PLDT, Inc. · PSE:TEL
PLDT — Q1 2017 Earnings Presentation
54 slides from PLDT's earnings presentation, May 12, 2017
Slide 1: 2017 First Quarter Financial and Operating Results
PLDT Inc. 2017 First Quarter Financial and Operating Results 12th May 2017 1
Slide 2: PLDT Group: 1Q17 vs 1Q16 Financial Highlights
PLDT Group: 1Q17 vs 1Q16 Financial Highlights Conso Service Revenues Wireless Fixed Line Service Revenues* Service Revenues* (net of interconnection costs: P2.1bn) P20.8bn P16.9bn -7% -16% P35.6bn (P2.6bn) (P3.9bn) +10% +P1.5bn Home* Enterprise* Individual* International* Voyager* Conso Service Reve
Slide 3: PLDT Group: 1Q17 vs 4Q16 Financial Highlights
PLDT Group: 1Q17 vs 4Q16 Financial Highlights Conso Service Revenues Wireless Fixed Line Service Revenues* Service Revenues* (net of interconnection costs: P2.1bn) P20.8bn P16.9bn -1% -4% P35.6bn (P0.2bn) (P0.8bn) +4% +P0.7bn Home* Enterprise* Individual* International* Voyager* Conso Service Revenu
Slide 4: PLDT Group: Consolidated Financial Highlights
PLDT Group: Consolidated Financial Highlights (Php in billions) EBITDA and EBITDA Margin Service Revenues, net of interconnection costs -7% -1% Three quarters of -2.6 -0.1 Negative sequential momentum of improvement in -1% +7% top line EBITDA 38.2 37.6 +1.0 36.1 35.8 -0.2 35.6 arrested in 16.6 1
Slide 5: PLDT Group: Service Revenues (by Business Unit)
PLDT Group: Service Revenues (by Business Unit) (Php in billions) Home Enterprise Service Revenues (net of interconnection costs) Service Revenues (net of interconnection costs) +12% +13% +0.8 +1.0 +2% +1% +1% +7% +2% +1% +3% +0.2 7.8 -- +0.3 7.9 +0.6 8.5 +4% +0.2 7.6 7.5 +0.1 7.6 7.6 +0.2 7.5 +0.3
Slide 6: PLDT Group: Consolidated Service Revenues by Business Unit
PLDT Group: Consolidated Service Revenues* By Business Units (Php in billions) Service Revenue Mix 1Q16 1Q17 Individual 47% 41% -1.3 +0.2 -2.6 Home 18% 22% 46% -24% +111% -7% Enterprise 20% 24% +1.0 +13% 4.2 0.4 35.6 International & Carrier 15% 12% +0.8 8.5 Voyager and Others 0% 1% (3.2) +12% -18% 7
Slide 7: PLDT Group: Consolidated Service Revenues by Product Type
PLDT Group: Consolidated Service Revenues* By Product type (Php in billions) Service Revenue Mix 1Q16 1Q17 Data/Broadband/Digital Platforms 38% 45% Lower by P2.6bn or 7% SMS 20% 16% LEC/Mobile Domestic Voice/Others 32% 30% LEC, mobile International Intl Voice/Fixed Line Domestic Voice 10% 9% Data, b
Slide 8: PLDT Group: Consolidated Service Revenues Sequential
PLDT Group: Consolidated Service Revenues* By Business Units (Php in billions) Lower by P0.2bn or 1% Service Revenue Mix 4Q16 1Q17 Individual 42% 41% -0.6 -- -0.2 Home 21% 22% +2% -1% 46% +0.6 -12% Enterprise 22% 24% +7% 4.2 0.4 35.6 International & Carrier 14% 12% +0.2 8.5 Voyager and Others 1% 1%
Slide 9: PLDT Group: Consolidated EBITDA
PLDT Group: Consolidated EBITDA (Php in billions) +7% Higher by P1.0bn or 7% +6% +3% -15% +0.8 +1.0 +0.5 16.6 -2.5 Higher 16.5 Lower Lower 15.0 15.4 svc cash sub- Lower 14.2 opex* provns rev* sidies 16.5 15.4 -0.2 -0.1 +1.4 -- 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 4Q16 1Q17 Margins 41% 35% 39% 40% 44%
Slide 10: PLDT Group: Core Income
PLDT Group: Core Income (Php in billions) Higher by P1.7bn or 46% vs recurring core income in 4Q16 Lower by P1.9bn or 26% vs 1Q16 Recurring core income Higher Lower Lower Higher Higher net equity Fin Non- Misc Provn for Gain from Lower in Costs - cash Income Taxes asset Higher net Higher earnings Ne
Slide 11: PLDT Group: Capex
PLDT Group: Capex (Php in billions) Fixed Line Wireless 46.0 43.2 42.8 36.4 34.8 17.2 31.2 12.9 10.7 37% (25% in 2016) 28.8 13.7 11.7 13.7 11.7 30.3 32.1 28.8 63% (75% in 2016) 22.1 23.0 17.2 17.1 2011 2012 2013 2014 2015 2016 2017F % of Capex to total service revenues: 21% 23% 18% 21% 26% 27% < 30%
Slide 12: PLDT Group: Debt Profile
PLDT Group: Debt Profile Net debt and net debt to EBITDA as of end March 2017 Debt Balance stood at US$2.7bn and 2.2x (US$ in billions) At end March 2017, gross debt amounted to US$3.5bn 3.4 3.7 3.5 US$ denominated gross debt now at 25% from 32% at YE16 2.9 2.9 2.9 2.7 following the full payme
Slide 13: Business Unit Updates
@PLDT &Smart Business Unit Updates
Slide 14: 1Q 2017 Highlights
1Q 2017 HIGHLIGHTS REVENUES IN PESOS BILLIONS INDIVIDUAL 14.75 B ● Contribution of Home and Enterprise, our fastest growing segments, comprise 52% of revenues, HOME 7.79 B excluding international, and forecasted to grow to approximately 56% share by 2019. ENTERPRISE 8.47 B ● Combined revenues of Hom
Slide 15: 1Q 2017 Highlights: PLDT Group Service Revenue
1Q 2017 HIGHLIGHTS: PLDT GROUP SERVICE REVENUE 1Q 2017 Service Revenue Net of Interconnection Cost In Pesos Billions 1Q 2017 Q1 ‘16 Q4 ‘16 Q1 ‘17 YOY GROWTH QOQ GROWTH Actual Actual Actual vs 1Q 2016 vs 4Q 2016 INDIVIDUAL 18.0 15.1 14.8 -3.2 -18% -0.4 -2% HOME 7.0 7.6 7.8 0.8 12% 0.2 2% ENTERPRISE 7
Slide 16: 1Q 2017 Highlights: Home Business
1Q 2017 HIGHLIGHTS: HOME BUSINESS In Pesos Billions In Millions of Subscribers HOME KICKS OFF THE YEAR WITH THE ALMOST 340K SUBSCRIBERS RESULTING 01 HIGHEST EVER 12% YOY GROWTH, WITH 02 TO A 10% YOY GROWTH BOTH VOICE AND DATA GROWING 7.79B 3.77M VOICE 6.97B 3.02B 3.43M 12% 6% VOICE 2.84B 10% DATA DA
Slide 17: 1Q 2017 Highlights: Home Business
1Q 2017 HIGHLIGHTS: HOME BUSINESS 03 REALIZING SIGNIFICANT GROWTH IN HOME BROADBAND, WITH DIGITAL CONTENT AND SERVICES INSTRUMENTAL TO CREATING MORE DEMAND Strong demand for higher broadband subscriptions, with a significant YOY growth of 20% in wired broadband revenue New premier content partnershi
Slide 18: 1Q 2017 Highlights: Home Business
1Q 2017 HIGHLIGHTS: HOME BUSINESS ACCELERATING MOMENTUM TO COVER THE COUNTRY WITH LEADING EDGE 04 TECHNOLOGIES AND IN STRENGTHENING MARKET DOMINANCE Toledo City, Cebu General Santos City Isulan, Sultan Kudarat ● PLDT Home Rolled out 110K Naga City, Camarines Sur high speed broadband lines by end Apr
Slide 19: 1Q 2017 Highlights: Enterprise Business
1Q 2017 HIGHLIGHTS: ENTERPRISE BUSINESS SUSTAINING ACCELERATED ALL BUSINESS PILLARS GROWING BY 01 GROWTH IN Q1 02 DOUBLE DIGIT +13% Enterprise Service Revenues 0.97 Net of Interconnect +11% +15% 8.47B 7.5B +13% 13% vs Q1 2016 7% vs Q4 2016 2016Q1 Fixed Wireless ICT 2017Q1 19
Slide 20: 1Q 2017 Highlights: Enterprise Business
1Q 2017 HIGHLIGHTS: ENTERPRISE BUSINESS ENTERPRISE BUSINESS IS GROWING FASTER THAN 03 04 IN THE RIGHT AREAS MARKET GROWTH INDUSTRY GROWTH Banking & Financial : 14% In support of industry demand for 6% secure and reliable ICT solutions Outsourcing : 17% 15% Empowering a 1.3M+ strong agent workforce 2
Slide 21: 1Q 2017 Highlights: Enterprise Business
1Q 2017 HIGHLIGHTS: ENTERPRISE BUSINESS CLEAR LEADERSHIP IN THE DATA CENTER CONTINUED MOMENTUM IN DRIVING SPACE, MAKING PLDT WELL POSITIONED TO 05 CAPITALIZE ON FUTURE GROWTH IN THE AREAS 06 RELEVANT SOLUTIONS TO BETTER SERVE THE NEEDS OF THE ENTERPRISE MARKET OF SMACS AND MANAGED SERVICES Cybersecu
Slide 22: 1Q 2017 Highlights: Wireless Individual Business
1Q 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL BUSINESS In Pesos Billions DECLINE IN NET SERVICE CONTRIBUTORS: 01 REVENUE VS LAST YEAR 68.2M QUARTERLY NET SERVICE REVENUE 63.1M SUBS BASE In Millions Q1 2016 Q1 2017 17.98B ₱110 ₱97 14.75B ARPU ARPU PhP Q1 2016 Q1 2017 Q1 2016 Q1 2017 22
Slide 23: 1Q 2017 Highlights: Wireless Individual Business
1Q 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL BUSINESS HOLDING THE LINE IN NET SERVICE REVENUE GREEN SHOOTS OF 02 03 ON A DAILY BASIS PROGRESS IN Q1 QUARTERLY NET SERVICE DAILY NET SERVICE REVENUE REVENUE In Pesos Millions 63.1M In Pesos Billions 62.8M 17.98 17.44 198 SUBS 15.84 15.10 14.75 192 172 164 16
Slide 24: 1Q 2017 Highlights: Wireless Individual Business
1Q 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL BUSINESS DELIVERING THE BEST CUSTOMER 04 EXPERIENCE LIKE NEVER BEFORE WITH SMART’S NEWEST AND FASTEST LTE NETWORK Validated by 24
Slide 25: 1Q 2017 Highlights: Wireless Individual Business
1Q 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL BUSINESS FURTHERING COMMITMENT TO IMPROVE EXPERIENCE IN PUBLIC AREAS 05 AS WE PROVIDE THE BEST WIFI OFFLOAD EXPERIENCE TO OUR SUBSCRIBERS THE YARD XAVIERVILLE THE YARD UNDERGROUND STREAT FOOD PARK MATINA TOWN SQUARE Quezon City Pasig Maginhawa Davao Experience
Slide 26: 1Q 2017 Highlights: Wireless Individual Business
1Q 2017 HIGHLIGHTS: WIRELESS INDIVIDUAL BUSINESS UPSELLING CONTENT AND DIGITAL SERVICES TO 06 CREATE MORE VALUE AND DEMAND FOR DATA Experience Content Like Never Before! 26
Slide 27: Renewal of Smart Franchise
Renewal of Smart Franchise Smart Franchise has been extended by Republic Act No. 10926 for another 25 years from the date of effectivity of the Act Published in the Philippine Star on May 4, 2017 and will take effect 15 days after such publication or on May 20, 2017 Republic Act No. 10926 sign
Slide 28: PLDT Group: Guidance for 2017
PLDT Group: Guidance for 2017 EBITDA: P70bn Capex: P46bn To grow by P8.8bn from P61.2bn in 2016 Higher by P3.2bn from P42.8bn in 2016 impact of P4.6bn in subsidies and provisions in 2016 Includes carry-over of capex started in 2016 to be completed/accepted which will not recur in 2017 in 201
Slide 29: Other Details
@PLDT &Smart Other Details
Slide 30: PLDT Group: Service Revenues by Business Segment
PLDT Group: Service Revenues* By Business Segment (Php in billions) Consolidated -1% -4% -1% -1% 38.2 -0.6 37.6 -1.5 -0.3 -0.2 1Q17 vs 1Q16: 36.1 35.8 35.6 -7% or -P2.6bn 1Q16 2Q16 3Q16 4Q16 1Q17 Service Revenue Mix: Data/broadband 38% 40% 41% 43% 44% Wireless Fixed Line -2% -7% -3% 24.7 -0.6 -1.8 -
Slide 31: PLDT Group: Fixed and Wireless Financial Highlights
PLDT Group: Fixed and Wireless Financial Highlights (Php in billions) Fixed Wireless Service Revenues (net of interconnection costs) Service Revenues (net of interconnection costs) +10% -16% +1.5 -3.9 +4% -4% +2% 16.9 24.7 24.0 +0.4 +0.7 22.3 21.6 -0.8 20.8 15.9 16.3 15.4 15.5 1Q16 2Q16 3Q16 4Q16 1Q
Slide 32: PLDT Group: Service Revenues
PLDT Group: Service Revenues* Higher by P1.5bn or 10% Service Revenue Mix 1Q16 1Q17 Fixed Line* Data/Broadband 59% 62% (Php in billions) Data and LEC and International and LEC/Others 31% 30% Broadband Others domestic voice 1Q17 vs 1Q16 International Voice/Domestic Voice 10% 8% +1.5 +0.3 -0.2 Service
Slide 33: PLDT Group: Home and Individual Service Revenues
PLDT Group: Home and Individual Service Revenues* Home Service Revenue Mix 1Q16 1Q17 (Php in billions) Data/Broadband 59% 61% Higher by P0.8bn or 12% LEC 38% 36% 1Q17 vs 1Q16 Domestic Voice 3% 3% Fixed Line Others 0% 0% Data/ Domestic broadband LEC Voice and Others Service Revenues (Php i n mi l l i
Slide 34: PLDT Group: Enterprise Service Revenues
PLDT Group: Enterprise Service Revenues* Enterprise* (Php in billions) 1Q17 vs 1Q16 Higher by P1.0bn or 13% Fixed and Mobile Mobile domestic Mobile ILD/NLD LEC voice Others Corp. Data Data SMS +6% +1% -41% +1% +19% +75% -5% --- --- -0.1 --- +0.8 +0.3 --- 8.5 7.5 SMS/mobile voice Data and broadband l
Slide 35: PLDT Group: Consolidated Data and Broadband
PLDT Group: Consolidated Data and Broadband* (Php in billions) Mobile Data Corp. Data and Data Center Home Broadband 1Q17 vs 1Q16 +1.5 +0.6 +10% +15% +10% +1.5 +0.7 +17% 4.7 15.9 +3% +0.1 4.9 15.3 +0.5 15.9 Y-o-Y 14.4 14.9 14.9 +2% 4.6 +2% 4.7 +15% 4.1 4.3 4.5 6.2 4.2 4.2 4.1 4.5 +11% 4.9 +17% 6.1 6
Slide 36: Appendix
@PLDT &Smart Appendix
Slide 37: Subscriber Base: Mobile
Subscriber Base: Mobile Mobile Subscribers (1) by Category: Mar-17 Dec-16 Sept-16 Jun-16 Mar-16 Mobile Subscriber Base (1) Prepaid 60,421,068 59,952,941 62,259,067 64,701,367 64,651,175 Smart Prepaid 21,933,462 21,643,963 23,560,542 24,185,165 24,836,433 Sun Prepaid 8,086,432 8,463,469 8,846,953 9,6
Slide 38: Subscriber Base: Broadband and Fixed Line
Subscriber Base: Broadband and Fixed Line Broadband Subscribers Mar-17 Dec-16 Sept-16 Jun-16 Mar-16 BROADBAND Home Broadband (Wireless) 264,227 270,203 271,572 265,473 248,675 Fixed Line Broadband 1,506,578 1,450,550 1,407,122 1,347,422 1,296,402 Total Broadband Subscribers 1,770,805 1,720,753 1,678
Slide 39: 1Q2017: Consolidated Financial Highlights
1Q2017: Consolidated Financial Highlights 1Q2017 1Q2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Total Revenues 23,162 19,049 - 39,188 42,779 (8%) Service Revenues 22,475 18,249 - 37,701 40,598 (7%) Cash Operating Expenses (12,101) (9,998) (18) (18,7
Slide 40: Underlying Core Income
Underlying Core Income 2017 2016 (Unaudited, Php in millions) 1Q 1Q 2Q 3Q 4Q FY Core Income 5,329 7,211 10,489 4,036 6,121 27,857 Core Income Adjustments One-Time Provisions and Subsidies (EBITDA Adjustments) - 1,011 2,034 1,605 - 4,650 Asset Sales - (970) (7,365) (396) (438) (9,169) Accelerated Dep
Slide 41: Reconciliation of Core and Reported net income
Reconciliation of Core and Reported net income 1Q2017 1Q2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Net Income (Losses) Attributable to Equity Holders of 2,230 3,190 (469) 4,951 6,217 (20%) Add (Deduct): Foreign Exchange Losses (gains), Net 254 41
Slide 42: Consolidated Service Revenues
Consolidated Service Revenues* 2017 2016 (Unaudited, Php in millions) 1Q 1Q 2Q 3Q 4Q FY Fixed Line 15,556 14,287 14,320 14,446 15,033 58,086 LEC 4,553 4,333 4,384 4,479 4,499 17,695 Fixed Line Voice - International 970 1,240 1,092 1,015 1,111 4,458 Fixed Line Voice - Domestic (NLD) 789 844 845 863 7
Slide 43: Consolidated Service Revenues and EBITDA
Consolidated Service Revenues* and EBITDA 2017 2016 (Unaudited, Php in millions) 1Q 1Q 2Q 3Q 4Q FY Data/Broadband/Digital Platforms 16,221 14,525 14,975 15,169 15,749 60,418 Mobile Data 6,235 6,063 6,444 6,375 6,333 25,215 Mobile Internet 4,612 3,811 4,257 4,471 4,628 17,167 Mobile Broadband 1,623 2
Slide 44: Wireless Service Revenues and EBITDA
Wireless Service Revenues* and EBITDA 2017 2016 (Unaudited, Php in millions) 1Q 1Q 2Q 3Q 4Q FY Data/Broadband/Digital Platforms 7,281 6,944 7,270 7,375 7,428 29,017 Mobile Data 6,308 6,127 6,536 6,445 6,409 25,517 Mobile Internet 4,612 3,811 4,257 4,471 4,628 17,167 Mobile Broadband 1,655 2,276 2,20
Slide 45: Fixed Line Service Revenues and EBITDA
Fixed Line Service Revenues* and EBITDA 2017 2016 (Unaudited, Php in millions) 1Q 1Q 2Q 3Q 4Q FY Data/Broadband 10,574 9,110 9,216 9,457 9,928 37,711 Home Broadband 4,134 3,434 3,655 3,835 3,972 14,896 Corp. Data and Other Network Services 5,622 4,938 4,793 4,970 5,279 19,980 Data Center and ICT 818
Slide 46: Expenses
Expenses 1Q2017 1Q2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Operating Expenses Compensation and Employee Benefits 1,943 3,548 - 5,487 5,231 5% Repairs and Maintenance 1,852 1,456 - 3,160 3,671 (14%) Selling and Promotions 1,089 427 - 1,508 1,718
Slide 47: Other Income (expenses)
Other Income (expenses) 1Q2017 1Q2016 % Change (Unaudited, Php in millions) Wireless Fixed Line Others Consolidated Consolidated Equity Share in Net Earnings (Losses) of Associates and Joint Ventures Beacon - - 408 408 705 (42%) Vega - - (269) (269) - - Others (33) 67 20 54 (68) (179%) Total Equity
Slide 48: ARPU
ARPU Mobile ARPU, Net(1) : 2017 2016 1Q 1Q 2Q 3Q 4Q Smart Postpaid 965 938 951 946 970 Smart Prepaid 104 112 110 102 104 TNT 71 80 77 71 75 Sun Postpaid 413 475 453 402 418 Sun Prepaid 78 80 81 84 85 (1) Includes Mobile Broadband subscribers Broadband ARPU, Net : 2017 2016 1Q 1Q 2Q 3Q 4Q Home Broadb
Slide 49: Earnings Per Share (EPS)
Earnings Per Share (EPS) 1Q2017 1Q2016 (Unaudited, Php in millions except EPS (in Php) and Shares (in mn)) Basic Diluted Basic Diluted Net Income Attributable to Equity Holders of PLDT 4,951 4,951 6,217 6,217 Dividends on Preferred Shares (15) (15) (15) (15) Net Income for the Period Attributable to
Slide 50: Balance Sheet
Balance Sheet Consolidated March 31, 2017 December 31, 2016 (Php in millions) (unaudited) (audited) Total Assets 467,456 475,119 Nominal Value of Total Long-Term Debt 175,834 185,663 in US$ $3,501 $3,730 Less: Unamortized Debt Discount 686 631 Total Long-Term Debt 175,148 185,032 Cash and Short-Term
Slide 51: Debt Profile
Debt Profile (US$ in millions) 2012 2013 2014 2015 2016 1Q2017 Debt Balance 2,851 2,353 2,920 3,429 3,730 3,501 Cash and Short-Term Investments 919 735 610 1,016 833 796 Net Debt 1,932 1,618 2,310 2,413 2,897 2,706 Interest-Bearing liabilities December 31, March 31, 2017 2016 Unamortized Debt Change
Slide 52: Foreign Exchange Risk
Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex sensitivity for every P1 change Forex sensitivity for every P1 change on B/S (in US$ millions) Conso - net of Elim Revaluation (in US$ millions) Conso US$ Revenues* 132.3 Debt (net of LT hedges & ST Forwards/opti
Slide 53: 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 54: ss —~~"S——e
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