ali presentation 2015h1

Investor PresentationOctober 2014

Key Messages

Ayala Land is in a strong position to benefit from the Philippine growth story,

with major businesses aligned with key drivers of the economy.

We are the most diversified property conglomerate with a solid track record

in developing large scale, integrated, mixed-use and sustainable communities.

• A trusted developer with a nationwide footprint, diversified product • A trusted developer with a nationwide footprint, diversified product

offerings across different market segments, and a strategic and valuable

land bank

• Executing well on a clear and aggressive growth strategy

• Delivering solid operating and financial performance

2

Riding on a more sustainable Philippine economy

7.6%

3.7%

6.8% 7.2%6.4%

2010 2011 2012 2013 Q2 2014

PH Real GDP Growth Rate

54.8%

52.4%

51.0%51.5%

49.2%

2010 2011 2012 2013 Q1 2014

Debt-to-GDP

Gross International Reserves

Source: BSP, Trading Economics

3

3.8%

4.6%

3.2% 3.0%

4.9%

2010 2011 2012 2013 Jul-14

Inflation Rate

$62.4b

$75.3b$83.8b $83.2b $80.6b

2010 2011 2012 2013 Jul-14

Businesses aligned with key economic drivers

Household Consumption Growth Overseas Filipino Remittances

$24b (F)

$19b $20b $21b$23b

$11.4b

(H1)

2010 2011 2012 2013 2014

3.4%

5.7%6.6%

5.7% 5.8%

2010 2011 2012 2013 Q1 2014

Source: BSP, BPAP, NSCB, Dept of Tourism

4

Tourist Arrivals

2010 2011 2012 2013 2014

6m (F)

3.5m3.9m

4.3m4.7m

2.4m

(H1)

2010 2011 2012 2013 2014

2010 2011 2012 2013 Q1 2014

$9b$11b

$13b

$16b$18b (F)

2010 2011 2012 2013 2014

BPO Revenues

Key Messages







land bank



5

• Incorporated in 1988 as a subsidiary of Ayala Corp, the oldest

business house in the Philippines.

• Publicly listed in July 1991

Key Shareholders

48.9%

Public 51.1%

(Foreign:23%)Western

Central

Luzon

Southern

Tagalog

Bicol

Region

CAR

Eastern

Ayala Land: The leading and most diversified property

developer in the Philippines

6

(Foreign:23%)

Central

Visayas

Western

Visayas

Northern

Mindana

o Southern

Mindanao

Eastern

Visayas

Nationwide development footprint

P159B

P233B P215B

P375BP351B

P468B

2009 2010 2011 2012 2013 Aug-14

Market Cap (as of 29Aug2014)

Solid track record in developing large scale, integrated

and mixed-use estates

Makati Bonifacio Global City Nuvali

20001960 2006

Cebu

1990

7

Today Today Today

*Makati capex includes Circuit - P42B

Today

5-yr Capex: P125b* 5-yr Capex: P25b 5-yr Capex: P66b 5-yr Capex: P51b

Makati (21 has.) Taguig (74 has.) Quezon City (29 has.) Alabang (6.6 has.)

Entertainment District Gateway of the South City Center of QC Convergence in the South

Expanding presence in new estates: Metro Manila

Entertainment District Gateway of the South City Center of QC Convergence in the South

• GFA build out: 1.3m

sqm.

• Residential: 66%

• Office and retail:

25%

• Hotel and others: 9%

• 5-year Capex: P42.5b

• GFA build out: 3.6m



26%

• Other Commercial:

43%

• 5-year Capex: P80b

• GFA build out: 1.8m sqm

• Residential :36%

• Office and retail: 55%

• Hotels and others:

9%

• 5-year Capex : P32b

• GFA build out: 339k sqm

• Residential 62%


31%

• Others: 7%

• 5-year Capex: P7b

8

Expanding presence in new estates: North Luzon

Bulacan (98 has.) Pampanga (1,025 has.)

Vibrant City Living Corridor to the NorthVibrant City Living Corridor to the North

• GFA build out: 768k sqm.


• Retail: 13%

• Other Commercial : 65%

• GFA build out: 639 has.


• Office and retail: 3%

• Others: 10%

5-year Capex: P6.8b 5-year Capex: P5.2b

9

Expanding presence in new estates: VisMin

Negros Occidental

(215 has.)

Iloilo

(21 has.)

Cagayan De Oro

(31 has.)

Davao

(10.1 has.)

Quality Living Emerging Business

District

Commercial District Commercial District

• GFA build out: 942k

sqm.

• Residential : 93%

• Office and Retail: 6%

• Other Commercial:

1%


sqm

• Residential 38%

• Office and Retail:

52%

• Hotel, Hospital and

Others: 10%


sqm



71%

• Hotel: 10%


sqm



59%

• Hotel: 7%

5-year Capex: P6.4b 5-year Capex: P7.5b 5-year Capex: P344m 5-year Capex: P6b

10

Balanced and complementary businesses

Property

Development

Commercial

Leasing

Hotels and

Resorts

Services

Residential

• 5 brands serving

different income

Shopping Centers

• 43 shopping centers

• 1.3m GLA

Hotels

Branded (1,294 rooms)• (Intercon, Marriott,

Construction

• 175 projects

• P75b net order

11

different income

segments

Commercial/

Industrial Lots

• Arca South (8.8

has.)

• Nuvali (200 has.)

• Laguna Technopark

(389 has.)

• 1.3m GLA

• 93% occupancy

Offices

• 5 HQ (72k GLA)

• 37 BPO (509k GLA)

• 91% occupancy

• 95% leased

• (Intercon, Marriott,

Raffles, Holiday Inn)

Seda (665 rooms)• (BGC, Centrio, Abreeza,

Nuvali)

Resorts

El Nido (203 rooms)• (Apulit, Miniloc, Lagen

and Pangalusian)

• P75b net order

book (98% ALI, 2% 3rd

party)

Property

Management

• 271 Facilities

• P1.6b outstanding

contract value

(97% ALI, 3% 3rd party)

Key Messages







land bank



12

Other Vismin

Other Luzon

Other MM

FTI

Manila

Vertis

Expanding geographic presence to address new markets

27%

24%

22%

]]

]

34%

34%

]

2009 2010 2011 2012 2013 H1 2014

Vertis

Cebu

Alabang

BGC

Nuvali

Makati

13

19%

22%

]]

] ]

Net Income contribution per location

ClassMonthly

IncomeHH% # of HH

AAA 250K up 0.1% 18 K

AA 180K - 250K 0.1% 29 K

A 120K - 180K 0.5% 98 K

B 50K - 120K 5.7% 1,217 K

C+ 30K - 50K 10.6% 2,281 K

Philippine Households by Income Class

(Total of 21.4m)

New Income Pyramid:Middle class (B to C+) benefiting the most

(up from 11% to 16% of population)

Wide product offering to address a broader market

C+ 30K - 50K 10.6% 2,281 K

C/C- 15K - 30K 25.2% 5,936 K

DE 15K below 57.8% 12,387 K

• 3.9M current housing backlog • Annual supply of 200K units vs. annual demand of 345K units

Similar strategy is being adopted by all other business lines

(HUDCC estimates from 2012-2030)

Source: NSO FIES 2012, ALI Corplan Analysis

14

Services

Hotels & Resorts

Office

Malls

Comm'l / Ind'l Lots

Diversified income sources to achieve balanced growth

]39% ]

44% ]43%

36%

40%

]

2009 2010 2011 2012 2013 H1 2014

Bellavita

Amaia

Avida

Alveo

ALP

15

]45%

]39% ] ]

*Target is to increase the recurring income contribution to 50%

]

BulacanBulacan

TarlacTarlac PampangaPampanga

BatangasBatangas

PangasinanPangasinan

Metro ManilaMetro Manila

BaguioBaguio

BataanBataan

Western

Central

Luzon

Southern

Tagalog

Bicol

Region

CAR

Eastern

CaviteCavite

994

8,453

• 8,453 hectares of developable landbank

across the country

• Positioned near infrastructure projects and

targeted at key growth centers

• Acquired mostly through asset-light modes

• Concentrated in 31 growth centers

Strategic and valuable land bank

Cagayan de OroCagayan de Oro

Negros Negros OccidentalOccidental

IloiloIloilo

CebuCebu

DavaoDavao

PalawanPalawan

Central

Visayas

Western

Visayas

Northern

Mindana

o Southern

Mindanao

Eastern

Visayas

New

Existing

*Includes Makati, Bonifacio Global City, other Mega Manila, Metro

Cebu, Metro Davao, Bacolod, Iloilo, Cagayan de Oro

443 576

560

708

994

2009 2010 2011 2012 2013

Suburban In City*

3,930

5,695

4,8854,411

16

Key Messages







land bank



17

4.0 5.5

7.1 9.0

11.7

2009 2010 2011 2012 2013 2014F

Net Income (Pbn)

10.0

Earnings target surpassed on the 4th year of our plan

Growth

• Aggressive launches

• Strategic land acquisition

Margin Improvement

• Reduced costs

Capital Efficiency

•

8%

10%

12%13% 13%

2009 2010 2011 2012 2013 2014F

Actual 5-10-15 Plan

Return on Equity (P bn)15%

18

• Increased leverage

• Higher dividends

Organizational Development

• Enterprise-wide risk management

• Training and decentralization

Brand-Building

• Customer service

• Product differentiation

On track with building up the investment portfolio

993 1,007 1,080 1,188 1,271 1,329

-257 266

342 287 304

150

2009 2010 2011 2012 2013 2014

Operational Under construction Launches

Mall Expansion

1,783

1,5581,5301,3461,264

Malls : Double the GLA

Offices : Triple the GLA

Hotels : Quadruple the no.

of room keys

19

2009 2010 2011 2012 2013 2014

784 784 784

1,467

2,001 2,162

615 765

462

893 846

926

2009 2010 2011 2012 2013 2014


348 395 429 509 562 581

38 154 162

240 237 262

257

2009 2010 2011 2012 2013 2014


386

Offices Build-up

549 591749 799

1,100

Hotels Roll-out

1,399 1,549 1,929

2,894

3,934

Residential Shopping Centers Hotels &

Resorts

Office

OFFICESOFFICES

Effective execution through “subsidiarization”

ConstructionProperty

Management

APRISA BUSINESS PROCESS SOLUTIONS, INC.

an AyalaLand company

Shared

ServicesRegional

20

Synergies maximized through strong corporate support

Investment

Committee

Corporate

Working Group

21

Finance Treasury ProcurementInnovation

and Design

Master

Planning

Land

Acquisition

Risk

Management

Subsidiaries

Key Messages







land bank



22

Solid Earnings and Revenue Growth

P36.6B

P46.2B

1H 2013 1H 2014

26%

Revenue Breakdown1H 2014 1H 2013 Amount %

(in P millions)

Property Development 31,087 23,819 7,268 31%

Residential 26,067 18,374 7,692 42%

Office for Sale 827 261 566 217%

Comm’l/Ind’l lots 4,193 5,184 -990 -19%

Commercial Leasing 10,364 8,493 1,870 22%

Shopping Center 5,520 5,036 484 10%

Office 2,096 1,596 500 31%

23

P5.6BP7.1B

Total Revenues Net Income

25%

Office 2,096 1,596 500 31%

Hotels and Resorts 2,748 1,861 887 48%

Services 14,574 10,503 4,072 39%

Gross Construction 14,100 9,892 4,208 43%

Property Mgmt. 474 611 (137) -22%

Interco Adjustments (11,277) (7,026) (4,251) 61%

Real Estate Revenues 44,749 35,790 8,959 25%

Interest & Other Income 1,449 844 605 72%

Total Revenues 46,198 36,634 9,564 26%

Steady improvement in margins across various product lines

Margin Performance 1H 2014 1H 2013

Property development

(Gross profit)

Residential

Horizontal 40% 42% Lower margins from recently acquired lots

of AGE and Nuvali

Vertical 34% 34% Steady margins from vertical products

Office for Sale 38% 34% Contribution of higher margin Avida offices

Commercial and

Industrial Lots

51% 35% Sale of higher margin commercial lots in FTI,

Altaraza and Nuvali

24

Industrial Lots Altaraza and Nuvali

Commercial leasing (EBITDA)

Shopping Centers 62% 62% Steady performance of malls

Office 83% 80% Higher average lease rates and

improved cost efficiency

Hotels & Resorts 29% 18% Higher margin contribution of new hotels

Services (EBITDA) 10% 8% Better margins from MDC

Solid balance sheet

Balance Sheet June DecemberChange %

(in P millions) 2014 2013

Cash & Cash Equivalents* 48,900 40,778 8,122 20%

Total Borrowings 118,930 101,902 17,028 17%

Stockholders’ Equity** 102,690 98,470 4,220 4%

Current Ratio 1.46 1.45

Interest Coverage Ratio 6.4 6.5

25

*Includes FVPL (financial assets at fair value through profit and loss)

**Attributable to equity holders of ALI

Debt-to-Equity Ratio 1.16 1.04

Net Debt-to-Equity Ratio 0.68 0.61

Return on Equity 14% 13%

2.9

6.65.6

10.5

5.5

11.5 11.8 11.7 11.7

6.16.9

16.7

8.0

7.9%

7.3%

6.2%

5.3%5.1%

4.4%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

4

6

8

10

12

14

16

18

20Long-term Debt Maturity

(in Php Billions)

Borrowing Cost

8.1

Debt profile: stretched maturities, lower cost and managed mixAs of June 30, 2014

Outstanding Balance: Php119B, ST loans Php8.1B

Short-term loans

0.6

2.02.9 2.6

2.00.9

2.0

0.0%

1.0%

2.0%

0

2

4

09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

201320122011

Fixed

58%

Float

42%

Fixed

53%

Float

47%

Fixed

69%

Float

31%

Fixed

78%

Float

22%

End-June 2014

26

Capex spend of P32.9b in line with target

Capex Schedule(In Php billions) FY

Target

P30b

P72bP66b P70b

40%

H1 2014 Capex Spend(In Php billions)

Land

Acquisition:

P13.2b

Land Acquisition

Project Completion

27

P16b P21bP30b

60%

Project

Completion

P19.7b13 18

2531

3950

2009 2010 2011 2012 2013 2014T

2Q

2012

3Q

2012

4Q

2012

1Q

2013

2Q

2013

3Q

2013

4Q

2013

1Q

2014

2Q

2014

ALP

Alveo

Avida

Amaia

BellaVita

Sales take-up: up 11% yoy to P48.6b

Sales Take-Up (In Php Bn)

19.6

24.2 24.2 23.921.3

19.818.8

19.8

27.3

1H 2014

vs 1H 2013

Sales Take up up 11%

Bookings up 7%

2Q

2012

3Q

2012

4Q

2012

1Q

2013

2Q

2013

3Q

2013

4Q

2013

1Q

2014

2Q

2014

ALP

Alveo

Avida

Amaia

BellaVita

2012 2012 2012 2013 2013 2013 2013 2014 2014

28

Booked Sales (In Php Bn)

13.1

16.5 16.3

22.0

14.111.0

15.4 15.117.5

1H 2014 Overseas Filipino (OF) Sales:

• Php 8.3b (Up 30% yoy)

• Represents 27% of total bookings

48

65

99

120

Unbooked Revenues(in Php billions)

Arbor Lanes Lumira

VerveHigh Park

Steady growth in unbooked revenues

29

• 10x the level in 2009

• 3x residential revenues in FY 2013

1219

2009 2010 2011 2012 2013 1H 2014

The Courtyards

Avida Towers Vita Amaia Steps

Nuvali

Shopping Centers: GLA up 10% yoy

• Total Malls GLA: 1.3m sqm

(vs. 1.2m sqm. in 1H 2013)

• Average occupancy: 93%

• Average building lease rates: up 4%

to P1,148/sqm/month

• Same store rental growth: up 10%

30

• Same store rental growth: up 10%

• 1H 2014 additional GLA: 61,000 sqm

• Fairview Terraces (60k sqm)

• Bonifacio Central Square New Wing (1,000 sqm managed)

Bonifacio Central Square

Shopping Centers Update

Malls under construction:

304k sqm

Mall GLA (in k sqm)

Circuit Mall 59

Solenad 3 47

Vertis 47

SouthPark Alabang 47

31

SouthPark Alabang 47

Paradigm Pasig 28

UP Town Center 26

BGC West Block 24

Circuit Lane 10

Shops at Atria 8

Boni Stopover 6

McKinley Exchange 2

Circuit

SouthPark

• Total GLA: 581k sqm

(vs. 537k in 1H 2013)

• Average occupancy: 91%; leased out rate

at 95%

• Average BPO lease rates: up 4% to

Php638/sqm / month with the opening

of non-CBD locations.

Offices: GLA up 8% yoy

Building N

of non-CBD locations.

• 1H 2014 additional GLA: 18,900 sqm

• UP Bldg N (9,450 sqm GLA)

• UP Bldg O (9,450 sqm GLA)

32

Building O

Offices Update

Offices under construction:

350k GLA

Name GLA (in k sqm)

Paradigm Corp Center 47

Circuit 45

Vertis 41

SouthPark BPO 38

Circuit

33

SouthPark BPO 38

Boni Stopover 35

AC Cebu Corp Center 29

PSE @ BGC 30

BGC Corp Center 27

ATC BPO 18

Cebu eBloc 4 16

McKinley Exchange 10

Fairview BPO 10

UP Town Center BPO 4

SouthPark

Cebu eBloc 4ATC BPOBGC Corp

Center

McKinley Exchange

Hotels and Resorts: Room count up 8% yoy

H1 2014 Hotels Resorts

No. of rooms

in operation

Branded: 1,294

Seda: 665

El Nido Resorts:

203

Revpar/night P3,816

(up 47% )

P8,011

(up 23%)

• Total room count: 2,162 rooms

(vs. 2001 in 1H 2013)

Seda Nuvali

34

Average

room rate

P5,321

(up 5%)

P15,005

(up 4%)

Average

occupancy

72%

(up 20 pts)

53%

(up 9 pts)

1H 2014 Additional Rooms: 160

• Seda Nuvali (150)

• El Nido (10)

El Nido

Hotels and Resorts update

Seda Hotels under construction:

846 rooms

• Vertis North (438 rooms)

• Circuit (255 rooms)

• Iloilo (153 rooms)

Seda Vertis Seda Circuit

35

• Iloilo (153 rooms)

Seda Iloilo

On track with 2014 Plans:

Residential/Office for Sale

Value of Launches(in billion Pesos)

P142b worth of projects in 2014o Residential Projects

o Office Buildings and Shopping Centers

o Hotels and Resorts

o Commercial Estate

o New Retail and Healthcare formats

36

52 11 20 32 35

1062

90

108 107

2010 2011 2012 2013 2014

Residential/Office for Sale

Malls, Offices, Hotels and Resorts

62

142 (F)

110

73

140

Southeast Asia Property AwardsBest Developer in the Philippines (2014)

Euromoney Real Estate AwardsBest Overall Developer in the Philippines (2005-2014)

Sustainable Business AwardsWinner – Strategy and Vision (2014)

Institutional InvestorBest Sell-Side IR Program (2014)

Awards and Recognition

Best Sell-Side IR Program (2014)

Frost and SullivanBuilder of the Year in the Philippines (2014)

Finance Asia4th Best Managed Company 3rd Best in Corporate Governance7th Best in Investor Relations (2014)

Channel News AsiaGreen Luminary Award (2014)

37

The Asset MagazinePlatinum AwardAll Around Excellence in Financial Performance, Management, Corporate Governance, Social Responsibility, Environmental Responsibility and Investor Relations (2013, Winner since 2009)

APREA Best PracticesCountry Award, Best Submission from the Philippines (2013)

Asia Money AwardsBest Large Cap Company of the Year (2013)

Awards and Recognition

(2013)

PSE Bell Awards Bell Awards for Corporate Governance (2012)

Institute of Corporate DirectorsPlatinum Plus Ranking for Corporate Governance (2005-2011)

38

Thank You.

INVESTOR RELATIONS

30F Tower One and Exchange Plaza, Ayala Triangle, Makati City

T +9083676 │ F +632 7506790

[email protected]

www.ayalaland.com.ph

ali presentation 2015h1

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