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World Class Benchmarking: Globe Telecom Incorporated (GLO PM)

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Founded in 1934, Globe Telecom Inc. is the second-largest provider of telecommunications services in the Philippines. The company has more than 61m mobile subscribers and also offers broadband network, fixed-line data and fixed-line voice services.

One reason accolades flow annually to Mr. Cu, the CEO, is that GLO has continued to put up high marks.

Learn more at: http://becomeabetterinvestor.net/blog/a-large-telecom-with-room-to-run/

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World Class Benchmarking: Globe Telecom Incorporated (GLO PM)

  1. 1. Presented by: Dr. Andrew Stotz, CFA Globe Telecom Incorporated
  2. 2. 220 September 2016  GLO’s business can be divided into three categories:  Mobile business, which generates the greatest revenue, comprises Globe Prepaid brand and Touch Mobile (TM), which is a cellular service brand of GLO. Its postpaid service is offered by the same two brands, making it a leader in this segment  Broadband segment, which is a high-speed Internet connection, offered in DSL and wireless (including LTE) formats. Its fixed-line data business offers Internet service for household and corporate users  Fixed-line voice service, the company has about 1m subscribers, which generates a relatively small part of the company’s revenue  GLO’s total subscriber base, as of 2Q16, was about 61m. Its high capex for infrastructure modernization, such as making broadband Internet (such as LTE) more accessible, has great potential for excellent ROI due to low (as low as 35%) smartphone penetration in the Philippines Sources: A. Stotz Investment Research, company data, Thomson Reuters Service revenue breakdown, by type 2015 Data revenue breakdown 2015 Globe Telecom Incorporated (GLO PM) Stock information: Name: Globe Telecom Inc. Ticker: GLO PM Price (PHP): 1,980 Mcap: US$5,495m 3MADTO: US$4m Beta: 0.0x Sector: Telecommunication Services Industry: Telecommunication Services Major shareholders: 47% Singapore Telecommunications Ltd. 30% Ayala Corp. 23% Free float Background: Founded in 1934, Globe Telecom Inc. is the second- largest provider of telecommunications services in the Philippines. The company has more than 61m mobile subscribers. GLO also offers broadband network, fixed-line data and fixed-line voice services. Mobile 75% Fixed-line data & voice 10%Broadband 15% Mobile 47% Broadband 37% Fixed line 16% 70 90 110 130 150 170 1,000 1,500 2,000 2,500 3,000 Sep-13 Jun-14 Mar-15 Dec-15 Sep-16 GLO PM (LHS) Price relative to local index (PHP) (%)
  3. 3. 320 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters Background: Founded in 1934, Globe Telecom Inc. is the second-largest provider of telecommunications services in the Philippines. The company has more than 61m mobile subscribers. GLO also offers broadband network, fixed-line data and fixed-line voice services. Globe Telecom Incorporated (GLO PM)
  4. 4. 420 September 2016 70 90 110 130 150 170 1,000 1,500 2,000 2,500 3,000 Sep-13 Jun-14 Mar-15 Dec-15 Sep-16 GLO PM (LHS) Price relative to local index (PHP) (%)Stock information: Name: Globe Telecom Inc. Ticker: GLO PM Price (PHP): 1,980 Mcap: US$5,495m 3MADTO: US$4m Beta: 0.0x Sector: Telecommunication Services Industry: Telecommunication Services Major shareholders: 47% Singapore Telecommunications Ltd. 30% Ayala Corp. 23% Free float Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters Globe Telecom Incorporated (GLO PM)
  5. 5. 520 September 2016  GLO’s business can be divided into three categories:  Mobile business, which generates the greatest revenue, comprises Globe Prepaid brand and Touch Mobile (TM), which is a cellular service brand of GLO. Its postpaid service is offered by the same two brands, making it a leader in this segment  Broadband segment, which is a high-speed Internet connection, offered in DSL and wireless (including LTE) formats. Its fixed-line data business offers Internet service for household and corporate users  Fixed-line voice service, the company has about 1m subscribers, which generates a relatively small part of the company’s revenue  GLO’s total subscriber base, as of 2Q16, was about 61m. Its high capex for infrastructure modernization, such as making broadband Internet (such as LTE) more accessible, has great potential for excellent ROI due to low (as low as 35%) smartphone penetration in the Philippines Sources: A. Stotz Investment Research, company data, Thomson Reuters Service revenue breakdown, by type 2015 Data revenue breakdown 2015 Globe Telecom Incorporated (GLO PM) Stock information: Name: Globe Telecom Inc. Ticker: GLO PM Price (PHP): 1,980 Mcap: US$5,495m 3MADTO: US$4m Beta: 0.0x Sector: Telecommunication Services Industry: Telecommunication Services Major shareholders: 47% Singapore Telecommunications Ltd. 30% Ayala Corp. 23% Free float Background: Founded in 1934, Globe Telecom Inc. is the second- largest provider of telecommunications services in the Philippines. The company has more than 61m mobile subscribers. GLO also offers broadband network, fixed-line data and fixed-line voice services. Mobile 75% Fixed-line data & voice 10%Broadband 15% Mobile 47% Broadband 37% Fixed line 16% 70 90 110 130 150 170 1,000 1,500 2,000 2,500 3,000 Sep-13 Jun-14 Mar-15 Dec-15 Sep-16 GLO PM (LHS) Price relative to local index (PHP) (%)
  6. 6. 620 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters  GLO’s business can be divided into three categories: Globe Telecom Incorporated (GLO PM)
  7. 7. 720 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters  Mobile, which generates the greatest revenue, comprises Globe Prepaid brand and Touch Mobile (TM), which is a cellular service brand of GLO  Its postpaid service is offered by the same two brands, making it a leader in this segment Globe Telecom Incorporated (GLO PM)
  8. 8. 820 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters  Broadband segment, which is a high-speed Internet connection, offered in DSL and wireless (including LTE) formats  Its fixed-line data business offers Internet service for household and corporate users Globe Telecom Incorporated (GLO PM)
  9. 9. 920 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters  Fixed-line voice service, the company has about 1m subscribers, which generates a relatively small part of the company’s revenue Globe Telecom Incorporated (GLO PM)
  10. 10. 1020 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters  GLO’s total subscriber base, as of 2Q16, was about 61m  Its high capex for infrastructure modernization, such as making broadband Internet (for example LTE) more accessible,  has great potential for excellent ROI due to low (as low as 35%) smartphone penetration in the Philippines Globe Telecom Incorporated (GLO PM)
  11. 11. 1120 September 2016  GLO’s business can be divided into three categories:  Mobile business, which generates the greatest revenue, comprises Globe Prepaid brand and Touch Mobile (TM), which is a cellular service brand of GLO. Its postpaid service is offered by the same two brands, making it a leader in this segment  Broadband segment, which is a high-speed Internet connection, offered in DSL and wireless (including LTE) formats. Its fixed-line data business offers Internet service for household and corporate users  Fixed-line voice service, the company has about 1m subscribers, which generates a relatively small part of the company’s revenue  GLO’s total subscriber base, as of 2Q16, was about 61m. Its high capex for infrastructure modernization, such as making broadband Internet (such as LTE) more accessible, has great potential for excellent ROI due to low (as low as 35%) smartphone penetration in the Philippines Sources: A. Stotz Investment Research, company data, Thomson Reuters Service revenue breakdown, by type 2015 Data revenue breakdown 2015 Globe Telecom Incorporated (GLO PM) Stock information: Name: Globe Telecom Inc. Ticker: GLO PM Price (PHP): 1,980 Mcap: US$5,495m 3MADTO: US$4m Beta: 0.0x Sector: Telecommunication Services Industry: Telecommunication Services Major shareholders: 47% Singapore Telecommunications Ltd. 30% Ayala Corp. 23% Free float Background: Founded in 1934, Globe Telecom Inc. is the second- largest provider of telecommunications services in the Philippines. The company has more than 61m mobile subscribers. GLO also offers broadband network, fixed-line data and fixed-line voice services. Mobile 75% Fixed-line data & voice 10%Broadband 15% Mobile 47% Broadband 37% Fixed line 16% 70 90 110 130 150 170 1,000 1,500 2,000 2,500 3,000 Sep-13 Jun-14 Mar-15 Dec-15 Sep-16 GLO PM (LHS) Price relative to local index (PHP) (%)
  12. 12. 1220 September 2016 Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters Service revenue breakdown, by type 2015 Data revenue breakdown 2015 Mobile 75% Fixed-line data & voice 10% Broadband 15% Mobile 47% Broadband 37% Fixed line 16%
  13. 13. 1420 September 2016 GLO: Leadership Sources: A. Stotz Investment Research, company data, FactSet ChairmanCEO 2012 2013 2014 2015 Past 12 months Jaime Augusto Zobel de Ayala Mar 1989 – Present Ernest L. Cu Oct 2008 – Present
  14. 14. 1520 September 2016 '12 '13 '14 '15 PTM 6 7 2 3 3 '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM 6 7 4 3 3 8 8 1 3 5 '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM 5 4 4 4 5 6 7 3 3 3 4 3 3 2 2 9 8 1 4 6 Benchmarked against 140 large Telecom companies worldwide. Profitable Growth Asset utilization Profit margin Sales growth Margin change Profitability Growth CEO, 2008 – Present Ernest L. Cu Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data. Profitable Growth has been in the top 3 since ‘14 GLO ranks among the best 42 large Telecom companies globally GLO: A. Stotz Profitable Growth
  15. 15. 1620 September 2016 '12 '13 '14 '15 PTM 6 7 2 3 3 '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM 6 7 4 3 3 8 8 1 3 5 '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM 5 4 4 4 5 6 7 3 3 3 4 3 3 2 2 9 8 1 4 6 Benchmarked against 140 large Telecom companies worldwide. Profitable Growth Asset utilization Profit margin Sales growth Margin change Profitability Growth Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data. Profitable Growth has been in the top 3 since ‘14 GLO ranks among the best 42 large Telecom companies globally Profitability remained #3, Growth fell to average rank GLO: A. Stotz Profitable Growth CEO, 2008 – Present Ernest L. Cu
  16. 16. 1720 September 2016 '12 '13 '14 '15 PTM 6 7 2 3 3 '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM 6 7 4 3 3 8 8 1 3 5 '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM 5 4 4 4 5 6 7 3 3 3 4 3 3 2 2 9 8 1 4 6 Benchmarked against 140 large Telecom companies worldwide. Profitable Growth Asset utilization Profit margin Sales growth Margin change Profitability Growth Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data. Profitable Growth has been in the top 3 since ‘14 GLO ranks among the best 42 large Telecom companies globally Profitability remained #3, Growth fell to average rank Profitability is driven by a strong Profit margin Sales growth is strong, but Margin change worsened and dragged down the Growth rank GLO: A. Stotz Profitable Growth CEO, 2008 – Present Ernest L. Cu
  17. 17. 1820 September 2016  Do YOU want to see the Profitable Growth rank for a company in YOUR portfolio?  Leave a comment below with company name and country of listing…and I’ll post it if I have it

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