Pccw Limited · HKEX:8
Pccw — FY2012 Earnings Presentation
35 slides from Pccw's earnings presentation, Feb 27, 2013
Slide 1: 2012 Annual Results
Click to edit Master title style 2012 Annual Results For the year ended December 31, 2012 February 27, 27 2013 - Hong Kong
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain “forward-looking forward-looking statements” 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 bus
Slide 3: Overview
Overview George Chan Group p Managing g g Director 2
Slide 4: Strong Financial Performance
Strong Financial Performance Consolidated Performance (US$ million) 2011 2012 % change Revenue 3,159 3,246 + 3% EBITDA 973 998 + 3% Profit Attributable to Equity Holders 206 213 + 3% The Board has recommended a final dividend of 13.55 HK cents per share, subject to approval of shareholders 3
Slide 5: Dividend Commitment to Reward Shareholders
Dividend Commitment to Reward Shareholders Final Dividend Interim Dividend (HK cents) Yield: 4.5% (1) 5.4% (2) 5.1% (3) • Maintain minimum dividend for 3 years at 2010 level (US$143m) 13.55 10.60 10.20 • 2012 full-year dividend of US$178m, an increase of 5.10 5.30 5.51 20% and a significant pass-thr
Slide 6: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 5
Slide 7: Growth Across All Core Businesses
Growth Across All Core Businesses (US$ million) Core Business* PCPD Revenue EBITDA 3,094 2,886 985 2,752 930 906 Core 33% 32% 32% EBITDA Margin 192 273 152 37 43 13 2010 2011 2012 2010 2011 2012 • Revenue grew across all core business segments • Remarkable increase in EBITDA underpinned by strong pe
Slide 8: Growth Businesses Shift Up to Sustain Profitability
Growth Businesses Shift Up to Sustain Profitability Profit Attributable to Equity Holders (US$ million) Core Business Pro Forma NPAT HKT (assuming HKT listed on Jan 1, 2011) PCPD 204 206 206 183 116 131 (63% HKT) 64 131 (63% HKT) 2 7 2011 2012 2010 2011 2012 Earnings g Per Share : 22.90 HK cents ((2
Slide 9: A Stellar Performance
A Stellar Performance • AFF up 12% to US$343 million, beating full-year forecasts • PCCW to receive a total distribution of approx. US$216 million from HKT for FY12 (US$ million) HKT Revenue HKT EBITDA Mobile 2,703 TSS 2,542 Others 983 2,375 316 + 25% 929 950 252 5 65 94 9 + 44% 219 46 776 + 7% 728
Slide 10: Stage Set for Further Growth
Stage Set for Further Growth (US$ million) Media Revenue Media EBITDA 347 360 306 81 63 30 23% 17% EBITDA 10% Margin 2010 2011 2012 2010 2011 2012 • Media revenue up 4%, boosted by pay-TV subscription, b i ti advertising d ti i and d di directories t i b business i • Dip in EBITDA and margin due to
Slide 11: Expanding Business Scope to Seize Market Opportunities
Expanding Business Scope to Seize Market Opportunities (US$ million) Solutions Revenue Solutions EBITDA 318 56 283 49 261 36 17% 18% EBITDA 14% Margin 2010 2011 2012 2010 2011 2012 • Strong revenue growth of 12% • Continued expansion of EBITDA margin • Secured order shot up to US$713 million to 18%
Slide 12: Effective Cost Management Strategy
Effective Cost Management Strategy (US$ million) Core Operating Expenses • Rise in opex solely in HKT, due to the launch of a series of Media Solutions & Others Media, P&P campaigns and opening HKT of flagship stores to drive 660 675 revenue growth; spending mainly to generate business 594 113 113 w
Slide 13: Financial Performance
Financial Performance Core Group (US$ million) 2011 2012 2011 2012 Revenue 2,886 3,094 + 7% 3,159 3,246 + 3% Cost of sales (1 296) (1 (1,296) (1,434) 434) (1 461) (1,515) (1,461) (1 515) Operating expenses (660) (675) (725) (733) Depreciation & Amortization (500) (561) (506) (566) Disposal loss on p
Slide 14: Demand-Driven Core Capex
Demand-Driven Core Capex (US$ million) Media, Solutions & Others • HKT capex remains demand- HKT 290 driven, particularly for fiber and driven mobile services; continues to 241 41 invest for near- and longer- 228 term growth 21 36 • Onlyy light g capex p spending p g required for the Media and Solut
Slide 15: Solid Financial Position
Solid Financial Position Gross Debt (1) (US$ million) 4,528 3,403 3 025 3,025 3,093 (HKT) 2010 2011 2012 Gross Debt / EBITDA(2) 4.8x 3.1x 3.4x (1) Gross debt refers to the principal amount of short-term and long-term borrowings (2) Based on gross debt as at period end divided by EBITDA for the 12-mo
Slide 16: A Measured Debt Maturity Profile
A Measured Debt Maturity Profile (US$ million) As at December 31, 2012 Bank Loans HKT US$ Bonds 590 706 500 500 500 297 300 2013 2014 2015 2016 2022 As at December 31, 2012 HKT (as at February 26, 2013) 706 669 500 500 500 218 300 2013 2014 2015 2016 2017 2018 2022 • PCCW issued a US$300m 10-year un
Slide 17: Business Review
Business Review George Chan Group Managing Director 16
Slide 18: 10 Years of Strong Brand, Content and Innovations
10 Years of Strong Brand, Content and Innovations 17
Slide 19: now TV is the Market Leader
now TV is the Market Leader Starting operations in 2003, now TV becomes No. 1 market leader in less than 10 Years against incumbent. Result of bold & forward looking investment a decade ago. Well positioned for the next phase of growth locally and internationally no TV is now i ahead h d off the
Slide 20: Now Set for New Growth
Now Set for New Growth Set for exciting new growth with the return of exclusive Barclays Premier League (2013-2016) rights through winning a disciplined bid executed with ith precise i strategy t t A catalyst to further drive subscriber up-take and lift ARPU Strategic value in strengthening No
Slide 21: Gathering Good Momentum in Sports Pack Take-Up & Price Increase
Gathering Good Momentum in Sports Pack Take-Up & Price Increase now TV in Best Position to Monetize BPL: Broadened base of over 1.18M loyal subscribers Up-selling Super Sports Pack & lift ARPU of: – existing now TV base – current sports subscriber base Loyal BPL fans switch over to now TV, als
Slide 22: TV Everywhere Strategy Realized
TV Everywhere Strategy Realized Populating now Player app with richer content. More International partners joining in. now Player now News now Finance Apps 1.4M App downloads Expanded to 34 live streaming channels and VOD services with BPL live channels coming up 1,500+ hours of on-deman
Slide 23: International Distribution
International Distribution Original production & co-branded channels with international distribution rights Signed multiple distribution deals in Malaysia, Thailand, Canada and USA CANADA: THAILAND: Partnered with Fairchild Media Agreement signed with the largest Cable TV Group, leading Chinese
Slide 24: Solutions Business
Solutions Business 23 “a PCCW’
Slide 25: Expanding Business Scope to Seize Market Opportunities
Expanding Business Scope to Seize Market Opportunities (US$ million) Solutions Revenue Solutions EBITDA 318 56 283 49 261 36 17% 18% EBITDA 14% Margin 2010 2011 2012 2010 2011 2012 • Strong revenue growth of 12% • Continued expansion of EBITDA margin • Secured order shot up to US$713 million to 18%
Slide 26: Diversified Customer Base
Diversified Customer Base Secured Order increased by 18% to US$713m Telecom Technology - Media Public Sector Enterprise Transport Banking and Finance Retail and M Manufacturing f t i 25
Slide 27: Increasing Demand for IT Outsourcing
Increasing Demand for IT Outsourcing Increasing trend of IT outsourcing to a SOFTWARE t t trustworthy th partner t for: f • Custom Software Development • Cost efficiency; • Core Banking • Speed to market; ntain and Update • Latest technology and; • Enterprise e p se Resource esou ce Planning a g • I
Slide 28: Diversified Customer Base
Diversified Customer Base Telecom Technology - Media Public Sector Enterprise Transport Banking and Finance Retail and Manufacturing 27
Slide 29: Integrating IT with Business: Hong Kong International Airport
Integrating IT with Business Telecom Technology - Media Hong Kong International Airport Public Sector M i t i mission Maintain i i critical iti l ICT systems including the air traffic control system Enterprise th t handles that h dl over 350 350,000 000 air movements a year Transport Banking and Fin
Slide 30: Integrating IT with Business: China Mobile
Integrating IT with Business Telecom Technology - Media China Mobile • Started 10 years ago, ago for ERP Public Sector finance software in a few provinces; • Now serving 31 provinces, 330 cities Enterprise for 6,000 users • Expanded to encompass HR, Logistics, Asset Management… Transport Banking and
Slide 31: Integrating IT with Business: China Unicom
Integrating IT with Business Telecom Technology - China Unicom Media • Started 9 years ago for nationwide Enterprise Resource Planning finance Public Sector software; • Expanded to HR, Logistics, Enterprise Sales System • U-Cloud platform integrates multiple systems Transport Banking and Finance Ret
Slide 32: Integrating IT with Business: Wuhan Rural Commercial Bank
Integrating IT with Business Telecom Technology - Media Wuhan Rural Commercial Bank Public Sector Implementation of core banking platform: • To enable rapid business expansion Enterprise • Scalable to 3M+ accounts and 2M+ daily transactions Transport Banking and Finance Retail and Manufacturing 31
Slide 33: Growth through Expanded Capabilities
Growth through Expanded Capabilities • Acquisition of Vanda, a leading banking software company in China • > 100 banking and finance co. co clients • > 300 banking software specialists • IPR of 2 software product lines • Develop export version SOFTWARE ate n and Upda Acquired core banking software O
Slide 34: Driving Growth through Expansion of Core Competencies and Geographical Reach
Driving Growth through Expansion of Core Competencies and Geographical Reach Expand core competencies • ERP (SAP) ( ) • CRM Portfolio • Identity Management of • Mobility Services • Security Solutions Software and Core Expand geographical reach Competencies • Americas Infrastructure • UK/Europe • Asi
Slide 35: Strong Financial Performance with Positive Outlook
Strong Financial Performance with Positive Outlook (US$ million) Core Business* Consolidated 2011 2012 % change 2011 2012 % change Revenue 2,886 3,094 + 7% 3,159 3,246 + 3% EBITDA 930 985 + 6% 973 998 + 3% Profit Attributable to Equity Holders 204 206 + 1% 206 213 + 3% * Core business includes HKT,