D.m. Wenceslao & Associates, Inc. · PSE:DMW
D.m. Wenceslao & Associates — Investor Presentation (October 2018)
49 slides from D.m. Wenceslao & Associates's investor presentation, October 2018
Slide 1: D.M. Wenceslao & Associates, Incorporated Management Presentation
D.M. Wenceslao & Associates, Incorporated (“DMW”) Management Presentation
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL By reading these materials, or attending the meeting where this presentation is made, you agree
Slide 3: Key Presenters
Key Presenters Delfin Angelo C. Wenceslao Heherson M. Asiddao Rachelle C. Paunlagui Chief Executive Officer Chief Finance Officer Head of Investor Relations 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 1D. M. WENCESLAO \'\'] AND ASSOCIATES, INCORPORATED. Page 4
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 Pixel Residences fully pre-sold 2016 Completion of construction of 1979 Aseana Square Pixel Residences starts Undertook pile driving Additional lease agreements with pre-selling activities works for Frabel Industrial Ayala Land and C
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 (322,137 sq.m.) Land Used/Allocated for Development Land Allocated for (246,984 sq.m.) Future Sales (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 Parkside Place 2 Aseana right of Land Aseana Town Parkside
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 2,007.7 buyers to pay the consideration in full upon signing of the purchase agreement 1,088.3 Development plans to comply with our master plan and submitted
Slide 20: Commercial Building Leasing
Commercial Building Leasing Aseana One and Aseana Two Highly flexible in specifications PEZA-accredited, suited for BPOs and logistics companies Aseana One (93.5% leased out); Aseana Two (98.2% leased out)(1) Tenants include: Aseana One Aseana Two Completed Properties in Aseana City(2) Tot
Slide 21: Property Development
Property Development Aseana Three / 8912 Asean Ave. (formerly Aseana Four) / Five / Six Aseana Three was fully leased out and completed Targeted at BPOs, logistics companies and gaming and tourism-related companies Located near Ayala Land’s mall development which includes a transport terminal
Slide 22: Property Development (Cont’d)
Property Development (Cont’d) Pixel Residences Parkside Place 1 & 2 (Oct 2019) (Jun 2021 & Sep 2022) Pixel Residences Designed by Spark Architects in collaboration with Casas Architects Fully sold out with unrecognized revenue of PHP1,861 mm as of December 31, 2017 Residential Developments Str
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 less than 20 construction companies in the Philippines have this di
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 1D. M. WENCESLAO \'\'] AND ASSOCIATES, INCORPORATED. Page 32
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 Parkside (Aseana Four) Five Six Résidences Place 1 Place 2 Targeted Completion: Targeted Completion: Targeted Completion: Targeted Completion: Ta
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
Enhance Our Earnings Base and Grow Our Recurring Income Streams Completed Projects Project Pipeline(1) (2005 - 2017) Aseana Powerstation Total Leasable Floor Area (in sq.m.) Aseana Two Aseana Main St. 2 Aseana Six 292,035 Aseana One Aseana Five 337,978 337,978 8912 Asean Ave. Aseana Square 275,836 6
Slide 40: 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 Six planned commercial prime land for long-term leasing developments targeting at BPOs, and 2,000 sq.m. of non-core land POGOs, logistics companies and for sale e
Slide 41: Aseana City Master Plan
Aseana City Master Plan Page 40
Slide 42: Financial Highlights
Financial Highlights Page 41
Slide 43: 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 44: 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) 80.4% 63.9% 75.7% 77.5% 62.2% 62.0% 74.1% 56.3% 2,333 1,651 1,867 1,320 1,357 887 1,049 674 2015 2016 2017 1H 2018 2015 2016 2017 1H 2018 Gross Profit Gross Profit Margin O
Slide 45: 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 1,507 1,550 1,327 89,914 1,350 1,229 1,150 962 950 31% 49% 39% 750 40% 56,863 59,000 550 45,432 350 16% 14% 29% 19% 150 5% 7% 6% 11% -50 1H 2015 2016 2017 2018 % to Total
Slide 46: Improving Debt Serviceability, Sustainable Returns & Working Capital
Improving Debt Serviceability, Sustainable Returns & Working Capital Debt To Equity(1) (%) Return on Equity(2) (%) 18.0% 42.0% 16.0% 16.0% 15.0% 33.0% 26.0% 12.0% 2015 2016 2017 1H 2018 2015 2016 2017 1H 2018 Current Ratio(3) (x) Assets to Equity(4) (x) 2.76x 3.81x 3.34x 3.03x 1.72x 1.55x 1.41x 2.13
Slide 47: Historical & Planned Capital Expenditure
Historical & Planned Capital Expenditure Historical & Planned Capital Expenditure (PHP mm) Historical Planned 4,325 3,527 3,144 849 457 228 2015 2016 2017 2018E 2019E 2020E Projected capital expenditure relates primarily to the development of pipeline projects Proceeds of IPO, together with our
Slide 48: Proposed Use of IPO Proceeds
Proposed Use of IPO Proceeds Percentage Est. Disbursements Proposed 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
Slide 49: www.dmwai.com iro@dmwai.com
www.dmwai.com iro@dmwai.com Page 48
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