2019 Digi.Com Berhad 1Q 2019 Results 22 April 2019
• KEY HIGHLIGHTS • PERFORMANCE REVIEW • OTHER UPDATES • 2019 PRIORITIES AND OUTLOOK • Q&A 2
HEALTHY EARNINGS & SOLID POSTPAID GROWTH supported by efficient operations Key Highlights +13.5% +13.3% -2.8% SERVICE REVENUE 1 GROWTH POSTPAID INTERNET REVENUE 1 REVENUE (Y-Y) (Y-Y) (Y-Y) 1Q 2019 > 8.0M 0.4% OPEX RM723m Performance 4G-LTE REDUCTION EBITDA SUBSCRIBERS (Y-Y) (48% MARGIN) EFFICIENCY 3.2M NETWORK SUSTAINED FUNCTION MyDigi MAU #1 NET VIRTUALISATION (21.0M upsell PROMOTER (NFV) DIGITAL transactions) SCORE This is a placeholder text. This text can be replaced with your own text. TRANSFORMATION 1 Revenue ex- contract asset amortisation All analysis and comparisons are based on post MFRS 9 and MFRS 15 3 A summary of the financial impact post adoption of MFRS 16 will be included as part of Other Updates
RE-DEFINING GROWTH OPPORTUNITIES supported by core, MyDigi and B2B Key Highlights Core Business MyDigi 3.0 B2B • • • Modernised and re-energised Brand-new look: Greater Sharper channel acquisition channel to support internet growth convenience and rewards at • My Digi Business self-care platform ambition customers’ fingertips • Digital business solutions • • Sharpened easy device ownership Easier payments: One account for program (Phone Freedom 365) to multiple numbers and seamless cater for broader customer base one-click payment • • Segmented internet offering and Personalised deals: Box of Surprise continued postpaid conversions and MyDigi Rewards Republic GG • • Base management activities to Secure sign-in: Enhanced login drive retention and ARPU growth security for safer online experience • rGG: One-stop gaming command centre for gaming exclusives and rewards 4
ACTIVELY EXPLORING 5G’S POTENTIAL to drive Malaysia’s digital future, and deliver on our purpose to connect customers to what matters most Key Highlights Key Highlights #5G Malaysia 5G-powered emergency services, learning and eSports @ Putrajaya (18-20 April 2019) • Broad multi-party collaborations important to test as many use cases to draw learnings that we can use to purpose-build 5G according to the needs of the country • Working closely with the MCMC and industry partners to test use cases, conduct field trials and explore modes of 5G implementation • Part of the 5G national taskforce • Command Centre Monitoring System (CCMS) to enable faster, better responses to study and recommend a especially in emergencies that require precision data in real-time holistic strategy for 5G deployment in the country • Augmented Reality for future learning purposes • Virtual Reality e-Sports and gaming 5
SOLID INTERNET GROWTH supported by improved network capabilities and growing internet base Performance Review 4G Plus Network Coverage Data Traffic Growth Internet Revenue (RM m) • 4G LTE: 89% • 51% Y-Y 13.3% Y-Y • LTE-A: 67% • 4% Q-Q 1.5% Q-Q • Fibre: 8,500KM 862 849 817 805 761 4G & Internet Subscribers Monthly Data Usage (# m) (Sub/GB/month) +25% 440 461 418 400 368 Y-Y 8.8 9.0 9.2 9.0 8.6 10.2 9.9 7.9 8.0 7.5 9.1 7.1 8.2 6.6 7.2 409 +2% 405 399 401 393 Y-Y 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 4G Internet Prepaid Postpaid 6
STRONGER POSTPAID ALONG WITH STRATEGIC SHIFT IN PREPAID MIX well-positioned for sustainable growth Performance Review Postpaid Prepaid ARPU ARPU 74 72 72 32 32 71 71 31 (RM) (RM) 30 29 Subscribers 2,855 2,805 2,730 2,655 Subscribers (‘000) 2,571 9,186 9,073 9,004 8,855 8,396 100.0% 12.3% 12.1% 11.5% 10.9% 10.7% (‘000) Non-Internet 120.0% 10,000 90.0% 2,500 9,000 80.0% 100.0% 8,000 24.7% 23.1% 70.0% 28.7% 27.4% 2,000 30.8% Non-Internet 7,000 60.0% 80.0% 6,000 1,500 50.0% 89.1% 89.3% 87.7% 87.9% 88.5% 60.0% 5,000 Internet Internet 40.0% 1,000 4,000 76.9% 75.3% 30.0% 71.3% 72.6% 40.0% 69.2% 3,000 20.0% 500 2,000 20.0% 10.0% 1,000 0.0% - 0.0% - 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 • • Solid subscriber growth driven by highly focused Significant change in prepaid mix with reduced reliance on acquisition and retention strategies traditional voice re-set baseline for subscriber, ARPU and revenue • 50K net adds to 2.9M subscribers or 25% of total subscribers • Stronger internet subscribers and usage but growth in ARPU challenged by prolonged data competition intensity • Stable ARPU while growing entry level postpaid subscriptions and plan upgrades from existing base • Re-energised channel strategy impacted current acquisition momentum but set a solid foundation towards building a stronger platform for sustainable growth 7
GROWING 4G AND INTERNET BASE along with relatively resilient ARPU Performance Review Blended ARPU 41 41 (RM) 40 40 39 Subscribers 11,757 11,803 11,659 11,660 (‘000) 11,251 100.0% 12,000 20.0% 21.4% 24.9% 23.7% 26.8% 90.0% Non-Internet 10,000 80.0% 70.0% 8,000 60.0% 50.0% 6,000 78.6% 80.0% Internet 75.1% 76.3% 73.2% 40.0% 4,000 30.0% 20.0% 2,000 10.0% 0.0% - 1Q18 2Q18 3Q18 4Q18 1Q19 • Strong focus on internet centric acquisition and base management activities supported growing smartphone and internet base to 81.4% and 80.0% • 4G subscribers increased 106K to 8.0M (4Q18 7.9M) although total subscriber base declined • ARPU relatively resilient after accounting for changes in prepaid subscriber mix, interconnect rate revision and seasonal effect 8
MOBILE SERVICE REVENUE: A new baseline from shift in prepaid mix and interconnect rate revision while supported by solid postpaid and internet growth Performance Review Service Revenue • Postpaid revenue 1 grew 13.5% Y-Y and 0.6% Q-Q led by solid acquisitions and retention while postpaid internet Service 1,483 1,484 1,482 1,475 Revenue 1 revenue rose 25.3% Y-Y and 4.8% Q-Q to RM461m 1,441 (RM m) • Prepaid internet revenue mix climbed to 52% (1Q18: 591 619 640 667 Postpaid 1 671 46%) but reduction from traditional voice and interconnect rate revision levelled prepaid revenue by 13.7% Y-Y 891 865 835 815 769 Prepaid • Overall internet revenue rose 13.3% Y-Y and 1.5% Q-Q Contract asset (22) (30) (37) (45) (48) to RM862m or 61.9% amortisation 1Q18 2Q18 3Q18 4Q18 1Q19 • Service revenue 1 trended 2.8% lower Y-Y and Q-Q to Service Revenue Mix RM1.44 billion or RM1.39 billion net of contract assets amortisation, a result from shift in prepaid revenue mix 38.1% 40.9% 43.2% 44.6% 47.9% with lower reliance on traditional voice and supported Non-Internet by the solid growth from postpaid Internet 61.9% 59.1% 55.4% 56.8% 52.1% • Contract asset amortisation accelerated Y-Y to RM48m as a flow through from prior year’s accelerated postpaid contract acquisition 1Q18 2Q18 3Q18 4Q18 1Q19 1 Revenue ex- contract asset amortisation 9
COST: Efficient operations to support capacity upgrades and enhanced digital capabilities Performance Review Total Cost • Cost of goods sold (COGS) declined 19.1% Y-Y and 30.1% Q-Q mainly due to seasonally lower device 937 volume in transition to the enhanced PF365 program 868 859 850 Total cost 794 and reduction in regulated interconnect rate (RM m) 502 492 485 491 • Opex reduced 0.4% Y-Y and 2.4% Q-Q Opex 490 • Improved efficiencies across sales and 435 376 368 365 304 COGS marketing and O&M functions 1Q18 2Q18 3Q18 4Q18 1Q19 • Included a one-time cost reduction of RM22m relating to O&M efficiency initiative Opex to Service Revenue • Opex to service revenue remained healthy at 35.2% Net opex 1 33.1% 33.4% 33.5% 34.7% 34.6% Opex 33.7% 33.4% 34.1% 34.9% 35.2% • Digi continued to demonstrate lean and efficient cost structure while investing into capacity upgrades and Others 7.1% 5.8% 7.4% 6.1% 6.0% digital capabilities to support our customers’ growing USO 7.1% 6.5% 6.7% 7.4% 6.6% data demand 7.8% 7.5% 8.2% 9.0% 7.8% O&M 4.4% 5.4% Staff cost 4.0% 3.8% 4.7% S&M 8.8% 8.6% 8.4% 8.0% 8.3% 1Q18 2Q18 3Q18 4Q18 1Q19 1 Net opex = Opex + Forex/FV changes + Other income 10
EBITDA & PAT: Profitable operations and healthy margins supported by sustainable growth and efficiencies Performance Review EBITDA and Margin • Healthy EBITDA and margin underpinned by solid postpaid growth, stronger prepaid internet base and 1,000 100% EBITDA efficient cost management 775 768 750 740 723 (RM m) 800 80% • Softer topline development from shift in prepaid 600 60% Margin mix and seasonally lower device volume 400 40% 48% 47% 47% 47% (%) 44% moderated EBITDA 6.7% Y-Y and 2.3% Q-Q to 200 20% RM723m although EBITDA margin improved to - 0% 48% 1Q18 2Q18 3Q18 4Q18 1Q19 • Profit before tax (PBT) eased 5.8% Y-Y and 6.4% Q-Q to Profit After Tax (PAT) and Margin RM485m after accounting for RM216m depreciation cost (1Q 2018: RM231m) and RM22m finance cost (1Q 2018: RM29m) 500 90% 393 PAT 386 384 378 366 400 70% • PAT remained fairly resilient at RM366m or 24% margin, (RM m) 300 50% although challenged by softer topline development 24% 24% 25% 24% 23% 200 30% Margin (%) 100 10% - -10% 1Q18 2Q18 3Q18 4Q18 1Q19 11
Recommend
More recommend
