Pccw Limited · HKEX:8
Pccw — H1 2014 Earnings Presentation
30 slides from Pccw's earnings presentation, Aug 6, 2014
Slide 1: 2014 Interim Results
Click to edit Master title style 2014 Interim Results For the six months ended June 30, 2014 August 6, 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 limitation, statements regarding PCCW PCCW'ss future results of operations, financial condition or business pro
Slide 3: Overview
Overview BG Srinivas Group Managing Director 2
Slide 4: Healthy Financial Performance
Healthy Financial Performance Consolidated Performance (US$ million) H1’13 H1’14 % change Revenue 1,707 1,880 + 10% EBITDA 506 561 + 11% Profit Attributable to Equity Holders 110 136 + 24% The Board has declared an interim dividend of 6.99 HK cents per share 3
Slide 5: Financial Review
Financial Review Susanna Hui Group Chief Financial Officer 4
Slide 6: Solid Growth on Core Business And the Return of CSL
Solid Growth on Core Business And the Return of CSL (US$ million) Core Business* PCPD Revenue EBITDA 1,851 571 1,643 505 1,418 471 Core 33% EBITDA 31% 31% Margin 108 64 21 29 1 (10) H1'12 H1'13 H1'14 H1'12 H1'13 H1'14 • Revenue grew across all core business segments • Growth in EBITDA was underpinne
Slide 7: Track Record of Sustainable Profitability
Track Record of Sustainable Profitability Profit Attributable to Equity Holders (US$ million) illi ) Earnings Per Share : Core Business 14.57 HK cents PCPD (H1’13: 11.79 HK cents) 136 16 107 110 1 4 120 106 106 H1'12 H1'13 H1'14 6
Slide 8: A Solid Performance And the Return of CSL
A Solid Performance And the Return of CSL • Adjusted Funds Flow up 7% yoy to US$204 million • Interim distribution of 21 HK cents per SSU (US$ million) HKT Revenue HKT EBITDA 1,605 Mobile TSS 567 1 419 1,419 Others 373 + 63% 1,246 229 492 124 + 113% 180 479 59 444 + 8% 413 45 281 Mobile Internationa
Slide 9: Consolidating Leadership Position
Consolidating Leadership Position ((US$ $ million)) Media Revenue Media EBITDA 191 28 29 167 23 162 EBITDA 17% 17% Margin 12% H1'12 H1'13 H1'14 H1'12 H1'13 H1'14 • Softening in EBITDA and margin reflecting • Media revenue up 14% underpinned by the full six-month impact of the costs subscription and
Slide 10: Demonstrates Continued Growth
Demonstrates Continued Growth (US$ million) Solutions Revenue Solutions EBITDA 187 179 30 28 22 145 EBITDA 15% 16% 16% Margin H1'12 H1'13 H1'14 H1'12 H1'13 H1'14 • Revenue growth of 5% driven by timely execution of projects and continued demand • EBITDA growth of 7% and stable margin for data center
Slide 11: Investing Prudently for Growth
Investing Prudently for Growth ((US$ $ million)) Core Operating Expenses Media, Solutions & Others HKT • Opex grew by 16% in H1’14 417 and the opex to revenue 360 63 ratio i was 23% 331 61 • Increase in opex primarily at 67 HKT, largely due to the CSL acquisition • Media & Solutions opex also 354 in
Slide 12: Financial Performance
Financial Performance (US$ million) H1’13 H1’14 Revenue 1,707 1,880 + 10% C t off sales Cost l (813) (870) Operating expenses (388) (449) Depreciation & Amortization (291) (323) Gain on disposal on property, plant and equipment 1 – Net other gains 25 88 Net finance costs (71) (67) Associates and JVs
Slide 13: Demand-Driven Core Capex
Demand-Driven Core Capex (US$ million) Media Solutions & Others Media, HKT 333 • HKT’s increase in capex due to CSL integration 290 y g but synergies expected p 73 41 • Increase in Media, 187 Solutions & Others capex 153 mainly for data center 40 116 23 expansion of Solutions 249 260 7 business 130
Slide 14: Solid Financial Position
Solid Financial Position Gross Debt (1) (US$ million) 6 423 6,423 Post the HKT Rights Issue 5,573 3 853 3,853 3,403 5,727 4,724 (HKT) (HKT) (HKT) 3,093 3 157 3,157 (HKT) (HKT) 2012 2013 H1'14 H1 14 Jul’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
Slide 15: Debt Maturity Profile
Debt Maturity Profile As at July 31, 2014 (US$ million) C h Cash Undrawn U d US$ million Balance (1) Debt Facilities Bank Loans HKT 320 4,724 542 US$ Bonds US$1 billion PCCW 251 657 781 proceeds from p Rights Issue PCCW 102 PCPD 105 (2) 192 392 Total 676 5,573 1,715 2,602 1,011 PCCW 255 1,602 447 PC
Slide 16: Shareholder Focused Dividend Policy
Shareholder Focused Dividend Policy Final Dividend Interim Dividend (HK cents) Yield: 5.1% (1) 5.6% (2) • 2014 interim dividend per share of 6.99 HK cents, representing an increase of 10% over the 13.85 same period last year 13.55 6.99 6.35 5.51 2012 2013 H1’14 DPS (HK cents) Interim 5.51 6.35 6.99
Slide 17: Media Business
Media Business 16 “a PCCW’
Slide 18: Consolidating Leadership Position
Consolidating Leadership Position ((US$ $ million)) Media Revenue Media EBITDA 191 28 29 167 23 162 EBITDA 17% 17% Margin 12% H1'12 H1'13 H1'14 H1'12 H1'13 H1'14 • Softening in EBITDA and margin reflecting • Media revenue up 14% underpinned by the full six-month impact of the costs subscription and
Slide 19: 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 20: Soccer Fans Base Continues to Expand
Soccer Fans Base Continues to Expand Interactive Features Amplify y 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 Un
Slide 21: Successful First TV Drama Series Production
Successful First TV Drama Series Production “The Virtuous Queen of Han” Successful completion of Now TV’s first 45-episode TV Cast : Wang Luo Dan , Raymond Lam, Niki Chow drama co-production co production “The The Virtuous Queen of HanHan”. (top actors in Mainland and Hong Kong) Global distributio
Slide 22: 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 23: Launch of Brand New MOOV App to Capture OTT Music Market
Launch of Brand New MOOV App to Capture p OTT Music Market • Digital Music Industry Revenue in HK Unique features in new MOOV App grew over 50% between 2010 to 2013* g • In line with our overall OTT strategy – brand new version of MOOV offer an open-to-all Hong Kong music service t attract to tt t m
Slide 24: 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. 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
Slide 25: IT Solutions Business
IT Solutions Business PCCW Solutions’ ® ® POCH toutions* Powerbese” §— “WER ims’ Ky Eom A Gipass_ 24 "a PCCW’
Slide 26: Demonstrates Continued Growth
Demonstrates Continued Growth (US$ million) Solutions Revenue Solutions EBITDA 187 179 30 28 22 145 EBITDA 15% 16% 16% Margin H1'12 H1'13 H1'14 H1'12 H1'13 H1'14 • Revenue growth of 5% driven by timely execution of projects and continued demand • EBITDA growth of 7% and stable margin for data center
Slide 27: 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 28: Expanding Data Center Capacity
Expanding Data Center Capacity MCX 10 A new world-class data center in Kwai Chung g with gross floor area of 202,000 sq.ft. and maximum electricity capacity of up to 8,000 kW has been opened in phases. phases Around 73,000 73 000 sq.ft. sq ft became available in H1 2014 Customers including governmen
Slide 29: Key Organic Growth Drivers
Key Organic Growth Drivers +38% +21% y-o-y y-o-y Secured orders from R Revenue ffrom Chi 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
Slide 30: Key Strategic Focus
Key Strategic Focus Consolidate leadership position across all core businesses Media Solutions • High quality content creation • Digital transformation • International I t ti l expansion i • China Chi expansion i • OTT distribution • Entry into new markets • Enhance capabilities 29