Intouch Holdings Plc & Advanced Info Service Plc. Non-Deal Road Show HK&SG Aug 2014

Transcription

1 Intouch Holdings Plc & Advanced Info Service Plc Non-Deal Road Show HK&SG Aug

2 Investment Structure Aspen Holding 41.62% Free float 58.38% 1) 1) 1) 2) 40.45% 41.14% 99.96% 99.99% 2) 2) 22% Digital Phone Co., Ltd % Advanced Wireless Network Co., Ltd % DTV Service Co., Ltd % CS Loxinfo PLC 42.07% Shenington Investments Pte. Ltd. 51% 2) 30% 25% Lao Telecommunications Co., Ltd 49% 1) Shareholding structure as of 4 Apr ) Listed Company on the Stock Exchange of Thailand 2

3 INTOUCH 1H14 Key Event Corporate name: Intouch Holding Plc Trading symbol: INTUCH transcosmos acquired newly-issued share of Ookbee % ownership: 25.03% -> 22.26% 2014 DPS at Bt4.39 Bt2.16 for the period of 1 Jan 27 Mar 14 Bt2.23 for the period of 28 Mar 13 Aug 14 INTOUCH changed the dividend policy from not less than 40% to pass through dividend received after deducting operating expenses. 3

4 To deliver Total Shareholder Return with focusing on Telecom, Media, IT, and Digital Content Strategic objective and direction for the next 5-7 years To increase wealth of INTOUCH with 75% : 25% contribution from AIS : Non-AIS in 5-7 years Effective Asset Management Monitoring & Controlling Auditing Supporting Growth and sustainable Creating 9 Breakthrough & new opportunities Competency Financial capital Intangible capital 4

5 Breakthrough Extension

6 Breakthrough Missions Digital TV : Monitor DTT industry movement and consider the business opportunity Venture Capital : Explore more investment alternatives to increase potential candidates / Many more in the pipeline Digital Contents : Identified framework of Digital Content business and in the process of preparing business plan 3G 2.1GHz : Rollout network to cover 97% of population coverage and reached 19,300 base stations / Achieved 34.4mn subscribers on 2.1GHz 4G LTE technology : Prepare for frequency auction which expected to be in 2015 Wired Broadband : To provide an integrated services to customers and added value for AIS Convergence : To converge Wired and Wireless broadband services Thaicom Satellites : Expected to launch Thaicom 7 in 3Q14 and Thaicom 8 in 1H16 Cloud Computing : To extend cloud computing service from Infrastructure as a Service to Software as a Service / Invested Bt300mn in new data center (phase1) and estimated to operate in 3Q14 6

7 INTOUCH Group 2Q14 Financial Highlights -4.7% YoY -8.4% QoQ 7

8 Strong Balance Sheet Consolidated (Btmn) Standalone (Btmn) Net Cash Position of Bt2.1bn Key Ratio: ROA 14.2% ROE 30.5% Total debt/equity 0.59X As of 30 June

9 Profit Contribution : H14 0.5% 3.2% 5.0% 9

10 INTOUCH 2014 Guidance (maintained) Sales & Service Revenues 5-7% Share of Profit of Associates 5-7% 40.45% of AIS Net Profit General & Administrative Expenses Bt mn 5-7% Dividend Policy 5-7% Pass through Venture Capital Project (InVent) Bt200mn 5-7% 10

11 Telecommunication Business 11

12 AIS at glance No.1 mobile operator in Thailand 52% revenue market share 34m 3G-2.1GHz users 42.9m users Breakdown of Service Revenue Breakdown of customers Quick introduction Officially launched 3G-2.1GHz service in May-13 and expanded coverage to all 77 provinces with 97% population coverage under a 15-year license of 2x15MHz bandwidth. Provide nationwide 2G network on 900MHz under Built-Transfer-Operate contracts which will be expired in Sep-15. According to NCPO, the 1800MHz remedy will be extended for one more year. 12

13 Deliver both growth & shareholder return Growth Shareholder return Enhance 3G-2.1GHz quality 900MHz & 1800MHz to strengthen our network Expected auction in % Dividend payout Dividend shall not exceed the retained earnings in separated financial statement. Wired-broadband services Digital service provider Bt30bn operating cash flow in 1H net debt to equity Capture potential growth in the future 13

14 Achieved 97% of population coverage on 3G-2.1GHz Enhance 3G-2.1GHz network quality 1 Increase small cells 4 Increase cell sites 2 Technology innovation & improvement 5 Increase Wifi hotspots 3 Cell splitting 6 Additional carriers 14

15 Increase 3G subscribers and smartphone penetration in mid-low tier segments 3G 2.1GHz 3G to total subscribers FY13 40% (16m) 1H14 80% (34m) Target FY14 85% (~36-37m) 3G device penetration 50% (8m) 46% (16m) 45% (~17m) AIS LAVA 3.5 Bt1,690 AIS LAVA 4.0 Bt2,390 AIS LAVA 4.5 Bt2, direct sales Dealers incentive Customer touch points AIS 3G centers Shop expansion & renovation Smartphone discount Co-brand handset Distribution channel 15

16 MAO MAO data pack and social pack Package Internet Throttling Validity Bt 9 10 MB - 1 Day Bt MB - 1 Day Bt MB unlimited 64 kbps 1 Day Bt MB - 7 Days Bt GB unlimited 64 kbps 7 Days Bt MB - 30 Days Bt GB unlimited 64 kbps 30 Days Package Internet Speed Validity Bt 14 Unlimited 384 kbps 1 Day Bt 69 Unlimited 384 kbps 7 Days 16

17 Million subscribers Non-data users Data users 25 20% 13 Growing demand for mobile data Data users +31% YoY Two key drivers Existing subscribers Pay as you go Postpaid 3G ismart Baht Data ARPU Base on data users MB Data VOU +19% YoY +240% YoY New subscribers Co-brand handset programs Handset discount bundling with packages Tariff discount Base on data users 2Q13 3Q13 4Q13 1Q14 2Q14 17

18 Focus on acquiring and retaining quality subscribers Concentrate on segmentations Target on foreign workers e.g. Burmese, Cambodians students, governors and officers Acquire new quality subscribers New incentive scheme for dealers Value our quality subscribers Serenade group privilege allow subscribers to accumulate up to 3 mobile numbers New privilege for Serenade Emerald 18

19 2Q14 Financial Highlights Service revenue ex. IC EBITDA Sales margin 1.7% YoY 2.2% QoQ +0.3% YoY -4% QoQ (Unit: Bt mn) 2Q13 1Q14 2Q14 2Q13 1Q14 2Q14 2Q13 1Q14 2Q14 % Service margin % EBITDA margin Net profit -7.8% YoY -11% QoQ 2Q13 1Q14 2Q14 2Q13 1Q14 2Q14 2Q13 1Q14 2Q14 19

20 1 2% (revised from 6-8%) 2014 guidance (revised) 85% (revised from 75% of total subscribers) +100bps (revised from flatted) Service revenue (excluding IC) Weak macroeconomic in 1H14 Expected growth momentum to be in 2H bps Service margin Increase 300bps from last year to 52% Higher marketing cost offset by lower regulatory cost saving 3G 2.1GHz subscribers 80% achieved in 1H14 45% using 3G devices Bt40bn FY14 CAPEX Achieved 97% population coverage 20k 3G BTS & additional small cells Faster fiber optic rollout AIS shop expansion & renovation Consolidated EBITDA margin Softer than expected handset sale Increase 100bps from last year to 43.3% 15% (revised from increase 18% YoY ) Depreciation & Amortization Incl. network, license fee, and fixed asset in SG&A 20

21 Satellite & Media Business 21

22 Key Highlights of 1H14 Continued positive financial performance Consolidated net profit of 2Q14 grew 162% YoY THAICOM 8 Successfully acquired approval from NBTC to operate THAICOM 8 under existing ; expect to launch in 1H16 Additional revenue from Conventional Commercialized services to support Digital Terrestrial TV (DTT) For MUX operators (TV5 and MCOT) since Mar14 For Must Carry channels (26 C & 26 Ku) since Apr14 Number of satellite TV increased from 641 channels in 2013 to 677 channels (116 HD channels) in 1H14 End-to-End solutions Signed service agreement with Nok Air for In-flight Connectivity solution in Mar; expected to start the service in 3Q14 Launched a 2 nd Screen App MCONNECT for MCOT in May 14 22

23 Broadcast Service: To support HD & Ultra HD broadcasting Higher Broadcast Resolution Lower TV/IRD costs More households More channels More demand for satellite bandwidth SD HD 4K 8K 0 Source : Thaicom PLC Number of Satellite TV channels on H14 SD channel HD channel HD 57% Projected pay DTH channels in Thailand HD channels to grow 45% CAGR, and 8% CAGR, Unit: channels HD channels to replace all SD channels by Source : Value Partners SD HD > 100 TPEs 23

24 Broadband Service: To support exponential growth in broadband services Broadband Access More subscribers & consumption More backhaul/offloading Mobility requirements Business continuity concerns More demand for satellite bandwidth Enterprise Data Mobility Services: More Data Consumption Source: NSR Business Continuity & Resiliency 24

25 Convergence Value Added Service: To expand our In-flight Connectivity business Euroconsult s 2013 Figures: 59 airlines (3,000+ commercial aircrafts) provide IFC through satellite or Air-to- Ground (ATG) networks IFC services generated around $440 million in revenue from airline passengers Source: Euroconsult, % Germany s 1-0 victory over Argentina in the World Cup final was watched in real-time by 40,000airline passengers 25

26 THCOM Footprint 50.5E 78.5E 119.5E 120E Coverage Area TC-4 TC-5 TC-6 TC-7 TC-8 TC-4 TC-5 TC-6 TC-7 TC E 78.5 E 78.5 E 120 E 78.5 E C Ku C Ku C Ku C Ku Ku Indochina SEA South Asia North Asia Australasia ME, Africa Total TPE TC-5 (C,Ku) TC-6 (C,Ku) TC-8 (Ku) TC-4 (Ku) TC-7 (C) Conventional Satellite Capacity (TPE*) Note: *TPE = 36 MHz transponder equivalents Ku C 26

27 THCOM 2Q14 & 1H14 Key Financial Highlights Financial Highlights (Bt million) 2Q13 1Q14 2Q14 YoY QoQ 1H13 1H14 YoY Sales & Service revenues 1,794 2,374 2,449 37% 3.2% 3,567 4,824 35% Satellite and related services 1,587 2,103 2,157 36% 2.6% 3,129 4,261 36% Gross profit ,093 43% 24% 1,465 1,977 35% EBITDA 947 1,066 1,331 41% 25% 1,758 2,398 36% EBIT % 46% 706 1,100 56% Net profit % 25% % EBITDA margin 52.8% 44.9% 54.3% 1.5% 9.4% 49.3% 49.7% 0.4% Net margin 10.6% 16.8% 20.3% 9.7% 3.5% 14.6% 18.6% 4.0% 27

28 Appendix 28

29 29

30 INTOUCH 1H14 Statement of Financial Position 30

31 INTOUCH 2Q14 & 1H14 Statement of Income 31

32 32

33 Depreciation & Amortization 3G 2.1GHz license amortization 1800MHz operational right amortization 3G 2.1GHz networks depreciation 2G assets amortization SG&A depreciation Breakdown of D&A Bt16.5bn Bt0.9bn Bt0.4bn Bt3bn Bt12bn Bt0.2bn FY13 +15% Bt0.9bn >Bt3bn ~Bt11bn >Bt0.2bn FY14 Rising 3G investment will result in higher D&A but partly offset by lower 2G amortization The value of 2G network assets will be depleted in FY15 Bt20.5bn FY13 FY14 FY15 Asset under BTO (2G assets) Bt0 33

34 Special shot-term discount 3X data usage for first 6 months Tier pricing volume base Fair usage policy: no real unlimited data offers Monthly fee Bt Bt Voice (minutes) Data Throttling Wifi Bt MB unlimited Bt Bt Bt MB unlimited 750MB unlimited 1.5GB unlimited 2GB unlimited 3GB unlimited 128Kbps 128Kbps 128Kbps 128Kbps 128Kbps 256Kbps unlimited unlimited unlimited unlimited unlimited unlimited 34

35 3G device bundling promotions For postpaid subscribers buying new 3G handset 50% package discount for 6 months Low-ends smartphone Mid-ends smartphone High ends smartphone Bt399 Bt199 Bt599 Bt299 Bt799 Bt399 Bt999 Bt499 3G handsets discount Condition: subscribes monthly package pays 6 months package upfront fee 35

36 Affordable 3G models lined up AIS LAVA 3.5 Bt1,690 AIS LAVA 4.0 Bt2,390 AIS LAVA 4.5 Bt2,690 Nokia X Bt3,990 Galaxy Pocket Neo Bt2,690 Acer Liquid Z3S Bt2,590 I-mobile I-STYLE 2.5 Bt2,990 Samsung Hero 3G Bt1,390 36

37 1H14 Financial Highlights Service revenue ex. IC EBITDA Sales margin -0.1% YoY +0.7% YoY (Unit: Bt mn) 1H13 1H14 1H13 1H14 1H13 1H14 % Service margin % EBITDA margin Net profit -6.1% YoY 1H13 1H14 1H13 1H14 1H13 1H14 37

38 Disclaimer Some statements made in this presentation are forward-looking statements with the relevant assumptions, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as may, will, expect, anticipate, intend, estimate, continue plan or other similar words. The statements are based on our management s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements. INTOUCH INVESTOR RELATIONS ir-intouch@intouchcompany.com TEL