1Q2016 RESULTS ANALYST BRIEFING. 25 May 2016

Transcription

1 1Q2016 RESULTS ANALYST BRIEFING 25 May 2016

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 Performance Overview Financial Review Operating Highlights Concluding Remarks 3

4 1Q2016 Highlights (1Q2016 vs. 1Q2015) Financial Performance Revenue RM2.86bn (+2.9%) Reported EBIT RM279.9mn (+15.0%) Normalised EBIT RM312.0mn (+26.9%) Reported PATAMI RM322.4mn (+>100.0%) Normalised PATAMI RM195.4mn (+9.6%) Operational Performance Positive growth in Internet & Others revenue- Higher subscriber base, customer projects and ICT-BPO revenue Total broadband take-up continues to grow - now at 2.36mn customers: Streamyx : 1.487mn customers Unifi : 877,000 customers Note: Unless stated otherwise all figures shall be inclusive of Webe 4 4

5 Performance Overview Financial Review Operating Highlights Concluding Remarks 5

6 Group Results 1Q2016 Higher profitability YoY due to higher revenue and cost efficiencies RM mn Reported 1Q16 4Q15 % Change QoQ 1Q15 % Change YoY Revenue 2, , % 2, % Other Operating Income % % EBITDA % % Depn & Amort % % EBIT % % Other Gains / (Loss) 50.5 (24.7) +>100.0% (0.6) +>100.0% Net Finance Cost* % % FX Gain /(Loss) >100.0% (41.2) +>100.0% Profit Before Tax (PBT) % >100.0% PATAMI % >100.0% Normalised PATAMI % % Note: Unless stated otherwise all figures shall be inclusive of Webe For Normalised EBIT and Normalised PBT refer Slides 7 and 8 *Excludes FX (Gain)/Loss 6

7 Normalised EBIT Normalised EBIT higher by 26.9% YoY RM mn 1Q16 4Q15 1Q15 Reported EBIT Non Operational Unrealised FX (Gain)/Loss on International trade settlement Loss on Sale of Assets MESRA Programme Normalised EBIT Normalised EBIT Margin 10.8% 10.9% 8.8% Reported EBIT Margin 9.7% 8.1% 8.7% 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: MESRA Programme: a voluntary separation programme for employees aged 55 Unless stated otherwise all figures stated shall be inclusive of Webe 7

8 Normalised PBT Normalised PBT higher by 24.9% YoY RM mn 1Q16 4Q15 1Q15 Reported PBT Non Operational Unrealised FX (Gain)/Loss on International trade settlement Other (Gain)/Losses* (50.3) Unrealised FX (Gain)/Loss on Long Term loans (104.5) (24.5) 41.2 MESRA Programme Normalised PBT * Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment gain/loss on disposal for AFS (available for sale) investments and gain/loss on Sale of Assets Note: MESRA Programme: a voluntary separation programme for employees aged 55 Unless stated otherwise all figures stated shall be inclusive of Webe 8

9 Cost % of Revenue 1 YoY: lower cost % across several categories RM mn RM2,563.1 RM2,957.9 RM2, % 91.9% 90.3% 2.0% 0.0% 4.1% 1.0% 3.2% 3.3% 6.0% 9.4% 6.0% 7.2% 6.6% 5.9% 10.9% 11.6% 22.6% 21.8% 17.9% 19.1% 11.7% 21.4% 18.8% Bad debt Marketing expenses Supplies & material Maintenance cost Other operating cost Manpower cost Direct cost Dep & amortisation 21.5% 19.3% 22.2% 1Q15 4Q15 1Q16 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 9

10 Group Capital Expenditure Higher Capex in line with expansion of HSBB and SUBB footprint RM mn 9.3% 11.1% Capex/Revenue ratio at 11.1% 50% Access 19% Core Network 31% Support Systems 1Q15 1Q16 Access Core Network Support System Capex / Revenue ( %) Note : Unless stated otherwise all figures shall be inclusive of Webe 10

11 Group Cash Flow Stable Cashflows with Debt Headroom RM mn 1Q16 1Q15 Cash & cash equivalent at start 3, ,975.0 Cashflows from operating activities Cashflows used-in investing activities (769.9) (502.8) Capex Cashflows from financing activities (77.8) Effect of exchange rate changes (0.3) 0.1 Cash & cash equivalent at end 3, ,886.8 Free cash-flow (EBITDA Capex) Key Financial Ratios 31 Mar Dec 15 Return on Invested Capital % 6.69% Return on Equity % 11.66% Return on Assets % 5.90% Current Ratio WACC 6.88% 7.36% 31 Mar Dec 15 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 11

12 Performance Overview Financial Review Operating Highlights Concluding Remarks 12 12

13 Group Total Revenue by Product Voice -0.6% RM mn -3.5% YoY 30% of total Group revenue Lower by 0.6% YoY, mainly due to lower voice revenue at Mass Market and Managed Accounts which offset higher revenue at Global & Wholesale Q15 4Q15 1Q16 RM mn Internet +7.7% +3.7% YoY 31% of Group Revenue Higher by 7.7% YoY mainly from increase in UniFi revenue and higher cumulative UniFi customer base and higher revenue from IPTV Content 1Q15 4Q15 1Q16 Note : Unless stated otherwise all figures shall be inclusive of Webe *Total revenue is after inter-co elimination. 13

14 Group Total Revenue by Product Data +1.4% YoY RM mn -14.2% 22% of Group Revenue Higher by 1.4% YoY, mainly contributed by GITN and Global & Wholesale 1Q15 4Q15 1Q16 Others* RM mn +2.8% YoY -32.1% 17% of Group Revenue % higher, mainly due to higher USP amortisation revenue Increased revenue at Managed Accounts by VADS and Government 1Q15 4Q15 1Q16 *Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects) Note : Unless stated otherwise all figures shall be inclusive of Webe 14

15 Group Total Revenue by Line of Business Mass Market Managed Accounts RM mn +3.5% RM mn +0.9% -1.4% -12.3% 1,225 1,208 1,182 1,167 1,027 1,037 1Q15 4Q15 1Q16 1Q15 4Q15 1Q16 YoY Higher revenue growth led by increase in UniFi revenue at TM Consumer YoY Positive revenue growth driven by major LOBs, mainly at VADS, in particular ICT-BPO products Note: Unless stated otherwise all figures shall be inclusive of Webe 15

16 Group Total Revenue by Line of Business Global & Wholesale Others* RM mn +9.3% RM mn -3.0% -23.4% -16.1% Q15 4Q15 1Q16 YoY Higher YoY revenue by 9.3%, mainly contributed by higher bilateral revenue *Others include revenue from Property Development, TM R&D, TMIM, UTSB, MKL & Webe YoY 1Q15 4Q15 1Q16 Lower YoY by 3.0%, mainly due to lower revenue at Webe Note: Unless stated otherwise all figures shall be inclusive of Webe 16

17 Physical Highlights Strong growth of Unifi customers YoY. ARPU levels are steady Broadband Customers (In thousand) ARPU (RM) % 2,266 2,288 2, , % 89 2,364 UniFi continues to drive growth, with 877,000 customers (38,000 net adds QoQ) Total broadband customers at 2.36mn Unifi ARPU at RM192 and Streamyx ARPU stable at RM89 UniFi ARPU (Blended) Streamyx Net ARPU 17

18 Performance Overview Financial Review Operating Highlights Concluding Remarks 18 18

19 Key Takeaways Operating revenue grew by 2.9% YoY, driven by Internet & Others Reported EBIT higher by 15% YoY to RM279.9mn Normalised EBIT higher by 26.9% YoY at RM312mn Reported PATAMI higher by >100.0% YoY at RM322.4mn Normalised PATAMI higher by 9.6% YoY at RM195.4mn Capex/revenue ratio at 11.1% Leadership in broadband: Total broadband customers 2.36mn to date 59% customers on packages 4mbps and above Stable ARPU Note : Unless stated otherwise all figures shall be inclusive of Webe 19

20 Appendices 20

21 Normalised EBITDA Normalised EBITDA higher by 12.4% YoY RM mn 1Q16 4Q15 1Q15 Reported EBITDA Non Operational Unrealised FX (Gain)/Loss on International trade Settlement Loss on Sale of Assets MESRA Programme Normalised EBITDA Normalised EBITDA Margin 33.0% 30.2% 30.3% Reported EBITDA Margin 31.9% 27.3% 30.2% 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: MESRA Programme: a voluntary separation programme for employees aged 55 Unless stated otherwise all figures stated shall be inclusive of Webe 21

22 Normalised PATAMI Normalised PATAMI higher by 9.6% YoY RM mn 1Q16 4Q15 1Q15 Reported PATAMI Non Operational Unrealised FX (Gain)/Loss on International trade settlement Other (Gain)/Losses* (50.3) Unrealised FX (Gain)/Loss on Long Term loans (104.5) (24.5) 41.2 MESRA Programme (Net of tax) Normalised PATAMI * Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment gain/loss on disposal for AFS (available for sale) investments and gain/loss Sale of Assets Note: MESRA Programme: a voluntary separation programme for employees aged 55 Unless stated otherwise all figures stated shall be inclusive of Webe 22

23 Cost % of Revenue 1Q16 4Q15 1Q15 Comments (1Q2016 vs. 1Q2015) Operating Revenue (RM mil) 2, , , Other Operating Income (RM mil) Direct Costs % RM mil Higher International Outpayment at TM Global Manpower % Lower due to reduction in certain allowances and employee RM mil leasing cost Supplies & Materials % RM mil Bad & Doubtful Debts % RM mil Marketing Expenses % RM mil Maintenance Cost % RM mil Other Operating Costs % RM mil Increase mainly in COS Material at Managed Accounts Lower rate of expected losses from Mass Market due to better credit management Higher A&P at Mass Market for webe activities Reduction of OPEX maintenance in TM Government Increase in forex loss for trading settlement and deposits Depreciation & Amortisation % Higher assets write-off and accelerated depreciation in RM mil Webe, higher amortisation of content cost Total (RM mil) 2, , ,563.1 Total (%) Note : Unless stated otherwise all figures shall be inclusive of Webe 23

24 Group Balance Sheet RM million As at As at 31 Mar Dec 2015 Shareholders Funds 7, ,780.6 Non-Controlling Interests Deferred & Long Term Liabilities 10, ,551.8 Long Term Borrowings 7, ,175.4 Deferred Tax 1, ,367.6 Deferred Income 1, ,661.7 Derivative financial instruments Trade and other payables , ,590.5 Current Assets 6, ,297.5 Trade Receivables 2, ,353.1 Other Receivables Cash & Bank Balances 3, ,511.6 Others Current Liabilities 5, ,822.6 Trade and Other Payables 3, ,367.0 Short Term Borrowings Others 1, ,047.3 Net Current Assets/(Liabilities) 1, ,474.9 Property Plant & Equipment 14, ,186.9 Other Non-Current Assets 1, , , ,590.5 Note : Unless stated otherwise all figures shall be inclusive of Webe 24

25 Mass Market & Managed Accounts RM mn Revenue by Product +2.3% -6.8% 2,194 2,407 2, Others Internet Data Voice Q15 4Q15 Note: Total revenue is after inter-co elimination. Revenue by product is before inter-co elimination Global & Wholesale 1Q16 *Others comprise other telco and non-telco services (i.e: ICT-BPO, MMU tuition fees, customer projects) RM mn Revenue by Product +9.3% -23.4% Others Data Voice Q15 4Q15 1Q15 Note : Unless stated otherwise all figures shall be inclusive of Webe 25

26 THANK YOU Investor Relations Level 11 (South Wing), Menara TM Jalan Pantai Baharu Kuala Lumpur Malaysia Tel: (603) / 7366 / 7388 investor@tm.com.my