Real Estate

F i n a n c i a l Infrastructure S e r v i c e s Power Generation

Industrial Telecom Technologies Analysts Briefing First Half of 2018 Financial and Operating Results W a t e r August 13, 2018 Healthcare

Social Commitment Education Financial Highlights

Strong performance of , Globe and AC Energy drove Ayala’s earnings growth

1H 2018 Financial Results (₱ billions) 2Q 2018 Financial Results (₱ billions)

₱16.1 billion + 7% ₱8.4 billion + 3% Net Income Net Income

₱19.5 billion + 12% ₱10.2 billion + 15% Equity in Net Earnings Equity in Net Earnings

2 1H2018 Equity Earnings

Ayala Land, Globe, and AC Energy continued to drive Ayala’s equity earnings

1H2018 Equity in Net Earnings by Business Unit (In ₱ billions)

+18% -5.7% 6.3 5.3

+25%

2.22x 3.1 +14% 2.1 1.7 +5% 0.8

3 1H2018 Parent Capital Expenditure

We deployed 67% of our 2018 capex budget halfway through the year to fund participation in BPI’s and IMI’s SROs

Parent-level actual capex spent for 1H 2018 (In ₱ Billion) 51.8 Budgeted Spent 34.9 26.2 26.6

12.2 3.1 3.4 3.1 3.9 3.8 1.3 1.3 1.4 0.5

Strategic Total Opportunities

4 Financial Management

We maintain a healthy balance sheet that can support our investments and fulfill our debt and dividend obligations

As of Dec 31, As of Jun 30, Schedule of Debt Maturities1* Click to edit2017 Master 2018 Click to edit Master (₱ billions) Audited Audited 20 PHP USD PARENT Gross debt ₱83.3B ₱109.2B 10 Cash ₱18.6B ₱15.7B ₱64.7B ₱93.5B Net debt 0 18 19 20 21 22 23 24 25 26 27 28 Net D/E ratio 0.59 0.85 Total Parent Equity Click to edit Master Debt Profile*

LTV ratio 6.4% 11.6% YE2017 1H2018 Cash flow Debt in ₱ 58.5% 66.4% 2.33x 1.62x adequacy ratio Debt with fixed rates 92.6% 84.5% CONSOLIDATED Blended cost of debt 4.2% 4.4% Net D/E ratio Avg. remaining life 15.4 years 13.7 years Total Equity 0.68 0.76 *Excludes preferred shares 1Excludes perpetual bonds

5 Equity Placement

Ayala conducted an equity placement exercise to fortify its balance sheet

Equity Placement KEY HIGHLIGHTS

▪ In July, Ayala conducted a placement of ▪ The sale was executed through a subscription agreement 8,810,000 common shares of stock at a for 8,810,000 shares with a single long-term institutional price of ₱916 per share raising investor ₱8.07 billion ▪ The placing price reflects a discount of 1.08% to the 30-day volume weighted average closing price of our shares ▪ The placement raised Php8.07 billion with proceeds going to our Company and will increase our public float from 51.6% to 52.3% ▪ We intend to use the proceeds to acquire properties or assets needed for the business of Ayala ▪ The company will, as soon as practicable, apply for the listing in the Philippine Stock Exchange of the shares, which constitutes 1.4% of our increased common stock

6 Summary of Business Unit Performance

Substantial growth of property development and sustained performance of commercial leasing drove Ayala Land’s net earnings

1H 2018 Financials KEY HIGHLIGHTS ▪ Property development revenues jumped 27% to ₱58.3 billion* on the back of new bookings and project completions. Ayala Land also recognized revenues of MCT ₱13.5 billion Bhd, ALI’s equity investment in Malaysia, amounting to + 18% ₱4.0 billion Net Income ▪ Reservation sales reached ₱72.0 billion, up 17% ▪ Commercial leasing revenues grew to ₱16.9 billion, up 15% on higher contributions of newly opened malls, offices, and hotels ▪ New estates and growth centers accounted for 55% of net income mix, while established estates accounted for the remaining 45% ▪ Recurring income businesses contributed 32% of net income ▪ Capex spend for 1H2018 reached ₱48.4 billion. ▪ 45% residential; 15% MCT and POPI; 15% land acquisition and estate development; 17% malls; 8% offices and hotels and resorts The Residences at Azuela Cove *Includes accretion income 7 Summary of Business Unit Performance

Growth in core banking businesses was offset by lower non-interest income and higher operating expenses

1H 2018 Financials KEY HIGHLIGHTS ▪ Total revenues increased 5.3% to ₱37.2 billion ▪ Net interest income rose 11.5% to ₱26.2 billion on the back of growth in average asset base and NIM expansion. -5.7% However, cost of funds increased for the period partly due ₱11.0 billion to higher documentary stamp tax. Net Income ▪ Non-interest income declined 6.9% to ₱11.0 billion due to lower income from trust and investment management fees, securities trading and asset sales. ▪ Total loans expanded by 15.7% to ₱1.22 trillion. ▪ Total deposits grew 7.2% to ₱1.53 trillion, with CASA ratio at 75.3% and loan-to-deposit ratio at 79.7%%. ▪ Cost-to-income ratio ended higher at 57.0% on higher operating expenses in support of the bank’s digitalization strategy and branch network expansion of BPI Direct BanKo ▪ Total assets stood at ₱1.90 trillion, 10.8% higher. Total capital reached ₱239.70 billion, up 38.2% on account of the bank’s recent SRO. ▪ In light of the recent SRO, capital adequacy ratio and common equity tier 1 improved to 17.29% and 16.40%, respectively.

8 Summary of Business Unit Performance

Globe sustained its growth momentum driven by solid demand for data 1H 2018 Financials KEY HIGHLIGHTS

▪ Gross service revenues reached ₱68.3 billion, up 9% on strong demand for data-related services. ▪ Mobile data revenues rose 26% to ₱25.6 billion as ₱10.1 billion* mobile subscriber base grew 9% to 65.1 million. Net Income ▪ Home broadband revenues were at ₱8.7 billion, up 12% on a 22% increase in its subscriber base to 1.5 million subscribers. ▪ Corporate Data revenues grew 9% to ₱5.5 billion.

*Post-PFRS net income, ▪ Data-related businesses accounted for 58% of total service revenues., with mobile data users making up for 54% of mobile subscribers ▪ Operating expenses and subsidy remained flat at ₱35.7 billion. ▪ EBITDA grew 19% to ₱32.5 billion ▪ EBITDA margin is at 48% ▪ Capex spend reached ₱22.9 billion with 77% deployed to data-related requirements. ▪ Globe Board approved additional capex of US$100 million, bringing 2018 capex guidance to US$950 million

9 Summary of Business Unit Performance

Strong contribution of Manila Concession and overseas investments coupled with lower depreciation expense boosted earnings

1H 2018 Financials KEY HIGHLIGHTS ▪ Revenues up 8% to ₱9.6 billion on additional billed connections in the Manila Concession. ▪ Depreciation expense declined 11% to ₱1.2 billion due ₱3.6 billion + 10% to a shift from a straight line method of depreciation to Net Income units of production beginning May 2017. ▪ Total billed volume growth of 4% to 409.8 mcm led by Manila Concession’s 3% growth to 250 mcm, boosted by a 30% growth in Estate Water to 3 mcm. ▪ Asia Pacific earnings contribution increased 58% to ₱187 million. ▪ Manila Water Philippine Ventures received a Notice to Proceed from the local government of Sta. Barbara, Pangasinan for the development and O&M of the municipality’s water supply facilities. ▪ Laguna Water received a Notice of Award from the Pagsanjan Water District for the design, improvement, expansion, and O&M of the water supply and sanitation facilities in the district.

10 Summary of Business Unit Performance

Solid performance across wind, geothermal, and thermal platforms, boosted by services income, buoyed AC Energy’s earnings

1H 2018 Financials KEY HIGHLIGHTS ▪ Net earnings expanded more than twofold to ₱2.1 billion, bolstered by solid performance across its ₱2.1 billion 2.2x wind, geothermal, and thermal platforms. This was underpinned by services income derived from the financial Net Income close of a new power plant.

▪ Excluding the services income gained this period, AC Energy’s net earnings jumped 59% yoy.

▪ Equity earnings from AC Energy’s investee companies surged 82 percent, reaching ₱2 billion in the first half, lifted by fresh contribution from the 75MW Sidrap Wind farm which started operations in the first quarter.

11 Summary of Business Unit Performance

AC Energy is investing in Australia’s renewables market

Project highlights: New Opportunities 9M17 Operating Statistics • AC Energy is investing up to $30M for a 50% ownership in UPC's Australian business and is also providing up to $200M in a revolver facility to fund development works or provide project equity.

• UPC Renewables Australia is developing the up to 1,000 MW Robbins Island and Jims Plain projects in North West Tasmania and the up to 600 MW New England Solar Farm located near Uralla in New South Wales.

• UPC Renewables Australia also has a further development portfolio of up to another 3,000 MW’s located in NSW, Tasmania and Victoria.

12 Summary of Business Unit Performance

AC Energy is expanding its solar project from 30MW to 280MW Project update: New Opportunities 9M17 Operating Statistics • AC Energy, in partnership with the BIM Group, is set to increase the solar farm size to 280MW from the initial 30MW.

• The joint venture plans to further expand the capacity to well over 300MW. Once completed, the solar farm will become the largest in Southeast Asia.

• The project is expected to commence operations in time for the June 2019 solar feed in tariff deadline.

• Estimated project cost is around US$240 million, which will be financed by debt and equity. AC Energy will participate with a 30% voting stake and approximately 50% economic share.

13 Summary of Business Unit Performance

Net income tempered due to IMI’s higher interest expense and forex losses and weaker auto sales

1H2018 Financials IMI Key Highlights • Net income of $31.6 million includes a one-time gain arising from a sale of property in China as well as a one- ₱752 million +2% off expense attributed to relocation costs from the AC Industrials Net Income property sale. • Revenues surged 33% to $668.8 million buoyed by the $31.6 million +86% strong revenue growth of its automotive and industrial IMI Net Income segments and contributions of its newly acquired entities. • Forex losses due to euro and RMB weakness, higher ₱119 million -63% interest expense, and higher effective tax rate weighed on AC Motors Net income IMI’s net income.

Auto Key Highlights • AC Motors’ net income fell to ₱119 million due to weaker sales of Honda and Isuzu partly driven by tempered consumer demand from higher automobile excise taxes • Further contributing to the decline is the late recognition of IPC dividends which were recorded in first half 2017 but will only be recorded in the third quarter this year.

14 Summary of Business Unit Performance

Volkswagen Philippines launched China-sourced models to provide German-engineered cars at accessible price points

Volkswagen

Santana Santana GTS Lavida Lamando Tiguan

Php686,000 ~Php1,000,000 Php1,171,000 ~Php1,600,000 Php1,648,000

▪ Volkswagen’s entry ▪ Volkswagen’s entry ▪ Volkswagen’s mid- ▪ Volkswagen’s ▪ Volkswagen’s main sedan model and most wagon model level sedan and premium sedan offer volume SUV offer affordable vehicle successor to Jetta next to the flagship ▪ Positioned in ▪ Positioned in compact offered model Passat subcompact hatch ▪ Positioned in compact SUV segment ▪ Positioned in segment but also will sedan segment ▪ Positioned in midsize subcompact sedan compete in sedan segment segment subcompact sedan segment

15 Summary of Business Unit Performance

AC Infra continues to optimize operations of its existing private- public partnership projects

Infrastructure Projects

LRT1 MCX AFCS

▪ Improved average daily ridership to ▪ Served an average of 31,589 vehicles daily ▪ ~5.4 million cards in circulation 448,000, a 4% increase from 1H2017 in 1H2018, 13% higher than a year ago. ▪ New payment/ retail platforms: additional ▪ Increased available LRVs from 77 to 111, 12 buses from existing partners’ new P2P since taking over operations in Sept. 2015 routes; Coins.ph application with beep™ loading capability using NFC-enabled Android phones

16 Summary of Business Unit Performance AC Infra set up a logistics platform to develop a broader fulfilment and logistics presence within and outside the Ayala group

Project rationale and highlights:

New• OpportunitiesAyala saw the value9M17of Operatingthe in-house Statisticslogistics platform that Zalora has built over the past 5 years. Ayala believed that the platform could be used to develop a broader fulfillment and logistics presence that can expand beyond servicing the needs of Zalora and the Ayala group.

• In Feb 2018, AC Infra and Brillant 1257 GMBH & Co. (a Zalora affiliate) formed a JV company 60% owned by AC Infra and 40% owned by Brillant that will provide a range of fulfillment and logistics solutions services.

• Pillars of service offering: Express parcel delivery Freight forwarding (Starting 2019) Contract logistics (Starting 2019)

• Since it started operations in March 2018, Entrego now has 8 clients that are in various industry verticals such as E-Commerce, Telecom, Banking, Automotive, and Retail.

17 Summary of Business Unit Performance

Entrego leverages experience in e-commerce logistics, focus on technology, and a diverse team of experts to build a next generation logistics provider rooted in the Philippines New Opportunities 9M17 Operating Statistics

18 Summary of Business Unit Performance

AC Health and AC Education continue to widen their reach to Filipinos

▪ Generika’s revenues increased 20% to ₱1.79 billion, ▪ Total student population of around 38,300 across on strong network retail sales and store expansion APEC schools , University of Nueva Caceres (UNC), ▪ 24 net store openings in the 1H, for a total and National Teachers College footprint of 774 as of end-June 2018 ▪ FamilyDOC revenues was at ₱85 million, more than ▪ APEC has 23 sites across , Cavite, four times the previous year’s figure on strong clinic Rizal and network expansion. ▪ Served over 128,500 unique patients across its 37 community-based clinics ▪ Clinic network now covers Cavite, Laguna, Las Pinas, Paranaque, Taguig, Pateros, Pasig, Caloocan, Marikina and Quezon City 19 Summary of Business Unit Performance

AC Health and AC Education continue to scale up, widening their reach to Filipinos

1H 2018 Operating Statistics

₱1.79 billion + 20% Generika revenues

774 +24 Generika stores ▪ Generika’s revenues increased 20% to ₱1.79 billion, on strong network retail sales and store expansion ▪ 24 net store openings in the 1H, for a total ₱85 million 4.3x footprint of 774 as of end-June 2018 ▪ FamilyDOC revenues was at ₱85 million, more than FamilyDOC revenues four times the previous year’s figure on strong clinic network expansion. ~128,500 ▪ Served over 128,500 unique patients across 37 FamilyDOC unique its 37 community-based clinics FamilyDOC clinics ▪ Clinic network now covers Cavite, Laguna, patients served Las Pinas, Paranaque, Taguig, Pateros, Pasig, Caloocan, Marikina and Quezon City

20 Summary of Business Unit Performance

AC Education has a total student population of approximately 38,300

Schools under AC Education

APEC UNC NTC

▪ Affordable Private Education Center ▪ University of Nueva Caceres (UNC) has a ▪ National Teachers College has a student Schools (APEC) has a student population student population of ~8,500. population of ~12,000. of ~17,700 . ▪ APEC has 23 sites across Metro Manila, Cavite, Rizal and Batangas.

21 Summary of Business Unit Performance

APEC produced its first batch of graduates in June 2018

Graduation Statistics New Opportunities 9M17 Operating Statistics • 1,999 graduates • 75.3% college bound • Significantly higher passing rate in select schools compared to national average

Passing Rates

De La Salle Ateneo De Manila University of Sto. University Tomas APEC National APEC National APEC National 68% 38% 29% 25% 60% 38%

22 Summary of Business Unit Performance

AC Ventures’ investee companies continued to gain momentum

▪ Mynt’s monthly average users as ▪ Gross merchandise value grew ▪ AC Ventures invested in Wave of June 2018 expanded more 48% year-on-year Computing, a Silicon Valley-based than two-fold from the year ago ▪ Active customer base ended startup which has developed and ▪ Transaction value in June grew 16% higher than the previous patented a new computer chip 42% year-on-year year. infrastructure that accelerates ▪ New features launched in 2018: ▪ 43.5 million site visits in the first Machine Learning, which is an ▪ GCredit half of 2018, 11% higher year- Artificial Intelligence application wherein computers are “trained” to ▪ Ginvest on-year. develop their own logic from ▪ Blockchain remittance massive data analytics, with minimal human intervention.

23 Summar y Key Takeaways

Ayala Land, Globe, AC Energy, and Manila Water all reported solid net income growth driven by strong revenues and healthy margins, offsetting the softer results of BPI and AC Industrials which incurred higher costs in support of their expansion to new areas of growth.

We remain positive about the environment with higher group-wide planned capital spending

AC Energy is starting to provide the necessary balance to some of our more cyclical and longer gestation businesses

Our emerging businesses continue to pursue strategic opportunities to scale up

We maintain a healthy balance sheet that can support our investments and fulfill our debt and dividend obligations

24 DISCLAIMER

Statements in this presentation describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, among others economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws, and other statutes and incidental factors.

For more information, please contact: Ayala Corporation – Investor Relations Unit

[email protected] http://ayala.com.ph/investor_relations