D.m. Wenceslao & Associates, Inc. · PSE:DMW
D.m. Wenceslao & Associates — Investor Presentation (November 2018)
49 slides from D.m. Wenceslao & Associates's investor presentation, November 2018
Slide 1: D.M. Wenceslao & Associates, Incorporated Management Presentation November 2018
D.M. Wenceslao & Associates, Incorporated (“DMW”) Management Presentation November 2018
Slide 2: Disclaimer
Disclaimer The information in this document has been prepared by D.M. Wenceslao & Associates, Incorporated (“DMW”) and does not constitute a recommendation regarding the securities of DMW. The statements contained in this document speak only as at the date as of which they are made, and DMW expressl
Slide 3: Key Presenters
Key Presenters Delfin Angelo C. Wenceslao Heherson M. Asiddao Rachelle C. Paunlagui Chief Executive Officer Chief Finance Officer Investor Relations Officer Page 2
Slide 4: Table of Contents
Table of Contents Section 1. DMW at a Glance 2. Key Investment Highlights 3. Business Strategies 4. Financial Highlights Page 3
Slide 5: DMW at a Glance
DMW at a Glance =D. M. WENCESLAO \\'] AND ASSOCIATES, INCORPORATED Page 4 ay
Slide 6: Distinct Profile with Strong Embedded Upside Across Businesses
Distinct Profile with Strong Embedded Upside Across Businesses We are an integrated property developer with expertise in land reclamation, construction and real estate development Commercial Property Land Sales and Land 1 Building Leasing 2 Development 3 Leasing 4 Reclamation 5 Construction ◼ 8 exis
Slide 7: Key Milestones – Demonstrating Execution Track Record
Key Milestones – Demonstrating Execution Track Record 2017 2018 2016 ▪ Pixel Residences fully pre-sold ▪ Completion of Aseana Three 1979 ▪ Completion of construction of ▪ DMW lists on the PSE Undertook pile driving ▪ Pixel Residences starts Aseana Square ▪ 8912 Asean Ave. commences works for Frabel
Slide 8: Key Investment Highlights
Key Investment Highlights Page 7
Slide 9: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 10: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 11: Aseana City – Conveniently Located and Anchored by Tourism, Recreational Developments and Retail Malls
Aseana City – Conveniently Located and Anchored by Tourism, Recreational Developments and Retail Malls Aseana City ✓ Located along the shoreline of Manila Bay bordering Pasay City and extending east to Ortigas CBD (<12km) Roxas Boulevard within Parañaque City Extensive Transport Network ✓ 5 – 10 min
Slide 12: A Strategic and Sizeable Land Bank in Aseana City
A Strategic and Sizeable Land Bank in Aseana City Positioned as the next major mixed-use CBD in Metro Manila anchored by tourism, recreational developments and retail malls Remaining Land Reserves (313,415 sq.m.) Land Used/Allocated Land Allocated for for Development Future Sales (262,862 sq.m.) (10
Slide 13: DMW’s Land Holdings, Completed Properties and Pipeline Projects in Aseana City
DMW’s Land Holdings, Completed Properties and Pipeline Projects in Aseana City Owned Land Holdings Completed Properties(1) Pipeline Properties Land area (sq.m.) Total leasable floor area (sq.m.) Leasable/saleable floor area (sq.m.) Roads and Aseana Town Parkside right of Land Aseana Center Place 2 w
Slide 14: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 15: Rapidly Appreciating Land Holdings Secured at Low Cost
Rapidly Appreciating Land Holdings Secured at Low Cost Land secured at low cost relative to current market prices as it was obtained in consideration of our land reclamation services Valuation per sq.m. (PHP’000 per sq.m. VAT exclusive) 575.0 560.5 533.5 499.5 10.1x 318.9 7.9x 249.8 248.8 228.8 233.
Slide 16: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 17: An Integrated Master Developer with Competitive Advantages across Business Lines
An Integrated Master Developer with Competitive Advantages across Business Lines Integrated master developer covering the entire value chain - land creation, infrastructure construction and property development Capital recycling for future growth Our Current Focus Construction Land sale For sales La
Slide 18: Land Reclamation and Construction
Land Reclamation and Construction Licensed AAAA contractor with established track record and proven abilities One of the top national construction companies in land reclamation, having reclaimed c.2,424,834 sq.m. of land to date Completed more than 100 projects including large scale and complex gove
Slide 19: Land Sales and Leasing
Land Sales and Leasing Revenue from Land Sales and Rentals (PHP mm) 1 Land Sales Starting 2016, we have successfully negotiated with our land 2,008 buyers to pay the consideration in full upon signing of the purchase agreement 1,088 Development plans to comply with our master plan and submitted 18 t
Slide 20: Commercial Building Leasing
Commercial Building Leasing Aseana One/ Two/ Three ✓ Highly flexible in specifications ✓ PEZA-accredited, suited for BPOs and logistics companies ✓ Tenants include: Aseana One Aseana Two Completed Properties in Aseana City(1) ✓ Total land area: 36,659 sq.m. ✓ Total leaseable floor area: 85,087 sq.m.
Slide 21: Property Development
Property Development 8912 Asean Ave. (formerly Aseana Four) / Aseana Five / Six ✓ Targeted at BPOs, logistics companies and gaming and tourism-related companies ✓ Located near Ayala Land’s mall development which includes a transport terminal ✓ PEZA accreditation for all the office buildings ✓ Typica
Slide 22: Property Development (Cont’d)
Property Development (Cont’d) Pixel Residences MidPark Towers (formerly Parkside Place) (Oct 2019) (2022) Pixel Residences ✓ Designed by Spark Architects in collaboration with Casas Architects ✓ Fully sold out with unrecognized revenue of PHP1,065 mm as of September 30, 2018 Residential Developments
Slide 23: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 24: A Diversified Earnings Base with Substantial and Recurring Revenue Streams
A Diversified Earnings Base with Substantial and Recurring Revenue Streams Increasing Land Leasing Revenues Due to Scarcity of Leasable Land in Metro Manila (In PHP mm) 919.4 Leasing of 860.5 803.2 Land Holdings 2015 2016 2017 Increasing Building Leasing Revenues with Strong Office Demand in Manila
Slide 25: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 26: Proven Expertise and Management Track Record
Proven Expertise and Management Track Record Long history Over 50 years of experience in the construction industry Licensed by the Philippine Licensing Board as a “AAAA" contractor (highest classification by PCAB) – High credibility only 20 construction companies in the Philippines have this distinc
Slide 27: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 28: A Strong Financial Position Based on Prudent Financial Management
A Strong Financial Position Based on Prudent Financial Management Support from Leading Local Financial Net Debt(1) (PHP mm) Debt to Equity(2) (%) Institutions 42% 2,239 1,848 33% 26% 1,046 2015 2016 2017 2015 2016 2017 Healthy borrowing profile and conservative funding strategy for land sales ◼ DMW
Slide 29: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 30: Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (1/3)
Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (1/3) 1 Robust GDP and Population Growth 2 Improving Investment Grade Ratings Population (mm) Rating 91.1 92.3 94.0* 95.6* 97.4* 99.1* 101.6* 103.2* 104.9* Baa2/BBB Baa3/BBB- 7.7% 6.8% 7.1% 6.9% 6
Slide 31: Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (2/3)
Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (2/3) Robust Demand for Office Space in Metro Manila 1,200,000 12.0% 1,000,000 10.0% 800,000 8.0% sq.m. 600,000 5.6% 6.0% 5.3% 5.0% 5.3% 400,000 4.0% 3.4% 200,000 2.0% 0 0.0% 2008 2009 2010 2011 2
Slide 32: Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (3/3)
Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (3/3) Strong Growth in Average Price per sq.m. in Manila Bay’s Primary Residential Market Average Price per sq.m. (PHP) 250,000 4Q15 4Q17 199,519 3rd highest average 200,000 178,033 157,981 148,13
Slide 33: Business Strategies
Business Strategies =D. M. WENCESLAO \\'] AND ASSOCIATES, INCORPORATED Page 32 ay
Slide 34: Business Strategies
Business Strategies 1 Grow Aseana City into a “Next Generation” CBD within Metro Manila 2 Develop a portfolio of high quality real estate projects 3 Multi-pronged Approach to Growing our Land Bank 4 Enhance our earnings base and grow our recurring income streams Page 33
Slide 35: Grow Aseana City into a “Next Generation” CBD within Metro Manila
Grow Aseana City into a “Next Generation” CBD within Metro Manila GLOBAL COMMUNITY URBAN RECREATION Master planned district Holistic development for all lifestyles Global infrastructure & Balanced locator mix service standards Detailed Promote Regular Attractive development continued review tenant m
Slide 36: Grow Aseana City into a “Next Generation” CBD within Metro Manila (Cont’d)
Grow Aseana City into a “Next Generation” CBD within Metro Manila (Cont’d) Page 35
Slide 37: Develop a Portfolio of High Quality Real Estate Projects
Develop a Portfolio of High Quality Real Estate Projects Commercial Leasing/Sales Residential Sales 8912 Asean Ave. Aseana Aseana Pixel Parkside MidPark 1 (Aseana Four) Five Six Résidences Place 2 ▪ Targeted Completion: ▪ Targeted ▪ Targeted Completion: ▪ Targeted Completion: ▪ Targeted Completion:
Slide 38: Multi-Pronged Approach to Growing Our Land Bank
Multi-Pronged Approach to Growing Our Land Bank Strategic acquisitions of land assets or purchase land from WHI with whom DMW has a ROFR Pursue strategic and opportunistic acquisition of land and other properties outside Aseana City Opportunistically undertake large-scale and complex Government and
Slide 39: Enhance Our Earnings Base and Grow our Recurring Income Streams (Cont’d)
Enhance Our Earnings Base and Grow our Recurring Income Streams (Cont’d) Land Leasing Commercial Leasing Allocate at least 5,000 sq.m. of Five planned commercial land for long-term leasing and developments targeting at BPOs, 2,000 sq.m. of non-core land for POGOs, logistics companies and sale each y
Slide 40: Aseana City Master Plan
Aseana City Master Plan Page 39
Slide 41: Financial Highlights
Financial Highlights Page 40
Slide 42: Robust Top-line Growth Driven By Increasing Recurring Income
Robust Top-line Growth Driven By Increasing Recurring Income Revenue (PHP mm) Key Events: Key Events: Key Events: ◼ Ramp-up of lease and occupancy ◼ Pile driving works began for ◼ Sale of 2,521 sq.m. of land to Uni-Asia rate at Aseana Two Ayala Mall ◼ Completion and full occupancy of Aseana ◼ Full y
Slide 43: Profit Expansion Supported by Strong Profit Margins from Rentals and Land Sales
Profit Expansion Supported by Strong Profit Margins from Rentals and Land Sales Gross Profit (PHP mm) Operating Profit (PHP mm) 80% 77% 76% 75% 64% 62% 62% 59% 2,333 1,651 1,337 1,867 1,320 1,045 1,357 1,049 2015 2016 2017 9M 2018 2015 2016 2017 9M 2018 Gross Profit Gross Profit Margin Operating Pro
Slide 44: Strong Performance Across All Operational Metrics
Strong Performance Across All Operational Metrics Recurring Income Contribution(1) (%) Total Leasable Floor Area(2) (sq.m.) 1,750 1,479 1,507 1,550 1,327 89,914 1,350 1,229 1,150 40% 950 31% 49% 39% 750 56,863 59,000 550 29% 45,432 350 16% 14% 19% 150 5% 11% 7% 6% -50 9M 2015 2016 2017 2018 % to Tot
Slide 45: Improving Debt Serviceability, Sustainable Returns & Working Capital
Improving Debt Serviceability, Sustainable Returns & Working Capital Debt To Equity(1) (%) Return on Equity(2) (%) 18% 42% 16% 16% 15% 33% 26% 11% 2015 2016 2017 9M 2018 2015 2016 2017 9M 2018 Current Ratio(3) (x) Assets to Equity(4) (x) 3.13x 3.81x 3.34x 3.03x 1.72x 1.41x 1.55x 2.04x 2015 2016 2017
Slide 46: Historical & Planned Capital Expenditure
Historical & Planned Capital Expenditure Historical & Planned Capital Expenditure (PHP mm) Historical Planned 4,325 3,527 1,938 849 457 228 2015 2016 2017 2018E 2019E 2020E ◼ Projected capital expenditure relates primarily to the development of pipeline projects ◼ Proceeds of IPO, together with our
Slide 47: Use of IPO Proceeds
Use of IPO Proceeds Percentage Est. Disbursements Use (%) of Proceeds Pipeline project development, such as but not limited to the development and 49.0 By end of 2022 construction of our nine planned real estate projects Obtain land assets through potential share acquisitions 38.0 By end of 2022 Dev
Slide 48: Progress Report on Use of Proceeds
Progress Report on Use of Proceeds Application of the Offering Proceeds Balance of the as of and for the Offering Proceeds Allocation of Quarter ended as of Offering Proceeds September 30, 2018 September 30, 2018 Pipeline project development ₱ 3,731,213,878 ₱ 449,821,429 ₱ 3,281,392,449 Land assets
Slide 49: www.dmwai.com iro@dmwai.com
www.dmwai.com iro@dmwai.com Page 48
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