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TRANSCRIPT
dtac third quarter 2012
19 October 2012
disclaimer
Certain forward looking statements may be made in the course of the presentation. These forward-looking statements generally can be identified by
use of statements that include words or phrases such as dtac or its management “believes”, “expects”, “anticipates”, “intends”, “plans”,
“foresees”, or other words or phrases of similar import. Similarly, statements that describe dtac’s objectives, plans or goals also are forward-looking
statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from
those contemplated by the relevant forward-looking statement. The forward-looking statements contained in the slides are not and should not be
constructed as representations of the future performance of dtac and that such statements are an expression of the Company’s reviews based on its
current view and certain assumptions including, but not limited to, prevailing economic and market conditions and currently available information.
key highlights
Strong net adds (54% QoQ) and 3G subscriber growth (40% QoQ)
Solid data revenue growth continued (83.2% YoY)
Voice revenue still under pressure compensated by data revenue
growth
3G 850MHz network expansion (3,500 site) and 2G network swap
(70% completion) progressing according to plan
3
highlights operational
300 283 283 278 273 281
Q211 Q311 Q411 Q112 Q212 Q312
262 265
269 271 269 268
Q211 Q311 Q411 Q112 Q212 Q312
blended MOU* (mins / month / sub)
subscribers reached 24M driven by strong net adds
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 5
Innovative marketing and retention
campaigns drove strong net adds in Sep’12
MOU rose QoQ driven by complimentary
minutes from Happy BD campaign and
Aug’12 network compensation
ARPU improved YoY from data growth but
slightly declined QoQ due to the above
given MOUs and higher prepaid bonus
blended ARPU* (THB / month / sub)
-0.5% +3.1%
+1.1% -0.4%
* Include IC
* Include IC
384
136 352
218 167 257
22.7 22.9 23.2 23.4 23.6 23.9
Q211 Q311 Q411 Q112 Q212 Q312
Net add (in thousand) Accum subs (in million)
subscribers
strong data growth continued
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 6
data subscribers (million)
3G subscribers (million)
smartphone penetration
Social network and smartphone adoption
are key growth drivers for rising data
demand
Data and 3G subscribers grew significantly
after the launch of 3G 850MHz in Aug’11
and continued network expansion
22.7 22.9 23.2 23.4 23.6
23.9 13.2% 14.2% 15.5%
17.0% 18.2% 20.5%
Q211 Q311 Q411 Q112 Q212 Q312
Accum subs (in million) Smartphone penetration
5.2 5.5 5.6 6.1 6.5 7.2
Q211 Q311 Q411 Q112 Q212 Q312
+30.5% +9.7%
n/a 0.3
0.5
0.8 1.1
1.6
Q211 Q311 Q411 Q112 Q212 Q312
+526.9% +40.1%
dtac launched 3G service in Aug 2011
7
Network
Network swap completed in
Bangkok and Southern region
Launched WiFi to offload data traffic
from 2G and 3G 850MHz network
3G 850MHz
3,500 sites
Nationwide network swap
and 3G 850MHz 5,000 sites
Q112 Q212 Q312 Q412
Distribution
Strengthen device supply
chain mgmt thru exclusive
partnership with Brightstar
Service outlet revamp to
be more retail-oriented
Organization
Leadership development
program to strengthen
people capabilities
Organization optimization
to build a strong platform
for future growth
IT System
BI and customer analytic
capabilities enhancement
continuous efforts for improved customer experience
financial
highlights
revenue growth continuously driven by VAS
quarterly revenues (THB billion)
18.0 18.4 18.8 19.2 19.2 19.4
1.7 1.1 1.5 3.3 2.4 1.8
19.7 19.6 20.3 22.5 21.6 21.2
Q211 Q311 Q411 Q112 Q212 Q312
Service revenue (incl IC) Handset & others
service revenue breakdown
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 9
+8.2% -2.1%
15.0% 15.3% 14.8% 13.8% 14.1% 13.9%
45.5% 45.0% 44.7% 43.7% 42.1% 40.9%
13.2% 14.0% 15.4% 17.4% 18.6% 19.8%
3.0% 2.9% 2.4% 2.4% 3.0% 3.0%
20.0% 19.5% 20.4% 19.4% 19.1% 18.6%
3.3% 3.3% 2.2% 3.3% 3.1% 3.8%
Q211 Q311 Q411 Q112 Q212 Q312
Postpaid airtime Prepaid airtime VAS IR IC Others
solid revenue growth from mobile data
VAS revenue (THB billion)
2.4 2.6
2.9 3.3
3.6 3.8
13.2% 14.0% 15.4% 17.4% 18.6% 19.8%
Q211 Q311 Q411 Q112 Q212 Q312
VAS revenue % to service revenue (incl IC)
VAS breakdown
47% 50% 53% 56% 59% 62%
25% 23% 23% 23% 20% 18%
28% 26% 24% 21% 21% 20%
Q211 Q311 Q411 Q112 Q212 Q312
Mobile Internet Messaging Others
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 10
+48.6% +7.5%
declining handset margin due to intense competition
handset revenue (THB billion)
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 11
1.5
1.0 1.3
3.1
2.3
1.6
10.0% 7.2%
4.9% 6.2% 2.2% 1.9%
Q211 Q311 Q411 Q112 Q212 Q312
Handset sales % handset margin
+64.6% -29.4% Growth of handset sales in 2012 was
mainly driven by the launch of iPhone 4s
in Dec’11 and android sales but softened
QoQ in expectation of new iPhone model
2013 onward, expecting handset margin
to maintain low with increasing sales
revenue sharing pressured cost of services
cost of services (THB billion) excluding amortization & depreciation
8.9 9.1
10.3 10.3 10.4 10.7
49.9% 49.4% 54.9% 53.7% 54.4% 55.0%
Q211 Q311 Q411 Q112 Q212 Q312
Cost of services % to service revenue (incl IC)
% to service revenue (incl IC)
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 12
+17.1% +2.1%
4.2% 4.3% 4.6% 4.4% 4.9% 5.1%
5.4% 5.2% 5.5% 4.9% 5.2% 5.4%
21.7% 22.1%
25.8% 26.0% 26.3% 26.9%
18.6% 17.8% 19.0% 18.4% 18.1% 17.6%
Q211 Q311 Q411 Q112 Q212 Q312
Network Opex Other cost
Regulatory cost IC cost
decreased SG&A from lower selling
and marketing expenses
SG&A (THB billion) excluding amortization & depreciation
2.4 2.5 2.5 2.5 2.3 2.2
13.3% 13.5% 13.5% 12.9% 12.1% 11.5%
Q211 Q311 Q411 Q112 Q212 Q312
SG&A % to service revenue (incl IC)
% to service revenue (incl IC)
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 13
-11.0% -4.2%
9.7% 9.1%
9.7% 8.9% 8.8% 8.8%
3.5% 4.4%
3.8% 4.0% 3.3%
2.7%
1.5% 0.3% 0.3% 0.8% 1.4% 1.2%
Q211 Q311 Q411 Q112 Q212 Q312
Admin excl A&D as % to service revenues
Selling and marketing expenses as % to service revenues
Bad debt as % of postpaid revenues
maintained bottom line despite pressure
from higher revenue sharing
EBITDA (THB billion)
6.9 7.0
6.1 6.8 6.6 6.7
35.0% 35.4% 29.8% 30.1% 30.6% 31.4%
Q211 Q311 Q411 Q112 Q212 Q312
EBITDA EBITDA margin
net profit (THB billion)
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 14
-5.1% +0.4%
3.0 3.1
2.4
3.0 2.8 2.9
Q211 Q311 Q411 Q112 Q212 Q312
-6.3% +1.9%
EBITDA dropped YoY mainly from
higher revenue sharing
7.0 6.7
0.9
0.3
0.1 0.05
1.1
0.2 0.1
Q311 Service rev
excl IC
Net IC Handset
margin
Regulatory
cost
Network
opex
SG&A Others Q312
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882 15
(THB billion)
continued healthy financial position
6.0 5.5
3.0
6.0 4.4
2.5
0.9 1.5
3.1
0.7 2.2
4.1
Q211 Q311 Q411 Q112 Q212 Q312
Operating FCF (EBITDA - CAPEX) CAPEX
operating FCF (THB billion)
THB 16.1 billion cash on hand
at the end of Q312
To pay interim dividend of
THB 2.7bn
Committed bank loan and
bank guarantee facilities
secured
16
debt repayment (THB billion)
21.9
2.7 0.0 2.7 0.0 2.1
14.5
Interest bearing debt Repayment
financial ratios
0.4 0.3
0.2
0.6 0.4
0.2
36.7 46.2 69.1 51.9 44.6 35.8
193.8
327.5 389.6
151.7 178.4 205.5
Q211* Q311* Q411* Q112 Q212 Q312
Net debt to equity
Net debt to EBITDA
Interest coverage ratio
FFO to total debt (%)
* net cash position
OE governance structure approved
OE committee formed to set direction and oversee overall implementation of the program
CFO responsible for driving the overall OE program
CXOs accountable for driving the implementation of OE projects in own and cross-functional areas
operational excellence program started in 2012
Way of Work Governance
Company-wide approach
Top-down target setting together with tactical bottom-up planning
Clear ownership and accountability assigned
CXOs endorsement to ensure successful implementation
Regular progress tracking and reporting to OE committee
17
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882
18
Extensive analysis to identify major
addressable cost optimization areas
Network Opex
SG&A excluding A&D
Other operating costs
Use % addressable cost to service
revenue in 2011 as a baseline (22.8% )
Savings from some OE initiatives
have been realized YTD
But expecting to increase in Q412
Disclaimer: Not yet including the effect of 2.1 GHz, we are not in the position to give any guidance at this point.
operational excellence targeting major cost areas
22.8% 26.4%
18.5% 18.0%
14.3% 14.2%
4.3% 4.8% 5.3% 5.2%
13.2% 12.2%
2011 2012YTD
Regulatory cost IC cost
Amortization and Depreciation (A&D) Network OPEX
Other Operating Cost SG&A excl. A&D
22.8%
22.1%
Free cash flow
Revenue growth
Approx. THB 18.0 – 19.0 billion CAPEX at THB 8.0 – 9.0 billion
High single digit
4.0 – 5.0 million net adds for the industry. Net adds
Investor Relations: www.dtac.co.th
E-mail: [email protected]
Tel: 662 202 8882