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21

April 2020

GLOBE TELECOM 2020 ANNUAL STOCKHOLDERS’ MEETING MESSAGE FROM THE PRESIDENT

GLOBE TELECOM 2020 ANNUAL STOCKHOLDERS’ MEETING MESSAGE FROM THE PRESIDENT

Welcome/Introduction
Thank you, Mr. Chairman and a pleasant morning to all present in this meeting.


Fast Tracking Digital Transformation
2019 has been a year of remarkable growth, driven by innovative customer-centric solutions, paving the way to enabling the fast-tracked digital transformation of the economy. The year in focus has been special for all of us at Globe, as we launched 5G in June 2019, strengthening our service delivery of broadband via fixed wireless access technology. Having made a record investment of ₱51.0 billion, we have made strong strides towards our vision of redefining customer experience, enabling last mile connectivity and revitalizing the digital economy of the country. We were able to deliver strong financial performance, while making a substantial positive impact on our society and environment.


Our company emerged with strong performance despite market changes, and the domestic and global economic slowdown. We posted a service revenue of ₱149.0 billion, 12% higher compared to 2018. This growth was primarily fueled by the gains from data services – spanning mobile, broadband and corporate data. Total data revenues at the end of 2019
accounted for 71% of total service revenues, evidence that more Filipinos are embracing a digitally enabled lifestyle.


Commitment to Improving Customer Experience
I am delighted to report that today, we are the service provider of choice for over 96 million customers nationwide. This positions us as an important player in connecting minds and inspiring ideas across the Philippines through digitization. With an increasing customer base and emerging customer needs, we endeavored to make substantial investments towards building our network infrastructure. As of December 2019, we put up 139% more sites and 28% more 3G and 4G base stations compared to 2018. These investments have translated to more customers enjoying higher data speeds, specifically improved LTE download and upload speeds, and lower latency as confirmed by a third party network quality test provider.

We have also extended our partnerships with leading providers of content, mobile messaging, social media and other popular OTT applications in order to provide products and services that cater to shifting customer preferences. As our customers realize the potential of digitization, our service proposition will focus on “owning our customers” through superior service experience. We anticipate enhanced customer delight, given our improved service delivery capabilities, coupled with unique offerings encompassing personalized plans and attractive product/device bundles.


Creating Impact and Leading with Purpose
For us at Globe, the true value we create lies in the impact we have on the lives of people – our customers, employees, business associates, suppliers, vendors, and Filipinos at large. Our employees are at the forefront of helping us achieve our goals and vision of ensuring that we create value for all our stakeholders. They share our desire for sustainable practices, and are key to furthering our sustainability agenda. We make it known to our employees that the ideas and innovation they bring to the company are central to the success we achieve year on year. In recognition of our employee-centric organizational culture, we have achieved 91% Sustainable Engagement score in 2018 (net of retention score) and 88% on Organizational Health Index Score in 2018.


Globe aspires to be an industry leader with purpose, helping customers discover new ways to enjoy life. As a company driven by passion and purpose, we are proud to share the result of our Purpose Survey with 3 Purpose Index Indicators: (1.) Role and Work contribution to Globe Purpose: 91 in 2019 vs 87 in 2018; (2.) Personal Purpose contribution to Globe Purpose: 88 in 2019 vs 87 in 2018; (3.) Employer NPS is the likeliness to recommend Globe as an employer: 53.40 vs 43.38 in 2018. The Purpose Survey serves as a gauge to determine how our employees resonate with the Globe Purpose, and their insights on factors that contribute to how they can live out Purpose in Globe including culture, clarity and ways of working.


Solving Problems Beyond Telecom
Aside from our employees, our business partners, vendors and suppliers play a vital role in furthering our business in a sustainable manner. We have formed an ecosystem that creates a mutually inspiring atmosphere to achieve greater integration of sustainability in business.

This year we reinforced our position as a change agent, leading Filipinos to a digitally-enabled lifestyle by incubating, developing, and operating new non-telecom businesses. By leveraging on Globe’s strengths and assets, these startups are nurtured by Globe to maximize the value they generate. We launched a new subsidiary, 917Ventures which will hold all of Globe’s incubated startups that are beyond telecommunication. 917Ventures will also now house Globe Fintech Innovations (Mynt), the company that operates mobile wallet GCash; AdSpark Holdings, a digital advertising firm; and Konsulta MD, a telehealth firm. Globe’s push for new digital businesses is seen to play an important role in actualizing the company’s vision, while sealing its future growth trajectory. Through this initiative, we are confident that the Philippines can catch up with the rest of the region in terms of ICT adoption, especially in areas of great importance like advanced medicine, health and wellness, delivery of basic services, and education.


Commitment to Environmental Conservation
As natural resources play an indispensable role in the well-being of the society, we strive to conduct our expansion and capability building in a manner that exerts minimum impact on the environment. We strive to find innovative avenues to offset our environmental impact. We have focused on deploying green network solutions and have rolled out almost 7,000 solutions in 2019.


Indeed, we are now living in times where we are experiencing the impacts of climate change. We have worked towards instating a robust Business Continuity Management Plan to mitigate the risks arising from extreme weather events and climate linked risks. We are also actively contributing to climate change mitigation. For instance, we have been able to save over 650 tons of paper through customers shifting to paperless billing. In addition, by automating and migrating to a paperless process, we were able to save over 20 tons of paper, equivalent to saving 480 trees.


We also institutionalized the avoidance of Single-Use Plastics (SUP) in our office and engaged our concessionaires to look for SUP alternatives. Last September, we held the Plastic Exchange Program in seven barangays in Metro Manila in partnership with Ayala Land and Green Antz. Over 245,000 pieces of single-use plastic waste were collected and turned into 24,500 ecobricks by Green Antz Builders, Inc. The ecobricks will be used to build community gardens and benches, a waste segregation facility and a creek fence. It would also be used for rehabilitation for daycare centers.


In 2019, Globe became a signatory to the United Nations Global Compact, and we commit to implement universal sustainability principles and integrate these into the business.


Sustaining Momentum and Growth in 2020
For the global telecom sector, interesting and promising times lie ahead. To sustain the momentum we have gained, we will ramp up infrastructure to improve network experience with a committed spending of ₱63.0 billion in capital expenditures in 2020. Our acquisitions and partnerships in the area of electronic payments (EC Pay) and IT (Yondu) point toward how we intend to grow new businesses by leveraging our core assets.


For 0917 Lifestyle, we are excited for the next year, as we expand outside our Globe stores and online shop, to open our first flagship 0917 Store in Makati. Our flagship store will be carrying our exclusive Vanguard collection – infusing Fashion and Tech in our Apparel collection, as well as key collaborations to give life to our vision for 0917 to become a Fashion and Tech Brand that consumers will desire.


Closing Remarks
This concludes my report. It is my hope that this has enabled you to understand our shared value creation story and approach toward entrenching the culture of sustainability in our business endeavors.


Thank you.