3q 2012 results analyst briefing - listed...
TRANSCRIPT
3Q 2012 RESULTS
ANALYST BRIEFING
30 November 2012
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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 TM.
Disclaimer
Performance Overview
Financial review
Operating highlights
Concluding remarks
3
Key Highlights YTD Sept 2012
4
Improved Capex efficiency :Total capex/revenue ratio: 19.8% vs. 21.2% for YTD Sept 2011
Reported EBITDA grew by 1.8% andNormalised EBITDA grew by 1.7% to RM2.3bn
Revenue up by 7.2% to RM7.2bn, - continued momentum from Internet, Data & Other telco services
Reported PATAMI up by 51.9% to RM900.5mnNormalised PATAMI up by 50.1% to RM592.5mn
Total broadband customer base grows 8.4% to 2.03mn
Key Operating Indicators
Key Highlights 3Q 2012
Financial Performance
5
• Operating revenue increased by 2.3% YoY but lower by 2.0% QoQ, to RM2,375.4bn
• Normalised EBITDA lower by 5.1% YoY and 3.8% QoQ, to RM762.3mn
• Normalised PATAMI grew by 35.5% YoY but lower by 16.5% QoQ, to RM186.1mn
• Internet revenue up by 15.8% YoY and 3.3% QoQ, at RM601mn
• UniFi customer base up 160% YoY and 11.2% QoQ, to 427,136 customers. Overall broadband customer base grew by 8.4% YoY and 0.8% QoQ, to 2.03mn
• Continued data revenue growth contributed by higher customer projects.
Performance Overview
Financial review
Operating highlights
Concluding remarks
6
Note: EBITDA Margin is calculated as percentage of EBITDA against Revenue + Other Operating IncomeFor Normalised EBITDA and Normalised PATAMI refer Slides 8 and 9
•Excludes FX (Gain )/Loss
RMmn
ReportedComments
(YTD12 vs. YTD11)3Q12 2Q12
% Change QoQ
3Q11% Change
YoYYTD Sept
12YTD Sept
11
% ChangeYTD12 vs
YTD11
Revenue 2,375.4 2,425.0 -2.0 2,321.7 +2.3 7,184.2 6,703.5 +7.2Positive growth in Internet, Data & Other Telco Services
Other Operating Income
20.5 44.1 -53.5 27.8 -26.3 91.2 83.9 +8.7 Higher due to disposal of assets
EBITDA 751.5 797.4 -5.8 812.5 -7.5 2,331.5 2,290.3 +1.8 -
EBITDA margin 31.4% 32.3% -0.9pp 34.6% -3.2pp 32.0% 33.7% -1.7pp -
Normalised EBITDA 762.3 792.3 -3.8 803.3 -5.1 2,339.3 2,300.3 +1.7 -
Normalised EBITDA Margin
31.8% 32.1% -0.3pp 34.2% -2.4pp 32.2% 33.9% -1.7pp -
Depn & Amort. 529.9 497.9 +6.4 580.7 -8.7 1,538.4 1,592.1 -3.4Lower due to revision of useful life of certain assets net of higher dep. due to higher asset base
Other Gains / (Loss) 0.8 (2.4) +133.3 278.3 -99.7 (0.2) 281.0 -100.1 -
Net Finance Cost* 48.7 46.9 +3.8 50.9 -4.3 137.2 134.6 +1.9Higher interest payment in line with higher borrowings
FX (Gain) / Loss (64.8) 64.7 +200.2 122.5 +152.9 (68.0) 73.0 +193.2Due to strengthening of RM against USD by 4%
Profit Before Tax (PBT)
238.5 185.6 +28.5 337.2 -29.3 723.4 771.6 -6.2 -
Normalised PBT 183.7 247.6 -25.8 172.1 +6.7 663.4 573.6 +15.7
PATAMI 301.4 348.5 -13.5 302.2 -0.3 900.5 592.7 +51.9Higher due to higher revenue, recognition of deferred tax income & unrealised forex gain
Normalised PATAMI 186.1 223.0 -16.5 137.3 +35.5 592.5 394.7 +50.1 -
Group Results 3Q2012
7
Normalised EBITDA
In RM mn 3Q12 2Q12 3Q11 YTD12 YTD11
Reported EBITDA 751.5 797.4 812.5 2,331.5 2,290.3
Non Operational
Loss on Sale of Assets - 0.2 0.2 0.3 1.0
FX (Gain)/Loss on International trade settlement
10.8 (5.3) (9.4) 7.5 9.0
Normalised EBITDA 762.3 792.3 803.3 2,339.3 2,300.3
Normalised EBITDA Margin 31.8% 32.1% 34.2% 32.2% 33.9%
Reported EBITDA Margin 31.4% 32.3% 34.6% 32.0% 33.7%
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
8
Normalised PATAMI
9
In RM mn 3Q12 2Q12 3Q11 YTD12 YTD11
Reported PATAMI 301.4 348.5 302.2 900.5 592.7
Non Operational
Loss on Sale of Assets - 0.2 0.2 0.3 1.0
FX (Gain)/Loss on International trade settlement
10.8 (5.3) (9.4) 7.5 9.0
Other (Gain)/Losses** (0.8) 2.4 (278.3) 0.2 (281.0)
Unrealised FX (Gain)/Loss on Long Term loans (64.8) 64.7 122.6 (68.0) 73.0
Tax Incentives (60.5) (187.5) - (248.0) -
Normalised PATAMI* 186.1 223.0 137.3 592.5 394.7
* Inclusive in YTD2012 is RM128.4mn for current year tax incentive**Comprise fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for
sale) investments.
23.5 21.1
17.017.6
20.419.5
11.611.3
6.18.2
6.1 6.2
4.2 4.30.8 0.9
YTD11 YTD12
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)
Cost/revenue ratio continues to improve
1
10
RM mnRM mn
Total Cost / Revenue ( %)
RM6,089.2
89.7%
RM6,482.3
89.1%
% of Revenue
YTD Sept 2012 vs. YTD Sept 2011
•Higher Maintenance cost due to customer projects, new maintenance contracts at ITNT
•Higher Direct cost due to higher international outpayment, USP and content cost
•Higher Marketing Expenses due to higher A&P activities and commissions for Unifi
686 709
527 466
211 244
0
200
400
600
800
1000
1200
1400
1600
YTD11 YTD12
Access Core Network Support System*
421522
343352
62
138
0
200
400
600
800
1000
1200
YTD11 YTD12Access Core Network Support System*
265187
184
114
149
106
0
100
200
300
400
500
600
700
YTD11 YTD12Access Core Network Support System*
Group Capital Expenditure
** Gross capex to be shared with Government equally up to RM4.8bnNote: Government coinvestment treated as deferred income, to be amortisedprogressively to match against the depreciation of assets
*Include Application, Support System & Others (building, land improvement, moveable plants,application & other assets)
Higher HSBB capex due to extension of EGNet project (GITN)
11
Total Capex
HSBB Capex**
Note : BAU – Business As Usual
RM mn
1,424
826
21.2
BAU Capex
598
8.9
Capex / Revenue ( %)
1,012
407
5.7
1,419
19.8
14.112.3
30 Sept 12 31 Dec 11 30 Sept 12 31 Dec 11Return on Invested Capital 6.12% 5.81% Gross Debt to EBITDA 2.11 1.93
Return on Equity 11.30% 8.14% Net Debt/EBITDA 1.00 0.69
Return on Assets 4.98% 4.47% Gross Debt/ Equity 1.03 0.86
Current Ratio 1.49 1.6 Net Debt/ Equity 0.61 0.30
WACC 6.17% 6.33% Net Assets/Share (sen) 183.2 207.5
30 Sept 12
Group Cash Flow & Key Financial Ratios
31 Dec 11*
RM mn YTD Sept 12 YTD Sept 11
Cash & cash equivalent at start 4,212.6 3,488.0
Cashflows from operating activities 1,335.1 1,661.8
Cashflows used-in investing activities (1,415.9) (653.6)
Capex* 1,277.0 860.7
Cashflows used-in financing activities (1,418.6) (1,160.4)
Effect of exchange rate changes 1.4 (4.6)
Cash & cash equivalent at end 2,714.6 3,331.2
Free cash-flow (EBITDA – Capex) 1,054.5 1,429.6
1
Based on Normalised PATAMI2
1
12
31 Dec 11*30 Sept 12
* Restated due to adoption of MFRS
2
Based on Normalised EBIT1
•net of HSBB grant received from Government ( YTD Sept 2012– RM142.0mn; YTD Sept 2011 – RM563.3mn)
Performance Overview
Financial review
Operating highlights
Concluding remarks
13
519 582 6011,460
1,746
3Q11 2Q12 3Q12 YTD11 YTD12
350 395326
9591,081
3Q11 2Q12 3Q12 YTD11 YTD12
506 502 543
1,467 1,558
3Q11 2Q12 3Q12 YTD11 YTD12
Voice42%
Data22%
Internet22%
Others14%
947 946 9052,817 2,799
3Q11 2Q12 3Q12 YTD11 YTD12
Voice39%
Data22%
Internet24%
Others15%
Group Total Revenue by Product
14
Data
RM mn
RM mn RM mn
Voice
Others*
InternetYTD12
YTD11
RM mnRM mn
RM mn
RM7,184mn
RM6,704mn
-0.6%
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)
+19.6%
+12.7%+6.2%+7.3%
+8.2%
-4.4%
-4.3%
+15.8%
+3.3%
-6.9%
-17.5%
629 671 666 1,820 1,993458 486 475
1,3651,424276 277 275
820819
361 397 372
1,0161,183
3Q11 2Q12 3Q12 YTD11 YTD12
Consumer SME Enterprise Government
Consumer28%
SME20%
Enterprise11%
Government16%
Global9%
Wholesale8%
Others8%
Consumer27%
SME20%
Enterprise12%
Government15%
Global9%
Wholesale8%
Others9%
191 195 201524 572
3Q11 2Q12 3Q12 YTD11 YTD12
215 212 189
589 626
3Q11 2Q12 3Q12 YTD11 YTD12
191 187 197
569 567
3Q11 2Q12 3Q12 YTD11 YTD12
Group Total Revenue by Line of Business
YTD12
YTD11
RM7,184mn
RM6,704mn
* Others comprise revenue from VADS (reclassified from retail), Property Development, TM R&D, TMIM, UTSB and MKL
Retail Wholesale
RM mn
RM mnRM mn
RM mn
5,0215,419
1,788
Global Others*
+7.9%
+3.7%
1,8311,724
-2.3%-0.4%
+3.1%
+5.3%
+6.3%
-12.1%
-10.8%+9.2%
+5.2%
+3.1%
15
Retail (C+S+E+G): 75%
Retail (C+S+E+G): 75%
2,710 2,692 2,633 2,566 2,524 2,468 2,429
1,607 1,596 1,568 1,546 1,526 1,509 1,497
64 109 164 237 316 384 427
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Fixed Line Residential Fixed Line Business UniFi
55,156 93,107 139,896 201,842 269,309 325,557 359,1628,38515,912
24,47934,659
46,43658,467
67,974
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
UniFi Residential UniFi Business
1,417 1,425 1,393 1,374 1,356 1,330 1,309
291 296 314 312 302 297 292
64 109 164 237 316 384 427
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Streamyx Residential Streamyx Business UniFiNet adds (in thousand)
In thousand
In thousand
+8.4%
+0.8%
Physical Highlights
Broadband Customer Growth
Fixed Line Customer Growth
*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU
16
1,772
4,381
ARPU (RM) 1H11 YTD 11 FY11 1H12 YTD12
Fixed Line (DEL)* 34 34 34 34 34
Streamyx Broadband** 77 78 78 79 79
UniFi*** 186 184 184 181 180
1,830
+58
4,397
1,871
+41
4,365 4,349
+52
1,923 1,974
+51
4,366
-0.3%
-0.2%
63,541
+11.2%
Net adds (in thousand)
109,019
+45
+159.9%
164,375236,501
315,745
UniFi
ARPU
+37
2,011
+55+72 +79 +68
384,024
4,361
2,028 427,136
+43+17
4,353
Higher forced churn impacted Unifi net-adds
Performance Overview
Financial review
Operating highlights
Concluding remarks
17
Key Takeaways
Financial Performance
Broadband Champion
18
• Revenue growth of 7.2% from Internet, Data & Other telcoservices
• Continued EBITDA growth: Reported EBITDA grew by 1.8% and Normalised EBITDA grew by 1.7% to RM2.3bn
• EBITDA margins in line with Headline KPI• Continued PATAMI growth: Reported PATAMI up by 51.9% to RM900.5mn Normalised PATAMI up by 50.1% to RM592.5mn
• Capital and cost efficiency improves
• Unifi remains strong despite higher forced churn from cleanup exercise More than 462,000 customers to date Assurance of quality, revenue-generating customer base
• HSBB rollout on target: 1.32mn premises passed
Appendices
3Q12 2Q12 3Q11 YTD12 YTD11 YTD2012 vs. YTD2011
Operating Revenue (RM mil) 2,375.4 2,425.0 2,321.7 7,184.2 6,703.5 -
Other Operating Income(RM mil)
20.5 44.1 27.8 91.2 83.9 -
Direct Costs % 17.8 16.9 16.7 17.6 17.0 Higher international outpayment, USP cost and content costRM mil. 425.3 418.1 392.8 1,282.3 1,156.2
Manpower % 19.7 19.6 19.8 19.5 20.4 Lower bonus provision, net of higher salaries, staff benefits and staff leasing costRM mil. 470.8 483.4 466.2 1,419.8 1,385.5
Supplies & Materials % 7.2 5.2 6.0 6.2 6.1 Higher customer acquisition cost, materialsRM mil. 171.9 129.1 141.7 448.7 415.4
Bad & Doubtful Debts % 0.1 0.5 0.3 0.9 0.8 Higher bad debts at Consumer and SME due to cleanupRM mil. 2.9 11.6 6.8 67.6 53.0
Marketing Expenses % 4.6 4.3 4.9 4.3 4.2 Higher A&P activities, ie Team Malaysia Olympics
RM mil. 109.5 106.1 115.4 310.0 284.6
Maintenance Cost % 7.4 9.6 6.9 8.2 6.1 Higher due to customer projects and new maintenance contracts at ITNTRM mil. 176.2 236.5 162.0 593.6 412.5
Other Operating Costs % 12.0 11.6 10.7 11.3 11.6 Higher utilities cost but lower as a % of revenueRM mil. 287.8 286.9 252.1 821.9 789.9
Depreciation & Amortisation % 22.1 20.2 24.7 21.1 23.5 Lower due to revision of useful life of certain assets and asset write-off
RM mil. 529.9 497.9 580.7 1,538.4 1,592.1
Total (RM mil) 2,174.3 2,169.6 2,117.7 6,482.3 6,089.2 -
Total (%) 90.8 87.9 90.1 89.1 89.7 -
Cost % of Revenue
20
7,424.0
162.9
10,036.1
6,402.7
1,541.8
2,072.7
18.9
17,623.0
7,405.8
1,854.8
468.4
4,213.0
869.6
4,629.3
3,995.2
7.7
626.4
2,776.5
14,121.7
724.8
17,623.0
6,553.5
150.8
9,977.7
6,562.2
1,266.7
2,122.6
26.2
16,682.0
5,933.9
1,922.6
405.3
2,715.0
891.0
3,984.9
3,202.9
157.2
624.8
1,949.0
14,000.4
732.6
16,682.0
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 MillionAs at 30 Sept 2012 As at 31 Dec 2011*
Group Balance Sheet
21
* Restated due to adoption of MFRS
776 770 745
315 307 339
514 577 598
126188 120
0
500
1000
1500
2000
3Q11 2Q12 3Q12
OthersInternetData Voice
2,329 2,273
884 964
1,447 1,734
388479
0
1,000
2,000
3,000
4,000
5,000
6,000
YTD11 YTD12
Others
Internet
Data
Voice
Consumer36%
SME28%
Enterprise16%
Government20%
Consumer37%
SME26%
Enterprise15%
Government22%
Revenue by Business Unit
RM mn
-2.3%
1,724
YTD12
+3.7%
RETAIL
Revenue by Product
YTD11
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
RM mn
RM mn
RM5,419mn
RM5,021mn
22
1,831 1,788
RM mn +7.9%
5,0215,419
MC83%
ASP17%
MC83%
ASP17%
54 52 52
151 152 160
22 22 17
0
50
100
150
200
250
3Q11 2Q12 3Q12
Others
Data
Voice
170 154
442 458
62 58
0
200
400
600
800
YTD11 YTD12
Others
Data
Voice
Others : Include internet
WHOLESALE
YTD12
YTD11
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination 23
Revenue by ProductRevenue by Customer Segment
191 187 197
RM mn
+5.3%
+3.1%
RM mn -0.4%
569 567
MC : Malaysian CarrierASP : Application Service Provider
America8%
Europe & AFME18%
Oceania & North Asia
26%
South Asia37%
Others11%
America12%
Europe & AFME15%
Oceania & North Asia
29%
South Asia32%
Others12%
143 129110
10
6695
96
2 63
0
50
100
150
200
250
3Q11 2Q12 3Q12
Others
Data
Data (IRU Sales)
Voice
352 382
13 0
241283
611
0
100
200
300
400
500
600
700
800
YTD11 YTD12
Others
Data
Data (IRU Sales)
Voice
Others : Include internet
GLOBAL
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination 24
Revenue by RegionRevenue by Product
215189
212
RM mn
-10.8%
-12.1%
RM mn+6.3%
589626
YTD12
YTD11
THANK YOUAny 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