ABS-CBN Corporation - Amazon Web Services

ABS-CBN Corporation
Sgt. Esguerra Avenue, Quezon City, Philippines
21 March 2013
Securities and Exchange Commission
Attn: Director Justina F. Callangan
Corporate Finance Department
SEC Building, EDSA, Mandaluyong City
Philippine Stock Exchange, Inc.
Attn: Ms. Janet A. Encarnacion
Head, Disclosure Department
3rd Floor, Philippine Stock Exchange Plaza
Ayala Triangle, Ayala Avenue, Makati City
Subject: Investor Briefing Materials
Gentlemen / Ladies:
Please find attached materials presented in our briefing this afternoon
Very truly yours,
Paul Michael V. Villanueva
Compliance Officer for Corporate Governance
2012
Financial & Operating Results
The Chronicle Lounge
14/F Eugenio Lopez Jr. Communications Center
Eugenio Lopez Ave., Q.C.
21 March 2013
Consolidated Gross Revenues
13%
in Php Millions
31,730
35,000
30,000
25,000
Without the
incremental revenues
from growth initiatives,
revenues grew by 10%
28,200
10,622
20,000
38%
12,669
40%
19,061
60%
15,000
10,000
17,578
62%
5,000
2011
Airtime Revenues
2012
Consumer Sales
2
Consolidated Advertising Revenues
in Php Millions
20,000
16,000
8% YoY
12,000
8,000
17,578
19,061
4,000
0
2011
2012
3
National Ratings – Total Philippines (Urban + Rural)
Kantar Media/TNS National Philippines TV Audience Shares
(June – December 2012)
Total Day Audience Share
Evening Primetime Audience Share
ABS-CBN
GMA
TV 5
Others
48
42
31
28
12
15
11
13
4
17 of Top 20 Programs are from ABS-CBN
Kantar Media/TNS National Philippines (Urban+Rural)
June- December 2012
Rank
1
2
Channel
ABS-CBN WALANG HANGGAN
Program
Ratings
38.4
3
4
5
6
7
8
9
10
GMA
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
PACQUIAO MARQUEZ 4
35.9
11
12
13-14
13-14
15
16
17-18
17-18
19
GMA
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
PACQUIAO-BRADLEY
25.5
20
GMA
KAPUSO MO, JESSICA SOHO SUNDAY
21.7
PRINCESS AND I
35.3
MMK ANG TAHANAN MO
33.4
WANSAPANATAYM
32.5
TV PATROL WEEKDAY
31.4
INA KAPATID ANAK
30.3
WBO JUNIOR FEATHERWEIGHT CHAMPIONSHIP DONAIRE
29.7 VS A
WORLD JUNIOR FEATHERWEIGHT CHAMPIONSHIP DONAIRE
28.8
V
DONAIRE VS MATHEBULA
27.5
DAHIL SA PAG-IBIG
25.3
KAPAMILYA DEAL OR NO DEAL
25.0
RATED K HANDA NA BA KAYO?
25.0
ARYANA
24.0
GOIN' BULILIT
23.6
MISS UNIVERSE LAS VEGAS 2012
22.8
ZOREN-CARMINA ALWAYS, FOREVER A WEDDING LIKE
22.8
NO OTH
BE CAREFUL WITH MY HEART
22.7
Consumer Sales
Without the incremental
revenues from the growth
initiatives, consumer sales
increased by 13%
in Php Millions
14,000
12,000
19% YoY
10,000
8,000
6,000
12,669
10,622
4,000
2,000
0
2011
2012
6
Consumer Sales
19%
in Php Millions
14,000
12,000
12,669
10,622
10,000
1%
32%
8,000
6,000
5,250
5,908
5,184
79%
4,491
4,000
2,000
881
1,577
0
Total Consumer
Sales
ABS-CBN Global
2011
2012
SkyCable
Others
7
ABS-CBN Global
• REVENUES: Increased 1% in USD terms, declined by
1% in Php
• Viewer count increased by 2%
• Continued growth in Canada, Asia Pacific, Australia
and North America
• Remittance revenues up by 24%
• Launch of TFC IPTV in new territories
• Korea
• New Zealand
• New products and channels:
• TFC.tv
• BRO
8
In Php Millions
7,000
32%
6,000
891
5,000
Strong revenue growth of
32%; without Destiny,
revenues grew 12%
• Total broadband revenues
grew 49%
4,000
3,000
2,000
•
4,491
5,018
2011
Sky Only
2012
• Total postpaid cable revenues
grew by 34%
1,000
0
Destiny
Revenues
9
ABS-CBN Film Productions
7 of 15 films released in January to September 2012 broke past the
Php 100 million mark in gross box office receipts
3 movies
grossed more
than Php 200
million
Highest grossing movie
of Global
10
Operating & Other Expenses
in Php Millions
30,000
25,000
23,495*
Without the
incremental costs from
12% growth initiatives,
Operating and Other
26,233 Expenses grew by 7%.
20,000
15,000
10,000
5,000
0
2011
*Without the one-time gain on sale of investments
2012
11
Operating & Other Expenses
in Php Millions
4%
12,000
10,000
9,835
10,259
16%
19%
8,248
8,079
8,000
7,091
6,796
6,000
4,000
2,000
0
-227
-2,000
Prod Cost
COSS
2011
GAEX
*
-353
Others
2012
*Without the one-time gain on sale of investments
12
Production Cost
in Php Millions
4%
12,000
10,000
9,835
8%
10,259
8,697
8,061
8,000
6,000
12%
4,000
1,774
2,000
1,561
0
Production Cost
2011
Cash
Non-cash
2012
13
Cost of Sales and Services
in Php Millions
10,000
Without the
incremental costs from
growth initiatives,
COSS grew by 9%.
19%
8,079
8,000
6,796
1%
6,000
25%
40%
3,744
4,000
3,003
2,370
2,349
1,986
2,000
1,423
0
Total Cost of Sales
and Services
2011
ABS-CBN Global
SkyCable
Others
2012
14
General & Administrative Expenses
in Php Millions
16%
10,000
18%
8,248
8,000
7,091
Without the
incremental GAEX from
growth initiatives,
GAEX grew by 10%.
7,640
6,476
6,000
4,000
1%
2,000
615
608
0
General &
Administrative
Expenses
Cash
Non-Cash
15
2011
2012
Consolidated Net Income
Recurring Income
23%
in Php Millions
2,500
2,420
Gain from sale
of investments
2,000
Reported Income
29%
1,032
+23%
1,500
1,000
1,388
1,708
500
16
0
2011
2012
Consolidated EBITDA
Recurring EBITDA
in Php Millions
8,000
Gain from sale of
investments
6,000
6,838
1,147
15%
+15%
Reported EBITDA
5%
4,000
5,691
6,524
2,000
0
2011
2012
17
Cash Capital Expenditure & Film Rights
in Php Millions
6,000
18% YoY
4,000
2,000
4,205
4,958
0
2011
2012
18
Balance Sheet Accounts
Total Assets
2011
Php44.8B
2012
Php49.5B
10%
Cash and Cash Equivalents
Php8.6B
Php6.4B
26%
Trade Receivables
Php6.4B
Php6.8B
6%
Day’s Sales Outstanding
83 days
78 days
5 days
Total Interest Bearing Debt
Php12.5B
Php15.8B
26%
Shareholders’ Equity
Php20.3B
Php21.5B
5%
Net Debt-to-Equity Ratio
0.19x
0.43x
0.24x
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
For the year ended December 31, 2012, ABS-CBN Corporation (“ABS-CBN” or the “Company”) generated
consolidated gross revenues of P31.730 billion from advertising and consumer sales, P3.530 billion or 13%
higher than in 2011. Advertising revenues contributed 60% of total consolidated net revenues while
consumer sales made up the balance of 40%.
Total operating and other expenses amounted to P26.233 billion, or a 12% increase from the previous year.
The company generated a net income of P1.708 billion for 2012, down by 29% compared with P2.420 billion
in the previous year. Removing the effects of the one-time gain from the sale of investments recognized in
2011 amounting to P 1.032 billion, net income increased by 23%.
Reported EBITDA reached P6.524 billion or a 5% decline year-on-year. Stripping the one-time gain in 2011,
EBITDA was up 15% year-on-year.
The table below summarizes the key performance indicators for the period as discussed above.
Key Performance Indicators
(Amounts in million Pesos)
Consolidated Gross Revenues
2012
2011
Variance
Amount
%
3,530
13
1,483
8
Consolidated Advertising Revenues
31,730
19,061
28,200
17,578
Consolidated Consumer Sales
12,669
10,622
2,047
19
26,233
1,708
6,524
23,495*
2,420
6,838
2,738
(712)
(314)
12
(29)
(5)
Operating and Other Expenses
Net Income
EBITDA
*without the Gain on Sale of Investments
Consolidated Revenues
For 2012, ABS-CBN generated consolidated gross revenues of P31.730 billion from advertising revenues and
consumer sales, P3.530 billion or 13% higher year-on-year. Without the incremental revenues from growth
initiatives, revenues increased by 10%.
Consolidated Net Revenues
(Amounts in million Pesos)
Consolidated Net Advertising Revenues
Consumer Sales
Sale of Services
Sale of Goods
Consolidated Net Consumer Sales
Consolidated Net Revenues
2012
2011
19,061
17,578
12,268
401
12,669
31,730
10,165
457
10,622
28,200
Variance
Amount
%
1,484
8
2,103
(56)
2,047
3,530
21
(12)
19
13
Advertising Revenues
Consolidated net advertising revenues across all platforms and subsidiaries increased by 8% to P19.061
billion fuelled by ABS-CBN’s ratings leadership and the improvement in revenue performance of Cable
Channels. In the fourth quarter, advertising revenues grew by 9% compared to the same period last year.
ABS-CBN led in national audience share and ratings for Urban and Rural audiences with prime-time audience
share averaging 48% for the period June to December 2012, a 20 percentage point lead over GMA’s, based on
the Kantar National TV Ratings.
For the period June to December 2012, 17 of the company’s shows were in the Top 20 for Total Philippines
(Urban and Rural), with the following occupying the Top 10 slots: Walang Hanggan, Princess and I, MMK Ang
Tahanan Mo, Wansapanataym, TV Patrol (Weekday), Ina Kapatid Anak, WBO Junior Featherweight
Championship, World Junior Featherweight Championship and Donaire vs Mathebula.
Consumer Sales
Consumer sales amounted to P12.669 billion, or a 19% increase year-on-year. The increase is largely
attributable to Sky Cable’s growth in revenues which grew by 32% . The increase in sales of other
subsidiaries is partly attributable to the incremental sales of our growth initiatives and the increase in
sales of ABS-CBN Films.
Consumer Sales
(Amounts in million Pesos)
ABS-CBN Global
Sky Cable
Other subsidiaries
Consolidated Net Consumer Sales
2012
5,184
5,908
1,577
12,669
2011
5,250
4,491
881
10,622
Variance
Amount
%
(66)
(1)
1,417
32
696
79
2,047
19
ABS-CBN Global’s revenues increased 1% in US dollar terms , but declined 1% in peso terms. The lower rate
of increase in peso terms was due to a 3% or P1.09 appreciation of the Philippine peso exchange rate against
the US dollar, from P43.30 in 2011 to P42.21 in 2012.
ABS-CBN Global’s overall viewer count increased by 2%. Double digit growth in viewers continued to be
experienced in Canada, and single digit growth in all other territories except Middle East, Japan and Europe
where viewers declined.
Sky Cable’s consolidated revenues for the year from cable TV and broadband services grew 32% year-onyear, driven by a 34% growth in postpaid revenues and a 49% growth in broadband revenues. The growth in
revenue is partly due to Sky’s acquisition of Destiny Cable. Without Destiny, Sky’s total revenues increased
by 12%.
ABS-CBN Film Productions, Inc. released 15 films in 2012. Seven of them–Enteng ng Ina Mo, Segunda Mano,
Unofficially Yours, Kimmy Dora and the Temple of Kiyeme, The Healing, The Mistress and This Guy’s In Love with
U Mare –topped P100 million in box office receipts, earning blockbuster status by local standards. Enteng ng
Ina Mo,The Mistress and This Guy’s In Love with U Mare grossed more than P200 million.
Without the incremental revenues from our growth initiatives, consumer sales grew by 13%.
Operating and Other Expenses
Total operating and other expenses amounted to P26.233 billion, 12% higher than in 2011. Without the
incremental costs of our growth initiatives, operating expenses grew by 7%.
Total Operating and Other Expenses
(Amounts in million Pesos)
Production Costs
Cost of Sales and Services
General and Administrative Expenses
Other Expenses (Income)
Consolidated Total Operating and Other Expenses
*without the Gain on Sale of Investments
2012
10,259
8,079
8,248
(353)
26,233
2011
9,835
6,796
7,091
(227)*
23,495
Variance
Amount
%
424
4
1,283
19
1,157
16
(126)
(56)
2,738
12
Production Costs
Total production costs went up by P424 million or a mere 4% to P10.259 billion. Cash production costs went
up by P637 million or 8% year-on-year, due to the increase in the number of shows produced and rising
personnel expenses and talent fees.
Production Costs
(Amounts in million Pesos)
Personnel Expenses and Talent Fees
Facilities-Related Expenses
Other Program Expenses
Sub-total: Cash Production Costs
Non-Cash Production Costs
Consolidated Production Costs
2012
5,286
2,037
1,375
8,698
1,561
10,259
2011
4,370
2,164
1,527
8,061
1,774
9,835
Variance
Amount
%
916
21
(127)
(6)
(152)
(10)
637
8
(213)
(12)
424
4
Non-cash production costs decreased by 12% to P1.561 billion, due to lower amortization of program rights.
Cost of Sales and Services
Cost of sales and services increased by 19% or P1.283 billion to P8.079 billion. Without our growth
initiatives, cost of sales increased by 9%.
ABS-CBN Global’s cost of sales and services decreased by 1%. Sky Cable’s cost of sales and services grew by
25% although significantly slower than its 32% growth in revenue. The increase in cost of sales and services
of other subsidiaries is partly attributable to the incremental costs of our growth initiatives.
Cost of Sales and Services
(Amounts in million Pesos)
ABS-CBN Global
Sky Cable
Other Subsidiaries
Consolidated Cost of Sales and Services
2012
2,349
3,744
1,986
8,079
2011
2,370
3,003
1,423
6,796
Variance
Amount
%
(21)
(1)
741
25
563
40
1,283
19
General and Administrative Expenses
Total General and Administrative Expenses (GAEX) posted a 16% or a P1.157 billion year-on-year increase to
P8.248 billion.
General and Administrative Expenses
(Amounts in million Pesos)
Personnel Expenses
Contracted Services
Facilities-Related Expenses
Depreciation and amortization
Provision for Doubtful Accounts
Other Expenses
Consolidated GAEX
2012
2011
4,199
999
607
608
3,627
790
515
615
390
1,445
8,248
255
1,289
7,091
Variance
Amount
%
572
16
209
26
92
18
(7)
(1)
135
156
1,157
53
12
16
Cash GAEX went up by 18% or P1.164 billion to P7.641 billion, of which more than half is accounted for by
personnel expenses. The increase in GAEX is partly attributable to the incremental costs brought about by
our growth initiatives. Without the incremental costs of the initiatives, GAEX would have grown by 10%.
Net Income
The company generated a net income of P1.708 billion in 2012, down by 29% compared with P2.420 billion
last year. Removing the effects of the one-time gain from the sale of investments recognized in 2011 , net
income would have been up by 23%.
EBITDA
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to P6.524 billion, or a 5%
decline year-on-year. Stripping the one-time gain in 2011, EBITDA was up 15% year-on-year.
EBITDA for the fourth quarter of 2012 was at P1.977 billion, 19% higher than that of the same period last
year.
Capital Expenditures
Cash capital expenditures and program rights acquisitions for 2012 amounted to P4.958 billion, P753 million
or 18% higher than last year’s P4.205 billion.
Balance Sheet Accounts
As at December 31, 2012, total consolidated assets stood at P49.480 billion, P4.672 billion or 10% higher
than total assets of P44.808 billion as at December 31, 2011. The significant increase in assets is attributable
to the provisional goodwill recognized upon the acquisition of Destiny Cable by Skycable, and capital
expenditures for property, plant and equipment, and program rights.
Cash and cash equivalents of P6.395 billion is P2.240 billion or 26% lower than the December 31, 2011
balance.
Trade accounts receivables amounting to P6.762 billion is P371 million or 6% higher than the P6.392 billion
trade accounts receivables at the end of 2011.
Days sales outstanding of 78 days is 5 days lower than the 83 days as at December 31, 2011.
Total interest-bearing loans was higher by P3.274 billion at P15.786 billion compared to P12.511 billion at
the end of 2011.
Shareholders’ equity stood at P21.507 billion, 5% higher compared with the Shareholder’s equity at the end
of 2011.
The company’s net debt-to-equity ratio was higher at 0.43x compared with 0.19x at the end of 2011.
PRESS RELEASE
Release Date : FOR IMMEDIATE RELEASE
Reference
: Paul Michael Villanueva, Head, Treasury and Compliance Officer
Tel : 415.2272 local 4322
Email : [email protected]
ABS-CBN’s recurring income for 2012 grew by 23% due to strong advertising
revenues and consumer sales
Quezon City, Philippines (March 21, 2013) – The consolidated net income of ABS-CBN
Corporation (“ABS-CBN” or the “Company”) (PSE: ABS, ABSP), the country’s largest multimedia
conglomerate, registered P1.708 billion for 2012, down by 29% compared with P2.420 billion
in 2011. Removing the effects of the gain from the sale of investments recognized in 2011
amounting to P1.032 billion, net income increased by 23%. The growth in recurring income
was fuelled by strong advertising revenues and consumer sales.
ABS-CBN generated consolidated revenues of P31.7 billion from advertising and consumer
sales, a 13% increase compared to last year.
ABS-CBN’s advertising revenues reached P19.1 billion, an increase of 8% from a year ago.
Consumer sales amounted to P12.7 billion, posting a 19% increase. Sky Cable continues to be
a major driver of growth with revenues increasing by 32% to P5.9 billion. The growth in
revenues is partly attributable to the acquisition of Destiny Cable.
Total operating and other expenses increased by 12% to P26.2 billion brought about by
increases in production costs, cost of sales and services , and general and administrative
expenses.
Capital expenditure and film and program rights acquisition amounted to P4.9 billion, 18%
higher than the level of spending in the previous year.
ABS-CBN maintained its national audience share and ratings leadership for Urban and Rural
audiences with prime-time audience share averaging 48% in 2012, a 20 percentage point lead
over GMA’s, based on the Kantar National TV Ratings.
For the period June to December 2012, 17 of the company’s shows were in the Top 20 for
Total Philippines (Urban and Rural), with the following occupying the Top 10 slots: Walang
Hanggan, Princess and I, MMK Ang Tahanan Mo, Wansapanataym, TV Patrol (Weekday), Ina
Kapatid Anak, WBO Junior Featherweight Championship, World Junior Featherweight
Championship and Donaire vs Mathebula.
ABS-CBN Film Productions, Inc. released 15 films in 2012. Seven of them–Enteng ng Ina Mo,
Segunda Mano, Unofficially Yours, Kimmy Dora and the Temple of Kiyeme, The Healing , The
Mistress, and This Guy’s in Love with U Mare! –topped P100 million in box office receipts,
earning blockbuster status by local standards. Enteng ng Ina Mo, The Mistress and This Guy’s in
Love with U Mare! grossed more than P200 million.
--About ABS-CBN Corporation
ABS-CBN Corporation is the leading Philippine entertainment and information multimedia conglomerate. In the
Philippines, ABS-CBN produces a wide variety of engaging world-class entertainment programs in several genres
and balanced credible news programs that are aired on free-to-air TV via Channels 2 (VHF) and 23 (UHF) and a
regional network of TV and radio stations nationwide. It also provides news and entertainment programming for
nine channels on cable TV. The Company owns the leading film and music production and distribution outfit in the
Philippines, and has interests in cable TV, Internet and mobile services, and glossy-magazine publishing. It brings
its content to worldwide audiences via cable, satellite and the Internet, primarily through ABS-CBN Global’s The
Filipino Channel (TFC).