Alliance Global Group Inc. · PSE:AGI
Alliance Global — H1 2017 Earnings Presentation
52 slides from Alliance Global's earnings presentation, Aug 14, 2017
Slide 1: Alliance Global Group Inc 1H 2017 Analyst Presentation
ALLIANCE GLOBAL GROUP INC 1H 2017 Analyst Presentation 14 August 2017 1
Slide 2: AGI Group Structure
AGI Group Structure A ALLIANCE GLOBAL VA ALLIANCE GLOBAL AGI PM (US$ 2.7bn) 67% 44% 82% WK = TRAVELLERS eS MEGAWORLD EMPERADOR INC. INTERNATIONAL RWM PM MEG PM EMP PM Number 1 in Number 1 in the First integrated townships liquor industry resort in the Number 1 in Emperador Brandy country BPO office
Slide 3: 1H 2017 performance highlights
Alliance Global Group Inc. 1H 2017 performance highlights 3
Slide 4: P492bn total resources, P140bn revenues
P492bn P140bn 2% 3,643 in total resources in total Parent net Hotel room keys (2016) revenues (2016) debt/equity (2016) (end-Jun17)
Slide 5: P&L highlights 2Q17 vs 2Q16
P&L highlights (Pbn) 2Q17 2Q16 % chg Comments Group revenues 33.14 33.99 -3% Megaworld 12.14 11.52 5% Sustained strong growth in rentals; higher completion of residential projects. Emperador 9.04 9.41 -4% Improvement in whisky sales cushions impact of softer brandy sales; lower interest & other inco
Slide 6: P&L highlights 1H2017 vs 1H2016
P&L highlights (Pbn) 1H2017 1H2016 % chg Comments Group revenues 66.84 67.07 -0% Megaworld 23.94 22.97 4% Robust performance of rental segment; higher completion of residential projects Emperador 18.01 18.34 -2% Stronger whisky sales capped impact of softer brandy sales; lower interest & other incom
Slide 7: Revenue contribution by company
P66.8bn P67.1bn GADC, GADC, 10.9bn, 12.3bn, MEG, 16% MEG, 18% 23.9bn, 23.0bn, 36% 34% RWM, RWM, 13.8bn, 11.2bn, 21% 17% EMP, EMP, 18.3bn, 18.0bn, 27% 27% MEG EMP RWM GADC Others MEG EMP RWM GADC Others 7
Slide 8: Net income contribution by company
P6.7bn -8% P7.3bn GADC , GADC , RWM, 0.3bn , 0.2bn , RWM, 3% 0.2 bn , 4% 0.8bn , 3% 10% MEG, EMP, 3.9 bn, 2.2bn , MEG, 48% 30% 4.3bn , EMP, 59% 2.8bn , 34% MEG EMP RWM GADC Others MEG EMP RWM GADC Others 8
Slide 9: Quarterly revenues and net income by company
38.2 3.9 3.8 40.0 4.5 3.8 33.1 34.0 34.5 33.7 33.1 4.0 3.3 3.6 3.2 35.0 3.5 30.0 3.0 25.0 2.5 20.0 2.0 1.5 15.0 1.0 10.0 0.5 5.0 - - (0.5) Q116 Q216 Q316 Q416 Q117 Q217 Q116 Q216 Q316 Q416 Q117 Q217 Others 0.6 0.4 0.4 0.3 0.7 0.7 Others (0.1) (0.3) (0.2) (0.5) (0.0) (0.3) GADC 5.2 5.6 5.6 6.3 6.0 6.
Slide 10: Revenue and income trends by company
100 87 90 78 72 75 80 70 55 60 50 40 31 31 30 20 10 - 2012 2013 2014 2015 2016 2017E 1H17 MEG EMP RWM GADC 10
Slide 11: Borrowings and cost of debt
• Increased borrowings to fund capex. • Average cost of debt stable. 12% 144 192 55 10% 118 1 30 33 8% 2 97 20 22 2 19 14 32 6% 70 64 2 29 13 29 4% 22 24 2 29 1 18 2% 71 19 - 61 53 - 34 29 20 0% 2012 2013 2014 2015 2016 1H17 2012 2013 2014 2015 2016 1H17 MEG EMP RWM MEG EMP (with ELS) RWM GADC Paren
Slide 12: Group net debt/equity
• In end-June 2017, group net debt/equity stood at 0.37x. • Parent net debt/equity remained low at 0.02x. Net debt (cash) Net debt/ equity (X) (Pbn) 120.0 0.37x 0.4x 0.34x 100.0 0.3x 80.0 0.17x 0.2x 60.0 40.0 0.1x 0.02x 20.0 0.0x - -0.1x (20.0) -0.11x -0.2x (40.0) -0.17x -0.20x (60.0) -0.3x 2011 201
Slide 13: Outlook by business
• Megaworld More resi projects for launch for the balance of the year. Expanding rental GLA capacity by ~20%; bring contribution of rentals to P12bn this year. • Emperador Aggressive push for new products both in the domestic and international markets. Increasing share of millennial drinks i
Slide 14: Megaworld Corporation 1H2017 performance highlights
Megaworld Corporation 1H2017 performance highlights 14
Slide 15: Megaworld key facts
Townships sqm Office hectares GLA landbank BPO Clients sqm Commercial GLA 15
Slide 16: Megaworld revenues and margins
• Total revenues +5% YoY to P24.3bn. • Real estate revenues +2% to P16.8bn; total realized gross profit +12% amid increasing project completion. • Real estate sales stood at P13.6bn: 67% MEG+SPI, 16% GERI, 17% ELI. • Metro Manila/provincial projects split: 73% / 27% • Rentals (office and commercial)
Slide 17: Megaworld revenue breakdown
11.2 11.8 11.6 11.8 +6% 10.8 10.5 11.8 11.6 0.3 0.3 0.3 0.3 10.5 0.3 2.6 0.3 2.6 3.0 3.0 0.6 0.6 2.4 2.4 0.5 5.0 5.0 6.0 8.2 8.3 8.8 7.8 8.3 8.4 16.5 16.7 16.8 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Development Rental Hotels Development Rental Hotels 100% 3% 2% 2% 3% 3% 3% 100% 2% 3% 3% 22% 24
Slide 18: Megaworld EBIT breakdown
5.1 9.3 +19% 4.7 8.6 4.2 4.2 0.1 7.9 3.9 3.7 0.0 0.1 0.1 0.1 0.1 0.1 2.3 0.1 0.1 2.0 4.5 2.0 2.2 4.0 2.0 3.7 1.7 2.7 2.7 4.5 4.7 1.9 2.1 1.8 2.0 4.0 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Development Rental Hotels Development Rental Hotels 100% 2% 2% 1% 2% 2% 1% 100% 2% 1% 1% 80% 42% 80% 48% 4
Slide 19: Megaworld gross profit and EBIT margins
RES, GP (Pbn) GP margin Rentals (Pbn) EBIT margin 46% 45% 47% 46% 46% 46% 3.5 74% 75% 75% 75% 75% 75% 85.0% 8.0 50% 2.8 70.0% 6.0 40% 2.1 55.0% 4.0 30% 1.4 40.0% 2.0 20% 0.7 25.0% - 10% - 10.0% Q116 Q216 Q316 Q416 Q117 Q217 Q116 Q216 Q316 Q416 Q117 Q217 Real estate sales Gross profit GP margin Total
Slide 20: Megaworld realised gross profit and net debt
3.8 3.5 2.9 2.9 4.0 3.5 2.6 2.6 2.6 3.0 3.1 2.9 2.3 2.6 0.8 1.1 1.2 2.5 1.1 1.1 3.0 1.2 1.0 1.0 1.0 1.0 2.0 0.9 0.9 2.0 3.0 1.5 2.4 2.4 1.0 1.7 2.0 1.9 1.0 1.8 1.8 1.4 1.5 1.5 1.6 0.5 0.0 Q116 Q216 Q316 Q416 Q117 Q217 - Q116 Q216 Q316 Q416 Q117 Q217 Realised GP - current year Realised GP - prior yea
Slide 21: Total of 22 Townships
35.6 ha 18.5 ha 12.4 ha 5 ha 50 ha 25 ha 34.5 ha * 640 ha 15.4 ha 62 ha 31 ha W E S T S I D E CITY 561 ha 140 ha Maple* Grove 1,200 350 ha ha 150 ha Megaworld 34 ha GERI 30 ha Suntrust 53 ha 72 ha Total of 173 ha 22 Townships 11 ha 21 *Launched in 2016
Slide 22: Rental income and GLA growth
20.0 Rental Income (in Pb) 2.5 13 GLA (million sqm) 2.0 10.0 10 9.0 0.6 1.5 7.3 7 6.2 5.1 0.3 1.0 3.9 4 2.7 0.2 0.2 1.5 0.2 0.5 0.1 0.2 0.9 1 0.1 0.6 0.7 0.4 0.4 0.5 0.3 - -2 2010 2011 2012 2013 2014 2015 2016 2020 Office GLA Commercial GLA Rental 22
Slide 23: Festive Walk, Iloilo Business Park
Festive Walk is the longest retail and dining strip in Western Visayas. It is located in Megaworld’s Iloilo Business Park. 23
Slide 24: Emperador Inc. 1H2017 performance highlights
Emperador Inc. 1H2017 performance highlights 24
Slide 25: Emperador key facts
1st Dalmore flagship store in the Sales offices Distribution Philippines nationwide network Consolidated Total resources Revenues(2016) (end-Jun2017)
Slide 26: Emperador revenues and margins
• Consolidated revenues down slightly to P18.1bn. • Brandy revenues stood at P12.9bn (71% of total). • Brandy sales -2%, but EMP’s aggressive push for its small brandy SKU Bunso and new products Andy Cola, Smirnoff Mule and Raffa Sparkling is gaining market traction. • Includes incremental sales con
Slide 27: Emperador sales and net income by brandy and whisky
13.1 22.7 -1% 18.4 18.1 9.0 9.4 9.5 3.7 9.0 9.1 6.5 2.7 2.7 5.0 5.2 2.2 2.4 2.8 9.4 16.2 6.7 6.7 6.8 6.5 6.4 13.4 12.9 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Brandy Whisky Brandy Whisky 2.8 -22% 4.3 2.0 0.4 3.4 0.2 1.5 1.5 2.7 1.4 1.2 0.7 0.4 0.2 0.3 2.4 0.3 0.2 0.5 1.9 3.6 1.2 1.2 3.1 1.2 1.0
Slide 28: Emperador brandy and whisky sales and income
13.2 22.7 9.4 17.8 17.8 8.9 8.9 3.7 9.0 8.8 6.5 2.2 2.7 2.7 2.4 2.7 4.9 5.1 9.5 16.2 6.6 6.7 6.5 12.9 12.7 6.3 6.2 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Brandy Whisky Brandy Whisky 5.7 9.0 -1% 1.0 6.0 1.8 5.9 3.3 3.2 2.7 3.0 2.9 0.7 1.3 1.5 0.8 0.7 0.6 4.7 0.7 7.1 2.6 4.7 4.5 2.1 2.4 2.3 2.2
Slide 29: Emperador margins and net debt
Sales, GP (Pbn) GP margin Sales, GP (Pbn) GP margin 48% 4.0 31% 35% 10.0 42% 50.0% 28% 29% 3.5 27% 27% 25% 30% 8.0 36% 40.0% 32% 35% 34% 3.0 25% 2.5 6.0 30.0% 20% 2.0 15% 4.0 20.0% 1.5 1.0 10% 2.0 10.0% 0.5 5% - 0.0% - 0% Q116 Q216 Q316 Q416 Q117 Q217 Q116 Q216 Q316 Q416 Q117 Q217 Brandy sales Gross
Slide 30: Emperador initiatives
"A ALLIANCE GLOBAL x a . . . . EMPERADOR INC. Initiatives: eatin wo = Age...” DALMORE. Aaa ~ ry shackleton | | a DOR es Arietta 8 ANDYCOLA = a LIG HT BRANDY
Slide 31: Pushing new products in the market
"A ALLIANCE GLOBAL = EMPERADOR INC. Initiatives: Pushing new products in the market Cota Goes Swabe . | EMPERADOR | &EOLA
Slide 32: Andy Cola in Food Parks
YA ALLIANCE GLOBAL 3 A EMPERADOR INC. Andy Cola: now a favorite drink in Food Parks
Slide 33: Emperador Hotshot
Emperador Hotshot contains cinnamon, a well-known all-natural antioxidant. Even if you drink a bottle, it will not give you a hangover on the following day.
Slide 34: Travellers International Hotel Group 1H2017 performance highlights
Travellers International Hotel Group Inc. 1H2017 performance highlights
Slide 35: Travellers key facts
sqm hotel hotel gaming Slots Capacity retail occupancy tables MGB retail rooms rate (1H17) (end-Jun17) (end-Jun17) outlets space Gross Revenues Total Resources (end- EBITDA (2016) Jun2017) (2016)
Slide 36: Travellers revenues and margins
• Net revenues -17% to P10.4bn. • GGR -22% to P9.2bn. • 27 days of non-casino operations weighed heavily on GGR. • Mass GGR (mass tables and slots/ETGs) -12% although hold rate was steady at 10%. • Blended hold rate improved to 5.4% (from 4.8% a year before). • Mass/VIP GGR mix now at 71%/29% (from
Slide 37: Gross gaming and non-gaming revenues
7.2 7.1 13.7 13.8 -18% 6.6 6.7 6.3 0.9 0.9 1.9 1.9 1.0 1.1 11.2 1.1 4.9 2.0 0.9 5.6 6.2 6.2 5.6 11.8 11.8 5.3 9.2 4.0 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Gross gaming Non-gaming Gross gaming Non-gaming 100% 100% 15% 13% 12% 16% 17% 18% 14% 14% 18% 80% 80% 60% 60% 85% 87% 88% 84% 83% 82% 86%
Slide 38: Gross gaming revenue: mass vs VIP
6.2 6.2 5.6 5.6 11.8 11.8 -22% 5.3 2.4 2.7 9.2 1.9 1.9 1.2 4.0 4.3 4.6 2.7 1.4 3.7 3.8 3.5 3.7 4.0 7.5 7.2 6.6 2.6 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Mass VIP Mass VIP 100% 100% 23% 30% 80% 34% 39% 34% 36% 80% 37% 39% 43% 60% 60% 40% 77% 40% 66% 66% 64% 70% 61% 57% 63% 61% 20% 20% 0% 0% Q1
Slide 39: Travellers gross profit, EBITDA and net debt
Gross profit GP margin EBITDA (Pbn) EBITDA margin (Pbn) 4.5 60% 54% 2.0 26% 30% 4.0 53% 22% 23% 22% 3.5 52% 51% 52% 55% 21% 25% 3.0 1.5 48% 50% 16% 20% 2.5 2.0 1.0 15% 45% 1.5 10% 1.0 40% 0.5 5% 0.5 - 35% - 0% Q116 Q216 Q316 Q416 Q117 Q217 Q116 Q216 Q316 Q416 Q117 Q217 Gross profit Gross profit marg
Slide 40: Multi-phased expansions
TRAVELLERS a INTERNATIONAL 4 ALLIANCE GLOBAL Initiatives: Multi-phased expansions at
Slide 41: Sheraton, Hilton and Maxims hotels
Sheraton Hotel Manila Hilton Manila Hotel Maxims Hotel (391 keys) (357 keys) (191 keys) 41
Slide 42: Resorts World Manila LED stairway
Resorts World Manila houses the first LED stairway in the Philippines?
Slide 43: Golden Arches Development Corporation 1H2017 performance highlights
Golden Arches Development Corporation 1H2017 performance highlights 43
Slide 44: GADC key facts
In sales revenues (2016) Systemwide same- store sales growth (1H 2017) dessert centers (2016) McDelivery hubs (2016)
Slide 45: GADC sales and margins
• Sustained +12% growth in sales revenues to P12.2bn. – Sales by co-owned stores (90% of total): +12% to P11bn – Rent, royalty & others (10%): +18% to P1.2bn – Systemwide same-store sales growth +5.2% YoY. – Number of stores by end-June 2017: 533 vs 494 a year before. – Average sales per store +5% Y
Slide 46: GADC revenues and gross profit
6.2 6.3 12% 5.2 5.6 5.6 5.9 11.8 10.2 10.8 0.5 0.6 0.5 0.5 0.6 0.5 1.1 1.2 1.0 5.1 5.0 5.7 5.3 5.6 11.0 4.7 9.8 10.7 Q116 Q216 Q316 Q416 Q117 Q217 1H16 2H16 1H17 Sales by co-operated restaurants Rent, royalty & others Sales by co-operated restaurants Rent, royalty & others Revenues Gross profit Reve
Slide 47: GADC EBIT, net income and net debt
EBIT, Net Margins EBIT, net Margins income (Pbn) income (Pbn) 9% 1.20 9% 10.0% 0.60 8% 8% 8% 10.0% 8% 8% 1.00 7% 0.50 6% 8.0% 6% 6% 7% 8.0% 0.40 5% 5% 0.80 5% 5% 6.0% 5% 6.0% 0.30 4% 0.60 4.0% 4.0% 0.20 0.40 0.10 2.0% 0.20 2.0% - 0.0% - 0.0% Q116 Q216 Q316 Q416 Q117 Q217 Q116 Q216 Q316 EBIT Net inco
Slide 48: Same-store sales growth and store count
14.0% 12.6% Systemwide Sales per store sales Pbn) (Pm) 12.0% 12.0 20 20.5 20 20.0 10.0% 10.0 19.5 7.2% 9.9% 7.4% 8.0 19 8.0% 19 19.0 5.3% 5.2% 18 6.0% 7.7% 6.0 18.5 7.2% 18 4.0 18.0 4.0% 6.8% 5.3% 5.2% 3.5% 17.5 2.0% 2.0 17.0 0.0% - 16.5 Q116 Q216 Q316 Q416 Q117 Q217 Q116 Q216 Q316 Q416 Q117 Q217 SS
Slide 49: McDonald's store locations
Lagro, Quezon City Cubao, Quezon City Tagaytay Kawit, Cavite
Slide 50: McDonald's Philippines facts
McDonald’s Philippines only uses farm-fresh, low-cholesterol, grade-A eggs from local suppliers. The Philippines is the only country under the McDonald’s international operations that serves McSpaghetti.
Slide 51: Key strategies
• Key strategies: Continue pursuit of ongoing expansion projects across all business segments. Launch more residential projects to take advantage of improving market demand. Push new liquor products in the domestic and international markets. • Still on the lookout for opportunities : new produ
Slide 52: Thank you
Thank you. 52
Alliance Global Group — H1 2017 Earnings Presentation on 6ix