Dear Fellow Stakeholders,

 

We send our warmest greetings on behalf of the Boards of AEV and AboitizPower.

 

In 2021, COVID continued to remind us that we operate in a complex and complicated world of accelerating change — the complex being challenging to understand, and the complicated being of many moving parts. COVID also has tested us if we were prepared. And we were, albeit not as prepared as we could or should have been prepared. Still, we thrived because of our appreciation of the value of timely adaptation to change to thrive and the skills to achieve the same, which are openness, agility, and resilience driven by unity, pragmatism, and hard work.

 

Surely, we must recognize that the onslaught of accelerating change is going to destroy as it creates. We see it happening in all sectors and corners and it has neither sympathy or empathy for how hard we work and how much time we put in. Consider how Russia’s invasion of Ukraine has thrown the world into a real-life Chutes and Ladders game with such a degree of volatility that threatens to wipe out any signs of economic recovery from COVID. War sets us back—there is so much to lose due to the economic interconnection of the world where everyone is buying from everyone.

 

Global trade also brings in tougher competition that is coming from more winds and yet more fields. No business will be left unconnected or unthreatened as technology facilitates innovation and creative destruction.

  

Your Boards are united in agreement that we need to ride the winds of accelerating change and not be waylaid in contrast as the forces that hold us from innovating and adapting may do more damage than ever. For this, we are quite possibly not prepared so how can we be wired for tomorrow?

 

Under the leadership of our CEO, your Governance and Management Team (GMT) is embarking on one of the most meaningful imperatives of the 200-year-old history of the Aboitiz as a family and firm: The Great Transformation 2025 towards becoming a tech conglomerate or “techglomerate”.

 

Over these two centuries as an institution, we have honed our skills in adapting to change at more or less the right point of time. We now set out to transform our company into one that can harness the exponential advances of the next decade and onward.

 

Fortunately, we came out of COVID with a fortified balance sheet supported by strong cash flows. We are long-term thinkers who have realized that value is created through the patient and purposeful look towards the longer term and, to do that, one must balance short-term cash flows for long-term value creation. We are in that position today.

 

COVID has put stress on ROP’s (Republic of the Philippines) balance sheet, forcing our government to invest in our society’s medical and social aspects, and rightly so. That means the private sector will have the opportunity to support our country’s infrastructure.

 

We are ready.

 

The Transformation we speak of requires changes in how we see things, our mindset, and the demand on our level of continuous learning and education. 

 

 

The techglomerate we aspire to become needs a GMT willing to take risks, accepts and harnesses failure, and is persistent — we will not give up easily. That GMT requires higher and higher levels of learning and educational upgrading.

 

The relationship between tight and challenging oversight and agile and effective execution is of critical importance. This is the partnership between our Boards and our management teams in a structure that supports the Great Transformation into techglomerate to harvest the benefits of this exponential advance that we see today and into the future.

 

It is our hope that the Ukraine situation will ease when you read this message. We sympathize with all who have been hurt and displaced. The pressure on both supply and price of energy and wheat, in particular, are of concern to our company and our economy. We are watchful as we are hopeful that the situation is settled sooner rather than later.

 

We need everyone Alert & Engaged 24 x 60 x 60 997 — all of the time, everywhere, and by all as much of this path is yet unclear.

 

Our imperative is as exciting as it is challenging.

 

May the forces of evolution be with us.

 

#OneAboitiz!

 

Enrique M. Aboitiz 

Chairman of the Board 

Aboitiz Equity Ventures Inc.

 

Sabin M. Aboitiz

Chairman of the Board 

Aboitiz Power Corporation