PLDT, Inc. · PSE:TEL
PLDT — 9M 2016 Earnings Presentation
51 slides from PLDT's earnings presentation, Nov 14, 2016
Slide 1: Nine Months 2016 Financial and Operating Results
Delivering the total digital experience PLDT Inc. Nine Months 2016 Financial and Operating Results 14th November 2016 1 1
Slide 2: PLDT Group: 9M 2016 vs 9M 2015 Financial Highlights
PLDT Group: 9M 2016 vs 9M 2015 Financial Highlights Revenues Wireless Fixed Line Revenues Revenues -2% P80.6bn P54.1bn P125.4bn (P2.5bn) -7% +6% (P6.2bn) +P3.1bn Home Individual Enterprise International Voyager Revenues Revenues Revenues Service Revenues Revenues P24.5bn P58.4bn P24.4bn P17.5bn P957
Slide 3: PLDT Group: 9M 2016 vs 9M 2015 Financial Highlights
PLDT Group: 9M 2016 vs 9M 2015 Financial Highlights EBITDA EBITDA Margin -15% 38% P45.7bn (P8.3bn) (9M15: 44%) Wireless Fixed Line EBITDA EBITDA Margin EBITDA EBITDA Margin P24.3bn P20.3bn 32% 40% -31% +13% (9M15: 37%) (9M15: 42%) (P10.9bn) +P2.4bn Lower service revenues* by P6.0bn or 8% Rise in
Slide 4: PLDT Group: Service Revenues
PLDT Group: Service Revenues Consolidated service revenues declined by P2.5bn or 2% year-on-year to P111.8bn in 9M16, with data, broadband and digital platform revenues of P44.6bn up by 19% and accounting for 40% of consolidated service revenues* Fixed Line* Service Revenue Mix 9M15 9M16 Higher by
Slide 5: PLDT Group: Consolidated EBITDA
PLDT Group: Consolidated EBITDA (Php in billions) Q-o-Q: higher by P0.8bn or 6% Higher Higher -15% Lower Sub- Cash Higher Lower Lower Lower 54.1 -8.3 Svc sidies Opex* Provns Svc Sub- Cash Lower Rev* Opex* Provns 45.7 16.6 -0.6 -0.1 Rev* sidies -0.2 -1.7 15.0 14.2 -1.5 +1.4 +0.2 +0.7 Improvement of P
Slide 6: PLDT Group: Core and reported net income
PLDT Group: Core and reported net income (Php in billions) Decline in core income for 9M16 of P5.3bn or Core Income 20% year-on-year due to: Lower EBITDA Lower by P5.3bn or 20% Costs resulting from higher capex Increase in depreciation by P1.4bn EBITDA Net Fin Provn for Rise in net financi
Slide 7: PLDT Group: Debt Profile
PLDT Group: Debt Profile (US$ in billions) Net debt and net debt to EBITDA as of end September 2016 stood Debt Balance at US$2.8bn and 2.16x At end 9M16, gross debt amounted to US$3.3bn 2.9 2.9 3.4 3.3 37% of gross debt is US$ denominated 2.4 2.8 1.9 2.4 2.3 Taking into account our US$ cash
Slide 8: PLDT Group: Capex
PLDT Group: Capex (Php in billions) Fixed Line Wireless 48.0 43.2 36.4 13.9 31.2 34.8 12.9 28.8 26.1 13.7 11.7 23.3 13.7 11.7 7.0 5.6 30.3 34.2 22.1 23.0 19.1 17.2 17.1 17.7 2011 2012 2013 2014 2015 2016 Guidance 9M 2015 9M 2016 % of Capex to total service revenues: 21% 23% 18% 21% 26% up to 30% Not
Slide 9: PLDT Group: Network Initiatives
PLDT Group: Network Initiatives Network Improvement Program to improve quality, coverage and internet speed 9 9
Slide 10: PLDT Group: Progress on Network Initiatives
PLDT Group: Progress on Network Initiatives METRO DAVAO REFARMING COMPLETED 2G BEFORE NOW % INC ADDITIONAL TRAFFIC 2G Base Stations (per 239 306 28% INCREASE band) 3,887 4739 22% Voice Traffic Increment Voice/Data Capacity (TRX) 2G -13.52% 3G 15.42% 3G BEFORE NOW % INC 3G Base Stations (per Data Vol
Slide 11: PLDT Group: Progress on Network Initiatives
PLDT Group: Progress on Network Initiatives METRO DAVAO: Significant coverage improvements BEFORE AFTER BEFORE AFTER 3G BEFORE AFTER LTE BEFORE AFTER Indoor 23% 45% Indoor 11% 66% Outdoor 97% 99% Outdoor 84% 98% 11 11
Slide 12: PLDT Group: Progress on Network Initiatives
PLDT Group: Progress on Network Initiatives INTERNAL CX TEST: Validated customer experience after Davao refarming BEFORE AFTER BEFORE AFTER May 24 – June 9 September 19 - October 27 May 24 – June 9 September 19 - October 27 Download Speed 1 Mbps 5.7 Mbps 3.7 Mbps 17.2 Mbps DATA Upload Speed 1.4 Mbps
Slide 13: PLDT Group: Next steps
PLDT Group: Next steps Finalise integration of SUN/SMART network and spectrum refarming for CEBU (Q4/16) and NCR region (Q1/17) yielding significantly better quality, outdoor/indoor coverage and internet speed, as proven in Boracay and Davao Continue to improve overall network quality, capacity
Slide 14: Consumer Wireless Business
Consumer Wireless Business 14 14
Slide 15: Consumer Wireless Business
Consumer Wireless Business 15 15
Slide 16: Consumer Wireless Business
Consumer Wireless Business 16 16
Slide 17: Consumer Wireless Business
Consumer Wireless Business 17 17
Slide 18: HOME Business
HOME Business HOME BUSINESS YTD SEPTEMBER 2016 HIGHLIGHTS HOME ACCELERATING GROWTH AT 9% YOY GROWTH WITH ALL SEGMENTS GROWING 24.5B Total Revenue YTD Sept, 9% or 2.1B YOY Growth DIGITAL SERVICES @p @Smart voyncer WORLD CLASS OFFERS CREATING INTEREST AMONGST CONSUMERS AND CREATING VALUE YOY Growth of
Slide 19: HOME Business
HOME Business @PLDT Smart voyncer 03 RAPIDLY DECREASING PER MBPS PRICE DRIVEN BY COMPETITION Competition dropped bandwidth price (per Mbps) by 93% in a span of seven quarters 500 Price per Mbps for High Speed Plans Based on Plans 2500 to 3500 Price-point PhP 438 400 PhP 350 (B UPDATE 19
Slide 20: HOME Business
HOME Business YOY SUBSCRIPTION GROWTH INCREASED ADOPTION OF DIGITAL SERVICES FURTHER STRENGTHENED WITH LEADING GLOBAL PARTNERS Digital Subscriptions grew by 69% YOY 51% 4 128%- 1,362% CONNECTIVITY Telpads end Tablets ENTERTAINMENT TWOlution, iFlix, Cignal, FOX SECURITY FamCams, Smart Watches CONVERG
Slide 21: Enterprise Business
Enterprise Business @PLDT @Smart voyncer ENTERPRISE BUSINESS ty, INTENSIFIED MARKET YTD SEPTEMBER 2016 HIGHLIGHTS 74 -OVERAGE ALPHA & SME SUSTAINED DOUBLE- DIGIT GROWTH - SANE TORE VID Sent More intimate = om. ~. ai “10% or +228 YOY Growth indstyverteastor 2 TO large enterprises w &é uk weet deal En
Slide 22: Enterprise Business
Enterprise Business CEMENTING DIGITAL INFRASTRUCTURE LEADERSHIP 9 DCs nationwide (10 by 2017) 8,300 Total Rack Capacity (9k+ by 2017) VITRO Makati launched 3,600 rack capacity e VITRO Davao and Clark commercial readiness slated Nov and Dec 2016. e VITRO Cebu 2 commercially ready by mid 2017 @p @Smar
Slide 23: Stringent competitive environment for consumer wireless and home markets
@PLDT Smart voyvncer STRINGENT COMPETITIVE ENVIRONMENT FOR BOTH CONSUMER WIRELESS AND HOME MARKETS CONSUMER WIRELESS BUSINESS HOME BUSINESS RAPIDLY DECREASING PREPAID ARPU DRIVEN BY COMPETITION RAPIDLY DECREASING PER MEPS PRICE DRIVEN BY COMPETITION r s oh Spee ns Bas ans 25) 35 01 2015 - 03 2016 Bl
Slide 24: Consumer wireless strategy
Pa @PLDT @Smart vovncer > Hold the line on our mainstream voice and SMS business ANS > Focus on targeting and keeping quality subscribers ~ 2 > Greater emphasis on driving data usage and adoption of compelling digital content 24
Slide 25: Home business strategy
@PLDT BSmart voyacer Continued roll out of Fibr network with best-in-class technologies Leverage convergent resources for faster provisioning of _ internet services in the HOME a. ai ' | Innovation to address growing digital lifestyles
Slide 26: Enterprise business strategy
@PLDT BSmart vovacer @ PLDT Enterprise © LE Intensified coverage of the large Enterprise market through intimate understanding of the industry verticals Granular street level market coverage in key regional/ provincial areas for SMEs ere Build beyond telco capabilities - —_ = =< managed enterprise s
Slide 27: PLDT Group: Updated Guidance for 2016
PLDT Group: Updated Guidance for 2016 EBITDA: P60bn Capex: P48bn Lower by P4bn from previous guidance Increase of P5bn (US$100mn) from the original capex Low single digit growth in consolidated service revenues guidance of P43bn Double-digit growth in data/broadband to continue Additional
Slide 28: Other Details
Oo if OO a —— @PLDT &Smart voyacer Other Details
Slide 29: Updates: Acquisition of SMC telco business
Updates: Acquisition of SMC telco business Tender offer by Vega Telecom at P2.20/share to minority shareholders of Liberty Telecom completed 107.0mn shares tendered representing 8.3% of total common shares outstanding Vega ownership to reach 95.45% after completion of tender offer Intention
Slide 30: PLDT Group: Consolidated Service Revenues
PLDT Group: Consolidated Service Revenues* (Php in billions) Service Revenues 9M15 9M16 Service Revenue Mix 9M15 9M16 Data/Broadband/Digital Platforms 37,453 44,603 Data/Broadband/Digital Platforms 33% 40% SMS and VAS/Domestic Voice/Others 63,649 56,416 SMS and VAS/Domestic Voice/Others 56% 50% Inte
Slide 31: Data and broadband
Data and broadband Consolidated Revenues (Php in billions) +0.4 +7.6 Wireless Broadband Fixed Broadband Mobile Internet Corp. Data +5% +21% 9M16 (vs 9M15) +1.4 +13% +3.9 +17% 8.4 44.3 +1.7 +45% 9.6 --- +1.9 14.9 15.0 Y-o-Y 12.5 +16% 13.2 3.2 -3% 3.1 +9% 13.8 2.8 3.5 4.3 +5% 4.5 +30% 4.1 4.6 +4% 4.8
Slide 32: Appendix
ee @PLDT BSmart vovacerR Appendix
Slide 33: Subscriber Data: Cellular
Subscriber Data: Cellular Cellular Subscribers by category: 3Q16 vs 3Q15 3Q16 vs YE2015 Net Adds Sept-16 Jun-16 Mar-16 Dec-15 Sept-15 Net Adds % Net Adds % 1Q16 % 2Q16 % 3Q16 % CELLULAR Prepaid 59,116,807 61,479,780 61,484,747 61,980,425 64,082,775 (4,965,968) -8% (2,863,618) -5% (495,678) -1% (4,96
Slide 34: Subscriber Data: Broadband and Fixed Line
Subscriber Data: Broadband and Fixed Line Broadband Subscribers 3Q16 vs 3Q15 3Q16 vs YE15 Net Adds Sept-16 Jun-16 Mar-16 Dec-15 Sept-15 Net Adds % Net Adds % 1Q16 % 2Q16 % 3Q16 % BROADBAND Wireless Broadband 3,837,153 4,049,555 3,989,519 3,932,820 3,789,654 47,499 1% (95,667) -2% 56,699 1% 60,036 2%
Slide 35: Wireless Broadband: Revenues and Subscribers
Wireless Broadband: Revenues and Subscribers Wireless Broadband, gross of interconnection costs 2016 2015 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Smart Bro (Dongles/Pocket WiFi) 2,277 2,209 1,925 6,411 1,715 1,899 2,098 5,712 2,240 7,952 Home Bro 683 674 700 2,057 813 778 743 2,334 705 3,039
Slide 36: 9M2016: Consolidated Financial Highlights
9M2016: Consolidated Financial Highlights 9M2016 9M2015 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Total Revenues 80,557 54,071 - 125,386 127,871 (2%) Service Revenues 76,986 51,187 - 118,932 122,001 (3%) Cash operating expenses 37,731 30,
Slide 37: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income 9M2016 9M2015 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net Income attributable to equity holder of PLDT 5,928 6,588 3,349 15,865 25,339 (37%) Add (deduct): Foreign exchange losses, net 892 2
Slide 38: Consolidated Service Revenues
Consolidated Service Revenues 2016 2015 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Fixed Line 14,287 14,320 14,446 43,053 13,034 13,302 13,589 39,925 13,817 53,742 Fixed Line voice - domestic 4,333 4,384 4,479 13,196 4,172 4,226 4,280 12,678 4,301 16,979 Fixed Line voice - international 1,240 1
Slide 39: Consolidated Service Revenues and EBITDA
Consolidated Service Revenues and EBITDA 2016 2015 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Data/Broadband/Digital platforms 14,525 14,974 15,169 44,668 11,656 12,309 13,566 37,531 13,648 51,179 Mobile Internet 3,811 4,257 4,471 12,539 2,450 2,766 3,451 8,667 3,388 12,055 Wireless broadband 2
Slide 40: Wireless Service Revenues and EBITDA
Wireless Service Revenues and EBITDA 2016 2015 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Data/Broadband/Digital platforms 6,905 7,199 7,327 21,431 5,243 5,688 6,643 17,574 6,523 24,097 Mobile internet 3,811 4,257 4,471 12,539 2,450 2,766 3,451 8,667 3,388 12,055 Wireless broadband 2,960 2,882
Slide 41: Fixed Line Service Revenues and EBITDA
Fixed Line Service Revenues and EBITDA 2016 2015 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Data/Broadband 9,110 9,216 9,457 27,783 8,074 8,261 8,537 24,872 8,876 33,748 Fixed broadband 4,428 4,638 4,839 13,905 3,812 3,962 4,113 11,887 4,254 16,141 Corp. data and other network services 3,944 3,
Slide 42: Expenses
Expenses 9M2016 9M2015 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Operating expenses Compensation and employee benefits 5,185 9,905 - 15,078 16,376 (8%) Repairs and maintenance 6,295 5,516 - 11,346 11,271 1% Selling and promotions 4,839 1,
Slide 43: Other Income (Expenses)
Other Income (Expenses) 9M2016 9M2015 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Equity share in net earnings (losses) of associates and joint ventures (206) (48) 1,731 1,477 2,668 (45%) Interest income 196 534 189 743 590 26% Gains (losse
Slide 44: Cellular and Broadband Net ARPU
Cellular and Broadband Net ARPU Cellular Net ARPU 2016 2015 1Q 2Q 3Q 1Q 2Q 3Q 4Q Smart Postpaid 999 1,018 1,004 1,039 1,065 1,021 1,014 Smart Prepaid 109 106 99 118 114 115 113 TNT 80 77 71 85 83 82 83 Sun Cellular Prepaid 78 80 83 63 64 65 71 Sun Cellular Postpaid 459 443 404 449 419 436 482 Cellul
Slide 45: Earnings Per Share
Earnings Per Share 9M2016 9M2015 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income attributable to equity holders of PLDT 15,865 15,865 25,339 25,339 Dividends on preferred shares (45) (45) (45) (45) Net income for the period attributable to common equity holders of PLDT 15,820 15,820 2
Slide 46: Cash Flows
Cash Flows 9M2016 9M2015 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net cash from operations 13,760 20,745 (858) 33,277 47,796 (30%) Add(Deduct): Capital expenditures (19,092) (7,039) - (26,131) (23,297) 12% Interest, net (1,405) (3,467) 6
Slide 47: Balance Sheet
Balance Sheet Consolidated September 30, 2016 December 31, 2015 (Php in millions) (unaudited) (audited) Total Assets 452,943 455,095 Nominal Value of Total Long-term Debt 161,493 161,568 in US$ $3,331 $3,429 Less: Unamortized Debt Discount 612 676 Total Long-term Debt 160,881 160,892 Cash and short-
Slide 48: Debt Profile
Debt Profile (US$ in millions) 2011 2012 2013 2014 2015 9M2016 Debt Balance 2,719 2,851 2,353 2,920 3,429 3,331 Cash and short-term investments 1,061 919 735 610 1,016 579 Net Debt 1,658 1,932 1,618 2,310 2,413 2,752 Interest-bearing Liabilities September 30, 2016 December 31, (unaudited) 2015 Unamo
Slide 49: 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 Debt (net of LT hedges)* 735.8 P1
Slide 50: 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 51: A@PLDT ASmart voeyacer
A@PLDT ASmart voeyacer