Globe Telecom Inc. · PSE:GLO
Globe Telecom — 2Q17 Earnings Presentation
18 slides from Globe Telecom's earnings presentation, Aug 8, 2017
Slide 1: SEC Cover Sheet
COVER SHEET p/|wlo|ojo}/oj1)1/71/7 low] T Pe PsteT TT TTT ETT 1 le[-fofefe] [rfel-] LITT | (Company's Full Name) 2}7yele] |rfelel [e]efof ele] [rfofwielr s]2|nfo] [s|t]rlefe|t] [elolr[yje[r] |7]t[y{ jajvielyjule B}O; NII |F/AIC}IEJO GILJOJBIJA}L cy ijt ly TIAIG] UJ I;G (Business Address: No. Street
Slide 2: SEC Form 17-C Current Report
SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-C » « CURRENT REPORT UNDER SECTION 17 / 5 OF THE SECURITIES REGULATIONS CODE (SRC) =” / 97 2017 AND 8RC RULE 17(a)-1(b)(3) THEREUNDER Ae ae # he / # \ 7 Auguet 2017 ; Date of Report (Date of earliest avent reported) 2 VT ee ena ent, BS 000-768-480-000 S
Slide 3: 2Q/1H 2017 Analysts' Briefing
2Q/1H 2017 Analysts’ Briefing 8 August 2017 | The Globe Tower BGC
Slide 4: Performance Highlights: Record revenues and EBITDA driven by data services
Performance Highlights: Record revenues and EBITDA driven by data services. NIAT impacted by higher depreciation and interest charges. 1H17 2Q17 Service Revenues Service Revenues 62.9 Php billion +5% YoY • Record revenues again led by data-related revenues. +6% vs. 2Q16 31.8 Php billion EBITDA EBITD
Slide 5: Revenue growth led by Mobile and Home Broadband
Revenue growth led by Mobile and Home Broadband Mobile Home Corporate Fixed Line Total Broadband Data Voice Δ1H17 +5% +8% +3% -5% +5% Δ2Q17 +8% +7% -1% -8% +6% Mobile Subscribers Home Broadband Subscribers 61.3 million -3% 59.7 million 1.14 million +8% 1.23 million 2Q16 2Q17 2Q16 2Q17 Postpaid Prepa
Slide 6: Data-related services now account for 53% of total service revenues
Data-related services now account for 53% of total service revenues Mobile Data Home Broadband Corporate Data In Php Billions In Php Billions In Php Billions 20.3 7.7 5.0 +24%* +8% +3% Total Data Revenues as a Percentage of Mobile Data Users as a % of Total Service Revenues Mobile Subscribers 1H16 1
Slide 7: On a normalized basis, mobile data revenues would have grown by 24%
On a normalized basis, mobile data revenues would have grown by 24% year on year. Facebook Traffic Mobile Data In Php Billions +1125% Paid FB volume End of Globe +24% Prepaid’s free Normalized Facebook offer MDS growth End of TM’s free Facebook offer Paid … … +13% Free 20.3 17.9 Jan- May- Jun- Jul-1
Slide 8: New products, events and initiatives that enrich the Filipino digital lifestyle
New products, events and initiatives that enrich the Filipino digital lifestyle. Globe’s SEA-US Cable system to Globe #StreamFest highlights Globe LIVE brings Newsies, West go commercial this August new GoBIG data plans Side Story to Manila Never miss out on online fun Watch longer, whenever with Cr
Slide 9: Financial Highlights
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Slide 10: Consolidated Financial Highlights
Consolidated Financial Highlights: Record revenues and EBITDA but higher operating and non-operating expenses, and depreciation resulted in lower NIAT and Core NIAT. VTI 6M17 6M16 6M17 YoY % Impact YoY% 2Q17 1Q17 Reported Reported Normalized (6M17) Gross Service Revenues 62,901 59,872 5% 62,901 5% 3
Slide 11: Record EBITDA on the back of record revenues partially offset by higher operating expenses
Record EBITDA on the back of record revenues partially offset by higher operating expenses 583 827 822 1,129 3,029 - 818 - - - YoY Change in +6% 27,259 EBITDA 25,598 In Php Millions 6M16 Inc. in Dec. in Inc. in Staff Dec. in Inc. in Inc. in 6M17 EBITDA Revenues Interconnect Costs Marketing & Network
Slide 12: Reported NIAT lower by 10% year on year
Reported NIAT lower by 10% year on year as increases in depreciation and non- operating charges negated record EBITDA; on a normalized basis NIAT lower by 4% year on year. -4% YoY 1,661 1,609 1,124 567 Change in 186 Reported Net Income 8,974 -10% 8,088 8,655 In Php Millions 6M16 Reported Change in I
Slide 13: 2Q17 Roll-out Updates
Capital expenditures at approximately Php27.5 billion or USD553million*, with 87% related to data requirements Capex* Capex Breakdown In Php Billions 37.0 36.7 35% 49% 48% 32.1 65% 27.5 87% 21.2 36% 27% 30% 14% 15% 10% 8% 10% 1% 15% 15% 15% 11% 6% 6% 2014 2015 2016 6M17 2013 2014 2015 2016 6M17 * Ba
Slide 14: Debt levels remain within covenant ratios following final SMC tranche payment
Following payment of the final tranche of the SMC transaction in 2Q17, debt levels remain within covenant ratios. Gross Debt Gross D/E Ratio In Php Millions Covenant = 2.5:1 1.67 1.89 123,578 1.22 105,729 72,229 2015 2016 6M17 2015 2016 6M17 Gross Debt/EBITDA 3Q17 Dividends Covenant = 3:1 Cash Divid
Slide 15: Create. Wonderful.
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Slide 16: Historical Consolidated Gross / Net Service Revenues and EBITDA Margin
Appendix 1 Historical Consolidated Gross / Net Service Revenues and EBITDA Margin 2015 2016 2017 (In Million Pesos) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q CONSOLIDATED SERVICE REVENUES Mobile 21,635 22,826 23,052 23,730 23,148 22,779 22,577 23,753 23,799 24,520 Mobile Voice 9,191 9,556 9,315 9,065 8,181 8,47
Slide 17: Mobile Subscribers, Net Adds, Churn Rates and Gross ARPUs
Appendix 2 Mobile Subscribers, Net Adds, Churn Rates and Gross ARPUs 2015 2016 2017 Subscribers 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Globe Postpaid 2,458,045 2,517,215 2,561,290 2,597,027 2,564,148 2,521,218 2,508,800 2,489,719 2,467,069 2,460,671 Globe Prepaid 22,214,373 23,287,012 24,391,990 25,915,096 2
Slide 18: Reconciliation of Net Income to Core Net Income
Appendix 3 Reconciliation of Net Income to Core Net Income (in Million Pesos) 2Q17 2Q16 % Change 1Q17 % Change Reported Net Income After Tax 4,327 4,639 -7% 3,761 15% Deferred Tax on Unexercised 8 (7) -224% (44) -118% Stock Options Add (deduct) Forex loss (gain) (60) 27 -325% (64) -6% Other Adjustme