D&l Industries, Inc. · PSE:DNL
D&l Industries — FY2023 Earnings Presentation
30 slides from D&l Industries's earnings presentation, Feb 29, 2024
Slide 1: D&L Industries Media Presentation for FY23
D&L’s expansion site in Batangas, Philippines FILIPINO MANUFACTURING CUSTOMIZED B2B2C SPECIALTY PRODUCTS D&L INDUSTRIES Media Presentation for FY23 February 29, 2024
Slide 2: FY23 Highlights
FY23 Highlights 1 FY23 earnings at P2.3 bn; higher interest expense and opex relating to the new plant in Batangas lowered earnings 2 As of February 2024, Batangas plant has already surpassed its first-year export commitment to the Philippine Economic Zone Authority (PEZA) 3 Green shoots are startin
Slide 3: Batangas Plant – D&L's next leg of growth
Batangas Plant – D&L’s next leg of growth 3
Slide 4: Batangas plant has already surpassed its first-year export commitment to PEZA
Batangas plant has already surpassed its first-year export commitment to PEZA Batangas plant export revenues As of February 2024, D&L’s Batangas plant has already delivered 175% its first-year export commitment to PEZA First-year commitment to PEZA Cumulative export sales as of February 2024 4
Slide 5: Key Figures Summary
Key Figures Summary (In Pmn) FY22 % change Sales 33,502 43,485 8% Gross Profit 5,713 6,066 15% Net Income 2,295 3,318 35% Net Income (ex-Batangas plant) 3,005 3,546 28% EPS (in centavos) 32.1 464 7.0 7.0 Gross Profit Margin 17.1% 13.9% 16.0% 16.0% HMSP Contribution 62% 51% 61% 61% Free Cash Flows 1,
Slide 6: FY23 Income has yet to reflect new plant's potential
FY23 Income has yet to reflect new plant’s potential Net Income (Php mn) Net income breakdown* 3,546 Consumer (Ex-Batangas) Products ODM, 10% 3,318 3,005 Food Specialty 2,643 -15% Plastics, Ingredients, 31% +26% -31% 31% 2,295 Chemrez Group, 27% FY21 FY22 FY23 FY23 ex-Batangas High base Excluding Ba
Slide 7: Condensed Income Statement
Condensed Income Statement *number of outstanding shares: 7,142,857,990 7
Slide 8: Sales mix back to pre-pandemic level
Sales mix back to pre-pandemic level REVENUES % share to total group revenues 33% 34% 33% 31% 41% 40% 39% 37% 37% 38% 42% 42% 43% 49% 67% 66% 67% 69% 59% 60% 61% 63% 63% 62% 58% 58% 57% 51% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 High Margin Specialty Products (HMSP) Co
Slide 9: HMSP Volume Growth (YoY)
HMSP Volume Growth (YoY) Significant pick up in HMSP volumes in 4Q with the commercial operations of Batangas plant HMSP volume growth (YoY) 40% Confluence of events such as the late 36% passage of the budget, US- China trade war, and spillover of negative consumer sentiment dampened overall volume
Slide 10: Exports sales
Exports sales EXPORT/ SALES 25% 24% 21% 29% 33% 31% 27% Breakdown of exports 13.6 Food -33% Oleochemicals 43% 37% 10.2 9.1 6.3 6.3 Specialty Plastics 18% 4.7 Consumer 4.1 Products ODM 2% In P bn FY17 FY18 FY19 FY20 FY21 FY22 FY23 10
Slide 11: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows FCF turned positive In PMN FY23 FY22 EBITDA 4,460 5,139 Interest Received 16 169 Paid taxes (560) (807) Non cash items (35) (46) With the commercial operations of the Batangas plant, the company has started ramping Change in working (619) (2,711) up investing in raw
Slide 12: Capex
Capex Capex (P mn)* 3,497 3,179 2,114 1,552 1,441 • Capex expected to go down further with the completion of the Batangas plant 443 456 • No other major capex requirement in the pipeline 2017 2018 2019 2020 2021 2022 2023 2024 *accrual basis capex 12
Slide 13: Pass-through pricing mechanism as natural hedge against volatility in forex and commodity prices
Pass-through pricing mechanism as natural hedge against volatility in forex and commodity prices 19.1% 20.9% Rapid increase in raw material prices 18.3% 16.8% 17.3% GP Margin resulted in a temporary margin 15.1% 15.7% 14.8% contraction 13.4% 13.9% 12.6% 12.4% 12.0% 10.5% 11.7% 10.8% 10.9% 8.9% 9.9%
Slide 14: Quarterly revenues reflecting movements in commodity prices
Quarterly revenues reflecting movements in commodity prices Evidencing the company’s ability to pass on raw material prices Sales (P mn) 12,329 11,578 9,996 9,582 9,324 8,787 8,414 8,485 7,627 7,816 7,004 6,901 5,831 5,672 5,745 5,822 4,501 Coconut oil Palm oil 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q2
Slide 15: FY23 Group Results
FY23 Group Results Food Ingredients Oleochemicals & Specialty Consumer D&L Industries - Other Specialty Plastics Products ODM Consolidated Chemicals % change in (28%) (-22%) +2% +20% (23%) Revenues % change in Net (18%) (-50%) +3% +12% (31%) Income* 15
Slide 16: DOE plans to increase Biodiesel blend to 3% (B3) from 2%
DOE plans to increase Biodiesel blend to 3% (B3) from 2% (B2) effective July 1, 2024 Impact of a higher biodiesel blend Biofuels industry short overview to the industry 2006 – Biofuels law was passed with the intention of a 5% biodiesel blend (B5) Volume 2007 – implementation of 1% blend (B1) Overal
Slide 17: Asset-Light Model
ASSET-LIGHT MODEL Rental expenses Management and Shared Service Fees (paid to affiliates) (MSSF) D&L provides management and shared services to its subsidiaries and affiliates, including executive management and admin support such as legal, MIS, accounting, human resource, and finance land, faciliti
Slide 18: Balance Sheet remains robust
Balance Sheet remains robust As of end As of end As of end As of end In Pmn In P mn Dec-23 Dec-22 Dec-23 Dec-22 Cash 2,844 3,250 Book Value 20,868 20,651 Current Assets 22,583 22,036 BVPS1 (in P) 2.92 2.89 Debt-to-equity Total Assets 42,594 40,760 0.82x 0.75x (Borrowings/E quity) Return on Borrowing
Slide 19: Capital Structure
Capital Structure Balance sheet in a solid position to withstand external pressure Borrowings (Pmn) Equity (Pmn) Net Gearing 20,868 20,651 interest 6x 19,105 69% 59% cover P14.3 net 17,764 45% 15,217 16,565 17,112 13,970 15,487 17,135 Billion debt 25% 13,790 15% ~5.74% average 17% 6,600 10% 8% 5,150
Slide 20: Net debt, effective interest rate, and interest cover
Net debt, effective interest rate, and interest cover Interest rate (%) Interest cover (x) 35 7.0% 14.3 30 6.0% 12.0 12.0 11.9 11.2 25 5.0% 10.0 9.5 9.0 8.6 20 4.0% 6.6 15 3.0% 4.4 4.0 10 3.7 2.0% 2.9 3.0 2.8 2.1 2.2 2.0 2.1 1.9 1.9 1.6 1.6 5 1.2 1.2 1.4 1.4 1.4 1.0% - 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Slide 21: Working Capital Cycle
Working Capital Cycle 14,000 CASH CONVERSION 12,000190 140 161 170 INVENTORY 143 12,000 147 10,000150 120 127 120 117 111 With the commercial operations 10,000 13,142 130 104 of100 the Batangas plant, the 8,000 91 8,000 9,621 11,823 110 90 company 80 has started ramping 101 6,00090 up investing in r
Slide 22: Investor Relations
INVESTOR RELATIONS Ownership as of 12-Month Daily Trading Average* December 2023 #50 Public, 27% Lao Family, 73% P50 bn* w US$254k Foreign Ownership as % Ranked 50th of Outstanding Shares among Philippines’ 17 16 % % 14 14 14 14 largest companies 14 14 13 13 14 % 14 % % % 14 % % % % % % by market ca
Slide 23: Investor Relations
INVESTOR RELATIONS Return since IPO Price Change Total Return DNL PM +223% +328% PCOMP Index +18% +33% Price as of 02/26: P6.95 Market Cap as of 02/26: P50bn USD 886 mn (USD1:P56.09) Outstanding Shares: 7,142,857,990 DNL +223% DLNDY:US Unsponsored ADR (BNY Mellon & Citi) PCOMP 1ADR = 25 Ordinary +18
Slide 24: Q&A
Q&A 24
Slide 25: Foundation of future growth
Foundation of future growth High value, high margin products: Expansion in export zones & “Pack at source” initiative 25
Slide 26: FIT Expansion
FIT Expansion Natura Aeropack D&L Premium Foods Natura Aeropack 26
Slide 27: CNO & CPO 1-yr Price Chart
CNO & CPO 1-yr Price Chart : Track Annotate News Zoom Last Price | aaa HE CNOIROM1 Index (USD) fA 1.189.625 KO1 Comdty (USD) ‘ WAL \ nM | Lt A 1 pn NM darts ‘ J \, “St Yawn +1100 I\| [rp J dla a fh V ' I} | \} | Vj FAK {\ | he | = tan \ N | fl | Fa | W P1000 +900 F800 r7 Jan Feb Mar Apr May Jun dl A
Slide 28: CNO & CPO 2-yr Price Chart
CNO & CPO 2-yr Price Chart Last Price HECNOIRDM1 Index (USD) 1189.625 KO1 Comdty (USD) -838.04138 i ll UL Track 4 Annotate = News % Zoom 2000 > 1500 a po pan py ee Lal \J My as a (INA pee er wr VA WM Anal fe fer : Aantal Nl Lag Mar Jun ) Dec Mar Jun Sep Dec 2022 2023 2024
Slide 29: Maiden Bond Offering
MAIDEN BOND OFFERING *Awarded Best New Bond (Philippines) by the Asset Magazine Offer Size Interest Rate Tenor Spread over BVAL Base offer: P3bn (Series A) 2.7885% p.a. 3 years +50 bps Oversubscription option: P2bn (Series B) 3.5962% p.a. 5 years +60 bps Bond Rating PRS Aaa with Stable Outlook Use o
Slide 30: 3yr and 5yr BVAL rates
3yr and 5yr BVAL rates D&L Bond Listing September 2021 30