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ABS-CBN Corporation Sgt. Esguerra Avenue, Quezon City, Philippines
13 August 2012 Philippine Stock Exchange, Inc. Attn: Ms. Janet A. Encarnacion
Head, Disclosure Department 3rd Floor, Philippine Stock Exchange Plaza Ayala Triangle, Ayala Avenue, Makati City
Securities and Exchange Commission Attn: Director Justina F. Callangan Corporate Finance Department SEC Building, EDSA, Mandaluyong City Subject: 2Q 2012 Analysts’ and Press Briefing Gentlemen / Ladies: We are providing you the materials that we are presenting in our briefing today. Thank you. Very truly yours, Paul Michael V. Villanueva Compliance Officer for Corporate Governance
PRESS RELEASE
Release Date : FOR IMMEDIATE RELEASE Reference : Paul Michael Villanueva, Head, Treasury and Compliance Officer
Tel : 415.2272 local 4322 Email : [email protected]
ABS-CBN’s nets P927 million in the 1st half of 2012 Quezon City, Philippines (August 13, 2012) – The consolidated net income of ABS-CBN Corporation (“ABS-CBN” or the “Company”) (PSE: ABS, ABSP), the country’s largest multimedia conglomerate, registered P927 million for the first half of 2012, down by 45% compared with P1.677 billion in the same period last year. Removing the effects of the gain from the sale of Sky Cable PDRs recognized in the first half of 2011 amounting to P674 million, net income decreased by 8%. ABS-CBN generated consolidated revenues of P15.3 billion from advertising and consumer sales for the first six months, a 9% increase compared to the same period last year. ABS-CBN’s advertising revenues reached P9.2 billion in the first six months of the year, an
increase of 5% from a year ago. Consumer sales for the first half of the year amounted to P6.1
billion, posting a 17% increase from a year ago. Sky Cable continues to be a major driver of
growth with revenues increasing by 22% to P2.5 billion. The growth in revenues is partly
attributable to the acquisition of Destiny Cable. ABS-CBN Global revenues was flat with a 1%
increase in overall viewer count compared to the previous year. There was double-digit
subscriber growth in Canada and single digit growth in all other territories, except Japan and
Europe where subscribers declined.
Total operating and other expenses increased by 12% year-on-year to P12.5 billion brought
about by increases in production costs, cost of sales and services , and general and
administrative expenses.
Capital expenditure and film and program rights acquisition for the first six months amounted to P2.4 billion, 14% higher than the level of spending for the same period last year. ABS-CBN maintained its national audience share and ratings leadership for Urban audiences
with prime-time audience share averaging 43% in the second quarter of 2012, a 14 percentage
point lead over GMA’s, based on the Kantar National TV Ratings. In June, ABS-CBN’s audience
share for Total Philippines (Urban +Rural) and Total Day was at 42%, a 10 percentage point lead
over GMA.
For June 2012, 16 of the company’s shows were in the Top 20 for Total Philippines (Urban and
Rural), with the following occupying the Top 10 slots: Walang Hanggan, Princess & I, Maalaala
Mo Kaya, Wansapanataym, TV Patrol (Weekday), The X Factor Philippines (Saturday), Rated K
Handa Na Ba Kayo?,Dahil Sa Pag-ibig and Kapamilya Deal or No Deal.
ABS-CBN Film Productions, Inc. released 8 films in the first six months of 2012. Four of them–
Enteng ng Ina Mo, Segunda Mano, Unofficially Yours and Kimmy Dora and the Temple of
Kiyeme –topped P100 million in box office receipts, earning blockbuster status by local
standards.
--- About ABS-CBN Corporation ABS-CBN Corporation is the leading Philippine entertainment and information multimedia conglomerate. In the Philippines, ABS-CBN produces a wide variety of engaging world-class entertainment programs in several genres
and balanced credible news programs that are aired on free-to-air TV via Channels 2 (VHF) and 23 (UHF) and a regional network of TV and radio stations nationwide. It also provides news and entertainment programming for nine channels on cable TV. The Company owns the leading film and music production and distribution outfit in the Philippines, and has interests in cable TV, Internet and mobile services, and glossy-magazine publishing. It brings its content to worldwide audiences via cable, satellite and the Internet, primarily through ABS-CBN Global’s The Filipino Channel (TFC).
First Half 2012 Financial & Operating Results
The Chronicle Lounge 14/F Eugenio Lopez Jr. Communications Center
Eugenio Lopez Ave., Q.C. 13 August 2012
Php15.3 billion 1H 2012 Consolidated Gross Revenue
9% year-on-year
Consolidated Gross Revenues
Ad Revenues
60%
Consumer Sales40%
o
2
Consolidated Advertising Revenues in Php Millions
5% YoY
0
2,000
4,000
6,000
8,000
10,000
1H2011 1H2012
8,760 9,173
3
35
43
33
29
1312
ABS-CBN GMA TV 5
National Ratings – Total Philippines (Urban)
4
Total Day Audience Share Evening Primetime Audience Share
Kantar Media/TNS National Urban Philippines TV Audience Shares
(2Q 2012)
42
51
32
27
11 11
ABS-CBN GMA TV 5
National Ratings – Total Philippines (Urban + Rural)
5
Total Day Audience Share Evening Primetime Audience Share
Kantar Media/TNS National Philippines TV Audience Shares
(June 2012)
Kantar Media/TNS National Philippines’ Top Programs (June 2012)
Top 20 Programs
6 Org Structure LOB Highlights Org Development
Urban Rural Urban + Rural
Consumer Sales in Php Millions
17% YoY
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1H2011 1H2012
5,195
6,079
7
Consumer Sales
8
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Total ConsumerSales
ABS-CBN Global SkyCable Other Subs
5,195
2,3392,092
764
6,079
2,342 2,545
1,192
1H2011 1H2012
in Php Millions
17% YoY
0% YoY 22% YoY
56% YoY
ABS-CBN Global
9
• REVENUES: 2% increase in terms of USD, flat in Php
• 2.5 million viewers worldwide, 1% more than in 1H 2011
• Continued growth in Canada, Asia Pacific,Australia, Middle East and North America
• Decline in subscriber count in Europe and Japan
Sky Cable
Strong revenue growth, up 22% YoY
• 38% YoY increase in broadband revenues
• 20% growth in postpaid cable revenues: driven by the growth in post-paid cable subscriptions due to the acquisition of Destiny Cable in May, and Sky’s lower end Php 280 and Php 499 packages
10
ABS-CBN Film Productions 4 of 8 films released in 1H 2012 broke past the
Php 100 million mark in gross box office receipts
11
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
TOTAL Prod Cost COSS GAEX Others
11,175
4,558
3,277 3,240
100
12,494
5,016
3,824 3,687
-33
1H2011 1H2012
12
Operating & Other Expenses in Php Millions
12% YoY
10% YoY 17% YoY 14% YoY
133% YoY
*
*
*Without the one-time gain on sale of Sky
Cable PDRs
0
1,000
2,000
3,000
4,000
5,000
6,000
Production Cost Cash Non-cash
4,558
3,809
749
5,016
4,257
758
1H2011 1H2012
13
Production Cost in Php Millions
10% YoY
12% YoY
1% YoY
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Total Cost ofSales andServices
ABS-CBN Global SkyCable Other Subs
3,277
1,033
1,494
750
3,824
1,130
1,715
979
1H2011 1H2012
14
Cost of Sales and Services in Php Millions
17% YoY
9% YoY
31% YoY
15% YoY
0
1,000
2,000
3,000
4,000
General &Administrative
Expenses
Cash Non-Cash
3,2402,936
304
3,6873,401
286
1H2011 1H2012 15
General & Administrative Expenses in Php Millions
14% YoY
6% YoY
16% YoY
• Without the incremental costs of new initiatives, GAEX grew by 8%
Consolidated Net Income in Php Millions
45% YoY
16
0
500
1,000
1,500
2,000
1H2011 1H2012
1,003 927
674
Gain from sale
of Sky Cable
PDRs
1,677 Reported Income
8% YoY Recurring Income
Consolidated EBITDA in Php Millions
20% YoY
17
0
1,000
2,000
3,000
4,000
1H2011 1H2012
3,218 3,180
749Gain from sale
of Sky Cable
PDRs
3,967
Reported EBITDA
1% YoY Recurring EBITDA
Capital Expenditure & Film Rights in Php Millions
0
500
1,000
1,500
2,000
2,500
3,000
1H2011 1H2012
2,117 2,404
18
14% YoY
Balance Sheet Accounts End June 30, 2012 vs. December 31, 2011
Total Assets Cash and Cash Equivalents Trade Receivables Day’s Sales Outstanding Total Interest Bearing Debt Shareholders’ Equity Net Debt-to-Equity Ratio
Php 48.9B Php6.5B Php7.2B 89 days Php14.7B Php20.5B 0.39x
9% 25% 13% 6 days 18% 1% 0.20x
20
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2012
For the six months ended June 30, 2012, ABS-CBN Corporation (“ABS-CBN” or the “Company”) generated
consolidated revenues of P15.3 billion from advertising and consumer sales, P1.3 billion or 9% higher year-
on-year. Advertising revenues contributed 60% of total consolidated revenues while consumer sales made
up the balance of 40%.
Total operating and other expenses in the first half of 2012 was at P12.5 billion, or a 12% increase year-on-
year.
The company generated a net income of P927 million for the first half of 2012, down by 45% compared with
P1.677 billion in the same period last year. Removing the effects of the one-time gain from the sale of Sky
Cable PDRs recognized in the first half of 2011 amounting to P674 million, net income decreased by 8%.
Reported EBITDA reached P3.18 billion for the first half of 2012, or a 20% decline year-on-year. Stripping
the one-time gain in the first half of 2011, EBITDA was down 1% year-on-year.
The table below summarizes the key performance indicators for the period as discussed above.
Key Performance Indicators
(Amounts in million Pesos) 1H12 1H11
Variance
Amount %
Consolidated Revenues 15,252 13,955 1,297 9
Consolidated Advertising Revenues 9,173 8,760 413 5
Consolidated Consumer Sales 6,079 5,195 884
17
Operating and Other Expenses 12,494 11,175* 1,319 12
Net Income 927 1,677 (750) (45)
EBITDA 3,180 3,967 (787) (20)
*without the Gain on Sale of Sky Cable PDR’s
Consolidated Revenues
For the six months ended June 30, 2012, ABS-CBN generated consolidated revenues of P15.3 billion from
advertising revenues and consumer sales, P1.3 billion or 9% higher year-on-year.
Consolidated Revenues
(Amounts in million Pesos) 1H12
1H11
Variance
Amount %
Consolidated Advertising Revenues 9,173 8,760 413 5
Consumer Sales
Sale of Services 5,879 4,979 900 18
Sale of Goods 200 216 (16) (7)
Consolidated Consumer Sales 6,079 5,195 884 17
Consolidated Revenues 15,252 13,955 1,297 9
Advertising Revenues
Consolidated advertising revenues across all platforms and subsidiaries increased by 5% to P9.2 billion
fuelled by ABS-CBN’s ratings leadership and the improvement in revenue performance of Sports.
ABS-CBN maintained its national audience share and ratings leadership for Urban audiences with prime-time
audience share averaging 43% in the second quarter of 2012, a 14 percentage point lead over GMA’s, based
on the Kantar National TV Ratings. In June, ABS-CBN’s audience share for Total Philippines (Urban +Rural)
and Total Day was at 42%, with a 10 percentage point lead over GMA.
For June 2012, 16 of the company’s shows were in the Top 20 for Total Philippines (Urban and Rural), with
the following occupying the Top 10 slots: Walang Hanggan, Princess & I, Maalaala Mo Kaya, Wansapanataym,
TV Patrol (Weekday), The X Factor Philippines (Saturday), Rated K Handa Na Ba Kayo?,Dahil Sa Pag-ibig and
Kapamilya Deal or No Deal.
Consumer Sales
Consumer sales for the first half of 2012 amounted to almost P6.1 billion, or a 17% increase year-on-year.
The increase is largely attributable to Sky Cable’s growth in revenues which grew by 22% partly due to its
acquisition of Destiny cable. The increase in sales of other subsidiaries is partly attributable to the
incremental sales of the wireless landline business.
Consumer Sales 1H12 1H11
Variance
(Amounts in million Pesos) Amount %
ABS-CBN Global 2,342 2,339 3 0
Sky Cable 2,545 2,092 453 22
Other subsidiaries 1,192 764 428 56
Consolidated Consumer Sales 6,079 5,195 884 17
Sky Cable’s consolidated revenues for the year from cable TV and broadband services grew 22% year-on-
year, driven by a 20% growth in postpaid revenues and a 38% growth in broadband revenues. The growth in
revenue is partly due to Sky’s acquisition of Destiny Cable.
ABS-CBN Global’s revenues was flat year-on-year in peso terms or up 2% in US dollar terms. The lower rate
of increase in peso terms was due to a 1% or P0.61 appreciation of the Philippine peso exchange rate against
the US dollar, from P43.50 in 2011 to P42.89 in 2012.
ABS-CBN Global’s overall viewer count was an estimated 2.5 million at the end of June 2012, 1% more
compared to the previous year. Double digit growth in subscribers continued to be experienced in Canada,
and single digit growth in all other territories except Japan and Europe where subscribers declined.
ABS-CBN Film Productions, Inc. released 8 films in the first six months of 2012. Four of them–Enteng ng Ina
Mo, Segunda Mano, Unofficially Yours and Kimmy Dora and the Temple of Kiyeme –topped P100 million in box
office receipts, earning blockbuster status by local standards.
Operating and Other Expenses
Total operating and other expenses in the first half of 2012 was at P12.5 billion. Removing the effects of the
one-time gain on the sale of Sky Cable PDRs which was an Other Income item in the first half of 2011,
operating and other expenses increased by 12%.
Total Operating and Other Expenses 1H12 1H11
Variance
(Amounts in million Pesos) Amount %
Production Costs 5,016 4,558 458 10
Cost of Sales and Services 3,824 3,277 547 17
General and Administrative Expenses 3,687 3,240 447 14
Other Expenses (Income) (33) 100* (133) (133)
Consolidated Total Operating and Other Expenses 12,494 11,175 1,319 12
*without the Gain on Sale of Sky Cable PDRs
Production Costs
Total production costs rose by P458 million or 10% to P5.0 billion in the first six months of 2012 compared
with the same period in 2011. Cash production costs went up by P449 million or 12% year-on-year, mostly
from the increase in talent fees and personnel expenses.
Production Costs 1H12 1H11
Variance
(Amounts in million Pesos) Amount %
Personnel Expenses and Talent Fees 2,532 2,084 448 21
Facilities-Related Expenses 1,049 1,038 11 1
Other Program Expenses 677 687 (10) (1)
Sub-total: Cash Production Costs 4,258 3,809 449 12
Non-Cash Production Costs 758 749 9 1
Consolidated Production Costs 5,016 4,558 458 10
Non-cash production costs went up by 1% to P758 million, due to higher depreciation costs and amortization
of program rights.
Cost of Sales and Services
Cost of sales and services increased by 17% or P547 million to P3.8 billion.
ABS-CBN Global’s cost of sales and services increased 9% due to higher marketing expenses. Sky Cable’s cost
of sales and services also grew by 15% year-on-year although significantly slower than its 22% growth in
gross revenue. The increase in cost of sales and services of other subsidiaries is partly attributable to the
incremental costs of the wireless landline business. Without these incremental costs, cost of sales and
services increased by 9%.
Cost of Sales and Services 1H12 1H11
Variance
(Amounts in million Pesos) Amount %
ABS-CBN Global 1,130 1,033 97 9
Sky Cable 1,715 1,494 221 15
Other Subsidiaries 979 750 229 31
Consolidated Cost of Sales and Services 3,824 3,277 547 17
General and Administrative Expenses
Total General and Administrative Expenses (GAEX) posted a 14% or a P447 million year-on-year increase to
P3.8 billion.
General and Administrative Expenses 1H12 1H11
Variance
(Amounts in million Pesos) Amount %
Personnel Expenses 1,839 1,558 281 18
Contracted Services 417 381 36 9
Facilities-Related Expenses 334 240 94 39
Depreciation and amortization 286 304 (18) (6)
Provision for Doubtful Accounts 108 103 5 5
Other Expenses 703 654 49 7
Consolidated GAEX 3,687 3,240 447 14
Cash GAEX went up by 14% or P447 million to P3.7 billion, of which about half is accounted for by personnel
expenses. The increase in GAEX is partly attributable to the incremental costs brought about by the wireless
landline business. Without the incremental costs of this new initiative, GAEX would have grown by a mere
8%.
Net Income
The company generated a net income of P927 million for the first half of 2012, down by 45% compared with
P1.677 billion in the same period last year. Removing the effects of the one-time gain from the sale of Sky
Cable PDRs recognized in the first half of 2011 amounting to P674 million, net income would have been down
by only 8%.
Net income for the second quarter of 2012 was at P621 million, 103% higher than the income in the first
quarter of P306 million.
EBITDA
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the six months ended June 30,
2012 was at P3.18 billion, or a 20% decline year-on-year. Stripping the one-time gain in 2011, EBITDA
declined by 1% year-on-year.
EBITDA for the second quarter of 2012 was at P1.818 billion, 33% higher than the EBTIDA in the first quarter
of P1.362 billion.
Capital Expenditures
Capital expenditures and program rights acquisitions for the first half of 2012 amounted to P2.4 billion, P287
million or 14% higher than last year’s P2.1 billion.
Balance Sheet Accounts
As at June 30, 2012, total consolidated assets stood at P48.9 billion, P4.1 billion or 9% higher than total assets
of P44.8 billion as at December 31, 2011. The significant increase in assets is attributable to the provisional
goodwill recognized upon the acquisition of Destiny Cable by Skycable.
Cash and cash equivalents of P6.5 billion is P2.2 billion or 25% lower than the December 31, 2011 balance.
Trade accounts receivables amounting to P7.2 billion is P850 million or 13% higher than the P6.4 billion
trade accounts receivables at the end of 2011.
Days sales outstanding of 89 days is 6 days higher than the 83 days as at December 31, 2011.
Total interest-bearing loans was higher by P2.2 billion at P14.7 billion compared to P12.5 billion at the end of
2011.
Shareholders’ equity stood at P20.5 billion, 1% higher compared with the Shareholder’s equity at the end of
2011.
The company’s net debt-to-equity ratio was higher at 0.39x compared with 0.19x at the end of 2011.
