ABS-CBN Corporation - Amazon Web Services

ABS-CBN Corporation
Sgt. Esguerra Avenue, Quezon City, Philippines
12 May 2011
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: 2011 1st Quarter Analyst and Business Press Briefing
Gentlemen / Ladies:
We are providing you the attached copies of the materials that we presented during our scheduled
analyst and business press briefing for our 2011 first quarter financial performance .
Thank you.
Very truly yours,
Paul Michael V. Villanueva, Jr.
Compliance Officer for Corporate Governance
PRESS
RELEASE
Release Date : FOR IMMEDIATE RELEASE
Reference
: Paul Michael Villanueva, Jr. - Head, Treasury and Compliance Officer
Tel : 415.2272 local 4322
Email : [email protected]
ABS-CBN nets close to P1 billion for the first quarter of 2011 despite the
absence of election related advertisements
Quezon City, Philippines (May 12, 2011) – The consolidated net income of ABS-CBN
Corporation (“ABS-CBN” or the “Company”) (PSE: ABS, ABSP), the country’s largest
multimedia conglomerate, registered P976 million for the first three months of the year
ending March 31, 2011.
ABS-CBN delivered consolidated revenues of P6.6 billion from advertising and consumer
sales, a 15% decline compared to a year ago. Less the revenues from political
advocacies and advertisement from the first quarter of 2010, consolidated revenues in
the first quarter of 2011 increased by 3% year-on-year.
ABS-CBN’s advertising revenues declined 21% or P1.0 billion to reach P4.0 billion. Minus
the revenues from political advocacies and advertisement in the first quarter of 2010,
advertising revenues in the first quarter of 2011 increased by 10% year-on-year. This
increase is attributable to the rise in total advertising minutes sold and programmed
rate increase that took effect in February 2011.
Consumer sales for the first quarter of 2011 amounted to P2.5 billion, posting a 5%
decrease or P147 million less from a year ago, mainly from ABS-CBN Global. ABS-CBN
Global revenues declined by 15% year on year in peso terms due to the decline in
subscribers and the appreciation of the Philippine peso against the US dollar.
Meanwhile, Sky Cable continues to contribute positively with revenues increasing by 6%
to P1.0 billion. This is mostly driven by the increased take up of its broadband service
subscriptions which increased by 31% year-on-year
Total expenses declined by P721 million or 13% year-on-year to P4.7 billion partly due to
the lower cost of sales and services and general and administrative expenses (GAEX).
Net income attributable to shareholders for the first quarter of 2011 is at P976 million,
inclusive of the gain on sale of Sky Cable Philippine Depositary Receipts (PDRs), a 10%
decline year-on-year. Removing the effects of this one-time gain in the first quarter of
2011 and P1.40 billion revenues generated from political advocacies and political
advertisement in the first quarter of 2010, net income would have increased by 12%
year-on-year.
Meanwhile, earnings before interest, taxes, depreciation and amortization (EBITDA) hit
P2.1 billion, a 14% decline year-on-year. Stripping the one-time gain in the first quarter
of 2011 and equally shaving the P1.40 billion revenues generated from political
advocacies and political advertisement in the first quarter of 2010, EBITDA would have
grown by 6% year-on-year
Capital expenditure and film and program rights acquisition for the first quarter of 2011
amounted to P886 million, P400 million or 82% higher than the level of spending from
previous year. These are all programmed expenditures to increase the company’s
capacity to produce additional shows.
ABS-CBN maintained its national audience share and ratings leadership with prime-time
audience share averaging 41% in the first quarter of 2011, going by Kantar Media
National TV Ratings’ figures.
For the period January to March 2011, all six of ABS-CBN’s primetime week-day shows
were in the Top 6: the Top 6: Emil Cruz Jr.'s Mara Clara, Pablo S. Gomez's Mutya,
Minsan Lang Kita Iibigin, Noah, TV Patrol and Imortal. The same trend was repeated in
the week-end where ABS-CBN’s primetime week-end shows also dominated the top
programs: Pilipinas Got Talent (Saturday and Sunday edition), Wansapanataym : Ulo,
Kokak, Family Tree, and Buhawi Jack, Maalaala Mo Kaya..., Rated K Handa Na Ba Kayo?,
and Goin' Bulilit.
Primetime programs launched in the first quarter of 2011—Mutya and Pilipinas Got
Talent—enjoyed national program ratings in the 30s, and audience share in the high
40s.
ABS-CBN Global’s overall viewer count decreased by 3% year-on-year, driven by the
decline in subscriber growth in the Middle East, Europe and Japan. Double digit
subscriber growth continued to be experienced in Canada, and mid-to-high single digit
subscriber growth in Asia-Pacific and Australia.
ABS-CBN Film Productions, Inc. released five films in the first three months of this year,
two more than the same period in 2010. Three of them–Ang Tanging Ina Mo Last Na
To, Dalaw and Catch Me I’m in Love–topped P100 million in box office receipts, earning
blockbuster status by local standards.
--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).
First Quarter 2011
Financial & Operating Results
The Chronicle Lounge
14/F Eugenio Lopez Jr. Communications Center
Eugenio Lopez Ave., Q.C.
Thursday, 12 May 2011
1
Consolidated Gross Revenues
Php6.6 billion
Advertising Revenues
61%
1Q2011 Consolidated Gross Revenue
15% year-on-year
Consumer Sales
39%
2
Consolidated Advertising Revenues
in Php Millions
5,058
5,000
4,012
1,407
Political Advocacies
& Advertisements
10% YoY
2,500
3,651
4,012
Q1 2010
Q1 2011
without
political
advocacies and
advertisements
0
3
Advertising Minutes
Total Channel 2, Q1 2010 vs. Q1 2011
26,000
12% YoY
25,208
22,437
13,000
Q1 2010
Q1 2011
4
Source: Nielsen Media Research
National Ratings – Total Philippines
Kantar Media/TNS National Urban Philippines TV Audience Shares (Q1 2011)
Total Day Audience Share
Evening Primetime Audience Share
42
41
36 36
36 35
13
34
31
4
31
31
16
15
12
4
36
5
ABS-CBN
18
15
4
Full Week Week Days Week End
30
4
4
Full Week Week Days Week End
GMA
TV 5
Studio 23
5
Top 20 Programs- Weekday
Kantar Media/TNS National Urban Philippines’ Top Programs (Q1 2011)
9 ABS-CBN weekday programs made it to the Top 20 in Q1 2011
RANK
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
CHANNEL
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
GMA
GMA
GMA
GMA
GMA
GMA
GMA
GMA
ABS-CBN
GMA
ABS-CBN
ABS-CBN
GMA
GMA
GMA
GMA
PROGRAMS
EMIL CRUZ JR.'S MARA CLARA
PABLO S. GOMEZ'S MUTYA
MINSAN LANG KITA IIBIGIN
NOAH
TV PATROL
IMORTAL
TEMPTATION OF WIFE
24 ORAS
MARS RAVELO'S CAPTAIN BARBELL
MAGIC PALAYOK
EAT... BULAGA!
DWARFINA
BANTATAY
JILLIAN
PRECIOUS HEARTS : KRISTINE
THE BAKER KING
MULA SA PUSO
SABEL
I HEART YOU PARE
MY LOVER MY WIFE
PABLO S. GOMEZ'S MACHETE
BEAUTY QUEEN
RTG%
33.7
33.2
33.1
28.0
27.1
25.5
20.9
20.9
20.6
19.6
19.5
19.3
19.0
17.9
17.4
17.4
17.3
17.0
16.7
16.1
16.0
15.9
6
Top 20 Programs- Weekend
Kantar Media/TNS National Urban Philippines’ Top Programs (Q1 2011)
and 13 ABS-CBN week-end programs made it to Top 20 in Q1 2011
RANK
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
CHANNEL
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
ABS-CBN
GMA
GMA
ABS-CBN
GMA
GMA
ABS-CBN
ABS-CBN
GMA
GMA
PROGRAMS
PILIPINAS GOT TALENT (SUNDAY)
PILIPINAS GOT TALENT (SATURDAY)
WANSAPANATAYM : ULO
WANSAPANATAYM : KOKAK
MAALAALA MO KAYA...
WANSAPANATAYM : FAMILY TREE
RATED K HANDA NA BA KAYO?
GOIN' BULILIT
WANSAPANATAYM : BUHAWI JACK
EAT... BULAGA! (SATURDAY)
KAPUSO MO, JESSICA SOHO
TV PATROL WEEKEND (SUNDAY)
KAP'S AMAZING STORIES
SPOOKY NIGHTS PRESENTS BAMPIRELLA
STAR CIRCLE QUEST FOR THE NEXT KIDDIE SUPERSTARS
TV PATROL WEEKEND (SATURDAY)
PEPITO MANALOTO REALITY SITCOM
24 ORAS WEEKEND (SATURDAY)
STAR POWER SHARON'S SEARCH FOR THE NEXT
ABS-CBN FEMALE POP SUPERSTAR
GMA
MAN VS BEAST
GMA
KAPUSO MOVIE SATURDAY FESTIVAL
RTG%
30.0
29.5
26.8
25.4
24.4
23.4
23.4
21.5
20.7
20.1
19.8
19.7
19.5
19.4
19.3
19.1
18.6
18.3
17.7
17.5
16.9
7
Consumer Sales
in Php Millions
3,000
5% YoY
1,500
2,694
2,547
Q1 2010
Q1 2011
0
8
ABS-CBN Global
~ 2.38 million viewers worldwide, down 3% YoY
• Decline in subscriber growth in Middle East,
Europe and Japan
• Not be offset by continued growth in Canada,
Asia Pacific and Australia
9
Sky Cable
Strong revenue growth, up 6% YoY
• 26% YoY increase in broadband revenue on the
back of 31% YoY growth in subscriptions
• 7% YoY growth in post-paid cable
subscriptions driven by the lower end Php 280
and Php 499 packages
10
ABS-CBN Film Productions
3 of 5 films
released in
1Q2011 broke
past the
Php 100 million
mark in gross
box office
receipts
11
Total Expenses
in Php Millions
6,000
13% YoY
4,000
25% YoY
5,437
2,000
10% YoY
14% YoY
938% YoY
4,716
1,803 2,257 1,703 1,529 1,853 1,585
0
Total Expenses Production Cost
-2,000
Q1 2010
Cost of Sales
and Services
General &
Administrative
Expenses
Q1 2011
78
-655
All Other
Expenses
12
Production Cost
in Php Millions
3,000
25% YoY
27% YoY
1,500
2,257
1,803
1,889
1,483
15% YoY
320
0
Production Cost
Cash
Q1 2010
368
Non-cash
Q1 2011
13
Cost of Sales and Services
in Php Millions
2,000
10% YoY
1,000
1,703
29% YoY
7% YoY
8% YoY
1,529
646
458
663
710
394
361
0
Total Cost of Sales ABS-CBN Global
and Services
Q1 2010
SkyCable
Q1 2011
Other Subs
14
General & Administrative Expenses
in Php Millions
2,000
1,000
14% YoY
14% YoY
1,853
1,585
1,668
1,430
16% YoY
185
0
General &
Administrative Expenses
Cash
Q1 2010
155
Non-Cash
Q1 2011
15
Consolidated Net Income
in Php Millions
1,200
600
10% YoY
1,086
976
0
Q12010
Q12011
16
Consolidated EBITDA
in Php Millions
2,500
1,250
14% YoY
2,437
2,098
0
Q12010
Q12011
17
Capital Expenditure & Film Rights
in Php Millions
900
82% YoY
450
886
486
0
Q12010
Q12011
18
Balance Sheet Accounts
End March 31, 2011 vs. December 31, 2010
Total Assets
Php 44.2B
14%
Cash and Cash Equivalents
Php7.2B
23%
Consolidated Trade & Other
Receivables
Php11.3B
56%
Day’s Sales Outstanding
75 days
12 days
Total Interest Bearing Debt
Php12.7B
32%
Shareholders’ Equity
Php19.0B
7%
Net Debt-to-Equity Ratio
0.29x
0.07x
19
Sky Cable & STT Communications
3 parts to the transaction
• ABS-CBN Corp and Lopez Holdings Corp sold
Php2.162 billion Sky Cable PDRs to a subsidiary
of STT Communications Ltd, Sampaquita
Communications Pte Ltd
• Sampaquita invested in new Sky Cable PDRs
worth P1.45 billion
• Sampaquita subscribed to P250 million worth
of Sky Cable convertible notes
21
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE FIRST QUARTER OF 2011
For the first three months of the year ending March 31, 2011, ABS-CBN Corporation (“ABS-CBN” or the
“Company”) generated consolidated revenues of P6.56 billion from advertising and consumer sales, P1.19
billion or 15% lower year-on-year. Minus the revenues of P1.40 billion from political advocacies and political
advertisement in quarter of 2010, consolidated revenues increased by 3% year-on-year.
Overall, the contribution share of both advertising revenues and consumer sales to consolidated revenues
remain robust in the absence of political advocacies and political advertisement. Advertising revenues
contributed 61% of total consolidated revenues while consumer sales made up the balance of 39%.
Total expense in the first quarter of 2011 was at P4.72 billion, or a 13% decline year-on-year.
Reported net income was at P976 million for the first three months of 2011, inclusive of the P674 million gain
in sale of Sky Cable Philippine Depositary Receipts (PDRs), a 10% decline year-on-year. Removing the effects
of this one-time gain in the first quarter of 2011 and P1.40 billion revenues generated from political
advocacies and political advertisement in the first quarter of 2010, net income would have increased by 12%
year-on-year.
Reported EBITDA hit P2.10 billion in the first quarter of 2011, or a 14% decline year-on-year. Stripping the
one-time gain in the first quarter of 2011 and equally shaving the P1.40 billion revenues generated from
political advocacies and political advertisement in the first quarter of 2010, EBITDA would have grown by 6%
year-on-year.
Consolidated Revenues
For the three months ending March 31, 2011, ABS-CBN generated consolidated revenues of P6.56 billion from
advertising revenues and consumer sales, P1.19 billion or 15% lower year-on-year. Minus the revenues of
P1.40 billion from political advocacies and political advertisement in the first quarter of 2010, consolidated
revenues increase by 3% year-on-year.
With the absence of election-related advertising revenues in 2011, the contribution of consumer sales to total
revenues is higher at 39% from 35% a year ago.
Consolidated Revenues
(Amounts in million Pesos)
Consolidated Advertising Revenues
Consumer Sales
Sale of Services
Sale of Goods
Consolidated Consumer Sales
Consolidated Revenues
Political Advocacies/Political Advertisements
Consolidated Revenues Net of Political Advocacies/
Political Advertisements
1Q11
4,012
Consolidated
Variance
1Q10
Amount
%
5,058
(1,046)
(21)
2,435
112
2,547
6,559
-
2,581
113
2,694
7,752
1,407
(146)
(1)
(147)
(1,193)
(1,407)
(6)
(1)
(5)
(15)
(100)
6,559
6,345
214
3
1
Advertising Revenues
Consolidated advertising revenues across all platforms and subsidiaries declined by 21% to P4.01 billion.
Minus the revenues of P1.40 billion from political advocacies and political advertisement in the first quarter
of 2010, however, advertising revenues increase by 10% year-on-year. This increase is attributable to both
the increase in total advertising minutes sold and the rate adjustment that took effect in February this year.
Total advertising minutes sold by Channel 2 for the first three months of the year grew 12%. Underpinning
the growth in advertising is the continued ability of Channel 2 to deliver solid national program ratings and
audience shares.
ABS-CBN maintained its national audience share and ratings leadership with prime-time audience share
averaging 41% in the first quarter of 2011, with a 10 percentage point lead over GMA’s, based on the Kantar
National TV Ratings figure.
For the period January to March 2011, all six of the company’s primetime week-day shows were in the Top 6:
Emil Cruz Jr.'s Mara Clara, Pablo S. Gomez's Mutya, Minsan Lang Kita Iibigin, Noah, TV Patrol and Imortal. The
same trend was repeated in the week-end where the company’s primetime week-end shows also dominated
the top programs: Pilipinas Got Talent (Saturday and Sunday edition), Wansapanataym : Ulo, Kokak, Family
Tree, and Buhawi Jack, Maalaala Mo Kaya..., Rated K Handa Na Ba Kayo?, and Goin' Bulilit
Primetime programs launched in the first quarter of 2011—Mutya and Pilipinas Got Talent—enjoyed national
program ratings in the 30s, and audience share in the high 40s.
Consumer Sales
Consumer sales for the first quarter amounted to P2.55 billion, or a 5% decline year-on-year.
Consumer Sales
(Amounts in million Pesos)
ABS-CBN Global
Sky Cable
Other subsidiaries
Consolidated Consumer Sales
Consolidated
1Q11
1,124
1,031
392
2,547
1Q10
1,319
972
403
2,694
Variance
Amount
(195)
59
(11)
(147)
%
(15)
6
(3)
(5)
ABS-CBN Global’s revenues declined year-on-year by 15% in peso terms or 11% in US dollar terms. The
stronger decline in peso terms was due to 5% or P2.20 appreciation of the Philippine peso exchange rate
against the US dollar, from P45.99 in the first quarter of 2010 down to P43.79 in the first quarter this year.
ABS-CBN Global’s overall viewer count declined by 3% year-on-year to an estimated 2.38 million at the end of
March 2011, driven by the decline in subscriber growth in the Middle East, Europe and Japan. Double digit
growth continued to be experienced in Canada, and mid-to-high single digit growth in Asia-Pacific and
Australia.
2
Sky Cable’s consolidated revenues from cable TV and broadband services grew 6% year-on-year, driven by
26% growth in broadband revenues. Broadband service subscriptions surged 31% year-on-year, while
subscriptions to Sky Cable’s post-paid TV offering grew by 7%.
ABS-CBN Film Productions, Inc. released five films in the first three months of this year, two more than the
same period in 2010. Three of them–Ang Tanging Ina Mo Last Na To, Dalaw and Catch Me I’m in Love–topped
P100 million in box office receipts, earning blockbuster status by local standards.
Expenses
Total expense in the first quarter of 2011 was at P4.72 billion, or a 13% decline year-on-year.
Total Expenses
(Amounts in million Pesos)
Production Costs
Cost of Sales and Services
General and Administrative Expenses
Other Expenses (Income)
Total Expenses
Consolidated
1Q11
2,257
1,529
1,585
(655)
4,716
1Q10
1,803
1,703
1,853
78
5,437
Variance
Amount
%
454
25
(174)
(10)
(268)
(14)
(733) (938)
(721)
(13)
Production Costs
In the first quarter, total production costs rose by P454 million or 25% to P2.26 billion, due to higher
programming costs, particularly of primetime and noontime programs. Cash production costs went up by
P406 million or 27% year-on-year, mostly from increase from talent fee adjustments and from new programs
that brought talent fees, equipment rentals and service fees, and other expenses substantially higher.
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
Total Production Costs
Consolidated
1Q11
1,073
526
290
1,889
368
2,257
1Q10
842
379
262
1,483
320
1,803
Variance
Amount
%
231
27
147
39
28
11
406
27
48
15
454
25
Non-cash production costs went up by 15% to P368 million, due to higher depreciation costs.
3
Cost of Sales and Services
Cost of sales and services declined by 10% or P173 million to P1.53 billion.
ABS-CBN Global’s cost of sales declined 29% in peso terms declining faster than the 15% year-on-year
reduction in its sale of goods and services. Sky Cable’s cost of sales meanwhile, grew by 7% year-on-year,
slightly higher than the increase in its gross revenue of 6%.
Cost of Sales and Services
(Amounts in million Pesos)
ABS-CBN Global
Sky Cable
Other Subsidiaries
Cost of Sales and Services
Consolidated
1Q11
458
710
361
1,529
1Q10
646
663
394
1,703
Variance
Amount
%
(188)
(29)
47
7
(33)
(8)
(174)
(10)
General and Administrative Expenses
Total General and Administrative Expenses (GAEX) posted a 14% or P268 million year-on-year decline to
P1.59 billion.
General and Administrative Expenses
(Amounts in million Pesos)
Personnel Expenses
Contracted Services
Facilities-Related Expenses
Depreciation
Provision for Doubtful Accounts
Other Expenses
Consolidated GAEX
Consolidated
1Q11
809
183
114
149
44
286
1,585
1Q10
862
209
125
184
119
354
1,853
Variance
Amount
(53)
(26)
(11)
(35)
(75)
(68)
(268)
%
(6)
(12)
(8)
(19)
(63)
(19)
(14)
Cash GAEX went down by P238 million to P1.43 billion, of which more than half is accounted for by personnel
expenses.
Net Income
The company generated net income of P976 million for the first three months of 2011, inclusive of the P674
million gain in sale of Sky Cable PDRs, a 10% decline year-on-year. Removing the effects of this one-time gain
in the first quarter of 2011 and P1.40 billion revenues generated from political advocacies and political
advertisement in the first quarter of 2010, net income would have increased by 12% year-on-year.
EBITDA
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2011 hit
P2.10 billion, or a 14% decline year-on-year. Stripping the one-time gain in the first quarter of 2011 and
4
equally shaving the P1.40 billion revenues generated from political advocacies and political advertisement in
the first quarter of 2010, EBITDA would have grown by 6% year-on-year.
Capital Expenditures
Capital expenditures and program rights acquisitions for the first quarter of 2011 amounted to P886 million,
P400 million or 82% higher year-on-year. These are all programmed expenditures to increase the company’s
capacity to produce additional shows.
Balance Sheet Accounts
As at March 31, 2011, total consolidated assets stood at P44.23 billion, P5.27 billion or 14% higher than total
assets of P38.96 billion as at December 31, 2010.
Cash and cash equivalents of P7.17 billion is P1.34 billion or 23% higher than the December 31, 2010 balance.
Consolidated trade and other receivables stood at P11.32 billion, P4.07 billion or 56% higher than as at the
end of 2010. Of the P4.07 billion increase, P3.52 billion is attributable to the receivables from the sales of Sky
Cable PDRs. Less this receivable, consolidated trade and other receivable only increased by 8% or P552
million.
Days sales outstanding of 75 days is 12 days more than the 63 days as at December 31, 2010, as trade
accounts receivables amounting to P6.33 billion is P764 million or 14% higher than the P5.56 billion trade
accounts receivables at the end of 2010.
Total interest-bearing loans went up by P3.08 billion or 32% to P12.72 billion compared with P9.64 billion at
the end of last year.
Shareholders’ equity stood at P19.05 billion, P1.30 billion or 7% higher than the P17.75 billion shareholders’
equity at the end of December 2010.
The company’s net debt-to-equity ratio rose slightly to 0.29x as a result of higher debt versus 0.22x at the end
of last year.
The company’s debt ratios remain well within the limits prescribed under its loan covenants.
*
*
*
*
5