Slide 1: 4Q/FY2019 Results NDR Presentation
4Q/FY2019 RESULTS NDR Presentation | February 2020 <Document Classification> 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS The following presentation may contain forward-looking statements by StarHub Ltd (“StarHub”) relating to financial trends for future periods. Some of the statements in this presentation which are not historical facts are statements of future expectations with respect to th
Slide 3: D.A.R.E. Transformation
D.A.R.E. TRANSFORMATION INSPIRING DIGITAL D.A.R.E. Strategy in Motion Progress INNOVATION – • “Hello Change” brand promise • Significant 130% YoY improvement in • Completion of cable-to-fibre migration Net Promoter Score1 IMPROVING THE • Improving customer experience LIVES OF OUR • Digital innovatio
Slide 4: FY2019 at a Glance
FY2019 AT A GLANCE S$2,330.6M 1.3% YoY1 MOBILE TOTAL REVENUE 6.3% QoQ 2 S$765.5M 7.2% YoY1 S$40 8.6% YoY1 1,451K 3.5% YoY1 REVENUE ARPU SUBS 0.5% QoQ 2 (POSTPAID) 1.4% QoQ 2 (POSTPAID) 0.6% QoQ 2 S$1,765.1M 3.7% YoY1 SERVICE PAY TV REVENUE 2.1% QoQ 2 20.3% YoY1 12.5% YoY1 19.4% YoY1 S$248.0M S$44 32
Slide 5: Financial Overview
FINANCIAL OVERVIEW S#039;M 4Q2019 4Q2018 Change (%) FY2019 FY2018 Change (%) Total Revenue 608.4 619.5 (1.8) 2,330.6 2,362.0 (1.3) Service Revenue 443.7 457.5 (3.0) 1,765.1 1,832.4 (3.7) EBITDA 138.4 110.8 24.9 617.1 567.1 8.8 Service EBITDA1 115.5 105.6 9.4 558.7 520.8 7.3 Service EBITDA Margin (%) 26
Slide 6: Guidance Checklist
GUIDANCE CHECKLIST ACTUAL GUIDANCE SERVICE REVENUE 3.7% 2% - 3% Lower-Than-Expected Due mainly to lower consumer revenues YoY YoY offset by higher enterprise performance SERVICE EBITDA MARGIN1 31.7% 30% - 32% Within Expectations CAPEX COMMITMENT2 7.5% 8% - 9% Better-Than-Expected Of Total Revenue Of
Slide 7: Group Revenue
GROUP REVENUE TOTAL REVENUE (S$’M) / REVENUE MIX (%)* S$2,362.0M S$2,330.6M Enterprise 12.6% Revenue YoY 22.4% 529.6 24.3% 565.5 S$510.8M 3.4% 81.3 Service 6.3% 145.7 3.7% S$575.2M Enterprise 18.2% 429.4 Revenue YoY Enterprise Revenue 18.4% Revenue 429.5 7.9% 185.8 7.6% 176.4 13.2% 311.3 S$1,832.4M
Slide 8: Mobile
MOBILE YOY PERFORMANCE & COMMENTARY QOQ PERFORMANCE POSTPAID • Lower postpaid ARPU due to lower IDD, excess data S$40 ARPU S$43 S$40 S$39 usage, roaming, data subscriptions and VAS revenues POSTPAID 1,402 1,451 1,442 1,451 SUBS (K) • Average monthly churn rate in 4Q2019 was 1.1% (3Q2019: 1.6%; 4Q201
Slide 9: Pay TV
PAY TV YOY PERFORMANCE & COMMENTARY QOQ PERFORMANCE ARPU S$50 • Lower ARPU and subscriber base S$44 S$42 due to promotional activities S$40 relating to the cable-to-fibre migration SUBS (K) 409 347 329 • 4Q2019 average monthly churn 329 rate reduced to 0.7% (3Q2019: 2.2%; 4Q2018: 1.4%) SEGMENT • YoY
Slide 10: Broadband
BROADBAND YOY PERFORMANCE & COMMENTARY QOQ PERFORMANCE ARPU S$32 • Lower YoY ARPU due to promotional S$27 S$27 S$29 activities relating to the cable-to-fibre migration • 4Q2019 average monthly churn rate SUBS (K) 482 501 reduced to 0.5% (3Q2019: 0.9%; 505 501 4Q2018: 0.8%) SEGMENT 185.8 • YoY revenu
Slide 11: Enterprise
ENTERPRISE NETWORK SOLUTIONS CYBERSECURITY SERVICES SEGMENT REVENUE Data & Internet SEGMENT REVENUE (S$’M) Managed Services (S$’M) Voice Services 429.4 429.5 145.7 113.8 106.7 110.9 14.7 9.8 62.5 10.9 29.2 26.5 33.7 81.3 49.0 3Q 38.8 69.9 69.3 67.4 4Q 113.8 4Q 110.9 4Q 32.4 4Q 44.4 FY2018 FY2019 4Q2
Slide 12: Operating Expenses
OPERATING EXPENSES OPERATING EXPENSES (S$’M) FY2019 COST STRUCTURE (S$’M) Cybersecurity Expenses Other Operating Expenses 16.4% Cost of Sales 2,089.7 2,085.8 24.3% 81.1 169.4 4.3% 590.1 563.8 974.3 921.1 45.6 501.6 52.1 5.4% 42.4 2,008.6 258.8 0.9% 1,916.3 249.0 225.6 544.5 511.7 4.7% 1.7% 19.3% 1,0
Slide 13: D.A.R.E. in Motion: 64% Cost Programme Executed
D.A.R.E. IN MOTION 64% COST PROGRAMME EXECUTED Planned 20% > S$210M Executed Current Net 5% Savings Expenditure Current Net Savings Workforce Operational TV Operations Total Digitalisation & Current Optimisation Efficiencies & Content Savings Transformation Initiatives Net Savings (As at 4Q2019) 13
Slide 14: EBITDA / Margins
EBITDA / MARGINS EBITDA (S$’M) SERVICE EBITDA (S$’M) / MARGIN (%) Full Year 31.7% 28.4% Service EBITDA Margin 617.1 558.7 520.8 567.1 115.5 138.4 105.6 110.8 152.8 170.5 132.2 147.0 4Q 146.4 4Q 141.0 140.8 155.3 3Q 3Q 2Q 2Q 1Q 154.0 161.9 1Q 142.0 149.7 FY2018 FY2019 FY2018 FY2019 14
Slide 15: Profit Highlights
PROFIT HIGHLIGHTS PROFIT FROM OPERATIONS (S$’M) NET PROFIT (S$’M) • Excluding cybersecurity losses of S$21.8M, profit from operations would have (ATTRIBUTABLE TO SHAREHOLDERS) improved to S$277.7M • While the cybersecurity business was initially impacted by initial investments in R&D and human capit
Slide 16: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS FREE CASH FLOW (S$’M) FY2019 DIVIDEND 9 SGD CENTS PER SHARE Responsible & sustainable dividend policy 221.3 218.6 NET DEBT 145.3 TO EBITDA 1.51X Prudent capital management with sufficient headroom for growth FY2017 FY2018 FY2019 16
Slide 17: Dynamic Operating Environment
DYNAMIC OPERATING ENVIRONMENT CONSUMER ENTERPRISE INTENSE MARKET COMPETITION ENABLING DIGITAL TRANSFORMATION • Mobile: 4 MNOs, 11 MVNOs • Leverage the rise of Singapore’s digital economy that • TV: Rise of OTTs (fragmented market) and content is driven by the Government’s Smart Nation push providers
Slide 18: Leveraging 5G
LEVERAGING 5G JOINT 5G BID PLAYING AN ACTIVE ROLE IN 5G 17 Feb 2020 Joint bid submitted Mid-2020 Expected award of licences By 2020 Commence 5G roll-out Pop-Up 5G Showcase Expected 5G 2021 commercial (Dec 2019) launch NYP-StarHub APEX-5G Launch (Jan 2020) By End-2022 2022 • SA networks to • Exclusiv
Slide 19: Views & Strategies
VIEWS & STRATEGIES GROUP Transform Diversify Leverage emerging Prudent capital For sustainable future Revenue Streams; 5G opportunities management growth Geographical Reach CONSUMER • Enhance customer experience Defensive; • Digitalisation – grow digital brands; drive online sales; embrace automatio
Slide 20: FY2020 Guidance
FY2020 GUIDANCE ADDITIONAL SERVICE SERVICE NOTES REVENUE EBITDA • Service Revenue expected to be lifted by higher cybersecurity 1% – 3% 27% – 29% • services revenue Lower YoY guidance for Service YoY Margin EBITDA margin due to change in revenue mix • Continue optimising operations through digitisat
Slide 21: Dare to Evolve
DARE TO EVOLVE 4Q/FY2019 RESULTS NDR Presentation | February 2020 Investor Relations: <Document Classification> Amelia LEE | IR@StarHub.com