Gt Capital Holdings, Inc. · PSE:GTCAP
Gt Capital — FY2017 Earnings Presentation
66 slides from Gt Capital's earnings presentation, Apr 5, 2018
Slide 1: gtcapital.com.ph
A> PRO+ FRIENDS j \ gtcapital.com.ph \
Slide 2: Notice
Notice The information in this presentation has been prepared by GT Capital Holdings, Inc. (the "Company"). By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations and represent that you are a person who is p
Slide 3: Table of Contents
Table of Contents Strategic Direction 4 GT Capital Corporate Profile 5 GT Capital Component Companies 6 Current Corporate/Ownership Structure 7 Financial Highlights 8 Net Income Contribution 9 Metropolitan Bank and Trust Company (MBT) 11 Toyota Motor Philippines Corp. (TMP) 17 Federal Land, Inc. (Fe
Slide 4: Strategic Direction
Strategic Direction New Sectors Synergy • New strategic partners • Toyota unit sales through • PPP projects MBT/PSBank auto loans/TFS • Infrastructure lease-to-own package • Logistics • Fed Land & Pro-Friends home mortgages by MBT/PSBank • AXA bancassurance through MBT/PSBank branch network • Motor
Slide 5: Corporate Profile
Corporate Profile GT Capital directly owns market-dominant businesses in underpenetrated sectors of Strategic Partnerships with the Philippine economy, namely banking; Best-of-Class Brands automotive assembly, importation, dealership, and financing; infrastructure; property development; and life- an
Slide 6: GT Capital Component Companies
GT Capital Component Companies No. 1 bank in net interest margins as of 1 end-Dec 2017 1 Largest automotive company in the Owns MERALCO, the Philippines’ largest power 1 distribution Philippines, maintaining 39% market company Second largest Philippine bank by share as of end-Dec 2017 Owns GLOBAL B
Slide 7: Current Corporate Ownership Structure
Current Corporate Ownership Structure Grand Titan Public Float 56.19% 43.81% Auto Assembly and Importation, Property Infrastructure Motorcycle Banking Dealership, and Financing Development Insurance and Utilities Financing 40.0%5 21.0% 36.0% 51.0% 25.3%2,3 15.55%6 20%8 26.47 %1 36.09% 80% 100
Slide 8: Financial Highlights Full Year 2017
Financial Highlights Full Year 2017 Php14.2 billion Consolidated Net Income -3% Php14.6 billion 2016* *Includes GBP & CPAIC after tax gain on sale of Php2.9B Php15.0 billion Core Net Income +29% Php11.7 billion 2016 Php239.8 billion Revenues +19% Php202.1 billion 2016 TMP & TMBC - Auto Sales (TMP –
Slide 9: GT Capital Net Income Contribution
GT Capital Net Income Contribution TFSPH AXA PCFI TMBC PCFI TMBC TFSPH GBP 1.5% AXA 2.1% 1.3% 1.6% SMFC 1.9%3.4% 1.2% 3.0% 3.6% 0.1% CPA - MPIC MPIC 1.2% 9.6% 7.5% TMP Fed Fed TMP 41.0% Land Land 39.1% 8.0% 10.8% MBT MBT 31.0% 34.4% MBT + TMP = 72.0% MBT + TMP = 73.5% 2016 2017 9
Slide 10: GT Capital Net Income Contribution by Sector
GT Capital Net Income Contribution by Sector Infrastructure Insurance Infrastructure & Power 11% Insurance 3% 1% 13% Property 11% Automotive Automotive Property 11% 39% 49% Banking Banking 28% 34% 2016 2017 10
Slide 11: Metrobank Plaza
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Slide 12: Peer Banks Highlights
Peer Banks Highlights Net Interest Margin – NIMs (%) +18% industry growth Total Loans (Php Billion) 3.8% 3.5% 2.9% +17% +19% +16% 1,736 1,265 1,202 MBT BDO BPI BDO MBT BPI +12% industry growth +3% industry growth Total Assets (Php Billion) CASA Deposits (Php Billion) +11% +6% +12% +15% +11% +10% 1,5
Slide 13: 2017 performance drivers
2017 performance drivers 2017 Operating Highlights Operating OperatingIncome Incomeand andOPEX OPEX(PHPbn) (PHPbn) PHP18.2bn net income; NII Trading & FX Other No-II OPEX Core income up 10% 19.0 Sustained double-digit growth in loans 17.4 3.9 (+19%) and low cost deposits (+12%) 17.0 8.6 2.1 NII
Slide 14: Peer Banks Highlights
Peer Banks Highlights Total Equity (Php Billion) Total Capital Adequacy Ratio and CET1 (%) +37% +3% +9% CAR CET1 297 202 14.4% 14.5% 181 12.9% 12.7% 11.8% 11.8% BDO MBT BPI Conglomerate Ownership in Peer Banks Ayala Corporation SM Investments 48.20% 40.08% 36.09% BPI BDO MBT BDO BPI Source: 17-A Rep
Slide 15: Metrobank Financial Highlights
Metrobank Financial Highlights CASA (Php Billion) Loans and Receivables (Php Billion) 846 950 +12% 1,265 +19% 1,061 FY 2016 FY 2017 FY 2016 FY 2017 Total Loan Portfolio Breakdown Consumer Loan Portfolio Breakdown Consumer Credit Cards 24% 21% Home +17% +19% 33% +8% Commercial Auto 76% 46% Growth rat
Slide 16: Metrobank to increase stake in Metrobank Card Corporation
Metrobank to increase stake in Metrobank Card Corporation Announced October 2017; subject to regulatory approvals Prior to acquisition Metrobank 60% ANZ Group 40% Post-acquisition Metrobank 100% Two tranches 20% for Php7.4B within 2017 20% remaining by 3Q 2018 1,500,000 Number One 32 years Part of A
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Slide 18: Philippine auto industry is the fastest-growing in ASEAN
Once again, the Philippine auto industry is the fastest-growing in ASEAN Car Production in Units (‘000) Domestic Sales in Units (‘000) End-Dec 2016 vs End-Dec 2017 End-Dec 2016 vs End-Dec 2017 1% +3% 1,809 1,832 +3% 994 +12% 975 1,130 1,089 767 +2% -7% 682 +16% 515 522 -7% 497 464 -17% +30% 325 380
Slide 19: CARS Incentives
Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Incentives 19
Slide 20: CARS Rationale and Regulations
Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Rationale and Regulations • Aims to provide a strategic enhancement program for the Philippine auto industry to increase local content from 30% to 60% • Manufacturing of model, body shell, large plast
Slide 21: CARS Program Updates
CARS Program Updates Comprehensive Automotive Resurgence Strategy Participating model Php1.03 billion Vehicle Php5.24 production 348 parts Confirmed as of July 2017 billion Total Toyota CARS Project Investment 91 Toyota suppliers Php4.21 Plan as of Sept 2017 30 Confirmed direct suppliers for the bil
Slide 22: CARS Program Updates: Out-house parts projects
CARS Program Updates Out-house parts projects BOI-registered auto parts partners Php495.9 Php520.0 million million Php94.5 VALERIE PRODUCTS MANUFACTURING, INC. Php167.2 million million OGIHARA (THAILAND) CO., LTD. TECHNOL EIGHT Php1.3 PHILIPPINES CORP. billion Aggregate Investments Source: The Phili
Slide 23: CARS Program Updates: In-house parts projects
CARS Program Updates In-house parts projects approved on 7 June 2017 Press parts (Body shell) Large plastic parts manufacturing Stamping die storage expansion at Press Shop • Machine installation/ trial 1H 2018 24 Nov 2017 – Inauguration of TMP’s new • Investment plan Php1.29 billion plastic molding
Slide 24: Factors in relation to industry car sales
Factors in relation to industry car sales Historically, gasoline prices have not had a significant correlation with Philippine industry car sales. More significant contributors to auto sales would be the affordability of car loan interest rates and the increase in Filipinos’ disposable incomes. 24
Slide 25: Industry car sales vs. PH GDP per capita
The Philippines is now enjoying the benefits of economic “motorization” Industry car sales vs. PH GDP per capita Units USD Motorization of the Philippine economy 500000 3500 450000 3000 400000 350000 2500 300000 2000 250000 200000 1500 150000 1000 100000 500 50000 0 0 2008 2010 2012 2014 2016 Indust
Slide 26: Retail auto unit sales volume
Retail auto unit sales volume As of December 2017 473,376 Industry growth 18% Y-o-Y 402,461 ▲ Toyota growth 183,908 158,728 ▲ 16% Y-o-Y 12M 2016 12M 2017 Industry Toyota Source: Company data, CAMPI, AVID 26
Slide 27: Overall Market Share
Toyota continues to be the Philippines’ dominant auto company Overall Market Share As of December 2017 39% No.1 No.1 No.1 Passenger Commercial Overall Car Sales Vehicle Sales Sales 16% 8% 8% 7% 6% 5% 4% Mitsubishi Hyundai 3% Ford Honda 1% 1% Isuzu Nissan 1% 1% Suzuki Others General Motors Kia Mazda
Slide 28: Auto Industry Market Share
Toyota continues to be the Philippines’ dominant auto company Auto Industry Market Share As of December 2017 Passenger Car Commercial Vehicle 41% 38% 16% 17% 14% 11% 11% 9% 6% 5% 6% 4% 4% 3% 4% 2% 2% 1% 1% 1% 1% 1% 1% 1% 0% Source: Company data, CAMPI, AVID 28
Slide 29: Toyota Financial Highlights
Toyota Financial Highlights Revenues Wholesale volume +13% 185.3 183,209 units; retail volume +16% 155.8 +19% Sales volume: (vs +18% industry growth) in Php Billion • Fortuner +39% Innova +35% Avanza +15% Hiace +6% Wigo +5% Fortuner, at 39,680 units sold, is the 2016 2017 best-selling vehicle
Slide 30: Toyota Dealership Expansion
Toyota Dealership Expansion Target by end of year 2013 2014 2015 2016 2017 Current 2018E Number of Dealerships 42 45 49 52 61 65 70 Expansion in Next Wave Cities outside Metro Manila Silang CAVITE Jan 2018 Calapan Mar 2018 ORIENTAL MINDORO 65 Dealerships as of 5 April 2018 Upcoming: Mabolo (Cebu), C
Slide 31: New Building
New Building • Inaugurated 19 Oct 2017 • The Philippines’ largest car dealership of any brand • Toyota Manila Bay Corp (TMBC) ownership: • 58% GT Capital • 42% Mitsui & Co. of Japan • TMBC owns 5 dealers: Manila Bay, Cubao, Marikina, Abad Santos, Dasmariñas • 7-storey building, with full service bay
Slide 32: Toyota Brand Attributes
Toyota Brand Attributes Globally trusted brand QUALITY, DURABILITY, RELIABILITY (QDR) Dealership network offering full range of services Availability of original parts, supplies and service Corporate policy of High resale value (up to 50% manufacturing original of original selling price for 5 parts
Slide 33: Price Comparable by Category (PHP)
Price Comparable by Category in Million Philippine Peso (PHP) In Million PHP Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 1.705 1.896 1.884 1.904 Model Altis Elantra Civic Lancer Price 0.941 1.466 0.965 1.178 1.138 1.663 0.928 1.238 Model Vios Accent City Mirage G4 Price 0.629 0.968 0.69
Slide 34: Price Comparable by Category (USD)
Price Comparable by Category in United States Dollars (USD) Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 33,998 37,807 37,567 37,966 Model Altis Elantra Civic Lancer Price 18,764 29,232 19,242 23,490 22,692 33,161 18,504 24,686 Model Vios Accent City Mirage G4 Price 12,542 19,302 13,759
Slide 35: Federal Land
GT CAPITAL HOLDINGS INCORPORATED *.. ) Jaga FEDERAL LAND GT Capital Holdings KEEPING YOU IN MIND
Slide 36: Growing tourist arrivals will help Federal Land's hotel business
Growing tourist arrivals will help Federal Land's hotel business Foreign Visitor Arrivals to the Phi @ 7 ) 66 million foreign visitors in 2017 Fo 80% 2 70% 9 5 2 3 60% & § 4 50% 2 5 23 40% 2 < 30% 8 = 2? 20% & 3 a £1 10% § s ree mae ; a, 1 Blow 2 5 2 ann SSRSA*edanyween $ 88ssssss SSSS85sgqsg Rae RA
Slide 37: Federal Land Financial Highlights
Federal Land Financial Highlights Revenues Reservation Sales +37% from Php12.7B to Php17.4B 9.9 11.3 +14% - Inventory -26% from 1,734 units to 1,272 units (5 mos. of sales) in Php Billion 0.2 +17% 9.7 core - Only 4 new projects were launched due to delays in securing permits Core Non-core and
Slide 38: Federal Land Current Projects
Federal Land Current Projects 30 On-going Projects 8 Different Locations • 7 launched in 2011 • 11 launched in 2012 • 6 cities within Metro Manila • 5 launched in 2013 • 2 cities outside Metro Manila • 4 launched in 2014 Recurring Income at 9% of total revenue • 3 launched in 2015 • 4 launched in 20
Slide 39: Sunshine Fort
Sunshine Fort at the Grand Central Park, Bonifacio North • Total project cost: USD400 million • Located within 10- hectare Grand Central Park • JV between Federal Land, Nomura Real Estate • Isetan Mitsukoshi as anchor tenant and O&M partner 39
Slide 40: Land Bank Location
Land Bank Location Land Bank Metro Manila Location (in hectares) Macapagal Quezon City Paco Manila Marikina 1. Metro Manila Ermita, Manila Fort Bonifacio (a) Macapagal 29.5 Mandaluyong (b) Fort Bonifacio 6.6 Makati City Binan Laguna (c) Marikina 15.6 Binondo Manila (d) Mandaluyong 3.5 Cavite (e) Man
Slide 41: FIABCI Philippines Gold Award
FIABCI Philippines Rising2017 Gold Award Together FOR OUTSTANDING DEVELOPER to New Heights • Gold Award for Outstanding Developer in the Residential High Rise category during the 2017 FIABCI Real Estate Awards for the Grand Midori Makati • FIABCI is the Federation Internationale des Administrateurs
Slide 42: Pro-Friends
GT CAPITAL HOLDINGS INCORPORATED PRO «FRIENDS PROPERTY COMPANY OF FRIENDS, INC. Creating communities, transforming lives.
Slide 43: New developments in Cavite
New developments in Cavite LRT1 Extension C5 South Link to Cavitex CALA Expressway (CALAX) • Metro Pacific signed • Expansion of Cavitex • Ongoing preparation of engineering, procurement, project detailed engineering and construction (EPC) design agreement - signed • Groundbreaking was in • Right-of
Slide 44: Property Development Sweet Spot
The Low-Cost Property Sector Property Development Sweet Spot Surplus/ Price Range % to Total Segment Demand Supply Segment (Deficit) PHP USD Households Socialized 1,146,275 551,109 (595,166) Socialized <400k <9k 23.0 Economic 2,509,271 618,542 (1,890,729) Economic 400k – 9k – 28k 66.3 1.25m Low cost
Slide 45: Map of Lancaster New City
6 NLEX-SLEX Connector Road Skyway Extension NAIA Expressway Entertainment City 4 2 Cavitex C-5 South Link LRT-1 1 CALAX 3 Extension Alabang 1,700 hectares Daang-Hari MCX SLEX EPZA CALAX Exit LRT-6 5 Aveia Federal Land/ EPZA Alveo 45
Slide 46: PRO-FRIENDS Financial Highlights
PRO-FRIENDS Financial Highlights Reservation Sales, 2015-2017 Real Estate Sales, 2015-2017 12 to 18 months lag from RES to Booked Sales Deliberate RES slowdown in 2016 to catch up on house 21.7 due to equity & POC buildup construction* +71% 12.2 *12.7 in Php Billion in Php Billion 6.7 6.7 6.3 2015 2
Slide 47: PRO-FRIENDS Financial Highlights
PRO-FRIENDS Financial Highlights Revenues Reservation sales +71% from Php12.7B to Php21.6B (Php1.8B per month) 7.4 -6% Real estate sales -6% from Php6.7B to Php6.3B in Php Billion 0.7 6.9 0.6 FY bank takeout Php7.8B (ave. of 6.7 6.3 Other Income Php650M/mo) RES FY houses built 5,537 unit
Slide 48: AXA Philippines
GT CAPITAL @ HOLDINGS INCORPORATED y
Slide 49: Insurance Industry Updates
Insurance Industry Updates As of 31 December 2017 Total Assets Total Equity (Net Worth) +19% +17% in Php Billion in Php Billion 1,486 289 1,245 222 246 176 +26% 87 77 +13% 169 +20% 202 1,069 +18% 1,264 2016 2017 2016 2017 Total Premiums in Php Billion +10% Legend 246 289 Life insurance sector 79 +9%
Slide 50: Philippines one of the fastest-growing insurance markets
The Philippines is one of the fastest- growing insurance markets in the world Projected 10-year CAGRs of industry-wide life insurance premiums by country Top 15 fastest growing markets, 2017-2025 % CAGR UAE 10 Indonesia 9.2 Philippines Philippines 9.1% China 8.8 Brazil 8.1 Colombia 7.2 Mexico 6.9 Th
Slide 51: Strong synergy and growth
Strong synergy and growth • Persistency Ratio: 84.2% from 82.7% in 2016 • Exclusive financial advisors: 3,665 • Total bancassurance (Metrobank and PSBank) branches: 952 Assets Under Management +27% 107.2 84.6 In Billion PHP 2016 2017 51
Slide 52: AXA Financial Highlights
AXA Financial Highlights Gross Premium Life: New Business (APE) +27% from Php5.0B to Php6.3B 31.6 +20% oo Regular Premium (RP) +29% in Php Billion 26.3 Single Premium (SP) +20% 21.6 26.4 Life +22% Non-Life: Gross written premium +16% 5.3 Non-Life+13% Php4.9B to Php5.7B 4.7 o Motor +36% 2016
Slide 53: Metro Pacific Investments
PACIFIC Ms INVESTMENTS
Slide 54: Strategic Partnership Agreement between GTCAP and MPI
Rising Together Strategic Partnership to New Heights Agreement between GT Capital (GTCAP) and Metro Pacific (MPI) Two transactions signed on 27 May 2016 1. Sale of 56% of Global Business Power Corp. (GBPC) to Beacon PowerGen Holdings, an associate of MPI, for Php22.0 billion 2. Acquisition of 15.55%
Slide 55: Sell-Side: Sale of 56% GBP stake to MPI
GTCAP-MPIC Strategic Partnership Sell-Side: Sale of 56% GBP stake to MPI 51.3% of GBPC 4.7% of GBPC Php39.39 billion total equity value of GBPC Beacon PowerGen Holdings, Inc., a subsidiary of Beacon Electric Asset Holdings, Inc., an associate of 55
Slide 56: Buy-Side: Acquisition of 15.55% of MPI
GTCAP-MPIC Strategic Partnership Buy-Side: Acquisition of 15.55% of MPI 15.55% Php22 11.43% 4.12% Php7.9 billion 3.6 billion 1.3 billion billion Primary Common Shares Secondary Common Shares Cash Paid Cash Paid on 27 May 2016 on 2 June 2016 4.9 billion shares at Php 6.10 per share 56
Slide 57: Accounting Criteria for Significant Influence
Accounting Criteria for “Significant Influence” Two board seats Joint selection of an Independent Director Representation in board committees Entitled to nominate 1/3 members in each of the: Audit, Risk Management, Corporate Governance committees Veto rights on certain corporate acts: declaration/pa
Slide 58: GTCAP-MPIC Strategic Partnership Rationale
GTCAP-MPIC Strategic Partnership Rationale • Diversification of power investments in the Visayas into the high-growth infrastructure and utilities sectors • Many of MPIC’s ongoing PPP projects are in Cavite, home to Pro-Friends’ Lancaster New City • Set up of Logistics subsidiary (MetroPac Movers, I
Slide 59: Metro Pacific Financial Highlights
Metro Pacific Financial Highlights Operating Net Income MPIC’s share: 15.1 17.8 +18% Power +30% Php9.4B Water +5% Php3.7B in Php Billion 0.28 Tollways +11% Php3.9B Logistics / Indra 0.27 0.7 0.6 LRMC/AFPI Hospitals +16% Php0.7B 7.2 9.4 Hospitals 3.5 3.9 Meralco/Beacon/GBPC 3.6 3.7 MPTC Rai
Slide 60: Sumisho Motor Finance Corporation
Sumisho’) Motor Finance Corporation Whi4 An affiliate of PSBank and Sumitomo Corporation
Slide 61: Philippines is ASEAN's fastest-growing motorcycle market
The Philippines is ASEAN’s fastest-growing motorcycle sales and manufacturing market Domestic Sales in Units (‘000) Philippine Motorcycle Sales End-Sept 2016 vs End-Sept 2017 In Millions of Units 2.83 2.46 -5% 2.11 4563 4340 1.80 -9% 9% +14% 1.14 1.46 10% 328 836 957 1350 1235 0.70 0.75 0.79 0.85 6
Slide 62: GT Capital enters motorcycle financing through acquisition of Sumisho
GT Capital enters motorcycle financing through acquisition of Sumisho Evolution of motorization acquired As GDP per capita expands, More people want to own their 20% of own vehicle from More motorcycle owners shift from two-wheelers to four wheelers for Php379.9 million Sumisho acquisition is a
Slide 63: Philippine Administration Agenda
Philippine Administration Agenda Continue stable Increase PH’s Relax constitutional Increase macroeconomic competitiveness restrictions on infrastructure policies and the ease of foreign ownership, spending to 9% doing business except for land of GDP by 2022 Boost rural Ensure security Develop human
Slide 64: Macroeconomic Indicators
Macroeconomic Indicators Foreign direct investments Benign inflation USD9.4 billion FY 2017 3.2% ▲18% from 7.9 billion Y-o-Y as of year-end 2017 Gross international reserves Population USD81.6 billion 104.9 million end-2017 External Debt-to-GDP 11 million OFWs remitting 24.5% as of end-2017 USD30.8B
Slide 65: Macroeconomic Indicators
Macroeconomic Indicators Household Consumption as % of GDP As of FY 2017 28.6% Consumption Government 10.5% 68.7% Investments Household Consumption +6% In USD Billion Year-on-Year 115.2 99.5 105.7 108.9 89.2 94.2 GDP Per Capita 5-year CAGR: +4%; PH now in motorization ($3,000<) $2,880 $2,947 $3,008
Slide 66: Rising Together to New Heights
Rising Together to New Heights 66