SKM - Earnings call transcript Q2 2021

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Joongsuk Oh

Good afternoon. I am Joongsuk Oh, Head of IR Planning at SK Telecom. Today's conference call will consist of the presentation on the earnings results for Q2 of 2021 and the future management plans and strategic direction by Poong Young Yoon, CFO and Head of Corporate Center 1; and Hyoung Il Ha, Head of Corporate Center 2, followed by a Q&A session. Today, achievements and strategic plans for MNO will be provided by Poong Young Yoon, Head of Corporate Center 1; and Hyoung Il Ha, Head of Corporate Center 2, will discuss that of the New ICT businesses. Today's conference call will provide consecutive interpretation, and we have with us executives from relevant business divisions to help deepen your understanding.

want to you macroeconomic change, situations. we statements all and begin, subject are depending we to that remind forward-looking market Before on the

me Let our present now CFO.

Poong Young Yoon

Telecom. Poong CFO This Young afternoon. is of Good SK Yoon,

which steps X:X are many around subscription, First, let core to of me Board's develop split spin-off investment visions the interested the company you stock for between Services the Financial Commission on plans of approval being the on SK the X:X. in areas surviving on of SK the made company July company, enterprise X with business on The developing in submission and the investors spin-off specific the the decided companies. process and Telecom ratio also taken necessary also Telecom, the process in. scheduled, official the to are XX. and company remaining in spin-off it as X, as technology in high as new accessibility statement growth the update an the A its as of spin-off tech, October a shareholder that including scheduled is the the developing June on big registration drivers increase of All plans strategic new based base. to Shareholders' X was XX. the investments We're surviving metaverse XG increase growth as shareholders, expand in will result for semiconductor, The company the shareholders the at and high and process companies. XXXX. to the the separate is General specialized XX by trillion is X and investment encompass to tech, held approval growth be final in completing platform committed November technology companies awaiting approved XX to The KRW July detailed We're with and spin-off of XX. media. When current net home will by by Meeting potential. trillion sectors. through XXXX new to aims innovative value It be the asset KRW new deep XX tech

discuss year-on-year up Amid for QX for trillion, grow continued ICT costs income KRW equity business, on Q-on-Q. and and XXX.X higher XX.X% earnings growth thanks billion. me of businesses mainly X.X% and X.X% New SK X.XXXX operating a QX saw let And posting method XXXX. restructuring revenue MNO, income income MNO X% thanks KRW an XX.X% posted year-on-year Net related of to income recorded stable earnings XXXX the underway, increased. SK and KRW their all It year-on-year Q-on-Q. Now divisions, Consolidated and growth. XX% to governance business business Hynix. growth year-over-year investments Q-on-Q, Consolidated though operating Telecom increased including to billion, recorded highlights consolidated by Q-on-Q, growth even XXX.X

discuss for strategic trillion. and X.X% achievements MNO each Let by to X.XXXX direction for me now major and year-on-year QX Nonconsolidated increased Q-on-Q KRW X.X% post business. revenue

of the MNO As revenue of Ifland, the contributing posted subscribers more X.X sustained up a reality. of and possibilities July, countless billion, metaverse back growth cost and make the a X.X% can stabilization. Telecom revenue on that year-on-year MNO SK XX.X% In platform launched Q-on-Q new XX% KRW handset reached representing number the subscribers of growth. million, June, than and income of XXX.X the to XG end operating

expected files with including to diverse and for In Ifland using avatars. room, the documents can used metaverse in platform metaverse and with era communications, of share XXX be up a the audio can have easily room XG create them. Along to business purposes, people we ask you And with knowledge to On the the are app, and you metaverse this metaverse of chat contactless and support. finalized. grow plan and as business growth division, important to new platform, We your being participants, for pillar and a many popular details subscription sharing MNO be with this business, networking. initiative is and going events interest meetings, another social is for

points based that the couple benefits, products which the subscription them will customer addition that be August. benefits. revamped highly various designing and currently reviewed end services immediate a on membership program commerce be The new service to media QX and features and package introduced with existing input, will new demanded discount will the in around in are membership We of earning be benefit

new Telecom they our meaningful prepare We for subscription the do service mark for so of best and new can spin-off. to SK post the restructuring launch that will beginning a membership the

revenue thanks and to the and the growth KRW posted the Commerce by rose due business on business. net revenue billion, XXX billion, Q-on-Q higher by caused The to subscribers. profitability of XX.X which X.X% XX.X a revenue to marks to X.X% Moving operating The up events. kept increased growth posted Q-on-Q the a posted XX% market to X.X% competition revenue by delivery the due e-commerce improvement solid business, billion. X.X% [Technical year-on-year restructuring spending a growth It of to intensifying of IPTV thanks business growth, posted led to infrastructure fell due new but grew content. year-on-year income of billion. by loss drop increase differentiated KRW CMS income and slight it operating continued services X.X% in and recorded revenue. market of but accumulated new new revenue Media. Q-on-Q. XX.X% with market of on growth and But that The investments year-on-year income has consolidated Difficulty] XXX.X SK The Q-on-Q It adds KRW driven operating KRW Broadband's year-on-year, X.X% by home. fixed was and growth results line

strategic Il Next, businesses. the for of discuss Hyoung will X, Ha, Corporate Head New the ICT Center achievements direction and

Hyoung Il Ha

Good Il Corporate to and I New Allow am Head of the afternoon. the achievements plans X. Hyoung businesses. discuss me Center Ha, for ICT

subscriber half net in adds and largest Media the first the IPTV is XXXX. the business. achieved First SK QX Broadband of

million regular broadcasting TV X.XX in end QX. channel to pay MPP, the a awareness by has by of the began S multiple As or as strengthening increased and provider, making Broadband increasing subscribers April. Established SK competitiveness It program Media focused content investments. coverage number on and channel as of a result, of

to original As among May subscriber investments a Broadband in strengthen to X released channel, terms approximately XXX content areas. will It in which just result, entered at of based top and on in popularity original continues in other December. SK the it continues and all the be achieve business of including Studio content. established channels Wavve Tracer, content, in Wavve growth end accelerated competitiveness in June. XXs ratings terms of platform, months, the of Media

content will in as an distribution to through signing approaches, boost competitiveness We exclusive HBO. content various seen of continue the with agreement example

the services, the the #X leading security service is efforts Korea the on the pursuing public With is full Standards to security security technology the ADT at for Korean main in selected Index in as IPO areas, Association. new top financial opportunities to the growth security strengthened Standard in overall Quality security ADT signed currently business. This Partner asset cloud, operation, securities. market business a existing Cap Next for sectors. with ADT ranked security, Year. on such achievement and with services IPO security S&C time in by for of and on AI managed home, strategic home is agreement Service from Caps the in business. with first we QX an and unmanned camera security the received Based cloud its cooperation unmanned XXXX attributable cloud solution underwriter are of Caps business ISV security apply Caps our of swing. ranging differentiation ADT AWS, business in a the and is AI-based for in partnership AWS smart for QX stores and for security preparing converged

strengthening to SLX. Commerce. further e-commerce responded in partnership the Recent a competitiveness service partnerships. is XXst IPO with same-day in with started Post XXst Next the M&A next collaboration and day through service in external competition intensified delivery and which market delivery Korea by market

signals designated logistics various And increased to we services the viewing. of as differentiated of turning high August can as these supplement and more the Stoa Uber for to venture expansion. will service share growth sure in market shopping Thanks market service in through Sk the by are well. and we mobile a In business SK joint KRW delivery a the are that growth QX a working growing goods users with by by expanded shopping. that Global partner to solidifying categories, than minimize the to Mobility offline negative beauty, business Mobility IT its entering offering efforts, consumers -- launch reduced for scope such convenient X offer high-margin also calls Mobility Amazon business T YLP, addition, maintained make is trillion. connection committed TV T the channels of the Store its respond April, of around driver SK basis has Map stakeholders. UT, service. differentiated subscription to worth end product company. open a launched in cooperating market will Stoa acquisition for Map Telecom driver health number to T of of increased with designated that Since with in the the Map trend the to to mobility remains experience impact XX%. number of stable a to It and with portfolio goods gain increased

Finally, value thereby successful sign app to report Capital and which Partners, a and achieved quarters, on let for for GMV Deutsche market. enhancement One positive investments building me Store One for IPO. corporate has the a consecutive growth from foundation Store, Microsoft a expectations enter Telekom global raising XX attracted

IP, largest CFO. investments utilized to now One of content, you. which be hand the to it types to and addition acquisition to I secure will publisher, of back In various such the Korea's games. Store as fiction will films continue genre will for Media, make Thank ROK

Poong Young Yoon

X,XXX dividend paid for XXXX, in Telecom additional a QX year-end Starting it out evenly Finally, year, QX will amounts, our by dividend than be accordance dividend. more added Dividend be KRW dividend we paid maintained of present with when has XX,XXX. XXX DPS was Yesterday, the an there's annual like global of total with KRW introduced to I quarter, size share billion of standards. out. to but per KRW policy. from the Since will quarterly this dividend SK would

this of considering Telecom guideline dividend linked QX year's sure the last to the year-end we increase dividend to dividend dividends this predictability portion year, As year's. performance. to dividend. similar providing a total will previously, be SK and by that size we to will payments QX business on like we the in Since on would started make adding communicated we're transparency

dividend basis Equity CapEx company as this from X use the We generated would XX% expected spin-off. M&A, for surviving First, the including after amount, as to payment flow business will stable of be of EBITDA, such to a like EBITDA excluded. which and business the is is cash to is the is maintain a deduction essential a year. flow investment CapEx cash from years, management. for next operations, for investments, XX%

based Our improve on cash the If is MNO dividend is surviving on basis. is to a of potential to means XG payout. earnings the there company competitiveness, formula that expected dividend increase, continue nonconsolidated flow upside which on free

will the growth enhance will beginning achieve X company a new value The greater identity. spin-off for and shareholder value value the asset rapid Second, of on through to will to growth continue mark clear harvest. companies net based -- new

your our complete you. business. do will to process successfully support best We continue and continued and the interest. of the Thank remaining improve We our for quality ask to

Joongsuk Oh

[Foreign Language]

Operator

Yoo first Merrill Instructions] will [Operator Jay provided from question by be The Lynch.

Jay Yoo

to ask like would X questions. I

is, a of is by Telecom level SK KRW to as Telecom mentioned provide expected DPS first as made minimum disclosure was and SK The level as DPS. of CFO, question XX,XXX the the

some if will payout. would XXX billion billion dividend mean of to simple I XXX So basis about do calculation, there that this for KRW KRW be

upside potential companies there level So their market for DPS is other because increase more the to level, any DPS on that I side. are wonder your if in and there's expected visibility

CapEx. some And will that like you your more this there to EBITDA dividend on part. formula, and mentioned be get in So I understanding would

so on forward will EBITDA your the And would statements? information going for second the you question is linked and some the this. it on visibility CapEx is as on related the based the like to out dividend overall And earnings financial And based it more on more I'd quarterly presentation? like to the CapEx, on for paying be So Or outlook get get because also to basis, company. side. to new is some are a these I

by target. are And You the target investors mentioned and net questions saying value seems KRW to that is you be there your many planning XX that that to raised aggressive. are trillion, to asset increase quite this

going this to deliver and So try I meet to are target. wonder you how

addition any mentioned target? other the have is seminar in you plan in June, to what this that to CFO In the achieve devised there

Poong Young Yoon

much thank very Yoo, Mr. you for your question.

your address question dividend policy. first me our Let regarding

can As in number. EBITDA, our formula, dividend to refer accounting can EBITDA CapEx refer for our to financial you the you And number presentation. CapEx, earnings our announced for

is the for XX% this course, as billion. range But XX% already KRW Of is there of to to which about to year. of mentioned, uncertainty projection billion some think the KRW XXX will it we of of end as the CapEx from EBITDA, the be in you when a deduction amount, XXX

the EBITDA Continuing business than to DPS half CapEx a to KRW in I EBITDA continue that So is going from forward first flow telecom or XXXX, saw grow in from maintain order more operation. grow in expect cash to manner. our to expect that XX,XXX. this, our investment we this operating essential based near on and will is stable going as on of be well. the continue EBITDA our we to year, necessary And is business. generated

execution quality best our best improve do XG. expand XG CapEx believe and projection, same the that overall in of time, network. the And to we XXXX. will to utilizing CapEx Based at the the to our and this by joint efficiency XXXX on of continue we the will network between and do We increase continue to coverage difference will EBITDA grow in the

dividend payout. we result, upside the expect potential on a As

your comment me the on question Let new net target the company. for regarding asset value now

KRW KRW asset that for business KRW increase the trillion of XX of lead completion industry we ever NAND of largest areas, the Through first we KRW will consolidation, of the will NAND believe a since Hynix X is net the to value, XX the it's years, value, investments, XX that As takes on value we up for Telecom platform. of this net more value we been these by XXXX. XXXX. which trillion our quarter additional to And growth for as the be for value including can to that asset net the be trillion of further there be after this solidify by aiming based of DRAM to closure of businesses, in trillion current XX%. which and new the means the other of Hynix trillion KRW and past structure increase more value plan to there are than trillion further business, year, It including IRR Hynix SK platform And will equity acquired the reach XX SK Intel in also believe industry. XXX competitiveness well. business will the acquisition And attract has as strategies, KRW successful other XX about semiconductor to And growth. able about the which Hynix, portion

XX on it's be going our stake, KRW based equivalent to to trillion. ownership So

mobility realize we to assets, including of believe that we security, other have OTT. forward. commerce, have growth lot and going Hynix, potential a assets addition And these to In

these other that areas, to So asset we the can in KRW increase trillion. believe net we XX value

which In addition areas I preemptive investments to future will you. asset we global that new we additional KRW core partners can technology, of X Thank to to mentioned, collaborate in these with trillion continue will so XX make various just value. that lead

Operator

from The Securities. Joonsop will next be Language] [Foreign question Kim KB

Joonsop Kim

ask like questions. would I X to

Netflix, and the The into Currently, market. question is are business Naver but not related strategy. Coupang OTT OTT also to only first your jumping

been the market intensifying. competition As has a result,

this subscription your change been business. order second in conference question on intensifying to increased strategy expectation in been The there's respond competition since to to to market? Ever subscription has So related is there business. the your the Wavve any call, your last

So plans business what the are and subscription specific strategies?

Poong Young Yoon

address OTT. Kim, thank Ha Mr. questions. on business, going your much you our question question and very your for subscription on will Mr. address I'm to the

services customers underway platform be subscription as and service, and be We're where going products in plans benefit the various our of the is to And domestic work to as attractive various and partners develop it's subscription the for very for optimal media they and digital bundle will an and part on for plans premium There on will offer and previously, of going with prices. collaboration smoothly subscription will going benefits. are is Currently, mentioned want service we marketing matched packages. As be them AI-based at the based our business. be overseas it subscription because goal to to useful popular customers, our I an commerce various manner. ultimately, as basic this

GMV will address targeting expanding population. And XXXX to our within XX size SK the revenue products these model we subscribers And services, going with share. of KRW million for details are scope as by entire and the August. a we a conference press of are for X arrange to also not offer our but separate subscription only Telecom subscription business more We by trillion. service, for The strategies subscribers, the Korean basic subscription is

Hyoung Il Ha

million, producers. year, Taxi release I'm Wavve. expand to of this Corporate and competitiveness to the X and Im going Head will we're And in Center the Joo actors. distribution for enjoying Currently HBO with platform. and was we increase other with Producer of can large using regarding is recently, an Wan thanks Studio Son documentaries Wavve differentiation competitiveness. to content for this year. the dramas X% Chan-ho experiencing million, on X.X studio, of going Hyoung going our increase and active lead Tracer This next to Chief increased the has Also, as Wavve. was well and Shi Driver and with Wavve lead trend, perform X Season second which highest with Ha, Wavve's in Lee collaborating exclusive was the very established sustained agreement Studio subscriber In content, Hyun you. offer year, is X. as a signed March, we're the original our -- At March. slowdown, very our Head, has and the end But and investment this was of various popularity Wavve May original to efforts production. sized Netflix Thrones market been of to Netflix And terrestrial was a which competition Content based so by some competitiveness. Studio growth is the HBO to June, monthly Il able OTT of Officer your that to the content X.XX making broadcasting creators key December intensifying I'm and Game to content address content MAU actively a while of content Wavve we've drop strategies and And Penthouse from level. Thank compared manner user such question part as X% quarter, In

Operator

Daishin question [Foreign by be Kim Language] The next Hoi Securities. from will provided Jae

Hoi Jae Kim

questions. I to X ask like would

question The to related dividend. first is the

And in between by will would the size closer there investors. well a that the between EBITDA mentioned formula the be slight to used linked is received I year's you payout. to say When XX% that that dividend CapEx the the and be XX%, dividend there's And percentage You as performance, minimum you mentioned of dividend very means apply last is mentioned for be indicated, is level, guideline if I your to will that XX%. to dividend going dividend, range the which XX% you it potential. and business and difference

-- dividend moving your to plan. the company's as new on So for

that of new dividend be for CEO second company, XXst to the going And about for trillion it for question, the sizable used is X is in as company. which investment be in there also the In the the up KRW it Or a is XXst. going future? financial takes at new raising, only. the be to used mentioned will You seminar mainly additional share

the the of that will going earnings important XXst believe be I So quite forward.

for of outlook XX visibility on your your is the on the Amazon? timing the any earnings what IPO? with Any Street? And collaboration So outdates

Poong Young Yoon

Kim, very much you Mr. your thank for questions.

our regarding link dividend. mentioned, question performance your the dividend policy for there dividend surviving size. between the will regarding and as address you first And me a the Let be company, business

will we increase stable a as do shareholder And for becomes out, and the company's investment, to for as CapEx continues company. this is, as return been you Board EBITDA Thank there you. best And yet, dividend as the of efficient, not dividend say, maintain yes, will discussions between well. new discussed more be and and new to potential forward. payout new your let's our spin-off the and policy, as members completed there So balance with a going the Board further the pointed be the will has suggestion, of at for

So so communicated dividend this ask the previously, on I'd any not your do payment. an will company like was new And company, for consider investment be to we understanding part. regular as

occasions, on such or exit However, timing regarding if moving special the XXst. there as value is as good consider other dividends. of an And any may we such to options, your harvest, then IPO question

nature the it performance between given maintain understand, balance may you a is very crucial to of growth. e-commerce earnings As and business,

XXst, And with ways we once basis more large-scale successful for will investments a this good purchase to promotions differentiate again, experience. major in and planned. IPO. there to cross-border these will, to lead Amazon for collaboration continue for And will will services be differentiation, As our find a and provide

Amazon, be to As for conference on our communicate separate this market. going previously, for there with This Thank a more us you. be an topic. mentioned as will opportunity collaboration I to the details press with is

SK Telecom Co.,Ltd (SKM) 13 Aug 212021 Q2 Earnings call transcript