Globe: Q2 analyst briefing presentation materials

8/12/2019 Globe: Q2 analyst briefing presentation materials

1/20


2/20

S

ECU

R ITI

E

S

A

N

D

E

X

C

H

AP

U

j^ui

v

i

ivi

i

ooi

w

n

SECFORM 17-C

CURREN

T

RE

PO

R

T

UNDERS

E

CT

I

O

N

17

OF

T

HESE

CURI

T

IESR

E

G

U

L

A

T

I

ONS

C

ODE

SR

C

ANDS

R

CRULE1

7

a)-1b)

3

)THEREU

N

DER

Date o

f

Repor

t

Dateofearliest even

t

report

e

d

117

3

..

.p00

fT

68

:

480

-0

q0

S

E

C

id

en

t

ifica

t

io

n

Nu

m

be

r BI

R

Ta

xIdentificatio

n

Nu

m

be r

i

*

M

n

r

n

n

^f

i-Q

nic

t

rant

ac

s

n

pn

i

f

i

s

di

n

it

s

cha

r

te

r

5

.

.

PH

I

L

IP

P

I

NE

u i

\ ~

.

.

:

.

/

/

Prov

in

c

e

,country

o

ro

t

h

e

rjurisd

ic

ti

o

no Indus

t

ryC

la

ssif

i

ca

t

i

o

nCode

in

co

r

p

oratio

n

7

27/F,

TheGlobe

T

ow

e

r

,

32n

d

Str

e

et

co

rn

e

r7

th

Ave

n

u

e

1

6

3

4

Boni

fa

c

io

G

lob

al

C

ity

,

.J

a

jgui

g

Ad

d

re

ss

o

f

p

ri

nc

ip

al

of

f

i

c

Po

st

al

c

o

de

Regis

t

rant

s

tele

ph

o

n

en

u

mber,

i

ncl

u

di

n

g

ar

e

acode

9

5

/F

,

G

l

ob

e

Tel

e

com

Plaza(Pio

ne

er

Hi

gh

land

s),

Pi

on

e

e

r

corn

er

Mad

i

son

S

ts

.

,

lyia

nd

alu

y

on

g

City

F

o

r

mer

n

am

e

o

rf

o

r

me

r

a

d

d

r

es

s

,

i

f

c

h

a

n

g

e

d

s

i

n

c

e

l

a

s

t

r

e

p

or

t

10

Se

c

urit

i

e

s

regis

t

eredpursuant

t

oSe

c

t

i

ons4an

d

8

ofth

e

SRC


3/20

Globe Telecom, Inc.

FINANCIAL AND OPERATING RESULTSFirst Half 2014

6 August 2014


4/20

First Half 2014 Performance Highlights

EBITDA up 1% YoY despite increase in

subsidies and operating expenses EBITDA up 17% QoQ on lower subsidies and

operating expenses

Core NIAT up 18% YoY due to higher

EBITDA, lower BAU and accelerateddepreciation, and non-operating expenses

Service Revenues up 7% YoY as growth

momentum continues across all product

categories

2Q14 revenues hit a new quarterly record

Service Revenues

EBITDA

Core NIAT

DividendsPhp18.75/

share

Record date on Aug 19, 2014; payable on Sept. 4, 2014

Quarterly pay-out in line with policy of distributing 75-90%of prior years core net income

23,163

24,465

23,230

2Q13 1Q14 2Q14

+5%

+6%

In Php MillionsIn Php Millions

1H13 1H14

44,532

47,695

+7%

In Php Millions

1H13 1H14

18,940

19,077

+1%

2Q13 1Q14 2Q14

+17%

+1%

In Php Millions

10,164 10,281

8,796

In Php Millions

1H13 1H14

6,426

7,589

+18%

2Q13 1Q14 2Q14

+26%

+27%

In Php Millions

3,3414,232

3,357


5/20

Mobile Revenues grew 5% YoY on the back of broad-based,

subscriber-driven growth

34.2 34.536.4

38.740.61.9 2.0

2.0

2.12.1

2Q13 3Q13 4Q13 1Q14 2Q14

Postpaid

Prepaid

Mobile SubscribersIn Millions

11.5 11.4 11.8

2Q13 1Q14 2Q14

7.2 7.0 7.5

2Q13 1Q14 2Q14

Quarterly Mobile RevenuesIn Php Billions

Gross AddsIn Thousands

7228 8936 9405

143

200 190

2Q13 1Q14 2Q14

Postpaid

Prepaid

Postpaid Prepaid

22.7 23.2

13.1 14.6

1H13 1H14

Postpaid

Prepaid

YTD Mobile RevenuesIn Php Billions

+5%

35.8 37.8 +18%

+5%

42.740.8

38.4

36.536.1

+7% +3%+5%

+5%

+2% +30%


6/20

Core services remain resilient with voice revenues up 9% YoY and SMS

revenues keeping steady, despite continued shift to unlimited promos

15.917.3

8.7 8.7

1H13 1H14 1Q14 2Q14

Mobile Voice RevenuesIn Php Billions

14.3 14.2

7.0 7.2

1H13 1H14 1Q14 2Q14

Mobile SMS RevenuesIn Php Billions

Mobile Voice and SMS Revenues as

a % of Mobile Revenues

84% 84%

44% 46%

40% 38%

85%82%

47% 45%

38% 37%

1H13 1H14 1Q14 2Q14

SMS

Voice

+3%

+9%


7/20

Data revenues, across different technologies, remains

a key growth driver for Globe

. . . driving substantial

revenue uplift

Mobile Browsing Revenues

. . . with additional

strategic benefits.

Improved brand equity

New customer insights

System integration for below-the-

line offers

Churn rates to be elevated in the

next quarters for non-paying subs

Mobile Browsing and

Other Data RevenuesIn Php Billions

2.83.4

1Q14 2Q14

5.4

8.9

Pre FB Post FB

The

Free Facebook promo

provided a step increase in

mobile data users . . .

Mobile FB Registered UsersIn Millions

Pre FB Post FB

+23%+65%

1.2x


8/20

Strong growth in data revenues extends to broadband

and fixed line data segments

Broadband RevenuesIn Php Billions

Fixed Line

Data RevenuesIn Php Billions

2.7

2.8

3.1

2Q13 1Q14 2Q14

1.1

1.3 1.3

2Q13 1Q14 2Q14

369 384 378 392 412

1,445 1,497 1,6541,798 1,836

1,814 1,8812,032

2,190 2,248

2Q13 3Q13 4Q13 1Q14 2Q14

+3%

+24%

Broadband Cumulative

SubscribersIn Thousands

Wired

Wireless

+15%

+10%

+14%


9/20

Creating a differentiated customer experience with

new products and services

GoUnli20 GoTXT19Plus

New Promo Bundles New TM Facebook Offer Globe partners with

Xiaomi for Mi 3 handset

New Tattoo Service and

Device Offers

GCash expands nationwide

reach with CashKO

Globe corporate M2M

solutions


10/20

Globe Telecom, Inc.

FINANCIAL PERFORMANCEFirst Half 2014


11/20

*OPEX & Subsidy includes interconnect expenses

**Core NIAT excludes forex, mark-to-market gains and losses, and non-recurring items

Consolidated Financial Highlights

In Php Mn6M14 6M13

Y/YChange

2Q14 1Q14Q/Q

Change

Service Revenues 47,695 44,532 7% 24,465 23,230 5%

OPEX & Subsidy* (28,618) (25,592) 12% (14,184) (14,434) (2%)

EBITDA 19,077 18,940 1% 10,281 8,796 17%

EBITDA Margin 40% 43% (3%) 42% 38% 4%

Depreciation 8,510 16,071 (47%) 4,443 4,067 9%

Affected by Network Modn 1,178 7,118 (83%) 666 512 30%

Others 7,332 8,953 (18%) 3,776 3,555 6%

EBIT 10,567 2,869 268% 5,838 4,728 23%

Non-Operating Charges (645) (1,046) (38%) (223) (422) (47%)

NIAT 6,835 1,410 385% 3,886 2,949 32%

Core NIAT** 7,589 6,426 18% 4,232 3,357 26%


12/20

YoY, EBITDA improved by 1%, driven by revenue growth and lower

interconnect charges, offsetting increases in operating costs

YoY Change in EBITDA(in Php Mn)

QoQ Change in EBITDA(in Php Mn)

+1%

+17%

19,077

3,163 446408 1,168 501

1,395

18,940

6M13 EBITDA Inc. in Revenues Dec. in

Interconnect

Charges

Inc. in Staff Costs Inc. in Marketing

& Subsidy

Inc. in Network

Costs

Inc. in Provisions,

Services, Others

6M14 EBITDA

1,235 175 233

114 38 6

8,796

1Q14 EBITDA Inc. in Revenues Inc. in

InterconnectCharges

Inc. in Staff Costs Inc. in Marketing

& Subsidy

Dec. in Network

Costs

Dec. in

Provisions,Services & Others

2Q14 EBITDA

10,281


13/20

Capital expenditures at approximately Php11 Billion,

in line with Php29 Billion CAPEX guidance for 2014

18,007 20,124

28,999

11,003

2011 2012 2013 6M14

CAPEXIn Php Millions

Core Capex

16%

Data-driven CAPEX54%

Others 16%

Business SupportSystems 14%

6M14 CAPEX Breakdown

29,000Guidance for 2014

d b h billi h h f bl


14/20

Gross debt at Php68.8 billion, though comfortably

within covenant ratios

48,67961,779

69,301 68,817

2011 2012 2013 6M14

Gross Debtin Php Millions

1.01

1.33

1.66 1.58

2011 2012 2013 6M14

Gross D/E Ratio

1.391.78

1.90 1.88

2011 2012 2013 6M14

Gross Debt/EBITDA Ratio

Covenant = 3:1

Covenant = 2:1

21.0% 21.6%26.3%

32.1%

FY2011 FY2012 FY2013 6M14

Annualized

Return on Equity*

ROE (annual)*Return on equity calculated as Core NIAT divided by averagestockholders equity

C h Di id d S i d i d li i l


15/20

Cash Dividends: Sustained commitment to delivering value to

our shareholders

4.3%*10.1%

5.8%

Dividend

yield

Share price

appreciation

TSR

2014 YTD Total Shareholder Return (as of

July 31, 2014)

Third quarter cash dividend of Php18.75

per common share payable onSeptember 4, 2014 to shareholders onrecord as of August 19, 2014.

4.3%*

2%3%

4%

GLO PSE Index 5YR PDST 7YR PDST

Globe 2014 Dividend Yield*

* On an annualized basis and using GLO share price of Php1,735 (July 31, 2014 close)

Cash Dividend perCommon Share:

Php 18.75

Record Date: August 19, 2014

Payment Date: September 4, 2014

Key Information


16/20


17/20

Appendix


18/20

2013 2014

(In Million Pesos) 1Q 2Q 3Q 4Q 1Q 2Q

CONSOLIDATED SERVICE REVENUES

Mobile 17,124 18,717 18,232 18,691 18,456 19,342

Voice 7,670 8,268 8,052 8,377 8,658 8,684

SMS 6,961 7,349 7,097 7,387 7,008 7,233

Data 2,493 3,100 3,083 2,927 2,790 3,425

Fixed Line & Broadband 4,244 4,447 4,493 4,552 4,774 5,123Broadband 2,486 2,659 2,632 2,663 2,790 3,065

Fixed Line Data 1,111 1,148 1,190 1,242 1,319 1,313

Fixed Line Voice 647 640 671 647 665 745

Total 21,368 23,164 22,725 23,243 23,230 24,465

EBITDA 8,776 10,164 9,353 8,221 8,796 10,281

EBITDA Margin 41% 44% 41% 35% 38% 42%

Appendix 1:

Historical Consolidated Gross / Net Service Revenues and EBITDA Margin

2013 2014

(In Million Pesos) 1Q 2Q 3Q 4Q 1Q 2Q

Net Service Revenues 19,172 20,683 20,425 20,939 21,173 22,293

Interconnection SettlementCosts

2,196 2,481 2,300 2,304 2,057 2,172


19/20

Appendix 2:

Net Income and Core Net Income

(in Million Pesos) 6M14 6M13

%

Change 2Q14 1Q14

%

ChangeReported Net Income After Tax 6,835 1,410 385% 3,886 2,949 32%

Deferred Tax on Unexercised Stock Options 55 (188) (129%) 13 41 (68%)

Add (deduct) forex loss (gain) (430) (1,914) (78%) (285) (145) 96%

Other Adjustments - accelerated depreciation 1,129 7,118 (84%) 617 512 20%

Core Net Income 7,589 6,426 18% 4,232 3,357 26%


20/20

Documents

Globe: Q2 analyst briefing presentation materials