PLDT, Inc. · PSE:TEL

PLDT — FY2015 Earnings Presentation

42 slides from PLDT's earnings presentation, Feb 29, 2016

  1. Slide 1: Full Year 2015 Financial and Operating Results

    We are Digital Philippine Long Distance Telephone Company (PLDT) Full Year 2015 Financial and Operating Results Monday, 29th February 2016 1

  2. Slide 2: Consolidated Service Revenues and EBITDA

    Consolidated Service Revenues and EBITDA Consolidated Service Revenues Service Revenue Mix 2015 2014 In Php bns Growing Mature Growing 30% 26% +6.6 -3.7 Mature 58% 59% (+15%) (-4%) Declining Declining 12% 15% -4.9 (-20%) 164.9  Early signs of progress from efforts to address impact of 162.9 (-1%) c

  3. Slide 3: Early Progress: Service Revenues (ex-ILD/NLD)

    Early Progress: Service Revenues (ex-ILD/NLD) In Php bns Fixed Line* +5% +4% +4% Consolidated Service Revenues 23.6 24.6 25.5 26.7 +1% +2% +1% 1H14 2H14 1H15 2H15 2014: P48.3bn 2015: P52.2bn * Net of interconnect 69.9 70.4 70.9 72.3 Wireless -1% -1% 1H14 2H14 1H15 2H15 2014: P140.3bn 2015: P143.2bn

  4. Slide 4: Fixed line segment

    Fixed line segment Service Revenues* Service Revenue Mix 2015 2014 In Php bns Growing 57% 54% Mature 32% 32% Mature Declining Declining 11% 14% Growing +3.4 +0.5 -1.2  2.3mn fixed line subscribers at YE15 (+3%) (-16%)  1.3mn or 55% have fixed broadband (+11%) 58.8 (+5%) subscriptions 56.1  Revenu

  5. Slide 5: Wireless segment

    Wireless segment Service Revenue Mix 2015 2014 Service Revenues Growing Mature Growing 20% 17% In Php bns +3.1 -4.2 Mature 70% 71% (+16%) (-5%) Declining Declining 10% 12% 115.0 -3.2  68.9mn wireless subscribers at YE15 (-23%)  65.0mn cellular subscribers  62.0mn prepaid subscribers 110.7 (-4%) 

  6. Slide 6: Data and broadband

    Data and broadband Corp data Revenues and data Wireless In Php bns Fixed center broadband Mobile broadband Internet +1.4 +1.0 48.5 (+16%) +2.1 (+14%) (+10%) +2.2 (+15%) (+26%) 41.9 2014 2015 Mobile Internet Fixed Broadband  Data usage rose by 106% to 99,492 terabytes  Fixed broadband subscribers g

  7. Slide 7: Core and Reported net income

    Core and Reported net income Core Income  Core income of P35.2bn for 2015 exceeded guidance of P35.0bn Provn EBITDA for Inc  Includes gain from sale of 37.4 -6.5 Taxes Meralco shares of P3.2bn in Fin Costs 35.2 (-6%) 2015 and P1.7bn in 2014 - Net +6.0 Others -0.9 -0.8  Lower provision for income

  8. Slide 8: PLDT Group: 2015 Financial Review

    PLDT Group: 2015 Financial Review  Growing contribution of data/broadband/digital service revenues in service revenue mix, now up to 30% of consolidated service revenues  Our goal is to accelerate data revenues and services to more than 40% of consolidated service revenues in the next three (3) ye

  9. Slide 9: PLDT Group: 2015 Financial Review

    PLDT Group: 2015 Financial Review  Higher capex investments required to support the changing preferences of customers  Higher financing costs and higher gearing levels with multi-year capex spending program  Results of various tests of network quality showing sustained improvements  Core earning

  10. Slide 10: Capital Management

    Capital Management Dividends per share for 2015 P122 Interim regular dividend (August 2015) P 65 Final regular dividend (February 2016) P 57  In line with PLDT’s dividend policy, P122 or 75% of 2015 core earnings were declared as regular dividends  At PLDT’s 2015 closing share price of P2,060, div

  11. Slide 11: PLDT Group: Our roadmap

    PLDT Group: Our roadmap  Data remains the main growth engine for PLDT  Customer experience is the main focus of our Consumer and Enterprise businesses: key enablers are:  Network dominance and reliability;  Capex of P43bn in 2016, similar to 2015 o 3G, FTTH, and LTE roll-out for capacity and cov

  12. Slide 12: PLDT Group: On-track and making progress

    PLDT Group: On-track and making progress  Impact of these various initiatives would manifest in 2016, at the earliest: we are on-track and making early progress  Encouraging signs from sequential revenue trends in our wireless and fixed line businesses  Results of various tests of network quality

  13. Slide 13: Core Income Guidance for 2016: P28bn

    Core Income Guidance for 2016: P28bn  The whole organization – structure and people – has been oriented to turn on a digital pivot, towards the direction of a digital journey  This will take time to bear fruition – perhaps three (3) years of critical adjustments  Consequently our revenue mix and

  14. Slide 14: Details

    Details &/PLDT SMART ‘sun

  15. Slide 15: PLDT Group: FY15 vs FY14 Financial Highlights

    PLDT Group: FY15 vs FY14 Financial Highlights Revenues Wireless Fixed Line Revenues Revenues P171.1bn 0% P115.5bn P68.9bn P0.3bn -3% +4% (P3.4bn) P2.7bn Service Revenues Wireless Fixed Line Service Revenues Service Revenues P162.9bn -1% P110.7bn P65.5bn (P2.0bn) -4% +2% (P4.3bn) P1.4bn Service Reven

  16. Slide 16: PLDT Group: Service Revenues and EBITDA

    PLDT Group: Service Revenues and EBITDA EBITDA EBITDA andEBITDA and EBITDAMarginmargin Consolidated Service Revenues (Php in millions) P162.9bn a -1% P70.2bn -9% (P2.0bn) (P6.5bn) Excluding ILD/NLD revenues, up by 2% or P2.9bn at P143.2bn EBITDA Margin: 43% Growing Mature Declining Voyager P6.5bn de

  17. Slide 17: PLDT Group: Core and Reported Net Income

    PLDT Group: Core and Reported Net Income Core Net Income EBITDA andNet Reported EBITDA margin Income (Php in millions) P35.2bn a -6% P22.1bn -35% (P2.2bn) (P12.0bn) Due to higher forex and derivative losses, higher fixed asset Exceeds 2015 Core Income Guidance of P35.0bn impairment, and impairment o

  18. Slide 18: Capital Management

    Capital Management Core Earnings Per Share Total Dividends Per Share P162.70 P122 Core Income for 2015 of P35.2bn 75% of 2015 Core EPS Dividend Payments (billion pesos, except per share amount) Dividends per share for 2015 P122 Interim regular dividend (August 2015) P 65 Final regular dividend (Febr

  19. Slide 19: PLDT Group: Fixed line segment

    PLDT Group: Fixed line segment Service Revenues Subscribers P58.8bn* +5% 2.3mn +4% P2.7bn 0.1mn * net of interconnection costs Excluding ILD/NLD revenues, up by P4.0bn or 8% at P52.2bn 1.3mn or 55% of fixed line subscribers have broadband subscriptions Growing Mature Declining Data center Corp data

  20. Slide 20: PLDT Group: Wireless segment

    PLDT Group: Wireless segment Service Revenues Subscribers P110.7bn a -4% 68.9mn -5% (P4.3bn) (4.0mn) Excluding ILD revenues, lower by 1% or P1.1bn at P99.7bn Broadband subscribers grew by 32% to over 3.9mn Mature Declining Cellular Revenues and Subscribers Growing Voyager Others Revenues % Y-o-Y Sub

  21. Slide 21: PLDT Group: Data and broadband

    PLDT Group: Data and broadband Revenues Subscribers P48.5bn a +16% 5.2mn +27% P6.6bn 1.1mn 29% of consolidated service revenues Net adds of 1.1mn in 2015 higher than 2014 net adds by 67% (in thousands) Corp. Data Mobile Internet Fixed Broadband Wireless Broadband Fixed Broadband Smart Broadband Sun

  22. Slide 22: PLDT Group: Debt Profile

    PLDT Group: Debt Profile Debt Balance Debt Maturities (US$ in billions) (US$ in millions, as of December 31, 2015) 3.4 Total: US$3,429mn 1,358 2.7 2.9 2.9 2.4 2.3 2.4 1.7 1.9 1.6 1.1 0.9 0.7 0.6 1.0 695 365 282 376 353 2011 2012 2013 2014 2015 Debt Balance Cash & Short-term Investments Net Debt 2016

  23. Slide 23: PLDT Group: Free Cash Flow and Capex

    PLDT Group: Free Cash Flow and Capex Free Cash Flow Capex P27.8bn 0% P43.2bn a +24% P0.1bn P8.4bn Stable FCF due to the combined effect of: Capex from 2006-15 (10 years): Approx P302bn or (US$6.7bn)  Focus on improving network quality and customer experience, +3.2 -8.4 provisioning of transport ahe

  24. Slide 24: PLDT Group: Appendix

    PLDT Group: Appendix Spor starr sun 24

  25. Slide 25: Subscriber Data: Cellular

    Subscriber Data: Cellular Cellular Subscribers by category: FY15 vs FY14 Net Adds Dec-15 Sept-15 Jun-15 Mar-15 Dec-14 Net Adds % 1Q15 % 2Q15 % 3Q15 % 4Q15 % CELLULAR Prepaid 61,980,425 64,082,775 65,843,593 66,721,243 67,091,612 (5,111,187) -8% (370,369) -1% (877,650) -1% (1,760,818) -3% (2,102,350)

  26. Slide 26: Subscriber Data: Broadband

    Subscriber Data: Broadband FY15 vs FY14 Net Adds Dec-15 Sept-15 Jun-15 Mar-15 Dec-14 Net Adds % 1Q15 % 2Q15 % 3Q15 % 4Q15 % BROADBAND Wireless Broadband 3,932,820 3,789,654 3,676,164 3,391,440 2,986,146 946,674 32% 405,294 14% 284,724 8% 113,490 3% 143,166 4% Smart Broadband 3,057,958 2,896,187 2,82

  27. Slide 27: FY2015: Consolidated Financial Highlights

    FY2015: Consolidated Financial Highlights FY2015 FY2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Total Revenues 115,513 68,865 - 171,103 170,835 - Service Revenues 110,716 65,475 - 162,930 164,943 (1%) Cash operating expenses 54,745 40,113 5

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

    Reconciliation of Core and Reported Net Income FY2015 FY2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Net Income attributable to equity holder of PLDT 15,432 6,185 448 22,065 34,091 (35%) Add (deduct): Foreign exchange losses, net 1,622 892

  29. Slide 29: Consolidated Service Revenues

    Consolidated Service Revenues 2015 2014 % Change FY15 vs 4Q15 vs 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY (Php in billions) FY14 4Q14 SMS and VAS 10.2 9.8 9.9 9.6 39.5 10.7 10.5 9.9 10.3 41.4 (5%) (6%) Voice - Domestic 13.9 13.8 13.5 13.4 54.6 13.9 14.3 14.1 14.5 56.9 (4%) (8%) Voice - International 4.3 4.1 3.

  30. Slide 30: Expenses

    Expenses FY2015 FY2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Operating expenses Compensation and employee benefits 7,725 13,899 - 21,606 18,749 15% Repairs and maintenance 8,577 7,028 - 15,035 14,988 - Selling and promotions 7,712 2,036 -

  31. Slide 31: Other Income (Expenses)

    Other Income (Expenses) FY2015 FY2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Equity share in net earnings of associates and joint ventures (81) 38 3,284 3,241 3,841 (16%) Interest income 308 620 99 799 752 6% Gains (losses) on derivative f

  32. Slide 32: Cellular and Broadband Net ARPU

    Cellular and Broadband Net ARPU Cellular Net ARPU 2015 2014 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Smart Postpaid 1,039 1,065 1,021 1,014 1,086 1,074 1,068 1,084 Smart Prepaid 118 114 115 113 132 134 124 125 Talk 'N Text 85 83 82 83 87 89 87 89 Sun Cellular Prepaid 63 64 65 71 67 66 64 65 Sun Cellular Postpaid 449

  33. Slide 33: Historical Consolidated: Service Revenues and EBITDA

    Historical Consolidated: Service Revenues and EBITDA 2015 2014 (Php in millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Fixed line 13,034 13,302 13,589 13,817 53,742 12,720 12,635 12,773 13,360 51,488 Local exchange 4,172 4,226 4,280 4,301 16,979 4,087 4,107 4,104 4,189 16,487 International long distance 1,3

  34. Slide 34: Historical Wireless: Service Revenues & EBITDA

    Historical Wireless: Service Revenues & EBITDA 2015 2014 (Php in millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Wireless Gross Service Revenues Cellular services 24,878 24,478 24,238 24,144 97,738 26,024 26,012 24,966 25,778 102,780 Cellular voice 11,915 11,599 10,995 10,972 45,481 12,811 12,946 12,382 12,

  35. Slide 35: Historical Fixed Line: Service Revenues and EBITDA

    Historical Fixed Line: Service Revenues and EBITDA 2015 2014 (Php in millions) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY Fixed Line Gross Service Revenues Local exchange 4,196 4,250 4,304 4,326 17,076 4,111 4,132 4,131 4,213 16,587 International long distance 2,255 2,335 2,233 2,396 9,219 2,859 2,843 2,696 3,00

  36. Slide 36: Earnings Per Share

    Earnings Per Share FY2015 FY2014 (audited) (audited) Basic Diluted Basic Diluted Net income attributable to equity holders of PLDT 22,065 22,065 34,091 34,091 Dividends on preferred shares (59) (59) (59) (59) Net income for the period attributable to common equity holders of PLDT 22,006 22,006 34,03

  37. Slide 37: Cash Flows

    Cash Flows FY2015 FY2014 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (audited) (audited) Net cash from operations 46,919 22,556 740 69,744 66,015 6% Add(Deduct): Capital expenditures (30,311) (12,864) - (43,175) (34,759) 24% Interest, net (1,083) (3,837) 41 (4,468

  38. Slide 38: Balance Sheet

    Balance Sheet Consolidated December 31, 2015 December 31, 2014 (Php in millions) (audited) (audited) Total Assets 455,095 436,295 Nominal Value of Total Long-term Debt 161,568 130,634 in US$ $3,429 $2,920 Less: Unamortized Debt Discount 676 511 Total Long-term Debt 160,892 130,123 Cash and short-ter

  39. Slide 39: Debt Profile

    Debt Profile (US$ in millions) 2011 2012 2013 2014 2015 Debt Balance 2,719 2,851 2,353 2,920 3,429 Cash and short-term investments 1,061 919 735 610 1,016 Net Debt 1,658 1,932 1,618 2,310 2,413 Interest-bearing Liabilities December 31, 2015 December 31, (audited) 2014 Unamortized Debt Change Carryin

  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 - net of Elim Conso P1 movement in the US$ Revenues*

  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: oN se .° “oe

    oN se .° “oe €>PLDT SMART

PLDT — FY2015 Earnings Presentation on 6ix