2015 SMPHI Annual Report
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SUSTAINING GROWTH, DELIVERING VALUE 10th Floor, OneE-com Center Harbor Drive, Mall of Asia Complex Pasay City 1300, Philippines Email: [email protected] www.sminvestments.com 2 IFC Our Business Philosophy 2 Business Highlights & Impact 6 Financial Highlights 7 Shareholder Value SM INVESTMENTS CORPORATION SM INVESTMENTS OUR BUSINESS PHILOSOPHY 8 Ten-Year Performance Overview 10 Our Business Footprint 12 Message to Shareholders SM Investments Corporation is the Philippines’ largest 14 President’s Report publicly-listed holding company that holds a group of sustainable businesses in retail, property and financial services. The Group thrives on leadership, innovation 18 RETAIL OPERATIONS and highly synergistic operations. • THE SM STORE Our Vision is to build world-class businesses that are • SM Markets catalysts for development in the communities we serve. Our long history of sustained growth is an indication of our ability to deliver value for all our stakeholders through sound financial management, leadership, innovation, long-term sustainability efforts and a comprehensive development program for all our host communities. Through our interests and activities, Our Mission is to strive to be a good corporate citizen by partnering with our host communities in providing consistently high standards of service to our customers, look after the welfare of our employees, and deliver sustainable returns to our shareholders at all times, upholding the highest standards of corporate governance in all our businesses. 28 PROPERTY Over the years, we have been committed to sustaining • Malls our growth, in creating value and delivering quality • Residences products and services that our millions of customers aspire for. We are here to serve. • Commercial Properties • Hotels & Convention Centers 44 BANKING • BDO Unibank • China Bank 54 OTHER INVESTMENTS 56 ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS: Creating a Sustainable Future 64 CORPORATE GOVERNANCE • Board of Directors • Board Committees CONTENTS CONTENTS • Corporate Governance Policies • Disclosure & Transparency • Rights, Roles, Protection of Stakeholders 77 Awards & Citations 81 FINANCIAL STATEMENTS 152 Corporate Information 1 2015 ANNUAL REPORT 2015 ANNUAL 2 CORE BUSINESSES SM INVESTMENTS CORPORATION SM INVESTMENTS PHP 76.5 THE SM STORE REVENUESREVENUES PHP 118.4 SM FOOD RETAIL GROUP CORE BUSINESSES PHP PHP PHP 41.5 51.2 3.2 RECURRING BDO BELLE REVENUES NET INTEREST INCOME OPERATING REVENUES PHP PHP PHP 24.7 14.1 16.2 NON-RECURRING CHINA BANK ATLAS MINING REVENUES NET INTEREST INCOME REVENUES 3 2015 ANNUAL REPORT 2015 ANNUAL 4 PORTFOLIO HIGHLIGHTS SM INVESTMENTS CORPORATION SM INVESTMENTS PERCENT OWNERSHIP CORE BUSINESSES OTHER INVESTMENTS NET INCOME PROFILE GROUP-WIDE EMPLOYEE HEADCOUNT PHP28.4bn 65,439 TOTAL EMPLOYEES AWARDS RECEIVED IN 2015 60 BDO & CHINA BANK 27 AWARDS SM PRIME 24 AWARDS SM INVESTMENTS 23 SM RETAIL AWARDS AWARDS 3 SM FOUNDATION AWARDS 5 2015 ANNUAL REPORT 2015 ANNUAL 6 CONSOLIDATED FINANCIAL HIGHLIGHTS SM INVESTMENTS CORPORATION SM INVESTMENTS 2015 2014 2013 800 80.00% 1,000 80.00% 40 30% 14 50% 900 40% Balance Sheet Highlights (PHP billion) 700 60.00% 60.00% 35 12 20% Total Assets 771.08 711.88 632.99 800 30% 600 40.00% 40.00% 30 10 Current Assets 164.33 184.04 162.94 700 20% 10% Non-current Assets 606.75 527.85 470.06 500 20.00% 20.00% 25 600 10% Current Liabilities 111.41 96.28 132.07 8 400 0.00% 0.00% 20 0% 0% Non-current Liabilities 277.97 265.66 200.69 500 6 400 -10% Total Liabilities 389.38 361.94 332.75 300 -20.00% -20.00% 15 -10% Stockholders’ Equity 381.70 349.95 300.24 300 4 -20% 200 -40.00% -40.00% 10 Book Value per Share (PHP) 354.16 322.73 275.58 200 -30% -20% 2 100 -60.00% -60.00% 5 100 -40% Income Statement Highlights (PHP billion) 357 549 566 649 694 466 705 711 815 864 22.06 25.41 34.85 35.66 35.68 7.23 8.32 11.80 10.34 10.61 0 -80.00% 0 -80.00% 0 -30% 0 -50% Revenues 295.88 276.62 253.58 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Gross Profit 58.63 56.26 51.15 MARKET SHARE EARNINGS DIVIDEND -7.77 Other Income (Expenses) -7.22 -5.99 CAPITALIZATION PRICE PER SHARE PER SHARE Net Profit Before Tax 49.69 46.46 43.66 (in billlion pesos) (in pesos) (in pesos) Consolidated Net Income 28.46 28.40 27.45 Adjusted Market Cap Adjusted Share Price EPS DPS Basic EPS (PHP) 35.68 35.66 34.85 Change Change Change Change Financial Ratios Current Ratio (x) 1.47 1.91 1.23 Return on Equity 10.3% 12.0% 13.5% Debt/Equity Ratio (Gross) 50:50 50:50 52:48 60 1.8 50 30 27.8 NRevet enueDebt Growth 7.0% 9.1% 13.1% 1.66% 53.2%* 1.55% 24.22 Net Income Growth 0.2% 3.5% 11.2% 50 25 40 22.85 EBITDA (PHP billion) 68.27 63.37 60.80 1.27% 21.1 1.23% 20.4 1.18% EBITDA Margin 23.1% 22.9% 24.0% 40 1.2 20 30% 30% 30% 30% 30% Net Margin 9.6% 10.3% 10.8% 30 30 15 Revenue Profile (in percent) 20 20 0.6 10 Retail 73.0% 72.8% 73.3% 16.1% PPropertyroperty 22.6% 22.8% 22.0% 10 10 8.9% 5 Banks* 4.4% 4.4% 4.7% 7.3% 2.1% 0 0 0 0 Income Profile (in percent) 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Retail 22.3% 20.9% 21.5% PPropertyroperty 37.7% 37.7% 35.4% TOTAL SHAREHOLDER DIVIDEND DIVIDEND P/E RETURN YIELD PAYOUT RATIO RATIO Banks 40.0% 41.4% 43.1% (in percent) (in percent) (in percent) *2012: Extraordinary growth in share price of 54.1% *Banks are not consolidated in the books of SMIC. SHAREHOLDER VALUE 2015 2014 2013 800 80.00% 1,000 80.00% 40 30% 14 50% 900 40% Balance Sheet Highlights (PHP billion) 700 60.00% 60.00% 35 12 20% Total Assets 771.08 711.88 632.99 800 30% 600 40.00% 40.00% 30 10 Current Assets 164.33 184.04 162.94 700 20% 10% Non-current Assets 606.75 527.85 470.06 500 20.00% 20.00% 25 600 10% Current Liabilities 111.41 96.28 132.07 8 400 0.00% 0.00% 20 0% 0% Non-current Liabilities 277.97 265.66 200.69 500 6 400 -10% Total Liabilities 389.38 361.94 332.75 300 -20.00% -20.00% 15 -10% Stockholders’ Equity 381.70 349.95 300.24 300 4 -20% 200 -40.00% -40.00% 10 Book Value per Share (PHP) 354.16 322.73 275.58 200 -30% -20% 2 100 -60.00% -60.00% 5 100 -40% Income Statement Highlights (PHP billion) 357 549 566 649 694 466 705 711 815 864 22.06 25.41 34.85 35.66 35.68 7.23 8.32 11.80 10.34 10.61 0 -80.00% 0 -80.00% 0 -30% 0 -50% Revenues 295.88 276.62 253.58 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Gross Profit 58.63 56.26 51.15 MARKET SHARE EARNINGS DIVIDEND -7.77 Other Income (Expenses) -7.22 -5.99 CAPITALIZATION PRICE PER SHARE PER SHARE Net Profit Before Tax 49.69 46.46 43.66 (in billlion pesos) (in pesos) (in pesos) Consolidated Net Income 28.46 28.40 27.45 Adjusted Market Cap Adjusted Share Price EPS DPS Basic EPS (PHP) 35.68 35.66 34.85 Change Change Change Change Financial Ratios Current Ratio (x) 1.47 1.91 1.23 Return on Equity 10.3% 12.0% 13.5% Debt/Equity Ratio (Gross) 50:50 50:50 52:48 60 1.8 50 30 27.8 NRevet enueDebt Growth 7.0% 9.1% 13.1% 1.66% 53.2%* 1.55% 24.22 Net Income Growth 0.2% 3.5% 11.2% 50 25 40 22.85 EBITDA (PHP billion) 68.27 63.37 60.80 1.27% 21.1 1.23% 20.4 1.18% EBITDA Margin 23.1% 22.9% 24.0% 40 1.2 20 30% 30% 30% 30% 30% Net Margin 9.6% 10.3% 10.8% 30 30 15 Revenue Profile (in percent) 20 20 0.6 10 Retail 73.0% 72.8% 73.3% 16.1% PPropertyroperty 22.6% 22.8% 22.0% 10 10 8.9% 5 Banks* 4.4% 4.4% 4.7% 7.3% 2.1% 0 0 0 0 Income Profile (in percent) 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Retail 22.3% 20.9% 21.5% PPropertyroperty 37.7% 37.7% 35.4% TOTAL SHAREHOLDER DIVIDEND DIVIDEND P/E RETURN YIELD PAYOUT RATIO RATIO Banks 40.0% 41.4% 43.1% (in percent) (in percent) (in percent) *2012: Extraordinary growth in share price of 54.1% 7 2015 ANNUAL REPORT 2015 ANNUAL 8 TEN-YEAR PERFORMANCE OVERVIEW SM INVESTMENTS CORPORATION SM INVESTMENTS MARKET CAPITALIZATION *CAGR ASSETS *CAGR REVENUES 18.6% *CAGR *CAGR = Compound Annual Growth Rate NET INCOME 13.5% *CAGR SMIC’s 10th Listing Anniversary SM Investments Corporation (SMIC) marked its 10th year in March 2015 as a publicly- listed company in the Philippine Stock Exchange (PSE).