2016 Annual Results Presentation 28 February 2017 Disclaimer - - PowerPoint PPT Presentation

▶
2016 annual results presentation
SMART_READER_LITE
LIVE PREVIEW

2016 Annual Results Presentation 28 February 2017 Disclaimer - - PowerPoint PPT Presentation

Sep 12, 2022 431 likes •689 views

2016 Annual Results Presentation 28 February 2017 Disclaimer Potential investors and shareholders (the Potential Investors and Shareholders) of Hutchison Telecommunications Hong Kong Holdings Limited (the Company) are reminded that

slide-1
SLIDE 1

2016 Annual Results Presentation 28 February 2017

slide-2
SLIDE 2

Potential investors and shareholders (the “Potential Investors and Shareholders”) of Hutchison Telecommunications Hong Kong Holdings Limited (“the Company”) are reminded that information contained in this Presentation comprises extracts of operational data and financial information of the Company and its subsidiaries (“the Group”) for the year ended 31 December 2016. The information included is solely for the use in this Presentation and certain information has not been independently verified. No representations or warranties, expressed or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or

  • pinions presented or contained in this Presentation. Potential Investors and Shareholders should refer to the 2016 Annual Report for the

results of the Group which are published in accordance with the listing rules of The Stock Exchange of Hong Kong Limited. The performance and the results of operations of the Group contained within this Presentation are historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking statements and opinions contained within this Presentation are based on current plans, estimates and projections, and therefore involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions. The Group, the Directors, employees and agents of the Group assume (a) no obligation to correct or update the forward-looking statements or opinions contained in this Presentation; and (b) no liability in the event that any of the forward-looking statements or opinions do not materialise or turn out to be incorrect. Potential Investors and Shareholders should exercise caution when investing in or dealing in the securities of the Company.

Disclaimer

1

slide-3
SLIDE 3

Business Performance

2

slide-4
SLIDE 4

Challengi llenging ng 2016 16 and achievement ievements s made

Ke Key Chall alleng enges es

  • Weakening economy
  • Intensified competition
  • Disruptive mobile pricing
  • Lesser demand in handsets, roaming and IDD
  • Increasing spectrum and network costs

Our effor forts s and achiev ievements ements

  • Customer base grew to 3.2m
  • Significant mobile churn reduction
  • Mobile opex reduced by 7% YoY
  • Launched attractive OTT services and roaming products
  • Upgraded to 4.5G mobile network with TDD&FDD aggregation
  • Good penetration in fixed-line corporate and business market segments

3

slide-5
SLIDE 5

Hi Highlight lights

  • Group service revenue at $12,024 million, with net service revenue stable at $7,640 million
  • Mobile local net service revenue remains stable with local net ARPU improved by 4%
  • Stable consolidated opex and capex
  • Consolidated EBITDA reports at $2,465 million
  • Consolidated EBIT reports at $1,044 million
  • Consolidated NPAT reports at $701 million
  • Final dividend at 6.90 cents per share, with full year dividend of 10.90 cents per share

4

slide-6
SLIDE 6

Mobile

Our customers benefit from HTHKH’s style of innovation via advanced mobile networks and services delivered in customer-centric fashion.

5

slide-7
SLIDE 7

Mo Mobile bile bus usiness iness

6

Favourable/ 2016 2016 2015 2015 (Unfavourable) HK$ million HK$ million Change Total revenue 8,332 18,477

  • 55%
  • Net service revenue

3,946 4,106

  • 4%
  • Hardware revenue

4,386 14,371

  • 69%

Net customer service margin 3,656 3,823

  • 4%

Net customer service margin % 93% 93%

  • Standalone handset sales margin

73 308

  • 76%

Total CACs (325) (270)

  • 20%

Operating expenses (2,071) (2,224) +7% EBITDA 1,333 1,637

  • 19%

Service EBITDA 1,260 1,329

  • 5%

Service EBITDA Margin % 32% 32%

  • Depreciation and amortisation

(733) (661)

  • 11%

EBIT 600 976

  • 39%
slide-8
SLIDE 8

Mo Mobile bile Ser ervic vice e Rev evenu enue

Mobile local service revenue

3,275 3,224

2,000 4,000 HK$ millions

2015 2016 831 722

500 1,000 HK$ millions

Mobile roaming service revenue

2015 2016 4,106 3,946

2,500 5,000 HK$ millions

Total mobile service revenue

2015 2016 7

slide-9
SLIDE 9

154 161 161 168 120 240 HK$ / month

Blended local postpaid net ARPU and net AMPU

Local net AMPU Local net ARPU

2015 2016 2015 2016

Postpaid Churn

1.8% 1.3% 0.0% 1.0% 2.0% Percentage (%)

Mo Mobile bile KP KPIs

1,547 1,736 1,484 1,486 2,000 4,000

Total customers in Hong Kong and Macau

3,031 2015 2016

2015 2016

3,222 +6% 1,466 1,714 1,000 2,000 MB/month

Blended data usage per 3G+4G customers

2015 2016 +17% Postpaid Prepaid +5% +4% 8

slide-10
SLIDE 10

Fixed-line

HTHKH enables customers with international, corporate, data centre and residential broadband services via an extensive fibre-optic network.

9

slide-11
SLIDE 11

Fi Fixed xed-line line bus usine iness s – financial ancial highlights hlights

10

Favourable/ 2016 2016 2015 2015 (Unfavourable) HK$ million HK$ million Change Revenue 4 4,127 3 3,973 +4% Operating expenses ( (2,875) ( (2,699)

  • 7%

Opex as % of revenue 70% 68%

  • 2% points

EBITDA 1 1,252 1 1,274

  • 2%

EBITDA margin % 30% 32%

  • 2% points

Depreciation and amortisation ( (688) ( (697) +1% EBIT 5 564 5 577

  • 2%

CAPEX (excluding licence) (509) (485)

  • 5%

EBITDA less CAPEX 743 789

  • 6%
slide-12
SLIDE 12

International and Local Carrier 53% (2015: 53%) Corporate and Business 31%

(2015: 30%)

Residential 13% (2015: 14%)

Fi Fixe xed-line line bus usiness iness

Total Fixed-lin ine re revenue 2016 : HK$4,1 ,127 million ion (2015 : HK$3,9 ,973 million) ion)

1 “Others” include revenues from interconnection charges , data centers and others

  • 87% fixed-line revenue contributed

from non-residential market

  • 4% YoY growth

Others1: 3% (2015: 3%)

11

slide-13
SLIDE 13

Fi Fixe xed-lin line e inte nterna rnational tional and nd loc

  • cal

al carrier rrier market rket

International and local carrier Revenue

914 944 1,192 1,253 1,300 2,600 2015 2016 HK$ millions ions 2,106 2,197

  • Strong growth (+4%) supported by the

increase in data consumption

  • Supported by trends such as OTT and IoT

Data IDD

12

53 53%

slide-14
SLIDE 14

Fi Fixe xed-line line corpor porate ate and bus usine iness ss market ket

  • +10% YoY growth driven by strong

growth in data

  • Extensive Network (4.9k FTTB commercial

buildings, 25k Wi-Fi hotspots)

  • Accredited service provider of SDNet/2 with

stringent requirement set by HKEx

  • Large and diversified base of 61.2k

corporate and SME customers

  • Winning vertical penetration strategy

(e.g. banks, government, insurance, logistics)

Corporate and Business Revenue

925 1,058 255 242 700 1,400 2015 2016 HK$ millions ions Data Voice and IDD 1,180 1,300

13

31%

slide-15
SLIDE 15

Fi Fixe xed-line line res esident idential ial market ket

Residential Market Revenue

558 518 300 600 2015 2016 HK$ millions ions

  • Over 1.8m fibre homepass and 9.3k

residential buildings passed with FTTB

  • Stable broadband subscribers base with

90%+ on 100Mbps or higher

  • Strong value proposition with 1GB FTTH in
  • ffer and multi-play infotainment

(MyTV SUPER, LeSports)

  • Steep price competition

14

13 13%

slide-16
SLIDE 16

Financial Overview

15

slide-17
SLIDE 17

Consolid nsolidat ated ed financial ancial highlight hlights

16

Favourable/ 2016 2016 2015 2015 (Unfavourable) HK$ million HK$ million Change Consolidated service revenue 7,640 7,674

  • Consolidated hardware revenue

4,384 14,368

  • 69%

Consolidated revenue 12,024 22,042

  • 45%

Consolidated service EBITDA 2,392 2,483

  • 4%

Consolidated hardware EBITDA 73 305

  • 76%

Consolidated EBITDA 2,465 2,788

  • 12%

Consolidated service EBIT 971 1,125

  • 14%

Consolidated hardware EBIT 73 305

  • 76%

Consoldated EBIT 1,044 1,430

  • 27%

Service profit 655 722

  • 9%

Hardware profit 46 193

  • 76%

Profit attributable to shareholders 701 915

  • 23%

Earnings per share (in HK cents) 14.55 18.99

  • 23%

Final dividend per share (in HK cents) 6.90 9.00

  • 23%

Full year dividend per share (in HK cents) 10.90 14.20

  • 23%
slide-18
SLIDE 18

Consolidated nsolidated cost t item tems

Customer acquisition costs Staff costs Other operating expenses Depreciation and amortisation

3,977 3,915 830 896 384 437 1,358 1,421 4,000 8,000 HK$ millions

Consolidated cost items

21% 7% 13% 59% +2% 6% 13% 60% 21%

6,549 2015 2016 6,669

17

  • Higher customer acquisition cost due to

increased selling activities for future revenue

  • Higher depreciation and amortisation from

spectrum renewal of 2100MHz and activation of 2300MHz in Q4 2016

  • Stable staff cost and other operating

expenses

slide-19
SLIDE 19

Capex pex inves estment tment

Mobile Capex

15.5%

capex over service revenue 574 589 14% 15%

0% 13% 26% 400 800 % to service revenue HK$ millions

Fixed-line Capex

485 509

12% 12% 0% 15% 30% 400 800 % to service revenue HK$ millions

Consolidated Capex

1,059 1,098 14% 14% 0% 15% 30% 750 1,500 % to service revenue HK$ millions 2015 2016 2015 2016 2015 2016 18

slide-20
SLIDE 20

1.1 1.7 0.0 1.0 2.0

Consolidat nsolidated ed financial ancial po position ition

Net debt

2,941 4,230 20% 26%

0% 20% 40%

2,500 5,000 Net debt to net total capital % HK$ millions Net debt to net total capital ratio As at As at 31 Dec 2015 31 Dec 2016 As at As at 31 Dec 2015 31 Dec 2016

Net debt/LTM EBITDA

Note: increase in net debt was to finance spectrum licence fee payment. 19

slide-21
SLIDE 21

Outlook

slide-22
SLIDE 22

Str trategies tegies to to mee eet t th the e Chall llenges enges

Customer Experience

  • Invest in customer loyalty
  • Reward customers for relationship and business
  • Segmental and delightful customer service

More Revenue Streams

  • Variety of products tailored to specific needs
  • Innovative roaming and prepaid products
  • Integrated solution for corporates
  • Capture OTT, M2M, Smart City and IoT opportunities
  • Expansion of Data Centre and Cloud services

Prepare for 5G

  • Continue to improve data speed by spectrum re-farming
  • Ready for network architectural change and expansion
  • Strengthen technology partnership paving for 5G

Higher Cost Efficiency

  • Continue to improve cost efficiency
  • Digital transformation
  • Innovative digital sales and market communication channels

21

slide-23
SLIDE 23

Spe pectrum trum

22

HTHKH constructively responded to OFCA’s 1st

st public

c co consul sulta tatio tion n on spec ectru rum reas reassi signment gnment. . While e we are re still study dying ng the 2nd

nd co

consu nsulta tation tion paper, , our initial al position tion is still to suppor port 80% % of spec ectr trum for re renew ewal al and 20% % for auctio tion. n. We sugges gest : 80% % spec ectr trum for re renewal al 20% % for auction tion

  • Less spectrum for renewal brings high risks in

business certainty and customer service continuity

  • Uncertainty in spectrum holding will discourage

long term investment in capital intensive technology development

  • Our prime consideration is to minimise disruption
  • f service to customers

OFCA’s pro roposed

  • sed spectru

trum prices es are re extrem emely ely high h and will heavily burden HK’s mobile industry

  • The proposed spectrum fee is conservatively

estimated at least 3 times more than current

  • Extremely high spectrum fee is equivalent to extra

tax on mobile industry

  • Heavy financial burden will hamper our ability to

provide competitive services to customers

  • Destructive impact on HK’s technology leadership

position

slide-24
SLIDE 24

Q & A

slide-25
SLIDE 25

THANK YOU

24