DIGI.COM ANALYST DAY - COFFEE CHAT

Transcription

1 DIGI.COM ANALYST DAY - COFFEE CHAT IR/ANALYST DAY SEP15 OPEN 7 Sept 2015

2 WELCOME TO DIGI AGENDA 3:30pm: Opening Karl Erik CEO s reflection Market and brand updates Building the best LTE network Nurturing the best talents 2015 guidance Albern Christian Kesavan Haroon 4:45pm: Management panel discussion DMT 5:30pm: End 2

3 1H15 Checkpoint: Healthy service revenue EBITDA margin 45% 45% 45% 1.8% service revenue growth 2.6% postpaid growth 1.5% prepaid growth Revenue (RM bn) Steady increase of smartphone users to 57% of the subscriber base Stronger subscriber base with 394K net adds in 1H15 Service revenue (RM bn) Solid progress on 4G-LTE expansion with extensive coverage available in key markets Steady EBITDA margin at 45% 1H13 1H14 1H15 Healthy YTD dividend of 12.0 sen per share or RM933 million 3

4 CEO S REFLECTION Source: Company and Bloomberg as at 27 Apr

5 A solid business unit within Telenor Group Creating value through excellent execution of strategy INTERNET FOR ALL Best for internet Enabling digital lifestyle for Malaysians LOVED BY CUSTOMERS Source of inspiration for our customers through excellent customer experience EFFICIENT OPERATIONS Most efficient network and most innovative service provider in Malaysia Internet For All market in Malaysia Population of 30.6 million, growing by around 0.5 million per year 3 rd largest mobile operator with 11.8 million subscribers 6.8 million active internet users and more to come with the proliferation of affordable smartphones 5

6 Exciting mobile internet opportunities ahead Growing mobile internet demand and usage Increasing smartphone penetration Rapid expansion of 4G-LTE and strengthen 3G Evolution of digital services 6

7 However, challenging near-term revenue growth in a volatile market Changing business landscape Elevated competition intensity Rich possibilities with innovative digital services Softer consumer sentiment GST impact on consumer wallet Weakening MYR currency Aggressive internet pricing and free internet access IDD price war Rich freebies on reload Social media Entertainment Storage Payment 7

8 Relentless drive for resilience and growth amid tough environment Focus on driving stronger usage and growth o Consistent drive to win and retain customers o Be the preferred mobile operator with #1 NPS o Competitive value propositions to increase internet adoption and upselling opportunities Deliver on our customer promise o Rapid expansion of 4G-LTE and strengthen 3G o > 65% 4G-LTE coverage in 5 key markets in 1H15 o Continue to invest and strengthen high-speed data network for Best For Internet experience Leverage on solid fundamentals and stronger network and IT capabilities o Continue excellent on-ground execution o Strengthen position to capitalise on the strong demand and obsession for mobile internet connectivity and speed Build and nurture the best talents Empower societies and corporate responsibilities program 8

9 MARKET AND BRAND UPDATES Source: Company and Bloomberg as at 27 Apr

10 Industry mobile service revenue growth potential being challenged Mobile service revenue y-y movement (RM mn) Industry mobile service revenue H15 suffered sharp decline in 2014 o Weak data monetisation o Aggressive IDD pricing to target subscriber market share (103) (2) (346) (235) (101) ARPU pressure imminent 58 Peer 1 Peer 2 Digi ARPU (RM mn) H Competition intensity remained elevated in 2H15 on the back of weak consumer sentiment Current price levels not sustainable o Need stronger data monetisation discipline to drive revenue Peer 1 Peer 2 Digi 10

11 Resilient performance backed by higher internet growth and usage Service revenue (RM bn) H13 1H14 1H15 Prepaid Postpaid Internet and Smartphone % 41.2% 49.4% 57.9% 57.1% 30.4% 41.9% 1H13 1H14 1H15 Smartphone Internet Healthy service revenue in 1H15 o +2.6% postpaid revenue growth o +1.5% prepaid revenue growth Stronger subscriber base with +344K net adds for prepaid and +50K net adds for postpaid Solid growth on internet revenue in 1H15 on the back of increasing internet and smartphone users o +13.8% postpaid internet revenue o +40.2% prepaid internet revenue Brand preference trending up among MI users and Digi perceived as an entertaining and creative brand among Youth 11

12 Continue to grow postpaid and strengthen prepaid value proposition to drive usage and growth Digi Smart Prepaid Digi Best Prepaid Digi Postpaid Smartplan Revitalised IU offerings (worry free hi-speed internet with daily max cap) Daily RM1 + unlimited FB + 300MB Youtube Innovative digital services 12

13 Clear game plan to WIN #1 in Prepaid Strengthen prepaid usage Grow mobile internet adoption and usage Drive internet to all subscribers Strengthen Postpaid Monetise and maximise 4G-LTE position Win entry level postpaid customers Acquire mid-tohigh ARPU postpaid Re-define Enterprise Business Grow SME and SOHO segments Be the best service provider for IOT Solutions driven portfolio and sales 13

14 Drive excellent on-ground execution at the respective regions Strengthen distribution and channels to meet and serve different customer segments Laser sharp execution on the ground, with a strong focus on fundamentals to win everyday Continue to drive new growth areas Defend stronghold Fuel internet adoption 14

15 Our customers are at the heart of our organisation Social Media postings Voice of Customer NPS (key company-wide ambition & KPI) Customer call backs Active Engagement On-ground engagement with dealers & customers CFL Market Visits Leverage on Voice of Customer o Foundation to identify specific initiatives towards issue resolution Resolve customer issues via structured decision-making platforms Drive positive Net Promoter Score (NPS) 15

16 Continuous improvement to deliver the best for our customers Regular assessment of customer experience and network quality o Net Promoter Score (NPS) o Network Drive Tests Innovating customer experience o Self service application and online customer service Regular assessment of dealers product knowledge and way of handling of customer queries, as well as scrutinize the promotional displays o Mystery shopping and market visits Creating informed Digi Ambassadors o Contact Centre o Digi Customer Champions o Customer First Day 16

17 BUILDING THE BEST LTE NETWORK Source: Company and Bloomberg as at 27 Apr

18 Strong foundation for data growth opportunity Modernised network and IT infrastructure with unique synergy and innovation potential Capex (RM mn) LET S e INSPIRE 18

19 Superior mobile network position Fastest growing 4G-LTE network with most consistent internet experience 4G launched in 2013 Data traffic % 1% - 9% 8% 7% 5% One third of sites with 4G-LTE Target to accelerate 4G-LTE network expansion and be the best LTE network Fast adoption of mobile data traffic on 4G-LTE Steady data traffic growth q-q and y-y 91% 91% 89% 2Q13 2Q14 2Q15 3G 2G 4G Physical sites 6,000 6,400 6,900 Preparing for VoLTE, VoWiFi and LTE-A Continuous investment in network 2Q13 2Q14 2Q15 2G/3G 4G 19

20 Extensive fiber network to support growing data demands Details Fiber network KM 6,000 9,000 10,000 Legend Planned fiber build Completed fiber build Planned lease line Completed lease line 20

21 Efficient deployment of 4G-LTE technology for best internet experience Leverage on modernised equipment to deliver fastest growing 4G-LTE network G-LTE 4G-LTE in all key market centers and aim to deliver the best 4G-LTE network position Rolling fiber closer to customer Preparing 4G+ by deploying LTE-A G-LTE 21

22 Clear strategy to drive a holistic approach on 4G-LTE Free LTE usim upgrade & 1GB quota Existing or New customer that upgrades to an LTE line will get additional 1GB quota Affordable LTE device bundle Lenovo A6000 for postpaid and Alcatel Pixi 3 for prepaid Innovative digital services 22

23 NURTURING BEST TALENTS IN MALAYSIA Source: Company and Bloomberg as at 27 Apr

24 Malaysia s talent landscape We believe that having sufficient and the right talent is critical to the future of a business and a country. As a business leader in Malaysia, Digi is cognizant of the talent issues the country and industry are facing and are actively participating in constructive dialogues and actions to address them. Labour Force Women Labour Participation Rate Tertiary Educated Source: TalentCorp Malaysia 24

25 Digi, a growth company driven by passionate employees Our People and Talent strategy is aimed at developing the best talents into passionate employees OBJECTIVE TALENT PILLARS Passionate Employees Most engaged and inspired employees Best talent in the industry that are equipped and inspired to win everyday 25

26 Challenge the norm Express myself Connect with others FREEDOM TO.AND MANY MORE! Achieve my potential INSPIRE THE Product or Service Customer Digizen NEXT Malaysian ENDLESS POSSIBILITIES! 26

27 Digital HR - a step to internet company culture 27

28 Refreshed Onboarding Journey 1 DAY D cuppa Welcome to Digi Ask a Digizen Office Tour D Lunch Get Started My Rewards HSSE Security 1/2 DAY D cuppa Telenor Way Customer Centricity Retail Work@ Prep Manager s Onboarding 1 DAY Retail stores 1 HOUR Reflections My Laptop My Transactions It s a Wrap! Preboarding Port In Day 1 Get Activated Day 15 Get Digified Day 30 Let s Inspire LET S INSPIRE 28

29 D House Renovation: upgrading the hardware after 9 years to complement our evolved software (Culture & Telenor / Digi way) Key effects to be realized: Telenor Workplace Model 2 nd Gen Sustainability & energy LET S INSPIRE efficiency Enhanced security solutions 29

30 Committed to deliver internet for all communities to inspire a better Malaysia (Social Purpose Groups) Partnering social change makers to enable innovative internet solutions (Youth Social Entrepreneurs) Global platform to connect and share digital communication innovations (Online Communities) Recognising Malaysians that increase online creativity and entrepreneurism (Technopreneurs) Global platform to share insights on innovation and digital business opportunities (Rural Communities) Enabling connectivity and easy ownership of smart devices (in partnership with CyberSecurity Malaysia) Schoolchildren Teachers and Educators Parents and communities (Women/Girls) Greater usage of the internet to inspire and empower the lives of women in Malaysia 30

31 2015 GUIDANCE 31

32 2015 a new challenge for the industry 2015 Guidance 1H15 Competition intensity remained elevated on the back of weak consumer sentiment Service revenue growth EBITDA margin Low to mid single digit Sustain at 2014 level 1.8% 45% Industry service revenue and earnings growth challenged by aggressive pricing, weak data monetisation and changing business landscape although mobile internet demand continued to grow steadily Capex Sustain at 2014 level RM393 million Strong mobile internet growth opportunity with increasing smartphone adoption and internet usage Resilient drive for sustainable service revenue Steadily strengthen infrastructure and distribution capability to drive best internet experience for customers 32

33 MANAGEMENT PANEL DISCUSSION 33

34 Disclaimer This presentation and the following discussion may contain forward looking statements by Digi.Com Berhad (Digi) related 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 Digi 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 Digi. In particular, such statements should not be regarded as a forecast or projection of future performance of Digi. It should be noted that the actual performance or achievements of Digi may vary significantly from such statements. 34

35 Thank you! LET S INSPIRE Investor_Relations@digi.com.my 35