3rd Quarter 2014 Investor’s Briefing Financial and Operating Results
November 11, 2014
ABS-CBN Investor Presentation 1
ABS-CBN Investor Presentation 2
Revenues increased by 4.0% excluding election-related advertisements
Revenues
10,344 11,118
15,040 13,939
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
9M'13 9M'14
Ad Revenues Consumer Sales
Election-related Revenues
59% 56%
41% 44%
25,384 25,057 1.3%
7.3%
7.5%
For the 9 months ended September 30, 2014
Costs and Expenses
ABS-CBN Investor Presentation 3
For the 9 months ended September 30, 2014
7,329 7,424
6,636 6,999
8,595 8,378
0
3,000
6,000
9,000
12,000
15,000
18,000
21,000
24,000
9M'13 9M'14
Production
Costs
Cost of Sales
& Services
GAEX
2.5%
1.3%
5.5%
22,560 22,801 1.1%
Costs and expenses up slightly; Production costs down 2.5%
Financial Summary - Recurring
ABS-CBN Investor Presentation 4
Net Revenues
In PHP Millions
For the 9 months ended September 30, 2014
Costs and Expenses Net Income
Excluding election-related advertisements, revenues for the first nine months grew by 4.0% due to the strong performance of our films both locally and internationally
and further supported by the performance of Sky Cable.
24,101 25,057
0
5,000
10,000
15,000
20,000
25,000
30,000
9M'13 9M'14
22,131 22,801
0
5,000
10,000
15,000
20,000
25,000
30,000
9M'13 9M'14
1,193 1,541
0
500
1,000
1,500
2,000
2,500
3,000
9M'13 9M'14
4.0%
3.0%
29.2%
Financial Summary
ABS-CBN Investor Presentation 5
Net Revenues
For the 9 months ended September 30, 2014
Costs and Expenses Net Income
25,384 25,057
0
5,000
10,000
15,000
20,000
25,000
30,000
9M'13 9M'14
22,560 22,801
0
5,000
10,000
15,000
20,000
25,000
30,000
9M'13 9M'14
1,791 1,541
0
500
1,000
1,500
2,000
2,500
3,000
9M'13 9M'14
1.3%
1.1%
14.0%
In PHP Millions
3rd Quarter 2014 Highlights – Revenues
ABS-CBN Investor Presentation 6
vs 2Q 2014 vs 3Q 2013
Ad revenue growth driven by higher volumes for the quarter coupled with an increase in the
ad rates.
Consumer sales fuelled by the growth in the cable business as well as the performance of
the films released.
Ad revenue growth driven by higher volumes for the quarter coupled with an increase in the
ad rates.
3,478 3,559
4,709 5,120
0
2,000
4,000
6,000
8,000
10,000
2Q'14 3Q'14
Ad Revenues Consumer Sales
8.7%
2.3%
6.0% 8,187
8,679
3,379 3,559
4,827 5,120
0
2,000
4,000
6,000
8,000
10,000
3Q'13 3Q'14
Ad Revenues Consumer Sales
6.1%
5.3%
5.8% 8,206
8,679
3rd Quarter 2014 Highlights – Costs and Expenses
ABS-CBN Investor Presentation 7
vs 2Q 2014 vs 3Q 2013
Increase of 4% versus last year due to the increase in programming and bandwidth costs
of SkyCable.
Production costs remained flat quarter-on-quarter conforming to the management’s cost
initiatives.
7,680 7,709
0
2,000
4,000
6,000
8,000
10,000
2Q'14 3Q'14
7,416 7,709
0
2,000
4,000
6,000
8,000
10,000
3Q'13 3Q'14
0.4% 4.0%
3rd Quarter 2014 Highlights – Net Income
ABS-CBN Investor Presentation 8
vs 2Q 2014 vs 3Q 2013
457 545
0
200
400
600
800
2Q'14 3Q'14
500 545
0
200
400
600
800
3Q'13 3Q'14
19.3% 9.0%
Net income increased by 9% as a result of revenue and cost initiatives.
Business Segments
ABS-CBN Investor Presentation 9
TV and Studio
Pay TV Networks
New Businesses
• Broadcast
• Global
• Films and Music
• Narrowcast and Sports
• ABS-CBN mobile delivers ABS-CBN content and offers traditional telecoms services on mobile devices.
• Kidzania - educational themepark
• Digital TV: digital broadcast plus additional free-to-air channels
• Cable systems
• Internet broadband
Business Segments - Recurring
ABS-CBN Investor Presentation 10
In Php Millions Revenues EBITDA Net Income
9M‘14 9M'13 % Ch 9M‘14 9M'13 % Ch 9M‘14 9M'13 % Ch
A. TV and Studio 19,150 18,671 2.6% 4,862 4,410 28.9% 2,190 1,767 23.9%
Margins 25.4% 23.6% 11.4% 9.5%
B. Pay TV Networks 5,780 5,151 12.2% 1,323 1,251 5.8% 186 216 -13.9%
Margins 22.9% 24.3% 3.2% 4.2%
C. New Businesses 288 400 -28.0% -884 -624 173.6% -836 -790 5.8%
D. Inter-segment Elims -161 -122
TOTAL 25,057 24,100 4.0% 5,301 5,037 5.2% 1,541 1,193 29.1%
Margins 21.2% 20.9% 6.1% 5.0%
*** Numbers presented are net of ABS-CBNmobile TVCs.
Our TV and Studio business has continued to strengthen…
Business Segments
ABS-CBN Investor Presentation 11
In Php Millions Revenues EBITDA Net Income
9M‘14 9M'13 % Ch 9M‘14 9M'13 % Ch 9M‘14 9M'13 % Ch
A. TV and Studio 19,150 19,954 -4.0% 4,862 5,264 8.0% 2,190 2,365 -7.4%
Margins 25.4% 26.4% 11.4% 11.9%
B. Pay TV Networks 5,780 5,151 12.2% 1,323 1,251 5.8% 186 216 -13.9%
Margins 22.9% 24.3% 3.2% 4.2%
C. New Businesses 288 400 -28.0% -884 -624 173.6% -836 -790 5.8%
D. Inter-segment Elims -161 -122
TOTAL 25,057 25,384 -1.3% 5,301 5,891 -10.0% 1,541 1,791 -14.0%
Margins 21.2% 23.2% 6.1% 7.1%
*** Numbers presented are net of ABS-CBNmobile TVCs.
TV and Studio - Broadcast
ABS-CBN Investor Presentation 12
In PHP Millions
With the company’s continuous cost reduction initiatives, production costs declined by 3.6%. For primetime, Ch2 continues to lead in audience share receiving
49% share for national and 37% for MM.
3Q 2014 Audience Share
CHANNELS
TOTAL DAY PRIMETIME
Total PH
Mega Manila
Metro Manila
Total PH
Mega Manila
Metro Manila
ABS-CBN 2 44 31 33 49 34 37
GMA 7 34 40 34 32 40 35
TV 5 10 12 11 8 11 10
Others 14 18 22 11 15 19
Source: Kantar Media, January – September 2014
Rank Channel Program Share
1 ABS-CBN THE VOICE KIDS SUNDAY 34.9 Weekend
2 ABS-CBN THE VOICE KIDS SATURDAY 34.0 Weekend
3 ABS-CBN HONESTO 31.7 Weekday
4 ABS-CBN MARS RAVELO'S DYESEBEL 30.1 Weekday
5 ABS-CBN BOSES NG BULILIT KAMI ULIT! 28.9 Weekend
6 ABS-CBN MMK ANG TAHANAN MO 28.4 Weekend
7 ABS-CBN GOT TO BELIEVE 28.3 Weekday
8 ABS-CBN IKAW LAMANG 28.3 Weekday
9 ABS-CBN HAWAK-KAMAY 28.0 Weekday
10 ABS-CBN PBB ALL IN THE BIG NIGHT 27.9 Weekend
3Q 2014 Top 10 Programs - TOTAL
Source: Kantar Media, January – September 2014
13,853 13,456
9M'13 9M'14
Net Revenues
8,234 7,939
9M'13 9M'14
Direct Costs
3.6%
2.9%
TV and Studio - Global
ABS-CBN Investor Presentation 13
Global Viewership
The success of international releases continues to play a major role in boosting the revenue of our Global business. Ok Go and ASAP events continue to generate advertising revenues for the group. Our remittance business is growing steadily, increasing its revenues by 10%.
In PHP Millions
4,049 4,222
9M'13 9M'14
Net Revenues
2,450 2,534
9M'13 9M'14
Cost of Sales and Services
4.3% 3.4%
2,143 2,463 2,449
2,254
2,741 2,799
2009 2010 2011 2012 2013 9M'14
Released 8 movies in 2014 vs 7 in 2013
ABS-CBN Investor Presentation 14
Total revenues increased by 22% driven by strong local theatrical sales of Star Cinema movies. She’s Dating the Gangster, released in the 3rd quarter, reached more than Php 250M in box office receipts. After the success of my Illegal Wife, the group ventured to the pop-novel genre with Talk Back and Your Dead making it the second most successful film of the group.
TV and Studio - Films and Music
3rd Quarter Movie Releases
Star Cinema, 1.3B
In PHP Millions
961 1,173
9M'13 9M'14
Net Revenues
496 558
9M'13 9M'14
Cost of Sales and Services
12.5%
22.1%
2014 2013
She's Dating the Gangster Bakit Di Ka Crush ng Crush Mo
Maria Leonora Teresa Momzillas
Talk Back and You’re Dead Ekstra
Once a Princess OTJ
Tuhog
TV and Studio - Narrowcast and Sports
ABS-CBN Investor Presentation 15
In PHP Millions
Subscription revenues from our cable channels grew by 8% fuelled by Cinema One’s growth from both locally and internationally. Advertising revenues from our Sports + Action channel, Balls and E! significantly driven by the FIBA World Cup, UAAP plus new content offerings.
1,267 1,369
9M'13 9M'14
Net Revenues
986 924
9M'13 9M'14
Direct Costs
8.1%
6.3%
Pay TV Networks - SkyCable
ABS-CBN Investor Presentation 16
In PHP Millions
Total revenues grew by Php 628M driven by an 7% increase in cable revenues and 38% increase in broadband revenues. Our broadband subscriber base continues to expand, growing by 38% as of the 3rd quarter of 2014. Excluding forex impact, expenses only increased by 13%.
5,152 5,780
9M'13 9M'14
Net Revenues
3,273 3,785
9M'13 9M'14
Costs and Expenses
12.2%
15.6%
New Business - ABS-CBNmobile
ABS-CBN Investor Presentation 17
-
2,000
4,000
6,000
8,000
10,000
June July August September October
Ave. Daily Activations
Over 1.1 M subscribers as of
October.
Partnerships
540
1,552 1,664 504
1,071 1,285
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Program Rights Pay TV Digital TV,Maintenance and Others
9M'14 Remaining Balance
Capital Expenditures
ABS-CBN Investor Presentation 18
In P
HP
Mill
ion
s
To date, CAPEX spending is at Php 3.8B out of the Php 6.6B budget.
1,044
2,623
2,948
Balance Sheet Highlights
ABS-CBN Investor Presentation 19
Ratios 2013 9M '14
Current 1.8 2.2
Debt-to-Equity 0.6 0.8
Net Debt-to-Equity 15.7% 18.2%
In PHP Millions
57,992 66,619
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2013 9M '14
Total Assets
14,680 20,384
0
5,000
10,000
15,000
20,000
25,000
30,000
2013 9M '14
Total Borrowings
25,923 26,901
0
5,000
10,000
15,000
20,000
25,000
30,000
2013 9M '14
Equity
10,617 15,494
0
5,000
10,000
15,000
20,000
25,000
30,000
2013 9M '14
Cash
Except for historical and operating data and other information of historical matters, the statements contained herein are “forward-looking statements”. The words “believe”, “intend”, “plan”, “anticipate”, “continue”, “estimate”, “expect”, “may”, “will” or other similar words are frequently used to indicate these forward looking statements. Any such forward-looking statement is not a guarantee of future performance and involves a number of known and unknown risks, uncertainties and other factors that could cause the actual performance, financial condition or results of operation of ABS-CBN to be materially different from any future performance, financial condition or results of operation implied by such forward-looking statement.
ABS-CBN Investor Presentation 20
THE END
ABS-CBN Investor Presentation 21