Financial results presentation Q4 FY08: Quarter ended 31 March 2008 - - PowerPoint PPT Presentation

14th May 2008

Financial results presentation

Q4 FY08: Quarter ended 31 March 2008 FY08: Full Year ended 31 March 2008

2

Forward looking statements - important note

The following presentation contains forward looking statements by the management of Singapore Telecommunications Limited ("SingTel"), relating to financial trends for future periods, compared to the results for previous periods. Some of the statements contained in this presentation that are not historical facts are statements of future expectations with respect to the financial conditions, results of operations and businesses, and related plans and objectives. Forward looking information is based on management's current views and assumptions including, but not limited to, prevailing economic and market conditions. These statements involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the statements as originally made. Such statements are not, and should not be construed as a representation as to future performance of SingTel. In particular, such targets should not be regarded as a forecast or projection of future performance of SingTel. It should be noted that the actual performance of SingTel may vary significantly from such targets. “S$” means Singapore dollars and "A$" means Australian dollars unless otherwise

• indicated. Any discrepancies between individual amounts and totals are due to

rounding.

Asia’s Leading Communications Company

Chua Sock Koong

Group CEO

Underlying EPS1

• 23.15¢

Group performance Revenue

Group FY08: strong revenue and earnings growth

1. Excludes exceptional items, currency translation gains, exceptional tax items & IDA compensation 2. In A$ terms 3. Group mobile subscribers, including SingTel, Optus and Regional Mobile associates 4. Based on Group’s share of Regional Mobile associates earnings before tax and exceptionals. Also excludes the additional quarter of Globe’s results recorded in Q1 FY07

Singapore Revenue Operational EBITDA Optus Operational EBITDA A$2bn Regional Mobile Customers3 Earnings up4 29% Revenue2 4% 185m 11% 17% 11% 3%

4

5

0.8 0.9 1.0 1.0 1.1 1.3 1.7 0.9 1.9 1.2 0.8 1.1 1.1 0.7 2.3 3.0 1.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 Shareholder payout (S$bn)2

Cumulative payout since 20001 82% of NPAT

1. Cash distribution as % of NPAT 2. All dividends paid after the FY07 interim dividends are one-tier exempt dividends without tax credits

S$22bn

Increase in full year ordinary dividend

Total cash distribution per share

Interim dividend

paid Jan 08

5.6¢ 6.9¢

Proposed final dividend

12.5¢ 54%

Payout ratio

Ordinary final dividend Ordinary interim dividend Special dividend Capital reduction

1. Operational EBITDA+IDA compensation+share of results of associates 2. Excludes exceptional items, currency translation gains, exceptional tax items & IDA compensation 6

14.3% 3,219 3,681 Underlying net profit2 25.0% 2,072 2,591 Associates (ex exceptionals) 5.8% 4,282 4,530 Operational EBITDA NM 32.0% 30.5%

• margin

16.9% (44.2%) 4.8% 5.9% NM 11.0% YoY % change 19.81 23.15 Underlying earnings per share2 337

• IDA compensation

185 103 Exceptional Items 3,779 3,960 Net profit 13,377 14,844 Operating revenue 6,692 7,089 EBITDA1 12 months to Mar 07 12 months to Mar 08 S$m

Group FY08: strong earnings growth

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impressive subscriber growth strong mobile customer acquisitions strong on-net broadband customer growth record growth in mobile subscribers submarine cable investment

7

Group Q4 FY08 highlights

23 % 32% 44%

1. Based on 3 months to Mar 08

244k SingTel Optus Regional Mobile

77 % Proportionate EBITDA1

• utside Singapore

Highlights

135k 14m

Q1 2010

Regional Mobile Optus SingTel

705k

as at Mar 08 completion

1. Operational EBITDA+IDA compensation+share of results of associates 2. Excludes exceptional items, currency translation losses, exceptional tax items & IDA compensation 8

1.7% 1,136 5.4% 1,096 1,155 Operational EBITDA NM 29.7% NM 32.4% 30.7%

• margin

(1.6%) 656 15.1% 561 646 Associates (ex exceptionals) 931 952 1,777

• 3,825

3 months to Dec 07

9.2% 10.5% 4.5% NM 11.0%

YoY % change

3.9% 14.8% 1.3%

• (1.8%)

Sequential % change

886 968 Underlying net profit2 84

• IDA compensation

989 1,093 Net profit 3,384 3,758 Operating revenue 1,723 1,801 EBITDA1

3 months to Mar 07 3 months to Mar 08 S$m

Group Q4 FY08: sustained momentum

SingTel

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Capex: revenue Capex as % of revenue at low double digit level Revenue S$4,904m Revenue to grow at single-digit level FY08 outcome FY08 Targets Free cash flow (ex associates dividend) to decline slightly Telecoms margin at mid-40% level Overall EBITDA margin at 40% Operational EBITDA (ex strategic initiatives) comparable to previous year Free cash flow S$1,422m Telecoms margin Overall margin S$1,996m

SingTel FY08: exceeded targets



11%



5% 46.5% 40.1%

 

9%

 

10%

SingTel: double digit revenue growth

strong telco & IT revenue growth S$1,290m Revenue strong revenue growth offsets higher expenses S$469m Op EBITDA telco margin : higher selling expenses & strategic initiatives IT margin 37.4% Singapore margins1 Highlights YoY Change Q4 FY08 Operating expenses S$835m S&A :increased mobile customer acquisitions & higher unit acquisition / retention costs cost of sales :higher IT & equipment sales staff costs :higher headcount & salary adjustments 12% 18% 1%

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4% pt 42.5% 12.2%

1. Excludes International Business and Group corporate costs of S$14m

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SingTel: growth across multiple platforms

growth across telco and IT business 1,290 Total revenue assisted by strong economic performance 156 International telephone higher equipment sales higher satellite revenue 222 Others higher contributions from systems and network integration projects 217 IT & Engineering Highlights YoY Change Revenue (S$ m) Q4 FY08 strong corporate data and broadband growth 356 Data & Internet Mobile 339 strong growth in customer base higher data usage as % of revenue 12% 3% 15% 16% 12% 8%

maintained market leadership

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Data & Mobile: winning share in growth segments

1. As at 31 Mar 08 2. Unique Wireless@SG customers who do not subscribe to SingTel’s residential broadband services

Broadband - Q4 net adds

19K

Mobile – Q4 net adds

244K

2.33 1.95 1.82 1.77 2.57 2.13 3Q FY07 4Q FY07 1Q FY08 2Q FY08 3Q FY08 4Q FY08 Mobile subs ('m)

207K 37K

Postpaid Q4 Prepaid Q4

$88

postpaid

ARPUs increased YoY: 54% Market share1 $16

prepaid

490 471 455 438 421 405 3Q FY07 4Q FY07 1Q FY08 2Q FY08 3Q FY08 4QFY08 Broadband subs ('000)

Wireless @SG customers2

433 484 579 631 647 693

Repositioning residential business International telephone

Fixed: leveraging with mio

mio TV customers 67K Fixed market share2 95% 44K

463 409 323 291 278 368 532 0.24 0.26 0.31 0.36 0.37 0.21 0.29 2Q FY07 3Q FY07 4Q FY07 1Q FY08 2Q FY08 3Q FY08 4Q FY08 IDD outgoing mins (m mins)1 Ave collection rate (S$/min)1

National telephone 8% mio plan customers

“Free IDD” promotions for prepaid mobile plans drove higher traffic and lower rate

1. Excludes Malaysia 2. Includes DEL and mio voice. As at 31 Mar 08

OpenNet

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Bid for fibre-to-the-home network

Optus

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Optus FY08: delivered targets

Revenue A$ 7,760m Revenue growth comparable to market growth Capex: revenue 15% Capital expenditure of $A1.1bn Free cash flow up 22% Free cash flow to increase slightly Op EBITDA A$2,002m Maintain EBITDA

FY08 Outcomes FY08 Targets

4% 1%



A$1,130m 

A$903m

 

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Optus: growing sustainable revenue and profits

High mobile customer adds offset termination rate decline and exit from consumer fixed line resale 1,935 Total revenue Gaining profitable market share Solid progress in Data & IP 477 Business & Wholesale Fixed Lower resale volumes/revenue On-net focus & ULL growth improve margin 373 Consumer & SMB Fixed Solid net adds – uplift from wireless broadband Strong outgoing service revenue Expanding 3G HSPA coverage 1,088 Mobile

Highlights

YoY change Revenue A$m

Q4 FY08

7% 10% 7% 5%

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Mobile revenue growth

Incoming Equipment Outgoing 1,022 1,088 +7%

9% 7%

206 189 702 754 114 146 Mobile revenue (A$m)

28%

Mobile: driving net adds with wireless broadband & caps

Q4 FY07 Q4 FY08

Quarterly ARPUs EBITDA margin

• up 3% points sequentially

Strong net adds

• postpaid net adds 87k

7%

A$26

prepaid

A$67

postpaid

Total data % of ARPU

non-sms data % of ARPU 6%

SAC stable sequentially

up 25% YoY

$145 135k 29% 35%

EBITDA growth Revenue growth

Business & Wholesale Fixed: delivering double digit revenue and earnings growth

Data & IP revenue

Gaining share in expanding Ethernet market Continuing innovation with ‘Evolve’ – (new suite of IP services) 10%

Data&IP Voice ICT Satellite

OB & Wholesale Revenue (A$m)

Q4FY07 Q4FY08

EBITDA margin

• up 2% points

+12%

• 2%

+40% stable

12% 24% 19%

Major corporate renewals include

St George Bank The Dept of Immigration & Citizenship Australian Bureau of Statistics

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On-net broadband subscriber growth

15%

Q4 FY07 Q4 FY08 Q4 FY07 Q4 FY08

Consumer Revenue(A$m)

+30%

• 48%

Off-net

181 235 86 165

On-net

Consumer & SMB: lifting margins with on-net growth

ULL subscribers

up 52k in Q4

317k

EBITDA margin

up 7 percentage points

+62%

• 42%

Off-net

271k 145k

434 705 202 347

On-net

Mar 07 Mar 08 Mar 07 Mar 08

Broadband cust base (000s)

Associates and joint ventures

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4% #5 45.0% 46% #1 21.4% #2 #4 #1 #1 Market position 51% 35.0% 17% 30.0% 24% 30.4% 44.5% Effective stake (%) 38% Market share (%)

Regional Mobile: world’s fastest growing mobile market

32% 67% 19% 26%

Mobile penetration (%)

51.3 62.0 25.1 23% 42% 62% 86% 1.6 25%

PBTL

61% 14.4 52% 21.3 32%

Mobile subscribers (m) Growth in subscribers (%)

NA 630 Regional Mobile

• perational performance affected by inflation

S$ results boosted by strong peso 81 Globe improved operational performance inclusion of interconnect income 76 AIS2 increased network rollout costs NA NA (19) Warid resilient performance despite increasing competition S$ results impacted by weaker Indo Rupiah 274 Telkomsel Bharti Q4 FY08 % Change (S$) % Change (local curr) 222 PBT1 (S$ m) Highlights continued strong subscriber growth and improved operational efficiency

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Regional mobile: profitable growth

41% 18% 38%

• 1. Excluding exceptional items – compared to 3 months to Mar 07
• 2. SingTel accounts for AIS Dec 07 quarter results in these results

6% 56% 11% 2% 18% 54%

Financial position,

• utlook & summary

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SingTel

S$124m

Group free cashflow1

1. Operating cash including associates dividends less cash capex 2. Net of withholding taxes 3. Based on Group’s share of associate post tax earnings for 12 months ended 31Mar 08

Capital structure: strong cash flow generation

Associate dividends2

606 1,001 891 1,152 1,298 1,422

FY07 FY08

Group free cashflow (S$m)

3,575 2,795 Optus Assoc div S$395m

FY07 FY08

Telkomsel 606 1,001 Assoc dividends (S$m) AIS Globe

28%

S$261m

65% 58%

Others

Dividends as % of earnings3

7.3 7.1 8.2 5.7 5.9 6.3 7.1 5.0 Jun- 06 Sep- 06 Dec- 06 Mar- 07 Jun- 07 Sep- 07 Dec- 07 Mar- 08

Net debt (S$bn)

Capital management Net debt

Capital structure: significant financial flexibility

Net gearing Net debt:EBITDA EBITDA:net interest expense S$7.3bn 26% 1.0x 21x

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Dividend payout ratio1

 up from 40% - 50%

45%-60%

1. Dividend payout ratio is expressed as a percentage of underlying earnings

27 27

4 to 6% GDP growth Singapore Regional mobile Australia mid to high single-digit GDP growth in regional economies continued growth in mobile penetration 2.8% GDP growth

FY09 : Outlook and assumptions

28 28

Revenue to grow at mid single-digit level growth in mobile and corporate data markets Revenue FY09 Targets Free cash flow Capex EBITDA Free cash flow

1 to be lower

reflects higher capex Capex: revenue to rise to mid-teens level mobile capacity expansion and fixed line infrastructure upgrade EBITDA to grow EBITDA margin of approximately 40%

Singapore: maintaining growth momentum

1. Excluding dividends from associates

29 29

Revenue to grow at single-digit level Revenue FY09 Targets Free cash flow Capex EBITDA Free cash flow to grow Capex: revenue at mid-teens level mobile coverage and capacity expansion and D3 satellite EBITDA to grow

Optus: driving sustainable revenue and profit growth

30 30

Payout ratio: 45-60% of underlying earnings Dividend policy Consolidated revenue and operational EBITDA to grow Revenue & EBITDA FY09 Targets Medium term target Associates Underlying earnings growth at double-digit level Contributions from regional mobile associates to grow at double-digit level

Group outlook

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SingTel: blue chip growth stock

S$3.6bn

Group free cash flow2

17%

Underlying EPS growth1

1. Excludes exceptional items, currency translation gains, exceptional tax items & IDA compensation 2. Operating cash including associates dividends less cash capex

FY08 Trends “maintaining growth momentum” “driving sustainable revenue and profit growth” “profitable growth” Regional mobile Singapore Optus

SingTel

Asia’s Leading Communications Company

www.singtel.com