Gt Capital Holdings, Inc. · PSE:GTCAP
Gt Capital — H1 2020 Earnings Presentation
66 slides from Gt Capital's earnings presentation, Oct 20, 2020
Slide 1: Investor Presentation: First Half 2020 Financial and Operating Results
October 2020 Investor Presentation First Half 2020 Financial and Operating Results For more information, Visit gtcapital.com.ph/investor-relations or contact IR@gtcapital.com.ph Music from Bensound.com
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 GT Capital Corporate Profile 5 History of Strategic Partnerships 6 Strategic Direction 9 GT Capital Component Companies 11 Current Corporate/Ownership Structure 12 Our Macroeconomic View 13 Group Consolidated Financial Highlights 16 Net Income Contribution 18 Metropolitan Bank and
Slide 4: Our history from Metrobank founded in 1963
• We trace our history to Metropolitan Bank and Trust Company (Metrobank), founded by Dr. George S.K. Ty in 1963 • Universal banking days: Key non-banking businesses of the Ty family were initially folded into Metrobank • Basel III regulations: GT Capital was formed to assume Metrobank’s non-banking
Slide 5: Corporate Profile
Corporate Profile GT Capital directly owns market-dominant businesses in Strategic Partnerships with underpenetrated sectors of the Philippine economy, namely banking; automotive assembly, importation, dealership, and financing; Best-of-Class Brands infrastructure; property development; and life and
Slide 6: Trusted by partners from Japan and around the world
Trusted by partners from Japan and around the world Toyota Motor Philippines Toyota Manila Toyota Financial ORIX Corporation Global Business Power Sumitomo partners with Federal Isetan Mitsukoshi Holdings is established with Services (TFS) Premium Group of Bay Corp is is established. Later, Corporat
Slide 7: Strong Group-wide Footprint
Strong Group-wide Footprint over ₱2.3 Tn 4.0 Mn 10,000 Trillion individual 960 52 20,000 institutional and SME branches remittance employees Group- total resources depositors nationwide centers wide clients 60,000 vehicles built annually at the 1.8 Mn Toyota units sold in PH 71 80% 3,695 dealerships
Slide 8: Strong Group-wide Footprint
Strong Group-wide Footprint 14 33,610 group-wide employees global strategic partners 23.2 including contractual & agency Million Across an broad 1,071 customers spectrum of clients Branches Institutional nationwide High net worth Upper middle-income Present in approx 68 10,000 Small and medium enter
Slide 9: Strategic Direction
Strategic Direction • Toyota unit sales through MBT/PSBank auto loans/TFS New Sectors Synergy lease-to-own package • New strategic Exploring partners • Federal Land home mortgages underpenetrated • Infrastructure (MPIC) by MBT/PSBank Cross-selling sectors with new • Medical diagnostics within the GT
Slide 10: Moving Forward Towards Recovery
Moving Forward Towards Recovery How are we protecting How are we moving Where are we today? our financial health? toward the future? Strong Fundamentals Financial Discipline Pivot Toward Recovery GT Capital Metrobank Metrobank Toyota •PPOP +61% • Conso cash and near-cash •22% of clients are now •Shi
Slide 11: GT Capital Component Companies
GT Capital Component Companies 1 Best Managed Bank in the Philippines for 2018, 1 Most dominant automotive company in the 1❖ company Owns MERALCO, the Philippines’ largest power distribution 2019 according to The Asian Banker Philippines, maintaining 35% to 40% market share from Second largest Phili
Slide 12: Current Corporate Ownership Structure
Current Corporate Ownership Structure 55.93% Grand Titan Public Float 44.07% Banking Automotive Property Development Insurance Infrastructure and Utilities 21.0% ➔ 36.0% ➔ 51% 100% 15.63% 26.47%1➔ 37.15%8 40%5 25.3%2,3 15% owned by Ty family-related entities 40.7% ➔ 60.0% 28% ➔ 58.1% 4 1 Free float
Slide 13: Our Macroeconomic View
Our Macroeconomic View 2Q 2020 GDP change (versus 2Q 2019, in %) ASEAN-5, US, China, Taiwan Global • Expectedly, economies around the +0.4 +3.2 world have suffered from the COVID- 19 pandemic Singapore US Malaysia Philippines Thailand Indonesia Taiwan Vietnam China -0.7 • Governments have responded
Slide 14: Our Macroeconomic View
Our Macroeconomic View Philippine Annual GDP Growth Trend (in %) Philippines Asian Financial Crisis Global Financial Crisis COVID • Annual GDP growth averaged 6.4% from 2010 until 2019, among the highest in ASEAN 1983-84: 1991:-0.6 1998: -0.6 -7.3 (last recession) • GDP declined -16.5% in 2Q2020 due
Slide 15: Our Macroeconomic View
Our Macroeconomic View Philippine Debt-to-GDP (in %) Philippines • Despite an increase in government 2003: borrowings to address the impact of 71.4 1H2020: the pandemic, Debt-to-GDP remains 48.1 in manageable levels • Can still afford to borrow money 2019: 41.5 without endangering the economy • BSP
Slide 16: GT Capital Group First Half 2020 Financial Highlights
GT Capital Group First Half 2020 Financial Highlights Consolidated Net Income Core Net Income Php2.74 Bn -62% Php3.17 Bn -55% Php7.2 billion 1H 2019 Php7.1 billion 1H 2019 Net Income Net Income Net Income Net Income Core Net Income Php9.1 Bn -30% Php1.0 Bn -77% Php171 Mn -58% Php1.6 Bn +29% Php5.3 B
Slide 17: GT Capital Net Income Contribution 1H 2020
GT Capital Net Income Contribution 1H 2020 AXA TFSPH TMBC SMFC TFSPH TMBC 1.6% 0.6% 0.4% AXA 2.1% -1.0% 3.3% 7.7% SMFC TMP 0.9% 10.2% MPIC TMP MPIC 13.8% 24.2% 9.4% FLI 4.4% FLI 3.4% MBT MBT 67.6% 51.8% MBT + TMP = 76.0% MBT + TMP = 77.7% 1H 2019 1H 2020 17
Slide 18: GT Capital Net Income Contribution by Sector
GT Capital Net Income Contribution by Sector Insurance Insurance Infrastructure 3.2% 7.7% 13.8% Infrastructure 9.4% Automotive 11.9% Property Property Automotive 4.4% 3.4% 26.8% Banking Banking 67.6% 51.8% 1H 2019 1H 2020 18
Slide 19: Banking
Rising Together to New Heights Partners for Good Banking
Slide 20: Loose Monetary and Quantitative Easing
Loose Monetary and Quantitative Easing RRR cuts to support liquidity Deep policy rate cuts to record-low level 20% 20% 20% 20% 4.50% 4.75% 18% 18% 4.00% 4.00% 4.00% 3.50% 14% 12% 3.00% 2.25% 2013 2014 2015 2016 2017 2018 2019 5M20 2013 2014 2015 2016 2017 2018 2019 5M20 Supported by low inflation BS
Slide 21: Banking Industry: Loan and Deposit Growth
Banking Industry Loan Growth vs. GDP Growth Deposit Growth vs. M3 Growth 22% 7.1% 6.1% 6.1% 6.9% 6.7% 6.2% 5.9% 8.0% 40% 32% 35% 20% 35% 30% 3.0% 20% 19% 34% 30% Loan Growth (In %) Loan Growth (In %) GDP Growth (In %) GDP Growth (In %) 18% 25% 17% -2.0% 25% 16% 20% 16% 16% -7.0% 20% 15% 14% 13% 12%
Slide 22: PH Big Three Banks Adequately Capitalized
PH Big Three Banks Adequately Capitalized The country’s largest banks have substantial capitalization above the minimum set by BSP December 31, 2009 June 30, 2020 CAR Tier 1 CAR CET1 20.0% 18.7% 14.3% 14.7% 16.5% 15.6% 13.0% 12.2% 13.8% 12.7% Min. CAR 10.0% Min. CET1 10.0% 8.3% 10.5% Min. CAR 10.0%
Slide 23: Peer Banks Highlights 1H 2020
Peer Banks Highlights 1H 2020 Pre-Provision Operating Profit (Php Billion) NPL Ratio (%) +60.7% +10.1% 1.95% 36.1 +31.8% 1.83% 1.56% 35.5 28.5 MBT BDO BPI BDO BPI MBT Net Interest Margin – NIMs (%) NPL Coverage (%) +101bps +37bps +41bps +43bps 4.36% 4.24% +18bps 188% +2.2bps 3.55% 141% 139% BDO MBT
Slide 24: Customer Touchpoints
Customer Touchpoints Clients enrolled in e-channels (as of Q2 2020) 22% Enrolled +176% Waived fees for money transfers via mobile app downloads the Metrobank Q2 2019 vs Q2 2020 Mobile App is extended until December 31, 2020 4,000,000 approx. client base Instapay Send money to another % E-Channels to
Slide 25: Loan Portfolio
Loan Portfolio Contraction in loan portfolio reflective of slowdown across industries Net Loans (Php Bn) Gross Loan Breakdown By Segment -5% Commercial Consumer 1,398 1,333 24% 25% +2% 76% 75% -4% 1H 2019 1H 2020 1H 2019 1H 2020 FY 2019 Loan Portfolio by Industry Consumer Loan Portfolio Breakdown Tr
Slide 26: Asset Quality
Asset Quality Metrobank proactively beefed up provisions even as NPL formation remained benign 1 2 NPLs amount (Php Bn) NPL Ratio better than industry +1% YoY MBT UKB 21.0 19.3 21.1 2.09%(May 2020) 1.50%1.60% 1.30% 1.60% 1.56% 1H 2019 FY 2019 1H 2020 1H 2019 FY 2019 1H 2020 3 Provision and Credit Co
Slide 27: Branches, Deposits, OPEX, and Efficiency Ratios
Branches, Deposits, OPEX, and Efficiency Ratios Consolidated Branches Cost-Income Ratio • Slow down on opening of physical branches • Revenue growth has consistently outpaced cost growth, leading to improved cost-income ratio 960 957 957 56% 55% 45% 953 2017 2018 2019 1H 2020 1H 2019 FY 2019 1H 2020
Slide 28: Automotive
Partners for Good Automotive
Slide 29: Motorization amid low motor vehicle penetration
Motorization amid low motor vehicle penetration Motor vehicle penetration in ASEAN Motor vehicle penetration per 1000 Vehicles per 1,000 individuals, 2019 individuals versus GDP per capita Vehicles per 1000 individuals 1,232 452 251 165 96 45 26 Source: Organisation Internationale des Constructeurs
Slide 30: Digital Transformation and Mobility Initiatives
Digital Transformation Mobility Initiatives KINTO ONE Leasing Virtual Showroom Balloon Payment Plus Connected Auto Loan MyToyota.PH Fleet Management 1.123 Mn Views Logistics Cargo On-Demand Shuttle 1.219 Mn Virtual Model Booking App Views Launches 30
Slide 31: Toyota Recent Developments
Toyota Recent Developments TMP Monthly Retail Vehicle Sales Monthly Inquiries Units %MoM 38% 32% 15,662 -44% 208% 18% -9% 12,283 -63% 6653% 7,485 8,838 8,044 10,657 14,390 8,890 -99% 4,523 2,431 13,640 36 Jan Feb Mar Apr May Jun Jul Aug Sep May June July %YoY 3M 2020: -23%YoY 6M 2020: -51%YoY 9M: -4
Slide 32: Retail auto unit sales volume
Retail auto unit sales volume As of September 2020 YTD In Units • Lack of access to public transportation created pent up demand for the Vios and Wigo 297,263 • Month-on-month (MoM) momentum after easing quarantine restrictions 161,212 • New reservations (e.g. orders booked after ECQ): 40% in 114,11
Slide 33: Automotive Sector Updates: Overall Market Share 9M 2020
STRICTLY CONFIDENTIAL Automotive Sector Updates Overall Market Share 9M 2020 1Q 2020: 36% 2Q 2020: 46% 3Q 2020: 40% 39% 24,243 Unit difference No.1 No.1 No.1 Passenger Commercial Overall Car Sales Vehicle Sales Sales 17% 10% 8% 7% 6% 5% 5% 3% 1% 0.6% 0.2% 0.2% MITSUBISHI NISSAN HYUNDAI SUZUKI FORD H
Slide 34: Auto Industry Market Share 9M 2020
STRICTLY CONFIDENTIAL Automotive Sector Updates Auto Industry Market Share 9M 2020 Passenger Car Commercial Vehicle 48% 30.5% of market 69.5% of market 37.1% of Toyota 35% 62.9% of Toyota 18% 13% 12% 12% 12% 8% 8% 3% 2% 1.3% 6% 6% 5% 0.8% 0.3% 0.1% 0.1% 4% 3% 0.6%0.5% 0.3%0.2% 0.2% Source: Company d
Slide 35: Comprehensive Auto Resurgence Strategy (CARS)
STRICTLY CONFIDENTIAL Comprehensive Auto Resurgence Strategy (CARS) Implementing Rules and Regulations – 23 December 2015 Incentives, Rationale and Regulations • Manufacturing of model, body shell, large plastic assemblies, common parts, OEM parts, and shared testing facility are covered • Php9.0 bi
Slide 36: CARS Program Updates
CARS Program Updates Comprehensive Automotive Resurgence Strategy Php5.38 B Total Toyota CARS Project Php1.3 Aggregate Investment Plan as of July 2019 billion Investments Out-house parts projects 30% 50% 58% BOI-registered auto parts partners Php520.0 before Gov’t CARS actual CARS requirement millio
Slide 37: CARS Unit Sales Progress
CARS Unit Sales Progress Units sold of Toyota Vios since launch of CARS Program model launched in July 2018 to date (cumulative) Sept 2020 June 2019 June 2020 64,344 26,933 57,170 Dec 2018 Dec 2019 11,336 44,500 Sept 2018 March 2019 3,503 18,423 Aug 2018 1,658 Introduction of FMC Vios July 2018 222
Slide 38: 2020 Virtual Model Launches
17 Oct; 750,000 Views Php1,633,000 – 2,414,000 20 August; 1.1 Mn Views 12 Sept; 1.0 Mn Views Php1,285,000 - 1,650,000 Php936,000 (Cargo) - 1,830,000 (Conquest) 2020 Virtual Model Launches on Facebook, Youtube, and the TMP Website 15 June; 1.1 Mn Views 25 July; 1.2 Mn Views Php568,000 – Php700,000 Ph
Slide 39: Dealership Update
Dealership Update Restarting full operations Target by end of year 2014 2015 2016 2017 2018 2019-20 after ECQ Number of Dealers 45 49 52 61 69 71 LUZON Location NCR Luzon Visayas Mindanao Total Open as of May 1 (GCQ) 0 7 7 6 20 28 Open as of May 20 (MECQ) 18 28 10 10 66 Open as of June 1 19 28 14 10
Slide 40: 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 1.841 2.042 2.288 Model Corolla Altis Elantra Civic Price 0.999 1.595 0.970 1.065 1.115 1.608 Model Vios Accent (Sedan) City Mirage G4 Price 0.671 1.071 0.790 1.038 0
Slide 41: Price Comparable by Category (USD)
Price Comparable by Category in United States Dollars (USD) Toyota Hyundai Honda Mitsubishi Model Camry Accord Price 36,470 40,452 45,325 Model Corolla Altis Elantra Civic Price 19,790 31,597 19,216 21,097 22,088 31,854 Model Vios Accent (Sedan) City Mirage G4 Price 13,290 21,216 15,650 20,563 16,24
Slide 42: 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 High resale value (up to 50% of Corporate policy of manufacturing original selling price for 5 years old origi
Slide 43: Acquisition of Toyota Santa Rosa Dealership
Acquisition of Toyota Santa Rosa Dealership Strategic Partnership Structure 60% 40% 60% Php516 40% Php344 Million Million Cash paid Cash paid Php860 Mn Valuation for 100% Php110 Mn • GTCAD will chair the Board and hold Dividend upflow key Finance roles to GT Capital • TCS will assume management cont
Slide 44: Rationale for the Acquisition of Toyota Santa Rosa Dealership
Rationale for the Acquisition of Toyota Santa Rosa Dealership Diversify Dealer network Strategic partnership geographical reach expansion w/ best-in-class brand JBT Global Metro Manila & Cavite North Luzon 71 • One of Japan’s leading dealership groups South Luzon dealers • TCS’s first joint venture
Slide 45: Joint Venture with Premium Group Warranty
Joint Venture with Premium Group Warranty Rationale ✓ Provide inspection and warranty service to the 100% used car sector ✓ Underpenetrated sector; no significant Philippine competitors ✓ Number 1 warranty co in Japan ✓ Relatively small investment 66.6% 33.3% ✓ First-mover advantage ✓ Continues auto
Slide 46: Property Development
Partners for Good Property Development
Slide 47: Digital Sales Process and Activities 1H2020 Highlights
Digital Sales Process and Activities 1H2020 Highlights Digital Platform Engagement Cumulative Reservation Sales (Php Mn) March to June 9,096 7,927 8,169 8,449 6,081 +647 M Audience views 1,254,709 151,510 +242 M +280 M 2,394 Customer Engagement 16,558 1,822 (clicks, likes, and comments) Jan Feb Mar
Slide 48: Projects Approved for Resumption
28 Projects Approved for Resumption Construction Update As of September 2020 HLURB, LGU, DPWH, Local Associations 23 Residential Projects PBW-Misibis PBW-Siargao PBW-Coron PBW-Baler Mi-Casa-Hawaii PGMH-Mango PGMH-Mimosa Siena-T1 + T2 SSR-T2 SSR-T3 TGMO-T1 and T2 Quantum T1, T2 and T3 5 Commercial Pr
Slide 49: 28 On-going Projects
Project Launches in 2019 Number of units are all estimates and subject to change Mi Casa Tower 1 28 On-going Projects The Estate BAY AREA, PASAY • 7 launched in 2011 AYALA AVENUE • 11 launched in 2012 • 5 launched in 2013 February • 4 launched in 2014 March • 3 launched in 2015 188 units, Php18.9B (
Slide 50: Land Bank Location
Land Bank Location Land Bank Location (in hectares) Macapagal Metro Manila Metro Manila Quezon City Kalaw, Manila Bay Area, Pasay 14.8 Marikina Ermita, Manila Fort Bonifacio Marikina 8.8 Mandaluyong Mandaluyong 5.3 Makati Fort Bonifacio 1.9 Binan Laguna Binondo Manila Kalaw, Manila 0.6 Paranaque 0.3
Slide 51: Exchange of Pro-Friends Shares for Land
Exchange of Pro-Friends Shares for Land Agreement signed on 10 May 2019 Approximately Redemption 702 hectares Php20 of 64,530,712 of selected assets Billion Series A Preferred Shares in PCFI (51% of PCFI) 51
Slide 52: Exchange of Pro-Friends Shares
Exchange of Pro-Friends Shares Investment History Redemption Rationale • The selected 702 hectares are best suited for master-planned, mixed-use developments o Use for affordable homes no longer optimal and best use of land bank • Land values no longer suitable for affordable housing • Spin-off inev
Slide 53: Ongoing infrastructure projects near Cavite land
TARGET COMPLETION DATES: 6 NLEX-SLEX Connector Road CAVITEX - 2021 CAVITEX C-5 South Link - 2021 Skyway Extension CALAX - 2022 NAIA Expressway Entertainment City 4 2 Cavitex CAVITEX C-5 South Link LRT-1 1 CALAX 3 Extension Alabang Ongoing Daang-Hari MCX infrastructure projects may EPZA CALAX Exit 1
Slide 54: Rising property values from infrastructure and developments
Rising property values from infra & NLEX-SLEX Connector Road other property developments Sale to McDonald’s NAIA Expressway Skyway Extension Php64.0 million 2,027 sq. m @ Entertainment City Php31,579/sq. m February 2019 Sale to Toyota Manila Bay Group CAVITEX CAVITEX C-5 to build Toyota Imus LRT-1 d
Slide 55: Valuation Methodology
Valuation Methodology • 702 hectares of Selected CALABARZON and Cavite Demographics Assets appraised by Cuervo CAVITE Appraisers • Reyes Tacandong issued fairness opinion on Enterprise Value of PCFI using various methodologies • Values converge at Php20 Billion for 51% 55
Slide 56: Return on GT Capital's Investment
Return on GT Capital’s Investment Return on Investment Php16.0 • GT Capital Net Initial Investment Billion Income Contribution versus from PRO-FRIENDS Approximate Value of Php20.0 CAGR +18% “Selected Assets” Billion • Return on investment Dividends from PRO- Php1.3 of 31% FRIENDS Billion Total Php21
Slide 57: Life and General Insurance
Partners for Good Life and General Insurance
Slide 58: AXA Virtual Selling Assist, Protection and Health 1H2020 Highlights
AXA Virtual Selling Assist (AVA), Protection and Health 1H2020 Highlights Annualized Premium Equivalent (APE) Protection and Health APE (Php Mn) %AVA to APE % Contribution to New Business (APE)* GCQ ECQ 54% 36% 39% 26% 28% 404 19% 21% 204 239 Apr May Jun 9M 2019 FY 2019 1Q 2020 1H 2020 Active Seller
Slide 59: Infrastructure and Utilities
Partners for Good Infrastructure and Utilities
Slide 60: Monthly Volume Dashboard Approximating Pre-Covid Levels
Monthly Volume Dashboard STRICTLY CONFIDENTIAL Approximating Pre-Covid Levels 60
Slide 61: Covid-Related Assistance
Covid-Related Assistance 61
Slide 62: Helping the nation heal as one
Over Helping the nation heal as one Php1.2 ₱1.0 Policies and programs in place to support 25,600 Group-wide officers, agency-based billion support staff and front-liners Billion ₱100 Food gift certificates for 1 million families through Project Ugnayan of the Phil. Disaster million Relief Foundation
Slide 63: Adherence to Bayanihan Heal as One and Recover as One Acts
Adherence to Bayanihan Heal as One and Bayanihan Recover as One (Bayanihan 1 and 2) Acts and other government agency directives • Interest payments deferred • Rental and amortization payments pushed back • Insurance premium collections postponed 63
Slide 64: Group Services During ECQ
Group Services During ECQ Grace Banking Insurance Auto Periods Services Coverage Assistance Grace periods for •Branches, Cash •Extended validity of Financial assistance monthly Accept Machines, coverage for to dealerships amortizations, lease and ATMs remained qualified policies collections, and ope
Slide 65: Our Key Messages
Our Key Messages • Uncharted territory • Strong balance sheet, solid global partners • Support for employees: preservation of capabilities • Diversification of sectors • Strong core businesses • Accelerating our digital transformation 65
Slide 66: Thank You!
Thank You! Partners for Good For more information, Visit gtcapital.com.ph/investor-relations or contact IR@gtcapital.com.ph