First Pacific Co. Ltd. · HKEX:142
First Pacific — H1 2019 Earnings Presentation
35 slides from First Pacific's earnings presentation, Oct 9, 2019
Slide 1: First Pacific 1H 2019 Results
Copyright © First Pacific Company Limited 9 October 2019. All rights reserved.
Slide 2: Consumer Foods, Infrastructure, Natural Resources, Telecommunications
Consumer Foods Infrastructure Natural Resources Telecommunications First Pacific owns 50.1% of First Pacific owns 41.9% 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
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
Slide 4: Gross Asset Value of $5.7 Billion
Gross Asset Value of $5.7 Billion Investment Objectives Roxas Holdings $28 mln (0.5%) o Unlock value, enhance cash flows to deliver dividend/distribution returns, grow share price, and Philex finance further investment in value-enhancing Group $342 businesses, taking into consideration all relevant
Slide 5: Diversified Portfolio, Strong Returns
$32.0 Bln of Major Assets Represented in Portfolio s Philex Group at i o n Plant ar & Su n g $ 1 .2 8 bl Diversified Portfolio, Strong Returns o Balanced weighting of mature and $629 mln growth investments PLDT ICBP o Balanced weighting of different sectors o 15 years of growth: Gross Asset Value $5
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
Slide 7: Entering 10th Year of 25% Dividend Payout
Entering 10th Year of 25% Dividend Payout Core Holdings Deliver Contribution Growth 1H 2019 Free Cash Flow (USD mln) 100 89.5 90 68.4 80.5 o Turnover rose 6% to $4.09 billion vs. $3.84 billion on strong 80 growth at Indofood and MPIC 70 13.5 60 o Contribution from three core holdings (Indofood, MPIC
Slide 8: Headline Group Data 1H 2019 & End-June
Headline Group Data 1H 2019 & End-June (USD mln) Core Gross Net Cash Interest Total Turnover EBITDA Gearing Profit/(Loss) Debt Debt/(Cash) On Hand Cover Equity PLDT 1,617 763 237 3,373 2,747 627 1.19 8.0 2,314 MPIC(i) 859 413 167 4,427 3,433 994 0.71 4.6 4,856 MPIC - Head Office 118 97 50 1,407 1,22
Slide 9: Interest Bill Reduced Following Bond Repayment
Interest Bill Reduced Following Bond Repayment Head Office Balance Sheet as at end-June 2019 Head Office Bond Issues at a Glance o Gross assets $5.5 billion at end-June 2019 o o Gross debt $1.65 billion, gross debt cover 3.3x Net debt $1.57 billion, net debt cover 3.5x Principal Coupon 4.0 x 12.0 Pr
Slide 10: Sustainability Matters Rise in Importance
Sustainability Matters Rise in Importance ISS Governance QualityScore of 4 at First Pacific Member of Key ESG Indexes o First Pacific has a QualityScore rating of 4 from Institutional o First Pacific is a founding member of Bloomberg’s Gender Shareholder Services as of October 2019 Equality index –
Slide 11: CBP Division Powers Earnings Surge
CBP Division Powers Earnings Surge 1H 2019 Financial Highlights Revenues & Core Income (USD mln) 6,000 5,350 o Revenues rose 7% to IDR38.6 trillion vs. IDR36.0 trillion on 5,004 5,237 5,136 surging sales at Consumer Branded Products unit, and strong 5,000 4,763 sales at Bogasari flour division 4,000
Slide 12: Sales Growth Led by Noodles, Seasonings
Sales Growth Led by Noodles, Seasonings 1H 2019 Financial Highlights Net Sales & Core Income (USD mln) 3,000 2,657 o Net sales rose 14% in Rupiah terms to IDR22.1 trillion vs. 2,526 2,580 2,688 IDR19.5 trillion on growth led by Noodles, Food Seasonings 2,500 2,360 and Dairy o EBITDA rose 19% to IDR4
Slide 13: Weak CPO Prices Impact Earnings
Weak CPO Prices Impact Earnings 1H 2019 Financial Highlights External Sales & Net Profit/(Loss) (USD mln) 1,400 1,259 1,173 o External sales fell 1% to IDR6.50 trillion vs. IRD6.56 trillion 1,200 1,029 1,091 984 mainly due to continuing weak palm prices, as a 10% fall in Plantations sales offset 2%
Slide 14: Telco Core Income Continues Higher
Telco Core Income Continues Higher 1H 2019 Financial Highlights 3,712 Revenues & Core Income (USD mln) 4,000 o Service revenues (net) rose 7% to ₱76.7 billion due 3,500 3,572 3,298 3,000 2,927 to a 20% increase in the Individual business segment, 3,000 followed by Enterprise and Home, slightly offse
Slide 15: Data Service Revenues Drive Earnings Growth
Data Service Revenues Drive Earnings Growth Surging Revenues at Main Businesses Individual Service Revenues (PHP bln) 20.0 o Data and broadband remain the growth drivers of the Home, Enterprise and 4.5 x 14.8 15.0 Individual segments representing 76%, 10.0 65% and 66% of total service revenues withi
Slide 16: PLDT & Smart Beat Globe in Every Category
PLDT & Smart Beat Globe in Every Category PLDT Network Is the Country’s Best, Say Observers Capex Is Focused on LTE/3G Expansion, Last Mile o 2019 capex budget of ₱78.4 billion to expand PLDT’s o Number of 4G LTE base stations rose by 3,000 in the first network lead and accelerate expansion of home
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
Slide 18: Laying Groundwork for Continued Growth
Laying Groundwork for Continued Growth 1H 2019 Financial Highlights Outlook o Contribution from operating companies rose 5% to ₱6.06 o Continuing strong demand growth for MPIC services seen billion vs. ₱5.82 billion led by Power, Water, Toll Roads and continuing to lift revenues; core income growth
Slide 19: Double-Digit Earnings Growth at Meralco
Double-Digit Earnings Growth at Meralco 1H 2019 Financial Highlights & Outlook: Meralco Distribution Revenues & Core Income (USD mln) 1,400 o Distribution revenues rose 6% to ₱32.5 billion vs. 1,207 1,144 1,183 1,177 1,200 1,269 ₱30.7 billion on 5% growth in volume sold and slightly higher average d
Slide 20: Roads & Water Businesses Begin to See Higher Tariffs
Roads & Water Businesses Begin to See Higher Tariffs 1H 2019 Financial Highlights & Outlook: Toll Roads Revenues & Core Income (USD mln) 350 o Revenues rose 21% to ₱8.92 billion vs. ₱7.39 billion on 300 260 294 strong traffic growth and toll increases on Philippine roads, 250 239 212 and consolidati
Slide 21: Silangan Project Shifts Into Gear
Silangan Project Shifts Into Gear 1H 2019 Financial Highlights Revenues & Core Income/(Loss) (USD mln) o Operating revenues fell 28% to ₽3.37 billion vs. ₽4.65 billion as 300 245 a result of less ore milled and lower grades leading to lower 250 201 215 198 metal production, compounded by lower coppe
Slide 22: Appendix
Appendix Shareholder Information Selected Financial Data
Slide 23: Contribution and Profit Summary
Contribution and Profit Summary Contribution to Turnover Group profit(i) For the six months ended 30 June 2019 2018 2019 2018 US$ millions Indofood 2,716.9 2,596.8 80.3 70.3 PLDT(ii) - - 58.3 62.7 MPIC 858.6 767.7 70.0 69.1 FPW(iii) - - 0.7 10.3 Philex(ii) - - (1.2) 4.1 FPM Power 364.0 347.8 (7.1) (
Slide 24: Head Office Free Cash Flow
Head Office Free Cash Flow(i) For the six months ended 30 June 2019 2018 US$ millions Cash dividend and fee income 68.4 67.5 Head Office overhead expense (9.2) (11.7) Net cash interest expense (37.5) (33.9) Tax paid (0.3) (3.5) Net cash inflow from operating activities 21.4 18.4 Net investments(ii)
Slide 25: Group Net Debt and Gearing
Group Net Debt and Gearing Consolidated At 30 June 2019 At 31 December 2018 Net Total Gearing(ii) Net Total Gearing(ii) US$ millions Debt(i) Equity (times) Debt(i) Equity (times) Head Office 1,573.4 1,822.5 0.86x 1,550.2 2,039.7 0.76x Indofood 1,164.5 3,622.3 0.32x 1,444.7 3,456.1 0.42x MPIC 3,432.7
Slide 26: Adjusted NAV per Share
Adjusted NAV per Share At At 30 June 31 December 2019 2018 US$ millions Basis Indofood (i) 2,183.9 2,261.7 PLDT (i) 1,390.8 1,182.0 MPIC (i) 1,238.7 1,166.9 Philex (i) 160.3 134.1 PXP (i) 83.1 160.6 FPW (ii) 325.0 325.0 FPM Power (iii) 230.0 230.0 FP Natural Resources (iv) 28.1 36.5 Head Office - Ot
Slide 27: A Decade in the Capital Markets
A Decade in the Capital Markets $152 mln bond tender $215 mln Bond ($69 mln of 2010 7-yr) Redemption ($83 mln of 2010 10-yr) (2012 7-yr) $220 mln bond tender ($160 mln of 2012 7-yr) ($60 mln of 2010 10-yr) $219 mln Bond Redemption (2010 7-yr) 2009 2010 2012 2013 2015 2017 2018 2019 $282 mln Rights O
Slide 28: Shareholding Structure of the Company
Shareholding Structure of the Company Shareholder Breakdown Institution Mln Shares 1 Brandes Investment Partners 352 8.1% 2 Lazard Asset Management 165 3.8% 3 M&G Investment Management 110 2.5% 4 Marathon Asset Management 81 1.9% All 5 Southeastern Asset Management 74 1.7% Others 6 Maple-Brown Abbot
Slide 29: Insider Ownership & Institutional Shareholder Statistics
Insider Ownership & Institutional Shareholder Statistics Very Active 1.0% Turnover Directors’ Total Interest* N/A 0.6% High Shares Options 3% Medium Anthoni Salim NED, 1,925,474,957 - Low Manny Pangilinan Chairman 70,493,078 - 24% 6.5 x 71% 6.5 Chris Young ED, CEO 6.5 x 16 8,385,189 - Benny Santoso
Slide 30: Insider Ownership & Shareholder Geography
Insider Ownership & Shareholder Geography Shareholder Analysis at First Pacific o FPC has engaged consultants since the autumn of 2012 to provide details of institutional share ownership of First Pacific o The data on this and the following page consider only institutional investors except where not
Slide 31: Institutional Shareholder Data Over Time
Institutional Shareholder Data Over Time LabelsStyle Investment 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Value 41% 44% 45% 44% 43% 45% 47% 45% 45% 44% 43% 42% 43% 33% 31% 32% Deep Value 18% 20% 20% 20% 20% 19% 18% 18% 16% 16% 16% 16% 18% 25% 26% 26% Growth Inde
Slide 32: FPC's Economic Interest
FPC’s Economic 25.6% Interest 41.9% 50.1% (%) 19 .3% .1% 40 % .3 34 26 .1 .6% % 47 .3% 26 22.1% 15.9% 41.9% 12.0% 41.9% 50.5% 50 % .0% 1 2.3 46 % .2 .8 % 31 23.1% 42 .4% 41.6% 25.2% 32
Slide 33: Notes
Notes
Slide 34: 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
Slide 35: 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 35
First Pacific Company — H1 2019 Earnings Presentation on 6ix