Shin Corporation Plc. Opportunity Day May 18, 2011 The Leader of Telecommunication and Media in Thailand Opportunity day May 18, 11
Vision We are the leading value creation asset management company in telecom and media
INTOUCH Group Wireless Communications Satellite & Inter. Business Media & Advertising Domestic Network Provider Advanced Info Service Largest mobile operator with over 32m subscribers Regional network provider Thaicom 1 Thaicom satellite with 25 C-band & 14 Ku band transponders IPSTAR broadband satellite in 13 countries DTV subs of 1.0m International Business LTC No.1 operator in Laos with 1.6m mobile subscribers Mfone No.3 operator in Cambodia with 0.7m mobile subscribers Advertising Agency Matchbox ITV CS Loxinfo Internet Service Provider Teleinfo Media Yellow Pages and Content Aggregator
4 INTOUCH Group Performance Assets Stake Performance (1Q11) 42.5% 41.1% Subsidiary of THCOM Subsidiary of THCOM Subsidiary of THCOM 1Q11 service revenue excl. IC surged 9.8% YoY to Bt23.8bn. Non-voice revenue still be a key driver, backed by a growing demand of mobile inter, social networking trend, and higher smart phone adoption. EBITDA was Bt14.3bn, increased of 11.2% YoY or EBITDA margin was at 46%, lower from 47.7% in 1Q10. Net income was Bt6.3bn, raised 26% YoY while normalized net profit was Bt6.7bn, an increased of 24% YoY. Revenue from sale of goods and rendering of services in 1Q11 was Bt1.57bn, down by 12% YoY. The revenue decreased from declining of telephone, satellite and media businesses. THCOM reported an EBITDA of Bt524m in 1Q11 compared with Bt536m, or slightly decreased by 2.2% YoY. THCOM reported net loss of Bt167m, slightly increased from net loss of Bt161m in 1Q10. Revenue from telephone business in 1Q11 was Bt321mn, decreased 29% YoY. It is mainly from a price war and the intense competition in the market, resulting in the number of Mfone s subscribers declined to 0.7m from 0.72m in 4Q10. LTC subscribers also dropped from 1.66m in 4Q10 to 1.63m in 1Q11. LTC declared it would pay a dividend for 2010 of USD15m. CSL reported a normalized profit in 1Q11 of Bt105m, an increase of 21% YoY and 17% QoQ. This is mainly due to the growth of internet services business and voice info & mobile content business. EBITDA increased 17% YoY and 8% QoQ owning to revenue growth as mentioned earlier. As at the end of 1Q11, accumulated DTV sales volume was 1.0m sets, up from 950,000 sets at the end of 2010 and 662,000 sets in 1Q10. Currently, there are 80 TV and radio channels broadcasted through DTV in Thailand.
Telecommunication Business
AIS 1Q11 Financial Highlights Financial Highlights (Bt million) Service revenue ex.ic* 1Q10 4Q10 1Q11 % yoy % qoq 21,671 23,044 23,788 9.8% 3.2% Non-voice 3,588 4,075 4,514 26% 11% EBITDA margin 47.7% 45.5% 46.0% 170bps 50bps Sales margin 16.3% 13.1% 13.2% 310bps 10bps Free cash flow 12,082 11,992 13,527 12% 13% Capex 805 1,730 809 0.5% 53% Solid revenues supported by positive economic sentiment rising demand for mobile internet well customer retention low voice cannibalization EBITDA margin declined diluted from expanding handset business and lower sales margin Excluding sales, service margin was stable yoy. Healthy FCF & accelerating capex capex is expected to accelerate to meet Bt10bn full-year guidance healthy FCF supported by strong operational revenue and well-controlled cost *restated since 1Q10 according to TFRS adoption
Rising revenue stream of mobile data Non-voice revenue (Bt million/%) Non-voice services rose 26% yoy and 11% qoq, supported by higher growth of mobile data which grew 56% yoy and 14% qoq. +26% yoy +11% qoq The rising demand of mobile internet reflected by the higher contribution of non-messaging service to revenue excluding IC at 12.8% in 1Q11 from only 10.2% in 1Q10. % Non-messaging revenue* Key driver of mobile data Higher smartphone/aircard adoption as well as lower price of handset. Growing trends of social network e.g. Facebook, Twitter, Foursquare AIS also offer the device-data bundling package. *Non-messeging services = Total non-voice (SMS+ Ringback tone)
Healthy FCF supported by strong EBITDA and low CAPEX Free Cash Flow* CAPEX (Bt billion) +12% yoy +13% qoq (Bt billion) +0.5% yoy -53% qoq Free cash flow grew 12% yoy and 13% qoq supported by strong operating revenue, growing handset sales and low capex CAPEX was relatively low at Bt809mn but is expected to accelerate to meet the full-year guidance of Bt10bn. To cope with rising data demand, AIS planned to expand data capacity and deploy 1,884 base station under 3G- 900MHz within 2011. The healthy free cash flow supported company s financial flexibility for any potential new technology/investment both near and longer term. Dividend payout: 100% of net profit *restated since 1Q10 according to TFRS adoption
Satellite & Media Business
THCOM 1Q11 Financial Highlights 40.3%YoY increase in IPSTAR Service Revenue and 2.6%QoQ growth in Telephone Services Revenue EBITDA up 4.8% from last quarter Revenue breakdown by Business (MTHB) Q1/2011 Q4/2010 Q1/2010 %QoQ % YoY EBITDA breakdown (MTHB) Q1/2011 Q4/2010 Q1/2010 %QoQ % YoY Conventional Satellite Services 562 539 637 4.3% -11.8% IPSTAR Services 487 446 347 9.2% 40.3% IPSTAR Sales 92 192 214-52.1% -57.0% Telephone Services 321 313 452 2.6% -29.0% Internet and Media Services 108 162 134-33.3% -19.4% Satellite 460 445 362 3.4% 27.1% Telephone 67 58 173 15.5% -61.3% Internet and Media -3-3 1 0.0% -400.0% Total 1,570 1,652 1,784-5.0% -12.0% EBITDA 524 500 536 4.8% -2.2%
Australia NBN Co project The Australia National Broadband Network project was signed on May 4th, 2011, between NBNCo and IPA. With the contractual period 5 years, an option to extend, the contractual value for IPA will be ~ 100 maud. Collaborating with the industrial leaders such as Optus and Gilat, IPA will be the supplier of raw Bandwidth for the project. The NBN project is designed to enable high-speed broadband to be delivered to all Australian households and businesses through a combination of fiber to the premise, wireless and satellite. NBN Co is operating a wholesale-only, openaccess network, and making its wholesale services available to retail service providers on non-discriminatory terms.
Recovery of Mobile Communication Network in Japan After the 11th March Tsunami aftermath of Great Tohoku-Kanto Earthquake Thaicom supported cell-phone carriers in Japan to recover the mobile communication networks in the affected areas by providing 10 IPSTAR user terminals and 60 satellite antennas. Installed VoIP enabled notebook computer connected via Thaicom 4 in Wakabayashi-ward, Sendai City to provide free IP phone service to the residents Source: Photo Courtesy of Softbank
Telephone Business LTC The mobile phone industry in Lao PDR have more competition, however, LTC ended its market share at the first largest with services subscriber 1.63m subscriber combined mobile and fixed, increased by 22.9% from 1Q10. LTC has total BTSs at 1,287 BTSs at the end of 1Q11. Market growth by 29%YoY to reach about 3.4m subscriber at end of 1Q11 LTC declared the USD15m dividend for the 2010 performance. Total Telephone subscribers 16.8% growth YoY Mfone Despite high competition in the market, Mfone regain its subscriber to end with 5% growth in number of subscriber compare to the same period last year.
Internet and Media Business The total number of DTV satellite television dish sets roll out as of the end of 1Q11 was 1,000,961 increase 51.3% from 1Q10. In term of eye ball on DTV-Thaicom-Ku platform, total satellite receivers roll out as of ending 1Q11 was 1,157,921. Currently, there are 80 TV and radio channels broadcasted through DTV in Thailand. 1,400,000 1,200,000 1,000,000 800,000 Total eye ball on DTV-Thaicom-Ku platform DTV Partners 815,613 876,668 1,003,983 1,101,716 1,157,921 945,164 1,000,961 600,000 847,883 661,765 721,365 400,000 200,000 0 153,848 155,303 156,100 156,552 156,960 1Q10 2Q10 3Q10 4Q10 1Q11 DTV-TV & Radio Channels
CSL 1Q11 Financial Highlights Total Revenue (Btm) 686 692 698 Total revenue slightly increased 1% QoQ due to ISP and voice info & mobile content businesses. 658 665 1Q10 2Q10 3Q10 4Q10 1Q11 Net Profit (Btm) Net profit in 1Q11 surged 17% QoQ from higher revenue, and lower marketing expense. 86 96 92 90 105 1Q10 2Q10 3Q10 4Q10 1Q11 EBITDA (Btm) 192 EBITDA rose 8% QoQ from 4Q10 mainly from ISP and voice info &mobile content businesses. 164 173 176 177 1Q10 2Q10 3Q10 4Q10 1Q11 15
INTOUCH
Statement of Profit or Loss 17
Statement of Profit or Loss (cont ) 18
INTUCH Consolidated Net Profit - QoQ 2,406 +92 +8 +74 2,579 4Q10 AIS Normalized THCOM INTUCH, ITV, MB, ITAS 1Q11
INTUCH Consolidated Net Profit - YoY +660 +4 +70 2,579 1,845 1Q10 AIS Normalized THCOM INTUCH, ITV, MB, ITAS 1Q11
Consolidated Assets and D/E ratio Btm 75000 60000 67,267 63,259 61,540 54% 50% 60% 50% 45000 47,173 49,835 40% 35% 36% 36% 30% 30000 20% 15000 10% 0 2007 2008 2009 2010 1Q11 0% Total Assets Debt/Equity ratio Debt free at INTUCH level Cash on hand as at March 31, 2011 was Bt4.65bn
Attractive Dividend Yield Bt 8.00 25% 7.00 6.00 15% 20% 20% 5.00 4.00 3.00 2.00 1.00 0.00 9% 2.30 1% 0.30 9% 4.37 2.40 2.40 2.40 5% 1.53 2006 2007 2008 2009 2010 Jan-Mar 31, 2011 DPS Special dividend Dividend yiled (RHS) 15% 10% 5% 0% INTUCH announced interim dividend payment for Jan 1 Mar 31, 2011 operation at Bt1.53/share. XD date is Apr 5, 2011 and payment date is Apr 27, 2011.
Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 Price Performance & Indices 56% 48% 40% 32% 24% 16% 8% 0% -8% -16% -24% % Change from Closing Price at the end of 2009 INTUCH +9% ICT +31% SET +48% INTUCH ICT SET
Disclaimer Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as may, will, expect, anticipate, intend, estimate, continue, plan or other similar words. The statements are based on our management s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.