Ayala Corp. · PSE:AC
Ayala — Investor Presentation (February 2014)
21 slides from Ayala's investor presentation, February 2014
Slide 1: Investor Presentation February 2014
I N V E S T O R P R E S E N TAT I O N February 2014 1
Slide 2: Key Messages
K E Y M E S S AG E S Positive momentum in the domestic market is sustained… Ayala’s core businesses are sustaining strong growth alongside the robust Philippine macroeconomic environment Ayala is rebalancing its existing portfolio as it scales up new businesses Ayala has a healthy balance shee
Slide 3: The Philippines is still one of the fastest growing countries in the region
The Philippines is still one of the fastest growing countries in the region P H I L I P P I N E G D P G R OW T H R E G I O N A L G D P G R OW T H (3Q13) 6.5%- 7.6% 7.5% 7.8% 7.2% 7.0% 6.8% 5.8% 5.6% 5.0% 3.9% 2.7% Philippines Malaysia Singapore China India Thailand 2010 2011 2012 YE13 2014F* Source:
Slide 4: Ayala Group Overview
AYA L A G R O U P O V E R V I E W CORE BUSINESSES: INTERNATIONAL: GROWTH PLATFORMS: Growth and Expansion Improving Profitability Scale-Up 49.0% 58.0% Largest and most diversified Growing portfolio property developer in the 100.0% of renewable and country Among the top 20 EMS conventional companies i
Slide 5: Key Portfolio Movements
KEY PORTFOLIO MOVEMENTS Timeline of Investments and Equity Commitments (US$) Established AC Infra and won Signed purchase Daang Hari Supported ALI’s agreement for ~20% Expanded SLTEC of GNPower (600MW) Phase2 (135MW) Launched VW project equity placement, distributorship Won automated fare 50M adjust
Slide 6: Businesses Sustaining Earnings Growth Momentum
B U S I N E S S E S S U S TA I N I N G E A R N I N G S G RO W T H M O M E N T U M 2014 Outlook 9M13 Earnings 9M13 Growth ROE Earnings ROE Growth 30% 14% 19% 21% 8%¹ 11% ¹ 9% 20%² -61% 3% 7% 3% NA 1% >15% 10-15% NA NA 5-9% 32%¹ 11%² 0-4% ¹ Based on core net income ² Annualized • ROE based on reported
Slide 7: Ayala Land: demand to remain strong across segments
1. Demand to remain strong across residential, mall, office and hotels & resorts • 3.9 million backlog in housing However, Ayala Land units • Tourist arrivals seen to keeps a tight watch on: significantly increase • BPO sector to grow at a CAGR 1. Interest rates of 19% to 2016 2. Consumer confidence
Slide 8: BPI: industry remains stable and well-capitalized
1. Industry remains stable and well- capitalized but Basel III However, BPI remains implementation to trigger capital vigilant of key challenges: raising • Low interest rate • General positive view on environment loan growth (13.6%) • Sustainability of • NPLs remain low (2.6%) trading gains 2. Core
Slide 9: Globe: telecom industry back on a high growth trajectory
1. The telecom industry is back on a high growth trajectory Globe is gearing up to address key issues: • High-end prepaid subscribers shifting to postpaid 1. Margin pressures in • Higher mobile data usage the mobile segment • Rising smartphone penetration 2. Highly competitive • Opportunities to exp
Slide 10: Manila Water: continued expansion within East Zone
Continued expansion within East Zone • Possible resolution on • Steady, single-digit the arbitration in 2014 growth in billed volume • Increased wastewater • Need for an alternate coverage major water source New businesses scaling up to account for 20-30% of net income by 2018 • Exploring opport
Slide 11: International businesses sustaining improvements in profitability
INTERNATIONAL BUSINESSES ARE SUSTAINING IMPROVEMENTS IN PROFITABILITY AND DRIVING MORE VALUE • Transitioned to providing end-to- • Doubled EBITDA over the last end higher value-added service two years as voice unit continues to perform strongly • Tapped high-margin, high growth niche markets in auto
Slide 12: Goal to surpass P20B in net income and mid-teens ROE by 2016
Our goal is to surpass P20B in net income and achieve sustainable mid-teens ROE by 2016 REPORTED NET INCOME 25.0 Php Billions • Accelerated depreciation less 20.0 pronounced Unlisted businesses to contribute • Sale of Stream ~15%-20% of equity earnings by 15.0 • Steady state of growth begins 2016
Slide 13: Potential sources and uses of cash
Potential sources and uses of cash 2012 - 2016 (Billion Pesos) (24) (89 – 97) (106) 10 89 35 Est. 2016 Est. 2016 Equity Net Debt- Interest Earnings 78 – 86 Equity Coverage Earnings CAGR: 18% CAGR 8 8 Ratio Ratio 51 Earnings CAGR: 12% 12% 54% 1.0x 10 (45) 48 BU dividends Other investments GAE 18% 45%
Slide 14: Ayala has the financial strength to enable growth
Ayala has the financial strength to enable growth We have a strong balance sheet and optimal maturity profile that can support our sizeable investments DEBT M AT U R I T Y PROFILE (in million Pesos) As of 9M13 13,285 14,930 10,079 10,022 10,022 10,022 6,273 4,277 3,342 2,099 2013 2014 2015 2016 20
Slide 15: Investments in power and transport infrastructure are scaling-up
Investments in power and transport infrastructure are scaling-up INVESTMENTS (US$ BILLIONS) 2007-2011 2012-2016 POWER: 4X • Deploy ~US$800M > 2.0 • Target to assemble 1,000+MW of renewable and conventional power assets INFRASTRUCTURE: • ~US$200M allotted for PPP projects focusing on rail, airport an
Slide 16: Committed over US$400M of equity over the past two years
Committed over US$400M of equity over the past two years CAPACITY EST. ECONOMIC ATTRIBU- EQUITY COMMITTED (MW) OWNERSHIP TABLE MW INVESTMENT S TAT U S (US$) CFB COAL SLTEC 270 50% 135 90 M Unit 1 expected to operate 2H2014 (South Luzon) Unit 2 expected to operate 2H2015 GN Power 600 20% 120 160 M Un
Slide 17: Entry into infrastructure will enhance group synergies
Entry into infrastructure will enhance group synergies and create new sources of earnings and cash flows PROJECT PPP PROJECT STATUS AYALA BID BID OUTCOMES COST Daang Hari P2B WON – Under P902M SMC: P608M Connector Road Construction Automated Fare P1.7B WON - Awaiting -P1,088,103.90 SM Group: -P1,088
Slide 18: Daang Hari and Cavite-Laguna Expressway
DAANG HARI • Expands access to Cavite landbanks CAVITE-LAGUNA EXPRESSWAY (CALAX) • Provides strategic connection between Cavite & Laguna; enhances access to Nuvali Cavite Section Laguna Section NUVALI | 18
Slide 19: Automated Fare Collection System consortium
• The Ayala and First Pacific consortium won the bidding for the automated fare collection system (AFCS). • Consortium members: o BPI Card Corp. o Globe Telecom o AC Infrastructure Holdings Corp. o Smart Communications o Metro Pacific Investments Corp. o Meralco FinServe • Will improve ridership exp
Slide 20: LRT Line 1
à LRT LINE 1 • Construction of 12-km extension to Cavite plus O&M of existing line; system integration of existing line and Cavite extension LEGEND: LRT 1 LRT 1 EXT. LRT 2 LRT 2 EXT MRT 3 | 20
Slide 21: Forward-looking statements disclaimer
Statements in this presentation describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors th