Results for the Year Ended December 31, January 28 th, 2014

Transcription

1 Results for the Year Ended December 31, 2013 January 28 th,

2 Disclaimer This material contains forward-looking statements with respect to the financial condition, results of operations and business of SK Telecom and its subsidiaries (the Company ) and plans and objectives of the management of the Company. Statements that are not historical facts, including statements about the Company s beliefs and expectations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. The Company does not make any representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained in this management presentation, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. Such forward-looking statements were based on current plans, estimates and projections of the Company and the political and economic environment in which the Company will operate in the future, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events. Additional information concerning these and other risk factors are contained in the Company s latest annual report on Form 20-F and in the Company s other filings with the U.S. Securities and Exchange Commission (SEC). 1

3 Table of Contents Financial Results 3 Operating Results (Non-consolidated) 6 Appendix 9 2

4 Financial Results Summary of Income Statement (Consolidated) (KRW bn) YoY 4Q13 3Q13 Operating revenue 16,602 16, % 4,295 4, % Operating expenses 14,591 14, % 3,785 3, % Operating income 2,011 1, % (42) -7.6% Operating margin 12.1% 10.7% 1.4%p 11.9% 13.4% -1.5%p Net profit or loss from non-operating items Income from continuing operations before income tax (184) (211) % (125) (122) (3) -2.9% 1,827 1, % (45) -10.5% Consolidated net income 1,610 1, % (209) -41.5% Net margin 9.7% 6.9% 2.8%p 6.8% 12.2% -5.3%p EBITDA 1) 4,831 4, % 1,238 1,258 (20) -1.6% QoQ SK Telecom ( SKT or the Company ) operating revenues recorded a 2.9% YoY increase led by the growth of LTE subscribers and new businesses including B2B solutions Operating income increased 16.2% YoY as heightened focus on service-oriented marketing led to reduced subsidy costs Consolidated net income increased 44.3% YoY due to increased equity gains from SK Hynix EBITDA margin 29.1% 26.6% 2.5%p 28.8% 30.5% -1.7%p 1) EBITDA = Operating income + Depreciation (including R&D related depreciation) 3

5 Financial Results Operating Expenses (Consolidated) (KRW bn) YoY 4Q13 3Q13 QoQ Labor cost 1,561 1, % % Commissions paid 5,499 5,950 (451) -7.6% 1,366 1, % Advertising % % Depreciation 1) 2,820 2, % % Network interconnection 1,044 1,057 (13) -1.3% % Leased line (22) -8.4% (7) -10.7% Frequency usage fees % (2) -4.1% Cost of goods sold 1,300 1, % % Others 1,524 1, % % Operating expenses 14,591 14, % 3,785 3, % 1) Includes R&D related depreciation Labor costs increased 23.1% YoY as a result of the SK M&C s merger with SK Planet and increased number of employees Commissions paid decreased 7.6% YoY as reduced market mobility and expenses decreased related costs Depreciation increased 9.8% YoY due to increases in depreciable LTE network assets and a acquisition of new spectrum Cost of goods sold increased 20.7% QoQ in line with the growth of B2B solutions, SK Planet and PS&M 4

6 Financial Results SK Telecom s Operating Revenues (Non-consolidated) (KRW bn) YoY 4Q13 3Q13 QoQ Total operating revenues increased 4.3% YoY led by LTE Total operating revenue 12,860 12, % 3,316 3, % Mobile service revenue 11,110 10, % 2,828 2, % Interconnection revenue (38) -4.0% % New business & others 1) % % 1) Includes sales from leased line, fixed-line resale, solution and other businesses subscriber growth and increased new business-related sales - Interconnection decreased 4% YoY resulting from decreased traffic from inbound fixed-line calls. Interconnection rose 4.1% QoQ as the introduction of [ SK Telecom Operating Revenues ] (KRW bn) unlimited voice price plans increased mobile traffic - Strong sales of B2B businesses continue to drive contribution ratio of new business & others 3,000 3, ,069 3,097 3,159 3, ,209 3, , [ New Business & Others, % of Total Revenue ] 2,500 2,621 2,666 2,689 2,782 2,727 2,787 2,768 2,828 Year % of Rev Quarter % of Rev 13.1Q 5.6% 2,000 '12.1Q '12.2Q '12.3Q '12.4Q '13.1Q '13.2Q '13.3Q '13.4Q % % 13.2Q 6.4% 13.3Q 6.9% New Business & Others Interconnection Mobile Service Revenue % 13.4Q 7.5% 5

7 Operating Results (Non-consolidated) ARPU ARPU 1) (KRW) YoY 4Q13 3Q13 QoQ Total ARPU 42,377 40,128 2, % 44,448 42,780 1, % Billing ARPU 2) 34,551 33,016 1, % 35,650 34, % 1) Includes SK Planet's earnings / based on SKT subscribers only 2) The billing ARPU excludes sign-up fee from mobile service revenues Annual billing ARPU increased 4.6% YoY led by the growth of LTE subscribers. Quarterly billing ARPU grew 2.1% QoQ and 5.6% YoY 38.0 Billing ARPU YoY 5.6% (KRW 000) 30.0 '12.1Q '12.2Q '12.3Q '12.4Q '13.1Q '13.2Q '13.3Q '13.4Q 6

8 Operating Results (Non-consolidated) Subscriber Numbers YoY 4Q13 3Q13 QoQ Subscribers ('000) 27,352 26, % 27,352 27, % Net adds (18) -4.3% % Activations 7,755 8,644 (889) -10.3% 1,885 1,903 (18) -1.0% Deactivations 7,364 8,235 (871) -10.6% 1,743 1,832 (89) -4.9% Monthly churn rate (%) 2.3% 2.6% -0.3%p 2.1% 2.2% -0.1%p Average subscribers ('000) 27,121 26, % 27,266 27, % Smartphone Subscribers ('000) 18,286 15,979 2, % 18,286 17, % LTE Subscribers ('000) 13,487 7,530 5, % 13,487 12,273 1, % The churn rate fell further to 2.1% in 4Q13, lowering the annual average to 2.3% The number of LTE subscribers reached 13.5m in 4Q13 and continues to show steady growth. Over 49% of SKT s subscribers are currently on the LTE service Subscriber by Network (m) LTE WCDMA 9.9 CDMA Year [ Monthly Chrun Rate Trend ] Churn Rate Smartphone Subscribers (m) % 66.9% % 1.9% 15.2% '09 '10 '11 '12 ' % 150.0% Subscribers 100.0% % of Total 50.0% Subscriberbase 0.0% Quarter Churn Rate 13.1Q Q Q Q

9 Operating Results (Non-consolidated) Marketing Expenses & Capex (KRW bn) YoY 4Q13 3Q13 QoQ Marketing expenses 1) 3,428 3,474 (46) -1.3% % % of revenues 26.7% 28.2% -1.5%p 25.4% 25.7% -0.3%p Capital expenditure 2,316 2,858 (542) -19.0% 1, % % of revenues 18.0% 23.2% -5.2%p 37.8% 13.0% 24.8%p 1) Marketing expenses = marketing related commission + advertising expense Annual marketing expenses decreased 1.3% YoY as the Company s focus on retention reduces market competition and costs Annual Capex decreased 19% YoY, and is expected to trend lower Marketing Expenses (KRW bn) 1,100 1, , % 31.3% 33.4% 23.9% 29.1% 26.6% 25.7% 25.4% '12.1Q '12.2Q '12.3Q '12.4Q '13.1Q '13.2Q '13.3Q '13.4Q 200.0% 150.0% 100.0% 50.0% 0.0% Marketing Expenses % of Revenue Capex , ,053 Non-Network Network (KRW bn) 8

10 Appendix Consolidated Income Statement (KRW bn) 1Q12 2Q12 3Q12 4Q12 FY12 1Q13 2Q13 3Q13 4Q13 FY13 Operating revenue 3, , , , , , , , , ,602.1 Operating expenses 3, , , , , , , , , ,590.9 Labor cost , ,561.4 Commissions paid 1, , , , , , , , , ,498.7 Advertising Depreciation 1) , ,819.8 Network interconnection , ,043.7 Leased line Frequency usage fees Cost of goods sold , ,300.4 Others , ,524.1 Operating income , ,011.1 EBITDA 1, , , , , , , , ,830.9 EBITDA margin 27.9% 25.5% 23.2% 29.8% 26.6% 26.7% 30.4% 30.5% 28.8% 29.1% Net profit or loss from non-operating items (105.4) (105.7) (106.2) (210.7) (121.7) (125.2) (184.0) Interest income Interest expenses Profit or loss in other non-operating items (40.0) (27.5) (24.8) (57.9) (62.1) 82.3 Income from continuing operations before tax Income(Loss) from discontinued , ,827.1 operations 2) (2.9) (117.6) 6.8 (1.8) (115.5) (0.5) Consolidated net income , ,609.5 Majority interests , ,639.0 Minority interests (6.0) (22.8) (3.2) (3.9) (36.0) (8.2) 1.1 (1.8) (20.5) (29.4) 1) Includes R&D related depreciation 2) Income(loss) from discontinued operations: Income or loss on discontinuation of satellite DMB business & Loen Entertainment 9

11 Appendix SK Telecom Non-consolidated Income Statement (KRW bn) 1Q12 2Q12 3Q12 4Q12 FY12 1Q13 2Q13 3Q13 4Q13 FY13 Operating revenue 3, , , , , , , , , ,860.4 Operating expenses 2, , , , , , , , , ,890.7 Labor cost Commissions paid 1, , , , , , , , , ,308.4 Marketing commissions , ,190.9 Other commissions , ,117.5 Advertising Depreciation 1) , ,115.5 Network interconnection Leased line Frequency usage fees Others , ,422.8 Operating income , ,969.7 EBITDA , , , , , ,085.2 EBITDA margin 30.3% 26.7% 23.1% 33.7% 28.5% 29.7% 33.2% 33.1% 31.1% 31.8% Net profit or loss from non-operating items (48.8) (97.6) (87.6) (128.7) (39.9) (135.3) (321.0) (252.7) (748.9) Interest income Interest expenses Net profit or loss from other non-operating items 1.2 (30.8) (16.7) (73.8) (262.9) (195.4) (507.7) Income from continuing operations before tax , ,220.8 Net income , ) Includes R&D related depreciation 10

12 Appendix Consolidated Balance Sheet (KRW bn) 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Total assets 26, , , , , , , ,608.1 Current assets 5, , , , , , , ,155.0 Cash and marketable securities 1) 2, , , , , , , ,765.1 Accounts receivable 2, , , , , , , ,932.5 Short-term loans Inventories Other current assets Non-current assets 20, , , , , , , ,453.1 Property & equipment 8, , , , , , , ,212.4 Intangible assets 4, , , , , , , ,484.0 Investment assets 6, , , , , , , ,302.0 Other non-current assets 1, , , Total liabilities 14, , , , , , , ,441.5 Current liabilities 6, , , , , , , ,103.8 Short-term borrowings 1, Accounts payable 1, , , , , , , ,222.4 Current portion of long-term debt , , ,268.4 Other current liabilities 3, , , , , , , ,352.9 Non-current liabilities 7, , , , , , , ,337.8 Bonds payable & long-term borrowings 6, , , , , , , ,010.4 Long-term payables - other Post-employment benefit obligation Other non-current liabilities Total shareholders' equity 12, , , , , , , ,166.6 Capital stock Capital surplus 2, , , , , , , ,323.4 Retained earnings 11, , , , , , , ,102.5 Capital adjustments (3,215.4) (3,215.4) (3,215.4) (3,213.6) (3,276.8) (3,101.5) (3,087.0) (3,005.8) Other comprehensive income/loss 2) (25.6) 2.2 (27.5) (18.2) (12.3) Minoriry interests 1, , , , ) Cash & marketable securities includes cash & cash equivalent, marketable securities & short-term financial instruments 2) Other comprehensive income/loss include gains or losses on valuation of investment securities and derivatives 11

13 Appendix SK Telecom Non-consolidated Balance Sheet (KRW bn) 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Total assets 23, , , , , , , ,827.4 Current assets 3, , , , , , , ,817.8 Cash and marketable securities 1) 1, Accounts receivable 1, , , , , , , ,901.6 Short-term loans Inventories Other current assets Non-current assets 19, , , , , , , ,009.6 Property & equipment 6, , , , , , , ,460.0 Intangible assets 3, , , , , , , ,545.4 Investment assets 9, , , , , , , ,747.4 Other non-current assets Total liabilities 11, , , , , , , ,512.0 Current liabilities 5, , , , , , , ,288.1 Short-term borrowings Accounts payable 1, , , , , , ,656.6 Current portion of long-term debt , , Other current liabilities 2, , , , , , , ,541.9 Non-current liabilities 6, , , , , , , ,223.9 Bonds payable & long-term borrowings 5, , , , , , , ,099.9 Long-term payables Post-employment benefit obligation Other non-current liabilities Total shareholders' equity 11, , , , , , , ,315.4 Capital stock Capital surplus 2, , , , , , , ,319.4 Retained earnings 11, , , , , , , ,665.7 Capital adjustments (3,156.9) (3,157.1) (3,157.1) (3,157.1) (3,157.1) (2,981.0) (2,966.5) (2,885.5) Other comprehensive income/loss 2) ) Cash & marketable securities includes cash & cash equivalent, marketable securities and short-term financial instruments 2) Other comprehensive income/loss includes gains or losses on valuation of investment securities and derivatives 12

14 IR Contacts Dong Seop Kim ( , Seung Oh Yoon ( , Jae Bum Park ( , Won Tuh Chung ( , Woo Sun Cho ( , Jung Hyun Kim ( , 13