PLDT, Inc. · PSE:TEL
PLDT — H1 2015 Earnings Presentation
42 slides from PLDT's earnings presentation, Aug 4, 2015
Slide 1: First Half 2015 Financial and Operating Results
First Half 2015 Financial and Operating Results Philippine Long Distance Telephone Company (PLDT) 4 August 2015
Slide 2: PLDT Group: 1H15 vs 1H14 Financial Highlights
PLDT Group: 1H 15 vs 1H14 Financial Highlights Revenues Wireless Fixed Line Revenues Revenues P85.2bn 0% P58.1bn P33.7bn (P0.3bn) -3% +3% (P1.8bn) P1.0bn Service Revenues Wireless Fixed Line Service Revenues Service Revenues P81.2bn -2% P55.6bn P32.1bn (P1.4bn) -4% +2% (P2.5bn) P0.5bn EBITDA* EBITDA
Slide 3: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA EBITDA EBITDA andEBITDA and EBITDAMarginmargin Consolidated Service Revenues (Php in millions) P81.2bn a -2% P35.5bn -7% (P1.4bn) (P2.8bn) due to declines in legacy and traditional businesses EBITDA Margin: 44% Growing Mature Declining P2.8bn decline in EBITDA
Slide 4: PLDT Group: Core and Reported Net Income
PLDT Group: Core and Reported Net Income Core Net Income EBITDA andNet Reported EBITDA margin Income (Php in millions) P18.9bn a -5% P18.7bn -6% (P0.9bn) (P1.3bn) 2015 Core Income Guidance: P35.0bn higher by P4.7bn or 33% vs 2H14 -5% -6% -12% +8% -4% +33% +4% 1H14 2H14 1H15 2Q14 1Q15 2Q15 1H14 2H14
Slide 5: Capital Management
Capital Management Core Earnings Per Share Interim Dividend Per Share P87.48 P65.00 Core Income for 1H15 of P18.9bn 75% of Core EPS Dividend Payments (billion pesos, except per share amount) Declaration Date 4 August 2015 40.7 41.4 37.5 38.6 38.7 Record Date 27 August 2015 34.6 37.2 33.7 Payment Dat
Slide 6: PLDT Group: Debt Profile
PLDT Group: Debt Profile Debt Balance Debt Maturities (US$ in billions) (US$ in millions, as of June 30, 2015) 2.9 3.2 Total: US$3,199mn 2.7 2.9 2.4 2.3 2.3 1.7 1.9 1.6 1.1 0.9 0.7 0.9 0.6 2011 2012 2013 2014 1H15 Debt Balance Cash & Short-term Investments Net Debt 2019 2015 2016 2017 2018 2020 to 2
Slide 7: PLDT Group: Free Cash Flow and Capex
PLDT Group: Free Cash Flow and Capex Free Cash Flow Capex P16.9bn a -6% P13.9bn a +71% (P1.1bn) P5.8bn decline in FCF due to the combined changes in: 2015 Revised Capex Guidance: Up to P43bn (Php in billions) ➢ Investments to further improve network quality and customer experience 18.1 -3.4 +1.4 -5.
Slide 8: PLDT Group: Segment Revenues
PLDT Group: Segment Revenues Fixed Line Service Revenues Wireless Service Revenues P28.8bn* +5% P55.6bn a -4% P1.3bn (P2.5bn) * net of interconnection costs continued growth in data/broadband and domestic voice due to declines in legacy revenues (Php in billions) (Php in billions) Growing Mature Dec
Slide 9: Convergence: home & away
CONVERGENCE: home & away CONNECTED HOME MEETS SMART LIFE CONNECTIVITY EVERYWHERE ENTERTAINMENT EVERYWHERE CONNECTED HOME PEACE OF MIND EVERYWHERE
Slide 10: Convergence: home & away
CONVERGENCE: home & away CONNECTED HOME MEETS SMART LIFE CONNECTIVITY EVERYWHERE ENTERTAINMENT EVERYWHERE CONNECTED HOME PEACE OF MIND EVERYWHERE
Slide 11: Digital consumer: Smart
• Digital consumer. • Anchored on innovation and leadership. • Convergence with PLDT Home and Voyager.
Slide 12: Value-seeking consumer: Sun
• Value-seeking consumer. • Complements SMART.
Slide 13: Entertainment Everywhere
Slide 14: Sustaining Market Leadership by Digitally Enabling Businesses
Enterprise Business: Sustaining Market Leadership by Digitally Enabling Businesses ➢ Consolidated corporate data and other network revenues in 1H15 were higher by 14% year-on-year at P5.3bn ▪ Includes data center revenues of P0.9bn which rose by 26% from 1H14
Slide 15: Smart Money/PayMaya: Traction in local and global markets
Voyager: Smart Money/PayMaya: Traction in local and global markets • P83.7bn throughput in 1H15, including trade money of P41.6bn • Commercial launch of physical card and app by early September 2015 • Biggest domestic remittance platform: 1H15 throughput of P41.4bn • Co-branded PayMaya cards (PLDT H
Slide 16: Voyager: Traction in local and global markets
Voyager: Voyager: Traction in local and global markets Financial Technology Next Gen Communication/Digital Commerce • Allows access to registered sites for free; sites pay Voyager for data access • 70% of mobile Internet users ✓ 27 enterprise partners registered downloaded the app including Zalora,
Slide 17: PLDT Group Guidance for 2015
PLDT Group Guidance for 2015 Core Net Income P35.0bn (P2.4bn or 6.4% lower than 2014) CAPEX Up to P43bn (approx. up to 27% of service revenues) Dividend Pay-out Policy: Capital Management 75% of Core EPS + “look-back” approach 17
Slide 18: PLDT Group: Challenges
PLDT Group: Challenges ➢ Declines in toll revenues (ILD and NLD) continue to bear down heavily on revenue growth, with the onslaught of the Internet causing adverse substitution ▪ Lower by P2.5bn in 1H15: P1.6bn for wireless and P0.9bn for fixed line ▪ Annualized decrease of P4 to 5bn year-on-year f
Slide 19: PLDT Group: Outlook
PLDT Group: Outlook ➢ Data/broadband will be the main growth engine for PLDT and the major focus of our efforts ▪ Fixed line businesses already reflecting this – more than 50% (actual – 57% for 1H2015) are data/broadband-driven ✓ Upward momentum in the Enterprise segment continues, underpinned by re
Slide 20: Other Details
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Slide 21: PLDT Group: Fixed line segment
PLDT Group: Fixed line segment Service Revenues Subscribers P28.8bn* 5% 2.3mn +5% P1.3bn 0.1mn * net of interconnection costs continued growth in data/broadband and domestic voice +2% or net adds of more than 49,000 from YE14 (Php in billions) Growing Mature Declining ➢ About 1.2mn or 53% of fixed l
Slide 22: PLDT Group: Wireless segment
PLDT Group: Wireless segment Service Revenues Subscribers P55.6bn a -4% 72.5mn +1% (P2.5bn) 1.0mn due to declines in legacy revenues stable vs YE14 (Php in billions) Mature Declining Cellular Revenues and Subscribers Growing Revenues % Y-o-Y Subscribers % Y-o-Y Cellular Voice - International Postpai
Slide 23: PLDT Group: Data and broadband
PLDT Group: Data and broadband Revenues Subscribers P23.0bn a +13% 4.9mn +34% P2.6bn 1.2mn Representing 28% of consolidated service revenues +19% or about 770,000 from YE14 (Php in billions) (in thousands) +13% +19% +15% +7% 4,861 vs YE14 4,092 20.4 21.5 23.0 Y-o-Y +6% 3,263 3,433 +25% Y-o-Y 2,928 +
Slide 24: PLDT Group: Appendix
PLDT Group: Appendix 24
Slide 25: Subscriber Data: Cellular
Subscriber Data: Cellular Cellular Subscribers by category: 1H15 vs 1H14 1H15 vs FY14 Net Adds Jun-15 Mar-15 Dec-14 Sept-14 Jun-14 Net Adds % Net Adds % 1Q15 % 2Q15 % CELLULAR Prepaid 65,843,593 66,721,243 67,091,612 66,374,421 66,339,954 (496,361) (1%) (1,248,019) (2%) (370,369) (1%) (877,650) (1%)
Slide 26: Subscriber Data: Broadband
Subscriber Data: Broadband 1H15 vs 1H14 1H15 vs FY14 Net Adds Jun-15 Mar-15 Dec-14 Sept-14 Jun-14 Net Adds % Net Adds % 1Q15 % 2Q15 % BROADBAND Wireless Broadband 3,676,164 3,391,440 2,986,146 2,694,840 2,598,920 1,077,244 41% 690,018 23% 405,294 14% 284,724 8% Smart Broadband 2,829,074 2,613,672 2,
Slide 27: 1H2015: Consolidated Financial Highlights
1H2015: Consolidated Financial Highlights 1H2015 1H2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Service Revenues 55,593 32,144 - 81,159 82,563 (2%) Cash operating expenses 26,716 20,787 49 40,276 39,013 3% Depreciation and amortization
Slide 28: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income 1H2015 1H2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net Income attributable to equity holder of PLDT 11,113 2,537 5,079 18,729 20,023 (6%) Add (deduct): Foreign exchange losses (gains), n
Slide 29: Consolidated Service Revenues
Consolidated Service Revenues 2015 2014 % Change 1H15 vs 2Q15 vs 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY (Php in billions) 1H14 2Q14 SMS and VAS 10.2 9.8 20.0 10.7 10.5 21.2 9.9 10.3 20.2 41.4 (6%) (6%) Voice - Domestic 13.9 13.8 27.7 13.9 14.3 28.2 14.1 14.5 28.6 56.9 (2%) (4%) Voice - International 4.3 4.1
Slide 30: Expenses
Expenses 1H2015 1H2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Operating expenses Compensation and employee benefits 3,585 7,739 - 11,315 10,443 8% Repairs and maintenance 4,385 3,348 - 7,452 7,111 5% Selling and promotions 4,017 1,041
Slide 31: Other Income (Expenses)
Other Income (Expenses) 1H2015 1H2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Equity share in net earnings of associates and joint ventures (23) (15) 2,272 2,234 2,083 7% Interest income 157 268 51 364 395 (8%) Gains (losses) on derivat
Slide 32: Cellular and Broadband Net ARPU
Cellular and Broadband Net ARPU Cellular Net ARPU 2015 2014 1Q 2Q 1Q 2Q 3Q 4Q Smart Postpaid 1,039 1,065 1,086 1,074 1,068 1,084 Smart Prepaid 118 114 132 134 124 125 Talk 'N Text 85 83 87 89 87 89 Sun Cellular Prepaid 63 64 67 66 64 65 Sun Cellular Postpaid 449 419 476 467 469 497 Cellular Prepaid
Slide 33: Historical Consolidated: Service Revenues and EBITDA
Historical Consolidated: Service Revenues and EBITDA 2015 2014 (Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Fixed line 13,034 13,302 26,336 12,720 12,635 25,355 12,773 13,360 26,133 51,488 Local exchange 4,172 4,226 8,398 4,087 4,107 8,194 4,104 4,189 8,293 16,487 International long distance 1,31
Slide 34: Historical Wireless: Service Revenues & EBITDA
Historical Wireless: Service Revenues & EBITDA 2015 2014 (Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Wireless Gross Service Revenues Cellular services 24,878 24,478 49,356 26,024 26,012 52,036 24,966 25,778 50,744 102,780 Cellular voice 11,915 11,599 23,514 12,811 12,946 25,757 12,382 12,926 25,
Slide 35: Historical Fixed Line: Service Revenues and EBITDA
Historical Fixed Line: Service Revenues and EBITDA 2015 2014 (Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Fixed Line Gross Service Revenues Local exchange 4,196 4,250 8,446 4,111 4,132 8,243 4,131 4,213 8,344 16,587 International long distance 2,255 2,335 4,590 2,859 2,843 5,702 2,696 3,006 5,702
Slide 36: Earnings Per Share
Earnings Per Share 1H2015 1H2014 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income attributable to equity holders of PLDT 18,729 18,729 20,023 20,023 Dividends on preferred shares (29) (29) (29) (29) Net income for the period attributable to common equity holders of PLDT 18,700 18,700 1
Slide 37: Cash Flows
Cash Flows 1H2015 1H2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net cash from operations 22,032 9,161 (72) 30,946 31,656 (2%) Add(Deduct): Capital expenditures (11,013) (2,864) - (13,877) (8,104) 71% Interest, net (546) (1,766) 20 (2,1
Slide 38: Balance Sheet
Balance Sheet Consolidated June 30, 2015 December 31, 2014 (Php in millions) (unaudited) (audited) Total Assets 438,098 436,295 Nominal Value of Total Long-term Debt 144,385 130,634 in US$ $3,199 $2,920 Less: Unamortized Debt Discount 650 511 Total Long-term Debt 143,735 130,123 Cash and short-term
Slide 39: Debt Profile
Debt Profile (US$ in millions) 2011 2012 2013 2014 1H2015 Debt Balance 2,719 2,851 2,353 2,920 3,199 Cash and short-term investments 1,061 919 735 610 859 Net Debt 1,658 1,932 1,618 2,310 2,340 Interest-bearing Liabilities June 30, 2015 December 31, (unaudited) 2014 Unamortized Debt Change Carrying
Slide 40: Foreign Exchange Risk
Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives Forex sensitivity for every P1 change (in US$ millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ millions) Conso P1 movement in the Conso - net of Elim Debt (net of L
Slide 41: Forward-looking statements
Except for historical financial and operating data and other information in respect of historical matters, the statements contained herein are “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchang
Slide 42: bares
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