Investor Presentation May 2016
2
Table of Contents
• The Philippine Economy 3 • About SM Investments 4 • SM Retail 12 • Banking 17 • SM Prime 18 • Land bank 33 • Portfolio Investments 36 • Financials 40
3
Philippines: Strong Macroeconomic Fundamentals
• Avg. Inflation rate: 1.1% (Jan-Mar 2016) • Avg. lending rate: 5.63% (Jan-Mar 2016) • Stable Currency: +0.84% (YTD 2016)
• Debt/GDP: 44.8% • CAR: 16.4% • NPLs: 1.7% • Net lender to the IMF
• Job creation and inclusive growth
• Regional growth – Visayas, Mindanao
• Infrastructure development
• Agriculture, Tourism, Manufacturing
• Foreign Investment
Opportunities
Net External Inflows and ICT Exports Improving Costs of Doing Business
Healthy Fiscal and Monetary System
Young Workforce with Rising Incomes
Strong GDP Growth
6.9% Consumption Driven
69% of GDP
Per Capita GDP
USD2,875 Per Capita GNI
USD3,475
Population
102M + 2% growth p.a. Median Age
23
S&P BBB Stable
Moody's Baa2 Positive
Fitch BBB- Positive
Current Credit Ratings 9.23.7
10.6
26.3
6.2
8.6
5.7
1.6
8.6
28.4
9.6
11.6
7.217.7
17.8 19.023.8
42.1
52.4
0
10
20
30
40
50
60
Viet Thai (2014) Mal Indo (2014) Phil (2014)
USD
bn
Net FDI Inflows Remittances ICT Export
Source: BSP Selected Economic and Financial Indicators Release as of April 20, 2016
Source: The World Bank Notes: • Vietnam: FDI (2014), Remit (2011), ICT Services Export No Data • Malaysia: FDI, and Remit (2014) and ICT Services Export (2013)
4
About SM Investments
Strong proxy for the continuing breakout of the Philippine Economy
Consumer-centric businesses
Large cap and diversified market play
Core businesses remain market leaders
Strong business model and excellent management
Prudent financial management
Tightly managed to leverage strengths and extract synergies across the Group
Ongoing focus on good corporate governance and shareholder value creation
Aggressive expansion plans ensure long-term growth
Aggressive expansion plans in all core businesses
China and Portfolio Investments provide additional upside
Funding options available for both organic and acquisition-led expansion
Retail
100% SM RETAIL INC.1
SAV
EMO
RE
SM H
YPER
MA
RK
ET
SM S
TOR
ES2
SM S
UP
ERM
AR
KET
Banking
44% BANCO DE ORO
20% CHINA
BANKING
CORP.
Property
50% SM PRIME HOLDINGS, INC.
M
ALL
S
R
ESID
ENTI
AL
LEIS
UR
E &
TO
UR
ISM
C
OM
MER
CIA
L
HO
TELS
&
CO
NV
ENTI
ON
S
Portfolio Investments
28% BELLE CORP
29% ATLAS
CONSOLIDATED MINING
34% CITYMALL
COMMERCIAL CENTERS
90% NET GROUP
Core Investments
1Pre-merger of related retail businesses
5
Our Investments
290% owned
Philippine Banks Total Resources ($bn)
Philippine Retailers Total Stores
SM Retail Puregold* Robinsons**
294 281 166
Property Developers Market Cap ($bn)
Philippine Conglos Market Cap ($bn)
Source: Company Information, 1Q 2016
*Includes S&R **Includes Supermarkets and
Department Stores only Source: Company Information
Source: Bloomberg; Figures as of May 27, 2016
Source: Bloomberg; Figures as of May 27, 2016
Philippine Retailers Total Sales ($mn)
SM Retail Puregold Robinsons*
4,482 2,060 1,927
*Includes all retail formats Source: Company Information
6
SM Group Companies’ Rankings
FY 2015
FY 2015
BDO 44.1
Metrobank 37.8
BPI 40.5
Landbank 31.7
PNB 21.1
China Bank 25.6
Security Bank 20.2
RCBC 24.3
DBP 20.0
UBP 20.7
SMPH 15.4
Ayala Land 11.6
Megaworld 3.0
Robinsons Land 2.5
Double Dragon 2.5
Vistaland 1.4
Filinvest 1.0
SMIC 16.6
JG Summit 12.7
Ayala Corp 11.0
Aboitiz Equity 9.0
GT Capital 5.4
San Miguel 3.9
LTG 3.3
Metro Pacific 3.6
DMCI 3.6
Alliance Global 3.4
Total Population: 102M
7
Our Business Footprint
16 Cities
Retail Stores GSA
Total 109 834,496
Food 88 482,361
Non-food 21 352,135
Property Buildings GFA
Malls 20 3,324,180
Residential 24
Office Bldgs 5 330,247
Exhibit Halls 3
Banking
BDO
China Bank 238
Metro Manila1 Municipality
Branches
459
38 Provinces
Retail Stores GSA
Total 155 772,598
Food 133 535,284
Non-food 22 237,314
Property Buildings GFA
Malls 27 2,435,754
Residential 2
Hotels 2 32,326
Banking
BDO
China Bank
Luzon55 Cities
Branches
290
174
16 Provinces
Retail Stores GSA
Total 35 207,709
Food 29 127,641
Non-food 6 80,068
Property Buildings GFA
Malls 5 1,088,157
Hotels 1 35,630
Exhibit Halls 2
Banking
BDO
China Bank
Visayas
Branches
112
64
43 Cities 27 Provinces
Retail Stores GSA
Total 15 104,764
Food 11 62,413
Non-food 4 42,351
Property Buildings GFA
Malls 4 491,254
Hotels 1 11,013
Exhibit Hall 1
Banking
BDO
China Bank 41
33 Cities
Mindanao
Branches
167
Metro Manila 43%
Luzon 40%
Visayas 11%
Mindanao 5%
Retail GSA 1,919,566
Metro Manila 45%
Luzon 33%
Visayas 15%
Mindanao 7%
Mall GFA 7,339,345
8
Our ESG Programs En
viro
nm
enta
l • First mall-based solar farm in the Philippines
• Recycled 29% of used water
• Recycled 38% of solid waste
Soci
al • SM Foundation
• 3,660 scholars to date
• 227 classrooms donated
• 1,131 medical missions
• 115 wellness centers donated
• 12,750 farmers trained
• 17,100 Families served through immediate disaster relief assistance in 2015
• SM Cares:
• Children and youth
• Overseas workers
• Persons with disabilities
• Women
• Senior Citizens
Go
vern
an
ce
• Policies and Disclosures
• Manual on Corporate Governance
• Code of Ethics
• Insider Trading Policy
• Guidelines on Acceptance of Gifts and Travel Sponsored by Business Partners (Anti-corruption)
• Accreditation of Vendors and Suppliers
• Whistleblowing Policy
• Annually published Corporate Governance Report
• Annually held Stockholders’ Meeting
“SM continues to find ways to provide Filipinos with various opportunities for growth. Equally important is our impact on the environment and the company’s thrust to becoming a progressive
leader in sustainable business practices in the country.” - SM Investments Corporation 2015 ESG Report
Note: All of SM’s ESG programs are aligned with the Sustainable Development Goals
9
Strong Leadership
STEPHEN C. CU-UNJIENG, Adviser to the Board • HANS T. SY, Adviser to the Board • VICENTE S. PEREZ, JR., Independent Director (outgoing) • HENRY T. SY, JR., Vice Chairperson • TERESITA SY-COSON, Vice Chairperson • HENRY SY, SR., Chairman • HARLEY T. SY Director and President • JOSE T. SIO, Director, Executive Vice President and Chief Finance Officer • JOSEPH R. HIGDON, Independent Director • AH DOO LIM, Independent Director • ELIZABETH T. SY, Adviser to the Board • HERBERT T. SY, Adviser to the Board • TOMASA H. LIPANA, Independent Director (incoming, not in photo)
From L to R:
Board of Directors
Business Leadership
Property Banking Retail
Henry Jr. Hans Elizabeth Teresita Hans
SM Prime BDO China Bank
Teresita Harley Herbert
Food Non-Food
10
10-Year Performance since PSE Listing
127
694
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
PH
P B
illio
n
170
771
2005 2015
In P
hp
Bill
ion
Assets grew at 16.3% p.a.
54
275.7
2006 2014
In P
hp
Bill
ion
Revenue grew at 18.6% p.a.
8.0
28.4
2005 2015
In P
hp
Bill
ion
Net Income grew at 13.5% p.a.
Market Cap grew at 18.5% p.a.
11
Summary of SMIC Recent Performance
Retail • Opened 5 stores in 1Q, 4 outside Manila • Alfamart operating 126 stores • Announced merger of related retail businesses • Ecommerce agreement with Lazada
Banking • BDO completed acquisition of One Network Bank • Joint investment in PCIB Securities with Nomura • BDO took control of its JV with Generali Phils. • China Bank completed acquisition of Planters Bank
Property • Formed an agreement with the local government
to reclaim 1,500 hectares in Cordova, Cebu • Formed a JV with ALI and acquired 26 hectares in
South Road Project (SRP) in Cebu • Opened 4 malls in 2015: SM San Mateo in Rizal, SM
Cabanatuan in Nueva Ecija, SM Sangandaan in Caloocan, and SM Seaside Cebu
• Launched FiveE-Com Center, started construction of Three and FourE-com Centers
Portfolio Investments • Atlas Mining announced restructuring plan • Belle delivered record recurring net income
Recent Events Figures in PHP billion except percentages
SM Investments 1Q 2016 1Q 2015 Change FY 2015
Revenues 69.8 65.2 7.1% 295.9
Net Income* 7.0 6.7 3.7% 28.4
Net Margin 10.0% 10.3% - 9.6%
ROE 10.2% 10.3% - 10.3%
Net Debt:Equity 36:64 34:66 - 36:64
*Recurring Earnings growth of 12%
SM Retail 1Q 2016 1Q 2015 Change FY 2015
Revenues 48.8 44.9 8.5% 211.4
Net Income 1.5 1.3 16.3% 6.8
Net Margin 3.2% 3.0% - 3.2%
BDO 1Q 2016 1Q 2015 Change FY 2015
Net Interest Income 15.5 13.3 16.7% 57.0
Non Interest Income 7.5 8.8 -14.7% 31.9
Net Income 5.5 6.1 -10.5% 25.0
SM Prime 1Q 2016 1Q 2015 Change FY 2015
Revenues 18.2 16.7 9.6% 71.5
Normalized Net Income 5.8 5.2 12.2% 20.9*
Net Margin 32.0% 31.2% - 28.0%
*Adjusted for gain on sale of AFS
12
SM Retail: Merger of Related Businesses
• Alignment of structure and ownership –between majority and minority shareholders
• Portfolio diversity – increased presence in faster growing, higher margin discretionary spend retail categories
• Greater footprint
• Local market leadership
• Synergies – fully complementary with potential operational efficiencies; strong synergies with SM Malls
• Asset swap – on the basis of net income contribution; no premium
• SMIC to own 77.3% of SM Retail
• Financial impact Earnings accretive Value accretive Improved returns
Key Points
Pre-Merger Post-Merger
Revenue PHP215 Bn PHP251 Bn
GFA 1.8M sqm 2.4M sqm
Outlets 553 1,927
Impact
13
SM Retail: Diversified Market Leading Portfolio
Pre-Merger Post-Merger
Non-Food
Fashion
Electronics
Furniture
Specialty
Pharmacy
Specialty
DIY Food Food
Non-Food
Other Retail Affiliates
14
SM Retail: Post-Merger Structure
SMIC 77.3%
Sy Family 22.7%
SM Retail
Food Non-Food
SM Store Specialty International
Partners
Supermarkets
Hypermarkets
SaveMore
Waltermart
• Forever 21 • Uniqlo • Sfera • Bata • Uno de 50 • Body Shop • L’ Indochine • Joseph • Crate & Barrel • Crocs
• Ace Hardware • Baby Company • Homeworld • Kultura • Our Home • SM Appliances • Sports Central • Toy Kingdom • Watsons • Others
15
SM Retail: Footprint Expansion Opportunity
Philippine Population: 102M
Visayas 20M people
Luzon 45M people
NCR 13M people
Mindanao 24M people
• Nationwide expansion • Multi-format approach • Augmenting organic expansion through
partnerships
Retail Strategy
Per Region Stores GSA % of Total
Metro Manila (NCR) 109 834,496 43%
Luzon (ex-NCR) 155 772,598 40%
Visayas 35 207,709 11%
Mindanao 15 104,764 5%
Total 314 1,919,566
Per Format Stores GSA Average
The SM Store 53 711,867 13,431
SM Supermarket 45 319,631 7,103
SM Hypermarket 44 362,477 8,238
SaveMore 140 430,444 3,075
Waltermart 32 95,147 2,973
Total 314 1,919,566
SM Retail Footprint 1Q 2016 (Pre-Merger)
16
Alfamart: First Mover in the Minimart Space
• Alfamart Philippines
• JV with Alfamart Indonesia
• First mover in the minimart space
• Different to convenience store format
• Supermarket pricing
• Ready-to-cook vs. Ready-to-eat
• Value-added services
• Primarily Residential Locations
• Currently in the testing phase with
126 branches in provincial areas south
of Metro Manila
• Alfamart Indonesia
• 10,377 stores with 39 warehouses
• Coverage: 16 provinces
• 3 store openings per day
17
Banking
• Diversified and sustainable earning stream
• Client acquisition through branch expansion
• Drive provincial lending and deposit taking initiatives
• Expand fee income via cross-selling
• Operating leverage
• Manage OPEX growth
• Implement digital strategy
• Prudent balance sheet management
• Conservative provisioning for risk assets
• Complement current funding with long term
• Ensure sufficient capital to support growth
Business Strategy • Accelerate Expansion
• Grow Revenue Lines
• Solidify presence in corporate market
• Defend market share for commercial/middle market/SMEs
• Expand menu of consumer products
• Continue diversification of fee-based businesses
• Intensify branding and differentiation
Business Strategy
BDO China Bank
18
About SM Prime
• Developer of large scale, mixed-use “Lifestyle cities” anchored on world-class malls.
• The largest integrated property developer in Southeast Asia by market capitalization
• High recurring income
• Extensive landbank
• Consistently cited for excellence in corporate governance, property development, environmental consciousness and service Residential
Commercial
Leisure
Malls
19
SM Prime’s 5-Year Roadmap
• Doubling revenues and profits by 2018 to PHP32 billion
• Growth will be driven by malls and residential units
A
A
E
(2013-2018)
(2013-2018)
2018
2015 A
2014 A
2013 A
Malls Residences
Commercial Hotels & Convention
Centers Primary Homes Leisure Homes
GFA: 10.6 Million sqm
(85% Phil + 15% China)
Launched Units: 139,628
Projects: 41
Launched Units: 2,500
Projects: 16
GFA: 0.46 Million sqm
No of Towers: 7
Rooms: 2,187
Projects: 10
+28%
in GFA
+69%
in units
+23%
in units
+44%
in GFA
+87%
in rooms
GFA: 8.3 Million sqm
(89% Phil + 11% China)
Launched Units: 82,841
Projects: 27
Launched Units: 2,035
Projects: 12
GFA: 0.32 Million sqm
No of Towers: 5
Rooms: 1,167
Projects: 5
+14%
in GFA
+.16%
in units
0%
in units
+68%
in GFA
+15%
in rooms
GFA: 7.3 Million sqm
(89% Phil + 11% China)
Launched Units: 69,421
Projects: 25
Launched Units: 2,035
Projects: 12
GFA: 0.19 Million sqm
No of Towers: 4
Rooms: 1,015
Projects: 4
+4%
in GFA
+9%
in units
0%
in units
+27%
in GFA
+0%
in rooms
GFA: 7.0 Million sqm
(89% Phil + 11% China)
Launched Units: 63,892
Projects: 21
Launched Units: 2,035
Projects: 12
GFA: 0.15 Million sqm
No of Towers: 3
Rooms: 1,015
Projects: 4
97%
69% 26% 80%
3% 31% 74% 20%
SMPH ALI MEG RLC
Gross Leasable Area (sqm)
Malls Offices
20
SM Prime vs Peers
Most defensive and least cyclical among Philippine property conglomerates
66%
24% 22%
67%
SMPH* ALI MEG RLC
Recurring Revenue Comparison
7.7M
2.0M 1.0M 1.4M
Source: Latest Available Company Information
*Excludes Hotels and Resorts
21
The Mall of Asia Complex: A Lifestyle City Development
• Commercial, entertainment and residential hub
• 60 hectares of reclaimed land fronting Manila Bay
• Existing structures:
• Mall of Asia
• SMX Convention Center
• SM Arena
• OneE-Com Center, TwoE-Com Center, FiveE-Com Center
• Sea Residences
• Under construction:
• ThreeE-Com Center, FourE-Com Center
• 6-star Conrad Manila
• Shell Residences, Shore Residences
• Galeon Museum
Two E-com Center
One E-com Center
Mall of Asia
SMX Convention Center
Conrad Hotel
Existing
Upcoming
Five E-com Center
Three E-com Center
Four E-com Center
Sea Residences
Shell Residences
Shore Residences
Mall of Asia Arena
Galeon Museum
22
SM Seaside Cebu: A Lifestyle City Development
• 30 hectares mixed use development on reclaimed land in Cebu
• Integrated development
• Site of Cebu’s largest mall and the fourth largest SM mall in the country with a GFA of 430,000 sqm
• Adjacent to 27 hectares co-owned with Ayala Land
SM Seaside City
Chapel of San Pedro Calungsod
Existing
Upcoming
Observation Tower
23
SM Malls: Overview
Largest mall operator/developer in the Philippines
24
SM Malls: Philippines
SM Aura Premier, Taguig City
Philippine Population: 102M
Visayas 20M people
Luzon 45M people
NCR 13M people
Mindanao 24M people
Area Malls GFA (sqm) % of Total
Metro Manila (NCR) 20 3,324,180 45%
Luzon (ex-NCR) 27 2,435,754 33%
Visayas 5 1,088,157 15%
Mindanao 4 491,254 7%
Total 56 7,339,345 100%
25
SM Malls: Philippines Expansion Plans
Projection
End 2016 Total Malls 61
Total GFA 7.7 mn sqm
SM Malls: Philippines Expansion Plans
New Opening GFA (sqm)
SM San Jose Del Monte April 2016 101,407
SM Trece Martires May 2016 83,783
SM Cherry Congressional 3Q2016 12,056
SM East Ortigas 4Q2016 58,958
SM Cherry Antipolo 4Q2016 19,321
Expansion
SM Calamba 2H2016 49,936
SM Naga 2H2016 11,186
Total 336,647
26
SM Malls: China
SM Zibo
SM Tianjin
Existing Date Opened GFA (sqm)
SM Xiamen 2001 December 238,125
Jinjiang 2005 November 167,830
Chengdu 2006 October 166,665
Suzhou 2011 September 72,552
Chongqing 2012 December 149,429
Zibo 2015 September 150,600
Total 945,200
Upcoming Target GFA (sqm)
Tianjin 2016 540,000
27
SM Residences
SMDC Fame SMDC Air
SMDC Shore Amenities
Projects Overview 1Q 2016
Ready-for-Occupancy (RFO) Units 3,573
Ongoing Construction (Unsold Units) 15,353
Total Units Made Available since 2003 86,466
Planned Launched in 2016 (units) 11,000-14,000
Reservation Sales (value) PHP8.1B
Reservation Sales (units) 2,949
2016 CAPEX PHP16.3B
Project PHP10.5B
Land banking PHP5.8B
Landbank (Hectares)
Metro Manila 52.7
Outside Metro Manila 388.9
Land for Future Projects 441.5
28
SM Shore Residences
One Bedroom Unit with Balcony Approx. 27.67 to 29.53 sqm
29
SM Shore Residences
Two Bedroom Unit with Balcony Approx. 58.46sqm
30
SM Commercial Properties
Completed Opened GFA (sqm)
SM Cyber Makati One 2008 22,055
SM Cyber Makati Two 2008 16,725
TwoE-com Center 2012 107,682
SM Cyber West 2014 41,799
FiveE-com Center 2015 129,307
Total 317,568
Under Construction Opening GFA (sqm)
ThreeE-com Center TBA 111,727
FourE-com Center TBA TBA
31
SM Hotels
Hotel Opened Rooms
Taal Vista, Tagaytay 2003 261
Radisson Blu, Cebu 2010 396
Pico Sands, Hamilo Coast 2011 154
Park Inn, Davao 2013 202
Park Inn, Clark 2015 154
Conrad Hotel, Pasay 2Q2016 347
Total 1,514
Conrad Manila
Park-inn Clark
32
SM Convention Centers and MOA Arena
Venue Location Seats
SM Arena MOA Complex 20,000
SM Arena Cebu TBA
SMX Convention Center, MOA
Mall of Asia Arena
Venue Location Leasable (sqm)
SMX Mall of Asia MOA Complex 17,306
SMX Davao SM Lanang 5,200
SMX Aura Premier SM Aura 3,137
SMX Bacolod Bacolod 4,269
Megatrade Hall Megamall 4,214
Cebu Trade Hall Cebu 1,498
Total 35,624
33
Land Bank
Coastal Zone
1,580 Has Inland
Mountain Zone 4,200 Has
Companies Land Bank (sqm)
SM Prime 12,961,510
Malls 2,067,505
Residences 4,415,447
Commercial 880,727
Leisure Homes 5,597,831
SMIC 57,801,502
Total 70,763,012
34
Land Bank in Batangas: Hamilo Coast
• Hamilo Coast asset is owned directly by SMIC
• 5,780 hectares
• 31 km of coastline
• 13 coves
• Pristine environment
• 1½ - 2 hours from Manila
35
2016 SM Group CAPEX
Businesses PHP bn Allocation/Projects
Retail 5.2 New stores / Renovations
Banks ~5.0 Branch expansion, IT enhancements
Property 60.2
Malls 32.2 New SM malls and expansions in
Philippines and China
Residential 20.7 Condominiums and HPI projects
Commercial 4.5 ThreeE-com and FourE-Com
Hotels and Convention Centers 2.7 Conrad Manila
Parent and Others 0.4
Total 70.7
36
Portfolio Investments: Belle Corporation
• 28% ownership; publicly listed
• Developer of high-end entertainment and leisure properties
• Subsidiary, Premium Leisure Corp., holds 1 of 4 gaming licenses in Entertainment City complex in Manila Bay
• US$1.3bn City of Dreams Manila, operated by Melco Crown
• Total gross floor area: 300,000 sqm
• Gaming floor area: up to c.22,000 sqm
• 372 gaming tables
• 1,680 slot machines
• 1,680 electronic table games
• Three hotel brands with 950 keys: Crown, Nobu, Hyatt
(In PHP mn) 1Q 2016 1Q 2015 % Chg
Revenues 1,494.6 1,344.8 11.1%
Operating Costs and
Expenses-638.8 -607.3 5.2%
Net Operating Income 855.8 737.5 16.0%
Net Income 412.8 377.7 9.3%
Net Margin 27.6% 28.1% --
ROE 6.5% 5.6% --
Net Debt (Cash) to
Equity Ratio0.16 : 1.00 0.01 : 1.00 --
37
Portfolio Investments: Atlas Consolidated Mining
• 29% ownership; publicly listed
• Copper mine with 20+ years mine life, over
400m tonnes of proved and probable
reserves
• Average cut-off grade of 0.30% Cu
• Excellent environmental and social record
• Supportive shareholders and other
stakeholders
• Announced restructuring plan to optimize
cash position during copper price downturn
• Optimal 40k tonnes/day production
volumes
• Reduce pre-stripping CAPEX for 2016
and 2017
• Cost reduction and operating efficiency
programme
*Net income after tax adjusted for non-recurring items such as foreign exchange and mark-to-market adjustments.
(In PHP mn) 1Q 2016 1Q 2015 % Chg
Revenues 3,351 2,635 27.2%
Total Cash Cost 2,554 2,485 2.8%
EBITDA 778 149 421.0%
Net Income -135 -637 -78.8%
Core Income* -385 -825 -53.4%
38
Portfolio Investments: Net Buildings in Bonifacio Global City
Net Plaza Net Cube Net Square Net One Net Quad
Gross Leasable Area 55,661 sqm 20,000 sqm 18,687 sqm 14,358 sqm 38,767 sqm
Occupancy Rate 100% 100% 100% 100% 100%
39
Portfolio Investments: CityMalls Commercial Corp.
• 34% ownership of a JV with outstanding local partners
• Rapid growth plans to develop 10k to 20k sqm strip malls in
underserved markets outside Metro Manila
• SM has right of first refusal on supermarket space in malls
• Secured 34 sites across Luzon, Visayas and Mindanao
• 100 CityMalls by 2020 - 30 targeted by YE2016
40
Financials
43%
21%
36%
Property Retail Banking
41
Financials: SMIC
Revenues +7.1% to PHP69.8bn
Reported Earnings +4% (Recurring Earnings +12%)
Banking business not consolidated
FY 2015 Consolidated Results In PHP Billion
SMIC Parent Debt
Net Debt to Equity 29 : 71 Average Cost of Debt 6.54%
Average Debt Tenure 4.34 years Peso-Foreign Currency Mix 47 : 53
Recent Bond Offerings
Issued Amount Currency Due Date Coupon Rate
June 10, 2014 USD350 mn US Dollar June 2024 4.88%
May 19, 2014 PHP15 bn Philippine Peso May 2021/May 2024 5.2958%/5.6125%
July 16, 2012 PHP15 bn Philippine Peso Jul 2019/Jul 2022 6.0%/6.9442%
October 17, 2012 USD500 mn US Dollar October 2019 4.25%
October 13, 2010 USD400 mn US Dollar (Exchange Bonds) October 2017 5.50%
June 25, 2009 PHP1 bn Philippine Peso June 2016 9.10%
1Q 2016 1Q 2015 FY2015 FY2014 FY2013 FY2012
Revenue 69.8 65.1 295.9 276.6 253.3 223.9
Reported Net Income* 7.0 6.7 28.4 28.4 27.5 24.7
Net Margin 10.0% 10.4% 9.6% 10.3% 10.8% 11.0%
Dividends n/a n/a 8.52 8.2 7.4 6.4
Return on Equity 10.2% 11.7% 10.3% 12.0% 13.0% 14.3%
*Recurring Earnings growth of 12% in 1Q 2016
Total Capital 1Q 2016 1Q 2015 FY2015 FY2014 FY2013 FY2012
Cash Equivalents & Short
Term Investments108.1 126.2 122.6 130.5 111.2 126.6
Net Debt 165.4 127.5 158.5 131.2 126.5 93.6
Equity 291.1 271.7 284.5 257.0 219.4 188.1
Net Debt:Equity 36 : 64 32 : 68 36 : 64 34 : 66 37 : 63 33 : 67
25%
71%
4%
42
Financials: BDO
Total Resources Loans Deposits Assets under
Management
*Basel III
Financial Highlights (In PHP Bn) 1Q 2016 1Q 2015 Change FY 2015
Net Interest Income 15.5 13.3 16.3% 57.0
Non Interest Income 7.5 8.8 -15.0% 31.9
Net Income 5.5 6.1 -10.2% 25.0
Assets 2,068.0 1,854.4 11.5% 2,031.3
Deposits 1,704.3 1,492.1 14.2% 1,663.9
Gross Customer Loans 1,274.9 1,104.7 15.4% 1,279.4
Net Interest Margin 3.2% 3.0% -- 3.2%
Cost to Income Ratio 65.4% 60.4% -- 62.0%
Return on Common Equity 11.0% 13.8% -- 13.6%
Loans to Deposits Ratio 74.8% 74.0% -- 76.9%
Gross NPL Ratio 1.26% 1.27% -- 1.2%
Consolidated CAR 13.4%* 14.0%* -- 13.3%*
CET1 11.4%* 11.9%* -- 11.3%*
Tier 1 Ratio 11.8%* 12.3%* -- 11.7%*
65.2%
57.7%
60.1%
62.0%
65.4%
2012 2013 2014 2015 1Q 2016
Cost to Income Ratio
43
Financials: BDO
Cost Focus Post ONB Acquisition
*63.4%
Extraordinary gains
Loan and Deposit Growth
Improving Asset Quality
15% 19% 20% 17% 15% 16% 16% 20% 15% 17%
82.5%
67.8% 73.0% 76.9% 74.8%
2012 2013 2014 2015 1Q 2016
Loan Growth
BDO Industry LDR
592 775 959 1,138 1,197 339
570 533
526 507
12.0%
31.0%
24.0%
11.0% 14.0%
-35%
-25%
-15%
-5%
5%
15%
25%
35%
45%
-
500
1,000
1,500
2,000
2,500
3,000
2012 2013 2014 2015 1Q 2016
Deposit Growth
CASA (PHP bn) Term Depo (PHP bn) Growth
21.3 14.8 14.2 15.8 16.1
26.7 25.2 26.8 26.2 26.1
2.8% 1.6% 1.3% 1.2% 1.3%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2012 2013 2014 2015 1Q 2016
Asset Quality
NPL Amount (PHP bn) Provisions (PHP bn) NPL Ratio
44
Financials: China Bank
*Net Loans inclusive of UDSCL; 2013 excludes PDB
Financial Highlights (In PHP Bn) 1Q 2016 1Q 2015 Change FY 2015
Net Interest Income 3.9 3.7 5.4% 15.1
Non Interest Income 1.4 1.1 27.3% 4.5
Net Income 1.4 1.2 16.7% 5.6
Assets 543.3 477.0 13.9% 526.8
Deposits 453.0 406.0 11.6% 439.3
Gross Customer Loans* 324.0 292.0 11.0% 315.0
Net Interest Margin 3.2% 3.4% -- 3.4%
Cost to Income Ratio 66.2% 66.2% -- 62.3%
ROE 9.2% 8.4% -- 9.6%
Loans (Net) to Deposits Ratio 70.3% 70.5% -- 70.5%
NPL 2.7% 2.5% -- 2.5%
CAR 14.0% 14.7% -- 13.5%
CET 1 13.1% 13.8% -- 12.6%
45
Financials: China Bank
90 137 179 212 208 128
146 147
160 179 54
71 73
67 66 272
354 399 439 453
70% 62% 73% 71% 72%
-74%
-54%
-34%
-14%
6%
26%
46%
66%
(5 0)
50
150
250
350
450
550
2012 2013 2014 2015 1Q 2016
Funding (PHP bn)
CASA High Cost FCDU LDR
94 109 127 126 134
82 89 128 142 142 23
30
43 48 49 199
228
298 316 324
-
50
100
150
200
250
300
350
2012 2013 2014 2015 1Q 2016
Gross Loans (PHP bn)
Corporate Commercial Consumer
Strong Balance Sheet with Sustainable Growth
Steady Asset Quality Stabilizing Cost Income Ratio
3.7% 2.2%
3.0% 2.9% 3.4% 2.6%
2.0% 2.2% 2.5% 2.7%
134.9% 146.6%
101.3% 88.7% 78.0%
0.0 %
20. 0%
40. 0%
60. 0%
80. 0%
100 .0%
120 .0%
140 .0%
160 .0%
180 .0%
0.0 %
1.0 %
2.0 %
3.0 %
4.0 %
5.0 %
6.0 %
7.0 %
8.0 %
9.0 %
10. 0%
2012 2013 2014 2015 1Q2016
Asset Quality
NPA Ratio NPL Ratio Loan Loss Coverage Ratio
59.2% 59.0%
62.2% 62.3%
66.2%
54. 0%
56. 0%
58. 0%
60. 0%
62. 0%
64. 0%
66. 0%
68. 0%
2012 2013 2014 2015 1Q 2016
Cost to Income Ratio
46
Financials: SM Prime
1Q 2016 Results In PHP Billions
72%
23%
5%
Earnings Mix
60% 30%
10%
Revenue Mix
Malls Residential Others
Consolidated 1Q 2016 1Q 2015 % Chg
Revenue 18.2 16.7 9.6%
Normalized Earnings 5.8 5.2 11.8%
Net Margin 32.0% 27.8% -
Return on Equity 11.0% 10.0% -
Malls Group 1Q 2016 1Q 2015 % Chg
Revenues 11.0 9.9 11.4%
Operating Income 6.3 5.5 12.8%
EBITDA 7.7 6.9 11.2%
EBITDA margin 70.3% 70.4% -
Net Income 4.3 3.8 13.8%
Net margin 39.1% 38.2% -
Philippine Malls 1Q 2016 1Q 2015 % Chg
Revenues 9.9 8.9 11.2%
Operating Income 5.7 5.1 11.6%
EBITDA 6.9 6.2 11.9%
EBITDA margin 70.1% 69.7% -
Net Income 3.8 3.3 14.1%
Net margin 37.9% 37.0% -
China Malls 1Q 2016 1Q 2015 % Chg
Revenues 1.1 1.0 9.6%
Operating Income 0.5 0.5 18.8%
EBITDA 0.8 0.7 14.7%
EBITDA margin 71.5% 68.4% -
Net Income 0.3 0.2 30.7%
Net margin 29.8% 25.0% -
Commercial 1Q 2016 1Q 2015 % Chg
Revenues 0.8 0.6 28.5%
Operating Income 0.5 0.3 55.2%
EBITDA 0.6 0.4 36.8%
EBITDA margin 79.9% 75.0% -
Net Income 0.3 0.3 30.3%
Net margin 43.2% 42.5% -
SMDC 1Q 2016 1Q 2015 % Chg
Revenues 5.3 5.1 5.5%
Operating Income 1.6 1.5 1.4%
EBITDA 1.6 1.6 1.1%
EBITDA margin 30.2% 31.5% -
Net Income 1.4 1.3 6.5%
Net margin 26.5% 26.3% -
47
Contact Information and Disclaimer
Investor Relations Office Office Number: +63 2 857-0100 Email Address: [email protected] SM Official Website: www.sminvestments.com Official Facebook Account: www.facebook.com/sminvestments.ir Official Twitter Account: @SM_INVESTMENTS PSE Ticker SM ADR Ticker SMIVY Bloomberg Ticker SM PM Equity Reuters Ticker SM.PH
Disclaimer Except for historical financial and operating data and other information in respect of historical matters, the statements contained herein are “forward-looking statements”. Any such forward-looking statement is not a guarantee of future performance and involves a number of known and unknown risks, uncertainties, and other factors that could cause the actual performance, financial condition or results of operation of SM and its subsidiaries to be materially different from any future performance, financial condition or results of operation implied by such forward-looking statement.
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