PLDT, Inc. · PSE:TEL

PLDT — Q1 2019 Earnings Presentation

60 slides from PLDT's earnings presentation, May 9, 2019

  1. Slide 1: 2019 First Quarter Financial and Operating Results

    2019 FIRST QUARTER FINANCIAL AND OPERATING RESULTS 9TH MAY 2019

  2. Slide 2: PLDT Group: 1Q 2019 Financial Highlights

    PLDT Group: 1Q 2019 Financial Highlights (Php in bn) Service Revenues 149.4bn 38.0bn 7% 1Q19 vs 1Q18* (net of interconnection costs) +2.4bn Individual Enterprise Home International/Carrier 16.9bn 18% 9.8bn 9% 9.1bn 3% 2.1bn 39% 44% 26% 24% 6% +2.6bn +0.8bn +0.3bn -1.3bn 35.8bn 12% 94% of Service Rev

  3. Slide 3: Consolidated Service Revenues (excl International)

    Consolidated Service Revenues (excl International) (Php in bn) Acceleration from FY18: 12% 6% yoy growth 3% Pro-forma (PAS18): +9% yoy +3.7 +1.0 35.4 35.8 1Q19 vs 1Q18 32.8 33.5 30.7 31.0 31.2 31.7 32.2 32.1 9.1 9.1 +3% 8.7 9.1 9.1 7.6 7.8 8.0 8.5 8.8 9.8 +9% 9.8 8.1 8.6 8.5 8.7 9.0 9.0 9.2 9.3 15.0

  4. Slide 4: Consolidated Service Revenues (with International)

    Consolidated Service Revenues (with International) (Php in bn) Acceleration from FY18: 7% 2% yoy growth 1% Pro-forma (PAS18): +5% yoy +2.4 +0.3 37.6 37.9 1Q19 vs 1Q18 36.3 36.2 35.5 35.2 35.2 35.7 35.9 35.5 2.2 2.1 -39% 3.7 3.5 3.5 2.7 4.8 4.2 4.0 4.1 9.1 9.1 +3% 8.7 9.1 9.1 7.6 7.8 8.0 8.5 8.8 9.8

  5. Slide 5: 1Q 2019 Service Revenues: Data now 68% of total revenues

    1Q 2019 Service Revenues: Data now 68%* of total revenues (Php in bn) 1Q19 vs 1Q18(1) 38.0bn 149.4bn 7% +2.4bn Data and broadband Domestic voice SMS International voice (fixed and mobile) (fixed and mobile) 149.4bn 21% 149.4bn 9% 149.4bn 16% 149.4bn 26% 24.4bn (2) 10.1bn 2.3bn 1.2bn +4.2bn -0.9bn -0

  6. Slide 6: Consolidated EBITDA (ex-MRP): 16% year-on-year growth

    Consolidated EBITDA (ex-MRP): 16% year-on-year growth, margin at 51% (Php in bn) 16% FY18 YoY∆: Lower by 1% Pro-forma (PAS18): stable +2.7 Higher Lower Higher Higher Reduction in svc cash subsidies cost rent expense rev* opex & provns of services (PFRS16) +2.4 +0.5 -0.1 -0.1 20.1 1.5 17.4 18.6 1Q18

  7. Slide 7: PLDT Group: EBITDA

    PLDT Group: EBITDA (Php in bn) 149.4bn 16% FY18 YoY∆: Lower by 1% Pro-forma (PAS18): stable +2.7 2% 4% 22% 20.1 17.4 17.4 17.1 +3.6 -0.3 -0.7 16.4 1.5 Impact of PFRS16 Y-o-Y +13% +7% +2.1 18.6 +1.2 1Q18 2Q18 3Q18 4Q18 1Q19 Margin: 46% 45% 45% 42% 51% 68.3bn 7

  8. Slide 8: Telco Core Income: On track to meet P26bn guidance

    Telco Core Income: On track to meet P26bn guidance (Php in bn) FY18 YoY∆ : 2% higher 6% Pro-forma (PAS18): +3% yoy +0.4 Higher Higher Higher Lower EBITDA Non-cash exp Fin. Cost, Prov. for +2.7 -2.1 net inc. tax -0.2 +0.1 7.2 6.8 1Q18 1Q19 Telco Core Telco Core (ex-Voyager)  Impact to telco core inc

  9. Slide 9: PLDT Group: Telco Core Income

    PLDT Group: Telco Core Income (Php in bn) FY18 YoY∆ : 2% higher 6% Pro-forma (PAS18): +3% yoy +0.4 5% 9% 19% 7.2 50% 6.8 -0.3 6.5 -0.6 5.9 -1.1 +2.4 4.8 1Q18 2Q18 3Q18 4Q18 1Q19 24.0bn  Core income of P7.2bn in 1Q19 higher than the 2018 average core income of P6.0bn per quarter 9

  10. Slide 10: Capex: Unparalleled fixed and wireless networks fuel growth

    Capex: Unparalleled fixed and wireless networks fuel growth In P bns 78.4 +P20bn  Network/IT capex at level similar to 1Q2019 Capex 2018 (P48bn) 58.5  “Revenue/customer capex” for last mile P12.2bn (1Q18: P6.9bn) and customer premises equipment (P14-16bn)  One-time capex related to restructured T

  11. Slide 11: Fixed Fiber and Wireless Network: Selected Highlights

    Fixed Fiber and Wireless Network: Selected Highlights Accelerated Fixed Network Rollout TOTAL HOMES PASSED TOTAL CAPACITY TOTAL FIBER FOOTPRINT (Million Homes) (Million Ports) (Thousand Cable Kilometers Laid)  1.2mn fiber ports available at end March 2019 (1 port = 1 customer) +6% +6% +13% 6.30 6.6

  12. Slide 12: PLDT Group: Debt Profile

    PLDT Group: Debt Profile Net debt Net debt-to- Maturities well spread out EBITDA US$2,451mn 67% due after 2021 1.92x Debt Balance Debt Maturities (gross) US$3,313mn (US$ in billions) (US$ in millions, 31 March 2019) 1,202 3.5 2.8 3.4 3.3 2.4 2.5 484 270 381 428 305 243 0.7 1.0 0.9 2017 2018 1Q19 201

  13. Slide 13: Enterprise Business Q1 2019 Update

    ENTERPRISE BUSINESS Q1 2019 UPDATE JOVY I. HERNANDEZ 13

  14. Slide 14: Enterprise Business Sustains robust growth

    Enterprise Business Sustains robust growth. ENTERPRISE BUSINESS Q1 2018 NET SERVICE 9.8 REVENUES 9.0 1.1 (IFRS) 0.9 1.5 1.4 P9.8B 6.7 7.2 YoY Growth 9% +0.8B Q1 2018 Q1 2019 FIXED WIRELESS ICT 6% | +0.5B 12% | +0.1B 26% | +0.2B 14

  15. Slide 15: Fixed Line Business Growth fueled by Demand for Data

    Fixed Line Business Growth fueled by Demand for Data. P7.2B 6% International 114% +0.5B Operations +0.1B PLDT Global DATA now accounts 11% for 70% of Revenues. +0.5B The FUTURE of Enterprise is FIBER. PLDT Enterprise GLOBAL NETWORK. Robust, Reliable, and Secure. Connecting Enterprises to the World.

  16. Slide 16: Wireless Business Sustains Double Digit Growth

    Wireless Business Sustains Double Digit Growth. P1.5B 12% +0.16B A Keen Eye on Enterprise Mobility Growing Beyond Postpaid. Enterprise Wireless Solutions Leading the charge. Wireless Solutions Postpaid Messaging/BizLoad M2M/IoT 37% +0.08B 8% +0.08B 56% 36% 16

  17. Slide 17: ICT Business Delivering Breakthrough Growth

    ICT Business Delivering Breakthrough Growth. P1.1B 26% +0.2B Full Spectrum of ICT Services Growing Beyond Data Centers Data center 12% +62M Cloud & Cyber Security 111% +129M The Bedrock of Digital Transformation Breakthrough growth Data Centers & Beyond. Almost 3x the pace of the market. 17

  18. Slide 18: Corporate Data Market Share

    Corporate Data Market Share. ENTERPRISE BUSINESS ↑12%, ↑16%, +0.7B +0.4B We are >2x the size of competition. Enterprise growing almost double vs competition. 6.5 5.8 PLDT Enterprise maintains its 2.7 3.1 indisputable market leadership position (68%). Q1 Q1 Q1 Q1 2018 2019 2018 2019 18

  19. Slide 19: Q1 2019 Consumer Business Update

    Q1 2019 Consumer Business Update May 9, 2019

  20. Slide 20: Consumer Q1 2019 revenues at highest in 6 years

    Home +3.0 YOY Individual +13% Consumer Q1 2019 26.0 25.0 revenues at its 24.6 24.9 23.0 9.1 6.4 7.0 22.4 6.5 HIGHEST in 6 YRS @ 7.8 8.8 Php 26.0B! 18.5 18.2 16.9 17.9 14.6 14.2 ● Individual @ +2.7B vs Q1’18 ● Home @ +300M vs.Q1’18 Q1 ‘14 Q1 ‘15 Q1 ‘16 Q1 ‘17 Q1 ‘18 Q1 ‘19 Actual Actual Actual Actual

  21. Slide 21: Consumer Individual

    PLDT @ Smart CONSUMER INDIVIDUAL

  22. Slide 22: 2019 starts strong with 18% YoY growth in Q1

    2019 starts strong with 18% YOY Growth (+2.7B) in Q1 16.9 14.2 Q1 ‘18 Q1 ‘19 NET SERVICE REVENUES In Billions of PhP | IFRS 15

  23. Slide 23: 5.7 Million more subscribers in Q1 2019

    5.7 Million more subscribers in Q1 2019 TOTAL SUBSCRIBERS In Millions | 90-day churn rule +5.7 M +10% 63.4 57.7 Q1 ‘18 Q1 ‘19

  24. Slide 24: New communication on Network Superiority

    New communication on Network Superiority to further accelerate LTE migration The Philippines’ fastest mobile data network ● Best Video Experience ● Best Download Speed Experience ● Best Upload Speed Experience ● Best Latency Experience “Excellent” category in mobile data

  25. Slide 25: Continuous double digit increase in video users

    Continuous double digit increase in video users 35% 90% 153% 170% Nov ‘18 Mar ‘19 Nov ‘18 Mar ‘19 Nov ‘18 Mar ‘19 Nov ‘18 Mar ‘19 YOUTUBE NBA IWANT IFLIX MONTHLY VIDEO APPS USERS In Millions

  26. Slide 26: SMART leading mobile gaming development with the Nationals

    SMART leading the mobile gaming development in the PH with the Nationals MOBILE LEGENDS THE NATIONALS TOURNAMENT Mar 17 Launched Feb 1

  27. Slide 27: Big play into mobile gaming gaining ground

    Big play into mobile gaming gaining ground +141% +235% +131% Jun ‘18 Sep ‘18 Dec ‘18 Mar ‘19 MONTHLY MOBILE LEGENDS DATA TRAFFIC

  28. Slide 28: Consumer Home

    | PLDT@ smart CONSUMER HOME

  29. Slide 29: PLDT Home growing modestly at 3% YOY in Q1

    Q1 2019 Home Service Revenues at P9.1B, growing at 3.1% YOY PLDT Home growing modestly NET SERVICE REVENUES In Billions of PhP | PFRS 15 at 3% YOY in Q1 Home at 9.1B is +300M vs. Q1’18 9.1B 8.8B Q1 2018 Q1 2019

  30. Slide 30: Unli Fibr upgraded speeds

    UNLI FIBR WE’RE GIVING ALL OUR LOYAL PLDT HOME UPGRADED SPEEDS CUSTOMERS ANOTHER SPEED BOOST!!! 5Mbps to 10Mbps 10Mbps to 20Mbps 920K subscribers upgraded 25Mbps to 30Mbps YTD Q1 2019 MAY W3

  31. Slide 31: Reduce installation time to 24 hours with Bilis Kabit

    MARK0 Reduce installation time to 24 hours 4 through the nationwide implementation of “Bilis Kabit” program Slide /

  32. Slide 32: Stepped up content marketing

    Stepped up content marketing efforts and drive brand love and usage

  33. Slide 33: Google Wifi Plan in partnership with Google

    Introducing a new standard in home Wifi in partnership with Google - the Google Wifi Plan

  34. Slide 34: PLDT Group: Guidance for 2019

    PLDT Group: Guidance for 2019 Telco Core Income: P26bn Capex: up to P78.4bn  To rise by P2bn from P24bn in 2018  To increase by up to P20bn from P58.5bn in 2018  Acceleration of revenue increases for the Consumer  Focus on: Individual business  Expansion of LTE/3G mobile coverage and  Monetiza

  35. Slide 35: Other details

    Other details 35

  36. Slide 36: Individual: Record 18% year-on-year growth

    Individual: Record 18% year-on-year growth (Php in bn) 149.4bn 18% +2.6 2% 16.9 10% 16.5 5% +0.3 1% +1.5 14.4 +0.7 15.1 14.2 +0.2 1Q18 2Q18 3Q18 4Q18 1Q19  Growth driven by data/broadband which now account for 65% of revenues  Turn-around of the business evidenced by sustained quarter-on-quarter r

  37. Slide 37: Home: Gearing up to recover lost momentum

    Home: Gearing up to recover lost momentum due to DOLE order in July 2018 (Php in bn) 149.4bn 3% +0.3 1% 3% +0.3 9.1 -0.1 9.1 9.1 9.1 8.8 1Q18 2Q18 3Q18 4Q18 1Q19  Data/broadband account for 76% of revenues  Despite negative impact of DOLE Order, 1Q19 revenues were 3% higher year-on-year  Home ram

  38. Slide 38: Enterprise: 9% growth vs 1Q18

    Enterprise: 9% growth vs 1Q18 (Php in bn) 149.4bn 9% +0.8 3% 1% 5% +0.2 +0.1 +0.4 9.8 9.8 9.0 9.2 9.3 1Q18 2Q18 3Q18 4Q18 1Q19  Data/broadband account for 65% of revenues Note: Net of interconnection costs 38

  39. Slide 39: International/Carrier: Declines persist at a slower pace

    International/Carrier: Declines persist at a slower pace (Php in bn) 39% -1.3 21% 21% 2% 3.5 3.5 -0.7 2.7 2.2 2.1 -0.6 --- 1Q18 2Q18 3Q18 4Q18 1Q19  Excluding P0.9bn decline in revenues due to lowering of interconnection fees, International/Carrier revenues for 1Q19 would have been lower by P0.5bn

  40. Slide 40: Revenue Allocation: Comparison

    Revenue Allocation: Comparison  Allocation of service revenues were updated to reflect current consumption trends of bundles based on network usage study: Fixed Line (starting 2Q18) and Wireless (starting 3Q18) 48% Due to new 6% Due to new allocation allocation Mobile +3.4 10.4 Fixed Home +0.4 6.8

  41. Slide 41: Appendix

    @PLOT Bsmart Appendix

  42. Slide 42: Subscriber Base: Mobile

    Subscriber Base: Mobile Mobile Subscribers (1) by Category: Net Adds (Reductions) Mar-19 Dec-18 Sept-18 Jun-18 Mar-18 1Q19 vs 1Q18 1Q19 vs YE18 (1) Mobile Subscriber Base Prepaid 61,585,197 58,178,978 55,627,968 56,081,230 55,666,020 5,919,177 11% 3,406,219 6% Smart Prepaid 22,011,859 20,532,174 19,

  43. Slide 43: Subscriber Base: Fixed Line and Broadband

    Subscriber Base: Fixed Line and Broadband Fixed Line Subscribers Net Adds Mar-19 Dec-18 Sept-18 Jun-18 Mar-18 1Q19 vs 1Q18 1Q19 vs YE18 Fixed Line Subscribers 2,707,077 2,710,972 2,778,274 2,756,865 2,707,079 (2) - (3,895) - Broadband Subscribers Net Adds (Reductions) Mar-19 Dec-18 Sept-18 Jun-18 Ma

  44. Slide 44: ARPU

    ARPU Mobile ARPU, Net(1) : 2019 2018 1Q 1Q 2Q 3Q 4Q Smart Postpaid 796 809 813 810 843 Smart Prepaid 118 112 116 120 123 TNT 67 73 73 71 69 Sun Postpaid 423 382 403 406 414 Sun Prepaid 77 80 82 82 82 (1) Includes Mobile Broadband subscribers Broadband ARPU, Net : 2019 2018 1Q 1Q 2Q 3Q 4Q Fixed Line

  45. Slide 45: 1Q2019: Consolidated Financial Highlights

    1Q2019: Consolidated Financial Highlights 1Q2019 Y-o-Y 1Q2018 Wireless Fixed Line Others Consolidated % Change (Php in millions) Service Revenues (1) 21,122 21,539 - 39,607 37,745 5% Cash Operating Expenses (2) 7,690 11,337 6 17,345 18,969 (9%) Subsidies and Cost of Services 519 548 - 1,058 852 24%

  46. Slide 46: Consolidated Service Revenues

    Consolidated Service Revenues 2019 2018 Y-o-Y 1Q 1Q 2Q 3Q 4Q FY % Change (Php in millions) Fixed Line 19,014 17,592 18,243 18,307 18,716 72,858 8% LEC 3,698 4,877 2,736 3,849 3,733 15,195 (24%) Fixed Line Voice - International 1,573 910 1,142 1,299 1,496 4,847 73% Fixed Line Voice - Domestic (NLD) 5

  47. Slide 47: Consolidated Service Revenues (normalized)

    Consolidated Service Revenues (normalized) 2019 2018 Y-o-Y 1Q 1Q 2Q 3Q 4Q FY % Change (Php in millions) Fixed Line 19,014 17,592 18,243 18,307 18,716 72,858 8% LEC (1) 3,698 3,803 3,761 3,898 3,733 15,195 (3%) Fixed Line Voice - International 1,573 910 1,142 1,299 1,496 4,847 73% Fixed Line Voice -

  48. Slide 48: Consolidated Service Revenues

    Consolidated Service Revenues 2019 2018 Y-o-Y 1Q 1Q 2Q 3Q 4Q FY % Change (Php in millions) Data and Broadband 24,423 17,388 20,442 25,633 23,593 87,056 40% Home Broadband 6,855 5,533 7,672 6,656 6,772 26,633 24% Fixed Home Broadband 6,828 5,485 7,633 6,619 6,741 26,478 24% Wireless Home Broadband 27

  49. Slide 49: Consolidated Service Revenues (normalized)

    Consolidated Service Revenues (normalized) 2019 2018 Y-o-Y 1Q 1Q 2Q 3Q 4Q FY % Change (Php in millions) Data and Broadband 24,423 20,238 21,471 21,754 23,593 87,056 21% Home Broadband 6,855 6,474 6,779 6,608 6,772 26,633 6% (1) Fixed Home Broadband 6,828 6,426 6,740 6,571 6,741 26,478 6% Wireless Ho

  50. Slide 50: Wireless Service Revenues

    Wireless Service Revenues 2019 2018 Y-o-Y 1Q 1Q 2Q 3Q 4Q FY % Change (Php in millions) Data/Broadband 11,670 6,720 7,167 13,515 11,103 38,505 74% Mobile Data 11,643 6,672 7,128 13,478 11,072 38,350 75% Mobile Internet 10,486 5,374 5,892 12,168 9,773 33,207 95% Mobile Broadband 948 1,260 1,191 1,118

  51. Slide 51: Wireless Service Revenues (normalized)

    Wireless Service Revenues (normalized) 2019 2018 Y-o-Y 1Q 1Q 2Q 3Q 4Q FY % Change (Php in millions) Data/Broadband 11,670 8,497 9,220 9,685 11,103 38,505 37% (1) Mobile Data 11,643 8,449 9,181 9,648 11,072 38,350 38% Mobile Internet 10,486 7,056 7,922 8,456 9,773 33,207 49% Mobile Broadband 948 1,26

  52. Slide 52: Fixed Line Service Revenues

    Fixed Line Service Revenues 2019 2018 Y-o-Y % Change (Php in millions) 1Q 1Q 2Q 3Q 4Q FY Data/Broadband 14,677 12,137 14,284 14,019 14,330 54,770 21% Home Broadband 6,875 5,551 7,699 6,684 6,799 26,733 24% Corp. Data and Other Network Services 6,694 5,683 5,485 6,337 6,486 23,991 18% Data Center and

  53. Slide 53: Fixed Line Service Revenues (normalized)

    Fixed Line Service Revenues (normalized) 2019 2018 Y-o-Y % Change (Php in millions) 1Q 1Q 2Q 3Q 4Q FY Data/Broadband 14,677 13,211 13,259 13,970 14,330 54,770 11% (1) Home Broadband 6,875 6,491 6,807 6,636 6,799 26,733 6% Corp. Data and Other Network Services 6,694 5,817 5,352 6,336 6,486 23,991 15%

  54. Slide 54: Expenses

    Expenses 1Q2019 Y-o-Y 1Q2018 (Php in millions) Wireless Fixed Line Others Consolidated % Change Operating Expenses Compensation and Employee Benefits 1,772 4,029 - 5,796 5,855 (1%) Repairs and Maintenance 2,315 1,780 - 3,936 3,340 18% Selling and Promotions 693 415 - 1,107 1,498 (26%) Rent 64 23 - 7

  55. Slide 55: Other Income (expenses)

    Other Income (expenses) 1Q2019 Y-o-Y 1Q2018 Wireless Fixed Line Others Consolidated % Change ( Php in millions) Equity Share in Net Earnings (Losses) of Associates and Joint Ventures Vega - - 6 6 (18) 133% Voyager - - (451) (451) - (100%) Others - 47 28 75 92 (18%) Total Equity Share in Net Earnings

  56. Slide 56: Earnings Per Share (EPS)

    Earnings Per Share (EPS) 1Q2019 1Q2018 (Php in millions except EPS (in Php) and Shares (in mn)) Basic Diluted Basic Diluted Net Income Attributable to Equity Holders of PLDT 6,708 6,708 6,900 6,900 Dividends on Preferred Shares (15) (15) (15) (15) Net Income for the Period Attributable to Common Equ

  57. Slide 57: Balance Sheet

    Balance Sheet Consolidated (Php in millions) March 31, 2019 December 31, 2018 Total Assets 496,536 482,750 Nominal Value of Total Long-Term Debt 174,373 176,694 in US$ $3,313 $3,362 Less: Unamortized Debt Discount 387 418 Total Long-Term Debt 173,986 176,276 Cash and Short-Term Investments 45,391 52

  58. Slide 58: Debt Profile

    Debt Profile (US$ in millions) 2016 2017 2018 1Q2019 Debt Balance 3,730 3,466 3,362 3,313 Cash and Short-Term Investments 833 668 1,005 864 Net Debt 2,897 2,798 2,357 2,449 Interest-Bearing liabilities December 31, March 31, 2019 2018 Unamortized Debt Change Carrying Discount/Debt Face Value Face Va

  59. Slide 59: 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

  60. Slide 60: A PLDT ASmart

    A PLDT ASmart

PLDT — Q1 2019 Earnings Presentation on 6ix