Ayala Corporation FY 2019 Analysts Briefing 12 March 2020 FY 2019 - PowerPoint PPT Presentation

Ayala Corporation FY 2019 Analysts’ Briefing 12 March 2020

FY 2019 FINANCIAL PERFORMANCE Strong consumer-driven growth of Ayala Land, BPI, and Globe lifted net earnings, boosted by divestment gains from AC Education and AC Energy Equity Earnings Consolidated NIAT in billions in billions +54% +11% ₱35.3 ₱60.7 ₱31.1 ₱31.8 ₱39.4 ₱30.3 ₱23.6 ₱1.5 - ₱18.1 - ₱0.7 - ₱0.7 FY 2018 FY 2019 FY 2018 FY 2019 Core NIAT Provisions for AC Industrials One-offs MWC bill waiver & provision for penalty MWC remeasurement loss Divestment gains from AC Education and AC Energy 3

4Q 2019 FINANCIAL PERFORMANCE Remeasurement loss arising from our investment in Manila Water weighed down our fourth-quarter results Equity Earnings Consolidated NIAT in billions in billions -13% ₱10.1 ₱8.0 ₱8.8 ₱8.0 - ₱18.1 - ₱0.8 - ₱10.9 4Q 2018 4Q 2019 4Q 2018 4Q 2019 Core NIAT MWC Remeasurement Loss Others 4

FY 2019 EQUITY EARNINGS BREAKDOWN Ayala Land, BPI, and Globe continue to boost earnings growth with the addition of AC Energy as a new core value driver in billions ⇧ 6x ⇧ 7% ⇧ 24% ⇧ 20% ₱24.5 ₱14.6 ₱13.6 ⇩ 17% ₱6.8 ₱2.6 ₱1.0 - ₱2.4 * Other Units** 5 *Lower growth in ALI EE vs NIAT due to dilution effect of exchangeable bonds **Includes gains from merger of AC Education and iPeople

FY 2019 BALANCE SHEET HIGHLIGHTS We have a strong balance sheet with significant debt capacity and a well spread out maturity profile Schedule of Debt Maturities PHP USD End-2018 End-2019 (in ₱ billions) Preferred PARENT 45 40.5 21.3 Gross debt ₱ 104.4B ₱ 105.8B 20 16.0 15 Cash ₱ 8.5B ₱ 22.6B 11.0 10.6 10.1 8.5 10 Net debt ₱ 95.9B ₱ 83.2B 4.6 3.6 5 1.0 0 Net D/E ratio ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27 ’28 P 0.81 0.63 Total Parent Equity Debt Profile* LTV ratio 11.8% 6.5% End-2018 End-2019 Cash flow Debt in ₱ 64.3% 61.9% 1.66x 2.07x adequacy ratio Debt with fixed rates 88.0% 90.6% CONSOLIDATED Blended cost of debt 4.6% 5.4% Net D/E ratio 0.74 0.58 Total Equity Ave. remaining life 13.3 years 21.2 years * Excludes preferred shares 6 *Preferred Shares B Series 1 Call Date November 15, 2023

FY 2019 PARENT CAPITAL EXPENDITURE Capital spending was 33% higher than budget as AC Energy utilized part of its proceeds from the sale of its thermal assets ₱30.1 FY19 Budget FY19 Spent in billions ₱22.6 ₱10.8 ₱7.9 ₱6.5 ₱6.5 ₱5.5 ₱4.7 ₱3.9 ₱2.4 ₱1.7 ₱1.2 ₱0.8 ₱0.8 Total and others 7

FY 2020 CAPEX PROGRAM Our businesses continue to execute on their growth strategy as reflected in our programmed capex for 2020 16% 15% 23% 9% 12% Group-wide 28% Parent CAPEX CAPEX 8% 8% ₱ 20.8B ₱ 275.1B 5% 2% 33% 42% Ayala Land AC Energy AC Industrials Yoma BPI Manila Water AC Infra AC Ventures Globe AC AC Health Others 8 8

AC SHARE BUYBACK PROGRAM Ayala started a ₱ 10 billion buyback program, reflecting our long-term optimism in the company amid challenging market conditions Shares Purchased Value of Shares Purchased 1,016 1,689 ₱763 ₱1,308 In millions In thousand shares ₱545 673 Dec-19 Jan-20 Feb-20 Total Dec-19 Jan-20 Feb-20 Total 9 9

FY 2019 OPERATIONAL & FINANCIAL HIGHLIGHTS ALI’s robust leasing arm provided support to FY19 revenues while aggressive 4Q project launches augment existing inventory +13% +2% ₱ 33.2B ₱ 168.8B Margin Expansion Across Segments Net Income Total Revenues 2018 vs 2019 Gross Profit Margins -2% +13% 62% ₱ 117.6B ₱ 39.3B Property Dev’t Comm’l Leasing 50% 45% 44% 43% 39% 34% 33% 8% decline in residential revenues from 11% increase in mall leasing revenues ▪ ▪ lower contribution of ALP and ALVEO Occupancy GLA in millions Horizonal Vertical Office Industrial & brands of sqm Ave 88% 2.12 • 1.90 for Sale Commercial 1.75 Stable 93% • 12% increase in office for sale ▪ 2018 vs 2019 EBITDA 517k sqm GLA developments 91% 90% under construction 2017 2018 2019 66% 66% 46% increase in commercial and industrial ▪ 32% 29% lots sales 9% 10% 12% increase in office leasing revenues ▪ Shopping Office Hotels & Const’n & GLA in millions Centers Resorts Property Occupancy in billions ₱122.0 ₱141.9 ₱145.9 of sqm Mgt Ave 96% • 1.17 1.11 1.02 Stable 97% Sales Reservations • ₱ 108.7B FY 2019 CAPEX 358k sqm GLA +3% YoY ₱ 145.9B under construction 2017 2018 2019 2017 2018 2019 Three New Estates in 2019 19% increase in hotel and resort revenues ▪ ₱139.4 ₱158.9 in billions Room count 3,705 Project Launches 2,973 2,583 ₱88.8 2,311 rooms under construction ₱ 158.9B 2017 2018 2019 2017 2018 2019 10

FY 2019 OPERATIONAL & FINANCIAL HIGHLIGHTS BPI’s full-year earnings driven by strong results from core businesses and efficient cost management +25% +20% +9% ₱ 1.48T ₱ 28.8B ₱ 94.3B Net Income Total Revenues Loans % to Total Loans +18% +25% ₱ 65.9B ₱ 28.4B Net Int. Income Non-Int. Income Corporate 77% 76% Consumer/SME 69-bp YoY increase in asset yields partially 12% increase in fee-based income due to 23% 24% ▪ ▪ offset by cost of funding robust growth in credit card loans and fees 2018 2019 % to Total Non-interest Income Corporate Loans 24-bp YoY net interest margin expansion ▪ in billions +7.9% Cards 17.6% ₱1,140 5.16% ₱1,057 Sec. Trading 14.1% 4.47% Trust 11.2% Asset 3.99% Deposit 9.9% Yield 3.35% 3.11% 2.91% Transaction Banking 8.4% NIM Insurance 8.1% 2.04% 2018 2019 FOREX 7.3% 1.52% 1.18% COF Leasing 7.0% Consumer Loans Asset Sales 4.6% Net Interest income in billions ₱65.9 Retail Loans 3.8% in billions +13.4% ₱55.8 ₱287.9 ₱48.0 Digital Channels 3.6% ₱253.8 Remittance 3.1% Service Charges 1.6% Investment Banking 1.6% Securities Brokerage 0.8% 2018 2019 2017 2018 2019 Cards up 16% ▪ Trading up 215% ▪ +7% ₱ 1.70T 55.50% Deposits 53.10% Deposits up 27% CIR ▪ Cost-to- Insurance up 8% ▪ Income Ratio CASA ratio steady at 69.1% ▪ Transaction Banking up 53% ▪ ₱50.1 ₱43.6 OPEX Leasing up 7% 53% ▪ in Loan-to-Deposit ratio at 87% ▪ billions Retail Loans up 15% 2018 2019 ▪ 11 Digital Channels up 44% ▪ 2018 2019

FY 2019 OPERATIONAL & FINANCIAL HIGHLIGHTS Globe’s focus on improving customer experience through data - related investments serves as backbone for earnings accretion +20% +17% ₱ 51.0B ₱ 22.3B ₱ 76.0B Net Income EBITDA FY 2019 CAPEX +200 Data +12% Total Service ₱ 149.0B 51% EBITDA Margin Others Revenues bps ₱51.0 in billions ₱42.5 ₱43.3 Evident growth in data oriented customers 17% growth in EBITDA and 200-bp margin ₱36.7 ▪ ▪ ₱32.1 in both mobile and home users expansion driven by robust revenue growth 79% and subdued costs 77% Mobile Data Users Home Broadband 48% 65% 82% +7% Users 39.6 36.9 +25% Modest 8% OPEX growth driven by -30% ▪ 2.0 1.6 drop in interconnect charges 2018 2019 YoY In php billions 2015 2016 2017 2018 2019 2018 2019 2018 2019 Gross Service Revenues 132.9 149.0 12% 18% increase in CAPEX spent to OPEX & Subsidy (67.7) (73.0) 8% ▪ Data accounts 71% of total service ▪ improve service to customers EBITDA 65.1 76.0 17% revenues ▪ +139% YoY cell sites EBITDA Margin 49% 51% +200bps ▪ +28% YoY base stations Mobile Data ▪ +16% YoY average LTE Depreciation (30.4) (34.1) 12% 48% Home Broadband download speed EBIT 34.7 41.9 21% 29% ▪ +6% YOY average LTE Corp Data Non-op Charges (7.1) (9.1) 28% upload speed Others 14% 9% Provision for Tax (9.0) (10.5) 17% ▪ -9% YoY latency Net income 18.6 22.3 20% 12