PLDT, Inc. · PSE:TEL
PLDT — 9M 2014 Earnings Presentation
36 slides from PLDT's earnings presentation, Nov 4, 2014
Slide 1: Nine Months 2014 Financial and Operating Results
Nine Months 2014 Financial and Operating Results Philippine Long Distance Telephone Company (PLDT) 4 November 2014
Slide 2: PLDT Group: 9M2014 Financial Highlights
PLDT Group: 9M2014 Financial Highlights 9M2014 9M2013 (PhP in billions, except EBITDA margin % Y-o-Y and Core EPS) (unaudited) Service Revenues 122.9 121.6 1% • Fixed Line 48.5 46.0 5% • Wireless 85.8 86.4 -1% EBITDA 56.8 59.6 -5% • Fixed Line 18.9 18.0 5% • Wireless 37.6 41.2 -9% EBITDA Margin* 46%
Slide 3: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues The ongoing structural change in PLDT’s revenue mix continues to subdue consolidated service revenue growth rates and EBITDA (Php in billions) margins 9M14: P122.9bn 9M13: P121.6bn Change: +1% Increasing contribution from grow
Slide 4: PLDT Group: Broadband revenues
PLDT Group: Broadband revenues Consolidated Broadband Revenues Broadband revenues for 9M14 grew by P3.9bn or 20% year-on-year to (Php in billions) P23.4bn or 19% of total service revenues from 16% in 9M13 Fixed broadband revenues, representing 44% of total broadband revenues, rose by P1.1bn or 1
Slide 5: PLDT Group: Fixed line segment
PLDT Group: Fixed line segment Fixed Line Service Revenues* Fixed line service revenues for 9M14, net of interconnection costs, (Php in billions) grew by 6% or P2.3bn year-on-year to P42.3bn due to the continued rise in retail and corporate data revenues Data revenues increased by P2.2bn or 11%
Slide 6: PLDT Group: Wireless segment
PLDT Group: Wireless segment Wireless Service Revenues Wireless service revenues were lower by P0.5bn or 1% at P85.8bn as increases in (Php in billions) cellular voice and broadband revenues were fully offset by declines in SMS and (1) VAS revenues as competition intensified Broadband revenues g
Slide 7: Market opportunities and initiatives
Market opportunities and initiatives Opportunities Initiatives Internet/social network habit among “Free Internet” for all prepaid, postpaid young, literate market mainly using and broadband subscribers until 5 Jan. 2015 internet cafes, wi-fi “Always-on” experience via low-denomination prepaid
Slide 8: Market opportunities and initiatives
Market opportunities and initiatives Opportunities Initiatives Sustained economic improvement PLDT Group has 5 data centers that offer: fuelling business expansions of colocation, server hosting/outsourcing, disaster corporates, SMEs, BPOs creating recovery, connectivity, and data scrubbing dema
Slide 9: PLDT's investment in Rocket Internet AG
PLDT’s investment in Rocket Internet AG (“Rocket”) On 7 August 2014, PLDT and Rocket entered into a global strategic partnership to drive the development of online and mobile payment solutions in emerging markets PLDT invested €333mn (pre-IPO, €33/share) and holds a 6.6% post-IPO stake in Rocket
Slide 10: PLDT Group: Debt Profile
PLDT Group: Debt Profile Debt Balance Net debt and net debt to EBITDA rose to US$2.4bn and (US$ in billions) 1.46x, respectively, as of end September 2014 Reflects impact of investment in Rocket Internet As of 9M14, gross debt stood at US$3.0bn, higher by US$0.6bn from YE13, mainly due to the
Slide 11: PLDT Group: Free Cash Flow and Capex
PLDT Group: Free Cash Flow and Capex Free cash flow for 9M14 was lower year-on-year by P8.8bn or 27% at P24.1bn, Free Cash Flow mainly due to the combined effect of: (Php in billions) Stable cash from operations Higher net decrease in working capital of P3.9bn 9M13 9M14 Increase in capex by
Slide 12: PLDT Group: Core and Reported Net Income
PLDT Group: Core and Reported Net Income Increased price-led competitive intensity in the prepaid cellular market, Core Net Income continued decline in inbound international revenues, the negative impact (Php in billions) on SMS of the increasing popularity of messaging apps, as well as higher ope
Slide 13: PLDT Group Guidance for 2014
PLDT Group Guidance for 2014 P37.0bn Core Net Income (P1.7bn or 4% lower than 2013) P34.5bn Capex (over 20% of service revenues) Dividend Pay-out Policy: Capital Management 75%* of Core EPS + “look-back” approach * Regular dividend payout updated from 70% on 5 August 2014 13
Slide 14: Other Details
Zs <> PLDT LIVE DIGITAL! Other Details 14
Slide 15: Subscribers
Subscribers Wireless Subscribers PLDT Group had 75.0mn subscribers at the end of September (in millions) 2014 1% Cellular subscriber base stood at 69.0mn, of which 96% or 66.4mn were prepaid subscribers 70.0 70.5 69.0 More than 133,000 new subscribers from 2Q14 69.9 68.9 63.7 vs. FY13 TNT su
Slide 16: MERALCO
MERALCO MERALCO’s 9M14 consolidated revenues were lower year-on-year by P5.2bn or 3% at Energy Sales Volumes and Revenues P202.9bn due to the combined effect of: (in „000 GWh and Php in billions) Higher electricity sales by 2% Downward adjustment on MERALCO‟s purchases from the WESM billed by
Slide 17: PLDT Group: Appendix
Zs <> PLDT LIVE DIGITAL! PLDT Group: Appendix 17
Slide 18: Subscriber Data: Cellular
Subscriber Data: Cellular Cellular Subscribers by category: 9M14 vs 9M13 9M14 vs FY13 Net Adds Sept-14 Jun-14 Mar-14 Dec- 13 Sept- 13 Net Adds % Net Adds % 1Q14 % 2Q14 % 3Q14 % CELLULAR Prepaid 66,374,421 66,339,954 68,030,812 67,667,750 70,198,270 (3,823,849) -5% (1,293,329) -2% 363,062 1% (1,690,8
Slide 19: Subscriber Data: Broadband
Subscriber Data: Broadband 9M14 vs 9M13 9M14 vs FY13 Net Adds Sept-14 Jun-14 Mar-14 Dec-13 Sept-13 Net Adds % Net Adds % 1Q14 % 2Q14 % 3Q14 % BROADBAND Wireless Broadband 2,694,840 2,598,920 2,551,882 2,453,826 2,378,607 316,233 13% 241,014 10% 98,056 4% 47,038 2% 95,920 4% Smart Broadband 2,103,587
Slide 20: 9M2014: Consolidated Financial Highlights
9M2014: Consolidated Financial Highlights 9M2014 9M2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Service Revenues 85,842 48,452 - 122,910 121,604 1% Cash operating expenses (1) (40,815) (29,528) (56) (58,751) (54,381) 8% Depreciation and
Slide 21: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income 9M2014 9M2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net Income attributable to equity holder of PLDT 17,859 5,866 4,232 27,957 26,885 4% - continuing operations Add (deduct): Foreign exch
Slide 22: Consolidated Service Revenues
Consolidated Service Revenues 2014 2013 % Change 9M14 vs 3Q14 vs (Php in billions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY 9M13 3Q13 SMS and VAS 10.8 10.5 10.1 31.4 11.9 11.9 11.5 35.4 11.9 47.3 -11% -13% Voice - Domestic 14.0 14.4 14.1 42.5 13.3 13.9 13.7 40.9 14.3 55.2 4% 3% Voice - International 5.5 5.2 4.
Slide 23: Expenses
Expenses 9M2014 9M2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Operating expenses Compensation and employee benefits (1) 6,068 9,726 - 15,777 15,038 5% Repairs and maintenance 6,488 4,939 - 10,952 9,524 15% Selling and promotions 6,436
Slide 24: Other Income (Expenses)
Other Income (Expenses) 9M2014 9M2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Gains (losses) on derivative financial instruments, net (32) 42 3 13 492 -97% Interest income 152 242 226 567 680 -17% Equity share in net earnings of associa
Slide 25: Cellular and Broadband Net ARPU
Cellular and Broadband Net ARPU Cellular Net ARPU 2014 2013 1Q 2Q 3Q 1Q 2Q 3Q 4Q Smart Postpaid 1,086 1,074 1,068 1,154 1,153 1,099 1,102 Smart Prepaid 132 134 124 141 141 142 153 Talk 'N Text 87 89 87 87 87 82 85 Sun Cellular Prepaid 67 66 64 57 58 60 68 Sun Cellular Postpaid 476 467 469 455 495 47
Slide 26: Historical Consolidated: Service Revenues and EBITDA
Historical Consolidated: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Fixed line 12,792 12,717 12,846 38,355 11,997 12,275 12,220 36,492 12,589 49,081 Local exchange 4,087 4,107 4,104 12,298 4,008 4,066 4,042 12,116 4,057 16,173 International long distance 1,
Slide 27: Historical Wireless: Service Revenues & EBITDA
Historical Wireless: Service Revenues & EBITDA 2014 2013 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Wireless Gross Service Revenues Cellular services 26,078 26,190 25,142 77,410 25,709 26,529 26,040 78,278 27,597 105,875 Cellular Voice 12,868 13,049 12,365 38,282 12,187 12,869 12,733 37,789 13,
Slide 28: Historical Fixed Line: Service Revenues and EBITDA
Historical Fixed Line: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Fixed Line Gross Service Revenues Local exchange 4,111 4,132 4,131 12,374 4,036 4,092 4,066 12,194 4,080 16,274 International long distance 2,859 2,843 2,696 8,398 2,968 2,802 2,678 8,448 2,9
Slide 29: Earnings Per Share
Earnings Per Share 9M2014 9M2013 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 27,957 27,957 28,954 28,954 Continuing Operations 27,957 27,957 26,885 26,885 Discontinued Operations - - 2,069 2,069 Dividends on preferred shares (44) (44)
Slide 30: Cash Flows
Cash Flows 9M2014 9M2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net cash from operations 31,508 15,185 (27) 46,573 51,605 -10% Add(Deduct): Capital expenditures (8,925) (7,056) - (15,981) (14,888) 7% Interest, net (844) (2,415) 47 (3,1
Slide 31: Balance Sheet
Balance Sheet Consolidated September 30, 2014 December 31, 2013 (Php in millions) (unaudited) (Audited) Total Assets 416,137 399,638 Nominal Value of Total Long-term Debt 133,261 104,472 in US$ $2,969 $2,353 Less: Unamortized Debt Discount 559 382 Total Long-term Debt 132,702 104,090 Cash and short-
Slide 32: Debt Profile
Debt Profile (US$ in millions) 2008 2009 2010 2011(1) 2012(1) 2013(1) 9M2014(1) Debt Balance 1,625 2,210 2,113 2,719 2,851 2,353 2,969 Cash and short-term investments 847 908 852 1,061 919 735 542 Net Debt 778 1,302 1,261 1,658 1,932 1,618 2,427 (1) Including Digitel Debt Maturities: Debt Maturities
Slide 33: Interest-bearing Liabilities
Interest-bearing Liabilities September 30, 2014 December 31, (unaudited) 2013 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,771 $4 $1,775 $1,284 $491 Smart 973 8 981 812 169 DIGITEL 213 - 213 257 (44) Total Debt $2,957 $1
Slide 34: Foreign Exchange Risk
Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives Forex sensitivity for every P1 change (in US$ millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ millions) Conso Conso - net of Elim P1 movement in the Debt (net of L
Slide 35: 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 36: LIVE DIGITAL!
LIVE DIGITAL! & PLDT CeEtruLtar