Post on 05-Jul-2020
FY 2015 RESULTS
ANALYST BRIEFING
24 February 2016
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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 TM.
Disclaimer
2
Performance Overview
Financial Review
Operating Highlights
Concluding Remarks
3
FY2015 Highlights
4Note : Unless stated otherwise all figures shall be inclusive of P1
Excluding P1 Including P1
Revenue RM11.52bn(+3.0%)
RM11.72bn(+4.3)
Reported EBIT
Normalised EBIT
Reported PATAMI
Normalised PATAMI
RM1.53bn(+13.7%)
RM1.52bn(+6.2%)
RM891.7mn(+2.9%)
RM1.03bn(+7.6%)
RM1.26bn(-2.9%)
RM1.24bn(-10.6%)
RM700.3mn(-15.8%)
RM894.9mn(-4.9%)
Customer Satisfaction Measure of >72
Total capex/revenue 21.4%
Broadband customer base crossed 2.34mn driven by Unifi
2nd interim dividend of 12.1 sen per share or RM454.7mn
Continued growth despite challenging circumstances
Performance Overview
Financial Review
Operating Highlights
Concluding Remarks
5
Group Results FY2015
RM mn
Reported
4Q15 3Q15% Change
QoQ4Q14
% Change YoY
FY2015 FY2014% Change
YTD vs YTD
Revenue 3,184.4 2,922.5 +9.0 3,157.3 +1.0 11,721.6 11,235.1 +4.3
Other Operating Income
32.7 29.2 +12.0 37.6 -13.0 123.7 154.3 -19.8
EBITDA 879.7 1,037.7 -15.2 960.4 -8.4 3,694.4 3,635.6 +1.6
Depn & Amort. 620.5 588.7 +5.4 631.0 -1.7 2,437.3 2,341.3 +4.1
EBIT 259.2 449.0 -42.3 329.4 -21.3 1,257.1 1,294.3 -2.9
Other Gains / (Loss) (24.7) (0.5) - >100 (1.7) - >100 (26.6) 4.8 - >100
Net Finance Cost* 41.0 42.6 -3.8 35.9 +14.2 159.0 155.0 +2.6
FX (Gain) / Loss (24.6) 153.3 - >100 43.2 - >100 184.4 47.9 - >100
Profit Before Tax(PBT)
224.6 259.0 -13.3 253.7 -11.5 911.8 1,105.5 -17.5
PATAMI 192.5 166.8 +15.4 218.3 -11.8 700.3 831.8 -15.8
Normalised PATAMI 259.7 228.2 +13.8 350.2 -25.8 894.9 941.2 -4.9
Note: Unless stated otherwise all figures shall be inclusive of P1For Normalised EBIT and Normalised PBT refer Slides 7 and 8•Excludes FX (Gain )/Loss 6
Profitability impacted by foreign exchange and higher direct cost
Normalised EBIT
In RM mn 4Q15 3Q15 4Q14 FY2015 FY2014
Reported EBIT 259.2 449.0 329.4 1,257.1 1,294.3
Non Operational
Unrealised FX (Gain)/Loss on International trade settlement
12.8 (109.8) (7.6) (95.4) (6.7)
Loss on Sale of Assets 0.2 - 0.1 0.6 0.4
Negative Goodwill on acquisition of a new subsidiary
- - - - (21.9)
MESRA Programme 77.4 - 111.2 77.4 111.2
Estimated cost and asset write-off due to flood - - 9.6 - 9.6
Normalised EBIT 349.6 339.2 442.7 1,239.7 1,386.9
Normalised EBIT Margin 10.9% 11.5% 13.9% 10.6% 12.2%
Reported EBIT Margin 8.1% 15.2% 10.3% 10.6% 11.4%
EBIT is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating CostEBIT Margin is calculated as percentage of EBIT against Total RevenueNormalised EBIT Margin is calculated as percentage of Normalised EBIT against Normalised Total Revenue (Operating Revenue + Oth. Operating Income – Loss on Sale of Assets – Negative Goodwill on acquisition of new subsidiary)
Note : MESRA Programme: a voluntary separation programme for employees aged 55Unless stated otherwise all figures stated shall be inclusive of P1
Normalised EBIT higher by 3.1% QoQ
7
Normalised PBT
In RM mn 4Q15 3Q15 4Q14 FY2015 FY2014
Reported PBT 224.6 259.0 253.7 911.8 1,105.5
Non Operational
Unrealised FX (Gain)/Loss on International trade settlement
12.8 (109.8) (7.6) (95.4) (6.7)
Other (Gain)/Losses & Impairment* 24.9 0.5 1.8 27.2 (4.4)
Unrealised FX (Gain)/Loss on Long Term loans
(24.5) 153.3 43.2 184.5 47.9
Negative Goodwill on acquisition of a new subsidiary
- - - - (21.9)
MESRA Programme 77.4 - 111.2 77.4 111.2
Estimated cost and assets write-off due to flood - - 9.6 - 9.6
Normalised PBT 315.2 303.0 411.9 1,105.5 1,241.2
* Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for sale) investments.
Normalised PBT higher by 4.0% QoQ
8
Note : MESRA Programme: a voluntary separation programme for employees aged 55Unless stated otherwise all figures stated shall be inclusive of P1
21.5 21.7 20.0 19.3 20.6 20.6
17.9 17.718.2 19.1 16.5 18.3
22.6 21.821.3 21.8
21.021.8
10.9 11.0
6.511.6
11.010.0
7.2 6.4
6.0
6.67.4 6.6
6.05.8
8.1
9.46.9 7.4
3.23.1
2.8
4.1
3.2 3.3
2.01.8
1.9
2.0 1.4
1Q15 2Q15 3Q15 4Q15 FY2014 FY2015
Bad debt
Marketing expenses
Supplies & material
Maintenance cost
Other operating cost
Manpower cost
Direct cost
Dep & Amortisation
Cost % of Revenue1
Total Cost / Revenue ( %)1 Revenue = Operating Revenue + Other Operating Income
Note: The classification of cost is as per financial reporting
(Please refer to Appendix for breakdown)
Note : Unless stated otherwise all figures shall be inclusive of P1
89.4%
RM10,588.2RM10,095.1
9
88.6%
RM2,564.5RM2,563.1
89.4%91.3% 84.8%
RM2,502.7
91.9%
RM2,957.9
QoQ: Higher opex due to Direct Cost, Manpower, Supplies & Materials and OOC
139244 247
558694
1188
81
115 113
475
662
784
38
69 107
320
480
533
1Q15 2Q15 3Q15 4Q15 FY2014 FY2015
Access Core Network Support System
Group Capital Expenditure
Note : Unless stated otherwise all figures shall be inclusive of P1 10
Capex / Revenue ( %)
15.1% 16.0%15.2%
16.3% 21.4%
RM mn
2,506
1,836
467428
258
FY2015: 21.4% of revenue at RM2.5bn
48% Access 31% Core Network 21% Support Systems
42.5%
1,353
Higher Capex to Expand HSBB and SUBB coverage
Group Cash Flow
RM mn FY2015 FY2014
Cash & cash equivalent at start 2,975.0 2,514.5
Cashflows from operating activities 2,942.0 3,014.1
Cashflows used-in investing activities (2,549.9) (2,162.0)
Capex 2,505.5 1,836.0
Cashflows from financing activities 142.5 (391.3)
Effect of exchange rate changes 1.2 (0.3)
Cash & cash equivalent at end 3,510.8 2,975.0
Free cash-flow (EBITDA – Capex) 1,188.9 1,799.6
31 Dec 15 31 Dec 14
Return on Invested Capital1 6.69% 7.72%
Return on Equity2 11.66% 12.80%
Return on Assets1 5.90% 6.34%
Current Ratio3 1.25 1.33
WACC 7.36% 7.54%
31 Dec 15 31 Dec 14
Gross Debt to EBITDA 1.90 1.77
Net Debt/EBITDA 1.02 1.02
Gross Debt/Equity 0.97 0.85
Net Debt/Equity 0.52 0.46
Net Assets/Share (sen) 209.2 203.6
Key Financial Ratios
Note : Unless stated otherwise all figures shall be inclusive of P1
1 Based on Normalised EBIT2 Based on Normalised PATAMI
Stable Cashflows with Debt Headroom
11
Performance Overview
Financial Review
Operating Highlights
Concluding Remarks
12
828 845 862
2,995
3,367
4Q14 3Q15 4Q15 FY2014 FY2015
889 895 880
3,469 3,507
4Q14 3Q15 4Q15 FY2014 FY2015
27% of Group Revenue
Higher by 2.0% mainly from higher Unifi customer base
Contribution from upselling
13
Group Total Revenue by Product
Voice
Internet
28% of Group Revenue
Lower by 1.7%, due to lower bilateral revenue at Global & Wholesale
Lower revenue at Mass Market & Managed Accounts due to lower usage and lower DEL customers
-1.0%
-1.7%
+4.1%
+2.0%
Note : Unless stated otherwise all figures shall be inclusive of P1
+1.1%
+12.4%
RM mn
RM mn
Internet, Data & Others – key QoQ revenue Drivers, Data & Internet for FY2015
QoQ
670
495
701
2,165 2,178
4Q14 3Q15 4Q15 FY2014 FY2015
771688
741
2,606 2,670
4Q14 3Q15 4Q15 FY2014 FY2015
14
Group Total Revenue by Product
Data
Others*
23% of Group Revenue
Higher by 7.7%, mainly due to higher data services, IRU and Domestic Ethernet at Global & Wholesale
22% of Group Revenue
41.6% higher, mainly due to higher ICT & BPO and USP amortisation
+7.7%
-3.9%
+4.6%
+41.6%
Note : Unless stated otherwise all figures shall be inclusive of P1
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)
+2.5%
+0.6%
RM mn
RM mn
QoQ
4Q14 3Q15 4Q15 FY2014 FY20154Q14 3Q15 4Q15 FY2014 FY2015
Group Total Revenue by Lines of Business
Mass Market
+3.4%
Higher by 6.2% due to higher internet revenue at Consumer due to upselling and higher customer base
RM mn
Note : Unless stated otherwise all figures shall be inclusive of P1
+3.3%
Managed Accounts
-0.7%
8.6% higher, mainly due to higher contribution from TM Government and ICT-BPO revenue at VADS
RM mn+0.1%
15
+6.2% +8.6%
1,2251,1541,185
4,586 4,736
1,191 1,088 1,182
4,353 4,358
Higher revenue across all customer segments
QoQ
204 174 216
520
757
4Q14 3Q15 4Q15 FY2014 FY2015
4Q14 3Q15 4Q15 FY2014 FY2015
Group Total Revenue by Lines of Business
Global & Wholesale
Others*
-2.8%
+6.0%
10.7% higher mainly due to IRU revenue
24.6% higher due to higher education fees at UTSB and higher grant amortisation
RM mn
RM mn
* Others comprise revenue from Property Development, TM R&D, UTSB, MKL & P1
Note : Unless stated otherwise all figures shall be inclusive of P1
+5.4%
+45.6%
16
+10.7%
+24.6%
561507577
1,7761,871
QoQ
3,685 3,648 3,567 3,527 3,497 3,461 3,426 3,402
653 673 700 729 757 782 793 839
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Fixed Line UniFi
1,577 1,578 1,513 1,502 1,509 1,506 1,501 1,501
653 673 700 729 757 782 793 839
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15Streamyx UniFi
Physical Highlights
Broadband
188 187 189192 190
+2.0%
86 85 8190 89
Cu
sto
me
rs (
In t
ho
usa
nd
)A
RP
U (
RM
)
UniFi ARPU (Blended) Streamyx Net ARPU
Fixed Line
Fixed Line (DEL) ARPU
30 31 3031 31
-0.3%
+0.5%
Cu
sto
me
rs (
In t
ho
usa
nd
)A
RP
U (
RM
)
Higher Fixed Line customers due to Unifi
ARPU stable at RM29
Unifi continues to drive growth, with 839,000 customers (46,000 net adds QoQ)
Total broadband customers at 2.34mn
Steady Unifi and Streamyx ARPU
17
86
190
30
87
192
2,230 2,251 2,213 2,231 2,266 2,288 2,294
+4.9%
29
4,318 4,321 4,267 4,256 4,254 4,243 4,219
2,340
4,242
89
190
29
Broadband takeup remains strong, higher % HSBB customers YoY. ARPU levels are steady
Performance Overview
Financial Review
Operating Highlights
Concluding Remarks
18
Key Takeaways
Note : Unless stated otherwise all figures shall be inclusive of P119
Continued growth despite challenging environment and heavy investments for future.
TR*M Index score of >72 points Global telco average of 69
Total Broadband customer base at over 2.34mn Driven by Unifi upselling (to Unifi Advance) More customers in HSBB bucket
12.1 sen per share or RM454.71mn 2nd interim dividend Total payout RM804.2mn, in line with commitment
Financial Performance
Broadband Champion
Shareholder Value
Customer-centricity
2016 Outlook and Business Priorities
The Year of Convergence – entry into mobility space
Aggressive rollout of major projects: HSBB2, SUBB
Focus on new platforms for growth
Operationally: focus on innovation, productivity enhancement, digitalization.
20
2016 Headline KPI
2016 2018
Revenue Growth
EBIT Growth
Customer Satisfaction Measure
1 Using TRiM index measuring end to end customer experience at all touch points. TRiM (Measuring, Managing and Monitoring) is astandardized 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 thestakeholder relationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and acompany's competitive advantage. The information is based on surveys/interviews on a sample customer base.”
*Note: Headline KPI are for TM Group excluding P1
21
3.5-4%
Maintain 2015 RM level 3-5%
7272
3-3.5%
Appendices
22
Normalised EBITDA
In RM mn 4Q15 3Q15 4Q14 FY2015 FY2014
Reported EBITDA 879.7 1,037.7 960.4 3,694.4 3,635.6
Non Operational
Unrealised FX (Gain)/Loss on International trade settlement
12.8 (109.8) (7.6) (95.4) (6.7)
Loss on Sale of Assets 0.2 - 0.1 0.6 0.4
Negative Goodwill on acquisition of a new subsidiary
- - - - (21.9)
MESRA Programme 77.4 - 111.2 77.4 111.2
Estimated cost and asset write-off due to flood - - 6.4 - 6.4
Normalised EBITDA 970.1 927.9 1,070.5 3,677.0 3,725.0
Normalised EBITDA Margin 30.2% 31.4% 33.5% 31.0% 32.8%
Reported EBITDA Margin 27.3% 35.2% 4Q14 31.2% 31.9%
EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & Impairment).EBITDA Margin is calculated as percentage of EBITDA against Total RevenueNormalised EBITDA Margin is calculated as percentage of Normalised EBITDA against Normalised Total Revenue (Operating Revenue + Oth. Operating Income – Loss on Sale of Assets – Negative Goodwill on acquisition of a new subsidiary )
23
Note : MESRA Programme: a voluntary separation programme for employees aged 55Unless stated otherwise all figures stated shall be inclusive of P1
Normalised EBITDA higher by 4.5% QoQ
Normalised PATAMI
In RM mn 4Q15 3Q15 4Q14 FY2015 FY2014
Reported PATAMI 192.5 166.8 218.3 700.3 831.8
Non Operational
Unrealised FX (Gain)/Loss on International trade settlement
8.0 (92.4) (7.6) (75.9) (6.7)
Other (Gain)/Losses & Impairment* 24.9 0.5 1.8 27.2 (4.4)
Unrealised FX (Gain)/Loss on Long Term loans
(24.5) 153.3 43.2 184.5 47.9
Impact of tax rate changes - - 3.9 - 3.9
Negative Goodwill on acquisition of a new subsidiary
- - - - (21.9)
MESRA Programme (Net of tax) 58.8 - 83.4 58.8 83.4
Estimated cost and assets write-off due to flood (Net of tax)
- - 7.2 - 7.2
Normalised PATAMI** 259.7 228.2 350.2 894.9 941.2
* Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment gain/loss on disposal for AFS (available for sale) investments and gain/loss Sale of Assets
24
Note : MESRA Programme: a voluntary separation programme for employees aged 55Unless stated otherwise all figures stated shall be inclusive of P1
Normalised PATAMI higher by 13.8% QoQ
Cost % of Revenue
4Q15 3Q15 4Q14 FY2015 FY2014Comments
(4Q2015 vs. 3Q2015)
Operating Revenue (RM mil) 3,184.4 2,922.5 3,157.3 11,721.6 11,235.1 -
Other Operating Income(RM mil)
32.7 29.2 37.6 123.7 154.3 -
Direct Costs % 19.1 18.2 17.2 18.3 16.5 International outbound, USP provisionRM mil. 615.1 537.7 548.6 2,162.6 1,883.7
Manpower % 21.8 21.3 19.3 21.8 21.0 Skim MESRA and higher staff benefitsRM mil. 700.7 629.0 615.1 2,587.5 2,393.2
Supplies & Materials % 9.4 8.1 8.0 7.4 6.9 Higher materials cost at Managed AccountsRM mil. 301.1 239.1 255.7 875.1 782.0
Bad & Doubtful Debts % 0.0 1.9 3.3 1.4 2.0
-RM mil. 1.2 56.2 104.8 165.6 228.9
Marketing Expenses % 4.1 2.8 3.1 3.3 3.2-
RM mil. 133.1 83.2 98.6 394.5 361.6
Maintenance Cost % 6.6 6.0 8.0 6.6 7.4 Higher at TM Govt for MERS999 expansionRM mil. 213.5 177.9 256.8 778.1 846.2
Other Operating Costs % 11.6 6.5 11.1 10.0 11.0 Impact of forex gain forinternational trade settlementsRM mil. 372.7 190.9 354.9 1,187.5 1,258.2
Depreciation & Amortisation % 19.3 20.0 19.8 20.6 20.6 Consolidation of P1 plus accelerated depreciation of WiMaxequipmentRM mil. 620.5 588.7 631.0 2,437.3 2,341.3
Total (RM mil) 2,957.9 2,502.7 2,865.5 10,588.2 10,095.1
Total (%) 91.9 84.8 89.7 89.4 88.6
Note : Unless stated otherwise all figures shall be inclusive of P125
7,780.6
258.1
10,551.8
7,175.4
1,367.6
1,661.7
321.9
25.2
18,590.5
7,297.5
2,353.1
594.0
3,511.6
838.8
5,822.6
4,367.0
408.3
1,047.3
1,474.9
15,186.9
1,928.7
18,590.5
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
Group Balance Sheet
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 MillionAs at 31 Dec 2014At as 31 Dec 2015
Note : Unless stated otherwise all figures shall be inclusive of P1
26
172 200 190 608 694435 352 405
1,271 1,31746 27 35
133 124
4Q14 3Q15 4Q15 FY2014 FY2015Voice Data Others*
561577 5071,776 1,871
716 699 6942,889 2,824409 400 399
1,565 1,594766 796 814
2,937 3,160615 467 650
1,980 1,991
4Q14 3Q15 4Q15 FY2014 FY2015
Voice Data Internet Others*
2,4072,376 2,242
8,939 9,094
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
Mass Market & Managed Accounts
Revenue by Product
+1.3%RM mn
*Others comprise other telco and non-telco services (i.e ICT-BPO, customer projects)
+7.4%
27
+1.7%
Global & Wholesale
RM mn
Revenue by Product
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
-2.8%+5.4%
+10.7%
THANK YOU
Investor RelationsLevel 11 (South Wing), Menara TMJalan Pantai Baharu50672 Kuala LumpurMalaysiaTel: (603) 2240 4848/ 7366 / 7388investor@tm.com.my