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Taiwan Mobile Co., Ltd. — Interim / Quarterly Report 2014
Nov 10, 2014
52277_rns_2014-11-10_b10f47fb-d6d1-4686-b8a0-7026a958fae7.pdf
Interim / Quarterly Report
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Press Release
November 10, 2014
TWM announced October consolidated revenue of NT$10.02bn. EBITDA was NT$2.41bn with an operating income of NT$1.37bn and a net income of NT$1.01bn. EPS was NT$0.37. For the first ten months of 2014, TWM reported a consolidated revenue of NT$92.45bn, an EBITDA of NT$26.45bn, an operating income of NT$16.96bn and a net income of NT$12.97bn. EPS for the first ten months was NT$4.82.
Rosie Yu, Chief Financial Officer and Spokesperson of TWM, said that, for October, consolidated revenues continue to rise thanks to increases in overall telecommunication services and momo shopping revenue. Increased handset subsidies due to the iPhone 6 and 6 Plus as well as other related marketing expenses attributed to consolidated EBITDA decreasing from a year ago. Overall, October consolidated EBITDA and net income reached 34% and 35% of the fourth quarter guidance, respectively.
Taiwan Mobile Consolidated Results (Unaudited)
| NT$mn | Oct. 2014 | Oct. 2013 | Jan.-Oct. 2014 | Jan.-Oct. 2013 |
|---|---|---|---|---|
| Revenue2 | 10,020 | 9,316 | 92,450 | 89,309 |
| Operating Revenue1&2 | 7,780 | 7,496 | 76,078 | 73,171 |
| Handset Sales Revenue | 2,240 | 1,820 | 16,372 | 16,138 |
| EBITDA2 | 2,415 | 2,902 | 26,454 | 26,297 |
| Operating income2 | 1,369 | 2,046 | 16,961 | 18,067 |
| Pre-tax income2 | 1,188 | 1,796 | 16,001 | 16,783 |
| Net income | 1,009 | 1,447 | 12,967 | 13,481 |
| EPS (NT$) | 0.37 | 0.54 | 4.82 | 5.01 |
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 October2013, 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] 13F, No.88, Yan Chang Rd., Xinyi Dist. Taipei City 110, Taiwan
Taiwan Mobile Co., Ltd.
3Q14 Results Summary October 31, 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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Post TWM’s 5MHz spectrum acquisition from Ambit
Available LTE spectrum
Total LTE spectrum acquired
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Unit: MHz
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Unit: MHz
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25
25
20
5 [2 ] 15
5
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Note 1: Prior to the expiration and/or the early return of other existing 2G/3G spectrum if any in the future
-
2: Subject to NCC’s approval
-
3: Represents the portion of Taiwan Star’s spectrum that is available for both download and upload transmissions
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Mobile Service Revenue*
VAS Revenue*
Unit: NT$mn
Unit: NT$mn
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- Based on IFRS – Residual Value Method, i.e. excluding revenue adjustments under the current bundle sales accounting policy.
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| 700 LTE Enabled Phones | 700 LTE Enabled Phones | 700 LTE Enabled Phones |
|---|---|---|
| iPhone 6, iPhone6 Plus | 2 | |
| Butterfly 2, M8, E8, One mini 2, Desire 816, Desire 610 |
6 | |
| Note 4, S5, Note 3, Note 3 Neo, Core Lite |
5 | |
| Z3, Z3 Compact, Z2a, C3 | 4 | |
| Amazing X1, X2, X3 | 3 | |
| M810, M511, M2 | 3 | |
| Padfone S, Zenfone 5 | 2 | |
| G3 | 1 | |
| F5 | 1 | |
| Total | 27 |
Mobile data adoption rate
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iPhone 6, iPhone6 Plus 2
Butterfly 2, M8, E8, One mini
6
2, Desire 816, Desire 610
Note 4, S5, Note 3, Note 3
5
Neo, Core Lite
Z3, Z3 Compact, Z2a, C3 4
Mobile broadband revenue 18% YoY Amazing X1, X2, X3 3
Unit: NT$mn
M810, M511, M2 3
Padfone S, Zenfone 5 2
G3 1
F5 1
Total 27
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Sub base
3Q14 ARPU
YoY growth
Analogue TV 1% $493
Cable Internet 4% $546
DTV 45% $133
Blended ARPU * $801 +2% YoY
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- Calculation based on total cable TV revenue excluding content agency revenue
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momo
3Q14 3Q13 YoY
(Unit: NT$bn)
Total Revenue 6.28 5.12 23%
- Online Shopping 3.99 2.89 38%
- TV Home Shopping & Others 2.29 2.23 3%
EBITDA 0.46 0.22 113%
EBITDA margin 7.3% 4.2%
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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$bn | Revenue | Revenue | Revenue | Revenue | EBITDA | EBITDA | EBITDA | EBITDA |
|---|---|---|---|---|---|---|---|---|
| Telecom | CATV | momo | Total | Telecom | CATV | momo | Total | |
| 3Q14 | 19.87 | 1.60 | 6.28 | 27.77 | 6.73 | 0.86 | 0.46 | 8.10 |
| % of total |
71% | 6% | 23% | 100% | 83% | 11% | 6% | 100% |
| 3Q14 YoY |
-3% | 2% | 23% | 3% | -4% | 5% | 113% | 1% |
| 2Q14 YoY |
-2% | 2% | 15% | 1% | 2% | 3% | 43% | 4% |
Note: The combined total of telecom, CATV and momo does not equal the consolidated total of each account due to other revenue and minor adjustments / eliminations.
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| NT$mn | 3Q14 | YoY |
as % of 3Q14 Guidance |
1-3Q 2014 |
|---|---|---|---|---|
| Revenue | 27,768 | 3% | 98% | 82,430 |
| Cost | (18,319) | 6% | 96% | (53,642) |
| Operating expenses | (4,362) | 1% | 98% | (13,197) |
| Operating income | 5,086 | -8% | 108% | 15,591 |
| Net non-operating items | (547) | 89% | 88% | (778) |
| Income before tax | 4,540 | -14% | 111% | 14,813 |
| Net income | 3,737 | -13% | 109% | 11,958 |
| EPS (NT$) | 1.39 | -12% | 109% | 4.45 |
| EBITDA | 8,103 | 1% | 103% | 24,039 |
| EBITDA margin | 29.18% | 29.16% |
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| NT$bn | 3Q14 | 2Q14 | 3Q13 | 3Q14 | 2Q14 | 3Q13 |
|---|---|---|---|---|---|---|
| Total Assets | 146.66 | 143.08 | 109.35 Liabilities |
89.39 | 89.70 | 54.49 |
| Current Assets | 28.71 | 26.81 | 28.86 Current Liabilities |
55.14 | 55.39 | 35.41 |
| - Cash & Cash Equivalents | 6.99 | 6.00 | 7.79 - ST Debts |
28.17 | 15.88 | 12.73 |
| - Accounts Receivable | 14.77 | 14.33 | 14.20 - Other Current Liabilities |
26.97 | 39.51 | 22.68 |
| - Inventories | 3.31 | 3.06 | 3.15 Non-Current Liabilities |
34.25 | 34.31 | 19.08 |
| - Other Current Assets | 3.64 | 3.42 | 3.72 - Long-Term Borrowings |
28.98 | 29.08 | 14.79 |
| Non-current Assets | 117.95 | 116.27 | 80.49 - Other Non-current Liabilities |
5.28 | 5.23 | 4.29 |
| - Long-term Investment | 2.51 | 2.57 | 4.20 | |||
| - Property and Equipment | 47.24 | 45.27 | 42.52 | |||
| - Concession | 39.37 | 39.70 | 3.93 | |||
| - Other Non-current Assets | 28.83 | 28.73 | 29.85 Shareholders' Equity |
57.27 | 53.38 | 54.86 |
| 3Q13 - Paid-in Capital - Capital Surplus |
34.21 | 34.21 | 34.21 | |||
| 3Q14 | 2Q14 | |||||
| 12.49 | 12.48 | 12.43 | ||||
| Current Ratio | 52% | 48% | 81% - Legal Reserve |
21.54 | 21.54 | 19.26 |
| Net Debt to Equity | 88% | 73% | 36% - Un-appropriated Earnings |
4.83 | 4.83 | 6.61 |
| Net Debt to EBITDA (x) | 1.61 | 1.22 | 0.64 - Treasury Shares |
(31.08) | (31.08) | (31.08) |
| ROE (annualized) | 28% | 33% | 32% - Retained Earnings & Others* |
15.28 | 11.40 | 13.42 |
- Including accumulated profits, minority interest and other equity items
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| NT$bn | 3Q14 | 2Q14 | 3Q13 |
|---|---|---|---|
| Operating Cash Flow | 7.59 | 6.68 | 5.89 |
| Investing Cash Flow | (3.66) | (4.79) | (2.53) |
| Financing Cash Flow | (2.94) | (4.07) | (6.85) |
| NT$bn | 3Q14 | 2Q14 | 3Q13 |
| Cash CAPEX | (3.59) | (4.78) | (2.63) |
| Free Cash Flow | 4.00 | 1.90 | 3.26 |
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4Q14 Guidance & Board Resolutions
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| NT$bn | 4Q14F | 4Q13 | YoY | 2014F |
|---|---|---|---|---|
| Revenue | 30.28 | 28.41 | 7% | 112.71 |
| EBITDA | 7.13 | 7.61 | -6% | 31.17 |
| D&A Expense | (3.23) | (2.56) | 26% | (11.67) |
| Operating Income | 3.90 | 5.05 | -23% | 19.50 |
| Non-operating Expense | (0.56) | (0.62) | -9% | (1.34) |
| Net Income | 2.90 | 3.55 | -18% | 14.86 |
| EPS (NT$) | 1.06 | 1.32 | -20% | 5.51 |
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Capex Guidance Revision
The board today (October 31, 2014) approved an additional NT$0.5bn capex budget for 2014 mainly to take the lead in the 4G network roll-out. Thus, 2014 capex is revised to be NT$16bn: NT$10.7bn for mobile, NT$1.7bn for fixedline, NT$1bn for cable TV, and NT$2.6bn for momo and other subsidiaries.
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Awards and Recognition
− TWM was selected as a member of the Dow Jones Sustainability Indices’ Emerging Markets Index for the third year in a row (2012~2014).
− TWM’s cloud internet data center (IDC) was nominated as a finalist of the “Innovation in the Mega-Data Center” award by DatacenterDynamics, the world’s largest third party data center analysis institute.
− The 2013 CSR report received the International Standards on Assurance Engagements (ISAE) 3000 certification, a first for a telecom operator in Taiwan.
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With the acquisition of 5MHz on the 700MHz frequency band from Ambit, TWM will have the largest 4G spectrum of 35MHz, including in particular, the biggest contiguous spectrum of 20MHz on the 700MHz band, leading TWM to be best positioned to provide the fastest 4G service to the consumers and increase corporate value to our shareholders. Additionally, we will adjust 4G product offerings to better monetize our 4G investments.
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Q & A
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