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1Q 2016 Analysts Briefing

5 May 2016 | The Globe Tower BGC

1Q 2016 Performance Highlights

Service Revenues

29.9

YoY

+14%

EBITDA

13.0

+18%

Net Income After Tax

4.3

+3%

Cash Dividend

22

.00
/sh

+6%

(in Php Bn)

Growth momentum sustained, driven by mobile data, home broadband

and corporate data
Excluding Bayan revenues, service revenues still up by 9% YoY to
Php28.5Bn
Beginning 1Q16, mobile services to include fully-mobile broadband, which
was previously reported under broadband services

New record quarterly EBITDA

YoY, higher revenues and lower subsidies and interconnection costs
mitigate higher network expenses
Excluding the impact of Bayan consolidation, EBITDA still improved
robustly by 12% YoY to Php12.4Bn
YoY increase on the back of record EBITDA
On QoQ basis, net income improved 85% against 4Q15 due to
record EBITDA and lower non-operating charges
Core net income at Php4.2Bn, flat against 1Q15
Record Date: May 19, 2016
Payment Date: June 3, 2016
On an annualized basis, represents approximately 77% of 2015 Core
Net Income
2

Mobile: Revenue growth remains robust, driven by increase in prepaid revenues (+9%).
Mobile Revenues*
(in Php Bn)

Postpaid Revenues*

Prepaid Revenues*

8.5

14.5

(in Php Bn)

23.1
+7%

(in Php Bn)

+9%

+3%
Total Mobile Revenues as a % of
Service Revenues**

Mobile services include mobile

broadband, which was previously
reported under Broadband
services
** Includes Bayan revenues

77%

83%

1Q16

1Q15

Mobile: Mobile subscribers reached 57.3mn, up slightly from 4Q15, due to record
prepaid gross acquisitions, though partially mitigated by churn of non-revenue subs
Mobile Subscribers Restatement
3,249,223

1,083,004

56,182,678

52,933,455

2015 Mobile

+2%

2015 Nomadic

2015 Restated
Mobile

Mobile cellular gross subscriber additions

remain strong (in 000s)

Postpaid

250

276

260
4900

5460

1Q16 Net Additions

1Q16 Mobile

Prepaid Blended Churn Rate

6.28%

6.40%

6.84%

6.49%

5473

Globe Prepaid
TM

57,265,682

5.67%

5864

6459

6750
1Q15

1Q15

4Q15

1Q16

2Q15

3Q15

Normalized

4Q15

1Q16

Increase in 1Q16
churn was due to the
one-time clean-up of
non-paying customers
as well as the impact
of prepaid migration
to the new business
support system. Churn
rate is anticipated to
normalize moving
forward.

Reported
4

Broad-based, data-driven revenue growth

Mobile Data*

Home Broadband**
(in Ph Bn)

(in Ph Bn)

9.1

Corporate Data**

3.5

+62%

(in Ph Bn)

2.3

+51%

+51%

Total Data Revenues as a % of

Service Revenues**

Includes mobile and nomadic browsing,

VAS, GCash and other mobile content
** Includes Bayan revenues

50%

36%

1Q16

1Q15

New services, devices and events that deliver unique

customer experiences
myLifestyle No
Lock-up Plan

Samsung
Galaxy S7

myStarter Plan

myShare Plan

Globe myBusiness Day

Globe first to offer Disney

Mobile in SEA

10th Gen3 Store in SM Mall of Asia

Financial Highlights

Consolidated Financial Highlights

Year on Year
(in Php Mn)
Gross Service Revenues
Net Service Revenues
OPEX & Subsidy*
EBITDA
EBITDA Margin
Depreciation
EBIT
Non-Operating Charges
Net Income
Core Net Income**

Globe Group
3M16
29,867
27,590
(16,838)
13,029
44%
(6,215)
6,814
(540)
4,335
4,185

Last Year
3M15
26,220
23,904
(15,211)
11,009
42%
(4,439)
6,570
(523)
4,203
4,182

YoY Change
vs Globe Group
14%
15%
11%
18%
40%
4%
3%
3%
0%

Globe Ex-Bayan
YoY Change
3M16
vs Globe Ex-Bayan
28,487
9%
26,217
10%
(16,136)
6%
12,351
12%
43%
(5,790)
30%
6,561
0%
(597)
14%
4,154
-1%
4,091
-2%

*OPEX & Subsidy includes interconnect charges

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

Higher revenues offset increases in OPEX mainly on Provisions, Services

and other expenses
YoY Change in EBITDA
(in Php Millions)

39-

525

158

498

14,012

13,514

3,647

485

+18%
11,009

11,009

14,656

14,170

3M15 EBITDA

Inc. in
Revenues

Dec. in
Interconnect
Charges

Inc. in Staff
Costs

Inc. in
Inc. in Network
Marketing &
Costs
Subsidy

13,029

13,029

Inc. in
Provisions,
Services &
Other OPEX

3M16 EBITDA

Capital expenditures at approximately Php7.1 Billion or USD150 Million,

with majority of the investments related to data requirements

CAPEX* (in Php Bn)

32%

32.1

29.1

49%

48%
73%

21.2

50%

7.1

9%
9%
2012

2013

35%

2014

2015

3M16

36%
27%

30%

15%

10%
15%

8%
15%

4%
8%
14%

2013

2014

2015

3M16

15%

Business Support

Others

Core

Data

* Based on FX rate of Php45.61

10

Gross Debt at Php 70.2 Billion, comfortably within covenant ratios

2Q16 Dividends
72,229

Gross Debt

(in Php Millions)

65,276
2014

Gross D/E Ratio

70,219

1.2

2015

3M16

Php 22.00/share

Record Date

May 19, 2016

Payment Date

June 3, 2016

2016 Total Shareholder Return

1.22

(Covenant = 2:1)

Cash Dividend per

Common Share

1.15
2014

2015

18.7%

22.7%

3M16

4.0%*

Gross Debt/EBITDA
(Covenant = 3:1)

1.66
1.51

2014

2015

1.41

3M16

Div Yield

Share Price
Appreciation

TSR

* Based on closing share price of Php2,200 as of April 28, 2016

11

Q&A

Appendix 1
Historical Consolidated Gross / Net Service Revenues and EBITDA Margin
(In Million Pesos)
Mobile

1Q

2014
2Q
3Q
4Q
1Q
CONSOLIDATED SERVICE REVENUES

2Q

2015
3Q

4Q

2016
1Q

19,346

20,382

20,874

21,959

21,635

22,826

23,052

23,730

23,064

Mobile Voice

8,710

8,738

8,530

9,016

9,191

9,557

9,315

9,064

8,181

Mobile SMS

7,044

7,271

7,332

7,675

6,807

6,753

6,645

6,193

Mobile Data

3,591

4,373

5,012

5,269

5,636

6,515

7,092

8,472

5,763
9,120

3,884

4,082

4,132

4,365

4,585

4,785

6,474

6,593

6,803

Home Broadband

1,900

2,024

2,084

2,185

2,300

2,420

3,126

3,474

3,481

Corporate Data

1,319

1,313

1,365

1,483

1,543

1,603

2,349

2,204

2,333

Fixed Line Voice

665

745

683

696

742

762

999

915

989

23,230

24,464

25,006

26,324

26,220

27,610

29,526

30,323

29,867

EBITDA

8,796

10,281

10,681

9,513

11,009

11,645

12,024

11,129

13,029

EBITDA Margin

38%

42%

43%

36%

42%

42%

41%

37%

44%

Fixed Line & Broadband

Total

(In Million Pesos)

Net Service Revenues

1Q
21,173

2014
2Q
3Q
22,292
23,044

4Q
24,086

1Q
23,904

2Q
25,280

3Q
27,293

4Q
28,194

2016
1Q
27,590

Interconnection Settlement
Costs

2,057

2,173

2,238

2,316

2,330

2,233

2,129

2,277

1,962

2015

Note: Starting 1Q16, Globe mobile revenues include revenues from mobile cellular and fully-mobile broadband. Home broadband would refer to
fixed broadband services, including wired and wireless solutions. All figures above have been restated.

14

Appendix 2

Restated figures for Subscribers, Net adds, Churn Rate and Gross APRU for the Mobile Segment
Subscribers
Globe Postpaid
Globe Prepaid
TM
Total
Net Adds
Globe Postpaid
Globe Prepaid
TM
Total
Churn Rate
Globe Postpaid
Globe Prepaid
TM
Blended
Gross ARPU
Globe Postpaid
Globe Prepaid
TM
Blended

2015
1Q
2Q
3Q
2,458,045
2,517,215
2,561,290
22,214,373 23,287,012
24,391,990
23,745,018 25,195,520
26,130,002
48,417,436 50,999,747 53,083,282
2015
1Q
2Q
3Q
9,361
59,170
44,075
1,071,443
1,072,639
1,104,978
1,248,151
1,450,502
934,482
2,328,955 2,582,311 2,083,535
2015
1Q
2Q
3Q
3.5%
2.9%
3.3%
5.9%
6.2%
6.1%
6.7%
6.6%
6.8%
6.1%
6.2%
6.3%
2015
1Q
2Q
3Q
1,116
1,130
1,088
128
130
124
74
76
73
153
154
146

4Q
2,597,027
25,915,096
27,670,555
56,182,678
4Q
35,737
1,523,106
1,540,553
3,099,396
4Q
3.2%
5.2%
6.1%
5.5%
4Q
1,122
117
70
141

2016
1Q
2,564,148
25,452,193
29,249,341
57,265,682
2016
1Q
(32,879)
(462,903)
1,578,786
1,083,004
2016
1Q
3.7%
7.7%
6.1%
6.7%
2016
1Q
1,099
116
65
135

Note: Starting 1Q16, Globe mobile revenues include revenues from mobile cellular and fully-mobile broadband. Home broadband would refer to
fixed broadband services, including wired and wireless solutions. All figures above have been restated.

15

Appendix 3
Historical Consolidated Gross / Net Service Revenues and EBITDA Margin

(in Million Pesos)

1Q16

1Q15

% Change

4Q15

% Change

Reported Net Income After Tax

4,335

4,203

3%

2,341

85%

(28)

(32)

-13%

54

-152%

(174)

15

-1234%

125

-240%

52

(5)

-1234%

(101)

-152%

4,185

4,182

0%

2,418

73%

Deferred Tax on Unexercised

Stock Options
Add (deduct) Forex loss (gain)
Other Adjustments (including
acc. depreciation)
Core Net Income

16

Appendix 4
Consolidated Financial Highlights

Quarter on Quarter
(in Php Mn)
Gross Service Revenues
Net Service Revenues
OPEX & Subsidy*
EBITDA
EBITDA Margin
Depreciation
EBIT
Non-Operating Charges
Net Income
Core Net Income**

Globe Group
1Q16
29,867
27,590
(16,838)
13,029
44%
(6,215)
6,814
(540)
4,335
4,185

Last Quarter
4Q15
30,323
28,194
(19,194)
11,129
37%
(6,521)
4,608
(932)
2,341
2,418

QoQ Change
vs Globe Group
-2%
-2%
-12%
17%
-5%
48%
-42%
85%
73%

Globe Ex-Bayan
QoQ Change
1Q16
vs Globe Ex-Bayan
28,487
-6%
26,217
-7%
(16,136)
-16%
12,351
11%
43%
(5,790)
-11%
6,561
42%
(597)
-36%
4,154
77%
4,091
69%

*OPEX & Subsidy includes interconnect charges

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

17