Gt Capital Holdings, Inc. · PSE:GTCAP
Gt Capital — Q1 2019 Earnings Presentation
66 slides from Gt Capital's earnings presentation, May 14, 2019
Slide 1: First Quarter 2019 Financial and Operating Highlights
First Quarter 2019 Financial and Operating Highlights Building on New opportunities 14 May 2019
Slide 2: First Quarter 2019 Financial Highlights
GT Capital Holdings First Quarter 2019 Financial Highlights 2
Slide 3: Financial Highlights 1Q 2019 year-on-year
Financial Highlights 1Q 2019 year-on-year (vs. 1Q18) Php3.42 billion Consolidated Net Income -8% Php3.74 billion 1Q 2018 Php3.47 billion Core Net Income (FV adjustments for PCFI, MPI, TMBC, TMP) -8% Php3.76 billion 1Q 2018 Php47.0 billion Revenues +3% Php45.5 billion 1Q 2018 Auto Sales (TMP – Php33.
Slide 4: GT Capital Net Income Contribution By Component Company
GT Capital Net Income Contribution By Component Company AXA TFSPH TMBC PCFI TFSPH TMBC PCFI 3.1% 1.7% 0.5% AXA 2.7% 1.5% 0.4% 2.2% 4.5% TMP TMP MPIC 26.8% MPIC 20.1% Fed 13.2% 12.1% Fed Land Land 5.1% 4.2% MBT MBT 47.1% 54.0% MBT + TMP = 73.9% MBT + TMP = 74.1% 1Q 2018 1Q 2019 4
Slide 5: GT Capital Net Income Contribution by Sector
GT Capital Net Income Contribution by Sector Insurance Insurance Infrastructure 4% Infrastructure 5% 13% 12% Automotive 29% Automotive Property 22% Property 7% 7% Banking Banking 47% 54% 1Q 2018 1Q 2019 5
Slide 6: Automotive
AUTOMOTIVE lj GT CAPITAL HOLDINGS INCORPORATED
Slide 7: Retail auto unit sales volume
Retail auto unit sales volume As of March 2019 YTD In Units Industry 96,919 96,920 0% Y-o-Y Toyota 34,440 33,554 ▼ 3% Y-o-Y Industry factors: 3M 2018 3M 2019 • Signs of recovery in volume from Industry Toyota seasonally high 4Q • Flat YoY due to easing inflation In Percent Year-on-year (%YoY) and re
Slide 8: Seasonality
Seasonality Volume to improve due to higher 2Q to 4Q seasonality TMP historically below industry in 1Q due to competitors fiscal year-end Seasonality – Industry and TMP (2009 to 2018) 1Q: 2Q to 4Q: Industry: 23% of total Industry: 77% of total annual sales TMP: 22% of total TMP: 78% of total annual
Slide 9: Base effect
Base effect Toyota retail volume in Jan. 2018 had spill over from Dec. 2017 front loading Jan 2018. TMP Retail Sales Units - 2018 spill over Average Share of Monthly Sales to Total Sales 9.8% 8.6% 8.4% 9.4% 8.0% 8.3% 9.2% 9.5% 7.5% 7.5% 7.4% 6.4% January February March April May June July August Sep
Slide 10: Signs of recovery
Signs of recovery Industry vehicle sales grew YoY for the first time in 12-mos. last Feb. 2019 due to easing inflation and rebound in consumer sentiment Industry Vehicle Sales (Absolute YoY Change) vs. Inflation (In %) and BSP Consumer Expectations Survey (In %) 15,000 13.1 10,000 6.7 5,000 -0.5 0 -
Slide 11: Hiace Run-out
Hiace Run-out (PH Largest market in the world at 17,000 units/annum) Contributed 11% of monthly sales in 2018 Hiace Retail Sales (In Units) 1,789 1,609 1,570 1,524 1,561 1,460 1,496 1,497 1,410 1,370 1,180 1,172 Hiace run-out 822 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
Slide 12: Overall Market Share
Toyota achieved a 35% market share in 1Q19 (vs. 36% in 1Q18) Overall Market Share As of March 2019 YTD 35% 17,414 No.1 Passenger No.1 Commercial No.1 Overall Unit difference Car Sales Vehicle Sales Sales 17% 12% 10% 7% 6% 5% 4% Mitsubishi Nissan 3% Hyundai Honda Ford 1% 0.7% 0.7% Suzuki Isuzu Others
Slide 13: Auto Industry Market Share
Toyota continues to be the Philippines’ dominant auto company Auto Industry Market Share As of March 2019 YTD Passenger Car Commercial Vehicle 39% 31.9% of total market 35.7% of Toyota sales 33% 68.1% of total market 64.3% of Toyota sales 6,832 10,562 Unit difference Unit difference 17% 15% 18% 17%
Slide 14: New model launch update
New model launch update Dominant in respective segments May 45% segment Php958k – 1.090M 2018 FY’18: 7.0% of sales share since launch July 34% segment Php659k – 1.110M 2018 FY’18: 16.8% of sales share since launch Php1.806 – 2.007M Dec 76% segment 2018 FY’18: 0.1% of sales share since launch Php1.44
Slide 15: € TOYOTA ay
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Slide 16: TMP Financial Highlights (YoY)
TMP Financial Highlights (YoY) Revenues WSV -4% 32,394 units; RSV -3% vs. 0% Industry +0.2 o Hiace: Runout Feb 2019 33.7 33.8 % o Fortuner & Vios: increased in Php Billion network discount o Avanza: Runout March 2019 Sales volume: 1Q 2018 1Q 2019 o PCs: Vios -6%, Wigo -14% Net Income ATP o CVs:
Slide 17: Dealership Expansion
Dealership Expansion Target by end of year 2014 2015 2016 2017 2018 Current 2019E Number of Dealers 45 49 52 61 69 70 72 January 2019 SANTA ROSA Nueva Ecija March 2019 DARAGA Albay 70 Dealerships as of 08 May 2019 Upcoming: Cebu (renovation), Valenzuela, Lucena (Quezon) 17
Slide 18: Property Development
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Slide 19: Residential Supply and Demand
RESIDENTIAL SUPPLY AND DEMAND Condominium demand continues to exceed supply; Unsold inventory expected to be steady from 2019 to 2021 Metro Manila Residential Condominium 60,000 Supply, Demand and Unsold Inventory 50,000 Forecasted Supply 40,000 34,067 34,900 Units 30,000 21,601 20,000 10,000 0 2014
Slide 20: Office Supply and Demand
OFFICE SUPPLY AND DEMAND 1Q19 office demand exceeded supply; Office supply and vacancy expected to decline by 2020 Metro Manila Office Supply (In SQM) vs. Average Vacancy Rate (In %) 1.4 6.0% 6.0% 6.0% 5.5% 1.2 5.0% 5.0% 4.0% 3.5% 3.0% GLA in Mn SQM 1 0.8 0.6 0.4 0.2 0 2013 2014 2015 2016 2017 2018
Slide 21: Federal Land
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Slide 22: Federal Land Financial Highlights
Federal Land Financial Highlights Revenues Reservation Sales Reservation - Sales+20% to Php4.3B Amount: +20% from Php3.6B to Php4.3B Real Estate fromSales -12% units to to 1.715 Php1.8B due -5% - Inventory +118% 786 units 2.6 to lower Real POC estate sales (due -12% to delayed from Php2.0 to
Slide 23: Project Launches
Project Launches 1Q 2Q 2019 Estimate 2 2 23
Slide 24: Two projects launched in 1Q 2019
Project Launches Two projects launched in 1Q 2019 Number of units are all estimates and subject to change ◄ The Estate AYALA AVENUE Feb. 2019 188 units, Php18.0B (JV 50%) ► Mi Casa Tower 1 BAY AREA, PASAY March 2019 158 units, Php3.8B 24
Slide 25: Pro-Friends
PRO * FRIENDS PROPERTY COMPANY OF FRIENDS, INC. : iss . " GT CAPITAL Creating communities, transforming lives. HOLDINGS INCORPORATED
Slide 26: PRO-FRIENDS Financial Highlights
PRO-FRIENDS Financial Highlights Revenues Ave. Bank Takeout from Php655M to Php853M 1.7 2.1 2.1 +20% Real estate sales +20% from Php1.6B to Php1.9B in Php Billion 1.7 0.2 0.9 0.2 Rental income +76% to Php23M due to 1.9 9.5 1.5 Other Income GLA increase, additional tenants, & rate 6.3 RES e
Slide 27: Insurance
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Slide 28: Insurance Industry Updates
Insurance Industry Updates Premium income hit record in 1Q18, due to strength in equities market 1Q19 premiums are coming from a high base Life Insurance Premiums vs. Philippine Stock Exchange Index (PSEi) Performance 8,558 Industry Premium Income - Life 8,600 61.8 63.0 Single Premium 8,400 Life: 42
Slide 29: Insurance Industry Updates
Insurance Industry Updates The Philippine insurance industry continues to be an underpenetrated high-growth sector Life and General Premium Income (In Php Bn) 278.0 11% 199.3 217.2 222.4 248.4 189.8 CAGR 147.1 Increase in premiums of Php24 billion per annum 2012 2013 2014 2015 2016 2017 2018 Life an
Slide 30: Insurance Industry Updates
Insurance Industry Updates As of December 2018 Total Premiums Total Equity (Net Worth) +12% +5 % 278 337 248 320 49 45 82 in Php Billion +9% 87 -6% in Php Billion 203 +13% 229 202 +9% 220 FY 2017 FY 2018 FY 2017 FY 2018 Legend Life insurance sector General/Non-Life insurance sector Source: Insurance
Slide 31: Life Insurance Ranking
Life Insurance Ranking Premium Income, December 2018 Market Share 16% 13% 10% 10% 8% Sun Life AXA Philam Life PRU Life UK BPI-Philam Source: Insurance Commission Unaudited Statistics, BusinessWorld, 2019 31
Slide 32: AXA Philippines
GT CAPITAL HOLD! TED INGS INCORPORATE:
Slide 33: AXA Philippines Financial Highlights
AXA Philippines Financial Highlights Gross Premium LIFE New Business (APE) -14% from Php2.0 to 10.94 -32% Php1.8B due to a high base in 2018; continued growth in Protection & Health line in Php Billion 7.43 o RP +9% Traditional +46% (Health & Protection) 9.50 6.04 AXA -36% Unit-linked +2% 1.
Slide 34: Banking
BANKING lj GT CAPITAL HOLDINGS INCORPORATED
Slide 35: 1Q 2019 Peer Banks Highlights
1Q 2019 Peer Banks Highlights MBT delivered NIM expansion and prudent operational expenditures NII less Opex (Php Billion) Operating Expenses (Php Billion) 4.6 +22% +10% +24% 4.0 28.3 13.5 12.1 -0.6 MBT BPI BDO BDO MBT BPI Cost-to-Income Ratio (In %) Net Interest Margin – NIMs (%) 66.5 55.6 +9bps 53
Slide 36: 1Q 2019 Peer Banks Highlights
1Q 2019 Peer Banks Highlights Total Equity (Php Billion) Total CAR and CET1 (%) +35% CAR CET1 Minimum CET1 338 289 257 17.4% 16.6% 15.7% 15.0% 14.0% 12.4% BDO MBT BPI 11% Total Loans* (Php Billion) +9.9% industry growth +8% +9% +12% 2,010 1,360 1,350 BDO MBT BPI MBT BDO BPI *excludes IBL and spurra
Slide 37: Metrobank
Slide 38: Metrobank Financial Highlights
Metrobank Financial Highlights Operating Income Net Interest Income +12% (Php18.1B or 74% of Operating Income) +11% ₋ Loan portfolio +9% at Php1.36T o Commercial +9% in Php Billion 6.0 6.5 Non-Interest Income o Consumer +5% 16.1 18.1 +8% o NIMs at 3.84% Net Int. Income Non-Interest income +8
Slide 39: Key Performance Drivers
Key Performance Drivers Loans and Receivables (Php Billion) Total Loan Portfolio Breakdown +9% Consumer 1,360 24% Commercial 76% Consumer Loan Portfolio Breakdown 1,253 Credit Cards, Others 22% 33% Home Auto 45% 1Q 2018 1Q 2019 Source: 17Q Report as of 31 March 2019 39
Slide 40: Infrastructure And Utilities
Infrastructure And Utilities 40
Slide 41: Infrastructure Project Updates
Infrastructure Project Updates 1Q 2019 project opening NLEX HARBOUR LINK SEGMENT 10 5.8km from Karuhatan Valenzuela to C3, Caloocan Opened Feb 2019 41
Slide 42: Infrastructure Project Updates
Infrastructure Project Updates Upcoming developments C5 SOUTH LINK PHASE 1 LRT1 CAVITE EXTENSION 2.2km C5 to Merville, Parañaque 11.7km Baclaran to Bacoor, Cavite 87% Complete Ground breaking: May 7, 2019 Target Completion: June 15, 2019 Target Completion: 2023 42
Slide 43: Metro Pacific Investments
PACIFIC Rs INVESTMENTS
Slide 44: Metro Pacific Financial Highlights
Metro Pacific Financial Highlights Share in Operating Net Income (Core) Power +8% o Meralco - Core NI Php5.6B +14% in Php Billion 0.1 0.1 Logistics / Indra 0.2 0.2 o GBPC - Core NI Php0.4B -44% LRMC/AFPI 2.4 2.7 1.1 1.1 Hospitals Toll Roads - Core NI Php1.1B +1% Meralco/Beacon/GBPC 0.8 0.9 (0.1)
Slide 45: Recent Developments
RECENT EVELOPMENTS F3 GT CAPITAL
Slide 46: Senior Bond Issuance
Senior Bond Issuance Raised Php17.5 billion 29 March 2019 Issued & listed on PDEX 11 April 2019 Issuance Details • Nearly 2x Oversubscribed • Initial target of Php10 Billion • Third bond issuance from Php100 billion program • Aggregate issue size Php45.5 billion 46
Slide 47: Avanza Full Model Change Launched
Avanza Full Model Change Launched April 2019 47
Slide 48: PRO-FRIENDS Share Redemption
PRO-FRIENDS Share Redemption 10 May 2019 48
Slide 49: Exchange of Pro-Friends Shares for Land
Exchange of Pro-Friends Shares for Land Agreement signed on 10 May 2019 (Subject to regulatory approvals) Redemption 702 hectares of 64,530,712 of selected assets Series A Preferred Shares in PCFI Approximately (51% of PCFI) Php20 Billion 49
Slide 50: Investment History
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Slide 51: Investment History 2015 to 2018
Investment History 2015 to 2018 • GT Capital invested Php16.0 billion for a 51.0% direct equity stake in Pro-Friends • Tranche 1: August 2015, Php7.24B for 22.68% • Tranche 2: June 2016, Php8.76B for 28.3% • Investment rationale: attain foothold in horizontal, affordable, low-cost housing sector 51
Slide 52: Rationale
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Slide 53: Redemption of PRO-FRIENDS Shares: selected 702 hectares
Redemption of PRO-FRIENDS Shares The selected 702 hectares are best suited for master-planned, mixed-use developments Map not drawn to scale 53
Slide 54: Ongoing infrastructure projects and target completion dates
TARGET COMPLETION DATES: NLEX-SLEX Connector Road CAVITEX - 2021 CAVITEX C-5 South Link - 2021 CALAX - 2022 NAIA Expressway CAVITEX C-5 South Link Entertainment City CAVITEX LRT-1 CALAX Extension Ongoing Alabang infrastructure projects Daang-Hari may translate to MCX higher land prices in the medium
Slide 55: Rising property values from infrastructure
NLEX-SLEX Connector Road Rising property NAIA Expressway C-5 South Link values from Entertainment City infra & other CAVITEX property LRT-1 developments Extension Alabang Daang-Hari MCX CALAX LRT-6 Exit 1 CALAX Aveia SLEX CALAX Federal Land/ Exit 2 Alveo CTBEX 55
Slide 56: CALAX: Surrounding Project Prices
Redemption of PRO-FRIENDS Shares CALAX Two dedicated exits at Lancaster New City Surrounding Project Prices Vita Kawit General Trias General Trias Bacoor c. Php30,000 c. Php17,000 c. Php52,000 c. Php45,500 toPhp40,000 Per sq. m, estimated Per sq. m, estimated Per sq. m, estimated Per sq. m, estimate
Slide 57: CAVITEX-C5 Link
Redemption of PRO-FRIENDS Shares CAVITEX-C5 Link 2.2km C5 to Merville, Parañaque 87% Complete Target Completion: June 15, 2019 57
Slide 58: Daang Hari: Surrounding Project Prices
Redemption of PRO-FRIENDS Shares Daang Hari Surrounding Project Prices Imus Bacoor c. Php28,000 c. Php92,000 c. Php55,600 c. Php44,000 Per sq. m, estimated to Php45,000 Per sq. m, estimated Per sq. m, estimated Per sq. m, estimated 20 has. 750 has. 62 has. 1,350 has. Source: Brokers’ websites 58
Slide 59: LRT-1 Extension
Redemption of PRO-FRIENDS Shares LRT-1 Extension Baclaran to Bacoor, Cavite Right-of-way awarded to LRMC 59 59
Slide 60: Recent Lot Sales
Recent Lot Sales Sale to McDonald’s Php64.0 million 2,027 sq. m @ Php31,579/sq. m February 2019 Imus Sale to Toyota Manila Bay Group to build Toyota Imus dealership Php223.8 million 13,429 sq. m @ Php16,667/sq. m June 2018 Sale to MetroPac Movers, Inc. Php1.1 billion 202,110 sq. m @ Php5,628/sq. m J
Slide 61: CALABARZON and Cavite Demographics
Redemption of PRO-FRIENDS Shares CALABARZON and Cavite Demographics CALABARZON CAVITE 21% 2nd largest 35 of OFWs contributor to GDP economic/industrial Highest in the Philippines only Metro Manila larger estates $2,058 37.2% 15 Contribution to accredited PEZA zones GDP per capita manufacturing GDP 2
Slide 62: Rationale for Redemption
Rationale for Redemption LNC best-use for mixed-use development • Land values no longer suitable for affordable housing • Spin-off inevitable • Partners to focus on areas of expertise • Right Timing 62
Slide 63: Return on Investment
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Slide 64: Valuation Methodology
Valuation Methodology • 702 hectares of Selected Assets appraised by Cuervo Appraisers • Reyes Tacandong issued fairness opinion on Enterprise Value of PCFI using various methodologies • Values converge at Php20 Billion for 51% 64
Slide 65: Return on GT Capital's Investment
Return on GT Capital’s Investment Return on Investment • GT Capital Net Income Initial Php16.0 Contribution Investment Billion from PRO-FRIENDS versus CAGR +18% Approximate Value of Php20.0 ―Selected Assets‖ Billion • Return on investment of Dividends from Php0.9 PRO-FRIENDS over 3 yrs Billion 31% T
Slide 66: Thank You!
“SGT CAPITAL