KT 2018 Earnings Release

Transcription

1 KT 2018 Earnings Release

2 Disclaimer This presentation has been prepared by KT Corp.(the Company ). This presentation contains forward-looking statements, which are subject to risks, uncertainties, and assumptions. This presentation is being presented solely for your information and is subject to change without notice. No presentation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information presented. KT Corp has applied new accounting standard of K-IFRS 1115 as of Jan 1st, Accordingly, we have elected the modified retrospective approach which will recognize the cumulative impact of the new standard as an adjustment to retained earnings as at January , the period of initial application. That said, there are no obligation to apply the new standard to previous financial statements. In this material, despite the new accounting standard, we have included the restated figures for 2018 prepared under IFRS 1018 (old-standard) for investors understandings. The restated figures are followed by * marking. However, please be noted that these restated figures have not been audited or reviewed by external auditors. If you have any related questions to this material, please contact IR department. Tel : , 3254, 3564, 3976, 5343 Fax :

3 Contents 1 Financial Highlights 2 Business Overviews 3 Q&A 4 Appendix

4 Contents 1 Financial Highlights 2 Business Overviews 3 Q&A 4 Appendix

5 1-1 Financial Highlights K-IFRS / Consolidated Income Statement Operating Revenue KRW 23.8tn, YoY +1.6% Service Revenue KRW 20.2tn, YoY +0.1% Operating Income KRW 1.2tn, YoY -11.4% Net Income KRW 715.1bn, YoY +27.3% EBITDA KRW 4.5tn, YoY -5.1% 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Operating Revenue 6, , , % -1.0% 5, , % 23, , % 23,460.1 Service Revenue 5, , , % -0.6% 5, , % 20, , % 19,985.2 Merchandise Revenue 1, , % -2.9% % 3, , % 3,475.0 Operating Expense 5, , , % -0.2% 5, , % 22, , % 22,198.6 Operating Income % -36.0% % 1, , % 1,261.5 Margin 2.2% 5.4% 1.4% -3.9%p -0.8%p 6.2% 1.6% -4.6%p 5.9% 5.1% -0.8%p 5.4% Non-op. Income/loss Deficit Increased Income before taxes TR Deficit Decreased Deficit Decreased Deficit Increased Deficit Decreased % , % 1,090.7 Net Income % TB % % Margin -2.0% 3.4% 0.1% -3.3%p 2.1%p 4.0% 0.3% -3.7%p 2.4% 3.0% 0.6%p 3.2% EBITDA , % -7.3% 1, % 4, , % 4,543.3 Margin 15.9% 19.0% 14.9% -4.1%p -1.0%p 19.9% 15.2% -4.8%p 20.3% 18.9% -1.3%p 19.4% * IFRS 1018 applied (old-standard) : Restated figures have been provided for investors understanding. The figures have not been audited or reviewed by external auditors. (applies to other slides) 4

6 1-2 Financial Highlights K-IFRS / Consolidated Operating Expenses Operating Expenses KRW 22.5tn, YoY +2.4% Labor Cost KRW 3.85tn, YoY +7.8% General Expense KRW 9.84tn, YoY -0.3% Cost of Service Provided KRW 2.62tn, YoY +2.0% Cost of Merchandise KRW 3.90tn, YoY +3.6% 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Operating Expenses 5, , , % -0.2% 5, , % 22, , % 22,198.6 Labor Cost , % 2.7% , % 3, , % 3,845.8 General Expense 2, , , % -1.0% 2, , % 9, , % 9,801.4 Cost of Service Provided % 0.8% % 2, , % 2,620.2 Selling Expense % 7.1% % 2, , % 2,034.1 Cost of Merchandise 1, , % -5.4% , % 3, , % 3,897.0 Marketing Expenses KRW 2.64tn, YoY -1.6% 4Q17* 3Q18* 4Q18* QoQ YoY FY17* FY18* YoY Marketing Expenses % -3.8% 2, , % KT Separate, Profit from handset sales adjusted / Selling expenses + Advertising expenses 5

7 1-3 Financial Highlights K-IFRS / Consolidated Financial Position Equity increase on IFRS15 application - Cumulative impact reflected in Jan 1 st, 2018 retained earnings Debt Position Borrowings: KRW 6.65tn New Debt: KRW 3.94tn Debt Ratio Debt to Equity: 118.5% 4Q 17* 3Q 18 4Q 18 QoQ YoY Assets 29, , , % 8.3% Cash & Cash Equivalents 1, , , % 40.2% Liabilities 16, , , % 5.7% Borrowings 6, , , % -0.5% Equity 13, , , % 11.5% Capital Stock 1, , , % 0.0% Net Debt 4, , , % -17.0% Debt / Equity 125.1% 123.1% 118.5% -4.6%p -6.5%p Net Debt / Equity 36.0% 24.8% 26.8% 1.9%p -9.2%p Net Debt to Equity: 26.8% 134.2% 112.1% 120.0% 125.1% 116.5% 108.6% 123.1% 118.5% Debt to Equity Net Debt to Equity 41.4% 36.9% 34.9% 36.0% 34.7% 30.2% 24.8% 26.8% 1Q17 * 2Q17 * 3Q17 * 4Q17 * 1Q18 2Q18 3Q18 4Q18 6

8 1-4 Financial Highlights K-IFRS / Separate CAPEX 2018 CAPEX KRW 1.98tn executed Executed 85.9% of 2018 Guidance 3,313 Access Network Backbone Network B2B Others CAPEX Breakdown Access Network: KRW 1.03tn Backbone Network: KRW 448.1bn B2B: KRW 304.7bn Others: KRW 189.0bn 1, ,514 2,397 2,359 2,250 1,977 1,362 1,316 1,133 1,196 1,

9 Contents 1 Financial Highlights 2 Business Overviews 3 Q&A 4 Appendix

10 2-1 Business Overview K-IFRS / Consolidated Wireless Wireless down by 2.3% YoY Service revenue declined on increased take-up of selective tariff discount and compensation for service failure caused by fire in cable tunnel, YoY -2.0% 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Wireless 1, , , % -6.2% 1, , % 7, , % 6,954.1 Service 1, , , % -4.4% 1, , % 6, , % 6,523.5 Interconnection % -34.8% % % [Wireless Subscriber] (Unit: 1,000) Net addition and LTE penetration continues Wireless net adds of 1.1M Net subscriber addition continues with successful launch of new pricing plan Data ON LTE penetration reached 80.4% 19,234 19,521 19,795 20,015 20,378 20,662 20,920 21, % 76.2% 76.7% 77.2% 77.9% 78.5% 79.4% 80.4% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Subscribers % of LTE 9

11 2-2 Business Overview K-IFRS / Consolidated Wireline Wireline down by 2.1% YoY 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Wireline 1, , , % -1.0% 1, , % 4, , % 4,745.1 Telephony Revenue down by 6.7% YoY on cord-cutting and usage drop Telephony % -2.9% % 1, , % 1,708.3 Broadband % -0.1% % 2, , % 1,998.6 Line lease % 0.3% % 1, , % 1,038.2 Broadband [Broadband Subscriber] (Unit: 1,000) Revenue up by 1.9% YoY with GiGA subscriber expansion despite interconnection rate decline - Revenue excluding interconnection up by 2.9% YoY 8,573 8,640 8,708 8,758 8,653 8,659 8,698 8, % 51.9% 54.2% 56.0% 41.5% 44.9% 37.5% 33.0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Subscribers % of GiGA 10

12 2-3 Business Overview K-IFRS / Consolidated Media / Contents Media/Contents up by 9.4% YoY Media IPTV net adds of 380K Media revenue up by 8.5% YoY on high-quality subscriber expansion and platform revenue increase Contents 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Media/Contents % 12.5% % 2, , % 2,414.3 Media % 8.9% % 1, , % 1,942.8 Contents % 27.9% % % [IPTV Subscriber] 7,161 7,280 7,397 7,472 7,573 7,672 7,775 7,851 (Unit: 1,000) Up by 13.4% YoY on T-commerce revenue growth of KTH 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Number of IPTV subscribers differs from MSIT s release that applies Combined Market Share Regulation under the IPTV law. (KT s 6-month average pay TV subscribers as of 1H18 are 6,605,107.) 11

13 2-4 Business Overview K-IFRS / Consolidated Finance and Others Finance down by 2.4% YoY Other Services up by 6.7% YoY Other Services revenue up on IDC and real estate growth 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Finance % -3.3% % 3, , % 3,444.9 Other Services % 9.0% % 2, , % 2,426.8 IT / Solution % 14.5% % , % 1,041.5 Real Estate % -7.3% % % Others % 11.7% % % Merchandise up by 10.7% YoY 4Q17* 3Q18* 4Q18* QoQ YoY 3Q18 4Q18 QoQ FY17* FY18* YoY FY18 Merchandise 1, , % -2.9% % 3, , % 3,

14 Contents 1 Financial Highlights 2 Business Overviews 3 Q&A 4 Appendix

15 Contents 1 Financial Highlights 2 Business Overviews 3 Q&A 4 Appendix

16 4-1 K-IFRS Income Statement Consolidated 4Q 17* 1Q 18* 2Q 18* 3Q 18* 4Q 18* 1Q 18 2Q 18 3Q 18 4Q 18 KT Separate 4Q 17* 1Q 18* 2Q 18* 3Q 18* 4Q 18* 1Q 18 2Q 18 3Q 18 4Q 18 Operating revenue 6, , , , , , , , ,994.5 Operating revenue 4, , , , , , , , ,418.2 Service revenue 5, , , , , , , , ,021.1 Service revenue 3, , , , , , , , ,508.3 Wireless 1, , , , , , , , ,689.6 Wireless 1, , , , , , , , ,655.0 Fixed line 1, , , , , , , , ,178.4 Fixed line 1, , , , , , , , ,167.1 Media/Contents Media Finance Other service Others Merchandise rev. 1, , Merchandise rev. 1, Operating expense 5, , , , , , , , ,898.7 Operating expense 4, , , , , , , , ,359.8 Service expense 4, , , , , , , , ,793.2 Service expense 3, , , , , , , , ,412.9 Labor expense , ,006.1 Labor expense General expense 2, , , , , , , , ,499.1 General expense 1, , , , , , , , ,731.2 Cost of svc provided Cost of svc provided Selling expense Selling expense Merchandise cost 1, , ,105.6 Merchandise cost 1, Operating income Operating income N-OP income (loss) N-OP income (loss) N-operating income N-operating income N-operating expense N-operating expense Equity method (G/L) Income bf taxes Income bf taxes Income tax Income tax Income from con. op Income from discon. op Net income Net income NI contribution to KT EBITDA , , , , , , EBITDA , , , , , EBITDA Margin 15.9% 21.7% 20.4% 19.0% 14.9% 21.5% 21.0% 19.9% 15.2% EBITDA Margin 17.6% 24.5% 23.2% 21.4% 16.8% 24.4% 24.3% 23.0% 17.6% * K-IFRS 1018 (old-standard) 15

17 4-2 K-IFRS Balance Sheet Consolidated 1Q 17* 2Q 17* 3Q 17* 4Q 17* 1Q 18 2Q 18 3Q 18 4Q 18 KT Separate 1Q 17* 2Q 17* 3Q 17* 4Q 17* 1Q 18 2Q 18 3Q 18 4Q 18 Asset 30, , , , , , , ,188.8 Asset 23, , , , , , , ,010.9 Current assets 10, , , , , , ,894.3 Current assets 4, , , , , , , ,861.6 Cash & cash equi. 2, , , , , , , ,703.4 Cash & cash equi. 1, , , , , , ,779.7 Trade & other rec 3, , , , , , , ,874.9 Trade & other rec 2, , , , , , , ,968.8 Inventories Inventories Other current asset 4, , , , , , , ,631.9 Other current asset , , , , Prepaid_Contractcost , , , Prepaid_Contractcost , , , , Contract assets Contract assets Non-current assets 20, , , , , , , ,294.6 Non-current assets 19, , , , , , , ,149.3 Trade & other rec Trade & other rec P.P.E 13, , , , , , , ,068.3 P.P.E 11, , , , , , , ,864.4 Other current asset 5, , , , , , , ,415.7 Other current asset 7, , , , , , , , Prepaid_Contractcost Prepaid_Contractcost Contract assets Contract assets Liabilities 17, , , , , , , ,457.6 Liabilities 12, , , , , , , ,299.2 Current liabilities 9, , , , , , , ,387.7 Current liabilities 5, , , , , , , ,908.5 Trade & other payables 7, , , , , , , ,007.5 Trade & other payables 3, , , , , , , ,002.4 Short-term borrowings 1, , , , , , ,368.5 Short-term borrowings 1, , , , , , ,181.4 Others , ,011.7 Others Contract liabilities Contract liabilities Non-current liabilities 7, , , , , , , ,069.8 Non-current liabilities 6, , , , , , , ,390.7 Trade & other payables ,513.9 Trade & other payables ,460.1 Long-term borrowings 5, , , , , , , ,279.8 Long-term borrowings 5, , , , , , , ,132.1 Others 1, , , , , , , ,276.2 Others Contract liabilities Contract liabilities Equity 12, , , , , , , ,731.3 Equity 11, , , , , , , ,711.7 Retained earnings 9, , , , , , , ,328.9 Retained earnings 9, , , , , , , ,740.0 * K-IFRS 1018 (old-standard) 16

18 4-3 Subscribers K-IFRS / Separate Wireless 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 QoQ YoY Subscribers (Unit: 1,000) 1) Total (LTE+WCDMA) 19,234 19,521 19,795 20,015 20,378 20,662 20,920 21, % 5.5% Net additions % -9.0% Gross additions 1,243 1,225 1,270 1,264 1,211 1,160 1,200 1, % -6.7% Deactivation 2) , % -6.7% Churn rate 1.6% 1.6% 1.7% 1.7% 1.4% 1.4% 1.5% 1.6% 0.1%p -0.1%p LTE 14,608 14,869 15,179 15,462 15,867 16,224 16,612 16, % 9.8% LTE Penetration rate 75.9% 76.2% 76.7% 77.2% 77.9% 78.5% 79.4% 80.4% 1.0%p 3.2%p ARPU (KRW) 3) 34,537 34,554 34,608 34,077 32,993 32,733 32,372 31,608 4) -2.4% -7.2% Note 1) Subscribers: MSIT s new guidelines for subscriber disclosure (Retroactively applied from 1Q14, MVNO included) Note 2) Deactivation: Mandatory deactivation included Note 3) ARPU = Wireless revenue* / Wireless subscribers** * Wireless revenue(3g, LTE and IoT included):revenue of Voice and Data usage (Interconnection/Subscription fee excluded), VAS, Contract/ Bundled Discounts, and etc. included ** Wireless subscribers: Based on MSIT s guidelines for average billed subscribers in quarter Note 4) ARPU based on old standard (New standard wireless ARPU 31,450) Wireline 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 QoQ YoY Subscribers (Unit:1,000) Telephony 16,129 16,045 15,815 15,610 15,478 15,343 15,163 14, % -4.0% PSTN 12,679 12,576 12,376 12,201 12,080 11,949 11,786 11, % -4.6% VoIP 3,450 3,469 3,439 3,409 3,398 3,394 3,377 3, % -1.6% Broadband 8,573 8,640 8,708 8,758 8,653 8,659 8,698 8, % -0.3% IPTV (OTV+OTS) 7,161 7,280 7,397 7,472 7,573 7,672 7,775 7, % 5.1% Number of IPTV subscribers differs from MSIT s release that applies Combined Market Share Regulation under the IPTV law. (KT s 6-month average pay TV subscribers as of 1H18 are 6,605,107.) 17

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