TELEKOM MALAYSIA BERHAD RHB INVESTMENT BANK REGIONAL CORPORATE DAY KUALA LUMPUR 19 JANUARY 2017

Transcription

1 TELEKOM MALAYSIA BERHAD RHB INVESTMENT BANK REGIONAL CORPORATE DAY KUALA LUMPUR 19 JANUARY 2017

2 TM Today Latest Updates About TM

3 at the leading edge of telecommunications in Malaysia DIGITAL TECHNOLOGY FULL-IP TRANSFORMATION ANALOG ERA 3

4 TM TODAY* MALAYSIA S CONVERGENCE CHAMPION No.1 Broadband provider in Malaysia 2.37mn broadband customers More than 2.16mn HSBB fiber ports RM8.82bn revenue as at YTD Sept 16, with 3.4% growth 356% Total Shareholder Return since demerger Commercial launch of webe mobile service in Sept 2016 As at 30 September 2016 TSR as at 13 January

5 Latest Updates TM 30 th AGM 30 April 2015

6 Realigning our strategy: A refreshed Vision Statement aligned toward Delivering Convergence and Life/Business Made Easier Our Vision Our Brand Values Refocused PIP3.0 Our Guiding Values & Principles 6

7 Our digital transformation supported by Convergence 7

8 UNDERLYING PRINCIPLES STRATEGIC THRUSTS Business Priorities in Delivering Convergence and Going Digital IMMEDIATE KEY FOCUS AREAS To make life and business easier, for a better Malaysia, enabled by digital DELIVER GO DIGITAL 1 Customer 2 Process 3 experience optimisation Generate easy and simpler ways for customers to engage with TM Simplify and streamline internal processes through digitalization New opportunities Create completely new adjacencies/ businesses enabled by digital REPRIORITISING PRODUCTIVITY EMBEDDING INNOVATION Advanced analytics Evolving organisation Modernised culture Next-gen technology Digital Capability 8

9 Going Digital for Life/Business Made Easier 7 Guiding Principles and 4 Key Programmes to create value through digitalization (i) Customer Experience (ii) Process Optimisation (iii) Analytics and Omni-Channel (iv) New adjacent/digital opportunities Wave 1: Customer Journey Improvement on track 9

10 WE ARE STRATEGICALLY PLACED TO REALISE OUR CONVERGENCE AND GOING DIGITAL ASPIRATIONS AS WE MOVE BEYOND CONNECTIVITY DELIVER Smarter Living Smarter Businesses Smarter Cities & Smarter Communities GO DIGITAL Smarter Nation B2B B2B2C 10

11 webe: TM s Mobility Centre of Excellence webe s network made commercially available to the public from 30th September 2016 To date more than 1500 sites operational Drive momentum toward Convergence by expanding product portfolios and digital services 11

12 Broadband Improvement Plan 2017 Implementation of speed upgrade and introduction of new packages for non-unifi customers in phases over

13 HSBB and SUBB Project HSBB 2 Target: 390,000 ports by end-2017 More than 200,000 ports covering 85 exchange areas delivered to date PENANG Northern Corridor Economic Region KANGAR ALOR STAR SUBB IPOH Target: 420,000 ports by end-2019 More than 170,000 ports covering 129 exchange areas delivered to date Zone 3 KOTA BHARU KUALA TERENGGANU KUANTAN KOTA KINABALU SHAH ALAM KUALA LUMPUR Klang Valley SEREMBAN MELAKA JOHOR BAHRU KUCHING Zone 3 LEGEND Zone 1 HSBB & HSBB2 High economic impact areas Industrial parks/ftzs State capitals/major towns Zone 2 SUBB Urban/Semi-urban and rural Iskandar Malaysia Zone 3 USP Less populated areas Areas are indicative and not to scale 13

14 About TM and Performance Highlights TM 31 st AGM 28 April 2016

15 Credit Rating Capital Structure Authorised Capital: RM3,528,003, Issued and Paid-up Capital: RM2,630,554, Date of Incorporation: 12 October 1984 Date of Listing: 7 November 1990 Total Return To Shareholders FBMKLCI % % TM % About TM.. Moody s S&P RAM A3 A- AAA 26% 31% AXIATA % MAXIS 3 DIGI % 17% 13% 13% Source: Bloomberg 1 For the period 22 April January For the period 25 April January For the period 18 November January 2017 As at 13 January 2017 Foreign Shareholding as at 31 December 2016 EPF: Employees Provident Fund Board Amanah Raya Berhad for Skim Amanah Saham Bumiputra 15

16 Key YTD Sept 2016 Highlights Revenue 0.0% +3.4% -4.0% 2,923 3,045 2,923 8,537 8,824 Revenue 3 Q Q Q 1 6 Y T D 1 5 Y T D 1 6 EBIT -31.6% (Normalised -8.6%) +9.2% (Normalised +17.9%) -13.0% (Normalised -0.6%) Reported EBIT Normalised EBIT 3 Q Q Q 1 6 Y T D 1 5 Y T D 1 6 *Includes accelerated depreciation and write-off of WiMAX assets amounting to RM141mn PATAMI -4.2% (Normalised -10.0%) +22.4% (Normalised -10.0%) +14.6% (Normalised +23.9%) Reported PATAMI Normalised PATAMI Q Q Q 1 6 Y T D 1 5 Y T D 1 6 Note : Unless stated otherwise all figures shall be inclusive of Webe 16

17 Group Total Revenue by Product Voice -10.4% -2.6% , % 2,473 Data -3.9% -7.4% , % 2,013 Data 23% YTD Sept 15 Others* 17% Internet 29% Voice 31% 3Q15 2Q16 3Q16 YTD15 YTD16 3Q15 2Q16 3Q16 YTD15 YTD16 RM8,537mn Internet Others* YTD Sept % +8.5% +9.4% +9.8% +1.5% 2,506 2, % 1,476 1,620 Others* 18% Voice 28% Data 23% Internet 31% 3Q15 2Q16 3Q16 YTD15 YTD16 Note : Unless stated otherwise all figures shall be inclusive of Webe *Total revenue is after inter-co elimination. 3Q15 2Q16 3Q16 YTD15 YTD16 *Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects) RM8,824mn 17

18 Group Total Revenue by Customer Clusters Mass Market Managed Accounts +4.2% +3.3% +1.1% +2.9% -0.6% -4.5% Others 4% YTD Sept 15 Global & Wholesale 15% Managed Accounts 37% Mass Market 43% Q 15 2Q 16 3Q 16 YTD 15 YTD RM8,537mn Global & Wholesale Others* YTD Sept % +3.5% +9.1% +7.4% Others* 4% -12.1% -2.4% Global & Wholesale 15% Managed Accounts 37% Mass Market 43% 3Q 15 2Q 16 3Q 16 YTD Sep 15 YTD Sep 16 Note: Unless stated otherwise all figures shall be inclusive of Webe 3Q 15 2Q 16 3Q 16 YTD Sep 15 YTD Sep 16 *Others include revenue from Property Development, TM R&D, TMIM, UTSB, MKL & Webe RM8,824mn 18

19 Customers (In thousand) ARPU (RM) Physical Highlights Higher take up on new plans drive stronger UniFi ARPU Broadband % +0.2% 2,266 2,288 2,294 2,340 2,364 2,365 2, UniFi continues to drive growth, with over 921,000 customers Total broadband customers at 2.37mn Unifi and Streamyx ARPU higher RM197 and RM90 1,509 1,506 1,501 1,501 1,487 1,465 1,448 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Streamyx Unifi UniFi ARPU (Blended) Streamyx Net ARPU 19

20 YTD Sept 2016: CAPEX & OPEX RM2,616.9 Cost % of Revenue 1 RM2,795.9 RM2,644.1 RM7,630.3 RM8,056.9 Group Capital Expenditure 90.3% 90.9% 89.6% 88.4% 90.3% 11.1% 20.4% 24.5% 13.5% 18.7% ,153 1, (0.7) 1Q16 2Q16 3Q16 YTD15 YTD16 Dep & Amortisation Direct Costs Manpower Other Operating Costs Maintenance Cost Supplies & Materials Marketing Expenses Bad & Doubtful Debts Total Cost / Revenue (%) 1 Revenue = Operating Revenue + Other Operating Income Q16 2Q16 3Q16 YTD15 YTD16 Core Network Access Support System Capex / Revenue (%) Note : Unless stated otherwise all figures shall be inclusive of Webe 20

21 Group Cash Flow YTD Sept 16 YTD Sept 15 Cash & cash equivalent at start 3, ,975.0 Cashflows from operating activities 1, ,577.7 Cashflows used-in investing activities (2,251.8) (1,631.6) Capex 1, ,153.4 Cashflows from financing activities (126.5) (11.8) Effect of exchange rate changes (0.4) 1.8 Cash & cash equivalent at end 2, ,911.1 Free cash-flow (EBITDA Capex) 1, ,661.3 Note : Unless stated otherwise all figures shall be inclusive of Webe 21

22 Group Balance Sheet RM million As at As at 30 Sept Dec 2015 Shareholders Funds 7, ,780.6 Non-Controlling Interests Deferred & Long Term Liabilities 11, ,551.8 Long Term Borrowings 7, ,175.4 Derivative financial instruments Deferred tax liabilities 1, ,367.6 Deferred income 1, ,661.7 Trade and other payables , ,590.5 Current Assets 6, ,297.5 Trade Receivables 2, ,353.1 Other Receivables Cash & Bank Balances 2, ,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 15, ,186.9 Other Non-Current Assets 1, , , ,590.5 Note : Unless stated otherwise all figures shall be inclusive of Webe 22

23 Headline KPI Revenue Growth Revenue Growth 3-3.5% 3-3.5% 3.5-4% EBIT Growth Maintain as per 2015 RM level 3-5% Customer Satisfaction Measure *Note: Headline KPI are for TM Group excluding Webe 1 Using TRI*M index measuring end to end customer experience at all touch points. TRI*M (Measuring, Managing and Monitoring) is a standardized indicator system. It analyzes, measures and portrays stakeholder relationships on the basis of standardized indicators. The TRI*M Index is an indicator of the status quo of a particular relationship. The index is made up of four points of view on the stakeholder relationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and a company's competitive advantage. The information is based on surveys/interviews on a sample customer base. 23

24 Appendix 24

25 Group Results: 3-Year Performance Revenue EBIT +5.7% +4.3% -5.7% (Normalised +2.0%) -2.9% (Normalised -10.6%) 10,629 11,235 11,722 FY2013 FY2014 FY2015 Revenue *Excluding webe: RM11.52bn (+3.0%) *Excluding webe: Reported EBIT: RM1.53bn (+13.7%) Norm. EBIT: RM1.52bn (+6.2%) EBITDA PATAMI +2.9% (Normalised +5.9%) +1.6% (Normalised -1.3%) -17.8% (Normalised -9.4%) -15.8% (Normalised -4.9%) Note: Unless stated otherwise, all figures shall be inclusive of Webe 25

26 3-Year Performance: Revenue by product Internet Data Voice Others* +11.9% +12.4% +3.7% +2.5% -4.1% +1.1% +18.8% +0.6% * Others comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages Change in revenue mix: non-voice revenue now 70% FY2013 FY2014 FY % 34% 19% 31% 22% 28% 25% 24% 27% 23% 27% 23% RM10,629mn RM11,235mn RM11,722mn Internet Note: Unless stated otherwise, all figures shall be inclusive of Webe Voice Data Others 26

27 3-Year Performance: Capex & Opex: 3-Year Capex Performance & Opex 1, % Total Capex 1, % 2, % 9, % Cost % of Revenue 1 10, , % 89.4% Total Cost / Revenue (%) 1 Revenue = Operating Revenue + Other Operating Income Capex / Revenue (%) Note: The classification of cost is as per financial reporting *Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets) 27

28 3-Year Performance: Physical Highlights In thousand +0.7% Broadband +4.9% More customers upgrading to high speed packages 2,215 2,231 2,340 FY2013 3Q % 41% 38% 62% Below 4Mbps 4Mbps and above 1,580 1,502 1,501 Evolving UniFi customer mix: more on 10Mbps or higher FY2013 3Q2016 FY2013 FY2014 FY % 12% 25% 75% Streamyx UniFi Below 10Mbps 10Mbps and above 28

29 webe mobile and webe broadband plans 29

30 Reiteration of Dividend Policy Telekom Malaysia Berhad ("the Company" or "TM") issues a statement to reiterate its stand on the Company's dividend policy. The Company s dividend policy as announced at the time of the demerger between TM and TM International Berhad (TMI) remains valid. The policy states as follows: In determining the dividend payout ratio in respect of any financial year after the Proposed Demerger, our Company intends to adopt a progressive dividend policy which enables us to provide stable and sustainable dividends to our shareholders while maintaining an efficient capital structure and ensuring sufficiency of funding for future growth. Upon completion of the Proposed Demerger, our Company intends to distribute yearly dividends of RM700 million or up to 90% of our normalised PATAMI, whichever is higher. Dividends will be paid only if approved by our Board out of funds available for such distribution. The actual amount and timing of dividend payments will depend upon our level of cash and retained earnings, results of operations, business prospects, monetization of non-core assets, projected levels of capital expenditure and other investment plans, current and expected obligations and such other matters as our Board may deem relevant. This policy remains unchanged for 2009 and beyond. The Company is currently able to meet this dividend policy, because: The Company has sufficient consolidated cash and bank balances of RM1.144 billion as at 30 September 2008, and it is confident that TMI is able to meet its obligation due to TM of RM4.025 billion by April In the event of a downturn in performance due to unforeseen circumstances, the Company wishes to state that its recurring cash generation ability is sufficient to meet its current dividend policy. TM s retained earnings is also sufficient to support this current dividend policy in the event of unforeseen shortfalls in normalised PATAMI. Given the unprecedented volatility in global markets, the Company will continue to examine the likely impact on its business, cashflow generation, capital structure and methods in which excess cash beyond the dividend policy and prudent level of cash required for operations, can be efficiently distributed to our shareholders. Moving forward, TM is focused on building a strong foundation for its future growth and operational excellence. TELEKOM MALAYSIA BERHAD (Bursa Malaysia Announcement Reference No TM ) Date Announced :13/11/

31 Shareholder Returns ( ) Payout Ratio 3 (%) Dividend Payout Policy of RM700mn or up to 90.0% of Normalised PATAMI whichever is higher Net Dividend Yield 2 (%) RM mn st Interim Dividend of 9.3 sen per share and 2 nd Interim Dividend of 12.1 sen per share 2 Net Dividend Yield based on closing share price at year end 3 Excludes Capital Distributions/Repayment 31

32 TM Group Debt Profile TM Group Debt Maturity Profile as at 30 Sept 2016 JPY denominated RM denominated USD denominated CDN denominated Others 0.04% Currency Mix USD 16.11% Fixed vs Floating Floating 6.22% Note: Sakura-JPY Loan: % 2 TMISIS Coupon: 4.87% 3 GTC Loan: 5.60%; 4 Sakura 2-USD Loan: 3mthL+0.91% ; IMTN 001 Coupon: 4.30%; GTC Loan: 5.30% 5 6 IMTN 2 Coupon: 4.50%; IMTN 4 & IMTN 6 Coupon: 4.20% IMTN 8 Coupon: 4.0%; IMTN 14 Coupon: 3.95%; IMTN 006 Coupon: 4.23% 7 IMTN 17 Coupon: 3.95%; IMTN 18 Coupon: 3.93%; Finance Lease Coupon: 6.23%; Tulip USD Sukuk 2.85% 8 IMTN 002 Coupon: 4.82%; IMTN 003 Coupon 4.738%; IMTN 004 & IMTN 005 Coupon: 4.55% Yankee Bond USD: 7.875%; IMTN % Tulip USD Sukuk: 3.7%; GTC Loan: 5.38% CIDA Loan : 0.00% Fibrecomm Loan Webe Deutsche Loan:2.95% Webe RC and Loans Finance Lease Coupon:6.0%; GTC: RC 5.30%, BO 5.15% & Loans MYR 83.85% Fixed 93.78% Key Financial Ratios 30 Sep Dec Sep Dec 15 Return on Invested Capital % 6.69% Return on Equity % 11.66% Return on Assets % 5.90% Current Ratio WACC 6.63% 7.36% 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 32

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