TELEKOM MALAYSIA BERHAD

Transcription

1 TELEKOM MALAYSIA BERHAD CONNECT COMMUNICATE COLLABORATE 21 st CLSA INVESTORS FORUM HONG KONG September 2014

2 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 the Company.

3 3 1 Country & Industry Overview About TM TM 1H2014 Results Performance High Speed Broadband Update Business Priorities Key Updates

4 Country & Industry Overview as at 1Q2014 Total Households in Malaysia = 6.96mn Population: 30mn <20 years old = 35% years old = 35% years old = 21% >60 years old = 9% Broadband penetration rate in Malaysia = 67.3% Cellular penetration rate in Malaysia = 143.7% TM s Market Share as at 2Q2014 Voice Revenue 22% Broadband Revenue 29% Data Revenue* 71% market share market share market share Market size: RM4.15bn Market size: RM2.53bn Market size: RM1.06bn * As at 2H2013 Fixed Line 98% physical market share Market size: 3.7mn Fixed Broadband 92% physical market share Market size: 2.4mn Source: MCMC, DOS, Company Financial Results; Group Regulatory & BMI Team Analysis Note: Industry figures are forecasted due to unavailability of Q MCMC statistics at the point of calculation. 4

5 Capital Structure TM Shareholders* Authorised Capital : RM3,528,003, Issued and Paid-up Capital: RM2,567,023, Free Float 28.1% Khazanah 28.9% Date of Incorporation: 12 October 1984 Date of Listing: 7 November 1990 Foreign 17.2% * as at 29 Aug 2014 Note : EPF : Employees Provident Fund Source : TM Website ( Amanah Raya 11.7% EPF 14.1% Snapshot of TM CREDIT RATING TOTAL RETURN TO SHAREHOLDERS SHARE PRICE PERFORMANCE Moody s A3 S&P A- Fitch A- RAM AAA FBMKLCI^ 82.91% TM^ % AXIATA* 49.53% MAXIS** 74.92% DIGI^ % TM Share Price 11 Sep 2014 : RM April 2008: RM3.05 YTD Growth TM Share price: +15.1% FBMKLCI: -0.1% Source: Bloomberg ^ For the period 22 April Sep 2014 * For the period 25 April Sep 2014 ** For the period 18 November Sep

6 6 About TM Malaysia s broadband champion and leading integrated information and communication company with over 60 years of experience Malaysia s leading ISP with >2.2 million broadband customers Malaysia s premier BPO provider Malaysia s largest fixed data provider with >50% market share Enhanced global capacity

7 7 Key 1H2014 Highlights Revenue +8.0% +8.0% +7.7% Normalised EBIT 5,038 5,442 2,614 2,620 2, % +1.5% 2Q13 1Q14 2Q14 1H13 1H % Normalised PATAMI -12.4% -16.5% % Q13 1Q14 2Q14 1H13 1H Q13 1Q14 2Q14 1H13 1H14 Reported PATAMI

8 1H2014 Highlights: Group Total Revenue by Product Strong growth in Internet and Others revenue -4.5% Voice Internet -2.5% +13.3% +14.0% 1H14 RM5,442mn +2.2% +0.1% Data +6.3% +5.0% +28.1% Others* +29.1% 1H13 RM5,038mn +6.4% +34.5% *Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects) 8

9 Retail 1H2014 Highlights: Group Total Revenue by Lines of Business Revenue growth across all lines of business Global & Wholesale Others* +9.2% +8.1% +6.6% +9.5% +9.0% -3.7% +7.7% +15.7% -5.1% 1,957 1,983 2,137 3,811 4,120 2Q13 1Q14 2Q14 1H13 1H14 1H14 RM5,442mn 1H13 RM5,038mn Others 9% Global & Wholesale 15% Others 9% Global & Wholesale 16% Retail 76% Retail 75% Retail (C+S+E+G): 76% Retail (C+S+E+G): 75% * Others comprise revenue from VADS, Property Development, TM R&D, TMIM, UTSB and MKL 9

10 10 1H2014 Highlights: CAPEX & OPEX Total Capex Cost % of Revenue ¹ RM4, % RM4, % H13 1H14 Access Core Network Support System* Note: * gross CAPEX Capex / Revenue (%) Business As Usual (BAU) Capex HSBB Capex % of Revenue Bad debt Marketing expenses Supplies & material Maintenance cost Other operating cost Manpower cost Direct cost Dep & Amortisation 29% 42% 29% 15% 56% % Access Core Network Support System* Access Core Network Support System* 1H13 1H14 Total Cost / Revenue ( %) 1 Revenue = Operating Revenue + Other Operating Income Note: The classification of cost is as per financial reporting

11 Physical Highlights as at 1H2014 Continued growth in broadband customers Broadband Customer Growth UniFi In thousand +4.6% In thousand +16.8% +1.0% +3.2% 2,109 2,153 2,184 2,215 2,230 2, Net adds (in thousand) Net adds (in thousand) Fixed Line Customer Growth In thousand -1.2% -0.4% ARPU 4,370 4,377 4,377 4,373 4,338 4,321 ARPU (RM) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Fixed Line (DEL)* Streamyx Broadband** UniFi*** *Call Usage Only ** Streamyx Net ARPU *** Blended ARPU 11

12 12 High Speed Broadband Update Delivered >1.54mn premises covering 105 exchanges Activated close to 700,000 customers ~44% takeup Gross capex spent todate: RM7.7bn > 1mn or 45% of customers on high speed broadband (4Mbps and above) 116 IPTV Channels Wide range of HyppTV packages for home, business, hospitality and multi-devices

13 Business Priorities 2014 : Game Changing Year MALAYSIA S BROADBAND CHAMPION Enabling a digital lifestyle Life Made Easier, Business Made Easier Innovative offerings across segments Enhanced customer service Expansion of broadband services in under-served areas INFORMATION & INNOVATION EXCHANGE Full suite of converged communications services Integrated ICT player Beyond Connectivity PERFORMANCE IMPROVEMENT PROGRAM 3.0 Continued growth Fundamental productivity shift Institutional health drivers 13

14 14 Key Updates: Malaysia s Next-Generation Converged Communications Services Partnership To Develop Malaysia s Next-Generation Converged Communications Services Investment Agreement signed on 27 March 2014 Partnership and collaboration between TM, Green Packet Berhad ( Green Packet ) and SK Telecom Co., Ltd. ( SK Telecom ) to develop and offer a full-suite of converged communications services using the LTE technology platform RM350mn capital injection in Packet One Networks (Malaysia) Sdn Bhd ( P1 ) for an estimated 55% stake In line with a strategy to deliver high quality and reliable data services and expand wireless broadband capabilities Completion expected before end of 3Q2014

15 15 and Accelerate Our Vision to Become Malaysia s Information & Innovation Exchange Develop converged services capabilities Strengthen core fixed business Leverage on market opportunities Combined base: ~2,000 sites Valuable spectrum assets Extensive Fibre network Extensive customer base #1 Fixed Line WiFi # 1 Fixed Broadband Enhance value of assets Realise significant synergies Establish avenues for future growth Mobile Data IPTV

16 16 Key Updates: Towards Information and Innovation Exchange New Products and Services OTT Application Wireless service via 4G Attractive IPTV Channels and Packages

17 THANK YOU

18 Appendix 18

19 19 Headline KPI Revenue Growth % 6% EBIT Growth 5% 8% Customer Satisfaction Measure Using TRiM index measuring end to end customer experience at all touch points. TRiM (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.

20 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/

21 Return to Shareholders 21

22 1H2014 Highlights: Group Balance Sheet & Key Financial Ratios RM Million Shareholders Funds Non-Controlling Interests Deferred & Long Term Liabilities Long Term Borrowings Deferred Tax Deferred Income Derivative financial liabilities Other payables As at 30 June , , , , , ,455.0 As at 31 Dec , , , , , ,376.0 USD denominated JPY denominated Current Assets Trade Receivables Other Receivables Cash & Bank Balances Others Current Liabilities Trade and Other Payables Short Term Borrowings Others Net Current Assets/(Liabilities)* Property Plant & Equipment Other Non-Current Assets 6, , , , , , , , , ,455.0 *Due to reclassification of long term debt due within the next 12 months to current liability (RM1.5bn) 5, , , , , , ,007.5 (48.3) 14, , June June Dec Dec June June Dec Dec Return on Invested Capital % 7.68% Gross Debt to EBITDA Return on Equity % 14.80% Net Debt/EBITDA Return on Assets % 6.27% Gross Debt/ Equity Current Ratio Net Debt/ Equity WACC 7.03% 6.67% Net Assets/Share (sen) Based on Normalised EBIT 2 Based on Normalised PATAMI 22

23 Group Results 3-Year Performance Revenue EBIT 9,151 9,994 10, ,187 1,150 1,372 1, EBITDA EBIT Normalised EBIT PATAMI 33.3% 33.5% 31.8% 31.6% 32.9% 32.7% 3,532 3,519 1,191 1, ,012 1,039 3,084 3,106 3,233 3, EBITDA Margin EBITDA Normalised EBITDA Normalised EBITDA Margin PATAMI Normalised PATAMI 23

24 Total Revenue by Product Non-voice Revenue now >65% of Group Revenue Others* 15% Others* 17% Internet 22% Voice 41% Internet 24% Voice 37% Data 22% Data 22% Internet Data Voice +18.5% +12.8% +9.5% +13.9% -0.7% -2.4% 2,001 2,372 2,676 2,013 2,205 2,512 3,734 3,706 3, * Others comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages 24

25 CAPEX & OPEX Business As Usual (BAU) Capex , Access Core Network Support System* BAU Capex / Revenue HSBB Capex** Access Core Network Support System* HSBB Capex / Revenue Note: **gross CAPEX *Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets) ,424 1,654 1,166 RM8, % Cost % of Revenue ¹ RM8, % Total Cost / Revenue ( %) RM9, % 1 Revenue = Operating Revenue + Other Operating Income Note: The classification of cost is as per financial reporting % of Revenue Bad Debt Marketing Expenses Supplies & Material Maintenance Cost Other Operating Cost Manpower Cost Direct Cost Dep & Amortisation 25

26 Broadband and Fixed Line customers Strong broadband growth led by Unifi Total Broadband Customers UniFi Customers In thousand +7.4% +7.2% In thousand % +31.6% 2,066 2,215 1, ,686 1,583 1, Streamyx UniFi UniFi Residential UniFi Business In thousand Fixed Line Customers +0.2% +0.3% 4,349 4,359 4, ,112 3,876 3, DEL UniFi 26

27 HSBB, SUBB and USP deployment areas KANGAR ALOR STAR GEORGETOWN Northern Corridor Economic Region IPOH 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 High economic impact areas Industrial parks/ftzs covered Iskandar Malaysia Zone 2 BBGP/SUBB Urban/Semi-urban and rural Zone 3 USP Areas are indicative and not to scale Less populated areas 27

28 Any queries please to : Rohaila Mohamed Basir Investor Relations Telekom Malaysia Berhad investor@tm.com.my Investor Relations Level 11 (South Wing) Menara TM Jln Pantai Baharu Kuala Lumpur, Malaysia Tel (603) / 7366 / 7388