cover sheet - globe telecomanalysts+briefi… · etr etr month day fiscal year ... revenues*...

COVER SHEET

P w 0 0 0 0 1 1 7 7

G L o B E T E L E c o M N c

(Company's Full Name)

5 I F G L olB E T E L E c o M P L A z A

P o N E E R c o R M A D I s o N s T R E E T s

M A N D A L u Y o N G c I T Y

No Tov\/n Province)

I

Company Telephone Number

(Business

mmMonth Day

Annual Meeting

[T,T'TTIFORM TYPE

Secondary License Type, if Applicable

Etr EtrMonth Day

Fiscal Year

this Doc.

Total No. Of Stockholders

Dept. Requiring

Foreign

ALBERTO M. DE LARRAZABAL

Contact Person

Amended Articles Number/Section

Document l.D.

STAMPS

To be accomplished by SEC Personnel concerned

Cashier

II

I

I

I

----i

Remarks = pls. Use black ink for scanning purposes

SECURITIES AND EXCHANGE COMMISSION

SEC FORM 17.C

CURRENT REPORT UNDER SECTION 17oF THE SECURTTTES REGULATTONS CODE (SRC)

AND sRc RULE 17(a)-1(b)(3) THEREUNDER

1. 8 Mav 2012Date of Report (Date of earliest event reported)

1177 3. 000-768480-0002.

4.

SEC ldentification Number BIR Tax ldentification Number

GLOBE TELECOM,INC.Exact Name of registrant as specified in its charter

5. PHILIPPINESProvince, country or other jurisdiction ofincorporation

7. 5/F, Globe Telecom Plaza (Pioneer Highlands), Pioneer9g.T.n.-e..T..1!{!3gig...o_n._sl_s.r,..M3ng.?!sy.9n9-9_ity_...-..........-..Address of principal office

730-2000Registrant's telephone number, including area code

Industry Classification Code

1552

Postal code

9.

Former 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

COMMON SHARES

Number of Shares of Common StockOutstanding and Amount of Debt Outstanding

(as of March 31,2012)132,391,908

I9-r-S.1,.-qF-P-r-.fi .n..1!4illigns.s.t.F..e.s-o..il............ 51,165

Indicate the item numbers reported herein : Please refer to aftached

Re: lQzol2ANAlysrs' BR|EF|NG PRESENTATION MATERTALS

Pursuant to the requirements of the Securities Regulations Code, the registrant has dulycaused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date : SMav 2012

5/8/2012

1

Service Revenues

19.1

20.1 20.2

1Q 2011 4Q 2011 1Q 2012

+6%

+1%

Core Net Income

3.0

1.9

2.7

1Q 2011 4Q 2011 1Q 2012

-7%

+48%

Amounts in ₱ Bn

1Q12

as new

all-time

high

% Change Y/Y Q/Q

Mobile +6% +1%

Broadband +13% +4%

Fixed Line Data

+5% +3%

Fixed Line Voice

-11% -6%

Consolidated +6% +1%

Service revenues have been restated to reflect the change in the presentation of outbound revenues to be at gross of interconnect expenses (from net previously)

If net of interconnect expenses, consolidated service revenues up 11% Y/Y and 2% Q/Q (compared to reported growth of 6% Y/Y and 1% Q/Q)

2

5/8/2012

2

4.5

11.1

15.6

5.3

11.3

16.6

Postpaid Prepaid Total Mobile

1Q 2011 1Q 2012

Mobile Service Revenues*

In ₱ Bn

₱748Mn +17%

₱195Mn +2%

₱944Mn +6%

1Q 2012 Y/Y

Change Q/Q

Change

Mobile Revenues

₱16.6Bn +6% +1%

Subscribers Postpaid Prepaid Total

1.5Mn

29.5Mn 31.0Mn

+34% +13% +14%

+6% +3% +3%

Gross Adds 6.1Mn +10% -1%

Net Adds 1.0Mn +16% +7%

Blended Churn

1Q12 5.6%

1Q11 5.8%

4Q11 5.9%

Key Mobile Metrics

Postpaid service revenues now at 32% of total mobile, up from 29% as of 1Q11 Domestic voice, mobile browsing, and int’l services higher Y/Y – Inbound SMS revenues lower with

reduced access charges, but interconnect opex also lower, resulting in net revenue growth for Globe Direct mobile browsing revenues (excluding postpaid MSF allocation) at ₱669Mn, up 33% Y/Y

* Service revenues have been restated to reflect the change in presentation of outbound revenues to be at gross of interconnect expenses 3

Revenues* Marketing &Subsidy

1Q 2011 1Q 2012

Revenues* Marketing &Subsidy

4Q 2011 1Q 2012

* Net of interconnect costs

14.6 13.1 2.5 1.2

₱1.5Bn

₱1.3Bn

₱0.4Bn

₱0.4Bn

14.2 14.6 2.1 2.5

Growth in Total Mobile Revenues, Marketing & Subsidy - Y/Y and Q/Q

In ₱ Bn

1Q 2011 1Q 2012

Low Mid/High

Low – MSF (monthly service fee) below ₱999 Mid/High – MSF of ₱999 and up

Postpaid Net Adds Mix

84%

45%

55%

16%

Growth in customer volumes and handset subsidies driving increase in total marketing & subsidy

1Q12 SAC (subscriber acquisition costs) higher with continued strong demand for iPhone 4S

Improved customer mix – 45% of postpaid net adds at mid/high MSF plans from only 16% LY

4

5/8/2012

3

₱

Fixed, at-home use - 72% (LY = 79%)

Nomadic - 28% (LY = 21%)

Significant improvements in churn rates across all technologies & services helping drive growth in subscriber base

Blended churn for 1Q at 3.8% from 4.4% last year and 4.6% last quarter

Revenues from fixed, @ home use include subscriptions to DSL and WiMax services, while nomadic includes revenues from prepaid and postpaid 3G HSPA+ services. 5

• Network Modernization – Davao subs now enjoying Globe's recently upgraded, state-of-the-art wireless network

• Simultaneous upgrade across all regions of the country now on-going

• IT Transformation – Re-designing customer experience to global best practice, in parallel to firming up of scope of capability build

Globe Super Home Phone

• Wireless landline service offers unlimited local calls to Globe landlines, Duo/Super Duo, and Globe/TM subscribers for only ₱599/month

Tattoo Nomadic Broadband Services

• LiveTattoo.ph, the country’s first-ever online lifestyle site, offering special privileges and discounts to Tattoo subscribers

• Tattoo Lifestyle Sticks provide prepaid subs with products that fit their lifestyles, offering various surfing speeds and freebies

• Tattoo now offers best value surfing plans with Tattoo Consumable Plan 299/499 and customizable plan through Tattoo Personalized Plan 999

Network / IT Transformation

6

Globe recently announced partnership with Vonage to introduce new products and services to address the long distance calling needs of US-based Filipinos

Globe also rolled-out various trade and consumer promos in 8 countries across Europe and Asia to grow international traffic and revenues

Launched Tokyo 03 service, in partnership with Japan-based company IPS Inc, enabling cheaper calls to & from the Philippines with the use of a virtual number

New Partnerships to Grow International Revenues

5/8/2012

4

• SUPERFB10 - Unlimited access to Facebook for only ₱10 a day

7

• Globe launches business incubator Kickstart Ventures, Inc., to provide aspiring technopreneurs with needed support mechanisms to start their own business.

• Globe, Kickstart and web engineering firm Proudcloud recently held its Startup Weekend in Manila, with a Cebu run to follow in May.

Nurturing the Mobile Ecosystem

• With ITXTALL30, Globe Prepaid subs can send 100 local or international SMS to 54 destinations worldwide for only ₱30 a day

• Nokia Lumia 800, exclusive to Globe subscribers, and available for free on Unli Surf Combo Plan 1799

Exclusive Device Offers

Personalized Mobile Services

• Globe Prepaid gives subs the freedom to choose the promo that suits their varying needs and dynamic lifestyle.

• Just call *143# for free on your phone and choose from IMMORTAL TRIO, UNLIALL TRIO or ALLNET COMBO promos

5/8/2012

5

1Q12 1Q11Y/Y

Change 1Q12 4Q11Q/Q

ChangeIn ₱ Mn

9

Robust revenue growth but NIAT lower Y/Y with higher marketing, subsidy, and network expenses

1Q12 includes ₱138Mn in transformation-related opex – Excluding these charges, core NIAT lower by 4% Y/Y compared to reported 7% decline

Against last quarter, earnings up driven by higher revenues and lower opex. Excluding opex related to transformation projects incurred in 1Q12 and 4Q11, core net income would still be higher 28% Q/Q

1Q12 non-operating charges include ₱60Mn in pre-termination costs for bonds originally due 2014

1Q 2011 1Q 2012 Higher Revenues

Higher Marketing & Subsidy

Lower Interconnect

Charges

2,961

(808)

(729)

Q/Q Change

Y/Y Change ₱ Mn, after tax

Higher Other Opex Items

447

84

Lower Depreciation

Non-operating Charges

796

(11) 2,740

4Q 2011 1Q 2012 Higher Revenues

Higher Marketing & Subsidy

Lower Interconnect

Charges

1,853 (193) 326

659

Lower Other Opex Items

174 108

(187) 2,740

10

₱ Mn, after tax

-7%

+48%

Lower Depreciation

Non-operating Charges

Includes transformation-related opex of ₱138Mn (before tax)

4Q11 included dep’n of ₱350Mn (before tax) for Davao pilot run. Charge considered regular dep’n and impacts core income

5/8/2012

6

1Q11 Interconnect Mktg &Subsidy

Staff Cost NetworkCosts

Other OPEX 1Q12

4Q11 Interconnect Mktg &Subsidy

Staff Cost NetworkCosts

Other OPEX 1Q12

In ₱ Mn

11

12

₱ End

1Q 2012 End

1Q 2011

Gross Debt in ₱ Bn

51.2 50.5

Gross Debt to Equity (limit – 2:1)

1.09

1.10

Net Debt to Equity

0.94 0.94

Debt to EBITDA (limit – 3:1)

1.48 1.39

5/8/2012

7

5/8/2012

8

Appendix

2012

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Consolidated Gross Service Revenues*

Mobile 16,347 16,225 15,315 15,392 63,279 14,853 14,984 14,341 16,153 60,331 15,627 15,763 15,665 16,483 63,538 16,571

Fixed Line and Broadband 2,172 2,277 2,474 2,699 9,622 2,795 3,100 3,220 3,295 12,410 3,482 3,520 3,617 3,608 14,227 3,675

Broadband 638 724 864 1,063 3,289 1,174 1,399 1,531 1,645 5,749 1,788 1,861 1,908 1,940 7,497 2,017

Fixed line Data 716 723 772 827 3,038 831 866 901 890 3,488 949 906 971 965 3,791 997

Fixed line Voice 818 830 838 809 3,295 790 835 788 760 3,173 745 753 738 703 2,939 661

Total 18,519 18,502 17,789 18,091 72,901 17,648 18,084 17,561 19,448 72,741 19,109 19,283 19,282 20,091 77,765 20,246

EBITDA 9,751 9,344 8,470 8,897 36,462 8,651 8,326 7,812 8,750 33,539 9,091 8,952 8,984 8,078 35,104 8,671

EBITDA Margin** 53% 51% 48% 49% 50% 49% 46% 44% 45% 46% 48% 46% 47% 40% 45% 43%

*Service Revenues stated to reflect the change in the presentation of outbound revenues

**EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnect expenses)

2012

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Net Service Revenues (as previously presented) 15,960 15,733 15,202 15,548 62,443 15,231 15,500 15,084 16,740 62,555 16,452 16,554 16,981 17,824 67,811 18,227

Add: Interconnection/settlement costs 2,559 2,769 2,587 2,543 10,458 2,417 2,584 2,477 2,708 10,186 2,657 2,729 2,301 2,267 9,954 2,019

Consolidated Gross Service Revenues 18,519 18,502 17,789 18,091 72,901 17,648 18,084 17,561 19,448 72,741 19,109 19,283 19,282 20,091 77,765 20,246

FY 11FY 10FY 09

FY 11FY 10FY 09

(in million pesos)

2009 2010 2011

2009 2010 2011

2012

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Wireless Gross Service Revenues*

Mobile 16,347 16,225 15,315 15,392 63,279 14,853 14,984 14,341 16,153 60,331 15,627 15,763 15,665 16,483 63,538 16,571

EBITDA 9,303 8,749 7,897 8,516 34,465 8,382 7,759 7,187 8,494 31,822 8,206 8,154 8,095 7,593 32,047 8,125

EBITDA Margin** 57% 54% 52% 55% 54% 56% 52% 50% 53% 53% 53% 52% 52% 46% 50% 49%



2012

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q


Add: Interconnection/settlement costs 2,453 2,566 2,488 2,451 9,958 2,323 2,495 2,389 2,621 9,828 2,567 2,625 2,174 2,219 9,585 1,933


FY 09 FY 10 FY 11

FY 09 FY 10 FY 11

2009 2010 2011

(in million pesos)

2009 2010 2011

5/8/2012

9

2012

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Fixed Line and Broadband

Broadband 638 724 864 1,063 3,289 1,174 1,399 1,531 1,645 5,749 1,788 1,861 1,908 1,940 7,497 2,017

Fixed line Data 716 723 772 827 3,038 831 866 901 890 3,488 949 906 971 965 3,791 997

Fixed line Voice 818 830 838 809 3,295 790 835 788 760 3,173 745 753 738 703 2,939 661

Total 2,172 2,277 2,474 2,699 9,622 2,795 3,100 3,220 3,295 12,410 3,482 3,520 3,617 3,608 14,227 3,675

EBITDA 448 595 573 381 1,997 269 567 625 256 1,717 885 798 889 485 3,056 547

EBITDA Margin** 21% 26% 23% 14% 21% 10% 18% 19% 8% 14% 25% 23% 25% 13% 21% 15%



2012

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q


Add: Interconnection/settlement costs 106 203 99 92 500 94 89 88 87 358 90 104 127 48 369 86


FY 11

FY 09 FY 10 FY 11

2009 2010 2011

FY 09 FY 10

(in million pesos)

2009 2010 2011

In Php Mn (after tax) 1Q12 1Q11 % change 1Q12 4Q11 % change

Reported Net Income 2,701 2,991 (10%) 2,701 1,838 47%

Foreign exchange & mark-to-market (gains)/losses

(48) (30) 60% (48) 15 (420%)

Depreciation - Affected by network modernization

87 87

Core Net Income 2,740 2,961 (7%) 2,740 1,853 48%

Core net income excludes foreign exchange, mark-to-market gains and losses, and non-recurring items. Non-recurring items includes depreciation of assets affected by the network modernization and IT transformation programs.

4Q 2011 reported net income included ₱350Mn (before tax) in depreciation charges for certain assets affected by a pilot run of the network change-out in Davao City. As this was a proof of concept or pilot run conducted prior to awarding the nationwide contract, these amounts were considered regular depreciation charges arising from changes in remaining useful lives of assets.

5/8/2012

10

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