Investor Presentation - SM Investmentssminvestments.com/sites/default/files/reports/1Q2016... ·...

47
Investor Presentation May 2016

Transcript of Investor Presentation - SM Investmentssminvestments.com/sites/default/files/reports/1Q2016... ·...

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Investor Presentation May 2016

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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

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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)

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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

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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

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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)

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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

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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

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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

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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

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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

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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

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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

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SM Malls: Overview

Largest mall operator/developer in the Philippines

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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%

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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

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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

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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

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SM Shore Residences

One Bedroom Unit with Balcony Approx. 27.67 to 29.53 sqm

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SM Shore Residences

Two Bedroom Unit with Balcony Approx. 58.46sqm

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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

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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

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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

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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

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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

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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

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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 --

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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%

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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%

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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

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Financials

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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%

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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%*

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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

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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%

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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

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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% -

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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.