dtac fy 2015 3 February 2016 Investor Relations E: ir@dtac.co.th T: +662 202 8882
Q415 highlights 25.3m total subscribers 90% of sub base registered under DTN 400k net adds during Q415 THB7.9b data revenues 48% of service revenues ex. IC THB6.7b EBITDA 29% EBITDA margin THB3.9b CAPEX 17% to total revenues THB0.52 per share dividend 124% payout ratio 2
operational highlights
4G on 1,800MHz launched launched 4G service on 15MHz bandwidth of 1,800MHz band with 2,200 sites covering BMA 3G coverage reached 94% of population FY14 17,555 3G sites 1,056 4G sites 88% pop coverage FY15 24,319 3G sites 6,342 4g sites 94% pop coverage injunction on 2.1GHz network rollout lifted network perception campaign continued 4
mass campaigns driving acquisition and usage acquisition campaigns lucky draw free calls or data when activating new SIM device campaigns: 4G festival, MNP usage stimulating campaigns lucky draw data topping combo & social topping Jai-dee borrowing service 5
strong growth in 4G subs and devices 0.5 0.2 4G subs (in million) 2.3 Q214 Q314 Q414 Q115 Q215 Q315 Q415 most used applications 2.3 million 4G subscribers at YE15 15% penetration of 4G-enabled device handset campaigns are important in expanding 4G subs 2/3 of devices sold via dtac channels are 4G-enabled 6
dtac remains competitive after auctions Concession 1/ License 2/ 850MHz 1800MHz 2100MHz Total adequate bandwidth to offer best mobile Internet services 2G 10MHz 10MHz 3G 10MHz 10MHz 20MHz 4G 15MHz 5MHz 20MHz Total 10MHz 25MHz 15MHz 50MHz 1/ concession expires in 2018, excluding 20MHz of unused 1800MHz band. 2/ license expires in 2027. without financial burden from the auctions, dtac is flexible to invest and compete in the market opportunity to strengthen market position 7
financial highlights
positive net adds for prepaid and postpaid dtac vs dtn subscribers arpu mou million subs THB/sub/month QoQ YoY mins/sub/month QoQ YoY w/ IC w/o IC +7.7% +7.7% +7.1% +9.8% w/ IC w/o IC +2.5% +2.6% -7.1% -8.9% 28.0 28.4 26.9 24.9 25.3 222 215 218 220 238 229 216 206 208 213 20.2 23.5 23.5 21.9 22.6 7.8 5.0 3.5 3.0 2.6 Q414 Q115 Q215 Q315 Q415 dtac DTN 200 195 198 204 220 Q414 Q115 Q215 Q315 Q415 ARPU incl. IC ARPU ex. IC 186 174 165 165 169 Q414 Q115 Q215 Q315 Q415 MoU incl. IC MoU ex. IC 90% of subscriber base registered under DTN ARPU trending up as a result of impact from prepaid registration declining trend was interrupted by impact from prepaid registration 9
service revenue grew qoq service revenues ex. ic data revenue data revenue breakdown THB billion YoY % of service revenues ex. IC % of vas revenues -3.0% QoQ YoY +1.4% -1.6% 68.3 66.2 12% 11% 10% 8% 8% 14% 9% 43.4% 44.5% 46.3% 47.5% 47.5% 46.4% 40.7% 5% 4% 4% 3% 3% 6% 4% 16.9 16.8 16.4 16.4 16.6 voice data others 7.3 7.5 7.6 7.8 7.9 27.8 30.7 83% 85% 86% 89% 89% 80% 87% mobile internet messaging others YoY decline of quarterly revenue has stabilized QoQ revenue growth mainly driven by seasonality revenue from data services contributed nearly half of total service revenues mobile Internet continued to dominate revenue from data services 10
huge improvement in handset margin % smartphone handset revenue handset margin THB billion YoY 48.0% 52.4% 57.1% 60.7% 60.9% 6.6 QoQ YoY +178% -20.1% 4.4 5.3 3.8 1.9 +1.8% 15.1 15.4-4.3% -1.0% -19.8% -17.8% -19.1% -6.0% -12.7% Q414 Q115 Q215 Q315 Q415 marginal increase in smartphone penetration strong QoQ growth of handset sale from the launch of new iphone model YoY drop of quarterly handset revenue mainly driven by lower sale of iphone handset margin significantly improved from last quarter from lower level of prepaid handset subsidy but remained in negative 11
decline in regulatory cost cost of services THB billion YoY QoQ YoY +4.0% -3.1% 24.0 22.2 5.8 5.4 5.7 5.4 5.6 * regulatory network opex others -7.6% % cost of services % to service revenues ex. IC 22.5% 18.3% 18.8% 18.7% 17.4% 22.8% 18.3% 7.6% 7.4% 8.8% 7.3% 8.4% 7.0% 8.0% regulatory costs network opex regulatory cost dropped QoQ from DR rate adjustment higher network OPEX from expansion of 4G and 3G networks * excluding depreciation and amortization, and IC 12
higher SG&A to get revenue growth back SG&A expenses THB billion YoY +14.0% QoQ YoY +14.7% +10.1% 4.1 3.3 3.5 3.9 4.5 * S&M bad debt gen admin 15.2 13.4 % to total revenues % sg&a expenses 10.7% 9.8% 7.7% 7.6% 7.7% 8.9% 7.2% 7.2% 6.0% 7.4% 7.9% 8.1% 6.9% 7.3% S&M gen admin higher S&M expenses in response to intensified competition higher general admin from implementation of cluster model and expansion of retail shops one-time provision of doubtful account and write-off of related equipment * excluding depreciation and amortization 13
ebitda margin up 1.3pp YoY ebitda * THB billion YoY -9.6% QoQ YoY -4.8% -3.1% 30.9 27.9 7.0 7.4 6.7 7.1 6.7 ebitda margin EBITDA margin 44.3% 38.8% 41.3% 41.8% 42.2% 41.3% 37.8% 27.7% 32.3% 35.9% 30.7% 29.0% EBITDA margin ex handset 34.1% 31.8% Q ly EBITDA margin improved 1.3pp YoY from lower handset subsidy, and lower regulatory cost, partly offset by higher SG&A and network expenses Q ly EBITDA margin dropped 6.9pp QoQ from higher proportion of handset sale, higher SG&A and network expenses, partly offset by lower handset subsidy and regulatory cost * change in EBITDA calculation, please see detail in notes to financial statements. 14
net profit dropped net profit THB per share (top) THB billion (bottom) QoQ YoY -18.7% -47.2% YoY -45.1% 4.53 2.49 0.80 0.97 0.58 0.52 0.42 10.7 5.9 dividend THB per share YoY -57.6% QoQ YoY -27.8% -77.8% 6.91 2.34 2.93 0.89 0.80 0.72 0.52 decline in net profit as a result of lower EBITDA, higher D&A charges, partly offset by gain in FX change in dividend policy not less than 50% of dtac s net profit, depending on financial position and future business plan aim to pay semi-annually 15
financial position remained strong THB billion operating cash flow 7.0 7.4 6.7 7.1 6.7 4.4 5.5 3.2 2.6 1.9 3.6 7.6 3.9-0.6 2.8 30.9 27.9 14.0 20.2 16.9 7.7 operating CF (ebitda-capex) capex key financial ratios 4.0 1.9 2.2 2.5 2.6 0.9 0.8 1.0 0.9 1.4 Q414 Q115 Q215 Q315 Q415 net debt:equity* net debt:ebitda FY15 operating cash flow declined from high level of CAPEX and lower EBITDA financial ratios remained at comfortable level * excluding other component of shareholders equity. 16
strategic direction and outlook
key focus areas network expansion attractive offers handset campaigns 4G on 2.1GHz and 1800MHz 3G coverage to reach 95% network densification defend value for money position individualized offers / contextual marketing brand refreshment / new brand platform competitive device offerings 4G festival / MNP Thank You for Being with Us 18
2016 outlook flat / slightly higher than previous year 27% - 31% same level as previous year service revenues ex. IC growth EBITDA margin capex (in THB billion) 19
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. Investor Relations E: ir@dtac.co.th T: +662 202 8882