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Malls INVESTOR KIT 2019 This presentation is available online through www.smprime.com Disclaimer This presentation does not constitute a prospectus or other offering memorandum in whole or in part. This presentation does not constitute an offer


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Malls

INVESTOR KIT 2019

This presentation is available online through www.smprime.com

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SLIDE 2

Disclaimer

This presentation does not constitute a prospectus or other offering memorandum in whole or in part. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company. There shall be no sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to any qualification under the securities laws of such state or jurisdiction. This presentation has not been and will not be reviewed or approved by any statutory or regulatory authority or any stock exchange in the Philippines or elsewhere. Prospective investors should undertake their own assessment with regard to their investment and they should obtain independent advice on any such investment’s suitability, inherent risks and merits and any tax, legal and accounting implications which it may have for them. This presentation contains statements about future events and expectations that constitute “forward-looking statements.” These forward-looking statements include words or phrases such as the Company or its management “believes”, “expects”, “anticipates”, “intends”, “may”, “plans”, “foresees”, “targets”, “aims” “would”, “could” or

  • ther words or phrases of similar import. Similarly, statements that describe the Company's objectives, plans or goals are also forward-looking statements. All such

forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Such forward-looking statements are made based on management’s current expectations or beliefs as well as assumptions made by, and information currently available to, management. These forward-looking statements speak only as at the date of this presentation and nothing contained in this presentation is or should be relied upon as a promise or representation as to the future. This presentation and the contents hereof are for the exclusive use of the intended recipient(s). This presentation and the contents hereof should not be (i) forwarded or delivered or transmitted in any manner whatsoever, to any other person other than the intended recipient(s); or (ii) reproduced in any manner whatsoever. Any forwarding, distribution or reproduction of this presentation in whole or in part is unauthorized. This presentation must not be distributed to the press or any media

  • rganization. By accepting this presentation, the recipient agrees to keep confidential at all times information contained in or made available in connection with this

presentation. Neither the Company nor its advisor, nor any of their respective affiliates, shareholders, directors, employees, agents or advisers makes any expressed or implied representations or warranties as to the accuracy and completeness of the information contained herein or any other information (whether communicated in written or oral form) and each of the foregoing parties expressly disclaims any and all responsibility and liability of any kind (including any contractual, non-contractual, or third party liability) for any loss or damage, whether or not arising from any error or omission in compiling such information or as a result of any party’s reliance or use of such

  • information. The information in this presentation has not been independently verified. The information and opinions in this presentation are subject to change without

notice, and no obligation is assumed by the Company nor its advisor, nor any of their respective affiliates, shareholders, directors, employees, agents or advisers to provide the recipient(s) with access to any additional information or to update this presentation or to correct any inaccuracies in it which may become apparent. Investor Kit 2019 2

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SLIDE 3

Outline

  • I. The Company
  • Company Profile
  • Key Business Units
  • Malls
  • Residences
  • Offices
  • Hotels & Convention Centers
  • II. Key Strategies
  • Key Strategies
  • Landbank
  • Capex Program
  • III. Financial Highlights
  • 1H 2019 Results
  • IV. Sustainability
  • Four Sustainability Pillars
  • UN SDGs
  • V. Investment Highlights

3

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SLIDE 4

Company Profile

One of the largest integrated property developers in Southeast Asia by market capitalization

One of the largest listed real estate developers on the PSE by market capitalization and net income

Consistently cited for excellence in corporate governance, property development, environmental consciousness, and investor relations programs

Investor Kit 2019 4

Market Capitalization

PSE Stock Symbol SMPH Market Capitalization PHP1,071bn Outstanding Shares 28,879mn Last Traded Price (June 28, 2019) Php37.10/share Average Daily Turnover (YTD) US$9.40mn

US$21.02bn

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SLIDE 5

Key Business Units

► SM Supermalls ► SM Lifestyle, Inc. ► Family

Entertainment Center Inc.

Investor Kit 2019 5

Malls

► SM Development

  • Corp. and

Subsidiaries

► Highlands Prime Inc. ► Costa Del Hamilo

Inc.

Residences

► Offices and

Warehouses

► Mall of Asia

Complex

► Seaside City Cebu

Complex

Commercial

► Radisson Blu ► Taal Vista ► Pico Sands ► Park Inn ► Conrad Manila ► SMX Convention

Centers

Hotels and Convention Centers

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SLIDE 6

Key Achievements

Investor Kit 2019 6

0M 2M 4M 6M 8M 10M 2013 2014 2015 2016 2017 2018

China Philippines Malls (GFA in sqm)

0.8M 0.8M 0.9M 1.3M 1.3M 1.3M 6.2M 6.5M 7.3M 7.7M 8.0M 8.2M 7.0M 7.3M 8.2M 9.0M 9.3M 9.5M

CAGR = 5.22%

0K 2K 4K 6K 8K 10K 12K 14K 16K 18K 20K 22K 24K 2013 2014 2015 2016 2017 2018

Residences (Units Sales)

6.0K 8.0K 9.5K 13.5K 16.2K 16.6K

CAGR = 23.23%

0K 100K 200K 300K 400K 500K 600K 700K 2013 2014 2015 2016 2017 2018

Offices (GFA in sqm)

147K 189K 318K 383K 456K 642K

CAGR = 27.85%

0.0K 0.2K 0.4K 0.6K 0.8K 1.0K 1.2K 1.4K 1.6K 1.8K 2013 2014 2015 2016 2017 2018

Hotels (Rooms)

1,015

CAGR = 6.99%

1,075 1,229 1,510 1,510 1,522

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SLIDE 7

At a Glance

Investor Kit 2019 7

MALLS 1H2019 Operating Highlights

► Total Revenues reached PHP31.07 billion, up by

8%from PHP28.71 billion

► Operating Income grew by 9% to PHP17.28 billion

from PHP15.90 billion

► Total Investment Properties of PHP270.89 billion

1H2019 Operating Highlights

► Total Revenues increased by 26%

to PHP21.43 billion from PHP17.05 billion

► Operating Income went up by 43% to PHP8.10 billion

from PHP5.67 billion

► Total Assets amounted to PHP204.65 billion

RESIDENCES OFFICES HOTELS AND CONVENTION CENTERS 1H2019 Operating Highlights

► Total Revenues increased by 31% to PHP2.18 billion

from PHP1.66 billion

► Operating Income went up by 29% to PHP1.82 billion

from PHP1.41 billion

► Total Investment Properties amounted to PHP40.21

billion 1H2019 Operating Highlights

► Total Revenues is flat at PHP2.45 billion ► Operating Income went down by 9% to PHP525

million from PHP579 million

► Total Investment Properties of PHP11.07 billion

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Malls

Revenue

PHP31.07bn

Operating Income

PHP17.28bn

Gross Floor Area

9.7m sqm

Malls

72 in PH & 7 in CH

(as of 1H2019)

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Malls

Key Business Units

Investor Kit 2019 9

SM Prime is the largest mall operator/developer in the Philippines.

PHILIPPINES

72 8.4M sqm 18,519 4.2M 330 90,739

CHINA

7 1.3M sqm 1,916 0.2M 58 15,534

Malls Total GFA Tenants Average Daily Pedestrian Count Cinema Screens Parking Slots

Malls

Malls Total GFA Tenants Average Daily Pedestrian Count Cinema Screens Parking Slots

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SLIDE 10

Malls

Key Business Units

Philippine Malls

In terms of GFA, Metro Manila malls account for 42%, Luzon is 36%, Visayas is 13% and Mindanao is 8%

Average mature mall occupancy rate is 95%

Overall Same-Mall-Sales-Growth (SMSG) is 7% year-on-year (YoY)

Investor Kit 2019 10

Malls

Philippine Population: 101M Luzon: 38 Malls Visayas: 6 Malls Mindanao: 5 Malls NCR: 23 Malls

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SLIDE 11

Malls

Key Business Units

Mall Coverage in PH

Investor Kit 2019 11

SMPH malls covered almost all of the key cities in Metro Manila and adjoining towns and municipalities, accounting for 42%

  • f the company’s total gross floor area in the Philippines.

SMPH mall expansion is geared towards the provinces. The focus is to cover most of Northern Luzon, Visayas and the progressive cities in Mindanao.

Caloocan (North) Quezon City (5 Malls)

Valenzuela (1 Mall)

Marikina (1 Mall) Caloocan (1 Mall) Malabon Navotas Manila (2 Malls) San Juan Mandaluyong (2 Malls) Pasig (2 Malls) Pateros Makati Pasay (2 Malls) Parañaque (3 Malls) Las Piñas (2 Malls) Muntinlupa (1 Mall)

Existing Sites Future Sites Untapped Area NCR: 13M People Philippine Population: 101M Luzon: 45M People Visayas: 19M People Mindanao: 24M People

Taguig (1 Mall)

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Malls

Key Business Units

China Malls

Operating in China since 2001 and became part of SM Prime in 2007

Contributed 5% of the overall revenues and 5% of consolidated operating income

Operates 7 malls with a total GFA of 1.3m sqm

Scheduled to expand SM Xiamen (120,000 sqm) and to start the construction of SM Yangzhou (220,000 sqm)

SM Xiamen Lifestyle SM City Tianjin SM City Suzhou Investor Kit 2019 12

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Malls

Key Business Units

Malls’ Expansion Program

This year, SM Prime’s mall launches will all be in the provinces, and these will add more than 300,000 sqm of GFA.

Available landbank of almost 200 hectares which is good for over the next 5 to 7 years Name GFA SM Center Dagupan 23,000 SM City Olongapo Central 72,000 SM City Butuan 48,000 SM Mindpro (Zamboanga) 36,000 SM City Baguio (expansion) +32,000 SM City Fairview (expansion) +116,000

2018 New Malls 2019 New Malls

Name GFA SM Center Imus 13,000 SM City Urdaneta Central 59,000 SM City Telabastagan 55,000 SM City Legazpi 87,000 SM Center Ormoc 33,000

SM City Olongapo Central SM City Legazpi Investor Kit 2019 13

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SLIDE 14

Malls

Key Business Units

SM Prime is building the first IKEA store in the Philippines, to be launched at the end of 2020.

This project will occupy 157,000 sqm of GFA in the Mall of Asia Complex in Pasay City.

IKEA will occupy 65,000 sqm of the GFA to house a two-level shop area, a large warehouse, an e-commerce facility and an integrated call center - making it the world’s largest IKEA store.

Latest Project: First IKEA Store in the Philippines

Investor Kit 2019 14

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Residences

Revenue

PHP21.43bn

Operating Income

PHP8.10bn

Reservation Sales

PHP41.46bn

(as of 1H2019)

Residential Units Launched

(since 2003)

134,166

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SLIDE 16

Residences

Investor Kit 2019 16

Key Business Units

Primary Homes

A leading residential developer of high- rise buildings (HRBs) mid-rise buildings (MRBs) and single-detached house and lots

Accounts to 36% of the consolidated revenues

Reservation sales value of PHP41.46 billion in 1H2019, up by 20% from PHP34.45 billion

Unbooked Revenue amounts to PHP128.0bn

Total landbank: 760 hectares

Lane Residences Pool Area Red Residences Lobby Park Residences Central Park

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SLIDE 17

Residences

Key Business Units

Primary Homes

Lush Residences, Makati City

Projects Overview (as of 1H2019) Ready-for-Occupancy (RFO) (Unsold Units) 2,233 Ongoing Construction (Unsold Units) 16,781 Estimated Inventory Value 1H2019 Reservation Sales (value) PHP107.64bn PHP41.46bn 1H2019 CAPEX PHP12.13bn Landbank (hectares) Metro Manila 91 Outside Metro Manila 669

Investor Kit 2019 17

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Residences

Key Business Units

Latest Project: The Estate

The Estate is a joint venture between SMDC and Federal Land.

Dubbed as an ultra luxury residential project, The Estate is designed by international architectural firm, Foster + Partners.

This is located along Ayala Avenue in Makati City. The Estate

Investor Kit 2019 18

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SLIDE 19

Residences

Residential Coverage

SMPH fairly covered Metro Manila with high-rise condominium projects with majority of its residential projects located in the cities of Quezon, Pasay, Paranaque and Makati.

As of 1H2019, 37 out of the 47 SMDC projects in the country are located in Metro Manila.

Investor Kit 2019 19

Existing Sites Future Sites Untapped Area

Caloocan (North) Quezon City (12 Projects)

Valenzuela

Marikina Caloocan Malabon Navotas Manila (1 Project) San Juan Mandaluyong (2 Projects) Pasig (1 Project) Pateros Makati (8 Projects) Pasay (7 Projects) Parañaque (4 Projects) Las Piñas (1 Project) Muntinlupa Taguig (1 Project)

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Residences

Investor Kit 2019 20

Key Business Units

Leisure Homes

Include 2 large-scale tourism projects – Tagaytay Highlands and Pico de Loro

Tagaytay Highlands is an exclusive mountain resort, golf club and residential complex, covering some areas of Cavite, Laguna and Batangas

The 40-hectare Pico de Loro is the Phase 1 of Hamilo Coast project, a premier and sustainable leisure destination in Nasugbu, Batangas

Landbank of 521 hectares

Freia at Pico de Loro Cove Horizon Terraces Garden Villas Woodlands Point Community at Tagaytay Highlands

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SLIDE 21

Residences

Investor Kit 2019 21

Key Business Units

Latest Project: Tagaytay Highlands – Horizon Terraces & Vireya

Horizon Terraces Vireya

Horizon Terraces is the first integrated development within Tagaytay Highlands featuring a 3.2-hectare Asian contemporary residences comprised 114 units occupying eight buildings of low-rise Garden Suites and Garden Villas.

Vireya, on the other hand, offers a modern, tropical-themed community located at the heart of Tagaytay Highlands. This developments spread over 20.8 hectares of land and offers exclusive, gated community. This community, which is composed of 301 available lots, is the closest to the Midland Golf Club

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Residences

Investor Kit 2019 22

Key Business Units

Latest Project: Pico de Loro - Freia

Freia

Freia is the latest and most prime beachfront condominium development in Hamilo Coast.

This contemporary tropical architectural development offers 223 units offering a mix of 2-BR units and 3-BR Penthouses.

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SLIDE 23

Offices

Revenue

PHP2.18bn

Operating Income

PHP1.82bn

Gross Floor Area

0.6M sqm

(as of 1H2019)

Office Buildings

11

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SLIDE 24

Offices

Investor Kit 2019 24

Key Business Units

Offices

Have 11 office buildings with a combined GFA of more than 642,000 sqm

Three of these 11 offices are located in the Mall of Asia Complex in Pasay City, which provide a combined GFA of 382,000 sqm

Have an available landbank of 73 hectares

TwoE-comCenter FiveE-comCenter ThreeE-comCenter

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SLIDE 25

Offices

Investor Kit 2019 25

Key Business Units

SM Prime will launch NU Tower this 3Q with 41,000 sqm of GFA.

While the three-tower FourE-Com Center will be launched in 2020 with 192,000 sqm of GFA.

Both are located in Mall of Asia Complex, Pasay City. NU Tower

Latest Projects: NU Tower and FourE-Com Center

FourE-Com Center

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SLIDE 26

Hotels and Convention Centers

Revenue

PHP2.45bn

Operating Income

PHP0.5bn

Hotels

7

(as of 1H2019)

Convention Centers & Trade Halls

7

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SLIDE 27

Hotels & Convention Centers

Key Business Units

Hotels and Convention Centers

Operating 7 hotels with over 1,700 rooms; 4 SMX Convention Centers, and 3 Megatrade Halls with more than 37,000 sqm of leasable space as of June 2019

Conrad Manila and SMX Manila are both located in Mall of Asia Complex, Pasay City.

Radisson Blu Hotel Pico Sands Hotel Park Inn by Radisson - Davao Park Inn by Radisson - Clark Conrad Manila SMX Convention Center

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SLIDE 28

Hotels & Convention Centers

Investor Kit 2019 28

Key Business Units

Latest Projects: Park Inn by Radisson Iloilo & Park Inn by Radisson North EDSA

Park Inn by Radisson - Iloilo SMX Clark

Park Inn by Radisson Iloilo, situated right next to SM City Iloilo in Mandurriao, was just launched last 1H2019 offering 200 rooms.

Park Inn by Radisson North EDSA, which is right next to SM City North EDSA, was launched last July 31, 2019 and offers 239 vibrant rooms. Park Inn by Radisson – North EDSA

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SLIDE 29

Key Strategies

Landbank

1,539ha

2019 CAPEX

PHP80bn

Net Debt To Equity

40:60

(as of 1H2019)

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SLIDE 30

Key Strategies

Key Strategies

1

Leverage on world-class malls to anchor lifestyle city strategy Continue the rollout of offices, hotels and convention centers as part of Integrated Development Maintain strong balance sheet, prudent risk & capital management and good governance Increase acquisition of large-scale strategic landbank to develop more lifestyle cities

2 3 4 5

Ensure excellence in delivering residential projects

Investor Kit 2019 30

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SLIDE 31

Key Strategies

Landbank

  • No. of Sites

Area (in hectares) % of Total Area by Region (in hectares) Metro Manila Provincial

38 185 12% 19 166 94 761 49% 91 669 3 521 34%

  • 521

14 73 5% 5 68 Total 149 1,539 100% 115 1,424

Malls Primary Homes Commercial Leisure Homes ▶

SM Prime’s landbank is good for the next 5 to 7 years, located in emerging progressive cities across the country

Leisure projects are for medium-term development

Investor Kit 2019 31

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SLIDE 32

Key Strategies

CAPEX Program

SM Prime will spend an average of PHP80bn for 2019 to support our provincial expansion and landbanking

The CAPEX program will be funded by the combination of local borrowings and internal funds

57% 65% 55% 41% 32% 39% 37% 28% 33% 51% 62% 48% 6% 7% 12% 8% 6% 13%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2014A 2015A 2016A 2017A 2018A 2019E

Malls Residences Others

PHP91bn PHP58bn PHP44bn PHP59bn PHP54bn

Investor Kit 2019 32

PHP80bn

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SLIDE 33

Key Strategies

Maintain Conservative Balance Sheet

68% 62% 63% 64% 60% 60% 32% 38% 37% 36% 40% 40%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018 1H2019

Net debt to Equity**

Equity Debt Net Debt

*Total interest-bearing liabilities

Total equity attributable to equity holders of the parent + Total interest-bearing liabilities

**Total interest-bearing liabilities- cash & cash equivalents

and investment securities Total equity attributable to equity holders of the parent + Total interest-bearing liabilities- cash & cash equivalents and investment securities

61% 58% 58% 57% 55% 55% 39% 42% 42% 43% 45% 45%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018 1H2019

Debt to Equity*

Equity Debt Debt to Equity

Investor Kit 2019 33

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SLIDE 34

Financial Highlights ₱

Consolidated Net Income Consolidated Revenue

PHP57.05bn

Consolidated Operating Income

PHP19.30bn

(as of 1H2019)

PHP27.43bn

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SLIDE 35

Financial Highlights

Consolidated Financials

Revenue Segment Contribution

Investor Kit 2019 35

Malls accounts for 55% of SM Prime’s consolidated revenues.

Residences accounts for 38%.

Other Businesses cover the rest.

61% 62% 61% 58% 57% 55% 34% 32% 32% 33% 35% 38% 5% 6% 7% 9% 8% 7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018 1H2019 Malls Residences Other Businesses

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Financial Highlights

74% 72% 67% 65% 62% 60% 25% 24% 24% 25% 29% 30% 1% 4% 9% 10% 10% 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018 1H2019 Malls Residences Other Businesses

Consolidated Financials

Net Income Segment Contribution

Investor Kit 2019 36

67% of the consolidated net income is recurring while the 32% comes from developmental income.

Malls contribute the most among key business units, followed by Residences.

The contribution from these Business units should be sustained over the medium term.

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SLIDE 37

Financial Highlights

Recorded a 16% net income growth to PHP19.3bn in 1H2019 from PHP16.6bn, while

  • perating income registered a 17% growth to PHP27.4bn in 1H2019 from PHP23.4bn.

Consolidated revenues likewise grew by 15% to PHP57.0bn from PHP49.8bn.

The consistent growth in rental income and higher residential sales drove the overall growth of the company.

Consolidated Financials

Investor Kit 2019 37

(In PHP Billion) 1H2019 1H2018 % Chg Revenues 57.05 49.77 15% EBITDA 32.24 27.71 16% Operating Income 27.43 23.36 17% Net Income 19.30 16.62 16%

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SLIDE 38

Financial Highlights

Rental Income went up by 8% in 1H2019 to PHP23.3bn from PHP21.6bn due to the additional rentals from new and expanded malls.

Same-mall-sales growth was sustained at 7% YoY.

Operating income increased by 9% to PHP15.8bn from PHP14.5bn.

Financials

Malls: PH

Investor Kit 2019 38

(In PHP Billion) 1H2019 1H2018 % Chg Revenues 28.08 25.75 9%

  • Rent Income

23.34 21.62 8%

  • Cinema and Event Ticket Sales

and others 4.74 4.13 15% EBITDA 19.25 17.55 10% Operating Income 15.82 14.52 9%

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SLIDE 39

Financial Highlights

Revenues went up by 7% to RMB0.39bn in 1H2019 from RMB0.36bn of the previous year.

SM City Xiamen is the major contributor among the seven SM China malls.

Financials

Malls: CH

Investor Kit 2019 39

(In RMB Billion) 1H2019 1H2018 % Chg Revenues 0.39 0.36 7%

  • Rent Income

0.37 0.35 7%

  • Others

0.01 0.01 15% EBITDA 0.30 0.26 13% Operating Income 0.18 0.17 11%

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SLIDE 40

Financial Highlights

Revenues grew by 26% to PHP21.4bn in 1H2019 from PHP17.0bn last year due to high demand on high-rise residential projects launched in 2016 to 2018, revenue recognition of recently launched projects and strong demand from overseas Filipinos, middle-income earners and international buyers

Gross profit margin improved to 53% from 50%, whereas net income margin also increased to 28% from 25% of last year.

Reservation sales grew by 20% to PHP41.5bn from PHP34.5bn last year.

Financials

Residences

Investor Kit 2019 40

(In PHP Billion) 1H2019 1H2018 % Chg Revenues 21.43 17.05 26% EBITDA 8.17 5.74 42% Operating Income 8.10 5.67 43%

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SLIDE 41

Financial Highlights

Revenues from Commercial Properties Group and Hotels and Convention Centers cover 7%

  • f the overall consolidated revenues.

Financials

Other Businesses

Investor Kit 2019 41

(In PHP Billion) 1H2019 1H2018 % Chg Revenues 4.63 4.11 13% EBITDA 2.93 2.48 18% Operating Income 2.35 1.99 18%

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SLIDE 42

Financial Highlights

Continue to maintain a very conservative balance sheet

Half of our assets are in the investment properties while our interest bearing debt accounts for 36%

Consolidated Balance Sheet

Investor Kit 2019 42

(In PHP Million (except % data) 1H2019 % to Assets 2018 % to Assets

Assets Cash and cash equivalents 40,558 6% 38,766 6% Financial assets at fair value through other comprehensive income 24,308 4% 23,532 4% Receivables & Contract Assets 42,784 7% 35,229 6% Investment Properties 322,448 47% 293,575 49% Land and development 81,359 13% 79,331 13% Condominium and residential units for sale 8,063 1% 8,088 1% Other Assets 125,432 22% 125,613 21% Total Assets 644,952 100% 604,134 100% Liabilities and Stockholders’ Equity Interest bearing debt 232,336 36% 222,811 37% Accounts payable and others 124,867 19% 102,245 17% Total Liabilities 357,203 55% 325,056 54% Total Equity 287,749 45% 279,078 46%

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SLIDE 43

Financial Highlights

(In PHP millions) 1H2019 2018 2017 2016 2015 2014 Cash Flows from Operating Activities Operating Income before Working Capital Changes 32,181 54,149 53,385 37,678 36,362 33,568 Net Cash provided by operations 28,849 45,964 45,777 31,491 31,938 6,751 Net Cash flows used in Investing Activities (23,076) (64,078) (41,012) (27,080) (55,230) (29,389) Net Cash Flows provided by (used in) Financing Activities (3,862) 12,633 14,176 (5,604) 14,015 30,750 Net Increase (Decrease) Cash and Cash Equivalents 1,792 5,605 19,171 (669) (9,375) 8,104 Cash and Cash Equivalents at Beginning

  • f Year

38,766 44,371 25,201 25,870 35,245 27,142 Cash and Cash Equivalents at End of Year 40,558 38,766 44,372 25,201 25,870 35,245 ▶

Net gearing is equivalent to 40:60 in 1H2019, well below the management target of keeping 50:50 net debt to equity ratio

Cash flow mostly come from malls, residential operations and increasing contribution from

  • ther businesses.

Cash Flow

Investor Kit 2019 43

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SLIDE 44

Hotels & Convention Centers

Sustainability

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SLIDE 45

SM Prime recognizes the valuable contributions

  • f

employees to the Company’s success. Hence, the Company puts great importance to their professional growth and well- being. The Company invests through developmental programs to improve the employee’s knowledge and skills. SM Prime institutionalized programs on health and wellness. Employee volunteerism is highly encouraged as it helps develop and strengthen relationships internally and with the communities served by the Company and its people. SM Prime’s property development brings about significant ripple effect to the communities where it has situated its businesses. Cognizant of this opportunity to serve millions of customers daily, the Company ensures that its facilities foster inclusivity and accommodate the needs of its stakeholders. The Company creates strong relationship not only with its local communities but also with the LGUs, NGOs, International Organizations and other interest groups. The communities are then transformed and grow with SM Prime.

Four Sustainability Pillars

SM Prime acknowledges that it plays a significant role as a catalyst of economic growth in the Philippine

  • economy. The Company’s mission

include the enhancement of shareholder value of its investors. Integral in maximizing the shareholders’ return

  • f investment is SM Prime’s strict

adherence to good corporate governance. Further, SM Prime’s businesses create multiplier effect in the communities where it

  • perates thereby resulting to increase economic activity and

improvement in the lives of its customers and stakeholders. SM Prime as a key player in the Philippine property development industry is aware that it needs to build and manage lifestyle cities sustainably. Thus, various innovations and technological advancements for the protection of natural capital have been adapted by the Company. It has also entered into partnerships with local and international environmental and disaster risk resilient organizations as a sign of its serious commitment to being environmentally responsible and resilient across all aspects of its operations.

Investor Kit 2019 45

Sustainability

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SLIDE 46

Supporting the United Nations Sustainable Development Goals*

Investor Kit 2019 46

Sustainability *Data as of December 31, 2018

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SLIDE 47

Investment Highlights

Investor Kit 2019 47

Establish strong brand equity

Leading integrated real estate platform with strong track record across full suite

  • f asset classes

World-class mall business, which will anchor future sustainable lifestyle city projects

Significant growth opportunities from landbank optimization and future acquisitions

Strong balance sheet supported by strong recurring income

Highly experienced management team and strong corporate governance

2018 Annual Report 2018 Sustainability Report

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SLIDE 48

Financial Highlights

INVESTOR KIT 2019

This presentation is available online through www.smprime.com