cover sheet - globe telecom · fiscal year form type month day annual meeting secondary license...
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COVER SHEET
(Business Address: No. Street City / Town / Province)
ALBERTO M. DE LARRAZABAL 797-4889
Contact Person Company Telephone Number
Month DayFiscal Year
FORM TYPE Month DayAnnual Meeting
Secondary License Type, if Applicable
Dept. Requiring this Doc. Amended Articles Number/Section
Total Amount of Borrowings
Total No. Of Stockholders Domestic
To be accomplished by SEC Personnel concerned
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LCU
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DocumentI.D.
I
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-C
CURRENT REPORT UNDER SECTION 17OF THE SECURITIES REGULATIONS CODE (SRC)
AND SRC RULE 17(a)-1(b)(3) THEREUNDER
1. 8 November 2013
2.
4.
5.
7.
Registrant's telephone number, including area code
9 5/F, Globe Telecom Plaza (Pioneer Highlands), Pioneer corner Madison Sts.,Mandajuyong CityFormer name or former address, if changed since last report
10. Securities registered pursuant to Sections 4 and 8 of the SRC
Title of Each Class Number of Shares of Common StockOutstanding and Amount of Debt Outstanding
(as of September 30, 2013)COMMON SHARES 132,568,084
IPIA!rP!^n!![l..M.!i!!.!?ns.. t:Pes. ?]! .?..-.?..2..0.
Indicate the item numbers reported herein : P.!?.3.8.6... . .*.?..?*!-??^@^
Re: 3Q 2013 Analysts' Briefing Presentation Materials
Pursuant to the requirements of the Securities Regulations Code, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
^^ istrapPl^JZ ,
Date : 8 November 2013 ALBERTOM: DE\ RRAZABAL'"@@ @CFilef Financial Officer
DateofReport(Dateofearliesteventreported)
1177 3.SECIdentificationNumber
GLOBETELECOM,INC.ExactNameofregistrantasspecifiedinitscharter
PHILIPPINES 6Province,countryorotherjurisdictionofincorporation
000-768-480-000BIRTaxIdentificationNumber
(SECUseOnly)IndustryClassificationCode
27/F,TheGlobeTower,32ndStreetcorner7thAvenue, 1634BonifacioGlobalCity,TaguigAddressofprincipaloffice
(02)797-2000
Postalcode
1
Globe Telecom, Inc.
FINANCIAL AND OPERATING RESULTS For the first nine months ending 30 September 2013
2
Gross Service Revenues (In Php Mn)
Core Net Income (In Php Mn)
EBITDA (In Php Mn)
9m 2013 Results: Revenue growth momentum sustained in 9M13, up 10% YoY; EBITDA and core net income posted 4% and 9% YoY improvements respectively
+9%
+10% +4%
9M 2013 Revenues (in Php Mn) YoY Change
Mobile 54,073
Broadband 7,777
Fixed Line Data 3,449
Fixed Line Voice 1,958
Consolidated 67,257
8%
22%
12%
10%
-4%
61,324
67,257
9M 2012 9M 2013
27,158 28,293
9M 2012 9M 2013
8,767
9,526
9M 2012 9M 2013
2
3
Postpaid Mobile Revenues (In Php Mn)
Mobile Revenues (In Php Mn)
Mobile: Sustained growth in service revenues led by growth in postpaid, which grew 20% YoY in revenues and 19% YoY in subscribers. Total mobile sub base now at 36.5 million, 14% higher than last year
16,684
33,174
49,858
19,988
34,085
54,073
Postpaid Prepaid Total Mobile
9M 2012 9M 2013
20%
3%
8% CAGR +16%
12,918 13,623 16,684
19,988
9M 2010 9M 2011 9M 2012 9M 2013
4
Share of Mobile Browsing and Other Data Revenues* to Total Mobile Revenues
Mobile Postpaid: Continued investments in postpaid subscribers through subsidy and re-contracting costs to seed sustained revenue growth
Mobile Browsing and Other Data: Growth in mobile browsing remain robust, improving contribution to total mobile revenues
* Includes mobile browsing, VAS, GCash and other mobile content
15%
11%
5%
Mobile International Voice: ILD voice revenues are declining due to competitive pressure from over-the-top alternatives
Mobile Postpaid Revenues vs. Re-contracting & Subsidy Costs (In Php Bn)
16.7
4.1
20.0
5.8
Postpaid MobileRevenues
Recontracting &Subsidy
9M 2012 9M 2013
P3.3Bn P1.7Bn
YoY decline in inbound voice revenues (In Php Mn)
9M10 9M11 9M12 9M13
7%
3
Broadband and Fixed Line: Broadband revenues and subscriber base grew by 22% and 15% YoY, respectively. Fixed line data continued to rise, with revenues up 12% YoY
6,349
7,777
9M 2012 9M 2013
Broadband Revenues (In Php Mn)
+22%
1,307,512 1,496,995
328,067384,092
9M 2012 9M 2013Wireless Wired
Broadband Subscribers +15%
+14%
+17%
3,075
3,449
9M 2012 9M 2013
Fixed Line Data Revenues (In Php Mn)
+12%
Continuously Creating A Differentiated Customer Experience
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NEW SMARTPHONE
OFFERS
FREE FACEBOOK ACCESS
MOBILE DATA
SERVICES RECOGNITIONS
SUPERIOR
INTERCONNECTIVITY
4
Network Modernization and IT Transformation Updates
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As migration of postpaid mobile subscribers into the new business support system was completed in 1Q13, stabilization management efforts being undertaken, which have resulted in marked improvements in system performance, albeit with minor disruptions
Succeeding phases of migration covering prepaid and broadband subscribers to be undertaken in 2014, as learnings from first phase integrated into the migration plans
With the first phase of network modernization completed since 1Q13, Globe has been building more sites, boosting capacity and enhancing network performance
Laid out more than 9,000 km. of fiber optic cables, complementing Globe’s existing transport infrastructure as the company continues to expand its optical and all IP Transport network nationwide
More than 80% of the network already on 4G HSPA+ providing faster mobile browsing experience for customers, complemented with pilot deployment of LTE in key CBDs
Globe continues to enhance its service quality with the continuing drive for coverage expansion and network performance optimization.
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• In September 2013, the Pasig Regional Trial Court (RTC), which has jurisdiction over the corporate rehabilitation of Bayan, confirmed the motion to amend the rehabilitation plan of Bayan in order to avoid the recurrence of default and ensure its continued viability
• The approved rehabilitation plan seeks to significantly reduce the debt burden of Bayan through a conversion of up to 69% of the debt into equity
• Applicable to all creditors of Bayan, the conversion aims to reduce the outstanding debt of Bayan to around $131 million in two separate tranches of conversion and would result to ownership of up to 55% of Bayan
• The first tranche of conversion was completed in October, following the issuance of Bayan of common shares amounting to 39% equity stake in the company to Globe and its other creditors
• In anticipation of the second tranche of conversion, Globe and Bayan filed last October 11, 2013 a Joint Application for Regulatory Approval with the National Telecommunications Commission for the change in the controlling interest in Bayantel. This will allow Globe and the other creditors to further convert debt into equity.
5
Globe Telecom, Inc.
FINANCIAL PERFORMANCE For the first nine months ending 30 September 2013
Consolidated Financial Highlights
In Php Mn 9M13 9M12 Y/Y Change 3Q13 2Q13
Q/Q Change
Service Revenues 67,257 61,324 10% 22,725 23,164 -2%
OPEX & Subsidy 38,964 34,166 14% 13,372 13,000 3%
EBITDA 28,293 27,158 4% 9,353 10,164 -8%
EBITDA Margin 42% 44% 41% 44%
Depreciation 21,871 16,242 35% 5,800 8,664 -33%
Affected by Network Mod’n 8,333 2,979 180% 1,215 4,056 -70%
Others 13,538 13,263 2% 4,585 4,608 -
EBIT 6,422 10,916 -41% 3,553 1,500 137%
Non-Operating Charges (1,556) (1,270) 22% (477) (576) -17%
NIAT 3,529 6,800 -48% 2,119 754 181%
Core NIAT 9,526 8,764 9% 3,100 3,340 -7%
*Core NIAT excludes forex, mark-to-market gains and losses, and non-recurring items
6
9M13 EBITDA and Core Net Income: Robust top line growth offsets higher operating expenses to bring EBITDA up 4% YoY. Core net income up 9% YoY.
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8,764
5,933 4,798
5,629 1,223
4,033
9,526
9M12 Core NetIncome
Higher ServiceRevenues
Higher Opex &Subsidy
Higer Dep'n &Amort'n
Net Change in Non-Operating Items &
Income Tax Provision
Due to Acc Dep andForex / MTM Gains
& Losses
9M13 Core NetIncome
+9%
YoY
YoY Change in Core Net Income (in Php Mn After-tax)
27,158
5,933 506 648 1,646 745 1,253 28,293
9M12 Inc. in ServiceRevenues
Inc. inInterconnect
Charges
Inc. in Staff Costs Inc. in Marketing& Subsidy
Inc. in NetworkCosts
Inc. in Others 9M13
YoY Change in EBITDA (in Php Mn) +4%
YoY
17,552 18,007 20,124
22,700
2010 2011 2012 9M13
CAPEX Cashflow (In PhP Mn)
Gearing ratios higher but remain comfortably within covenant limits with additional borrowings raised for transformation initiatives
12
52%20%
12%
15%
9M13 CAPEX Breakdown *
Transformation-related
Data-related
Traditional Services
Others (includingone-time CAPEX)
* Based on consolidated CAPEX additions
50,371 48,679 61,779
69,920
2010 2011 2012 9M13
Gross Debt (In PhP Mn)
1.08 1.01 1.33
1.74
2010 2011 2012 9M13
1.51 1.39
1.78 1.93
2010 2011 2012 9M13
Gross D/E Ratio
Gross Debt/EBITDA Ratio
Covenant = 2 : 1
Covenant = 3 : 1
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Q & A
Appendix
8
Appendix 1:
Historical Consolidated Gross / Net Service Revenues and EBITDA Margin
2012 2013
(in Million Pesos) 1Q 2Q 3Q 4Q 1Q 2Q 3Q
CONSOLIDATED GROSS SERVICE REVENUES
Mobile 16,571 16,710 16,577 17,331 17,124 18,717 18,232
Data 8,635 8,554 8,599 8,955 9,454 10,449 10,180
Voice 7,936 8,156 7,978 8,376 7,670 8,268 8,052
Fixed Line & Broadband 3,675 3,811 3,980 4,087 4,244 4,447 4,493
Broadband 2,017 2,089 2,243 2,372 2,486 2,659 2,632
Fixed Line Data 997 1,020 1,058 1,092 1,111 1,148 1,190
Fixed Line Voice 661 702 679 623 647 640 671
Total 20,246 20,521 20,557 21,418 21,368 23,164 22,725
EBITDA 8,671 9,008 9,477 7,855 8,776 10,164 9,353
EBITDA Margin 43% 44% 46% 37% 41% 44% 41%
2012 2013
(in Million Pesos) 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Net Service Revenues 18,227 18,311 18,316 19,029 19,172 20,683 20,425
Interconnection Settlement Costs 2,019 2,210 2,241 2,389 2,196 2,481 2,300
Appendix 2:
Net Income and Core Net Income
(in Million Pesos) 9M13 9M12 % Change 3Q13 2Q13 % Change
Reported Net Income After Tax 3,529 6,800 -48% 2,119 754 181%
Deferred Tax on Unexercised Stock Options (102) - - (102) - -
Add (deduct) forex loss (gain) 266 (147) -280% 51 121 -58%
Other Adjustments - accelerated depreciation 5833 2,111 176% 1031 2,465 -59%
Core Net Income 9,526 8,764 9% 3,100 3,340 -7%
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