Investor Presentation November 2019 Section 1 FDC at a Glance Diversified Range of Market-Leading Businesses That Target the Underserved Middle Market
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Investor Presentation November 2019 Section 1 FDC at a Glance Diversified range of market-leading businesses that target the underserved middle market Real Estate & Hospitality Banking Power Others – Sugar & Infra Pacific Sugar 65%1 100% 78%1 100% Holdings 100% 93%1 Clark Consortium 42.5% NAIA Consortium TBC • One of the leading • Manages c.1,800 keys • Most consumer • Early mover into the • Operates sugar mill, real estate developers in significant growth focused bank in retail Mindanao power refinery and sugarcane in the Philippines with areas across the and middle-market sector farms that provide residential land bank of Philippines corporate segments stable cash flows 2,236 ha • Operates a 405MW • First mover advantage • One of the largest clean coal thermal • Led a consortium that • Developed over to invest in the consolidated branch power plant in was awarded a 25-year 200 projects and Clark region store networks with Mindanao Operation and 3,000 ha of land a total of 467 branch Management (“O&M”) • Obtained a provisional stores • Offtake agreements for contract for Clark • Develops integrated casino license from a total of 302 MW4 International Airport self-contained PAGCOR2 for its 201 ha • Ranked 2nd in auto with 17 distribution masterplanned cities integrated resort in loans in the Philippines utilities and an • Member of the and “REIT-able” assets Clark industrial customer in consortium that was Mindanao awarded NAIA Original Proponent Status ("OPS") Respective bubbles represent % ownership Source: Company information Notes: 1 Directly and indirectly 2 PAGCOR = Philippine Amusement and Gaming Corporation 2 3 In terms of credit card receivables in 2018, according to Credit Cards Association of the Philippines 4 Includes 70MW subject to SC ruling requiring the distribution utility to submit a DOE certification to the ERC that they have complied with CSP Rules. From its humble beginnings, FDC has grown to become a major conglomerate with a market cap of US$2.3bn1 Amongst the top 6 publicly-listed conglomerates in terms of assets1 Amongst the top 35 publicly-listed companies in terms of market capitalization1 Original shophouse office in 1955 3 Note: 1 As of 30 September 2019 on the Philippine Stock Exchange 3 Targeted diversification strategy to capture growth sectors and create synergies Infrastructure Sustainable Hospitality Solutions 2018 Hospitality 2017 Won OPS for Ninoy Completed Phase 1 of Aquino International the largest district Airport as part of the cooling system in the NAIA Consortium Banking 2008 2012 Philippines under Chroma Filinvest Hospitality PDDC1, a JV Real Estate 1989 Hospitality Inc. Corporation with Engie and FDC 2019 Filinvest Land, Inc 1994 formed formed Utilities, Inc. Signed O&M concession incorporated East West Banking with FDC holding agreement for Clark 60% interest 1967 Corporation International Airport incorporated Filinvest Realty 2016 Launched an innovation Corporation 1993 Filinvest Mimosa, Inc. and logistics park at incorporated Sugar Power incorporated FLI listed on the PSE New Clark City 1973 Filinvest 2009 Signed JV with Hitachi to Filinvest Alabang, Inc. 2007 FDC Utilities, Inc. establish FLOW for Development incorporated FDC acquired 100% incorporated water and wastewater Corporation of Pacific Sugar services incorporated Holdings Corporation 2012 1982 EW listed on the PSE FDC listed on the Philippine Stock Exchange (“PSE”) Source: Company information Note: 1 PDDC = Philippine DCS Development Corporation 4 Strong track record of growing a diverse portfolio of profitable businesses Consolidated revenues (PHPbn) Consolidated net income (PHPbn) 64.1 13.4 57.9 49.6 10.3 43.5 8.5 32.1 7.0 6.5 28.9 6.2 5.8 24.5 4.9 5.0 19.8 16.9 12.6 2.8 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Real estate Hospitality Banking Power Sugar Source: Company information 5 Key Investment Highlights 1 Strategically positioned in 3 Disciplined strategic financial attractive sectors management supports business expansion First mover advantage into high growth areas and provinces Strong cash flow and healthy which target the middle market leverage to finance expansion and M&A initiatives 2 Solid foundation for future 4 Experienced management growth in place, including team strategic partnerships with Gotianun family representatives industry leaders and professional management Well-positioned to monetise its with extensive industry growth initiatives experience Source: Company information 6 Section 2 Strategically positioned in attractive growth sectors Macroeconomic overview Participative play in the key drivers of Philippine growth Key Philippine Macro Themes Strong real GDP growth PHP Trillion Sustained GDP growth. 6.2% GDP growth in 2018 and consistent >6% 24 GDP growth every year since 2012 21 22 19 20 Expansionary fiscal policy. Relatively low debt / GDP of 43.3% as of Q3 2019 16 17 14 15 13 14 Growing middle-income class. Young demographics with a median age of 24.7 Controlled inflation. Annual inflation rate fell to a 3-year low of 0.8% in October 2019 from a high of 6.7% in September-October 2018 Growth drivers 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F China factor. Tourism, manufacturing transfers, POGO players lead China Youngest country in SEA with a median age of 24.7 in 2018 investments and drive hospitality, power, real estate sector growth 2018 median age (years) 43.3 Heavy infrastructure spending. The Government Build Build Build program 39.3 31.7 targets US$158bn from 2017 to 2022 28.8 28.9 24.7 Tourism sector. Local and International arrivals have a 5-year CAGR of 11% and 9%, respectively BPO sector. US$23bn BPO sector contributes to consumer spend and office and residential demand OFW remittances. US$29bn (+ 3.1%) remittances continue to drive domestic consumption Young population with increasing disposable income Significant spending on infrastructure > 80 0.7 35.8 30.7 70-79 2.2 25.1 28.2 7.3% 60-69 5.3 20.9 59% (62.8m) of the population 50-59 8.9 6.8% 6.9% 6.9% is under 30-years old 40-49 11.8 6.3% 30-39 14.7 20-29 19.0 10-19 21.0 2018 2019F 2020F 2021F 2022F 0-9 22.9 Infra spending target in US$bn Infra spending target % of GDP Source: Oxford Economics, World Bank, Fitch, UBS Macroeconomic Reports 2019, Department of Trade and Industry, Philippines, Economist Intelligence Unit, Trading Economics 8 Real estate Well-positioned in middle-market housing and CBD office leasing Housing Philippines' middle-class Pioneering landlord for IT-BPO space Rising CBD commercial rates Housing demand backlog is estimated to reach The Philippine IT-BPO sector is expected to Land values have increased 3-5x in less than a 3.2m units for affordable to middle-income continue its consistent growth trend decade segment by 2030 1,000 ) 4.0 2,000 1.8m 800 3.0 sqm 3.0 2.6 1,500 1.1m 600 2030 – 2.0 1,000 400 2012 1.0 0.6 500 200 backlog units (m) units backlog 0.1m 0.0 ('000) employees of # 0 0 Socialized Affordable Middle High End '000/ (PHP values Land 2004 2006 2008 2010 2012 2014 2015 2011 2012 2013 2014 2016 2017 2018 Income 2010 2018F 2020F 2020F 2019F 2016E Makati CBD Fort Bonifacio Ortigas Center Manila Bay Area Filinvest Land Cyberzone Properties Filinvest Alabang Development of residential projects, adding PEZA registered IT zone designed, master- Flagship Filinvest City, an integrated retail, 7,000 to 8,000 affordable and middle-income planned and built around the needs of commercial, residential and leisure units per year technology-based companies township development in Metro Manila Source: Department of Tourism, IBPAP, Colliers , KMC Savills, Department of Trade and Industry, Board of Investments, Company information 9 Real estate Filinvest City – successful 244-hectare township project Residential Office Retail and hospitality From high-end lots to studio apartments, there is a 31 high-rise office towers with an IT hub for BPO Festival Mall, the largest mall in South Metro place for every target segment and Knowledge Process Outsourcing ("KPO") in the Manila, has over 1,500 tenants with a GLA of 18.7 ha PEZA registered IT zone 231,000 sqm; total of 1,680 hotel keys including Crimson Hotel; Palms Country Club Sprawling over an expansive 244 hectares of prime property in Alabang, Muntinlupa City, Filinvest City is a fully-integrated, self-contained, master- planned urban development, divided into districts that provide a balanced mix of developments 86 hectares of prime commercial land, the largest contiguous Metro Manila CBD property controlled by a single group Gateway to high growth regions Close proximity to CBDs and airport Well supported community Less than 1 hour drive from Calabarzon, one of the 15 mins drive from Makati and Bonifacio Global City Home to 3 hospitals, a university and other fastest growing industrial regions in the Philippines via Skyway; 20 mins drive from NAIA Airport healthcare and education facilities Source: Company information, Philippine Statistics Authority 10 Real estate Superior location of Filinvest City to become even more strategic with the completion of two major infrastructure projects North and South Rail will connect Filinvest City all the NLEX-SLEX Connector Road will reduce travel way from Clark in the north to Bicol in the south, further time from Filinvest City to Quezon City and increasing number of major access points in addition to Clark significantly, improving accessibility the existing five major roads Tarlac Philippines Nueva Ecija New Clark City Clark International