no slide title · 5 mobile market in taiwan increasing revenue pressure 2015-18 mobile rev in...
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Chee ChingPresident
4904 (TWSE)2018 4Q Investor Update
Sherman LeeCFO
President Chee Ching
Dr. Chee Ching joined Far EasTone in Sep. 2018. Before joining Far EasTone, she has
rich experience in network operation and IT management in AT&T more than 23
year. Her professional background covering Network Operations Planning, Systems
Engineering, and Process Engineering to Delivering E2E System Solutions for AT&T’s
products and services. For her distinguished performance, Chee is awarded
Outstanding 50 Asian Americans in Business in 2018.
Present
President, Far EasTone
Previous
Chief Transformation Officer, Far EasTone
Vice President, Technology Development, AT&T
Assistant VP, Technology Development, AT&T
Director, PMOSS Planning, Engineering, and Development, AT&T
District Manager, GNOC, AT&T
Assistant Professor, Decision & Information Systems, College of Business, Arizona
State UniversityEducation
Ph. D., Management Information System, Purdue University
M.S. Management Information System, University of South Carolina
Bachelor of Science, International Business, National Taiwan University
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Disclaimer
This presentation contains forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. Actual results may differ materially from those expressed or implied by these forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect, or at all. You should not place undue reliance on any forward-looking information.
In preparing the information herein, FET have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to FET or which was otherwise reviewed by FET. Neither FET nor its advisors have made any representation or warranty as to the accuracy or completeness of such information and nor do they assume any undertaking to supplement such information as further information becomes available or in light of changing circumstances. None of FET, nor any of their respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be reproduced to a third party without the prior written consent of FET.
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Agenda
I. Market Overview & FET 2018 4Q Operational Performance
II. FET 2018 4Q Financial Performance
III. 2019 Guidance
IV. Management Highlight
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Mobile Market in TaiwanIncreasing Revenue Pressure
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2015-18 Mobile Rev in Taiwan(1) 2018 Mobile Rev in Taiwan(1)
by Quarter
Source: (1) 2015-2017 mobile revenue data from company’s reported financials, and 2018 data from company’s factsheets
48
55
49
52
1Q18 2Q18 3Q18 4Q18
-9.8%-10.1%-4.6% +1.6%
217
205
227 225224
2014 2015 2016 2017 2018
Total Mobile Rev in Taiwan(1)
Unit: NT$bn
-5.7%-3.3%-0.7%+1.3%
Unit: NT$bn
YoY
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ICT Orders Grew Substantially Enterprise High Growth Areas
Y2017 Y2018
FET Operational PerformanceThriving New Economy
Cloud Business
+41%YoY
Security Business
+31%YoY
Total Contract Amount+89% YoY
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Average Customer Satisfactionon Network QualityPostpaid Churn Rate %
2H16 1H17 2H17 1H18 2H18
1.7%1.8%
1.7%1.8% 1.9%
1.6%1.49%
1H16 2H16 1H17 2H17 1H18 2H18 Jan'19
FET Operational PerformanceImproved Churn Rate and Increased Customer Satisfaction
FET customers
Source: company data; customer satisfaction surveys were conducted by a third-party consulting firm.
Other customers
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Agenda
I. Market Overview & FET 2018 4Q Operational Performance
II. FET 2018 4Q Financial Performance
III. 2019 Guidance
IV. Management Highlight
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Postpaid ARPU(2) (NT$)Service Revenue(1) (NT$mn)
878
770787
847843866
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
FET Financial PerformanceService Revenue and ARPU facing challenges
Source: Company DataNote: (1) IFRS 15 (relative fair value) was adopted since 2018/0101, but 2017 was not comparatively adjusted.
(2) Mobile ARPUs are under residual value method across 2017-2018.
17,055
13,63113,55414,64114,341
16,769
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
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7,262
5,850
6,8747,151
6,8106,476
31.9% 31.4%33.1%
26.2%
32.7%
26.3%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
2,2492,453
2,678 2,618
1,632
2,854
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
FET Financial PerformanceProfitability
Source: Company DataNote: IFRS 15 (relative fair value) was adopted since 2018/01/01, but 2017 was not comparatively adjusted.
Net Income (NT$mn)EBITDA (NT$mn) and Margin %
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Consolidated Financial Result4Q18 & FY2018 Result vs. Guidance
ItemUnit: NT$ mn, except for EPS
4Q18(1)
Result(Relative Fair
Value)
YoY%(2) % of Guidance
FY2018Result
(Relative Fair Value)
YoY%(2) % of Guidance
▶Total Revenue 22,289 -1% 89% 86,635 -6% 96%
▶EBITDA 5,850 -5% 84% 26,685 -5% 95%
▶Pre-tax Income 2,084 -11% 65% 11,869 -10% 90%
▶Net Income 1,632 -14% 65% 9,381 -14% 90%
▶EPS $0.50 -14% 65% $2.88 -14% 90%
Source: Company DataNote (1) There was a one-time expense increased YoY mainly arising from employee early retirement made in 4Q18
(2) IFRS 15 (relative fair value) was adopted since 2018/01/01, but 2017 was not comparatively adjusted.
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As of 3Q18 As of 4Q18
Consolidated Financial Result4Q18 Financial Stats
Cash & Cash Equivalents
Available-for-Sale Financial Assets &
Derivatives
Total Borrowing
Net Debt(1)
Shareholders’ Equity
Net Debt to EBITDA (x)
Free Cash Flow – YTD(2)
Cash-based Capex – YTD
EPS(NT$) – YTD
(NT$ mm unless otherwise stated)
(1) Net Debt= Total Borrowing – (Cash and Cash Equivalent +Available-for-Sale Financial Assets & Derivatives )(2) Free Cash Flow = Operating Cash flow- acquisition of fixed-asset & intangible asset
4,248
1,279
29,464
23,937
74,036
0.90x
15,960
7,103
$2.88
7,366
1,281
32,842
24,195
72,363
0.89x
15,498
5,143
$2.38
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Agenda
I. Market Overview & FET 2018 4Q Operational Performance
II. FET 2018 4Q Financial Performance
III. 2019 Guidance
IV. Management Highlight
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Consolidated Financial Forecast2019 Guidance
Note: (1) 2019 financial guidance is prepared in accordance with IFRS 16, resulting an increase of 3.6bn in EBITDA and depreciation; but 2018 financial result was not comparatively adjusted.
Item(Unit: NT$ Million, except for EPS & margin)
FY2019Guidance(1)
FY2018Result
YoY%
Total Revenue 84,658 86,635 -2.3%
EBITDA 28,852 26,685 +8.1%
Pre-tax Income 10,832 11,869 -8.7%
Net Income 8,467 9,381 -9.8%
EPS $2.60 $2.88 -9.8%
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NT$bn
8.07.18.8
9.911.8
13.2
0
4
8
12
16
2014 2015 2016 2017 2018 2019E
14.0%12.2%
10.5%9.5%
8.2% 8~9%
Capex toSales %
2019 Capex GuidanceKeep at Low Level
Capex (NT$bn) and Capex to Sales %
planned: 8.5
Source: company dataNote: (1) 2018 planned capex was 8.5bn, but spent 7.1bn.
(1)
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Dividend per share (NT$)
3.753.75 3.753.75 3.75
2014 2015 2016 2017 2018
Source: company dataNote: (1) 2018 dividend distribution is subject to 2019 AGM’s approval
Dividend DistributionGood Track Record of Dividend
Maintain Stable Cash Dividend to Shareholders
(1)
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Agenda
I. Market Overview & FET 2018 4Q Operational Performance
II. FET 2018 4Q Financial Performance
III. 2019 Guidance
IV. Management Highlight
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From Telecom to Telecom+Big Data, AI, IoT &Cloud Enabled
Digital Services & Enterprise Solutions
Management Highlight2019-2021 Corporate Strategy Theme
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Grow New Economy business revenues
Deliver sustainable and profitable growths in
Cloud, IoT, Security and ICT business
Form Strategic Partnership with world leading
Tech companies
Protect Core Mobile Business with Big Data
Analytics Drive down costs and improve Ops Efficiency
Enrich our offer with Value Added Services
Provide the BEST customer experience
Continue to develop internal talents in new
technologies
Continue to maintain a stable dividend policy
analytics
data
customer
Management Highlight2019 Priorities
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Q & A
Websites email
Investor Relations [email protected]
http://corporate.fetnet.nethttp://www.fetnet.net
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