Hkt Trust And Hkt Ltd · HKEX:6823
Hkt Trust And Hkt — FY2020 Earnings Presentation
32 slides from Hkt Trust And Hkt's earnings presentation, Feb 4, 2021
Slide 1: 2020 Annual Results
2020 Annual Results For the year ended December 31, 2020 February 4, 2021 – Hong Kong
Slide 2: Business Review
Business Review Susanna Hui Group Managing Director 2
Slide 3: Steady Performance amid Challenging Conditions
Steady Performance amid Challenging Conditions Adjusted Funds Flow Revenue EBITDA (excluding Mobile Product Sales) FY 20 FY 20 FY 20 690 + 1% YoY 3,818 Stable YoY 1,606 - 2% YoY (US$ million) (US$ million) (US$ million) HK cents FY 20 Total Distribution per SSU Interim Distribution 30.10 Dividend Yi
Slide 4: COVID-19 Challenges Faced and Met; Opportunities Now and Ahead
COVID-19 Challenges Opportunities Now and Ahead Faced and Met e-Commerce Virtual Office Global Travel Restrictions Impacted Mobile Roaming Surge in Network Traffic Soaring Demand for Content and Economic Contraction Applications Hitting SMEs Increase in Demand Telemedicine for Digital Business
Slide 5: Financial Impact of the Growth and COVID Impacted Areas
Financial Impact of the Growth and COVID Impacted Areas Revenue (US$’M) 10 3,818 3,808 140 (140) COVID Impacted Growth New Business Areas Areas Initiatives • Roaming Revenue • Broadband & Home Wi-Fi • The Club • CPE Projects Solutions • HKT Financial Services • Revenue from SME & • Digital and Busin
Slide 6: Unrivaled Integrated Network Connecting People and Businesses
Unrivaled Integrated Network Connecting People and Businesses Major network nodes Capacity and resilience to support the traffic surge in 2020 Major fiber cable routes Submarine cables for Internet Key Applications outlying islands and UEL Growth in Bandwidth Demand (Dec 2020 vs. Jan 2020) 54x Growt
Slide 7: Increasing Need for Connectivity at Home
Increasing Need for Connectivity at Home Encouraging Increase in Consumer Broadband Customers B2B: Developers Responding to Demand for Connected Homes Sustained Low Churn Rate 1,457 • Preinstalling Smart Living solutions 1,450 0.8% 0.8% in new residential properties FY 19 FY 20 • Secured over 140 re
Slide 8: Trusted Partner for Enterprise Digital Transformation
Trusted Partner for Enterprise Digital Transformation Continued Successes in Digital Transformation Projects across Industry Verticals Smart Retail FinTech PropTech A landmark retail and office campus at the airport • Supporting rapid business • Developed mobile application, • Landmark campus compri
Slide 9: HKT Advancing Hong Kong as a Smart City
HKT Advancing Hong Kong as a Smart City Smart City Infrastructure Smart Mobility • Establishing 5G Infrastructure in Hospitals to Enable • Delivering New Generation Smart Parking System for Advanced Healthcare Applications Transport Department • Extending Fiber Networks to Remote Villages • Deliveri
Slide 10: Network as a Service – From a Global Carrier to a Technology Company
Network as a Service – From a Global Carrier to a Technology Company Providing Automated Network Connectivity • COVID-19 and Digital Transformation driving work-from-home and geographic diversity, leading to increased global voice traffic and demands for cross-country connectivity between data centr
Slide 11: Solidified Mobile Customer Base and Local ARPU
Solidified Mobile Customer Base and Local ARPU Post-paid Customer Base Mobile Services Revenue 1O1O Customers 23% surge HoH in core local revenue, benefiting 3,250 3,252 from the encouraging 5G + 3% YoY customer uptake Roaming & IDD revenue as % of FY 19 FY 20 Mobile Services revenue Roaming & IDD C
Slide 12: 5G Rollout and Encouraging Adoption
5G Rollout and Encouraging Adoption • Comprehensive Outdoor and Extensive Indoor 5G Coverage 5G Customer Uptake • 1st Operator to Provide Underground 5G Coverage along 6 Major MTR lines • Only Operator Deploying Dedicated Spectrum for 5G in the MTR 10% 8% 5G 2% Penetration 329 264 78 (’000) JunJun'2
Slide 13: Driving 5G Adoption with Innovative Applications
Driving 5G Adoption with Innovative Applications Early Adopters – Technology Experts, Lifestyle Explorers, Heavy Gamers, TV Show Lovers and Sports Enthusiasts Augmented Reality (AR) Virtual Reality (VR) csl. 5G Lens csl. 5G Multi Angle VR A location based platform with AR gamification A virtual plat
Slide 14: Realizing 5G Opportunities in Enterprise and Public Sectors
Realizing 5G Opportunities in Enterprise and Public Sectors Utilizing 5G Technology to Accelerate Digital Transformation Connected Healthcare Smart Building Smart Construction • Remote consultation • Smart apps • Internet of Medical • 5G surveillance • Energy savings Things (IoMT) • Robotics • Robot
Slide 15: Integrating Now TV to Provide the Only Seamless Quadplay Service in Hong Kong
Integrating Now TV to Provide the Only Seamless Quadplay Service in Hong Kong • Revenue softened due to live sports suspension and slowdown in hospitality sector • Rebound evident in H2 as live sports resumed: • Commercial team won back 14 hotels and office clients with 3,000+ screens • Advertising
Slide 16: The Club – An Ecosystem-Centric Loyalty Platform
The Club – An Ecosystem-Centric Loyalty Platform Adapting to the New Normal in Retail FinTech Connectivity e-Commerce • HKT online channels (including Club Like, 1O1O, csl, 3.18 million NETVIGATOR and HKT Smart Living) were revamped into one single e-Commerce platform, Club Shopping Entertainment Me
Slide 17: HKT Financial Services Growing Two Significant Ecosystems
HKT Financial Services Growing Two Significant Ecosystems Merchant Consumer Comprehensive e-Payment Solutions for Every Business Need Steady Growth of e-Wallet Engagement HKT’s one-stop solution leveraging our Transactions continued to grow due to established relationship with retailers our focus on
Slide 18: HKT Pioneers Telemedicine in HK with DrGo
HKT Pioneers Telemedicine in HK with DrGo DrGo – the most comprehensive end-to-end telemedicine service in Hong Kong Customer Engagement to Drive Upcoming Service PortfolioDevelopment Extension Awareness & Registration • DrGo online health store to be launched in • Registered Users: 88k as of Dec 20
Slide 19: Community Support amid COVID-19
Community Support amid COVID-19 Various initiatives to support the immediate and longer-term needs of students, the elderly, low income families and other segments, as well as providing assistance to businesses HKT 2020 Annual Results 19
Slide 20: Highlights
Highlights 1 Stability and resilience – HKT’s strong fundamentals and agility enabled us to respond quickly to challenges and opportunities and operate without interruptions 2 Growth potential – huge potential for 5G consumer adoption and 5G enterprise applications as well as urgent need for enterpr
Slide 21: Financial Review
Financial Review Evan Wong Chief Financial Officer 21
Slide 22: HKT Delivered Resilient Financial Performance Underpinned by Broadband and Enterprise Businesses
HKT Delivered Resilient Financial Performance Underpinned by Broadband and Enterprise Businesses (US$ million) FY 19 FY 20 % Change Adjusted Funds Flow 683 690 + 1% Revenue (excluding Mobile Product Sales) 3,808 3,818 ― Revenue 4,244 4,152 (2)% EBITDA 1,643 1,606 (2)% EBITDA Margin (excluding Mobile
Slide 23: TSS Benefited from Business Resilience and Diversity
TSS Benefited from Business Resilience and Diversity TSS Business Broadband Network & Local Data Revenue Revenue • Boom in demand for high-quality and 2,814 2,866 1,053 + 2% YoY 998 reliable broadband and home Wi-Fi solutions • Remote office led to higher bandwidth requirement for business continuit
Slide 24: Mobile Showing Early Benefits of 5G
Mobile Showing Early Benefits of 5G Mobile Business Mobile Services Business 1,515 Revenue 1,079 Revenue 1,329 995 - 12% YoY - 8% YoY 654 603 650 609 EBITDA EBITDA Revenue - 6% YoY - 8% YoY Revenue EBITDA EBITDA (US$ million) FY 19 FY 20 FY 19 FY 20 EBITDA EBITDA Margin 61% 61% Margin 43% 46% • Mobi
Slide 25: Pay TV Integrating into HKT
Pay TV Integrating into HKT Now TV Business • FY 20 consolidated 3 months of Now TV results since October 2020 83 • Now TV generated revenue of US$83 million and EBITDA of US$22 million in the 4th quarter of 2020 • Installed base of 1.348 million as at 22 December 2020 Revenue EBITDA • Expected to a
Slide 26: Stringent Cost Control to Counter Challenging Market Conditions
Stringent Cost Control to Counter Challenging Market Conditions Operating Expenses • Opex savings of 8% in FY 20, with opex to revenue ratio further 577 improving to 12.8% 533 - 8% YoY 16 • Continued focus on improving 178 176 efficiencies for both TSS and Mobile businesses 353 264 • Key initiatives
Slide 27: Disciplined Capital Investments for Future Growth
Disciplined Capital Investments for Future Growth Capex • Disciplined capital investments with 346 capex to revenue ratio of 7.5%, 312 - 10% YoY 4 within stated guidance 113 112 • Mobile capex spend contained despite full 5G network rollout 215 Pay TV • Lower TSS capex benefiting from 182 Mobile the
Slide 28: Adjusted Funds Flow
Adjusted Funds Flow (US$ million) FY 19 FY 20 YoY Better/ (Worse) EBITDA 1,643 1,606 (2)% Less cash outflows in respect of capital expenditures, customer acquisition costs and licence fees: Capital expenditures (339) (305) Customer acquisition costs and licence fees (153) (171) Fulfillment costs (63
Slide 29: Income Statement
Income Statement (US$ million) FY 19 FY 20 YoY Better/(Worse) Revenue 4,244 4,152 (2)% Revenue (excluding Mobile Product Sales) 3,808 3,818 ― Cost of sales (2,024) (2,013) 1% Opex (577) (533) 8% EBITDA 1,643 1,606 (2)% Depreciation & amortization expenses (657) (685) Net other gains ― 46 Net finance
Slide 30: Solid Financial Position Investment Grade Credit Ratings
Solid Financial Position Investment Grade Credit Ratings (US$ million) As of Dec 2019 As of Dec 2020 5,220 5,448 BBB/Baa2 Gross Debt (1) Investment 3.18x 3.39x Grade Rating Gross Debt to EBITDA (2) Cash Balance (3) 372 337 Undrawn Facilities 1,178 1,163 Total 1,550 1,500 (1) Gross debt refers to the
Slide 31: Debt Maturity Profile
Debt Maturity Profile As of December 31, 2020 Bank Loans Bonds 1,237 563 750 500 500 500 340 346 300 199 213 (US$ million) 2021 2022 2023 2024 2025 2026 2027 2029 2030 • Current mix of floating and fixed rate debt is approx. 40:60 • Effective interest rate was approx. 2.9% in FY 2020 • Average matur
Slide 32: Highlights
Highlights 1 Stability and resilience – HKT’s strong fundamentals and agility enabled us to respond quickly to challenges and opportunities and operate without interruptions 2 Growth potential – huge potential for 5G consumer adoption and 5G enterprise applications as well as urgent need for enterpr