TELEKOM MALAYSIA BERHAD 1Q 2017 RESULTS ANALYST BRIEFING

Transcription

1 TELEKOM MALAYSIA BERHAD 1Q 2017 RESULTS ANALYST BRIEFING 23 May

2 Disclaimer This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any securities and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract or commitment or investment decision. This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed to have agreed and confirmed to Telekom Malaysia Berhad (the Company ) that: (a) you agree not to trade in any securities of the Company or its respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain absolute confidentiality regarding the information disclosed in this presentation until the public disclosure of such information, or unless you have been otherwise notified by the Company. Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. None of the Company and its affiliates and related bodies corporate, and their respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or negligence) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it. This presentation contains projections and forward-looking statements relating to the Company s business and the sectors in which the Company operates. These forward-looking statements include statements relating to the Company s performance. These statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It is important to note that actual results could differ materially from those anticipated in these forward looking statements. The Company does not undertake to inform you of any matters or information which may come to light or be brought to the Company s attention after the date hereof. The forecasts and other forward-looking statements set out in this presentation are based on a number of estimates and assumptions that are subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to change and in many cases outside the control of the Company. The directors and officers of the Company believe that they have prepared the forecasts with due care and attention and consider all best estimates and assumptions when taken as a whole to be reasonable at the time of preparing the presentation. However, the Company s forecasts presented in this presentation may vary from actual financial results, and these variations may be material and, accordingly, neither the Company nor its directors or officers can give any assurance that the forecast performance in the forecasts or any forward-looking statement contained in this presentation will be achieved. Details of the forecasts and the assumptions on which they are based are set out in the presentation. This presentation may not be copied or otherwise reproduced without the written consent of TM. 2

3 Introducing The TM Management Team Leadership Line-Up As We Cement Our Position As Malaysia s Convergence Champion 3

4 1 Performance Overview 2 Financial Review 3 Operating Highlights 4 Concluding Remarks

5 1Q2017 Highlights (1Q2017 vs. 1Q2016) Encouraging growth in the first quarter Total CAPEX/revenue at 11.9% Revenue growth across all customer clusters; 1Q operating revenue continues on uptrend New webe products to cater to SME s broadband needs (webemobile biz and webebroadband biz) 5

6 1 Performance Overview 2 Financial Review 3 Operating Highlights 4 Concluding Remarks

7 Group Results 1Q 2017 RM mn 1Q17 4Q16 Reported % Change QoQ 1Q16 % Change YoY Revenue 2, , , Other Operating Income EBITDA Depn & Amort EBIT Other (Loss) / Gains (4.7) 0.9 -> >100.0 Net Finance Cost* FX Gain /(Loss) 22.7 (120.5) +> Profit Before Tax (PBT) > PATAMI Normalised PATAMI Note: Unless stated otherwise all figures shall be inclusive of Webe *Excludes FX Gain/(Loss) 7

8 Cost % Revenue¹ Improved collections and cost efficiencies RM mn 2, % 2, % 2, % Bad & Doubtful Debts Marketing Expenses Supplies & Materials Maintenance Cost Other Operating Costs Manpower Direct Costs Depreciation & Amortisation 1Q16 4Q16 1Q17 Total Cost / Revenue ( %) 1 Revenue = Operating Revenue + Other Operating Income Note: The classification of cost is as per financial reporting (Please refer to Appendix for breakdown) Note : Unless stated otherwise all figures shall be inclusive of Webe 8

9 RM mn Group Capital Expenditure CAPEX investment continues for network expansion for broadband and LTE 11.1% % CAPEX/Revenue ratio at 11.9% 23% Core Network 53% Access 24% Support Systems 59 1Q Q17 Core Network Access Support Systems CAPEX/Revenue ( %) Note : Unless stated otherwise all figures shall be inclusive of Webe 9

10 Group Cash Flow RM mn 1Q17 1Q16 Cash & cash equivalent at start 2, ,510.8 Cash flows from operating activities Cash flows used in investing activities (673.0) (769.9) Capex Cash flows used in financing activities (599.6) (77.8) Effect of exchange rate changes (12.2) (0.3) Cash & cash equivalent at end 2, ,191.1 Free cash-flow (EBITDA Capex) Key Financial Ratios 31 Mar Dec 16 Return on Invested Capital % 6.25% Return on Equity % 10.03% Return on Assets % 4.80% Current Ratio WACC 7.11% 7.17% 31 Mar Dec 16 Gross Debt to EBITDA Net Debt/EBITDA Gross Debt/Equity Net Debt/Equity Net Assets/Share (sen) Based on Normalised EBIT 2 Based on Normalised PATAMI Note : Unless stated otherwise all figures shall be inclusive of Webe 10

11 1 Performance Overview 2 Financial Review 3 Operating Highlights 4 Concluding Remarks

12 Group Total Revenue by Product Voice Internet RM mn -5.3% -6.2% RM mn +8.4% +1.9% Q16 4Q16 1Q17 YoY: Decreased traffic minutes and lower bilateral revenue across all customer clusters RM mn Data +3.3% -10.2% 1Q16 4Q16 1Q17 YoY: Higher UniFi and IPTV content revenue Others* RM mn +12.4% -23.2% *Others comprise other telco and nontelco services (i.e ICT-BPO, UTSB tuition fees, customer projects) 1Q16 4Q16 1Q17 YoY: Increased International and Domestic Leased revenue 1Q16 4Q16 1Q17 YoY: Higher customer projects and ICT/BPO revenue Note : Unless stated otherwise all figures shall be inclusive of Webe 12

13 Group Total Revenue by Customer Clusters Mass Market Managed Accounts RM mn +4.1% -0.2% RM mn +2.3% -11.5% 1,309 1, , Q16 4Q16 1Q17 1Q16 4Q16 1Q17 YoY Contributed by higher UniFi revenue and higher IPTV content revenue YoY Higher revenue from customer projects as well as higher ICT/BPO revenue Note : Unless stated otherwise all figures shall be inclusive of Webe 13

14 Group Total Revenue by Customer Clusters Global & Wholesale Others* RM mn RM mn +6.0% +3.1% -20.4% -11.3% Q16 4Q16 1Q17 1Q16 4Q16 1Q17 *Others include revenue from Property Development, TM R&D, UTSB & MKL YoY Higher International Leased and Domestic Leased revenue YoY Mainly from revenue recognition on share of GDV of property development Note: Unless stated otherwise all figures shall be inclusive of Webe 14

15 Customers (In thousand) ARPU (RM) Customers (In thousand) ARPU (RM) Physical Highlights Healthy UniFi growth and stable ARPU Broadband % 0.0% 2,364 2,365 2,369 2,370 2, ,487 1,465 1,448 1,421 1,391 UniFi customer base close to 979,000 customers Contribution from upselling and content revenue Webe achieved 4.2% penetration of TM Households* 1Q16 2Q16 3Q16 4Q16 1Q17 Streamyx UniFi UniFi ARPU (Blended) Streamyx Net ARPU Fixed Line *TM Household denotes households with at least 1 TM service % -0.5% 4,241 4,219 4,201 4,182 4, ARPU at RM26 3,364 3,319 3,280 3,233 3,184 1Q16 2Q16 3Q16 4Q16 1Q17 Fixed Line UniFi Fixed Line (DEL) ARPU 15

16 PROG Recent Developments Held inaugural Cloud Summit 2017 for the Enterprise and Public Sector segments In April, we launched webemobile biz and webebroadband biz to cater to SME s broadband needs Deployment of Smart C-RAN for Smart Putrajaya project VADS Twin Core Data Centres, in Iskandar Putri, Johor will be operational this year 16

17 1 Performance Overview 2 Financial Review 3 Operating Highlights 4 Concluding Remarks

18 Concluding Remarks Revenue higher by 3.8% YoY, driven by Internet, customer projects and ICT/BPO revenue Reported EBIT higher by 8.5% YoY to RM303.8mn Normalised EBIT at RM311.9mn Reported PATAMI lower by 28.5% YoY to RM230.4mn Normalised PATAMI higher by 13.2% YoY to RM229.8mn CAPEX/revenue ratio at 11.9% Malaysia Convergence Champion Nationwide coverage for broadband & mobility Good webe traction at 4.2% penetration of TM Households 81% UniFi customers on packages 10Mbps and above Stable ARPU 18

19 Thank you! Investor Relations Level 11 (South Wing), Menara TM Jalan Pantai Baharu Kuala Lumpur Malaysia Tel: (603) / 7366 / investor@tm.com.my

20 Appendix 20

21 Cost % Revenue Total Revenue* (RM mn) 3, , , Q17 4Q16 1Q16 Comments (1Q17 vs. 1Q16) Direct Costs % Increase in domestic roaming cost and higher cost RM mn of sales on ICT/BPO Manpower % RM mn Higher staff benefits Supplies & Materials % Higher material and equipment cost at Managed RM mn Accounts Bad & Doubtful Debts % Improvement in credit management & collection RM mn of bad debts Marketing Expenses % Lower commission on broadband packages and RM mn discontinuation of WiMax service Maintenance Cost % Expansion of comprehensive network managed RM mn services for ITNT and LTE services Other Operating Costs % Contribution from license fee on apparatus RM mn assignment and site rental in line with LTE rollout Depreciation & Amortisation % Increased assetisation from major projects and RM mn submarine cable system Total Cost (RM mn) 2, , ,616.9 Total (%) *Total Revenue = Operating Revenue + Other Operating Income Note : Unless stated otherwise all figures shall be inclusive of Webe 21

22 Normalised EBIT RM mn 1Q17 4Q16 1Q16 Reported EBIT Non Operational Unrealised FX Loss/(Gain) on International trade settlement 7.9 (62.1) 31.9 Loss on Sale of Assets MESRA programme Normalised EBIT Normalised EBIT Margin 10.4% 9.2% 10.8% Reported EBIT Margin 10.1% 8.8% 9.7% EBIT is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost EBIT Margin is calculated as percentage of EBIT against Total Revenue Normalised EBIT Margin is calculated as percentage of Normalised EBIT against Normalised Total Revenue (Operating Revenue + Oth. Operating Income Loss on Sale of Assets) Note: Unless stated otherwise all figures stated shall be inclusive of Webe 22

23 Normalised PATAMI RM mn 1Q17 4Q16 1Q16 Reported PATAMI Non Operational Unrealised FX Loss/(Gain) on International trade Settlement (net of tax) 9.2 (53.6) 27.8 Other (Gain)/Losses¹ 4.9 (0.7) (50.3) Unwinding of discount on put option over shares of a subsidiary Unrealised FX (Gain)/Loss on Long Term loans (22.7) (104.5) MESRA programme Tax Incentives² - (15.6) - Normalised PATAMI ¹Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment, gain/loss on disposal for AFS (available for sale) investments, (gain)/loss Sale of Assets and option over shares of a subsidiary ²2015 tax incentives that has been booked only in 4Q16 Note: Unless stated otherwise all figures stated shall be inclusive of Webe 23

24 Normalised EBITDA RM mn 1Q17 4Q16 1Q16 Reported EBITDA Non Operational Unrealised FX Loss/(Gain) on International trade Settlement 7.9 (62.1) 31.9 Loss on Sale of Assets MESRA programme Normalised EBITDA Normalised EBITDA Margin 31.9% 30.2% 33.0% Reported EBITDA Margin 31.6% 29.7% 31.9% EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & impairment). EBITDA Margin is calculated as percentage of EBITDA against Total Revenue Normalised EBITDA Margin is calculated as percentage of Normalised EBITDA against Normalised Total Revenue (Operating Revenue + Oth. Operating Income Loss on Sale of Assets) Note: Unless stated otherwise all figures stated shall be inclusive of Webe 24

25 Normalised PBT RM mn 1Q17 4Q16 1Q16 Reported PBT Non Operational Unrealised FX Loss/(Gain) on International trade settlement 7.9 (62.1) 31.9 Other (Gain)/Losses* 4.9 (0.7) (50.3) Unwinding of discount on put option over shares of a subsidiary Unrealised FX (Gain)/Loss on Long Term loans (22.7) (104.5) MESRA programme Normalised PBT * Comprise fair value (FV) changes of FVTPL (FV through P&L) investment gain/loss on disposal for AFS (available for sale) investments, (gain)/loss on Sale of Assets and option over shares of a subsidiary Note: Unless stated otherwise all figures stated shall be inclusive of Webe 25

26 Group Balance Sheet RM million As at As at 31 Mar Dec 2016 Shareholders Funds 7, ,692.3 Non-Controlling Interests Deferred & Long Term Liabilities 11, ,194.4 Long Term Borrowings 7, ,662.6 Derivative financial instruments Deferred tax liabilities 1, ,514.8 Deferred income 1, ,711.4 Trade and other payables , ,026.9 Current Assets 6, ,887.5 Trade Receivables 2, ,357.1 Other Receivables Cash & Bank Balances 2, ,926.0 Others Current Liabilities 5, ,974.7 Trade and Other Payables 3, ,103.0 Short Term Borrowings Others 1, ,171.0 Net Current Assets/(Liabilities) Property Plant & Equipment 15, ,010.6 Other Non-Current Assets 2, , , ,026.9 Note : Unless stated otherwise all figures shall be inclusive of Webe 26

27 Revenue by Product by Customer Clusters RM mn Mass Market & Managed Accounts +3.4% -5.6% 2,298 2,515 2, Others Internet Data Voice 1Q16 4Q16 1Q17 *Others comprise other telco and non-telco services (i.e: ICT-BPO, MMU tuition fees, customer projects) Global Wholesale RM mn +6.5% % Others Data Voice Q16 4Q16 1Q17 Note: Total revenue is after inter-co elimination. Revenue by product is before inter-co elimination Unless stated otherwise all figures shall be inclusive of Webe 27

28 Thank you! Investor Relations Level 11 (South Wing), Menara TM Jalan Pantai Baharu Kuala Lumpur Malaysia Tel: (603) / 7366 / investor@tm.com.my