PLDT, Inc. · PSE:TEL

PLDT — Q1 2012 Earnings Presentation

45 slides from PLDT's earnings presentation, May 8, 2012

  1. Slide 1: Investing in the Future: First Quarter 2012 Results

    INVESTING IN THE FUTURE First Quarter 2012 Financial and Operating Results 8 May 2012

  2. Slide 2: PLDT Group: 1Q12 Financial Highlights

    PLDT Group: 1Q12 Financial Highlights 1Q 2012 % Y-o-Y 1Q 2011 Total (Unaudited) (PhP in billions) PLDT* DIGITEL PLDT* Total (Unaudited) Service Revenues** 37.2 5.6 42.8 37.7 -1% 13% • Wireless 24.2 4.7 28.9 25.1 -4% 15% • Fixed Line 14.6 1.0 15.6 14.3 2% 9% • BPO 2.4 - 2.4 2.0 20% 20% EBITDA 18.8 1.

  3. Slide 3: PLDT Group: Core and Reported Income

    PLDT Group: Core and Reported Income Core Net Income ¾ Core income for 2011 of P39.0bn consisted of P21.0bn (PhP in billions) in 1H11 and P18.0bn in 2H11 reflecting the more 21.0 challenging operating environment in the second 18.0 semester of 2011 arising from deteriorating competitive 10.5 10.5 co

  4. Slide 4: Subscriber Base

    Subscriber Base Cellular Subscribers ¾ Combined cellular subscriber base grew to 66.1mn at end of (in thousands) March 2012, with net adds of 2.4mn from YE11 ƒ Sun registered 15.6mn subscribers with net adds of 0.9mn +4% 66.1 ƒ Smart recorded 50.5mn subscribers with net adds of 63 7 63.7 1 5mn: 1.5m

  5. Slide 5: PLDT Group: Service Revenues and EBITDA

    PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues* ¾ Consolidated service revenues for the first quarter of 2012 improved (PhP in billions) by 13% or P5.1bn year-on-year to P42.8bn ƒ DIGITEL 1Q12 service revenues of P5.6bn accounted for over 13% of total PLDT group service revenu

  6. Slide 6: Service revenues and outlook per segment

    Service revenues and outlook per segment ¾ Broadband service revenues for the first quarter of 2012 climbed by Broadband Service Revenues* 34% year-on-year or P1.5bn to P5.8bn (Php in billions) ¾ Broadband profitability to be further enhanced by: Smart Broadband PLDT DSL Smart Mobile Internet ƒ Incr

  7. Slide 7: Service revenues and outlook per segment

    Service revenues and outlook per segment ¾ Wireless service revenues in 1Q12 grew 15% year-on-year or Wireless Service Revenues* P3.8bn to P28.9bn (Php in billions) ¾ Potential for improvements in our wireless business to be realized from: ƒ Growth in wireless broadband and mobile internet browsing

  8. Slide 8: Capex and Network Modernization Program: Updates

    Capex and Network Modernization Program: Updates ¾ Capex for 1Q12 at P2.8bn PLDT Group Network Upgrade Projects: Status as of 1Q12 NETWORK MODERNIZATION ™ Access Network: On-track ¾ Single RAN deployment: over 80% complete ¾Improve Network Quality ¾ Almost 60% 3G population coverage (YE target : 90%

  9. Slide 9: PLDT/SMART/DIGITEL/SUN Synergies

    PLDT/SMART/DIGITEL/SUN SYNERGIES ¾ Strategic objectives: ƒ Increase DIGITEL/SUN revenues through coverage expansion and service quality improvement, resulting in improved profitability ƒ Reduce cost through rationalization of expenditures, alignment of processes, and improvement of operational effic

  10. Slide 10: Investment in PDRs of MediaQuest

    INVESTMENT IN PDRs of MEDIAQUEST 10 | Investing in the future

  11. Slide 11: Financial investment by PLDT in PDRs of MediaQuest

    Financial investment by PLDT in PDRs of MediaQuest ¾ Investments in Media have historically been made and managed through MediaQuest, a wholly-owned entity of the PLDT Beneficial Trust Fund. ¾ BTF has h to-date t d t incubated i b t d TV5 and d Cignal Ci l TV using i internal i t l funds f d ƒ TV5 h

  12. Slide 12: Rationale for PLDT's investment in PDRs of Mediaquest

    Rationale for PLDT’s investment in PDRs of Mediaquest ¾ Mediaquest will serve as the anchor for the media and multi-media service offerings of the PLDT Group: ƒ Creation of content – gain economies of scale in the production of content for all platforms and produce proprietary content to become a so

  13. Slide 13: Investment in Mediaquest via PDR structure

    Investment in Mediaquest via PDR structure ¾ ePLDT will subscribe to PDRs* to be issued by Mediaquest (PDR Issuer). ¾ Proceeds from subscription will be invested by Mediaquest into TV5 and Mediascape/Cignal. ¾ The new shares to be issued out by TV5 and Mediascape will be the underlying shares of the

  14. Slide 14: Financial highlights of TV5 and Cignal TV

    Financial highlights of TV5 and Cignal TV 2010 2011 2012F Free‐to‐Air Business (TV5) Audience Share (1) 9.8% 15.6% 19.0% Revenue Share (2) 2.8% 6.9% 13.5% Gross airtime revenues (in P mns) 883 2,274 4,500 Pay TV business (Cignal TV) Subscribers , 124,143 256,314 , 424,000 , Prepaid 106,975 225,182 P

  15. Slide 15: PLDT Group Guidance

    PLDT Group Guidance P37.0 billion, Core Net Income and return to 2010 level of P42bn by 2014 P38.0 billion for 2012, Capex and d decreasing d i for f 2013 onwardsd att below b l 20% off service i revenues Dividend Payout y Ratio: 70% of Core EPS Capital Management + “look back” approach Buyback of u

  16. Slide 16: Segment Details

    SEGMENT DETAILS 16 | Investing in the future

  17. Slide 17: Broadband

    Broadband ¾ Momentum in broadband continued with 1Q12 revenues of Broadband Service Revenues* P5.8bn, now 14% of consolidated service revenues, reflecting a (Php in billions) year-on-year increase of P1.5bn or 34% Smart Broadband PLDT DSL Smart Mobile Internet ƒ DIGITEL registered broadband revenues

  18. Slide 18: Wireless

    Wireless ¾ Wireless service revenues for first quarter 2012 rose by 15% year- Wireless Service Revenues* on-year or P3.8bn to P28.9bn (Php in billions) ƒ DIGITEL contributed P4.7bn in wireless service revenues ƒ SMART’s wireless service revenues declined by 4% to P24.2bn as the increase in wireless

  19. Slide 19: Fixed Line

    Fixed Line ¾ Fixed line service revenues for 1Q12 grew by 9% year-on-year or P1.3bn Fixed Line Service Revenues* Revenues to P15 P15.6bn 6bn (Php in billions) ƒ PLDT fixed line revenues of P14.6bn registered a 2% or P0.2bn year-on- year increase 9 PLDT data and other network services (including reve

  20. Slide 20: BPO

    BPO ¾ BPO service revenues for 1Q12 of P2 P2.4bn, 4bn which accounted for 5% BPO Service Revenues of total consolidated service revenues, were higher by 20% year- (Php in billions) on-year ƒ KPS service revenues rose by 22% year-on-year to P1.6bn as U. S. dollar denominated revenues grew by 11%, inc

  21. Slide 21: Meralco

    Meralco Energy Sales and Service Revenues ¾ Meralco’s consolidated service revenues for 1Q12 rose by 16% year-on-year to P65.6bn mainly due to: (in ‘000 GWh and PhP in Billions) ƒ Higher customer count Energy Sales Revenues ƒ Energy sales for the first quarter of 2012 were higher by 10% year-on-year

  22. Slide 22: Free Cash Flow and Capex

    Free Cash Flow and Capex Free Cash Flow ¾ FCF for the first quarter of 2012 was lower by P2.8bn or (PhP in billions) 19% at P12.2bn primarily due to: 1Q11 1Q12 ƒ Reduction in cash from operations by P2.2bn due to a 20.8 3.1 P1.8bn increase in settlement of payables 18.6 2.8 0.9 1.8 15.0 1.0 26 2.6 ƒ

  23. Slide 23: Debt Profile

    Debt Profile Debt Balance ¾ Net debt at end of the first quarter 2012 stood at (US$ in billions) US$1.6bn, with net debt/EBITDA at 0.9x ¾ At the end of March 2012, gross debt remained at $2.7bn, inclusive of US$0.5bn Digitel debt which is mostly US$ denominated ƒ 50% of total debt are US$-denominate

  24. Slide 24: 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

  25. Slide 25: Appendix

    A Appendix di 25 | Investing in the future

  26. Slide 26: Subscriber Data

    Subscriber Data 1Q12 vs FY11 1Q12 vs 1Q11 Mar-12 Dec-11 Sep-11 Jun-11 Mar-11 Dec-10 Sep-10 Jun-10 Mar-10 Amount % Amount % CELLULAR Smart 27,470,678 27,123,622 26,606,008 26,509,537 26,165,500 25,715,018 25,594,008 26,204,136 25,479,359 347,056 1% 1,305,178 5% Buddy 26,853,620 26,573,137 26,129,264

  27. Slide 27: 1Q 2012: Consolidated Financial Highlights

    1Q 2012: Consolidated Financial Highlights 1Q2012 1Q2011 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (PhP in millions) SMART DIGITEL Total PLDT DIGITEL Total (Unaudited) (Unaudited) (1) Service Revenues 24,222 4,691 28,913 14,566 1,046 15,612 2,415 - 42,780 37,707 13% Cash oper

  28. Slide 28: Reconciliation of Core and Reported Net Income

    Reconciliation of Core and Reported Net Income 1Q2012* 1Q2011 Diff Difference (PhP in billions) Reported net income 10.1 10.7 (0.7) Core net income 9.3 10.6 (1.2) 0.8 0.2 0.6 Accounted for by: Forex gains (losses), net 1.2 0.3 0.9 Gains ((losses)) on derivatives - 0.5 ( (0.5) ) Others - (0.1) 0.1 Ad

  29. Slide 29: Consolidated Service Revenues

    Consolidated Service Revenues % Change 1Q2012* 1Q2011** (PhP in billions) 1Q12 vs 1Q11 Voice **19.3 17.7 9% Data and BPO 23.5 20.1 17% 42 8 42.8 37 7 37.7 13% * Including Digitel ** First quarter of 2011 service revenues have been restated to reflect the change in the presentation of outbound revenu

  30. Slide 30: Service Revenues by Segment

    Service Revenues by Segment 1Q2012 1Q2011* Wireless Fixed Line Consolidated Consolidated % Change BPO (PhP in millions) SMART DIGITEL Total PLDT DIGITEL Total (Unaudited) (Unaudited) Service Revenues Wireless 24,222 4,691 28,913 Cellular 22,149 4,204 26,353 26,353 23,101 14% Broadband 1,677 487 2,16

  31. Slide 31: Wireless Net ARPU

    Wireless Net ARPU 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Smart Postpaid 1,666 1,627 1,614 1,646 1,557 1,576 1,430 1,480 1,279 Smart Buddy 204 197 181 189 180 179 166 166 155 Talk 'N Text 122 123 118 123 113 111 103 109 104 Red Mobile Prepaid 9 4 5 19 28 38 33 34 40 Red Mobile Postpaid - - - -

  32. Slide 32: Expenses

    Expenses 1Q2012 1Q2011 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (PhP in millions) SMART DIGITEL Total PLDT DIGITEL Total (Unaudited) (Unaudited) Operating expenses Compensation and employee benefits 1,533 361 1,894 2,715 112 2,827 1,372 - 6,090 5,341 14% Repairs and maintena

  33. Slide 33: Other Income (Expenses)

    Other Income (Expenses) 1Q2012 1Q2011 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (PHP in millions) SMART DIGITEL Total PLDT DIGITEL Total (U dit d) (Unaudited) (Unaudited) Gains (losses) on derivative financial instruments, net (1) (22) (23) (2,153) 2,130 (23) 39 - (7) 511 101

  34. Slide 34: EBITDA

    EBITDA 1Q2012 1Q2011 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (PhP in millions) SMART DIGITEL Total PLDT DIGITEL Total (Unaudited) (Unaudited) Income before tax 10,192 613 10,805 10 2,236 2,246 382 433 13,866 14,358 -3% Add (deduct): Depreciation and amortization 2,742 1,369

  35. Slide 35: Historical Consolidated EBITDA Margin (restated)

    Historical Consolidated EBITDA Margin (restated) 2009 2010 2011 2012 (PhP in millions) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q** 1Q*** Consolidated Gross Service Revenues* Revenues Fixed line 12,232 12,384 12,816 12,778 12,973 11,616 12,336 12,539 12,021 12,244 12,115 12,939 13,217 Local exchange 3,988

  36. Slide 36: Historical Wireless EBITDA Margin (restated)

    Historical Wireless EBITDA Margin (restated) 2009 2010 2011 2012 (PhP in millions) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q** 1Q*** Wireless Gross Service Revenues* Revenues Cellular services 24,595 24,985 23,608 24,957 24,139 24,568 22,995 23,818 23,101 23,149 21,846 25,548 26,353 Cellular Voice 10,670

  37. Slide 37: Historical Fixed line EBITDA Margin (restated)

    Historical Fixed line EBITDA Margin (restated) 2009 2010 2011 2012 (PhP in millions) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q** 1Q*** Fixed Line Gross Service Revenues* Local exchange 4,024 3,821 3,894 3,942 3,930 3,839 3,803 3,770 3,732 3,725 3,734 3,918 4,008 International long distance 2,682 2,874 3,1

  38. Slide 38: Core Net Income

    Core Net Income 1Q2012 1Q2011 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (PhP in millions) SMART DIGITEL Total PLDT DIGITEL Total (Unaudited) (Unaudited) Reported net income 7,125 458 7,583 (456) 2,232 1,776 292 428 10,079 10,734 -6% Add (deduct): Foreign exchange losses (gain

  39. Slide 39: Earnings Per Share

    Earnings Per Share 1Q2012 1Q2011 (Unaudited) (Unaudited) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 10,079 10,079 10,734 10,734 Dividends on preferred shares (12) (12) (114) (12) Net income for the period attributable to common equity holders of PLDT 10,067

  40. Slide 40: Cash Flows

    Cash Flows 1Q2012 * ((Unaudited)) 1Q2011 Consolidated C lid t d % Ch Change Wireless Fixed Line BPO Others Consolidated (Unaudited) (PhP in millions) Net cash from operations 9,515 8,514 601 (14) 18,592 20,830 -11% Add(Deduct): Capital expenditures (1,216) (1,469) (66) - (2,751) (3,113) -12% Other i

  41. Slide 41: Balance Sheet

    Balance Sheet Consolidated March 31, 2012* December 31, 2011* (PhP in millions) (Unaudited) (Audited) Total Assets 400,286 395,646 Nominal Value of Total Debt 115,981 119,411 in US$ $2,701 $2,719 Less: Unamortized Debt Discount 1,893 2,136 Total Debt 114,088 117,275 Cash and short-term investments 4

  42. Slide 42: Debt Profile

    Debt Profile (US$ in millions) 2006 2007 200 2008 2009 2010 2011* 1Q2012* Debt Balance 1,756 1,585 1,625 2,210 2,113 2,719 2,701 Cash and short-term investments 514 745 847 908 852 1,061 1,104 Net Debt 1,242 840 778 1,302 1,261 1,658 1,597 * Including Digitel Debt Maturities as of March 31, 2012 (US

  43. Slide 43: Interest-bearing Liabilities

    Interest-bearing Liabilities March 31, 2012 December 31, (Unaudited) 2011 Change Unamortized (Audited) Carrying Value Face Value (US$ in millions) Debt Discount Face Value Debt PLDT $1,265 $2 $1,267 $1,271 ($4) Smart S $8 4 $854 $42 $896 $890 $6 2014 Debt $242 $38 $280 $280 $0 Others $612 $4 $616 $6

  44. Slide 44: Foreign Exchange Risk

    Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives PLDT Group Digitel TOTAL PLDT Group Digitel TOTAL Forex sensitivity for every P1 change (in US$ Millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ Millions) P1 moveme

  45. Slide 45: DIGITEL

    DIGITEL FOR THE THREE MONTHS ENDED MARCH 31, 2012 Conso Impact at (in million pesos) Wireless Fixed Line Digitel Interco PLDT REVENUES 4,821 1,046 5,867 (172) 5,695 Service 4,691 1,046 5,737 (172) 5,565 Non-Service 130 - 130 - 130 EXPENSES 4,919 797 5,716 (151) 5,565 Cash Operating Expenses 2,836 58

PLDT — Q1 2012 Earnings Presentation on 6ix