GLOBE TELECOM ASM SPEECH
2020 ANNUAL STOCKHOLDERS’ MEETING
MESSAGE FROM THE CHAIRMAN JAIME AUGUSTO ZOBEL DE AYALA
APRIL 21, 2020
To our fellow shareholders, members of the Board of Directors, and friends: Good morning and welcome to Globe Telecom’s Annual Stockholders Meeting.
This year Globe achieved an important milestone as the Company launched the “Globe At Home Air Fiber 5G” postpaid plans. This made the Philippines the first Southeast Asian country to experience the fifth generation (5G) fixed wireless broadband.
Over the years our Company has been at the forefront of enabling digital inclusion and empowering Filipinos with the power of connectivity. Today we cater to over 94.2 million mobile customers.
We also serve over 2 million home broadband customers, a notable 25% increase compared to year 2018. At Globe, the belief is that we grow when our customers further enhance their digital lifestyle, the economy flourishes through digital transformation, and the natural ecosystem is nurtured in the process. With the ability to contribute towards a digitally enabled economy, our mission is to revitalize businesses and empower customers with enhanced digital capabilities.
Despite the country’s dampened economic growth in the global and domestic front, Globe had a record performance with a 12% growth in service revenues year-on-year. In line with past year trends, revenue growth has been predominantly data-driven. Total data revenues accounted for 71% of total service revenues compared to 61% reported last year. We have also been able to consistently increase our customer base; we witnessed a 27% rise in customer base this year compared to 2018.
Conscientious of our fiduciary duty to generate sustained value for our shareholders, we paid out ₱12.1 billion in common share dividends, which is similar to what we paid out in the previous year. This represents about 65% of 2018 core net income, in line with our new dividend policy of 60% to 75% of prior year’s core net income. This also translates to a 4.8% dividend yield, which is more competitive than other Philippine listed companies.
It is noteworthy that we have been able to showcase this performance with the looming entry of the third player. This reaffirms my belief that with the evolving market dynamic, strategic innovation is critical to reaffirm our reputation as a nimble service provider committed to bringing world class services to our customers.
In our quest to enhance customer experience and build the Philippine’s digital economy we made substantial capital investments this year. We spent ₱51.0 billion, which represents 34% of gross service revenues and 67% of full year EBITDA.
We also forged more partnerships to anchor infrastructure development at a larger scale.
In our endeavor to digitally transform businesses, we acquired a 77% equity interest in EC Pay, Inc., whose platform will enable small business owners to offer more products and services. This move will also future-proof Globe’s distribution network, bringing the company a step closer to its vision of a digitally-enabled Philippines. Additionally, our GCash partnership with CIMB Philippines reached a milestone of 1 million GSave accounts opened after only 8 months from launch. Moreover, together with other operators, we entered into a consortium and selected Syniverse as the Mobile Number Portability service provider.
We became a signatory to the United Nations Global Compact, committing to implement universal sustainability principles and contribute to the United Nations Sustainable Development Goals. Our focus areas in this vision include education, environmental conservation, digital inclusion and development.
We have rolled out various programs to realize our vision.
We also expanded the reach of DTP via the National Summit on Digital Citizenship and Responsibility (NSDCR) in partnership with the Department of Education last September. Over 400 curriculum experts on Values Education and ICT from DedEd were in attendance and help them become responsible online citizens. We also encourage social innovators, using ICT through the regional Future Makers program.
In line with Globe’s commitment to holistic value creation, we have made considerable progress in our environmental stewardship programs. This year we rolled out our Marine Protection Program for Boracay and Siargao Islands aimed towards biodiversity conservation. In recognition of the material risks and opportunities climate change presents, we have devised a dedicated climate strategy. Our strategy focuses on building the resilience of our value chain to extreme weather events and ensuring protection of the Globe network in times of disasters.
While focusing on climate adaptation, our strategy also contributes towards climate change mitigation through fostering an organizational culture of resource conservation and actively taking part in reforestation activities. Globe is also committed to resource usage optimization and waste minimization with a focus on effective E-waste management.
The strong performance we witnessed this year serves as a testament of our integrated approach to value creation and our commitment to adopting a holistic approach to risk management. Globe instated a dedicated Board Risk Oversight Committee (BROC) in April 2019. The BROC was established to assist the Board of Directors in fulfilling its oversight responsibilities in relation to risk governance to anchor clear definition of risk-taking responsibility and authority while ensuring effective functioning of the Enterprise Risk Management framework. This step will play a crucial role in enhancing the robustness of the company by proactively managing risks thereby ensuring continuous stakeholder value generation.
In closing, I would like to thank our Board of Directors, the management team, and all our employees for their untiring commitment and dedication to serving our customers. Our board members remained engaged across a variety of governance committees throughout the year and our employee and executive teams work tirelessly to improve our standards, to innovate, and to enhance our customers’ experience. I would also like to thank our business partners for their support, our customers for their loyal patronage, and our fellow shareholders for their trust and confidence in our ability to build and create stakeholder value in the years ahead.
Thank you again for joining us here today. I now hand over the floor to our President and CEO, Mr. Ernest Cu, to deliver his report.