Converge Information & Communications Technology Solutions Inc · PSE:CNVRG
Converge Information & Communications Technology Solutions — FY2023 Earnings Presentation
35 slides from Converge Information & Communications Technology Solutions's earnings presentation, 2024
Slide 1: FY2023 Results Investors Briefing
FY2023 RESULTS INVESTORS BRIEFING #LeaveNoOneBehind 1
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: Presenters: Jesus Romero and Grace Uy
Jesus C. Romero Chief Operations Officer Uy Grace Y. Uy President and Co-Founder »>OneBehind
Slide 4: Dennis Anthony H. Uy, CEO and Co-Founder
Mr. Dennis Anthony H. Uy CEO and Co-Founder
Slide 5: 2023 Was a Pinnacle Year for Converge
We forged new partnerships, broke new ground with our products, expanded to key areas, and enhanced our customer experience. 2023 WAS A PINNACLE YEAR FOR CONVERGE
Slide 6: Converge Goes to the Mass Market
With BIDA and S2S, we are finally realizing our dream of bringing quality internet access to the unserved and underserved communities in the Philippines. S2S Launch in Tondo and Bida Fiber launched in Cebu. Both have gained strong traction and exceeded expectations The combined market for these CONV
Slide 7: A Leap into the Future
We aim to provide differentiated solutions beyond the traditional telco services. This includes Managed Services, Value-Added Services, Cloud and Security Services A LEAP INTO THE FUTURE
Slide 8: 30 Years of Internet in Philippines
30 YEARS OF INTERNET IN PHILIPPINES We at Converge are happy that we are able to contribute to the development of the internet in our country through our fiber technology
Slide 9: Ms. Grace Y. Uy
Ms. Grace Y. Uy President and Co-Founder
Slide 10: Converge remains industry leading in growth, margins and ROIC
Converge remains industry leading in revenue growth, profitability margins, and ROIC; Highest consolidated net adds for FY2023 Converge continues to lead the industry in growth in FY2023 with consolidated revenues growing by 5% YoY FiberX sustained year-high net quarterly subscriber adds at >35k in
Slide 11: Jesus Romero and Benjamin Azada
Mr. Jesus C. Romero Mr. Benjamin B. Azada Chief Operations Officer Chief Commercial Officer \ and Chief Sustainability Officer
Slide 12: Christine Renee R. Blabagno
Ms. Christine Renee R. Blabagno Deputy Chief Finance Officer
Slide 13: Steady Financial Performance
Steady Financial Performance FY2023 EBITDA margin at 60.9% amidst inflationary environment Revenue EBITDA (1) PHP Mn PHP Mn Enterprise 21,528 Residential 19,353 35,359 33,696 4,234 5,077 14,803 26,479 3,350 15,653 8,218 3,025 29,462 30,282 9,140 4,665 23,129 2,786 12,628 6,354 2019 2020 2021 2022 20
Slide 14: FY2023 Cash CAPEX at PHP 9.0 Bn; FY2024 guidance
FY2023 Cash CAPEX at PHP 9.0 Bn, due to PHP 3 Bn Cash CAPEX delayed to 2024; FY2024 Cash CAPEX expected to reach PHP 17 to 19 Bn FY2023 Cash CAPEX of PHP 9.0 Bn spent largely on outside plant, inside plant, and customer premise equipment. Cash CAPEX FY2023 CAPEX PHP Bn • FY2023 Cash CAPEX ended at P
Slide 15: Moderately levered balance sheet with limited macro exposure
Moderately levered balance sheet with limited exposure to macro pressures Moderately leveraged capitalization structure Long-term, 100% peso denominated debt portfolio Debt exposure(1) Capitalization Structure In PHP Bn Common Equity In PHP Bn PHP Bn 0.7 Current portion of LT debt 5.3 Share capital
Slide 16: Mr. Jesus C. Romero
Mr. Jesus C. Romero Chief Operations Officer
Slide 17: Championing World-Class Broadband Connectivity
CHAMPIONING WORLD-CLASS BROADBAND CONNECTIVITY 123.18 457.56 Mbps 448.15 Mbps CONVERGE SY) AsianTelecom Speed Score Top download se Top upload tas aig: e SA) Awards 2023 : (e 1) Broadband Telecom CONVERGE ICT SOLUTIONS INC Top-Rate xe! - LAs Company of the Year, BROADBAND TELECOM COMPANY 3.6 ” Phili
Slide 18: Growing subscriber adds increase port utilization
Growing subscriber adds across the country results in increasing port utilization Port utilization saw two consecutive upticks starting 3Q2023 due to the sustained net adds from all three fiber brands Quarterly Consolidated Gross Adds – By Region(1) Product Presence As of Sept. 2023 As of Dec. 2023
Slide 19: Subscribers at 2.1Mn; newly launched brands at 175k
Consolidated EOP subscribers ended at >2.1Mn; Newly launched brands total EOP subscribers at 175k – outperforming initial target of 120k Consolidated ending subscriber count for FY 2023 ended at 2,128,052 Year-end Subscribers (‘000) Quarter-end Subscribers (‘000) 615 841 591 759 FiberX Newly launche
Slide 20: Enterprise maintains robust double-digit growth
Enterprise maintains robust growth in FY2023 with all sub-segments delivering double-digit YoY increases SME leads enterprise subsegment growth, growing by 35% YoY All enterprise segments continue their upward trajectory Enterprise revenues by segment SME Sub-segment Monthly Recurring Revenues (MRC)
Slide 21: Mr. Benjamin B. Azada
Mr. Benjamin B. Azada Chief Commercial Officer and Chief Sustainability Officer
Slide 22: Improving network operations and customer service
Improving network operations and customer service Network operations metrics and recognition (FY2023) Customer service metrics (4Q2023) Across the board faster average repair time in 2023 vs 2022 Faster answer and handle time across different CXP platforms Backbone Outside plant Field network ops me
Slide 23: Commitment to sustainable practices
Converge remains steadfast in its commitment to sustainable practices Sustainability ratings and initiatives (4Q/FY2023) Significant rating upgrades across three major 3 rd party sustainability ratings Continuous efforts in improving corporate sustainability practices 3rd party ratings 2022 2023 Sus
Slide 24: Residential and Enterprise Business Initiatives
Residential and Enterprise Business Initiatives Residential Segment Enterprise Segment Initiatives that cover each stage of the customer lifecycle to drive growth and Initiatives to grow the segment through adjacent offerings while strengthening improve customer stickiness core enterprise business S
Slide 25: Q&A
(coNvERGE Q&A #LeaveNoOneBehind
Slide 26: Thank you!
(coNvERGE Thank you! #LeaveNoOneBehind
Slide 27: 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 28: Expanding target addressable market
Expanding target addressable market New product offerings to result in larger target market Monthly recurring Targeted Value Product Household Count Market Segment charge price range Proposition Differentiation Total: 22 Mn • Speed offerings start from 200 P1500 or Higher Postpaid Mbps to 1 Gbps 5 M
Slide 29: Quarterly Operational Performance
Quarterly Operational Performance 2022 2023 YoY Change % 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4Q2023 vs 4Q2022 Residential Revenues (In PHP millions) 6,812 7,272 7,278 8,100 7,399 7,476 7,595 7,812 -3.6% FTTH 6,299 6,800 6,853 7,605 7,089 7,186 7,335 7,600 -0.1% HFC 513 472 424 480 311 291 259 212 -55.8% Custome
Slide 30: Consolidated Income Statement
Consolidated Income Statement For the year ended For the three months ended December 31 December 31 YoY YoY change YoY YoY 2023 2022 change % 2023 2022 change change % (in P millions) Revenues 35,359 33,696 1,664 5% 9,111 9,215 (104) -1% Residential 30,282 29,402 881 3% 7,812 8,100 (288) -4% Enterpr
Slide 31: Consolidated Income Statement
Consolidated Income Statement For the year ended For the three months ended December 31 December 31 YoY YoY YoY YoY 2023 2022 change change % 2023 2022 change change % (in P millions) Depreciation and amortization 6,015 6,063 (48) -1% 1,676 1,781 (105) -6% Amortization of deferred contract cost 2,13
Slide 32: Consolidated Income Statement
Consolidated Income Statement For the year ended For the three months ended December 31 December 31 YoY YoY YoY change YoY change 2023 2022 change % 2023 2022 change % (in P millions) Provision for impairment of property plant and equipment 1,059 707 352 50% 657 - 657 #DIV/0! Provision for inventory
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet As of the period Dec 31, 2023 Dec 31, 2022 Change Change % In P millions Current assets Cash and cash equivalents 13,694 10,214 3,480 34% Trade and other receivables, net 3,456 3,337 119 4% Due from related parties, net, current portion 209 609 (401) -66% Network materials
Slide 34: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement For the year ended December 31 2023 2022 YoY change YoY change % (in P millions) Cash flow from operating activities Profit before income tax 12,122 9,856 2,266 23% Adjustments for operating income 12,490 13,238 (748) -6% Adjustments for assets and liabilities (3,765
Slide 35: Liquidity and Capital Resources
Liquidity and Capital Resources December 31, 2023 December 31, 2022 Change (%) Balance Sheet Data (in P millions) Total Assets 101,145 98,098 3% Total Debt(1) 35,244 38,240 -8% Total Stockholders' Equity 45,246 36,111 25% Financial Ratios Total Debt to EBITDA (gross) 1.6x 2.0x Total Debt to EBITDA (
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