Ayala Land Inc. · PSE:ALI
Ayala Land — FY2005 Earnings Presentation
41 slides from Ayala Land's earnings presentation, Feb 14, 2006
Slide 1: Shareholder Value Creation Program Bearing Fruit
Ayala Land, Inc. Shareholder Value Creation Program Bearing Fruit 2005 Year-End Analysts’ Briefing February 14, 2006
Slide 2: Shareholder value creation program
Shareholder value creation program Shareholder Positioned to outperform in profit and TSR growth Value despite RP uncertainty Institutional strengths reduce risk ALI WAY - Innovative, best-in-class products Profit upside through - Moving at scale focus on fundamentals - Financial discipline & govern
Slide 3: Focus on TSR delivers excellent results
Focus on TSR delivers excellent results ALI TSR (in Php) ALI (cap gain) ALI Market Cap vs. Phisix (P billion) 2005 35% 4% 39% + 142% 106.9 2004 19% 1% 20% - 26% 78.7 2003 33% 7% 30% - 18% 65.7 2002 -7% 3% -4% + 50% 48.7 Cap Gain Div Yield 2001 -11% 1% -10% + 52% 51.9 -20% -10% 0% 10% 20% 30% 40% 50%
Slide 4: ALI TSR outperforms industry
ALI TSR outperforms industry (except RLC) TSR (Annual) … 145% 16% 2005 5% 23% 39% -6% 18% 2004 9% 29% 20% … 121% 2003 … 80% 22% 39% 40% -20% 2002 -19% -8% -24% -4% -19% 2001 -12% 21% 9% -10% -50% -25% 0% 25% 50% 75% ALI SM PH FLI M EG RLC
Slide 5: Sustained growth in revenues and net income
Sustained growth in revenues and net income Revenues Net Income 5.4 before 25 5 22.1 (up 22%) provisions: up 82% 20 18.1 4 3.6 14.6 3.0 15 3 2.7 P Billion P Billion 12.2 2.5 after provisions: 11.7 2.3 up 21% 10 2 5 1 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005
Slide 6: Declining NOI margin but stabilizing NIAT margin
Declining NOI margin but stabilizing NIAT margin 50% 43% 41% 40% 37% 36% 34% NIAT Margin 30% 25% NIAT Margins (before 20% 21% provisions) 19% 20% 17% 16% NOI Margin 10% 0% 2001 2002 2003 2004 2005*
Slide 7: Improved asset efficiency and returns
Improved asset efficiency and returns 60% Net Asset Efficiency (Revenues / Net Assets) 12% ROE ROA 50% Asset Efficiency (Revenues / Total Assets) 9.4% 7.7% 8.1% 39% 7.1% 40% 8% 6.6% 31% 28% 30% 26% 23% 23% 24% 22% 19% 20% 20% 4% 4.7% 3.8% 4.1% 4.2% 4.2% 10% 0% 0% 2001 2002 2003 2004 2005 2001 2002 2
Slide 8: Income Statement
Income Statement Increase/(Decrease) (P million) Amount 2005 2004 % Total Revenues 22,061 18,084 3,976 22% Real Estate & Hotel Revenues 17,865 16,374 1,491 9% Real Estate & Hotel Expenses 11,739 10,479 1,259 12% NOI 6,126 5,895 231 4% NOI Margin 34% 36% GAE 2,360 2,082 278 13% Interest & Other Charg
Slide 9: Balance Sheet
Balance Sheet Increase/(Decrease) (P million) 2005 2004 Amount % Cash & Cash Equivalents 6,756 6,360 396 6% Total Assets 77,424 76,550 874 1% Total Borrowings 10,723 13,437 (2,714) (20%) Net Debt 3,967 7,077 (3,110) (44%) Stockholders’ Equity 38,457 38,122 335 1% Current Ratio 1.58:1 1.85:1 Debt-to-
Slide 10: Shareholder value creation program
Shareholder value creation program Shareholder Positioned to outperform in profit and TSR growth Value despite RP uncertainty Institutional strengths reduce risk ALI WAY - Innovative, best-in-class products Profit upside through - Moving at scale focus on fundamentals - Financial discipline & govern
Slide 11: The Consumer Brand Architecture
The Consumer Brand Architecture At home with Ayala Westgrove LiveThe the life you Columns Affordable living at Glorietta luxury deserve itsAvida best Towers San Lazaro Lovémall! Ayala Greenfield Verdana Ayala Center Cebu Avida Discriminating The Residences Young urban Two Serendra Middle class Resid
Slide 12: Business Lines
Business Lines
Slide 13: Revenues
Revenues Increase/(Decrease) (P million) Amount % 2005 2004 Shopping Centers 3,533 2,897 636 22% Corporate Business 632 668 (36) (5%) Residential Developments 9,483 8,602 881 10% Strategic Landbank Mgt. 485 711 (226) (32%) Visayas-Mindanao 183 158 25 16% Support Businesses 3,550 3,340 210 6% Interes
Slide 14: 2005 Revenue Breakdown
2005 Revenue Breakdown P 22.1 billion Shopping Centers 16% Corporate Business 3% Interest & Other Income 19% Residential Developments Ayala Land Premier Support Businesses High-end lots 11% Residential Construction 7% High-end units 11% Support Businesses Developments Property Mgt. 2% 41% Leisure 1%
Slide 15: 2005 Revenue Breakdown (with Equity Earnings)
2005 Revenue Breakdown (with Equity Earnings segmentized by business line) P 22.1 billion Shopping Centers 16% Corporate Business 3% Interest & Other Income 18% Residential Support Businesses Developments 18% 41% Visayas-Mindanao 1% Strategic Landbank Mgt. 3% Eq. Earnings (PM) Business Line Alabang
Slide 16: NOI by Business Line
NOI by Business Line 2005 Cost of Sales % to (P million) Revenues & Direct Opex NOI Total NOI • NOI up 4% to P6.1B Shopping Centers 3,533 1,423 2,110 34% Corporate Business 632 391 240 4% • Key contributors to Residential Developments 9,483 7,127 2,356 39% NOI were residential Strategic Landbank Mgt
Slide 17: NOI Margins
NOI Margins 2005 2004 Shopping Centers 60% 66% Corporate Business 38% 40% Residential Developments 25% 23% Strategic Landbank Mgt. 35% 96% Visayas-Mindanao 11% 8% Support Businesses 35% 32% Overall NOI Margin 34% 36% • Lower shopping center margin due to lower margin Market! Market! • Decline in cor
Slide 18: Shopping Centers
Shopping Centers (P million) 2005 2004 % Change • Revenue growth due to increased Revenues 3,533 2,897 22% GLA, higher effective rent, and NOI 2,110 1,900 11% higher management fees given full Equity Earnings* 76 67 13% operations of Market! Market! Ph1A Retail GLA** 744K 698K 7% • Additional GLA fr
Slide 19: Alabang Commercial Corp. / Lagoon Devt. Corp.
Alabang Commercial Corp. / Lagoon Devt. Corp. ACC (P million) LDC (P million) Alabang Town Center Increase/(Decrease) Pavilion Mall Increase/(Decrease) 2005 2004 Amount % 2005 2004 Amount % Revenues 532.5 488.3 44.2 9% Revenues 91.3 79.9 11.4 14% Net Income 145.3 129.9 15.4 12% Net Income 8.6 6.9 1.
Slide 20: Corporate Business
Corporate Business (P million) 2005 2004 % Change • Decline in revenues due to sale of Revenues 632 668 (5%) office space at Ayala Life FGU NOI 240 269 (11%) Makati in 2004 Office Bldgs. • Partly offset by start of BPO GLA (year-end)* 75K 39% buildings operations and higher 104K Ave Occ Rate** 93% 0
Slide 21: Residential Developments
Residential Developments (P million, 2005 2004 % Change except units) 2005 2004 % Change Ayala Land Premier High-end lots 2,395 1,894 26% High-end units 2,608 3,547 (26%) Revenues 9,483 8,602 10% Leisure 173 - - Upper mid-income hsg. 2,152 1,232 75% Affordable housing 2,154 1,928 12% 2005 2004 % Cha
Slide 22: Ayala Land Premier: High-End Lots
Ayala Land Premier: High-End Lots Higher revenues due to: (P million) 2005 2004 % Change • Launch of Sonera Revenues 2,395 1,894 26% 697 723 (4%) • Higher bookings at Ayala Greenfield due NOI 29% 38% to launch of The Terraces NOI Margin • Partly offset by lower bookings at Ayala Booked Lots 480 379
Slide 23: Ayala Land Premier: High-End Units
Ayala Land Premier: High-End Units • Lower revenues due to lower bookings given full sell-out (P million) 2005 2004 % Change of Ferndale and One Legazpi Park, as well as depleted Revenues 2,608 3,547 (26%) inventory at The Residences at GB (Laguna Tower) NOI 538 414 30% – Partly offset by the launch
Slide 24: Ayala Land Premier: Leisure
Ayala Land Premier: Leisure • Still low revenue contribution due to minimal construction (P million) 2005 2004 % Change accomplishment at Anvaya Revenues 173 - - NOI 69 - - • Brisk take-up of 111 lots and 558 NOI margin 40% - shares exceeded targets • 17 villa units (P20-25M/unit) Booked Units 573 -
Slide 25: Community Innovations: Upper Mid-Income Housing
Community Innovations: Upper Mid-Income Housing • Marked growth in revenues despite 10% decline in (P million) 2005 2004 % Change unit bookings Revenues 2,152 1,232 75% – Largely due to construction accomplishments NOI 471 313 51% at Serendra and The Columns at Ayala Ave. NOI Margin 22% 25% – Accele
Slide 26: Avida Land: Affordable Housing
Avida Land: Affordable Housing (P million) 2005 2004 % Change Selected Avida Projects Units Cumulative Completion Revenues 2,154 1,928 12% Launched Take-up Rate NOI 581 507 15% Avida Towers Sucat NOI Margin 27% 26% Tower 1 240 99% 100% Tower 2 240 97% 66% Booked Units Tower 3 264 69% 0% High afforda
Slide 27: Strategic Landbank Management
Strategic Landbank Management (P million) 2005 2004 % Change • Decline in revenues due to Revenues 485 711 (32%) absence of Makati lot sale NOI 168 683 (75%) • Partly offset by the Equity Earnings* 100 97 3% additional construction Booked Units** 176 181 -3% accomplishment at The Columns and One * E
Slide 28: Fort Bonifacio Development Corp.
Fort Bonifacio Development Corp. Financials (P million) Increase/(Decrease) • Decline in revenues and 2005 2004 Amount % net income due to lower Revenues 2,580 3,213 (633) (20%) lot sales Net Income 41 68 (27) (40%) • FBDC Debt pared down by 26% Cash & Cash Equiv. 952 862 90 10% Total Assets 50,984
Slide 29: Visayas-Mindanao
Visayas-Mindanao (P million) 2005 2004 % Change • Higher revenues mainly due to Revenues 183 158 16% increase in unit bookings at NOI 21 12 68% Plantazionne Verdana Homes Equity Earnings* 52 42 24% Booked Units** 151 108 40% * Equity earnings from CHI; reported under Interest & Other Income ** Exclu
Slide 30: Cebu Holdings, Inc.
Cebu Holdings, Inc. CHI* (P million) Increase/(Decrease) • Lower revenues due to the smaller 2005 2004 Amount % size of CBP lot sold in 2005 and Revenues 515.4 534.6 (19.2) (4%) decline in Asiatown IT Park lot Net Income 109.9 89.7 20.2 23% bookings Cash & Cash Equiv. 287.8 171.5 116.3 68% • Partly
Slide 31: Support Businesses
Support Businesses (P million) 2005 2004 % Change 2005 2004 % Change Construction 1,056 989 7% Revenues 3,550 3,340 6% Property Mgt. 486 457 6% Waterworks 270 245 10% Hotels 1,738 1,649 5% 2005 2004 % Change Construction 357 313 14% Property Mgt. 168 182 (8%) NOI 1,232 1,074 15% Waterworks 86 79 8%
Slide 32: Construction
Construction • Construction revenues, net of (P million) 2005 2004 % Change inter-segment eliminations, Revenues* 1,056 989 7% slightly grew on account of NOI* 357 313 14% higher revenues from NOI Margin* 34% 32% infrastructure projects, * Net of inter-segment eliminations equipment rentals and conc
Slide 33: Property Management
Property Management • Property management revenues, (P million) 2005 2004 % Change net of inter-segment eliminations, Revenues* 486 457 6% grew by 6% NOI* 168 182 (8%) – Due to new facilities NOI Margin* 34% 40% management contracts with third parties (i.e., NAIA, IS * Net of inter-segment eliminati
Slide 34: Hotels
Hotels • Revenue growth due to higher room rates (P million) 2005 2004 % Change and revenues per available room Revenues 1,738 1,649 5% (REVPAR) across all Company-owned NOI 621 499 24% hotels and serviced apartments NOI margin 36% 30% • Improved average occupancy rate also pushed revenues higher Av
Slide 35: Shareholder value creation program
Shareholder value creation program Shareholder Positioned to outperform in profit and TSR growth Value despite RP uncertainty Institutional strengths reduce risk ALI WAY - Innovative, best-in-class products Profit upside through - Moving at scale focus on fundamentals - Financial discipline & govern
Slide 36: Additional value created through active portfolio management
Additional value created through active portfolio management • Divestment of non-core assets generated substantial cash flow 5 2,500 Non-Core Asset Sales Net cash Flow Accounts Receivables Sold (P Billion) (P Million) 4 2,000 1,839 3.1 3 1,500 1,062 2 1,000 820 1.4 1.1 1 500 0.3 112 20 0 0 2002 2003
Slide 37: Shareholder value creation program
Shareholder value creation program Shareholder Positioned to outperform in profit and TSR growth Value despite RP uncertainty Institutional strengths reduce risk ALI WAY - Innovative, best-in-class products Profit upside through - Moving at scale focus on fundamentals - Financial discipline & govern
Slide 38: Shareholder value creation program
Shareholder value creation program Shareholder Positioned to outperform in profit and TSR growth Value despite RP uncertainty Institutional strengths reduce risk ALI WAY - Innovative, best-in-class products Profit upside through - Moving at scale focus on fundamentals - Financial discipline & govern
Slide 39: Substantial growth in consolidated project & capital expenditures in 2006
Substantial growth in consolidated project & capital expenditures in 2006 18 up 137% 16.1 15 Support Businesses 12 Strategic Landbank Mgt. P Billion Visayas-Mindanao 9 6.8 Corporate Business 6 Shopping Centers 3 Residential Developments 0 2005 2006
Slide 40: Significant investments to be undertaken across all product lines in 2006
Significant investments to be undertaken across all product lines in 2006 Shopping • GLA growth is locked in until 2008 Centers • Immediate focus is on on-time delivery of new malls and expansion plans • Maintain strong position in the traditional segment Corporate • BPOs as new growth engine Busine
Slide 41: End of Presentation
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