Converge Information & Communications Technology Solutions Inc · PSE:CNVRG
Converge Information & Communications Technology Solutions — Q2 2021 Earnings Presentation
35 slides from Converge Information & Communications Technology Solutions's earnings presentation, August 2021
Slide 1: 2Q 2021 Results Investors Briefing
2Q 2021 RESULTS INVESTORS BRIEFING
Slide 2: Meeting Reminders
Meeting Reminders • Please mute your microphones during the presentation. • Questions will be entertained during the Q&A portion after the presentation. You may send your questions through the Zoom Chat feature. Please introduce yourself along with your affiliated company/research house. • The sessi
Slide 3: Today's Speakers
Today’s Speakers Mr. Dennis Anthony H. Uy Ms. Grace Y. Uy Mr. Matthias Vukovich Mr. Jesus C. Romero Mr. Benjamin B. Azada CEO and Co-Founder President and Co-Founder Chief Financial Office Advisor Chief Operations Officer Chief Strategy Officer
Slide 4: Mr. Dennis Anthony H. Uy
Mr. Dennis Anthony H. Uy S *“ CEO and Co-Founder
Slide 5: Ms. Grace Y. Uy
.. Ms. Grace Y. Uy ““ President and Co-Founder
Slide 6: 2Q2021 Results Key Takeaways
2Q2021 Results Key Takeaways ✓ Maintained industry-leading trifecta in 1H2021 (vs. 1H2020) with 81.5% revenue growth, 55.1% EBITDA margin and 21.6% ROIC ✓ Consistently strong EBITDA growth in 1H2021 with 96.0% YoY growth (vs. 1H2020) ✓ Record high of 566k new ports and 215k gross residential subscri
Slide 7: Mr. Matthias Vukovich
Mr. Matthias Vukovich “%f * Chief Financial Office Advisor
Slide 8: Added a record 565,848 FTTH ports in 2Q2021
Added a record 565,848 FTTH ports in 2Q2021 Extensive and Fast-growing Network Homes Passed (MM) (1)(2)(3) 13% 190 25% 350 17% 240 32% 388 55% 15.1 HFC Homes Passed ✓ More than 8.3MM homes passed as of June 2021, more than double from June 2020 ✓ >2x FTTH Homes ~32% nationwide household coverage as
Slide 9: Record quarterly gross adds of ~216k with improved churn rate at 1.11%
Record quarterly gross adds of ~216k with Improved churn rate at 1.11% Number of Subscribers (‘000) 292 617 >2x ✓ ~1.36MM subscribers as of June 2021, net subscriber adds of ~173k in 2Q2021 ✓ >2.5x 1,355 Record quarterly gross subscriber adds of ~216k in 2Q2021, representing 56% Subscribers 1,038 21
Slide 10: Strong 1H Financial Trifecta of ~81.5% Revenue growth, 55.1% EBITDA margin, 21.6% ROIC
Strong 1H Financial Trifecta of ~81.5% Revenue growth, 55.1% EBITDA margin, 21.6% ROIC Revenue ($324) EBITDA (2) PHP MM (1) PHP MM (1) ($170) 15,652 8,218 3,024 ($244) ($135) 11,781 6,494 ($189) 1,569 ($97) 9,139 ($134) 4,665 ($69) ($105) 2,786 6,490 ($53) 12,628 3,314 5,055 1,512 ($61) 10,212 ($30)
Slide 11: P&L Highlights
P&L Highlights For the six months ended For the three months ended June 30 June 30 YoY YoY 2021 2020 Change % 2021 2020 Change % (in PHP millions) Revenue 11,781 6,490 82% 6,235 3,469 80% Cost of Services (4,825) (3,018) 60% (2,495) (1,578) 58% Gross profit 6,956 3,472 100% 3,740 1,891 98% General a
Slide 12: Revenue growth and cost management initiatives contributed to EBITDA growth
Revenue growth and cost management initiatives contributed to EBITDA growth Total Cost Net Increase: PHP (2,111) YoY EBITDA growth 5,291 (501) (289) (399) (254) 127 (595) (200) 6,494 3,314 Inc in Inc in Network Inc in Labor Inc in Inc in Managed Dec in Inc in Other Inc in Provision 1H2020 Revenue Ma
Slide 13: Well Funded CAPEX Plan
Well Funded CAPEX Plan Fully Funded Capex Plan in 2021 Well-Funded between 2022-25 Sufficiently funded with current funding 1H2021 CAPEX: US$466MM PHP11.2Bn (PHP23Bn) (vs. 1H2020 – PHP4.7Bn) Sufficiently funded US$414MM with current US$124MM (PHP20Bn) funding (PHP6Bn) US$311MM 27% (PHP16Bn)(2) 22% 5
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Slide 15: Service Coverage Pipeline
Service Coverage Pipeline ILOCOS NORTE – Soft launch CAGAYAN No. of Households – 139k No. of Households – 272k GDP per Capita – USD2,500 GDP per Capita – USD2,200 Ave Household Income – USD5,950 Ave Household Income – USD5,500 MASBATE CAPIZ (PANAY) No. of Households – 890k No. of Households – 760k G
Slide 16: Connected Visayas and Mindanao to the Backbone
Connected Visayas and Mindanao to the Backbone Officially Launched in Select Key Cities in VisMin Region • Added c. 11,800 kilometers of fiber in 2Q2021, resulting to Converge’s nationwide backbone network of 76,500 kilometers(1) (80,500 kilometers by July 2021) • Domestic fiber backbone connected t
Slide 17: Supporting SME Entrepreneurs through the Pandemic
Supporting SME Entrepreneurs through the Pandemic Project “SME Reboot” SME Brand Building and Doubling our SME Subscriber base in 1H2021 Investments in Marketing Communication # of Unique SME Customers 2x Increase in 1H2021 15,000 c. 14,000 SME Customers today 14,000 13,000 12,000 11,000 10,000 9,00
Slide 18: Augmented Subsea Cable Portfolio
Augmented Subsea Cable Portfolio • On June 6th, Converge agreed to acquire shares in two entities owning and operating the C2C and EAC Cable Landing Stations • JV partnership with Telstra owned Pacnet • First international Cable Landing Stations owned by Converge 18
Slide 19: Announced Cable Offering "VISION"
Announced Cable Offering “VISION” Note 1. Service offered in partnership with Pacific Kabelnet Holding Co. Inc. (PKN), an affiliate cable company of Converge ICT 19
Slide 20: Announced Cable Offering "VISION"
Announced Cable Offering “VISION” 20
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Slide 22: Enhancing Customer Experience
Enhancing Customer Experience Launched Omnichannel CRM System Improved Real-Time & Real-Person Customer Care # of Contact Agents and ACR ❖ Various customer touchpoints flow through a single system - improved contact 900 100% agent distribution and faster response time 750 90% 600 80% 450 70% 300 150
Slide 23: Sustainability Commitment
Sustainability Commitment 23
Slide 24: Sustainability Initiatives
Sustainability Initiatives CORPORATE GOVERNANCE COVID RESPONSE - Strengthening enterprise risk management and business - Conducted vaccine education programs for employees continuity framework and processes - Connectivity for LGU vaccination and evacuation sites in Angeles - Conducted governance tra
Slide 25: Q&A
Q&A CONVERGE
Slide 26: www.convergeict.com
www.convergeict.com Dennis Anthony Uy Converge ICT Solutions Inc. @DennisUyFiberMaster @ConvergeICTOfficial @TheFiberMaster @ExperienceCNVRG
Slide 27: Thank you!
Thank you! For any questions after the briefing, please feel free to email us at: [email protected]
Slide 28: Disclaimer
Disclaimer This material has been prepared exclusively for information and disclosure purposes only. This does not constitute any offer to buy or sell securities. These may contain forward-looking statements and information that are, by their nature, subject to significant risks, uncertainties, and
Slide 29: Appendix
Appendix CONVERGE
Slide 30: Quarterly Operational Performance Summary
Quarterly Operational Performance Summary 2020 2021 YoY Change % 1Q 2Q 3Q 4Q 1Q 2Q 2Q2020 vs 2Q2021 Residential Revenues 2,287 2,691 3,435 4,215 4,797 5,415 101% FTTH 1,614 1,992 2,679 3,509 4,086 4,771 140% HFC 673 698 756 707 711 644 -8% Customers 615,466 731,563 900,531 1,038,321 1,181,723 1,355,
Slide 31: Consolidated Income Statement
Consolidated Income Statement For the six months ended For the three months ended June 30 June 30 YoY YoY change YoY YoY 2021 2020 change % 2021 2020 change change % (in P millions) Revenues 11,781 6,490 5,291 82% 6,235 3,469 2,765 80% Residential 10,212 4,978 5,234 104% 5,415 2,691 2,724 101% Enter
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet As of the period June 30 2021 Dec 31 2020 Change Change % (in P millions) Current assets 16,326 21,271 (4,945) -23% Cash and cash equivalent 6,070 12,957 (6,887) -53% Trade and other receivables, net 2,818 2,173 645 30% Network materials and supplies 2,577 2,031 545 27% Ot
Slide 33: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement For the six months ended June 30 YoY YoY change 2021 2020 change % (in P millions) Cash flow from operating activities Profit before income tax 4,222 1,797 2,425 135% Adjustments for operating income 3,109 1,999 1,110 56% Adjustments for assets and liabilities (1,935
Slide 34: Liquidity and Capital Resources
Liquidity and Capital Resources June 30, 2021 December 31, 2020 Change (%) Balance Sheet[ Data (in P millions) Total Assets 63,964 56,712 13% Total Debt 12,409 11,314 10% Total Stockholders' Equity 31,027 27,775 12% Financial Ratios Total Debt to EBITDA (gross) 1.1x 1.4x Total Debt to EBITDA (net) 0
Slide 35: 2Q 2021 Results Investors Briefing
2Q 2021 RESULTS INVESTORS BRIEFING
Converge Information and Communications Technology Solutions — Q2 2021 Earnings Presentation on 6ix