Ayala Corp. · PSE:AC
Ayala — H1 2011 Earnings Presentation
24 slides from Ayala's earnings presentation, Aug 12, 2011
Slide 1: Analysts' Briefing First Half 2011
ANALYSTS’ BRIEFING FIRST HALF 2011 12 August 2011
Slide 2: Consolidated Financial Highlights
Consolidated Financial Highlights (in million pesos) • Consolidated revenues up 9% due to continued ramp-up in revenues of +9% property, water, and electronics units, +7% partly tempered by lower sales of automotive business • Cost and expenses increased at a +12% milder rate of 7% as a result of co
Slide 3: Strong performance of core businesses lift earnings
Strong performance of core businesses lift earnings Equity Earnings • Equity earnings up 9% due to strong (in million pesos) performance of property and banking units and continued strong recovery of 9% telco • Lower net earnings of auto, electronics, and BPO tempered growth 2,080 ALI BPI GLOBE MWC
Slide 4: Balance Sheet Highlights Parent Company
Balance Sheet Highlights Parent Company (in billion pesos) As of 6-30-11 As of 12-30-10 Net Debt to 0.17 0.12 Equity Debt Mix (%) Peso 88 84 Dollar 12 16 Cost of Debt % 5.5 5.7 Parent Debt *Excludes Preferred Shares Maturity Profile (In million pesos) • Issued P10B multiple put bond last May • Redee
Slide 5: Development work on various power projects progressing
Development work on various power projects progressing AC Energy Holdings, Corp. PhilNew NorthWind PhilNewHydro South Luzon Energy, Inc. Power Corp. Group Thermal Energy Corp. 50% 50% 70% 50% • JV with Diamond • JV with Sta. Clara • JV with Tran-Asia Oil • JV with NorthWind Generating Asia Power Cor
Slide 6: Business Unit Review
O BUSINESS UNIT REVIEW
Slide 7: Robust performance with strong revenue and earnings growth sustained
Robust performance with strong revenue and earnings growth sustained Consolidated Net Income, +15% by Quarter (in million pesos) (in million pesos) +10% +35% Double-digit revenue growth sustained Quarterly earnings momentum in 1H11 driven by buoyant residential sustained with 2Q11 net income up
Slide 8: Revenue growth driven by property development and commercial leasing
Revenue growth driven by property development and commercial leasing Take-up value Revenue Breakdown 1H10 1H11 % 13,681 (in million pesos) Change 9,728 10,127 9,025 Property Development 9,686 12,336 + 27% 7,932 Pmillions 6,453 Residential Units 9,309 11,287 +21% Comm’l/Ind’l Lots 377 1,049 +178% • 2
Slide 9: Revenue growth driven by property development and commercial leasing
Revenue growth driven by property development and commercial leasing Shopping Centers Revenue Breakdown 1H10 1H11 % • Average occupancy of all malls (in million pesos) Change at 96% vs 93% in 2Q10 Commercial Leasing 2,977 3,493 + 17% Shopping Center 2,133 2,317 +9% • Average lease rates up 6% to Off
Slide 10: Project launches across brands and geographies are on track
Project launches across brands and geographies are on track and should sustain momentum RESIDENTIAL: COMMERCIAL LEASING: • 3Q11 launches to reach ~5K units: Cavite Mall - Launched in July (1,900 units): Park Terraces 3, Elaro (ALP), Lerato 2 (Alveo), Centera 2, Avida Residences Cabanatuan (Avida) -
Slide 11: Strong Double-Digit Growth in Business Volumes, Revenues, and Net Income
Strong Double-Digit Growth in Business Volumes, Revenues, and Net Income Revenues increased due to: +10% (in million pesos) • 12% growth in net interest income as a result of higher average assets and +11% spreads +11% • Other income up 7% from fee-based income and rental Operating costs increas
Slide 12: Double-digit loan growth sustained while asset quality remains strong
Double-digit loan growth sustained while asset quality remains strong • Total resources grew by 11% as deposits (in Php B) As of YoY expanded by 9% 6/30/11 Growth Total Resources 855 +11% • Net loans rose by 16% with all market Deposits 691 +9% segments posting double-digit growth: Net Loans 409 +16
Slide 13: Four consecutive quarters of consistent growth in revenues
Four consecutive quarters of consistent growth in revenues Q U A R T E R LY C O N S O L I D AT E D R E V E N U E S In Php Bn • Recovery sustained in 2Q11 with quarterly consolidated revenues reaching a new high 4Q10 service revenues were normalized to exclude a one-time upward adjustment of P526 mil
Slide 14: Revenue growth driven by sustained recovery in mobile and broadband
Revenue growth driven by sustained recovery in mobile and double-digit growth in broadband 7% MOBILE BUSINESS: (in million pesos) • Quarterly net adds of 1.11M was the highest in three years • Subscriber base up year-on-year across all brands • Globe Postpaid up 38% • Globe Prepaid up 12% • TM up 18
Slide 15: Building momentum in mobile and broadband through innovative service offerings
Building momentum in mobile and broadband through innovative service offerings Mobile SIM Subscribers Broadband Subscribers +7% (in ‘000) (in Millions) 1,074 1,293 39% 715 930 • 7% YTD growth in mobile subscribers • Building scale through Nomadic and • Building momentum through innovative @Home Broa
Slide 16: Solid improvements in earnings and profitability
Solid improvements in earnings and profitability In million pesos In million pesos EBITDA Margins • Margins remain strong supported by robust growth of fixed line & broadband business and steady earnings from mobile • Net income growth of 9% year-on-year • Core net income (excluding forex, mark-to-
Slide 17: Steady growth in revenues and earnings with improved operating efficiencies
Steady growth in revenues and earnings with continued improvement in operating efficiencies • Revenues grew by 6% driven by 5% increase in tariff, modest growth in billed volume and contribution from Laguna and Boracay concessions. • Operating expenses up 3% resulting in 7% increase in EBITDA; EBITD
Slide 18: Ayala dealerships maintain network leadership nationwide
Ayala dealerships maintain network leadership nationwide In million pesos Revenues declined by 22% due 22% to lower vehicle unit sales as a result of supply disruptions in Japan 71% Total auto industry sales down 1% year-on-year. Ayala dealerships maintained leadership (46% share of Honda Ayal
Slide 19: Strong revenue growth tempered by higher direct costs
Strong revenue growth tempered by higher direct costs (in US$M) Net Income Excluding One-Offs -13% +39% -52% • Sales of $262.5M up 39% year-on- • Higher direct labor cost • Net Income of $1.1M was 52% year, inclusive of PSI business brought down GP ratio below last year excluding one- to 8% offs in
Slide 20: Continued ramp-up in BPO revenues and EBITDA
Continued ramp-up in BPO revenues and EBITDA 1H2011 versus 1H2010 16% growth • In the first half of 2011, LiveIt’s share of combined BPO revenues grew by 16% due to growth in client volumes across all investee companies. • LiveIt’s share of combined EBITDA also improved by 55% to 55% US$11 million a
Slide 21: Achieved revenue growth and improved EBITDA margins across all investee companies
Achieved revenue growth and improved EBITDA margins across all investee companies Stream Revenues In US$ Millions 10% 35% growth growth $418.0 $380.5 1H2010 1H2011 Revenues up due to new program Revenues increased due to growth wins generating $80M at full run rate from all business units 28% 124% g
Slide 22: Achieved positive Operating Net Income
Achieved positive Operating Net Income 1H11 versus 1H10 0.6 • Operating Net Income of $0.6M in 1H11 (4.2) vs an Operating Net Loss of $4.2M in 1H10 due to revenue growth and cost (8.8) efficiencies at all investee companies. (6.8) • Non-Operating Items are comprised largely of non-cash charges (e.g.
Slide 23: Streamlined operations resulting in improved earnings performance
Streamlined operations resulting in improved earnings performance NET ASSET Value as of Value as of VALUE 12-31-10 06-30-11 (in USD million) Asia 98.1 123.8 USA 30.7 29.9 Net Other Assets/ (37.9 ) (50.5) (Liabilities) TOTAL 90.9 103.2 • Net income of $5.2m is a turn around from last year’s $39.3m lo
Slide 24: Analysts' Briefing First Half 2011
ANALYSTS’ BRIEFING FIRST HALF 2011 12 AUGUST 2011