1Q 2013 RESULTS
ANALYST BRIEFING
30 May 2013
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Disclaimer
Performance Overview
Financial review
Operating highlights
Concluding remarks
3
Key Operating Indicators
Key Highlights 1Q2013
Financial Performance
• Operating revenue increased by 1.7% YoY to RM2.4bn
• Normalised EBIT increased by 9.5% YoY to RM300.1mn; Reported EBIT increased by 9.6% YoY to RM298.0mn
• Normalised PATAMI grew by 27.6% YoY to RM234.0mn; Reported PATAMI lower by 14.9%
YoY to RM213.2mn
• Internet revenue up by 14.4% YoY to RM644mn driven by UniFi growth and HyppTV content. Data revenue up by 13.8% YoY to RM585mn.
• UniFi customer base up 68.4% YoY to >532,000 customers. Overall broadband customer base grew by 6.8% YoY to 2.11mn
4
5
Performance Overview
Financial review
Operating highlights
Concluding remarks
Note: For Normalised EBIT and Normalised PATAMI refer Slides 7 and 8 •Excludes FX (Gain )/Loss
RMmn Reported
1Q13 4Q12 % Change QoQ 1Q12 % Change YoY
Revenue 2,424.6 2,809.3 -13.7 2,383.8 +1.7
Other Operating Income
30.7 74.2 -58.6 26.6 +15.4
EBITDA 806.7 900.1 -10.4 782.6 +3.1
Depn & Amort. 508.7 506.3 +0.5 510.6 -0.4
EBIT 298.0 393.8 -24.3 272.0 +9.6
Other Gains / (Loss) (0.1) 0.5 -120.0 1.4 -107.1
Net Finance Cost* 49.6 54.7 -9.3 41.6 +19.2
FX (Gain) / Loss 18.6 (5.4) -444.4 (67.9) -127.4
Profit Before Tax (PBT) 229.5 346.2 -33.7 299.3 -23.3
PATAMI 213.2 363.2 -41.3 250.6 -14.9
Normalised PATAMI 234.0 288.4 -18.9 183.4 +27.6
Group Results 1Q2013
6
Normalised EBIT
In RM mn 1Q13 4Q12 1Q12
Reported EBIT 298.0 393.8 272.0
Non Operational
Loss on Sale of Assets 0.1 0.2 0.1
FX (Gain)/Loss on International trade settlement 2.0 (5.1) 2.0
Impairment of AFS – receivables - (1.2) -
Realisation of tax refund related to a previous RM bond - (38.8) -
Normalised EBIT 300.1 348.9 274.1
Normalised EBIT Margin 12.2% 12.3% 11.4%
Reported EBIT Margin 12.1% 13.7% 11.3%
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 – Realisation of tax refund related to a previous RM bond)
7
Normalised EBIT higher by 9.5% YoY
Normalised PATAMI
In RM mn 1Q13 4Q12 1Q12
Reported PATAMI 213.2 363.2 250.6
Non Operational
Loss on Sale of Assets 0.1 0.2 0.1
FX (Gain)/Loss on International trade settlement 2.0 (5.1) 2.0
Impairment of AFS – receivables - (1.2) -
Realisation of tax refund related to a previous RM bond - (38.8) -
Other (Gain)/Losses* 0.1 (0.5) (1.4)
Unrealised FX (Gain)/Loss on Long Term loans 18.6 (5.4) (67.9)
Tax Incentives - (53.4) -
S108 shortfall from utilisation of tax incentives - 29.4 -
Normalised PATAMI** 234.0 288.4 183.4
8
* Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment gain/loss on disposal for AFS (available for sale) investments. **Current year tax incentives: 1Q13:RM53.6mil (HSBB), 1Q12: RM26.0mil (last mile).
Normalised PATAMI higher by 27.6% YoY
21.2 20.7
18.2 17.5
19.3 22.5
10.2 11.0
7.5 6.0
6.1 5.6
3.9 3.3 2.2 1.3
1Q12 1Q13
Bad Debt
Marketing Expenses
Supplies & material
Maintenance Cost
Other operating cost
Manpower cost
Direct cost
Dep & Amortisation
Revenue = Operating Revenue + Other Operating Income
Cost % of Revenue1
Note: The classification of cost is as per financial reporting
(Please refer to Appendix for quarterly details & breakdown)
Improved cost/revenue ratio
1
RM mn RM mn
Total Cost / Revenue ( %)
RM2,138.4
88.7%
RM2,157.3
87.9%
% of Revenue
1Q 2013 vs. 1Q 2012
•Higher Manpower cost due to higher salaries and staff benefits •Lower Direct cost due to lower international outpayment •Lower D&A due to lower provision for write-off •Lower Maintenance cost due to lower customer projects
9
169 162
60 38
58
36
0
50
100
150
200
250
300
1Q12 1Q13
Access Core Network Support System*
53 37
23
11
22
20
0
20
40
60
80
100
1Q12 1Q13 Access Core Network Support System*
116 125
37 27
36 16
0
40
80
120
160
200
1Q12 1Q13
Access Core Network Support System*
Improved capex/revenue ratio Group Capital Expenditure
** Gross capex to be shared with Government equally up to RM4.8bn Note: Government coinvestment treated as deferred income, to be amortised progressively to match against the depreciation of assets
*Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)
HSBB Capex**
Note : BAU – Business As Usual
RM mn
287
189
12.0
BAU Capex
98
4.1
Capex / Revenue ( %)
168
68
2.8
236
9.7
6.9 7.9
Total Capex
10
31 Mar 13 31 Dec 12 31 Mar 13 31 Dec 12Return on Invested Capital 6.79% 6.67% Gross Debt to EBITDA 2.25 2.10
Return on Equity 13.38% 12.31% Net Debt/EBITDA 1.08 0.87
Return on Assets 5.39% 5.17% Gross Debt/ Equity 1.04 1.04
Current Ratio 1.09 1.03 Net Debt/ Equity 0.51 0.49
WACC 6.04% 6.10% Net Assets/Share (sen) 198.4 192.7
31 Mar 13
Group Cash Flow & Key Financial Ratios
31 Dec 12
RM mn 1Q13 1Q12
Cash & cash equivalent at start 3,738.3 4,212.6
Cashflows from operating activities 326.3 242.8
Cashflows used-in investing activities (501.3) (541.4)
Capex 236.0 287.0
Cashflows from financing activities 197.7 147.8
Effect of exchange rate changes (2.3) 1.9
Cash & cash equivalent at end 3,758.7 4,063.7
Free cash-flow (EBITDA – Capex) 570.7 495.6
1
Based on Normalised PATAMI 2
1
31 Dec 12 31 Mar 13
2
Based on Normalised EBIT 1
11
12
Performance Overview
Financial review
Operating highlights
Concluding remarks
Voice 40%
Data 21%
Internet 24%
Others 15%
Voice 36%
Data 24%
Internet 27%
Others 13%
359
630
318
1Q12 4Q12 1Q13
514 646 585
1Q12 4Q12 1Q13
563 626 644
1Q12 4Q12 1Q13
948 907 878
1Q12 4Q12 1Q13
Group Total Revenue by Product
Data
RM mn
RM mn RM mn
Voice
Others*
Internet 1Q13
1Q12
RM mn RM mn
RM mn
RM2,425mn
RM2,384mn
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)
-7.4%
-3.2%
13
Internet and Data revenue now 51% of Group
+14.4%
+2.9%
+13.8%
-9.4%
-11.4%
-49.5%
Retail 75%
Global & Wholesale
17%
Others 7%
Retail 76%
Global & Wholesale
15%
Others 8%
1,800 2,035 1,854
1Q12 4Q12 1Q13
177
318
197
1Q12 4Q12 1Q13
407 457 374
1Q12 4Q12 1Q13
Global & Wholesale
1Q13 1Q12 RM2,425mn RM2,384mn
* Others comprise revenue from VADS (reclassified from retail), Property Development, TM R&D, TMIM, UTSB and MKL
Retail
RM mn RM mn RM mn
Others*
14
+3.0%
-8.9%
-8.1%
-18.2%
+11.3%
-38.1%
Higher revenue from Mass Market segment Group Total Revenue by Line of Business
269 326 359 406 448
47 58
68 77
84
1Q12 2Q12 3Q12 4Q12 1Q13
UniFi Residential UniFi Business
2,524 2,468 2,429 2,390 2,364
1,526 1,509 1,497 1,486 1,474
316 384 427 483 532
1Q12 2Q12 3Q12 4Q12 1Q13
Fixed Line Residential Fixed Line Business UniFi
1,356 1,330 1,309 1,296 1,292
302 297 292 287 285
316 384 427 483 532
1Q12 2Q12 3Q12 4Q12 1Q13
Streamyx Residential Streamyx Business UniFi Net adds (in thousand)
In thousand
In thousand
+6.8%
+2.1%
Physical Highlights
Broadband Customer Growth
Fixed Line Customer Growth
+43
4,370
2,109 1,974
4,366
+0.1%
+0.3%
+10.1%
Net adds (in thousand)
+68.4%
532
316
UniFi
+37
2,011
+49
+68
384
4,361
2,028
427
+43
+17
4,353
Continued growth in Broadband
2,066
+38 +56
483
4,359
15
*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU
ARPU (RM) 1Q12 2Q12 3Q12 4Q12 1Q13
Fixed Line (DEL)* 34 35 34 32 32
Streamyx Broadband** 79 79 80 81 82
UniFi*** 181 178 181 181 178
ARPU
16
Performance Overview
Financial review
Operating highlights
Concluding remarks
Key Takeaways & 2013 Business Priorities
17
Key Takeaways & 2013 Business Priorities
Financial Performance
Broadband Champion
• Operating Revenue grew by 1.7% YoY • Normalised EBIT up by 9.5% YoY Reported EBIT up by 9.6% YoY
• Normalised PATAMI grew by 27.6% YoY Reported PATAMI lower by 14.9% YoY • Internet & Multimedia revenue grew by 14.4% YoY
• Total broadband customers cumulatively grew 6.8% YoY to 2.11mn • UniFi customers grew by 68.4% YoY, takeup rate ~38%
Commitment to being Trusted Broadband Champion with enhanced services –Streamyx 8Mbps launched in January, HyppTV over Broadband, HyppTV Everywhere
planned for 3Q2013
Ongoing PIP 3.0 initiatives – Continued Growth, Fundamental Productivity Shift, Institutional Health Drivers
Appendices
Normalised EBITDA
In RM mn 1Q13 4Q12 1Q12
Reported EBITDA 806.7 900.1 782.6
Non Operational
Loss on Sale of Assets 0.1 0.2 0.1
FX (Gain)/Loss on International trade settlement 2.0 (5.1) 2.0
Impairment of AFS – receivables - (1.2) -
Realisation of tax refund related to a previous RM bond - (38.8) -
Normalised EBITDA 808.8 855.2 784.7
Normalised EBITDA Margin 32.9% 30.1% 32.6%
Reported EBITDA Margin 32.9% 31.2% 32.5%
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 – Realisation of tax refund related to a previous RM bond)
19
Normalised EBITDA higher by 3.1% YoY
1Q13 4Q12 1Q12 Comments
Operating Revenue (RM mil) 2,424.6 2,809.3 2,383.8 -
Other Operating Income (RM mil)
30.7 74.2 26.6 -
Direct Costs % 17.5 15.5 18.2 Lower absolute cost QoQ but higher as a % of revenue due to slower revenue growth RM mil. 430.0 447.4 438.9
Manpower % 22.5 21.0 19.3 Lower absolute cost QoQ but higher as a % of revenue due to slower revenue growth RM mil. 551.3 604.7 465.6
Supplies & Materials % 5.6 6.8 6.1 Lower equipment cost and customer acquisition cost RM mil. 136.7 195.9 147.7
Bad & Doubtful Debts % 1.3 (0.1) 2.2 -
RM mil. 31.4 (4.0) 53.2
Marketing Expenses % 3.3 3.9 3.9 Lower dealers commission
RM mil. 80.9 112.3 94.4
Maintenance Cost % 6.0 9.3 7.5 Lower maintenance due to lower customer projects RM mil. 147.1 266.9 181.0
Other Operating Costs % 11.0 12.5 10.2 -
RM mil. 271.2 360.2 247.0
Depreciation & Amortisation % 20.7 17.6 21.2 Lower provision for write-off
RM mil. 508.7 506.3 510.6
Total (RM mil) 2,157.3 2,489.7 2,138.4 -
Total (%) 87.9 86.3 88.7 -
Cost % of Revenue
20
6,894.8
165.2
8,513.7
5,130.2
1,202.6
2,129.4
51.5
15,573.7
6,808.8
1,740.9
466.1
3,738.7
863.1
6,622.2
3,545.5
2,010.2
1,066.5
186.6
14,637.6
749.5
15,573.7
As at 31 Dec 2012
7,098.9
174.3
8,485.8
5,139.4
1,191.6
2,082.6
72.2
15,759.0
7,151.1
2,063.5
444.0
3,759.1
884.5
6,548.0
3,025.1
2,209.2
1,313.7
603.1
14,383.8
772.1
15,759.0
Shareholders’ Funds
Non-Controlling Interests
Deferred & Long Term Liabilities
Long Term Borrowings
Deferred Tax
Deferred Income
Derivative financial liabilities
Current Assets
Trade Receivables
Other Receivables
Cash & Bank Balances
Others
Current Liabilities
Trade and Other Payables
Short Term Borrowings
Others
Net Current Assets
Property Plant & Equipment
Other Non-Current Assets
RM Million As at 31 Mar 2013
Group Balance Sheet
21
RETAIL
22
758 737 727
318 392 383
558 625 643
171 286 112
0
500
1000
1500
2000
2500
1Q12 4Q12 1Q13
Others Internet Data Voice
RM mn
-8.9%
+3.0%
1,854 2,035
1,800
Revenue by Product
194 182 154
237 312
247
21
23
19
0
100
200
300
400
500
600
1Q12 4Q12 1Q13
Others
Data
Voice
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
Revenue by Product
407
457
374
RM mn
-8.1%
-18.2%
GLOBAL & WHOLESALE
THANK YOU Any queries please email to : [email protected]
•Investor Relations • Level 11 (South Wing) •Menara TM •JlnPantaiBharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388