SM Investments Corporation · PSE:SM
SM Investments — Investor Presentation (November 2016)
44 slides from SM Investments's investor presentation, November 2016
Slide 1: Investor Presentation
Investor Presentation November 2016
Slide 2: Table of Contents
Table of Contents • The Philippine Economy 3 • About SM Investments 5 • SM Retail 13 • Banking 15 • SM Prime 16 • Land Bank 31 • Portfolio Investments 34 • Financials 37 2
Slide 3: Philippines: Strong Macroeconomic Fundamentals
Philippines: Strong Macroeconomic Fundamentals Young Workforce with Rising Incomes Opportunities Strong GDP Growth Consumption Driven • Job creation and inclusive growth 6.9% 70% of GDP • Provincial growth – Visayas, Mindanao Per Capita GDP Per Capita GNI • Infrastructure development USD2,973 (+3.2%
Slide 4: Current Administration's 10-point Socio-economic Agenda
Current Administration’s 10-point Socio-economic Agenda Maintain current macroeconomic policies, including fiscal, monetary, Effective land management and trade policies Invest in human capital Progressive tax management development Promote science, technology, and Pursue investment friendly reforms
Slide 5: About SM Investments
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 lev
Slide 6: Our Investments
Our Investments Portfolio Core Investments Investments Retail Banking Property 28% BELLE CORP 29% 77% 44% 20% 50% ATLAS CHINA CONSOLIDATED SM RETAIL INC. BANCO SM PRIME HOLDINGS, INC. MINING BANKING DE ORO CORP. 90% SPECIALTY RETAILERS LEISURE & TOURISM NET GROUP JOINT VENTURES CONVENTIONS THE SM ST
Slide 7: SM Group Companies' Rankings
SM Group Companies’ Rankings Philippine Conglos Philippine Retailers Philippine Banks Property Developers Market Cap ($bn) Total Sales ($mn) Total Resources ($bn) Market Cap ($bn) SMIC 16.1 FY 2015 BDO 45.9 SMPH 15.3 JG Summit 10.1 SM Retail 4,482 Metrobank 35.5 Ayala Land 9.9 Ayala Corp 9.5 Puregol
Slide 8: Our Business Footprint
Our Business Footprint Metro Manila 16 Cities 1 Municipality Total Population: 101M Luzon Retail Stores GSA 38 Provinces 55 Cities Total 687 1,064,075 Retail Stores GSA Food 92 475,943 Total 802 980,288 Non-food 22 354,818 Food 141 551,387 Specialty 573 233,314 Non-food 23 246,671 Property Buildings
Slide 9: Our ESG Programs
Our ESG Programs “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.” - Harley T. Sy Environmental Corpora
Slide 10: Strong Leadership
Strong Leadership Board of Directors From L to R: TOMASA H. LIPANA, Independent Director • 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 Of
Slide 11: 10-Year Performance since PSE Listing
10-Year Performance since PSE Listing Assets grew at 16.3% p.a. Market Cap grew 18.5% p.a. Revenue grew at 18.6% p.a. Net Income grew at 14.9% p.a. In PHP Billion 28.4 7.1 2005 2015 11
Slide 12: Summary of SMIC Recent Performance
Summary of SMIC Recent Performance Figures in PHP billion except percentages Recent Events SM Investments 9M 2016 9M 2015 Change FY 2015 Retail Revenues 252.4 230.8 9.4% 332.2 • Completed merger of specialty retail stores Net Income* 22.0 19.9 10.7% 43.7 • Opened 21 food, 2 department and 95 special
Slide 13: SM Retail: Footprint Expansion Opportunity
SM Retail: Footprint Expansion Opportunity SM Retail Footprint by Format SM Retail Footprint by Region Department Stores Stores GSA (sqm) Average The SM Store 55 728,066 13,238 Luzon 45M people Metro Manila Food Stores GSA (sqm) Average 13M people SM Supermarket 47 327,731 6,973 SM Hypermarket 45 34
Slide 14: SM Retail: Merger of Related Businesses
SM Retail: Merger of Related Businesses • Merger – SM Retail Inc. surviving entity • Strategic Fit Discretionary retailing Scale and diversity Strong mall synergies • Alignment of Structure and Ownership • Earnings Accretive – higher growth and margins • Greater footprint • Local market leader
Slide 15: Banking: BDO and China Bank
Banking BDO China Bank Business Strategy Business Strategy • Diversified and sustainable earning stream • Accelerate Expansion • Client acquisition through branch expansion • Grow Revenue Lines • Drive provincial lending and deposit taking initiatives • Solidify presence in corporate market • Expand
Slide 16: About SM Prime
About SM Prime • Developer of large scale, mixed-use “Lifestyle cities” anchored on world-class malls Malls • The largest integrated property developer in Southeast Asia by market capitalization • High recurring income Commercial • Extensive landbank • Consistently cited for excellence in corporate
Slide 17: SM Prime's 5-Year Roadmap
SM Prime’s 5-Year Roadmap Residences Hotels & Convention Malls Commercial Primary Homes Leisure Homes Centers (2013-2018) GFA: 10.6 Million sqm Launched Units: 139,628 Launched Units: 2,500 GFA: 0.46 Million sqm Rooms: 2,187 2018 (85% Phil + 15% China) Projects: 41 Projects: 16 No of Towers: 7 Proje
Slide 18: SM Prime vs Peers
SM Prime vs Peers Most defensive and least cyclical among Philippine property conglomerates 63% *Excludes Hotels and Resorts 7.7M 2.0M 1.0M 1.4M Source: Latest Available Company Information 18
Slide 19: The Mall of Asia Complex: A Lifestyle City Development
The Mall of Asia Complex: A Lifestyle City Development Sea Residences Mall of Asia Arena • Commercial, entertainment SMX Convention and residential hub Shell Residences Center • 60 hectares of reclaimed Shore Residences land fronting Manila Bay • Existing structures: Mall of Asia Five E-com Center •
Slide 20: SM Seaside Cebu: A Lifestyle City Development
SM Seaside Cebu: A Lifestyle City Development Chapel of San Observation Tower Pedro Calungsod • 30 hectares mixed use SM-ALI JV development on reclaimed land in Cebu • Integrated development • Site of Cebu’s largest mall SM Seaside City and the fourth largest SM mall in the country with a GFA of 430
Slide 21: SM Malls: Overview
SM Malls: Overview Largest mall operator/developer in the Philippines 21
Slide 22: SM Malls: Philippines
SM Malls: Philippines Philippine Population: 101M Area Malls GFA (sqm) % of Total Metro Manila (NCR) 20 3,297,272 44% Luzon Luzon (ex-NCR) 29 2,633,723 35% 45M Visayas 5 1,088,157 14% people NCR Mindanao 4 491,254 7% 13M Total 58 7,510,406 100% people SM Seaside City, Cebu Visayas 19M people Mindana
Slide 23: SM Malls: Philippines Expansion Plans
SM Malls: Philippines Expansion Plans New Opening GFA (sqm) SM San Jose Del Monte April 2016 114,186 SM Trece Martires May 2016 83,783 SM Cherry Congressional Nov 2016 13,273 SM East Ortigas Dec 2016 80,127 Expansion SM San Pablo Ph 1 Oct 2016 13,359 SM Molino Oct 2016 39,674 Total 344,402 Projectio
Slide 24: SM Malls: BPO Expansion Plans
SM SM Malls: Malls: Philippines BPO Expansion Expansion Plans Plans SM City Clark 5&6 SM Southmall Tower New Number GLA (sqm) Total Available Sites 27 252,028 Upcoming Sites Opening GLA (sqm) SM City Clark 5&6 4Q 2016 28,900 SM City Sta. Rosa 4Q 2016 26,117 SM City Sta. Rosa SM Fairview Tower Sub-to
Slide 25: SM Malls: China
SM Malls: China SM Zibo SM Tianjin Existing Date Opened GFA (sqm) SM Xi a men 2001 December 238,125 Ji nji a ng 2005 November 167,830 Chengdu 2006 October 166,665 Suzhou 2011 September 72,552 Chongqi ng 2012 December 149,429 Zi bo 2015 September 150,600 Total 945,200 Upcoming Target GFA (sqm) Ti a n
Slide 26: SM Residences
SM Residences Projects Overview 9M 2016 Total Launched since 2003 89,634 Total Units Sold since 2003 74,934 % Sold to date 83.6% Planned Launched in 2016 (units) 11,000-14,000 Reservation Sales (value) PHP35.5B Reservation Sales (units) 12,579 2016 CAPEX SMDC Fame SMDC Air PHP16.3B Project PHP10.5B
Slide 27: SM Residences Example – Shore Residences
SM Residences Example – Shore Residences One Bedroom with Balcony Two Bedroom with Balcony Approx. 27.7 to 29.5 sqm Approx. 58.5 sqm 27
Slide 28: SM Commercial Properties
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 107,962 SM Aura Tower 2013 52,837 SM Cyber West 2014 41,799 FiveE-com Center 2015 129,307 Total 370,685 Under Construction Opening GFA (sqm) ThreeE-com Center TBA
Slide 29: SM Hotels and Convention Centers
SM Hotels and Convention Centers Mall of Asia Arena • Growing tourism market opportunity • SM Hotel expansions complement existing mall, commercial and residential developments • Iloilo • SM North Edsa • San Fernando, Pampanga • SM Seaside City, Cebu Conrad Manila SMX Convention Center 29
Slide 30: SM Hotels and Convention Centers
SM Hotels and Convention Centers Conrad Manila Lobby Hotel Opened Rooms Taal Vista, Tagaytay 2003 260 Radisson Blu, Cebu 2010 396 Pico Sands, Hamilo Coast 2011 151 Park Inn, Davao 2013 202 Park Inn, Clark 2015 154 Conrad Manila, Pasay 2016 347 Total 1,510 Conrad Manila Diplomatic Suite: Bedroom Venu
Slide 31: Land Bank
Land Bank Companies Land Bank (sqm) SM Prime 11,270,901 Coastal Malls 1,812,356 Zone Inland 1,580 Has Mountain Zone Residences 3,146,993 4,200 Has Commercial 883,252 Leisure Homes 5,428,300 SMIC 57,801,502 Total 69,072,403 31
Slide 32: Land Bank in Batangas: Hamilo Coast
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 32
Slide 33: 2016 SM Group CAPEX
2016 SM Group CAPEX Businesses PHP bn Allocation/Projects Retail 5.2 New stores / Renovations Banks 7.5 Branch expansion, IT enhancements Property 60.2 New SM malls and expansions in Malls 32.2 Philippines and China Residential 20.7 Condominiums and HPI projects Commercial 4.5 ThreeE-com and FourE-C
Slide 34: Portfolio Investments: Belle Corporation
Portfolio Investments: Belle Corporation (In PHP mn) 9M 2016 9M 2015 % Chg FY 2015 • 28% ownership; publicly listed • Developer of high-end Revenues 4,641 3,981 16.6% 5,195 entertainment and leisure properties • Subsidiary, Premium Leisure Corp., Operating Costs (1,821) (1,707) 6.7% (2,318) holds 1
Slide 35: Portfolio Investments: Atlas Consolidated Mining
Portfolio Investments: Atlas Consolidated Mining • 29% ownership; publicly listed • Copper mine with 20+ years mine life, over 400m tonnes of proved and probable reserves (In PHP mn) 9M 2016 9M 2016 % Chg FY 2015 • Average cut-off grade of 0.30% Cu Revenues 8,777 8,403 4.5% 11,342 • Excellent enviro
Slide 36: Portfolio Investments: CityMalls Commercial Corp.
Portfolio Investments: CityMalls Commercial Corp. • 34% owned by SM Investments • Rapid growth plans to develop strip malls markets outside Metro Manila • SM group brands consist of almost 40% of the GFA • 70% of target land bank secured • 100 CityMalls by 2020 36
Slide 37: Financials
37 Financials ) INVESTMENTS CORPORATION
Slide 38: Financials: SMIC
Financials: SMIC 9M 2016 Consolidated Results Revenues +9.3% to PHP252.4bn In PHP Billion 9M 2016 9M 2015 Change FY2015 FY2014 FY2013 4% Revenue 252.4 230.8 9.3% 332.2 308.8 286.7 21% Reported Net Income* 22.0 19.9 10.7% 43.7 41.5 40.0 Net Margin (inc-NCI) 13.4% 13.2% - 13.1% 13.5% 14.0% Return on E
Slide 39: Financials: BDO
Financials: BDO Financial Highlights 9M 2016 9M 2015 Change FY 2015 (In PHP Bn) Net Interest Income 48.4 41.8 15.9% 57.0 Other Income 31.8 23.8 33.3% 31.9 Net Income1 19.3 17.6 9.7% 25.0 Assets 2,207.9 1,952.2 13.1% 2,031.3 Deposits 1,816.5 1,600.1 13.5% 1,663.9 Gross Customer Loans2 1,412.1 1,223.1
Slide 40: Financials: BDO
Financials: BDO Loan and Deposit Growth Loan Growth Deposit Growth 3,000 CASA Time Deposits BDO Industry 2,500 2,000 1,664 1,816 PHP Bn 1,345 1,492 20% 1,500 526 544 19% 932 533 18% 570 16% 17% 1,000 20% 339 1,272 500 959 1,138 592 775 16% 15% 15% - 14% 2012 2013 2014 2015 3Q 2016 Deposits YoY∆ 44%
Slide 41: Financials: China Bank
Financials: China Bank Financial Highlights 9M 2016 9M 2015 Change FY 2015 (In PHP Bn) Net Interest Income 12.3 11.2 9.3% 15.1 Non-Interest Income 4.2 3.0 42.2% 4.6 Net Income 4.8 3.7 31.2% 5.6 Assets 564.8 472.1 19.6% 527.0 Deposits 472.8 392.1 20.6% 438.7 Gross Customer Loans (ex-UDSCL) 347.3 293.
Slide 42: Financials: China Bank
Financials: China Bank Loan and Deposit Growth Gross Loans (PHP bn) Funding (PHP bn) Corporate Commercial Consumer CASA High Cost FCDU LDR 67% 70% 73% 71% 73% 73% 350 62% 316 400 550 298 473 66% 439 350 52 450 399 392 78 300 228 43 48 354 67 46% 199 295 350 73 68 272 250 71 26% 30 152 216 160 170 20
Slide 43: Financials: SM Prime
Financials: SM Prime 9M 2016 Results Earnings Revenue In PHP Billions Consolidated 9M 2016 9M 2015 % Chg Revenue 57.8 52.2 10.7% 9% 7% Normalized Earnings 17.5 15.5 12.9% Net Margin 30.2% 29.6% - 24% Return on Equity 10.7% 10.1% - 32% 67% 61% Malls Group 9M 2016 9M 2015 % Chg Revenues 35.2 32.3 8.9%
Slide 44: Contact Information and Disclaimer
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 SM
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