Singtel’s Digital Transformation 17 May 2018
Forward looking statement – Important note The following presentation contains forward looking statements by the management of Singapore Telecommunications Limited ("Singtel"), relating to financial trends for future periods, compared to the results for previous periods. Some of the statements contained in this presentation that are not historical facts are statements of future expectations with respect to the financial conditions, results of operations and businesses, and related plans and objectives. Forward looking information is based on management's current views and assumptions including, but not limited to, prevailing economic and market conditions. These statements involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the statements as originally made. Such statements are not, and should not be construed as a representation as to future performance of Singtel. In particular, such targets should not be regarded as a forecast or projection of future performance of Singtel. It should be noted that the actual performance of Singtel may vary significantly from such targets. “S $ ” means Singapore dollars, "A$" means Australian dollars and “US $ ” means United States dollars unless otherwise indicated. Any discrepancies between individual amounts and totals are due to rounding. 2
Asia’s leading communications group Regional Scale & Diversification Ou Our Di Diver versif sifie ied Op Operatio ations ns • Market-leading operators in Singapore, Australia, India, Indonesia, Thailand, Philippines and across Africa ion 1 mobile 706 million Integrated fixed & wireless operator customers • Delivering seamless entertainment & communications experience to customers or 1 in #1 or #2 operator • Growth engines in cyber security, digital marketing, cloud 19 out of 21 countries and analytics Reaping benefits from digitalisation • ~24% of FY18 revenue from ICT & digital businesses • Productivity & customer experience improvements • Well-placed to benefit from opportunities in the digital economy Strong Dividend Track Record 75% of FY18 8 unde derly lying ing net profit fit from • Strong cash generation and disciplined capital allocation, operations outside Singapore supporting returns to shareholders • One of the strongest credit ratings amongst global telcos 1. As at 31 March 2018. 3
FY18: Record earnings on NetLink Trust divestment gains Strong ng co core exe xecution cution and growth th in digital ital service vices S$5,089m S$17,532m 2% 5% OPERATING REVENUE EBITDA S$2,304m S$3,544m 13% 8% SHARE OF REGIONAL UNDERLYING NET PROFIT ASSOCIATES’ EARNINGS S$3,606m S$5,451m 18% 42% NET PROFIT FREE CASH FLOW 4 4
Three pronged approach to Singtel’s digital transformation Digitising core operating model Driving sales via Driving self-help online store adoption via Apps Partnerships to build digital ecosystem & enhance the core Gaming & Mobile Cloud E-Sports Payments Building new standalone businesses where we have a right to play Cyber OTT Digital Security Video Advertising 5 5
Group Enterprise Key enab abler ler of smart t ci cities es & d & digital tal enterp erprise rises s with deep p ca capabilit bilities ies 6
Si Singt gtel el Group oup En Enter erprise prise at a gl glance ance #1 #1 #1 International EVPN and Eline IPLC in Singapore 3 IPVPN in APeJ in APeJ >12,000 11 >70 Offices in > 3,000 Industry Certifications >25 Countries Data Centres > 2,000 Cyber Security Experts 1. Gartner IT Services, Apr 2017 2. IDC Telecom Services Database Asia-Pacific 1H2017, Jan 2018 3. Leased line + Eline market revenue for Local Singapore 7 4. Frost & Sullivan 2016 Asia Pacific Telco Cloud Service Provider of the Year
Shift in revenue mix towards ICT services S$’M FY18 S$6.3b S$6.3b S$6.4b S$6.6b S$6.6b S$3.1B in ICT revenue ~ 46% of revenue S$530M in Cyber Security 46% 41% 38% 37% 45% Revenue FY19 guidance 54% 63% 55% 62% 59% ICT to grow mid-single digit, with cyber security to grow by low teens FY14A FY15A FY16A FY17A FY18A Core MS ICT 8
Leade adership ship in APAC Enterpri terprise e data ta service ices el 16.2% el 21.8% Singt gtel Singt gtel Int’l Leased 11.5% Int’l IPVPN 6.7% Circuit US$1.51B US$453M 6.1% 7.5% Others 5.8% 40.3% Others 7.2% 5.4% 49.9% 5.2% 4.5% 6.1% 5.9% el 17.5% Singt gtel el 23.4% 23.4% Singt gtel E-Line E-VPN 11.1% US$294M US$248M Others 13.1% 8.8% 34.5% Others 5.6% 4.9% 48.3% 9.9% 6.3% 4.8% 7.0% 4.7% Source: IDC Telecom Services Database Asia-Pacific 1H2017, Dec 2017 9
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Group Enterprise : Our 3 Year Vision To be the key enabler of smart cities & digital enterprises with deep capabilities Robotics Digital Cyber Security Analytics/ AI and IoT Cloud Services Capabilities 11
Proven Track Record of Smart City and Digital Enterprise Transformation Citizen Engagement with Next-Generation Electronic Public Safety Pharmacy Robotic Dispensary Smart Apps Road Pricing System Cyber Defence for Retail Analytics Smart Urban Infrastructure Automation & Robotics Enterprises for Enterprises Core & Digital capabilities Telco, Video, AI, Machine Geographic Cyber Security Sensors & IOT Cloud Infrastructure Social & Customer Information System Learning, RPA & OT Security Management Data Analytics 12
Collaboration with Research Institutions to develop local IP, build deep capabilities and drive Innovations. Singtel Cognitive and AI Lab NUS-Singtel Cyber Security Research and Advanced Remanufacturing and Technology Centre (ARTC) as 47 th member Development Laboratory in Oct 16 (SCALE@NTU) & Singtel-A*STAR Master Research Collaboration on 4 Dec 17 by to focus on Industrie 4.0 DPM Teo Chee Hean Supported ted by: 13
Global al Cyber ber Security urity Market et grow owing ing at 8. 8.5% 5% annually ally 4 t types of p playe ayers s compet pete e in MSS in US$’ billions CAGR GR 83.2 Carriers CAGR +8.5% 5% 76.4 6.1% 6. 70.1 24.0 64.3 22.6 59.9 55.3 21.2 System 20.0 Integrators 19.0 TS 17.8 8. 8.2% 2% 30.6 28.2 26.0 23.9 PS 22.3 Product 20.6 Vendors 11.1% 1% 28.5 25.5 MS 22.9 20.4 18.6 16.8 Pure-Play 2016 2017 2018 2019 2020 2021 MSSPs Source: Gartner, Forecast: Information Security, Worldwide, 2015-2021, 4Q17 Update, , 5 February 2018 Chart created by Singtel based on Gartner’s Research MS: Managed Security Service : Remote management and/or monitoring of IT security functions delivered via remote security operations centers (SOCs), not through personnel on-site. PS: Professional Services includes professional / advisory services to help companies analyze business operations and technology strategies. Include two subsegments: business and IT consulting. Includes Security Testing TS: Includes Hardware Support and Implementation 14
Ou Our key cyber ber capab abilities ilities Global ASOC network and market access Developing automated Managed Detection & Response platform Cyber Security Institute Leading edge technology ecosystem & R&D investments 15
We have established a Global Leadership Position in Managed Security … Trustwave is a leader in Gartner’s 2018 MSS Highlights from Gartner Magic Quadrant Leader “ Trustwave is a competitive provider with both, proprie ietary tary products s and services” “…able to support a larg rge client base up to larger global organizations” 2018 2016 2017 2015 “Expanded global footprint across APAC and NA via strat ategic ic partnerships” The only y new leader der in Gartn rtner er MSS MQ “ Spiderlabs enhances the value of MSS through 2018 18 integrat ation ion of threat t intellig igence ce data and SpiderLab abs' s' analy lyst sts serving as a higher tier of skills for advanced triage” SOURCE: Gartner 16
Group Digital Life Leveraging on our core telecom assets to build standalone digital businesses for the Singtel Group 17
Singtel Group Digital Life at a glance Creating new scalable engines of growth for the Singtel Group FY FY18 8 Reve venue ue FY FY18 8 EBITD ITDA Group up Digital gital S$1.16b S$ .16b Increased by + + 66% S$71m S$ 71m vs FY17 Life e Fi Financi ncials als vs FY17 Actual FY17 : -S$-122m FY18 : -S$51m Core bus Co usiness inesses es VC C Fun und one the largest gest indepe epend nden ent ~S ~S$1 1 Working with >2000 >2 buy-side marketing Innovation Engine Digital technology providers in the Billion Marketing world advertisers Revenue Office ices in: San Francisco Israel Rollout of Singapore Leading subscription video >10 #1 in downloads Free e to to Air r OTT Video and branding in service in the emerging Live e TV in Indonesia markets MILLION 65+ + FY19 Downloads Investments Data-as-Service Delivering mobility intelligence US$250 250 Mobility Intelligence Reports insights leveraging carrier data Data Analytics Data Science Consulting million evergreen fund 18
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