Wilcon Depot, Inc. · PSE:WLCON
Wilcon Depot — IPO Roadshow (March 2017)
42 slides from Wilcon Depot's IPO roadshow presentation, March 2017
Slide 1: Investors' Briefing
Investors’ Briefing Wilcon Depot, Inc. March 2017
Slide 2: Disclaimer
Disclaimer This presentation does not constitute a prospectus or any kind of offering memorandum in whole or in part. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company. There shall be no sale of these securities in any state o
Slide 3: Disclaimer
Disclaimer A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR OFFERS TO BUY THEM BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT IS RENDERED EFFECTIVE. THIS
Slide 4: Discussion Agenda
Discussion Agenda 1 Overview of Wilcon Depot, Inc. (“the Company”) 2 Home Improvement Industry 3 Investment Highlights 4 Key Growth Strategies 5 Financial Highlights 6 Offer Terms 4
Slide 5: Overview of Wilcon Depot, Inc.
S E CTI O N I Overview of Wilcon Depot, Inc. 5
Slide 6: Overview
Overview #1 home improvement and construction supply retailer in the Philippines* Strong reputation and industry leadership with a 40-year track record Well-recognized brand and a favored retailer offering a complete spectrum of home improvement products Directly offers and distributes its in-house
Slide 7: Brief History
Brief History Number of Stores 37 1 1977 2002 2003 2004 2009 2012 2015 2017 Opened its Opened its Opened the Began operating a Began its corporate IPO first branch first branch largest Wilcon small-format store restructuring to Publicly list in in Quezon in Mindanao Depot store in under “Wilco
Slide 8: Wilcon Group: Corporate Structure
Wilcon Group: Corporate Structure Old Structure Post Restructuring Wilcon Builder’s Depot, Inc. Wilcon Corporation (formerly WBDI, “Parent”) (“WBDI”) Real Estate 99.06% Intellectual Real Estate Properties Intellectual Wilcon Depot, Inc. Properties (“ListCo”) Pays Parent the lease of property Retail
Slide 9: Store Network & Presence
Store Network & Presence Wilcon operates 37 stores strategically located in dominant markets and in fast- growing cities nationwide. 9
Slide 10: Store Formats
Store Formats DEPOT HOME ESSENTIALS No. of stores 31 6 • 2,800 sqm to 31,000 sqm, with • 1,500 sqm to 5,200 sqm, with an Net Selling Space an average net selling space of average net selling space of 9,500 sqm 2,400 sqm 10 *as of January 31, 2017
Slide 11: Home Improvement Industry
S E CTI O N I I Home Improvement Industry 11
Slide 12: The Home Improvement Industry
The Home Improvement Industry Demand Indicators Importation of Home Construction Sector Housing Supply Household Budget Improvement Goods The Construction Sector continues to be one of the foundations and growth drivers of the Philippine economy. Share of GVA Construction to GDP, Growth of Philippin
Slide 13: The Home Improvement Industry
The Home Improvement Industry Demand Indicators Importation of Home Construction Sector Housing Supply Household Budget Improvement Goods The outlook of Home Improvement sector remains positive backed by robust housing production. Housing Production from 2001-2015 Total Housing Units Produced, Regio
Slide 14: The Home Improvement Industry
The Home Improvement Industry Demand Indicators Importation of Home Construction Sector Housing Supply Household Budget Improvement Goods The sustained strength of the Philippine economy, growing household formation, and increasing purchasing power will continue to stimulate households to build new
Slide 15: The Home Improvement Industry
The Home Improvement Industry Demand Indicators Importation of Home Construction Sector Housing Supply Household Budget Improvement Goods Summary of Major Import Items’ Value (in ‘000 USD) and Ave. Growth (%), 2011-2015 Average Growth Major Home Improvement Industry Value (in '000 USD); Top Three So
Slide 16: Investment Highlights
S E CTI O N I I I Investment Highlights 16
Slide 17: Investment Highlights
Investment Highlights 1 Industry leader in the home improvement sector in the Philippines 2 Well-recognized brand and favored retailer 3 Excellent Customer Service 4 Solid long-term business relationships with key suppliers 5 Strong portfolio of in-house brands 6 Dual-format offering a wide array of
Slide 18: Industry leader in the home improvement sector in the Philippines
Industry leader in the home improvement sector in the 1 Philippines Wilcon Depot, Inc. remains to be the market leader in terms of sales for the home improvement industry TOP DEPOTS IN TERMS OF SALES FY 2014 TOP DEPOTS AND MALL-BASED STORES IN amounts in ₱ billions TERMS OF SALES FY 2014 (amounts in
Slide 19: Well-recognized brand and favored retailer
2 Well-recognized brand and favored retailer • “One-stop shop” Complete • High quality products across various product categories ✓ spectrum of • • Extensive portfolio of over 2,000 local and international brands Exclusive distributor of a number of renowned international product brands offerings •
Slide 20: Well-recognized brand and favored retailer
2 Well-recognized brand and favored retailer 20
Slide 21: Excellent Customer Service
3 Excellent Customer Service Knowledgeable and Competent design well-trained sales ABCDE Lounge After sales support consultants team 21
Slide 22: Solid long-term business relationships with key suppliers
4 Solid long-term business relationships with key suppliers Wilcon has over 400 local and foreign suppliers, many of whom have supplied the Company for over 25 years. This has benefitted Wilcon in terms of: ✓ Lowering costs ✓ Sourcing exclusive products ✓ Obtaining products in short supply ✓ Enablin
Slide 23: Strong portfolio of in-house brands
5 Strong portfolio of in-house brands The Company has 16 in-house brands with strong presence across its product categories. 23
Slide 24: Dual-format offering a wide array of products
6 Dual-format offering a wide array of products DEPOT HOME ESSENTIALS • Large-scale home improvement and • Replacement household and do-it- Product Offering construction supply products. yourself (“DIY”) products • Carries 90,000–200,000 SKUs • Middle- high-income class individual • Caters to commun
Slide 25: Highly Experienced Management Team
7 Highly Experienced Management Team The Management Team has an average of over 20 years of industry experience in the retail, home improvement and construction industries. Furthermore, succession planning efforts of the Company is strongly evident through the active involvement of family members in
Slide 26: Key Growth Strategies
S E CTI O N I V Key Growth Strategies 26
Slide 27: Key Growth Strategies
Key Growth Strategies ✓ Expand store network ✓ Continually improve store layouts and product offering ✓ Leverage market leadership and synergies ✓ Focus on continuous introduction of in-house and exclusive brands Further strengthen and increase brand awareness and ✓ visibility 27
Slide 28: Key Growth Strategies: Expand Store Network
Key Growth Strategies 1 Expand Store Network Solidify presence in existing markets Wilcon’s Store Network Expand foothold in fast-growing cities with focus on Visayas and Mindanao 33 regions Target to open 28 branches in the next 16 5 years Luzon Target locations include Cavite, Laguna, Bico
Slide 29: Key Growth Strategies: Improve store layouts and product offering
Key Growth Strategies 2 Continually improve store layouts and product offering Improve and renovate existing stores to enhance overall shopping experience. Remodel store layouts by optimizing and/or expanding the sales floor areas of existing stores to improve visitor traffic 29
Slide 30: Key Growth Strategies: Leverage market leadership and synergies
Key Growth Strategies 3 Leverage market leadership and synergies Continue entering into strategic partnerships and other business relationships with suppliers and other As a market leader, the Company can take business partners, such as institutional advantage of its market knowledge and contracto
Slide 31: Key Growth Strategies: In-house and exclusive brands
Key Growth Strategies 4 Focus on continuous introduction of in-house and exclusive brands Enhance the Company’s ability to provide its customers with value for money products Rationalize product offerings In-house brands Select Exclusive brands 31
Slide 32: Key Growth Strategies: Strengthen brand awareness and visibility
Key Growth Strategies 5 Further strengthen and increase brand awareness and visibility Tap various media outlets such as television, radio, newspapers, billboards, and social media to enhance customer’s awareness Use brand ambassadors to represent the Company’s products and brands Actively par
Slide 33: Financial Highlights
S E CTI O N V Financial Highlights 33
Slide 34: Financial Highlights
Financial Highlights Healthy growth of revenues Consistently improving margins GROSS PROFIT (Pro-forma in ₱ millions) SALES (Pro-forma in ₱ millions) 4,000 3,610 30.0% 3 Yr CAGR: 6.80% 2,956 16,000 3,000 2,561 2,662 25.0% 14,450 2,520 YoY: 10.3% 25.0% 25.0% 25.2% 14,000 13,596 2,000 21.6% 20.0% 11,8
Slide 35: Financial Highlights
Financial Highlights Double-digit growth in assets brought about Low D/E (Bank Debts / Equity) levels provide by Wilcon’s continuous expansion headroom for further expansion TOTAL ASSETS (Pro-forma in ₱ millions) D/E RATIO 2.50x 2.2x 12,000 2.00x 1.50x 10,000 9,566 1.1x 1.00x 0.8x 8,581 0.5x 0.50x 8
Slide 36: Financial Highlights
Financial Highlights Double-digit ROE levels indicate strong shareholder value EQUITY (Pro-forma in ₱ millions) ROE (%) 3,500 25.0% 21.6% 2,946 3,000 20.0% 2,487 2,500 16.4% (a) 2,074 15.0% 2,000 11.6% 1,500 10.0% 1,158 1,000 5.0% 3.4% 500 0 0.0% 2013 2014 2015 9M 2016 2013 2014 2015 9M 2016 36 (a)
Slide 37: Offer Terms and Conditions
S E CTI O N V I Offer Terms and Conditions 37
Slide 38: Offer Terms and Conditions
Offer Terms and Conditions Issuer Wilcon Depot, Inc. (“WLCON”) Share offering 1,393,906,200 primary shares (“Offer Shares”) Offer price range: ₱5.05 per share Estimated offer size Offer size range: ₱7 Bn Estimated Market Capitalization ₱20.7 Bn Public Float 34% To fund expansion of sto
Slide 39: Use of Net Proceeds
Use of Net Proceeds ESTIMATED ESTIMATED USE OF NET PROCEEDS % AMOUNT* TIMING Store Network Expansion ₱ 6,111.8 Mn 91% 2017-2021 Debt Repayment 428.1 Mn 6% 2017-2018 General Corporate 200.0 Mn 3% 2017-2018 TOTAL ₱ 6,739.9 Mn 100% 39
Slide 40: Timetable
Timetable Date Activity March 17 Pricing Announcement March 20 Start of Offer Period March 24 End of Offer Period March 31 Listing and Trading 40
Slide 41: Q&A
S E CTI O N V I I Q &A 41
Slide 42: End of Presentation
END OF PRESENTATION 42