synergy of >HK$300m* • Massive “shock” change to Talent-oriented Co-Ownership culture • Rejuvenation of JOS Beyond-HK lead by Almira, CSO of HKBN (ex-CFO of WTT) Set for GROWTH * Last shown
Slide 17: JOS Beyond-HK pain/GAIN Alignment
JOS Beyond-HK pain/GAIN Alignment How we turned a ~USD$200m revenue business from breakeven to AFF positive? 70 Top Executives aligned through pain/GAIN incentive scheme: USD$8m in FY21 We’re here AFF Target More to Come! Below : All pain Over : GAIN Contributions go to charity 25% share by pain/GAI
Slide 18: William Yeung, Co-Owner & Executive Vice-chairman
William Yeung Co-Owner & Executive Vice-chairman 18
Slide 19: Transformation into T&T Powerhouse
Transformation into T&T Powerhouse Transformation Co-Ownership III Plus KPI period for Co-Ownership IV cumulative HK$2.53 to HK$3.03 AFF^ and more .. FY16 FY17 FY18 FY19 FY20 FY21 FY22 Actual Actual Actual Actual Actual Harvest JOS Integration Towards integrated Telecom Integrate Integrate Enterpris
Slide 20: Realizing Full Potential of 1-HKBN
Realizing Full Potential of 1-HKBN >HK$1.7 billion Total Contract Value* Co-Ownership Extended Network Coverage Solutions & SI Expertise Culture & Customer Base Extended Customer Base Transformed to a Premier Telecom & Technology Solutions Provider HK-Based Mobile Carrier Local Quick Service A Finan
Slide 21: In Tough Times, We Grow Stronger
In Tough Times, We Grow Stronger HKBN’s ethos HK - TAC 1-HKBN HK - KITEC GZ Global HKBN Day celebration event for all HKBNers on 13 October (1310), our stock code number on the Hong Kong Stock Exchange 21 21
Slide 22: The End
Bet eta HONG KONG BROADBAND NETWORK The End Changing the Game
Slide 23: Appendix
Appendix 23
Slide 24: Operational Highlights – Enterprise Solutions
Operational Highlights – Enterprise Solutions YoY FY19 FY20 Changes Commercial building coverage 7,224 7,374 +2% Subscriptions ('000) - Broadband 116 117 +1% - Voice 454 443 -2% Market share - Broadband 37.8% 36.8% -1.0pp - Voice 25.3% 25.3% +0pp Enterprise customers ('000) 103 105 +2% Broadband chu
Slide 25: Operational Highlights – Residential Solutions
Operational Highlights – Residential Solutions YoY FY19 FY20 Changes Residential homes passed ('000) 2,360 2,415 +2% Subscriptions ('000) - Broadband 878 886 +1% - Voice 500 498 -0% Market share - Broadband 35.8% 35.2% -0.6pp - Voice 22.0% 22.4% +0.4pp Residential customers ('000) 1,019 1,019 +0% Br
Slide 26: Consolidated Income Statement
Consolidated Income Statement (HK$ million, unless otherwise stated) FY19 FY20 YoY Changes Enterprise Solutions 2,324 4,708 >100% Enterprise Solutions related Product - 1,806 n/a Residential Solutions 2,473 2,447 -1% Other product 311 491 58% Turnover 5,108 9,453 85% Other net income 30 26 -14% Netw
Slide 27: Consolidated Balance Sheet (Summary)
Consolidated Balance Sheet (Summary) At 31 August At 29 February At 31 August (HK$ million, unless otherwise stated) 2019 2020 2020 Non-current assets 18,635 19,480 19,211 Current assets 1,747 3,042 2,913 Current liabilities 1,745 3,737 4,632 Total assets less current liabilities 18,637 18,784 17,49
Slide 28: Reconciliation of EBITDA and Adjusted Free Cash Flow
Reconciliation of EBITDA and Adjusted Free Cash Flow (HK$ million, unless otherwise stated) FY19 FY20 YoY Changes Profit for the year 215 97 -55% Finance costs 259 527 >100% Interest income -4 -3 -19% Income tax charge/ (credit) 95 -5 >100% Depreciation 535 974 82% Amortisation of intangible assets
Slide 29: Impact of New Accounting Standard
Impact of New Accounting Standard The impact of the initial application of HKFRS16 is summarized as follows: Presented by Presented by FY20 (HK$mn) old accounting new accounting Impact Remarks standard standard HKAS17 HKFRS16 Revenue 9,453 9,453 No impact Under HKFRS16, operating leases are capitali