Converge Information & Communications Technology Solutions Inc · PSE:CNVRG
Converge Information & Communications Technology Solutions — Q3 2021 Earnings Presentation
36 slides from Converge Information & Communications Technology Solutions's earnings presentation, November 2021
Slide 1: 3Q 2021 Results Investors Briefing
3Q 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. 2
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: Key Milestones Since Our IPO
Key Milestones Since Our IPO Completed the nationwide backbone subsea cable Included in the project Small-cap Index cv of the FTSE Qualified for early Global Equity cv inclusion into Index Series November 2021 the Philippine cv Stock Exchange Reached 1 Secured Index Anniversary million Fiber backbon
Slide 7: 3Q2021 Results Key Takeaways
3Q2021 Results Key Takeaways ✓ Industry-leading trifecta with 76.4% YoY revenue growth from 9M2020 to 9M2021, 55.1% EBITDA margin and 21.7% ROIC ✓ Consistently strong EBITDA growth in 9M2021 with 86.0% YoY growth and margin expansion from 52.5% to 55.1% YoY ✓ Record high FTTH port-rollout of more th
Slide 8: Mr. Matthias Vukovich
Mr. Matthias Vukovich “%f * Chief Financial Office Advisor
Slide 9: Added a record 654,188 ports in 3Q2021
Added a record 654,188 ports in 3Q2021 Extensive and Fast-growing Network Homes Passed (MM) (1)(2)(3) 13% 190 25% 350 21% 353 38% 478 55% 15.1 ✓ More than 9.6MM homes passed as of September 2021, ~88% higher than that of September 2020 ✓ 9.6 0.8 ~38% nationwide household coverage as of September 202
Slide 10: Record quarterly gross adds of ~280k and net adds of ~221k
Record quarterly gross adds of ~280k and net adds of ~221k Number of Subscribers (‘000) ✓ 292 617 Record quarterly net subscriber adds of ~221k in 3Q2021, resulting to ~1.57MM 1,577 subscribers as of September 2021 2.9x 1,038 213 901 Subscribers 530 216 228 1,364 Since 2019 ✓ 199 823 673 331 Record
Slide 11: Strong 9M financial trifecta of revenue growth, EBITDA margin and ROIC
Strong 9M financial trifecta of ~76% revenue growth, EBITDA margin expansion from ~52% to ~55%, and ROIC of 21.7% Revenue EBITDA (2) PHP MM (US$ MM) (1) ($375) PHP MM (US$ MM) (1) 18,831 ($207) ($312) 2,457 10,371 15,652 ($164) 3,024 ($213) 8,218 ($182) ($111) 10,677 ($93) 9,139 5,576 ($101) 2,264 4
Slide 12: P&L Highlights
P&L Highlights For the nine months ended For the three months ended September 30 September 30 YoY YoY 2021 2020 2021 2020 Change % Change % (in PHP millions) Revenue 18,831 10,677 76% 7,050 4,187 68% Cost of Services (7,461) (4,944) 51% (2,636) (1,926) 37% Gross profit 11,370 5,733 98% 4,413 2,262 9
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 9M2021 CAPEX: US$468MM (PHP24Bn) PHP18.2Bn (vs. 9M2020 – PHP 8.7Bn) Sufficiently funded US$404-498MM with current US$197MM (c. PHP20-25Bn) funding (PHP9.6Bn) US$311MM 36% (PHP1
Slide 14: Exploring "New Telco" Initiatives over Next 2–3 Years
Exploring “New Telco” Initiatives over Next 2 – 3 Years Content Partnership Satellite Partnership Financial Services (FS) Partnership OTT Video Penetration (1) Philippines Fiber Penetration Philippines Banking Penetration 90% 84% ~65% Unbanked 70% 67% 49% Under-banked 15% ~35% Well-banked ~15% 20% 6
Slide 15: “ilts)
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Slide 16: Service Coverage Pipeline
Service Coverage Pipeline Cities and municipalities reached through our network ILOCOS NORTE CAGAYAN Household count: Household count: Number of Cities and Municipalities(#) 591,198 271,967 440 MINDORO MASBATE Household count: Household count: 302,477 890,170 CAPIZ (PANAY) CEBU 316 Household count:
Slide 17: Completed Domestic Subsea Cable Project
Completed Domestic Subsea Cable Project P6 billion Investment to connect the country’s major islands to the Converge national fiber backbone 1,800 Kilometers Subsea Cables 20 Landing Stations 90,000 Kilometers Of Terrestrial Fiber Backbone Note: 17 Total nationwide fiber network length includes Conv
Slide 18: Leading with Superior Speeds at Affordable Prices
Leading with Superior Speeds at Affordable Prices In celebration of the Company’s IPO Anniversary BASE PLAN Add-on TIME OF DAY WHOLE HOME WIFI 10FOR99 Linksys Velop DB: Dual Band* : TB: Tri-Band, W6: WiFi 6 199-349/599/849 50 Mbps 1500 1599 (35 Mbps) 60 50 Mbps (45 Mbps) 100 Mbps Mbps 1699 2000 200
Slide 19: Recovery of Enterprise Business
Recovery of Enterprise Business Strong recovery momentum for enterprise business PHP MM Growth: ~18.1% 3Q2021 Highlights • 10 Gbps contract with one of the biggest TV and broadband providers in VisMin • 100 Gbps international connectivity with major Asian telco • One (1) year ~20GBps cross-border ba
Slide 20: 20
20
Slide 21: Enhancing Customer Experience
Enhancing Customer Experience Nationwide reach via launch of One Reduced line queuing through multiple Augmented customer experience Nationwide Cellular Hotline initiatives ✓ Launched last September 2021 ✓ Launched self-service kiosks last ✓ Over 631k cumulative app registrations September 2021 in 4
Slide 22: Sustainability Commitment
Sustainability Commitment 22
Slide 23: Sustainability Targets
Sustainability Targets Energy and Emissions Net Zero 4 Managing Waste 2030 O kg solid waste to landfill oy ue 2025 “Y/\, Female 30% CONVERGE UNIVERSITY
Slide 24: Sustainability Initiatives
Sustainability Initiatives Delighting customers by taking care of our own • Milestone vaccination rate of 85% vaccinated employees reached last September 30, 2021. Operating a sustainable company and • Launch of Converge University which provides leading it with integrity and good governance upskill
Slide 25: Q&A
Q&A CONVERGE
Slide 26: www.convergeict.com Dennis Anthony Uy Converge ICT Solutions Inc.
www.convergeict.com Dennis Anthony Uy Converge ICT Solutions Inc. @DennisUyFiberMaster @ConvergeICTOfficial @TheFiberMaster @ExperienceCNVRG
Slide 27: Thank you!
Thank you! CONVERGE
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: Revenue growth and cost management initiatives contributed to EBITDA growth
Revenue growth and cost management initiatives contributed to EBITDA growth YoY EBITDA Growth PHP MM Total Cost Net Increase: PHP (3,359) 52.2% 55.1% 10,371 9M2020 Inc in Inc in Network Inc in Labor Inc in Inc in Managed Dec in Inc in Other Inc in Provision 9M2021 EBITDA Revenue Material and Install
Slide 31: Quarterly Operational Performance Summary
Quarterly Operational Performance Summary 2020 2021 YoY Change % 1Q 2Q 3Q 4Q 1Q 2Q 3Q 3Q2020 vs 3Q2021 Residential Revenues 2,287 2,691 3,435 4,215 4,797 5,415 6,162 79% FTTH 1,614 1,992 2,679 3,509 4,086 4,771 5,571 108% HFC 673 698 756 707 711 644 590 -22% Customers 615,466 731,563 900,531 1,038,3
Slide 32: Consolidated Income Statement
Consolidated Income Statement For the nine months ended For the three months ended September 30 September 30 YoY YoY change YoY YoY 2021 2020 change % 2021 2020 change change % (in P millions) Revenues 18,831 10,677 8,154 76% 7,050 4,187 2,862 68% Residential 16,374 8,413 7,961 95% 6,162 3,435 2,727
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet As of the period Sept 30 2021 Dec 31 2020 Change Change % (in P millions) Current assets 21,441 21,271 171 0.8% Cash and cash equivalent 9,647 12,957 (3,310) -26% Trade and other receivables, net 3,080 2,173 907 42% Network materials and supplies 3,392 2,031 1,361 67% Othe
Slide 34: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement For the nine months ended September 30 YoY YoY change 2021 2020 change % (in P millions) Cash flow from operating activities Profit before income tax 6,740 3,142 3,598 114% Adjustments for operating income 5,573 3,167 2,406 76% Adjustments for assets and liabilities
Slide 35: Liquidity and Capital Resources
Liquidity and Capital Resources September 30, 2021 December 31, 2020 Change (%) Balance Sheet[ Data (in P millions) Total Assets 75,434 56,712 33% Total Debt 18,098 11,314 60% Total Stockholders' Equity 33,087 27,775 19% Financial Ratios Total Debt to EBITDA (gross) 1.5x 1.4x Total Debt to EBITDA (n
Slide 36: 3Q 2021 Results Investors Briefing
3Q 2021 RESULTS INVESTORS BRIEFING
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