Gt Capital Holdings, Inc. · PSE:GTCAP
Gt Capital — Q1 2018 Earnings Presentation
60 slides from Gt Capital's earnings presentation, Jun 30, 2018
Slide 1: First Quarter 2018 Financial & Operating Results
First Quarter gtcapital.com.ph 2018 Financial & Operating Results Updated 30 June 2018 D E F I N E D B Y E X C E L L E N C E , R E F I N E D T H R O U G H P A R T N E R S H I P
Slide 2: Notice/Disclaimer
Notice/Disclaimer The information in this presentation has been prepared by GT Capital Holdings, Inc. (the "Company"). By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations and represent that you are a pers
Slide 3: Table of Contents
Table of Contents Strategic Direction 4 GT Capital Corporate Profile 5 History of Strategic Partnerships 6 GT Capital Component Companies 7 Current Corporate/Ownership Structure 8 Financial Highlights 9 Net Income Contribution 10 Metropolitan Bank and Trust Company (MBT) 12 Toyota Motor Philippines
Slide 4: Strategic Direction
Strategic Direction New Sectors Synergy • New strategic partners • Toyota unit sales through • PPP projects MBT/PSBank auto loans/TFS • Infrastructure lease-to-own package • Logistics • Federal Land & Pro-Friends home mortgages by MBT/PSBank • AXA bancassurance through MBT/PSBank branch network Expa
Slide 5: Corporate Profile
Corporate Profile GT Capital directly owns market-dominant businesses in underpenetrated sectors of Strategic Partnerships with the Philippine economy, namely banking; Best-of-Class Brands automotive assembly, importation, dealership, and financing; infrastructure; property development; and life- an
Slide 6: Trusted by partners from Japan and around the world
Trusted by partners from Japan and around the world Toyota Manila Bay Global Business ORIX Corporation ORIX Corporation Toyota Motor Philippines is Corp is established Power is established. Toyota Financial Services Sumitomo partners with and Federal Land Isetan Mitsukoshi Holdings established with
Slide 7: GT Capital Component Companies
GT Capital Component Companies No. 1 bank in net interest margins as of automotive company in the 1 end-March 2018 1 Largest Owns MERALCO, the Philippines’ largest power 1 distribution Philippines, with 36% market share as of company end-March 2018 2 Second largest Philippine bank by assets as of e
Slide 8: Current Corporate Ownership Structure
Current Corporate Ownership Structure Grand Titan Public Float 56.19% 43.81% Auto Assembly and Importation, Property Infrastructure Motorcycle Banking Dealership, and Financing Development Insurance and Utilities Financing 40.0%5 21.0% 36.0% 51.0% 25.3%2,3 15.55%6 20%8 26.47 %1 36.36%9 80% 10
Slide 9: Financial Highlights 1Q 2018
Financial Highlights 1Q 2018 Php3.74 billion Consolidated Net Income (PPA adjustments for PCFI, MPI, TMBC, TMP) +21% Php3.1 billion 1Q 2017 Php3.75 billion Core Net Income +18% Php3.2 billion 1Q 2017 Php45.5 billion Revenues -7% Php48.8 billion 1Q 2017 TMP & TMBC - Auto Sales (TMP – Php33.7B) Php 37
Slide 10: GT Capital Net Income Contribution
GT Capital Net Income Contribution AXA TFSPH TMBC PCFI TFSPH TMBC PCFI 2.5% 1.3% 1.2% AXA 2.2% 1.7% 0.5% 3.5% 3.1% MPIC TMP MPIC TMP 13.2% 26.8% 12.1% 32.8% Fed Fed Land Land 5.1% 8.4% MBT MBT 38.2% 47.1% MBT + TMP = 71.0% MBT + TMP = 73.9% 1Q 2017 1Q 2018 10
Slide 11: GT Capital Net Income Contribution
GT Capital Net Income Contribution Infrastructure Insurance Infrastructure Insurance 12% 3% 13% 3% Property Property Automotive Automotive 12% 7% 29% 35% Banking Banking 38% 47% 1Q 2017 1Q 2018 11
Slide 12: Metrobank
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Slide 13: Banking Sector Updates
Banking Sector Updates Banking still an underpenetrated sector Deposit accounts per 1,000 individuals ASEAN Members and Observers, 2017 2,277 2,242 Deposit accounts per 1,000 1,955 1,549 individuals 1,056 963 579 577 518 252 Source: International Monetary Fund Financial Access Survey, Tracking Acces
Slide 14: Metrobank Financial Highlights
Metrobank Financial Highlights Net Interest Income +11% (Php16.1B or Operating Income 73% of Operating Income) 19.6 22.1 +13% ₋ NIMs from 3.68% to 3.75% ₋ Loan portfolio +14% from Php1.1T to in Php Billion Php1.3T vs. Industry +18% 5.1 6.0 Non-Interest Income o Commercial +14% 14.5 16.1 +17% o C
Slide 15: Peer Banks Highlights
Peer Banks Highlights Net Interest Margin – NIMs (%) Total Loans (Php Billion) 3.8% +19% industry growth 3.4% 2.9% +22% +14% +17% 1,886 1,253 1,210 MBT BDO BPI BDO MBT BPI CASA Deposits (Php Billion) Total Assets (Php Billion) +12% industry growth +12% industry growth +13% +7% +11% +17% +7% +11% 1,5
Slide 16: Peer Banks Highlights
Peer Banks Highlights Total Equity (Php Billion) Total Capital Adequacy Ratio and CET1 (%) +10% industry growth 11.5% industry CAR CAR CET1 +6% +6% +10% 299 14.5% 14.3% 13.6% 12.6% 12.7% 12.0% 214 190 BDO MBT BPI MBT BDO BPI Source: 17-A Report of Banks as of 31 March 2018 and BSP Report on Financia
Slide 17: Metrobank Financial Highlights
Metrobank Financial Highlights CASA Deposits (Php Billion) Loans and Receivables (Php Billion) +11% 1,253 961 +14% 863 1,102 1Q 2017 1Q 2018 1Q 2017 1Q 2018 Total Loan Portfolio Breakdown Consumer Loan Portfolio Breakdown Consumer Credit Cards 25% 21% Home +17% +21% 32% +9% Commercial Auto 75% 47% G
Slide 18: Metrobank increases stake in Metrobank Card Corporation
Metrobank increases stake in Metrobank Card Corporation Prior to acquisition Metrobank 60% ANZ Group 40% Post-acquisition Metrobank 100% Two tranches 20% for Php7.4B Dec 2017 20% remaining by 3Q 2018 1,500,000 Number One 32 years Part of ANZ’s global strategy of focusing on cards in force credit car
Slide 19: Toyota Motor Philippines
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Slide 20: CARS Incentives
Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Incentives 20
Slide 21: CARS Rationale and Regulations
Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Rationale and Regulations • Aims to provide a strategic enhancement program for the Philippine auto industry to increase local content from 30% to 60% • Manufacturing of model, body shell, large plast
Slide 22: CARS Program Updates
CARS Program Updates Comprehensive Automotive Resurgence Strategy Participating model Php1.03 billion Vehicle Php5.24 production 348 parts Confirmed as of July 2017 billion Total Toyota CARS Project Investment 91 Toyota suppliers Php4.21 Plan as of Sept 2017 30 Confirmed direct suppliers for the bil
Slide 23: CARS Program Updates: Out-house parts projects
CARS Program Updates Out-house parts projects BOI-registered auto parts partners Php495.9 Php520.0 million million Php94.5 VALERIE PRODUCTS MANUFACTURING, INC. Php167.2 million million OGIHARA (THAILAND) CO., LTD. TECHNOL EIGHT Php1.3 PHILIPPINES CORP. billion Aggregate Investments Source: The Phili
Slide 24: CARS Program Updates: In-house parts projects
CARS Program Updates In-house parts projects approved on 7 June 2017 Press parts (Body shell) Large plastic parts manufacturing Stamping die storage expansion at Press Shop • Machine installation/ trial 1H 2018 24 Nov 2017 – Inauguration of TMP’s new • Investment plan Php1.29 billion plastic molding
Slide 25: Factors in relation to industry car sales
Factors in relation to industry car sales Historically, gasoline prices have not had a significant correlation with Philippine industry car sales. More significant contributors to auto sales would be the affordability of car loan interest rates and the increase in Filipinos’ disposable incomes. 25
Slide 26: Industry car sales vs. PH GDP per capita
The Philippines is now enjoying the benefits of economic “motorization” Industry car sales vs. PH GDP per capita Units USD Motorization of the Philippine economy 500000 3500 450000 3000 400000 350000 2500 300000 2000 250000 200000 1500 150000 1000 100000 500 50000 0 0 2008 2010 2012 2014 2016 Indust
Slide 27: Retail auto unit sales volume
Retail auto unit sales volume As of May 2018 176,150 Industry growth 158,687 ▼ 10% Y-o-Y Toyota growth 69,231 61,733 ▼ 11% Y-o-Y • Front loading in 2017 • TNVS suspension August 5M 2017 5M 2018 2017 • CV supply issues in 2018 Industry Toyota being ameliorated Source: Company data, CAMPI, AVID 27
Slide 28: Overall Market Share
Toyota continues to be the Philippines’ dominant auto company Overall Market Share As of May 2018 39% No.1 No.1 No.1 Passenger Commercial Overall Car Sales Vehicle Sales Sales 17% 8% 7% 7% 6% 5% 4% Mitsubishi 4% Hyundai Nissan Ford 1% 1% Honda Suzuki Isuzu 1% 1% Others* General MotorsMazda Subaru Ki
Slide 29: Auto Industry Market Share
Toyota continues to be the Philippines’ dominant auto company Auto Industry Market Share As of May 2018 Passenger Car Commercial Vehicle 45% 36% 19% 17% 14% 10% 9% 8% 6% 5% 5% 5% 4% 4% 4% 1% 1% 1% 0% 2% 1% 1% 1% 1% 0% Source: Company data, CAMPI, AVID 29
Slide 30: Toyota Financial Highlights
Toyota Financial Highlights Revenues Wholesale volume -12% 33,877 units; retail volume -15% -9% (vs -8% industry growth) 37.1 33.7 Sales volume: in Php Billion • Wigo +25% Avanza +8% Vios affected by LTFRB’s suspension of issuance of new franchise to TNVS effective August 2017 1Q 2017 1Q 2018
Slide 31: Toyota Dealership Expansion
Toyota Dealership Expansion Target by end of year 2013 2014 2015 2016 2017 Current 2018E Number of Dealerships 42 45 49 52 61 66 70 Expansion in Next Wave Cities outside Metro Manila Tuguegarao May 2018 Negros Occidental June 2018 ISABELA (New location) 66 Dealerships as of 30 June 2018 Upcoming: Va
Slide 32: Toyota Brand Attributes
Toyota Brand Attributes Globally trusted brand QUALITY, DURABILITY, RELIABILITY (QDR) Dealership network offering full range of services Availability of original parts, supplies and service Corporate policy of High resale value (up to 50% manufacturing original of original selling price for 5 parts
Slide 33: Price Comparable by Category (PHP)
Price Comparable by Category in Million Philippine Peso (PHP) In Million PHP Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 1.741 1.932 1.884 1.904 Model Corolla Altis Elantra Civic Lancer Price 0.961 1.492 0.970 1.183 1.138 1.663 0.928 1.238 Model Vios Accent (Sedan) City Mirage G4 Price
Slide 34: Price Comparable by Category (USD)
Price Comparable by Category in United States Dollars (USD) In US Dollars Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 32,560 36,132 35,235 35,609 Model Corolla Altis Elantra Civic Lancer Price 17,973 27,903 18,141 22,125 21,283 31,102 17,356 23,153 Model Vios Accent (Sedan) City Mirage
Slide 35: Federal Land
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Slide 36: Growing tourist arrivals will help Federal Land's hotel business
Growing tourist arrivals will help Federal Land’s hotel business Foreign Visitor Arrivals to the Philippines se 6.6 million foreign visitors in 2017 Be 80% 2 70% B55 2 4 60% € 64 50% 2 = 5 23 40% 8 5 30% § cS 2? 20% & Era 10% § < 3 50 7 0% & £2 ag ner Saamynen 4 SSSsSSSSSsqgagsgggggsa S RR RAS RRRRR
Slide 37: Federal Land Financial Highlights
Federal Land Financial Highlights Revenues Reservation Sales +17% from Php3.1B to Php3.6B 2.5 2.6 +2% - Inventory -58% from 1,866 units to 786 in Php Billion units (7 mos. of sales) due to delays in securing HLURB permits and licenses for new projects Real estate sales at Php2.0B 1Q2017 1Q2018
Slide 38: Federal Land Current Projects
Federal Land Current Projects 30 On-going Projects 8 Different Locations • 7 launched in 2011 • 11 launched in 2012 • 6 cities within Metro Manila • 5 launched in 2013 • 2 cities outside Metro Manila • 4 launched in 2014 Recurring Income at 9% of total revenue • 3 launched in 2015 • 4 launched in 20
Slide 39: Land Bank Location
Land Bank Location Land Bank Location (in hectares) Macapagal Metro Manila Metro Manila Quezon City Kalaw, Manila Bay Area, Pasay 12.85 Marikina Ermita, Manila Fort Bonifacio Marikina 8.63 Mandaluyong Mandaluyong 4.34 Makati Fort Bonifacio 1.36 Binan Laguna Binondo Manila Kalaw, Manila 0.56 Paranaqu
Slide 40: Property Company of Friends (Pro-Friends)
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Slide 41: New developments in Cavite
New developments in Cavite LRT1 Extension C5 South Link to Cavitex CALA Expressway (CALAX) • Metro Pacific signed • Expansion of Cavitex • Ongoing preparation of engineering, procurement, project detailed engineering and construction (EPC) design agreement - signed • Groundbreaking was in • Right-of
Slide 42: Property Development Sweet Spot
The Low-Cost Property Sector Property Development Sweet Spot Surplus/ Price Range % to Total Segment Demand Supply Segment (Deficit) PHP USD Households Socialized 1,146,275 551,109 (595,166) Socialized <400k <9k 23.0 Economic 2,509,271 618,542 (1,890,729) Economic 400k – 9k – 28k 66.3 1.25m Low cost
Slide 43: Map of Lancaster New City and MPIC Projects
6 NLEX-SLEX Connector Road Skyway Extension NAIA Expressway Entertainment City 4 2 Cavitex C-5 South Link LRT-1 1 CALAX 3 Extension Alabang 1,700 hectares Daang-Hari MCX SLEX EPZA CALAX Exit LRT-6 5 Aveia Federal Land/ EPZA Alveo 43
Slide 44: PRO-FRIENDS Financial Highlights
PRO-FRIENDS Financial Highlights Revenues Reservation sales +23% from Php6.2B to Php7.6B (Php2.5B per month) 1.7 +77% Real estate sales +83% from Php0.9B to Php1.6B in Php Billion 1.0 0.1 Rental income +161% from Php5.0M 0.1 0.9 1.6 Other Income to Php13.1M RES YTD bank takeout Php2.0B 1
Slide 45: AXA Philippines
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Slide 46: Insurance Industry Updates
Insurance Industry Updates As of December 2017 Total Assets Total Equity (Net Worth) +19% +17% in Php Billion in Php Billion 1,486 289 1,245 222 246 176 +26% 87 77 +13% 169 +20% 202 1,069 +18% 1,264 2016 2017 2016 2017 Total Premiums in Php Billion +10% Legend 246 289 Life insurance sector 79 +9% 86
Slide 47: FY 2017 Insurance Industry Rankings
FY 2017 Insurance Industry Rankings Net Premium Income, in billion Php is the world’s number one insurance brand in 32.1 terms of value 26.2 20.3 19.9 19.2 17.6 11.7 9.9 Sun Life 8.2 BPI Philam 6.5 Philam PRU Manulife Insular BDO Life ManuCHIB UCPB Life Source: Insurance Commission, May 2018 47
Slide 48: Philippines one of the fastest-growing insurance markets
The Philippines is one of the fastest- growing insurance markets in the world Projected 10-year CAGRs of industry-wide life insurance premiums by country Top 15 fastest growing markets, 2017-2025 % CAGR UAE 10 Indonesia 9.2 Philippines Philippines 9.1% China 8.8 Brazil 8.1 Colombia 7.2 Mexico 6.9 Th
Slide 49: Strong synergy and growth
Strong synergy and growth • Persistency Ratio: 84.2% from 82.7% in 2016 • Exclusive financial advisors: 3,665 • Total bancassurance (Metrobank and PSBank) branches: 953 Assets Under Management +27% 107.2 84.6 In Billion PHP 1Q 2017 1Q 2018 49
Slide 50: AXA Philippines Financial Highlights
AXA Philippines Financial Highlights Gross Earned Premium New Business (APE) +37% from Php1.5B to Php2.0B 10.9 +59% o Regular Premium (RP) +20% o Single Premium (SP) +106% in Php Billion 6.9 SP/RP Premium Income mix – from 51:49 to 5.7 9.5 AXA +68% 64:36 CPAIC +17% CPAIC Gross written prem
Slide 51: Metro Pacific Investments
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Slide 52: Rising Together to New Heights
Rising Together Strategic Partnership to New Heights Agreement between GT Capital (GTCAP) and Metro Pacific (MPI) Two transactions signed on 27 May 2016 1. Sale of 56% of Global Business Power Corp. (GBPC) to Beacon PowerGen Holdings, an associate of MPI, for Php22.0 billion 2. Acquisition of 15.55%
Slide 53: Sell-Side: Sale of 56% GBP stake to MPI
GTCAP-MPIC Strategic Partnership Sell-Side: Sale of 56% GBP stake to MPI 51.3% of GBPC 4.7% of GBPC Php39.39 billion total equity value of GBPC Beacon PowerGen Holdings, Inc., a subsidiary of Beacon Electric Asset Holdings, Inc., an associate of 53
Slide 54: Buy-Side: Acquisition of 15.55% of MPI
GTCAP-MPIC Strategic Partnership Buy-Side: Acquisition of 15.55% of MPI 15.55% Php22 11.43% 4.12% Php7.9 billion 3.6 billion 1.3 billion billion Primary Common Shares Secondary Common Shares Cash Paid Cash Paid on 27 May 2016 on 2 June 2016 4.9 billion shares at Php 6.10 per share 54
Slide 55: Accounting Criteria for Significant Influence
Accounting Criteria for “Significant Influence” Two board seats Joint selection of an Independent Director Representation in board committees Entitled to nominate 1/3 members in each of the: Audit, Risk Management, Corporate Governance committees Veto rights on certain corporate acts: declaration/pa
Slide 56: GTCAP-MPIC Strategic Partnership Rationale
GTCAP-MPIC Strategic Partnership Rationale • Diversification of power investments in the Visayas into the high-growth infrastructure and utilities sectors • Many of MPIC’s ongoing PPP projects are in Cavite, home to Pro-Friends’ Lancaster New City • Set up of Logistics subsidiary (MetroPac Movers, I
Slide 57: Metro Pacific Financial Highlights
Metro Pacific Financial Highlights Share in Operating Net Income (Core) MPIC share: 4.0 4.6 +14% Power +16% Php2.4B in Php Billion 0.1 0.1 0.2 Water +12% Php0.8B 0.2 LRMC/AFPI 2.1 Hospitals 2.4 Meralco/Beacon/GBPC 0.9 1.1 0.7 0.8 MPTC Tollways +16% Php1.1B Maynilad/MWIC 1Q 2017 1Q 2018 Hospi
Slide 58: Philippine Administration Agenda
Philippine Administration Agenda Continue stable Increase PH’s Relax constitutional Increase macroeconomic competitiveness restrictions on infrastructure policies and the ease of foreign ownership, spending to 9% doing business except for land of GDP by 2022 Boost rural Ensure security Develop human
Slide 59: Macroeconomic Indicators
Macroeconomic Indicators Foreign direct investments Inflation USD10.0 billion FY 2017 4.7% ▲21% from 8.3 billion Y-o-Y as of May 2018 Gross international reserves Population USD79.1 billion 105.8 million end-May 2018 External Debt-to-GDP 11 million OFWs remitting 23.0% as of March 2018 USD28.1Bln Do
Slide 60: Macroeconomic Indicators
Macroeconomic Indicators First Quarter 2018 GDP Growth Household Consumption as % of GDP As of 1Q 2018 6.8% Still the fastest 20.2% Consumption among the 11.0% Government 3.9% ASEAN-5 68.8% 5.5% Investments 4.3% 5.1% Household Consumption +6% In USD Billion Year-on-Year GDP Per Capita in USD, nomina