AEV FY 2019 Financial and Operating Performance Final v4 · Review of Business Units ... Renewable...

Aboitiz EquityVentures

FullYear2019Financial&OperatingResults

11March2020

ReviewofBusinessUnits

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Presenters

Outlook

TAAL ASF COVID 19

TAAL ERUPTION AFRICAN SWINE FEVER CORONAVIRUS DISEASE 2019

COVID 19CORONAVIRUS DISEASE 2019

Deaths:

4,000+Affected Countries:

109

Covid-19 Cases:

113,000+

Source: WHO

“Palabradehonor”WORDOFHONOR

We will lead the Aboitiz teaminto the next decade.

POWER 56% NON-POWER 44%

POWER 65% NON-POWER 35%

*Includes 100% of Subsidiaries and Affiliates 1- Budgeted figures 2-Actual figure

P73 bn

P53 bn

P49 bn

P35 bn 2

2

2

1

2017

2018

2019

2020

Capital Expenditure(with partners)

Wewillcontinuetoinvestincapacitiestoadvancebusinessandcommunities.

PARTNERS

Despite these difficulties,we are not contemplatinga reduction in our expenditures. Our Build, Build, Build will go full blast, so will other programs of the government.

Carlos G. DominguezFinance Secretary

Republic of the Philippines

“”

Renewable Capacity Bulk Water Treatment Capacity Regional Banking linked by Ethereum

Affordable Microstudio Rental Units Regional Airport Infrastructure Common Towers Infrastructure

Wewillachieveour10-yearEBITDAtargetbymanagingourESGrisksandfindingopportunities intheworld’sSustainableDevelopmentGoals.

Wewillbalanceourbusinessportfoliobytheendofthedecade

50%POWER

50%Non - POWER

~

~

10% from overseas~

50% renewable in energy mix~

ABCadvance business and communities.

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FY2019BeneficialEBITDA

-12%decline,mainlyofwhich…• -7%duetohigherpurchasedpowercost• -3%duetoloweravailabilityfromcoalfacility• -2%duetolowerrevenuesfromspotsales

*-15%vs4Q2018

FY2019CoreIncome

FY2019NetIncome

BalanceSheetHighlights

*TotalInterestBearingDebt/TotalEquity

OperatingHighlights:CapacitySales

FiguresinMW

BilateralContractQuantity(BCQ)

OperatingHighlights:RevenueandEnergySold

PhpMN GWh

-2%23,525 22,942

BilateralContractQuantity(BCQ)

OperatingHighlights:GrossMargin

InPhp MN

InGWh

QuarterlyBreakdown

InPhpMN

InGWh

OperatingHighlights:AverageSellingPrice(P/kWh)

OperatingHighlights:FY2019Availability

NERC– NorthAmericanElectricReliability Corporation

OperatingHighlights:WESM

FY2019AverageLWAP:P4.96(P/kWh)FY2018AverageLWAP:P3.53(P/kWh)

OperatingHighlights:WaterLevelMagat’sWaterLevelvsRuleCurve(inMASL)

OperatingHighlights:Distribution

Stronggrowth indistribution salesBeneficialPowerSales(GWh)

PeakDemandin(MW)BeneficialPowerSalesByCustomerType(GWh)

OperatingHighlights:Distribution

GrossMargin/kWh FeederLoss

ProjectUpdate

Wewillreachourcapacitytargetof4,000MWby2020

Grid Project Capacity(Net)

%Ownership AttributableNet SellableCapacity

EstimatedCommercialOperationDate

Luzon Dinginin Unit1(Coal– GNPD) 668MW 70% 468MW Q42020

Dinginin Unit2(Coal– GNPD) 668 MW 70% 468 MW Q22021

Visayas NagaPowerPlant Complex 42MW 100% 42MW Q32020

Vietnam Dam Nai (Wind – MekongWind)

39MW 100% 39MW Q1 2020

1,417MW 1,017MW

AttributablenetsellablecapacityasofFY2019:3,455MW

ProjectUpdate

Dinginin - 2x668MWofCoalPower(GNPowerDinginin)

ProjectUpdate

MekongWind– 39MW

ProjectUpdate

NagaPowerPlantComplex– 42MW

CapitalExpenditure(withpartners)

DividendPayment

Payout Ratio: 1/2 of previous year’s consolidated net income2020 Dividend Yield: Computed based on March 06, 2020 closing price

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2019NetIncomedoubledtoP14.0Bn

• UBPpostedarecordhighnetincomeofP14.0Bndrivenby:

• Solidloangrowthofconsumer&SME• Increaseinmarginsin2019• Strongnon-interestincomegrowth

• Profitabilityratioswayabovepreviousyearandsurpassedindustryaverage

*Attributable to Parent Bank’s StockholdersNote: Industry ratios based on latest BSP data

9.9%

16.3%

Dec 2018 Dec 2019

Return on Equity

11.2% Industry

Avg

1.1%

2.0%

Dec 2018 Dec 2019

Return on Assets

1.3%Industry

Avg

6.9

14.0

Dec 2018 Dec 2019

Net Income*(in Php Bn)

2x

NetInterestIncomegrewdouble-digitfromrobustgrowthofearningassets;marginsimproved70+bps

20.0

22.3

Dec 2018 Dec 2019

Net Interest Income (in Php Bn)

12%

30 31

177 217

278 307

497 566

81% 80%

-

0

0

0

0

1

1

1

1

1

-

100

200

300

400

500

600

700

800

Dec 2018 Dec 2019

Earning Assets (ADB, in Php Bn)

Liquid Earning Assets Securities Current Loans Others Share of EA to Net Assets

14%

+10%

+23%

+4%

6.4%

6.6% 6.6% 6.7% 6.7%

3.3% 3.2% 3.1% 3.0% 2.8%

3.1%3.4% 3.5%

3.7%3.9%

Jan-19 Mar-19 Jun-19 Sep-19 Dec-19

Group MarginsYield Cost NIM

+76bps increase from start of 2019

EarningAssetsdrivenbyhighyieldingConsumer&SMEloans

41 54

53 63

136

146

61

54 291

317

Dec 2018 Dec 2019

Credit Portfolio (ADB, in Php Bn)

Retail Commercial Corporate Mass Market Loans

+7%

+19%

+31%

-10%

6.1

8.3

Dec 2018 Dec 2019

Credit Cards (ADB, in Php Bn)

35.3

46.1

Dec 2018 Dec 2019

Consumer Loans (ADB, in Php Bn)

47.0

54.7

Dec 2018 Dec 2019

Commercial Loans (ADB, in Php Bn)

9%

16%

35% 31%

5.7

8.0

Dec 2018 Dec 2019

Businessline(ADB, in Php Bn)

40%

HigherCASAratioYoY;Managedhigh-costdepositsbyshiftingtocost-efficientliabilities

133 145

22 25

157 172 36%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

50

100

150

200

Dec 2018 Dec 2019

CASA Deposits (ADB, in Php Bn)

Peso FCDU Subsidiaries Share of CASA to Total

+9%

+11%9%

441 435

71 139

512

574

Dec 2018 Dec 2019

Total Liabilities (ADB, in Php Bn)

Total Deposits Other Borrowings

-1%

+95%12%

Non-InterestIncomemorethandoubledfromstronggrowthofkeyrevenuestreams

1.6 2.0

1.5

9.4

2.4

3.0

5.5

14.3

Dec 2018 Dec 2019

Non-Interest Income(in Php Bn)

Ser. Charges, Fees, & Comm Securities Trading Gains Miscellaneous Income

2.6x +26%

+6.1x

+24%

in Php Bn Dec 2018 Dec 2019 Growth

Total Misc. Income 2.4 3.0 26%

Foreign exchange gains 0.6 0.7 17%

Others 1.8 2.3 29%

in Php Bn Dec 2018 Dec 2019 Growth

Total Ser. Charges & Fees 1.6 2.0 24%

Parent 1.3 1.5 11%

Subsidiaries 0.3 0.5 86%

Opex higherthanexpectedduetoacquisitionsinCSB

15.7 17.9

1.0

2.4 16.7

20.3

Dec 2018 Dec 2019

Operating Expenses (in Php Bn)

Core Opex Non-Core Opex

In Php Bn Dec 2018 Dec 2019 GrowthTotal Core Opex 15.7 17.9 14%Recurring 11.7 13.4 14%

Volume-Related 4.0 4.5 13%

22%

+14%

+2.4x

Highercapitalratiosasearningsoutpacegrowthofriskassets

15.2%15.3%

12.7% 13.2%

8.5%

10.0%

Dec 2018 Dec 2019

Capital Adequacy Ratio CET1/Tier 1 Capital Ratio

CET1 Regulatory Minimum CAR Regulatory Minimum

6.0

10.1 7.9 6.9

14.0

2015 2016 2017 2018 2019

Net Income In Php Bn

Summary

41 54

53

63

94

117

Dec 2018 Dec 2019

Retail & SME Loans(Parent Bank ADB, in P Bn)

Retail Commercial

6.4%

6.6% 6.6% 6.7% 6.7%

3.3% 3.2% 3.1% 3.0% 2.8%

3.1%3.4% 3.5% 3.7% 3.9%

Jan-19 Mar-19 Jun-19 Sep-19 Dec-19

Group Margins

Yield Cost NIM

+76bps increase from start of 2019

1.6 2.0 1.5

9.4

2.4

3.0

5.5

14.3

Dec 2018 Dec 2019

Non-Interest Income(in P Bn)

Fees Trading Gains Misc Income

• Recordnetincome

• Robustconsumer&SMElending

• Substantialmarginimprovementwithintheyear

• Strongnon-interestincomegrowth

24%

+19%

+31%

2.6x +26%

+6.1x

+24%

Outlook

• FurthercutsonpolicyrateandRRRshallfurtherimprovemargins

• Robustexpansionofretail&SMEloans

• CSBtobedrivenbysalary&motorcycleloangrowth

• Acceleratecustomeracquisitionviadigitalchannels

4.50%4.25%

4.00%3.75%

?

Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20

Overnight RRP Facility

4.75%

RRP down 100bps from

Jan 2019

18%17%

16.5%16%

15%14%

?

Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20

RRR

RRR down 400bps from

Jan 2019

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FY2019FinancialHighlights

vs. FY18

Revenue 74,724 +16%

EBITDA 5,363 +29%

EBITDA Margin 7% +100bps

NIAT 2,105 +12%

FY2019FinancialHighlights:Revenue

12% 11%

33% 29%

50%57%

5%

4%P64B

P75B

FY18 FY19

FARMS

GOLD COIN FEEDS

PILMICO FEEDS PH & VN

FLOUR

16% P2.7B

P3.5B

FY19

FY18

P42.4B

P32.2B

FY19

FY18

P21.3B

P20.9B

FY19

FY18

P8.4B

P7.7B

FY19

FY18

24%

2%

9%

FARMS

GOLD COIN FEEDS

PILMICO FEEDS

PH & VN

FLOUR

32%

50

1,068

FY19

FY18

2,507

1,273

FY19

FY18

1,472

1,175

FY19

FY18

1,252

625

FY19

FY18

95%

25%

100%

FARMS

GOLD COIN FEEDS

PILMICO FEEDS

PH & VN

FLOUR

97%

FY2019FinancialHighlights:EBITDA

15%23%

28%

29%31%

47%26%

1%

P4B

P5B

FY18 FY19

FARMS

GOLD COIN FEEDS

PILMICO FEEDS PH & VN

FLOUR

29%

FY2019FinancialHighlights:NetIncome

16%34%

27%

34%27%

46%

30%

-13%

P1.9B

P2.1B

FY18 FY19

FARMS

GOLD COIN FEEDS

PILMICO FEEDS PH & VN

FLOUR

12% -P281M

P564M

FY19

FY18

P965M

P513M

FY19

FY18

P709M

P506M

FY19

FY18

P711M

P299M

FY19

FY18

150%

40%

138%

FARMS

GOLD COIN FEEDS

PILMICO FEEDS

PH & VN

FLOUR

88%

HUBERT DE ROQUEFEUILPRESIDENT & CEO FOOD GROUP

TRISTAN ROBERTO ABOITIZPRESIDENT & CEO

PILMICO FOODS CORPORATION

ONE FOOD GROUPLeadership Team

ONE FOOD GROUP

BALANCEBalance portfolio, market

opportunities and risks

OPTIMIZEExecution excellence

through processes and systems

DEVELOPBuild capabilities,

innovate, and expand the business

KEY STRATEGIC PRIORITIES

2020 Project Pipeline

Jan 2020

FEEDS

Indonesia DepotDepot in Bangka Island, Indonesia

Completion rate: 100%

Apr 2020

Floating Fish Line+5TPH in Dongguan, China

Completion rate: 60%FEEDS

Fish Feed Line+5TPH in Ha Nam, Vietnam

Completion rate: 85%

FEEDS

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HighlightsofOperations:Water

4% improvementinoperatingmargins

10% increaseinwaterproduction

99.8%facilityuptime

92%customersatisfactionrating

PhP 3BnCAPEXspentforFY19

ConstructionofintakefacilitiesinTamugan Riverisinfullswing

Layingofconveyancepipelinesinongoing

Pouring ofconcreteonfoundations of theHEPPandprocesstrainshavebeencompleted

ProjectUpdates

Bohol-PanglaoInternationalAirport

NAIA

ApprovedbytheNEDABoardlastNovember29,2019

WeareworkingwiththeGovernmentonfinalstepsbeforecommencingSwiss

Challenge

Laguindingan Airport

ApprovedbytheNEDAICC-CabinetCommittee lastDecember20,2019

ThenextstepistogetNEDABoardApproval

BicolAirport

UnsolicitedProposalsubmitted onSeptember18,2019

35yearconcessionwithoptimization

Towers

ContinuingactiveengagementwiththeMNOs,particularlyonsiteacquisition

andselection

2,000towersin5years

MOUwith3telcos (Globe,DITO,andPLDT-Smart)

Improvedoperationalperformanceinachallengingenvironment• Modestgrowthincementdemandascontractionin

infrastructurewasoffsetbygrowthinresidentialandnon-residentialsegments

• Marketpricesstablewhileproductioncostsundercontrol

• Debottleneckingprojectscompletedsafely,withinbudget,andnowdeliveringresults

• Newmillsnearingcompletion• ContributiontoAEVatPhP604Min2019,higherby

PhP470Mversus2018

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FY 2019 vs FY 2018

Revenues 4,196M 5%

Gross Profit 1,485M 17%

Net Operating Profit 549M 43%

NIAT 943M 46%

Residential Sales 2,196M 6%

FY2019FinancialPerformance

FY2019Revenues

1,346 1,587

2,4752,368

181241

4,001 4,196

FY 2018 FY 2019

5%-4%

+33%

+18%

Residential

Industrial & Others

Commercial

FY2019GrossProfit&NetOperatingProfit

1,7901,485

FY 2018 FY 2019

959

549

FY 2018 FY 2019

Gross Profit Net Operating Profit

17%

43%

FY2019BusinessHighlights

In December we opened Lima Exchange, the latest commercial addition to our New Industry City in Lima. It houses a Robinsons supermarket, a public transport terminal, and more establishments that cater to the community’s basic needs.

FY2019BusinessHighlights

The Outlook 2019: Philippine Buyers’ Choice Property Awards (organized by Lamudi Philippines)

Winner Best House in VisMin (Amoa)

Nominee

Best Developer in Luzon

Best Developer in Vismin

Best Premium House (Seafront Residences

Our communities and elegantly designed homes caught the attention of award-giving bodies

FY2019BusinessHighlights

In 2019, AboitizLand partnered with Cebu Landmastersto deliver housing solutions to the Cebuano market. The JV’s first project is a three-tower condominium in Mandaue City, Cebu.

FY2019BusinessHighlights

We also teamed up with Point Blue, a pioneer in the integrated micro-studio market.

Point Blue currently has 4 buildings in operation covering a total of 657 units, and plans to build 20 more apartment buildings over the next two years.

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FY2019FinancialPerformance

CoreNet Income

₱5.6bn |₱21.5bn

+4% -7%

vsFY2018vs4Q2018

Revenues

₱48.7bn |₱201.2bn

-6% +8%

vs4Q2018 vsFY2018

Conso EBITDA

₱15.3bn |₱60.2bn

NetIncome

₱6.3bn |₱22.0bn

+1% -1%vs4Q2018 vsFY2018

+28% -1%

vsFY2018vs4Q2018

FY2019BeneficialEBITDA(inPhp mn)

+4%vsFY2018,ofwhich• +13%fromoutperformanceofnon-powerbusinessunits

• -9%fromPowerduetohigherpurchasedpowercost,loweravailabilityofcoalfacilityandlowerspotsales

FY2019ConsolidatedEBITDA(inPhp mn)

FY2019CoreNetIncome(inPhp mn)

FY2018 FY2019 ChangeConso EBITDA 60,653 60,157 -1%Less:Interest Expense 13,162 15,474 18%

Depcn.&Amort. 9,818 11,537 18%Tax&Others 4,799 4,572 -5%Non-controllingInterest 9,749 7,054 -28%

CoreNetIncome 23,124 21,521 -7%EPS 4.10 3.82

FY2019NetIncome(inPhp mn)

FY2018 FY2019 ChangeCoreNetIncome 23,124 21,521 -7%Non-recurring gains/(losses) (891) 516 158%

NetIncome 22,233 22,036 -1%EPS 3.95 3.91

FXrate:31Dec2019:50.6431Dec2018:52.58

BalanceSheetHighlights(inPhp mn,exceptratios)

YE2018 YE2019

CashandCashEquivalents 59,033 46,425TotalAssets 554,494 588,386

TotalLiabilities 336,016 371,191

TotalEquity 218,478 217,195EquityAttributabletoParent 174,691 176,481BookValuePerShare 31.01 31.33CurrentRatio 1.8x 1.3xDebttoEquity 1.5x 1.7xNetDebttoEquity 1.0x 1.2x

ConsolidatedBalanceSheet/KeyRatiosParentNetDebt

ND/E0.14x0.19x

DividendPayment

PayoutRatio:1/3ofpreviousyear’sconsolidatednetincome

2020DividendYield:ComputedbasedonMarch06,2020closingprice

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