Pccw Limited · HKEX:8
Pccw — Investor Presentation (September 2014)
34 slides from Pccw's investor presentation, September 2014
Slide 1: Investor Presentation September 2014 - Hong Kong
Click to edit Master title style Investor Presentation September 2014 - Hong Kong
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain “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
Slide 3: Solid Telecom Business, Media & Solutions Businesses – Growth Focus
Solid Telecom Business Media & Solutions Businesses – Growth Focus (US$ million) FY13 Revenue 3,502 FY13 EBITDA 1,030 Market Value (as at Sep 12, 2014) 4,770 Core Businesses (100%) (100%) (71.69%) Media Solutions PCPD Growth FY13 Revenue 86 FY13 Revenue 387 FY13 Revenue 380 businesses FY13 EBITDA (1
Slide 4: Diverse Global Workforce
Diverse Global Workforce • Approximately 23,000 people work within the PCCW Group worldwide after the successful integration of CSL • Diversity of Nationalities • 50 Nationalities are represented in our workforce • Gender Balance • Women and Men accounted for approximately 35% and 65% of the total w
Slide 5: Media Business
Media Business 4
Slide 6: Consolidating Leadership Position
Consolidating Leadership Position (US$ million) Media Revenue Media EBITDA 81 387 347 360 63 65 191 167 29 EBITDA 23% 23 Margin 17% 17% 17% 12% FY 2011 FY 2012 FY 2013 H1'13 H1'14 FY 2011 FY 2012 FY 2013 H1'13 H1'14 • Media revenue up 14% in H1’14 underpinned by • Softening in EBITDA and margin in H
Slide 7: Continued Market Leadership in Pay TV
Continued Market Leadership in Pay TV now TV continued to excel over competitors and recorded expansion in subscription base and ARPU in H1’2014 191 187 173 174 Thousands 174 172 169 171 171 169 167 169 165 1269 153 1237 1204 1165 1183 1140 1088 1028 1039 992 1001 125 953 927 882 818 H1 H2 H1 H2 H
Slide 8: Soccer Fans Base Continues to Expand
Soccer Fans Base Continues to Expand Interactive Features Amplify Service Differentiation Apart from BPL, the broadcast of World Cup on now TV platform in June, reinforced Now TV as the ultimate choice for soccer fans, and brought forward sports subscription before new BPL season kick-off Unique
Slide 9: Successful First TV Drama Series Production
Successful First TV Drama Series Production “The Virtuous Queen of Han” Successful completion and launch of Now TV’s first 38-episode Cast : Wang Luo Dan , Raymond Lam, Niki Chow TV drama co-production “The Virtuous Queen of Han”. (top actors in Mainland and Hong Kong) Global distribution of the s
Slide 10: Continual Expansion of International Footprint
Continual Expansion of International Footprint Established important affiliate partnerships to distribute now TV channels across Asia and North America Latest addition to footprint Viettel of Vietnam and Bell’s Fibe TV of Canada Debuted Chef Corner & Junior Chef Corner co-production projects
Slide 11: Launch of Brand New MOOV App to Capture OTT Music Market
Launch of Brand New MOOV App to Capture OTT Music Market • Digital Music Industry Revenue in HK Unique features in new MOOV App grew over 50% between 2010 to 2013* • In line with our overall OTT strategy – brand new version of MOOV offer an open-to-all Hong Kong music service to attract mobile and c
Slide 12: IT Solutions Business
IT Solutions Business PCCW Solutions’ Powerbese” POWER Logistics” essa ane aveN (@@mpass AE BE Yn Hit Bs 2 POCW solutions company 2 POCW solutions cc 1 “a PCCW’
Slide 13: Demonstrates Continued Growth
Demonstrates Continued Growth (US$ million) Solutions Revenue Solutions EBITDA 380 67 318 56 283 49 179 187 28 30 EBITDA 17% 18% 18% 16% 16% Margin FY 2011 FY 2012 FY 2013 H1'13 H1'14 FY 2011 FY 2012 FY 2013 H1'13 H1'14 • Revenue growth of 5% in H1’14 driven by timely execution of • EBITDA growth of
Slide 14: Significant Contract Wins
Significant Contract Wins Secured Orders increased by 16% yoy to US$774m Project Implementation Data Center Services • Re-design and implement the • Design, plan and provide education information system data center services for a for Education Bureau government department • Supply, installation and
Slide 15: Expanding Data Center Capacity
Expanding Data Center Capacity MCX 10 A new world-class data center in Kwai Chung with gross floor area of 202,000 sq.ft. and maximum electricity capacity of up to 8,000 kW has been opened in phases. Around 73,000 sq.ft. became available in H1 2014 Customers including government departments and fina
Slide 16: Key Organic Growth Drivers
Key Organic Growth Drivers +38% +21% y-o-y y-o-y Secured orders from Revenue from China Cloud Computing Cloud Computing China Business – Healthy growth engine – Connecting China to the world • Implemented a Central Hosting • Bringing in world-class technologies Infrastructure supporting more than an
Slide 17: Telecom Business
Telecom Business H K Trice Tooerve 16 “a PCCW’
Slide 18: A Solid Performance And the Return of CSL
A Solid Performance And the Return of CSL • Adjusted Funds Flow up 7% yoy to US$204 million in H1’14 • Interim distribution of 21 HK cents per SSU (US$ million) HKT Revenue HKT EBITDA 1% 1% -3% -3% Mobile 2,927 11% 16% 9% 13% 23% TSS 1,013 12% 22% 2,703 15% 983 432 28% 29% 26% 28% Others 950 113 91%
Slide 19: Stable Fixed-line Business
Stable Fixed-line Business Solid Customer Base Maintained Since 2004 (’000) Business Lines Residential Lines 1,408 1,408 1,408 1,409 1,409 1,423 1,400 1,407 1,407 1,406 1,407 1,144 1,164 1,180 1,183 1,195 1,182 1,183 1,228 1,238 1,242 1,245 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1'14 18
Slide 20: Consolidated Position in Broadband
Consolidated Position in Broadband Consolidated broadband market position with churn rate of around 1% Industry dynamic has shifted from market share gain to value creation and ARPU growth (‘000) Wholesale 1,567 1,567 1,567 1,567 Business 1,518 1,540 Consumer 1,437 126 128 130 131 1,367 119 122
Slide 21: Wide Coverage of our Fiber Network
Wide Coverage of our Fiber Network FTTB-ready (86.9%)* 1.5M or above (supporting speeds of up to (98%) 100Mbps) FTTH-ready (79.9%)** (supporting speeds up to 1000Mbps) (as of July 2014) * FTTB-ready means FTTH service can be available within 29 days of receiving a service order, building management
Slide 22: Continued Growth of Fiber Customers
Continued Growth of Fiber Customers Fiber-To-The-Home (FTTH) Service continued to attract new customers and existing customers for service upgrade 462K customers enjoying FTTH service as of Jun 2014, grew 28% vs. Jun 2013 462 (‘000) 419 362 304 226 144 57 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-1
Slide 23: International Business Continues to Grow
International Business Continues to Grow 22
Slide 24: Our Mobile Business Now
Our Mobile Business Now CSL Acquisition Completed on May 14, 2014 ● Total customer base of 4.512M – Post-paid customer base of 3.183M ● Post-paid exit ARPU of HK$216 ● Mobile data represents 68% of total services revenue ● 76% of post-paid customers are smart-device users ● IDD and roaming represent
Slide 25: Integration Process Well Underway
Integration Process Well Underway Staff Integration Complete – CSL staff acceptance rate of over 94% Launched Multi-Brand Strategy – Three-brand strategy allows full coverage of the market according to customer’s affordability and service requirements Rationalized Shop Networks Started Network Integ
Slide 26: Investing Prudently for Growth
Investing Prudently for Growth (US$ million) Core Operating Expenses Media, Solutions & Others • Opex grew by 16% in H1’14 and the HKT opex to revenue ratio was 23% 733 • Increase in opex in H1’14 primarily 660 675 116 at HKT, largely due to the CSL 113 113 acquisition; expect the synergies realized
Slide 27: Demand-Driven Core Capex
Demand-Driven Core Capex (US$ million) Media, Solutions & Others • HKT’s increase in capex HKT 333 in H1’14 due to CSL integration but synergies 290 expected 73 241 41 • Increase in Media, 36 187 Solutions & Others capex 153 in H1’14 mainly for data 40 260 23 center expansion of 249 205 Solutions bu
Slide 28: Solid Financial Position
Solid Financial Position Gross Debt (1) (US$ million) 6,423 Post the HKT Rights Issue 5,573 3,853 3,403 5,727 4,724 (HKT) (HKT) (HKT) 3,093 3,157 (HKT) (HKT) 2012 2013 H1'14 Jul’14 Gross Debt / EBITDA(2) 3.4x 3.7x 5.9x 3.8x (4) Net Debt / EBITDA(3) 2.8x 3.1x 4.9x 3.3x (5) Cash Balance (US$ million)
Slide 29: Debt Maturity Profile
Debt Maturity Profile As at July 31, 2014 (US$ million) Cash Undrawn US$ million Balance (1) Debt Facilities Bank Loans HKT 320 4,724 542 US$ Bonds US$1 billion proceeds from PCCW 251 657 781 Rights Issue PCCW 102 PCPD 105 (2) 192 392 Total 676 5,573 1,715 2,602 1,011 PCCW 255 1,602 447 PCPD 192 500
Slide 30: Shareholder Focused Dividend Policy
Shareholder Focused Dividend Policy Final Dividend Interim Dividend (HK cents) Yield: 5.1% (1) 5.6% (2) • 2014 interim dividend per share of 6.99 HK cents, representing an increase of 10% over the 13.85 same period last year 13.55 6.99 6.35 5.51 2012 2013 H1’14 DPS (HK cents) Interim 5.51 6.35 6.99
Slide 31: Appendix
Appendix 30
Slide 32: Free TV Preparation Underway
Free TV Preparation Underway Sports We continue to make progress with the Government News on the final terms of our free TV license. Consistent with the government policy on spectrum allocation in the interest of public benefit, we urge the Government for equal access to broadcast spectrum to new
Slide 33: Summary P&L
Summary P&L (US$ million) FY 2012 FY 2013 H1’13 H1’14 Revenue 3,246 3,502 1,707 1,880 + 10% Cost of sales (1,515) (1,681) (813) (870) Operating expenses (733) (791) (388) (449) Depreciation & Amortization (566) (586) (291) (323) Disposal (loss)/gain on property, plant and equipment (2) 1 1 - Net oth
Slide 34: Adjusted Funds Flow
Adjusted Funds Flow (US$ million) FY 2012 FY 2013 H1’13 H2’13 H1’14 YoY EBITDA 983 1,013 492 521 567 + 15% Less cash outflows in respect of: Customer acquisition costs and licence fees (220) (205) (91) (114) (98) Capital expenditures (244) (254) (127) (127) (146) Adjusted Funds Flow before tax paid,