Alliance Global Group Inc. · PSE:AGI
Alliance Global — Q1 2017 Earnings Presentation
44 slides from Alliance Global's earnings presentation, May 15, 2017
Slide 1: Alliance Global Group Inc. 1Q 2017 Analyst Presentation
ALLIANCE GLOBAL GROUP INC 1Q 2017 Analyst Presentation 15 May 2017 1
Slide 2: AGI Group Structure
AGI Group Structure A ALLIANCE GLOBAL VA ALLIANCE GLOBAL AGI PM (US$ 2.9bn) a 82% 44% 49% TRAVELLERS es a MEGAWORLD EMPERADOR INC. INTERNATIONAL GGOLDEN ARCHES DEVELOPMENT CORPORATION MEG PM EMP PM RWM PM | Not, | Number 1 in Number 1 in the Most profitable _ Number 2: townships liquor industry inte
Slide 3: 1Q 2017 performance highlights
Alliance Global Group Inc. 1Q 2017 performance highlights 3
Slide 4: Key group figures
P491bn P140bn 7% 3,643 in total resources in total Parent net Hotel room keys (2016) revenues (2016) debt/equity (1Q (2016) 2017)
Slide 5: P&L highlights (Pbn) 1Q2017 vs 1Q2016
P&L highlights (Pbn) 1Q2017 1Q2016 % chg Comments Group revenues 33.70 33.08 2% Megaworld 11.80 11.45 3% Robust growth in rentals + hotel income; modest improvement in residential revenues Emperador 8.98 8.93 1% Increasing contribution from whisky sales offset weaker brandy sales. Travellers 6.27 6.
Slide 6: Group revenues by segment
P33.7bn 2% P33.1bn Others Others 2% 2% GADC, GADC, P6.0bn, MEG, P5.2bn, MEG, 18% P11.8bn, 16% P11.5bn, 35% 34% RWM, RWM, P6.9bn, P6.3bn, 21% 18% EMP, EMP, P9.0bn, P8.9bn, 27% 27% MEG EMP RWM GADC Others MEG EMP RWM GADC Others 6
Slide 7: Net income by segment
P3.6bn 7% P3.3bn GADC & GADC & others RWM, others RWM, -1% P0.3bn 5% P0.5bn, 9% 16% MEG, MEG, P1.7bn P1.9bn, 51% EMP, 53% EMP, P1.2bn, P1.1bn, 34% 34% MEG EMP RWM GADC & others MEG EMP RWM GADC & others 7
Slide 8: Quarterly revenues and net income by segment
38.2 3.9 3.8 40.0 4.5 3.8 34.5 33.7 33.1 34.0 3.6 35.0 4.0 3.3 3.5 30.0 3.0 25.0 2.5 20.0 2.0 15.0 1.5 1.0 10.0 0.5 5.0 - - (0.5) Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Others 0.6 0.4 0.4 0.3 0.7 Others (0.1) (0.3) (0.2) (0.5) (0.0) GADC 5.2 5.6 5.6 6.3 6.0 GADC 0.1 0.1 0.2 0.2 0.1 RWM 6.
Slide 9: Segment trends 2010-2017E
100.0 87 90.0 78 75 80.0 72 70.0 55 60.0 50.0 40.0 31 26 30.0 19 20.0 10.0 0.0 2010 2011 2012 2013 2014 2015 2016 2017E MEG EMP RWM GADC 9
Slide 10: Capex funding and debt levels
• Funding capex through internal cash flows and debts. • Further rise in debt levels across all segments; cost of debt stable. 150 12% 144 29.9 10% 118 29.8 1.5 1.7 25.0 97 19.8 8% 21.9 2.0 18.7 14.2 30.0 70 64 1.9 29.4 6% 13.4 29.2 44 21.6 23.7 29.1 4% 1.7 1.7 0.7 1.0 17.7 72.2 20.2 19.3 - 61.2 52.
Slide 11: Group net debt/equity
• In end-March 2017, group net debt/equity stood at 0.35x. • Parent net debt/equity remained low at 0.07x. Net debt (cash) Net debt/equity 100.0 0.34x 0.35x 0.4x 80.0 0.3x 60.0 0.17x 0.2x 40.0 0.1x 20.0 0.02x 0.0x - -0.1x (20.0) (40.0) -0.11x -0.2x -0.17x -0.20x (60.0) -0.3x 2011 2012 2013 2014 2015
Slide 12: Outlook by business
• Megaworld Targeting to increase rental GLA capacity this year by ~20%; raise contribution of rentals to P12bn. More project launches throughout the country. • Emperador More product initiatives in the domestic market. Increasing share of revenues and profit from overseas operations. • Trav
Slide 13: Megaworld Corporation 1Q2017 performance highlights
Megaworld Corporation 1Q2017 performance highlights 13
Slide 14: Megaworld key facts
Townships Office GLA landbank BPO Clients Commercial GLA 14
Slide 15: Megaworld results summary
• Total revenues +5% YoY to P12.0bn. • Rentals (office and commercial) +25% to P3.0bn. • Increasing share of rentals to 25% of total revenues (from 21% a year before). • Real estate revenues +2% to P8.3bn. • Real estate sales (RES): 66% from MEG+SPI, 17% each from GERI and ELI. • Increasing share of
Slide 16: Megaworld revenues by segment
12.0 11.0 12.0 4.6 4.6 11.2 11,2 4.2 3.9 0.0 3.4 0.2 0.3 0.4 0.5 0.1 0.4 0.0 0.3 0.5 0.3 0.1 0.3 2.6 0.3 0.2 0.1 2.4 2.6 2.9 0.1 2.0 2.4 2.0 2.2 1.7 2.0 8.2 8.3 8.8 7.8 8.3 2.7 1.9 2.1 1.8 2.0 (0.1) (0.5) (0.1) Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Development Rental Hotels Others Develo
Slide 17: Megaworld rentals and operating margins
3.0 2.7 2.8 2.9 3.0 2.6 2.6 3.0 2.6 2.6 2.6 2.4 2.5 2.3 1.1 2.5 2.1 1.0 1.9 1.8 1.0 1.0 1.8 2.0 0.9 2.0 1.5 1.5 1.0 1.8 1.0 1.4 1.5 1.5 1.6 0.5 0.5 - 0.0 Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Office Commercial Rentals (Pbn) Total opex (Pbn) 74% 75% 75% 75% 75% 3.3 4.0 3.2 2.8 2.5 2.3 3.0
Slide 18: Megaworld margins, hotel and net debt
RES, GP (Pbn) GP margin) Rentals, EBIT EBIT margin (Pbn) 46% 45% 47% 46% 46% 8.0 50% 3.5 74% 75% 75% 75% 75% 80.0% 6.0 40% 2.8 70.0% 4.0 30% 2.1 60.0% 1.4 50.0% 2.0 20% 0.7 40.0% - 10% - 30.0% Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Real estate sales Gross profit GP margin Total rentals Re
Slide 19: Total of 22 Townships
35.6 ha 18.5 ha 12.4 ha 5 ha 50 ha 25 ha 34.5 ha * 640 ha 15.4 ha 62 ha 31 ha W E S T S I D E CITY 561 ha 140 ha Maple* Grove 1,200 350 ha ha 150 ha Megaworld 34 ha GERI 30 ha Suntrust 53 ha 72 ha Total of 173 ha 22 Townships 11 ha 19 *Launched in 2016
Slide 20: Annual GLA capacity additions
2,500 ~250k sqm annual capacity addition 2,000 1,500 ~115k sqm annual capacity addition 1,000 500 - 2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E End-2016 GLA capacity Additions 2017 Additions 2018 Additions 2019 Additions 2020 20
Slide 21: Emperador Inc. 1Q2017 performance highlights
Emperador Inc. 1Q2017 performance highlights 21
Slide 22: Emperador key facts
1st Dalmore flagship store in the Sales offices Distribution Philippines nationwide network Consolidated Total resources (2016) Revenues(2016)
Slide 23: Emperador results summary
• Revenues flat to P9.0bn. • Brandy revenues fell 3% to P6.5bn (73% of total). • Domestic competitive landscape remains challenging: In Q117, EMP aggressively pushing for new products and its small brandy SKU. • Incremental contribution from Fundador. • Whisky revenues up 9% to P2.4bn (27% of total)
Slide 24: Emperador revenues, margins and net debt
13.1 2.8 2.0 0.4 9.0 9.4 9.5 9.0 3.7 1.4 0.2 1.5 1.5 2.2 2.7 2.7 2.4 0.2 0.3 2.4 0.3 9.4 1.9 6.7 6.7 6.8 6.5 1.2 1.2 1.2 Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Brandy Whisky Brandy Whisky Net debt Net debt/ 43% (cash) (Pbn) equity 39% 0.4x 0.4x 20.0 0.5x 33% 34% -0.0x 31% 30% 29% 10.0 -0.
Slide 25: Brandy and whisky sales and margins
5.7 13.2 1.4 9.4 3.5 8.9 8.9 3.7 9.0 3.0 3.1 2.7 2.2 2.7 2.7 2.4 0.7 0.6 0.8 0.7 9.5 4.3 6.6 6.3 6.7 6.5 2.8 2.1 2.2 2.3 Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Brandy Whisky Brandy Whisky Sales, GP (Pbn) GP margin Sales, GP (Pbn) GP margin 10.0 50.0% 4.0 48% 40% 45% 3.5 31% 8.0 40.0% 28%
Slide 26: Emperador product pricing
350ml 750ml 1l 1l 1l USD0.84-0.96/ USD1.65-1.90/ USD2.25-2.60/ USD4.28-4.90/ USD6.17-7.05/26 PHP42-48 PHP83-95 PHP 113-130 PHP215-246 PHP310-354
Slide 27: New product: whisky cola
has preserved the familiar taste of cola with the addition of the “SWABE” whisky component of The Andy Player Whisky Perfect for meals, snacking around, or when you are just simply winding down.
Slide 28: New product: spiced brandy
The classic taste of Emperador Brandy that everybody loves spiced up with super hot cinnamon to give it an edge we dare you to drink Target Generation Z & young Millennials a Fiery Delicious Blend; a first of its 62 proof kind in the Philippines 31% ABV
Slide 29: Emperador initiatives
"A ALLIANCE GLOBAL x EMPERADOR INC. Initiatives: eeeueaon ove =m aaa = Ap TRES CEPAS + Gebo Domeg G ee Ole DOR es a SOR rea i ANDYCOLA MULE fuk i EMPE: RADOR EMPERADOR LIGHT BRANDY
Slide 30: Travellers International Hotel Group 1Q2017 performance highlights
Travellers International Hotel Group Inc. 1Q2017 performance highlights
Slide 31: Travellers key facts
hotel hotel gaming Capacity retail sqm. retail Slots rooms occupancy tables MGB outlets rate (Q117) space Gross Revenues Total Resources EBITDA (2016) (2016) (2016)
Slide 32: Travellers results summary
• Net revenues -2% to P5.8bn. • GGR -6% to P5.3bn. • Growth in mass drop cushioned fall in VIP volumes. • Sustained growth (+10%) in mass GGR also buoyed by better win rate. • Mass/VIP GGR mix now at 77%/23% (from 66%/34% a year before). • Non-gaming revenues +9% to P1.1bn. • 86% occupancy rate for
Slide 33: Travellers gaming and non-gaming revenues
6.2 6.2 7.2 7.1 6.7 6.6 6.3 5.6 5.6 5.3 0.9 0.9 1.0 1.1 2.4 1.1 1.9 2.7 1.9 1.2 5.6 6.2 6.2 5.6 5.3 3.7 3.8 3.7 4.0 3.5 Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Gross gaming Non-gaming Mass VIP 100% 100% 15% 13% 12% 16% 17% 90% 90% 23% 80% 34% 39% 34% 80% 43% 70% 70% 60% 60% 50% 50% 85% 87%
Slide 34: Travellers gross profit, EBITDA and net debt
Gross profit GP margin EBITDA (Pbn) EBITDA margin (Pbn) 54% 2.5 26% 30% 4.0 55% 23% 21% 22% 22% 3.8 53% 54% 2.0 24% 3.6 52% 51% 52% 53% 1.5 18% 3.4 52% 1.0 12% 3.2 51% 0.5 6% 3.0 50% 2.8 49% - 0% Q116 Q216 Q316 Q416 Q117 Q116 Q216 Q316 Q416 Q117 Gross profit Gross profit margin EBITDA (Pbn) EBITDA m
Slide 35: Runway Manila launched in April
TRAVELLERS SS INTERNATIONAL ”A ALLIANCEGLOBAL Runway Manila launched in April RUNWAY MANILA
Slide 36: Phase 3 expansion
Maxims Hotel (191 keys) Sheraton Hotel Manila (391 keys) Hilton Manila Hotel (357 keys) • Three (3) new hotels • Additional 14,000 sqm in gaming areas • Additional 3,200 sqm in retail space • Six (6) level basement parking • Target completion by 2018 36
Slide 37: Golden Arches Development Corporation 1Q2017 performance highlights
Golden Arches Development Corporation 1Q2017 performance highlights 37
Slide 38: GADC key facts
In sales revenues (2016) System wide same- store sales growth (1Q 2017) dessert centers (2016) McDelivery hubs (2016)
Slide 39: GADC results summary
• Sales revenues remained robust, +13% to P5.9bn. – 90% from sales by co-owned stores; 10% from rent, royalty & others. – Systemwide same-store sales +5.3% YoY. – Number of stores by end-Mar 2017: 526 vs 484 a year before. – Sales per store +6% YoY, despite coming off a high base. • Margin direction
Slide 40: GADC revenues, margins and net debt
16.0% 7.0 6.2 12.6% 5.6 5.6 5.9 6.0 5.2 0.5 12.0% 9.8% 0.5 0.6 5.0 0.5 0.5 7.2% 7.2% 6.8% 4.0 8.0% 9.9% 5.3% 3.0 5.7 3.1% 7.2% 7.7% 3.5% 7.4% 4.7 5.1 5.0 5.3 4.0% 2.0 4.9% 5.3% -0.7% 4.0% 1.0 3.1% 0.0% 1.1% - Q116 Q216 Q316 Q416 Q117 -4.0% Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Sales by co-ope
Slide 41: GADC profitability and store count
Revenues, GP GP margin EBIT, Net Margins (Pbn) Profit (Pbn) 28% 7.0 30% 0.8 11% 12% 23% 23% 23% 9% 6.0 21% 25% 8% 8% 5.0 0.6 7% 9% 20% 6% 6% 4.0 5% 15% 0.4 5% 6% 3.0 5.6 5.6 6.2 5.9 4% 0.7 5.2 10% 2.0 0.2 0.5 0.5 0.4 0.5 3% 1.0 5% 0.3 0.3 0.3 0.3 1.1 1.3 1.3 1.8 1.3 0.2 - 0% - 0% Q116 Q216 Q316 Q416
Slide 42: GADC store formats and locations
Lagro, Quezon City Cubao, Quezon City Tagaytay Kawit, Cavite
Slide 43: GADC strategy and outlook
• Current strategy: focusing on developing multiple, high-margin revenue sources for more stable, sustainable income streams. • Still on the lookout for opportunities : new products, initiatives, undertakings. • Capex program remains robust. • While debt levels have risen, financial gearing is still
Slide 44: Thank you
Thank you. 44
Alliance Global Group — Q1 2017 Earnings Presentation on 6ix