Globe Telecom Inc. · PSE:GLO
Globe Telecom — Q2 2005 Earnings Presentation
16 slides from Globe Telecom's earnings presentation, Aug 3, 2005
Slide 1: GLOBE TELECOM, INC 2Q05 Investors' Briefing
GLOBE TELECOM, INC 2Q05 Investors’ Briefing 3 August 2005 President’s Message 2 1
Slide 2: First Half 2005 Highlights
First Half 2005 Highlights 1. Soft revenues and increased costs of business- building weaken profitability 2. Subscriber growth slows as market matures 3. Initiatives on track with strategy for strengthening competitiveness 3 3 Profits decline 38% from last year (in P bn) 1H2005 1H2004 YoY % Var Net
Slide 3: Revenue growth has not kept pace with expense growth
Revenue growth has not kept pace with expense growth YoY Changes: 1H05 vs 1H04 (in Pm, Rounded to 50M) Favorable Unfavorable " Revenues P 550M " Network Costs (+2%) " Non-Op Exp 600M ! Related Opex P 1,900M 2,550M (+21%) ! Depreciation 650M " Marketing Exp 300M " Income Tax 900M 1,150M 3,750M ! Net
Slide 4: Subscriber Net Adds improve in Q2, But slow down YoY for 1H05
Subscriber Net Adds improve in Q2, But slow down YoY for 1H05 Quarterly Subscriber Base & Net Adds Total Subs (‘000) Net Adds (‘000) ! Wireless subscribers 16,000 2,500 reach 13.6 million 12,956 13,627 14,000 12,514 11,714 2,000 12,000 10,542 ! Net adds of 0.7 million in 10,000 9,137 1,404 1,500 Q2
Slide 5: Initiatives on track with Strategy for Strengthening Competitiveness
Initiatives on track with Strategy for Strengthening Competitiveness Unmatched Service Foundation for Growth Quality Superior Product Innovation Sales and Distribution Pervasiveness Extensive Network Coverage 9 9 We Aggressively Expanded Network Coverage Network Roll- Roll-out 5,000 Cell Sites 4,555
Slide 6: We launched Value Promotions
We launched Value Promotions ! 50% OFF on IDD rates ! Discounted prepaid rates of as ! No NDD charges from at only US$0.20 per low as P2.50 per minute and any Globelines minute after the first P0.50 per text message postpaid phone 4 minutes on calls to ! Call Promo – 3 minutes for P10 nationwide to
Slide 7: We have over 1 million G-Cash users
We have over 1 million G-Cash users ! Averaging P2million transaction amounts daily ! Partner establishments grew to 49% QoQ to 159 ! Won “Most Innovative Mobile Operator Service” at the Asian MobileNews Awards in Singapore, and “Best M-Commerce Application or Service” at the Global Messaging Awards
Slide 8: TM continues to demonstrate significantly improved competitiveness post relaunch
TM continues to demonstrate significantly improved competitiveness post relaunch TM Subscribers (‘000) ! Net subscribers increased 3,000 2,554 by 50% over 6 months 2,500 50% 2,000 1,698 1,502 1,500 ! TM captured 25% of total 853 1,000 market net adds in 1Q05 vs 500 90 3% in 1Q04 0 2001 2002 2003 200
Slide 9: We will pursue a sound, long-term growth strategy
We will pursue a sound, long-term growth strategy -- despite the near term pressure this will put on our cost-revenue equation ! Ensure long-term competitiveness by completing the build- out of a pervasive nationwide network ! Significantly reduce lag between time to market/roll-out of new sites and
Slide 10: Service Revenues up 2%
Service Revenues up 2% Conso Service Revenues Breakdown ! Service revenues up 2% at (in P m) P26.7bn 30,000 26,728 26,173 4% Wireline Data 3% ! Bulk of service revenues 25,000 8% Wireline Voice 7% accounted for by wireless with 88% share 20,000 15,000 ! Wireline voice at 8% 88% 90% 10,000 ! Wireline
Slide 11: Stable ARPUs
Stable ARPUs Postpaid Gross ARPU (P) Prepaid Gross ARPU (P) 2,500 500 469 2,175 2,168 2,117 2,159 2,060 450 2,000 386 393 400 368 363 340 350 325 334 1,500 300 279 282 250 1,000 200 150 100 500 50 - - 2Q04 3Q04 4Q04 1Q05 2Q05 2Q04 3Q04 4Q04 1Q05 2Q05 GHP Prepaid TM ! Globe Postpaid ARPU improved to
Slide 12: Wireline Revenues up 14%
Wireline Revenues up 14% Wireline Revenues (1H05) Wireline Service Revenues Others As of 30 June (in P M) 2005 2004 24% Int'l Lease 36% Voice 2,187 1,873 Data 943 863 Domestic Lease Total 3,130 2,736 40% Data As of 30 June 2005 2004 30% Lines in Service 352,742 290,681 Gross ARPU (P) 1,234 1,283 Voi
Slide 13: Total Expenses up 18%
Total Expenses up 18% Subsidy ! Higher non-service revenues (P m) 1H05 1H04 -3% growth of 27% vs cost of sales growth of only 12% Subsidy 1,482 1,522 Service and Others ! Higher charges on contracted 44% services for subscriber Services and Other 2,769 1,917 acquisition activities Selling, Advertisi
Slide 14: Positive Bottomline for both Wireless and Wireline
Positive Bottomline for both Wireless and Wireline (P m) Total Wireless Wireline Service Revenues 26,728 23,598 3,130 EBITDA 15,081 13,618 1,463 Net Income 4,214 4,098 116 ! Net income mainly attributed to wireless business ! Positive bottomline for the wireline business # Sustained subscriber growt
Slide 15: Healthy Leverage Profile
Healthy Leverage Profile Gross Debt / EBITDA* (x) Gross Debt / Equity* (x) 2.50 1.40 2.02 1.17 1.17 1.87 1.20 2.00 1.02 0.96 1.59 1.59 1.00 1.50 0.80 1.00 0.60 0.40 0.50 0.20 0.00 0.00 2003 2004 1H04 1H05 2003 2004 1H04 1H05 EBITDA / Gross Interest* (x) Net Debt / Equity* (x) 9.00 1.20 8.00 7.21 6.6
Slide 16: THANK YOU
THANK YOU 31 31 16