Hkt Trust And Hkt Ltd · HKEX:6823
Hkt Trust And Hkt — H1 2019 Earnings Presentation
26 slides from Hkt Trust And Hkt's earnings presentation, Aug 7, 2019
Slide 1: 2019 Interim Results
2019 Interim Results For the six months ended June 30, 2019 August 7, 2019 – 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 HKT’s future results of operations, financial condition or business prospects, are based
Slide 3: Business Review
Business Review Susanna Hui Group Managing Director 3
Slide 4: HKT Sustains Market Leadership Delivering Consistent Financial Performance
HKT Sustains Market Leadership Delivering Consistent Financial Performance (US$ million) H1’18 H1’19 % change Revenue (excl. Mobile Product Sales) 1,749 1,765 + 1% EBITDA 723 735 + 2% Adjusted Funds Flow 283 291 + 3% Interim Distribution of 30.01 HK cents per Share Stapled Unit 4
Slide 5: Current Market Dynamics
Current Market Dynamics Price Competition in the Value Seeking Segment of the Consumer Market Continues to be Keen Similar Competition being Witnessed in the SME Segment of the Enterprise Sector which is also being Impacted by the Challenging Economic Environment Large Enterprises and Public O
Slide 6: Consumer Broadband Consolidates Market Leadership
Consumer Broadband Consolidates Market Leadership Continued Expansion in Customer Base with Low Churn Rate of 0.8% Supported by our FTTH Network and the Offering of Value-Added Services via Multi-Brand Strategy Consumer Broadband Consumer Churn Rate 0.8% 0.8% 1,446 1,439 H1'18 H1'19 High-speed Consu
Slide 7: Providing Smart Home Solutions
Providing Smart Home Solutions Revenue Growth Driven by Continued Penetration of Home Wi-Fi Solutions and Increasing Adoption of Smart Home Solutions Home Wi-Fi Solutions Smart Home Solutions Upselling our Comprehensive Home Wi-Fi Solutions to Meet Customers’ Smart Living Needs Partnering with P
Slide 8: HKT Enterprise Solutions
HKT Enterprise Solutions Providing Unmatched, Total End-to-End Enterprise Solutions Strong Revenue Growth driven by Increasing Demand for Digital Transformation, Artificial Intelligence, Video Analytics and Cyber Security Solutions Executing a Number of Large Scale Projects for Public Organizati
Slide 9: Significant Large Scale Contract Wins
Significant Large Scale Contract Wins New Generation Parking Meter System Smart Airport Transformation Smart Mobility Initiative Smart Airport Initiative Design, Deployment, Operation and Maintenance of Two Critical Network Infrastructure Projects New Generation of Parking Meter System in HK to Supp
Slide 10: Leading the Mobile Market
Leading the Mobile Market Expanded Customer Base in Post-paid Segment While Retaining Focus on Profitability Further Improved Customer Retention Post-paid Customer Base Post-paid Exit ARPU Post-paid Churn Rate 1O1O Customers 3,247 3,242 198 195 1.1% 1.0% (’000) (HK$) H1’18 H1’19 H1'18 H1'19 H1'18 H1
Slide 11: Driving Increased Customer Spending and Profitability
Driving Increased Customer Spending and Profitability Mobile Value-Added Services and Roaming Data Passes Post-paid Exit ARPU 198 195 (HK$) now E MOOV Music Viu Premium Package Package Package H1'18 H1'19 Roaming Revenue Non-Data Data Data +18% YoY Always-Be-Connected 86 Easy China Number Club SIM H
Slide 12: Ready to Offer High Quality 5G Services
Ready to Offer High Quality 5G Services 5G Rollout Timeline 2019 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 High Band 5G Use Case Demo on 28GHz Coverage to Focus on High Traffic Locations, Large Compounds, Campuses or Exhibition Arenas 400MHz Bandwidth of 28GHz Band Initial Discussions with Enterpr
Slide 13: Building a Digital Ecosystem for Customers and Merchants
Building a Digital Ecosystem for Customers and Merchants Deepening the Relationship with our Customers Enhancing Customer Retention and Increasing Engagement through New Service Offerings Over 2.8 million + 13% YoY Members Coalition and Redemption Partners 500+ Redemption Items 3,800+ Plus Flight Ti
Slide 14: HKT Financial Services
HKT Financial Services Consumer Merchant Integrate Financial Services to Streamline Customer Experience Total Solution to Streamline Operations and Facilitate Digital Transformation Tap & Go eWallet Smart POS Secure online and offline payment platform A wireless all-in-one POS to broaden payment
Slide 15: Highlights
Highlights HKT Delivered Another Solid Financial Performance Demonstrating our Continued Market Leadership across All Lines of Business Continue to Seek to Increase Profitability and Cash Flow Of our Underlying Businesses by Providing Increased Value for Customers and through Improved Operational Ef
Slide 16: Financial Review
Financial Review Evan Wong Chief Financial Officer 16
Slide 17: HKT Sustains Market Leadership Delivering Consistent Financial Performance
HKT Sustains Market Leadership Delivering Consistent Financial Performance (US$ million) H1’18 H1’19 % change Adjusted Funds Flow 283 291 + 3% Revenue (excl. Mobile Product Sales) 1,749 1,765 + 1% Revenue 2,182 1,937 - 11% EBITDA 723 735 + 2% EBITDA Margin (excl. Mobile Product Sales) 42% 42% Overal
Slide 18: TSS Continues Steady Growth Trajectory
TSS Continues Steady Growth Trajectory TSS Revenue (US$ million) TSS EBITDA (US$ million) 1,302 1,309 + 1% yoy 482 491 + 2% yoy Broadband Network 280 292 + 5% yoy Local Data 153 172 + 12% yoy International 466 441 - 5% yoy Local Telephony 209 207 - 1% yoy Others 194 197 + 2% yoy H1’18 H1’19 H1’18 H1
Slide 19: Mobile Consolidates Market Leadership
Mobile Consolidates Market Leadership Mobile Revenue (US$ million) Mobile EBITDA (US$ million) 925 669 278 283 + 2% yoy Mobile Services Mobile + 1% yoy 282 285 Mobile Services Mobile + 1% yoy Services 492 497 433 Services 57% 57% Mobile EBITDA Product Margin Sales 172 (4) (2) H1’18 H1’19 H1’18 H1’19
Slide 20: Continued Focus to Drive Operating Efficiencies
Continued Focus to Drive Operating Efficiencies Operating Expenses (US$ million) 324 311 - 4% yoy Opex savings of 4% in H1’19, benefiting from our continued 111 focus on maximizing efficiencies 108 across all lines of business Areas of improvement included 200 194 enhanced staff efficiency throu
Slide 21: Disciplined Capital Investments while Investing for the Future
Disciplined Capital Investments while Investing for the Future Capex (US$ million) Capex spending was steady and 172 171 - 1% yoy within stated guidance 61 59 Mobile spending focused on critical infrastructure enhancements, network capacity expansion to support data traffic growth and 106 105 Mo
Slide 22: Adjusted Funds Flow (US$ million)
Adjusted Funds Flow (US$ million) H1’18 H1’19 YoY Better/ (Worse) EBITDA 723 735 + 2% Less cash outflows in respect of capital expenditures, customer acquisition costs and licence fees: Capital expenditures (169) (166) Customer acquisition costs and licence fees (57) (51) Fulfillment costs (23) (35)
Slide 23: Income Statement (US$ million)
Income Statement (US$ million) H1’18 H1’19 YoY Better/ (Worse) Revenue 2,182 1,937 (11)% Revenue (excluding Mobile product sales) 1,749 1,765 + 1% Cost of sales (1,135) (891) + 22% Opex (324) (311) + 4% EBITDA 723 735 + 2% Depreciation & amortization expenses (346) (304) Net finance costs (81) (85)
Slide 24: Solid Financial Position Investment Grade Credit Ratings
Solid Financial Position Investment Grade Credit Ratings BBB/Baa2 As of As of Investment (US$ million) Dec 2018 Jun 2019 Grade Rating Gross Debt (1) 5,178 5,178 Gross Debt to EBITDA (2) 3.22x 3.19x Cash Balance (3) 392 277 (4) Undrawn Facilities 849 1,174 Total 1,241 1,451 (1) Gross debt refers to t
Slide 25: Debt Maturity Profile
Debt Maturity Profile As of June 30, 2019 (US$ million) Bank Loans Bonds 1,234 800 750 500 528 500 353 300 213 2019 2020 2021 2022 2023 2024 2025 2026 2027 2030 Current mix of floating and fixed rate debt is approx. 50:50 Effective interest rate was approx. 3.1% in H1’19 Average maturity was a
Slide 26: Highlights
Highlights HKT Delivered Another Solid Financial Performance Demonstrating our Continued Market Leadership across All Lines of Business Continue to Seek to Increase Profitability and Cash Flow Of our Underlying Businesses by Providing Increased Value for Customers and through Improved Operational Ef