PLDT, Inc. · PSE:TEL

PLDT — 9M 2013 Earnings Presentation

40 slides from PLDT's earnings presentation, Nov 5, 2013

  1. Slide 1: Nine Months 2013 Financial and Operating Results

    Nine Months 2013 Financial and Operating Results 5 November 2013

  2. Slide 2: PLDT Group: Nine Months and Third Quarter 2013 Financial Highlights

    PLDT Group: Nine Months and Third Quarter 2013 Financial Highlights 9M2013 9M2012 3Q2013 3Q2012 (PhP in billions, except EBITDA % Y-o-Y % Y-o-Y margin and Core EPS) (Unaudited) (Unaudited) Service Revenues* 121.6 119.1 2% 40.6 39.3 3% • Wireless 86.4 84.7 2% 28.8 28.0 3% • Fixed Line 46.0 44.2 4% 15

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

    PLDT Group: Core and Reported Net Income  PLDT anticipates a “return to growth” in 2013 with Core Net Income core net income for the year expected to grow to (Php in billions) P38.3bn +4% 28.8 +2%  Core net income for 9M13 of P28.8bn remains in line 27.7 -4% with full year guidance and is P1.1bn o

  4. Slide 4: Subscriber Base: Cellular and Broadband

    Subscriber Base: Cellular and Broadband  At the end of September 2013, PLDT Group combined Cellular Subscribers fixed, wireless and broadband subscriber base rose to (in millions) 78mn  Cellular subscribers at 9M13 grew by 2.6mn or 4% to Sun Cellular +4% 72.5mn from the end of 2012 Talk 'N Text SM

  5. Slide 5: PLDT Group: Service Revenues and EBITDA

    PLDT Group: Service Revenues and EBITDA  Structural change in revenue mix continues to impact Consolidated Service Revenues (Php in billions) consolidated service revenue growth and EBITDA margins  “Cross-over” has occurred, i. e., growing revenue streams now greater than declining revenues, with

  6. Slide 6: Service revenues and outlook per segment

    Service revenues and outlook per segment Consolidated Broadband Service Revenues  Broadband service revenues of P19.5bn at 9M13 represents 16% of (Php in billions) total consolidated service revenues, and reflects a 16% or P2.6bn year-on-year growth, mainly from a 6% increase in subscribers  Mobil

  7. Slide 7: Service revenues and outlook per segment

    Service revenues and outlook per segment  Wireless service revenues for 9M13 grew by P1.7bn or 2% year-on-year Wireless Service Revenues to P86.4bn mainly from the continuing rise in non-SMS data and cellular voice revenues (Php in billions) (1)  Wireless broadband revenues of P10.5bn reflect a 22

  8. Slide 8: Free Cash Flow and Capex

    Free Cash Flow and Capex  Free cash flow for 9M13 was P3.2bn or 11% higher year-on-year at Free Cash Flow P32.9bn mainly due to: (Php in billions)  Higher cash from operations of P0.5bn  Lower capex by P4.4bn 9M12 9M13  Net decrease in working capital of P3.4bn 62.5 (0.1) (7.6) 62.9 (3.5) (7.8)

  9. Slide 9: PLDT Group: Debt Profile

    PLDT Group: Debt Profile  Net debt of US$1.8bn and net debt to EBITDA ratio of Debt Balance 1.02x as of 9M13 were both lower compared with YE12 (US$ in billions) 2.9  At end September 2013, gross debt declined by 2.7 2.5 2.2 2.1 1.9 1.8 US$329mn to US$2.5bn 1.8 1.6 1.6 1.7 1.2 1.3 1.3  55% of gro

  10. Slide 10: Updates on PLDT Group multi-media initiatives

    Updates on PLDT Group multi-media initiatives PLDT triple-play: Fibr (fiber-to-the-home) + landline + CignalTV content through a dedicated connection  PLDT is the access provider (landline + high-speed broadband of up to 100mbps), Cignal provides the payTV portion  Monthly plans ranging from P3,50

  11. Slide 11: PLDT Group Guidance for 2013

    PLDT Group Guidance for 2013 Core Net Income Core Net Inc P38.3bn P29.0bn Capex Core Net Income (P7.4bn or 20% lower than 2012) Capital Management Dividend Core Pay-out Policy: Net Income 70% of Core EPS + “look-back” approach 11

  12. Slide 12: Segment and Other Details

    YEARS Segment and Other Details eN 0 a fee = <7 PLDT SMART ir 12

  13. Slide 13: Broadband

    Broadband  Broadband service revenues of P19.5bn at 9M13 represents 16% of Consolidated Broadband Service Revenues total consolidated service revenues, and reflects a 16% or P2.6bn (Php in billions) year-on-year growth, mainly from a 6% increase in subscribers  Mobile internet revenues of P3.4bn g

  14. Slide 14: Wireless

    Wireless  Wireless service revenues for 9M13 grew by P1.7bn or 2% year- Wireless Service Revenues on-year to P86.4bn mainly from the continuing rise in non-SMS (Php in billions) data and cellular voice revenues (1)  Wireless broadband revenues of P10.5bn reflect a 22% or P1.9bn Satellite and Other

  15. Slide 15: Fixed Line

    Fixed Line  Fixed line service revenues grew by P1.8bn or 4% year-on- Fixed Line Service Revenues year to P46.0bn at 9M13 as the rise in retail and corporate (Php in billions) data revenues outpaced declines in ILD, NLD and LEC LEC NLD ILD Data Miscellaneous revenues  Data revenues of P20.3bn, acc

  16. Slide 16: MERALCO

    MERALCO  MERALCO‟s revenues at 9M13 declined by P6.7bn or 3% year-on- Energy Sales Volumes and Revenues year to P208.1bn as the 5% rise in electricity sales volumes and (in „000 GWh and Php in Billions) increase in customer count were muted by lower generation costs from recently negotiated Power S

  17. Slide 17: Financial Investment in PDRs of MediaQuest

    Financial Investment in PDRs of MediaQuest  In May 2012, PLDT announced the financial investment by ePLDT of P6bn in Philippine Depository Receipts (PDRs) to be issued by MediaQuest  MediaQuest, a wholly owned entity of the Beneficial Trust Fund, has investments in media assets that include TV5, C

  18. Slide 18: 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

  19. Slide 19: Appendix

    FS \G Appendix Kit PLDT smAarr YEARS 19

  20. Slide 20: Subscriber Data

    Subscriber Data 9M13 vs FY12 9M13 vs 9M12 Net adds Sept- 13 Jun-13 Mar-13 Dec- 12 Sept- 12 Jun- 12 Mar-12 Amount % Amount % 1Q2013 % 2Q2013 % 3Q2013 % CELLULAR Smart 24,733,803 25,458,569 25,360,446 25,744,933 26,036,774 27,492,175 28,370,594 (1,011,130) -4% (1,302,971) -5% (384,487) -1% 98,123 - (7

  21. Slide 21: 9M2013: Consolidated Financial Highlights

    9M2013: Consolidated Financial Highlights 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Service Revenues 86,380 45,990 - 121,604 119,050 2% (1) Cash operating expenses 38,448 27,164 4 54,383 55,984 -3% Depreciation and amortiz

  22. Slide 22: Reconciliation of Core and Reported Net Income

    Reconciliation of Core and Reported Net Income 9M2013 9M2012 Difference (PhP in billions) Reported net income 29.0 28.4 0.6 Core net income 28.8 27.7 1.1 0.2 0.7 (0.5) Accounted for by: Forex gains (losses), net (2.0) 2.4 (4.4) Gains (losses) on derivatives, net 0.7 (1.3) 2.0 PAS 19 Adjusment (1.3)

  23. Slide 23: Consolidated Service Revenues

    Consolidated Service Revenues % Change 2013 2012 9M13 vs 3Q13 vs (in billion pesos) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY 9M12 3Q12 2Q13 SMS 11.9 11.9 11.5 ** 35.4 12.0 12.2 11.9 36.1 12.2 48.3 -2% -3% -3% Voice - Domestic 13.3 13.9 13.7 40.9 13.4 13.4 13.2 40.0 13.6 53.6 2% 3% -2% Voice - International 5.5

  24. Slide 24: Revenues by Segment

    Revenues by Segment 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line (PhP in millions) (unaudited) (as adjusted) Service Revenues Wireless 86,380 Cellular 78,278 78,278 77,088 2% Broadband 7,073 7,073 6,384 11% Satellite and other services 1,029 1,029 1,194 -14% Fixed line 45,990

  25. Slide 25: Expenses

    Expenses 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Operating expenses Compensation and employee benefits (1) 6,213 9,075 - 15,248 16,632 -8% Repairs and maintenance 5,911 4,102 - 9,524 9,624 -1% Selling and promotions 5,44

  26. Slide 26: Other Income (Expenses)

    Other Income (Expenses) 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PHP in millions) (unaudited) (as adjusted) Gains (losses) on derivative financial instruments, net (16) 508 - 492 (1,560) 132% Interest income 282 318 101 680 1,008 -33% Equity share in net earnings

  27. Slide 27: Wireless and Broadband Net ARPU

    Wireless and Broadband Net ARPU Wireless Net ARPU 1Q13 2Q13 3Q13 1Q12 2Q12 3Q12 4Q12 Smart Postpaid 1,154 1,153 1,099 1,269 1,237 1,252 1,248 Smart Prepaid 141 141 142 153 145 141 150 Talk 'N Text 87 87 82 102 100 93 93 Sun Cellular Prepaid 57 58 60 57 57 58 64 Sun Cellular Postpaid 455 495 476 388

  28. Slide 28: EBITDA

    EBITDA 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Income before tax 23,948 6,212 2,891 33,197 36,268 -8% Add (deduct): Depreciation and amortization 12,246 9,934 - 22,180 22,957 -3% Financing costs, net 2,622 2,644 - 5,245

  29. Slide 29: Historical Consolidated: Service Revenues and EBITDA

    Historical Consolidated: Service Revenues and EBITDA 2013 2012 (PhP in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Consolidated Gross Service Revenues Fixed line 11,997 12,275 12,220 36,492 12,067 11,835 11,765 35,667 11,964 47,631 Local exchange 4,008 4,066 4,042 12,116 4,146 4,089 4,059 12,294 4,063 1

  30. Slide 30: Historical Wireless: Service Revenues & EBITDA

    Historical Wireless: Service Revenues & EBITDA 2013 2012 (PhP in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Wireless Gross Service Revenues Cellular services 25,709 26,529 26,040 78,278 25,884 25,776 25,428 77,088 26,517 103,605 Cellular Voice 12,187 12,869 12,733 37,789 12,493 12,207 12,175 36,875 12,

  31. Slide 31: Historical Fixed line: Service Revenues and EBITDA

    Historical Fixed line: Service Revenues and EBITDA 2013 2012 (PhP in millions) 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY Fixed Line Gross Service Revenues Local exchange 4,036 4,092 4,066 12,194 4,174 4,115 4,089 12,378 4,092 16,470 International long distance 2,968 2,802 2,678 8,448 2,810 2,479 2,661 7,950 2,8

  32. Slide 32: Core Net Income

    Core Net Income 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Net Income attributable to equity holder of PLDT 17,658 6,265 2,816 26,885 28,021 -4% - continuing operations Add (deduct): Foreign exchange losses (gains), net 1,3

  33. Slide 33: Earnings Per Share

    Earnings Per Share 9M2013 9M2012 (unaudited) (as adjusted) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 28,954 28,954 28,384 28,384 Continuing Operations 26,885 26,885 28,021 28,021 Discontinued Operations 2,069 2,069 363 363 Dividends on preferred shares (44)

  34. Slide 34: Cash Flows

    Cash Flows 9M2013 9M2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Net cash from operations 32,732 20,482 3,034 51,605 54,822 -6% Add(Deduct): Capital expenditures (7,274) (7,614) - (14,888) (19,294) -23% Other investing activities (242

  35. Slide 35: Balance Sheet

    Balance Sheet Consolidated September 30, 2013 December 31, 2012 (PhP in millions) (Unaudited) (Audited) Total Assets 390,817 405,815 Nominal Value of Total Debt 109,795 117,115 in US$ $2,522 $2,851 Less: Unamortized Debt Discount 342 1,323 Total Debt 109,453 115,792 Cash and short-term investments 3

  36. Slide 36: Debt Profile

    Debt Profile (US$ in millions) 2006 2007 2008 2009 2010 2011(1) 2012(1) 9M2013(1) Debt Balance 1,756 1,585 1,625 2,210 2,113 2,719 2,851 2,522 Cash and short-term investments 514 745 847 908 852 1,061 919 698 Net Debt 1,242 840 778 1,302 1,261 1,658 1,932 1,824 (1) Including Digitel Debt Maturities

  37. Slide 37: Interest-bearing Liabilities

    Interest-bearing Liabilities September 30, 2013 December 31, (Unaudited) 2012 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,408 $2 $1,410 $1,440 ($30) Smart $821 $6 $827 $957 ($130) DIGITEL $285 $ - $285 $454 ($169) Other

  38. Slide 38: 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

  39. Slide 39: 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

  40. Slide 40: \Z PLDT = b

    ZN \Z PLDT = b YEARS ®

PLDT — 9M 2013 Earnings Presentation on 6ix