dtac fiscal year 2018dtac.listedcompany.com/misc/fs/2018/20190128-dtac-conferencecall-fy2018.pdf ·...

Sensitivity: Internal

28 January 2019

dtac fiscal year 2018

Investor RelationsE: [email protected] T: +662 202 8882

1


FY18 Highlights

• 21.2m total subscribers

– all sub base

registered under DTN

• 78.2% smartphone

penetration

– 64.7% 4G-enabled

devices penetration

• THB63.0b service

revenues ex. IC

– declining 2.8% YoY

• THB28.4b EBITDA

– 37.9% EBITDA margin

• THB19.5b CAPEX

– 31.0% of service

revenues ex. IC

2


• concession ended on 15 Sep 2018

• remedy period ended on 15 Dec 2018

• 900MHz and 1800MHz licenses granted on 16 Dec 2018

• transition out of remedy with minimum disruption

• resetting baseline for new cost structure

3

dtac completely out of remedy


Operational Highlights

1

4


Good foundation for future growth

5

10

10

30

60

850MHz

1800MHz

2100MHz

2300MHz

spectrum portfolio

1 x 60MHz

2 x 15MHz

2 x 5MHz

2 x 5MHz

partnership with TOT, end in 2025

license from NBTC, end in 2027 (2100MHz) and 2033 (1800MHz and 900MHz)

• strong and competitive spectrum portfolio

• long-term access to infrastructure under concession

• historic year for network investment

• first TD-LTE network in Thailand

• 12.7k 2300MHz base stations installed

– deployment of 64T64R Massive MIMO

• 7.9k additional 2100MHz base stations installed

• significant reduction in legal risks

• settlement of disputes related to concession agreement with CAT


Improvement in sub development amid uncertainties during transition out of concession

6

• lowest level of negative quarterly net adds in nearly 3

years, mainly driven by

– constant communication on strong commitment to

improve network quality

– device and topping campaigns

• huge jump in subs on 2300MHz network

– approx. 80% of postpaid subs on 2300MHz network

– campaigns to increase 2300MHz-compatible device

penetration

• service revenue under pressure

– uncertainties during transition out of concession

– clean up of CPA services to improve customers’ experience

– lower arrival of tourists from China


Empowering society with digital technology

Smart Farmer

Project

• Launched Farm Man Yum

Application and Precision

Farming IoT technology,

helping farmers to reduce

crop damages by 44%.

• 20,000 farmers were

trained on Online

Marketing and increased

income by 25%.

Net Arsa Project

• Reduced Digital Divide at

grassroots level to support

local economic and social

growth under Thailand 4.0

initiative.

• Reached over 7,600 local

authorities, communities

and schools.

7


Financial Highlights

2

8


Decline in service revenues due mainly to uncertainties from transition out of concession

9

service revenues ex. IC data usageTHB billion GB/sub/month

ARPUTHB/sub/month

• core service revenues* declined by 0.7% in FY18.

• lower IDD revenue and clean up of CPA services also contributed to the decline.

• data consumption growth remained strong.

• yearly ARPU grew strongly, while YoYgrowth of quarterly ARPU slowed down.

14.9 14.9 14.8 14.7 14.3

1.4 1.2 1.2 1.0 1.0

59.1 58.7

5.7 4.316.2 16.0 16.0 15.7 15.3

64.8 63.0

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 FY17 FY18

core service revenue* others

7.2 7.78.4 8.8 9.1

5.8

8.5


* defined by voice + data service revenues

YoY

-2.8%QoQ YoY

-2.5% -5.9%

YoY

46.3%QoQ YoY

2.7% 26.0%

Q417 Q118 Q218 Q318 Q418 FY17 FY18 Q417 Q118 Q218 Q318 Q418 FY17 FY18

250 249

258 256 253

237 240 248 247 243

242

254

230

244


ARPU incl. IC ARPU ex. IC

Q417 Q118 Q218 Q318 Q418 FY17 FY18

QoQ YoY

w/ IC -1.2% 1.1%

w/o IC -1.3% 2.5%

YoY

w/ IC 4.8%

w/o IC 6.4%


cost of services % cost of servicesTHB billion % to service revenues ex. IC

• regulatory cost in Q418 comprised:– recurring regulatory costs include 1.5%

license fee, 2.5% USO fee, and numbering fee of THB 2 per month per number; and

– cost of remedy and one-time adjustment after end of concession.

• network OPEX in Q418 increased from– THB 1.1b expenses for lease of

infrastructure and equipment from CAT and the amortization of one-time up-front payment, and

– cell site related expenses – electricity, repair & maintenance, rental, etc. – due to expansion of network.

• higher other cost of services mainly driven by variable portion of TOT network roaming cost of THB 615m in Q418. (net

EBITDA impact of THB 25m after offsetting with network equipment rental and service revenues of THB 590m)

* excluding depreciation and amortization, and IC

*

10

Resetting baseline for cost of services after end of remedy period

1.7 1.9 1.6 1.5 1.3

1.9 1.9 1.8 1.8 3.0

0.7 0.6 1.4 1.8

2.4

8.76.3

6.98.5

3.0 6.2

4.4 4.4 4.8 5.1

6.718.5

21.0


regulatory network others

10.8%12.0%

9.8% 9.5%8.3%

13.4%

9.9%

12.0%11.7%11.4%11.3%

19.7%

10.6%

13.4%


regulatory costs network opex

QoQ YoY

32.0% 52.6%

YoY

13.4%

Q417 Q118 Q218 Q318 Q418 FY17 FY18 Q417 Q118 Q218 Q318 Q418 FY17 FY18


% SG&A expenses• decline in full year S&M expenses

from of ongoing efficiency improvement measures.

• gen admin expenses and provision for bad debt well under control.

• continued focus on improving operational efficiency.

SG&A expensesTHB billion % to total revenues

* excluding depreciation and amortization, and one-time CAT settlement in Q418.

*

SG&A declined in FY18

11

1.3 1.1 1.1 1.2 1.50.4 0.4 0.3 0.3 0.3

2.22.0 2.0 1.9 1.9

4.9 4.8

1.5 1.4

8.0 7.83.93.4 3.4 3.4 3.8

14.4 14.0


S&M bad debt gen admin

11.0%10.4%10.7%10.6%10.1% 10.2%10.4%

6.4% 5.5% 5.7% 6.5%7.8%

6.2% 6.4%


gen admin S&M

Q417 Q118 Q218 Q318 Q418 FY17 FY18

QoQ YoY

9.8% -4.8%

YoY

-2.9%

Q417 Q118 Q218 Q318 Q418 FY17 FY18


Decline in EBITDA reflected new cost structure after end of concession

12

EBITDA (before other item) EBITDA marginTHB billion

• QoQ decline in EBITDA in Q418 was mainly driven by– temporary cost of remedy of

THB 472m,– one-time adjustment of regulatory

costs after end of concession, – full quarter of CAT related expenses,

net of revenues, of THB 753m,– higher S&M expenses during festive

quarter, and– seasonal high device campaigns.– lower service revenue ex. IC

• full year device subsidies declined by 28%.

7.8 8.47.6 7.2

5.3

30.428.4


38.6%

43.8%

40.4%40.0%

27.4%

38.9%37.9%

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 FY17 FY18Q417 Q118 Q218 Q318 Q418 FY17 FY18 Q417 Q118 Q218 Q318 Q418 FY17 FY18

QoQ YoY

-26.7% -32.7%

YoY

-6.7%


• one-time legal dispute settlement with CAT of THB 9.5b recorded in Q418.

• sharp QoQ drop in D&A charges after end of concession of approx. THB 5.6b, partly offset by amortization of 900MHz and 1800Mhz licenses and depreciation of additional investment in network and others of approx. THB 0.5b.

Net profit impacted by one-time CAT settlement

13

key financial ratios

* excluding other component of shareholders’ equity.

• full year operating cash flow stayed positive despite high network investment.

• strong and flexible financial position

operating cash flowTHB billion

net profitTHB billion

3.45.9 4.6

1.1-2.7

4.42.5

3.06.1 8.0 13.9

8.9

16.519.5

7.8 8.4 7.6 7.2 5.3

30.4 28.4


operating CF (EBITDA - capex) capex

2.3 1.7 1.6 2.8

12.5

0.8 0.6 0.6 0.7 1.2

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18

Net debt : Equity Net debt : EBITDA

0.51.3

0.2

-0.9

-4.9

2.1

-4.4

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 FY17 FY18Q417 Q118 Q218 Q318 Q418 FY17 FY18 Q417 Q118 Q218 Q318 Q418 FY17 FY18 Q417 Q118 Q218 Q318 Q418

QoQ YoY

-436% -1011%

YoY

-307%


Immediate Focus & Outlook

3

14


Improve the network

and customer

experience

Rebuild

confidence in

dtac brand

Continued innovation

and improvements in

operational efficiency


2019 outlook

16

• return to growth during 2019, with continued focus on operational efficiency

• more details outlook to be updated in the second quarter

capex

THB13 – 15 billion


Disclaimer

• Certain forward looking

statements may be made in the

course of the presentation. These

forward-looking statements

generally can be identified by use

of statements that include words

or phrases such as dtac or its

management “believes”,

“expects”, “anticipates”,

“intends”, “plans”, “foresees”, or

other words or phrases of similar

import. Similarly, statements that

describe dtac’s objectives, plans

or goals also are forward-looking

statements.

• All such forward-looking

statements are subject to certain

risks and uncertainties that could

cause actual results to differ

materially from those

contemplated by the relevant

forward-looking statement. The

forward-looking statements

contained in the slides are not and

should not be constructed as

representations of the future

performance of dtac and that such

statements are an expression of

the Company’s reviews based on

its current view and certain

assumptions including, but not

limited to, prevailing economic

and market conditions and

currently available information.

17

Investor RelationsE: [email protected] T: +662 202 8882

dtac fiscal year 2018dtac.listedcompany.com/misc/fs/2018/20190128-dtac-conferencecall-fy2018.pdf ·...

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