SM Investments Corporation President’s Reportsminvestments.com/sites/default/files/reports/2010 SMIC Presidents...SM Investments Corporation President’s Report ... on BSP formula,

SM Investments CorporationPresident’s Report

28 April 2010

| SMIC President’s Report | 04.28.101

2009 Target Achieved with Proper Planning and Timely Execution

Retail35%

Malls26%

Proper-ty/ Tou-

rism…

Banks 28%

Net Income ProfileNet Income ProfileNet Income ProfileCore Business 2009 Earnings Growth

Retail 28%

Malls 10%

Banks 99%

Property/Tourism 37%


Net Income Grew 14%


2009 2008 % Chg

Revenues (Php bn) 160.0 147.5 +9%

Gross Profit (Php bn) 28.3 21.7 +30%

Net Other Income (Php bn) -2.4 1.4 -271%

Net Income (Php bn) 16.0 14.0 +14%

EPS (Php)* 26.2 22.9 +14%

Return on Equity (%)* 13.6% 12.9% --

Interest Cover (x) 6.2 8.1 -23%

EBITDA (Php bn) 34.2 28.1 +22%

EBITDA Margin (%) 21.4 18.9 --

Net Margin (%) 10.0% 9.5% --

Net Assets Expanded by 13%


2009 2008 % Chg

Total Assets (Php bn) 341.6 292.4 +17%

Current Assets (Php bn) 88.5 83.2 +6%

Total Liab ilities (Php bn) 175.9 142.6 +23%

Stockholders Equity (Php bn) 165.7 149.8 +11%

Book Value/Sh 204.2 180.2 +13%

Current Ratio (x) 2.17: 1 1.44 : 1 --

Debt/Assets Ratio 34.4% 30.5% --

Debt/Equ ity Ratio 94.3% 81% --

Net Debt (Php bn) 33.9 24.3 +39%

Retail Operations


Focused Merchandising and Continued Renovations


SM Department Stores

SM Department Stores

36 Department Stores

15 in Metro Manla21 in Areas Outside MM

NSA: 378,034 sqm.

36 Department Stores

15 in Metro Manla21 in Areas Outside MM

NSA: 378,034 sqm.

SM Retail, Inc.Non-Food GroupSM Retail, Inc.

Non-Food Group

Aggressive Expansion of SaveMore Stores


SM Retail, Inc.Food Group

SM Retail, Inc.Food Group

SM Supermarkets

SM Supermarkets

SM Hypermarkets

SM Hypermarkets MakroMakro

52 Stores27 SaveMore26 Supermarkets

24 stores in M.M.28 stores in areas outside M.M.NSA: 180,563.58 sqm.

52 Stores27 SaveMore26 Supermarkets

24 stores in M.M.28 stores in areas outside M.M.NSA: 180,563.58 sqm.

19 Hypermarkets

13 stores in M.M6 stores in areas

outside M.M.NSA: 150,818.15

sqm.

19 Hypermarkets

13 stores in M.M6 stores in areas

outside M.M.NSA: 150,818.15

sqm.

12 Wholesale outlets

4 stores in M.M.8 stores in areas outside MMNSA: 90,253 sqm.

12 Wholesale outlets

4 stores in M.M.8 stores in areas outside MMNSA: 90,253 sqm.


Overall Retail Earnings Grew 26% 2009 2008 % Chg

Sales (Php bn) 123.9 114.8 +8%

Net Income (Php bn) 4.4 3.5 +28%

Net Margins 3.6% 3.0% --

ROE 34% 29% --

No. of Stores 119 97 +23%

Mall Operations



SM NagaSM Pamplona

SM North Edsa Sky Garden

2009 New Malls and Mall Expansion

SM City SM City NagaNaga SM PamplonaSM Pamplona SM City RosarioSM City Rosario

SM North EDSASM North EDSA SM City FairviewSM City Fairview SM City RosalesSM City Rosales


Mall Trivia:Mall Trivia:36 SM malls with a GFA of 4.5 million 36 SM malls with a GFA of 4.5 million sqmsqm. and home to 11,957 tenants; . and home to 11,957 tenants;

Has over 200 cinemas with 131,666 seats. Average foot traffic ofHas over 200 cinemas with 131,666 seats. Average foot traffic of over 2.5 over 2.5 mnmn per day or. 900 per day or. 900 mnmn p.a.p.a.

SM SM SupermallsSupermalls in the Philippinesin the Philippines


SM Lifestyle Center Xiamen


SM China Malls: 577,141 sqm.

SM City SM City XiamenXiamen and Lifestyle Center: 238,150 and Lifestyle Center: 238,150 sqmsqm

SM SM ChengduChengdu : 169,407 : 169,407 sqmsqm SM JinSM Jin --JiangJiang : 169,584 : 169,584 sqmsqm


2009(Php bn)

% chg

Revenues 20.5 15%

Rental Fees 17.7 15%

Operating Expenses 9.8 19%

Income from Operations 10.8 12%

Net Income 7.0 10%

EBITDA 14.0 14%

Mall Operations Earnings Grew 10% in 2009Mall Operations Earnings Grew 10% in 2009

Twelve months’performance:Same mall sales: 5%Operating margin:52%EBITDA margin:68%Net income margin: 34%


2010 SM Malls: 234,228 SQM.2010 SM Malls: 234,228 SQM.

SM SM CalambaCalamba : 41,394 : 41,394 sqmsqm

SM SM TarlacTarlac : 103,340 : 103,340 sqmsqm SM SM NovalichesNovaliches : 55,085 : 55,085 sqmsqm

SM San Pablo: 34,409 SM San Pablo: 34,409 sqmsqm

16 | SMIC President’s Report | 04.28.10

Banking


BDO’s Profits Soared by 173%Financial

Highlights2009

(Php bn)2008

(Php bnGrowth

(y/y)

Net Interest Income 30.6 23.0 +33%

Other Income 15.5 13.7 +13%

Net Income 6.1 2.2 +173%

Assets 862.0 802.0 +7%

Capital 67.9 57.1 +19%

Deposits 694.7 636.8 +9%

Gross Customer Loans 472.7 392.8 +20%

ROE (%) 9.7% 3.8%

NPL (%) 3.2% 4.0%

NPA (%) 8.6% 9.7%

Net Interest Margin (%) 4.1% 3.7%

CAR (%) 12.4% 13.8%


China Bank Delivers 41% Profit Growth Financial

Highlights2009

(Php bn)2008

(Php bnGrowth

(y/y)

Net Interest Income 8.2 6.5 +26%

Other Income 4.1 2.1 +92%

Net Income* 4.1 2.9 +41%

Assets 234.0 208.5 +12%

Capital* 30.3 25.8 +18%

Deposits 193.3 173.8 +11%

Loans ** 102.8 105.1 -2%

ROE (%) 15.4% 12.0%

NPL (%) 4.2% 5.1%

NPA (%) 4.1% 5.0%

Net Income Margin (%) 4.2% 3.8%

CAR (%) 12.8% 13.5%

* Att ributable to equity holders of the p arent; ** Gross cu stomer loan s, NPL( %) based on BSP formula, NPA ( %) NPA/Tot al Asset s NIM-def ined as Net Int erest M argin


Property Development


Property Business Gains More Traction…

2009 2008%

Chg

Sales (Php bn) 9.4 6.3 +50%

Net Income (Php bn)

2.2 1.6 +37%

Net Margin (%) 23% 26% --

Net Income Profile

Com-mercial Proper-

ties24%

Tourism6%Residen

-tial70%


As SMDC Gains More Momentum

(In Php billion) 2009 2008 % chg

Revenues from Real Estate Sales 5.26 3.05 72%

Gross Profit from Real Estate Sales 2.41 1.72 40%

Net Income from Real Estate 1.57 1.11 41%

Net Income after Tax 1.86 0.06 3,174%

Return on Equi ty (%) 17% 1% --

Interest Cov er (x) 22 1 2100%

EBITDA (Php bn) 2.15 0.50 330%

EBITDA M argin (%) 41% 16% --

Net M argin (%) 35% 2% --


Aggressive Expansion in 2008 and 2009

22

GrassField Sea

Light Princeton Sun Jazz Wind

2009

2009


Pico De Loro Shows Steady Growth in Sales

2009 Sales (P mn)

Units for sale

% Sold

%Complete

Jacana 943 246 92% 98%

Myna 957 246 90% 72%

Carola 158 248 16% 9%

Miranda 597 248 46% 8%

Club Shares 295 4,000 16% --

Commercial Properties Group Constructs TwoE-Com Center


Building Features:

GFA – 107,683 sqm

NLA – 59,485 sqm

Estimated time of completion – Q4 2011Amenities include: - Over 8,000 sqm of commercial and retail space complemented by a landscaped garden - 340 parking slots- 20 elevators


Hotels and Conventions

Hotels and ConventionsNewest core business that aims to further broaden S M’s range of tourism-related products and servicesFurther strengthen Group synergies and added value within SM businesses by:

Providing additional foot traffic to SM malls and s toresHarnessing value of existing land assetsCreating new avenues for SM’s brand franchise

Capitalize on SM’s dominant position in the expo and convention businessesProduct offerings

Upscale and boutique hotelsExhibition convention centers Sports Arena


Group Capex for Full-Year 2010 Capex

(Php bn)Proj ects

Retail 2.6 25 stores

Malls 12.1 4 malls in the Phils .;One mall in China

Banks 2.2 Branch expansion, renov ation, IT enhancements

Property 15.014 Residentia l proj ects;

Tw oE-com; PDL con do’s and countr y c lub, Hamilo ferry terminal and causew ay

Hotels and Convention 4.5M OAC – Radisson, Sports Arena

Complex; M id-scale boutique hote ls ; Pico Sands

Total 36.4


SM Foundation



Emergency Response Program: Operation Tulong Express

Post Ondoy and PepengPost Ondoy and Pepeng


Education: Over 800 College Scholars Nationwide

College scholars are provided with: Free tuition, books, allowance, medical benefits, summer jobs, social activities, retreats, job

fairs, etc.

College scholars are provided with: Free tuition, books, allowance, medical benefits, summer jobs, social activities, retreats, job

fairs, etc.

Makeover of 10 Government-owned Health Centers


Wellness Center for Wellness Center for Children Children -- BulacanBulacan

Wellness Center for the Wellness Center for the Elderly Elderly –– QuezonQuezon CityCity

Wellness Center for the Wellness Center for the Elderly Elderly -- IloiloIloilo

BeforeBefore AfterAfter BeforeBefore AfterAfter BeforeBefore AfterAfter


Kabalikat sa Kabuhayan Provided Free Training to 1,259 Farmers

Three mon ths tra ining pro gram using new farming tec hnology for high-yie ld fruits and vegetables inc lude propagation, irrigation, an d fertilizer propagation among others. Products of the graduates w ill be carried b y SM food stores.

SM Investments CorporationPresident’s Report

28 April 2010


Except for historical financial and operating data and other information in respect of historical matters, the statements contained herein are “forward-looking statements”. Any such forward-looking statement is not a guarantee of future performance and involves a number of known and unknown risks, uncertainties, and other factors that could cause the actual performance, financial condition or results of operation of SM and its subsidiaries to be materially different from any future performance, financial condition or results of operation i mplied by such forward-looking statement.

34

Thank you.

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SM Investments Corporation President’s Reportsminvestments.com/sites/default/files/reports/2010 SMIC Presidents...SM Investments Corporation President’s Report ... on BSP formula,