Pccw Limited · HKEX:8

Pccw — FY2005 Earnings Presentation

41 slides from Pccw's earnings presentation, Mar 29, 2006

  1. Slide 1: Innovation & Growth: 2005 Annual Results

    Innovation & Growth 2005 Annual Results For the year ended December 31, 2005 Hong Kong - March 29, 2006

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements The statements included in this presentation that are not historical in nature are “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 as amended and Section 21E of the U.S. Securities Exchange Act of 1934 as amended. These for

  3. Slide 3: 概覽

    概覽 副主席兼集團董事總經理 蘇澤光 2

  4. Slide 4: 2005年的財務表現

    2005年的財務表現 (百萬美元) 2004 2005 收益 2,949 2,885 核心收益 2,255 2,267 未計貝沙灣項目 集團 EBITDA 842 853 本公司股權持有人應佔 溢利 200 204 本簡報內若干過往年度的比較數字已遵照2005年1月1日生效的《香港財務報告準則》重列。 董事會建議派付末期股息每股港幣12分，但仍須待股東通過後方可作實。 3

  5. Slide 5: 2005年的業務成績

    2005年的業務成績 成功吸引新舊固網客戶，並於05年下半年錄得線路數目增長 重振核心業務 推出創新服務及多元化內容，帶動 及「網上行」寬頻業 務增長 使電訊盈科成為全面的綜合電訊營運商 購入SUNDAY 在同一平台提供四合一服務 創造交叉銷售機會及其他協同效益 在區內拓展電訊盈科企業方案、萃鋒及PCCW Global的業務 拓展海外業務 與中國網通集團在內地攜手開拓業務 進一步控制成本及減債 改善財務表現 結束非核心業務 繼續以優厚的股息回饋股東 4

  6. Slide 6: IPTV創新技術的領導者

    IPTV創新技術的領導者 獨家頻道 增長強勁 住宅 y 549 已安裝 --oo--y 收費頻道客戶 yy 22 商業 22% % 已安裝收費頻道服務 ++55 441 17 (’000) 361 391 22 10 本地內容 269 271 17 192 369 10 147 254 182 106 互動功能 29 H2 H1 H2 H1 H2 2003 2004 2005 高清電視 5

  7. Slide 7: 與中國網通集團合作 最新發展

    與中國網通集團合作 最新發展 物業發展 寬頻 北京市朝陽區呼家樓電話機樓 網通寬帶有限責任公司 y 電訊盈科與中國網通集團聯合提交重建建議書 y 電訊盈科收購其百分之五十股權 y 地盤面積介乎1.25萬至1.5萬平方米， 總樓面面積 y 在杭州及寧波兩個城市提供寬頻接入及增值服務 達100萬平方呎 y 交易預期將於2006年4月落實 y 獲當地政府部門積極回應，現正等待審批 指南(黃頁) 流動通訊 大中華黃頁 y 電訊盈科與中國網通集團正研究在廣東省及長江 三角洲提供流動通訊服務 y 大中華黃頁的重組已進入後期階段 y 已準備與中國網通集團磋商成立合營企業 y 中國網通集團正試行3G服務 y

  8. Slide 8: 展望

    展望 以創新服務保持在IPTV的領導地位 增添更多互動及優質內容，進一步推動用戶人數增長 引入高清電視 成為提供全面綜合電訊服務的營運商 流動通訊融合 通過3G試用計劃建立3G客戶基礎 促進交叉銷售及爭取節省成本的協同效益 保持在傳統電話服務的市場地位 固網業務 充份掌握開拓收益的商機 收益及 在內地或東亞國家開展具戰略意義的項目 價值增長 推動電訊盈科企業方案、萃鋒及PCCW Global增長 7

  9. Slide 9: Overview

    Overview Jack So Deputy Chairman & Group Managing Director 8

  10. Slide 10: 2005 Financial Performance

    2005 Financial Performance (US$ million) 2004 2005 Revenue 2,949 2,885 Core Revenue 2,255 2,267 excluding Bel-Air Group EBITDA 842 853 Profit attributable to 204 equity holders of the Company 200 Certain prior years’ figures in this presentation have been restated in accordance with the new HKFRSs e

  11. Slide 11: 2005 Achievements

    2005 Achievements Won back fixed line customers, gained lines in 2H’05 Revitalize Core Boosted & NETVIGATOR broadband by innovation, Business and expanded content offering Transaction made PCCW a fully integrated operator SUNDAY Provided a platform to offer quadruple play Acquisition Created cross-s

  12. Slide 12: Leader in IPTV Innovation

    Leader in IPTV Innovation Exclusive, & Only on Strong Growth of Residential y 549 Installed --oo--y Pay channel customers yy 22 Commercial 22% % ++55 Installed pay channel services 441 17 (’000) 361 391 10 22 Local & Localized Content 269 271 17 192 369 10 147 254 182 106 Interactivity 29 H2 H1 H2 H

  13. Slide 13: Co-operation with China Netcom Group

    Co-operation with China Netcom Group Latest Developments Property Development Broadband Hujialou exchange, Chaoyang China Netcom Broadband district, Beijing Corporation Limited y PCCW & CNC joint development proposal y PCCW acquiring 50 percent stake y 12,500-15,000 sq. meter site, GFA 1 million sq.

  14. Slide 14: Outlook

    Outlook Maintain worldwide IPTV leadership with innovations More interactivity and quality content to further grow customers Introduce HDTV Fully integrated telecom services for quadruple play Mobile Build 3G customer base from the 3G trial experience Integration Promote cross-selling and achieve sy

  15. Slide 15: Financial & Business Review

    Financial & Business Review Alex Arena Executive Director & Group Chief Financial Officer 14

  16. Slide 16: Summary P&L

    Summary P&L Better/ (worse) (US$ million) 2004 2005 y-o-y Revenue 2,949 2,885 (2)% Cost of Sales 1,350 1,342 1% General and administrative expenses 1,075 1,033 4% Operating profit 524 510 Other gains, net 52 80 Provision for impairment losses and restructuring costs (12) (7) Finance costs, net (251)

  17. Slide 17: Revenue

    Revenue (US$ million) 2,949 2,885 ( -2% y-o-y ) 289 225 (1) 694 618 Bel-Air ( -11% y-o-y ) • Booked according to new accounting 1,966 2,042 standards % SS TTS S uupp 44% TSS • Including SUNDAY 2004 2005 (1) Other revenue less elimination 16

  18. Slide 18: Cost of Sales

    Cost of Sales (US$ million) 1,350 1,342 203 181 Others Bel-Air 529 599 • Booked according to new accounting standards TSS 632 • Attributed to higher 548 COS for CPE sales, new services, and consolidating SUNDAY 2004 2005 17

  19. Slide 19: Expenses

    Expenses (US$ million) DDoow wnn44% % 1,454 1,392 128 142 Tax 251 217 Net finance costs 318 Depreciation, 343 amortization & fixed Opera ting co asset disposal st s D Doow wnn 99% % Operating costs 757 • Staff costs 690 • Repair & maintenance • Other operating costs 2004 2005 18

  20. Slide 20: EBITDA

    EBITDA (US$ million) 842 853 ( +1% y-o-y ) 71 69 Bel-Air • Booked according to new accounting standards 771 784 Air e x Bel- Group % Group ex Bel-Air Upp 22% U 2004 2005 19

  21. Slide 21: Profit for the Year

    Profit for the Year (US$ million) 8%% uupp 118 239 202 35 Minority interests 2 Attributable to 204 200 equity holders of PCCW .5% uupp 22.5 % 2004 2005 20

  22. Slide 22: Credit Fundamentals

    Credit Fundamentals Net Debt Gross Debt/ EBITDA (1) PCCW consolidated (US$ million) PCCW consolidated HKTC 5.1 4.7 4.5 4.4 (3) 4.3 4,220 3.4 3.0 3,735 2.1 3,368 2,498 ’02 ’03 ’04 ‘05 ’02 ’03 ’04 ‘05 EBITDA/ Interest (2) 8.2 8.5 6.4 6.6 2002 2003 2004 2005 3.7 3.2 3.2 2.9 Gross Debt down 2% y-o-y to

  23. Slide 23: Debt Profile

    Debt Profile (US$ million) Convertible Bond Gross debt: US$ 3,739m Revolving Credit Facility US$ Bond As of Dec 31, 2005 Guaranteed Note $1,000 $956 $769 $500 $450 $456 $64 $500 2007 2008 2009 2010 2011 2012 2013 2014 2015 y Repaid debt of over US$1.5bn during 2005 - US$54m Telstra CB - US$250m yen

  24. Slide 24: Operational & Strategic Review

    Operational & Strategic Review 23

  25. Slide 25: Stabilized Traditional Fixed-line Services

    Stabilized Traditional Fixed-line Services Fixed-line Strategy New Carrier License y Allows the Company to compete y Provides flexibility in marketing and bringing innovative products to customers Successful Campaigns y Effective marketing campaigns build brand preference y Differentiate service thr

  26. Slide 26: Achieved Line Gain During H2'05

    Achieved Line Gain During H2’05 Business Residential (’000) +50 2003 2004 2005 13 H1 H2 H1 H2 H1 37 -30 -17 -31 -61 H2 -70 -36 -64 -124 -56 Net fixed line gain of 50,000 -135 lines in H2’05 68% Market Share at End 2005 25

  27. Slide 27: Broadband Growth Driven by...

    Broadband Growth Driven by Fast Growing Broadband Lines Broadband Drivers (’000) --yy yy--oo Wholesale Business 0% ++220 % 953 y Premium quality broadband service Consumer 857 with full range of VAS 796 753 88 703 80 y 66% of consumer broadband lines 629 74 have installed 68 63 58 798 y 90% of new N

  28. Slide 28: Building Momentum

    Building Momentum Strong Demand on Residential y Drivers Installed oo--y 549 yy-- Pay channel customers 22 22% % Commercial ++55 y Quality, quantity, and variety of content Installed pay channel services 441 (over 110 channels in H1’06) 17 (’000) 361 391 y Exclusive channels, and only on 10 22 Disne

  29. Slide 29: Strategy to Increase ARPU

    Strategy to Increase ARPU Rising Pay Channel Customers & ARPU ARPU Drivers Increasing exit ARPU Pay channel for pay channel y Content - over 110 channels by March 2006 customers customers as % of total installed (HK$/ month) y Mini Packs where 59% of channel subscriptions come from 114 100% 110 120

  30. Slide 30: Latest Channels

    Latest Channels on ’s own 24 Hours Cantonese Business News Channel Live on March 20 y Recruited top journalists and renowned finance commentators with live broadcast facilities at more than 10 brokerage and analyst offices y Viewers can look up stock quotes using their remote control while watching

  31. Slide 31: Carriage Agreement with TVB PAY VISION

    Carriage Agreement with TVB PAY VISION 20 Channels on Platform Including 8 TVB Produced Channels and a Selection of Asian and International Channels y 24-hour news channel y Channel with TVB archive epic drama series y Drama series channel brings y Offers medical advice from the latest local product

  32. Slide 32: 2005 Targets and Achievements

    2005 Targets for Achievements 25 channels added in 2005 Continue to enhance content line up Dec’04 Dec’05 52% growth Exceed 500,000 installed customers 361,000 549,000 Dec’04 Dec’05 Further increase: 1) ARPU HK$105 HK$114 2) Percentage of paying customers 53% 71% 31

  33. Slide 33: 2006 Targets

    2006 Targets y Exceed 750,000 installed customers y Continue to enrich the user experience through more interactivity and access to more content y Further increase in ARPU and percentage of pay channel customers y Introduce HDTV y Achieve EBITDA breakeven by end 2006 32

  34. Slide 34: PCCW mobile – Completing Platform for Integrated Services

    PCCW mobile – Completing Platform for Integrated Services 3G Trial Received Overwhelming Response • Over 330,000 participants registered • 110,000 users selected for the trial, and about 100,000 activated - now using PCCW mobile 3G services • Recruited quality customers – Shown high usage on voice a

  35. Slide 35: UK Broadband

    UK Broadband A Valuable Asset with Significant Potential y Retain prudent approach to UK Broadband network development y Expanded coverage to west London in 2005, after 2004 soft launch y Seeing major wireless broadband fundraising & deployment in US, Europe and other regions y Seeing release of 3.5

  36. Slide 36: Winning Major IT & Services Contracts

    Winning Major IT & Services Contracts Building Value through Organic Growth Electronic passport system (ePASS) y To design and build a collaborative network for Brunei’s Ministry of Finance interconnecting all government agencies as part of Brunei y 10-year contract from the HKSAR e-government initi

  37. Slide 37: Quadruple Play

    Quadruple Play Complete Platform for Integrated Services Fixed-line Broadband y Shifted to line gain y 953k lines, up 20% y-o-y y Stabilized market share at 68% y Over 50% HDTV capable Pay TV Mobile y 549k subscribers, up 52% y-o-y y Launched PCCW 3G trial y HDTV in trial y 110,000 users selected 36

  38. Slide 38: Appendix

    Appendix 37

  39. Slide 39: Over 110 Channels

    Over 110 Channels on Exclusive Channels Only on Kids Movie Sports Entertainment News News Entertainment Other Exciting Channels Movie Sports Kids Infotainment Entertainment News Adult 38

  40. Slide 40: PCCW Consolidated Debt Maturity Profile

    PCCW Consolidated Debt Maturity Profile 1 (US$ million) 1 Dec 2002 $1,518 Net Debt = 4,220 Debt to EBITDA = (5,303 / 1,046) = 5.07X $1,290 $96 $190 $781 $1,000 $641 $1,100 $450 $250 $641 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 1 Dec 2003 Net Debt = 3,735 Debt to EBITDA = (4,424 /

  41. Slide 41: HKTC Debt Maturity Profile

    HKTC Debt Maturity Profile 1 (US$ million) $1,422 Net Debt = 3,628 HKTC Debt to EBITDA = (3,763 / 1,109) = 3.39X Dec 2002 $781 $641 $1,000 $450 $641 $250 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2031 Dec 2003 Net Debt =2,074 HKTC Debt to EBITDA = (2,200 / 1,047) = 2.10X $1,000 $450 $50

PCCW — FY2005 Earnings Presentation on 6ix