Q4 2020 SK Telecom Co Ltd Earnings Call

Okay, I connected everything. Thank you.

phone number

Good afternoon. First of all, thank you all for joining this conference call and now we will begin the conference call by the fiscal year 2020 fourth-quarter earnings results by this conference wage. With the presentation followed by divisional Q&A sessions. If you have a question, please press 1 and 4 and now we shall commence the presentation by

Ahead of our planning at St. Center, today's conference call will consist of representation on the earnings results.

For management plans and specific Direction and head of the center one and tell me a half bath off your treatment plan for mno will be provided by ambulance head of Corporate Center and head up 4% off. Of the new ideas and division. We also have here with us Executives from the relevant rest of the month club.

Depending on the macroeconomic and marketing situation. Let me now if you sent over to your phone dead. Good afternoon. This is Ella, Let me first discuss the Consolidated earnings highlights versus pull your 2018 month 169th Avenue for fiscal year twenty-twenty recorded $18 624.7 million one up 5% year-on-year dead.

Connectivity enables adaptacion to the non face-to-face business environment those resulting in sustained quarterly growth all business divisions of media took another record-high red dead, dead dead. Still young 349.3 billion one up 21.8% year-on-year thanks to M&S operating income turn around and operating income improvements of India and wage.

I don't need some revenues but also to operate.

Hello.

Hello, can you hear me?

Let me know discuss the major achievements a strategic direction for each business division wage. And then they be some high percentage. You got 1505 six point six billion one up 2.8% year-on-year decline in roaming Revenue to the pandemic had a negative impact, but we achieved an annual revenue turn around based on 5G service and data usage increase.

Mentally all vegan and then they'd be here. And so if you do like a month operating income grew 7.5% or near-record 1 trillion months between 1 billion one while marketing expense and depreciation and amortization costs increase Revenue growth back by 5G mentioned that you were trying to round in operating income as well.

Oh my God, I don't want to confirm the increase and maintained number one month and through reasonable Market operation and distribution Innovation to cater to the non face-to-face business environment. The 5G subscriber count stands at 5.48 million of the end of the 2020 which is expected to reach nine million by the end of 2021. We will continue to increase the subscriber base with new services and business Innovation while maintaining dead

You're welcome home business into an AI platform based Subscription Service Company based on slow waves Cloud games and people who subscribe subscriber base has something planned attack plan to introduce various subscription products and services to go beyond the boundaries of mobile lines are smartphones. These subscription products will be offered not only to each other, plus to everyone in Korea.

One group home phone service platform with easy access ability and restructure the membership program. We're making all the necessary preparations to implement these plans because of Subscription Service Company is a new bulb and direction of business for this year. And we will do our best to make this an opportunity to expand the scope of a man of business just bought a system becomes you have

I am moving on to Media Broadband Consolidated Revenue recorded three trillion 713.5 billion one which has he brought merger and I. The fiber rope it Rose by 17.2% year-on-year. Thanks to the record high Revenue operating income increased by 59.2% year-on-year recording 330.9 billion months.

once a month

3D business recorded one trillion $338 billion in Revenue with sound growth of Core Business such a CMS and information security and you visit us this summer working and contact solution related to COVID-19 the revenue increased by 12.2% year-on-year operating income recorded $129 billion one month down 8.2% year-on-year due to reasons related to new business expansion.

Most, turn on text. I'm off. I'm going to get home if I come with billion one 12.1% year-on-year off the GM vehicles driven by the business department and test drive operating income reported eleven billion one for two consecutive month.

2020 was a year when we achieved greater volume and higher-margin despite intensified competition in the Farmers Market. We will make efforts to strengthen the competitiveness of Commerce business basis of our experience last year just on your home will discuss achievements and strategic direction for the new ICT businesses.

Good afternoon. Allow me to discuss the achievements and plans for the new ITT business division home. First the media business last year the murder of St. Broadband and he brought was completed successfully June June June.

Thanks to the effect of the merger and IPTV subscriber growth. We have stirred 8.9 8.59 million subscribers in 2020 based on which we achieved revenue and operating in, we will continue on with this high growth Trends through media business growth and need to be business expansion in 20, 21 months. You know, you should be you must be strengthened some time off from Brooklyn platform security band.

Obviously, I'm going to argue security president in November last year. We decided to merge ADT caps and educate.

Delete the security market and accelerate growth and the merger will be completed in to one of 20 21. We're determined to lead the Integrated Security Service Market by combining a hello, 5 g n a i s k in for sex information security platform and ADT caps EMS infrastructure took some time off position in 2018. The annual revenue of ADT caps was around seven hundred eighty billion one after three years. We expect that the revenue of the merged entity will double to Thursday is 1.6 trillion won this year.

So, how much is Dead growth in GMD and achieved a positive operating income wage for them to eat on June Eleventh Street or more than 10% growth in BMV. Thanks to digital marketing such as cool marketing with Sellers and providing Point benefits to confirm a chief GMB growth of more than 50% on the back of a virtuous cycle of growing customer base and expanded product sourcing capabilities of birth.

I'm Global retail Hub platform as was announced in November last year. We will co-operate with Amazon for e-commerce business Innovation to allow customers to buy Amazon products through 11th Street.

I'm at all educate to let cool man.

You know, you should be able to Superman. He hasn't got home and took her hands off me know once your phone Mobility has become the fifth business division of each other, launched in December last year. He Mobility will grow into an only one who ability as a service provider of the covers a wide range of services including public transit car rental car sharing and texting.

What is your name and number will establish a joint venture for a tech T healing service in April or Uber plans to invest more than one hundred million dollars in the JV and around 15 million years.

Yep. Let me move on to one store, which is preparing for an IPO this year by a virtual cycle of growing number of users and large game titles wage growth continued for ten consecutive quarters and the business became profitable in terms of net income last year. We will maintain the revenue growth Trend this year for one store and Prestige process month.

Thank you.

Chinese Moon apartment 620 has been decided by the board at 10,000 one including the paid out 1000/1 interim dividend. The amount will be confirmed after the approval of the March a GM.

Welcome you home with me. Let me now present to you. This year's guidance. According to the management plan. Annual Consolidated revenue is expected to be $19 billion five hundred billion one up 5% year-on-year based on the solid growth of both mno and new ITT businesses. We will do our best to exceed our guidance a Chinese million times and and beauty of them at all. I just put you are dead.

You don't know how long that despite the unprecedented pandemic situation Telecom achieved meaningful results with the highest-ever revenue and operating income. We believe that these achievements have been driven by constant innovation of services and Technology based on AI and a competitive business portfolio that allowed us to remain competitive in the non face-to-face sessions environment this year. We will further Advance the business portfolio carry out our first subsidiary IPO and strive for a constant Innovation and growth based on trust and openness in order to create greater corporate value.

Because I know it's terrible to the edge.

I'm told me to ask for the interest and support from investors and analysts. Thank you.

Crown Chicken.

Going on name.

Now the Q&A session will begin, please press one and full. If you have any questions questions will be taken according to the order. You have pressed the number 1 and full, please press 1 and 5 if you want to confirm your questions.

The first question will be provided by being from any investments in Securities, please go ahead sir.

Daniel is he in each Implanon birth control pill not presenting issue English with our best to make sure you see you tonight as soon as you come home. You'll get that in young too.

Thank you for this opportunity to ask you a question. I have two questions. So first question is in recent lunch. You can see that there has been a lot of talks about possible corporate governance chapter change and there have been some legislative changes as well. So what is the likelihood of any meaningful corporate governance changed within this year. Can you provide us with some color on this topic off? The second question is about price plans recently three telcos in Korea has been launching lower-end 5G price plans in a competitive manner. So what is the impact of this wage and price plan on your earnings?

Yeah, and this isn't going to engineer.

Mister on thank you for your question. Let me address your question regarding the possible corporate governance changing according to the legislative change.

I'm trying to log.

Based on the ultimate goal of maximizing shareholder value by having not only our MN of business but also new businesses being recognized in their value in the financial Market. We have brunch open to all possibilities and we have been exchanging opinions with various stakeholders, including shareholders another job specific decisions regarding corporate governance changes, including various options of taking off some of the businesses. However, we have to mention that the basic assumption will be to maximize the corporate value and we will opt for us that will be in line with the interests of shareholders.

You are violent in as soon as we have some specific decisions, we will communicate them with the market.

100 and let me now move on to your question regarding the potential impact of the new price plan on our earnings.

None at all.

In January this year as the first case of reporting in announcing new price plan under the new regime. We have announced a new online lower-end plan. Wanted to play a game plan, which is about 30% lower than the existing scheme. Therefore as we have seen the increase in non face-to-face consumption Trends. There's been a lot of interest in this price range and you don't want to take a bath a compared to the existing time scheme and the selective discount option are Prue is likely to go down slightly. However with more reasonable pricing available in the market we expect the new

The subscriber growth and revenue growth has well, I'm sorry. Thank you.

The next question will be presented by keeping you from insecurities, please go ahead sir. Yeah, and you said that you change your whole life has been kind of confusing me off. I'm going to get

Thank you for this opportunity. I have two questions. The first question is related to your dividend plan you communicated to us that starting from the year 2021 the interim dividend a link to the dividend situation of SK hynix and the subsidiaries. So what would be the overall DPS range going forward? And as for the year-end dividend it is linked to the performance of your life and Kearny you said that you would maintain the level of 9,000 one. But in order for this to be maintained or to enjoy some dividend upside what will be the level of job performance that we will expect any guidelines for that. The second question is regarding the market competition landscape before the Galaxy twenty one was launched. There were some talks about a potential increase of subsidy for this new device. And after the iPhone launch in December last year. What is the current marketing situation? And what is your outlook for marketing situation going for bath?

Yeah, tensions are going to give me your name. Thank you. Mr. Came for your question. Let me first give you a comment on our dividend policy for your 2021.

She's not dead last year. We announced our dividend policy Direction and we mentioned that our dividend policy will be maintained in a stable manner by linking it to a mental performance package will also be more flexible in our dividend especially for interim dividend by linking it to hynix and other subsidiary performances You Don't Own no.

This basic sense will be maintained but we do understand that there are Market expectations about interim dividend upside as the dividend from SK. Hynix has been increased slightly off. You don't in consideration of these factors. We will make discussions at the word. And once the decision is made we will communicate this with the market wage. I just was announced has been decided at 9001. I'm trying to Thursday. We will do our best increased our dividend payout capability by accelerating Revenue growth of various businesses, including operational efficiency Improvement dead.

Business office that we have been spending a lot of time considering various options and measures to make our shoulder return policy more effective and efficient in order to maximize shareholder value. We have some specific plans. We will communicate them with the market answer your question regarding intensifying competition in the market in terms of marketing.

Hello, I'm not interested in that subsidies go up temporarily whenever new device.

Somebody else at this table Market Trend to continue for the rest of the year, continue to lead healthy competition based on differentiated Services rather than price request competition. Thank you.

The next question will be prevented. But sorry next question will be presented by Ethan Hawke from Honda investment in security, please go ahead sir.

Did you have a confirmed to get the treatment to get off off? What do you know in some Johnston and I just need that money.

For this opportunity. I would like to ask you to question. The first question is that in your presentation, you mentioned that you're planning to transform your business into an AI base monthly subscription service company and this is quite new to us. So can you elaborate more on that? Especially in terms of your expected subscriber increase or Revenue Target if there are any specific targets East share them with us and the second question is related to your Mobility business in December last year. The team ability was launched and you mentioned that you will grow this into an all-in-one and Mobility as a service company. So what's the current situation after this entity was launched and what is your expectation for this company?

Yeah.

Don't come off as early for your question regarding your question on mno business. I'm going to cover this and then I will hand it over to mister, huh for the mobility related question.

You telling you should be done and we would like to purchase a new growth Story by transforming our mno business into an AI platform based Subscription Service Company switching off the engine off to collaborate with various players in the areas of FNB education rentals and travel so that we can offer a subscription products and services that will have huge impact on our customer. You don't come from marketing job.

In order to carry out this Subscription Service Company related marketing. We are currently in the process of building a new infrastructure and we're also preparing to we club or membership program that has been used as a very strong marketing tool as a telecom company bought some subscribe 20 million month and service users by the year 2023 and the revenue Target of six hundred billion one.

What was the tools and pajamas off that are to let me answer your question regarding the performance of Ki Mobility after the split off and are the strategy.

You know, you should be worried Escape here as you mentioned in December last year business division of 6:30 a.m. In terms of financial investment raising and service preparation where smooth sailing right now and we expect a joint venture established with Uber for a taxi service rep official service launched to be happening in April of them are various services, including designated driver service and Mobility as a service in a gradual manner.

you

Mom is planning to grow its five core areas by utilizing Korea's largest Mobility platform T map and the corporate value Target by 20 25 ft 5 trillion lens on your insurance off. The first of such is life platform, which is for me to see customers. They include gap insurance parking and other existing businesses, which will be expanded and we will also launch new types of subscription membership services.

Thursday it's going to be centered around Auto which is about growing the embedded team at visit us and we are planning to expand the mobile ecosystem to the vehicles by offering by offering navigation as well as entertainment services Thursday. We are planning to launch a digital platform. There's an S including designated driver service and many other Mobility Services that we will we will mediate.

We are going to offer differentiated services in collaboration with Uber Adventure as a service dog. Various Transportation beings can be utilized and bundled in one service.

Turn it off. Thank you.

We don't do manage. You should fill in Katie's in clinic in June.

The next question will be presented by Kim consult from Securities, please go ahead sir. Well, usually plus TV package should be daughter. Oh, she didn't go out loud to see how may I help you?

Thank you for this opportunity. I would like to ask two questions one is regarding media. And the other one is regarding Commerce. You mentioned that there is a lot of interests in public services and for your wave business. Are there any strategies related to collaborating with Disney and other companies and the second question is regarding Commerce and I can you update us on your partnership with Ms. Since November. You mentioned that you are planning to grow 11th Street at the global retail help platform. So if this happens near future, what is your specific user Target or gmv Target? What is your overall strategy for this part of the business?

Images sienkiewicz and Bun engines help your name. I'm sorry. Thank you. Mr. Kim for your question Joe, first. Let me comment on your question regarding wave strategy to go to maintain competitiveness in the Market of Choice of media this an S4 IP TV and Ott. We are open to various options for hyper collaboration. But please do understand that we cannot disclose any specific names for potential partnership.

Album Gateway Vernon originally from original content line of expansion including delete Justice and she don't need if you can on the wave platform as well as the popularity of drama series Penthouse, which was broadcast a territorial a TV network as a result. We were able to reach the annuals paid TV subscriber number of 2 million and twenty $20 and the subscriber rate has been continuing. So we're smooth sailing in achieving our Target of five million paid subscribers by 2023. What is your birth?

Global children

for a new wave is considering various options to improve the competitiveness through original content investment expansion and Global Partnerships.

Hello, super your name and how many months off 11th Street is making preparations in collaboration with Amazon. So that 11th Street customers can purchase Amazon product issue at the 11th Street and together with Amazon. We expect to offer unique shopping experiences for domestic customers Imagine by month.

based on smooth cooperation with

Amazon we are now in the process of making preparations so that we can offer differentiated benefits and services to our customers as soon as possible fraudulent purchase Amazon products 11th Street. This will lead to an increase in traffic for direct cross-border buying like cases, and this will not only increase the volume of cross-border purchase photos. So the increase of the scale of domestic shopping should be able to take a message or have a phone number.

Cross-border purchased which is currently around 40 trillion one in volume and we will also work hard to allow domestic sellers to sell their products over Dead Planet Katie none. Imagine how much I need to collaborate with Amazon so that it's not only Commerce area. But also in other ICT areas, we will create synergies office regarding the contract with Amazon am not able to provide with any further details. So please do understand but when time is right, we will communicate more details with the market.

I'm telling you. Thank you.

What name is Jim?

Put me on some boom. Pop up. Yeah.

I lost question will be presented by UT Health from Merrill Lynch, please go ahead sir.

Could you gay?

the 150 a month

Ask question. I have two questions. The first question is that you mentioned in your presentation the overall guidance were 20 21 in terms of Revenue. Can you put up with some breakdowns of your outlook on mno Revenue? The second question is related to keep X in 2020 the executed capex have declined quite substantially. So what is your outlook for the deployment of context for 20 21?

Yeah you your name?

It's for you. Thank you very much for this you thank you very much for your question, June 1st. Let me answer your question regarding the mno subscriber and revenue Outlook.

Okay.

Course, we have to see the pace of subscriber growth going forward, but we expect that the mobile side Wireless revenue for 2021 is going to increase by three to four person. May I ask your question on the capex Outlook? It's going to be a similar to the level of twenty-twenty and we will make sure to manage our catering efficiently. Thank you.

Did you wanna do?

Thank you very much for joining us for this conference call. If you have any further questions, please contact the oil team. Thank you off the end of conference call for fiscal year 2024 SK Telecom. Thank you.

Thursday

Thursday

Mm. She is actually on the phone cut off.