TELEKOM MALAYSIA BERHAD - tm.listedcompany.com Asean Corporate Day 2014...Net Current...
Transcript of TELEKOM MALAYSIA BERHAD - tm.listedcompany.com Asean Corporate Day 2014...Net Current...
TELEKOM MALAYSIA BERHAD CONNECT COMMUNICATE COLLABORATE
RHB-OSK Asean Corporate Day 2014
Singapore 27 June 2014
This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any
securities and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract
or commitment or investment decision.
This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are
deemed to have agreed and confirmed to Telekom Malaysia Berhad (the “Company”) that: (a) you agree not to trade in any securities of
the Company or its respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain
absolute confidentiality regarding the information disclosed in this presentation until the public disclosure of such information, or unless
you have been otherwise notified by the Company.
Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation
does not take into consideration the investment objectives, financial situation or particular needs of any particular investor.
No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information,
opinions and conclusions contained in this presentation. None of the Company and its affiliates and related bodies corporate, and their
respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or
negligence) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it.
This presentation contains projections and “forward-looking statements” relating to the Company’s business and the sectors in which the
Company operates. These forward-looking statements include statements relating to the Company’s performance. These statements
reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It
is important to note 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 the Company.
Disclaimer
2
3
2
3
•About TM
4
•TM 1Q2014 Results Performance
1 •Country & Industry Overview
5
•High Speed Broadband Update
•Business Priorities 2014
6 •Key Updates
Country & Industry Overview as at 1Q2014
* As at 2H2013
4
Total Households in Malaysia =
6.96mn
Cellular penetration rate in Malaysia =
143.7%
Broadband penetration rate in Malaysia =
67.3%
Voice Revenue
21% market share
Fixed Broadband
92% physical market share
Fixed Line
97% physical market share
Data Revenue*
71% market share
Broadband Revenue
30% market share
TM’s Market Share as at 1Q2014
Source: MCMC, Company Financial Results; Group Regulatory & BMI Team Analysis
Market size: RM4.17bn Market size: RM2.43bn Market size: RM1.06bn
Market size: 3.7mn Market size: 2.4mn
* as at 30 May 2014 •Note : EPF : Employees Provident Fund
Source: Bloomberg ^ For the period 22 April 2008 – 13 June 2014 * For the period 25 April 2008 – 13 June 2014 ** For the period 18 November 2009 – 13 June 2014
YTD Growth
TM Share price: +11.7%
FBMKLCI: +0.5%
Moody’s A3
S&P A-
Fitch A-
RAM AAA
CREDIT RATING
FBMKLCI^ 82.80%
TM^ 333.81%
AXIATA* 48.24%
MAXIS** 82.55%
DIGI^ 250.10%
TM Share Price
13 June 2014 : RM6.20
22 April 2008: RM3.05
TOTAL RETURN TO SHAREHOLDERS
SHARE PRICE PERFORMANCE
Authorised Capital :
RM3,528,003,015
Issued and Paid-up Capital:
RM2,567,023,489.80
Date of Incorporation:
12 October 1984
Date of Listing:
7 November 1990
Snapshot of TM
Capital Structure
TM Shareholders*
Source : TM Website (www.tm.com.my)
5
Malaysia’s leading ISP with >2.2 million broadband
customers
About TM
6
Malaysia’s broadband champion and leading integrated information
and communication company with over 60 years of experience
Malaysia’s premier BPO provider
Malaysia’s largest fixed data provider with
>50% market share
Enhanced global capacity
234 290
185
1Q13 4Q13 1Q14
Normalised PATAMI
300 380
294
1Q13 4Q13 1Q14
2,425 2,980
2,620
1Q13 4Q13 1Q14
RM mn
RM mn
Normalised EBIT
Normalised PATAMI RM mn
Reported PATAMI
Revenue
7
Key 1Q2014 Highlights
211
+8.1%
-12.1%
-2.1%
-22.6%
-20.8%
-36.0%
344
213
8
1Q2014 Highlights: Group Total Revenue by Lines of Business
Retail 76%
Global & Wholesale
15%
Others 9%
Retail 77%
Global & Wholesale
15%
Others 8%
1,854 2,207 1,983
1Q13 4Q13 1Q14
* Others comprise revenue from VADS, Property Development, TM R&D, TMIM, UTSB and MKL
197
294 248
1Q13 4Q13 1Q14
374 478
388
1Q13 4Q13 1Q14
Global & Wholesale
1Q14 1Q13 RM2,620mn RM2,425mn
Retail
RM mn RM mn RM mn
Others*
+7.0%
-10.1%
+4.0%
-18.8%
+25.8%
-15.5%
Positive YoY growth across all segments
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1Q2014 Highlights: Group Total Revenue by Product
Voice 33%
Data 23%
Internet 28%
Others 16%
Voice 36%
Data 24%
Internet 27%
Others 13%
318
673
414
1Q13 4Q13 1Q14
644 709 726
1Q13 4Q13 1Q14
585 687
606
1Q13 4Q13 1Q14
878 911 874
1Q13 4Q13 1Q14
Data
RM mn
RM mn RM mn
Voice
Others*
Internet 1Q14
1Q13
RM mn RM mn
RM mn
RM2,620mn
RM2,425mn
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)
+12.7%
+2.4%
-0.4%
-4.0%
+3.5%
-11.8%
+30.4%
-38.5%
YoY revenue growth driven by Internet and Others
8%
22%
70%
Support System* Core Network Access
30%
17%
53%
Support System* Core Network Access
20.7 21.7
17.5 16.8
22.5 22.4
11.0 10.4
6.0 6.8
5.6 5.7 3.3 3.0 1.3 1.4
1Q13 1Q14
Bad Debt
Marketing Expenses
Supplies & material
Maintenance Cost
Other operating cost
Manpower cost
Direct cost
Dep & Amortisation
RM mn
1Q2014 Highlights: CAPEX & OPEX
Business As Usual (BAU) Capex
9.7 7.7
Note: * gross CAPEX
Cost % of Revenue ¹
1 Revenue = Operating Revenue + Other Operating Income
Note: The classification of cost is as per financial reporting
Capex / Revenue (%)
10
RM mn
Total Cost / Revenue ( %)
% of Revenue
RM2,157.3
87.9%
RM2,353.4
88.1%
HSBB Capex
Total Capex
31 Mar 14 31 Dec 13 31 Mar 14 31 Dec 13Return on Invested Capital 6.96% 7.68% Gross Debt to EBITDA 1.86 1.92
Return on Equity 11.45% 14.80% Net Debt/EBITDA 1.12 1.04
Return on Assets 5.90% 6.27% Gross Debt/ Equity 0.94 0.90
Current Ratio 1.17 0.99 Net Debt/ Equity 0.56 0.55
WACC 6.90% 6.67% Net Assets/Share (sen) 205.0 199.5
3
Includes reclassification of long term debt due within the next 12 months to current liabilities (RM1.5bn)
Based on Normalised EBIT (1Q14 excludes Negative Goodwill on acquisition of a new subsidiary) Based on Normalised PATAMI (1Q14 excludes Negative Goodwill on acquisition of a new subsidiary)
1
1
2
3
1 2
As at 31 Mar 2014 RM Million
As at 31 Dec 2013
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1Q2014 Highlights: Group Balance Sheet & Key Financial Ratios
7,136.7
162.6
8,076.7
4,865.0
1,151.0
1,999.5
51.4
9.8
15,376.0
5,722.2
1,847.7
440.9
2,514.9
918.7
5,770.5
3,172.8
1,590.2
1,007.5
(48.3)
14,572.0
852.3
15,376.0
7,333.9
170.8
8,522.5
5,288.2
1,190.4
1,980.5
51.1
12.3
16,027.2
6,582.1
2,463.7
451.8
2,799.2
867.4
5,628.0
2,920.5
1,592.7
1,114.8
954.1
14,217.5
855.6
16,027.2
Shareholders’ Funds
Non-Controlling Interests
Deferred & Long Term Liabilities
Long Term Borrowings
Deferred Tax
Deferred Income
Derivative financial liabilities
Other payables
Current Assets
Trade Receivables
Other Receivables
Cash & Bank Balances
Others
Current Liabilities
Trade and Other Payables
Short Term Borrowings
Others
Net Current (Liabilities)/Assets*
Property Plant & Equipment
Other Non-Current Assets
*Due to reclassification of long term debt due within the next 12 months to current liability (RM1.5bn)
31 Mar 14 31 Dec 13 31 Dec 13 31 Mar 14
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Physical Highlights as at 1Q2014
2,364 2,337 2,317 2,296 2,262
1,474 1,463 1,453 1,442 1,423
532 577 607 635 653
1Q13 2Q13 3Q13 4Q13 1Q14
Fixed Line Residential Fixed Line Business UniFi
448 484 509 530 544
84 93 98 105 109
1Q13 2Q13 3Q13 4Q13 1Q14
UniFi Residential UniFi Business
1,292 1,291 1,290 1,292 1,292
285 285 287 288 285
532 577 607 635 653
1Q13 2Q13 3Q13 4Q13 1Q14
Streamyx Residential Streamyx Business UniFi
Net adds (in thousand)
In thousand
In thousand
+5.7%
+0.7%
Broadband Customer Growth
Fixed Line Customer Growth
4,370
2,109
Net adds (in thousand)
532
UniFi
*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU
ARPU (RM) 1Q13 2Q13 3Q13 4Q13 1Q14
Fixed Line (DEL)* 31 32 31 33 30
Streamyx Broadband** 80 82 83 85 86
UniFi*** 178 180 183 185 188
ARPU
577
+45
+44
2,153
4,377
In thousand
+30
607 2,184
+31
4,377
2,215
+31 +28
635
4,373
+22.6%
+2.8%
-0.8%
-0.8%
2,230
+15 +18
653
4,338
Healthy broadband growth, higher take up of high speed broadband
High Speed Broadband Update
117 IPTV Channels Wide range of HyppTV packages for home,
business, hospitality and multi-devices
Delivered >1.5mn premises covering 105 exchanges Activated close to 653,000 customers ~43% takeup Gross capex spent todate: RM7.5bn
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> 949,000, or 43% of customers on high speed broadband (4Mbps and above)
Business Priorities 2014 : Game Changing Year
14
MALAYSIA’S BROADBAND CHAMPION
Enabling a digital lifestyle – Life Made Easier, Business Made Easier Innovative offerings across segments Enhanced customer service Expansion of broadband services in under-served areas
INFORMATION & INNOVATION EXCHANGE
Full suite of converged communications services Integrated ICT player Beyond Connectivity
PERFORMANCE IMPROVEMENT PROGRAM 3.0
Continued growth Fundamental productivity shift Institutional health drivers
• Investment Agreement signed on 27 March 2014
• Partnership and collaboration between TM, Green Packet Berhad (“Green Packet”) and SK Telecom Co., Ltd. (“SK Telecom”) to develop and offer a full-suite of converged communications services using the LTE technology platform
• RM350mn capital injection in Packet One Networks (Malaysia) Sdn Bhd (“P1”) for an estimated 57% stake
• In line with a strategy to deliver high quality and reliable data services and expand
wireless broadband capabilities
Partnership To Develop Malaysia’s Next-Generation Converged Communications Services
Key Update
15
The Partnership Between TM, SK Telecom and Green Packet Is The Ideal Platform to Expand P1 Capabilities…
Focus on large screen data play
2.3GHz / 2.6 GHz LTE spectrum bands
Nationwide network footprint of ~2,000 WiMax sites
~500k wireless customer base
Entrepreneurial organization and team
Malaysia’s Leading broadband provider
Extensive fiber footprint
Anchor the growth and development of P1’s business
TM
#1 South Korean mobile operator in one of the most advanced LTE markets globally
Contribute valuable technical and strategic knowhow
SK Telecom
Global player in 4G devices, founded and led P1 to become a leading wireless player
Continue to lend management expertise and contribute to the LTE device ecosystem
Green Packet
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… and Accelerate Our Vision to Become Malaysia’s Information & Innovation Exchange
Develop converged services capabilities
Strengthen core fixed business
Leverage on market opportunities
Enhance value of assets
Realise significant synergies
Establish avenues for future growth
Combined base:
~2,000 sites
Valuable spectrum assets
Extensive Fibre network
Extensive customer base
#1 Fixed Line
WiFi # 1 Fixed Broadband
Mobile Data IPTV
17
THANK YOU
Appendix
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20
Headline KPI
2014 2016
Revenue Growth
EBIT Growth
Customer Satisfaction Measure
5.0-5.5% 6%
5% 8%
72 72
1 Using TRiM index measuring end to end customer experience at all touch points. TRiM (Measuring, Managing and Monitoring) is a standardized indicator system. It analyzes, measures and portrays stakeholder relationships on the basis of standardized indicators. The TRI*M Index is an indicator of the status quo of a particular relationship. The index is made up of four points of view on the stakeholder relationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and a company's competitive advantage. The information is based on surveys/interviews on a sample customer base.”
Telekom Malaysia Berhad ("the Company" or "TM") issues a statement to reiterate its stand on the Company's dividend policy. The
Company’s dividend policy as announced at the time of the demerger between TM and TM International Berhad (TMI) remains
valid. The policy states as follows:
“In determining the dividend payout ratio in respect of any financial year after the Proposed Demerger, our Company intends to
adopt a progressive dividend policy which enables us to provide stable and sustainable dividends to our shareholders while
maintaining an efficient capital structure and ensuring sufficiency of funding for future growth.
Upon completion of the Proposed Demerger, our Company intends to distribute yearly dividends of RM700 million or up to 90% of
our normalised PATAMI, whichever is higher.
Dividends will be paid only if approved by our Board out of funds available for such distribution. The actual amount and timing of
dividend payments will depend upon our level of cash and retained earnings, results of operations, business prospects,
monetization of non-core assets, projected levels of capital expenditure and other investment plans, current and expected
obligations and such other matters as our Board may deem relevant.”
This policy remains unchanged for 2009 and beyond. The Company is currently able to meet this dividend policy, because:
• The Company has sufficient consolidated cash and bank balances of RM1.144 billion as at 30 September 2008, and it is
confident that TMI is able to meet its obligation due to TM of RM4.025 billion by April 2009.
• In the event of a downturn in performance due to unforeseen circumstances, the Company wishes to state that its recurring cash
generation ability is sufficient to meet its current dividend policy.
• TM’s retained earnings is also sufficient to support this current dividend policy in the event of unforeseen shortfalls in normalised
PATAMI.
Given the unprecedented volatility in global markets, the Company will continue to examine the likely impact on its business,
cashflow generation, capital structure and methods in which excess cash beyond the dividend policy and prudent level of cash
required for operations, can be efficiently distributed to our shareholders.
Moving forward, TM is focused on building a strong foundation for its future growth and operational excellence.
TELEKOM MALAYSIA BERHAD (Bursa Malaysia Announcement Reference No TM-081113-37325)
Date Announced :13/11/2008
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Reiteration of Dividend Policy
22
Return to Shareholders
980 1,150
1,359
2011 2012 2013
635 881
1,039
2011 2012 2013
3,108 3,196 3,519
2011 2012 2013
9,151 9,994 10,629
2011 2012 2013
+9.2%
Total Revenue
RM mn
Normalised EBITDA Margin (%)
RM mn
Normalised EBITDA
Normalised PATAMI
RM mn
31.6 33.5 32.7
TM 3-year performance
Normalised EBIT
23
+6.4% +2.8% +10.1%
+17.3% +18.2% +38.8% +17.9%
Sustained growth in revenue and profitability
RM mn
2,001 2,372
2,676
2011 2012 2013
2,013 2,205 2,512
2011 2012 2013
3,734 3,706 3,618
2011 2012 2013
Voice Data Internet RM mn RM mn RM mn
2012 2011
Total Revenue by Product
+12.8%
Non-voice Revenue now >65% of Group Revenue
Voice 41%
Data 22%
Internet 22%
Others* 15%
Voice 37%
Data 22%
Internet 24%
Others* 17%
+18.5% +13.9% +9.5% -2.4% -0.7%
24 *”Others” comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages
2013
659 781 479
633 645
516
132 228
171
2011 2012 2013Access Core Network Support System*
401 338 269
343 278
129
395
276
299
2011 2012 2013Access Core Network Support System*
23.0 20.1 20.1
16.6 17.0 17.2
20.2 19.9 21.0
11.7 11.6 10.9
6.5 8.5 7.1
6.5 6.3 6.4
4.5 4.2 3.7
0.8 0.6 0.8
2011 2012 2013
Bad Debt
Marketing Expenses
Supplies & Material
Maintenance Cost
Other Operating Cost
Manpower Cost
Direct Cost
Dep & Amortisation
RM mn
Business As Usual (BAU) Capex
HSBB Capex**
12.4 8.9
Note: **gross CAPEX
BAU Capex / Revenue
Cost % of Revenue ¹
1 Revenue = Operating Revenue + Other Operating Income
RM mn
Note: The classification of cost is as per financial reporting
HSBB Capex / Revenue
25
RM mn
Total Cost / Revenue ( %)
RM8,313.2
89.7%
RM8,972.0
88.3%
% of Revenue
CAPEX & OPEX
1,139
892
697
6.6
1,424 1,654
1,166
15.6 16.6 11.0
RM9,378.3
87.2%
*Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)
4,112 3,876 3,738
237 483 635
2011 2012 2013
DEL UniFi
202
406 530
35
77
105
2011 2012 2013
UniFi Residential UniFi Business
1,686 1,583 1,580
237 483 635
2011 2012 2013
Streamyx UniFi
Broadband and Fixed Line customers
Total Broadband Customers
In thousand
In thousand
1,923
4,349 4,359 4,373
+7.2%
2,066 2,215
Strong broadband growth led by Unifi
Fixed Line Customers
UniFi Customers
In thousand
237
483
635
+7.4%
+0.3% +0.2%
+31.6% +103.8%
26
Any queries please email to : Rohaila Mohamed Basir
Investor Relations Telekom Malaysia Berhad
•Investor Relations • Level 11 (South Wing) • Menara TM •Jln Pantai Baharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388