2 nd Quarter 2014 Investor’s Briefing Financial and Operating Results August 13, 2014 1 ABS-CBN Investor Presentation
2nd Quarter 2014 Highlights ABS-CBN Events Launched ABS-CBN Digital Storefront Recognitions and Awards - Service Company of the Year, Asia Pacific Stevie Awards; Mr. Eugenio Lopez III, - Best TV Station, 22nd Golden Dove Awards of the KBP KBP Lifetime award - Gold Award – Advocacy , Tulong Na, Tabang Na, Tayo Na, Asia-Pacific Tambuli Awards - Silver Award – Innovative and Integrated Media( Tulong Na, Tabang Na, Tayo Na), Asia-Pacific Tambuli Awards Mrs. Charo Santos-Concio , - International Gold Quill 2014 – Film Restoration Woman of the Year - ABS-CBNNews.com & iWantTV – Best in category Digital Asia Pacific Stevie Award Filipino Awards 2 ABS-CBN Investor Presentation
1 st Half 2014 Revenues Excluding election-related advertisements, revenues increased by 3.0% 4.7% 20,000 17,178 16,378 18,000 16,000 14,000 In PHP Millions 13.6% 59% 10,213 8,819 54% 12,000 10,000 8,000 6,000 4,000 8.5% 7,559 46% 6,965 41% 2,000 0 1H'13 1H'14 Consumer Sales Ad Revenues Election-related revenues 3 ABS-CBN Investor Presentation
Costs and Expenses For the 6 months ended June 30, 2014 0.3% 15,145 15,092 16,000 14,000 3.9% Production 5,600 5,826 12,000 In PHP Millions Costs 10,000 8,000 Cost of Sales 6.8% 4,397 4,698 & Services 6,000 4,000 2.6% 4,922 4,794 GAEX 2,000 0 1H'13 1H'14 4 ABS-CBN Investor Presentation
Costs and Expenses - Recurring For the 6 months ended June 30, 2014 2.6% 15,092 16,000 14,716 14,000 2.9% Production 5,600 12,000 5,770 In PHP Millions Costs 10,000 8,000 Cost of Sales 6.8% 4,698 4,397 & Services 6,000 4,000 5.4% 4,794 4,549 GAEX 2,000 0 1H'13 1H'14 5 ABS-CBN Investor Presentation
Financial Results Summary For the 6 months ended June 30, 2014 In PHP Millions Net Revenues Net Income Cost and Expenses 20,000 20,000 3,000 18,000 4.7% 18,000 0.3% 2,500 16,000 16,000 14,000 14,000 2,000 12,000 12,000 10,000 10,000 1,500 17,178 16,378 8,000 22.9% 8,000 15,145 15,092 1,000 6,000 6,000 1,291 4,000 4,000 500 995 2,000 2,000 0 0 0 1H'13 1H'14 1H'13 1H'14 1H'13 1H'14 6 ABS-CBN Investor Presentation
Financial Results Summary - Recurring For the 6 months ended June 30, 2014 In PHP Millions Net Revenues Cost and Expenses Net Income 20,000 20,000 3,000 18,000 3.0% 18,000 2.6% 2,500 16,000 16,000 14,000 14,000 2,000 12,000 12,000 10,000 10,000 1,500 43.6% 16,378 8,000 15,895 8,000 15,092 14,716 1,000 6,000 6,000 4,000 4,000 500 995 693 2,000 2,000 0 0 0 1H'13 1H'14 1H'13 1H'14 1H'13 1H'14 Excluding election-related advertisements, revenues for the 1 st half grew by 3.0% due to the strong performance of our films both locally and internationally and further supported by the performance of Sky Cable. 7 ABS-CBN Investor Presentation
Income Statement For the 6 months ended June 30, 2014 Change Php Millions 1H'14 1H'13 Amount % Change NET REVENUES 16,378 17,178 -800 -4.7% Advertising Revenues 8,819 10,213 -1,394 -13.6% Consumer Sales 7,559 6,965 594 8.5% COSTS and EXPENSES 15,092 15,145 -53 -0.3% Production Costs 5,600 5,826 -226 -3.9% Cost of Sales and Services 4,698 4,397 301 6.8% GAEX 4,794 4,922 -128 -2.6% NET INCOME 995 1,291 -296 -22.9% EBITDA 3,430 4,130 -700 -16.9% 8 ABS-CBN Investor Presentation
Income Statement – Recurring For the 6 months ended June 30, 2014 Change Php Millions 1H'14 1H'13 Amount % Change NET REVENUES 16,378 15,895 483 3.0% Advertising Revenues 8,819 8,930 -111 -1.2% Consumer Sales 7,559 6,965 594 8.5% COSTS and EXPENSES 15,092 14,716 376 2.6% Production Costs 5,600 5,770 -170 -2.9% Cost of Sales and Services 4,698 4,397 301 6.8% GAEX 4,794 4,549 245 5.4% NET INCOME 995 693 302 43.6% EBITDA 3,430 3,276 154 4.7% 9 ABS-CBN Investor Presentation
2nd Quarter 2014 Highlights – Revenues vs 1Q 2014 vs 2Q 2013 8,191 9,000 9,253 8,187 10,000 11.5% 8,000 9,000 8,187 7,000 8,000 4,110 7,000 6,000 4,709 14.6% 5,790 6,000 4,709 5,000 18.7% 5,000 4,000 4,000 3,000 3,000 4,081 2,000 14.8% 0.4% 3,478 2,000 3,463 3,478 1,000 1,000 0 0 1Q'14 2Q'14 2Q'13 2Q'14 Consumer Sales Ad Revenues Consumer Sales Ad Revenues Election-related Revenues The ad revenue growth was fuelled by higher Excluding election-related advertisements, volume for the quarter and the impact of rate total revenues declined by 1%. increase implemented last February. On the other hand, consumer sales declined due to lower number of movies released for the quarter. 10 ABS-CBN Investor Presentation
2nd Quarter 2014 Highlights – Costs and Expenses vs 2Q 2013 vs 1Q 2014 9,000 9,000 7,934 7,680 3.6% 3.2% 7,680 7,412 8,000 8,000 7,000 7,000 6,000 6,000 5,000 5,000 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 0 0 1Q'14 2Q'14 2Q'13 2Q'14 The growth in costs and expenses comes from Excluding election-related expenses, higher costs of programming and bandwidth of consolidated costs and expenses were flat our cable business and inventory costs from versus last year. our licensing business. Production costs remains flat quarter-on- quarter conforming to the management’s cost initiatives. 11 ABS-CBN Investor Presentation
2nd Quarter 2014 Highlights – Net Income vs 2Q 2013 vs 1Q 2014 900 900 788 800 800 700 700 538 600 600 15.1% 42.0% 457 457 500 500 400 400 300 300 200 200 100 100 0 0 1Q'14 2Q'14 2Q'13 2Q'14 Net Income Net Income Election-related Net Income Excluding election-related income, net income Blockbuster movies released both locally and internationally boosted net income for the 1 st for the quarter increased by 47.9% versus last quarter of 2014. year. 12 ABS-CBN Investor Presentation
Business Segments • Broadcast • TV and Studio Global Operations • Films and Music • Narrowcast and Sports • Cable systems Pay TV • Internet broadband Networks • ABS-CBN mobile delivers ABS-CBN content and offers traditional telecoms services on mobile devices. New • Kidzania - educational themepark Businesses • Digital TV: digital broadcast plus additional free-to-air channels 13 ABS-CBN Investor Presentation
Business Segments For the 6 months ended June 30, 2014 Revenues EBITDA Net Income In Php Millions 1H‘14 1H'13 % Ch 1H‘14 1H'13 % Ch 1H‘14 1H'13 % Ch A. TV and Studio 12,999 13,650 -4.8% 3,537 3,658 -3.3% 1,706 1,646 3.6% Margins 27.2% 26.8% 13.1% 12.1% B. Pay TV Networks 3,823 3,410 12.1% 879 830 5.9% 122 147 -17.0% Margins 23.0% 24.3% 3.2% 4.3% C. New Business 198 275 -28.0% -986 -358 175.4% -833 -502 65.9% Mobile 198 275 -846 -301 -638 -350 DTT -61 -36 -128 -136 Others -79 -21 -67 -16 D. Inter-segment Elims -569 -64 TOTAL 16,451 17,271 -4.7% 3,430 4,130 -16.9% 995 1,291 -22.9% Margins 20.8% 23.9% 6.0% 7.5% 14 ABS-CBN Investor Presentation
Business Segments - Recurring For the 6 months ended June 30, 2014 Revenues EBITDA Net Income In Php Millions 1H‘14 1H'13 % Ch 1H‘14 1H'13 % Ch 1H‘14 1H'13 % Ch A. TV and Studio 12,999 12,367 5.1% 3,537 2,804 26.1% 1,706 1,048 62.8% Margins 27.2% 22.7% 13.1% 8.5% B. Pay TV Networks 3,823 3,410 12.1% 879 830 5.9% 122 147 -17.0% Margins 23.0% 24.3% 3.2% 4.3% C. New Business 198 275 -28.0% -986 -358 175.4% -833 -502 65.9% Mobile 198 275 -846 -301 -638 -350 DTT -61 -36 -128 -136 Others -79 -21 -67 -16 D. Inter-segment Elims -569 -64 TOTAL 16,451 15,988 2.9% 3,430 3,276 4.7% 995 693 43.6% Margins 20.8% 20.5% 6.0% 4.3% 15 ABS-CBN Investor Presentation
TV and Studio - Broadcast For the 6 months ended June 30, 2014 In PHP Millions Excluding election-related Net Revenues Production Costs advertisements, revenue grew 12,000 8,000 9.4% 7,000 by 4.6% backed by the strong 10,000 4.6% 6,000 ratings of our programs. 8,000 5,000 6,000 4,000 For primetime, Ch2 continues to 9,576 3,000 8,675 5,505 4,000 5,250 lead in audience share receiving 2,000 2,000 49% share for national and 36% 1,000 0 0 for MM. 1H'13 1H'14 1H'13 1H'14 1 st Half 2014 Audience Share 1 st Half 2014 Top 10 Programs - TOTAL Rank Channel Program Share TOTAL DAY PRIMETIME ABS-CBN THE VOICE KIDS SUNDAY 1 36.4 Weekend CHANNELS 2 ABS-CBN THE VOICE KIDS SATURDAY 34.2 Weekend Total Mega Metro Total Mega Metro 3 ABS-CBN HONESTO 31.7 Weekday PH Manila Manila PH Manila Manila ABS-CBN MARS RAVELO'S DYESEBEL 30.7 4 Weekday ABS-CBN IKAW LAMANG 5 29.3 Weekday ABS-CBN 2 44 31 33 49 34 36 6 ABS-CBN WANSAPANATAYM 29.0 Weekend GMA 7 33 39 34 31 39 34 7 ABS-CBN MMK ANG TAHANAN MO 28.5 Weekend ABS-CBN GOT TO BELIEVE 8 28.3 Weekday TV 5 10 13 12 9 12 11 9 ABS-CBN TV PATROL WEEKDAY 27.2 Weekday Others 13 17 22 11 16 20 10 ABS-CBN BET ON YOUR BABY 24.9 Weekend Source: Kantar Media, January – June 2014 Source: Kantar Media, January – June 2014 16 ABS-CBN Investor Presentation
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