First Pacific Co. Ltd. · HKEX:142

First Pacific — FY2018 Earnings Presentation

37 slides from First Pacific's earnings presentation, May 15, 2019

  1. Slide 1: First Pacific Full-Year 2018 Results

    Copyright © First Pacific Company Limited 15 May 2019. All rights reserved.

  2. Slide 2: First Pacific Holdings by Sector

    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: Senior Management of First Pacific

    Senior Management of First Pacific Joseph H.P. Ng Chris H. Young Manuel V. Pangilinan John W. Ryan Ray C. Espinosa Associate Director Executive Director & CFO Managing Director & CEO Associate Director Associate Director Richard P.C. Chan Peter T.H. Lin Stanley H. Yang Marilyn A. Victorico P. Vargas

  4. Slide 4: Gross Asset Value of $5.43 Billion

    Gross Asset Value of $5.43 Billion Investment Objectives Roxas Holdings $29 mln (0.5%) o Unlock value, enhance cash flows to deliver Philex dividend/distribution returns, grow share price, and Group finance further investment in value-enhancing $223 businesses, taking into consideration all relevant

  5. Slide 5: $31.6 Bln of Major Assets Represented in Portfolio

    $31.6 Bln of Major Assets Represented in Portfolio Philex Group $6 Plantations & Sugar $1.35 bln Diversified Portfolio, Strong Returns o Balanced weighting of mature and growth investments 01 o Balanced weighting of different sectors mln PLDT ICBP o 15 years of growth: Gross Asset Value grew at a co

  6. Slide 6: Renewed Focus on Core Assets

    Renewed Focus on Core Assets Core Assets Are Engines of Growth Diverse Emerging ASEAN Portfolio o First Pacific’s key investments are based in the fast- o Our Hong Kong-based investment management and growing economies of Southeast Asia, a region we know holding company has developed three core asse

  7. Slide 7: Turnover Rises to Record; Net Profit up 9%

    Turnover Rises to Record; Net Profit up 9% Currencies, Commodities Hold Back Contribution 2018 Free Cash Flow (USD mln) 350 202.9 o Turnover rose 6% to $7.74 billion vs. $7.30 billion on higher 300 sales at MPIC and PLP 250 o Contribution from operations fell 6% to $393.9 million vs. 200 (71.2) 7.5

  8. Slide 8: Headline Group Data FY 2018 & End-December

    Headline Group Data FY 2018 & End-December (USD mln) Core Core Gross Net Cash Interest Total Turnover Profit/(Loss) Debt/(Cash) On Hand Gearing EBITDA Debt Cover Equity PLDT 2,927 1,215 491 3,353 2,348 1,005 1.06 5.5 2,219 MPIC(i) 1,576 717 286 4,091 3,084 1,007 0.68 4.3 4,546 MPIC - Head Office 183

  9. Slide 9: Interest Bill Reduced Following Tender & New Bond

    Interest Bill Reduced Following Tender & New Bond Head Office Balance Sheet as at end-2018 Head Office Bond Issues at a Glance o Cash and banking facilities in hand to refinance 2019 bond; 2020 bond repayment to come from Goodman Principal Coupon Price* Term Maturity Fielder sale proceeds US$215 mln

  10. Slide 10: Sustainability Matters Rise in Importance

    Sustainability Matters Rise in Importance Working to Improve Governance Score at First Pacific First Sustainability Reports Published o First Pacific has a QualityScore rating of 6 from Institutional o First Pacific’s inaugural ESG Report covered the 2016 financial Shareholder Services year, met SEH

  11. Slide 11: Revenues Rise; Agribusiness Holds Back Profit

    Revenues Rise; Agribusiness Holds Back Profit 2018 Financial Highlights Revenues & Core Income (USD mln) 6,000 5,350 o Revenues rose 5% to IDR73.4 trillion vs. IDR70.2 trillion 5,237 5,136 5,004 on stronger sales in every unit except Plantations and 5,000 4,763 Distribution 4,000 o Core income decli

  12. Slide 12: Sales Growth Led by Noodles, Dairy

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

  13. Slide 13: Lower CPO Prices Impacts Earnings

    Lower CPO Prices Impacts Earnings 2018 Financial Highlights External Sales & Net Profit/(Loss) (USD mln) 1,400 1,259 o External sales fell 11% to IDR14.06 trillion vs. IRD15.73 1,173 trillion in 2017 mainly due to lower sales at the Plantation 1,200 1,091 1,029 984 Division, partly offset by sales g

  14. Slide 14: Surge in Data Revenues Heralds Turn-Around

    Surge in Data Revenues Heralds Turn-Around 2018 Earnings Highlights Revenues & Core Income (USD mln) 4,000 3,712 o Service revenues (net) rose 2% to ₱154.2 billion 3,298 3,500 3,572 due to strong growth in the main Individual, 3,000 2,927 3,000 Enterprise and Home segments, offset by sharply 2,500 l

  15. Slide 15: Data Service Revenues Continue Driving Earnings

    Data Service Revenues Continue Driving Earnings Surging Revenues at Main Businesses Individual Service Revenues (PHP bln) 19 o Data and broadband remain the growth 17 drivers of the Home, Enterprise and 15 Individual segments representing 75%, 13 64% and 60% of total service revenues 11 within each

  16. Slide 16: Capex Delivers Competition-Clearing Experience

    Capex Delivers Competition-Clearing Experience PLDT Network Is the Country’s Best, Say Observers Download Speed Experience (Mbps) o 2019 capex budget of ₱78.4 billion to expand PLDT’s network lead and accelerate expansion of home Smart broadband offerings Globe o Independent industry observers agree

  17. Slide 17: MPIC: Toll Roads, Electricity, Water, Hospitals

    Toll Roads Electricity Water Hospitals Rail/Logistics/AFP 29%-100% stakes 46% & 62% stakes* 53%-100% stakes 60% 20%-99% stakes 100% 14 Hospitals Light Rail Manila 3 Primary Care Clinics 55% 35% § Largest healthcare provider in the Philippines 10.5% § Present in all major island groups 56% 14% § Larg

  18. Slide 18: Strong Results Continue

    Strong Results Continue 2018 Earnings Highlights Outlook o Contribution from operating companies rose 10% to ₱19.6 o Continuing strong demand growth for MPIC services seen billion vs. ₱17.8 billion on double-digit growth from Power, continuing to lift revenues; core income growth to be limited Toll

  19. Slide 19: Strong Power Business Drives Dividends

    Strong Power Business Drives Dividends 2018 Earnings Highlights & Outlook: Meralco Distribution Revenues & Core Income (USD mln) 1,400 o Distribution revenues rose 4% to ₱62.0 billion vs. 1,269 1,207 1,183 1,177 ₱59.6 billion on higher volume sold, offset in part by 1,200 1,144 lower distribution ta

  20. Slide 20: Roads & Water Businesses Strong; Tariff Issues Remain

    Roads & Water Businesses Strong; Tariff Issues Remain 2018 Earnings Highlights & Outlook: Toll Roads Revenues & Core Income (USD mln) 350 o Revenues rose 18% to ₱15.5 billion vs. ₱13.1 billion on strong 294 300 traffic growth and add-on toll rate on NLEX closed system 239 260 250 from November 2017

  21. Slide 21: Lower Costs & Grades, Higher Prices

    Lower Costs & Grades, Higher Prices 2018 Earnings Highlights Revenues & Core Income (USD mln) 300 o Operating revenues fell 17% to ₽8.3 billion vs. ₽10.0 billion as a 245 result of lower metal production offset in part by a weaker Peso 250 215 201 198 o Cash production cost fell 3% to ₱2.12 billion

  22. Slide 22: Appendix

    Appendix Shareholder Information Selected Financial Data

  23. Slide 23: Contribution and Profit Summary

    Contribution and Profit Summary Contribution to Turnover Group profit(i) For the year ended 31 December 2018 2017 2018 2017 US$ millions Indofood 5,136.1 5,237.5 134.7 148.0 PLDT(ii) - - 120.7 124.8 MPIC 1,575.8 1,240.8 120.9 118.3 FPW(iii) - - 21.2 30.3 Philex(ii) - - 2.9 12.7 FPM Power 728.6 565.4

  24. Slide 24: Head Office Free Cash Flow

    Head Office Free Cash Flow(i) For the year ended 31 December 2018 2017 US$ millions Dividend and fee income 202.9 185.5 Head Office overhead expense (26.2) (26.5) Net cash interest expense (71.2) (72.4) Tax paid (3.6) - Net cash inflow from operating activities 101.9 86.6 Net investments(ii) (32.9)

  25. Slide 25: Group Net Debt and Gearing

    Group Net Debt and Gearing Consolidated At 31 December 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 1,550.2 2,039.7 0.76x 1,521.8 1,837.7 0.83x Indofood 1,444.7 3,456.1 0.42x 784.6 3,485.2 0.23x MPIC 3,083

  26. Slide 26: Adjusted NAV per Share

    Adjusted NAV per Share At At 31 December 31 December 2018 2017 US$ millions Basis Indofood (i) 2,261.7 2,474.2 PLDT (i) 1,182.0 1,637.5 MPIC (i) 1,166.9 1,814.1 Philex (i) 134.1 276.9 PXP (i) 160.6 88.6 FPW (ii) 325.0 554.0 FPM Power (iii) 230.0 230.0 FP Natural Resources (iv) 36.5 58.5 Head Office

  27. Slide 27: Proven Track Record in the Capital Markets

    Proven Track Record in the Capital Markets 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

  28. Slide 28: Shareholding Structure of the Company

    Shareholding Structure of the Company Shareholder Breakdown Institution Mln Shares 1 Brandes Investment Partners 348 8.0% 2 Lazard Asset Management 170 3.9% 3 Marathon Asset Management 81 1.9% 4 M&G Investment Management 80 1.9% All 5 Maple-Brown Abbott 66 1.5% Others 6 Dimensional Fund Advisors 63

  29. Slide 29: Insider Ownership & Institutional Shareholder Statistics

    Insider Ownership & Institutional Shareholder Statistics Shareholder Analysis at First Pacific Directors’ Total Interest o FPC has engaged IPREO since the autumn of 2012 to Shares Options provide details of institutional share ownership of First Anthoni Salim NED, Chairman 1,925,474,957 - Pacific Ma

  30. Slide 30: Turnover, Coverage & Shareholder Geography

    Turnover, Coverage & Shareholder Geography Very Active 0.8% Turnover Price Targets for First Pacific (HKD/Share) N/A 1.1% High 6% Rating Date Target Citigroup Buy 26 Mar 2019 $4.00 Medium CLSA Outperform 27 Mar 2019 $3.25 17% Low Average $3.63 75% Earnings Forecasts (USD mln) Holding periods: 2019 2

  31. Slide 31: Institutional Shareholder Data Over Time

    Institutional Shareholder Data Over Time 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Value 40% 41% 44% 45% 44% 43% 45% 47% 45% 45% 44% 43% 42% 43% 33% 31% Deep Value 17% 18% 20% 20% 20% 20% 19% 18% 18% 16% 16% 16% 16% 18% 25% 26% Growth 20% 18% 11% 11% 11% 12% 11%

  32. Slide 32: FPC's Economic Interest

    FPC’s Economic Interest 42.0% 25.6% 50.1% (%) 19 .3% .1% 40 % .4 31 26 .2 .6% % 47 .3% 26 22.2% 15.9% 42.0% 11.0% 41.9% 50.0% 50 % .0% 1 2.4 46 % .2 .9 % 31 23.1% 42 .4% 41.6% 25.2% 32

  33. Slide 33: Notes

    Notes

  34. Slide 34: Notes

    Notes

  35. Slide 35: Notes

    Notes

  36. Slide 36: Important Notice

    IMPORTANT NOTICE 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 re

  37. Slide 37: Contact Us

    Contact Us 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 37

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