Cosco Capital, Inc. Investor Presentation 9M2016 Financial Results & Performance. November 15, 2016

Transcription

1 Cosco Capital, Inc. Investor Presentation 9M2016 Financial Results & Performance November 15,

2 DISCLAIMER These presentations and/or other documents have been written and presented by COSCO CAPITAL, INC. (COSCO). COSCO is solely responsible for the accuracy and completeness of the contents of such presentations and/or other documents. Third parties, other than COSCO, do not have any responsibility for or control over the contents of such presentations and/or other documents. No endorsement is intended or implied notwithstanding the distribution of this presentation and/or other documents during the analysts and investors calls and meetings of COSCO. The materials and information in the presentations and other documents are for informational purposes only, and are not an offer or solicitation for the purchase or sale of any securities or financial instruments or to provide any investment service or investment advice. Head Office Address 2nd floor, Tabacalera Building, 900 Romualdez Street, Paco, Manila, 1007 Philippines 2

3 Agenda Company Overview Corporate Structure Our Subsidiaries Company Milestones 9M2016 Consolidated Financial Results Core Businesses Grocery Retailing Liquor Distribution Specialty Retailing Commercial Real Estate Key Initiatives for FY2016 Q&A 3

4 Company Overview

5 Corporate Structure Lucio Co Family 73% Public 27% 51% 100% 100% Grocery Retailing Liquor Distribution Specialty Retailing 90% 100% Commercial Real Estate Ellimac Prime Holdings, Inc., Fertuna Holdings Corp., Patagonia Holdings Corp., Nation Realty, Inc. NE Pacific Shopping Centers Corporation Pure Petroleum Corp., 5

6 Our Subsidiaries Grocery Retailing Puregold Price Club, Inc. 2 nd largest grocery retail chain in the Philippines Nationwide presence with 268 stores across the country S&R Membership Shopping Club Pioneer and dominant player in membership club retailing 11 warehouses and 21 Quick Service Stores ( QSR ) nationwide Specialty Retailing Liquigaz Philippines Corporation 2 nd largest liquefied petroleum gas ( LPG ) supplier in the Philippines Office Warehouse, Inc. Office and school supplies, furniture and technology products 64 retail outlets nationwide Liquor Distribution Leading player in the premium wine and liquor distribution industry Covers 90% of imported wine and liquor in the Philippines Global brands such as Jose Cuervo, Alfonso, Johnnie Walker and other well-known imported names Commercial Real Estate Commercial Real Estate portfolio includes community malls, commercial buildings, land for long-term lease 38 commercial properties located mostly in the Metro Manila area as well as in neighboring provinces of Luzon 6

7 Company Milestones April 22: Approval by the Securities and Exchange Commission (SEC) of change in corporate name and increase in capital stock of Parent company. May 31: Implementation of issuance and listing of new shares, cross trade at the Philippine Stock Exchange (PSE) of PGOLD shares to the Parent company, issuance of shares to the subscribers pursuant to share swap, special block sale at the PSE of new shares. January 29: Approval of merger of Nation Realty, Inc., Go Fay & Co, Inc., SVF Corporation and 999 Shopping Mall, Inc. (Nation Realty, Inc. as the absorbing entity). February 28: Acquisition of NE Pacific Shopping Centers Corporation May 1: Acquisition of Office Warehouse, Inc. July 17: Acquisition and subscription of additional shares of Canaria Holdings Corporation. July 21: Acquisition of Liquigaz Philippine Corporation through Canaria Holdings Corporation February 3 Puregold Price Club, Inc. acquired nine (9) supermarkets from NE Incorporated. Cosco Capital, Inc. through its whollyowned subsidiary, Ellimac Prime Holdings, Inc., acquired four (4) commercial properties from NE Incorporated August 5: through wholly-owned subsidiary, Ellimac Prime Holdings, Inc. acquired RFC mall located along Alabang, Zapote, Las Pinas City August 6: Puregold Price Club, through wholly-owned subsidiary Entenso Equities and Goldtempo Company, Inc., acquired eight (8) supermarket stores operating under trade name Budgetlane August 12: Cosco Capital, Inc. through its wholly-owned subsidiary, Ellimac Prime Holdings, Inc., acquired Maunlad mall situated at Malolos Bulacan 7

8 9M2016 Consolidated Financial Results

9 9M2016 Consolidated Financial Highlights (In PHP millions) Revenues +11.5% 98, ,752 81,455 90,841 48,976 9,534 Gross Profit +12.2% 17,287 19,964 13,535 15,187 5,733 EBITDA Net Income +6.5% +9.3% 10,179 11,675 6,236 6,987 8,769 8,231 4,622 3,731 5,053 9

10 Revenue Contribution Consolidated Revenues 9M2016 9M2015 Liquor 3% Real estate 1% Specialty retail 9% Grocery retail 87% Specialty retail 12% Liquor 4% Real estate 1% Grocery retail 83% PHP billion PHP81.45 billion 10

11 Net Income Contribution 12% Liquor distribution 10% Specialty retail 9M % Real estate -3% Oil and Gas 57% Grocery retailing 14% Specialty retail 13% Liquor distribution 9M2015-5% Oil and Gas 24% Real estate 54% Grocery retailing PHP3.24 billion PHP 3.01 billion *attributable to equity holders of the parent company 11

12 9M2016 Consolidated Balance Sheet (In PHP millions) Increase (Decrease) % Cash and cash equivalents 5,359 14,541-9,182-63% Total Current Assets 28,739 24,958 3,781 15% Total Non Current Assets 62,818 58,117 4,701 8% TOTAL ASSETS 96,915 97, % Total Current Liabilities 14,411 19,041-4,630-24% Total Non-current Liabilities 11,984 13,032-1,048-8% TOTAL LIABILITIES 26,394 32,073-5,679-18% TOTAL EQUITY 70,521 65,544 4,977 8% 12

13 Core Businesses

14 14 Grocery Retailing: 9M2016 Financial Highlights (In PHP millions) 46,024 84,697 97,172 67,334 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000-7,871 Gross Profit +16.9% +14.8% 78,737 FY2013 FY2014 FY2015 9M2015 9M2016 4,012 8,133 Revenues 8,847 5,830 6, % 5, % 4, % 13.0% 3, % 2, % 1, % 5.0% - 3.0% 14,760 16,489 11,243 12, % 17.4% 17.0% 16.7% 16.4% FY2013 FY2014 FY2015 9M2015 9M2016 2,548 Gross Profit Net Income 4,520 5,002 Gross Profit Margin +13.3% +13.8% 6, % 9.6% 9.1% 8.7% 8.4% FY2013 FY2014 FY2015 9M2015 9M2016 EBITDA EBITDA EBITDA Margin 3,203 3, % 5.3% 5.1% 4.8% 4.0% 4.6% 2.0% FY2013 FY2014 FY2015 9M2015 9M2016 Net Income Net Income Margin 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 14.0% 12.0% 10.0% 8.0% 6.0% Key Highlights 16.9% growth in Consolidated Net Sales to PHP 78.7 billion, with Puregold contributing 82.1% of total. Growth in Revenues driven by Puregold s Same Store Sales Growth ( SSSG ) of 6.6% due to positive growth in basket size of 6.5% and traffic count of 0.2% Consolidated Net Profit Margin of 4.6%. Puregold only net margin is 3.7% while S&R net margin is 8.7%.

15 Grocery Retailing: Recent Developments Puregold opened 17 new stores out of targeted 25 new stores and closed 4 stores S&R opened 1 S&R Warehouse and 5 S&R New York Style Pizza (QSR) As of 9M2016, the Grocery Retailing segment is operating a total of 300 stores with consolidated NSA of more than 442,200 square meters 1. PUREGOLD S&R S&R QSR Metro Manila Luzon Visayas Mindanao Total excludes NE Bodega and Budgetlane stores with a total of 17 stores and 33,000 sqm NSA 15

16 Liquor Distribution: Products Brandy Alfonso Alfonso Light Excelente Tequila Patron Whiskey Johnnie Walker Jack Daniels Various Wines Brandy Fundador Fundador Light Whiskey Jim Beam Glenfiddich Tequila Jose Cuervo Whiskey Bushmills Chivas Regal Cognac Martel Vodka Absolut Liqueurs Jagermeister Specialty Beverages Red Bull Various Wines 16

17 Liquor Distribution: 9M2016 Financial Highlights (In PHP millions) 3,565 4,841 5, % 1,400 1,200 1, ,377 3,707 FY2013 FY2014 FY2015 YTD2015 YTD Revenues EBITDA % 30.0% % 17.3% 16.2% 15.5% 14.1% FY2013 FY2014 FY2015 YTD2015 YTD2016 1,003 1,188 1, Gross Profit Net Income % 24.5% 22.9% 22.8% 22.0% FY2013 FY2014 FY2015 YTD2015 YTD % 20.0% 15.0% 10.0% Gross Profit Gross Profit Margin +5.7% % 12.5% 11.6% 11.3% 10.2% FY2013 FY2014 FY2015 YTD2015 YTD % 25.0% 20.0% 15.0% -0.7% 9.8% increase in revenues due to the 16% increase in volume of cases sold Decline in GP Margin due to higher cost of sales and sales mix for lower margin segments Net income remained flat due to the net effect of decrease in GP Margins and increase in operating expenses 28.0% 23.0% 18.0% 13.0% 8.0% Key Highlights EBITDA EBITDA Margin Net Income Net Income Margin 17

18 Liquor Distribution: Total Volume Sales 16% growth in total volume of cases sold Growth mainly driven by Alfonso Light and Alfonso Solera (in no of cases) 9M2015 9M2016 Increase % Growth Brandy 587, , ,188 20% Other spirits 201, ,341 14,904 7% Wines 101, ,042 9,779 10% Specialty Beverages 82,297 93,480 11,183 14% Total 972,859 1,126, ,054 16% 18

19 Liquigaz: 9M2016 Financial Highlights (In PHP millions) 18, % Revenues 11,854 EBITDA 6.2% 9, % -26% 6,739 FY2014 FY2015 9M2015 9M2016 1,200 1, ,014 Gross Profit % % 7.9% 9.0% 9.6% FY2013 FY2014 FY2015 9M2015 Gross Profit Gross Profit Margin -19.6% -27% % FY2013 FY2014 FY2015 9M % 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% % Net Income % % 4.6% FY2013 FY2014 FY2015 9M % 17.0% 15.0% 13.0% 11.0% Decline in revenues due to low 9.0% 7.0% global LPG price and 6% decline 5.0% in total volume sold for the 9-3.0% month period New terminal facility in Sairaya, Quezon to be completed in 2H % Operating 2 LPG showrooms and 8.0% signed 5 new sites 6.0% 4.0% 2.0% 0.0% Key Highlights EBITDA Volume Sold (In metric tons) EBITDA Margin Net Income Net Income Margin M2015 9M , , , ,683 19

20 Office Warehouse, Inc.: 9M2016 Financial Highlights (In PHP millions) Revenues FY2013 FY2014 FY2015 9M2015 9M ,043 1, ,156 EBITDA % Gross Profit % +17% +24% % % % 25.7% 27.2% 26.5% 26.1% FY2013 FY2014 FY2015 YTD2015 YTD2016 Gross Profit Gross Profit Margin 5.9% 4.4% 7.5% 7.8% 8.4% % % 4.1% 4.5% 4.7% % 3.1% 2.2% - 2.0% FY2013 FY2014 FY2015 9M2015 9M2016 FY2013 FY2014 FY2015 YTD2015 YTD2016 EBITDA EBITDA Margin Net Income Net Income M2016 # of Stores Net Selling Area 11,036 sqm 12,638 sqm Net Income Margin 29.0% 27.0% 25.0% 23.0% 21.0% 19.0% 17.0% 15.0% +24.8% % 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Key Highlights Opened 5 new stores out of targeted 10 new organic stores for the year Sales grew by 19% versus last year, with SSSG of 9.69%. Positive results is due to store network expansion, enhanced product offerings, and active sales and marketing campaigns. Decline in Gross Profit Margin due to product mix and promotional discounts 20

21 Commercial Real Estate: 9M2016 Financial Highlights (In PHP millions) Revenues 1,838 2,210 2,423 1,600 1,400 1,721 1,739 1,200 1, % +2.7% FY2013 FY2014 FY2015 9M2015 9M2015 FY2013 FY2014 FY2015 9M2015 9M EBITDA +2.5% 1,346 1,504 1,105 1,1331,000 61% 62% 64% 65% 42% 1,200 90% 85% 80% 75% 70% 65% 60% 55% 50% 45% 40% 35% -30% Gross Profit 1,275 1,464 1,022 1,049 58% 60% 59% 60% 53% 563 Gross Profit Gross Profit Margin Net Income +8.5% 959 1, % 42% 42% 45% 31% FY2013 FY2014 FY2015 9M2015 9M2016 FY2013 FY2014 FY2015 9M2015 9M % 75% 70% 65% 60% 55% 50% 45% 40% 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% Key Highlights 1.1% increase in Revenues attributable acquisition of 6 community malls last year and higher income from its oil storage facility 8.5% increase in Net Income due to stable rental income and effective management of operating expenses On-going construction of community malls located in Binan, Laguna and Marikina with target date of opening by 1H2017 FINANCIAL RATIOS 2016 Rental Yield, gross 11.90% Rental Yield, net 4.92% Leverage 0.59 ROE 5.4% EBITDA EBITDA Margin Net Income Net Income Margin 21

22 Commercial Real Estate: Property Portfolio Key statistics Category 3Q2016 GLA/Lot Area in sq.m. Investment cost in PHP million Land under lease 9 146,148 4, Commercial Buildings ,215 12, Total ,363 17, * Ave. Occupancy Rate 92% Geographic coverage Metro Manila 13 Commercial Buildings 5 Land under lease Luzon 16 Commercial Buildings 3 Land under lease Nueva Ecija, Batangas, Zambales, Isabela, Aurora, Quezon, Rizal, Cavite, Bulacan, Pampanga, Pangasinan Visayas 1 Land under lease Cebu City Area with commercial property 22

23 Key Initiatives for FY2016 Management remains focused on core target markets for each of its brands, and on the sustainable and long-term growth of the Company Grocery Retailing Continue to expand into new geographic locations Puregold to increase store network by 25 stores S&R to expand by 2 new warehouse club outlets Liquor Distribution Maintain market leadership in the premium wine and liquor segment Continue to introduce new product lines Specialty Retailing Commercial Real Estate Liquigaz to invest in additional infrastructure and pursue downstream market expansion strategy Office Warehouse store expansion by 10 stores per year in the mid-term, and strengthen customer base through loyalty program and online marketing Development of 3 community malls Refurbishment and renovation of newly acquired properties to increase tenancy 23

24 Thank you.