Alliance Global Group Inc. · PSE:AGI
Alliance Global — Morgan Stanley Asia Pacific Summit 2016
62 slides from Alliance Global's conference presentation, Nov 18, 2016
Slide 1: Alliance Global Group Inc – Morgan Stanley Asia Pacific Summit
ALLIANCE GLOBAL GROUP INC Morgan Stanley Asia Pacific Summit 17-18 November 2016
Slide 2: Key positions and highlights
• Maintaining key positions in respective sectors: MEG – leader in township development, BPO-driven office segment. EMP – dominates liquor market. RWM – most profitable integrated resort. GADC – strong position in the QSR segment. AGI – leading player in the hotel industry. • Strong 9M16 p
Slide 3: AGI Group Structure
AGI Group Structure A NULIANCE GLOBAL VA ALLIANCE GLOBAL AGI PM (US$ 2.6bn) ays 81% 44% 49% TRAVELLERS os MEGAWORLD EMPERADOR INC. INTERNATIONAL GOLDEN ARCHES DEVELOPMENT CORPORATION Ma EMP PM RWM PM | ee] (USS 2.6bn) (USS 2.3bn) (US$ 1.0bn) Number 1 in : Most profitable Number 2 townships Sieber vi
Slide 4: Macro drivers
Alliance Global Group Inc. Macro drivers
Slide 5: Macro drivers: OFW flows, GDP, affordability
8.0% OFW flows YoY change 30.0 (US$bn) 40% 6.0% 25.0 30% 4.0% 20% 20.0 10% 2.0% 15.0 0% 10.0 0.0% -10% 5.0 -20% -2.0% 0.0 -30% 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 1H16 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 8M16 GDP growth PCE growth O
Slide 6: Performance review
Alliance Global Group Inc. Performance review
Slide 7: Group key figures
P139bn in consolidated revenues (2015) P467bn in total resources (Sep2016) P136bn in fixed assets (Sep2016) 0.04x Parent net debt/equity (Sep2016) 2,570 Hotel room keys (2015)
Slide 8: Group revenues by segment
• Group revenues driven by the strong performance of EMP (helped by acquisition) and MEG (supported by the development upcycle). • In 2015, MEG+EMP contribution stood at >60%. 138.9 140.00 1% 2% 124.9 5% 5% 119.7 12% 15% 15% 14% 13% 120.00 102.1 18% 20% 25% 100.00 4% 31% 27% 80.00 26% 66.3 26% 31% 2
Slide 9: Group profit contribution
• In 2015, MEG+EMP contributed 90% of Group profit. • MEG enjoyed strong topline growth and higher margins. • EMP growth helped by WMG; domestic business stable. • RWM weighed by volatile gaming performance; GADC steady. 15.0 13.9 13.9 3% 13.6 4% 10% 11% 3% 13.0 3% 2% 3% 13% 9% 20% 30% 12.0 25% 41%
Slide 10: Revenues and profit by subsidiary
• MEG: rising share of rentals helped lift profit margins. • EMP: WMG augmented sales but weighed down on margins. • RWM: maintaining profitability despite competitive challenges. • GADC: steady sales and margins. 20.4 0.4 18.7 0.4 GADC 16.0 GADC 0.4 13.9 0.3 12.1 0.3 27.8 1.8 31.7 2.6 RWM 32.9 RWM
Slide 11: Margins by subsidiary
• MEG: rising share of rentals, better residential GP margins. • EMP: pulled down by WMG; RWM competitive pressures. • GADC: generally steady helped by continued store expansion. 37% 36% 35% 34% 21% 33% 32% 29% 18% 28% 27% 18% 26% 26% 16% 24% 15% 15% 23% 15% 22% 13% 13% 14% 21% 21% 13% 19% 11% 11% 1
Slide 12: P&L highlights 3Q2016
P&L highlights (Pbn) 3Q2016 3Q2015 % chg Comments Group revenues 34.49 34.17 1% Megaworld 12.18 11.49 6% Sustained rise in rentals; modest growth in residential sales Emperador 9.26 10.80 -14% Lower WMG sales due to RSV exit; incremental sales from Fundador cushioned weaker EMP sales. Travellers 7.0
Slide 13: P&L highlights 9M2016
P&L highlights (Pbn) 9M2016 9M2015 % chg Comments Group revenues 101.56 99.59 2% Megaworld 35.15 33.46 5% Sustained growth in rentals; steady contribution from residential segment Emperador 27.60 29.12 -5% Incremental contribution from Fundador offsets lower WMG sales due to RSV exit Travellers 20.8
Slide 14: Quarterly revenues and net income
11.0 120.0 10.6 101.6 99.6 12.0 100.0 10.0 8.0 80.0 6.0 4.0 3.9 3.4 3.8 60.0 3.3 3.1 3.5 39.5 4.0 34.5 34.2 32.3 34.0 33.1 33.1 40.0 2.0 - 20.0 (2.0) Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 - Others (0.0 0.2 (0.3 (0.5 (0.1 (0.3 (0.2 -0.2 -0.6 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Others
Slide 15: Quarterly EBIT and margins
24.7 45% 24.1 25.0 40% 22.0 35% 19.0 30% 16.0 25% 13.0 8.7 8.8 20% 8.2 8.1 7.3 7.7 10.0 7.2 15% 7.0 10% 4.0 5% 1.0 0% -2.0 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Others 0.2 0.5 -0.8 -0.3 0.3 0.0 (0.4) -0.1 -0.1 MEG 33.8%39.6%41.8%31.5%34.3%40.7%40.8
Slide 16: Heavy capex continues
Heavy capex continues 100.0 87 90.0 77 76 80.0 72 70.0 60.0 55 31% CAGR 50.0 40.0 31 26 30.0 19 20.0 10.0 0.0 2010 2011 2012 2013 2014 2015 2016E 2017E MEG EMP RWM GADC 16
Slide 17: Debt and net debt/equity
• Heavy capex funded through internal cash flows and debts. • Debts grew 2.8x from 2011 level but still comfortable. • Group net debt/equity stood at 0.30x; parent net debt/equity at 0.04x at end-Sep 2016. Net debt Net debt/ 117.8 125.8 (cash) (Pbn) equity (X) 96.6 25.7 80.0 0.4x 21.7 0.30x 14.2 17.
Slide 18: Outlook by subsidiary
• Megaworld On-track to hit office GLA capacity of 851k sqm by end-2016. Ongoing capacity expansions: 2x office GLA, 3x commercial GLA by 2020 from 2015. Intensified township development throughout the country. • Emperador Increase presence in the domestic and global market. • Travellers M
Slide 19: Growth Initiatives
Alliance Global Group Inc. Growth Initiatives
Slide 20: Megaworld: 21 townships on 3,064 hectares
35.6 ha 18.5 ha 5 ha 12.4 ha 50 ha 25 ha 34.5 ha 62 ha 15.4 ha 31 ha WESTSIDE 561 ha CITY 140 ha Maple Grove* 1,200 ha 350 ha 150 ha Megaworld 30 ha GERI 34 ha Suntrust 72 ha 53 ha 173 ha 21 townships on 11 ha 3,064 hectares 20 *Launched in 2016
Slide 21: Megaworld office GLA expansion
1,600 1,200 +160k sqm per year 800 +85k sqm per year 400 - 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E End-2015 New 2016 New 2017 New 2018 New 2019 New 2020
Slide 22: Megaworld commercial GLA expansion
800 600 +80k sqm per year 400 +25k sqm per year 200 - 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E End-2015 New 2016 New 2017 New 2018 New 2019 New 2020
Slide 23: Hotel portfolio
Marriott Hotel Manila Richmonde Hotel Belmont Hotel Savoy Hotel Newport City Iloilo Business Park Newport Mactan Newtown
Slide 24: 900
900 800 700 600 500 400 300 200 100 0 24
Slide 25: Brand portfolio tiers
Luxury Super Premium Premium Standard 25
Slide 26: Domestic distribution footprint
Isabela La Union Quezon Pangasinan Pampanga Bicol Pasig, Quezon Ave, Head office (3) Batangas & Tacloban Cavite (2) Roxas Cebu Iloilo CDO Bacolod Butuan Ozamis Davao Gensan 26
Slide 27: Export regions
Europe North America Asia Middle East Africa 2013 Export Region New Export Region 27
Slide 28: Expanding global footprint
7 Further expanding Emperador’s pomone Global footprint V4 ALLIANCE GLOBAL
Slide 29: Performance review: Megaworld Corporation
Megaworld Corporation Performance review
Slide 30: Megaworld townships
ait MEGAWORLD “sd TOWNSHIPS: LIVE IT! LOVE IT!
Slide 31: Megaworld key figures
office GLA commercial townships GLA hectares in landbank BPO Clients 31
Slide 32: Megaworld revenues and profit
• Faster growth in rentals, driven by capacity increases in office and commercial properties. • Development segment healthy on back of steady housing demand. 44.8 45.0 41.0 18.00 16.4 40.0 35.5 16.00 15.1 15.1 32.7 13.9 35.0 30.6 14.00 13.1 29.5 12.1 30.0 28.6 11.6 11.3 11.0 25.8 12.00 10.6 10.0 25.
Slide 33: Megaworld revenue mix
2%2% 3% 2% 3% 1% 6% 2%2% 9% 3% 1% 2% 13% 1% 16% 18% 18% 25% 1% 18% 20% 41% 1% 38% 44% 36% 1% 36% 26% 80% 77% 77% 75% 76% 50% 52% 52% 32% 37% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Development Rental Hotels Others Development Rental Hotels Others 8.7 10.0 8.0 7.5 7.1 76% 77% 74% 76% 8.0 72
Slide 34: Megaworld 9M16 highlights
• Total revenues up 5% YoY to P35.3bn. • Rentals (office and commercial) delivered the growth, +15% to P7.4bn. • Rentals contributed 21% of total revenues (from 19% a year ago). • High occupancy rates of 98-99%. • Real estate sales +1% to P20.7bn. • 58% MEG-standalone, >16% each from GERI and ELI, 9
Slide 35: Megaworld quarterly revenues and EBIT
5.0 14.0 12.0 4.0 2.0 2.2 2.2 2.6 2.6 1.7 1.8 10.0 2.0 2.3 2.3 3.0 2.0 8.0 1.5 1.7 2.0 1.7 6.0 8.7 8.5 7.8 8.2 8.3 8.8 2.5 2.7 4.0 7.7 2.4 2.1 1.0 1.8 1.9 2.0 1.3 0.0 0.0 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q115 Q215 Q315 Q415 Q116 Q216 Q316 -1.0 Development Rental Hotels Others Development Rental Ho
Slide 36: Megaworld rentals, opex and net debt
16.0 80% 8.0 7.0 12.0 48% 51% 48% 60% 6.0 3.0 44% 46% 45% 47% 46% 40% 5.0 2.7 8.0 40% 4.0 3.0 4.0 20% 1.0 1.0 3.8 4.4 2.0 0.8 0.9 0.9 0.9 0.9 1.0 1.2 1.3 1.3 1.4 1.4 1.5 1.5 - 0% - Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Real estate sales Gross profi
Slide 37: Performance review: Emperador Inc.
Emperador Inc. Performance review
Slide 38: Emperador brands
Ths ANEWE D KE
Slide 39: Emperador key figures
50m liters alcohol capacity 33m cases sold in 2013 36k barrels distillation capacity 39
Slide 40: Emperador revenues and profit
• Strong topline growth supported by Whyte and Mackay (WMG) contribution as domestic liquor business remained stable. • But lower blended margins capped the growth in earnings. 43.6 13.7 45.0 14.0 40.0 12.0 11.0 35.0 32.0 29.9 10.0 9.2 30.0 8.2 23.6 8.0 7.0 5.8 6.2 25.0 6.0 5.0 20.0 17.4 4.4 15.0 4.
Slide 41: Emperador ex-WMG and WMG
3.3 16.5 0.7 3.6 9.2 10.4 10.4 28.6 27.8 26.7 8.2 22.8 17.0 4.4 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 EMP ex-WMG WMG EMP ex-WMG WMG Revenues Gross profit Revenues Gross profit (Pbn) margin (Pbn) margin 18.0 20% 20.0% 30.0 50% 38% 39% 24.0 36% 40% 15.0 19.5% 32% 26% 12.0 19.0% 18.0 30% 9.
Slide 42: Emperador 9M16 highlights
• Revenues down 4% to P27.9bn. • EMP ex-WMG sales grew 10% to P20.2bn (72% of total). • Incremental contribution from Fundador starting in March. • EMP-domestic continues to experience some headwinds amid a highly competitive domestic landscape. • Sales of WMG fell 28% to P7.7bn (28% of total). • Te
Slide 43: Emperador quarterly results and margins
0.5 0.7 10.8 7.7 0.6 0.2 4.2 4.2 5.8 0.3 18.4 20.2 0.0 0.2 0.2 0.3 3.2 3.3 4.2 2.2 2.7 2.7 1.9 1.4 1.6 1.2 1.6 1.2 1.2 5.7 6.1 6.6 8.8 6.7 6.7 6.8 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 EMP ex-WMG WMG EMP ex-WMG WMG Net debt Net debt/ 40.0 (cash) (P
Slide 44: Emperador liquor sales and margins
2.1 2.1 10.7 7.6 1.1 7.3 7.1 5.8 0.7 0.7 4.2 18.1 19.6 0.6 0.8 0.6 0.8 3.2 3.3 2.2 2.7 2.7 8.6 2.8 3.1 2.8 6.0 6.6 6.6 6.3 6.7 2.2 2.3 2.1 2.2 5.5 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 EMP ex-WMG WMG EMP ex-WMG WMG Sales, GP (Pbn) GP margin Sales,
Slide 45: Performance review: Travellers International
Travellers International Hotel Group Inc. Performance review
Slide 46: Travellers International
TRAVELLERS INTERNATIONAL THE FILIPINO
Slide 47: Travellers key figures
P28bn 4,000 in gross Marriott revenues Grand (2015) Ballroom capacity 85% P6bn in overall in 2015 hotel EBITDA occupancy rate (9M16) P77bn 1,226 in total In hotel room assets keys (Sep2016) (2015)
Slide 48: Travellers revenues and profit
• Increased competition capped growth in gaming revenues, but non-gaming segment provided support. • Maintaining profitability on back of cost-containment measures. 33.4 35.0 10.0 9.2 31.1 31.6 8.6 30.0 28.1 27.7 7.9 8.0 6.7 6.9 6.2 25.0 5.6 6.0 5.0 20.0 4.1 15.0 4.0 2.9 10.0 2.0 5.0 0.0 - EBITDA Ne
Slide 49: Travellers gaming and non-gaming revenues
3.0 3.4 3.2 2.7 3.5 13.8 15.2 13.6 13.5 10.4 26.4 27.5 25.9 24.0 21.1 14.3 14.8 14.7 13.8 11.9 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Net gaming Non-gaming Mass VIP 10.0 9.2 8.4 30% 30% 7.9 8.0 6.7 7.2 7.5 26% 25% 6.2 6.4 24% 22% 6.0 20% 20% 4.6 4.8 17% 4.0 14% 2.0 - EBITDA EBIT 2011 2012
Slide 50: Travellers 9M16 highlights
• Net revenues rose 5% to P18.9bn. • GGR continued to recover in Q316, bringing 9M16 level flat to P18.0bn. • Overall improvement in volumes (+8%), driven by grind. • Sharp growth in VIP revenues in Q316, due to improved VIP win rate. • Mass/VIP GGR mix now at 61%/39% (from 57%/43% a year ago). • No
Slide 51: Travellers quarterly revenues and EBITDA
2.5 2.8 7.7 7.0 17.9 18.0 0.8 0.9 1.0 0.9 0.9 11.0 0.8 1.0 3.5 2.3 2.7 1.9 2.4 2.7 10.2 1.9 6.8 5.7 5.4 6.3 5.6 6.2 6.2 3.3 3.4 3.5 3.5 3.7 3.8 3.5 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Q115 Q215 Q315 Q415 Q116 Q216 Q316 9M15 9M16 Gross gaming Non-gaming Mass VIP EBITDA (Pbn) Margin Net debt
Slide 52: Mass and VIP gaming revenues
500.0 25.0 20.2 18.7 18.7 19.4 19.0 19.2 17.9 18.8 18.8 19.0 18.4 400.0 20.0 300.0 15.0 314.3 280.0 200.0 262.5 267.2 258.5 10.0 194.4 192.7 173.2 174.9 100.0 5.0 61.7 69.0 67.8 67.4 69.7 72.5 66.6 71.8 75.1 - - 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q11
Slide 53: Performance review: Golden Arches Development Corporation
Golden Arches Development Corporation Performance review
Slide 54: Golden Arches Development Corporation
GOLDEN ARCHES DEVELOPMENT CORPORATION FIRST FOR THE
Slide 55: GADC store network
Total number of stores in operation (end-Sep2016) McDelivery Hubs Stores with Drive Thru Systemwide same-store sales growth (9M16)
Slide 56: GADC sales and profit
• Sustained topline growth driven mainly by continued store expansion program. • Achieving operating leverage to support growth in earnings. 32.9 4.50 4.2 35.0 3.9 29.0 4.00 3.6 28.0 25.1 3.50 3.1 21.5 3.00 20.3 2.6 21.0 18.4 18.4 2.50 15.8 13.7 2.00 14.0 11.5 1.50 0.8 0.8 0.8 7.0 1.00 0.6 0.7 0.50
Slide 57: GADC revenues and store count
Revenues No. of (Pbn) stores 14.4 25.0 600 457 481 12.1 20.0 408 480 10.6 376 329 8.9 15.0 360 7.7 10.0 18.4 20.3 240 16.9 18.5 15.8 14.6 11.5 13.7 10.7 12.6 5.0 120 - - 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Co-owned stores Franchisees Revenues (Pbn) Number of stores 2.5 12.5% 11.3% 11.3
Slide 58: GADC 9M16 highlights
• Sales revenues remained robust, up 11% to P16.4bn. – 90% from sales by co-owned stores; 10% from rent, royalty & others. – Systemwide same-store sales growth at 8% YoY. – Number of stores hit the 500 milestone (vs 468 a year ago). – Despite aggressive capacity expansion, revenue per store has been
Slide 59: GADC revenues, margins and stores
25.00 23.0% EBIT, Net Margins 22.7% 22.7% 20.3 1.5 12% 22.5% 18.4 22.5% profit (Pbn) 20.00 16.4 22.0% 15.8 14.8 13.7 7.8% 15.00 11.5 21.4% 1.0 6.6% 6.5% 7.7% 8% 21.0% Margins 6.0% 20.8% 5.2% 10.00 20.6% 5.4% 5.1% 5.0% 5.0% 3.6 3.9 4.2 3.7 20.0% 4.3% 3.1% 5.00 2.6 3.1 3.0 0.5 3.7% 4% 0.6 0.7 0.8 2.1%
Slide 60: GADC quarterly results and net debt
6.0 15.0% 12.6% 0.5 0.5 0.5 9.8% 5.0 0.5 0.5 7.7% 0.4 0.5 10.0% 7.2% 7.2% 4.0 9.9% 5.0% 3.1% 3.5% 3.0 1.1% 7.2% 4.7 5.1 4.7 5.1 5.0 4.9% 2.0 4.3 4.4 4.0% 0.0% 3.1% 1.0 -0.7% - -5.0% Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Sales by co-operated restaurants Rent, royalty &
Slide 61: Chairman's closing statement
WA ALLIANCE GLOBAL “We have already laid out the foundation and made significant investments across all our business segments, both here and abroad, in order to future-proof our growth.” -AG! Chairman Andrew L. Tan MEGAWORLD EMPERADOR INC, 22 Ge McDonald's 61
Slide 62: Thank you
Thank you.
Alliance Global Group — Morgan Stanley Asia Pacific Summit 2016 on 6ix