PLDT, Inc. · PSE:TEL
PLDT — H1 2017 Earnings Presentation
57 slides from PLDT's earnings presentation, Aug 10, 2017
Slide 1: 2017 First Half Financial and Operating Results
PLDT Inc. 2017 First Half Financial and Operating Results 10th August 2017 1
Slide 2: PLDT Group: 1H17 vs 1H16 Financial Highlights
PLDT Group: 1H17 vs 1H16 Financial Highlights Home* Enterprise* Individual* International* Voyager* Conso Service Revenues Conso Service Revenues Conso Service Revenues Conso Service Revenues Conso Service Revenues P15.8bn P16.8bn P29.6bn P8.3bn P0.6bn +12% +11% -16% -23% +234% +P1.6bn +P1.7bn (P5.8
Slide 3: PLDT Group: 2Q17 vs 1Q17 Financial Highlights
PLDT Group: 2Q17 vs 1Q17 Financial Highlights (Php in billions) Service Revenues* EBITDA and Margin Net Income 35.6 35.6 +4% ILD/NLD: -2% -6% 3.0 3.0 +3% 17.1 16.5 15.5 +127% 12.1 7.8 8.0 Ex-ILD/NLD: 32.6 32.7 0% 5.3 1Q17 2Q17 1Q17 2Q17 1Q17 2Q17 2Q17 1Q17 2Q17 Consolidated Home ex-MRP Core 44% 41%
Slide 4: PLDT Group: Consolidated Financial Highlights
PLDT Group: Consolidated Financial Highlights (Php in billions) Service Revenues, net of interconnection costs EBITDA and EBITDA Margin 5% +4% -1% -2.0 +10% +0.6 +1.4 Excluding P1.5bn MRP 1% 4% 1% 1% Stemming expenses in 6% -0.6 -1.5 -0.3 -0.2the negative 2Q17, 38.2 37.6 36.1 momentum 16.6 16.5 -
Slide 5: PLDT Group: Fixed and Wireless Financial Highlights
PLDT Group: Fixed and Wireless Financial Highlights (Php in billions) Fixed Wireless Service Revenues (net of interconnection costs) Service Revenues (net of interconnection costs) Ex-ILD 14% ILD/NLD Ex-ILD/NLD +12% ILD -3.4 +1.8 +2% 2% 7% 3% 4% 1% +2% +2% +4% 16.9 24.7 24.0 15.4 15.5 15.9 16.3 +0.4
Slide 6: PLDT Group: Service Revenues (by Business Unit)
PLDT Group: Service Revenues (by Business Unit) (Php in billions) Home Enterprise * 2017 quarterly average of P8.4bn +11% +10% * 2Q17 a 10% y-o-y +0.8 +0.7 increase 8.5 -2% - +3% - +7% 8.3 - +2% +0.2 8.0 - +3% -0.2 +3% +2% 7.8 - +1% - +1% 7.9 +0.6 +0.2 +0.3 +3% +0.2 7.6 +0.1 -- 7.6 7.5 7.5 7.6 +4% +
Slide 7: PLDT Group: Consolidated Service Revenues by Business Units
PLDT Group: Consolidated Service Revenues* By Business Units (Php in billions) -4.5 -2.5 +0.4 +1.7 -6% -23% +149% +11% 8.3 0.7 71.2 Service Revenue Mix 1H16 1H17 +1.6 16.8 Individual 47% 41% +12% Home 19% 22% 46% -5.8 15.8 Enterprise 20% 24% -16% International and Carrier 14% 12% 29.6 Voyager and Ot
Slide 8: PLDT Group: Consolidated Service Revenues by Product type
PLDT Group: Consolidated Service Revenues* By Product type (Php in billions) Service Revenue Mix 1H16 1H17 Data/Broadband/Digital Platforms 39% 46% Lower by P4.5bn or 6% SMS 20% 16% LEC/Mobile Domestic Voice/Others 31% 30% LEC, mobile International International Voice/Fixed Line Domestic voice 10% 8
Slide 9: PLDT Group: Consolidated EBITDA
PLDT Group: Consolidated EBITDA (Php in billions) +9% Higher by P0.6bn or 4% +2.8 +10% Lower by P0.9bn or 6% +3.1 +4% +1.3 Stable Higher Lower 2Q17 +5% svc cash sub- Higher MRP 30.8 32.0 33.5 rev* opex** sidies provns 30.4 +1.6 +1.5 17.1 16.5 --- -1.6 +0.8 -0.1 15.5 Excl P1.5bn MRP 1H16 2H16 1H17 **
Slide 10: PLDT Group: Core Income
PLDT Group: Core Income (Php in billions) Higher by P6.8bn or 127% Core Income (recurring)* +23% - +1% +1.2 Adj* +0.1 Higher Higher +5.5 12.1 Higher Lower Equity Provn non- fin in for Inc Higher cash 11.8 -+41% 11.9 costs Earnings Taxes EBITDA exp – net +3.5 +0.9 -0.1 6.6 +0.6 -0.2 +0.1 8.4 5.3 1H16
Slide 11: Capital Management
Capital Management Core income for First Half 2017 P17.4bn Core income per share P80.53 Interim dividend per share (60%) P48 Declaration Date 10 August 2017 Record Date 25 August 2017 Payment Date 08 September 2017 Core income of P17.4bn for 1H17 includes a P6.6bn gain from asset sales (shares of
Slide 12: PLDT Group: Capex
PLDT Group: Capex (Php in billions) Fixed Line Wireless 43.2 42.8 38.1 36.4 34.8 31.2 12.9 10.7 32% (25% in 2016) 28.8 12.0 13.7 11.7 13.7 11.7 30.3 32.1 68% (75% in 2016) 22.1 23.0 26.1 17.2 17.1 2011 2012 2013 2014 2015 2016 2017F % of Capex to total service revenues: 21% 23% 18% 21% 26% 27% < 30%
Slide 13: PLDT Group: Debt Profile
PLDT Group: Debt Profile Debt Balance Net debt and net debt to EBITDA as of end June 2017 stood (US$ in billions) at US$2.6bn and 2.1x 3.4 3.7 3.5 At end June 2017, gross debt amounted to US$3.5bn 2.9 2.9 2.9 1.9 2.4 2.3 2.4 2.6 US$ denominated gross debt now at 23% from 32% at YE16 1.6 follow
Slide 14: Business Unit Updates
@PLDT &Smart Business Unit Updates
Slide 15: Enterprise Business Sustains Double Digit Growth
ENTERPRISE BUSINESS SUSTAINS DOUBLE DIGIT GROWTH ENTERPRISE SERVICE REVENUES (In Billions of PhP) Growing Like Never Before. Enterprise Growing in the Right Places. 11%, +1.7B CORPORATE DATA & ICT VOICE, SMS & OTHERS 18%, +1.67B = 0%, +0.02B 61% 65% 39% 35%
Slide 16: Robust Growth Across Business Lines
ROBUST GROWTH ACROSS BUSINESS LINES ENTERPRISE SERVICE REVENUES (In Billions of PhP) Growth Drivers: Business Lines Growth Drivers: Key Industry Verticals 16.8 Banking & Financial Svcs: 15.1 12% Industry Growth 6%-8%. Outsourcing Industry: 14% Industry Growth at 9%-10% 23% ITIndustry & Gaming Indust
Slide 17: Enterprise: Undisputed Leadership in the Enterprise Space
ENTERPRISE Undisputed Leadership in the Enterprise Space. E2E ICT Partner & Thought Leader in the Enterprise Market. Undisputed Leadership in Enabling Delivering Value Beyond Access: Digital Infrastructure Value-Laden Solutions Bedrock of Digital Transformation Unparalleled Partnerships Trusted Part
Slide 18: 1H 2017 Highlights: Home Business
1H 2017 HIGHLIGHTS: HOME BUSINESS 12% YOY growth, with both Added 364K Subscribers 1 2 Voice and Data growing resulting in 10% YOY growth In Billions of PhP In Millions of Subscribers 15.8B 3.88M 14.2B VOICE 6.1B 3.52M VOICE 6% 12% 10% 5.8B DATA DATA 9.7B 8.4B 15% H1 2016 H1 2017 H1 2016 H1 2017
Slide 19: 1H 2017 Highlights: Home Business
1H 2017 HIGHLIGHTS: HOME BUSINESS Accelerating momentum to cover the country with leading edge 3 technologies and in strengthening market dominance Toledo & Bogo City, Cebu General Santos City Isulan, Sultan Kudarat Naga City, Camarines Sur So. Manila (BF Homes, Merville and ● PLDT Home Rolled out 1
Slide 20: 1H 2017 Highlights: Home Business
1H 2017 HIGHLIGHTS: HOME BUSINESS Realizing significant growth in Home Broadband, with Digital 4 Content and Services instrumental to creating more demand Beyond Access: Roku & Whole Home WiFi Launch of the Roku Powered™ Tvolution to drive data usage and adoption of PLDT Home’s premier content Launc
Slide 21: Wireless Individual Turnaround Plan Taking Root
1H 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL TURNAROUND PLAN TAKING ROOT QUARTERLY NET SERVICE REVENUE In Billions of Pesos 18.0 17.4 P0.2B 15.8 15.1 14.7 14.9 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Slide 22: Turnaround Plan Centered on Data Adoption and Usage
TURNAROUND PLAN CENTERED ON DATA ADOPTION AND USAGE WIRELESS INDIVIDUAL DATA REVENUE In Billions of PHP P0.4B Prepaid Data Up 5% Q2 vs Subscribers Q1 5.5 5.9 Prepaid Data Up 7% Q2 vs Q1 ‘17 Q2 ‘17 ARPU Q1 CONTRIBUTION TO CONSUMER WIRELESS REVENUE: 37% 40%
Slide 23: Showcasing Smart's Superior LTE Network and New Data Products
SHOWCASING SMART’S SUPERIOR LTE NETWORK AND NEW DATA PRODUCTS Build Superior Data Drive Relevant Drive Relevant Manage Mainstream Strengthened Long-Validity Mainstream Services Network Equity Data Products Data Products Services Enhanced TU 200 (Now with PLDT calls) Sustain On-ground Merchandising A
Slide 24: Effective and Efficient Execution Using Analytics
EFFECTIVE AND EFFICIENT EXECUTION USING ANALYTICS AND A TARGETED GO-TO-MARKET BUSINESS MODEL ADVERTISING & PROMOTIONS PRODUCT SUBSIDY In Millions of Pesos In Millions of Pesos 2,030 1,038 766 487 2016 H1 2017 2016 H1 2017 Ave. Ave. Ave. Ave. Quarterly Quarterly Quarterly Quarterly Spend Spend Spend
Slide 25: Build on Turnaround Plan by Pushing LTE Adoption
BUILD ON TURNAROUND PLAN BY AGGRESSIVELY PUSHING LTE ADOPTION AND BEYOND ACCESS SERVICES Improve customer experience through the Stimulate data usage through relevant country’s fastest LTE Network “beyond access” and data packages LTE SUN TNT PRIME VIDEO GAANS CAMPA NOW IN TROPA PLAY PRIME URF IGN L
Slide 26: 1H 2017 Highlights: Service Revenues
1H 2017 HIGHLIGHTS SERVICE REVENUES In Billions of Pesos ● Contribution of Home and Enterprise, our HOME 15.8 fastest growing segments, comprise 52% of ENTERPRISE 16.8 revenues, excluding international and INDIVIDUAL 29.6 Voyager. INTERNATIONA ● Combined revenues of Home and Enterprise 8.3 L (FIXED:
Slide 27: 1H 2017 Highlights: Enterprise and Home Business
1H 2017 HIGHLIGHTS: ENTERPRISE AND HOME BUSINESS Double digit growths and pulling away in FIXED LINE market leadership ENTERPRISE HOME Enterprise grew 11% YoY, which is Home grew 12% YoY, driven by faster than industry growth pervasive nationwide rollout of fiber Corporate Up by 1.7B or Home Up by 1
Slide 28: 1H 2017 Highlights: Wireless Individual Business
1H 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL BUSINESS NET SERVICE DATA REVENUE Green shoots of REVENUE progress showing NET SERVICE REVENUE INDIVIDUAL DATA REVENUE In Billions of PHP In Billions of PHP stronger form... P0.2M P0.4M 14.7 14.9 5.5 5.9 Q1 ‘17 Q2 ‘17 Q1 ‘17 Q2 ‘17 Encouraging QoQ growth Mobil
Slide 29: 1H 2017 Highlights: Strategies for 2nd Half
1H 2017 HIGHLIGHTS Continue to build on top of the H1 Strategies and Programs in the 2nd Half of 2017 LEVERAGE ANALYTICS BEYOND ACCESS SOLUTIONS NETWORK & PLATFORMS ● Granular Insights ● Stimulate more data usage ● Fiber in PLDT SmartCities ● Regional BTL Go-To-Market ● Drive stickiness ● Superior L
Slide 30: PLDT Group: Guidance for 2017
PLDT Group: Guidance for 2017 EBITDA: P70bn Capex: P38bn To grow by P8.8bn from P61.2bn in 2016 Updated from original guidance of P46bn impact of P4.6bn in subsidies and provisions in 2016 Includes carry-over of capex started in 2016 which will not recur in 2017 Increase in fixed line cape
Slide 31: Other Details
@PLDT &Smart Other Details
Slide 32: PLDT Group: Service Revenues (by Business Unit)
PLDT Group: Service Revenues (by Business Unit) (Php in billions) Home Enterprise Service Revenues (net of interconnection costs) Service Revenues (net of interconnection costs) +12% +11% +1.6 +1.7 +11% +0.8 +10% +5% +8% +6% +3% +0.7 +0.7 +1.3 +0.9 15.8 +0.4 16.8 14.2 15.1 +3% 15.1 15.5 2% +0.2 7.8
Slide 33: PLDT Group: Service Revenues
PLDT Group: Service Revenues* Service Revenue Mix 1H16 1H17 Fixed Line* Data/Broadband 59% 63% Higher by P3.3bn or 11% LEC/Others 31% 30% (Php in billions) International Voice/Domestic Voice 10% 7% Data and LEC and International and Broadband Others domestic voice Service Revenues (Php in millions )
Slide 34: PLDT Group: Home and Individual Service Revenues
PLDT Group: Home and Individual Service Revenues* Home (Php in billions) Higher by P1.6bn or 12% Service Revenue Mix 1H16 1H17 1H17 vs 1H16 Data/Broadband 59% 62% Fixed Line LEC 38% 36% Data/ Domestic Domestic Voice 3% 2% broadband LEC Voice and Others Others 0% 0% +15% +7% -8% +1.3 +0.4 15.8 Servic
Slide 35: PLDT Group: Enterprise Service Revenues
PLDT Group: Enterprise Service Revenues* Enterprise* (Php in billions) 1H17 vs 1H16 Higher by P1.7bn or 11% Fixed and Mobile Mobile Mobile domestic Data LEC ILD/NLD voice SMS Corp. Data Others +37% +2% +1% -16% -18% +16% +0.1 +36% +1.3 +0.4 --- -0.1 -0.1 +0.1 16.8 15.1 Voice revenues Data and broadb
Slide 36: PLDT Group: Service Revenues (2Q17 vs 1Q17)
PLDT Group: Service Revenues* Fixed Line* Higher by P0.4bn or 2% (Php in billions) Service Revenue Mix 1Q17 2Q17 International and Data/Broadband 62% 63% Data and LEC and Others domestic voice LEC/Others 30% 30% Broadband +0.1 --- International Voice/Domestic Voice 8% 7% +0.3** 17.3 +2% -2% 16.9 +3%
Slide 37: PLDT Group: Consolidated Service Revenues
PLDT Group: Consolidated Service Revenues* By Business Units (Php in billions) 2Q17 vs 1Q17 Service Revenue Mix 1Q17 2Q17 Individual 41% 42% -- Stable Home 22% 23% -0.2 46% +3% Q-o-Q Enterprise 24% 23% -0.2 -5% -2% 4.0 0.4 35.6 International & Carrier 12% 11% +0.2 8.3 Voyager and Others 1% 1% +0.1 +
Slide 38: PLDT Group: Consolidated Data and Broadband
PLDT Group: Consolidated Data and Broadband* (Php in billions) 1H17 vs 1H16 +1.3 +2.7 Mobile Data Corp. Data and Data Center Home Broadband +9% +15% +1.3 9.6 32.0 +2% +4% +3% +3% +15% +0.5 +0.4 +0.5 15.9 +0.3 16.1 9.7 14.9 14.9 15.3 +0.2 14.4 +1% 4.7 4.9 4.1 4.3 4.5 4.6 12.7 4.7 4.2 4.2 4.1 4.5 4.9
Slide 39: Appendix
@PLDT &Smart Appendix
Slide 40: Subscriber Base: Mobile
Subscriber Base: Mobile Mobile Subscribers (1) by Category: Jun-17 (2) Mar-17 Dec-16 Sept-16 Jun-16 Mar-16 Mobile Subscriber Base (1) Prepaid (2) 56,083,707 60,421,068 59,952,941 62,259,067 64,701,367 64,651,175 Smart Prepaid 20,587,687 21,933,462 21,643,963 23,560,542 24,185,165 24,836,433 Sun Prep
Slide 41: Subscriber Base: Broadband and Fixed Line
Subscriber Base: Broadband and Fixed Line Broadband Subscribers Jun-17 Mar-17 Dec-16 Sept-16 Jun-16 Mar-16 BROADBAND Wireless Home Broadband 257,187 264,227 270,203 271,572 265,473 248,675 (1) Fixed Line Broadband 1,575,914 1,506,578 1,450,550 1,407,122 1,347,422 1,296,402 Total Broadband Subscriber
Slide 42: 1H2017: Consolidated Financial Highlights
1H2017: Consolidated Financial Highlights 1H2017 1H2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Total Revenues 46,665 38,658 6 79,015 85,284 (7%) Service Revenues 44,858 36,829 6 75,383 80,604 (6%) Cash Operating Expenses 24,236 21,858 19 39,004 38,
Slide 43: Underlying Core Income
Underlying Core Income 2017 2016 (Unaudited, Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Core Income 5,329 12,098 17,427 7,211 10,489 17,700 4,036 6,121 10,157 27,857 Core Income Adjustments One-Time Provisions and Subsidies - - - 1,011 2,034 3,045 1,605 - 1,605 4,650 Manpower Reduction Program (
Slide 44: Reconciliation of Core and Reported net income
Reconciliation of Core and Reported net income 1H2017 1H2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Net Income (Losses) Attributable to Equity Holders of PLDT 4,301 5,333 7,123 16,518 12,463 33% Add (Deduct): Foreign Exchange Losses (gains), Net 27
Slide 45: Consolidated Service Revenues
Consolidated Service Revenues* 2017 2016 (Unaudited, Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Fixed Line 15,556 15,620 31,176 14,287 14,320 28,607 14,446 15,033 29,479 58,086 LEC 4,553 4,623 9,176 4,333 4,384 8,717 4,479 4,499 8,978 17,695 Fixed Line Voice - International 970 859 1,829 1,240 1
Slide 46: Consolidated Service Revenues and EBITDA
Consolidated Service Revenues* and EBITDA 2017 2016 (Unaudited, Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Data/Broadband/Digital Platforms 16,221 16,608 32,829 14,525 14,975 29,500 15,169 15,749 30,918 60,418 Mobile Data 6,235 6,614 12,849 6,063 6,444 12,507 6,375 6,333 12,708 25,215 Mobile Int
Slide 47: Wireless Service Revenues and EBITDA
Wireless Service Revenues* and EBITDA 2017 2016 (Unaudited, Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Data/Broadband/Digital Platforms 7,281 7,627 14,908 6,944 7,270 14,214 7,375 7,428 14,803 29,017 Mobile Data 6,308 6,691 12,999 6,127 6,536 12,663 6,445 6,409 12,854 25,517 Mobile Internet 4,61
Slide 48: Fixed Line Service Revenues and EBITDA
Fixed Line Service Revenues* and EBITDA 2017 2016 (Unaudited, Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Data/Broadband 10,574 10,885 21,459 9,110 9,216 18,326 9,457 9,928 19,385 37,711 Home Broadband 4,134 4,361 8,495 3,434 3,655 7,089 3,835 3,972 7,807 14,896 Corp. Data and Other Network Servi
Slide 49: Expenses
Expenses 1H2017 1H2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Operating Expenses Compensation and Employee Benefits (1) 3,756 8,677 - 12,425 10,064 23% Repairs and Maintenance 3,925 3,043 - 6,611 7,593 (13%) Selling and Promotions 2,084 906 - 2,982
Slide 50: Other Income (expenses)
Other Income (expenses) 1H2017 1H2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Equity Share in Net Earnings (Losses) of Associates and Joint Ventures Beacon - - 886 886 1,332 (33%) Vega - - (383) (383) (150) 155% Others (66) 94 618 646 (247) 362% Tot
Slide 51: ARPU
ARPU Mobile ARPU, Net(1) : 2017 2016 1Q 2Q 1Q 2Q 3Q 4Q Smart Postpaid 965 985 938 951 946 970 Smart Prepaid (2) 104 109 112 110 102 104 TNT (2) 71 77 80 77 71 75 Sun Postpaid 413 412 475 453 402 418 Sun Prepaid (2) 78 82 80 81 84 85 (1) Includes Mobile Broadband subscribers (2) Beginning 2Q2017, pre
Slide 52: Earnings Per Share (EPS)
Earnings Per Share (EPS) 1H2017 1H2016 (Unaudited, Php in millions except EPS (in Php) and Shares (in mn)) Basic Diluted Basic Diluted Net Income Attributable to Equity Holders of PLDT 16,518 16,518 12,463 12,463 Dividends on Preferred Shares (29) (29) (30) (30) Net Income for the Period Attributabl
Slide 53: Balance Sheet
Balance Sheet Consolidated June 30, 2017 December 31, 2016 (Php in millions) (unaudited) (audited) Total Assets 465,804 475,119 Nominal Value of Total Long-Term Debt 175,689 185,663 in US$ $3,498 $3,730 Less: Unamortized Debt Discount 623 631 Total Long-Term Debt 175,066 185,032 Cash and Short-Term
Slide 54: Debt Profile
Debt Profile (US$ in millions) 2012 2013 2014 2015 2016 1H2017 Debt Balance 2,851 2,353 2,920 3,429 3,730 3,483 Cash and Short-Term Investments 919 735 610 1,016 833 876 Net Debt 1,932 1,618 2,310 2,413 2,897 2,606 Interest-Bearing liabilities December 31, June 30, 2017 2016 Unamortized Debt Change
Slide 55: Foreign Exchange Risk
Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex sensitivity for every P1 change Forex sensitivity for every P1 change on B/S (in US$ millions) Conso - net of Elim Revaluation (in US$ millions) Conso US$ Revenues* 253.1 Debt (net of LT hedges & ST Forwards/opti
Slide 56: 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 57: ss —~~"S——e
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