Gt Capital Holdings, Inc. · PSE:GTCAP
Gt Capital — H1 2018 Earnings Presentation
68 slides from Gt Capital's earnings presentation, Aug 22, 2018
Slide 1: First Half 2018 Financial & Operating Results
Rising Together to New Heights First Half 2018 Defined by Excellence, Financial & Refined through Partnership Operating Results gtcapital.com.ph
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 Group Consolidated Financial Highlights 9 Net Income Contribution 10 Metropolitan Bank and Trust Company (MBT) 12 Toyota
Slide 4: Strategic Direction
Strategic Direction New Sectors Synergy • New strategic partners • Infrastructure (MPIC) • Toyota unit sales through MBT/PSBank auto loans/TFS • Logistics (for Toyota) lease-to-own package • Retail (e.g. Isetan Mitsukoshi/Nomura RE) • Federal Land & Pro-Friends home mortgages by MBT/PSBank • AXA ban
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 Corp ORIX Corporation ORIX Corporation and is established with Global Business Power is partners with Federal Federal Land enter into Toyota Financial Services (TFS) Toyota Motor Philippines is established Mitsui & Co. Ltd as Sumi
Slide 7: GT Capital Component Companies
GT Capital Component Companies No. 1 bank in net interest margins as of 1 end-June 2018 1 Most dominant automotive company Owns MERALCO, the Philippines’ largest power 1 distribution in the Philippines, with 38% market share company as of end-June 2018 2 Second largest Philippine bank by assets as
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 First Half 2018
Financial Highlights First Half 2018 Php7.1 billion Consolidated Net Income (PPA adjustments for PCFI, MPI, TMBC, TMP) -1% Php7.2 billion 1H 2017 Php7.1 billion Core Net Income -3% Php7.4 billion 1H 2017 Php101.2 billion Revenues -6% Php108.2 billion 1H 2017 TMP & TMBC - Auto Sales Php 85.0 billion
Slide 10: GT Capital Net Income Contribution by Component Company
GT Capital Net Income Contribution by Component Company AXA TFSPH TMBC PCFI TFSPH TMBC PCFI 2.9% 1.1% 1.3% AXA 3.4% 1.8% 0.6% 4.0% 3.8% TMP MPIC MPIC 25.2% TMP 13.8% 15.4% 36.7% Fed Fed Land Land 8.8% 5.6% MBT MBT 31.5% 44.1% MBT + TMP = 68.2% MBT + TMP = 69.2% 1H 2017 1H 2018 10
Slide 11: GT Capital Net Income Contribution by Sector
GT Capital Net Income Contribution by Sector Insurance Insurance 3% Infrastructure 4% 15% Infrastructure 14% Automotive Automotive 28% Property Property 13% 39% 9% Banking Banking 31% 44% 1H 2017 1H 2018 11
Slide 12: Metropolitan Bank and Trust Company
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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: Peer Banks Highlights
Peer Banks Highlights Net Income (Php Billion) Net Interest Margin – NIMs (%) -1% 3.09% industry NIMs 13.1 +16% -6% 3.8% 3.5% 3.0% 11.0 11.0 BDO MBT BPI MBT BDO BPI Total Assets (Php Billion) Total Loans (Php Billion) +11% industry growth +19% industry growth +16% +11% +11% +19% +18% +16% 2,877 1,90
Slide 15: Peer Banks Highlights
Peer Banks Highlights Total Equity (Php Billion) Total Capital Adequacy Ratio and CET1 (%) +15% industry growth CAR CET1 +5% +35% +38% 17.8% 17.3% 303 16.4% 278 15.3% 14.0% Minimum 240 12.4% CAR 11.5% 10% Minimum CET1 BDO MBT BPI MBT BDO BPI Source: 17-Q Report of Banks as of 30 June 2018 and BSP Re
Slide 16: Metrobank Financial Highlights
Metrobank Financial Highlights Operating Income Net Interest Income +12% (Php33.3B or 74% of Operating Income) 40.0 45.1 +13% ₋ NIMs from 3.72% to 3.77% ₋ Loan portfolio +18% from Php1.1T to Php1.3T vs. Industry +19% in Php Billion 10.4 11.8 Non-Interest Income o Commercial +21% 29.6 33.3 +14% o
Slide 17: Metrobank Components of Income
Metrobank Components of Income Net Interest Income Net Interest Income +12% (Php33.3B or 74% of Operating Income) 29.6 33.3 +12% ₋ Sustained double-digit growth in loans (+18%) from Php1.1T to Php1.3T in Php Billion o Commercial +21% o Consumer +13% o CASA growth at 8% to Php964B; CASA ratio remai
Slide 18: Key Performance Drivers
Key Performance Drivers 1H 1H2018 2018Operating OperatingHighlights Highlights NII less Opex • Php11.0B net income, up 16% Net Interest Income • Sustainable growth in recurring revenue base Operating Expenses in Php Billion - NII more than covers for OPEX - Against peers, MBT superior in the NII les
Slide 19: Metrobank Financial Highlights
Metrobank Financial Highlights Loans and Receivables (Php Billion) Total Loan Portfolio Breakdown Consumer +18% +13% Commercial +21% 1,324 24% Top Corporate 1,118 +21% 76% Mid-Mkt/SME 920 +16% Consumer Loan Portfolio Breakdown Credit Cards +17% 21% Home 32% +7% 47% Auto 1H 2016 1H 2017 1H 2018 +16%
Slide 20: Toyota Motor Philippines
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Slide 21: Comprehensive Auto Resurgence Strategy (CARS) Incentives
Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Incentives 21
Slide 22: CARS Rationale and Regulations
Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Rationale and Regulations • Aims to increase local content from 30% to 60% • Manufacturing of model, body shell, large plastic assemblies, common parts, OEM parts, and shared testing facility are cove
Slide 23: 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 24: 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 Php167.2 VALERIE PRODUCTS MANUFACTURING, INC. million million OGIHARA (THAILAND) CO., LTD. TECHNOL EIGHT PHILIPPINES CORP. Php1.3 billion Aggregate Investments Source: The Phili
Slide 25: 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 26: 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. 26
Slide 27: Economic motorization amid low vehicle penetration
The Philippines is now enjoying the benefits of economic “motorization” amid low vehicle penetration Industry car sales vs. PH GDP per capita Motor vehicle penetration in ASEAN Units USD Vehicles per 1,000 individuals, 2017 500000 3500 Vehicles per 1000 450000 individuals 711 3000 400000 2500 350000
Slide 28: Retail auto unit sales volume
Retail auto unit sales volume As of June 2018 217,895 Industry 12% Y-o-Y 191,495 ▼ Toyota 85,728 73,136 ▼ 14% Y-o-Y 1H 2017 1H 2018 Industry Toyota Source: Company data, CAMPI, AVID 28
Slide 29: Toyota dominant auto company: Overall Market Share
Toyota continues to be the Philippines’ dominant auto company Overall Market Share As of June 2018 YTD 38% No.1 No.1 No.1 Passenger Commercial Overall 18% Car Sales Vehicle Sales Sales 8% 7% 7% 6% 5% 4% Mitsubishi 4% Hyundai Nissan Ford 1% 1% Honda Suzuki Isuzu 1% 1% Others* General MotorsMazda Suba
Slide 30: Auto Industry Market Share
Toyota continues to be the Philippines’ dominant auto company Auto Industry Market Share As of June 2018 YTD Passenger Car Commercial Vehicle 42% 36% 19% 17% 15% 10% 10% 8% 6% 5% 5% 5% 4% 4% 4% 1% 1% 1% 1% 2% 1% 1% 1% 1% 0% Source: Company data, CAMPI, AVID 30
Slide 31: TMP Financial Highlights
TMP Financial Highlights Revenues Wholesale volume -12% (9,839 units) 74,777 units; retail volume -15% 82.1 76.4 -7% (vs -12% industry volume) in Php Billion Front-loading, TRAIN law effect TNVS suspension Aug 2017 Low supply of CV models from exporting countries 1H 2017 1H 2018 Vios run-o
Slide 32: TMP's road to unit sales recovery
TOYOTA MOVING FORWARD TMP’s road to unit sales recovery Vios monthly unit sales Vios sales push in anticipation 3,666 of FMC Vios 3,642 2,965 3,158 3,219 2,899 2,914 3,664 2,900 2,857 3,552 2,798 2,603 2,711 2,396 2,443 1,998 Stop TNVS production suspension 568 TRAIN Law implemented Vios run-out Jan
Slide 33: TMP's road to unit sales recovery
TOYOTA MOVING FORWARD TMP’s road to unit sales recovery • Vios run-out in • Launches of the new anticipation of full- Rush and Vios model change Vios • LTFRB opening up to • Suspension of new five new TNVS players TNVS applications • Expected • Front-loading due to normalization of TRAIN Law market
Slide 34: New model launches in 2018
TOYOTA MOVING FORWARD New model launches in 2018 Model introduction May 2018 Full-model change July 2018 34
Slide 35: 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 67 70 Expansion in Next Wave Cities outside Metro Manila Tuguegarao May 2018 Valencia July 2018 CAGAYAN BUKIDNON 67 Dealerships as of 27 August 2018 Upcoming: Albay, San Jose
Slide 36: 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 37: Price Comparable by Category
Price Comparable by Category in Million Philippine Peso (PHP) In Million PHP Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 1.741 1.917 1.884 1.938 Model Corolla Altis Elantra Civic Lancer Price 0.961 1.477 0.970 1.065 1.168 1.673 0.928 1.238 Model Vios Accent (Sedan) City Mirage G4 Price
Slide 38: Price Comparable by Category in US Dollars
Price Comparable by Category in United States Dollars (USD) In US Dollars Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 32,560 35,852 35,235 36,245 Model Corolla Altis Elantra Civic Lancer Price 17,973 27,623 18,141 19,918 21,844 31,289 17,356 23,153 Model Vios Accent (Sedan) City Mirage
Slide 39: Federal Land
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Slide 40: Average Selling Prices in CBDs
(AFEDERALLAND & Average Selling Prices in CBDs remains strong in Metro Manila based on projects launched 12 months prior Metro Manila Residential Condominium CAGR per annum over Launches and Reservation Sales (in ‘000 u 250,000 the past five years 200,000 a = a me) £ 5 5 Ww ® 150,000 2 o = es Oo § o
Slide 41: Federal Land Financial Highlights
Federal Land Financial Highlights Revenues Reservation Sales -6% from Php6.4B to Php6.0B - Inventory -17% from 1,642 units to 1,364 units due 5.3 5.3 0% to delays in securing permits and licenses for new in Php Billion projects - 4 new projects launched to date, 5 to 7 more within 2H Real estate
Slide 42: Federal Land Highlights
Federal Land Highlights Redesigning of podium for additional commercial space Increasing retail spaces within high- density residential communities Additional GFA of approximately 20,000 sq. m Higher revenue CLOCKWISE, FROM LEFT • Grand Hyatt Residences 1 recognition • Central Park West with project
Slide 43: Project Launches
FEDERAL LAND GT Capital Holdings KEEPIN ‘OU IN MIND Project Launches < Florida Sun Estates-Orlando GENERAL TRIAS, CAVITE February 2018 LTS No. 033109 Mimosa Tower Peninsula Garden Midtown Homes PACO, MANILA. April 2018 LTS No. 032466 Baler Tower Palm Beach West METRO PARK, BAY AREA May 2018 Quantum
Slide 44: 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 45: 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 46: Actual drone shot of Lancaster New City
Actual drone shot of Lancaster New City 46
Slide 47: ~Manila San Juan’
~Manila San Juan’ Emits a i] | Sain CAVITEX a wae a Pasig = Target completion: 2020 ROW progress: 85% hone Angono Status: Ongoing pre i! "| construction activities 4 Taytay Manila Bay Target completion: 2021 ROW progress: 48% Target completion: 2021 Status: Ongoing construction ROW progress: 21% Sta
Slide 48: CALAX 1,700 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 1,700 hectares Daang-Hari MCX SLEX EPZA CALAX Exit LRT-6 5 Aveia Federal Land/ EPZA Alveo 48
Slide 49: 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 50: Recent Lot Sales
Imus Sale to Toyota Manila Bay Group to build Toyota Imus dealership Php223.8 million 13,429 sq. m @ Php16,667/sq. m 1,700 June 2018 hectares Recent Lot Sales at total Sale to MetroPac Movers, Inc. Php1.1 billion 202,110 sq. m @ Php5,628/sq. m July 2018 Map not drawn to scale 50
Slide 51: Construction updates at Lancaster New City
Construction updates at As of 30 June 2018 51
Slide 52: Now Open
66 1,700 57,000 Retail/commercial Hectares of land Residents locators Now Open Soon to Open express 1,000-seater BPO hub Global leader from Australia in high-quality, human-annotated training data for machine learning and artificial intelligence 52
Slide 53: PRO-FRIENDS Financial Highlights
PRO-FRIENDS Financial Highlights Revenues Reservation sales +14% from Php11.3B to Php12.9B (Php2.1B per month) 4.4 +23% Real estate sales +23% from Php3.3B to Php4.1B (excluding lot sale to TMBC in Php Billion 3.6 0.36 +17%) 0.28 0.20 Other Income 3.33 3.87 Non-core Rental income +120% fro
Slide 54: AXA Philippines
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Slide 55: FY 2017 Life Insurance Industry Rankings
FY 2017 Life Insurance Industry Rankings Net Premium Income, in billion Php 32.1 26.2 20.3 19.9 19.2 17.6 11.7 Sun Life 9.9 BPI Philam 8.2 Philam PRU 6.5 Manulife Insular BDO Life ManuCHIB UCPB Life is the world’s number one insurance brand in terms of value Source: Insurance Commission, May 2018 55
Slide 56: FY 2017 General/Non-Life Industry Rankings
FY 2017 General/Non-Life Industry Rankings Net Premiums Written, in billion Php Source: Insurance Commission, June 2018 56
Slide 57: 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 58: Insurance Industry Updates
Insurance Industry Updates As of March 2018 Total Premiums Total Assets +33% 84 +9% 1,471 1,354 in Php Billion 185 222 63 +20% 22 +14% in Php Billion 19 1,169 +7% 1,249 +40% 62 1Q 2017 1Q 2018 44 Total Equity (Net Worth) 267 +4% 278 1Q 2017 1Q 2018 in Php Billion Legend 77 +9% 84 Life insurance sect
Slide 59: AXA Philippines Financial Highlights
AXA Philippines Financial Highlights Gross Earned Premium New Business (APE) +27% from Php3.0B to Php3.8B due to double-digit growth in PSEi in +36% 1Q +37% vs. 2Q +18% 19.3 o Regular Premium (RP) +20% in Php Billion 14.2 o Single Premium (SP) +58% 16.5 AXA +41% SP/RP Premium Income mix – from
Slide 60: Strong synergy and growth
Strong synergy and growth • Persistency Ratio: 85.1% ▲from 83.3% in 1H 2017 • Exclusive financial advisors: 4,000+ • Total bancassurance (Metrobank and PSBank) branches: 953 • Branches nationwide 36 Assets Under Management +10% 96.7 106.1 In Billion PHP 1H 2017 1H 2018 60
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Slide 62: 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 Acquisition of 15.55% of Metro Pacific Sale of 56% of Global Business Power Investments Corp. (MPI) for Php29.9 Corp. (GBPC) to Beacon PowerGen billion at Php6.10 per share Holdi
Slide 63: Rationale & Significant Influence
Rationale & Significant Influence Rationale Accounting Criteria • Diversification of power for “Significant Influence” investments in the Visayas into the • Two board seats high-growth infrastructure and • Joint selection of an Independent utilities sectors Director • Many of MPIC’s ongoing PPP • Re
Slide 64: Metro Pacific Financial Highlights
Metro Pacific Financial Highlights Share in Operating Net Income (Core) CORE NET INCOME PERFORMANCE 9.6 10.6 +11% GBPC - Php1.3B +7% Meralco - Php10.9B +7% in Php Billion 0.2 0.1 0.3 0.3 LRMC/AFPI 5.3 5.8 Hospitals Toll Roads - Php2.3B +12% 2.3 Meralco/Beacon/GBPC 2.0 1.8 2.1 MPTC Water - Ph
Slide 65: 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 66: Macroeconomic Indicators
Macroeconomic Indicators Foreign direct investments Inflation USD10.0 billion FY 2017 4.9% ▲21% from 8.3 billion Y-o-Y as of June 2018 Gross international reserves Population USD76.9 billion 106.2 million end-July 2018 External Debt-to-GDP 23.0% as of March 2018 Personal remittances of 11 million OF
Slide 67: Macroeconomic Indicators
Macroeconomic Indicators Second Quarter 2018 GDP Growth Components of GDP (%) As of 1H 2018 6.0% Still the fastest 20.5% Consumption among the 3.7% ASEAN-5 12.1% Government 67.4% 4.5% Investments 3.8% 5.3% Household Consumption +6% In USD Billion Year-on-Year GDP Per Capita in USD, nominal 113.8 5-y
Slide 68: Top-performing companies, ASEAN Corporate Governance Scorecard
are recognized by the Institute of Corporate Directors as TOP-PERFORMING COMPANIES based on the ASEAN CORPORATE GOVERNANCE SCORECARD Ms. Jette Gamboa Metrobank SVP Mr. Francis Suarez GT Capital Group CFO Mr. JV Alde PSBank President 68