1H 2016 | Analysts’ Briefing 09 August 2016 Outline Message from the President 1H 2016 Results • Financial Statements • Margins • Capex • Operating Statistics 2 Duterte’s 10 Socio-Economic Priorities http://www.rappler.com/nation/140318-duterte-trust-rating-july- 2016 Source: Mike Oyson, Sales Commentary 3 Balanced and sustainable growth through the 2020-40 Plan NET INCOME AFTER TAX P40B NIAT by 2020 (in billion pesos) Sustainable and balanced growth strategy: 40.0 50% from Residential Development • Mix: 50% Horizontal, 50% Vertical 50% from Leasing • GLA growth: Malls, Office, Hotels and Resorts 17.6 14.8 Average Annual 11.7 Growth Rate 9.0 of 20% 7.1 5.5 4.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4 Platform for growth in place 19 Estates across the Philippines Makati Cebu Bonifacio Global City Nuvali 1960 1990 2000 2006 With 8,948 ha of land bank Present across Present Present Present Present 55 growth centers across the Philippines Capitol Central 5 Strategically located near major infrastructure projects ALTARAZA UP Town Center-Ateneo Viaduct 2017 North Ave/ Mindanao Ave Interchange (DPWH) 2018 AYALA HEIGHTS VERTIS NORTH EDSA/North Av C-5/Acropolis- Green Meadows- -West Av UP TOWN CENTER Interchange CLOVERLEAF Calle Industria Flyover (DPWH) 2018 (DPWH) 2018 AYALA MALLS FELIZ ALI-LTG Buendia/Makati Ave-Paseo de Roxas MAKATI Underpass (DPWH) 2018 BGC AYALA Pasig-BGC Bridge (DPWH) 2018 MALLS ASEANA ARCA SOUTH Southwest ITS (Megawide) 2018 SLEX ALABANG TOWN CENTER VERMOSA South ITS (ALI) 2018 6 NUVALI Strategically located near transit and expressway projects ALTARAZA MRT7 North-South Commuter Rail (SMC) 2019 (DOTC) 2021 Quezon Ave C-5 Segments 8,9,10 Bus Rapid Transit (MNTC) 2017-2019 (DOTC) 2019 AYALA HEIGHTS LRT1-MRT7-MRT3 VERTIS NORTH Common Station 2020 LRT2 West Extension (LRTA) 2020 UP TOWN CENTER RIZAL CLOVERLEAF LRT2 East Extension (LRTA) 2018 NLEX-SLEX Connector Rd TUTUBAN (MPIC) 2019 AYALA MALLS FELIZ ALI-LTG Skyway Stage 3 (Citra) 2018 MAKATI C-6 Ph 1 (Citra) 2020 NAIA Expressway BGC (SMC) 2017 AYALA MALLS C-5 South Link ASEANA ARCA SOUTH Expressway (CIC-MPIC) 2019 Skyway C-5/ C-6 Ph 1A LRT1 South Extension (Citra) 2018 (LRMC) 2020 SLEX ALABANG CALA Expwy TOWN CENTER (MPCALA) 2020 VERMOSA North-South Legend: CAVITE Railway (DOTC) 2020 Rail/Transit System Expressways 7 NUVALI Strategically located near infrastructure projects To Danao Cebu Cebu BRT (Cebu LGU) Kan-Irag 2019 AMARA CEBU IT PARK Cebu-Cordova Bridge (MPIC) 2020 SDK Mancao CBP MACTAN SRP CORDOVA 8 Strategically located near infrastructure projects Davao To Tagum Davao Bypass To Bukidnon Road (DPWH) 2021 Alsons ABREEZA SAMAL To Gen Santos 9 Residential: Steady launch of various product lines Wide product offering to address a broader market segment Based on Income Classes of 18M Households Segment Price Range Average/unit High End P9 - 350M P20M “A-AAA” – (1%) (US$200-7M) (US$400k) (P120-250K/mo) Upscale P4 - 35M P10M (US$100-770K) (US$220k) “B” – (4%) Middle Income P2.5 – 18M P5M (P50-120K/mo) (US$38-300K) (US$100K) Economic Housing P800K – 2.9M P1.2M (US$15-64K) (US$30K) “C/C-” (32%) (P15-50K/mo) Social Enterprise P400K - 1M P600K Community (US$10-25K) (US$15K) • 3.9M current housing backlog “D/E”- (P63%) • Annual supply of 200K units vs annual demand of 345K (<P15K/mo) units Source: Nat’l Statistics Office, 2012 FIES Similar strategy is being adopted by all other business lines 10 Leasing: Continued expansion of investment properties Malls, Offices and Hotels and Resorts growth • Regional Malls • Headquarter Type Offices • SEDA Hotels • Lifestyle Malls • BPO-Type Facilities • Island Resorts and Estates • Value Malls • International Brand • Community Centers Formats Malls GLA : 1.2 to 3.1 Office GLA : 0.5 to 1.5 Hotels & Resorts : 2.0k to 6.0k (in million sqm.) (in million sqm.) (# of rooms in thousands ) 6.0 3.1 1.5 1.4 0.7 2.3 1.2 1.3 0.6 2.0 2.1 2.6x GLA 0.5 3.2x GLA 3x Room Keys 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 11 Equity earnings from new investments 12 Balanced and sustainable growth through the 2020-40 Plan NET INCOME AFTER TAX P40B NIAT by 2020 (in billion pesos) Sustainable and balanced growth strategy: 40.0 50% from Residential Development • Mix: 50% Horizontal, 50% Vertical 50% from Leasing • GLA growth: Malls, Office, Hotels and Resorts 17.6 14.8 Average Annual 11.7 Growth Rate 9.0 of 20% 7.1 5.5 4.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 13 Outline Message from the President 1H 2016 Results • Financial Statements • Margins • Capex • Operating Statistics 14 Key Messages 1. Results continue to be positive with net income at P9.7b, 16% higher year on year 2. Total revenues reached P54.8 billion, up 8% driven by the steady performance of the core real estate businesses which grew 9% 3. Total capex spent at P43.4b on track with project completion 4. Total value of launches at P65.7 billion composed of an estate, residential, office for sale and leasing projects 15 Net income of P9.7b, up 16% Income Statement • Real Estate Revenues 1H 2016 1H 2015 Change % higher by 9% (in Php millions) Total Revenues 54,760 50,611 4,150 8% Real Estate* 53,861 49,525 4,335 9% • GAE ratio improved Interest & Other Income 900 1,085 (186) -17% to 6.0% from 6.3% Equity in Net Earnings of Associates and JVs 267 -81 348 431% Interest & Investment Income 351 859 (508) -59% Other Income • EBIT margin higher 282 308 (26) -8% at 34% (vs. 31%) Expenses 39,552 37,497 2,054 5% Real Estate 32,439 30,979 1,460 5% GAE 3,307 3,174 133 4% Interest Expense, Financing and other charges 3,806 3,345 461 14% Income Before Income Tax 15,208 13,113 2,095 16% Provision for Income Tax 3,928 3,192 736 23% Income before Non-Controlling Interest 11,280 9,921 1,359 14% Non-Controlling Interest 1,540 1,534 7 0% NIAT Attributable to ALI Equity Holders 9,740 8,388 1,352 16% *Includes interest income on accretion. Per statutory reporting (17q), interest income on accretion is classified under Interest Income **Excluding commercial lot sales, revenue grew by 12% and NIAT by 22% 16 Steady performance of core businesses Revenue Breakdown 1H 2016 1H 2015 Amount % (in P millions) Property Development 36,068 33,946 2,121 6% Residential 31,089 28,809 2,280 8% New bookings and project completion Office for Sale 3,380 2,360 1,020 43% Contribution of ALVEO Financial Tower Comm’l/Ind’l lots 1,598 2,777 (1,179) -42% Arca South lot sales in 2015 Commercial Leasing 12,755 11,399 1,355 12% Shopping Center 6,984 6,011 973 16% Improved contribution of new malls – UPTC and Solenad 3 Office 2,579 2,427 152 6% Contribution of new offices Hotels and Resorts 3,192 2,961 231 8% Higher REVPAR Services 31,712 19,900 11,811 59% Gross Construction 30,982 19,212 11,770 61% Increase in order book Property Mgmt. 729 688 42 6% Sub –Total 80,534 65,246 15,288 23% Interco Adjustments (26,673) (15,721) (10,953) 70% Real Estate Revenues 53,861 49,525 4,335 9% Interest & Other Income 900 1,085 (186) -17% Total Revenues 54,760 50,611 4,150 8% 17 Improved margins across various product lines Margin Performance 1H 2016 1H 2015 Property Development (Gross profit) Residential Horizontal 42% 43% Lower margin on newly launched projects due to higher land cost Vertical 36% 35% Sale of higher margin projects Office for Sale 39% 39% Sustained margins of newly launched projects Commercial and Industrial Lots 56% 49% Higher margin lots for sale in Nuvali and Arca South Commercial Leasing (EBITDA) Shopping Centers 68% 67% Cost containment initiatives and better performance of Office 90% 88% maturing leasing assets Hotels & Resorts 32% 30% Improved occupancy of Hotels Services (EBITDA) Construction and 9% 12% Bulk of accomplishments are from lower margin contract Property Management packages 18 Continued diversification into new growth centers NIAT contribution per business center 36% Other Vismin 32% Other Luzon Other MM FTI Manila 34% ] Vertis ] Cebu 27% 37% Alabang BGC 24% ] ] Nuvali ] ] Makati 2011 2012 2013 2014 2015 1H2016 19 Continued diversification towards higher recurring income NIAT contribution per core business segment 34% Hotels & Resorts 29% Office Malls Comm'l / Ind'l Lots 27% ] ] Residential Business and Office for sale 40% 36% ] 38% ] ] ] 2011 2012 2013 2014 2015 1H 2016 Note: Excludes NIAT from services. Target is to increase the recurring income contribution to 50% by 2020 20 Solid balance sheet to support growth Balance Sheet June December Change % (in P millions) 2016 2015 Cash & Cash Equivalents* 19,961 19,540 421 2% Total Borrowings 154,744 130,996 23,748 18% Stockholders’ Equity 157,674 149,825 7,849 5% Current Ratio 1.05 1.14 - - Debt-to-Equity Ratio *** 0.98 0.87 - - Net Debt-to-Equity Ratio*** 0.85 0.74 - - Return on Equity** 14.3% 14.7% - - *Includes FVPL (financial assets at fair value through profit and loss) **Attributable to equity holders of ALI ***Consolidated debt over equity inclusive of minority interest 21 Sustained capital efficiency via stretched maturities lower cost of debt and managed debt mix As of June 30, 2016 Total Borrowings: Php154.7B, Long-term Php127.9B, Short-term Php26.8B 9.0% 35 7.9% Short-term Debt Maturity (in Php Billions) 8.0% 7.3% 30 Long-term Debt Maturity (in Php Billions) 7.0% 6.2% 25 6.0% 5.3% 5.1% Borrowing Cost 4.7% 5.0% 4.5% 4.5% 20 4.0% 15 15.8 16.5 3.0% 15.7 14.5 15.2 12.9 10 2.0% 11.9 9.0 5 1.0% 26.8 8.1 4.5 2.0 0.0% 2.4 0 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 2012 2013 2014 2015 1H 2016 Floating Floating Floating