A blend of success
NEARLY six decades ago, the SM that Filipinos know today was a mere shoe store on Rizal Avenue in Manila. It has evolved to one of the largest conglomerates not just in the Philippines but also in Asia, with synergistic businesses in the retail, property development and banking industries.
The transformation is the fruit of the vision of its founder, Henry Sy, Sr., according to Jose T. Sio, chairman of SM Investments Corp. (SMIC), the parent company of SM Prime Holdings, Inc. (which controls the shopping malls and property businesses), BDO Unibank, Inc., China Banking Corp. and SM Retail Group.
He recalled in a recent interview with BusinessWorld the days when SM only had two completed malls — SM City North EDSA and SM City Sta. Mesa (formerly known as SM Centerpoint) — and one under construction, which would soon be SM Megamall.
“Every night after office hours, he would call me up and we would go to Megamall,” he said. Mr. Sy would walk through the site as Mr. Sio trailed behind him. “By the time he finished his walking inspection, he had already so many suggestions in mind,” Mr. Sio said. “That’s the type of person he is — very committed, very detailed.”
The SM Group that Mr. Sy has painstakingly built, together with his offsprings and a trusted non- family member like Mr. Sio, amidst a volatile political and economic landscape, continues to thrive and achieve market leadership in the industries it operates in.
“We remain optimistic about continued development in the Philippines supported by government investment plans and we will continue to prioritize expansion in underserved regions across the country,” said Mr. Sy, Sr., now the chairman emeritus, along with Henry Sy, Jr. and Teresita Sy- Coson, vice- chairpersons, in a message to shareholders.
In 2016, SMIC earned consolidated revenues of P362.8 billion, up by 9% from P332.8 billion in 2015. Likewise, the group’s consolidated net income grew by 8.1% to P31.2 billion. The increase was driven by the strong performance of SMIC’s core investments. Of the total net income, 39.1% was contributed by the property arm, 37.1% by the banking arm and the remaining 23.8% by the retail arm.
In the first quarter of this year, the group posted an 8% growth in net income, from P7.1 billion to 7.7 billion. Its consolidated revenues also grew at roughly the same pace, from P78.4 billion to P84.5 billion.
“SM is off to a strong start in the first quarter with good growth and steady profit margins across our core businesses,” said Frederic C. DyBuncio, president of SMIC. “We are also pleased with recent acquisitions like our stake in 2GO Group, which will help us build our portfolio of investments to capture the high growth of the Philippine economy.”
Although the property business is SMIC’s biggest revenue generator, it is the retail arm that has a greater impact on the society, according to Mr. Sio, because it answers the basic needs of the people. To illustrate the extent of this impact, Mr. Sio said, “The first three words of a baby would be ‘ Papa,’ ‘ Mama,’ and ‘ SM.’”
On top of raking in profits, SMIC has also been accumulating awards f rom di f ferent publications and organizations. Mr. Sio alone has brought the company multiple awards while he was still serving as the conglomerate’s chief financial officer. He was often named by various award- giving bodies as the best chief financial officer in the Philippines, and sometimes even in Asia. In 2016 alone, he added three more awards to his collection.
Recently, the SM Group bagged two platinum awards for Best Corporate Communications and Investor Relations and Best Governed & Most Transparent Company at the 9th Annual Global Corporate Social Responsibility (CSR) Summit & Awards held in Malaysia, and seven at the 12th Corporate Governance Asia Recognition Awards 2016, including the Asian Corporate Director Award bestowed on Harley Sy, Ms. Sy- Coson and Hans Sy.
Mr. Sio f i rmly bel ieves that leadership is the one factor that determines any company’s future.