Ayala Corporation Investor Presentation August 2020 Key Messages - PowerPoint PPT Presentation

Ayala Corporation Investor Presentation August 2020

Key Messages The Philippines saw the worst economic contraction for over 30 years in 2Q20, but • signs of recovery have been materializing slowly. Consumer confidence indicators are recovering as evidenced in trends seen in some of • our business units when quarantine restrictions were eased in June as demand improved and operations ramped up. We are ideally positioned to capture the opportunities around the accelerated digital • adoption in the country, with BPI Online, GCash, Entrego, and Zalora seeing unprecedented growth. With a strong brand and a healthy balance sheet, Ayala is poised to weather the • impact of the health crisis. 2

PHILIPPINE MACROECONOMIC SNAPSHOT The Philippines saw the worst economic contraction for over 30 years in 2Q20, but signs of recovery have been materializing slowly The Philippines’ 2Q20 GDP growth saw a steep Monetary easing worldwide will help contraction, falling by 16.5% with the industrial alleviate the economic/social fallout of the sector (-22.9%) recording the biggest decline COVID 19 pandemic among the three major sectors of the economy Mobility has improved in August with grocery, Assuming a vaccine can be administered late pharmacy, and workplace activity recovering next year, we expect the economy to bounce fastest, but there's still a long way to go before back to pre-crisis levels early in 2022 reverting to pre-crisis levels The worst is over; now, the strength of fiscal China's manufacturing PMI has recovered response and ability to balance health with sharply (50.9 as of June) and much earlier than economic goals will be the key to a speedy economies; SE Asia may benefit from China's recovery demand 3 Source: BPI Economic Research

AYALA GROUP DIGITAL CHANNELS BPI’s online platform sees continued momentum in digital enrollments, volume, and value #5 finance app on App Store #10 finance app on 26% 47% Active digital user penetration Digital enrollment penetration in 2Q20 vs 23% in 1Q20 in 2Q20 vs 44% in 1Q20 18% 61% Online/mobile transaction Online/mobile transaction value grew by 18% vs pre-ECQ. count grew by 61% vs pre-ECQ. 4

AYALA GROUP DIGITAL CHANNELS GCash is seeing unprecedented growth with P2P , load purchases, and bank transfers remaining as top use cases #2 App Store 2.5x >2x 2.4x Finance app on GCash user base vs the Growth in user base Increase in payment 2 nd biggest e-money versus pre-ECQ value in July vs pre-ECQ platform* Main Growth Drivers Payments Financial services Transactions Charges on features such Share for provided financial Merchant discount rate as Send Money, Cash-ins services such as mutual for vendors who charge via 7/11 , and InstaPay funds and insurance through GCash 5 *according to a 3 rd party intelligence provider

AYALA GROUP DIGITAL CHANNELS Entrego’s operations have gradually recovered volumes going back to pre-ECQ levels and a surge of new onboarded clients from April to June Operations Volume saw a slump during ECQ, but by July, figures have recovered to even surpass pre-COVID levels . 38 new clients onboarded from April to July (26 from June- July) versus 3 from January to March Areas for expansion Develop domestic backhaul freight forwarding to capitalize on existing trucks routes servicing provincial areas myEntrego is a web-based booking and delivery platform that targets online SME sellers On trial to developing a standard courier express delivery service which delivers better margins 6

AYALA GROUP DIGITAL CHANNELS Zalora is now the third most downloaded e-commerce app in both the App Store and Google Play store in the Philippines #3 App Store PH e-commerce platform Around 400 new brands from April – June, with +250 Essential brands Launched the Essentials category on April 28; now accounts for over 5% of items sold ~30% increase in new customers acquired from April - July vs the same period last year 7

BUSINESS OPERATIONS UPDATE Ayala Land continues to adapt to the new normal while glimpses of recovery are seen in its various segments as quarantine restrictions loosen • Sustained growth from the continued operations of BPO and HQ buildings. • 2Q 2020 sales reservations reached P13.6B • No rent waivers granted • Average monthly sales for May and • BPO tenants indicated no intention to Offices Residential June at P6.1B close • Hotel bookings mostly from BPO locators. Hotel operations may operate at 50% in • Foot traffic and tenant occupancy MGCQ areas continue to improve since opening in mid-May • Dine-in at restaurants allowed at 30% • Construction has restarted across 125 capacity in GCQ areas and 50% for projects Others MGCQ areas Shopping Centers • Launched contactless e-initiatives for • ALI listed the Philippines’ first REIT, mall navigation, curbside pick-up, and raising P13.6B in August 2020 delivery 8

BUSINESS OPERATIONS UPDATE Ayala Malls observes strict health and social distancing measures to ensure the safety of its shoppers and adopted digital initiatives for a contactless experience 9

BUSINESS OPERATIONS UPDATE BPI remains liquid and capital sufficient with its focus on asset quality preservation and provisioning to manage effects of expected NPL formation 2.9x July OTC branch transactions have nearly tripled vs the low in April during ECQ 93% July credit card billings as a % of pre-ECQ level; significant recovery from the lowest point in April which was at just 38% Credit cost NPLs Loan growth Base case for NPLs for the Credit cost guidance of Guidance for 2020 loan year is a doubling of the 100-120 bps for 2020 growth is 0-2% . This 1.8% 1 NPL ratio in 1Q year’s focus will be on 2020 to 4% be the end of asset quality and NIM- 2020 , forecasting the peak accretive loans. to be in 2021 or even 2022 10 1) under Bayanihan Act

BUSINESS OPERATIONS UPDATE Globe has been seeing improvement in mobile data and home prepaid Wi-Fi demand since the lifting of ECQ Mobile data usage Building on the 45% YoY growth in mobile data traffic in 1H20, mobile data usage continues to grow due with the deeper adoption of a digital lifestyle. Home prepaid Wi-Fi ECQ saw increased sales for HPW products ; we expect further growth as more students shift to online learning in SY 2020-21. Mobile top-ups Monthly mobile top-ups slumped in April but are now approaching pre-ECQ levels with the improvement in mobility under GCQ. CAPEX As Metro Manila shifted to GCQ, Globe’s roll out of personnel improved to 70% . Site acquisition activities have also resumed. 11

OPERATIONAL AND FINANCIAL HIGHLIGHTS AC Energy and Manila Water saw relatively steady demand despite the crisis as both continued to operate despite the quarantine 9% 1,832 MW Increase in East Zone’s June billed volume vs Pro forma 1 attributable capacity of assets operating and under construction of June 2018 ACEN 2% 95% Increase in East Zone’s 1H20 billed volume Luzon peak demand in July 2020 vs 1H18 compared to July 2019’s Collection status for the month of June from P35.7B Cash as of end-June with additional 63% 31.5% in May. By July, this overshoot 100% P17.2B in credit lines available as payment of arrears came in 1. Pro forma capacity after the completion of onshore and offshore asset infusions to ACEN, and the sell-down of Ingrid 12 Power to Axia Power Holdings

BUSINESS OPERATIONS UPDATE ACI has restarted all plants, AC Health is seeing higher clinic traffic, and AC Infra is recording better tollway and LRT ridership levels All 30 manufacturing sites are operating as quarantine measures ease globally 62% Units serviced by AC Motors have recovered from nearly no activity in April AC Health has expanded to helping companies facilitate a back- to-office program , establishing health protocols at offices 85% 3.2x Increase in clinic foot traffic in July vs April Count of operational clinics (70) vs pre-ECQ The health crisis has made opportunities in logistics more apparent; Entrego’s figures have surpassed the company’s target 80% 21% MCX volume in July 2020 as a percentage LRMC ridership in July as percentage of of pre-ECQ levels pre-ECQ levels 13

PARENT BALANCE SHEET Ayala maintains a strong balance sheet, with ample cash to ride through the uncertainties ₱ 43B ₱ 30B AC Parent cash level is at ₱29.7 B as of Credit lines have ₱42.5B available as of July 2020 vs P17.8b pre-ECQ July 2020 0.69x ₱ 92B June Net D/E is healthy with liquidity levels Net debt is at P91.9B as of July 2020 vs sufficient to support annual cash burn of P91.3B pre-ECQ P11.0B, inclusive of preferred dividends 14

BUSINESS OVERVIEW Amid the Philippines’ economic growth, our unique portfolio of businesses provides various engines for growth and diversification Core Value Drivers AC Energy and Infrastructure Portfolio Investments Industrial and Social Infrastructure Technologies 15