Chief Executive Presentation - 24th AGM 26 April 2022
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24th AGM Chief Executive 26 April 2022 Presentation
Forward-Looking Statements The following presentation may contain forward-looking statements by StarHub Ltd (“StarHub”) relating to financial trends for future periods. Some of the statements in this presentation which 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. These forward-looking statements are based on StarHub’s current views, intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside StarHub’s control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks and uncertainties. Because actual results could differ materially from StarHub’s current views, intentions, plans, expectations, assumptions and beliefs about the future, such forward-looking statements are not and should not be construed as a representation, forecast or projection of future performance of StarHub. It should be noted that the actual performance of StarHub may vary significantly from such statements.
CONSUMER >15 Years
Infinite Possibilities; Enriched Experiences Listed since 2004
2.0M
1 In 2 Mobile Subscribers >20 Years
Households in 444K
Solid Track Record STARHUB
SG is a StarHub Entertainment Subscribers DIGITAL
customer S$2.4B
484K
Broadband Subscribers Market Cap ECOSYSTEM*
S$485M
E NT E R P R IS E Free Cash Flow 6.4 cents
Enabling Digital Businesses of Tomorrow Dividend / Share
CYBERSECURITY | CLOUD | CONNECTIVITY
CONNECTIVITY &
MANAGED SERVICES
CYBERSECURITY
SERVICES
REGIONAL ICT
SERVICES * All figures as at 31
December 2021 or FY2021,
unless otherwise stated.
MOST AWARDED NETWORK IN 2021 3
Successful DARE 1.0 Execution
$273M TOTAL SAVINGS ACHIEVED 29% REDUCTION IN OTHER OPEX1
FY2019-2021 Potential Savings & Reinvestment 28.7%
30% $273M Reinvestment
Commenced:
Oct 2018
974.3
-17% 921.1
Concluded:
25% Oct 2018
733.0
694.2
45% Original
Target:
>$210M
Workforce Operational TV Total Digitalisation & FY2018 FY2019 FY2020 FY2021
Optimisation Efficiencies Operations Savings Transformation
& Content Initiatives 1 Other Operating Expenses (“Opex”) excludes cost of sales and operating Opex relating to Cybersecurity and Regional
ICT Services
4
DARE +
NEXT PHASE OF TRANSFORMATION | FY2022 - FY2026
DIGITAL ACCELERATING REALISING EXPERIENCES
In Everything We Do Value Creation Growth Without Frontiers That Enrich Customers’ Lives
The next giant step in our digital Value for customers, enriching their Continuously expand product & services Our paramount objective for our
transformation: lives and improving their productivity for our customers customers:
Bring customers digital products that Growth across all our businesses Continuously grow capabilities and skills Bring customers an infinite range of
enrich their digital lives to serve our customers growing needs diverse experiences, product and services
Focus our businesses on cohesively
Continue to pursue acquisitions that add to match our customers’ diversity,
Empower customers to engage with us serving our Enterprise customers’ own
to our scale, footprint as well as product complexity, and growing wants and needs
on zero-touch digital platforms with cloud, digital and 5G transformations
and capabilities for customers every day…
true freedom to act on their choices
Constantly digitalise end-to-end for
Drive synergies across our platform to …Supported by the fastest, highest-quality
Digitalise systems, process & an increasingly efficient & scalable
pursue new growth areas connectivity to deliver these enriching
architecture for agility and efficiency to business model as we grow
experiences to our customers, from
innovate rapidly with customers’
anywhere, on any device and on any
evolving needs
network
5
DARE +
$220M
Expected Gross Profit1 Growth
Expected Cost savings
TRANSFORMATION + GROWTH Expected gross profit1 growth
over next five years to enhance
Executed Cost savings the continued sustainability &
viability of our business model
$500M
* Chart not drawn to scale
Savings + Growth
$280M
Expected savings over
next five years
$105M
$35M
$80M $80M p.a.
Stable State Incremental
$273M NPAT Run Rate
From FY2026
INVESTMENTS: $270M
Digital Platform & 5G Network 1 Gross profit is
calculated by
deducting cost
FY2019-2021 FY2022 FY2023 FY2024 FY2025 FY2026 of goods sold
from revenue
DARE DARE+
6
From Telco to Connecting Your Digital Life
Transformation is Underway… GLOBAL / REGIONAL
STARHUB
APP-BASED
CONSUMER DIGITAL LIFE
PLATFORMS: PLATFORM
Expand reach to both StarHub More & more product to drive
INFINITY Infinite continuum of
Lifetime Value, Customer by CONTINUOUSLY
✔
digital products & non-StarHub customers
PLAY Customer DRIVING
Driving Lifetime INTO NEW
Value, Customer TODAY TOMORROW ADJACENCIES
by Customer
Mobile, TV+, Broadband, OTT, Nvidia GeForce NOW More OTT, More Gaming, New Verticals from 2022
Self-serve; Zero-touch; Customer Digital Identity Loyalty & Engagement DIGITAL
✔
Frictionless
DIGITAL DISTRIBUTION;
PLATFORM HIGH
ENGAGEMENT TODAY 140% YoY Subscribers Growth TOMORROW ENGAGEMENT
Highest NPS in Industry Across all connectivity, OTT, Super App
Minimal capex, rapid speed to market gaming and other products
Dynamic IT stack, SaaS tools, Accelerated product cycle, 360° view of customers; data lake; PLATFORM
AGILE,
CLOUD-BASED
ongoing refresh MVP model, rapid change cycle AI recommendation & upsell POWER WITH
VENDORS & ✔
IT CAPABILITIES TODAY TOMORROW CUSTOMERS
Roadmap established, build underway Rollout from 2022
Increasingly embedded in
Superior Network Expand Fiber Network with
ACCESS: Singaporean households: Mobile; CORE PHYSICAL
ANYTIME,
4G, 5G NSA & SA infrastructure development
Home Broadband; Entertainment INFRASTRUCTURE
AS MOAT
✔
ANYWHERE,
TODAY TOMORROW
ANY DEVICE 5G NSA strong adoption; 5G SA launch and rollout
Continued take-up and ongoing rollout;
New spectrum (2.1GHz) 7
FOCUS ON CONVERGENCE OF CYBERSECURITY, CLOUD & CONNECTIVITY
HARNESSING TAILWINDS... ...WITH OUR BUSINESSES… …WITH INTERWOVEN FOCUS AREAS
Strong secular growth in public cloud... CYBERSECURITY • Security Across Public Cloud Environments
Leading Cybersecurity • 5G & IoT Security, OT Security
Provider to Singapore • Capabilities in Data Science; AI for Threat
IaaS 5-year 24.1% CAGR growth
Government Agencies & Detection
with S$2.7B market by 2024 in SG1
Large Corporates • Regionalisation
Cybersecurity an imperative; Cloud • Regionalisation & Vertical Depth
Security the opportunity...
REGIONAL ICT
• Cloud capabilities, Managed Services &
Cloud Security 5-year 36% CAGR growth 5G enablement
Digital Solutions ICT Specialist with
with S$9M market by 2024
Provider with >30 years track
5-yr CAGR growth for Security at 7% with
S$1.6B market by 2024 in SG2
proprietary products record
• Rich suite of 5G solutions; Ops Tech for
Smart City, Industry 4.0, with NETWORK SOLUTIONS industrial development
Sustainability as a cornerstone Connectivity, Managed Services, • Next-Generation Network Product;
(SG Green Plan 2030) Cloud migration Managed SASE, Secure Low Latency Cloud
& apps modernization, Connectivity
Ops Tech • Digital/Cloud Transformation for
Enterprises & SMEs
• New platforms and use cases exponentially grow Data creation & new Cloud workloads
• Ultra low latency and more agile Connectivity needed as complexity grows - distributed from core to edge, in physical Data Centres to 5G MEC.
All requires end-to-end Cybersecurity from device to network to workload to core
1 Source: GlobalData | 2 Source: Gartner 8
Relentless Innovation
Over Past Year…
EPL:
Exclusive
6-year
Exclusive
Partnership;
Multi-Year CYBER World’s First
Partnership App-Based CYBER
COVER
Platform
2021 First among new suite
of cybersecurity
PROTECT
All-in-one
CLOUD GAMING Products. Insurance Device Security
JAN MOBILE+ Service
Exclusive Multi-Year
SIM Only EASYGO coverage against
Partnership SG’s First online threats
SG’s First
FEB Interest- & MAR
APR
5G SIMO
Contract-free
Device
2022
5G IoT Instalment FEB
One-stop solution: MAY Payment NOV
aggregate & manage
JUN NUS CYBER
IoT devices on a
JUL SEP 5G SMART
single platform MANAGED SASE SECURE
Mission
Secure, cloud-based CAMPUS Multi-layered
5G DIGITAL WORKPLACE Ensign Critical PTT; SG’s First 100% end-to-end
networking approach to
enhance Enterprise IT Empower mobile workforce for partners 5G MEC; Solar-Powered cybersecurity
the Future of Work CSA for IoT 5G Experience Campus WiFi managed
Showcase service
threat
analytics
capabilities
9
Strong FY2021 Results Despite Market Conditions
SERVICE REVENUE ($’M) SERVICE EBITDA ($’M)1 / MARGIN (%) – EXCL JSS2
29.8% 29.0% 29.7%
28.7%
1.4%
4.0%
2.9%
6.9%
1,589.2 1,611.2
460.5 478.9
808.1 831.8 232.1 248.1
2H2020 2H2021 FY2020 FY2021 2H2020 2H2021 FY2020 FY2021
NET PROFIT ($’M) – EXCL JSS2 FREE CASH FLOW ($’M)
(ATTRIBUTABLE TO SHAREHOLDERS)
17.0% NET DEBT
TO EBITDA
1.04x
27.5% 25.0%
167.5%
148.3
126.7
81.0 387.7 484.6
63.5 302.5
113.1
2H2020 2H2021 FY2020 FY2021 2H2020 2H2021 FY2020 FY2021
1 Service EBITDA refers to EBITDA less equipment margin (sales of equipment less cost of equipment)
2 Excluding the effect of JSS payouts recognised over the comparative periods
10Key Segmental Trends Reflect Infinity Play
MOBILE ($’M) BROADBAND ($’M)
30 30 31 31 32 34 33 32
28 28 29 28 30 29
ARPU ($) 10.4%
8.5%
250K 5G Subs 300K 5G Subs
As at 30 Nov 2021 As at 31 Dec 2021
7.4%
0.8% 176 194
3.1% 580 531 1.6%
139 130 130 133 138 46 47 49 50 49
4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 FY2020 FY2021 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 FY2020 FY2021
ENTERTAINMENT2 ($’M) ENTERPRISE ($’M)
Network Solutions Cybersecurity Regional ICT
42 43 44 42 9.4%
40 40 39
706
ARPU ($) 646 76
33
4.2% 2.9%
221 269
3.9%
5.4%
1.0% 188 180 188 179 190 183
16 154 18 21 19 392 362
73 19
43 73 79 73
47 45 46 45 45 100 93 88 90 91
4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 FY2020 FY2021 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 FY2020 FY2021
1 Includes one-time rebate extended to customers due to service disruption in April 2020
2 Consists of service revenue from Pay TV only 11FY2022 GUIDANCE & FY2023 OUTLOOK1
Investing In Our Future Growth
(Charts not drawn to scale)
SERVICE REVENUE & SERVICE EBITDA MARGIN CAPEX COMMITMENT
• Lower utilities YoY & further
(As % of Total Revenue)
• Higher Opex from significant rise in
DARE+ cost savings
utilities
• Higher EBITDA margin from
• Upfront Investments: IT Transformation,
manpower, entertainment content &
tactical & new growth initiatives,
Including 12-15% 12-15%
including 5G products & services
network repairs & maintenance to Investments
• Sustained Opex investments from
support new DARE+ business initiatives (DARE+ initiatives &
FY2022
IT Transformation)5
Service
EBITDA 7-9% 7-9%
Margin 30% At Least 23%
At Least 20% 4%
BAU
5% - 10% Capex5
At Least 10%
DARE+4
MyR SG BB2 MyR SG BB2 FY2021 FY2022 FY2023
JOS SG & MY3 JOS SG & MY3
Higher revenues across DIVIDEND PER SHARE
most segments except (FY2022 & FY2023)
Entertainment (decline
$1,611M in Pay TV subscribers &
advertising revenue
from Enterprise
5.0 Cents
customers).
Based on expectations that DARE+ outcomes will enable StarHub to sustain
FY2021 FY2022 FY2023 or exceed this dividend level. We remain committed to our dividend policy6.
3 HKBN JOS (Singapore & Malaysia): Acquisition completed on 3 January 2022.
1 In view of significant investments to be incurred in the next two years, the Group has taken the proactive step to offer the following guidance for FY2022 and FY2023,
4 Initial contributions
expected from new DARE+ business initiatives.
taking into account the outcomes expected to be generated from the DARE+ initiatives, which will be realised from FY2023 until it reaches steady state in FY2026
5 Excluding 5G Capex and spectrum right
2 MyRepublic Broadband (Singapore): Acquisition expected to complete in 1Q2022.
6 At least 80% of Net Profit attributable to shareholders (adjusted for one-off, non-recurring items), payable on a semi-annual basis 1212SUSTAINABILITY AT THE HEART Our Commitments
FY2021 Achievements By 2030
50% reduction in GHG emissions
(Scope 1 and 2) from 2019 levels
Advancing Environmental Sustainability & Resilience
• Increased renewable energy use to 6% By 2030
• 8% reduction in greenhouse gas emissions against 2019 baseline 30% of energy use from
• 40% YoY reduction in water consumption renewable sources
Caring For People & The Community
By 2022
• 22,789 training hours provided to employees, reaching 99% of workforce Carbon neutral for corporate
• Gender Diversity: 25% of the Board and 42% of workforce are female office and four main StarHub
• Invested over $880K, channelling care to over 4.8K beneficiaries Shops
(Scope 1 and 2)
• 9.6% incremental YoY improvement in NPS
Embedding Responsible Business Practices By 2022
• Most Transparent Company (Communications) – SIAS Investors’ Choice Power usage effectiveness of
Awards 2021 1.70 for StarHub technical
• SGTI: Ranked 40th out of 519 listed companies centres
1301 INFINITY PLAY
Integrating More Consumption Drivers
02 SUPER APP & DIGITAL ENGAGEMENT
Agile & Cloud-based; Extend reach beyond customers
2 03
ENTERPRISE CONVERGED CAPABILITIES
Tap opportunities in Cloud, Cybersecurity, Connectivity
0 KEY
2 PRIORITIES
04 5G-ENABLED OPPORTUNITIES
New possibilities for Consumers & Enterprises
2
05
DISCIPLINED EXPENDITURE
Prioritising strategic investments for growth
06 M&A TO PROPEL GROWTH
Synergistic & Accretive Additions To Our Growing Ecosystem
14THANK YOU
Investor Relations:
Amelia LEE | IR@StarHub.comYou can also read
