Singtel: Asia s Leading Commuications Group Credit Suisse Asian Investment Conference 20-21 March 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that could cause actual results, performance or events to differ materially from those in the statements as originally made.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 Market-leading operators in Singapore, Australia, India, Indonesia, Thailand, Philippines and across Africa Integrated fixed & wireless operator Delivering seamless entertainment & communications experience to customers Growth engines in cyber security, digital marketing, cloud and analytics Reaping benefits from digitalisation ~24% of 9MFY18 revenue from ICT & digital businesses Productivity & customer experience improvements Well-placed to benefit from opportunities in the digital economy Our Diversified Operations 688 million 1 mobile customers #1 or #2 operator 1 in 18 out of 21 countries 3 Strong Dividend Track Record Strong cash generation and disciplined capital allocation, supporting returns to shareholders One of the strongest credit ratings amongst global telcos 1. All figures as at 31 December 2017. 2. Includes losses from Trustwave and Amobee. ~75% of 9MYFY18 underlying net profit from operations outside Singapore 2
Our group strategy and key business segments VISION To be Asia Pacific s best communications technology company TRANSFORMATION STRATEGY Strengthen & drive growth from the core Create innovative, differentiated digital services GOALS Create sustainable long-term growth Deliver superior returns to shareholders Create positive impact on stakeholders Group Consumer Diversified portfolio of telecom assets offering consumer related functions including mobile, broadband & Pay TV Group Enterprise Asia s leading telco and ICT services provider Group Digital Life New engines of growth in the digital space Cyber security Business mobility Smart cities Digital marketing Over-the-top video Cloud computing Data centres IT services Data analytics 4
Three pronged approach to Singtel transformation Digitising core operating model Value-added services & partnerships to build digital ecosystem & enhance the core Building new standalone businesses where we have a right to play 5
Digitising core operating model driving productivity and better customer experience 2,868 Monthly active app users 1 % of online sales transactions 2 2,901 811 840 3,018 877 3,154 929 16% 12% Singtel Optus 17% 16% 18% 17% 20% 17% Q4FY17 Q1FY18 Q2FY18 Q3FY18 % of self-help transactions 2,3 2,056 2,061 2,141 2,225 Singtel Optus 61% 59% 58% 54% 55% 50% 50% 51% Q4FY17 Q1FY18 Q2FY18 Q3FY18 My Singtel users My Optus users Q4FY17 Q1FY18 Q2FY18 Q3FY18 6 1. Customers who access the My Singtel or My Optus app at least once a month 2. Includes mobile, broadband and Pay TV services. 3. Self-help transactions include activation, recharge, payments, usage & billing enquiries.
Value-added services & partnerships to build digital ecosystems Digital content Others Home services Spotify KKBox Deezer Savvn TIDAL Security WiFi Mesh Smart Home solutions Payments 7
Building new standalone digital businesses Independent global ad-tech leader Comprehensive technology stack with integrated Demand Side Platform (DSP) & Data Management Platform (DMP) Leading OTT video service in emerging markets Expansive content catalogue Advanced analytics player delivering consumer insights Rich insights from geolocation data Growth in revenue and narrowing losses 8 S$m S$m 1200 900 600 300 0 GDL Revenue 923 CAGR +54% 626 511 369 184 111 FY13 FY14 FY15 FY16 FY17 9MFY18 S$m 0-50 -100-150 -200 GDL EBITDA FY13 FY14 FY15 FY16 FY17 9MFY18-51 -104-122 -137-170 -180
Leveraging new growth engines in digital enterprise Cyber security Managed services Cloud solutions Smart Nation End-to-end managed services across the protection stack and security operations Help companies in the day-to-day running of their ICT infrastructure Differentiated cloud platforms and service offerings Lead partner for Singapore's Smart Nation program 9
Stable core and diversified operations support strong cash generation S$ m 16,961 Group Revenue -2% 16,711. 12,404 13,205 S$ m 5,013 Group EBITDA Stable 4,998 +7% +5%. 3,689 3,854 Regional associate s pretax earnings S$ m +4% 2,604 698 1,906 Ex-Airtel +12% 2,711 580 2,131. 2,004 1,816 490 224 1,514-9% Ex-Airtel +5% 1,592 S$ m Group free cash flow +12% 2,718 3,054. +23% 2,291 2,806 FY16 FY17 9MFY17 9MFY18 FY16 FY17 9MFY17 9MFY18 FY16 FY17 9MFY17 9MFY18 FY16 FY17 9MFY17 9MFY18 Airtel pre-tax earnings 10
& attractive returns for shareholders 78% Dividend Policy: 60 75% of underlying net profit 91% 86% 117% 106% 74% 74% 74% 73% 73% Full year DPS as % of FCF 1 Full year DPS as % of underlying EPS 16.8 16.8 17.5 17.5 17.5 Singapore cents per share 10.0 10.0 10.7 10.7 10.7 9.8 3.0 6.8 6.8 6.8 6.8 6.8 6.8 FY13 FY14 FY15 FY16 FY17 1HFY18 11 1. Free cash flow after interest and tax. Interim dividend Final dividend Special dividend