Slide 1: Wilcon Depot, Inc. Nine Months 2018 Performance Report
Wilcon Depot, Inc. Nine Months 2018 Performance Report November 2018 1
Slide 2: Discussion Agenda
Discussion Agenda 1 Company Overview 2 Strategy Overview 3 Financial Results 4 Outlook 2
Slide 3: Company Overview
S E CTI O N 1 Company Overview 3
Slide 4: Leader in the home improvement and construction supply retail space in the Philippines
Leader in the home improvement and construction supply retail space in the Philippines; 41 years in operation One-stop shop offering the complete spectrum of home improvement products Strong line-up of quality, value-priced in-house brands Exclusively carries a number of renowned international and l
Slide 5: Brief Background
Brief Background 2017 - Present • Initial public offering of WDI • Roll out of the five-year 29-depot expansion plan 2009 - 2014 • Major re-branding / Evolution of Wilcon logo and brand • Re-conceptualization of the smaller-sized stores 2015 - 2016 into a separate format labeled “Home Essentials” •
Slide 6: Store Formats
Store Formats DEPOT HOME ESSENTIALS No. of stores 41 8 • 2,800 sqm to 16,100 sqm, with • 740 sqm to 2,800 sqm, with an Net Selling Space an average net selling space of average net selling space of 8,700 sqm 1,600 sqm *as of October 23, 2018 6
Slide 7: Store Network & Presence
Store Network & Presence Wilcon operates 49* stores strategically located in dominant markets and in fast- growing cities nationwide. Luzon ex-Metro Manila – 22 stores Visayas – 6 stores: 5 depots/ 1 HE Mindanao – 4 stores 7
Slide 8: 9M18 New Store Openings
9M18 New Store Openings Libis Home Essentials Mar 9 Silang – May 4 Lipa – Jul 27 General Trias – Nov 23 Iloilo Home Essentials – Jun 30 Naga – Jun 29 Zamboanga – Aug 10 Tacloban – Apr 20 8
Slide 9: Major Categories and Select Brands
Major Categories and Select Brands 9
Slide 10: Strategy Overview
S E CTI O N 2 Strategy Overview 10
Slide 11: Key Growth Strategies: Expand Store Network
Key Growth Strategies 1 Expand Store Network Solidify presence in existing markets Expand foothold in fast-growing cities with focus on Visayas and Mindanao regions Target to open 29 depot branches from 2017 to 2021 (accelerated to 2020) Target locations are , Batangas, Davao, General Santos
Slide 12: Key Growth Strategies: In-house and Exclusive Brands
Key Growth Strategies 2 Focus on continuous expansion of in-house and exclusive brands Enhance the Company’s ability to provide its customers with value for money products Rationalize product offerings In-house brands Select Exclusive brands 12
Slide 13: Key Growth Strategies: Improve Store Layouts and Product Offering
Key Growth Strategies 3 Continually improve store layouts and product offering Improve and renovate existing stores to enhance overall shopping experience. Remodel store layouts by optimizing and/or expanding the sales floor areas of existing stores to improve visitor traffic 13
Slide 14: Key Growth Strategies: Brand Awareness and Visibility
Key Growth Strategies 4 Further strengthen and increase brand awareness and visibility Tap various media outlets such as radio, newspapers, billboards, and social media to enhance customer’s awareness Use brand ambassadors to represent the Company’s products and brands Actively participate in
Slide 15: Financial Results
S E CTI O N 3 Financial Results 15
Slide 16: Results Highlights
Results Highlights For the Nine-Month Period ended September 30, 2018 • Net Income grew 24.3% year-on-year to P1.390 billion for a net margin of 9.0% driven by: • Net Sales growth of 17.9% year-on-year to P15.359 billion with a comparable sales growth of 8.2% • Gross profit margin expansion to 31.3%
Slide 17: Net Income grew 24.3% to P1.39 B
Net Income grew 24.3% to P1.39 B (Nine Months ended Sep 30, 2018) (In PHP MM) 9M18 % Sales 9M17 % Sales % Growth Net Sales up 17.9% NET SALES 15,359 100.0 13,027 100.0 17.9 COST OF SALES 10,551 68.7 9,101 69.9 15.9 GPM expanded to GROSS INCOME 4,808 31.3 3,926 30.1 22.5 31.3% OPERATING EXPENSES -3,1
Slide 18: Net Income grew 33.8% to P475 M
Net Income grew 33.8% to P475 M (Third Quarter 2018) (In PHP MM) 3Q18 % Sales 3Q17 % Sales % Growth Net Sales up 17.8% NET SALES 5,358 100.0 4,549 100.0 17.8 COST OF SALES 3,679 68.7 3,180 69.9 15.7 GPM expanded to GROSS INCOME 1,679 31.3 1,369 30.1 22.7 31.3% OPERATING EXPENSES -1,105 -20.6 -938 -2
Slide 19: Balance Sheet
Balance Sheet (In Php MM) Unaudited Sept 30, 2018 Audited Dec 31, 2017 Current Assets 11,165 11,748 Noncurrent Assets* 5,535 4,277 Total Assets 16,700 16,024 Current Liabilities 3,803 3,725 Noncurrent Liabilities 125 381 Total Liabilities 3,928 4,106 Capital Stock 4,100 4,100 Additional Paid-in Capi
Slide 20: Healthy Sales Growth
Healthy Sales Growth Net Sales 17,748 15,965 15, 359 4,720 17.9% 4,236 13,027 5,358 11,729 4,549 4,054 5,296 4,296 4,008 3,667 4,182 4,705 2016 2017 9M18 1Q 2Q 3Q 4Q 20
Slide 21: Total Net Sales Breakdown
Total Net Sales Breakdown Amounts in PhP Millions 9M18 Home Projects; Essentials; 215; 1% 462 ; 3% - Home Essentials; 410 ; 3% 9M17 Projects; 358 ; 3% ales (Php Millions) erage Ticket Size (Php) ales Transactions ('000) PRODUCT CATEGORY PERFORMANCE 9M18 VS 9M17 Hardware & Tools Tiles & Flooring Pain
Slide 22: Comparable Sales Summary
Comparable Sales Summary COMP AVE TICKET / Comp Sales per Format TRANSACTIONS 22.2 Ticket Transactions 30.0 9.6 11.1 20.0 5.5 6.4 10.0 9M18 5.0 3.1 - -10.0 Depot Home Essentials Projects -20.0 -40.0 -30.0 9M17 3.1 2.7 -40.0 9M17 9M18 22
Slide 23: Improving Margins
Improving Margins Effective product mix strategy: Expansion of contribution to 29.7% 31.3% net sales to 46.6% of the higher-margin in-house and 26.8% GPM exclusive brands • Faster than expected ramp up 13.3% 11.0% of most of the stores opened in 9.0% EBITDAM 2017 and 1H18 • Marketing initiatives 12.
Slide 24: Outlook
Outlook 24
Slide 25: 2018 to 2020 Store Expansion Plan
2018 to 2020 Store Expansion Plan 2018 2019 IH Libis (HE) - Mar 9 Panacan, Davao Tacloban - Apr 20 Sta. Barbara, Iloilo Silang - May 4 Opol, CDO Naga - Jun 29 Sto. Tomas, Batangas Iloilo (HE) - Jun 30 Antipolo City 2H Lipa - Jul 27 Commonwealth Zamboanga - Aug 10 Tagum, Davao City Tayabas – Oct 5 Tu
Slide 26: Continue to increase margins thru in-house & exclusive brands expansion
Continue to increase margins thru in- house & exclusive brands expansion 26
Slide 27: Disclaimer
Disclaimer This presentation does not constitute a prospectus or any kind of offering memorandum in whole or in part. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company. There shall be no sale of these securities in any state o