08-30-17 meg 1h2017 ir kit - megaworld corporation best position to capture bpo ......
TRANSCRIPT
IRKit1H2017
ALLIANCEGLOBALSTRUCTUREFocusedconsumercentricbrand
2
81% 44% 49%
RealEstatePioneertownshipdeveloper
andleadingBPO/officelandlordinthePhilippines
LiquorLargestbrandycompanyin
theworld
GamingFirstintegratedresortinthe
Philippines
QSRSecondinthePhilippine
QSRindustry
67%MEGPM
Marketcap:USD3.1b
EMPPMMarketCap:USD2.2b
RWMPMMarketCap:USD1.1b
NotListed
AGIPMMarketCap:USD2.7b
Marketcapfiguresasof08/29/2017
MEGAWORLDSTRUCTUREAstreamlinedvehicleforAGI’spropertyinterests
82% 82% 100%
TownshipDevelopment
Upper-middletohighincomemostlyinMetroManilaPHP3m– 30m(USD75k– 750k)Pricerange(perunit)
OfficeandcommercialMostlyBPOandLifestyleMalls
TourismestatedevelopmentsPHP3m– 12m(USD75k– 300k)Pricerange(perunit)
Middle-incomePHP1.5m– 4m(USD37.5k– 100k)Pricerange(perunit)
Affordable/economicPHP800K– 3m(USD20k– 75k)Pricerange(perunit) 3
GERIPMMarketCap:USD350m
ELIPMMarketCap:USD198m
NotListed
Marketcapfiguresasof08/29/2017
KEYMESSAGES
MEG– USD3.9b
Townshipdominance
Rentalincomegrowth
Strategiclandbank
• Pioneersof“Live-Work-Play-Learn”concept
• Diversifiedroster;inlinewiththedirectionofthegovernmentofregionalgrowth
• 22Townships:• 4inFortBonifacio• 6inMM(ex-FortBoni)• 5inLuzon(ex-MM)• 6inVisayas• 1inMindanao
4
• BestpositiontocaptureBPOindustrygrowth
• #1BPOlandlordinthePH• Highmarginbusiness• P12bnrentalincomein2017• P20bnrentalincomein2020
• Expansivelandbankacross3mainregionsofthecountry
• Nopressuretoacquirelandatunreasonableprices
• Canlastforthenext10-15years
Excellenttrackrecordprovingstabilityandsustainability
Strongfinancials
• Strongbalancesheet• Lowgearingvs industry
standard• Abletowithstand
downturns• Abletoseizeopportunities
Excellentmanagement
RAWLANDBANK
3,356ha
362ha
5
172ha
404ha
2,418ha
105hectares– unmatchedscaleinFortBonifacio,oneofthelargestCBDsinManila
UNMATCHEDTOWNSHIPDEVELOPMENTSINMETROMANILA
6
PHILIPPINE’SPREMIERTOWNSHIPDEVELOPERANDPIONEEROFTHE“LIVE-WORK-PLAY-LEARN”LIFESTYLE
7
50ha
5ha
34.5ha
15.4ha
18.5ha
12.4ha
25ha
350ha
561ha
62ha
1,200ha
150ha
30ha
72ha
11ha
34ha
53ha
173haSta. Barbara Heights
35.6ha
31ha WEST S I D EC I T Y
���������
MegaworldGERI
Suntrust
MapleGrove140ha
Totalof22TownshipsCovering3,704hectares
640ha
*Launchedin2016
*
*
4826
25%bookingthreshold
500k(5%)lumpsum
Month
RESIDENTIALBUSINESSCYCLETriedandtestedmodel
8
12
TypicalPaymentScheme
0Monthlypayments
500k(5%)lumpsum
24 36
500k(5%)lumpsum
500k(5%)lumpsum
0.5%permonth 0.6%permonth 1%permonth 1.2%permonth
ConstructionPeriod
Totalcontractprice:P10m•60%AmortizedPayments:P6m• Monthly:stepupperyear• 5%peranniversarydate:P500k
•40%TurnoverBalance:P4m
30%
RealEstateSalesP10mCostofRES(P6m)GrossProfitP4mDeferredGP(P2.8m)RealizedGPP1.2m
P1.1m(11%) P1.2m(12%) P1.7m(17%) P2m(20%)+P4m(40%)
Annualpayments
P1.1m(11%) P2.3m(23%) P4m(40%) P10m(100%)Cumulativepayment
30
PaymentPeriod
Toberealizedbasedonpercentageofcompletion
100%
1. Affordableandflexible2. Self-funding3. Conservativebooking4. Securedbypostdatedchecks
0%
~70%presold
Completion
0downpayment
50k(0.5%) 60k(0.6%) 120k(1.2%)100k(1%)
Fort MMex-fort Luzonex-MM Vis-Min Total
1H2016
1H2017
MEG 9.1 67% 9.2 67%
Taguig 3.2 24% 2.8 20%
Makati 1.1 8% 1.9 14%
Pasay&Parañaque 2.0 15% 1.0 8%
QuezonCity 0.7 5% 0.8 6%
Manila 0.1 1% 0.2 1%
Cavite >0.1 0% 0.1 0%
Cebu 0.2 1% 0.2 1%
Iloilo 0.5 4% 0.4 3%
Bacolod 0.1 0% 0.1 1%
Other Subs 1.3 10% 1.9 14%
GERI 2.1 16% 2.1 16%
ELI 2.3 17% 2.3 17%
TOTAL 13.4 100% 13.6 100%
DIVERSIFIEDREALESTATESALESMIX
inPHPbillions
9
1H2016(%sales)
MEG67% ELI
17%
GERI16%
Vis-Min12%
FortBonifacio
20%
MMEx-FortBonifacio
53%
LuzonEx-MM15%
1H2017PerBrand 1H2017PerLocation
10%
1%
14%
Year-on-YearGrowthperArea
14%
1H2017(%sales)
9%
STABLEOVERALLRESIDENTIALMARGINS
10
In PHPbillions 1H 2016 1H2017 %change
Real EstateSales(RES) 13.4 13.6 1.4%+InterestincomeonRealEstateSales 0.6 0.6 -0.2%
Total RES 14.0 14.2 1.4%
-CostofRES 7.6 7.7 1.0%
Gross ProfitonRES 6.4 6.5 1.8%
Gross ProfitMargin 45.7% 45.8% +10bps
-DeferredGrossProfit 2.7 2.3 -17.1%
RealizedGrossProfit 3.7 4.3 15.7%
+RealizedGrossProfitOnPriorYears'Sales 2.1 2.2 5.8%
TotalRealizedGrossProfit 5.8 6.5 12.2%
• SteadyhighblendedGPM
• Healthyincreaseintotalrealizedgrossprofitfromcontinuedprojectcompletion
P460/sqm
P480/sqm
P510/sqm
P530/sqm
P560/sqm
INVESTMENTPROPERTIESHighmarginandyieldingbusiness
11
LandAcquisition ConstructionPeriod
0 12 24 36
0 12 24 36
Preleasing
Month
Month
Leasing
48 60
TotalCost:P28k/sqm
eCommerce (EastwoodCity)GFA:22,600sqmGLA:21,000sqmConstructionpersqm:P27k/sqmAccommodationValue:P1k/sqm
*MonthlyRent
AccommodationValue
P1k/sqm
ConstructioncostP27k/sqm
GrossYield P5.5k20% P5.8k21% P6.1k22% P6.4k23% P6.7k24%}
4-5yearspayback*AdjustedtoperGFA
1. Landcost=P25m(P10,000/sqm)2. Constructioncost=P610m
P520/sqm
P540/sqm
P570/sqm
P600/sqm
P630/sqm
INVESTMENTPROPERTIESHighmarginandyieldingbusiness
12
LandAcquisition ConstructionPeriod
0 12 24 36
0 12 24 36
Preleasing
Month
Month
Leasing
48 60
TotalCost:P30k/sqm
OneWorldSquare(McKinleyHill)GFA:33,000sqmGLA:29,200sqmConstructionpersqm:P27k/sqmAccommodationValue:P2.5k/sqm
*MonthlyRent
AccommodationValue
P2.5k/sqm
ConstructioncostP27k/sqm
GrossYield }
4-5yearspayback*AdjustedtoperGFA
1. Landcost=P83m(P20,000/sqm)2. Constructioncost=P905m
P6.2k21% P6.5k22% P6.8k22% P7.2k24% P7.6k 25%
6.1
0.2 0.2 0.3 0.2 0.22.9 3.6 4.0
2.0 2.3
4.15.1
6.0
2.9 3.6
2014 2015 2016 1H2016 1H2017 2017 2020
166 170 170 237 273 356432 509 621
737 8511,009
2012 2013 2014 2015 2016 2017 2020
Rentalportfolio(‘000sqm)
13
7.2
598 679 791
8.9
20
974
15%
ExcellentTenantBaseQuality&Quantity• Over130tenants• Blue-chipcompanies
HealthyPre-leasing
Office
Commercial
CapturedMarketMegaworld LifestyleMalls
TopRetailers
2,110
IncreasingRentalIncome(inPhP billions)
OfficeCommercial&OthersIntersegment
OfficeCommercial&Others
23%
10.312
1,124
• P10bnin2016• P20bnin2020• Over1millionGLAin
2016• Over2millionGLAin
2020
Rental
1,365
20%
GROWINGRENTALINCOME–DRIVENBYOFFICE&COMMERCIALLEASING
5.1
GROWINGRENTALINCOME– HIGHMARGINBUSINESS
14
In PHPbillions 1H 2016 1H2017 %changeRevenuesRental 4.8 5.8 20.3%
IntersegmentSales 0.2 0.2 0.7%
TotalRentalRevenues 5.0 6.0 19.7%
-Operating Expense 1.3 1.5 16.9%
RentalEBIT 3.7 4.5 20.7%
RentalEBITMargin 74.5% 75.1% +60bps
In PHPbillions 1H2016 %share 1H2017 %shareEBIT Contribution
RealEstate 4.0 51% 4.7 51%Rental 3.7 47% 4.5 49%Hotel 0.1 2% 0.1 1%Corporate&Elimination 0.0 0% -0.1 -1%
TotalEBIT 7.8 100% 9.2 100%
• 50/50splitonEBIT
• StrongandsteadyrentalEBITMargin
• TotalrentalsinlinewithFYtarget
OFFICEPIPELINE
15
DavaoFinanceCenter Davao ParkDistrict 30,000TwoTechnoPlace IloiloBusinessPark 9,000OneTownSquare Las Piñas 20,000SouthEastAsianCampus McKinley Hill 50,000Southwoods BPO1&2 Southwoods City 37,000PacificWorldTower TheMactan Newtown 12,000
158,000
TwoPaseo Arcovia City 43,000OneRepublic Plaza DavaoParkDistrict 20,000Emperador House DavaoParkDistrict 10,000EastwoodSkyPlaza1 Eastwood City 20,000EastwoodGlobalPlaza Eastwood City 32,000FestiveWalkBPO IloiloBusinessPark 12,000BPO6 IloiloBusiness Park 9,00010WestCampus McKinleyWest 34,000TheUpperEastBPO TheUpperEast 30,000
210,000
OnePaseo Arcovia City 43,000BPO7 Iloilo BusinessPark 9,000WorldCommercePlaza UptownBonifacio 105,000
157,000
2017
2018
2019GLA(sqm)Township
GLA(sqm)Township
TheCapitalBPO Capital Town 20,000EastwoodSky Plaza2 EastwoodCity 20,000BPO8 Iloilo BusinessPark 9,000Maple GroveBPO Maple Grove 20,000ParkWest1 McKinleyWest 30,000Block 3 UptownBonifacio 55,000
154,000
2020
COMMERCIALPIPELINE
16
2017
2018
Grossfloorarea(sqm)
Leasablearea(sqm)
Commonarea(sqm)
Township
Arcovia Parade Arcovia CityFestiveWalkAnnex IloiloBusinessParkFestive WalkMall IloiloBusinessParkKing’sPlaza Manila 186,000 82,400 105,600McKinleyWestBPOD,E,F McKinleyWestSouthwoods Mall Southwoods CityUptownResidences UptownBonifacio
Alabang WestRetail Alabang WestBoracay Beach Strip Boracay NewcoastTheCapitalRetail Capital TownDavaoParkRetail DavaoParkDistrict 53,200 28,800 24,800MapleGroveRetail MapleGroveNorthill GatewayRetail Northill GatewayThe UpperEastRetail TheUpperEastMactan NewtownBeach TheMactan Newtown
COMMERCIALPIPELINE
17
2019
2020
Township
Boracay Belmont Boracay NewcostGovernors’Hills Governors’Hills 85,000 26,900 38,600ThePad Shaw
Arcovia Palazzo Arcovia CityBoracay Chancellor Boracay NewcoastRomaCainta CaintaTheCapitalRetail2 CapitalTownBlock20 McKinleyWest 267,700 168,200 99,300Maple GroveRetail2 Maple GroveSanAntonioResidences SanAntonioResorts WorldRetail Westside City
Grossfloorarea(sqm)
Leasablearea(sqm)
Commonarea(sqm)
PERFORMANCEUPDATE
18
In PHPbillions 1H 2016 1H2017 %change
Revenues 23.0 24.3 5.4%Real EstateSales 13.4 13.6 1.4%Rental 4.8 5.8 20.3%Hotel 0.6 0.6 9.8%OtherRevenues 4.2 4.2 0.3%
Cost&Expenses 17.0 17.6 3.4%Cost ofRealEstateSales 7.6 7.7 1.0%Hotel 0.3 0.4 17.1%OPEX& OtherExpenses 6.5 6.7 2.3%OperatingIncome 8.5 9.5 11.2%InterestExpense 0.7 0.8 5.0%Pre-taxIncome 7.8 8.7 11.8%IncomeTax Expense 1.8 2.1 14.5%NetIncome 6.0 6.7 11.0%Minority Interest 0.2 0.2 17.9%NetIncome toOwners 5.8 6.4 10.8%
EBITMargin 37.1% 39.2% +210bpsNetIncomeMargin 26.2% 27.6% +140bps
• Netincomeinlinewithdouble-digitgrowthtarget
• Marginimprovementfromhigherrentalcontribution
• OPEXup8.6%
• Flattishbutdiversifiedmix
• Modestcostexpansion
• Robustgrowthforbothrental&hotels
• DeferredGPdown17.1%
CONSOLIDATEDREVENUEBREAKDOWN
19
1H2017
RentalIncome24%
HotelOperations3%
Interest&Other4%
RealEstate69%
1H2016
RentalIncome21%
HotelOperations3%
Interest&Other5%
RealEstate71%
In PHPbillions 1H 2016 1H2017 %change
Real EstateSales 13.4 13.6 1.4%InterestincomeonRealEstateSales 1.0 1.0 0.1%
RealizedGross ProfitonPriorYears’Sales 2.1 2.2 5.8%
Rental 4.8 5.8 20.3%Hotel 0.6 0.6 9.8%Interest& Otherincome 1.1 1.0 -9.6%
Total Revenues 23.0 24.3 5.4%
• Morerentalcontribution;300bp expansion
• Residentialrevenuesup1.9%drivenbygrowingRGPfromcontinuedprojectcompletion
71.0
61.252.6
33.528.6
20.115.916.4
22.825.131.8
26.8
47% 43% 39%
26% 28% 25%
37% 31%
22%
7%
1H2017FY2016FY2015FY2014FY2013FY2012
TotalBorrowings Cash&CashEquivalents DettoEquity NetDebttoEquity
FY2012 FY2013 FY2014 FY2015 FY2016 1H2017
DebttoEquity 25% 28% 26% 39% 43% 47%
NetDebttoEquity Net Cash NetCash 7% 22% 31% 37%
20
SOLIDBALANCESHEETinPHPbillions
34.622.320.924.824.8
13.6
36.4
38.931.7
8.83.8
6.5
1H2017FY2016FY2015FY2014FY2013FY2012
21
DEBTMATURITYPROFILE
Borrowings Loans
$250,000,000 4.25% April2013 2023$200,000,000 6.75% April2011 2018
₽12,000,000,000 5.35% March2017 2024
Bonds DateIssued MaturityCouponRate
inPHPbillions
BondsLoans
₽36,386,223,575 ~5.00% Various Various
Loans YearIssued MaturityAve.Rate
28.6 33.5
52.6
71.0
20.1FixedRate99%
FloatingRate<1%
61.2
5-YEARCAPEXPLANPHP285.8BUNTIL2019
22
2015PHP54.5B
2016PHP48.8B
2017PHP60B
2018 2019
PHP285.8B
PHP122.5B
Residential/Office/Retail/HotelPHP48B
LandBankingPHP12B
2017CAPEXBudget
20%
80%
1H2017CAPEXSpending
99%
Resi/Office/Retail/HotelPHP21.9B
<1% LandBankingPHP0.9B
67%
49%
76%
47% 48%
FLI ALI MEG RLC SMPH
82% 64% 54%
23% 21%
16% 8%
27%
21% 6%
10% 23% 22%
50% 74%
0% 4% 1% 6% 2%
-8%
1%
-4%
0%
-3% FLI ALI MEG RLC SMPH
Residential Office Retail Hotels Others
ImpactofRentalAssetsonEarnings
23
49%31%
80%
71%
26%
94% 60%
103% 127%
165%
FLI ALI MEG RLC SMPH
EBITContribution
RentalMargins RentalIncomeas%ofOPEX
Basedon2015FSs
KEYTAKEAWAYS
24
• Diversifiedtownshiproster22townshipsacrossthecountryGrowingcontributionsfromoutsideMM
• HighresidentialbaseHighblendedGPMat46%1H2017presalesatP58.3bn(P90bnE2017guidance)1H2017launchesatP18.4bn(P30bnE2017guidance)
• GrowinghighmarginrentalbusinessRentalEBITmarginat75%2017Target:P12bn2020Target:P20bn
EndofPresentation