PLDT, Inc. · PSE:TEL

PLDT — Q1 2013 Earnings Presentation

37 slides from PLDT's earnings presentation, May 7, 2013

  1. Slide 1: First Quarter 2013 Financial and Operating Results

    First Quarter 2013 Financial and Operating Results 7 May 2013

  2. Slide 2: PLDT Group: 1Q13 Financial Highlights

    PLDT Group: 1Q13 Financial Highlights * Excluding BPO business segment ** EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnect expenses) Foreign Exchange Rates (Php:US$1) 1Q2013 1Q2012 Inc/(Dec) Period-end P40.92 P42.93 -5% Period-average P40.70 P43.03 -5% 2

  3. Slide 3: PLDT Group: Core and Reported Net Income

    PLDT Group: Core and Reported Net Income Core Net Income*  PLDT expects to return to growth in 2013 with core (Php in billions) income anticipated to rise by P1bn or 3% to P38.3bn from 2012 which year was impacted by heightened competition and the integration of Digitel into the group  Core income

  4. Slide 4: PLDT Group: Service Revenues and EBITDA

    PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues *  Consolidated service revenues for 1Q13 of P40.0bn was stable (Php in billions) Cellular Voice-Domestic ILD year-on-year but the revenue mix continues to evolve Wireless Broadband SMS NLD  Non-SMS data revenues, representing a

  5. Slide 5: Subscriber Base: Cellular and Broadband

    Subscriber Base: Cellular and Broadband  Combined cellular subscriber base rose to 71.7mn at Cellular Subscribers (in millions) the end of March 2013, with net adds of 1.8mn from YE12  30.6mn TNT subscribers +3%  25.4mn Smart subscribers Sun Cellular Talk 'N Text SMART  15.8mn Sun subscribers 69

  6. Slide 6: Service revenues and outlook per segment

    Service revenues and outlook per segment  Broadband service revenues for 1Q13 rose by 10% or P0.6bn Broadband Service Revenues year-on-year to P6.4bn, or about 16% of total group service (Php in billions) revenues  DSL revenues grew by 5% or P0.1bn to P2.9bn  Wireless broadband revenues grew by 7

  7. Slide 7: Service revenues and outlook per segment

    Service revenues and outlook per segment  Wireless service revenues for 1Q13 were steady year-on-year at Wireless Service Revenues P28.3bn reflecting early signs of a more stable competitive (Php in billions) environment  Cellular data was up 2% or P0.2bn at P12.4bn (1)  Cellular voice revenues o

  8. Slide 8: Free Cash Flow and Capex

    Free Cash Flow and Capex Free Cash Flow (Php in billions)  FCF for the first three months of 2013 of P7.1bn was lower by P5.0bn compared with the same period last year – Lower cash operating income (net of taxes paid) by P0.5bn 1Q12 1Q13 – Net decrease in working capital of P3.7bn – Higher capex by

  9. Slide 9: Other updates

    Other updates  Sale of the Business Process Outsourcing (“BPO”) businesses owned by PLDT’s wholly owned subsidiary – SPi Global Holdings, Inc. (“SPi”) - to Asia Outsourcing Gamma Limited (“AOGL”), a company controlled by CVC Capital Partners (“CVC”) completed on 30 April 2013  Divestment of BPO bu

  10. Slide 10: PLDT Group Guidance for 2013

    PLDT Group Guidance for 2013 Core Net Income Core Net P38.3 Inc billion Capex P29.0 Core Netbillion Income (P7.4bn or 20% lower than 2012) Capital Management Dividend Core Pay-out Policy: Net Income 70% of Core EPS + “look-back” approach 10

  11. Slide 11: Segment and Other Details

    YEARS Segment and Other Details eN 0 a fee = <7 PLDT SMART in 1

  12. Slide 12: Broadband

    Broadband  Broadband service revenues for 1Q13 rose by 10% or P0.6bn year- Broadband Service Revenues on-year to P6.4bn, or about 16% of total group service revenues (Php in billions)  DSL revenues grew by 5% or P0.1bn to P2.9bn  PLDT DSL revenues increased by 7% or P0.2bn to P2.8bn, following a

  13. Slide 13: Wireless

    Wireless  Wireless service revenues for 1Q13 were steady year-on- Wireless Service Revenues year at P28.5bn reflecting early signs of a more stable (Php in billions) competitive environment  Cellular data was stable at P12.9bn (1)  Mobile internet browsing revenues increased by 42% Satellite and

  14. Slide 14: Fixed Line

    Fixed Line  Fixed line service revenues for 1Q13 were higher by Fixed Line Service Revenues Note: 2Q-4Q12 figs for update to (Php in billions) reflect elim of interco 1% year-on-year or P0.2bn at P15.2bn as increases in DSL and corporate data revenues fully offset Miscellaneous Data declines in NLD

  15. Slide 15: Meralco

    Meralco  Consolidated revenues for 1Q13 dipped by 1% or P0.8bn to P64.8bn due to the Energy Sales and Revenues combined effect of: (in „000 GWh and Php in Billions)  Higher distribution revenues resulting from a modest rise in electricity sales volumes and number of customers  Lower generation ch

  16. Slide 16: PLDT Group: Debt Profile

    PLDT Group: Debt Profile Debt Balance  Net Debt as of 1Q13 dipped to US$1.8bn from YE12, (US$ in billions) with Net Debt/EBITDA lower at 0.95x 2.7 2.9 2.8  At the end of March 2013, gross debt stood at 2.2 2.1 1.9 1.8 US$2.8bn, inclusive of US$0.4bn of Digitel 1.8 1.6 1.6 1.7 1.2 1.3 1.3  46% of

  17. Slide 17: PAS 19 Adjustments

    PAS 19 ADJUSTMENTS  Change in PAS19 affecting termination benefits (MRP costs): Old PAS 19 – allows for the recognition of termination benefits when the Company is demonstrably committed to provide termination benefits, which only entails an approved detailed, formal plan and that plan has no reali

  18. Slide 18: Appendix

    FS \G Appendix Wa PLDT smart = YEARS 18

  19. Slide 19: Subscriber Data

    Subscriber Data 1Q13 vs 1Q12 1Q13 vs FY12 Mar-13 Dec- 12 Sept- 12 Jun- 12 Mar-12 Amount % Amount % CELLULAR Smart 25,178,410 25,510,846 25,636,712 26,929,737 27,470,678 (2,292,268) -8% (332,436) -1% Prepaid 24,411,169 24,827,418 24,977,891 26,287,817 26,853,620 (2,442,451) -9% (416,249) -2% Postpaid

  20. Slide 20: 1Q2013: Consolidated Financial Highlights

    1Q2013: Consolidated Financial Highlights 1Q2013 1Q2012 Fixed Consolidated Consolidated % Change Wireless BPO Others (PhP in millions) Line (unaudited) (unaudited) Continuing Operations Service Revenues 28,470 15,190 2,502 - 39,968 40,030 0% Cash operating expenses 12,370 10,156 2,170 1 18,597 17,61

  21. Slide 21: Reconciliation of Core and Reported Net Income

    Reconciliation of Core and Reported Net Income 1Q2013 1Q2012 Difference (PhP in billions) Reported net income 9.2 10.0 (0.8) Core net income 9.6 9.2 0.4 (0.4) 0.8 (1.2) Accounted for by: Forex gains, net 0.2 1.2 (1.0) Gains on derivatives 0.1 0.0 0.1 PAS 19 Adjusment (0.8) - (0.8) Others - - - Adjus

  22. Slide 22: Consolidated Service Revenues

    Consolidated Service Revenues % Change 1Q2013 1Q2012 (in billion pesos) 1Q13 vs 1Q12 ** SMS 11.9 12.0 -1% Voice - Domestic 13.3 13.4 -1% Voice - International 5.5 6.0 -8% Non-SMS data 8.2 7.5 10% Others 0.9 1.1 -12% Total 40.0 40.0 0% 22

  23. Slide 23: Revenues by Segment

    Revenues by Segment 1Q2013 1Q2012 Consolidated Consolidated % Change Wireless Fixed Line (PhP in millions) (unaudited) (unaudited) Service Revenues Wireless 28,470 Cellular 25,795 25,795 25,884 - Broadband 2,321 2,321 2,122 9% Satellite and other services 354 354 396 -11% Fixed line 15,190 Local exc

  24. Slide 24: Expenses

    Expenses 1Q2013 1Q2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (unaudited) Operating expenses Compensation and employee benefits 2,161 3,679 - 5,824 4,778 22% Repairs and maintenance 1,987 1,494 - 3,301 3,189 4% Selling and promotions 1,514 413 - 1

  25. Slide 25: Other Income (Expenses)

    Other Income (Expenses) 1Q2013 1Q2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PHP in millions) (unaudited) (unaudited) Gains (losses) on derivative financial instruments, net 3 20 - 23 (134) -117% Interest income 143 145 8 296 354 -16% Equity share in net earnings (losses) of

  26. Slide 26: EBITDA

    EBITDA 1Q2013 1Q2012 Consolidated Consolidated % Change Wireless Fixed Line BPO Others (PhP in millions) (unaudited) (unaudited) Income before tax 9,863 1,132 303 631 11,731 13,450 -13% Add (deduct): Depreciation and amortization 4,051 3,177 121 - 7,228 7,350 -2% Financing costs, net 631 973 4 - 1,6

  27. Slide 27: Historical Wireless EBITDA Margin (restated)

    Historical Wireless EBITDA Margin (restated) 2012 2013 (PhP in millions) 1Q 2Q 3Q 4Q 1Q Wireless Gross Service Revenues Cellular services 25,884 25,824 25,451 26,539 25,795 Cellular Voice 12,471 12,247 12,182 12,778 12,272 Cellular Data 12,720 12,900 12,654 13,155 12,914 Other Cellular Revenues 693

  28. Slide 28: Historical Fixed line EBITDA Margin (restated)

    Historical Fixed line EBITDA Margin (restated) 2012 2013 (PhP in millions) 1Q 2Q 3Q 4Q 1Q Fixed Line Gross Service Revenues Local exchange 4,174 4,116 4,089 4,092 4,037 International long distance 2,810 2,479 2,661 2,839 2,881 National long distance 1,338 1,293 1,242 1,173 1,155 Data and other netwo

  29. Slide 29: Core Net Income

    Core Net Income 1Q2013 1Q2012 Consolidated Consolidated % Change Wireless Fixed Line BPO Others (PhP in millions) (unaudited) (unaudited) Net Income attributable to equity holder of PLDT 7,483 839 230 626 9,178 9,969 -8% Add (deduct): Foreign exchange losses (gains), net (188) (25) (2) - (215) (1,23

  30. Slide 30: Earnings Per Share

    Earnings Per Share 1Q2013 1Q2012 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 9,178 9,178 9,969 9,969 Continuing Operations 9,053 9,053 9,788 9,788 Discontinued Operations 125 125 181 181 Dividends on preferred shares (15) (15) (12) (12

  31. Slide 31: Cash Flows

    Cash Flows 1Q2013 1Q2012 (unaudited) Consolidated % Change Wireless Fixed Line Others Consolidated (unaudited) (PhP in millions) Net cash from operations 11,542 2,559 (7) 14,302 18,592 -23% Add(Deduct): Capital expenditures (1,421) (1,522) - (3,066) (2,751) 11% Other investing activities 21 (347) -

  32. Slide 32: Balance Sheet

    Balance Sheet March 31, 2013 December 31, 2012 (PhP in millions) (Unaudited) (Audited) Total Assets 407,046 405,815 Nominal Value of Total Debt 112,915 117,115 in US$ $2,760 $2,851 Less: Unamortized Debt Discount 1,132 1,323 Total Debt 111,783 115,792 Cash and short-term investments 40,722 37,735 Ne

  33. Slide 33: Debt Profile

    Debt Profile (US$ in millions) 2006 2007 2008 2009 2010 2011(1) 2012(1) 1Q2013(1) Debt Balance 1,756 1,585 1,625 2,210 2,113 2,719 2,851 2,760 Cash and short-term investments 514 745 847 908 852 1,061 919 995 Net Debt 1,242 840 778 1,302 1,261 1,658 1,932 1,765 (1) Including Digitel Debt Maturities

  34. Slide 34: Interest-bearing Liabilities

    Interest-bearing Liabilities March 31, 2013 December 31, (Unaudited) 2012 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,347 $2 $1,349 $1,440 ($92) Smart $969 $26 $995 $957 $37 2014 Debt $259 $22 $280 $280 $ - Others $711

  35. Slide 35: Foreign Exchange Risk

    Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives PLDT Group Digitel TOTAL PLDT Group Digitel TOTAL Forex sensitivity for every P1 change (in US$ Millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ Millions) Debt (net

  36. Slide 36: DIGITEL

    DIGITEL FOR THE THREE MONTHS ENDED MARCH 31, 2013 Elim with Impact at Wireless Fixed Line Conso PLDTGR PLDT In million pesos REVENUES 5,092 658 5,750 (61) 5,689 Service 4,984 658 5,642 (61) 5,581 Non-Service 108 - 108 - 108 EXPENSES 4,416 648 5,064 (106) 4,958 Cash Operating Expenses 2,143 425 2,568

  37. Slide 37: 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

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