Hutchison Telecommunications Hong Kong Holdings Limited (Stock code: 215) 216 Interim Results Presentation 2 August 216
Disclaimer Potential investors and shareholders (the Potential Investors and Shareholders ) of Hutchison Telecommunications Hong Kong Holdings Limited ( the Company ) are reminded that information contained in this Presentation comprises extracts of operational data and financial information of the Company and its subsidiaries ( the Group ) for the six months ended 3 June 216. The information included is solely for the use in this Presentation and certain information has not been independently verified. No representations or warranties, expressed or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions presented or contained in this Presentation. Potential Investors and Shareholders should refer to the 216 Interim Report for the results of the Group which are published in accordance with the listing rules of The Stock Exchange of Hong Kong Limited. The performance and the results of operations of the Group contained within this Presentation are historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking statements and opinions contained within this Presentation are based on current plans, estimates and projections, and therefore involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions. The Group, the Directors, employees and agents of the Group assume (a) no obligation to correct or update the forward-looking statements or opinions contained in this Presentation; and (b) no liability in the event that any of the forward-looking statements or opinions do not materialise or turn out to be incorrect. Potential Investors and Shareholders should exercise caution when investing in or dealing in the securities of the Company. 1
Business Performance
Highlights For the For the For the 1H 216 1H 216 six months ended six months ended six months ended vs vs 3 June 216 31 December 215 3 June 215 2H 215 1H 215 HK$ million HK$ million HK$ million change change Consolidated revenue 5,324 11,22 11,2-52% -52% Consolidated service revenue 3,826 3,84 3,87 +1% -1% Consolidated hardware revenue 1,498 7,218 7,15-79% -79% Consolidated EBITDA 1,253 1,332 1,456-6% -14% Consolidated service EBITDA 1,233 1,22 1,281 +3% -4% Consoldated EBIT 556 641 789-13% -3% Consolidated service EBIT 536 511 614 +5% -13% Profit attributable to shareholders 376 47 58-8% -26% Earnings per share (in HK cents) 7.8 8.45 1.54-8% -26% Interim dividend per share (in HK cents) 4. N/A 5.2 N/A -23% 3
Outlook Customer value Enhanced caring customer services Data usage Bundled telecommunications services Expand OTT and IoT offerings Meet increasing data demand Travellers Expand variety of roaming packages Commercial and carrier market Package with advanced technology One-stop solution provider Network Expand wireless and WiFi network International business connection Capital and operating expenditure Focus on operating efficiency Spectrum payment in Q3 216 Disciplined capex spending Dividend policy Sustainable and clear dividend policy 4
Customer service focus International Customer Relationship Excellence Award Contact Center + People Development Program of the Year Smiling Enterprise Smiling Staff Outstanding Award Best Mobile Site Best App Creative Design Mobile Excellence Award 215 36 216 1H Company of the year for Innovation & Over-the-Top Leadership- Asia 2 Innovation in B2B Innovation in Technology Management Big Data Application HGC Cloud Audience Analytics Best Smart HK Gold Award 5
Extensive Wi-Fi network 2, + hotspots 1Gbps optical fibre backhaul facility Customer oriented, facilitate infotainment access Further B2B and B2C opportunities 6
Multi-play operator with self-owned infrastructure 7
Extensive roaming packages Extensive roaming packages in Europe and Asia 3LikeHome package offers data sharing within 3 Group European countries Hassel free arrangement and avoid bill shock Expand customer reach to different segments United Kingdom Ireland Austria Denmark Hong Kong Italy Sweden Macau 8
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HK$ millions HK$ millions HK$ millions HK$ millions Mobile Business Mobile local service revenue (1) 2, 1,644 1,631 1,612 1, Mobile hardware revenue 7,15 7,221 1, 1H 215 2H 215 1H 216 Mobile local net service revenue after variable costs 5, 6,734 6,822 1,499 294 416 399 1,25 1H 215 2H 215 1H 216 Standalone hardware revenue Bundled hardware revenue Mobile roaming service revenue 1,8 1,576 1,554 1,552 55 448 383 361 9 275 1H 215 2H 215 1H 216 1H 215 2H 215 1H 216 Note 1: Local service revenue represents service revenue excluding roaming revenue 1
GB HK$ / month Percentage (%) Mobile KPIs Total customers in Hong Kong and Macau 4, 2,869 +6% 3,31 +2% 3,78.% Postpaid Churn 1H 215 2H 215 1H 216 2, 1,542 1,484 1,481 1.1% 2. 1. 1,327 1,547 1,597 1H 215 2H 215 1H 216 Prepaid Postpaid Blended Data usage (1) 1.33 1.39 1.47 1.54 1.12 1.3% 1.6% 1.9% 2.2% Blended local postpaid ARPU and net AMPU 24 29 214 212 151 157 161 158 165 168 12. 1H 214 2H 214 1H 215 2H 215 1H 216 Note 1: based on total active 3G+4G customers 215 215 216 215 215 216 215 215 216 1H 2H 1H 1H 2H 1H 1H 2H 1H Local net AMPU Local net ARPU Local gross ARPU 11
Fixed-line
Fixed-line business 1H 215 Total revenue: HK1,984 million Others (1) 3% 2H 215 Total revenue: HK1,989 million Others (1) 3% 1H 216 Total revenue: HK2,67 million Others (1) 3% Residential 15% Corporate and Business 29% International and Local Carrier 53% Residential 14% Corporate and Business 3% International and Local Carrier 53% Residential 12% Corporate and Business 31% International and Local Carrier 54% 88% fixed-line revenue contributed from non-residential market 1 Others include revenue from interconnection charges and others 13
HK$ millions Corporate and Business Market 31% (1) 1% yoy growth Corporate and Business revenue 8 Penetrations to new market segments 581 +3% 599 126 129 +6% 637 121 Value-added business solution provider 4 455 47 516 1H 215 2H 215 1H 216 Voice and IDD revenue Data revenue Note 1: Contribution to fixed-line revenue 14
HK$ millions International and Local Carrier Market 54% (1) Growing data demand International and local carrier revenue Benefits from OTT and IoT 8 4 61 591 632 451 463 479 1H 215 2H 215 1H 216 International and local data revenue IDD revenue Note 1: Contribution to fixed-line revenue 15
Residential Market 12% (1) 4% HoH decrease in revenue due to keen competition Multi-play infotainment player 1GB FTTH in offer Over 2, Wi-Fi hotspots Note 1: Contribution to fixed-line revenue 16
Financial Overview
Financial Highlights - Consolidated For the For the For the 1H 216 1H 216 six months ended six months ended six months ended vs vs 3 June 216 31 December 215 3 June 215 2H 215 1H 215 HK$ million HK$ million HK$ million change change Consolidated revenue 5,324 11,22 11,2-52% -52% Consolidated service revenue 3,826 3,84 3,87 +1% -1% Consolidated hardware revenue 1,498 7,218 7,15-79% -79% Consolidated EBITDA 1,253 1,332 1,456-6% -14% Consolidated service EBITDA 1,233 1,22 1,281 +3% -4% Consoldated EBIT 556 641 789-13% -3% Consolidated service EBIT 536 511 614 +5% -13% Profit attributable to shareholders 376 47 58-8% -26% Earnings per share (in HK cents) 7.8 8.45 1.54-8% -26% Interim dividend per share (in HK cents) 4. N/A 5.2 N/A -23% 18
Mobile business For the For the For the 1H 216 1H 216 six months ended six months ended six months ended vs vs 3 June 216 31 December 215 3 June 215 2H 215 1H 215 HK$ million HK$ million HK$ million change change Total revenue 3,472 9,235 9,242-62% -62% - Net Hardware customer revenue service revenue 1,973 1,499 2,14 7,221 2,92 7,15-79% -2% -79% -6% - Hardware sales revenue 1,499 7,221 7,15-79% -79% Net customer service margin 1,829 1,878 1,945-3% -6% Net customer service margin % 93% 93% 93% - - Standalone handset sales margin 2 133 175-85% -89% Total CACs (443) (537) (548) +18% +19% Less: Bundled sales revenue 294 399 416-26% -29% Total CACs (net of handset revenue) (149) (138) (132) -8% -13% Operating expenses (1,35) (1,16) (1,118) +6% +7% Opex as a % of net customer service revenue 52% 55% 53% -3% points -1% point EBITDA 665 767 87-13% -24% Service EBITDA 645 634 695 +2% -7% Service EBITDA Margin % 33% 31% 33% +2% points - Depreciation and amortisation (351) (343) (318) -2% -1% EBIT 314 424 552-26% -43% CAPEX (excluding licence) (198) (414) (16) +52% -24% EBITDA less CAPEX 467 353 71 +32% -34% Licence (1) (2) (1) +5% - 19
Fixed-line business For the For the For the 1H 216 1H 216 six months ended six months ended six months ended vs vs 3 June 216 31 December 215 3 June 215 2H 215 1H 215 HK$ million HK$ million HK$ million change change Revenue 2,67 1,989 1,984 +4% +4% Total CACs and Operating expenses (1,42) (1,371) (1,328) -4% -7% Total CACs and Opex as % of revenue 69% 69% 67% - -2% points EBITDA 647 618 656 +5% -1% EBITDA margin % 31% 31% 33% - -2% points Depreciation and amortisation (346) (348) (349) +1% +1% EBIT 31 27 37 +11% -2% CAPEX (excluding licence) (231) (292) (193) +21% -2% EBITDA less CAPEX 416 326 463 +28% -1% 2
HK$ millions Key cost items HK$ millions Cost of inventories sold Key cost items 1, 5, 6,975 +2% 7,88 4, 2, +1% 3,256 3,293-79% 2% 21% 6% 12% 13% 14% 667 21% 691 697 187 6% 197 6% 21 386 444 446-3,29 1,478 62% 59% 2,16 6% 1,961 1,946 65.% 1H 215 2H 215 1H 216 1H 215 2H 215 1H 216 Depreciation and amortisation Customer acquisition costs Staff costs Other operating expenses 21
HK$ millions HK$ millions EBITDA/EBIT Margin Consolidated EBITDA Consolidated EBIT 2,2 1,1 38% 35% 33% 1,456 175 32% 1,332 1,253 13 2 1,281 1,22 1,233 33% 32% 4% 2% 2,2 1,1 2% 16% 789 175 614 17% 15% 13% 14% 641 556 13 2 511 536 3% 15% % 1H 215 2H 215 1H 216 1H 215 2H 215 1H 216 % Service EBITDA Hardware margin EBITDA margin Service EBITDA margin Service EBIT Hardware margin EBIT margin Service EBIT margin 22
HK$ millions HK$ millions HK$ millions Capex investment Consolidated Capex 1, 76 5 353 19% 429 9% 11% 1H 215 2H 215 1H 216 3% 15% % % to service revenue 5 25 16 Mobile Capex 414 21% 198 26% 13% % to service revenue 1% 8% % 1H 215 2H 215 1H 216 1H 215 2H 215 1H 216 32 16 capex over service revenue Fixed-line Capex 193 1% 292 15% 231 11% 2% 1% % % to service revenue 23
HK$ millions Financial position Net debt Net debt/ LTM EBITDA 5, 4% 2. 2,5 2,81 2,941 19% 2% 2,65 18% As at As at As at 3 Jun 215 31 Dec 215 3 Jun 216 2% % Net debt to net total capital % 1.. 1. 1.1 1. As at As at As at 3 Jun 215 31 Dec 215 3 Jun 216 Net debt to net total capital ratio 24
HK$ millions HK cents Liquidity and Dividend EBITDA less CAPEX Interim dividend per share 1,5 8. 75 1,13-43% 626 +32% 824 4. 5.2-23% 4.. 1H 215 2H 215 1H 216 1H 215 1H 216 25
Q & A
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