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TELEKOM MALAYSIA BERHADCONNECT COMMUNICATE COLLABORATE
INVEST MALAYSIA 2015 Kuala Lumpur
23rd & 24th April 2015
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
2
3
•About TM
4
•Group Results : 3- Year Performance
1 •Country & Industry Overview
5
•High Speed Broadband Update
•Convergence
6 •2015 Outlook and Business Priorities
3
4
Country & Industry Overview as at 4Q2014
Tota
l Ho
use
ho
lds
in
Mal
aysi
a
7.03 million
Age
De
mo
grap
hic
<20 years old = 35%
20-39 years old = 35%
40-59 years old = 21%
>60 years old = 9%
Bro
adb
and
p
en
etra
tio
n r
ate
in
Mal
aysi
a
70.2% Ce
llula
r p
en
etra
tio
n
rate
in M
alay
sia
148.5%
Market Share as at 4Q2014
Voice Revenue
22% market share
Market share: RM4.11bn
Broadband Revenue
30%market share
Market size: RM2.76bn
Data Revenue2
71% market share
Market size: RM1.06bn
Fixed Line
97%physical market share
Market size: 3.69mn
Fixed Broadband1
92% physical market share
Market size: 2.4mn
1 Official 4Q2014 data unavailable at the time of publication2 Data as at 2H2013
Source: MCMC, DOS, Company Financial Results; Group Regulatory & BMI Team Analysis
Khazanah29%
EPF15%
Amanah Raya13%
Foreign 15%
Free Float28%
Khazanah
EPF
Amanah Raya
Foreign
Free Float
Cap
ital
Str
uct
ure
CREDIT RATING
TOTAL RETURN TO SHAREHOLDERS
• Authorised Capital: RM3,528,003,015.00• Issued and Paid-up Capital: RM2,603,561,225.30• Date of Incorporation: 12 October 1984• Date of Listing: 7 November 1990
85.82%FBMKLCI1
432.98%TM1
52.75%AXIATA2
100.76%MAXIS3
296.62%DIGI1
• A3Moody’s
• A-S&P
• A-Fitch
• AAARAM
Source: Bloomberg1 For the period 22 April 2008 – 21 April 20152 For the period 25 April 2008 – 21 April 20153 For the period 18 November 2009 – 21 April 2015
* As at 31 March 2015Note: EPF stands for Employees Provident Fund BoardSource: TM Website (www.tm.com.my)
TM Shareholders*
5
About TM
6
1946 1964 1987 1990 2005 2008Establishment of Malayan Telecommunication Department
Jabatan Talikom Malaysia
Corporatisation of Syarikat Telekom Malaysia Berhad
Listing of Telekom Malaysia
Re-branding of TM
Demerger of fixed and mobile
1st Reinvention of TM
1st Technology Inflection point –from analog to digital
2nd Reinvention of TM
2nd Technology Inflection point –from legacy digital to IP-based
HSBB Project
Malaysia’s leading ISP with >2.2 million
broadband customers
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
7
Group Results: 3-Year Performance
1,1871,372 1,2941,150
1,359 1,387
FY2012 FY2013 FY2014
EBIT Normalised EBIT
9,994
10,629
11,235
FY2012 FY2013 FY2014
Revenue
3,233
3,532 3,636
3,196 3,159
3,725
FY2012 FY2013 FY2014
EBITDA Normalised EBITDA
1,264
1,012832881
1,039941
FY2012 FY2013 FY2014
PATAMI Normalised PATAMI
31.8%
31.6%
32.9%
32.7%
31.9%
32.8%
EBITDA Margin Normalised EBITDA Margin
Revenue EBIT
EBITDA PATAMI
RM mn RM mn
RM mn RM mn
+6.4% +5.7%+15.6% (Normalised +18.2%) -5.7% (Normalised +2.0%)
+9.2% (Normalised +10.1%) +2.9% (Normalised +5.9%)
-19.9% (Normalised +17.9%) -17.8% (Normalised -9.4%)
8
Total Revenue by Product: 3-Year Performance
Internet
+12.8% +11.9%
2,372 2,676 2,995
F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4
Data
+13.9% +3.7%
2,2052,512 2,606
F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4
Voice
-2.4% -4.1%
3,706 3,618 3,469
F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4
Voice37%
Data 22%
Internet 24%
Others17%
Voice
Data
Internet
Others
Voice34%
Data 24%
Internet 25%
Others17%
Voice
Data
Internet
Others
Voice31%
Data 23%
Internet 27%
Others19% Voice
Data
Internet
Others
FY2012 FY2013 FY2014
1,711 1,8232,165
F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4
Others*
+18.8%+6.5%
RM mn RM mn RM mn RM mn
Non-voice Revenue now >69% of Group Revenue
*”Others” comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages
9
Capex & Opex: 3-Year Performance
338 269 330
278
129
285
276
299
339
FY2012 FY2013 FY2014
Access Core Network Support System*
Business As Usual (BAU) Capex
HSBB Capex**
781479 364
645
516377
228
171
141
FY2012 FY2013 FY2014
Access Core Network Support System*
954892
697
882
1,654
1,166
8.9 6.6 8.5
16.6 11.0 7.9
BAU Capex / Revenue
Note: **gross CAPEX HSBB Capex / Revenue
*Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)
Cost % of Revenue1
20.1 20.1 20.5
17.0 17.2 16.5
19.9 21.0 21.0
11.6 10.9 11.0
8.5 7.1 7.4
6.3 6.4 6.9
4.2 3.7 3.20.6 0.8 2.0
FY2012 FY2013 FY2014
Bad Debt
Marketing Expenses
Supplies & Materials
Maintenance Cost
Other Operating Cost
Manpower Cost
Direct Cost
Dep & Amortisation
RM8,972.0 RM9,378.3 RM10,095.1
88.6%87.2%88.3%
RM mn
RM mn
Total Cost / Revenue ( %)
1 Revenue = Operating Revenue + Other Operating Income
Note: The classification of cost is as per financial reporting
10
Group Physical Highlights : 3-Year Performance
Broadband
1,583 1,580 1,502
483 635 729
FY2012 FY2013 FY2014
Streamyx UniFi
DEL
3,876 3,738 3,527
483 635 729
FY2012 FY2013 FY2014
DEL UniFi
UniFi
406530
604
77
105
125
FY2012 FY2013 FY2014
UniFi Residential UniFi Business
In thousand
In thousand
In thousand
+7.2%
2,2312,066 2,215
+0.7%
+0.3%
4,2564,359 4,373
-2.7%
729
483
635
+31.6% +14.8%
11
High Speed Broadband Update
Delivered >1.624mn ports covering 106 exchanges
Activated more than 750,000 customers translating to 46% take-up
>1mn or 48% of customers on high speed broadband (4Mbps and above)
121 IPTV Channels
Wide range of HyppTV packages for home, business, hospitality and multi-devices
Announced HSBB Phase 2 & Sub Urban Broadband (SUBB) projects in February 2015
Announced Collaboration between HyppTV and DiGi for HyppTV Everywhere in April 2015
Combined base:
~2,000 sites
Valuable spectrum assets
Extensive Fibre network
Extensive customer base
HOME
SME
TV
notebook /
desktop
tablets /
smartphone
Devices
desktop
tablets /
smartphone
Internet Usage
15
6
02468
10121416
Using Internet Watching TV
Total average weekly time spent
with each media (hours)
1.Video streaming 2.Social networking 3.Emails 4.Games 5.Messaging
notebook 17%20%
21%
31%
73%Services (e.g. email,
browsing)
File transfer
Voice call (VoIP)
ecommerce
Cloud software
Reason for using Internet
Source: Content Eco system in Digital age – Result Malaysia, Google;
Source: MCMC Internet User Survey 2012; comScore Inc., Nielsen)
At home, users need broadband mainly for video streaming, whilst SMEs carry out business functions i.e sending emails and browsing
Customer Behaviour Trends: Access Broadband via Mulitple Devices
13
Wireless service via 4GInnovative Products and Services
Attractive IPTV Channels and Packages
At a glance: TM's latest products and services...
15
RM38/month RM179/month
• All price are exclusive of GST• Only applicable through selected channels
New Broadband Packages to drive Broadband Penetration
Speed: 1 Mbps Quota: 1 GB per month 12 months Free modem Launch date: 16 June
2015
Speed: 10 Mbps Quota: unlimited 24 months Free CPE Free HyppTV FTA
channels Launch date: 16 July
2015
16
10% penetration growth in broadband will result in 1.3% of GDP Growth
- World Bank Report 2009-
What you can do with 1GB?
1GB of…. Looks like…. How we worked it out….
Email 20,480 emails (text only) 1 email (text only) = 50KB
Web Surfing 44 hours 1 hour= 23MB
Whatsapp 34,144 messages (text only) 1 messages (text only) = 30KB
YouTube 68 video plays 1 video play (4 minute video)= 30KB
Skype 4 hours video chat 1 hour= 250MB
Facebook 51 hours
(not including streaming video)
1 hour= 20MB(not including streaming video)
VideoStreaming
2 hours 1 hour= 500MB
Source:http://www.confused.com/mobile-phones/articles/what-does-a-gb-get-you-mobile-internet-datahttp://kenstechtips.com/index.php/what-does-500mb-or-1gb-internet-actually-mean-explaining-mobile-data-limits#Data_Usage_Table
17
• Rollout of HSBB 2, Sub-Urban Broadband• Investments for future growth
CONVERGENCE CHAMPION delivering
INFORMATION & INNOVATION EXCHANGE
2015 Outlook and Business Priorities
17
THANK YOU
Investor RelationsLevel 11 (South Wing), Menara TMJalan Pantai Baharu50672 Kuala LumpurMalaysiaTel: (603) 2240 4848/ 7366 / 7388investor@tm.com.my
18
20
2015 2017
Revenue Growth
EBIT Growth
Customer Satisfaction Measure1
4-4.5% 5-5.5%
4-4.5 % 5-5.5%
72 72
*Note: Headline KPI for TM excluding P1, HSBB 2, SUBB & other mega projects
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.”
Headline KPI
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 21
Reiteration of Dividend Policy
2323
2,980 2,636 3,157
10,629 11,235
4 Q 1 3 3 Q 1 4 4 Q 1 4 F Y 1 3 F Y 1 4
Revenue
380 306443
1,359 1,387
4 Q 1 3 3 Q 1 4 4 Q 1 4 F Y 1 3 F Y 1 4
Normalised EBIT
Key FY2014 Highlights
Revenue grew 5.7% vs FY2013
Driven by Internet, Data & Others which grew 11.9% , 3.7%
and 18.8% respectively
Normalised EBIT higher by 2.0% vs FY2013
Higher operating revenue
Normalised PATAMI was 9.4% lower vs FY2013 due to higher
tax expense from the absence of HSBB tax incentive (FY2013:
RM163mn)
+6.0%
+19.8%
+5.7%
290 192350
1,039 941
4 Q 1 3 3 Q 1 4 4 Q 1 4 F Y 1 3 F Y 1 4
Normalised PATAMI
+16.6%
+44.9%
+2.0%
+20.9%
+82.8%
-9.4%
218189344
1,012 832
RM mn
RM mn
RM mn
Reported PATAMI
24
Group Total Revenue by Product
911812
889
3,6183,469
4Q13 3Q14 4Q14 FY13 FY14
Voice
709 714
828
2,676
2,995
4Q13 3Q14 4Q14 FY13 FY14
Internet
687
586
771
2,512 2,606
4Q13 3Q14 4Q14 FY13 FY14
Data
673
524
670
1,823
2,165
4Q13 3Q14 4Q14 FY13 FY14
Others*
Voice31%
Data 23%
Internet 27%
Others19%
Voice34%
Data 24%
Internet 25%
Others17%
RM10,629mn
FY2014
FY2013
-2.5%
+9.4%
-4.1%
+16.8%
+16.0%
+11.9%
+12.2%
+31.6%
+3.7%-0.4%
+27.7%
+18.8%
RM11,235mn
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)
Note : Unless stated otherwise all figures stated shall be inclusive of P1
RM mn RM mn
RM mn RM mn
2,2082,051
2,240
7,9658,411
4Q13 3Q14 4Q14 FY13 FY14
+9.3%
25
Group Total Revenue by Lines of Business
Retail Global & Wholesale Others*
Note : Unless stated otherwise all figures stated shall be inclusive of P1
478
361
577
1,706 1,776
4Q13 3Q14 4Q14 FY13 FY14
294
224
339
9581,048
4Q13 3Q14 4Q14 FY13 FY14
Retail75%
Global & Wholesale
16%
Others9%
FY2014
Retail75%
Global & Wholesale
16%
Others9%
RM10,629mn
FY2013
RM11,235mn
+1.5%
+5.6%
+20.7%
+60.0%
+4.1%+15.6%
+51.2%
+9.4%
Retail (C+S+E+G): 75% Retail (C+S+E+G): 75%
* Others comprise revenue from VADS, Property Development, TM R&D, TMIM, UTSB, MKL & P1
RM mn RM mn RM mn
26
FY2014 Highlights: CAPEX & OPEX
Total Capex
748 694
645 662
470 480
FY13 FY14
Access Core Network Support System*
RM mn
20.1 20.5
17.2 16.5
21.0 21.0
10.9 11.0
7.1 7.4
6.4 6.9
3.7 3.20.8 2.0
FY13 FY14
Bad debt
Marketing expenses
Supplies & material
Maintenance cost
Other operating cost
Manpower cost
Direct cost
Dep & Amortisation
Total Cost / Revenue ( %)
Cost % of Revenue1
1 Revenue = Operating Revenue + Other Operating Income
Note: The classification of cost is as per financial reporting
87.2% 88.6%
RM9,378.3 RM10,095.1
RM mn
1,863 1,836
17.5% 16.3%
269 330
129
286299
338
FY13 FY14
Access Core Network Support System*
BAU Capex
479 364
516
377
171
141
FY13 FY14
Access Core Network Support System*
HSBB Capex
697
954 1,166
882
6.6% 8.5% 11.0% 7.9%
Capex / Revenue (%)
Capex / Revenue (%) Capex / Revenue (%)
Note : Unless stated otherwise all figures stated shall be inclusive of P1
% of Revenue
RM mn RM mn
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
7,571.1
388.8
9,806.1
6,251.4
1,258.0
1,823.1
337.8
135.8
17,766.0
6,481.2
2,237.2
588.1
2,985.8
670.1
4,857.2
3,605.2
197.0
1,055.0
1,624.0
14,785.1
1,356.9
17,766.0
Shareholders’ Funds
Non-Controlling Interests
Deferred & Long Term Liabilities
Long Term Borrowings
Deferred Tax
Deferred Income
Derivative financial instruments**
Trade and other payables
Current Assets
Trade Receivables
Other Receivables
Cash & Bank Balances
Others
Current Liabilities
Trade and Other Payables
Short Term Borrowings
Others
Net Current Assets/(Liabilities)*
Property Plant & Equipment
Other Non-Current Assets
RM Million
*Due to reclassification of long term debt due within the next 12 months to current liability (RM1.5bn)** Includes the put option obligation (RM267.6m) to buy Non Controlling Interest shares
Note : Unless stated otherwise all figures stated shall be inclusive of P1
FY2014 Highlights: Group Balance Sheet
As at 31 Dec 2014 As at 31 Dec 2013
27
31 Dec 14 31 Dec 13 31 Dec 14 31 Dec 13Return on Invested Capital 7.72% 7.68% Gross Debt to EBITDA 1.77 1.92
Return on Equity 12.80% 14.80% Net Debt/EBITDA 1.02 1.04
Return on Assets 6.34% 6.27% Gross Debt/ Equity 0.85 0.90
Current Ratio 1.33 0.99 Net Debt/ Equity 0.46 0.55
WACC 7.54% 6.67% Net Assets/Share (sen) 203.6 199.5
31 Dec 1431 Dec 13
1
Based on Normalised PATAMI2
1
31 Dec 1331 Dec 14
2
Based on Normalised EBIT1
Note : Unless stated otherwise all figures stated shall be inclusive of P1
FY2014 Highlights: Debt Profile & Key Financial Ratios
28
29
Physical Highlights
Broadband
1,292 1,292 1,296 1,246 1,242
288 284 282 267 260
635 653 673 700 729
4Q13 1Q14 2Q14 3Q14 4Q14
Streamyx Residential Streamyx Business UniFi
UniFi
530 544 559 580 604
105 109 114 120 125
4Q13 1Q14 2Q14 3Q14 4Q14
UniFi Residential UniFi Business
+0.7%
+0.8%
2,215 2,230 2,251 2,213 2,231
In thousand
+15 +21 -38 +18
635 653 673 700 729
+14.8%
+4.1%
+20 +27+18
+29
Net adds (in thousand)
Net adds (in thousand)
In thousand
Broadband growth in FY2014 was driven by UniFi
48% of total broadband customers are on speeds of 4Mbps & above
UniFi grew 14.8% YoY in 2014, translating to 45% take-up rate
Steady growth throughout 2014 mainly due to aggressive upselling activities
HyppTV now consists 121 channels
30
Physical Highlights
DEL
ARPU
2,296 2,262 2,239 2,181 2,154
1,442 1,423 1,409 1,386 1,373
635 653 673 700 729
4Q13 1Q14 2Q14 3Q14 4Q14
Fixed Line Residential Fixed Line Business UniFi
-2.7%
-0.3%
4,373 4,338 4,321 4,267 4,256
In thousand
ARPU (RM) 4Q13 1Q14 2Q14 3Q14 4Q14
Fixed Line (DEL)* 33 30 31 30 31
StreamyxBroadband**
85 86 85 81 90
UniFi*** 185 188 187 189 192
*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU
Higher ARPU across all segments
Reducing rate of decline
Dual- and triple-play broadband packages
Areas are indicative and not to scale
KUALA TERENGGANU
©
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KANGAR
ALOR STAR
IPOH
SHAH ALAM
MELAKA
KUANTAN
KUALA LUMPUR
Klang
Valley
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©KOTA KINABALU
KUCHING
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Less populated areas
Zone 2 – BBGP
Zone 1 – HSBB
LEGEND
High economic impact areas
Urban/Semi-urban and rural
Industrial parks/FTZs
covered
SEREMBAN
JOHOR BAHRU
Northern
Corridor
Economic
Region
Iskandar
Malaysia
Zone 3
Zone 3
Zone 3 – USP
HSBB deployment areas
31
106 service areas have been covered under HSBB Phase 1