Pccw Limited · HKEX:8
Pccw — H1 2013 Earnings Presentation
32 slides from Pccw's earnings presentation, Aug 6, 2013
Slide 1: 2013 Interim Results
Click to edit Master title style 2013 Interim Results For the six months ended June 30, 2013 August 6, 2013 - 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: Overview
Overview George Chan Group Managing Director 2
Slide 4: Solid Financial Performance
Solid Financial Performance Consolidated Performance (US$ million) H1’12 H1’13 % change Revenue 1,526 1,707 + 12% EBITDA 492 506 + 3% Profit Attributable to Equity Holders 107 110 + 2% The Board has declared an interim dividend of 6.35 HK cents per share 3
Slide 5: Shareholder Focused Dividend Policy
Shareholder Focused Dividend Policy Final Dividend Interim Dividend (HK cents) Yield: 5.4% (1) 5.1% (2) • Maintain minimum dividend for 3 years at 2010 level (US$143 million) 13.55 10.60 • 2013 interim dividend per share of 6.35 HK cents, 6.35 representing an increase of 5.30 5.51 15% over the same
Slide 6: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 5
Slide 7: Growth Across All Core Businesses
Growth Across All Core Businesses (US$ million) Core Business* PCPD Revenue EBITDA 1,643 1,402 1,418 505 453 471 Core 33% EBITDA 32% 31% Margin 160 108 31 64 21 1 H1'11 H1'12 H1'13 H1'11 H1'12 H1'13 • Revenue grew across all core business segments • Remarkable increase in EBITDA underpinned by stead
Slide 8: Track Record of Sustainable Profitability
Track Record of Sustainable Profitability (US$ million) Earnings Per Share : Profit Attributable to Equity Holders Non-controlling Interests 185 11.79 HK cents 164 (H1’12: 11.51 HK cents) 75 57 113 7 106 107 110 H1'11 H1'12 H1'13 * PAT refers to Profit after Income Tax 7
Slide 9: A Steady Performance
A Steady Performance • AFF up 4% yoy to US$190 million • Interim distribution of 21 HK cents per SSU (US$ million) HKT Revenue HKT EBITDA Mobile 1,419 TSS 492 1,223 1,246 174 + 20% Others 479 145 464 57 + 29% 118 44 28 403 + 9% 341 369 Mobile 215 + 0% Local Data 212 215 Local Telephony 444 452 + 2%
Slide 10: Positioned for Next Growth Phase
Positioned for Next Growth Phase (US$ million) Media Revenue Media EBITDA 167 162 30 29 28 152 19% 17% 17% EBITDA Margin H1'11 H1'12 H1'13 H1'11 H1'12 H1'13 • Media revenue up 3% underpinned by improved pay TV subscription revenues • Steady EBITDA and margin • Encouraging BPL take-up from early mone
Slide 11: Delivering its Growth Potential
Delivering its Growth Potential (US$ million) Solutions Revenue Solutions EBITDA 179 28 145 22 140 20 EBITDA 14% 15% 16% Margin H1'11 H1'12 H1'13 H1'11 H1'12 H1'13 • Impressive revenue growth of 24% driven by execution of projects, expanding presence in China and increase • Continued expansion of EB
Slide 12: Investing Prudently for Growth
Investing Prudently for Growth (US$ million) Core Operating Expenses Media, Solutions & Others • Opex grew by 8% in H1’13 and the opex to revenue ratio HKT was 22% 360 341 331 • Increase in opex primarily at 61 HKT – a combined result of 64 67 the expansion in business, in particular the Internation
Slide 13: Financial Performance
Financial Performance (US$ million) H1’12 H1’13 Revenue 1,526 1,707 + 12% Cost of sales (677) (813) Operating expenses (357) (388) Depreciation & Amortization (273) (291) Gain on disposal of property, plant and equipment, net - 1 Net other gains 2 25 Net finance costs (57) (71) Associates and JVs (6
Slide 14: Demand-Driven Core Capex
Demand-Driven Core Capex (US$ million) Media, Solutions & Others • HKT capex focused on HKT demand driven spending for 290 fibre upgrades and increasing mobile data usage 241 41 • Only light capex spending required for the Media and 36 Solutions businesses 153 • Moderate increase in Solutions 23 cap
Slide 15: Sound Financial Position
Sound Financial Position Net Debt (1) (US$ million) 3,029 2,819 2,333 2,785 2,879 (HKT) (HKT) (HKT) 2011 2012 H1'13 Net Debt / EBITDA(2) 2.4x 2.8x 3.0x (1) Net debt refers to the principal amount of short-term and long-term borrowings minus cash and cash equivalents and certain restricted cash (2) B
Slide 16: Optimal Financing Structure
Optimal Financing Structure (US$ million) As at June 30, 2013 Bank Loans US$ Bonds PCCW Level 706 Repaid in July 2013 395 PCCW Level 500 500 500 457 500 300 154 2013 2014 2015 2016 2017 2018 2022 2023 • Next debt repayment only due in 2015 • Ample liquidity of US$673 million for HKT, US$211 million
Slide 17: Business Review
Business Review George Chan Group Managing Director 16
Slide 18: Media Business
Media Business 10 Years of Strong Brand, Content & Innovations 17
Slide 19: Market Leader in Pay TV
Market Leader in Pay TV now TV continues to excel with good customer up-take; total installed base reached over 1.2M. Growth to accelerate as the new BPL season kicks off in H2’2013. 2007 2008 2009 2010 2011 2012 2013 18
Slide 20: Early BPL Monetization & Service Differentiation Set Stage for Growth
Early BPL Monetization & Service Differentiation Set Stage for Growth Early monetization of BPL: Commencing January’13, the price of premium packages including sports has increased from $258+ to $428+ Early bird offer has brought forward momentum of new subscribers and existing subscribers upg
Slide 21: Clear Leadership Across All Key Content Categories
Clear Leadership Across All Key Content Categories Unrivalled World-Class Strongest MOVIE Line-up SPORTS content Bringing Home-Theatre Excitement Exclusive Exclusive Most KIDS & EDUCATION Channels A Significant Producer of & On-demand Learning Content in Town LOCAL Content - Providing 23 self-produc
Slide 22: Strategic Alliance with Mainland Partners
Strategic Alliance with Mainland Partners Top rated Strategic alliance with key partners to build Drama Gems from Hai-run Media Group exclusive content asset of dramas, Chinese movie channel with movies, lifestyle and entertainment Huayi Brothers, We Pictures programs to satisfy Hong Kong, & Edko
Slide 23: Continual Expansion of International Distribution
Continual Expansion of International Distribution Business expansion outside the local market continues. now TV programming also made available to pay TV viewers of StarHub in Singapore. Launch Markets Partners Channels/Content Telekom Malaysia Berhad - TM’s Hypp Nov-12 Malaysia TV is Malaysia's l
Slide 24: Embracing New Media Technologies
Embracing New Media Technologies Embracing new media technology for revenue and subscriber growth: now subscribers enjoy TV everywhere service with enriched content and features: 42 live streaming channels and services Over 3,000 hours of on-demand videos Launched now FREE TV app with 3 fr
Slide 25: Solutions Business
Solutions Business . ® PCCW soutors® YOR Ompass PCCW solutions” Powerbese’ 2°" Cad Bete On @mpass 24 “a Pccw’
Slide 26: Delivering its Growth Potential
Delivering its Growth Potential (US$ million) Solutions Revenue Solutions EBITDA 179 28 145 22 140 20 EBITDA 14% 15% 16% Margin H1'11 H1'12 H1'13 H1'11 H1'12 H1'13 • Impressive revenue growth of 24% driven by execution of projects, expanding presence in China and increase • Continued expansion of EB
Slide 27: Diversified Customer Base
Diversified Customer Base Secured Order increased by 4% yoy to US$670m Banking and Finance Technology, Media & Communications Public Sector Transport & Hospitality Retail Manufacturing 26
Slide 28: Contribution from Cloud Computing to Secured Order
Contribution from Cloud Computing to Secured Order Healthy Transition from Project-Based Systems Integration to Cloud Computing Solidifies Recurring Nature of Secured Order 2012 1H Secured Order 2013 1H Secured Order Cloud Computing Cloud Computing Services 2.8% Services 9.6% 27
Slide 29: Key Growth Drivers
Key Growth Drivers Organizations moving away from owning infrastructure and software license: Cloud Computing • Migrated the HKSAR Government’s entire financial system to a private cloud providing a centralized database and removing the need for hardware monitoring, software maintenance, first line
Slide 30: Key Growth Drivers
Key Growth Drivers Data Centre Increasing demand for premium data center hosting services Hosting • “Build to Demand” strategy; improves speed to market and return on investment • 75,000 sq. ft. GFA completed earlier this year • Confirmed to convert 166,000 sq. ft. GFA of an existing building to dat
Slide 31: Inorganic Growth Yielding Synergies
Inorganic Growth Yielding Synergies Compass Solutions Vanda China • Acquisition Date: May 2013 • Acquisition Date: Nov 2012 • 200+ SAP expertise and 300+ customer base in • Expert software company serving city retail and manufacturing sectors commercial banks and finance companies in China • Combini
Slide 32: Solid Financial Performance
Solid Financial Performance Consolidated Performance (US$ million) H1’12 H1’13 % change Revenue 1,526 1,707 + 12% EBITDA 492 506 + 3% Profit Attributable to Equity Holders 107 110 + 2% 31