D&l Industries, Inc. · PSE:DNL
D&l Industries — FY2024 Earnings Presentation
30 slides from D&l Industries's earnings presentation, Feb 28, 2025
Slide 1: D&L Industries Media Presentation for FY24
D&L’s expansion site in Batangas, Philippines FILIPINO MANUFACTURING CUSTOMIZED B2B2C SPECIALTY PRODUCTS D&L INDUSTRIES Media Presentation for FY24 February 28, 2025
Slide 2: FY24 Highlights
FY24 Highlights 1 FY24 earnings up 2% YoY to P2.3 bn; 4Q24 earnings +6% YoY, +9% QoQ to P536 mn 2 Batangas plant booked P244 mn in profits for the full year; ahead of expectations 3 Export continues to drive overall earnings with sales +37% YoY, gross profits + 37% YoY, GPM higher by 4 ppts vs domes
Slide 3: FY24 earnings up 2% YoY
FY24 earnings up 2% YoY Net Income (Php mn) Net income breakdown Consumer 3,318 Products ODM, 5% 2,643 +2% Specialty Food 2,295 2,345 Ingredients, Plastics, 34% 34% Chemrez Group, 27% FY21 FY22 FY23 FY24 Start of commercial operations of Batangas plant. Incremental expenses weighed on earnings. *Net
Slide 4: Batangas plant booked income for the full year; ahead of expectations
Batangas plant booked income for the full year; ahead of expectations Quarterly & YTD income/losses of Batangas plant 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 FY24 300 248 244 200 149 100 - -16 -100 -101 -111 -132 -132 -137 -200 -300 Pre-operating rental expenses -315 -400 -390 -500 Start o
Slide 5: Batangas Plant – D&L's next leg of growth
Batangas Plant – D&L’s next leg of growth 5
Slide 6: Condensed Income Statement
Condensed Income Statement *number of outstanding shares: 7,142,857,990 6
Slide 7: Exports sales
Exports sales Sharp recovery in exports following a soft FY2023 EXPORT/ 25% 24% 21% 29% 33% 31% 27% 30% SALES Breakdown of exports 13.6 Oleochemicals +37% 12.4 28% 10.2 Food 9.1 57% Specialty Plastics 14% 6.3 6.3 Consumer 4.7 Products 4.1 ODM 1% In P bn FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 7
Slide 8: Export vs Domestic Market
Export vs Domestic Market Export is a bright spot, outpacing the performance of the domestic market Sales (P bn) Gross Profits (P bn) +16% 28.3 24.4 -4% 4.1 4.0 +37% +37% 2.2 12.4 9.1 1.6 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 Exports Domestic Exports Domestic Blended Gross Profit Margins 18.1% 14.
Slide 9: Segment volume growth and GP Margin
Segment volume growth and GP Margin FY24 Y-o-Y Volume Growth High Margin Commodities Total Overall Gross Profit Margin Specialties 18% 15% 14% 13% 15% 15% 13% 12% 10% +21% +40% +33% 9% Food Ingredients FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 26% 22% 23% 19% 20% 17% 17% 18% 19% 17% -9% +41%
Slide 10: HMSP Volume Growth (YoY)
HMSP Volume Growth (YoY) HMSP volume growth (YoY) 40% Confluence of events such as the late 36% passage of the budget, US- China 33% trade war, and spillover of negative consumer sentiment dampened overall volume in 2019 13% 14% 13% 13% 11% 10% Average quarterly YoY 7% 8% 7% 6% growth = 5% 3% 6% 2%
Slide 11: Sales mix
Sales mix REVENUES % share to total group revenues 33% 34% 33% 31% 41% 40% 39% 37% 37% 38% 42% 42% 43% 49% 47% 67% 66% 67% 69% 59% 60% 61% 63% 63% 62% 58% 58% 57% 51% 53% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 High Margin Specialty Products (HMSP) Commodities* *Co
Slide 12: Condensed Statement of Cash Flows
Condensed Statement of Cash Flows In P mn FY24 FY23 EBITDA 4,941 4,415 Interest Received 3 16 Paid taxes (327) (729) Non cash items 12 48 Change in working (2,777) (1,096) Due to higher raw capital material prices Net Operating Cash 1,852 2,654 Flow Capex (1,026) (1,511) FCF remained positive as Fre
Slide 13: Capex normalizing after the completion of Batangas plant
Capex normalizing after the completion of Batangas plant Capex (P mn)* • Capex peaked in 2022 and started to normalize in 2023 after the completion of the plant • No other major capex requirement in the near-term 3,497 3,179 2,114 1,552 1,441 1,160 443 456 2017 2018 2019 2020 2021 2022 2023 2024 *ac
Slide 14: Pass-through pricing mechanism as natural hedge against volatility
Pass-through pricing mechanism as natural hedge against volatility in forex and commodity prices 20.9% 19.1% 16.8% 18.3% 17.3% GP Margin 15.1% 15.7% 14.8% 15.3% 13.4% 13.9% We expect margins to improve over 12.6% 12.4% 12.0% 10.5% 11.7% 10.8% 9.9% 10.9% time as we further invest in R&D 8.9% 9.0% EBI
Slide 15: FY24 Group Results
FY24 Group Results Food Ingredients Oleochemicals & Specialty Consumer D&L Industries - Other Specialty Plastics Products ODM Consolidated Chemicals % change in +31% +18% +7% -13% +22% Revenues % change in Net +16% +7% +18% -51% +2% Income 15
Slide 16: DOE increased Biodiesel blend to 3% (B3)
DOE finally increased Biodiesel blend to 3% (B3) from 2% (B2) last October 1, 2024; targets B4 by October 2025 and B5 by October 2026 Impact of a higher biodiesel blend Biofuels industry short overview to the industry 2006 – Biofuels law was passed with the intention of a 5% biodiesel blend (B5) Vol
Slide 17: Asset-Light Model
ASSET-LIGHT MODEL Rental expenses Management and Shared Service Fees (paid to affiliates) (MSSF) D&L provides management and shared services to its subsidiaries and affiliates, including executive management and admin support such as legal, MIS, accounting, human resource, and finance land, faciliti
Slide 18: Balance Sheet remains robust
Balance Sheet remains robust As of end As of end As of end As of end In Pmn In P mn Dec-24 Dec-23 Dec-24 Dec-23 Cash 2,830 2,844 Book Value 21,788 20,868 Current Assets 28,324 22,583 BVPS1 (in P) 3.05 2.92 Debt-to-equity Total Assets 48,447 42,625 0.97x 0.82x (Borrowings/E quity) Return on Borrowing
Slide 19: Capital Structure
Capital Structure Philratings reaffirmed its highest credit rating (PRS Aaa with a stable outlook) on D&L’s maiden bond offering Borrowings (Pmn) Equity (Pmn) Net Gearing 84% 21,788 20,868 67% interest 62% 19,105 20,651 4x cover 50% 15,217 16,565 17,112 17,764 21,056 P18.2 net 25% 17,135 Billion deb
Slide 20: Net debt, effective interest rate, and interest cover
Net debt, effective interest rate, and interest cover Interest rate (%) Interest cover (x) 35 7.0% 18.2 30 6.0% 14.3 14.5 25 5.0% 12.5 12.0 12.0 11.9 11.9 11.2 20 10.0 4.0% 9.5 9.0 8.6 15 3.0% 6.6 10 4.4 2.0% 4.0 3.7 2.9 2.8 3.0 2.1 2.2 2.0 2.1 1.9 1.9 5 1.6 1.6 1.4 1.4 1.4 1.0% 1.2 1.2 - 4Q161Q172Q
Slide 21: Working Capital Cycle
Working Capital Cycle 18,000 CASH CONVERSION 14,000190 140 161 143 170 INVENTORY 16,000 139 12,000 120 14,000 127 150 117 111 With the commercial operations 120 10,000130 107 12,000 16,300 of100 the Batangas plant, the 101 10,000 8,000110 90 91 company 80 has started ramping 13,142 90 74 up investin
Slide 22: Investor Relations
INVESTOR RELATIONS Ownership as of 12-Month Daily Trading Average* December 2024 #53 Public, 27% Lao Family, 73% P42 bn* w US$175k Foreign Ownership as % Ranked 53rd of Outstanding Shares among Philippines’ largest companies by market cap *as of February 26, 2025 22
Slide 23: Investor Relations
INVESTOR RELATIONS Return since IPO Price Change Total Return DNL PM +170% +284% PCOMP Index +23% +38% Price as of 02/26: P5.80 Market Cap as of 02/26: P42bn USD 716 mn (USD1:P57.89) Outstanding Shares: 7,142,857,990 DNL +191% DLNDY:US Unsponsored ADR (BNY Mellon & Citi) PCOMP 1ADR = 25 Ordinary +23
Slide 24: Q&A
Q&A 24
Slide 25: Foundation of future growth
Foundation of future growth High value, high margin products: Expansion in export zones & “Pack at source” initiative 25
Slide 26: FIT Expansion
FIT Expansion Natura Aeropack D&L Premium Foods Natura Aeropack 26
Slide 27: CNO & CPO 2-yr Price Chart
Track 4 Annotate = News ©, Zoom Last Price HECNO1RDM1 Index (USD) 2050.00 KO1 Comdty (USD) 1079.33997 fr [yen L 400 iw all > 1200 we Met VW verry bal ™ Bayi 1000 +800 p600 Mar Jun Sep Dec Mar Jun Sep Dec 2023
Slide 28: CNO & CPO 5-yr Price Chart
CNO & CPO 5-yr Price Chart ME CNOIRDM1 Index (USD) 2050.00 KO1 Comdty (USD) P2500 p 1500 > 1000 500
Slide 29: Maiden Bond Offering
MAIDEN BOND OFFERING *Awarded Best New Bond (Philippines) by the Asset Magazine Offer Size Interest Rate Tenor Spread over BVAL 2.7885% p.a. 3 years +50 bps Base offer: P3bn (Series A) Oversubscription option: P2bn (Series B) 3.5962% p.a. 5 years +60 bps Bond Rating PRS Aaa with Stable Outlook Use o
Slide 30: 3yr and 5yr BVAL rates
3yr and 5yr BVAL rates D&L Bond Listing September 2021 30