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Taiwan Mobile Co., Ltd. — Earnings Release 2014
Oct 31, 2014
52277_rns_2014-10-31_8b89387c-4bc2-4ab1-bd0d-9189716eae7b.pdf
Earnings Release
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Press Release
September 10, 2014
TWM announced August consolidated revenue of NT$9.11bn. EBITDA was NT$2.68bn with an operating income of NT$1.69bn and net income of NT$1.23bn. EPS was NT$0.46. For the first eight months of 2014, TWM reported a consolidated revenue of NT$72.95bn, an EBITDA of NT$21.38bn, an operating income of NT$13.97bn and a net income of NT$10.75bn. EPS for the first eight months was NT$4.00.
Rosie Yu, Chief Financial Officer and Spokesperson of TWM, said both cable TV and momo online shopping continued to grow in August, resulting in consolidated EBITDA increasing 1% YoY. However, D&A expense related to telecom and cable TV equipment rose, resulting in net income decreasing YoY.
Taiwan Mobile Consolidated Results (Unaudited)
| NT$mn | August 2014 | August 2013 | Jan.-August 2014 |
Jan.-August 2013 |
|---|---|---|---|---|
| Revenue2 | 9,112 | 9,230 | 72,955 | 71,216 |
| Operating Revenue1&2 | 7,779 | 7,516 | 60,623 | 58,328 |
| Handset Sales Revenue | 1,333 | 1,714 | 12,332 | 12,888 |
| EBITDA2 | 2,683 | 2,656 | 21,384 | 20,718 |
| Operating income2 | 1,686 | 1,830 | 13,968 | 14,170 |
| Pre-tax income2 | 1,494 | 1,787 | 13,353 | 13,230 |
| Net income | 1,229 | 1,451 | 10,747 | 10,589 |
| EPS (NT$) | 0.46 | 0.54 | 4.00 | 3.94 |
Note 1: Derived from deducting handset sales revenue from the total revenue
Note 2: Due to the sale of momo’s cosmetic stores and department store in March 2014 and September 2013, their financial numbers were reclassified as discontinued operations since January 2013 and are excluded at the operating level.
IR contact: Shirley Chu Rosie Yu Senior Director of Investor Relations Chief Financial Officer and Spokesperson Tel: 8862-6636-3159 Tel: 8862-6638-3909 E-mail: [email protected] E-mail: [email protected] 18Fl, No. 172-1, Sec.2, Ji-Lung Rd., Taipei 106, Taiwan, R.O.C.
Taiwan Mobile Co., Ltd.
2Q14 Results Summary July 28, 2014
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The information contained in this presentation, including all forwardlooking information, is subject to change without notice, whether as a result of new information, future events or otherwise, and Taiwan Mobile Co., Ltd. (the “Company”) undertakes no obligation to update or revise the information contained in this presentation. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is the information intended to be a complete statement of the Company, markets or developments referred to in this presentation.
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Business Overview
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TWM’s Performance
Mobile Service Revenue
Unit: NT$mn
Unit: NT$mn Unit: NT$mn 2% YoY 16,299 16,182 16,151 16,043 15,899 2Q13 3Q13 4Q13 1Q14 2Q14
VAS Revenue
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17% YoY
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Peer Comparison - ARPU
Unit: NT$
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762
749 750
737 731
TWM
731 735 728
714 718 FET
623
612 609
588 591 CHT
2Q13 3Q13 4Q13 1Q14 2Q14
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- Based on IFRS – Residual Value Method, i.e. excluding revenue adjustments under the current bundle sales accounting policy.
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Smartphone as % of total handsets sold
700 LTE enabled devices
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HTC LG Sony M8 G3 Z2a
Samsung Samsung Note 3 S5
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HTC HTC ASUS Desire 816 Desire 610 PadFone S
Samsung HTC One Note 3 Neo Mini 2
Mobile data adoption rate
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Infocus ASUS TWM Amazing TWM Amazing Samsung M511 Zenfone 5 X2 X1 Core Lite
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Samsung Galaxy Samsung TWM Amazing ASUS Samsung Tab 10.5 Galaxy P6 Fonepad 7 Galaxy Tab 4 Tab 8.4 5
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Sub base
2Q14 ARPU
YoY growth
Analogue TV 1% $494
Cable Internet 5% $546
DTV 55% $133
Blended ARPU * $796 +2% YoY
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- Calculation based on total cable TV revenue excluding content agency revenue
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momo
2Q14 2Q13 YoY
(Unit: NT$bn)
Total Revenue 5.62 4.89 15%
- Online Shopping 3.52 2.66 32%
- TV Home Shopping & Other 2.10 2.23 -6%
EBITDA 0.39 0.28 43%
EBITDA margin 7.0% 5.6%
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Note: momo announced the sale of its cosmetics stores and department store operations on March 28, 2014 and August 30, 2013, respectively. The related operating results of the aforementioned business lines were reclassified retroactively as discontinued operations and thus were not included in the table above.
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Financial Overview
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| NT$bn | Revenue | Revenue | Revenue | Revenue | EBITDA | EBITDA | EBITDA | EBITDA |
|---|---|---|---|---|---|---|---|---|
| Telecom | CATV | momo | Total | Telecom | CATV | momo | Total | |
| 2Q14 | 19.73 | 1.58 | 5.62 | 26.94 | 6.85 | 0.86 | 0.39 | 8.16 |
| % of total |
73% | 6% | 21% | 100% | 84% | 11% | 5% | 100% |
| 2Q14 YoY |
-2% | 2% | 15% | 1% | 2% | 3% | 43% | 4% |
| 1Q14 YoY |
3% | 3% | 15% | 5% | 2% | 5% | 35% | 3% |
Note: The combined total of telecom, CATV and momo does not equal the consolidated total of each account due to other revenue and minor adjustments / eliminations.
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| NT$mn | 2Q14 | YoY |
as % of 2Q14 Guidance |
1H14 |
|---|---|---|---|---|
| Revenue | 26,936 | 1% | 95% | 54,663 |
| Cost | (17,333) | 3% | 92% | (35,323) |
| Operating expenses | (4,210) | -4% | 92% | (8,835) |
| Operating income | 5,394 | 0% | 112% | 10,505 |
| Net non-operating items | (199) | -57% | 45% | (231) |
| Income before tax | 5,195 | 5% | 118% | 10,274 |
| Net income | 4,137 | 5% | 116% | 8,221 |
| EPS (NT$) | 1.54 | 5% | 116% | 3.06 |
| EBITDA | 8,164 | 4% | 105% | 15,936 |
| EBITDA margin | 30.31% | 29.15% |
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| NT$bn | 2Q14 | 1Q14 | 2Q13 | 2Q14 | 1Q14 | 2Q13 |
|---|---|---|---|---|---|---|
| Total Assets | 143.08 | 142.93 | 111.81 Liabilities |
89.70 | 78.51 | 61.36 |
| Current Assets | 26.81 | 28.54 | 31.74 Current Liabilities |
55.39 | 49.62 | 42.31 |
| - Cash & Cash Equivalents | 6.00 | 8.18 | 11.28 - ST Debts |
15.88 | 25.55 | 4.77 |
| - Accounts Receivable | 14.33 | 14.15 | 13.00 - Other Current Liabilities |
39.51 | 24.07 | 37.54 |
| - Inventories | 3.06 | 2.94 | 3.18 Non-Current Liabilities |
34.31 | 28.89 | 19.05 |
| - Other Current Assets | 3.42 | 3.27 | 4.28 - Long-Term Borrowings |
29.08 | 23.08 | 14.79 |
| Non-current Assets | 116.27 | 114.39 | 80.08 - Deferred Income Tax Liability |
2.44 | 2.66 | 2.48 |
| - Long-term Investment | 2.57 | 2.47 | 3.27 - Other Non-current Liabilities |
2.79 | 3.15 | 1.78 |
| - Property and Equipment | 45.27 | 42.81 | 42.38 | |||
| - Concession | 39.70 | 40.02 | 4.11 | |||
| - Other Non-current Assets | 28.73 | 29.09 | 30.32 Shareholders' Equity |
53.38 | 64.42 | 50.46 |
| 2Q13 - Paid-in Capital - Capital Surplus |
34.21 | 34.21 | 34.21 | |||
| 2Q14 | 1Q14 | |||||
| 12.48 | 12.48 | 12.43 | ||||
| Current Ratio | 48% | 58% | 75% - Legal Reserve |
21.54 | 19.26 | 19.26 |
| Net Debt to Equity | 73% | 63% | 16% - Un-appropriated Earnings |
4.83 | 6.61 | 6.61 |
| Net Debt to EBITDA (x) | 1.22 | 1.30 | 0.27 - Treasury Shares |
(31.08) | (31.08) | (31.08) |
| ROE (annualized) | 33% | 27% | 32% - Retained Earnings & Others* |
11.40 | 22.94 | 9.02 |
- Including accumulated profits, minority interest and other equity items
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| NT$bn | 2Q14 | 1Q14 | 2Q13 |
|---|---|---|---|
| Operating Cash Flow | 6.68 | 6.84 | 7.42 |
| Investing Cash Flow | (4.79) | (0.99) | (5.12) |
| Financing Cash Flow | (4.07) | (5.63) | 2.90 |
| NT$bn | 2Q14 | 1Q14 | 2Q13 |
| Cash CAPEX | (4.78) | (2.27) | (2.71) |
| Free Cash Flow | 1.90 | 4.57 | 4.70 |
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3Q14 Guidance & Board Resolutions
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| NT$bn | 3Q14F | 3Q13 | YoY |
|---|---|---|---|
| Revenue | 28.30 | 27.08 | 5% |
| EBITDA | 7.89 | 8.02 | -2% |
| Operating Income | 4.72 | 5.54 | -15% |
| Non-operating Expense | 0.62 | 0.29 | 115% |
| Net Income | 3.44 | 4.27 | -19% |
| EPS (NT$) | 1.28 | 1.58 | -19% |
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ECB Issuance
The board today (July 28, 2014) approved the issuance of a 5-year EuroConvertible Bond of no more than US$500mn with a zero coupon, zero yield to maturity, conversion premium of 20% to 32.5%, and no conversion price adjustment for dividend yield below 5.8%.
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Capex Guidance Revision The board today (July 28, 2014) approved an additional NT$1.82bn capex budget for 2014 mainly to reflect momo’s investment of its logistics and warehousing center. Thus, 2014 capex is revised to be NT$15.4bn: NT$9.8bn for mobile, NT$2.1bn for fixed-line, NT$1bn for cable TV, and NT$2.5bn for momo and other subsidiaries.
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Regulatory Update
NCC approved TWM and FET returning their respective 5MHz 2G spectrums on the 1800MHz band on July 16, 2014. Accordingly, TWM will be able to launch 1800 LTE service by the end of September.
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Awards and Recognition
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Won the “Trusted Brand Gold Award” by Reader’s Digest for the eleventh consecutive year.
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Received the highest “A[++] ” rating among listed companies in
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“Transparency and Information Disclosure” from Taiwan’s Securities and Futures Institute for the ninth year in a row.
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For the eighth time, winner of the “Corporate Social Responsibility Award” .
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by Global Views Monthly
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Acceleration in the deployment of the 4G network, growing number and greater variety of LTE devices and the earlier-than-expected availability of the 1800MHz LTE spectrum will propel customers’ migration to 4G services. TWM is best positioned to capture the business upside of the LTE services.
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Q & A
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