1Q 2019 UNAUDITED RESULTS INVESTORS BRIEFING 1Q2019... · 1Q 2019 UNAUDITED RESULTS INVESTORS BRIEFING Mike Liwanag Senior Vice President. Agenda 2 ... RLC’s CAPEX excludes development

1Q 2019 UNAUDITED RESULTSINVESTORS BRIEFING

Mike LiwanagSenior Vice President

Agenda

2

1Q 2019 Unaudited Results1

Business Updates, Plans and Prospects2

30.7 33.3

18.3 21.2

6.3 6.8 10.4 9.6 1.4 1.9 70.1

76.3

0

20

40

60

80

1Q18 1Q19URC CEB RLC Petrochem Banks Others

JGS: Profits significantly recovered early in 2019

3

• Topline growth was mainly driven by thepivot in URC’s Philippines business,acceleration in CEB’s revenues, andsustained momentum in RLC and RBank

• Core net income remained flattish as thestrong performances of URC, CEB and RLCwere largely offset by Petrochem’s delayedmargin recovery

• Mark-to-market and hedging gain, and lowerforex loss due to peso appreciation furtherboosted net income growth*attributable to equity holders of the parent

Revenues, +9% Core net income after taxes, -2%Segment Breakdown (in billion pesos)

+9%

+16%

+7%-8%

+40%14%

% chg vs SPLY

1.2 1.6

1.3 1.7

0.9 1.1 0.9

(0.8)

2.0 2.6

6.3 6.2

-1

1

3

5

7

1Q18 1Q19

+28%

+28%

+20%

-194%

+34%

% chg vsSPLY

Revenues

Core net income after taxes

Net Income*

70.1 76.3 +9%

6.3 6.2 -2%

4.8 7.4 +54%

1Q18 1Q19 GrowthIn billion pesos

*2019 and 2018 figures are restated following IFRS 9 and 15

URC: Started strong with growth driven by businesses in the Philippines

4

Revenue, +9%

Net Income, +3%• Growth of coffee in the Philippines, and

higher selling prices & volumes ofCommodities group and Feeds resulted inaccelerated sales growth for the period

• Net income growth lagged revenue growth aslower forex gain and higher finance costtempered a strong operating performance

48%

31%

21%

Sales Breakdown

Branded ConsumerFoods Philippines

Branded ConsumerFoods International

Agro-Industrial &Commodities

-3%

+10%

+16%

% chg vs LY

In PHP Billions

30.7 33.3

1Q18 1Q19

3.0 3.0

1Q18 1Q19

*2019 and 2018 figures are restated following IFRS 9 and 15

1.4

3.4

1Q18 1Q19

5

Revenue, +16%

Net Income, +138%• Topline accelerated on the back of higher

passenger volumes, robust cargo sales andbetter performance of ancillary revenue

• Lower fuel prices, operational efficiencies, fuel hedging gains and lower forex losses led to a significant improvement in net income

18.321.2

1Q18 1Q19

CEB: Profits more-than-doubled as a result of higher passenger volume and yields

74%7%

19%

Sales Breakdown

Passenger

Cargo

AncilliaryRevenue

+15%

+13%

% chg vs LY

+23%

In PHP Billions

46%

17%

7%

29%

Sales Breakdown

Malls

Offices

Hotels

IID

Residential

6

Revenue, +7%

Net Income, +19%» Revenues were driven by the stable growth of

its investment portfolio (malls, office, hotels &IID), tempered by the decline in residentialdue to timing of revenue recognition

» Net income grew faster as cost of sales andOPEX of most businesses grew slower thantheir respective revenues

6.3 6.8

1Q18 1Q19

1.51.8

1Q18 1Q19

+9%

+30%

% chg vs LY

+10%

RLC: Earnings growth momentum was sustained

+7%

In PHP Billions

-7%

Petrochem: Margins squeezed due to lower selling prices and higher cost naphtha

7

» In spite of slightly higher total volumes,overall sales decreased due to lower averageselling prices following the decline ofnaphtha prices in the market

» High-priced naphtha from 2018 year-endinventory coupled with the decline inaverage selling prices, plus higher interestexpense resulted in a net loss in 1Q19

SALES VOLUME (MT) 1Q18 1Q19 %chg

*C2 (Ethylene) 15,495 18,481 19%

*C3 (Propylene) 0 0 NA

Pygas 51,235 51,138 0%

Mixed C4 21,835 26,039 19%

PE 65,480 73,403 12%

PP 48,177 40,790 -15%

TOTAL 202,222 209,851 4%

*After eliminations

10.4 9.6

1Q18 1Q19

0.8

-0.71Q18 1Q19

Revenue, -8% EBITDA, -105% Net Income, -188%

1.3

-0.11Q18 1Q19

In PHP Billions

» Consolidated loan portfolio expanded 23%to Php70.3 billion, led by faster growth inconsumer loans

» Net interest income now account for 82% ofnet revenues

» Current consolidated network of 162*branches and 312 ATMs

Robinsons Bank: Topline growth maintained but profits dropped on higher funding costs

8*Including 4 branch lites

Consolidated (Php Bn) 1Q18 1Q19 Growth

Assets 104.8 121.3 16%

Equity 12.8 16.3 28%

Gross TLP 56.9 70.3 23%

Gross NPLs 1.1 1.2 10%

Capital Adequacy Ratio 18.8% 19.4%

Tier 1 Ratio 17.9% 18.7%

1.4

1.9

1Q18 1Q19

0.8 0.9

1Q18 1Q19

Gross Revenue+40%

Net Interest Income+5%

Loans

39.2 45.9

17.7 24.4

56.9

70.3

1Q18 1Q19

Commercial Consumer

+17%

+38%

+23%

In PHP Billions

JGS: Balance sheet remains healthy

9

24.5

5.3 5.0

53.9

Current 2020 2021 2022 2023 andthereafter

In billion pesos except ratios(1) Cash, FVPL and available for sale (AFS) investments from Robinsons Bank and AFS on PLDT are excluded

Dec 2018 Mar 2019 Growth

Cash(1) 50.3 54.1 8%

Financial Debt 245.7 249.7 2%

Total LT Debt 210.2 208.9 -1%

FX-Denominated 110.8 110.3 0%

Net Debt 195.4 195.6 0%

D/E Ratio 0.67 0.66

Net D/E Ratio 0.53 0.52

Dec 2018 Mar 2019 Growth

Cash 15.9 16.3 2%

Total LT Debt 88.5 88.5 0%

Total ST Debt 5.1 4.2 -17%

Net Debt 77.6 76.4 -2%

Blended Cost of LT Debt 5.0% 5.0%

Blended Avg. Remaining Life(2) 3.1 yrs 2.9 yrs

Schedule of parent LT debt maturities

3.8 1.8

0.5

0.6

2.7

3.5

0.8 0.8

7.8 6.7

1Q18 1Q19URC MER GBPC PLDT

Stable recurring dividends

Consolidated Parent

Petrochem, CEB and RLC mainly contributed to 1Q2019 CAPEX Spending

• Capacity expansion of BCF Int’l, Sugar and Flour

• Aircraft acquisition

• Land acquisitions• Development of malls,

offices, hotels and warehouse facilities

• Maintenance CAPEX

In PHP Billions

• Maintenance and expansion projects

10

1.9 3.1 9.1 4.1 4.4

27.1

3.0 1.8

18.1

2.1 6.8

32.4

11.0 16.2

87.5

1Q18 1Q19 2019 Budget

URC Cebu Air RLC Petro/Olefins Banks Others

1Q19 CAPEX Spending

RLC’s CAPEX excludes development CAPEX and intercompany transfers

Key Business Updates

11

Business Updates, Plans and Prospects

12

▪ Launched new white coffee variants with robust investments in A&P and distribution▪ Rolling out across business units the new Innovation Process Management coupled with re-aligned

organization between marketing and Global Innovation▪ Announced long term sustainability commitments in Natural Resources, People and Products

▪ Increase mall’s GLA to 1.6M sqm by opening one new mall and one mall expansion; Complete three new office

developments which will increase NLA to ~600K sqm; open five new hotels which will boost hotel room count

to 3,371 rooms by end-2019; and add 35,000 sqm in warehouse space

▪ Launch projects across residential segments which include JVs with Shang Properties & Hong Kong Land

▪ Upsize strategy with new generation Airbus aircrafts that are more fuel efficient

▪ Maximize use of airport slots in Manila and expand in other hubs

▪ Grow cargo business

▪ Increase digitalization and own capability for simplification, scalability & cost control

▪ Implement reliability initiatives to maximize run rates of the complex▪ Successfully execute the rest of the expansion projects to ensure seamless integration▪ Prepare organization for the expanded operations and upcoming new products

▪ Infused Php3.0 billion recapitalization in 4Q18 to sustain growth▪ Increase users, frequency and utilization of cards business through effective digital marketing,

merchant acquisition and insurance bundling▪ Expand geographic reach through regional center offices, regular branches and branch lites

▪ Incorporated Data Analytics Ventures, Inc. (DAVI) to build a leading digital lifestyle rewards program and create a robust data infrastructure and analytics business to support the group

▪ Incorporated Digital Equity Ventures (DEV) which will be the strategic investor of potential digital/ tech platforms in SEA

▪ Incorporated Luzon International Premiere Airport Development Corporation (LIPAD) for the operations and maintenance of Clark International Airport

*JG Summit is part of the NLAC consortium with Filinvest, Changi Airports Philippines and Philippine Airports Ground Support Solutions

Thank you!

13

For more information, please contact:

JG Summit Investor Relations

[email protected]

+632 470 3919

Appendix

14

Corporate Structure

15

Food & Beverage

Real Estate

Petrochemicals BankingMarket

Capitalization

₱434.8 bn

Stake: 55.3%Mkt Cap: ₱352.9 bn

Att Mkt Cap: ₱195.0 bn

Stake: 61.0%Mkt Cap: ₱119.7 bn

Att Mkt Cap: ₱73.0 bn

Stake: 60.0%Stake: 100%

Stake: 67.8%Mkt Cap: ₱48.7 bn

Att Mkt Cap: ₱33.0 bn

Stake: 29.6%Mkt Cap: ₱420.4 bn

Att Mkt Cap: ₱124.3 bn

Stake: 37.0%Mkt Cap: ₱169.6 bn

Att Mkt Cap: ₱62.8 bn

Stake: 8.0%Mkt Cap: ₱278.7 bn

Att Mkt Cap: ₱22.3 bnStake: 30.0%

Air Transportation

Power Real Estate Communications*

As of May 9, 2019Forex Rate: 1USD= 52.024 PHP

Core Businesses

Growth Business

Minority & AFS Investments

*PLDT is booked as AFS investment; only dividend income is recognized in the P&L

Balance Sheet

16

(Php Millions) As of Dec 2018 As of Mar 2019

Cash & cash equivalents (including Financial assets at FVPL and financial assets at FVOCI)

76,761 79,767

Other current assets137,734

194,362

Investments in Associates and JVs - net 144,915 143,983

Property, plant, and equipment 218,274 227,560

Other noncurrent assets 240,446 194,845

TOTAL ASSETS 818,129 840,516

Current liabilities 226,714 241,883

Noncurrent liabilities 223,938 222,223

TOTAL LIABILITIES 450,651 464,106

Stockholders' Equity 276,586 285,212

Non-Controlling Interest 90,892 91,198

TOTAL EQUITY 367,478 376,410

Income Statement

17

(Php Millions) 1Q18

(As Restated)1Q19 YoY

REVENUES 70,146 76,262 9%

Cost of sales and services 45,640 48,565 6%

GROSS INCOME 24,506 27,697 13%

Operating Expenses 12,600 14,321 14%

OPERATING INCOME 11,906 13,376 12%

Financing costs & other charges (2,084) (2,829) 36%

Foreign exchange gain/ (loss) - net (1,057) 221 -121%

Market valuation gain/ (loss) (283) 1,778 -728%

Finance income 376 548 46%

Others (239) (322) 34%

INCOME BEFORE TAX 8,618 12,772 48%

Provision for Income Tax 1,291 2,048 59%

NET INCOME 7,327 10,725 46%

NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

4,822 7,436 54%

CORE NET INCOME 6,346 6,221 -2%

Performance of Minority Investments

*from operations, attributable to equity holders of the Company; UIC net income includes fair value gains from investment property, which is eliminated in JGS consolidated FS Source: Company Filings

REVENUES

NET INCOME* NET INCOME*

REVENUES REVENUES

In PHP Billions In PHP Billionsin SGD Millions

NET INCOME*

18

165.7185.3

1Q18 1Q19

60.2

81.1

1Q18 1Q19

70.8 75.4

1Q18 1Q19

5.3 5.7

1Q18 1Q19

6.35.8

1Q18 1Q19

0.7

0.3

1Q18 1Q19