Dmci Holdings Inc. · PSE:DMC

Dmci — FY2016 Earnings Presentation

23 slides from Dmci's earnings presentation, Mar 16, 2017

1. Slide 1: Analyst Briefing FY 2016 Earnings Call

   ANALYST'BRIEFING' FY'2016'Earnings'Call' Thursday,'16'March'2017' 3:00pm'DMCI'Annex'

2. Slide 2: Agenda

   Agenda • DMCI Holdings Inc.: Net Income (segment breakdown) • Business Segment FY 2016 Results: Coal & On-Grid Power (Semirara) Real Estate Development (DMCI Homes) Construction (DMCI) Nickel (DMCI Mining) Off-Grid Power (DMCI Power) Water Concession (Maynilad)* • Parent Balance Sheet as of 31 Decem

3. Slide 3: Holdings' Net Income Breakdown

   Holdings’ Net Income Breakdown • 2016"Core"net"income"flat"due"mainly"to:"understatement"of"Real"Estate"profits"due"to" accounCng"method,"naConwide"suspensions"resulCng"in"losses"for"nickel"mining" business,"and"expiry"of"Maynilad’s"Income"Tax"Holiday"(ITH)" • 05%"Decline"in"Reported"Net"Income"due"in

4. Slide 4: Semirara Consolidated

   Semirara Consolidated • Due"to"higher"coal"prices,"Semirara"Sales"and"EBITDA"grew"+48%"and"+41%" respecCvely" • One-5me,"non0cash!provisioning"impacted"4Q16"bodom"line;"4Q16/FY16"cash"flow"as" proxy"for"normalized"earnings" (In Million Php) FY 2016 FY 2015 % Revenues "36,584"" "24,680"" 48%" COS & Op

5. Slide 5: Semirara Coal

   Semirara Coal • Coal"division"driven"by"+52%"increase"in"volumes"(FY16)"and"+46%"increase"in"coal" prices"(4Q16);"though"ASP’s"for"FY16"dropped"3%" • ResulCng"in"+90%"increase"in"EBITDA"and"a"+83%"increase"in"earnings" • 2017"outlook"for"coal"price"remains"posiCve"with"mining"capacity"increase"by"17

6. Slide 6: Semirara Power (SCPC & SLPGC)

   Semirara Power (SCPC & SLPGC) • Power"revenues"(all"power"plants)"driven"by"higher"volumes"sold"at"higher"prices" • Decrease"in"SCPC"capacity"factor"was"compensated"for"by"reliable"performance"of"new$ SLPGC"plants"–"resulCng"in"+22%"increase"in"Net"Income"in"2016" (In Million Php) FY2016 FY 2015 % P

7. Slide 7: Semirara Power (SCPC)

   Semirara Power (SCPC) • Revenues"impacted"by"rehabilitaCon"which"had"the"plants"offline"but"2017"should"see" uClizaCon"improve"meaningfully"along"with"higher"profitability" (In Million Php) FY 2016 FY 2015 % Capacity(Factor((Unit(1+2) Power Revenues "10,984"" "12,797"" 014%" 2016 55% 027%" COS & Operat

8. Slide 8: Semirara Power (SLPGC)

   Semirara Power (SLPGC) • Higher"uClizaCons,"volumes"sold"+"average"price"sold"helped"to"drive"solid"growth" • Note"the"significantly!higher!EBITDA!margins!at!76%"that"SLPGC"generates"due"to" Semirara’s"strategy"of"using"low"cost"waste"coal"(vs."50%"at"SCPC)" • SLPGC"generated"more"profits"than"SCPC"de

9. Slide 9: Real Estate Development

   Real Estate Development • Though"2016"reported"net"income"declined"on!a!completed!contract!basis"–"Sales!&! Reserva5ons!jumped!by!+65%"indicaCng"strong"market"demand" • DMCI"Homes"will!transi5on!in!2018!to!percentage!of!comple5on!method!to"be"in"line" with"the"industry"which"will"also"result"in"2017

10. Slide 10: Real Estate Development

    Real Estate Development • Sales"&"ReservaCons"jumped"by"+65%"while"default"rates"conCnued"to"decline" • Launches"also"increased"by"270%"due"to"conCnued"high"demand"for"DMCI"Homes" " Sales&&&Reservations&(in&BNs&of&PHP) Default(Rate 40.0 15% 31.2% 12% 30.0 9% 10% 17.3% 18.5% 19.0% 18.8% 20.0 6% 5% 4%

11. Slide 11: Real Estate Development

    Real Estate Development • Number"of"DMCI"Homes"units"sold"increased"by"+55%"compared"to"2015" • Unit"pricing"also"increased"by"+7.5%"due"to"the"launch"of"higher"end"products"which" have"also"seen"very"strong"demand" Php!(in!millions)! Dec!2016! Dec!2015! %!Change! Units" PHP"28,236" 16,978" +66%" Pa

12. Slide 12: 2017 Launch Calendar

    2017 Launch Calendar • DMCI"Homes"will"launch"a"combinaCon"of"mid"and"high"rise"buildings"in"2017" • DMCI"Homes"will"also"launch"its"first"mixed0use"project"(ForCs)" " Month! Project! No.!of!Bldgs.! /!Type! 3"HRB" Jan! PRISMA!RESIDENCES!Pasig"Blvd,"Pasig"City" (42F)" 8"MRB" Mar! MULBERRY!PLACE!Acacia

13. Slide 13: Construction

    Construction • Sales"grew"by"+4%"and"core"income"grew"+49%"in"2016" • EBITDA"margins"expanded"to"15.4%"from"13.5%"resulCng"in"+19%"EBITDA"growth" • FY"2016"shows"the"full"recovery"of"our"construcCon"business" (In Million Php) FY 2016 FY 2015 % Construction Revenues "13,817"" "13,249"" 4%" COS and Op

14. Slide 14: Construction

    Construction • ConstrucCon"backlog"grew"by"PHP"9.5BN"in"2017"(YTD)" • Infrastructure"book"should"see"strong"growth"due"to"government0led"push"for"more" highways"and"bridges"" Newly Booked Product Line Contract Dec ‘15 Dec '16 % of Total Awarded Revenue Buildings 33,727 5,272 6,224 3,295 8,362 42% In

15. Slide 15: Skyway Stage 3, Section 2

    Skyway Stage 3, Section 2 • Segment"in"blue,"to"be"retained"on"DMCI’s"orderbook" • Segment"in"green,"which"borders"proposed"San"Juan"River"alignment"(in"yellow)," METRO MANILA SKYWAY STAGE 3 PROJECT- SECTION 2 requires"re0designing"(recogniCon"of"PHP"5BN"on"DMCI’s"orderbook"to"be"deferred)" PIER NO.

16. Slide 16: Nickel Mining

    Nickel Mining • Closure"of"ZDMC"and"suspension"of"BNC"(ISO:14001)"pending"DENR’s"resoluCon"on" moCons"filed"for"reconsideraCon" • Our"nickel"mines"hold"meaningful"reserves"with"significant"market"share"in"shipments;" cash"costs"ca."20"USD"per"ton" • DMCI"Nickel"Mining"cut"62%"of"employees"(as"of"Septe

17. Slide 17: Off-Grid Power

    Off-Grid Power • DMCI"Power"CorporaCon"conCnues"to"grow"and"DMCI"Holdings"expects"it"to" become"a"meaningful"part"of"total"earnings"in"a"few"years" (In Million Php) FY 2016 FY 2015 % Power Revenues "2,302"" 2,169" 6%" COS and Operating Expenses "(1,714)" (1,658)" 3%" EBITDA !588!! 511! 15%! Deprecia

18. Slide 18: Off-Grid Power

    Off-Grid Power • Off0grid"power"had"strong"growth"in"2016"across"all"power"plants" Capacity!(MW)! GWH!Sales! 120! 300! 100! 4! 250! 16! 2! 80! 200! 52! 16! 46! 60! 150! 38! 48! 14%! 78! 91! 14%! 40! 100! 20! 30! 50! 86! 95! 27! 0! 0! 2015! 2016! 2015! 2016! Masbate" Palawan" Mindoro"" Sultan"Kudarat"

19. Slide 19: Water Concession (Maynilad)

    Water Concession (Maynilad*) • Maynilad"earnings"should"conCnue"to"grow"in"2017" • ArbitraCon"ruling"expected"to"come"out"in"1H"2017" (In Million Php) FY 2016 FY 2015 % #"of"Customers"in"000s Revenues 20,224 19,098 6% COS & Operating Expenses (5,741) (4,951) 16% 2016 1,312% EBITDA 14,483 14,147 2% +

20. Slide 20: Holdings' Balance Sheet

    Holdings’ Balance Sheet • Parent"Company"sCll"net"cash"posiCve"with"PHP"5.1BN" • Dividend"policy:"25%"of"previous"year’s"income,"but"averaging"ca."50%"over"last"5"years"" (In Million Php) FY 2016 FY 2015 % Cash & Cash Equivalents* 5,054 3,695 37% Receivables** 2,228 934 139% Investments in subsidiar

21. Slide 21: DMCI Holdings Remains Undervalued

    DMCI Holdings Remains Undervalued DMCI%is%cheap%on%a%rela1ve%and%absolute%basis%in%terms%of%2017%P/E% While%earnings%growth%is%beDer%than%peers,%with%upside%risk%to% Ra1o% consensus%earnings…% Conglomerates:820178Consensus8 P/E Conglomerates:&Consenus&2016:2018&EPS&Growth 25.0x 21.6x 15.0% 13.7%& 12

22. Slide 22: DMCI Holdings Key Takeaways + Outlook

    DMCI Holdings Key Takeaways + Outlook •"Overall"core"earnings"driven"by"+43%"and"+49%"increase"(respecCvely)"in"Semirara’s"and"ConstrucCon’s" DMCI!Holdings:! net"income" •"DMC’s"dividend"payout"raCo"for"the"year"will"be"at"least"25%,"in"line"with"Holdings’"dividend"policy" •"2016"performance"for"Sem

23. Slide 23: Disclaimer

    Disclaimer The information contained in this document is strictly confidential. Neither DMCI Holdings, Inc. (DMCI), nor its advisors make any representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in any information conta

DMCI Holdings — FY2016 Earnings Presentation on 6ix