Ayala Corp. · PSE:AC
Ayala — Investor Presentation (March 2014)
40 slides from Ayala's investor presentation, March 2014
Slide 1: March 2014
MK March 2014 INFRASTRUCTURE INFRASTRUCTURE i hehe 38)
Slide 2: Disclaimer
This presentation has been prepared by Ayala Corporation (the “Company”) based on information that the Company considers reliable but that has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accur
Slide 3: Table of Contents
Table of Contents 1 Introduction 1. 2 Key Investment Highlights 2. 3 Business Overview 3. 4 Financial Overview 4. Appendix 2
Slide 4: Introduction
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Slide 5: Overview of the Ayala Group
Overview of the Ayala Group Market Cap: PHP345bn / US$7.7bn (AC) CORE BUSINESSES: INTERNATIONAL: GROWTH PLATFORMS: Growth and Expansion Improving Profitability Scaling-Up 49.0% Largest and most diversified 58.0% property developer in the 100.0% Growing portfolio of Philippines renewable and Market C
Slide 6: Key Investment Highlights
2 Key Investment Highlights 5
Slide 7: Key Investment Highlights
Key Investment Highlights 1 Well positioned to benefit from macroeconomic growth in the Philippines 6 2 Best in class corporate Diversified portfolio of governance and businesses with leading experienced management positions and household team driving synergies brand names in the across the group Ph
Slide 8: Well Positioned to Benefit from Macroeconomic Growth in the Philippines
1 Well Positioned to Benefit from Macroeconomic Growth in the Philippines Demographic Windows in Asia (years)¹ Philippines Remittances and BPO Revenues (US$ bn) Japan 1965 1995 6.9% 6.8% 23 Hong Kong 1980 2015 21 20 Singapore 1980 2015 7.8% 19 17 Korea 1985 2020 9.2% 16 China 1990 2025 10.5% 13 Thai
Slide 9: Well Positioned to Benefit from Macroeconomic Growth in the Philippines
1 Well Positioned to Benefit from Macroeconomic Growth in the Philippines Significant Opportunity for Loan Growth given Relatively Continuing Strong Housing Demand Expected (units) Low Loan Penetration 148.3% 120.6% 686,484 133.7% 672,763 117.8% 659,306 106.8% 93.1% 89.5% 646,128 80.5% 77.0% 633,209
Slide 10: Diversified Portfolio of Businesses with Leading Market Positions
2 Diversified Portfolio of Businesses with Leading Market Positions and Household Brand Names in the Philippines Top 5 Conglomerates by Market Capitalization in the Philippines (PHP billions)1 Diversified Sources of Income2 Globe Other 573 Telecom 1% 9% 345 333 331 308 Manila Water BPI 13% 47% SM Ay
Slide 11: Rebalancing Portfolio to Position for Further Growth
3 Rebalancing Portfolio to Position for Further Growth Established AC Signed purchase Expanded SLTEC Launched VW Won automated BPI stock Infra and won Supported ALI’s agreement for Phase2 (135MW) distributorship fare collection rights offering Daang Hari project equity placement1, ~20% of GNPower US
Slide 12: Rebalancing Portfolio: Manila Water and Globe Case Studies
3 Rebalancing Portfolio to Position for Further Growth Manila Water Case Study Globe Telecom Case Study 1997 2013 90.5 38.5 5.5 0.4 1998 2013 Subscribers (millions) Revenue (PHP billions) 24 hours 13-23 hours 0-12 hours Ayala Corp incorporated Manila Water in 1997 Ayala Corp acquired a stake in
Slide 13: Power and Infrastructure Investments Targeted at US$1bn by 2016
3 Rebalancing Portfolio to Position for Further Growth AC’s investments in power and infrastructure are targeted to reach a total of US$1bn by 2016 Strong growth in demand for power and transport infrastructure in the Philippines Source of stable earnings and cashflows Grow AC’s unlisted propo
Slide 14: Solid Balance Sheet to Support Investments
4 Solid Balance Sheet to Support Investments (PHP billion) As of 31-Dec-2013 As of 31-Dec-2012 Parent Gross Debt 71.0 70.6 Majority of debt Cash 25.6 37.2 (83%) is in PHP Net Debt 45.4 33.4 and at fixed rates D/E Ratio 0.49x 0.57x (65%) Net D/E Ratio 0.32x 0.27x Blended cost of Consolidated debt
Slide 15: Financial Track Record of Growth, Cash Flow Generation, ROE Delivery
5 Financial Track Record of Growth, Cash Flow Generation, ROE Delivery and Efficient Capital Allocation Consolidated Revenues (PHP millions)1 Net Income (PHP millions)2 159,412 12,778 130,571 10,504 9,183 22.1% 110,828 21.6% 17.8% 14.4% 36,583 44,034 1,903 2,348 2011 2012 2013 Q4 2012 Q4 2013 2011 2
Slide 16: Best in Class Corporate Governance and Experienced Management Team
6 Best in Class Corporate Governance and Experienced Management Team Driving Synergies Across the Group Ayala Corp and its subsidiaries have received numerous recognitions of its outstanding corporate governance including 9th Corporate Governance Asia Recognition Awards (June 2013): Ayala Corporat
Slide 17: Overall Group Strategy
Overall Group Strategy Continue to invest and expand Expand product lines to meet the needs aggressively in core markets of real of a broader and more empowered estate, banking, telecom and water to customer base maintain leadership positions and 1 2 sustain growth trajectory Strengthening Expan
Slide 18: Business Overview
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Slide 19: Overview of Ayala Land (1/2)
Overview of Ayala Land (1/2) Business Description Key Businesses1 Ayala Land (“ALI”) is the largest real estate developer and owner in 5 brands serving different income segments for the Philippines Property residential segment ALI is primarily engaged in the planning, development, subdivision
Slide 20: Overview of Ayala Land (2/2)
Overview of Ayala Land (2/2) Strategy Real Estate Revenues (PHP millions) Launches in 2014 targeted to include 78 projects worth PHP142bn including 55 residential / office for sale, 8 76,337 office buildings, 6 shopping centers, 5 hotels and resorts, 2 commercial estates, 2 hospitals 54,705 Plan
Slide 21: Overview of BPI (1/2)
Overview of BPI (1/2) First Nine Months of 2013 Revenue2 by Business Description Business Segments Bank of the Philippine Islands (“BPI”) was founded in 1851 and Investment is the largest bank in the Philippines by market capitalization Banking BPI is a commercial bank focused on the Philippines
Slide 22: Overview of BPI (2/2)
Overview of BPI (2/2) Net Income (PHP millions) Comments 16,291 18,811 Net interest income grew by 10% as the average asset base grew by PHP151bn 12,822 27.1% Non-interest income also increased by 11%, mainly due to higher fees & commissions and other operating income 15.5% Net income in the y
Slide 23: Overview of Globe Telecom (1/2)
Overview of Globe Telecom (1/2) Business Description 2013 Service Revenue by Segments Globe Telecom (“GLO”) is a major Philippine telecom Fixed Line Data Fixed Line Voice 5% 3% service provider with c.38.5 million mobile and c.2.0 million broadband subscribers Broadband 12% GLO’s principal co
Slide 24: Overview of Globe Telecom (2/2)
Overview of Globe Telecom (2/2) Strategy & Plans Service Revenue (PHP millions) Network modernized to improve network and service 90,500 quality and increase data and voice capacity 82,742 77,765 Upgrading of IT and business support systems in 9.4% response to changing business demands Continu
Slide 25: Overview of Manila Water (1/2)
Overview of Manila Water (1/2) Business Description 2013 Total Billed Volume Breakdown Manila Water (“MWC”) provides water distribution Clark Water infrastructure including wastewater management services Laguna Water Boracay Island 2% 2% Water It has concessions in the East Zone of Metro Mani
Slide 26: Overview of Manila Water (2/2)
Overview of Manila Water (2/2) Strategy Revenue (PHP millions) Expanding operations in the Philippines outside 14,451 the East Zone 15,280 Exploring opportunities in Vietnam and 12,004 Indonesia 20.4% Planned investment program for East Zone. Capex spend of PHP214bn targeted from 2013 9.0% 3,5
Slide 27: Overview of Ayala's Other Businesses
Overview of Ayala’s Other Businesses Integrated Micro-Electronics LiveIt Ayala Automotive Integrated Micro-Electronics is a LiveIt holds Ayala’s BPO 45% share of Honda nationwide global end-to-end electronics investments network sales and 32% of Isuzu manufacturing services provider nationwide
Slide 28: AC Energy
AC Energy Committed over US$400m of equity over the past two years to build growth platform in power Est. Economic Attributable Equity Inv Committed Capacity (MW) Ownership MW (US$m) Status CFB Coal SLTEC Unit 1 targeted to operate 2H2014 270 50% 135 90 (South Luzon) Unit 2 targeted to operate 2
Slide 29: AC Infrastructure
AC Infrastructure Entry into infrastructure to enhance synergies across Ayala Group and create new sources of earnings and cash flows Project Cost PPP Project Status Ayala Bid (PHP billions) Daang Hari Connector Road 2 WON – Under Construction PHP902m Automated Fare Collection 1.7 WON – Awaiting Sig
Slide 30: Financial Overview
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Slide 31: Recent AC Consolidated Financial Results
Recent AC Consolidated Financial Results Consolidated Revenues (PHP millions)1 Net Income (PHP millions)2 2,348 44,034 36,583 1,903 20.4% 23.4% Q42012 Q42013 Q42012 Q42013 Equity in Net Earnings (PHP millions) Return on Equity (%)3 3,623 10.2% 9.6% 3,166 14.4% Q42012 Q42013 FY2012 FY2013 Note: 2013
Slide 32: Strong Cash Flow Generation and Shareholder Remuneration
Strong Cash Flow Generation and Shareholder Remuneration Total Shareholder Return Over the Last Three Years1 260% 240% 220% 109.6% 200% 180% 160% 66.2% 140% 120% 100% 80% Mar-2011 Sep-2011 Mar-2012 Sep-2012 Mar-2013 Sep-2013 Mar-2014 AC PSEi Significant Cash Inflows from Dividends Common Dividends P
Slide 33: Capital Expenditures to Drive Growth
Capital Expenditures to Drive Growth Principal operating companies able to finance on standalone basis and are expected to execute investment plans with minimal or no funding support from AC AC Parent Level Investments (US$ billions) Ayala Land Capex Plan 2007-2011 2012-2016 2014E Capex: PHP70bn 4X
Slide 34: Significant Sources of Funding Available to Fund Investments
Significant Sources of Funding Available to Fund Investments Source Description PHP25.6 billion1 of cash at parent level Internal Cash Significant dividend inflows from subsidiaries and affiliates Debt of PHP71.0 billion1 at parent level with net debt to equity ratio of 0.32x1 Debt Facilities
Slide 35: AC's Businesses Sustaining Earnings Growth Momentum
AC’s Businesses Sustaining Earnings Growth Momentum FY2013 Earnings FY13 Growth ROE1 30% 13% 15% 18% 13%2 11% 5% 19% 91% 5% 22% 10% Note: 2013 financials are unaudited. ¹ ROE based on reported net income. 2 Based on core net income. 34
Slide 36: Key Investment Highlights
Key Investment Highlights 1 Well positioned to benefit from macroeconomic growth in the Philippines 6 2 Best in class corporate Diversified portfolio of governance and businesses with leading experienced management positions and household team driving synergies brand names in the across the group Ph
Slide 37: Appendix
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Slide 38: AC Infrastructure – Tollroads
AC Infrastructure – Tollroads Daang Hari Expands access to Cavite landbanks Cavite-Laguna Expressway (CALAX) Provides strategic connection between Cavite & Laguna; enhances access to Nuvali NUVALI Cavite Section Laguna Section 37
Slide 39: AC Infrastructure – Automated Fare Collection System
AC Infrastructure – Automated Fare Collection System The Ayala and Metro 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 C
Slide 40: AC Infrastructure – Railways
AC Infrastructure – Railways 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 39