As businesses now recognise the exigent value of change amid the fragility exposed by COVID, HKBN is taking a leading role – leveraging our one-stop capabilities backed by expertise gained from our own digital transformation experiences – to innovate, transform and drive customer resilience for the future.
Always ready to adapt, HKBN is also redefining how business is done. For enterprise customers, we're taking our relationships to all-new levels through partnership models built around growth co-creation, which, like never before, enable us to deepen residential customer engagement with more exclusive rewards and offers.
In crisis, there is opportunity AND responsibility. Leading through purpose, we've continued to inspire – via committed action before and during COVID – the business sector to take greater responsibility for our society's shared future.
Dear fellow HKBN shareholders
Let’s first express our deep appreciation to all our fellow 5,929 HKBNers for the incredible work in delivering dividend per share growth of 7% to HK$0.75 for FY20, which is by far the highest growth within our telecom industry peer group.
Dear fellow HKBN shareholders
Let’s first express our deep appreciation to all our fellow 5,929 HKBNers for the incredible work in delivering dividend per share growth of 7% to HK$0.75 for FY20, which is by far the highest growth within our telecom industry peer group.
We are particularly proud of these results as they are inclusive of our comprehensive pay-it-forward #ToughTimesTogether initiatives such as 1-month service fee waiver to our entire residential fixed-line and enterprise customer base, 10,000 free broadband lines for the underprivileged, 100 fresh graduate hires being 10x more than what we need, and most significantly, pass-through to all our eligible Talents of regional government wage subsidies.
Whereas COVID-19 is an unprecedented global crisis, at HKBN we see COVID-19 as an unprecedented calling to serve our community and an accelerant for our own much needed transformations. In confronting the COVID-19 situation, our baseline is “perfect is the enemy of good”, i.e. we embrace imperfect and incomplete information decision making and rely on our agility to adjust to changing conditions. In uncertainty, our Company’s clear core purpose of
“Make our Home a Better Place to Live” sets a
very clear priority on safety above all else, impact to the community and taking care of our wide range of stakeholders. At HKBN, we consider profit to be a subset of PURPOSE and we run HKBN for PURPOSE.
At HKBN we “eat what we cook”, i.e. we must first transform ourselves as to earn the right to help others transform. Our digital transformation, which we accelerated a couple of years ago, is now paying big dividends. Being digital has transformed our Company from a “fibre” company to a “distribution” company, leveraging our massive reach of 1-in-3 residential households and 1-in-2 active enterprises in Hong Kong.
At HKBN, we condemn “silos”, i.e. we intermix our residential and enterprise scale to empower innovations such as our Barter & Bundle, where we happily accept partial payment for our enterprise solutions in the form of service vouchers to use in our residential acquisition and retention programmes. In doing so, we transform our enterprise customers into our business partners which opens a far greater range of opportunities for value creation. Our partners, formerly known as enterprise customers, love our Barter & Bundle as this brings new business from our massive reach to them. Whereas in the past, we were selling our telecom services to their procurement team, we are now strategising CEO-to-CEO to improve our businesses for true Win-Win-Win for our enterprise partners, our residential customers and HKBN.
With each sequential integration of our five acquisitions post our Management Buy Out in 2012, we have learned and strengthened our “best of breed” merger process. Our baseline is that there is no ex-HKBN, ex-WTT, ex-JOS, etc silo culture that should survive, but rather there is only one “best of breed” 1-HKBN. Our deep Co-Ownership alignment means we have skin-in-the-game to realise integration gains. So far, we are well on track to fully realise the highlighted HK$300 million synergies from our recent WTT Merger and JOS Acquisition by FY21.
Beyond our operational transformation, we are super excited to see the formal launch of our HKBN Talent CSI Fund seeded by Co-Owners’ contribution of 4 million HKBN shares currently valued at over HK$54 million. This fund is governed independently from the HKBN executive group with the additional checks and balances of independent non-executive directors as voted in by Co-Owners. Having a percentage of our HKBN owned by this Fund means that we are perpetually aligned, i.e. the more value and dividends we execute for HKBN, the more funding this CSI Fund will have to make positive impacts. This perpetual alignment gives our CSI Fund the runway to make strategic impact, rather than just short term ad-hoc initiatives.
At HKBN, we embrace “Change or Die” and we want to live. We have exited past predicaments such as SARS in 2003 and the global financial crisis in 2008 stronger than when they hit us, and this is exactly what we are doing with COVID-19.
We are here to GROW!
Sincerely yours
William Yeung
Co-Owner and Executive Vice-chairman
NiQ Lai
Co-Owner and Group Chief Executive Officer
Total Revenue
+85
%
Strong growth
through transformation from telco to one-stop telecom and solutions provider
HK$5.1B
FY19
HK$9.5B
FY20
Ebitda
+47
%
Driven by synergy
from our hugely successful integration of HKBN, WTT & JOS
HK$1.7B
FY19
HK$2.5B
FY20
AFF
+49
%
Co-creating
purposeful profits with our aligned 1-HKBN Co-Owners
HK$0.8B
FY19
HK$1.1B
FY20
DPS
+7
%
Industry leading
dividend growth
HK$0.70
FY19
HK$0.75
FY20
DPS
by year
(HK$)
ENTERPRISE SOLUTIONS
HK$
6,514
M
Revenue
>100
%
105
k
Enterprise customers
+2
%
HK$
2,948
Enterprise ARPU
+69
%
RESIDENTIAL SOLUTIONS
HK$
2,483
M
Revenue
+0.4
%
886
k
Broadband subscribers
+1
%
HK$
190
Residential ARPU
+3
%
Please refer to our full annual report for definitions and explanations of terms used in this truncated version.
Leading Change
for Customers
The pace of change for telecom and tech is now faster than ever. To stay ahead, we focused on leveraging our expertise with game-changing ideas that can improve lives and experiences, as well as redefine how our enterprise customers grow and move forward into the future.
Transformation
as a Service
Long before COVID, we began accelerating our own digital transformation. Through this journey, we reinvented HKBN’s way of doing business, and our underlying technologies and culture. After transforming, we now operate with hugely shortened product release cycles, up to 5x faster rollout of marketing campaigns, and tripled revenue via digital marketing in just two years.
We eat what we cook
Having transformed ourselves to great results, we’ve been empowered with the technical expertise and proven business insights to help our customers transform and speed up their journey of success.
Barter
&Bundle
We brought game-changing flexibility to the market by promoting a new model of doing business, Barter & Bundle (B&B), to give enterprise customers a compelling way to slash costs and grow their business simultaneously – an opportune measure in extraordinary times.
Enterprise customers can exchange their goods and services to offset part of their payments for our range of ICT solutions. The goods and services we receive are then repurposed as rewards and special offers, provided to our base of over 1 million residential customers. So, instead of enterprise customer relationships that only go one way, B&B is fundamentally changing the whole dynamic, unlocking win-win partnerships.
JOS
Integration
Our integration of JOS has expanded both our operations – which now encompasses Hong Kong, Singapore, Malaysia, mainland China and Macau – and our capabilities with end-to-end telecom and technology solutions. After consolidation, our solutions portfolio increased by about 40%, greatly enhancing our ability to comprehensively serve enterprise customer demands.
As part of our integration strategy, we’re aggressively expanding JOS beyond merely a leader in system integration and bespoke solutions. By breaking down silos, our teams are unleashing their collective tech prowess to better serve customers across a wider range of challenges.
Deepening Residential Customer Engagement with
Infinite-play
Through our multi-play strategy, customers have shown they love the value of our telecom and entertainment bundles. To give them more reasons to stick with HKBN, this year we focused on delivering even more infinite-play value – via a broader range of enticing products and services, as well as customer exclusive freebies and discounts.
United
to
Lead Change
HKBN is now powered by elite expertise from five companies acquired in the past seven years. As our Talents focus on driving customer change, we remain obsessed with providing our Talent-force with everything they need to thrive.
A Stronger
Elite Sports Team
We now operate in markets across Hong Kong, Singapore, Malaysia, mainland China and Macau
with over
5,900
Talents
Broad-based
Co-Ownership with Skin-in-the-game
In total, we now have around 990 Co-Owners from our Co-Ownership Plans and Beyond-HK pain/GAIN schemes. Having mass skin-in-the-game investment from these Talents means we are fully aligned in feeling both the pain and the gain from our decisions and actions, hence HKBN is far more motivated to make the right long-term choices for our stakeholders.
Talent-obsessed
While many companies still grapple with work-life balance, we uphold LIFE-work priority. When combined with our Co-Ownership, the copious opportunities to develop professionally, and our Core Purpose "Make our Home a Better Place to Live", HKBN Talents have every reason to come to work with a sense of purpose, pride and passion.
And so, it’s no surprise that we’ve been named "Best Companies to Work for in Asia 2020" by HR Asia!
Win-Win-Win
More than ever before, our relationships with partners and suppliers are creating long-term co-growth opportunities. The aim is to deliver greater value for our customer reach of 1-in-3 residential households and 1-in-2 active enterprise companies in Hong Kong for win-win-win.
Evolving the
Partnership Game
More than ever before, we're working with different business partners not to necessarily only seek better prices, but rather better deals based on mutual strategic needs and long-term benefits.
Responding to COVID and the changing economic landscape, we understood the need for greater flexibility and promoted our ‘Barter & Bundle’ scheme to embrace win-win-win opportunities on a massive scale. By co-creating co-growth value for each other, we’re turning enterprise customers into business partners.
Sustainable
Procurement
By integrating sustainable procurement practices into our supply chain activities, we’ve added sustainability measurements as part of our sourcing assessments, and mandated environmental, health and safety provisions in our supplier contracts. These enhancements will help us identify supply chain partners who are most prone to environment and social-related risks.
Tough
Times Together
In times of crisis, opportunity and responsibility go hand in hand. At HKBN, we consider profit to be a subset of PURPOSE and we run HKBN for PURPOSE. We see COVID-19 as an unprecedented calling to serve our communities.
Technology for Good
Throughout our Corporate Social Investment (CSI) journey, HKBN has been actively giving back via empowerment that aims to boost technology accessibility, connectivity, as well as support digital skills development. By working closely with like-minded business partners, NGOs and the HKBN Talent CSI Fund, our independent charity, we’re creating a more digitally inclusive future for local communities.
COVID Relief
As a purpose-driven Group, we quickly responded to COVID with decisive #ToughTimesTogether actions to show how businesses can give back to local communities and help alleviate the challenges. With the situation and its impacts changing over time, we evolved our #ToughTimesTogether and related initiatives to better address the needs of different stakeholder groups.
Proactive
#ToughTimesTogether Initiatives
1-month service fee waivers offered to over 900,000 residential fixed service and enterprise customers
10,000 free broadband lines x 24 months
Free SIM cards and computers for disadvantaged students
Free data smartphones for nursing home residents and rehab centre members
3-month job placement and mentorship opportunities for over 100 graduates
A Smarter Way to
Green
HKBN is committed to protecting the planet for our future generations. As a technology-driven business, we believe that conventional approaches to energy, carbon and waste reduction can only go so far. This year, we continued pursuing smarter ways that put innovative technology and better workflow changes into practice to improve our long-term environmental impact.
Something From
Nothing
As a pioneering eco-project, Something from Nothing has required zero capital investment from us, despite numerous energy efficiency upgrades implemented throughout the years. Expenditures made since 2016 for all incurred retrofitting have been fully funded by an external energy consultant, which received a fraction of our energy cost savings as compensation.
This year, using our model, we extended more upgrades throughout Hong Kong at our office, data centres and warehouse. In November 2019, this joint project was recognised with an Asia Pacific Award of Excellence in Collaborative Partnership from the International Facility Management Association (“IFMA”).
Reduction
of Carbon Emissions
Since 2016, Something from Nothing contributed to 5,258,477 kWh in total energy savings
While many companies still grapple with work-life balance, we uphold LIFE-work priority. When combined with our Co-Ownership, the copious opportunities to develop professionally, and our Core Purpose "Make our Home a Better Place to Live", HKBN Talents have every reason to come to work with a sense of purpose, pride and passion.
