First Pacific Co. Ltd. · HKEX:142

First Pacific — H1 2018 Earnings Presentation

36 slides from First Pacific's earnings presentation, Sep 13, 2018

  1. Slide 1: First-Half 2018 Results

    Copyright © First Pacific Company Limited 13 September 2018. All rights reserved.

  2. Slide 2: First Pacific business sectors and ownership stakes

    Consumer Foods Infrastructure Natural Resources Telecommunications First Pacific owns 50.1% of First Pacific owns 42.0% of First Pacific owns 31.2% of First Pacific owns 25.6% of Indofood and has an MPIC and has economic Philex and Two Rivers, a PLDT which in turn owns economic interest of 40.3% int

  3. Slide 3: Management team

    Chris H. Young Robert C. Nicholson Manuel V. Pangilinan Executive Director Executive Director Managing Director and CEO & Chief Financial Officer Marilyn A. Joseph H.P. Ng John W. Ryan Stanley H. Yang Ray C. Espinosa Victorico P. Vargas Victorio-Aquino Exec. Vice President, Chief Investor Relations

  4. Slide 4: Investment objectives and criteria

    Investment Objectives Roxas Holdings  Unlock value, enhance cash flows to deliver $42 mln (1%) Philex dividend returns, grow share price, and finance Group further investment in value-enhancing $338 businesses, taking into consideration all relevant mln criteria, including Environmental, Social and

  5. Slide 5: Diversified Portfolio, Strong Returns

    Plantations & Sugar $1.49 bln Diversified Portfolio, Strong Returns MPIC PLDT  Balanced weighting of the more mature assets and newer ones $5.62 bln $3.21 bln  Balanced weighting of different sectors  14 years of strong growth: Gross Asset Value grew at a compound annual Indofood growth rate of 1

  6. Slide 6: Profit Rises in Signal of Renewed Growth Trend

    Profit Rises in Signal of Renewed Growth Trend 1H 2018 Free Cash Flow (USD mln) 120 8.7 67.5  Turnover rose 8% to $3.84 billion vs. $3.57 billion on higher 100 90.6 sales at MPIC and PLP 80 (20.7) 64.6  Contribution from operations fell 8% to $213.8 million vs. 60 (11.7) (3.5) $231.8 million as lo

  7. Slide 7: Subsidiary and associate financial summary

    Core Gross Net Cash Interest Total Turnover EBITDA Profit Debt Debt On Hand Gearing Cover Equity PLDT 1,463 636 252 3,446 2,464 982 1.12 7.3 2,204 MPIC(i) 768 366 165 3,602 2,804 798 0.66 5.1 4,235 MPIC - Head Office - (14) (39) 1,041 962 79 0.42 2.0 2,301 MPTC 142 99 44 800 682 118 0.93 4.9 732 Mer

  8. Slide 8: Head Office Balance Sheet as at end-June 2018

    Head Office Balance Sheet as at end-June 2018 Head Office Bond Issues at a Glance  May 2018 bond tender and issuance pushed out maturity profile and cut overall borrowing costs Principal Coupon Price* Term Maturity  Cash interest cover approx. 2.6x, gearing at 0.87x US$215 mln 6.0% 101.988 7-Year

  9. Slide 9: Head office funding history

    7-yr $400 mln $152 mln bond tender $115 mln Secured 7-yr $300 mln 7-yr $175 mln Unsecured Bond ($69 mln of 2010 7-yr) Bond Secured Bond Unsecured Bond ($215 mln remaining) ($83 mln of 2010 10-yr) 10-yr $400 mln 10-yr $400 mln $219 mln Bond $350 mln $199 mln Secured Bond Unsecured Bond Redemption Con

  10. Slide 10: First Sustainability Reports Published

    First Sustainability Reports Published Sustainability & the Corporate Governance Committee  First Pacific’s inaugural ESG Report covered the 2016 financial  First Pacific’s Corporate Governance Committee is formally year, met SEHK ESG reporting requirements and Global responsible not only for corp

  11. Slide 11: Indofood 1H 2018 Financial Highlights

    1H 2018 Financial Highlights Revenues & Core Income (USD mln) 6,000  Revenues rose 1% to IDR36.0 trillion vs. IDR35.7 trillion on 5,286 5,350 5,004 5,237 stronger sales in every unit except Agribusiness 5,000 4,763  Core income declined 11% to IDR1.98 trillion vs. IDR2.23 4,000 trillion 2,675  Fa

  12. Slide 12: ICBP 1H 2018 Financial Highlights

    1H 2018 Financial Highlights Net Sales & Core Income (USD mln) 3,000  Net sales rose 5.4% in Rupiah terms to IDR19.5 trillion vs. 2,580 2,657 2,526 IDR18.5 trillion on growth led by Noodles, Dairy, Nutrition 2,500 2,385 2,360 and Special Foods, and Beverages  EBITDA rose 17% to IDR3.72 trillion vs

  13. Slide 13: IndoAgri 1H 2018 Financial Highlights

    1H 2018 Financial Highlights Revenues & Net Profit (USD mln) 1,800  Revenue down 23% vs. 1H17 mainly due to timing in CPO 1,534 stock sales, higher internal sales and soft commodity 1,600 1,403 1,400 1,262 1,259 1,306 prices (CPO -8%, PK -14%, rubber -26%) 1,200  First-half core profit was at IDR5

  14. Slide 14: PLDT 1H 2018 Earnings Highlights

    1H 2018 Earnings Highlights Revenues & Core Income (USD mln) 4,500  Service revenues rose 1% to ₱76.4 billion 4,000 3,847 3,712 3,572 primarily due to higher revenues from data 3,500 3,298 3,000 services in the fixed line business, partially offset 3,000 by lower revenues from mobile and home 2,500

  15. Slide 15: Home & Enterprise Businesses Lead

    Home & Enterprise Businesses Lead Mobile & Broadband ARPU (PHP/month)  Home and Enterprise revenues account for 50% of total service revenues, 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 greater than the 40% share of the Smart Postpaid 965 985 975 961 809 813 Individual segment Smart Prepaid 104 109 108 110 112

  16. Slide 16: Surge in Capex Brings World-Class Network

    Surge in Capex Brings World-Class Network Securing the Balance Sheet  2018 capex budget of ₱58 billion is part of ₱260 billion five-year  Investment-grade credit rating with stable outlook program to 2020 to build industry-leading telecommunications from two of the three major agencies services 

  17. Slide 17: MPIC businesses: toll roads, electricity, water, hospitals

    Toll Roads Electricity Water Hospitals Rail/Logistics/AFP 29%-100% stakes 45% & 62% stakes* 53%-100% stakes 60% 20%-100% stakes 100% 14 Hospitals 55% 3 Primary Care Clinics Light Rail Manila NLEX & SCTEX 75.6% 35% ▪ Largest healthcare provider in the Philippines 10.5% ▪ Present in all major island g

  18. Slide 18: MPIC 1H 2018 Earnings Highlights and Outlook

    1H 2018 Earnings Highlights Outlook  Continuing strong demand growth for MPIC services seen  Contribution from operating companies rose 11% % to ₱10.62 continuing to lift revenues; core income seen rising billion vs. ₱9.58 billion on double-digit growth from all  Water and toll road tariff increa

  19. Slide 19: Meralco 1H 2018 Earnings Highlights & Outlook

    1H 2018 Earnings Highlights & Outlook: Meralco Distribution Revenues & Core Income (USD mln) 1,400 1,316  Distribution revenues rose 6% to ₱30.7 billion vs. 1,269 1,207 1,183 1,144 ₱29.0 billion on higher volume sold 1,200  Core EBITDA rose 2% with growth slowed by higher 1,000 cost of purchased p

  20. Slide 20: Toll Roads and Maynilad Earnings Highlights

    1H 2018 Earnings Highlights & Outlook: Toll Roads Revenues & Core Income (USD mln) 300  Revenues rose 14% to ₱7.4 billion vs. ₱6.5 billion on strong 239 260 traffic growth and add-on toll rate of 25 centavos/km on 250 212 191 194 NLEX closed system from November 2017 200  Core EBITDA rose 23% to ₱

  21. Slide 21: Goodman Fielder First-Half Earnings Highlights

    2018 First-Half Earnings Highlights Net Sales Value (USD mln) Normalized Net Income (USD mln)  Sales growth slowed to 1% increase as strong performance by the 795 792 25 23.6 International business offset difficulties in the Australia and New Zealand markets 790 20  Sales rose to A$1.03 billion vs

  22. Slide 22: Philex 1H 2018 Earnings Highlights and Outlook

    1H 2018 Earnings Highlights Revenues & Core Income (USD mln)  Operating revenues fell 2% to ₽4.65 billion vs. ₽4.76 billion as a 300 245 245 result of lower metal production offset by sharply improved 250 215 copper prices and a weaker Peso 201 198 200  Cash production cost fell 3% to ₱2.12 billio

  23. Slide 23: Appendix

    Appendix Shareholder Information Selected Financial Data

  24. Slide 24: Contribution to Group profit and turnover

    Contribution to Turnover Group profit(i) For the six months ended 30 June 2018 2017 2018 2017 US$ millions Indofood 2,596.8 2,675.4 70.3 77.2 PLDT(ii) - - 62.7 77.7 MPIC 767.7 481.4 69.1 66.9 FPW(iii) - - 10.3 6.6 Philex (ii) - - 4.1 6.1 FPM Power 347.8 277.6 (3.4) (3.9) FP Natural Resources 132.6 1

  25. Slide 25: Head Office cash flow

    For the six months ended 30 June 2018 2017 US$ millions Dividend and fee income(ii) 137.6 123.6 Less: Indofood dividend received on 5 July 2018/6 July 2017(ii) (70.1) (68.6) Cash dividend and fee income 67.5 55.0 Head Office overhead expense (11.7) (12.6) Net cash interest expense (33.9) (40.7) Tax

  26. Slide 26: Consolidated debt and gearing

    Consolidated At 30 June 2018 At 31 December 2017 Net Total Gearing(ii) Net Total Gearing(ii) US$ millions Debt(i) Equity (times) Debt(i) Equity (times) Head Office 1,573.5 1,800.6 0.87x 1,521.8 1,837.7 0.83x Indofood 809.5 3,289.4 0.25x 784.6 3,485.2 0.23x MPIC 2,803.6 4,220.4 0.66x 2,717.4 4,302.5

  27. Slide 27: Net asset value and share price discount

    At At 30 June 31 December 2018 2017 US$ millions Basis Indofood (i) 2,029.6 2,474.2 PLDT (i) 1,336.1 1,637.5 MPIC (i) 1,140.3 1,814.1 Philex (i) 192.5 276.9 PXP (i) 114.2 88.6 FPW (ii) 574.1 554.0 FPM Power (iii) 230.0 230.0 FP Natural Resources (iv) 44.8 58.5 Head Office - Other assets (v) 94.5 100

  28. Slide 28: Shareholder Breakdown

    Shareholder Breakdown Institution Mln Shares % 1 Brandes Investment Partners 305 7.0% 2 Lazard Asset Management 190 4.4% 3 GIC Asset Management 135 3.1% 4 M&G Investment Management 122 2.8% All 5 Kabouter Management 112 2.6% Others 6 City of London IM 90 2.1% 13% 7 The Vanguard Group 75 1.7% 8 Thomp

  29. Slide 29: Shareholder Analysis at First Pacific

    Shareholder Analysis at First Pacific Investment Style  FPC has engaged IPREO since the autumn of 2012 to 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 provide details of institutional share ownership of First Pacific Value 40% 42% 43% 42% 41% 41% 40% 40% Deep Value 19% 18% 17% 16% 15% 14% 15% 15%  The

  30. Slide 30: Analyst price targets and profit forecasts

    Price Targets for First Pacific (HKD/Share) Profit Forecasts (USD mln) Very Active 1.3% Turnover High 0.8% N/A Rating Date Target 2018 2019 2020 5% Medium Citigroup Buy 29 Aug 2018 $4.80 324 370 413 12% CLSA OP 29 Aug 2018 $3.80 274 310 326 Low 80% Holding periods: Low: Longer than 3 years Medium: 2

  31. Slide 31: FPC's Economic Interest

    FPC’s Economic Interest 25.6% 42.0% (%) 42.0% 15.7% 23.1% 42.0% 25.2% 31

  32. Slide 32: Notes

    Notes

  33. Slide 33: Notes

    Notes

  34. Slide 34: Notes

    Notes

  35. Slide 35: Disclaimer

    This presentation is provided for information purposes only. It does not constitute an offer or invitation to purchase or subscribe for any securities of First Pacific or any of its subsidiaries or investee companies, and no part of this presentation shall form the basis of or be relied upon in conn

  36. Slide 36: First Pacific Company Limited contact details

    First Pacific Company Limited (Incorporated with limited liability under the laws of Bermuda) 24th Floor, Two Exchange Square 8 Connaught Place, Central Hong Kong Tel: +852 2842 4374 info@firstpacific.com www.firstpacific.com

First Pacific Company — H1 2018 Earnings Presentation on 6ix