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Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

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Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update
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Page 1: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Yvonne LiPresident

4904 (TWSE)2014 2Q Investor Update

Page 2: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Disclaimer

This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.

In preparing the information herein, FET have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to FET or which was otherwise reviewed by FET. Neither FET nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of FET, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of FET.

 

2

Page 3: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Agenda3

I. Market Overview

II. 2014 2Q Performance

III. Business Update

Page 4: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

8.5%

1.3%

4.7%

0%

5%

10%

FET TWM CHT

10.8%

-0.3%

4.6%

-10%

0%

10%

20%

FET TWM CHT

Taiwan Mobile MarketMarket Dynamic

Market UpdateMarket Update

For 2Q 2014, despite negative Impact from MTR, FET continued growing with…

Mobile Service Rev up 2.0% YoY

Mobile Data Rev up 20.6% YoY

Overall mobile competitive landscape remains quite stable

Source: Mobile service revenues of FET, CHT, TWM, APT from company’s factsheet, Vibo ‘s from Taiwan M.O.P.S. reported revenue deduct estimated equipment revenue. Y2013 market share % has been restated.

Mobile Service Rev Share Change (1Q14 vs. 1Q13)

Mobile Service Rev Share Change (1Q14 vs. 1Q13)

TWM

CHT

FET27.6%(2Q13)

28.1% (2Q14)

34.5% (2Q14)

34.3%(2Q13)

29.0% (2Q14)

28.5%(2Q13)

8.3% (2Q14)

9.6%(2Q13)

4

EBITDA Growth (2Q14 vs. 2Q13)EBITDA Growth (2Q14 vs. 2Q13)

Net Income Growth (2Q14 vs. 2Q13)Net Income Growth (2Q14 vs. 2Q13)

APT+VIBO

Page 5: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Agenda5

I. Market Overview

II. 2014 2Q Performance

III. Business Update

Page 6: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

('000)

5,190 5,341 5,583 5,698

1,503 1,528 1,543 1,553 1,553 1,565 1,571 1,576 1,583 1,615

5,7295,6415,5045,3925,249 5,437

01,000

2,0003,000

4,0005,000

6,0007,000

8,0009,000

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Postpaid Prepaid

Operational PerformanceIncreasing Subs

Total Subscribers – continue to grow for 50 consecutive monthsTotal Subscribers – continue to grow for 50 consecutive months

22%

78%

4%YoY

6,694 6,8846,777 6,945

6

6,990 7,069 7,154 7,2817,217 7,344

Page 7: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Million Minutes

3,7963,623 3,588

3,745 3,7633,540

0

1500

3000

4500

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

NT$

872 867 856864 875 849

0

250

500

750

1000

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Operational PerformanceMOU and ARPU

Postpaid Minutes of Use(1)Postpaid Minutes of Use(1) FET’s Postpaid ARPUFET’s Postpaid ARPU

-1.9%YoY

7

-5.5%YoY

Source: Company Data(1) MOU has been adjusted by MVNO's usage starting Y2014 and re-state Y2013

Page 8: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

($mn)

22,086 22,10023,360

22,124 22,02222,864

17,96217,71918,04718,00417,71917,344

0

5,000

10,000

15,000

20,000

25,000

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14Total Revenue Service Revenue

($mn)

15,581 15,723 15,432 15,65415,34415,069

0

5,000

10,000

15,000

20,000

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Consolidated RevenueConsolidated Revenue Mobile Service RevenueMobile Service Revenue

2%YoY

Financial PerformanceStable Top Line

8

1.4%YoY

Page 9: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

9

($mn)

2,783

3,469

2,727

3,1103,1873,132

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

6,1426,525

6,741

6,191

7,0776,698

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

($mn)

Consolidated EBITDAConsolidated EBITDA Net Income(1)Net Income(1)

2Q14 vs.2Q138% YoY

2Q14 vs. 2Q1311% YoY

Financial PerformanceProfitability continues Growing

Source: Company Data(1) 2013 Net Income was restated due to accounting policy change for Investment Property

Page 10: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

NT$ mn

5,695 6,030 6,358 6,626 6,866

5,462

36.3%38.7% 40.4%

43.9%42.9%

37.1%

0

2,500

5,000

7,500

10,000

1Q13 2Q13 3Q13 4Q13 1Q14 2Q140%

10%

20%

30%

40%

50%

Mobile Data Rev Mobile Data % of Service Rev

Data %

10

Mobile Data PerformanceAccelerated Mobile Data Growth

Data Service(1) Subscriber GrowthData Service(1) Subscriber GrowthFET Mobile Data Growth FET Mobile Data Growth

2Q14 vs. 2Q1321% YoY

2Q14 vs. 2Q1327% YoY

Note:(1) Data Service includes smartphone related data rate plans and datacard, broadband, GPS related products

1,109

2,9222,555

1,428

2,184

1,8101,272

1,604

1,981

2,378

2,729

3,111

3,296

3,458

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

%

Page 11: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

ItemUnit: NT$ mn, except for EPS

2Q14Actual

2Q13Actual

YoY %2Q14

ForecastAchieve-

ment %

▶ Total Revenue 22,022 22,101 0.4% 22,401 98%

▶ Service Revenue 17,962 17,719 1% 17,918 100%

▶ EBITDA 7,077 6,525 8% 6,642 107%

▶ Net Income(1) 3,469 3,132 11% 2,997 116%

▶ EPS(2) $1.06 $0.96 11% $0.92 116%

Source: Company Data(1) 2013 Net Income and EPS were restated due to accounting policy change for Investment Property(2) EPS was based on current outstanding shares of 3,258,501K

Consolidated Financial Achievement2Q’14 Actual vs. Forecast

11

Page 12: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

ItemUnit: NT$ mn, except for EPS

1H14Actual

1H13Actual

YoY %1H14

ForecastAchieve-

ment %

▶ Total Revenue 44,887 44,186 2% 45,460 99%

▶ Service Revenue 35,681 35,063 2% 35,653 100%

▶ EBITDA 13,775 12,666 9% 13,169 105%

▶ Net Income 6,579 5,915 11% 5,871 112%

▶ EPS(1) $2.02 $1.82 11% $1.80 112%

Consolidated Financial Achievement1H’14 Actual vs. Forecast

12

Source: Company Data(1) 2013 Net Income and EPS were restated due to accounting policy change for Investment Property(2) EPS was based on current outstanding shares of 3,258,501K

Page 13: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

As of 1Q14

Consolidated Financial2Q14 Financial Stats

As of 2Q14

Cash & Cash EquivalentsAvailable-for-Sale Financial Assets & Derivatives

Total BorrowingNet Debt(1)

Shareholders’ Equity

Debt/Capitalization Ratio¾ Gross (%)

¾ Net (%)

Free Cashflows – YTD(2)

Cash-based Capex – YTD

EPS(NT$) – YTD

(NT$ mm unless otherwise stated)

13

(1) Net Debt= Total Borrowing – (Cash and Cash Equivalent +Available-for-Sale Financial Assets & Derivatives +Debt investments with no active market )

(2) Free Cashflows = Operating Cash flow- acquisition of fixed-asset & intangible asset(3) 2013 EPS was restated due to accounting policy change for Investment Property

19,482

751

30,58710,353

68,507

30.9% 10.4%

7,5026,317

$2.02

8,226

838

22,24713,183

77,380

22.3% 13.2%

4,2013,196

$0.95

Page 14: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Agenda14

I. Market Overview

II. 2014 2Q Performance

III. Business Update

Page 15: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

37%

54%51%47%44%

41%

0%

25%

50%

75%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

True smartphone penetration

Smartphone Revenue and Profit Grow Together with Penetration Growth

Note: * smartphone penetration means iOS, Andriod & WM8 smartphone users with data rate plan as % of total postpaid subs excluding data only subs

15

($mn)

15,581 15,723 15,432 15,65415,34415,069

0

5,000

10,000

15,000

20,000

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Mobile Service RevenueMobile Service Revenue

($mn)

2,783

3,469

2,7273,1103,1873,132

0500

1,0001,5002,0002,5003,0003,500

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Net IncomeNet Income

+3%YoY

Smartphone Penetration* (%)Smartphone Penetration* (%)

+16%YoY

+15%YoY

+12%YoY

+12%YoY

+11%YoY+4%

YoY

+3%YoY

+3%YoY

+2%YoY

+2%YoY

+2%YoY

Page 16: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

4G Update

FET launched 4G on June 3rd, 2014

– Band: launch on 700MHz first with widest coverage and penetration

– Devices: more than 20 4G LTE devices, including Samsung, hTC, LG,

SONY…etc

– Initial coverage: 7 metro cities and 16 scenery spots

– Pricing: volume based data tier-pricing + limited voice

– Roaming: allied with Vodafone + Conexus for international roaming

in 7 regions

4G Deployment Plan and Target

– Will soon have 1800MHz band before end of Sep

– Will reach around 95% population coverage by end of 2014

– Optimistic on ARPU uplift

– Subscriber target: expect to reach 400-500K subscribers by end of

2014

Page 17: Yvonne Li President 4904 (TWSE) 2014 2Q Investor Update.

Q & AWebsites email

Investor Relations [email protected] Investor Relations [email protected]

http://corporate.fetnet.nethttp://www.fetnet.nethttp://corporate.fetnet.nethttp://www.fetnet.net

For Further Information:

17


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