D.m. Wenceslao & Associates, Inc. · PSE:DMW
D.m. Wenceslao & Associates — Investor Presentation (June 2018)
48 slides from D.m. Wenceslao & Associates's investor presentation, June 2018
Slide 1: D.M. Wenceslao & Associates, Incorporated Management Presentation June 2018
D.M. Wenceslao & Associates, Incorporated (“DMW”) Management Presentation June 2018
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL By reading these materials, or attending the meeting where this presentation is made, you agree
Slide 3: Table of Contents
Table of Contents Section 1. DMWAI at a Glance 2. Key Investment Highlights 3. Business Strategies 4. Financial Highlights Page 2
Slide 4: DMWAI at a Glance
DMWAI at a Glance }D.M. WENCESLAO "J AND ASSOCIATES, INCORPORATED Page 3
Slide 5: DMWAI at a Glance
DMWAI at a Glance We are an integrated property developer with an established track record and market-leading capabilities in land reclamation, construction and real estate development Commercial Property Land Sales and Land 1 Building Leasing 2 Development 3 Leasing 4 Reclamation 5 Construction 7
Slide 6: Key Milestones – Demonstrating Execution Track Record
Key Milestones – Demonstrating Execution Track Record 2017 Pixel Residences fully pre-sold 2016 Completion of construction of 1979 Aseana Square Pixel Residences starts Undertook pile driving Additional Ayala Land agreements pre-selling activities works for Frabel Industrial to lease land si
Slide 7: Key Investment Highlights
Key Investment Highlights Page 6
Slide 8: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 9: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 10: Aseana City – Conveniently Located and Anchored by Tourism, Recreational Developments and Retail Malls
Aseana City – Conveniently Located and Anchored by Tourism, Recreational Developments and Retail Malls Aseana City Located along the shoreline of Manila Bay bordering Pasay City and extending east to Ortigas CBD (<12km) Roxas Boulevard within Parañaque City Extensive Transport Network 5 – 10 min
Slide 11: A Strategic and Sizeable Land Bank in Aseana City
A Strategic and Sizeable Land Bank in Aseana City Remaining Land Reserves (327,034.5 sq.m.) Land Used/Allocated for Development Land Allocated for (242,086.8 sq.m.) Future Sales (10,000 sq.m.) Completed Land Allocated for Properties Future Leases (36,659.0 sq.m.) (25,000 sq.m.) Land Leased/Developed
Slide 12: DMWAI’s Land Holdings, Completed Properties and Pipeline Projects in Aseana City
DMWAI’s Land Holdings, Completed Properties and Pipeline Projects in Aseana City Owned Land Holdings Completed Properties(1) Pipeline Properties Land area (sq.m.) Total leasable floor area (sq.m.) Leasable/saleable floor area (sq.m.) Roads and Parkside Place 2 Aseana right of Land Aseana Town Three
Slide 13: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 14: Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation
Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and Profitability Land secured at low cost relative to current market prices as it was obtained in consideration of our land reclamation services Valuation per sq.m. (PHP’000 per sq.m.) 575.0 560.5 53
Slide 15: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 16: An Integrated Master Developer with Competitive Advantages across Business Lines
An Integrated Master Developer with Competitive Advantages across Business Lines Integrated master developer covering the entire value chain - land creation, infrastructure construction and property development Capital recycling for future growth Our Current Focus Construction Land sale For sales La
Slide 17: Land Reclamation and Construction
Land Reclamation and Construction Licensed AAAA contractor with established track record and proven abilities One of the top national construction companies in land reclamation, having reclaimed c.2,424,834 sq.m. of land to date Completed more than 100 projects including large scale and complex gove
Slide 18: Land Sales and Leasing
Land Sales and Leasing Revenue from Land Sales and Rentals (PHP mm) 1 Land Sales Starting 2016, we have successfully negotiated with our land 2,007.7 buyers to pay the consideration in full upon signing of the purchase agreement 1,088.3 Development plans to comply with our master plan and submitted
Slide 19: Commercial Building Leasing
Commercial Building Leasing Aseana One and Aseana Two Highly flexible in specifications PEZA-accredited, suited for BPOs and logistics companies Aseana One (93.5% leased out); Aseana Two (98.2% leased out)(1) Tenants include: Aseana One Aseana Two Completed Properties in Aseana City(2) Tot
Slide 20: Property Development
Property Development Aseana Three / Four / Five / Six Aseana Three was fully leased out and 95% completed as at December 31, 2017 Targeted at BPOs, logistics companies and gaming and tourism-related companies Located near Ayala Land’s mall development which includes a transport terminal PEZA
Slide 21: Property Development (Cont’d)
Property Development (Cont’d) Pixel Residences Parkside Place 1 & 2 (Oct 2019) (Jun 2021 & Sep 2022) Pixel Residences Designed by Spark Architects in collaboration with Casas Architects Fully sold out with unrecognized revenue of PHP1,861 mm as of December 31, 2017 Residential Developments Str
Slide 22: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 23: A Diversified Earnings Base with Substantial and Recurring Revenue Streams
A Diversified Earnings Base with Substantial and Recurring Revenue Streams Increasing Land Leasing Revenues Due to Scarcity of Leasable Land in Metro Manila (In PHP mm) 919.4 Leasing of 860.5 803.2 Land Holdings 2015 2016 2017 Increasing Building Leasing Revenues with Strong Office Demand in Manila
Slide 24: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 25: Proven Expertise and Management Track Record
Proven Expertise and Management Track Record Long history Over 50 years of experience in the construction industry Licensed by the Philippine Licensing Board as a “AAAA" contractor (highest classification by PCAB) – High credibility less than 20 construction companies in the Philippines have this di
Slide 26: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 27: A Strong Financial Position Based on Prudent Financial Management
A Strong Financial Position Based on Prudent Financial Management Support from Leading Local Financial Net Debt(1) (PHP mm) Debt to Equity(2) (%) Institutions 42% 2,239 1,848 33% 26% 1,046 2015 2016 2017 2015 2016 2017 Healthy borrowing profile and conservative funding strategy for land sales DMWA
Slide 28: Key Investment Highlights
Key Investment Highlights 1 A Strategic and Sizeable Land Bank in Aseana City that is Well Positioned for Future Growth Favorable Acquisition Costs for Our Land Holdings Provide a Solid Foundation for Value Appreciation and 2 Profitability 3 An Integrated Master Developer with Competitive Advantages
Slide 29: Well-positioned to Benefit from Strong Macroeconomic Fundamentals (1/3)
Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (1/3) 1 Robust GDP and Population Growth 2 Improving Investment Grade Ratings Population (mm) Rating 91.1 92.3 94.0* 95.6* 97.4* 99.1* 101.6* 103.2* 104.9* Baa2/BBB Baa3/BBB- 7.7% 6.8% 7.1% 6.9% 6
Slide 30: Well-positioned to Benefit from Strong Macroeconomic Fundamentals (2/3)
Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (2/3) Robust Demand for Office Space in Metro Manila 1,000,000 12.0% 10.3% 10.0% Percentage Growth 800,000 9.1% 7.6% 8.0% sq.m. 600,000 6.0% 400,000 5.3% 4.0% 200,000 2.0% 0 0.0% 2008 2009 2010 20
Slide 31: Well-positioned to Benefit from Strong Macroeconomic Fundamentals (3/3)
Well-positioned to Benefit from Strong Macroeconomic Fundamentals and Attractive Industry Growth Trends (3/3) Strong Growth in Average Price per sq.m. in Manila Bay’s Primary Residential Market Average Price per sq.m. (PHP) 250,000 199,519 3rd highest average 200,000 178,033 157,981 148,134 150,000
Slide 32: Business Strategies
Business Strategies }D.M. WENCESLAO "J AND ASSOCIATES, INCORPORATED Page 31
Slide 33: Business Strategies
Business Strategies 1 Grow Aseana City into a “Next Generation” CBD within Metro Manila 2 Develop a portfolio of high quality real estate projects 3 Multi-pronged Approach to Growing our Land Bank 4 Enhance our earnings base and grow our recurring income streams Page 32
Slide 34: Grow Aseana City into a “Next Generation” CBD within Metro Manila
Grow Aseana City into a “Next Generation” CBD within Metro Manila GLOBAL COMMUNITY URBAN RECREATION Master planned district Holistic development for all lifestyles Global infrastructure & Balanced locator mix service standards Detailed Promote Regular Attractive development continued review tenant m
Slide 35: Grow Aseana City into a “Next Generation” CBD (Cont’d)
Grow Aseana City into a “Next Generation” CBD within Metro Manila (Cont’d) Page 34
Slide 36: Develop a Portfolio of High Quality Real Estate Projects
Develop a Portfolio of High Quality Real Estate Projects Commercial Leasing/Sales Residential Sales Aseana Aseana Aseana Pixel Parkside Parkside Four Five Six Résidences Place 1 Place 2 Targeted Completion: Targeted Completion: Targeted Completion: Targeted Completion: Targeted Completion:
Slide 37: Multi-Pronged Approach to Growing Our Land Bank
Multi-Pronged Approach to Growing Our Land Bank Strategic acquisitions of land assets or purchase land from WHI with whom DMWAI has a ROFR Pursue strategic and opportunistic acquisition of land and other properties outside Aseana City Opportunistically undertake large-scale and complex Government an
Slide 38: Enhance Our Earnings Base and Grow Our Recurring Income Streams
Enhance Our Earnings Base and Grow Our Recurring Income Streams Completed Projects Project Pipeline(1) (2005 - 2017) Aseana Powerstation Total Leasable Floor Area (in sq.m.) Aseana Two Aseana Main St. 2 Aseana Six 292,035 Aseana One Aseana Five 323,575 323,575 Aseana Square Aseana Four 62,142 261,43
Slide 39: Enhance Our Earnings Base and Grow our Recurring Income Streams (Cont’d)
Enhance Our Earnings Base and Grow our Recurring Income Streams (Cont’d) Land Leasing Commercial Leasing Allocate at least 5,000 sq.m. of Six planned commercial prime land for long-term leasing developments targeting at BPOs, and 2,000 sq.m. of non-core land POGOs, logistics companies and for sale e
Slide 40: Aseana City Master Plan
Aseana City Master Plan Page 39
Slide 41: Financial Highlights
Financial Highlights Page 40
Slide 42: Robust Top-line Growth Driven By Increasing Recurring Income
Robust Top-line Growth Driven By Increasing Recurring Income Revenue (PHP mm) Key Events: Key Events: Key Events: Ramp-up of lease and occupancy rate at Pile driving works began for Ayala Mall Sale of 2,521 sq.m. of land to Uni-Asia Aseana Two Sale of 2,180 sq.m. land parcel to Bay Complet
Slide 43: Profit Expansion Supported by Strong Profit Margins from Rentals and Land Sales
Profit Expansion Supported by Strong Profit Margins from Rentals and Land Sales Gross Profit (PHP mm) Operating Profit (PHP mm) 63.9% 80.4% 62.2% 62.0% 75.7% 77.5% 2,333 1,651 1,867 1,320 1,357 1,049 2015 2016 2017 2015 2016 2017 Gross Profit Gross Profit Margin Operatiing Profit Operating Profit Ma
Slide 44: Strong Performance Across All Operational Metrics
Strong Performance Across All Operational Metrics Recurring Income Contribution (%) Total Leasable Floor Area(1) (sq.m.) 74.9% 56,863 59,000 60.8% 50.0% 45,432 2015 2016 2017 2015 2016 2017 Occupancy(2) (%) Total Leased Land Area (sq.m.) 97.6% 150,521 94.1% 140,540 138,900 86.6% 2015 2016 2017 2015
Slide 45: Improving Debt Serviceability, Sustainable Returns & Working Capital
Improving Debt Serviceability, Sustainable Returns & Working Capital Debt To Equity (%) Return on Equity (%) 18.0% 42.0% 16.0% 16.0% 33.0% 26.0% 2015 2016 2017 2015 2016 2017 Current Ratio (x) Assets to Equity (x) 1.72x 1.55x 1.41x 3.81x 3.34x 3.03x 2015 2016 2017 2015 2016 2017 Page 44
Slide 46: Historical & Planned Capital Expenditure
Historical & Planned Capital Expenditure Historical & Planned Capital Expenditure (PHP mm) Historical Planned 4,325 3,527 3,144 849 457 228 2015 2016 2017 2018E 2019E 2020E Projected capital expenditure relates primarily to the development of pipeline projects Proceeds of IPO, together with our
Slide 47: Proposed Use of IPO Proceeds
Proposed Use of IPO Proceeds Percentage Est. Disbursements Proposed Use (%) of Proceeds Pipeline project development, such as but not limited to the development and 49.0 By end of 2022 construction of our nine planned real estate projects Obtain land assets through potential share acquisitions 38.0
Slide 48: www.dmwai.com iro@dmwai.com
www.dmwai.com iro@dmwai.com Page 47
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