1Q16 Results Presentation 13 April 2016
1
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.
2
Overview
• Service revenue was S$203m
• EBITDA margin at 40.9% of service revenue
• Net profit after tax declined 6.9% YoY to S$43m
• Mobile customer base increased 13,000 QoQ to 1.94m
• Mobile data revenue was 53.1% of service revenue
• Fibre customer base grew 9,000 QoQ to 136,000
• Fibre revenue increased to 12.0% of service revenue
Performance
highlights
for 1Q16
Financial
highlights
for 1Q16
3
Financial highlights
Performance highlights
Developments and outlook
Agenda
4
Operating revenue (S$m)
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
Service revenue (S$m) 204 204 205 209 203 831 822
167 167 166168
163
671 668
19 17 17 16 16
89 69
19 20 22
99
25
71 86
90 73 7325
54
245335
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
Handset sales
Fixed services
International callservices
Mobile services
-12.6%
-16.3%
278258
295 308277
1,076
1,158
+7.5%
5
Cost of sales (S$m)
8109
710
33 3810
11
109 9
38 34
11
10
9
9
10
52 3976
110 96 91
122
330
419
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
Handset costs
Traffic Expenses
Other costs
Wholesale costs offixed services
-23.9%
-30.1%
150
+17.2%
105
138
119
453
531
124
6
Other operating expenses (S$m)
3 24 3
8
11 95
7
1 5 724 2478 6 6
2030 26
88 88 8
30 322121
27 29
3
81 82
273029 31 29
114118
31
21 21
3230
114 118
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
Depreciation &amortisation
Staff costs
Facilities expenses
Leased circuit costs
Other G&A expenses
Advertising &promotion
Doubtful debtprovision
-1.2%
-4.6%
104 105
404 409
100102 99
+1.3%
7
EBITDA & net profit after tax
EBITDA (S$m) & margin
on service revenue
Profit after tax (S$m) & margin
on service revenue
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
PAT margin
(on service revenue)22.3% 21.7% 21.9% 20.8% 20.9% 21.2% 21.7%
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
EBITDA margin
(on service revenue)40.8% 41.0% 42.3% 42.2% 40.9% 40.4% 41.6%
8383 84 87 88
342336
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-0.1%
-5.6%
+1.9%
46434444 45
179176
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-6.9%
-2.5%
+1.5%
8
Capex & free cash flow
Capex (S$m) Free cash flow (S$m)
42
2540 38
26
140 133
40
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
Cost of spectrum
51.1% +
4.4%-
9.8%-
(11)
64
34 31
52
93
106
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
+13.4%
90.8%+
300%+<
9
Financial leverage
S$m 1Q2015 1Q2016 Change
Cash & cash equivalents 17.8 11.6 35.1%
Net debt 236.0 299.9 27.1%
Net assets 450.3 436.7 -3.0%
Net debt/equity (x) 0.5 0.7 31.1%
Net debt/EBITDA (x) 0.7 0.9 25.6%
EBITDA/Interest (x) 78.2 66.8 -14.5%
Net assets per share (cents) 48.2 47.0 -2.5%
EPS - diluted (cents) 4.9 4.5 -6.5%
10
Financial highlights
Performance highlights
Agenda
Developments and outlook
11
Mobile customers
Postpaid customer base (‘000) Prepaid customer base (‘000)
1,157 1,169 1,180 1,195 1,208
1Q15 2Q15 3Q15 4Q15 1Q16
713 714 711 733 734
1Q15 2Q15 3Q15 4Q15 1Q16
12
Postpaid mobile
Postpaid mobile revenue (S$m) Postpaid monthly ARPU (S$)
145147 147 147 149
591 591
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-1.8%
-3.1%
+0.0%
55.0 54.5 53.5 53.8 51.7 55.6 54.2
58.6 62.162.0 61.2 61.6 61.7 62.4
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
ARPU allocated to handset sales
-4.9%
-5.5%
-1.1%
13
Prepaid mobile
Prepaid mobile revenue (S$m) Prepaid monthly ARPU (S$)
19 19 1919 19
8077
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-2.2%
-2.3%
-4.0%
15.1 14.9 14.6 14.0
13.2 14.5 14.7
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-5.7%
12.6%-
1.4%+
14
Mobile market share
Overall market share* Postpaid & Prepaid market share*
* - Based on published statistics available at the time of submission
23.1% 23.2% 23.2% 23.4% 23.3%
1Q15 2Q15 3Q15 4Q15 Jan-16
24.4% 24.5% 24.6% 24.6% 24.6%
1Q15 2Q15 3Q15 4Q15 Jan-16
Postpaid
21.1% 21.2% 21.2% 21.7% 21.5%
1Q15 2Q15 3Q15 4Q15 Jan-16
Prepaid
15
Postpaid mobile
Acquisition cost
per postpaid customer (S$) Monthly churn rate (postpaid)
Note: Cash basis
1.0%1.0%1.0% 1.0%1.1% 1.1%
1.0%
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
392
342
313
398
321
355 363
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-18.1%
19.3%-2.3%+
16
Tiered data plans & mobile data contribution
Tiered data plans Mobile data contribution
to service revenue
70% 72% 73% 74% 75%
20%20%23% 22% 21%
1Q15 2Q15 3Q15 4Q15 1Q16
Postpaid customers on tiered data plans
Percentage of tiered data planscustomers exceeding data bundles
41.3%
44.9%48.0%
51.2%53.1%
35.6%
46.3%
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
17
Fibre monthly ARPU (S$) Fibre customer base (‘000)
Fixed services
108114
120128
136
1Q15 2Q15 3Q15 4Q15 1Q16
45.3 46.3 47.3 47.5 46.943.9
46.7
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
+3.5%
1.3%- 6.4%+
18
International call services
International retail minutes
(million mins)
International call services
revenue (S$m)
16 1619 17 17
89
69
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-16.2%
23.1%-
2.4%-
172
220
186206 201
813
1,131
1Q15 2Q15 3Q15 4Q15 1Q16 FY14 FY15
-22.0%
-7.5%
-28.1%
19
Financial highlights
Performance highlights
Developments and outlook
Agenda
20
Developments for 2016
• Enhanced product propositions to attract and retain customers
Improved SIM-only plans
Upsized data bundles
Increased coverage of Data Passport roaming service
• Capture growth opportunities in the Corporate and Government segments
Expedited investment in fibre network
Expanded suite of cloud-based offerings and smart vertical solutions
• Revised approach to content
Unbundling of content by Netflix and other OTT players
Enable access and optimise network for streaming experience
• Invest in new technologies to complement core business
21
Outlook for 2016
• Capex to be around S$140m
• Estimate stable performance for 2016
22
Thank you