Investor Presentation Advanced Info Service Plc. June 2019 Ticker: ADVANC (SET) AVIFY (ADR) Add AIS IR LINE@
AIS: Digital Life Service Provider Lead and digitally transform in Grow stronger in Partner to offer differentiated “ Mobile ” “ Fixed broadband ” “ Digital service/platform ” Mobile revenue market share Focused on five key areas Subscriber market share (market size of approx. 8.7mn) 29% 48% 34% 1Q19 16% 1Q19 Mobile 23% Enterprise money 9% 41% 1Q19 breakdown Video IoT prepaid postpaid Bt31.6bn Source: Operators’ reports 3% Others Other 3% 5 th year of operation in 2019 25% 21% platforms Voice 44% covering 57 key cities out of Non- 79% 72% voice 77 provinces 52% Game Insurance expect to cover 7mn homes Mobile revenue subs % to mobile Advertising 41.5mn passed out of total 21.5m revenue households Digital life service provider with convergence products Mark leadership in mobile data Expand access and convergence Pursue long-term growth with • Nationwide 4G/3G/2G coverage to homes integrated services • Leverage existing nationwide fibre • Emphasize partnership & with focus on network quality • Competitive in retaining both infrastructure ecosystem • Defensive value to core mobile • Leverage the large sub base and revenue and subscriber scale business telecom infrastructure 2
1Q19 Overview: Competitive in mobile while strongly grew in non-mobile Core service revenue: grew 2.5% • Revenue +1.1% YoY, +0.4% QoQ while discontinuing fixed-speed YoY driven by FBB and enterprise unlimited subscriptions Mobile • 322k net addition with data consumption of 11.4 GB/month +2.5% 33,962 (Bt mn) 33,147 • Robust revenue growth of +27% YoY, +6.3% QoQ driven by 64.5k 1,119 +21% 926 Others net addition FBB 1,288 • Focused on FMC and high-valued mobile customers +27% 1,013 FBB Mobile Enterprise: 31,555 • 31,208 Maintained high-single digit growth for FY19 , supported by end- +1.1% Digital to-end product proposition combined with CSL services Consumer: • Established insurance broker company as point of online sale • Made presence in eSports for future monetization 1Q18 1Q19 EBITDA and margin: continued cost control Net profit: pressured by investments 46.2%* (Bt mn) -5.3% 8,037 43.1%* 7,615 • +10% YoY from mobile Network & FBB expansion Flat OPEX 18,905 18,906 • (Bt mn) - 1.6% QoQ from cost (excl. TOT) control 1Q18 1Q19 • +7.1% YoY from ad. and handset campaigns • -5.3% YoY from network and license SG&A • -2.6% QoQ driven by D&A lower ad. • +11% QoQ following improved 1Q18 1Q19 EBITDA *Normalizing impact from TOT partnership, margin would be 45.5% in 1Q19 vs 46.9% in 1Q18. 3
FY19 Pre-TFRS 15 Guidance (maintained) FY19 guided items Guidance Rationale • Mobile: stay competitive in maintaining business scale Core service revenue Mid-single digit growth driven by 4G and penetration in growing segments • FBB: deploy FMC (Fixed- Mobile Convergence) targeting 1mn subscribers milestone • Enterprise: gain share in mobile airtime and EDS while growing in Cloud/DC/ICT managed services • Allocate sufficient capital to retain and expand scale in EBITDA margin Stable from last year (43.4% in FY18) respective businesses • Optimize OPEX, offset with cost to support network growth in all businesses • Focus on 4G capacity expansion incorporating 5G- Budgeted CAPEX Bt20-25bn, of which (excludes spectrum Bt4-5bn allocated for compatible architecture • Expand last miles to serve 1mn FBB customers payment) FBB • Preserve financial health and flexibility for future growth Dividend policy Minimum 70% payout ratio 4
Mobile: Revenue grew softly from price competition Revenue growth remained challenging Strong net addition while 4G penetration continued uptrend Mobile revenue (Bt bn) 1Q19 Mobile revenue mix +1.1% YoY 4G Penetration on total base Postpaid, 46% +0.4% QoQ 63% 57% 59% 31.6 54% 50% 31.4 31.2 Net subscriber addition (‘000) Prepaid, 54% 1Q18 4Q18 1Q19 Prepaid Postpaid 347 360 Discontinued low/mid postpaid fixed-speed plans 227 206 354 Full 4G speed Fixed-speed 192 175 Old : New : -32 with limited data unlimited -161 -233 Bt599 14GB Bt600 6Mbps 1Q18 2Q18 3Q18 4Q18 1Q19 Blended VOU (GB/data sub/month) %QoQ growth • Maintained strong postpaid growth 17% 13% 13% underpinned by demand for 4G and handset 7.9% 4.6% campaigns. • Prepaid softened due to aggressive data 10.1 10.9 11.4 8.9 7.6 plans in the market. • 1Q18 2Q18 3Q18 4Q18 1Q19 Continued to gain improving awareness in teen/tourist segments • Data consumption grew more reasonably following barring take-up of fixed-speed plans 5
FBB: Competitively grew while focusing on FMC Revenue remained healthy growth Focused on quality acquisition Beginning Net addition (‘000) Fixed broadband revenue (Bt mn) ARPU (Bt/month) subscriber (‘000) 795 618 610 573 574 563 731 677 65 623 +27% YoY 54 1,288 1,212 572 1,117 1,094 53 1,013 +6.3% QoQ 52 51 731 677 623 572 521 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 • Maintained strong revenue growth but softened ARPU • Gained 65k subscribers in 1Q19, highest in 7 following FMC offering and price competition quarters Continued to offer FMC and ramped up operations Guaranteed service quality for gamers Of 795k subscribers FMC, 26% • Focused on cross selling Separate network between eSports Package convergence offerings Gaming and Internet For Home Use Seamless connectivity Non-FMC, 74% 100/100Mbps and Low Latency Bt790 • Facilitated customers using DL Speed = UL Speed For Gaming online service via “ AIS Fiber full efficiency 100/100Mbps Line Connect” 6
Digital service: Expanded strategic digital services for both enterprise and consumer Increased capabilities in enterprise segment Strengthened engaging consumer platforms • 1 Maintained target to achieve high-single digit growth in Video FY19 for enterprise segment • Debuted the first eSports channel 2mn active users in Thailand on AIS PLAY and AIS • Strategic cooperation with business partners PLAYBOX (March-19) • Collaborated with China Unicom 5.5mn to provide local/international data connectivity Active 4.5 2 Mobile money Registered, but not active 1.0 • Pioneered with Provincial Mar-19 Electricity Authority to launch Solar • Continued expanding sub base Rooftop IoT solution 3 • • Established an insurance Established 5G Garage Innovation LAB Insurance broker company to be a point of online insurance sale • 4 Targeted advertisement on Advertisement partner’s websites • Cooperated with Faculty of Engineering, • Made presence in “eSports” to 5 Chulalongkorn University, with the support from the Games support game ecosystem and NBTC to research and test 5G technology. further monetize 7
Continued highly-recognized in brand and customer engagement Ranked World’s Strongest Telecoms Brand Most retweeted hashtags in 2018 • Awarded “ World’ Strongest Telecoms Brand” by Brand Finance • Received “ 2018 Most engaged brands with a brand strength index (BSI) in Thailand” from Twitter score of 90.0 out of 100, highest in Mark #1 300 most valuable telecoms brands in brand Engaged with digital users on social media leadership • Measured by the Investment efficacy of a brand’s performance: Equity • Marketing investment • Stakeholder equity • Business performance Performance • The only brand in the industry globally to post • Best Brand Performance on Social Media, a AAA+ rating Social Media Platform and Media Campaigns by Thailand Zocial Awards 2019 8
Ongoing cost management supported profit growth QoQ EBITDA and net profit gradually improved sequentially (Bt mn) YoY EBITDA Flat YoY 815 18,906 18,905 • YoY, EBITDA was stable mainly from higher 149 433 222 10 46.2% 43.1% network OPEX and localized marketing margin margin activities, offset by revenue improvement. EBITDA Core Cost of SGA Net Others EBITDA 1Q18 service service sale 1Q19 revenue QoQ EBITDA (Bt mn) +4.6% QoQ 131 185 41 199 279 18,906 18,071 • QoQ, EBITDA improved from slight revenue growth, optimized network OPEX, 43.1% 40.5% and lower advertisement. margin margin EBITDA Core Cost of SGA Net Others EBITDA 4Q18 service service sale 1Q19 revenue Net profit (Bt mn) -5.3% YoY +11% QoQ 8,037 8,005 7,615 • Net profit remained pressured by mobile & 6,849 6,800 FBB depreciation and license amortization, but trended better in past 3 quarters. 1Q18 2Q18 3Q18 4Q18 1Q19 9
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