Investor Presentation Advanced Info Service Plc. September 2019 Ticker: ADVANC (SET) AVIFY (ADR) Add AIS IR LINE@
AIS: Digital Life Service Provider Medium to long term Enterprise Enterprise Mobile 9% FBB 87% FBB 4% Digital Strengthen the Core Expand New Growth Engine Build New Digital Businesses Maintain leadership in core mobile Expand revenue and profit stream from Fixed Build new digital platforms to serve future customer’s lifestyle and create new way of business while optimizing and Broadband and Enterprise Business while digitizing to preserve strong cash serving to strengthen and leverage from the customer engagement through partnership flow generation core mobile business models 5 th year of operation 48% market share 41mn subscribers 9% market share Mobile Cloud money Nationwide 4G/3G/2G 855K subscribers Fibre to home internet mobile network >98% coverage Video IoT Cover 57 key cities out of Other 77 provinces partners’ >98% Mobile network services coverage Cover 7mn home-pass out of • Insurance 22m households in Thailand • Game • Advertising 2
1H19: Solid performance with guidance maintained 1H19 FY19 • Maintain leadership in network quality performance Guidance • Continue strengthening brand perception • Competitive in both mass market and targeted segments Mid-single +4.1% • Fixed-Mobile Convergence (FMC) digit YoY • 1mn subscriber target with quality growth acquisition Core service revenue • Gain share in EDS (Enterprise data service) Business • Drive double-digit growth in Cloud/DC/ICT • Explore IoT in key verticals EBITDA 43.7% margin Stable from last year • Continue operational efficiency & digitization Normalized • Ensure spending effectiveness to compete and retain EBITDA margin quality subscribers • Invest for 4G leadership and fixed broadband • Invest in future-proof technology and incorporate 5G capability in network plan • Capex Seek the appropriate spectrum and timing for 5G Capex 13bn 20-25bn 3
2Q19 Overview: Mobile saw improvement while FBB continued strong growth Core service revenue: grew 5.8% • Revenue +5.3% YoY, +4.3% QoQ following discontinuation of fixed- YoY driven by improvement in mobile speed U/L plans Mobile • Postpaid subs gained 250k vs -276k in prepaid with data consumption of 11.5 GB/month +5.8% 35,394 (Bt mn) • Robust revenue growth of +26% YoY, +7.1% QoQ driven by 60.4k 33,464 1,103 -1.1% net addition 1,380 Others FBB 1,115 +26% • Focused on FMC and maintain 1mn subs target supported by AIS 1,094 shops, Telewiz, and AIS Call Center to ensure quality FBB Mobile Enterprise: 32,911 +5.3% • Maintained high-single digit growth for FY19 , supported by end- 31,256 Digital to-end product proposition combined with CSL services Consumer: • Continued building engagement platforms in video, mobile money, IoT, and partner platforms 2Q18 2Q19 EBITDA and margin: grew 4% YoY supported by revenue growth Net profit: continued improving trend 45.0%* 44.2%* Norm. (Bt mn) +2.9% • +7.6% YoY and +4% 8,234 Network 8,005 QoQ from mobile & FBB Norm. +4% OPEX expansion (Bt mn) 19,753 (excl. TOT) 18,998 • +25% YoY and +14% QoQ from brand and 2Q18 2Q19 SG&A handset campaigns • +2.9% YoY and +8.1% QoQ following EBITDA expansion, despite rising D&A 2Q18 2Q19 *Show performance after normalizing Bt636mn (before tax) of legal severance compensation in 2Q19 4
Mobile: Revenue grew with price adjustment Revenue improved from price adjustment 4G penetration continued uptrend Mobile revenue (Bt bn) 4G Penetration on total base +3.2% YoY +5.3% YoY 64.5 63% 66% +4.3% QoQ 59% 57% 54% 62.5 +4.1% 32.9 31.6 31.3 QoQ Net subscriber addition (‘000) ARPU improvement Prepaid Postpaid 2Q18 1Q19 2Q19 1H18 1H19 360 347 354 250 206 192 175 -32 Acquired 700MHz to strengthen network leadership -276 -161 2Q18 3Q18 4Q18 1Q19 2Q19 2100MHz, 900MHz, 20MHz 30MHz • Maintained strong postpaid growth driven by 700MHz License 120MHz customer demand to convert from prepaid to 20MHz 2100MHz 1800MHz, postpaid and handset campaigns. *Starting from (with TOT), 40MHz October 2020 30MHz • Prepaid softened due to seasonal churns of one- under current operation time segmented SIMs. • With 700MHz, total bandwidth equals 140MHz, largest in the industry. • 700MHz inherits a wide-coverage characteristic which will support coverage in 5G and efficient investment in 4G. 5
Mobile: Network quality remained superior OOKLA Throughput Speed Test Internal Drive Test Customer Perception Awarded AIS the Fastest NW for 4 years Remained most preferred Inline with external test Operator 2 4G Coverage 45% 45% 44% 99.4% 99.5% 99.6% 99.6% 99.7% 99.5% 100% 99% Operator 2 98% Operator 3 97% 4Q18 1Q19 2Q19 Operator 3 >2.5Mbps % of customers conducted the survey <2.5Mbps selecting AIS Brand as a preference (Mar - May 2019) 4G %Good Quality on LINE app 99.6% 99.6% 99.6% 99.6% 99.6% 99.6% 100% 99% Operator 2 In 2018, had 98% Operator 3 15 million samples 97% 2 million unique devices Outnumbering and more reliable 6
5G: More spreading investment outlook 5G investment CAPEX and technology cycle Bt bn #MHz GSMA’ s Global Mobile CAPEX (excl. spectrum) as % of mobile revenue 4G Coverage 100 60 90 3G Capacity 4G Capacity 2.6GHz 3.5GHz 18% 18% 80 17% 17% 50 26-28GHz 70 3G Coverage 14% 40 60 50 30 2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 40 20 30 Dependent on 20 Whether 2G, 3G or 4G, the industry has 5G use cases and 10 kept investing 16 – 18% of its revenue in expect to spread out 10 mobile networks – a trend expected to 0 0 continue in the 5G era . 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 • Ensure spectrum leadership and efficient investment 7
FBB: Continued quality acquisition target 1mn Remained double-digit revenue growth Target 1mn sub focusing on quality acquisition Beginning Net addition (‘000) Fixed broadband revenue (Bt mn) ARPU (Bt/month) subscriber (‘000) 1,000 610 573 574 563 558 target 855 795 1,380 +26% YoY 1,288 1,212 731 1,117 60 1,094 677 +7.1% QoQ 65 623 54 53 52 795 731 677 623 572 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 4Q19 • Maintained strong revenue growth while ARPU • Gained 60.4k subscribers in 2Q19, focusing dropped 1% QoQ as part of FMC revenue is allocated on footprints in 57 key cities to mobile segment Acquisition strategy: creating value via FMC • Focused on cross-selling to existing mobile customers ARPU 20% higher Power4 Maxx PACKAGE than blended ARPU • Leverage AIS shops, Telewiz, and AIS Max speed Call Center to support quality mobile SIM FMC, 29% Bt699 50/20Mbps 5GB* acquisition Bt799 100/50Mbps 10GB* Bt999 300/100Mbps 15GB* Non-FMC, 71% Of 855k subscribers *Throttled speed: 128kbps 8
Digital service: Expand strategic digital services for both enterprise and consumer Enterprise: Repositioned to be #1 service provider Strengthened engaging consumer platforms • 1 Maintained target to achieve high-single digit growth Video in FY19 for enterprise segment PLAYBOX WEBSITE AIS PLAY 2mn active users • Rebranded CSL aiming to become #1 end-to-end ICT • Available on mobile, FBB and (Jun-19) service provider website 6.0mn Focusing on data center & cloud solutions, managed services, 5.2 Registered, but not active and system integration 2 Mobile money Active 0.8 Jun-19 • Partnered to explore and expand IoT use cases in • Continued to drive subscriber selected verticals acquisition • Established an insurance • Awarded Thailand’s IoT 3 Insurance broker company to be a point Solutions Provider for of online insurance sale 2019 • 4 Targeted advertisement on Advertisement partner’s websites • Motor insurance • Cooperated with business 5 Games partners to drive the eSports industry and further monetize 9
Maintained financial flexibility for future growth Balance Sheet 1H19 Cash flow (Bt bn) (Bt bn) Cash increase Cash decrease others A/P goodwill spectrum Operating Investing Financing Net cash license 19 3 38 spectrum payable 38.0 license 68 107 Assets Liabilities 11.7 9.8 9.4 223 3.4 B/S 2.1 1.6 0.1 288 interest- 2Q19 97 Income Cash Cash Repayment of bearing Operating cash flow tax paid CAPEX Finance cost Dividend paid Others borrowings increased debt Equity 129 Stable 65 PPE 19 39 others 25 18 11 retained earnings A/R cash others Operating cash flow in 1H19 was sufficient to fund both CAPEX, debt repayment, and dividend. 1.1x 1.5x Investing cash flow was Bt9.4bn while FY19 budgeted CAPEX is maintained at Bt20-25bn Net debt to EBITDA Interest bearing debt Average finance costs = 3.1% p.a. to Equity • Maintained investment grade credit ratings • Fitch: national rating AA+ (THA), outlook stable 0.6x 51% • S&P: BBB+, outlook stable Current ratio Return on Equity 10
Recommend
More recommend
