PLDT, Inc. · PSE:TEL

PLDT — FY2014 Earnings Presentation

42 slides from PLDT's earnings presentation, Mar 3, 2015

  1. Slide 1: Full Year 2014 Financial and Operating Results

    Full Year 2014 Financial and Operating Results Philippine Long Distance Telephone Company (PLDT) 3 March 2015

  2. Slide 2: PLDT Group: FY2014 Financial Highlights

    PLDT Group: FY2014 Financial Highlights (PhP in billions, except EBITDA margin FY2014 FY2013 % Y-o-Y and Core EPS) audited Service Revenues 165.1 164.1 1% • Wireless 115.0 116.7 -1% • Fixed Line 65.2 61.9 5% EBITDA 76.9 77.6 -1% • Wireless 50.9 54.7 -7% • Fixed Line 25.6 22.3 15% EBITDA Margin* 47%

  3. Slide 3: PLDT Group: Service Revenues and EBITDA

    PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues  Data and broadband growth makes available alternatives to international (Php in billions) voice and SMS, resulting in muted service revenue and EBITDA growth rates FY13: P164.1bn FY14: P165.1bn Change: 1%  Total revenues from d

  4. Slide 4: PLDT Group: Core and Reported Net Income

    PLDT Group: Core and Reported Net Income Core Net Income  Core net income of P37.4bn for 2014 was 3% or P1.3bn lower (Php in billions) year-on-year mainly due to:  Decrease in EBITDA by P0.7bn FY13: P38.7bn FY14: P37.4bn % Change: 3%  Increase in non-cash expenses by P1.2bn  Higher provision for

  5. Slide 5: Capital Management

    Capital Management Dividend Declaration  PLDT’s dividend policy: regular dividends of 75% of core EPS + “look back” to determine possibility Core earnings for 2014 P 173 per share of a special dividend Total dividends per share for 2014 P156 per share (90% of core EPS)  On 3 March 2015, Board of D

  6. Slide 6: PLDT Group: Fixed line segment

    PLDT Group: Fixed line segment  Fixed line service revenues for FY14, net of interconnection costs, Fixed Line Service Revenues* improved by 6% or P3.4bn to P57.0bn buoyed by the robust growth in (Php in billions) retail and corporate data revenues and an increase in domestic voice  Data revenues

  7. Slide 7: PLDT Group: Broadband revenues

    PLDT Group: Broadband revenues Consolidated Broadband Revenues  Data/broadband service revenues climbed by P5.3bn or 20% (Php in billions) year-on-year to P31.9bn at YE14, and accounted for 19% total consolidated service revenues  Mobile internet revenues, representing 25% of total 16% broadband r

  8. Slide 8: PLDT Group: Wireless segment

    PLDT Group: Wireless segment Wireless Service Revenues  Wireless service revenues dipped by 1% or P1.6bn year-on-year to P115.0bn in 2014 as the increase in data/broadband revenues was (Php in billions) overtaken by declines in SMS and voice revenues (1)  Data/broadband revenues rose by P3.7bn or

  9. Slide 9: PLDT Group: Debt Profile

    PLDT Group: Debt Profile Debt Balance  Net debt and net debt to EBITDA rose to US$2.3bn and (US$ in billions) 1.34x, respectively, at end December 2014  Reflects impact of investment in Rocket Internet  Full-year effect of higher debt level in 2015  As of FY14, gross debt stood at US$2.9bn, high

  10. Slide 10: PLDT Group: Free Cash Flow and Capex

    PLDT Group: Free Cash Flow and Capex Free Cash Flow  Free cash flow for 2014 was lower year-on-year by P14.3bn or 34% at P27.7bn due to the combined effect of: (Php in billions)  Stable cash from operations FY13 FY14  Higher net decrease in working capital of P7.5bn  Increase in capex by P5.9bn

  11. Slide 11: Five Pillars of the PLDT Group's converged digital communications business

    Five Pillars of the PLDT Group’s converged digital communications business  Re-shaping PLDT Group from a telco-access business to a converged digital communication business  Charting PLDT‟s future path-to-growth  Transition involves an investment phase  Valuation model: from P&L/DCF to “sum-of-t

  12. Slide 12: Smart "Internet for all" Campaign

    Smart “Internet for all” Campaign  Smart “Internet for all” campaign for digital inclusion: “Fast, Safe, and Fun Internet for all your needs, for every Filipino”  “Free Internet” promo granting 30MB/user/day launched on 26 September 2014 to stimulate usage and increase awareness of an “always-on”

  13. Slide 13: The strongest connections are at Home

    The strongest connections are at Broadband Plans  PLDT’s HOME provides a compelling suite of digital services ranging from communication, entertainment, and home monitoring, all running on a formidable integrated network, with the end goal of delivering to the customer a CONNECTED HOME  Broadband

  14. Slide 14: Alpha Enterprise and SME Nation: enabling businesses

    Alpha Enterprise and SME Nation: enabling businesses  PLDT’s Enterprise segment continues to support growth of Philippine businesses (large corporates, BPOs, SMEs) by providing end-to-end business and ICT solutions delivered via the PLDT Group’s fixed and wireless networks  End-to-end ICT solution

  15. Slide 15: Cignal TV: The Philippines' premier DTH pay TV provider

    Multi-media/Content Cignal TV: The Philippines’ premier DTH pay TV provider  At the end of 2014, Cignal TV had over 844,000 subscribers, surpassing the 20-year incumbent o 34% increase in subscribers from over 630,000 at YE13 Top Channels on Cignal TV  Cignal TV is 100% digital, with a nation-wide

  16. Slide 16: Our Digital Unit

    Digital PLDT to expand its footprint in the digital space organically and in partnership with global players Our Digital Unit 16

  17. Slide 17: PLDT Group to focus on adjacent businesses

    Digital PLDT Group to focus on adjacent businesses which have links and/or the ability to enhance the telco access business  Mobile remittance (Smart Money, Smart Padala)  e-commerce/mobile payments (MePay, Takatack, Tack this)  Digital platforms and products (e. g., Lock-by-Mobile)  Big data, d

  18. Slide 18: Rocket Internet: Recent updates

    Digital Rocket Internet: Recent updates  PLDT investment: €333mn (€33/share), 6.1% ownership  IPO listing price (2 October 2014): €42.50/share  As of 2 March 2015:  Closing Price €51.12/share  Market Cap: €8,442mn  Value of PLDT Interest: €515mn (55% over original investment)  Recent developm

  19. Slide 19: PLDT Group Guidance for 2015

    PLDT Group Guidance for 2015 Core Net Income P35.0bn (P2.4bn or 6.4% lower than 2014) CAPEX P39.0bn (approx. 23% of service revenues) Dividend Pay-out Policy: Capital Management 75% of Core EPS + “look-back” approach 19

  20. Slide 20: Other Details

    Other Details 0 2 \ ‘SpLor + ,*0 See : sun LIVE MORE

  21. Slide 21: Subscribers

    Subscribers Wireless Subscribers (in millions)  PLDT Group had 76.1mn subscribers at the end of December 2014 1%  Cellular subscriber base stood at 69.9mn, of which 96% or 67.1mn were prepaid subscribers 69.9 70.0 70.5 69.9  4Q14 net adds of over 826,000, consisting of 717,000 prepaid and 68.9 69

  22. Slide 22: MERALCO

    MERALCO  MERALCO’s consolidated revenues declined by P32.3bn or 11% to P266.3bn in Energy Sales Volumes and Revenues FY14, due to the combined effect of: (in „000 GWh and Php in billions)  Higher electricity sales by 3%  P9.3bn downward adjustment on MERALCO‟s purchases from the WESM billed by PE

  23. Slide 23: PLDT Group: Appendix

    PLDT Group: Appendix 23

  24. Slide 24: Subscriber Data: Cellular

    Subscriber Data: Cellular Cellular Subscribers by category: FY14 vs FY13 Net Adds Dec- 14 Sept-14 Jun-14 Mar-14 Dec- 13 Net Adds % 1Q14 % 2Q14 % 3Q14 % 4Q14 % CELLULAR Prepaid 67,091,612 66,374,421 66,339,954 68,030,812 67,667,750 (576,138) -1% 363,062 1% (1,690,858) -2% 34,467 - 717,191 1% Smart Pr

  25. Slide 25: Subscriber Data: Broadband

    Subscriber Data: Broadband FY14 vs FY13 Net Adds Dec-14 Sept-14 Jun-14 Mar-14 Dec-13 Net Adds % 1Q14 % 2Q14 % 3Q14 % 4Q14 % BROADBAND Wireless Broadband 2,986,146 2,694,840 2,598,920 2,551,882 2,453,826 532,320 22% 98,056 4% 47,038 2% 95,920 4% 291,306 11% Smart Broadband 2,309,366 2,103,587 2,052,1

  26. Slide 26: FY2014: Consolidated Financial Highlights

    FY2014: Consolidated Financial Highlights FY2014 FY2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Service Revenues 115,037 65,164 - 165,070 164,052 1% Cash operating expenses (1) 54,326 39,522 56 78,371 75,573 4% Depreciation and amortization

  27. Slide 27: Reconciliation of Core and Reported Net Income

    Reconciliation of Core and Reported Net Income FY2014 FY2013 Consolidated Consolidated % Change Wireless Fixed Line Others (in million pesos) (audited) (audited) Net Income attributable to equity holder of PLDT 21,915 6,703 5,473 34,091 33,351 2% - continuing operations Add (deduct): Foreign exchang

  28. Slide 28: Consolidated Service Revenues

    Consolidated Service Revenues 2014 2013 % Change FY14 vs 4Q14 vs (Php in billions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY FY13 4Q13 SMS and VAS 10.8 10.6 10.1 10.5 42.0 11.9 11.9 11.5 11.9 47.3 -11% -11% Voice - Domestic 13.9 14.3 13.9 14.3 56.4 13.3 13.9 13.7 14.3 55.2 2% - Voice - International 5.5 5.2 4.8

  29. Slide 29: Expenses

    Expenses FY2014 FY2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Operating expenses Compensation and employee benefits (1) 6,944 11,825 - 18,749 20,100 -7% Repairs and maintenance 8,666 6,956 - 14,988 13,107 14% Selling and promotions 8,512 2

  30. Slide 30: Other Income (Expenses)

    Other Income (Expenses) FY2014 FY2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Equity share in net earnings of associates and joint ventures (11) 63 3,789 3,841 2,742 40% Interest income 217 350 295 752 932 -19% Gains (losses) on derivative

  31. Slide 31: Cellular and Broadband Net ARPU

    Cellular and Broadband Net ARPU Cellular Net ARPU 2014 2013 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Smart Postpaid 1,086 1,074 1,068 1,084 1,154 1,153 1,099 1,102 Smart Prepaid 132 134 124 125 141 141 142 153 Talk 'N Text 87 89 87 89 87 87 82 85 Sun Cellular Prepaid 67 66 64 65 57 58 60 68 Sun Cellular Postpaid 476

  32. Slide 32: Historical Consolidated: Service Revenues and EBITDA

    Historical Consolidated: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Fixed line 12,748 12,669 12,804 13,394 51,615 11,997 12,275 12,220 12,589 49,081 Local exchange 4,087 4,107 4,104 4,189 16,487 4,008 4,066 4,042 4,057 16,173 International long distance 1,6

  33. Slide 33: Historical Wireless: Service Revenues & EBITDA

    Historical Wireless: Service Revenues & EBITDA 2014 2013 (Php in millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Wireless Gross Service Revenues Cellular services 26,171 26,284 25,233 26,148 103,836 25,709 26,529 26,040 27,597 105,875 Cellular Voice 12,782 12,926 12,226 12,706 50,640 12,187 12,869 12,733 13

  34. Slide 34: Historical Fixed Line: Service Revenues and EBITDA

    Historical Fixed Line: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Fixed Line Gross Service Revenues Local exchange 4,111 4,132 4,131 4,213 16,587 4,036 4,092 4,066 4,080 16,274 International long distance 2,859 2,843 2,696 3,006 11,404 2,968 2,802 2,678 2,9

  35. Slide 35: Earnings Per Share

    Earnings Per Share FY2014 FY2013 (audited) (audited) Basic Diluted Basic Diluted Net income attributable to equity holders of PLDT 34,091 34,091 35,420 35,420 Continuing Operations 34,091 34,091 33,351 33,351 Discontinued Operations - - 2,069 2,069 Dividends on preferred shares (59) (59) (59) (59) N

  36. Slide 36: Cash Flows

    Cash Flows FY2014 FY2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Net cash from operations 49,884 18,145 (1,818) 66,015 73,763 -11% Add(Deduct): Capital expenditures (23,048) (11,711) - (34,759) (28,838) 21% Interest, net (1,205) (3,128) 4 (

  37. Slide 37: Balance Sheet

    Balance Sheet Consolidated December 31, 2014 December 31, 2013 (Php in millions) (audited) (audited) Total Assets 436,295 399,638 Nominal Value of Total Long-term Debt 130,634 104,472 in US$ $2,920 $2,353 Less: Unamortized Debt Discount 511 382 Total Long-term Debt 130,123 104,090 Cash and short-ter

  38. Slide 38: Debt Profile

    Debt Profile (US$ in millions) 2008 2009 2010 2011(1) 2012(1) 2013(1) 2014(1) Debt Balance 1,625 2,210 2,113 2,719 2,851 2,353 2,920 Cash and short-term investments 847 908 852 1,061 919 735 605 Net Debt 778 1,302 1,261 1,658 1,932 1,618 2,315 (1) Including Digitel Debt Maturities: Debt Maturities a

  39. Slide 39: Interest-bearing Liabilities

    Interest-bearing Liabilities December 31, 2014 December 31, (audited) 2013 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,762 $4 $1,766 $1,284 $482 Smart 955 7 962 812 150 DIGITEL 192 - 192 257 (65) Total Debt $2,909 $11 $

  40. 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 Conso - net of Elim P1 movement in the Debt (net of L

  41. 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

  42. Slide 42: LIVE MORE

    So om © PLDT SMART = LIVE MORE ‘ su CELLULAR

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