Megaworld Corp. · PSE:MEG
Megaworld — Q1 2017 Earnings Presentation
25 slides from Megaworld's earnings presentation, May 2017
Slide 1: IR Kit 1Q 2017
IR Kit 1Q 2017
Slide 2: Alliance Global Structure
ALLIANCE GLOBAL STRUCTURE Focused consumer centric brand AGI PM USD 3.1b 67% 81% 44% 49% MEG PM EMP PM RWM PM Not USD 2.7b USD 2.1b USD 1.1b Listed Real Estate Liquor Gaming QSR Pioneer township developer Largest brandy company in First integrated resort in the Second in the Philippine and leading B
Slide 3: Megaworld Structure
MEGAWORLD STRUCTURE A streamlined vehicle for AGI’s property interests Township Development Upper-middle to high income mostly in Metro Manila PHP3m – 30m (USD75k – 750k) Price range (per unit) Office and commercial Mostly BPO and Lifestyle Malls 82% 82% 100% GERI PM ELI PM Not USD 223m USD 201m Lis
Slide 4: Key Messages
KEY MESSAGES Township Rental income dominance growth • Pioneers of “Live-Work-Play- • Best position to capture BPO Learn” concept industry growth • Diversified roster; inline with • #1 BPO landlord in the PH the direction of the • High margin business government of regional • MEG – USD3.9b P12bn ren
Slide 5: Raw Land Bank
RAW LAND BANK 3,650 ha 393 ha 403 ha 225 ha 2,628 ha 5
Slide 6: Unmatched Township Developments in Metro Manila
UNMATCHED TOWNSHIP DEVELOPMENTS IN METRO MANILA 105 hectares – unmatched scale in Fort Bonifacio, one of the largest CBDs in Manila 6
Slide 7: Philippines' Premier Township Developer
Megaworld PHILIPPINE’S PREMIER TOWNSHIP DEVELOPER AND GERI PIONEER OF THE “LIVE-WORK-PLAY-LEARN” LIFESTYLE Suntrust 35.6 ha 18.5 ha 5 ha ArcoVia 12.4 ha City 50 ha 25 ha 34.5 ha EASTLAND H E I G H T S 640 ha 15.4 ha 31 ha W EST S I D E 62 ha CITY Maple 140 ha Grove 561 ha 350 ha 1,200 ha 150 ha Tota
Slide 8: Residential Business Cycle
RESIDENTIAL BUSINESS CYCLE Tried and tested model 1. Affordable and flexible Typical Payment Scheme 2. Self-funding Total contract price: P10m 3. Conservative booking • 60% Amortized Payments: P6m 4. Secured by post dated checks • Monthly: step up per year • 5% per anniversary date: P500k • 40% Turn
Slide 9: Diversified Real Estate Sales Mix
DIVERSIFIED REAL ESTATE SALES MIX in PHP millions 1Q 2016 (%sales) 1Q 2017 (%sales) 1Q 2017 Per Brand 1Q 2017 Per Location MEG 4,776 70% 4,542 66% MM Taguig 2,287 33% 1,387 20% GERI Ex-Fort 17% Bonifacio 49% Makati 279 4% 856 12% MEG 66% Fort ELI Luzon Bonifacio Pasay&Parañaque 899 13% 442 6% 17% 20
Slide 10: Stable Overall Residential Margins
STABLE OVERALL RESIDENTIAL MARGINS In PHP millions 1Q 2016 1Q 2017 %change Real Estate Sales (RES) 6,858 6,863 0.1% +Interest income on 300 304 1.2% Real Estate Sales Total RES 7,158 7,167 0.1% -Cost of RES 3,862 3,866 0.1% Gross Profit on RES 3,296 3,301 0.2% Gross Profit Margin 46.0% 46.1% +0.1pp
Slide 11: Investment Properties
INVESTMENT PROPERTIES High margin and yielding business eCommerce (Eastwood City) GFA: 22,600 sqm GLA: 21,000 sqm Construction per sqm: P27k/sqm Accommodation Value: P1k/sqm Land Acquisition Construction Period Total Cost: Month 0 12 24 36 P28k/sqm Accommodation Construction cost Value P27k/sqm P1k/
Slide 12: Investment Properties
INVESTMENT PROPERTIES High margin and yielding business One World Square (McKinley Hill) GFA: 33,000 sqm GLA: 29,200 sqm Construction per sqm: P27k/sqm Accommodation Value: P2.5k/sqm Land Acquisition Construction Period Total Cost: Month 0 12 24 36 P30k/sqm Accommodation Construction cost Value P27k
Slide 13: Growing Rental Income – Driven by Office & Commercial Leasing
GROWING RENTAL INCOME – DRIVEN BY OFFICE & COMMERCIAL LEASING Increasing Rental Income (in PhP millions) Rental 20,000 • P10bn in 2016 12,000 • P20bn in 2020 10,324 8,958 • Over 1 million GLA in 7,275 15% 5,991 2016 5,145 4,150 23% • Over 2 million GLA in 2,356 2,952 2020 4,020 2,921 3,584 1,361 25%
Slide 14: Growing Rental Income – High Margin Business
GROWING RENTAL INCOME – HIGH MARGIN BUSINESS In PHP millions 1Q 2016 1Q 2017 %change Revenues Rental 2,288 2,892 26.4% Intersegment Sales 68 60 -11.5% Total Rental Revenues 2,356 2,952 25.3% • 60/40 split between office -Operating Expense 608 746 22.8% and commercial Rental EBIT 1,748 2,206 26.2% Re
Slide 15: Office Pipeline
OFFICE PIPELINE GLA GLA 2017 Township (sqm) 2019 Township (sqm) Pacific World Tower The Mactan Newtown 12,000 World Commerce Plaza Uptown Bonifacio 105,000 One Town Square Las Piñas 20,000 BPO 7 Iloilo Business Park 9,000 South East Asian Campus McKinley Hill 50,000 One Paseo ArcoVia City 43,000 Two
Slide 16: Commercial Pipeline
COMMERCIAL PIPELINE 2017 Township Gross floor Leasable Common area (sqm) area (sqm) area (sqm) Uptown Residences Uptown Bonifacio McKinley West BPO D, E, F McKinley West Southwoods Mall Southwoods City Festive Walk Annex Iloilo Business Park 186,000 82,400 105,600 Festive Walk Mall Iloilo Business P
Slide 17: Commercial Pipeline
COMMERCIAL PIPELINE Gross floor Leasable Common 2019 Township area (sqm) area (sqm) area (sqm) Governors’ Hills Governors’ Hills Boracay Belmont Boracay Newcost 85,000 26,900 38,600 The Pad Shaw 2020 ArcoVia Palazzo ArcoVia City Boracay Chancellor Boracay Newcoast Block 20 McKinley West Roma Cainta
Slide 18: Performance Update
PERFORMANCE UPDATE In PHP millions 1Q 2016 1Q 2017 %change Revenues 11,465 11,991 4.6% Real Estate Sales 6,858 6,863 0.1% • Steady high residential base Rental 2,288 2,892 26.4% • Robust rental & hotel Hotel 271 335 23.3% income growth Other Revenues 2,048 1,901 -7.2% Cost & Expenses 8,831 9,065 2.6
Slide 19: Consolidated Revenue Breakdown
CONSOLIDATED REVENUE BREAKDOWN 1Q 2016 1Q 2017 Real Estate Real Estate 72% 70% Rental Income Rental Income 20% 24% Hotel Operations Hotel Operations 2% 3% Interest & Other Interest & Other 6% 4% In PHP millions 1Q 2016 1Q 2017 %change Real Estate Sales 6,858 6,863 0% Interest income on 437 438 0% Re
Slide 20: Solid Balance Sheet
SOLID BALANCE SHEET in PHP millions 49% 43% 39% 31% 33% 28% 26% 25% 22% 72,189 61,183 7% 52,603 31,752 33,538 26,827 28,627 25,143 22,763 24,049 20,055 16,396 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 1Q 2017 Total Borrowings Cash & Cash Equivalents Det to Equity Net Debt to Equity FY 2012 FY 2013 FY
Slide 21: Debt Maturity Profile
DEBT MATURITY PROFILE Borrowings Loans 72,189 in PHP millions 61,183 52,603 37,727 Floating Rate 38,853 1% 33,538 31,673 28,627 3,800 8,753 20,055 Fixed 6,498 34,462 24,827 24,785 Rate 20,930 22,331 13,557 99% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 1Q 2017 Bonds Loans Bonds Coupon Rate Date Issued
Slide 22: 5-Year Capex Plan
5-YEAR CAPEX PLAN PHP285.8B UNTIL 2019 PHP285.8B 2015 2016 2017 2018 2019 PHP54.5B PHP48.8B PHP60B PHP122.5B 2017 CAPEX Budget 1Q 2017 CAPEX Spending Residential/Office/ Retail/Hotel Resi/Office/Retail/Hotel PHP48B PHP11.3B 99% 80% 20% Land Banking 1% Land Banking 22 PHP12B PHP150M
Slide 23: Impact of Rental Assets on Earnings
Impact of Rental Assets on Earnings EBIT Contribution 1% 4% 0% 1% 6% 2% 0% 10% 26% 23% 22% 31% 16% 49% 8% 50% 27% 74% 71% 80% 82% 21% 64% 54% 6% 23% 21% -8% -4% -3% FLI ALI MEG RLC SMPH Residential Office Retail Hotels Others Rental Margins Rental Income as % of OPEX 67% 76% 165% 127% 49% 47% 48% 10
Slide 24: Key Takeaways
KEY TAKEAWAYS • Diversified township roster 22 townships across the country Growing contributions from outside MM • High residential base High blended GPM at 46% 1Q 2017 presales at P26bn (P90bn E2017 guidance) 1Q 2017 launches at P5.7bn (P30bn E2017 guidance) • Growing high margin rental business R
Slide 25: End of Presentation
End of Presentation