FY2014 Results Presentation
19 January 2015
Forward looking statements Important note
This presentation and the following discussion may contain forward looking statements
by M1 Limited (M1) relating to financial trends for future periods
Some of the statements contained in this presentation or arising from this discussion
which are not of historical facts are statements of future expectations with respect to
financial conditions, results of operations and businesses, and related plans and
objectives. Such forward looking statements are based on M1s current views and
assumptions including, but not limited to, prevailing economic and market conditions
and currently available information. These statements involve known and unknown risks
and uncertainties that could cause actual results, performance or achievements to differ
materially from those in the forward looking statements. Such statements are not, and
should not be construed, as a representation as to future performance or achievements
of M1. In particular, such statements should not be regarded as a forecast or projection
of future performance of M1. It should be noted that the actual performance or
achievements of M1 may vary significantly from such statements.
Overview
Service revenue increased 1.4% YoY to S$831m
Financial
highlights
for 2014
EBITDA margin improved to 40.4% of service revenue
Net profit after tax increased 9.7% YoY to S$176m
Margin improved to 21.2%
Postpaid ARPU for 4Q14 increased to S$63.1
Mobile data was 38.8% of service revenue for 4Q14
Performance
highlights
66% of postpaid customers on tiered data plans
22% exceeded data bundle
Fibre customer base increased 18,000 YoY to 103,000
Dividend &
Outlook
Proposed final dividend of 11.9 cents
Estimate moderate growth in FY2015 net profit after tax
2
Agenda
Financial highlights
Performance highlights
Developments and outlook
Operating revenue (S$m)
+6.8%
1,076
1,008
+24.3%
188
245
Handset sales
+38.4%
62
71
114
89
346
279
135
240
250
16
27
240
36
16
24
31
17
24
43
18
22
19
20
163
164
168
168
172
4Q13
1Q14
2Q14
3Q14
4Q14
72
Service revenue (S$m)
Fixed services
671
644
International call
services
Mobile services
FY13
FY14
4Q13
1Q14
2Q14
3Q14
4Q14
FY13
FY14
207
204
209
207
211
820
831
4
Cost of sales (S$m)
+6.8%
453
424
+37.7%
Handset costs
+98.8%
185
284
330
Traf f ic Expenses
134
93
Other costs
157
89
86
57
53
64
17
911
15
89
14
811
39
38
13
8
8
10 9
9
31
33
4Q13
1Q14
2Q14
3Q14
4Q14
FY13
FY14
98
70
52
Wholesale costs of
f ixed services
Other operating expenses (S$m)
+4.1%
388
+10.1%
404
114
+3.9%
115
Depreciation &
amortisation
Staf f costs
Facilities expenses
97
97
98
102
31
27
28
29
29
28
28
29
106
114
109
Leased circuit costs
30
29
78
81
20
62
37
19
8
8
36
19
8
8
35
20
8
7
46
22
7
8
38
25
24
25
13
30
30
24
11
4Q13
1Q14
2Q14
3Q14
4Q14
FY13
FY14
Other G&A expenses
Advertising &
promotion
Doubtf ul debt
provision
EBITDA & net profit after tax
EBITDA (S$m) & margin
on service revenue
Profit after tax (S$m) & margin
on service revenue
4Q13 1Q14 2Q14 3Q14 4Q14 FY13
EBITDA margin
38.2% 40.0% 39.8% 40.8% 40.9% 38.1%
(on service revenue)
FY13
FY14
PAT margin
19.6% 21.0% 21.0% 21.5% 21.1% 19.5%
(on service revenue)
21.2%
4Q13 1Q14 2Q14 3Q14
FY14
40.4%
4Q14
+7.4%
+9.7%
336
312
+9.3%
176
+9.9%
160
+2.3%
+0.1%
79
82
83
84
86
41
4Q13
1Q14
2Q14
3Q14
4Q14
FY13
FY14
4Q13
43
44
45
45
1Q14
2Q14
3Q14
4Q14
FY13
FY14
Capex & free cash flow
Capex (S$m)
Free cash flow (S$m)
-47.0%
Cost of spectrum
+11.4% / +43.4%
176
-973.3%
40
-14.5% / +72.7%
-163.0%
93
67
-0.2% / +101.6%
41
27
40
46
4Q13
33
28
1Q14
2Q14
39
39
3Q14
4Q14
125
FY13
140
FY14
4Q13
(42)
1Q14
2Q14
3Q14
4Q14
FY13
FY14
Financial leverage
S$m
FY2013
FY2014
Change
54.5
22.8
-58.2%
Net debt
195.5
279.2
42.8%
Net assets
395.1
394.6
-0.1%
Net debt/equity (x)
0.5
0.7
43.0%
Net debt/EBITDA (x)
0.6
0.8
32.9%
EBITDA/Interest (x)
70.1
83.0
18.4%
Net assets per share (cents)
42.8
42.4
-0.9%
EPS - diluted (cents)
17.4
18.8
8.3%
Cash & cash equivalents
Agenda
Financial highlights
Performance highlights
Developments and outlook
10
Mobile customers
Postpaid customer base (000)
1,130
1,138
1,148
1,147
Prepaid customer base (000)
1,149
979
966
855
756
703
4Q13
1Q14
2Q14
3Q14
4Q14
4Q13
1Q14
2Q14
3Q14
4Q14
11
Postpaid mobile
Postpaid mobile revenue (S$m)
Postpaid monthly ARPU (S$)
+5.8%
ARPU allocated to handset sales
+1.4%
591
558
+2.1%
+5.9%
+1.0%
62.2
62.3
62.3
61.8
63.1
61.8
62.4
54.4
55.1
55.5
55.2
56.8
53.4
55.6
4Q13
1Q14
2Q14
3Q14
4Q14
FY13
FY14
+2.7%
143
4Q13
145
1Q14
148
2Q14
147
3Q14
151
4Q14
FY13
FY14
12
Prepaid mobile
Prepaid monthly ARPU (S$)
Prepaid mobile revenue (S$m)
-6.7%
+24.3%
86
+7.6%
80
+1.5%
-2.0%
16.9
15.7
+2.4%
13.7
13.6
14.8
14.5
FY13
FY14
12.6
21
4Q13
19
1Q14
20
20
21
2Q14
3Q14
4Q14
FY13
FY14
4Q13
1Q14
2Q14
3Q14
4Q14
13
Mobile market share
Overall market share*
Postpaid & prepaid market share*
Postpaid
25.1%
25.0%
24.1%
23.3%
25.0%
24.9%
24.9%
24.7%
24.6%
4Q13
1Q14
2Q14
3Q14
Oct-14
23.1%
Prepaid
25.2%
4Q13
1Q14
2Q14
3Q14
Oct-14
4Q13
25.0%
1Q14
23.2%
21.6%
21.1%
2Q14
3Q14
Oct-14
* - Based on published statistics available at the time of submission
14
Postpaid mobile
Acquisition cost
per postpaid customer (S$)
Monthly churn rate (postpaid)
+10.6%
+18.7%
438
+2.6%
396
369
346
355
309
268
4Q13
1Q14
2Q14
1.2%
3Q14
4Q14
FY13
FY14
4Q13
1.1% 1.1%
1.1%
1Q14
3Q14
2Q14
1.2%
4Q14
1.1%
1.1%
FY13
FY14
Note: Cash basis
15
Data plan ARPU & non-voice contribution
Mobile data and SMS contribution
to service revenue
Data plan ARPU (S$)
SMS
Mobile Data
-6.6%
0.0%
-9.1%
19.6
19.5
18.3
18.3
46.1%
47.3%
12.3% 11.7%
41.6%
11.5%
11.7%
12.7%
18.9
34.4% 36.4%
32.7%
31.0%
4Q13 1Q14 2Q14 3Q14 4Q14
49.9%
11.1%
12.4%
20.8
19.7
43.4%
45.1%
47.9%
FY13 FY14
38.8%
4Q13 1Q14 2Q14 3Q14 4Q14
35.6%
28.9%
FY13 FY14
16
Fixed services
Fibre Customer base (000)
Fibre monthly ARPU (S$)
+6.4%
85
90
94
98
103
+3.1%
43.6
4Q13
1Q14
2Q14
3Q14
4Q14
4Q13
41.7
41.9
1Q14
2Q14
45.0
3Q14
-4.8%
46.4
46.1
4Q14
FY13
43.9
FY14
17
International call services
International call services
revenue (S$m)
International retail minutes
(million mins)
-13.2%
-21.6%
1,303
114
1,131
-23.0%
89
-23.4%
-9.4%
-9.3%
324
314
291
276
250
27
4Q13
1Q14
2Q14
3Q14
4Q14
FY13
FY14
4Q13
24
1Q14
24
22
20
2Q14
3Q14
4Q14
FY13
FY14
18
Agenda
Financial highlights
Performance highlights
Developments and outlook
19
Developments and outlook for 2015
Faster network and devices will drive data growth
First nationwide LTE-Advanced network supporting
300Mbps
Data usage of smartphone users
Mobile
services
Contributed 65% of total data traffic, up from 55% a year ago
Average data usage grew to 3.0GB/month in 4Q14, from
2.5GB/month a year ago
Continue to invest in smart solutions and M2M platforms
Support Smart Nation initiatives and machine-based
applications
Residential
Fixed
services
Take-up of higher speed fibre plans will be ARPU accretive
Corporate
Focus on product and service differentiation
Well-placed to capture growth with increasing fibre adoption
20
Guidance for 2015
Financial
guidance
Dividend
policy
Estimate moderate growth in FY2015 net profit after tax
Capex to be around S$120m
At least 80% payout ratio
Regularly review capital requirements
21
Thank you
22
