SM Investments Corporation · PSE:SM
SM Investments — Investor Presentation (August 2015)
46 slides from SM Investments's investor presentation, August 2015
Slide 1: First Half Investor Presentation
First Half Investor Presentation August 2015
Slide 2: Table of Contents
Table of Contents • The Philippine Economy 3 • About SM Investments 4 • SM Retail 13 • Banking 15 • SM Prime 16 • Landbank 31 • Portfolio Investments 34 • Financials 38 2
Slide 3: Philippines: Strong Macroeconomic Fundamentals
Philippines: Strong Macroeconomic Fundamentals Young Workforce with Rising Incomes Opportunities Strong GDP Growth Consumption Driven • Jobs creation, entrepreneurship 5.6% 70% of GDP • Infrastructure • Transport and utilities Per Capita GDP Per Capita GNI • Housing USD2,849 USD3,419 • Tourism Media
Slide 4: 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 5: Our Investments
Our Investments Portfolio Core Investments Investments Retail Banking Property 28% BELLE CORP 29% 100% 45% 20% 50% ATLAS CHINA CONSOLIDATED SM RETAIL INC. BANCO SM PRIME HOLDINGS, INC. MINING BANKING DE ORO CORP. 90% LEISURE & TOURISM NET GROUP SM HYPERMARKET SM SUPERMARKET CONVENTIONS COMMERCIAL RE
Slide 6: SM Group Companies' Rankings
SM Group Companies’ Rankings Philippine Philippine Philippine Property Philippine Banks Retailers Developers Conglomerates Total Resources ($bn) Total Sales ($mn) Market Cap ($bn) Market Cap ($bn) 1H 2015 BDO 41.7 SM Prime 12.8 SMIC 15.9 Metrobank 35.9 SM Retail 2,140 Ayala Land 12.1 PLDT 13.4 BPI 3
Slide 7: Our Business Footprint
Our Business Footprint Metro Manila Total Population: 100M Luzon 16 Cities 1 Municipality 38 Provinces 55 Cities Retail Stores GSA Retail Stores GSA Total 103 800,823 Total 140 736,572 Food 83 461,064 Food 118 503,597 Non-food 20 339,758 Non-food 22 232,975 Property Buildings GFA Property Buildings
Slide 8: Our ESG Programs
Our ESG Programs “SM is Fully committed to integrate sustainability and risk management into its existing management and operating systems.” - SM Investments Corporation 2014 ESG Report Social Environmental Governance • First mall-based solar farm in • SM Foundation • Policies and Disclosures the Ph
Slide 9: Strong Leadership
Strong Leadership Board of Directors From L to R: STEPHEN C. CU-UNJIENG, Adviser to the Board • HANS T. SY, Adviser to the Board • VICENTE S. PEREZ, JR., Independent Director • HENRY T. SY, JR., Vice Chairperson • TERESITA SY-COSON, Vice Chairperson • HENRY SY, SR., Chairman • HARLEY T. SY Director
Slide 10: 10-Year Performance since PSE Listing
10-Year Performance since PSE Listing Assets grew at 17% p.a. In Php Billion Market Cap grew at 19% p.a. 712 170 2005 2014 720 Revenue grew at 15% p.a. In Php Billion 275.7 89.1 2006 2014 Net Income grew at 13% p.a. 127 In Php Billion 28.4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10.5
Slide 11: Summary of SMIC Recent Performance
Summary of SMIC Recent Performance Figures in Php billion except percentages Recent Events SM Investments 1H 2015 1H 2014 Change FY 2014 Retail Revenues 138.9 130.9 6.2% 275.7 • Opened 20 stores in 1H, 17 outside NCR Net Income 13.5 12.3 9.6% 28.4 • Alfamart operating 50 stores Net Margin 9.7% 9.4%
Slide 12: SM Retail
SM Retail Food Non-Food Large Format Medium Format Retail Affiliates Small Format - Minimart 12
Slide 13: SM Retail: Footprint Expansion Opportunity
SM Retail: Footprint Expansion Opportunity Per Region Stores Gross Selling Area% of Total Philippine Population: 100M Metro Manila 103 800,823 44% Luzon Luzon 44M 140 736,572 41% (ex-Metro Manila) people NCR Visayas 32 185,013 10% 13M people Mindanao 14 96,505 5% Total 289 1,818,912 Visayas 19M Per
Slide 14: Alfamart: First Mover in the Minimart Space
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 • Currently in the testing phase with 50 branches
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 • One of the largest integrated property developers in Southeast Asia by market Malls capitalization • One of the largest listed real estate developers on the PSE by market capitalization, total assets and net income Commercial • Consistently cited for excellence in corporate governan
Slide 17: SM Prime's 5-Year Roadmap
SM Prime’s 5-Year Roadmap Doubling revenues and profits by 2018 Hotels & Malls Residential Commercial Convention Centers +57% in GFA +119% in Units +207% in GFA +115% in Rooms 2018 GFA: 10.96 Million sqm Launched Units: 139,628 GFA: 0.46 Million sqm Rooms: 2,187 (90% Phil + 10% China) Projects: 41 N
Slide 18: SM Prime vs Peers
SM Prime vs Peers Most defensive and least cyclical among Philippine property conglomerates FY 2014 SMPH ALI RLC2/ MEG Total Revenue (in PHP bn) 66.24 100% 95.20 100% 17.05 100% 41.173/ 100% Recurring 41.51 63% 21.21 22% 7.96 47% 7.07 17% Others 24.73 37% 73.99 78% 9.09 53% 34.10 83% Total GLA (in ‘
Slide 19: The Mall of Asia Complex: A Lifestyle City Development
The Mall of Asia Complex: A Lifestyle City Development Mall of Asia Sea Residences Arena Shell SMX Convention Center • Commercial, entertainment Residences and residential hub Shore Residences • 60 hectares of reclaimed land fronting Manila Bay Mall of Asia • Existing structures: Five E-com Center •
Slide 20: SM Seaside Cebu: A Lifestyle City Development
SM Seaside Cebu: A Lifestyle City Development Residential Chapel of San Hospital • 30 hectares mixed use Pedro Calungsod development on reclaimed land in Cebu • Integrated development School • Site of Cebu’s largest mall and the fourth Aquarium Observation largest SM mall in the Center Tower country
Slide 21: SM Malls: Overview
SM Malls: Overview Largest mall operator/developer in the Philippines 52 6.6M 3.0M 5 0.8M 0.2M 21,017 70,769 134,393 1,600 6,793 6,456 21
Slide 22: SM Malls: Philippines
SM Malls: Philippines Philippine Population: 100M Number GFA % of Total Area of Malls (sqm) GFA Luzon 44M NCR 18 3,215,879 49% people NCR Luzon 26 2,281,733 35% 13M Visayas 4 619,533 9% people Mindanao 4 491,254 7% Total 52 6,608,399 100% Visayas 19M SM Aura Premier, Taguig City people Mindanao 24M
Slide 23: SM Malls: Philippines Expansion Plans
SM Malls: Philippines Expansion Plans New GFA (sqm) SM San Mateo Opened in Q2 2015 80,043 SM Sangandaan Opened in Q2 2015 35,319 SM SRP Cebu 2H 2015 460,791 SM Cabanatuan 2H 2015 154,020 Expansion SM Iloilo 1H 2015 37,544 SM Lipa 1H 2015 28,212 Total 795,929 Projection Total Malls 55 End 2015 Total
Slide 24: SM Malls: China
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 154,000 Total 948,601 Upcoming Target GFA (sqm) Tianjin 2016 540,000 24
Slide 25: SM Residences
SM Residences Projects Overview Land Bank Total Units Available since 2005 79,741 Area Hectares Units Sold 60,837 Batangas 81.3 Units Sold (%) 76% Pampanga 29.3 Projects Launched (units) in 1H 2015 10,320 Reservation Sales for 1H 2015 P18.8 bn Davao 6.2 Rizal 5.5 2015 Budget CAPEX P21.2 bn Cavite 1.
Slide 26: SM Shore Residences: One Bedroom Unit
SM Shore Residences One Bedroom Unit with Balcony Approx. 27.67 to 29.53 sqm 26
Slide 27: SM Shore Residences: Two Bedroom Unit
SM Shore Residences Two Bedroom Unit with Balcony Approx. 58.46sqm 27
Slide 28: SM Commercial Properties
SM Commercial Properties SM Cyber Makati One TwoE-com Center Sen. Gil Puyat Ave., MOA Complex Makati City Pasay City Completed: 2008 Completed: 2012 GFA: 22,055 sqm GFA: 107,962 sqm SM Cyber Makati Two FiveE-com Center Sen. Gil Puyat Ave., MOA Complex Makati City Pasay City Completed: 2008 Completio
Slide 29: SM Hotels
SM Hotels Taal Vista Hotel Hotel Location Rooms Taal Vista Tagaytay 261 Radisson Blu Cebu 396 Pico Sands Hamilo Coast 154 Pico Sands Hotel Radisson Blu Cebu Park Inn Davao 202 Conrad Hotel Pasay 347 (Under Construction) Park Inn Clark 154 Park Inn Davao (Under Construction) Total by end 2015 1,514 2
Slide 30: SM Convention Centers, and MOA Arena
SM Convention Centers, and MOA Arena SMX Convention Center, MOA Leasable Space Venue Location (in sqm) Mall of Asia SMX Mall of Asia 17,326 Complex SMX Lanang Premier SM Lanang 5,196 SMX Aura Premier SM Aura 3,137 SMX Bacolod Bacolod 4,269 Megatrade Hall Megamall 4,214 Mall of Asia Arena Cebu Trade
Slide 31: Landbank
Landbank Landbank Companies (sqm) SM Prime 10,277,697 Coastal Malls 2,348,065 Zone Inland 1,700 Has Mountain Zone Residential 1,818,118 4,200 Has Commercial 510,470 Leisure 5,601,044 SMIC 57,801,502 Total 68,079,199 31
Slide 32: Land Bank in Batangas: Hamilo Coast
Land Bank in Batangas: Hamilo Coast • Hamilo Coast asset is owned directly by SMIC • 5,900 hectares • 31 km of coastline • 13 coves • Pristine environment • 1½ - 2 hours from Manila 32
Slide 33: Pico de Loro Cove in Hamilo Coast
Pico de Loro Cove in Hamilo Coast Beach Club In partnership with Country Club 33
Slide 34: Portfolio Investments: Belle Corporation
Portfolio Investments: Belle Corporation • 28% ownership; publicly listed (In PHP mn) Q1 2015 Q1 2014 % Change • Developer of high-end entertainment and leisure properties • Subsidiary, Premium Leisure Corp., holds 1 Revenues 1,345 558 141.0% of 4 gaming licenses in Entertainment City Operating Cost
Slide 35: Portfolio Investments: Atlas Consolidated Mining
Portfolio Investments: Atlas Consolidated Mining • 29% ownership; publicly listed (In PHP mn) Q1 2015 1Q2014 % Change • Copper mine with 20+ years mine life, over 400m tonnes of proved and probable Revenues 2,635 3,639 -28% reserves at ave. cut-off grade of 0.34% Cu • Business turnaround Total Cash
Slide 36: Portfolio Investments: Net Buildings in Bonifacio Global City
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% 36
Slide 37: Portfolio Investments: CityMalls Commercial Corp.
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 all malls • 100 CityMalls by 2020 -
Slide 38: Financials
38 Financials ) INVESTMENTS CORPORATION
Slide 39: Financials: SMIC
Financials: SMIC 1H 2015 Consolidated Results Revenues +6% to PHP138.9bn In PHP Billion 1H2015 1H2014 FY2014 FY2013 FY2012 FY2011 4% Revenue 138.9 130.9 275.7 253.3 223.9 199.9 25% Net Income 13.5 12.3 28.4 27.5 24.7 21.2 Net Margin 9.7% 9.4% 10.3% 10.8% 11.0% 10.6% Dividends n/a n/a 8.2 7.4 6.4 5.5
Slide 40: Financials: BDO
Financials: BDO 1H ’15 1H ’14 % FY FY Financial Highlights (PHP bn) (PHP bn) Change 2014 2013 Net Interest Income 27.1 24.6 10.2% 51.2 43.2 Non Interest Income 16.4 14.4 14.1% 29.5 31.8 Net Income 11.7 11.0 6.1% 22.8 22.6 Assets 1,873.2 1,684.5 11.2% 1,863.6 1,672.8 Deposits 1,520.4 1,365.9 11.3% 1,
Slide 41: Financials: BDO
Financials: BDO Loan and Deposit Growth Loan Growth Deposit Growth BDO Industry LDR CASA (PHP bn) Term Depo (PHP bn) Growth 78.1% 82.5% 44.5% 73.0% 74.1% 2,50 0 60% 67.8% 9.7% 10.9% 11.3% 40% 2,00 0 8.4% 20% 0% 1,50 0 533 520 -20% 24.0% 19.0% 20.0% 1,00 0 588 16.0% -40% 16.0% 328 339 -60% 500 757 95
Slide 42: Financials: China Bank
Financials: China Bank 1H ‘15 1H ‘14 % FY FY Financial Highlights (PHP bn) (PHP bn) Change 2014 2013 Net Interest Income 7.4 6.8 9.3% 14.1 9.9 Non Interest Income 2.0 2.0 4.3% 4.8 5.2 Net Income 2.5 2.2 14.1% 5.1 5.1 Assets 479.3 457.4 4.8% 470.9 413.7 Deposits 399.4 387.7 3.0% 399.3 354.3 Gross Cus
Slide 43: Financials: China Bank
Financials: China Bank Strong Balance Sheet with Sustainable Growth Gross Loans (PHP bn) Funding (PHP bn) Corporate Commercial Consumer CASA High Cost FCDU LDR 297 67% 70% 73% 72% 320 298 550 62% 86% 270 228 43 44 399 66% 399 450 198 30 354 70 46% 73 220 23 128 350 170 154 133 272 71 26% 18 82 89 25
Slide 44: Financials: SM Prime
Financials: SM Prime 1H 2015 Results In PHP Billions Revenue Mix Earnings Mix Consolidated 1H 2015 1H 2014 FY2014 FY2013 Revenue 35.9 33.3 66.2 59.8 6% 3% 5% 2% Recurring Net Income 11.2 9.8 18.4 16.3 Net Margin 31.4% 29.4% 27.8% 27.0% Dividends n/a n/a 5.6 5.02 Return on Equity 11.0% 10.0% 10.0% 10
Slide 45: SM Group CAPEX
SM Group CAPEX Businesses Capex Allocation/Projects (Pesos bn) Retail 4.7 New stores / Renovations Banks 4.0 Branch expansion, IT enhancements Property 73.3 New SM malls and expansions in Malls 41.6 Philippines and China Residential 22.0 Condominiums and HPI projects Commercial 4.0 ThreeE-com and Fi
Slide 46: Contact Information and Disclaimer
Contact Information and Disclaimer Investor Relations Office Office Number: +632 857-0100 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 SMI