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Message from the Chairman

The year 2015 will be remembered as the year when Alliance Global Group, Inc. (AGI) set records in net income and consolidated revenues as we continued our thrust to expand our geographic footprint both in the Philippines and across the globe.

We posted P21.6 billion in net income, reflecting a 3.5% improvement over the previous year, driven by sustained gains of our major businesses which include property development, food and beverage manufacturing and distribution, quick-service restaurants, and integrated tourism development. This was achieved on the back of a robust 10.9% year-on-year growth in consolidated revenues to P139 billion, the highest in our company’s history.

All our businesses delivered strong results in 2015. Megaworld Corporation recorded a 10.6% year-on-year increase in core net income to P10.4 billion, driven by its development and investment projects within its townships throughout the country. Emperador Inc. posted a 12.2% year-on-year growth in net profit to P7.0 billion as the full year contribution from its Scotch whisky business under Whyte and Mackay pushed revenues to grow to P43.6 billion. Travellers International Hotel Group, Inc. registered a net income ofP4.0 billion as it continued to build on its mass and premium mass gaming segments and raise the contribution from its non-gaming businesses. Golden Arches Development Corporation generated P760 million in net income as it benefitted from its aggressive store expansion program.

Our company’s outstanding performance is a result of our continuous efforts to innovate and remain proactive in order to keep our leadership in an increasingly challenging and competitive market. This is part of our commitment and dedication to sustain our company’s growth.

For instance, four out of five of Megaworld’s new live-workplay-learn townships launched in 2015 are located outside of Metro Manila. These are in Pampanga (for its township called Capital Town Pampanga), Bacolod (The Upper East and Northill Gateway) and Iloilo (Sta. Barbara Heights). The company has also intensified its thrust to grow its recurring income stream with more office, commercial and hotel projects to complement our residential development. Backed by its huge landbank of over 3,300 hectares, Megaworld’s move is in line with its efforts to tap various areas throughout the country where it could replicate its successes in township development. These undertakings are expected to provide the company with new sources of growth moving forward.

While maintaining its leadership in the domestic market through its premiumization strategy, Emperador is also fast-becoming a truly global liquor player. The purchase of Bodegas Fundador and other Spanish assets, coming just a year after the acquisition of Whyte and Mackay, has provided Emperador with internationally renowned brands and market access to over 100 countries throughout the world. Now, The Dalmore and Jura Scotch whiskey and the iconic Fundador brandy sit well together with Emperador’s own Andy Player premium whisky which was relaunched duringthe year. These brands complete the roster of Emperador products that cover all segments of the market and which could provide the company with another leg for growth in the near future.

Travellers International Hotel Group, Inc., which owns andoperates Resorts World Manila (RWM), remains to be the country’s most profitable tourism-entertainment and gaming company. To further enhance its position in the industry, Travellers is committed to complete its ongoing expansion programs within RWM. It’s Marriott Grand Ballroom, which became operational in 2015, is now a preferred venuefor MICE (meetings, incentives, conventions and exhibition) activities and now contributes to the group’s non-gaming revenues. It is Travellers’ intention to further grow its non-gaming component alongside its mass and premium mass segment to sustain its profitable operations even amidst intensifying competition in the gaming sector.

Golden Arches Development Corporation, which owns the master franchise for McDonald’s in the Philippines, grew its revenues by 9% year-on-year, boosted in part by its new restaurant openings, reimaging of existing ones, and the introduction of new products and enhanced services. These activities ensure that McDonald’s remains relevant and adaptable to the changing tastes, preferences and lifestyle of its consumers.

Our strong operating performance in 2015 only serves to inspire us to continue to do better to accelerate our growth trajectory and maintain our market leadership. We have already laid out the foundation and made significant investments across all our business segments, both here and abroad, in order to future-proof our growth. On that note, I would like to express my deepest appreciation to all our employees, our management team, and our business partners for their unwavering dedication and support. With our strong commitment to succeed, we look forward to setting new milestones for the Group in 2016 and beyond.

Andrew L. Tan
Chairman and Chief Executive Officer
Alliance Global Group, Inc. and Megaworld Corporation

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