Sm Investments Corporation · PSE:SM
Sm Investments — Investor Presentation (April 2023)
56 slides from Sm Investments's investor presentation, April 2023
Slide 1: Investor Presentation
Investor Presentation April 2023
Slide 2: Table of Contents
Table of Contents 03 We are SM 43 Annex 11 Recent Developments 44 About the Philippines 18 Our Businesses 45 SMIC 10-Year Performance 19 Retail 50 Our 2021 Integrated Report 23 Property 51 Contact Information 32 Banking 34 Portfolio Investments 46 Financials 2
Slide 3: We are SM
We are SM Our Vision What We Stand For To build an ecosystem of sustainable businesses that are catalysts for responsible development in the communities Drive and we serve. Entrepreneurship Teamwork Enthusiasm Our Mission We will provide a consistently high standard of service to our customers, look
Slide 4: About SM Investments
About SM Investments SM Investments is a leading Philippine conglomerate that is invested in market leading businesses in retail, banking and property. It also invests in ventures that can capture high growth opportunities in the emerging Philippine economy Strong Proxy for Philippine Recovery and L
Slide 5: Our Businesses
Our Businesses Retail Property Portfolio Investments 26.6% 34.1% Belle Corp Atlas Mining 34.0% 95.0% 77.3% 49.7% SM Retail SM Prime Neo Associates Neo Subsidiaries 52.9% 51.0% 2GO Group Airspeed Banking 71.3% 74.1% MyTown Goldilocks 34.0% 100.0% 45.3% 22.5% CityMall Philippine Geothermal BDO China B
Slide 6: Leading Philippine Conglomerate
Leading Philippine Conglomerate Our three largest companies – SMIC, SM Prime and BDO – comprise ~30% of the value of the Philippine Index Philippine Conglos Philippine Retailers Philippine Banks Property Developers Market Cap ($ bn) Total Sales ($ mn) Total Assets ($ bn) Market Cap ($ bn) SMIC 19.5
Slide 7: Our Business Footprint
Our Business Footprint Philippines 3,512 retail outlets 82 malls GDP Population 2,290 bank branches Distribution Distribution Luzon (ex-NCR) Metro Manila (NCR) 2,122 retail outlets 961 retail outlets 44 malls 24 malls 779 bank branches 968 bank branches 2021 Regional GDP Growth NCR 4.38% Luzon 6.66%
Slide 8: Our Leadership Team
Our Leadership Team Our Leadership Team Frederic C. Jose T. Sio Teresita T. Sy Henry T. Sy, Jr. Chairman Vice Chairperson Vice Chairman DyBuncio President/CEO We are a purpose driven company with the fundamental belief that business growth and social development go together. To make this happen, we
Slide 9: How We Create Shared Value
How We Create Shared Value Our Valued Resources What We Do Our Path to Sustainable Growth We create inclusive Our Brand socioeconomic opportunities Our Connections to We develop integrated Our Customers properties centered on our malls as community centers We facilitate development Our People We cre
Slide 10: External Recognitions
External Recognitions RESPONSIBLE ENTERPRISE AWARDS: 2022 WORLD'S BEST EMPLOYERS sce AP we y me d ESG raulfiawN Q INVESTOR < CORPORATE w XY Vale} ¥ Le on Asset * vena) sustananvres ESG REGIONAL TOP RATED INDUSTRY IR] TOP RATED magazine ASEAN G CORPORATE GOVERNANCE [ASEAN CORPORATE GOVERNANCE SCORECA
Slide 11: Recent Developments
Recent Developments 12 FY 2022 Financial Performance 13 Recent Events 14 Together against Climate Change 15 Together for Relief and Resilience 16 Digital Innovation 11
Slide 12: FY 2022 Financial Performance
FY 2022 Financial Performance Figures in PHP billion except percentages SM Investments FY 2022 FY 2021 % Chg Revenues 553.8 432.4 28% Net Income 61.7 40.4 53% Net Margin (inc-NCI) 15.2% 12.6% - ROE 13.1% 9.4% - ▪ Strong pandemic recovery, led by economic reopening Net Debt:Equity 35 : 65 38 : 62 - a
Slide 13: Recent Events
Recent Events Parent/Group Property ▪ Surpassed pre-pandemic top and bottomline performance ▪ Weekend foot traffic above 97% of pre-covid level, operational occupancy ▪ ESG recognitions from: at ~92%, tenant sales at 100% of pre-covid level, SM Supermalls ▪ Sustainalytics: Top-Rated ESG Industry and
Slide 14: 2GO Tender Offer
2GO Tender Offer SMIC, as the majority shareholder, will undertake a tender offer to take the company private ▪ To provide SMIC with greater exposure to the long-term growth and financial success of 2GO ▪ SMIC engaged BPI Capital which issued an fairness valuation report ▪ Price of the offer: Php 14
Slide 15: Together against Climate Change
Together against Leading in financing 58 renewable energy projects Climate Change Net Zero SM Prime committed to leading in renewable energy use, exceeding Philippine goals At least 50 % Renewable Energy by 2022 15
Slide 16: BDO's Sustainable Financing
BDO’s Sustainable Financing Installed As of 2022 No. of Projects Capacity (MW) Biodiesel 1 60 ML/Y 2,252 MW 71,142,786 913.,491 Total installed Equivalent tree Equivalent passenger Bioethanol 2 4.1 ML/Y renewable energy seedlings grown vehicles taken off capacity in megawatts over 10 years roads yea
Slide 17: Digital Innovations
Digital Innovations We continue to work hard to develop innovative online and offline delivery channels that are integrated into our business and enhance our customer service Retail Malls Banking Logistics Multi-channel Ordering and High Touch Service Payments Last Mile 17
Slide 18: Using Our Channels
Using Our Channels Our enhanced digital platforms complement our expansion, getting us even closer to our customers 18
Slide 19: Our Businesses
Our Businesses 19 Retail 23 Property 32 Banking 34 Portfolio Investments 19
Slide 20: Retail
Our group was born out of retailing. With more than 30 brands, both food and non-food, we serve as a platform for local and international brands to be more accessible to the Filipino market Store Network GSA 77.3% 72 THE SM Store 844 Effective Interest 1,611 Brand Affiliates 653 65 SM Supermarket 38
Slide 21: Our Retail Brands
We stand by our tagline, “We’ve got it all for you”. Our brands Our Retail Brands provide a wide selection of best local products and in-demand global brands for every member of the family Department Stores Athleisure and Fashion Health, Beauty and Wellness Philippine Crafts Foot wear Food Retail Ho
Slide 22: Food Retail
Food Retail Format Description SKUs Large format anchor tenant in Supermarkets >50k SM malls Stand-alone large format Hypermarkets destinations with 60/40 45k-50k food/non-food mix Mid-sized format tenant 30k-45k WalterMart located in WalterMart Malls expanding in Luzon Stand-alone mid-sized format
Slide 23: Non-Food Retail
Non-Food Retail Department Stores – The SM STORE ▪ Anchor tenants in SM malls ▪ Wide range of merchandise and price points ▪ Targets all customer segments ▪ Pioneering digital shopping platforms Specialty Retailers ▪ Leading local category specialist ▪ Aspirational but affordable foreign brands ▪ Hi
Slide 24: SM Prime
SM Prime We build integrated lifestyle cities with malls serving as meeting centers, residential developments, hotels, convention centers and office spaces, helping facilitate the rapid urbanization of local communities Developments 49.7% 22 Integrated Lifestyle Cities Effective Interest 82 Malls in
Slide 25: SM Malls
SM Malls SM City Zibo, PHILIPPINES CHINA China 82 7 Malls 9.0mn 1.4mn Total GFA in SQM SM City Cebu 19,562 1,856 Tenants SM City 2.9mn 0.1mn Average Daily Sorsogon Pedestrian Count Data as of FY2022, GFA (Gross Floor Area) 25 Entry Deck
Slide 26: SM Malls Philippines
SM Malls Philippines SM Aura ▪ In terms of GFA, Metro Manila malls account for 42%, Luzon (ex NCR) is 38%, Visayas is 12% and Mindanao is 8% ▪ SMPH mall expansion is geared towards the provinces. The focus is to cover most of Northern Luzon, Visayas and the SM CDO progressive cities in Mindanao Down
Slide 27: SM Malls China
SM City, Zibo SM Malls China ▪ Construction for the expansion of SM Xiamen and the new SM Yangzhou is on-going ▪ Operates 7 malls with a total GFA of 1.4m sqm SM Tianjin SM City, Zibo 27
Slide 28: SM Residences
SM Residences Vine Residences A leading residential developer of high-rise buildings (HRBs), mid-rise buildings (MRBs) and single-detached house and lots Projects Overview (as of FY 2022) SMDC Projects to date 64 (46 in NCR) Ready-for-Occupancy (RFO) 8,068 (Unsold Units) Ongoing Construction 20,405
Slide 29: SM Commercial Properties
SM Commercial Properties Three E-com Center ▪ Have 18 office buildings with a combined GFA of almost 1.5 sqm ▪ Five of these 18 offices are located in the Mall of Asia Complex in Pasay City, which provide a combined GFA of 627,000 sqm ICE Tower ▪ Have an available landbank of 115 hectares for future
Slide 30: SM Hotels and Convention Centers
Conrad Manila SM Hotels and Convention Centers Conrad Manila ▪ Operating 9 hotels with over 2,200 rooms; 6 Convention Centers, and 2 Trade Halls with approximately 49,000 sqm of leasable space as of December 2022 Convention GLA Hotels Rooms Centers (sqm) Taal Vista, Tagaytay 261 SMX Manila 17,170 Ra
Slide 31: SM Prime Integrated Lifestyle Cities
SM Prime Integrated Lifestyle Cities SM Prime has integrated property developments in Metro Manila and in key provincial cities in the Philippines Key Provincial Cities Metro Manila Novaliches, Quezon City Clark, Pampanga Marilao, Bulacan Fairview, Quezon City Olongapo, Zambales North EDSA Taytay, R
Slide 32: Pico de Loro Development, Batangas
Pico de Loro Development, Batangas ▪ Sprawling seaside sanctuary flanked by the sea on the West, mountain ranges in the East, with thirteen coves, three of which are Marine Protected Areas 32 ▪ 90 minutes from the Mall of Asia Complex
Slide 33: BDO Unibank, Inc.
BDO Unibank , Inc. BDO is a leader and investor in banking products and services, making financial services more accessible to Filipinos 45.3% Effective Interest 1,652 PHP149.2bn Branches in the Philippines Net Interest Income 2 PHP71.5bn Foreign branches Other Income 4,655 PHP57.1bn ATMs Net Income
Slide 34: China Banking Corporation
China Banking Corporation China Bank has over a hundred years of banking heritage anchored on good governance. The bank has been instrumental in building generations of enterprises in the country 22.5% Effective Interest PHP45.6bn 640 Net Interest Income Branches PHP10.1bn 1,044 Other Income ATMs PH
Slide 35: Portfolio Investments
Portfolio Investments 2GO Group Airspeed Atlas Mining Belle Corp. Goldilocks 52.9% 51% 34.1% 26.6% 74.1% MyTown Neo Group Philippine Geothermal ▪ We invest in new and related sectors that help capture high growth opportunities in the Philippines ▪ We build market leaders through access to the synerg
Slide 36: 2GO Group
2GO Group The largest and broadest logistics and transportation solutions provider integrating Shipping, Logistics and Distribution Shipping ▪ Efficient and reliable 9 vessel fleet ▪ Serving 17 ports of call Express and Logistics ▪ 48 warehouse facilities nationwide ▪ Sea, land and air-freight expre
Slide 37: Airspeed
Airspeed Airspeed is a reliable end-to-end logistics solutions and express courier. Aiming to provide support to help clients build and grow their businesses ▪ Tailor fit services that are based on the client’s logistics needs so that their shipment will be transported without any issue. ▪ Operating
Slide 38: Atlas Consolidated Mining
Atlas Consolidated 15,760 Mining trees planted since 2006 Atlas Mining is one of the largest copper concentrate producers in the Philippines ▪ Copper mine with 22 years mine life ▪ Over 408m tonnes of proven and probable reserves Operating Information FY 2022 Daily Milling Avg 46,189 Mahogany (In dm
Slide 39: Belle Corporation
Belle Corporation Belle Corporation is a developer of premium resort destinations and leisure properties City of Dreams Manila ▪ Award-winning integrated resort operated by partner, Melco ▪ Total gross floor area: 315,531 sqm City of Dreams ▪ Gaming floor area: 21,324 sqm Manila ▪ ~2,333 electronic
Slide 40: Goldilocks
Goldilocks Goldilocks is a well-loved Filipino heritage brand trusted by customers for over 55 years ▪ 11 manufacturing facilities serving an extensive retail footprint of over 800 company owned and franchise stores in the Philippines ▪ Resilient amidst the pandemic, Goldilocks pivoted to cater to c
Slide 41: MyTown (PULS)
MyTown (PULS) A leading developer and operator of purpose-built co-living communities providing housing solutions for young urban professionals and corporations ▪ Pioneered the concept of urban dormitories as communities with amenities ▪ Scalable solution to metro traffic and lack of affordable hous
Slide 42: NEO Buildings Net Zero
One/NEO, Bonifacio NEO Buildings Global City The NEO Buildings consist of 7 office buildings located within the largest and only PEZA certified IT park in Bonifacio Global City, Metro Manila ▪ NEO is the first commercial property portfolio in the world to be certified as Carbon Net Zero under the ED
Slide 43: Philippine Geothermal Production Company (PGPC)
Philippine Geothermal Production Company (PGPC) PGPC operates the Tiwi and Mak-Ban steam fields, in operation since 1979, generating geothermal steam sufficient to produce c.300MW of electricity. PGPC also has $99.4mn several other greenfield concession areas for geothermal Revenues in 2021 steam de
Slide 44: Annex
Annex 44 About the Philippines 45 SMIC 10-Year Performance 46 Financials SM Investments SM Prime BDO China Bank 50 Our 2021 Integrated Report 51 Contact Information 44
Slide 45: Philippines: Strong Macroeconomic Fundamentals
Philippines: Strong Macroeconomic Fundamentals Young Workforce with Rising Incomes Opportunities Per Capita GDP Growth Median Age ▪ Improved Infrastructure development GDP ▪ Provincial growth – Luzon, Visayas, Mindanao $3,623 7.6% 26 ▪ Job creation and inclusive growth Per Capita Consumption Driven
Slide 46: SM Investments' 10-Year Performance
SM Investments’ Asset Growth 10-Year Performance SMIC Retail SM Prime BDO 12% 13% 1,400 Market Cap Growth 10% 10% SMIC 7% p.a. BDO 8% p.a. 1,200 SM Prime 14% p.a. 1,000 Revenue Growth 14% In PHP Bn 800 9% 9% 6% 600 400 SMIC Retail SM Prime BDO Net Income Growth 200 15% 11% - 2012 2013 2014 2015 2016
Slide 47: SM Investments Corporation FY 2022 Consolidated Results
SM Investments Corporation Portfolio Investments Banking FY 2022 Consolidated Results In PHP Billion 8% 6% Particulars FY 2022 FY 2021 % Chg FY 2020 FY 2019 FY 2018 18% Property Revenue 553.8 432.4 28.1% 394.2 501.7 449.8 Net Income to Parent 61.7 40.4 52.6% 23.4 44.6 37.1 Revenue Net Margin (inc-NC
Slide 48: SM Retail Consolidated
SM Retail Consolidated ▪ Economic reopening, pent up Financials 2022 2021 Chg consumer demand and strong Revenue 378.2 303.9 24% mall foot traffic, drove revenues SSSG 22.2% -1.1% ▪ Net income grew by 86% driven EBIT Margin 7.6% 5.6% by Non-Food sales Net Income 17.9 9.6 86% Figures in PHP B except
Slide 49: SM Retail – The SM Store
SM Retail – The SM Store Financials 2022 2021 Chg ▪ Fashion led growth in department Revenue 98.8 61.5 61% stores as students returned to SSSG 59.9% 10.9% school and workers reported to EBIT Margin 6.6% -0.5% offices Net Income 4.5 -0.6 896% ▪ Net income and margins positive Figures in PHP B except
Slide 50: SM Retail – Food Group
SM Retail – Food Group Revenue by Format Financials 2022 2021 Chg Revenue 219.6 196.2 12% Alfamart 11% SSSG 9.4% -6.7% SM Supermarket EBIT Margin 5.0% 4.9% Waltermart 28% Net Income 8.4 7.1 19% 16% Figures in PHP B except percentages SM Hypermarket Profile 18% Store Count 1,829 1,608 14% Savemore Se
Slide 51: SM Retail – Specialty
SM Retail – Specialty Financials 2022 2021 Chg Revenue 85.2 65.4 30% SSSG 26.0% 7.3% ▪ Healthy growth across specialty EBIT Margin 11.2% 9.8% brands Net Income 7.2 4.7 51% Figures in PHP B except percentages ▪ Net income grew by 51% Profile Store Count 1,611 1,539 5% Selling Area 0.7 0.6 4% Gross Se
Slide 52: SM Prime FY 2022 Results
SM Prime FY 2022 Results In PHP Billion Consolidated FY 2022 FY 2021 %Chg Residences FY 2022 FY 2021 % Chg Revenues 105.79 82.32 29% Revenues 40.08 45.9 -13% Net Income 30.10 21.79 38% Operating Income 16.06 19.89 -19% Operating Income 49.24 32.41 52% EBITDA 16.19 20.01 -19% Return on Equity 9% 7% -
Slide 53: BDO Financial Highlights
BDO Financial Highlights Loans Growth Industry* BDO CASA Deposits Time Deposits CASA Ratio FY 2022 FY 2021 % Chg (In PHP Bn) 85% 4,000 81% 79% Net Interest Income 149.2 131.3 13.6% 3,500 3,221 76.67% Other Income 71.5 61.4 16.6% 14% 3,000 2,821 Net Income1 57.1 42.8 33.3% 2,610 684 56.67% 416 (PHP B
Slide 54: China Bank Financial Highlights
China Bank Financial Highlights Loans Growth Deposits FY 2022 FY 2021 % Chg (In PHP Bn) Growth Industry Net Interest Income 45.6 39.1 16.6% CASA High Cost FCDU LDR 16% 2,000 75% Other Income 10.1 9.6 5.2% 15% 73% 1 13% Net Income 19.1 15.1 26.5% 70% 14%1,500 69% 67% Assets 1,330.0 1,112.0 19.6% 13%
Slide 55: Our Integrated Report <IR> 2021
Our Integrated Report <IR> 2021 In 2020, SMIC adopted the Integrated Reporting Framework developed by the International Integrated Reporting Council (IIRC) Our 2021 integrated report follows the theme of “Recovering Together” and further communicates our commitments to sustainable business practices
Slide 56: Contact Information and Disclaimer
Contact Information and Disclaimer Investor Relations Office Office Number: +63 2 8857-0100 SM Official Website: Email Address: ir@sminvestments.com Official Facebook Account: www.facebook.com/sminvestments.ir Official Twitter Account: @SM_INVESTMENTS PSE Ticker SM Bloomberg Ticker SM PM Equity Reut