Pccw Limited · HKEX:8
Pccw — FY2007 Earnings Presentation
39 slides from Pccw's earnings presentation, Mar 6, 2008
Slide 1: 2007 Annual Results
2007 Annual Results For the year ended December 31, 2007 March 6, 2008 - Hong Kong 0
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements" that are not historical in nature. These forward-looking statements, which include, without limitation, statements regarding PCCW's future results of operations, financial condition or business prospects, are based on
Slide 3: Overview
Overview Alex Arena Group Managing Director 2
Slide 4: 2007 Financial Performance
2007 Financial Performance (US$ million) FY’06 FY’07 2006年 % Change Revenue 3,287 3,040 收益 Core Business* 2,356 2,638 + 12% EBITDA EBITDA 875 935 + 7% Core Business* 753 834 + 11% 股權持有人 Profit Attributable to Equity應佔溢利 Holders 161 193 + 20% * Core business includes telecom, media and ICT businesses
Slide 5: Core Business Has Continued to Grow
Core Business Has Continued to Grow Core Business Revenue Growth Core Business EBITDA Growth 11% 12% 5% 6% 1% -4% FY'05 FY'06 FY'07 FY'05* FY'06 FY'07 * 2005 EBITDA normalized with non-operational one-off items 4
Slide 6: Financial & Business Review
Financial & Business Review Susanna Hui Group Chief Financial Officer 5
Slide 7: Core Business Achieves Higher Profitability
Core Business Achieves Higher Profitability (US$ million) Core Business* PCPD Revenue EBITDA Profit Attributable to Equity Holders % ss + 12 + 11% Bu sine re Bu siness Core Co 5 4% s s+ ine Bus re Co 2,638 834 134 2,356 753 87 74 931 59 402 122 101 FY’06 FY’07 FY’06 FY’07 FY’06 FY’07 * Core business
Slide 8: Core Business Revenue Robust Growth in All Segments
Core Business Revenue Robust Growth in All Segments (US$ million) y y --oo--yy 2% ++112% TSS 2,638 Mobile 2,356 188 + 19% TV & Content 158 2,133 TSS 218 + 70% PCCW Solutions + 8% 128 1,971 Other Businesses 212 230 + 9% 42 1 32 Eliminations FY’06 FY’07 (155) (163) FY’06 FY’07 7
Slide 9: Core Business Opex Efficiency Gained Across Quad Play Platforms
Core Business Opex Efficiency Gained Across Quad Play Platforms (US$ million) -- 11% % yy-o -o-y -y 719 714 TSS Mobile TV & Content 487 475 - 6% y-o-y PCCW Solutions Other Businesses 113 92 Eliminations 54 69 + 26% y-o-y 51 47 123 136 (109) (105) FY’06 FY’07 8
Slide 10: Core Business EBITDA Solid Improvement in Mobile & TV Businesses
Core Business EBITDA Solid Improvement in Mobile & TV Businesses (US$ million) o-y % yy--o-y ++ 1111% TSS 834 Mobile breakeven 753 in FY’07 Mobile TV & Content (24) PCCW Solutions FY’06 FY’07 TSS Other Businesses 898 953 +6% TV & Content breakeven in Q4’07 Q4 (40) (20) 20 19 (24) (20) (40) FY’06 FY’
Slide 11: Other Expenses
Other Expenses (US$ million) 675 700 118 124 Tax 158 Net finance costs 164 Depreciation, amortization & others 393 418 FY'06 FY'07 10
Slide 12: Group Performance
Group Performance (US$ million) FY 2006 FY 2007 % change Revenue 3,287 3,040 Core Business 2,356 2,638 up 12% Cost of sales (1,663) (1,351) Operating expenses (749) (754) EBITDA 875 935 up 7% Core Business 753 834 up 11% Depreciation, amortization & others (393) (418) Operating profit 482 517 Other
Slide 13: Debt Profile
Debt Profile (US$ million) Revolving Credit Facilities Gross debt: US$3,304m US$ Bonds As of December 31, 2007 $1,301 $1,000 $500 $500 2007 2008 2009 2010 2011 2012 2013 2014 2015 Update y Gross debt reduced 11% from US$3.7bn to US$3.3bn y Average debt maturity at 5 years y Average cost of debt decr
Slide 14: Credit Fundamentals
Credit Fundamentals (3) Gross Debt/EBITDA (1) Net Debt PCCW consolidated (US$ million) HKTC 4.5 4.4 4.2 4.3 3.5 3.2 3.3 3.0 3,368 2,819 2,498 2,529 ’04 ’05 ’06 ’07 ’04 ’05 ’06 ’07 EBITDA/Interest (2) 8.5 2004 2005 2006 2007 6.6 5.3 5.0 4.3 3.2 2.9 3.3 Gross Debt down 11% y-o-y to US$ 3,304m Net Debt
Slide 15: Operational & Strategic Review
Operational & Strategic Review Alex Arena Group Managing Director 14
Slide 16: Quad Play Performance Update
Quad Play Performance Update Fixed line IPTV HDTV Broadband Mobile 15
Slide 17: Stable Fixed-line Business
Stable Fixed-line Business Solid Customer Base & ARPU Fixed Lines (’000) Residential Lines y Maintained solid customer base Business Lines - Monthly churn rate less than 1% y Focus on profitability and providing value to customers 1,667 - Firm ARPU trend sustained 1,543 1,487 1,4031,407 1,407 1,407
Slide 18: Market Leader in Broadband
Market Leader in Broadband Broadband Lines Continue to Grow Achievements --yy (’000) yy--oo 1% ++111 % y Broadband lines grew 11% y-o-y Wholesale 1,237 with less than 1% churn rate Business 1,176 Consumer 1,117 998 107 y Innovative applications and unique 953 104 99 content continue to drive 857 796
Slide 19: Premium service with high speed, mobility and wireless convenience
Premium service with high speed, mobility and wireless convenience High Speed Mobility + y Most extensive fiber deployment y Ubiquitous wireless platform covering two- thirds of HK’s integrating 3G, 7.2Mbps HSDPA households and WiFi y Wide range of high bandwidth y Auto network selector detects fibe
Slide 20: Rapid PCCW Wi-Fi Expansion
Rapid PCCW Wi-Fi Expansion Expanding Wi-Fi Hotspots y Wi-Fi usage rose 10 times since launch in Jan ‘07 y Rapid expansion to over 4,000 hotspots to enable city-wide coverage - Public payphone kiosks - Partnership with various retailers - Strategic alliances with universities y Equipped at MTR, a maj
Slide 21: PCCW's Ubiquitous Broadband Strategy
PCCW’s Ubiquitous Broadband Strategy Enabling PCCW’s quad play and other services on multiple devices, which roam seamlessly over our broadband, mobile and Wi-Fi networks 3G/ WiFi dual mode Imbedded with Netvigator Everywhere Access NGN IP Core Content, Applications&&Transactional Content Applicatio
Slide 22: Growing Mobile Customer Base
Performance Improvements Growing Mobile Customer Base • Customers grew by 16% with increased (’000) --yy market share despite fierce competition yy--oo 6%% 3G ++116 - Leading net gain from mobile number portability in 2G Post-paid 1,071 Q4’07 2G Prepaid 957 • 3G customers almost quadrupled to 206,00
Slide 23: Compelling Content on Mobile
Compelling Content on on mobile y Exclusive live BPL on mobile y Strongest TV content line-up y Strongest mobile music with streaming HD quality with 13 local & international platform in town (H.264 with double resolution) channels, 4 channels being HD over HSDPA/ WiFi/ 3G -Library currently over 11
Slide 24: Momentum Continues
Momentum Continues Strong Growth for Drivers y --oo--y • Widest selection of content with over 155 yy (’000) 66% % local & international channels ++11 882 Installed base Paying base 818 - Over 80 exclusive world-class movies, sports, 758 news and general entertainment channels - Newest self-produced
Slide 25: ARPU Accelerates
ARPU Accelerates Paying Base Growing & ARPU Strengthens ARPU Drivers Paying base (’000) Paying base ARPU Mega Sports (HK$/ month) Pack pick-up • Highly popular $218 Mega Sports Pack with increasing variety of sports programming and Value packs further 199 HD live events as premium content enhanced A
Slide 26: Comprehensive HDTV Offer
now Comprehensive HDTV Offer TV Sports Channel Line-up y Exclusive sports content available on such as: Barclays Premier League, UEFA EURO 2008TM, Italian Serie A, NHL, NFL and K-1 Content y Other world-class content & more.. y Introduced innovative All-In-One HDTV and DTT STB with access to and fre
Slide 27: Digital Home Networking & Home Media Center
Digital Home Networking & Home Media Center Paul Berriman Chief Technology Officer 26
Slide 28: PCCW - Building a Pathway to a Digital Future
PCCW - Building a Pathway to a Digital Future n t ed Internet re s e 1 8, Camera s t p b e r Fir ovem . Telephone Jacks N … on 2003 Entertainment Center Monitor Broadband Home Gateway Network Printer Wireless Digital Pad Picture Broadband Frame Pipe Smart Appliances Internet PCCW Phone New Generatio
Slide 29: Full Range of Service Platforms Now and Going Forward
Full Range of Service Platforms Now and Going Forward o me ng i 2003 H2004 wor k nted 2005 2006 2007 Going Forward t e Ne pres 30, irst arch Voice F on M 2005 Packet INTERACTIVE CONTENT & TRANSACTIONS Circuit Switched Switched NGN PSTN NGFL IP Voice INTEGRATED SERVICES HOME NETWORKING Broadband FTTH
Slide 30: Fixed Line Evolution from Basic Voice to Advanced Integrated NGN Phone Services
Fixed Line Evolution from Basic Voice to Advanced Integrated NGN Phone Services Now Tomorrow In the Past Voice + Data Voice + Data + Video + Access Only me g Ho rkin d in Content Applications & t wo te Transactions e en N res r st p 005 Future Fi 2 Color screen Integrated Services VoWi-Fi Home netwo
Slide 31: Evolution from Basic Broadband to HDTV and Mobile TV
Evolution from Basic Broadband to HDTV and Mobile TV k ing 2007 STB with or in etw e d H.264 for HD @ 6Mbit/s e N ent plus MPEG2 for SD m s Ho st pre 05 Fir 20 HDTV MPEG4 Advanced Home Networking Multiple TVs Interactivity MOBILE TV Media server Basic Network based personal video recorder Replay/ ti
Slide 32: IPTV – Home Networking Roadmap
IPTV – Home Networking Roadmap Home Media Center DTT Combo HDTV HD H.264 Advanced 720P at 8Mbps Interactivity Network based Personal Video Recorder Basic On-demand Interactive Advertising Interactivity Transactional services (e.g. Cinema Ticketing, Stock Trading, In-play eBetting) Casual games Elect
Slide 33: Experience the New Home
Experience the New Facilitate customer content management of media coming IN, going OUT and WITHIN the home HOME Digital Camera Digital Picture Frame 32
Slide 34: Home Media Center – Companion to STB
Home Media Center – Companion to STB New Service Features HDTV set y Introduce a companion to now TV’s set top PC box as the central unit for digital TV and RF socket media playing at home DTT - Single remote control for TV, now TV and HMC RF in HDMI out - Equipped with a Digital Terrestrial TV (DTT
Slide 35: Future Digital Home
Future Digital Home Digital Music Player Media Digital Desktop PC Storage Photo Frame IP Cam Smartphone Portable Game Device HMC / STB Companion Home WiFi Set-Top-Box Laptop Gateway PC 34 Connecting to Other Appliances
Slide 36: Reinforcing our Quad Play Advantage
Reinforcing our Quad Play Advantage 35
Slide 37: Appendix
36 ONLY PCCW Appendix
Slide 38: PCCW Consolidated Debt Maturity Profile
PCCW Consolidated Debt Maturity Profile (US$ million) Net Debt = 3,368 Debt3 to EBITDA = (3,816 / 842) = 4.53x Dec 2004 $1,154 $1,000 $956 $54 $450 $1,100 $456 $250 $500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 Net Debt = 2,498 Debt to EBITDA = (3,739 / 853) = 4.38x Dec 2005 $769 $1,000 $95
Slide 39: HKTC Debt Maturity Profile
(US$ million) HKTC Debt Maturity Profile Net Debt = 2,621 HKTC Debt to EBITDA = (2,656 / 889) = 2.99x Dec 2004 $1,000 $956 $450 $456 $250 $500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 Net Debt = 3,709 HKTC Debt to EBITDA = (3,739 / 876) = 4.27x Dec 2005 $769 $1,000 $956 $450 $456 $500 $64 $