Deli livering vering the tot otal al digital gital experien erience ce PLDT Inc. First st Half 2016 Finan nancia cial l and Operatin ting Results lts 2 nd August 2016 1 1
PLDT T Grou oup: : 1H16 6 vs vs 1H15 Fi Fina nanc ncia ial l Highli light ghts Revenues 0% P85.3bn P0.1bn Service Revenues Service Revenues (net of interconnect) 0% -1% P80.6bn P75.8bn (P0.6bn) (P0.2bn) Wireless (ex-ILD) Fixed Line (ex-ILD/NLD) Service Revenues (ex-ILD/NLD) Service Revenues Service Revenues +2% P48.2bn P72.1bn P27.9bn -3% +9% P1.2bn P2.4bn (P1.5bn) EBITDA EBITDA Margin -13% P30.8bn 38% (P4.8bn) Reported Net Income Core Net Income* -33% -6% P17.7bn P12.5bn (P1.2bn) (P6.3bn) * updated 2016 core income guidance of P30bn 2 2
Consumer: Data surge fuels converged digital services in 1H16 SUPERIOR BARRAGE OF PEACE OF MIND ENTERTAINMENT CONVERGENCE CONNECTIVITY DATA MOBILE INTERNET: 2X FIBR + TELPAD – IPTV with Cignal + FAMCAM Home QuadPlay, Shared growth rate vs. Control Center of the TVolution VOD monitoring system Data, Wearables 2015 Smart Home SMART HOME & CONVERGED DIGITAL SERVICES HOME: 3X growth 930M, +37% vs. 2015 rate vs. 2015 3 3
Enabling the Digital Enterprise Key Initiatives to Double-digit Robust YTD Real-time Sales Ensure New Data Center YTD Revenue Pipeline across Performance Continued Strong Capacity to Sell Growth Fixed, Wireless & ICT Tracking Growth VITRO Clark VITRO Makati • Enterprise with more • Total YTD Jun • Real-time enterprise • Aggressive Go- • New VITRO Makati than P300mn Enterprise revenues sales tracking to-Market on the opened on July 28, monthly recurring of P15.79bn, YoY through Enterprise front 2016 and VITRO charges (MRC) and growth of P1.62bn Salesforce.com through ALPHA’s Clark set to be P1.2B one-time or 11% Digital Overdrive opened in Sep, charges (OTC) in • Conso revenue and SME’s and will provide recorded • Double-digit growth performance Sugod-Suyod fresh/additional opportunities monitoring on both ALPHA campaign capacity of over (10%) and SME automated thru SCV 5,000 full racks (13%) (Single Customer View) 4 4
Voyager: Continued String of Breakthroughs in 1H16 68 Enterprise Accounts PayMaya Account Base doubled in H1 2016 Micro-credit lending Consumer lending w/ Consumer loans : soft launch June 2016 insurance and auto- platform : Account growth significantly accelerating with #NowNation : Around 30% response : 35 banks signed savings campaign rate : Auto loans for CBS and : >P4B disbursed YTD : UBER partnership : PayMaya is the only Prepaid Card that : greater than 50% pension loans for PNB 2016 works with Uber approval rate now live : now open to Globe subs : Payment platform of choice for largest online merchants : Smart Padala brand relaunch in June 2016 Digital Commerce SafeZone is now freenet! Digital commerce platform solutions for B2B2C Enabling enterprises to reach Enabling digital participation in : Chosen as online store platform by digital consumers - major events several large companies , including “Digital Access for All!” : Mobile Live Stream of Presidential Inauguration UBER : Over 70 enterprises accounts onboarded and FIBA Olympic Qualifying Tournament Gilas TackThis! cited as Best SME Service : Most visited local community site as per Games Coverage at the Asia Communications Awards Effective Measure as of end-June 2016 #1 Trending in App Store PH 5 5
PLDT PL T Group: up: Consoli solida dated ed Se Service vice Reven enues ues (Php in billions) By Service Revenue Streams Service Revenue Mix 1H15 1H16 S Lower by P0.6n or 1% Data/Broadband/Digital Platforms 29% 36% D S SMS/Domestic Voice 58% 53% In ILD 13% 11% Data, Broadband and SMS, Voice Domestic Digital Platforms and Others S Service Revenues 1H15 1H16 ILD and NLD D Data/Broadband/Digital Platforms 23,965 29,499 (1.7) (4.3) +5.5 S SMS/Domestic Voice 46,954 42,610 -17% -9% +23% 81.2 80.6 In ILD 10,240 8,495 Total 81,159 80,604 Over 1/3 of consolidated service revenues are now from our data and broadband businesses 1H 2015 1H 2016 By Business Units -1% Service Revenue Mix 1H15 1H16 -0.6 -15% Consumer 65% 66% +10% 80.6 Enterprise 17% 19% -2.1 0.3 +1.4 International & Carrier 17% 15% 12.1 +1% Voyager and Others 1% 0% 15.3 +0.4 Service Revenues 1H15 1H16 Consumer 52,533 52,937 52.9 Enterprise 13,844 15,286 International & Carrier 14,167 12,100 Voyager and Others 615 281 Total 81,159 80,604 Voyager 1H 2016 Enterprise International Consumer & Carrier And Combined CONSUMER and Others ENTERPRISE businesses, accounted for 85% of total service revenues 6 6
Fixed Line and Wireless: Service Revenues (Php in billions) Service Revenue Mix 1H15 1H16 +5% Fixed Line Data/Broadband 57% 59% Higher by P2.1bn or 7% Domestic Voice and Others 32% 31% ILD/NLD 11% 10% Domestic Voice Data and Service Revenues 1H15 1H16 ILD and NLD and Others Broadband Data/Broadband 16,301 18,299 +0.4 -0.2 +2.0 Domestic Voice and Others 9,200 9,565 30.9 +4% -7% +12% ILD/NLD 3,294 3,071 28.8 Total 28,795 30,935 Increases in data/broadband fully offset declines in ILD/NLD 1H 2015 1H 2016 revenues * Net of interconnect Wireless Service Revenue Mix 1H15 1H16 Data/Broadband/Digital Platforms 20% 27% SMS/Domestic Voice 70% 65% Lower by P2.9bn or 5% ILD 10% 8% SMS, Domestic Service Revenues 1H15 1H16 Data, Broadband, Voice Data/Broadband/Digital Platforms 10,931 14,104 Digital Platforms and Others ILD +3.2 -4.7 SMS/Domestic Voice 38,854 34,144 -1.3 +29% -12% ILD 5,808 4,493 55.6 52.7 -23% Total 55,593 52,741 Growth in data/broadband not yet enough to absorb declines in SMS, domestic voice and ILD 1H 2015 1H 2016 7 7
Breakdown of Consolidated Service Revenues (Php in billions) Service Revenue Mix 1H15 1H16 Consumer Higher by P0.4bn or 1% Data/Broadband 30% 38% Voice 39% 35% Wireless Fixed Line Wireless Fixed Line Mobile SMS 29% 25% Voice Internet Data Broadband Voice SMS Others Others 2% 2% -13% +49% +18% +13% +4% -12% -12% -1.9 +2.3 +1.1 +0.6 +0.2 -1.8 -0.1 52.9 52.5 Service Revenues 1H15 1H16 Data/Broadband 15,925 20,001 Voice 20,492 18,761 +4.1 or +26% -1.7 or -8% SMS 15,198 13,367 Others 918 808 Total 52,533 52,937 1H2015 1H2016 Rise in data/broadband revenues of P4.1bn exceeded P3.5bn reduction in SMS and voice revenues Enterprise Service Revenue Mix 1H15 1H16 Higher by P1.4bn or 10% Data/Broadband 53% 59% Voice 42% 36% Fixed Fixed SMS 3% 3% Wireless Mobile Wireless Line Line Others 2% 2% Internet SMS Voice broadband Others Voice Data +31% -23% +121% -4% +9% -2% +17% +0.5 +0.1 -0.2 -- +1.2 -0.1 15.3 Service Revenues 1H15 1H16 13.8 Data/Broadband 7,375 9,040 Voice 5,824 5,470 SMS 336 439 +1.7 or 23% Others 309 337 -0.4 or -6% Total 13,844 15,286 1H2015 1H2016 Data/broadband revenue increases underpinned the growth in Enterprise revenues 8 8
PLDT Group: Consolidated EBITDA (Php in billions) Lower by P4.8bn or 13% Svc Rev Subsidies Cash 35.5 -0.6 Opex -2.5 Provns +1.5 -3.3 30.8 1H 2015 1H 2016 Margins 44% 38% Consolidated EBITDA declined by P4.8bn or 13% year-on-year to P30.8bn in 1H16 mainly due to increases in subsidies and provisions for receivables and inventory to support initiatives to grow the data business and defend market share Data/broadband revenues grew by P5.5bn or 23% year-on-year Now account for 36% of total service revenues from 30% in 1H15 Rise in subsidies by P2.5bn partly offset by P0.8bn reduction in selling and promo expenses Excluding impact of P1.4bn in MRP expenses in 1H15, cash operating expenses remained stable Front-end recognition of subsidy expenses vis-à-vis future revenues from the customer EBITDA margin for 1H16 at 38% Partly reflects impact of structural change in revenue mix vis-à-vis 1H15 ILD/NLD representing 11% of total service revenues from 13% SMS contributing 21% to total service revenues compared to 24% 9 9
PLDT Group: Core and reported net income (Php in billions) Core Net Income Core net income for 2016 estimated at P30.0bn Lower by P1.2bn or 6% P2bn higher than original guidance of P28bn P6.5bn net gain from sale of stake in Provn for Net EBITDA Beacon Misc Fin Inc Taxes 18.9 -4.8 equity in 17.7 Income Lower EBITDA by P6bn vis-à-vis Costs - +0.8 earnings +5.4 Non-cash Net original guidance of P70bn -1.3 expenses -0.7 Additional financing costs arising from -0.6 incremental capex from acquisition of SMC telco businesses Equity in losses of SMC telco businesses 1H 2015 1H 2016 Asset impairment of P5.4bn booked in Reported Net Income 1H16 reflecting the further decline in the value of the investment in Rocket (Php in billions) Internet Asset P9.2bn ( € 17.47/share) at end June 2016 Forex and Core Impairment vis-à-vis P14.6bn ( € 28.24/share) at end Deriv Gains, net Income (Rocket Internet) Reported 2015 +0.1 -5.4 17.7 Income Of total investment of P19.7bn, Others 12.5 impairment of P10.5bn YTD As of 1 August 2016: Rocket closed at € 18.22 Rocket focusing on: Improving profitability of its companies 1H 2016 1H 2016 while supporting their growth Streamlining operations and portfolio 10 10
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