Hutchison Telecommunications (Australia) Ltd
Hutchison Telecommunications (Australia) — H1 2005 Earnings Presentation
22 slides from Hutchison Telecommunications (Australia)'s earnings presentation, Aug 16, 2005
Slide 1: ASX cover letter: Half Year Results Presentation
Hutchison Telecommunications (Australia) Limited ABN 15 003 677 227 A member of the Hutchison Telecommunications Group Building A, 207 Pacific Highway St Leonards NSW 2065 Tel: (02) 9964 4646 Fax: (02) 9964 4668 www.hutchison.com.au Companies Announcements Office Australian Stock Exchange Date 16 Au
Slide 2: Media Release: Hutchison Continues Solid Improvements in Financial Performance
Hutchison Telecommunications (Australia) Limited ABN 15 003 677 227 A member of the Hutchison Telecommunications Group Building A, 207 Pacific Highway St Leonards NSW 2065 Tel: 02 9964 4646 Fax: 02 9964 4668 www.hutchison.com.au Media Release 16 August 2005 Hutchison Continues Solid Improvements in
Slide 3: Media release page 2: operating and financial highlights
Hutchison Telecommunications (Australia) Limited A member of the Hutchison Telecommunications Group -2- Hutchison recorded improved control over operating expenditure. Direct costs of providing telecommunications goods and services decreased by 8% from $192 million in the six months to June 2004, to
Slide 4: 2005 Half Year Results
Hutchison Telecommunications (Australia) Limited 2005 Half Year Results For the period ended 30 June 2005 Kevin Russell Chief Executive Officer 16 August 2005
Slide 5: A Different Market
A Different Market • 2G market becoming saturated Ø Customer quality, not quantity • Voice and SMS It’s commoditising about Ø Margins, not just ARPU • Fixed line traffic migrating Ø Increasing contribution from non-voice services • Competition increasing Ø 3G investment required • 3G networks launch
Slide 6: Highlights
Highlights • 73% increase in service revenue to $364.4 million • 23% improvement in per customer margin to $48 • 43% reduction in EBITDA losses to $122.6 million • 160% increase in service revenue to $218.1 million • Non-voice ARPU grew strongly to $16 • 27% improvement in per customer margin to $56
Slide 7: Financial Highlights
Financial Highlights Half Year Half Year Change ($million) 30 Jun 05 30 Jun 04 Service Revenue 364.4 211.1 73% Equipment Revenue 80.2 119.3 -33% Revenue(1) 444.6 330.1 35% EBITDA(2) -122.6 -214.0 43% NPAT(3) -305.3 -332.9 8% Cash CAPEX 147.9 111.6 33% (1) Revenue excludes interest income and other i
Slide 8: Customer Base
Customer Base (Customers `000) 950 950 839 839 92 73 532 610 610 858 413 15 766 224 595 426 418 386 1H04 2H04 1H05 1H04 2H04 1H05 Orange 3 Post-paid Pre-paid 56% growth in 12 months 5
Slide 9: Net Customer Growth
Net Customer Growth Half Year Half Year Half Year Net (Customers `000) 30 Jun 05 31 Dec 04 30 Jun 04 Change 3 post-paid 117 124 137 -7 3 pre-paid 2 65 - -63 Orange post-paid -25 47 61 -72 Orange pre-paid 17 -7 - 24 Total net customer growth 111 229 198 -118 Growth focus on 3 post-paid 6
Slide 10: Scope for Growth
Scope for Growth • Improved handset range and functionality • Increased awareness of network quality and coverage – supported by new Telstra roaming agreement • Launch of new coverage areas – Canberra – Campbelltown • Increased consumer appetite and awareness of 3’s non-voice services Customer growt
Slide 11: ARPU and Margin
ARPU and Margin $70 $69 $62 $48 $45 $39 1H04 2H04 1H05 1H04 2H04 1H05 Margins strengthening with increased contribution from non-voice revenue 8
Slide 12: 3 ARPU and Margin
3 ARPU and Margin $91 $94 $13 $84 $12 $16 $81 $79 $58 $68 $56 $44 1H04 2H04 1H05 ARPU Voicevoice ARPU but ARPU lower non-voice margin relatively Margin stable 9
Slide 13: Continued Growth in Content
Continued Growth in Content • Non-voice ARPU continues to strengthen • Non-SMS services growing sharply • Over 65% of base actively using content services • Over 50% of base generating billable content events • 420,000 content subscription services sold Non-SMS $16 Snow report SMS $13 $12 $7 $4 $5 $
Slide 14: Operating Expenditure
Operating Expenditure $392 $million $47 Other $318 $317 Adv & promotion $47 $35 $55 Employment $41 $55 Direct $36 telecommunication $50 $50 $243 $192 $176 1H04 2H04 1H05 Operating expenditure relatively stable, increasingly offset by scale Operating expenditure excludes handset costs 11
Slide 15: Customer Acquisition Costs
Customer Acquisition Costs $392 $389 $269 1H04 2H04 1H05 Customer acquisition costs to decline in 2H05 12
Slide 16: What to Expect in 2H05?
What to Expect in 2H05? • Acquisition focus – 3 post-paid – Orange pre-paid • Improved handset cost, range and functionality • Network leadership • Non-voice service innovation and usage • Profitability trends – scale benefits in margin – reducing customer acquisition costs – operating costs under c
Slide 17: Hutchison Telecoms: telecommunications operations of Hutchison Whampoa
MM Hutchison BM ‘Telecoms Telecommunications operations of Hutchison Whampoa Limited MUL
Slide 18: Chief Executive's Address: speaking notes, slides 1-2
Hutchison Telecommunications (Australia) Limited 2005 Half Year Results 16 August 2005 Chief Executive’s Address Slide 1- Introduction Slide 2 – A Different Market There are some very clear trends emerging in the mobile market. Whilst 2G customer numbers reported by the industry are climbing, corres
Slide 19: Speaking notes: Slide 3 Highlights
Slide 3 – Highlights You should note that the financial results for the period ending 30 June 2005 reflect the mandatory adoption of the new Australian equivalents of International Reporting Standards from 1 January 2005. Details of the policy and financial impacts are contained in our 4D filing. Du
Slide 20: Speaking notes: capital expenditure and customer base
Capital expenditure is principally attributable to costs associated with 3’s network capacity enhancements and incremental site build. The investment in our network infrastructure has not only resulted in increased geographical coverage, but also in a more robust and better quality network performan
Slide 21: Speaking notes: ARPU and margin, content growth
the increased contribution from non-voice revenue which has helped to offset the decline in voice ARPU. Slide 9 – 3 ARPU and Margin Looking specifically at our 3 business, we continued to record strong customer revenue, with an ARPU of $84. The impact of lower mobile termination rates has reduced vo
Slide 22: Speaking notes: operating costs, acquisition costs, 2H05 outlook
Both advertising and employment costs also demonstrated significant reductions since the second half of 2004. Slide 12 – Customer Acquisition Costs Customer acquisition costs increased year on year by $120 per blended sale across 3 and Orange. This increase reflected an increasing mix of $0 handsets
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