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Aboitiz Equity Ventures
First Quarter 2016Financial & Operating Results
6 May 2016
2
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
3
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
4
DistributionGeneration AP Parent & Others
Net income up on strong performance by the generation and distribution segments
812 851
3,573 4,189
1Q2015 1Q2016
5,016EPS = P0.68
15%
+17%
+5%
4,347EPS = P0.59
FINANCIAL HIGHLIGHTS
NET INCOME (in Php million)
5
DistributionGeneration AP Parent & Others
Non-Recurring Items1Q2015 1Q2016
AP Parent (1) (15)
AP -Gen 13 257
Total Gains/(Losses) 11 242
Core net income up on higher sales from the Coal and Large Hydro Units
812 851
3,561 3,932
1Q2015 1Q2016
4,774EPS = P0.65
10%
+10%
+5%
4,335EPS = P0.59
FINANCIAL HIGHLIGHTS
CORE NET INCOME (in Php million)
6
Cash generation continued to be strong
1,265 1,325
7,239 8,096
1Q2015 1Q2016
9,526
+12%
+5%
8,531
12%
DistributionGeneration AP Parent & Others
FINANCIAL HIGHLIGHTS
BENEFICIAL EBITDA (in Php million)
7
Balance sheet continued to be strong with low gearing
FINANCIAL CONDITION
YE2015 1Q2016 YE2015 1Q2016
Cash and Equivalents 13,841 14,024 51,098 67,040
Investments and Advances 70,373 70,490 22,555 22,503
Total Assets 85,574 86,177 242,489 265,725
Total Interest Bearing Debt 9,911 9,914 114,612 129,283
Total Liabilities 22,613 34,817 140,876 171,479
Net Debt - - 63,514 62,243
Total Equity 62,962 51,360 101,614 94,245
Current Ratio 1.2x 0.6x 3.1x 2.3x
Net Debt to Equity -0.1x -0.1x 0.6x 0.7x
PARENT CONSOLIDATEDBALANCE SHEET
(in m illion pesos)
8
176 135
540 549
943 1,151
144179
1Q2015 1Q2016
Capacity Sales Breakdown by Profile (MW)
Spot Market Energy Contracts
Capacity Contracts Ancillary
2,0141,804 12%
Capacity Sold Factor
Fuel Group 1Q15 1Q16Change in % points
MINI HYDRO 29% 25% -4
LARGE HYDRO 65% 73% 8
SNAP Magat 55% 64% 9
SNAP Benguet 79% 84% 5
GEOTHERMAL 77% 76% -1
COAL 95% 94% -1
Therma Luzon 94% 91% -3
Therma South 100% -
OIL 97% 96% -1
83% 83%CapacitySold Factor
Capacity sales growth driven by Therma South and SNAP
OPERATING HIGHLIGHTS: GENERATION
9
Fuel GroupBeneficial
Total Energy Sales(GWh)
BeneficialAncillary Sales
(GWh)
1Q15 1Q16 YoY Chg 1Q15 1Q16 YoY Chg
MINI HYDRO 75 71 -5%
LARGE HYDRO 169 178 5% 243 296 22%
SNAP Magat 79 105 33% 135 145 7%
SNAP Benguet 90 74 -18% 108 151 40%
GEOTHERMAL 663 667 1%
COAL 1,533 2,055 34%
Therma Luzon 1,317 1,300 -1% 69 94 36%
Therma South - 499 -
OIL 388 478 23%
AP – GENERATION 2,828 3,451 22% 312 390 25%
Volume growth driven by the Coal, Large Hydro and Oil Business Units
OPERATING HIGHLIGHTS: GENERATION
10
MAGAT’S WATER LEVEL VS. RULE CURVE (in MASL)
Dry Spell to persist until mid-2016
OPERATING HIGHLIGHTS: GENERATION
OPERATING HIGHLIGHTS: GENERATION
11
In Peso/kWhBilateral
ContractsSpot Market
Weighted Average
Ancillary
1Q15 1Q16 1Q15 1Q16 1Q15 1Q16 1Q15 1Q16
AP GENERATION GROUP 4.54 4.09 5.17 2.99 4.63 4.00 2.08 2.08
SNAP Magat 4.95 4.82 6.71 3.36 5.18 4.67 2.24 2.46
SNAP Benguet 4.75 4.68 9.15 5.38 4.88 4.72 2.19 1.91
Therma Luzon* 3.93 3.76 6.21 3.28 4.18 3.72 1.61 1.75
Therma South - 4.58 - - - 4.58
APRI** 4.45 3.74 4.18 2.60 4.36 3.46
Note: Fuel cost and purchased power:*TLI: P1.47/kWh (1Q2016) versus P1.52/kWh (1Q2015)**APRI: P1.37/kWh (1Q2016) versus P1.79/kWh (1Q2015)
Average selling price dropped amid declining fuel cost
OPERATING HIGHLIGHTS: GENERATION
2,790 3,142 3,322 3,606 3,727 3,934 4,076 4,480 4,759
1,111 1,201
2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q2015 1Q2016
OPERATING HIGHLIGHTS: DISTRIBUTION
12
334 435
24 98 94
22 28 23
1,060
349
497
24 102 100
21 30 27
1,151
DavaoLight
VECO CotabatoLight
SFELAPCO SEZ MEZ BEZ LEZ Total
1Q2015 1Q2016
270
841
1,111
300
900
1,201
Residential Commercial &Industrial
Total Power Sales
1Q2015 1Q2016
BENEFICIAL POWER SALES (GWh)
BENEFICIAL GWH SALES GROWTH(BY CUSTOMER TYPE)
PEAK DEMAND (MW)
9%
8%
8%
11%
7%
Power sales grew across all customer segments
OPERATING HIGHLIGHTS: DISTRIBUTION
2%
1% 1%
3%
7%
6%
8%8%
1%1% 1%
3%
5%
7% 7%
6%
13
Gov’t Cap – 8.50%
SYSTEMS LOSSGROSS MARGIN / KWH SALE
SFELAPCOSEZ Davao Light VECO CotabatoLight
MEZ BEZ
1.44
1.60
1.77
1.71
1.61
1.46
2011 2012 2013 2014 2015 1Q2016
1Q2016
1Q2015
LEZ
Gross margin down on continued operations of embedded plant
OPERATING HIGHLIGHTS: DISTRIBUTIONOPERATING HIGHLIGHTS: DISTRIBUTION
14
SaCaSun – 46 MW 75-hectare at Barangay Punao, San Carlos City, Negros Island
SaCaSun - Began delivering energy to the Visayas grid
Source: Official Gazette of the Republic of the Philippines
PROJECT UPDATES
15
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
1,479
1,612
1Q2015 1Q2016
16
Net income grew on strong recurring income
Attributable to Parent Bank’s Stockholders
NET INCOME(in Php million)
FINANCIAL HIGHLIGHTS
9%
4.37%5.09%
1.32% 1.25%
3.05%3.84%
YTD Mar2015
YTD Mar2016
Ave. Yield Ave. Cost NIM
2,528
3,539
1Q2015 1Q2016
17
Net interest income surged due to loan expansion and improved margins
40%
NET INTEREST INCOME(in Php million)
79bps
FINANCIAL HIGHLIGHTS
YTD Mar 2015 YTD Mar 2016
NET INTEREST MARGIN EARNING ASSETS(ADB In Php million)
216 194
127 175
350 373
89.6% 89.4%
-1700.0%
-1500.0%
-1300.0%
-1100.0%
-900.0%
-700.0%
-500.0%
-300.0%
-100.0%
100.0%
100
150
200
250
300
350
400
450
YTD Mar 2015 YTD Mar 2016Liquid Assets Loans Others Share to Net Assets
7% +38%
-10%
18
Credit portfolio posted strong expansion propelled by both corporate and retail loans
CREDIT PORTFOLIO(ADB in Php million)
FINANCIAL HIGHLIGHTS
67 78
2527
43
77135
182
YTD Mar 2015 YTD Mar 2016
Retail Commercial Corporate
35%
+12%
+16%
+64%
19
Non-interest income weighed down by trading amidst robust fee business
NON-INTEREST INCOME(in Php million)
FINANCIAL HIGHLIGHTS
879 974
462
(32)
412
377
1,753
1,319
1Q2015 1Q2016
Ser. Charges, Fees and Com. Trading and FX Gain-net Miscellaneous
25%
+11%
-8%
20
Operating expenses rose on branch expansion
OPERATING EXPENSES(in Php million)
FINANCIAL HIGHLIGHTS
1,972 2,260
218
241 2,292
2,569
1Q2015 1Q2016
Core Bank Taxes (GRT & DST) Subsidiaries
12%
+15%
+11%
87 101
11
13 100
116
34.5% 37.1%
-1000.0%
-800.0%
-600.0%
-400.0%
-200.0%
0.0%
200.0%
60
70
80
90
100
110
120
130
140
YTD Mar 2015 YTD Mar 2016
Subsidiaries FCDU Peso Share of CASA to Total
246 269
44 44
289 313
-
50
100
150
200
250
300
350
YTD Mar 2015 YTD Mar 2016Subsidiaries UnionBank
TOTAL DEPOSITS(ADB in Php Billion)
21
CASA deposits sustained double-digit expansion
FINANCIAL HIGHLIGHTS
16% +16%
+18%
CASA DEPOSITS(ADB in Php Billion)
8%+9%
22
Capital ratios remained healthy and above regulatory limits
FINANCIAL HIGHLIGHTS
13.6%
12.5%
17.1%
15.5%
1Q2015 1Q2016
Tier 1 Capital Ratio Total Capital Adequacy Ratio
CAPITAL ADEQUACY RATIOSConsolidated Basis
23
Profitability ratios improved on strong quarter results
FINANCIAL HIGHLIGHTS
Return on Equity
Return on Average Assets
Cost to Income Ratio
10.6% 10.9%
1Q2015 1Q2016
1.5% 1.5%
1Q2015 1Q2016
54% 53%
1Q2015 1Q2016
24
UnionBank shares trailing behind PSE and Financial indices
60%
70%
80%
90%
100%
110%
120%
UnionBank PSEi Financial Index
REBASED STOCK PERFORMANCE3/31/2015-3/31/2016
25
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
2,080 1,551
2,207 2,702
891 773
451 473
1Q2015 1Q2016
26
FINANCIAL HIGHLIGHTS
Feeds PhilippinesFlour FarmsFeeds Vietnam
5,498
2%
5,629
REVENUE(in Php million)
27
FINANCIAL HIGHLIGHTS
2,080 1,551
1Q2015 1Q2016
Flour
25%
2,207 2,702
1Q2015 1Q2016
Feeds Philippines
22%
891 773
1Q2015 1Q2016
Feeds Vietnam
13%
451 473
1Q2015 1Q2016
Farms
5%
REVENUE(in Php million)
28
FINANCIAL HIGHLIGHTS
EBITDA (in Php million)
306 304
238 335
58
22 124 91
1Q2015 1Q2016
Feeds PhilippinesFlour FarmsFeeds Vietnam
751
4%725
29
FINANCIAL HIGHLIGHTS
306 304
1Q2015 1Q2016
Flour
1%
238 335
1Q2015 1Q2016
Feeds Philippines
41%
58
22
1Q2015 1Q2016
Feeds Vietnam
61%
124 91
1Q2015 1Q2016
Farms
EBITDA (in Php million)
27%
30
FINANCIAL HIGHLIGHTS
NET INCOME(in Php million)
178 162
146 203
45 14
60 20
1Q2015 1Q2016
Feeds PhilippinesFlour FarmsFeeds Vietnam
3997%
429
31
FINANCIAL HIGHLIGHTS
178 162
1Q2015 1Q2016
Flour
9%
146 203
1Q2015 1Q2016
Feeds Philippines
39%
45
14
1Q2015 1Q2016
Feeds Vietnam
69%
60
20
1Q2015 1Q2016
Farms
66%
NET INCOME(in Php million)
58,485 59,365
2,105
1Q2015 1Q2016
Export Domestic
32
OPERATING HIGHLIGHTS – Flour Division
5%
Sales VolumeIn MT
Average Selling Prices and
Gross ProfitPeso/bag
Average Selling Price Gross Profit
61,470
889
631
149 124
1Q2015 1Q2016
81,767 97,739
41,655 39,367
1Q2015 1Q2016
123,422 137,106
33
OPERATING HIGHLIGHTS – Feeds Division
11%
Sales VolumeIn MT
Average Selling Prices and
Income Over Ingredient Cost
Peso/MT
Average Selling Price
Income Over Ingredient Cost
Volume: Philippines Volume: Vietnam
Feeds Philippines
Average Selling Price
Income Over Ingredient Cost
Feeds Vietnam
23,847 23,843
5,347 5,516
1Q2015 1Q2016
21,380 19,649
2,904 2,259
1Q2015 1Q2016
4,001 4,522
8,572
10,121
-
2,000
4,000
6,000
8,000
10,000
12,000
1Q2015 1Q2016
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1Q2015 1Q2016Sales Volume ('000 Kilos) Ave Sow Level (heads)
34
OPERATING HIGHLIGHTS – Farms Division
Sales VolumeIn ‘000 kilos
Average Selling Prices and
Gross Profit
Peso/kilo
Average Selling Price Gross Profit
13%
109 97
27
14
-
5
10
15
20
25
301Q2015 1Q2016
-
20
40
60
80
100
120
1Q2015 1Q2016
35
PROJECT UPDATES
Project
Updates
PROJECT UPDATES - FEEDMILL
36
PROJECT UPDATES - FARM
37
PROJECT UPDATES - FARM
38
39
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
Improvements anticipated from industrial lot sales and residential projects completion
FINANCIAL HIGHLIGHTS
40
300 282
253186
23
32
Q1 2015 Q1 2016
REVENUES(in Php million)
Residential Industrial Commercial and Others
13%576
500
Residential sales exceeded targets driven by mid-market house & lots and high-end lot-only products
FINANCIAL HIGHLIGHTS
41
88 105
194
35354
130
1Q 2015 1Q 2016
RESIDENTIAL SALES(in Php million)
Condo H&L Lots
75%
336
588
EBITDA and NIAT down by 37% and 38%, respectively
FINANCIAL HIGHLIGHTS
42
126
80
Q1 2015 Q1 2016
EBITDA(in Php million)
80
50
Q1 2015 Q1 2016
NIAT(in Php million)
37%
38%
OPERATING HIGHLIGHTS
43
Residential
Residential sales exceeded target
Launch of Amoa’s second enclave ahead of schedule
Commercial
Continued vigor shown by shoppers in The Outlets at Pueblo Verde, as evidenced by a 45% increase in foot traffic
45 brands in stores, 7 restaurants in The Fork in the Road
Has evolved into a unique shopping destination in Cebu
Industrial
Continued expansion activities
1.4 hectares sold out of 20-hectare target
10 hectares acquired out of 25-hectare target
44
CDPEIEstate launch and commercial groundbreaking by June 2016
Garden District.
Esplanade
Anchor tenant
PROJECT UPDATES
PROJECT UPDATES
45
Final planning phases for
3 new projects in Luzon
2 new projects in Cebu
46
Transfer of corporate HQto Taguig by mid-2017
PROJECT UPDATES
PROJECT UPDATES
47
2016 CAPEX targeted at 4.6B
29%
65%
6%
Q1 2016 CAPEX at 519M
28%
62%
10%
Land AcquisitionProject DevelopmentOther Initiatives
48
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
● Strong Q1 cement demand supported by:○ Increased government spending in areas such as roads and
other public facilities○ Sustained rise in commercial and other non-residential
spaces ○ Continued growth in the residential sector
● Contribution to AEV amounts to P391 million
● Continued solid demand is expected for the remainder of 2016
49
OPERATING HIGHLIGHTS
Strong cement demand experienced
50
● The new finish mill boosts Norzagaray plant’s production capacity by 850,000 metric tons per annum
OPERATING HIGHLIGHTS
850,000 MT capacity added
● Supports sustainability initiatives through technology designed to have low wear rate and less energy consumption
51
300 MLD Davao Bulk Water Project
One of the country’s largest private bulk water supply project
100% powered by renewable energy
Partnership with JV Angeles Construction Corporation
PROJECT UPDATES
52
PROJECT UPDATES
AEV + SMRT Int’l Pte. Ltd =
Aboitiz-SMRT Transport Solutions Consortium
LRT 2 & Masinag Extension*Regional Bundled Airports
AEV + VINCI Airports =Maya Consortium
AEV Business Development – PPP Projects of Interest
*O&M
53
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
54
FINANCIAL HIGHLIGHTS
1Q2015 1Q2016 % Ch
Revenues 27,029 27,736 3%
Equity Earnings 1,109 2,001 80%
EBITDA 9,408 11,166 19%
Net Income 4,086 5,049 24%
Core Net Income 4,077 4,863 19%
CONSOLIDATED PROFIT & LOSS(in Php million)
Maintained strong financial performance
3,342 3,857
382
833
416
389 390
73
37
(127) (456)
1Q2015 1Q2016
55
5,049EPS = P0.91
24%
4,086EPS = P0.74
Power Financial Services Food Parent & OthersReal Estate Infrastructure
FINANCIAL HIGHLIGHTS
NET INCOME(in Php million)
Power still accounted for bulk of earnings; fresh contribution from cement
56
Power Financial Services Food Parent & OthersReal Estate Infrastructure
Non-Recurring Items1Q2015 1Q2016
Parent (0.3) (0.3)Power 9 186Total Gains/(Losses) 9 186
FINANCIAL HIGHLIGHTS
CORE NET INCOME (in Php million)
Netting out unrealized forex gains, core net income still increased
3,333 3,671
382
833 416
389
390
(127) (456)
73
37
4,863EPS = P0.88
4,077EPS = P0.74
19%
9,408
7,908
11,166
10,176
EBITDA (Consolidated) EBITDA (Beneficial)
57
1Q2015 1Q2016
19%
FINANCIAL HIGHLIGHTS
EBITDA(in Php million)
EBITDA increased on the back of new entrants and stronger results from Power and Banking
29%
32,000 31,737
YE2015 1Q2016
7,056 7,272
YE2015 1Q2016
58
Parent net debt decreased by P479mn
Cash & Equivalents
Long-term Debt
3%
1%
24,944 24,465
YE2015 1Q2016
FINANCIAL HIGHLIGHTS
59
YE2015 1Q2016 % Change
Cash and Cash Equivalents 63,582 82,736 30%
Total Assets 340,118 370,596 9%
Total Liabilities 193,133 220,392 14%
Total Equity 146,984 150,188 2%
Equity Attributable to Parent 118,220 120,412 2%
Book Value Per Share 21.28 21.68
Current Ratio 2.84x 2.55x
Debt to Equity 1.31x 1.47x
Net Debt to Equity 0.66x 0.64x
FINANCIAL HIGHLIGHTS
CONSOLIDATED BALANCE SHEET/KEY RATIOS(in Php million, except ratios)
Gearing remained benign
60
1Q2015 1Q2016 % Ch
AboitizPower 3,342 3,857 15%
UnionBank 382 837 119%
Petnet - (4)
Pilmico 416 389 -6%
AboitizLand 80 50 -38%
Republic Cement - 391
Parent & Others (134) (470) 250%
Net Income 4,086 5,049 24%
Core Net Income 4,077 4,863 19%
FINANCIAL HIGHLIGHTS
Fresh income contribution from new businesses
EARNINGS CONTRIBUTION(in Php million)
61
AGENDA
• Review of Business Units
• Power
• Banking & Financial Services
• Food
• Land
• Infrastructure
• AEV Financials
• Q&A
Is there a better way?
62