Netlink Nbn Trust · SGX:CJLU
Netlink Nbn Trust — Investor Presentation (May 2018)
30 slides from Netlink Nbn Trust's investor presentation, May 2018
Slide 1: Investor Presentation
Investor Presentation May 2018 The joint issue managers of the initial public offering and listing of NetLink NBN Trust were DBS Bank Ltd., Morgan Stanley Asia (Singapore) Pte., and UBS AG, Singapore Branch. The joint underwriters of the initial public offering and listing of NetLink NBN Trust were
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only and does not constitute or form part of an offer, solicitation, recommendation or invitation for the sale or purchase or subscription of securities, including units in NetLink NBN Trust (the “Trust” and the units in the Trust, the “Units”
Slide 3: Presentation outline
Presentation outline Agenda Slide Section 1 Overview of the Trust Group 4 Section 2 Resilient Business Model 7 Section 3 Operational & Financial Highlights 13 Appendix Supplemental Business Information 23 3
Slide 4: Overview of the Trust Group
Section 1 Overview of the Trust Group 4
Slide 5: Next Gen NBN industry structure
Next Gen NBN industry structure The Next Gen NBN industry comprises three distinct layers to ensure open access to the Next Gen NBN for all participants Consumer / End Users Services (including services & customer-premises equipment) Retail Services Providers (RSPs) Purchase bandwidth connectivity f
Slide 6: Scope of services provided by the Trust Group
Scope of services provided by the Trust Group 1 2 3 Use of other passive Provision of other End-user fibre connections, currently for broadband, infrastructure to provide non-fibre ancillary IPTV and VoIP services fibre connections services a b e g NLT Residential (1) Non-residential (1) Ducts and m
Slide 7: Resilient Business Model
Section 2 Resilient Business Model 7
Slide 8: Critical infrastructure enabling Singapore's Next Gen NBN
1 Critical infrastructure enabling Singapore’s Next Gen NBN Foundation of Next Nationwide Passive fibre Able to cater to Gen NBN, over coverage in infrastructure future which Singapore in terms supported by an technological ultra-high-speed of residential aggregate of S$732 developments with interne
Slide 9: Growing demand for connectivity
2 Growing demand for connectivity Increasing use of fibre broadband services for day-to-day activities makes the Trust Group’s business resilient Growing demand for connectivity OTT Content Consumption Bandwidth Intensive Electronic Games “Ultra-high-speed fibre broadband has become a necessity and
Slide 10: Sole nationwide provider of residential fibre network in Singapore
3 Sole nationwide provider of residential fibre network in Singapore Sole ~1.5 million ~1.3 million ~1.2 million Nationwide Residential Residential Residential Provider of Home Home End-User Residential Fibre Passed (1) Reached (2) Connections Network in Supported Singapore 1. Residential home passe
Slide 11: Well-positioned to benefit from growth in the non-residential segment
4 Well-positioned to benefit from growth in the non-residential segment as the independent nationwide network provider Nationwide ~32,000 5 of the 13 ~44,000 coverage for all non-residential Requesting Licensees non-residential end-user non-residential premises deployed to (1) predominantly utilised
Slide 12: Well-positioned to capitalise on growth in connected services including Smart Nation
5 Well-positioned to capitalise on growth in connected services including Singapore’s Smart Nation Initiatives Initiatives that require fibre connections… Smart Nation Initiative • The Government has taken an integrated approach to lay the foundation infrastructure, and drive pervasive Smart Nation
Slide 13: Operational & Financial Highlights
Section 3 Operational & Financial Highlights 13
Slide 14: Residential fibre connections
Residential fibre connections ’000 1,200 1,192.5 1,183.4 1,165.0 • 1.19m residential 1,142.6 connections as at 31 Mar 2018 1,094.8 1,100 • Residential connections exceeded forecast by 0.8%. 1,000 938.0 900 800 FY16A FY17A Q2 FY18A Q3 FY18A Q4 FY18A FY18E 14
Slide 15: Non-residential fibre connections
Non-residential fibre connections ’000 50 43.2 43.9 42.8 • 43,855 non-residential 42.0 connections as at 40 38.5 31 Mar 2018 31.5 • Non-residential 30 connections exceeded forecast by 2.4% 20 10 0 FY16A FY17A Q2 FY18A Q3 FY18A Q4 FY18A FY18E 15
Slide 16: Non-Building Address Point (NBAP) connections
Non-Building Address Point (“NBAP”) connections 1,200 1,069 1,000 • NBAP connections below forecast due 835 mainly to slower than 800 expected project 635 deployment from customers 600 549 • Continue to support 400 357 RLs and government agencies on the rollout of Smart 200 142 Nation initiatives 0
Slide 17: FP18 Profit & loss statement
FP18 Profit & loss statement Revenue was lower than forecast S$’000 FP18(1) Forecast(2) % Change mainly due to lower installation- related revenue Revenue 228,587 232,802 (1.8) EBITDA and EBITDA margin were EBITDA 167,275 161,235 3.8 ahead of forecast mainly due to lower operation and maintenance co
Slide 18: FP18 Key revenue segments
FP18 Key revenue segments Ducts, manholes and Fibre-business revenue Central Office revenue NLT Residential Non- NBAP Segment Co-Location Installation Diversion Ducts and Central end-user Residential Connections Fibre Revenue related Income Manholes Office Connections end-user Connections Revenue Se
Slide 19: Q4 FY18 Profit & loss statement
Q4 FY18 Profit & loss statement S$’000 Q4 FY18(1) Forecast(2) % Change Revenue was lower than forecast mainly due to lower installation- Revenue 80,716 84,387 (4.4) related revenue. EBITDA 57,341 58,432 (1.9) EBITDA was lower than forecast mainly due to lower revenues; EBITDA margin (%) 71.0% 69.2%
Slide 20: Balance sheet as at 31 Mar 2018
Balance sheet as at 31 Mar 2018 Cash Balance S$166 million Net Debt S$425 million Net Assets S$3,174 million Debt/EBITDA(1) 2.5x EBITDA Interest Cover(1) 9.8x Net Assets per unit(2) 81.5 cents (1) Ratios calculated based on NetLink Trust Group’s trailing 12-month financials (2) Net assets per unit r
Slide 21: Focus for FY19
Focus for FY19 • Continue to improve our residential and non-residential QoS Timeframe Standards performance Quality of • Pre-lay fibre infrastructure to non-residential buildings to service speed up service provisioning • Continue to maintain high network reliability of > 99.99% • Support RLs’ effo
Slide 22: Long-term, regular and predictable distributions
Long-term, regular and predictable distributions Distribution Policy Distribution Yield “The Trust’s distribution policy is to distribute 5.73%(1) 5.7%(2) NetLink NBN Trust 100% of its cash 5.43%(1) available for distribution (CAFD)” NLT's distribution policy: at least 90% of its Distributable Incom
Slide 23: Supplemental Business Information
Supplemental Business Information 23
Slide 24: Residential segment
a Residential segment Providing fibre connection to all residential homes in Singapore The Trust Group's key operating statistics ‘000 1,434 1,483 1,319 1,375 1,347 1,279 1,165 960 Mar-15 Mar-16 Mar-17 Mar-18 (2) (3) Residential home passed Residential home reached Growth in the Trust Group's fibre
Slide 25: Non-residential segment
b Non-residential segment The Trust Group's key operating statistics and total Providing competitive non-residential access across Singapore addressable market ‘000 125 128 * 108 114 28 29 30 32 Mar-15 Mar-16 Mar-17 Mar-18 Premises deployed Total corporate wired broadband connections Increase in the
Slide 26: NBAP segment
c NBAP segment Providing NBAP connection services throughout Singapore The Trust Group's key operating statistics NBAP connections 1,592 835 357 142 59 (1) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Fibre connections The Trust Group's NBAP segment to benefit from Smart Nation initiatives • The Trust Group i
Slide 27: NetLink Trust's pricing for its services
NetLink Trust’s pricing for its services Pricing of NLT’s principal services are regulated by IMDA • IMDA shall hold a review of pricing terms every five years following the last price review, or at any such time as IMDA may consider appropriate (which may include a mid-term review in the third year
Slide 28: NetLink Trust's pricing for its services
NetLink Trust’s pricing for its services Framework for RAB Based Pricing Model Methodology for RAB based pricing model 1 1 • Base year of the RAB is 2012 RAB WACC – Assets purchased up to 2012 are valued at 2012 Cost Base prices for RAB – Assets purchased after 2012 are valued at actual cost 2 2 • N
Slide 29: Understanding the ICO pricing framework
Understanding the ICO pricing framework Illustrative Worked Example How Does EAC Work for 1 Year’s Outflow on Capex? Assuming Opening RAB of S$1Bn, WACC of 7.0% and Asset Useful Life of 10 Years EAC (S$ MM) RAB (S$MM) 300 1,000 750 200 142 142 142 142 142 142 142 142 142 142 500 34 26 18 9 65 60 54
Slide 30: Thank You
Thank You NetLinkNBN