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Tanduay Distillers, Inc G AINING MOMENTUM 11th Floor Unit 3 Bench Tower, 30th Street corner Rizal Drive Cresent Park West 5, Bonifacio Global City, Taguig City, Philippines ltg.com.ph G AINING MOMENTUM ANNUAL REPORT ANNUAL REPORT 2018 2018 Contents 2 Financial Highlights 3 Our Businesses at a Glance The LT Group Logo 4 Our Partnerships Strength and solidarity. This is the essence of the LT Group (LTG) logo. The 6 clean balance lines and curves are central elements -- a mystical Chairman’s Message symmetrical tree. Drawn in an Eastern-Oriental style, it gives hint to the 8 President’s Message Company’s Chinese heritage. 12 CFO’s Message Tree is life. Life is growth. Like a tree, a company with rm roots, properly 14 Asia Brewery, Inc. nurtured, will continuously grow and give value. 16 Eton Properties Philippines, Inc. The tree’s trunk is upright, and the branches spread out -- a symbolic 18 PMFTC Inc. consolidation of the subsidiaries and stakeholders within two circles, one for continuity, the outer one for solidarity. 24 Philippine National Bank 26 Tanduay Distillers, Inc. 28 Corporate Governance Report VISION 36 Corporate Social Responsibility To be a world-class conglomerate at the forefront of Philippine economic e Tan Yan Kee Foundation, Inc. growth, successfully maintaining a strong presence and dominant position in key Philippine industries while ensuring continuous benets to its Asia Brewery, Inc. consumers, communities, employees, business partnerts, and shareholders. Eton Properties Philippines, Inc. MISSION PMFTC Inc. Anchored to its Vision, the LT Group commits: Philippine National Bank To increase stockholder values through long-term growth in its major Tanduay Distillers, Inc. business groups. 46 Sustainability To continuously improve the value of its products and sevices and to Asia Brewery, Inc. provide consumers with more and better choices. PMFTC Inc. To build the largest, most effective distribution network and widest Philippine National Bank customer reach in the Philippines. Tanduay Distillers, Inc. To leverage on synergies between its various businesses to continuously 52 Statement of Management’s Responsibility improve revenues and cost structure. for Financial Statements To enhance the welfare of its employees and the communities where it lives and works. 53 Independent Auditor’s Report 56 Consolidated Financial Statements (The Vision and Mission Statements are reviewed and approved annually by the Board of Directors. The latest reviews were on January 16, 2018 and and Notes January 15, 2019.) 138 Board of Directors 140 Investor Information OUR COVER THE LT Group keeps moving toward greater and bigger goals. It is open to exploring new ideas, new markets and new partnerships. Such courage and perseverance have brought the conglomerate to where it is now -- visibly gaining momentum in achieving its vision to become a market leader in all its businesses. The stylized arrow moving from left to right is a reection of LT Group's focus toward its goals. The white subtle streaks parallel to it are graphic representations of LTG's agility to gain momentum and to adapt to changes and challenges it faces along the way. The bright pastel yellow represents optimism and the success of the conglomerate. in overcoming different issues and changes in the environment. To convey that all ve subsidiaries are gaining momentum and all moving in the same direction as well, they have been arranged to form a straight horizontal line that goes along and compliments the stylized arrowhead. This is the DNA that the conglomerate is made of -- focused yet agile, optimistic despite the challenges, strong and positive but most importantly, committed to building a better Filipino nation for all. Contents 2 Financial Highlights 3 Our Businesses at a Glance The LT Group Logo 4 Our Partnerships Strength and solidarity. This is the essence of the LT Group (LTG) logo. The 6 clean balance lines and curves are central elements -- a mystical Chairman’s Message symmetrical tree. Drawn in an Eastern-Oriental style, it gives hint to the 8 President’s Message Company’s Chinese heritage. 12 CFO’s Message Tree is life. Life is growth. Like a tree, a company with rm roots, properly 14 Asia Brewery, Inc. nurtured, will continuously grow and give value. 16 Eton Properties Philippines, Inc. The tree’s trunk is upright, and the branches spread out -- a symbolic 18 PMFTC Inc. THE LT GROUP consolidation of the subsidiaries and stakeholders within two circles, one for continuity, the outer one for solidarity. 24 Philippine National Bank 26 Tanduay Distillers, Inc. 28 Corporate Governance Report VISION 36 Corporate Social Responsibility To be a world-class conglomerate at the forefront of Philippine economic e Tan Yan Kee Foundation, Inc. growth, successfully maintaining a strong presence and dominant position in key Philippine industries while ensuring continuous benets to its Asia Brewery, Inc. consumers, communities, employees, business partnerts, and shareholders. Eton Properties Philippines, Inc. MISSION PMFTC Inc. Anchored to its Vision, the LT Group commits: Philippine National Bank To increase stockholder values through long-term growth in its major Tanduay Distillers, Inc. business groups. 46 Sustainability To continuously improve the value of its products and sevices and to Asia Brewery, Inc. provide consumers with more and better choices. PMFTC Inc. To build the largest, most effective distribution network and widest Philippine National Bank customer reach in the Philippines. Tanduay Distillers, Inc. To leverage on synergies between its various businesses to continuously 52 Statement of Management’s Responsibility improve revenues and cost structure. for Financial Statements To enhance the welfare of its employees and the communities where it lives and works. 53 Independent Auditor’s Report 56 Consolidated Financial Statements (The Vision and Mission Statements are reviewed and approved annually by the Board of Directors. The latest reviews were on January 16, 2018 and and Notes January 15, 2019.) 138 Board of Directors ASIA BREWERY, INC. 140 Investor Information OUR COVER ETON PROPERTIES PHILIPPINES, INC. THE LT Group keeps moving toward greater and bigger goals. It is open to exploring new ideas, new markets and new partnerships. Such courage and perseverance have brought the conglomerate to where it is now -- visibly gaining momentum in achieving its vision to become a market leader in all its businesses. PMFTC INC. The stylized arrow moving from left to right is a reection of LT Group's focus toward its goals. The white subtle streaks parallel to it are graphic representations of LTG's agility to gain momentum and to adapt to changes and challenges it faces along the way. The bright pastel yellow represents optimism and the success of the conglomerate. in overcoming PHILIPPINE NATIONAL BANK different issues and changes in the environment. To convey that all ve subsidiaries are gaining momentum and all moving in the same direction as well, they have been arranged to form a straight horizontal line that goes along and compliments the stylized arrowhead. TANDUAY DISTILLERS, INC. This is the DNA that the conglomerate is made of -- focused yet agile, optimistic despite the challenges, strong and positive but most importantly, committed to building a better Filipino nation for all. FINANCIAL SUMMARY OUR BUSINESSES AT A GLANCE REVENUES Total Assets (in Php Millions) (in Php Millions) Net Income Net Income Net Income (in Php Millions) (in Php Millions) Eton Properties Philippines, Inc. (in Php Millions) 5 99.9% 99.6% 56.47% 75,559 1,097,777 Ownership Ownership Ownership 479 2018 2018 1,75 Asia Brewery, Inc. started as a brewery 9,777 in 1982. It offers non-alcoholic beverages 7 as well as packaging materials. It is a 390 2017 63,780 2017 917,096 market leader in the energy drinks and Eton Properties Philippines, Inc. 8,55 soymilk categories. It is ranked second is the real estate arm of the group. 2 552 in the bottled water segment. Its alcoholic 348 It has a diversied portfolio of 57,800 829,091 7,38 2016 2016 421 beverages, namely beer and alcopop, residential subdivisions, high-rise Philippine National Bank is one of the were spun off into AB Heineken and mid-rise condominiums, BPO ofce largest private universal banks 2016 2017 2018 Philippines Inc. in 2016. 2016 2017 2018 buildings and commercial centers. 2016 2017 2018 in the country. Net Income Attributable to Equity Holders Total Liabilities (in Php Millions) Net Income Net Income Net Income of LTG (in Php Millions) (in Php Millions) (in Php Millions) (in Php Millions) 49.6% 100.0% 30.9% Ownership Ownership Ownership 908 760 16,195 866,586 909 764 2018 2018 16,793 Tanduay Distillers, Inc. has a 99% 654 8 631 market share of rum in the Philippines Victorias Milling Company, Inc. is one 2017 10,831 2017 721,780 PMFTC Inc. is the business and 27% market share of the distilled of the country’s largest sugar reneries, 8,29 9 combination of Philip Morris Philippines spirits industry in 2018. It is the world’s based in Negros Occidental. In crop Manufacturing Inc. and Fortune Tobacco number one rum in terms of volume. In year 2017-2018, it milled 2.95 million 2016 9,390 2016 650,486 4,70 Corp. It is the leading cigarette 2016, Tanduay started selling ethanol to tons of cane and produced 4.62 million 2016 2017 2018 manufacturer in the Philippines. 2016 2017 2018 fuel companies. 2016 2017 2018 50-kilogram bags of rened sugar. Note: For the crop years September to August Attributable Net Income Contribution to LTG EBITDA
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