PLDT, Inc. · PSE:TEL
PLDT — FY2011 Earnings Presentation
42 slides from PLDT's earnings presentation, Mar 6, 2012
Slide 1: Investing in the Future: Full Year 2011 Results
INVESTING IN THE FUTURE Full Year 2011 Financial and Operating Results 6 March 2012 1
Slide 2: PLDT Group: 2011 Financial Highlights
PLDT Group: 2011 Financial Highlights FY 2011 % Y-o-Y FY 2010 Total ( Audi t e d) ( PhP i n bi l l i ons) PLDT* DIGITEL * * PLDT* Total ( Audi t e d) Service Revenues*** 150.2 3.8 154.0 156.2 -4 % -1 % • Wireless 99.0 3.1 102.1 104.0 -5 % -2 % • Fixed Line 58.1 0.7 58.8 59.1 -2 % -1 % • BPO 8 6 8.6
Slide 3: Capital Management
Capital Management Dividend Declaration ¾ Total dividends of P38.6bn or P189 per share represents 100% Declaration Date 6 March 2012 payout of 2011 core income - the fifth consecutive year of 100% Record Date 20 March 2012 payout Payment Date 20 April 2012 ¾ Consistent with the committed 70% dividen
Slide 4: Consolidated Service Revenues, EBITDA, and Core Income
Consolidated Service Revenues, EBITDA , and Core Income ¾ In line with guidance, Core Net Income for 2011 stood at P39.0bn Core Net Income compared with P42.0bn in 2010, with the decline largely on account of (Php in billions) lower service revenues and higher operating expenses, partially offset by
Slide 5: Reported Net Income and Capex
Reported Net Income and Capex Reported Net Income Reported Net Income (Php in billions) (Php in billions) 40.2 (0.6) 1.7 93 9.3 0.1 40.2 1.3 2.4 31.7 -21% 0.7 31.7 +15% 21.3 -51% 18.5 10.4 on for 2010 2011 ues income tax nc. ash controlling Other in Revenu Non-ca Provisio Cost of interest (exp.) Ope
Slide 6: Network Modernization Program
Network Modernization Program NETWORK MODERNIZATION PLDT Group Network at end 2012: ¾ Improve Network Quality • Enhanced E h d quality lit off our voice, i SMS and dbbroadband db d … with additional capacity that is flexible and scalable to allow services future business growth and allow seamless tr
Slide 7: Subscriber Base
Subscriber Base ¾ Combined Smart, TNT, Red Mobile and Sun cellular Cellular Subscribers subscriber base stood at 63.7mn at end-2011 (in thousands) Sun registered 14.7mn subscribers Smart had 49.0mn subscribers, or net adds of 3.4mn for SMART Talk 'N Text Red Mobile Sun Cellular 2011 2011: 63.7 +
Slide 8: Service Revenues
Service Revenues Wireless* ¾ Prospects for the wireless business are encouraging (Php in billions) With the acquisition of Digitel, we have created a Cellular Data Cellular Voice Broadband platform that should eventually p y lead to improved p yyields S t llit and Satellite d Others Oth DIGITEL an
Slide 9: Service Revenues
Service Revenues Broadband * ¾ Initiatives to improve broadband delivery include (Php in billions) Introduction of more volume-based pricing and fair usage policies SMART Wireless Broadband Mobile Internet DIGITEL Make available tiered/differentiated services that PLDT DSL Others offer varying s
Slide 10: PLDT/SMART/DIGITEL/SUN Synergies
PLDT/SMART/DIGITEL/SUN SYNERGIES ¾ Strategic objectives: Increase DIGITEL/SUN revenues through coverage expansion and service quality improvement, resulting in improved profitability Reduce cost through rationalization of expenditures, alignment of processes, and improvement of operational effic
Slide 11: PLDT Group Guidance for 2012
PLDT Group p Guidance for 2012 P37.0 billion, Core Net Income and return to 2010 level of P42bn by 2014 P38.0 billion for 2012, Capex and d decreasing d i for f 2013 onwardsd att below b l 20% off service i revenues y Dividend Payout Ratio: 70% of Core EPS Capital Management + “look back” approach B
Slide 12: 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 13: Details
| INVESTING IN THE FUTURE Details 13 SPLOT swe =
Slide 14: Service Revenues and EBITDA
Service Revenues and EBITDA ¾ Consolidated service revenues were lower by P2.2bn or Consolidated Service Revenues* 1% at P154.0bn in 2011 from P156.2bn in 2010 (Php in billions) DIGITEL’s consolidated service revenues for the two months ended December 2011 were P3.8bn Data and BPO*** DIGITEL Exc
Slide 15: Broadband
Broadband Broadband Service Revenues* ¾ Broadband service revenues remained strong in 2011 with an (Php in billions) 18% or P2.9bn year-on-year growth to P18.8bn, including P0.5bn in broadband revenues from Digitel SMART Wireless Broadband Mobile Internet DIGITEL Excluding DIGITEL, DIGITEL broadba
Slide 16: Wireless
Wireless ¾ Wireless service revenues decreased by P2.0bn or 2% year-on-year to Service Revenues* P102.1bn in 2011 (Php in billions) DIGITEL registered P3.1bn in wireless service revenues Smart’s wireless service revenues dipped by 5% to P99.0bn with the Cellular Data Cellular Voice Broadband S t
Slide 17: Fixed Line
Fixed Line Fixed Line* ¾ Fixed line service revenues were lower by P0.3bn or 1% to P58.8bn in (Php in billions) 2011 from P59.1bn in 2010 Local Exchange NLD ILD Combined LEC, NLD and ILD revenues decreased by 3% year-on-year Data Vitro Miscellaneous Corporate data and DSL revenues rose by 5% DIG
Slide 18: BPO
BPO: ¾ In 2011, PLDT consolidated at SPi Global its business process BPO Service Revenues operations (BPO) consisting of knowledge process solutions (KPS) and (Php in billions) customer interaction solutions (CIS), previously under ePLDT Knowledge Processing Solutions All other ICT businesses of e
Slide 19: Meralco
Meralco Energy Sales and Service Revenues ¾ Meralco’s consolidated service revenues for 2011 rose by 7% (in ‘000 GWh and Php in Billions) year-on-year to P256.8bn due to a 1% growth in electricity sales, higher transmission and distribution charges but slightly Electricity y Sales Revenues offset by
Slide 20: Free Cash Flow and Capex
Free Cash Flow and Capex Free Cash Flow ¾ FCF for FY2011 increased by P3.5bn or 8% to P47.2bn (Php in billions) mainly due to: 2010 2011 + Increase in cash from operations by P2.0bn including 77.3 (28.8) 79.2 (31.2) P1.4bn from Digitel + Decline in net interest by P0.4bn (4.4) (0.4) 43.7 (4.0) 3.1 4
Slide 21: PLDT Group: Debt Profile
PLDT Group: Debt Profile Debt Balance ¾ Net debt at end 2011 amounted to US$1.7bn, with net (US$ in billions) debt/EBITDA at 0.9x 2.7 2.2 2.1 ¾ At year-endd 2011 2011, gross debt d bt stood t d att 1.8 1.6 1.6 1.7 $2.7bn, including US$0.5bn of Digitel debt which is 1.2 1.3 1.3 0.8 0.8 largely US$ de
Slide 22: Appendix
| INVESTING IN THE FUTURE Appendix 22 SPLOT swe =
Slide 23: Subscriber Data
Subscriber Data FY11 vs FY10 Net adds Dec-11 Sep-11 Jun-11 Mar-11 Dec-10 Sep-10 Jun-10 Mar-10 Amount % 1Q11 2Q11 3Q11 4Q11 CELLULAR Smart 27,123,622 26,606,008 26,509,537 26,165,500 25,715,018 25,594,008 26,204,136 25,479,359 1,408,604 5% 450,482 344,037 96,471 517,614 Buddy 26,573,137 26,129,264 26
Slide 24: FY 2011: Consolidated Financial Highlights
FY 2011: Consolidated Financial Highlights g g FY 2011 2010 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (in million pesos) SMART DIGITEL* Total PLDT DIGITEL* Total (Audited) (Audited) Service Revenues ** 98,971 3,098 102,069 58,079 706 58,785 8,588 - 153,958 156,170 -1% Cash op
Slide 25: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income FY11* FY10 Difference (in billion pesos) Reported net income 31.7 40.2 (8.5) Core net income 39.0 42.0 (3.0) (7.3) (1.8) (5.5) Accounted A t d for f by: b Forex gains (losses), Net (0.8) 1.8 (2.6) Gains(losses) on Derivatives 0.6 (1.3) 1.9 Others (8.3)
Slide 26: Consolidated Service Revenues
Consolidated Service Revenues* 2011** 2010 % Change (in billion pesos) 1Q 2Q 3Q 4Q FY 1Q 2Q 3Q 4Q FY FY11 vs FY10 Voice 17.7 17.4 16.6 18.6 70.3 19.7 18.8 18.3 18.3 75.1 -6% Data and BPO 20.1 20.5 20.0 23.1 83.7 20.2 20.5 19.6 20.7 81.0 3% 37.7 37.9 36.6 41.7 154.0 39.9 39.3 37.9 39.0 156.2 -1% * Se
Slide 27: Service Revenues by Segment
Service Revenues by y Segment g FY 2011 2010 Wireless Fixed Line Consolidated Consolidated % Change BPO (in million pesos) SMART DIGITEL* Total PLDT DIGITEL* Total (Audited) (Audited) Service Revenues ** Wireless 98,971 , 3,098 , 102,069 , Cellular 90,837 2,808 93,645 93,645 95,520 -2% Broadband 6,5
Slide 28: Wireless Net ARPU
Wireless Net ARPU 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Smart Postpaid 1,666 1,627 1,614 1,646 1,557 1,576 1,430 1,480 Smart Buddy 204 197 181 189 180 179 166 166 Talk 'N Text 122 123 118 123 113 111 103 109 Red Mobile Prepaid 9 4 5 19 28 38 33 34 Red Mobile Postpaid - - - - 133 413 431 355 Sun Ce
Slide 29: Expenses
Expenses p FY 2011 2010 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (in million pesos) SMART DIGITEL* Total PLDT DIGITEL* Total (Audited) (Audited) Operating expenses Compensation and employee benefits 5,029 219 5,248 9,771 84 9,855 5,062 - 20,151 24,070 -16% Repairs and mainte
Slide 30: Other Income (Expenses)
Other Income (Expenses) ( p ) FY 2011 2010 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (in million pesos) SMART DIGITEL DIGITEL* Total PLDT DIGITEL DIGITEL* Total (Audited) (Audited) Gains (losses) on derivative financial instruments, net - (10) (10) 2,381 (1,807) 574 (4) - 560
Slide 31: EBITDA
EBITDA FY 2011 2010 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (i million (in illi pesos)) SMART DIGITEL* T t l Total PLDT DIGITEL* Total T t l (Audited) (Audited) Income before tax 31,458 (663) 30,795 11,053 (2,260) 8,793 1,102 1,987 42,677 53,685 -21% Add (deduct): Depreciat
Slide 32: Historical Consolidated EBITDA Margin (restated)
Historical Consolidated EBITDA Margin (restated) 2009 2010 2011 (in million pesos) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q** Consolidated Gross Service Revenues* Fixed line 12,232 12,384 12,816 12,778 12,973 11,616 12,336 12,539 12,022 12,244 12,115 12,938 Local exchange 3 988 3,988 3 789 3,789 3 834 3,
Slide 33: Historical Wireless EBITDA Margin (restated)
Historical Wireless EBITDA Margin g (restated) ( ) 2009 2010 2011 (in million pesos) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q** Wireless Gross Service Revenues* Cellular services 24,596 24,984 23,609 24,956 24,138 24,568 22,996 23,816 23,101 23,150 21,846 25,548 Broadband, satellite and others Broadband
Slide 34: Historical Fixed line EBITDA Margin (restated)
Historical Fixed line EBITDA Margin g (restated) ( ) 2009 2010 2011 (in million pesos) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q** Fixed Line Gross Service Revenues* Local exchange 4,024 3,821 3,894 3,942 3,930 3,839 3,803 3,770 3,731 3,725 3,734 3,918 International long distance 2,682 2,874 3,115 2,910 3
Slide 35: Core Net Income
Core Net Income FY 2011 2010 Wireless Fixed Line Consolidated Consolidated % Change BPO Others (in million pesos) SMART DIGITEL* Total PLDT DIGITEL* Total (Audited) (Audited) Reported net income 22,821 (405) 22,416 8,554 (2,242) 6,312 984 1,985 31,697 40,217 -21% Add (deduct): Foreign exchange losse
Slide 36: Earnings Per Share
Earnings g Per Share FY 2011 FY 2010 (Audited) (Audited) (in million pesos) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 31,697 31,697 40,217 40,217 Dividends on preferred shares (458) (458) (458) (458) Net income for the period attributable to common equity h
Slide 37: Cash Flows
Cash Flows 2011 FY 2010 (Audited)* Consolidated % Change Wireless Fixed Line BPO Others Consolidated ((Audited)) (in million pesos) Net cash from operations 54,971 35,475 (11,213) 8 79,212 77,260 3% Add(Deduct): Capital expenditures (17,151) (13,654) (400) (1) (31,206) (28,766) 8% Other investing ac
Slide 38: Balance Sheet
Balance Sheet Consolidated December 31, 2011* December 31, 2010 (in million pesos) (Audited) (Audited) Total Assets 395,646 277,815 Nominal Value of Total Debt 119,411 92,590 in US$ $2,719 $2,113 Less: Unamortized Debt Discount 2,136 2,944 Total Debt 117,275 89,646 Cash and short-term investments 46
Slide 39: Debt Profile
Debt Profile (in million US$) 2006 2007 2008 2009 2010 2011* Debt Balance 1,756 1,585 1,625 2,210 2,113 2,719 Cash and short-term investments 514 745 847 908 852 1,061 Net Debt 1,242 840 778 1,302 1,261 1,658 * Includes Digitel Debt Maturities as of December 31, 2011 (in million US$) PLDT,, SMART, S
Slide 40: Interest-bearing Liabilities
Interest-bearing g Liabilities December 31, 2011 December 31, (Audited) 2010 Change Unamortized (Audited) Carrying Value Face Value (in millions) Debt Discount Face Value Debt PLDT $1,268 $3 $1,271 $1,123 $148 Smart $844 $46 $890 $987 ($97) 2014 Debt $238 $42 $280 $280 $0 Others $606 $4 $610 $707 ($
Slide 41: Foreign Exchange Risk
Foreign g Exchange g Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives PLDT Groupp Digitel g TOTAL PLDT Group Digitel g TOTAL Forex sensitivity for every P1 change (in US$ Millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ Millions)
Slide 42: DIGITEL
DIGITEL FOR THE YEAR ENDED DECEMBER 31, 2011 Conso Impact at (In million pesos) Wireless Fixed Line Digitel Interco PLDT REVENUES 3,184 706 3,890 (45) 3,845 Service 3,098 706 3,804 (45) 3,759 Non-Service 86 - 86 - 86 EXPENSES 3,083 726 3,809 (24) 3,785 Cash Operating Expenses 1,727 608 2,335 (24) 2,