PLDT, Inc. · PSE:TEL

PLDT — 9M 2019 Earnings Presentation

60 slides from PLDT's earnings presentation, Nov 7, 2019

  1. Slide 1: 2019 Nine Months Financial and Operating Results

    2019 NINE MONTHS FINANCIAL AND OPERATING RESULTS 7th November 2019

  2. Slide 2: PLDT Group: 3Q 2019 Financial Highlights

    PLDT Group: 3Q 2019 Financial Highlights (in Php) vs 3Q 2018* vs 2Q 2019 Service Revenues 9% 2% 39.6bn (net of interconnection costs) +3.3bn +0.9bn Individual 18.2bn 21% 4% 46% +3.1bn +0.6bn Enterprise 9.8bn +5% +3% 25% 48% +0.5bn +0.3bn Home 9.2bn +2% -- 23% +0.2bn -- Consumer and 37.3bn 11% 3% Ent

  3. Slide 3: PLDT Group: 9M 2019 Financial Highlights

    PLDT Group: 9M 2019 Financial Highlights (in Php) vs 9M 2018* Service Revenues 8% 116.3bn (net of interconnection costs) +8.1bn Individual 52.6bn 20% 45% +8.9bn Enterprise 29.2bn +6% 25% 49% +1.6bn Home 27.6bn +2% 24% +0.6bn Consumer and 109.4bn 11% Enterprise 94% +11.1bn 6.7bn -31% International/Ca

  4. Slide 4: Historical Service Revenues for First Nine Months

    PLDT Group: Historical Service Revenues for First Nine Months (Php in bn) Break-out Service Revenues ILD 1% 8% 1% 2% 5% 2% +8.1 116.3 113.5 +1.0 114.5 -1.0 113.5 -2.1 111.4 -5.1 106.4 +1.8 108.2 3.4 14.8 13.5 10.8 8.5 6.7 4.8 112.8 102.9 99.7 103.3 98.7 101.1 102.7 9M13 9M14 9M15 9M16 9M17 9M18 9M19

  5. Slide 5: Historical Quarterly Service Revenues

    PLDT Group: Historical Quarterly Service Revenues (Php in bn) 9M19: 116.1 8% 9M18: 108.0 +8.1 9% 1% +3.4 -0.1 +0.5 Y-o-Y 38.7 39.6 %Δ 37.6 37.9 35.8 35.4 35.2 35.2 35.7 35.9 35.5 36.3 36.2 2.3 2.3 -17% 2.2 2.1 3.7 3.5 2.7 4.8 4.8 4.2 4.0 4.1 3.5 9.2 9.2 +2% 9.1 9.1 9.1 9.1 7.5 7.6 7.8 8.0 8.5 8.7 8.

  6. Slide 6: 9M2019 Service Revenues: Data now 66% of total revenues

    9M2019 Service Revenues: Data now 66% of total revenues (Php in bn) vs 9M2018 P116.3bn149.4bn 8% +8.1 Data and broadband Domestic voice SMS International voice (fixed and mobile) (fixed and mobile) 149.4bn 20% 149.4bn 6% 149.4bn 18% 149.4bn 29% 76.7bn 29.6bn 6.5bn 3.4bn +12.9 -1.9 -1.4 -1.4 Mobile

  7. Slide 7: Consolidated EBITDA (ex-MRP): Double digit growth sustained

    Consolidated EBITDA (ex-MRP): Double digit growth sustained (Php in billions) 16% +8.5 Higher Higher Lower Subsidies cost Reduction Higher Cash & of in rent svc Opex Provns services expense rev* +8.1 +1.3 -0.6 -0.3 60.3 (4.4) 51.8 55.9 PFRS16 impact 9M18 * Net of interconnection costs 9M19 9M19 (ex-

  8. Slide 8: PLDT Group: Consolidated EBITDA (ex-MRP)

    PLDT Group: Consolidated EBITDA (ex-MRP) (Php in bn) Margin 9M19: 60.3bn 16% 51% 9M18: 51.8bn +8.5 46% Impact of PFRS16 15% 19% 149.4bn +3.3 FY18: Lower by 1% y-o-y Highest since 2Q13 +2% +0.5 20.1 19.9 20.4 17.4 17.4 17.1 1.5 1.3 16.4 1.6 17.4 17.4 17.1 18.6 18.3 19.1 16.4 1Q18 2Q18 3Q18 4Q18 1Q19

  9. Slide 9: Telco Core Income: On track to hit P26.4bn guidance

    Telco Core Income: On track to hit P26.4bn guidance (Php in bn) 1% +0.3 Higher Higher Non-Cash Higher Lower Higher EBITDA Exp Fin. Cost, Misc. Prov. for +8.5 -5.2 net inc Inc. Tax -1.2 -0.2 -1.6 19.1 19.4 9M18 9M19 Telco Core Telco Core  Impact to telco core income from adoption of PFRS16 effective

  10. Slide 10: PLDT Group: Telco Core Income

    PLDT Group: Telco Core Income (Php in bn) 9M19: 19.4bn 1% 9M18: 19.1bn +0.3 5% +0.3 +3% 7.2 +0.2 6.8 6.4 5.9 6.0 6.2 4.9 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 10

  11. Slide 11: PLDT Group: Debt Profile

    PLDT Group: Debt Profile Debt Balance Debt Maturities (gross) (US$ in billions) (US$ in millions, 30 September 2019) Net Debt Net Debt-to-EBITDA** Gross Debt US$2,919mn 2.0x US$3,451mn Maturities well spread out 1,480 3.5 2.8 3.4 3.5 2.9 2.4 436 494 1.0 386 312 250 0.7 0.5 94 2017 2018 9M2019 2019 2

  12. Slide 12: Capex: Unassailed network superiority powers fixed and wireless growth

    Capex: Unassailed network superiority powers fixed and wireless growth In P bns +P20bn 78.4  Network/IT capex broadly in line with 2018 9M2019 Capex (P48bn) P53.4bn* 58.5  Includes expansion of fiber/transport (9M18: P35.6bn) network to support fiber home broadband  “Revenue/customer capex” for l

  13. Slide 13: Fixed Fiber and Wireless Network: Selected Highlights

    Fixed Fiber and Wireless Network: Selected Highlights Extensive Fixed Network Rollout TOTAL HOMES PASSED TOTAL CAPACITY TOTAL FIBER FOOTPRINT (Million Homes) (Million Ports) (Thousand Cable Kilometers Laid)  1.2mn fiber + 0.5mn VVDSL ports  Additional 23.7kms laid from end available at end Sept 20

  14. Slide 14: Key Metrics of Growth

    PLDT-Smart Revenue Group REVENUE Key Metrics of Growth 9 % + ACCELERATED IMPROVED CX, ACTIVATIONS DATA ADOPTION & USAGE & CHURN Q3 2019 vs Q3 2018 +3.35Bn Sept YTD 2019 +8% UPLIFT USER BASE BY +8.13Bn DIGITAL TRANSFORMATION WIDENING INTERNATIONAL FOR PH ENTERPRISES REACH 14

  15. Slide 15: Q3 Sources of Growth

    Q3 Sources of Growth IMPROVED CX TO DRIVE ACTIVATIONS & ACCELERATED DATA ADOPTION CHURN REDUCTION AND USAGE Q3’19 reported a stellar +21% 21% INDIVIDUAL HOME 2% Grew 2% in Q3’19 growth vs Q3’18 which was Launched new ops process for attributed to our aggressive data improved CX, while boosting insta

  16. Slide 16: Consumer Individual

    PLDT A Smart CONSUMER INDIVIDUAL

  17. Slide 17: Individual Business continues strong growth at +21% in Q3'19

    Individual Business continues strong growth at +21% in Q3’19 +3.1 +8.9 +21% YoY +20% YoY 18.2 52.6 15.1 16.5 16.9 17.6 43.7 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 SEP ’18 SEP ’19 YTD YTD NET SERVICE REVENUES In Billions of PhP | PFRS 15 17

  18. Slide 18: 13.1 Million more subscribers in Q3'19

    TOTAL SUBSCRIBERS 13.1 Million more in Millions subscribers in Q3’19 +13.1 +23% YoY 70.7 60.0 63.4 66.8 57.6 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 18

  19. Slide 19: Growing prepaid LTE data users key driver to accelerating growth

    Growing prepaid LTE data users has been a key driver to accelerating growth Q3 2017 Q3 2018 Q3 2019 LTE CAPABLE DEVICE +88% +68% LTE DEVICE + LTE SIM +157% +88% LTE DATA USER +171% +86% 19

  20. Slide 20: Data revenue contribution to 70% in Q3'19

    +3.7 +41% YoY Driving data revenue contribution to 12.7 11.9 70% in Q3’19, as 9.0 10.1 11.0 it grows over 800M quarterly Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ’19 to now 12.7B per Data Contribution to 60% 61% 65% 68% 70% quarter Revenue DATA REVENUE In Billions of PhP *Normalized Data Revenue 20

  21. Slide 21: Free YouTube for All Launch fuelled LTE migration and Top-up growth

    Free YouTube for All Launch in July fuelled LTE migration and Top-up growth NEW YOUTUBE USERS (In Millions, As of Sept. 30) 57% ARPU +1.43 Uplift +1.37 per Promo Taker +0.23 21

  22. Slide 22: Engaging gamers, future vloggers and loyal customers driving growth

    Engaging gamers, future vloggers and loyal customers driving growth 1 2 3 Mobile Legends online & on- Vlogger Camps complement Smart Signature Series ground campaigns drive video push and tap the Youth engage subs and drive gaming usage market retention 22

  23. Slide 23: Biggest events ever this Q4!

    Biggest events ever this Q4! CREATING EXCITEMENT, BUILDING BRAND 1 LOVE, AND WINNING MULTI-SIMMERS VIA THE GIGA MANIA RAFFLE CAMPAIGN OWN GAMING AND ACQUIRE GLOBE 2 GAMERS WITH SIKLAB- SAYA ML TOURNAMENT 23

  24. Slide 24: Enterprise Business

    Enterprise Business 3Q 2019 Results Presentation Jovy. I. Hernandez 24

  25. Slide 25: Revenue Performance, YTD Sept 2019

    Revenue Performance, YTD Sept 2019 Revenue Performance, YTD Sept 2019 Performance Highlights: 6%, 1.6B 29.2 27.6 3.2 Enterprise sustains growth path 2.7 at 6% YoY, +PhP1.6B. 4.7 4.3 • ICT business still growing >2x that of market pace. • Wireless business with steady 21.3 double-digit growth fueled

  26. Slide 26: Fixed Line: Fueled by Demand for Data

    Fixed Line: Fueled by Demand for Data Net Service Revenues, YTD Sept 2019. Performance Highlights: (in billions) 21.3 21.4 Broadband 7.7B 21.2 3%, +0.7B 4% | +0.31B 21.0 Domestic Networking 3.4B 10% | +0.28B 20.8 20.6 Global Enterprise 20.6 56% | +0.21B 0.6B 20.4 US/Europe 7% AsiaPac (HK/SG) 336% 20

  27. Slide 27: Wireless: Growing Beyond Postpaid

    Wireless: Growing Beyond Postpaid Net Service Revenues, YTD Sept 2019. Performance Highlights: (in billions) 4.8 4.7 4.7 Mobility Solutions Portfolio Exhibiting Breakout Growth 11%, +0.4B 4.6 4.5 Mobile Platforms 49% +0.18B ARPU @ 200k Php 4.4 4.3 4.3 M2M/IoT 17% +0.08B Total Connections > 500k 4.2

  28. Slide 28: ICT: Rising >2x of Market Pace

    ICT: Rising >2x of Market Pace Net Service Revenues, YTD Sept 2019* (in billions) Performance Highlights: 3.3 3.2 3.2 Indisputable Leadership 19%, +0.5B in the data center space 3.1 9K Rack capacity across 3 10 data centers nationwide 1.8B 2.9 Data Center Reveneus 12%, +0.2B 2.8 2.7 2.7 Revenue Grow

  29. Slide 29: PLDT Enterprise: Connected Industry Orchestrator

    PLDT Enterprise: Connected Industry Orchestrator NETWORK TELE WIFI IoT/5G AS A COMMUTE DATA SERVICE CLOUD CENTER SECURITY CONNECTED CONNECTED DEVICE CONNECT CONNECT HEALTH MFG MGT UNIFIED MANAGED VOICE PBX SD-WAN SENSORS COMMS NETWORKS METRO FIBER SMART DATA INTERNET ROUTER MPLS SMART AUTONOMIC ETHE

  30. Slide 30: Q3'19 Home Business Performance Update

    Q3’19 HOME BUSINESS PERFORMANCE UPDATE Consumer Home • November 7, 2019 30

  31. Slide 31: PLDT Home YTD Revenue Performance

    PLDT HOME YTD REVENUE PERFORMANCE PLDT Home Net Service Revenues Q3’18 YTD vs Q3’19 YTD +0.55B (+2%) vs Q3 2018 YTD 27.58 27.03 Modest YTD growth of Home Business +2% (+0.55B) Q3'18 YTD Q3'19 YTD PLDT HOME SERVICES 4,296,041 4,317,654 31

  32. Slide 32: PLDT Home Quarterly Revenue Performance

    PLDT HOME QUARTERLY REVENUE PERFORMANCE PLDT Home Quarterly Net Service Revenues Q3’18 to Q3’19 +0.187B (+2%) vs Q3’18 9.22 9.25 9.06 9.10 9.12 Q3’19 REVENUES 9.25B Moderate Growth Quarter on Quarter +29M (0.3%) vs Q2’19 +187M (+2%) vs Q3’18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 PLDT HOME 4,317,654 4,225,42

  33. Slide 33: Home Q3 Operational Challenges

    HOME Q3 OPERATIONAL CHALLENGES Adjusting to Lack of High Low flow new zone modems & Broadband through / operations Delay in launch Churn. conversion model - In & of Postpaid Average of rates Out Fixed Wireless 28K/mo. 33

  34. Slide 34: A PLDT

    A PLDT

  35. Slide 35: Operational Adjustments to New Install & Repair Model

    OPERATIONAL ADJUSTMENTS TO NEW INSTALL & REPAIR MODEL Continuous enhancements and improvements of operating model to ensure optimal efficiency. 3.1 ALIGN MONITOR ANALYZE Alignment of critical groups: Daily monitoring of performance Constant analysis on a zone per Marketing, Sales, Network, and quick

  36. Slide 36: Climb Higher Heights

    CLIMB HIGHER > % HEIGHTS

  37. Slide 37: The Strongest Connections Deliver the Strongest Performance in 2020

    THE STRONGEST CONNECTIONS DELIVER THE STRONGEST PERFORMANCE IN 2020 37

  38. Slide 38: PLDT Group: Guidance for 2019

    PLDT Group: Guidance for 2019 Telco Core Income: P26.4bn Capex: up to P78.4bn  To increase by up to P20bn from P58.5bn in 2018  To rise by P2bn from P24bn in 2018  Focus on:  Acceleration of revenue increases for the Consumer  Expansion of LTE/3G mobile coverage and Individual business fiber fo

  39. Slide 39: Other details

    Other details @PLOT Bsmart 39

  40. Slide 40: Individual: Strong recovery underpinned by data and network superiority

    Individual: Strong recovery underpinned by data and network superiority (Php in bn) 20% 21% 52.6 50.9 +8.9 +3.1 43.8 43.7 +4% +0.6 16.9 17.6 18.2 15.1 16.5 14.2 14.4 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 9M16 9M17 9M18 9M19 PAS18  Acceleration of growth in revenues due to rapid rise in data revenues -

  41. Slide 41: Home: Finetuning installation and repair operations for stronger 2020

    Home: Finetuning installation and repair operations for stronger 2020 (Php in bn) 2% 2% +0.2 +0.6 27.0 27.6 24.3 21.7 9.2 9.2 9.1 9.1 9.1 9.1 8.8 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 9M16 9M17 9M18 9M19 PAS18  Data/broadband account for 77% of revenues  Fiber-to-the-home continues to be the flagship

  42. Slide 42: Enterprise: Making steady progress

    Enterprise: Making steady progress (Php in bn) 5% 6% +0.5 +1.6 27.6 29.2 25.9 +3% 23.2 +0.3 9.2 9.3 9.8 9.8 9.6 9.8 9.0 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 9M16 9M17 9M18 9M19 PAS18  Data/broadband account for 67% of revenues • ICT/data center registered a 20% year-on-year growth in 9M19 Note: Net o

  43. Slide 43: International/Carrier: New revenue streams mute ILD declines

    International/Carrier: New revenue streams mute ILD declines (Php in bn) 17% 15.5 -0.5 12.3 31% 9.7 -3.0 6.7 3.5 3.5 2.7 2.3 2.2 2.1 2.3 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 9M16 9M17 9M18 9M19  Growing international data revenues offsetting declines in international voice revenues  Revenue decline

  44. Slide 44: Appendix

    @PLOT Bsmart Appendix

  45. Slide 45: Subscriber Base: Mobile

    Subscriber Base: Mobile Mobile Subscribers (1) by Category: Net Adds (Reductions) Sep-19 Jun-19 Mar-18 Dec-18 Sep-18 3Q19 vs 3Q18 3Q19 vs YE18 1Q19 vs YE18 2Q19 vs 1Q19 3Q19 vs 2Q19 Mobile Subscriber Base (1) Prepaid 69,012,106 65,151,418 61,585,197 58,178,978 55,627,968 13,384,138 24% 10,833,128 19

  46. Slide 46: Subscriber Base: Fixed Line and Broadband

    Subscriber Base: Fixed Line and Broadband Fixed Line Subscribers Net Adds (Reductions) Sep-19 Jun-19 Mar-18 Dec-18 Sep-18 3Q19 vs 3Q18 3Q19 vs YE18 1Q19 vs YE18 2Q19 vs 1Q19 3Q19 vs 2Q19 Fixed Line Subscribers 2,727,035 2,711,411 2,707,077 2,710,972 2,778,274 (51,239) (2%) 16,063 1% (3,895) - 4,334

  47. Slide 47: ARPU

    ARPU Mobile ARPU, Net(1) : 2019 2018 1Q 2Q 3Q 1Q 2Q 3Q 4Q Smart Postpaid 796 813 809 809 813 810 843 Smart Prepaid 118 118 114 112 116 120 123 TNT 67 67 67 73 73 71 69 Sun Postpaid 423 418 401 382 403 406 414 Sun Prepaid 77 73 76 80 82 82 82 (1) Includes Mobile Broadband subscribers Broadband ARPU,

  48. Slide 48: 9M2019: Consolidated Financial Highlights

    9M2019: Consolidated Financial Highlights 9M2019 Y-o-Y 9M2018 Wireless Fixed Line Others Consolidated % Change (Php in millions) Service Revenues (1) 66,356 65,319 - 119,008 113,601 5% (2) Cash Operating Expenses 24,447 37,169 91 53,185 56,943 (7%) Subsidies and Cost of Services 2,043 1,999 - 4,036

  49. Slide 49: Consolidated Service Revenues (normalized)

    Consolidated Service Revenues (normalized) 2019 2018 % Change 9M19 vs 3Q19 vs 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY (Php in millions) 9M18 3Q18 Fixed Line 18,199 17,955 18,356 54,510 17,275 17,785 17,807 52,867 18,153 71,020 3% 3% (1) LEC 3,698 3,648 3,583 10,929 3,803 3,761 3,898 11,462 3,733 15,195 (5%) (

  50. Slide 50: Consolidated Service Revenues (normalized)

    Consolidated Service Revenues (normalized) 2019 2018 % Change 9M19 vs 3Q19 vs 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY (Php in millions) 9M18 3Q18 Data and Broadband 24,667 25,393 26,728 76,788 20,407 21,602 21,869 63,878 23,824 87,702 20% 22% Home Broadband 6,855 6,994 7,089 20,938 6,474 6,779 6,608 19,861 6,

  51. Slide 51: Wireless Service Revenues (normalized)

    Wireless Service Revenues (normalized) 2019 2018 % Change 9M19 vs 3Q19 vs 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY (Php in millions) 9M18 3Q18 Data/Broadband 11,670 12,603 13,679 37,952 8,497 9,220 9,685 27,402 11,103 38,505 39% 41% (1) Mobile Data 11,643 12,580 13,660 37,883 8,449 9,181 9,648 27,278 11,072 38

  52. Slide 52: Fixed Line Service Revenues (normalized)

    Fixed Line Service Revenues (normalized) 2019 2018 % Change 9M19 vs 3Q19 vs 1Q 2Q 3Q 9M 1Q 2Q 3Q 9M 4Q FY (Php in millions) 9M18 3Q18 Data/Broadband 14,996 14,891 15,115 45,002 13,462 13,483 14,139 41,084 14,648 55,732 10% 7% Home Broadband (1) 6,875 7,007 7,101 20,983 6,491 6,807 6,636 19,934 6,799

  53. Slide 53: Expenses

    Expenses 9M2019 Y-o-Y 9M2018 (Php in millions) Wireless Fixed Line Others Consolidated % Change Operating Expenses Compensation and Employee Benefits 5,611 13,688 - 19,284 16,712 15% Repairs and Maintenance 7,264 4,949 - 11,509 10,280 12% Selling and Promotions 2,881 1,673 - 4,553 4,297 6% Rent 492

  54. Slide 54: Other Income (expenses)

    Other Income (expenses) 9M2019 Y-o-Y 9M2018 Wireless Fixed Line Others Consolidated % Change ( Php in millions) Equity Share in Net Earnings (Losses) of Associates and Joint Ventures Multisys - - 78 78 - 100% Vega - - (24) (24) (15) (60%) Voyager - - (1,329) (1,329) - (100%) Others - 164 - 164 214 (

  55. Slide 55: Earnings Per Share (EPS)

    Earnings Per Share (EPS) 9M2019 9M2018 (Php in millions except EPS (in Php) and Shares (in mn)) Basic Diluted Basic Diluted Net Income Attributable to Equity Holders of PLDT 15,996 15,996 16,269 16,269 Dividends on Preferred Shares (44) (44) (44) (44) Net Income for the Period Attributable to Common

  56. Slide 56: Balance Sheet

    Balance Sheet Consolidated (Php in millions) September 30, 2019 December 31, 2018 Total Assets 510,388 482,750 Nominal Value of Total Long-Term Debt 178,755 176,694 in US$ $3,451 $3,362 Less: Unamortized Debt Discount 379 418 Total Long-Term Debt 178,376 176,276 Cash and Short-Term Investments 27,56

  57. Slide 57: Debt Profile

    Debt Profile (US$ in millions) 2016 2017 2018 9M2019 Debt Balance 3,730 3,466 3,362 3,451 Cash and Short-Term Investments 833 668 1,005 533 Net Debt 2,897 2,798 2,357 2,918 Interest-Bearing liabilities December 31, September 30, 2019 2018 Unamortized Debt Change Carrying Discount/Debt Face Value Fac

  58. Slide 58: Foreign Exchange Risk

    Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex sensitivity for every P1 change Forex sensitivity for every P1 change on B/S Conso - net of Elim Revaluation (in US$ millions) Conso (in US$ millions) US$ Revenues* 356.4 Debt (net of LT hedges & ST Forwards/opti

  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 — 9M 2019 Earnings Presentation on 6ix