Ayala Corp. · PSE:AC
Ayala — Q1 2014 Earnings Presentation
20 slides from Ayala's earnings presentation, May 13, 2014
Slide 1: Analysts' Briefing First Quarter 2014
A N A LY S T S ’ B R I E F I N G F I R S T Q U A RT E R 2 0 1 4 MAY 13, 2014 1
Slide 2: Key Highlights
Key Highlights 1Q14 net income rose by 22% to P5.5B driven by: Strong earnings of core BUs and international businesses Capital gains from divestment of Stream Equity earnings up 20% to P6.9B Net income up 24% to P3.6B excluding Globe’s accelerated depreciation and BPI’s trading gains in 1
Slide 3: Consolidated Net Income & Equity in Net Earnings 1Q14 vs. 1Q13
Consolidated Net Income & Equity in Net Earnings 1Q14 vs. 1Q13 Consolidated Net Equity in Net Earnings Income (in Million Pesos) (in Million Pesos) 5,471 6,880 4,507 5,747 +22% +20% 1Q13 1Q14 Reported 1Q13 1Q14 • Excluding Globe’s accelerated depreciation, BPI trading gains in 1Q13 and gain from Str
Slide 4: Equity in Net Earnings
Equity in Net Earnings (in million Pesos) 3,683 1Q13 1Q14 1,871 1,608 1,395 +4x +21% 910 654 -49% +15% 538 215 ALI BPI GLO MWC Equity earnings from core businesses down 14% year-on-year Excluding the impact of Globe’s accelerated depreciation and BPI’s trading gains last year, equity earnings ju
Slide 5: Equity in Net Earnings
Equity in Net Earnings (in million Pesos) 1,761 1Q13 1Q14 7 132 50 23 128 -130 -40 -145 -34 IMI LiveIt Auto AC Energy Others Equity earnings from IMI surged exponentially on higher revenues and better margins AC recognized net capital gains from Stream sale through LiveIt of P1.8B | 55
Slide 6: Summary of Business Unit Performance
Summary of Business Unit Performance Reported earnings of all core subsidiaries up except BPI on absence of extraordinary gains N E T I N C O M E (in million Php) KEY HIGHLIGHTS Real estate revenues up 19%; 8 projects launched worth P12B Residential sales take-up (P21.3B) 9% higher with bookings
Slide 7: Summary of Business Unit Performance
Summary of Business Unit Performance Reported earnings of all core subsidiaries up except BPI on absence of extraordinary gains N E T I N C O M E (in million Php) KEY HIGHLIGHTS Revenues down 25% due to absence of significant trading gains in 1Q14 57% Core banking business posted robust growth o
Slide 8: Summary of Business Unit Performance
Summary of Business Unit Performance Reported earnings of all core subsidiaries up except BPI on absence of extraordinary gains N E T I N C O M E (in million Php) KEY HIGHLIGHTS Service revenues up 9% (P23.2B) on sustained growth in mobile (+8%), broadband 4.3x (+12%) and fixed line data 1Q14 1Q13
Slide 9: Summary of Business Unit Performance
Summary of Business Unit Performance Reported earnings of all core subsidiaries up except BPI on absence of extraordinary gains N E T I N C O M E (in million Php) KEY HIGHLIGHTS Revenues up 5% (P3.8B) driver by higher billed volume • East Zone billed volume up 3% • Non-EZ billed volume up 64% 7%
Slide 10: Summary of Business Unit Performance: International
Summary of Business Unit Performance International businesses registered significant earnings improvement N E T I N C O M E (in million Php) KEY HIGHLIGHTS Revenues surged 25% driven by ~20x strong sales and margins mainly from Philippine, Europe and China 1Q14 1Q13 operations coupled with improve
Slide 11: Summary of Business Unit Performance: New growth platforms
Summary of Business Unit Performance New growth platforms in ramp-up phase N E T I N C O M E (in million Php) KEY HIGHLIGHTS Lower Honda sales coupled with startup costs incurred by Volkswagen business unit 1Q14 1Q13 -29 50 Decline in equity earnings from NorthWind due to a provision recognized
Slide 12: Parent Company Capex of P49B for 2014
Parent Company Capex of P49B for 2014 • Auto, education, & others • Participation in 17% BPI Stock Rights • Daang Hari, 6% 47% Offer AFCS, other • Acquisition of bids 30% additional stake Closing of 17% stake in GNPower, completion of other thermal projects, expansion of wind project Spent 57% or
Slide 13: Raised US$300M from sale of exchangeable bonds
Raised US$300M from sale of exchangeable bonds Issue size of US$300M, 0.50% due 2019 2.5x oversubscribed Cost of funding lowest in 2014 across Asia ex-Japan Exchangeable starting June 2014 up to 10th day before maturity ALI as the underlying security: • AC’s largest and most liquid listed
Slide 14: Balance Sheet / Debt Profile
Balance Sheet / Debt Profile As of As of in billion pesos 12.31.2013 3.31.2014 (Audited) (Unaudited) 71% of debt in PARENT pesos; 48% with Gross Debt* 70,950 94,473 fixed rates Cash 25,563 29,934 Blended cost of 4.3% Net Debt 45,387 64,539 Ave. life of 7.5 years D/E Ratio 0.49 0.63 Net D/E Rat
Slide 15: Summary
SUMMARY On track to surpass goal of P20B in net income and mid-teens ROE by 2016 Investments in new businesses moving to execution phase with power to begin earnings contribution Maintains healthy balance sheet that can support sizeable investments 15
Slide 16: Committed US$430M of equity to date on thermal, wind and hydro
Committed US$430M of equity to-date on thermal, wind and hydro technologies EQUITY EST. CAPACITY ATTRIBU- COMMITTED INVESTMENT ECONOMIC STATUS (MW) TABLE MW (US$) OWNERSHIP THERMAL South Luzon Thermal Energy Company (SLTEC) - South Luzon • Unit 1 expected to operate by 2H2014 270 135 90M 50% • Unit
Slide 17: Committed US$430M of equity to date on thermal, wind and hydro
Committed US$430M of equity to date on thermal, wind and hydro technologies ATTRIBUT- EQUITY EST. CAPACITY COMMITTED ABLE INVESTMENT ECONOMIC STATUS (MW) MW (US$) OWNERSHIP WIND NorthWind - North Luzon • Operating and 33 + awaiting FIT 18MW of 26 20M 50% • 18MW expansion to be expansion completed 2H
Slide 18: Plan to invest another ~US$400M over the next two years
Plan to invest another ~US$400M over the next two years EQUITY EQUITY CAPACITY ATTRIBUTABLE PIPELINE INVESTMENT INVESTMENT STATUS (MW) TABLE MW (US$) (US$) GN Power Kauswagan 600 600 300M 100% Target financial close 2H14 (Mindanao) GN Power Bataan II 1,320 660 300M 50% Negotiations with EPC ongoing
Slide 19: Committed US$60M equity in transport infrastructure
Committed US$60M equity in transport infrastructure PPP PROJECT BID STATUS AYALA BID PROJECT COST OUTCOMES AWA R D E D Daang Hari Connector P2B Under P902M SMC: P608M Road Construction Operational by end-2014 Automated Fare P1.7B Implementation -P1,088,103.90 SM Group: - Collection System on 3Q2015
Slide 20: Analysts' Briefing First Quarter 2014
A N A LY S T S ’ B R I E F I N G F I R S T Q U A RT E R 2 0 1 4 MAY 13, 2014 20