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 Ayala Corporation Analysts’ Briefing First Quarter 2018 Financial and Operating Results W a t e r May 11, 2018 Healthcare Social Commitment Education 1Q2018 Financial Hig h lig ht s Strong performance of Ayala Land and AC Energy buoyed Ayala’s earnings in 1Q2018 1Q 2018 Financial Results (₱ billions) ₱9.2 billion ₱7.7 billion +10% +9% Net Income Equity in Net Earnings 2 1Q2018 Equity Earnings Ayala Land and AC Energy boosted Ayala’s equity earnings in the 1Q2018 1Q2018 Equity in Net Earnings by Business Unit (In ₱ billions) +15% +1% 3.0 3.0 +24% 1.5 +21% +94% 0.8 -34% 0.6 0.2 3 1Q2018 Parent Capital Expenditure We deployed less than 10% of our budgeted capital spend for the year as major spending plans are back-ended Parent-level actual capex spent for 1Q 2018 (In ₱ Billion) 51.8 Budgeted Spent 26.2 12.2 3.1 3.4 3.1 3.9 3.8 4.5 0.0 0.1 0.1 0.5 0.0 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 Mar 31, Schedule of Debt Maturities1* Click to edit2017 Master 2018 Click to edit Master (₱ billions) Audited Audited 20 PHP USD PARENT Gross debt ₱83.3B ₱88.95B 10 Cash ₱18.6B ₱16.92B ₱64.7B ₱72.03B Net debt 0 18 19 20 21 22 23 24 25 26 27 28 Net D/E ratio 0.59 0.65 Total Parent Equity Click to edit Master Debt Profile* LTV ratio 6.4% 7.5% YE2017 1Q2018 Cash flow Debt in ₱ 58.5% 59.7% 2.33x 1.49x** adequacy ratio Debt with fixed rates 92.6% 88.2% CONSOLIDATED Blended cost of debt 4.2% 4.4% Net D/E ratio Avg. remaining life 15.4 years 15.0 years Total Equity 0.68 0.71 *Excludes preferred shares 1Excludes perpetual bonds **CAR declined due to timing of ALI dividends received in April. Had it been received in 1Q 5 CAR would have been 2.52x. Summary of Business Unit Performance Substantial growth of property development and sustained performance of commercial leasing drove Ayala Land’s net earnings 1Q 2018 Financials KEY HIGHLIGHTS ▪ Property development revenues jumped 27% to ₱26.1 billion* on the back of new bookings and project completions ₱6.5 billion ▪ Reservation sales reached ₱31.5 billion, up 16% + 17% ▪ Commercial leasing revenues grew to ₱8.2 billion, up 11% Net Income on higher contribution from newly opened malls, offices, and hotels. ▪ New estates accounted for 55% of net income mix, while established estates accounted for the remaining 45%. ▪ Recurring income businesses contributed 34% of net income. ▪ Capex spend for 1Q2018 reached ₱26.7 billion. ▪ 41% residential; 23% MCT and POPI; 14% land acquisition and estate development; 15% malls; 7% offices and hotels and resorts *Includes accretion income 6 Summary of Business Unit Performance Growth in core banking businesses was offset by lower non-interest income 1Q 2018 Financials KEY HIGHLIGHTS 1Q 2017 Consolidated Net Income (₱ billions) ▪ Total revenues increased 3% to ₱18.5 billion ▪ Net interest income rose 9% to ₱12.5 billion on the back of expansion in average asset base. ₱6.2 billion ▪ Non-interest income declined 8% to ₱5.9 billion due to lower income from trust and investment management fees, Net Income securities trading and asset sales. ▪ Total loans expanded 17% to ₱1.21 trillion. ▪ Total deposits grew 10% to ₱1.59 trillion, with CASA ratio at 71.6% and loan-to-deposit ratio at 76%. ▪ Cost-to-income ratio ended higher at 52.8% on higher operating expenses driven mainly by accelerated IT-related spending. ▪ Total assets and total capital grew 10% to ₱1.9 trillion and ₱189.5 billion, respectively. ▪ Capital adequacy ratio stood at 13.55% and common equity tier 1 at 12.65%. ▪ Recently completed its ₱50 billion stock rights offering, AC subscribed to its proportionate and unsubscribed rights share, slightly raising effective ownership in the bank to 48.6%. 7 Summary of Business Unit Performance Sustained topline growth on strong demand for data and larger subscriber base 1Q1Q17 2018 Net Financials Income (₱ billions) KEY HIGHLIGHTS ▪ Gross service revenues reached ₱33.6 billion, up 8% on strong demand for data-related services. ▪ Mobile data revenues rose 26% to ₱12.6 billion as ₱4.7 billion mobile subscriber base grew 8% to 63.3 million. Net Income ▪ Home broadband revenues were at ₱4.3 billion, up 11% on a 17% increase in its subscriber base to 1.4 million subscribers. ▪ Corporate Data revenues grew 4% to ₱2.6 billion. ▪ Data- related businesses now account for 58% of total service revenues., with mobile data users making up for 55% of mobile subscribers ▪ EBITDA grew 18% to ₱15.8 billion ▪ EBITDA margin at 47% ▪ Capex spend reached ₱6.6 billion with 64% deployed to data-related services. ▪ Globe in talks with 3rd parties for creation of independent tower company. 8 Summary of Business Unit Performance Improved performance of Manila Concession and domestic businesses coupled with lower depreciation boosted earnings 1Q 2018 Financials KEY HIGHLIGHTS ▪ Revenues up 8% to ₱4.7 billion largely driven by additional billed connections in the Manila Concession and its domestic operating subsidiaries. ₱1.7 billion + 17% ▪ Depreciation expense declined 20% to ₱601 million due to a shift from a straight line method of depreciation Net Income to units of production beginning May 2017. ▪ Total Billed volume growth of 3% led by Manila Concession, boosted by improvements in Laguna Water, Clark Water, Boracay Water, and Estate Water. ▪ Manila Water Asia Pacific earnings contribution increased 26% to ₱109 million. ▪ 63% increase in capital expenditures for 1Q2018 to ₱3.4 billion on continuous infrastructure build-up. ▪ Received Notices of Award from two water districts in the Province of Bulacan. The projects both have estimated capital expenditures of around ₱400 million each and 25-year concessions. 9 Summary of Business Unit Performance Fresh contribution from its geothermal asset and higher output from GNPower Mariveles and Montesol propelled growth 1Q 2018 Financials KEY HIGHLIGHTS ▪ Net profits nearly doubled to ₱593 million, boosted by robust contributions of its Indonesia investment and thermal and renewable platforms. ₱593 +89% ▪ Equity earnings from AC Energy’s doubled to ₱822 million led by fresh contribution from Salak and Darajat in million Indonesia. In addition, higher generating capacity of its thermal unit GN Power Mariveles and solar farm Montesol Net Income supported AC Energy’s profitability during the period ▪ As of the 1Q2018, AC Energy has a total attributable capacity of ~1600MW from thermal and renewable Operating plants plants in operations and under construction. ▪ Has a target to ramp up capacity to ~2,000MW by 2020, with 1,000MW from renewable sources. In parallel, it has a goal of achieving ₱5 billion net income by 2020. 10 Summary of Business Unit Performance One-off expense from relocation and start up costs of new acquisitions weighed down net income in the first quarter 1Q2018 Financials 1Q 2017 ConsolidatedIMI Key Highlights Net Income (₱ billions) • Net income of $5.6 million includes a one-off expense ₱217 million -36% of $3.0 million attributed to relocation costs from a AC Industrials Net Income property sale in Shenzhen, which will result in gains to be realized in the coming months. $5.6 million -36% • Revenues surged 38% to $325.8 million buoyed by the IMI Net Income strong revenue growth of its automotive, industrial and telecommunications segments, and contributions from its recently acquired entities. ₱129 million +11% Auto Net income • Recently completed ₱5 billion stock rights offering. AC Industrials subscribed to its proportionate and unsubscribed rights share, raising its stake in IMI to 52% from 50.6%. Auto Key Highlights • Vehicle retail business 1Q2018 net income grew 11% to ₱129 million on robust unit sales of the Volkswagen and KTM brands 11 Summary of Business Unit Performance AC Infra continues to optimize operations of its existing private- public partnership projects 1Q17 Net Income (₱ billions) Infrastructure Projects1Q 2017 Consolidated Net Income (₱ billions) LRT1 MCX AFCS ▪ Improved average daily ridership to ▪ Served an average of 31,269 vehicles daily ▪ ~5.1 million cards in circulation 459,417, a 4% increase from 1Q2017 in 1Q2018, 12% higher than a year ago. ▪ New payment/ retail platforms: additional ▪ Increased available LRVs from 77 to 109, 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 ▪ Improved headway to 3.4 minutes, from Android phones 3.5 minutes in 1Q2017 12 Summary of Business Unit Performance NAIA Consortium is studying revisions to its unsolicited bid Proposal update: New Opportunities1Q 20179M17 Consolidated Operating Net Statistics Income (₱ billions) • The Department of Transportation (DOTr) has requested for a shorter concession period, which the consortium is open to and is studying. Project highlights: • Estimated1Q17project Net Incomecost (₱ ofbillions)up to ₱102 billion for first 3 to 5 years for phase 1 improvements and expansion plans. • Phase 1 outcomes: • Increase annual passenger capacity to 65 million in 2022. • Increase Gross Floor Area for Terminals 1, 2 and 3, • All terminals interconnected by an Airport People Mover • Mass transport connectivity 13 Summary of Business Unit Performance AC Health and AC Education continue to scale up, widening their reach to Filipinos ▪ Generika’s revenues increased 23% to ₱920 ▪ Total student population of over 24,000 across million, on strong network retail sales and store APEC schools and University of Nueva Caceres expansion (UNC) ▪ Opened 15 new stores, for a total footprint of 758 as of end-March 2018, 10% higher than 684 ▪ APEC has 23 sites across Metro Manila, Cavite, stores as of end March-2017 Rizal and Batangas ▪ FamilyDOC served over 95,000 unique patients across its 29 community-based clinics ▪ Completed acquisition of approximately 96% of the ▪ Clinic network now covers Cavite, Laguna, Las outstanding shares of National Teachers College Pinas, Paranaque, Taguig, Pateros, Pasig, and (NTC).