3Q17 Results Presentation. 16 October 2017

Transcription

1 3Q17 Results Presentation 16 October 2017

2 Forward looking statements Important note This presentation and the following discussion may contain forward looking statements by M1 Limited ( M1 ) relating to financial trends for future periods Some of the statements contained in this presentation or arising from this discussion which are not of historical facts are statements of future expectations with respect to financial conditions, results of operations and businesses, and related plans and objectives. Such forward looking statements are based on M1 s current views and assumptions including, but not limited to, prevailing economic and market conditions and currently available information. These statements involve known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of M1. In particular, such statements should not be regarded as a forecast or projection of future performance of M1. It should be noted that the actual performance or achievements of M1 may vary significantly from such statements. 1

3 Overview Service revenue increased 4.9% YoY to S$207m Financial highlights for 3Q 2017 Fixed services revenue grew 19.9% YoY to S$32m EBITDA was 1.3% higher YoY at S$76m Net profit after tax was S$33m Mobile services revenue continued to trend up QoQ Mobile data revenue was 55.9% of service revenue Performance highlights for 3Q 2017 Mobile customer base declined 37,000 to 2.01m Fixed services contributed 15.7% of service revenue Fibre customer base grew 6,000 QoQ to 182,000 Corporate segment made up 10% customer base and 47% of fixed services revenue 2

4 Agenda Financial highlights Performance highlights Developments and Outlook 3

5 Revenues (S$m) 3Q16 4Q16 1Q17 2Q17 3Q17 Service revenue (S$m) % Handset sales 9M2017 vs 9M2016 Handset sales (+5.9%): Higher sales volume 1.0% % Fixed services International call services Mobile services Fixed services revenue (+21.4%): Higher customer base & corporate segment projects contribution International call revenue (-8.8%): Lower retail revenue Mobile revenue (-0.8%): Lower prepaid revenue 3Q16 4Q16 1Q17 2Q17 3Q17 4

6 Cost of sales (S$m) % % Q16 4Q16 1Q17 2Q17 3Q % Handset costs Traffic Expenses Other costs Wholesale costs of fixed services 9M2017 vs 9M2016 Handset costs (+5.8%): Higher sales volume Wholesale costs of fixed services (+21.9%): Higher customer base Other costs (+17.1%): Higher dealers commission & project related expenses 5

7 Other operating and interest expenses (S$m) +1.7% % % 3Q16 4Q16 1Q17 2Q17 3Q Q16 4Q16 1Q17 2Q17 3Q17 Interest expense (S$m) Depreciation & amortisation Staff costs Facilities expenses Leased circuit costs Other G&A expenses Advertising & promotion Doubtful debt provision 9M2017 vs 9M2016 Depreciation & amortisation expenses (+2.8%): Higher fixed asset base Staff cost (+4.8%): Salary increment and benefitted from the government s wage credit scheme 6

8 EBITDA & net profit after tax EBITDA margin (on service revenue) EBITDA (S$m) & margin on service revenue 3Q16 4Q16 1Q17 2Q17 3Q % 35.8% 39.2% 35.9% 36.5% 39.7% 37.2% PAT margin (on service revenue) Profit after tax (S$m) & margin on service revenue 3Q16 4Q16 1Q17 2Q17 3Q % 15.8% 18.0% 15.9% 15.8% 19.5% 16.6% -5.0% % +1.3% -4.8% % % 33 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 7

9 Capex & Cash flows Capex (S$m) Operating and free cash flows (S$m) Operating cash flow 3Q16 4Q16 1Q17 2Q17 3Q % 104 Free cash flow Spectrum rights payment -8.8% +3.3% >+500% % >+500% Q16 4Q16 1Q17 2Q17 3Q Q16 4Q16 1Q17 2Q17 3Q17 8

10 Financial leverage 9 months ended S$m FY2016 FY2017 Change Cash & cash equivalents % Net debt % Net assets % Net debt/equity (x) % Net debt/ebitda (x) % EBITDA/Interest (x) % Net assets per share (cents) % EPS - diluted (cents) % 9

11 Agenda Financial highlights Performance highlights Developments and Outlook 10

12 Mobile customers Postpaid customer base ( 000) Prepaid customer base ( 000) +40 1,232 1,247 1,271 1,267 1, Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 11

13 Postpaid mobile Postpaid mobile revenue (S$m) Postpaid monthly ARPU (S$) +1.0% ARPU allocated to handset sales % -0.7% -4.6% +5.5% % Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 12

14 Prepaid mobile Prepaid mobile revenue (S$m) Prepaid monthly ARPU (S$) -15.4% % -13.3% +2.9% -13.6% % Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 13

15 Mobile market share Overall market share* Postpaid & Prepaid market share* Postpaid 24.7% 24.8% 24.9% 25.0% 25.0% 23.7% 23.8% 24.0% 24.1% 24.1% 3Q16 4Q16 1Q17 2Q17 Jun-17 Prepaid 22.1% 22.5% 22.6% 22.9% 22.9% 3Q16 4Q16 1Q17 2Q17 Jun-17 3Q16 4Q16 1Q17 2Q17 Jun-17 * - Based on published statistics available at the time of submission 14

16 Postpaid mobile Acquisition cost per postpaid customer (S$) Monthly churn rate (postpaid) +5.9% % 11.3% % 1.2% 1.3% 1.3% 0.9% 1.0% 1.0% 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Note: Cash basis 15

17 Tiered data plans & mobile data contribution Tiered data plans Data contribution to mobile service revenue Postpaid customers on tiered data plans Percentage of tiered data plan customers exceeding primary data bundles 26% 28% 27% 32% 33% 76% 77% 78% 79% 80% 54.2% 54.8% 55.1% 55.5% 55.9% 53.8% 55.5% 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 16

18 Fixed services Fibre customer base ( 000) Fibre monthly ARPU (S$) % % -6.3% Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 17

19 International call services International retail minutes (million mins) International call services revenue (S$m) -8.8% -3.0% -11.2% % -4.1% % Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 18

20 Agenda Financial highlights Performance highlights Developments and Outlook 19

21 Developments and outlook Competitive landscape Competition likely to pick up with impending entry of new mobile network operator Change in consumer preferences from traditional telecommunications to data centric services Proactive customer service management Enhance customer experience Network optimisation and upgrades Small cells / WiFi HetNet deployment Enhance video streaming experience Innovative and competitively priced service propositions Asia s first network-based mobile malware detection solution Postpaid and prepaid data centric plans 20

22 Outlook Expanded ICT solutions with value added services Managed infrastructure ICT and digital solutions Cloud-based cyber security solutions Data analytics Nationwide NB-IoT network will drive adoption of new and innovative IoT applications Pilots/trials: Electricity metering, water metering/flood sensor, smart waste management Capex to be around S$150m FY2017 Expects a decline in net profit after tax for full-year 80% dividend payout ratio for full-year 21

23 Thank you 22