Gt Capital Holdings, Inc. · PSE:GTCAP
Gt Capital — Q1 2017 Earnings Presentation
60 slides from Gt Capital's earnings presentation, Jun 13, 2017
Slide 1: Investor Update: Financial Results January to March 2017
Rising Together to New Heights Investor Update FINANCIAL RESULTS JANUARY TO MARCH 2017
Slide 2: Notice
Notice 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 person who is p
Slide 3: Table of Contents
Table of Contents Strategic Direction 4 GT Capital Corporate Profile 5 GT Capital Component Companies 6 Current Corporate/Ownership Structure 7 Financial Highlights 8 Net Income Contribution 10 Metropolitan Bank and Trust Company (MBT) 12 Toyota Motor Philippines Corp. (TMP) 17 Federal Land, Inc. (F
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 Fed Land & Pro-Friends home mortgages by MBT/PSBank AXA Bancassurance through MBT/PSBank branch network Motor vehicle insuranc
Slide 5: GT Capital Corporate Profile
GT Capital 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; a
Slide 6: GT Capital Component Companies
GT Capital Component Companies No. 1 bank in net interest margins as of 1 end-March 2017 1 Largest automotive company in the Owns MERALCO, the Philippines’ largest power 1 distribution Philippines, maintaining 39% market company Second largest Philippine bank by share as of end-March 2017 Owns GLOB
Slide 7: Current Corporate Ownership Structure
Current Corporate Ownership Structure Grand Titan Public Float 56.19% 43.81% from 51.59% from 48.41% Auto Assembly and Importation, Property Infrastructure, Water, Banking Dealership, and Financing Development Insurance Power, and Healthcare 40.0%5 21.0% 36.0% 51.0% 25.3%2 3 15.55%6 26.47 %1 36
Slide 8: Financial Highlights 1Q 2017
Financial Highlights 1Q 2017 Php3.1 billion Consolidated Net Income +5% Php2.9 billion 1Q 2016 Php3.2 billion Core Net Income +12% Php2.8 billion 1Q 2016 Php48.8 billion Revenues +32% Php36.8 billion 1Q 2016 TMP & TMBC - Auto Sales (TMP – Php37.1B) Php 42.8 billion +39% Equity in Net Income of Assoc
Slide 9: GT Capital 1Q 2017 vs. 1Q 2016 Comparative
GT Capital 1Q 2017 vs. 1Q 2016 Comparative Consolidated TMP -11% Core Net Income MBT +20% – exc. gain on +12% sale in 1Q 2016 MPIC NI contribution 3.2 Php467M MPIC (non-recurring) 2.8 Maynilad right sizing in Php Billion program Php19.6M – added back PCFI NI contribution Php136M Gain on
Slide 10: GT Capital Net Income Contribution
GT Capital Net Income Contribution PCFI TFS TMBC PCFI TMBC TFS AXA AXA 3.5% 1.2% 1.3% 3.6% 1.9% 0.7% 2.8% 2.5% MPIC GBPC 12.1% 5.8% TMP TMP Fed 40.4% 32.8% Land 12.4% Fed Land MBT 8.4% MBT 37.4% 38.2% MBT + TMP = 77.8% MBT + TMP = 71.0% 1Q 2016 1Q 2017 10
Slide 11: GT Capital Net Income Contribution by Sector
GT Capital Net Income Contribution by Sector* Insurance Insurance Insurance Power 3% Infrastructure Infrastruc 3% 3% 6% 12% ture 12% Property 16% Property Property 12% 12% Auto Auto 35% 43% Banking Banking 37% Banking 38% 38% *Prior to additional 10% of Metrobank 1Q 2016 1Q 2017 11
Slide 12: Metropolitan Bank and Trust Company
GT CAPITAL HOLDINGS INCORPORATED zai aiad a . E Metrobank Plaza =e \ANe NY 12
Slide 13: Peer Banks Highlights
Peer Banks Highlights +18% industry growth Net Interest Margin – NIMs (%) Total Loans (Php Billion) 3.7% +21% +26% +20% 3.3% 2.9% 1,543 1,102 1,033 BDO MBT BPI MBT BDO BPI +13% industry growth +13% industry growth Total Deposits (Php Billion) CASA Deposits (Php Billion) +13% +11% +16% +17% +13% +19%
Slide 14: Peer Banks Highlights
Peer Banks Highlights Total Capital Adequacy Ratio (%) Common Equity Tier 1 (CET1) Ratio (%) 15.6% 15.6% 13.97% 12.81% 12.79% 13.7% BDO MBT BPI MBT BDO BPI Total Equity (Php Billion) Total Assets (Php Billion) 282 2,396 201 1,924 1,730 172 BDO MBT BPI BDO MBT BPI Source: 17-Q Report of Banks as of 3
Slide 15: Metrobank Financial Highlights
Metrobank Financial Highlights CASA (Php Billion) Loans and Receivables (Php Billion) +19% 873 1,102 +26% 1Q 2016 1Q 2017 1Q 2016 1Q 2017 Total Loan Portfolio Breakdown Consumer Loan Portfolio Breakdown Consumer Credit Cards 24% 20% Home +17% +22% 35% Commercial Auto 76% 45% +30% +24% Growth rates S
Slide 16: Metrobank Financial Highlights
Metrobank Financial Highlights Operating Revenues Above-industry volume growth: loans 19.2 19.9 +4% +26% vs 18% and CASA +19% vs 13% Strategic re-balancing of asset mix +3% in Php Billion o Investments: from 27% to 20% o Loans: from 52% to 57% CASA deposit/total deposit from 58% to 60% 1Q 2016
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Slide 18: Automotive Industry Updates
Automotive Industry Updates Car Production in Units (‘000) Domestic Sales in Units (‘000) End-March 2017 vs End-March 2016 End-March 2017 vs End-March 2016 -4% 486 507 6% 283 267 12% 16% 319 210 285 182 7% 7% 141131 23% 138 130 94 5% 0% 33% 76 59 56 47 47 33 25 Thailand Indonesia Malaysia Philippine
Slide 19: Comprehensive Automotive Resurgence Strategy: Incentives
Comprehensive Automotive Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Incentives 19
Slide 20: CARS: Rationale and Regulations
Comprehensive Automotive 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
Slide 21: 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. 21
Slide 22: Industry car sales vs. PH GDP per capita
As the economy grows, more Filipinos buy vehicles Industry car sales vs. PH GDP per capita Units USD Motorization of the Philippine economy 100000 3500 90000 3000 80000 70000 2500 60000 2000 50000 40000 1500 30000 1000 20000 500 10000 0 0 Mar Mar Mar Mar Mar 2008 2010 2012 2014 2016 Industry car sal
Slide 23: Toyota outperformed the industry in Q1 sales growth
Toyota outperformed the industry in Q1 sales growth Retail unit sales volume As of March 2017 104,927 Industry growth 86,316 ▲ 20% Y-o-Y Toyota growth 30,498 40,689 ▲ 33% Y-o-Y 1Q 2016 1Q 2017 Industry Toyota Source: Company data 23
Slide 24: Overall Market Share
Still the dominant auto company Overall Market Share As of March 2017 39% 16% 8% 7% 7% 6% 5% 4% 3% 2% 1% 1% 1% Source: Company data 24
Slide 25: Auto Industry Market Share
Still the dominant auto company Auto Industry Market Share As of March 2017 Passenger Car Commercial Vehicle 41% 37% 17% 18% 12% 11% 11% 9% 6% 6% 5% 3% 4% 4% 3% 2% 2% 2% 3% 1% 1% 1% 1% 0% 0% Source: Company data 25
Slide 26: Toyota Dealership Expansion
Toyota Dealership Expansion Target by end of year 2012 2013 2014 2015 2016 2017E Number of Dealerships 32 42 45 49 52 67 Expansion in Next Wave Cities Outside Metro Manila ANGELES, PAMPANGA February MATINA, DAVAO April TALISAY, CEBU May CALBAYOG, SAMAR May 56 Dealerships as of 31 May 2017 Opening in
Slide 27: Toyota New Model Launches
Toyota New Model Launches Model refresh March 2017 27 27
Slide 28: Toyota Financial Highlights
Toyota Financial Highlights Gross Profit Margin Net Profit Margin 17.3% 10.2% 11.2% 6.8% 1Q 2016 1Q 2017 1Q 2016 1Q 2017 USD:PHP depreciated from 47.07 to 49.90 USD:JPY appreciated from 120.71 to 104.83 2828
Slide 29: 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 30: Toyota Price Comparables by Category (PHP)
Price Comparables by Category in Million Philippine Peso (PHP) In Million PHP Toyota Hyundai Honda Mitsubishi Model Camry Sonata Accord Price 1.575 - 2.190 1.698 - 1.898 1.793 - 2.313 Model Altis Elantra Civic Lancer Price 0.896 - 1.335 0.908 – 1.158 1.103 – 1.535 0.850 – 1.238 Model Vios Accent Cit
Slide 31: Toyota Price Comparables per Category (USD)
Price Comparables per Category in United States Dollars (USD) Toyota Hyundai Honda Mitsubishi Model Camry Sonata Accord Price 31,500-43,800 33,960-37,960 35,860-46,260 Model Altis Elantra Civic Lancer Price 17,920-26,700 18,160-23,160 22,060-30,700 17,000-24,760 Model Vios Accent City Mirage G4 Pric
Slide 32: TMP Financial Highlights
TMP Financial Highlights Revenues Wholesale volume +27% +32% 38,576 units 37.1 Strong sales volume: in Php Billion 28.1 • PCs: Vios +14% • CVs: Fortuner +363%, Innova +145%, Avanza +18% & Hilux +9% 1Q 2016 1Q 2017 Overall market share from 35.3% to 38.8% Q-on-Q Net Income ATP -12% 2.8 Normal
Slide 33: Federal Land
GT CAPITAL HOLDINGS INCORPORATED AAAI FEDERAL LAND GT Capital Holdings KEEPING YOU IN MIND 33
Slide 34: Strong demand continues in the property sector
Strong demand continues in the property sector Source: Leechiu Property Consultants “Approx. 60% of new units (14,000) will be completed in the Bonifacio and Bay Area CBDs this year” -Colliers 34
Slide 35: Federal Land Financial Highlights
Federal Land Financial Highlights Revenues Managed growth, fewer project launches, focus on POC improvement 2.5 +13% Reservation sales -7% from Php3.3B to Php3.1B in Php Billion 2.4 - Inventory -14% from 2,181 units to 0.2 1,866 units (11 mos.) 2.2 Non-core - 2017 Estimated Project Launches: O
Slide 36: Federal Land Current Projects
Federal Land Current Projects Over 30 On-going Projects • 7 launched in 2011 8 Different Locations • 11 launched in 2012 • 6 cities within Metro Manila • 5 launched in 2013 • 2 cities outside Metro Manila • 4 launched in 2014 • 3 launched in 2015 Recurring Income at 9% of total revenue • 4 launched
Slide 37: Land Bank Location
Land Bank Location Land Bank Metro Manila Location (in hectares) Macapagal Quezon City Paco Manila Marikina 1. Metro Manila Ermita, Manila Fort Bonifacio (a) Macapagal 29.5 Mandaluyong (b) Fort Bonifacio 5.3 Makati City Binan Laguna (c) Marikina 14.4 Binondo Manila (d) Mandaluyong 3.5 Cavite (e) Pac
Slide 38: Property Company of Friends, Inc.
GT CAPITAL HOLDINGS INCORPORATED PRO «FRIENDS PROPERTY COMPANY OF FRIENDS, INC. Creating communities, transforming lives. 38
Slide 39: 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 40: Cavite: Ideal for BPO growth
Caviteño Talent Cavite: Ideal for BPO growth Large entry-level graduate Cost of living Rental price talent pool index index 145,000 100 100 75 70 total annual graduates 20,000 NCR Cavite NCR Cavite annual college graduates Wage index 100 87 70,000 annual technical school graduates NCR Cavite Source:
Slide 41: 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 42: 1,600 hectares
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 1,600 hectares Daang-Hari MCX SLEX EPZA CALAX Exit LRT-6 5 Aveia Federal Land/ EPZA Alveo 42 42
Slide 43: Pro-Friends Financial Highlights
Pro-Friends Financial Highlights Revenues Calibrated sales slowdown for Interest income construction catch-up (up to 500 units 1,917.6 RES per month) in Php Million 126.1 987.9 Construction backlog addressed by 1,791.5 126.9 Q1 2017, POC impact starts in Q2 861.0 Reservation sales Php2B pe
Slide 44: AXA Philippines
GT CAPITAL @ HOLDINGS INCORPORATED y redefining / standards 44
Slide 45: Underpenetrated Fast-growing Sector
Underpenetrated Fast-growing Sector Life and non-life Philippine insurance premiums 2009-2018F (In Billion USD) 10 9.4 9 Projected to grow to 8.3 8 USD9.4 billion in 2018 Gross Premium Written 7.1 7 USD7.2 billion from life +15% 6.1 in billion USD 6 5.1 4.9 5 average growth 3.8 4 2.9 3 2.3 2 1 0 201
Slide 46: Underpenetrated Fast-growing Sector
Underpenetrated Fast-growing Sector ALL FIGURES IN BILLION PHP UNLESS OTHERWISE STATED Life Assets Non-Life Assets 1,069.3 953.2 159.1 157.0 161.8 160.6 847.4 730.0 128.4 621.9 531.6 CAGR + 15% 112.2 CAGR + 7% 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 Life Premium Income Non-Life G
Slide 47: Strong synergy and growth
Strong synergy and growth • Persistency Ratio: 83% • Agency Sales Force: 3,000 from 2,700 • Total bancassurance (Metrobank and PSBank) branches: 925 out of 959 branches Assets Under Management 81.5 90.5 +11% In Billion PHP 1Q 2016 1Q 2017 47
Slide 48: AXA-Conso Financial Highlights
AXA-Conso Financial Highlights Gross Premium New Business (APE) at Php1.5B in 2017 vs. Php1.1B in 2016 (39% vs. LY) 5.44 6.90 +27% o Regular Premium (RP) +40% o Single Premium (SP) +34% in Php Billion 1.23 1.09 SP/RP product mix - 50:50 to 51:49 CPAIC +13% 4.35 5.68 AXA +30% 1Q 2016 1Q 2017 N
Slide 49: Metro Pacific Investments
PACIFIC Ms INVESTMENTS 49
Slide 50: Strategic Partnership Agreement between GT Capital and Metro Pacific
Strategic Partnership 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% of Metro Pacific Investments C
Slide 51: 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 51
Slide 52: 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 52
Slide 53: 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 54: 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 55: 1,600 hectares
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 1,600 hectares Daang-Hari MCX SLEX EPZA CALAX Exit LRT-6 5 Aveia Federal Land/ EPZA Alveo 55
Slide 56: Metro Pacific Financial Highlights
Metro Pacific Financial Highlights Share in Operating Net Income (Core) Meralco +15% Energy sales +3% from 9,077 GWh to 9,317 GWh Increased direct equity stake from 32.5% 4.0 in Php Billion 3.5 Logistics / Indra to 41.2% effective June 2016 0.1 0.1 LRMC/AFPI GBPC contribution through Beacon
Slide 57: 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 58: Macroeconomic Indicators
Macroeconomic Indicators Household Consumption as % of GDP As of FY 2016 Consumption 26.9% Government 10.5% 69.4% Spending Investments Household Consumption +6.9% In USD Billion Y-o-Y 113.0 99.5 105.7 89.2 94.2 GDP Per Capita 5-year CAGR: +5% $2,880 $2,947 $2,591 $2,768 $2,852 $2,364 2012 2013 2014
Slide 59: Macroeconomic Indicators
Macroeconomic Indicators Thriving BPO sector 11 million OFWs 1.2 million employees remitting USD22.9 billion revenues USD26.9 billion ▲12% year-on-year ▲5% year-on-year Source: Bangko Sentral; Migrante Int’l Source: IT-BPAP 59
Slide 60: Macroeconomic Indicators
Macroeconomic Indicators Foreign direct investments USD5.8 billion Gross international reserves Benign inflation 1.8% USD80.7 billion as of FY 2016 External Debt-to-GDP 25.5% as of end-Sept 2016 Domestic liquidity, end-Nov 2016 PHP 9.1 trillion ▲12.7% from 8.0 trillion in end-Nov 2015 Population 103