Concepcion Industrial Corporation (“CIC”)

Concepcion Industrial Corporation (“CIC”)
Presentation
November 2014
TODAY’S PRESENTERS
Raul Joseph A. Concepcion – Chairman, Chief Executive Officer and President
 Over 25 years of experience with the Concepcion Group
 President of Concepcion-Carrier Air Conditioning Company (“CCAC”) and CIC
 Chairman Emeritus of the Philippine Appliance Industry Association
 Holds a Business Administration Degree from Simon Fraser University
Ma. Victoria A. Betita – Chief Finance and Information Officer
 Over 6 years of experience with the Concepcion Group
 Head of Corporate and Business Services of CCAC
 Holds a B.S. Management Engineering degree from the Ateneo de Manila University and a Masters
in Business Management from the Asian Institute of Management
Mary Grace Z. Velasco – Vice President
 Over 10 years of experience in investor relations, corporate planning and financial advisory.
 Head of Investor Relations and Corporate Planning of CIC
 Holds a Bachelor of Science degree in Business Administration, Major in Finance and Economics,
from Fordham University
2
TABLE OF CONTENTS
1. Company Overview
2. Strategy
3. 2014 Key Programs
4. Q3 Performance
5. YTD 2014 Performance (as of September 2014)
6. Guidance
7. Appendix
3
OVERVIEW
Company Overview
Holding
Company
Entity
Ownership
60%
100%
40%
51%
Products &
Services
Airconditioning
& Refrigeration
Residential
Refrigeration
Consumer
Appliances
Elevators
& Escalators
•
Over 50 years in the industry
•
Combined annual sales of Php 7.6 billion (FY13)
•
Market leader in air conditioning and domestic refrigeration segments
•
Largest air conditioner and refrigerator manufacturing facilities in the Philippines
•
Broad range of products
•
Market leading brands
•
Established nationwide sales and service network
5
Company Overview
Holding
Company
Entity
Ownership
60%
100%
40%
51%
Products &
Services
Airconditioning
& Refrigeration
Residential
Refrigeration
Consumer
Appliances
Elevators
& Escalators
Brands
6
Ownership Structure
Foresight
• Owned by the family of Raul T. Concepcion
• His son Raul Joseph Concepcion is currently
the President of CIC and CCAC
• His son Raul Anthony Concepcion is president
of CDI
22.7%
Hy-land
• Owned by the family of Rafael G. Hechanova
and his wife Eumelia Concepcion Hechanova
• His daugther, Renna Hechanova Angeles is
currently the Treasurer of CIC and the Vice
Chairman of CDI
• His son, Rafael C. Hechanova, Jr is currently
the Vice President of Marketing and Business
Development for CIC and CCAC
22.7%
Horizons
• Owned by the family of Jose S. Concepcion, Jr
• Horizon also owns 20% of RFM Corporation,
listed on the PSE which primarily engages in:
• Manufacturing, wholeselling, distribution and
processing of food products
• In patnership with Unilever Corporation in the
ice cream business - Selecta
22.7%
68%
7
Proven Track Record Spanning More
Than 50 Years
8
Business Overview
Concepcion Carrier Air Conditioning Corporation
Concepcion Durables, Inc. (“CDI”)
 Manufactures, sells, distributes, installs and provides comprehensive
air conditioning products and services
 Manufactures, assembles, wholesells, retails, purchases and trades
refrigeration equipments
 Involves in 3 market segments:
 Involves in 1 market segment:
% of Revenue
Product Segments
2012
2013
Residential & Light Commercial
44.5%
51.2%
Commercial & Industrial
18.1%
14.2%
Aftermarket Product & Services
3.6%
3.6%
% of Revenue
Product Segment
Residential & Light Commercial
2012
2013
33.8%
31.1%
 Joint Venture with Carrier Corporation1 and a trademark agreement on
Kelvinator2
 Trademark agreement on Kelvinator for the use of certain trademarks
related to Kelvinator brand equipments
 Joint Venture with Midea to enter into a wider spectrum of the white
goods appliance market
 Market leader and largest distribution network in the Philippines
 Market leader and largest distribution network in the Philippines
 Operates the largest air conditioner manufacturing facility in Philippines
 Offers multiple market leading product brands, including:
 Operates the largest refrigeration manufacturing facility in Philippines
 Offers multiple market leading product brands, including:
% of FY13 Revenue – 70% , PATAMI – 98%
% of FY13 Revenue – 30%, PATAM I–10%
9
Largest Manufacturing Facilities in
the Philippines
•
2 Manufacturing Facilities
•
Combined Production area:
35,000 sq. m.
•
In-house R&D Facilities
•
8 Testing Laboratories
10
Long Track Record of Market Leadership
& Market Leading Brands
11
Extensive Nationwide Sales and
After Sales Footprint
Dedicated Parts Stores
24/7 Customer Care
8 parts stores
strategically
located
Nationwide Logistic
Network
Nationwide Service &
Install Capability
Nationwide
distribution
Nationwide Retail
Coverage
90% retail
store
coverage
Highly Trained Service
Technicians
In-store Merchandisers
Over 1000+
disers
12
Largest Range of Product Offerings
Airconditioning
Residential
Light
Commercial
Condura
WRAC
Carrier
iCool
Carrier
Optima
Carrier XPower
Carrier
Ceiling Carrier Floor Carrier
Mounted Mounted Cassettes
Toshiba
Hi-Wall Single
Inverter
Toshiba Digital
Inverter
Refrigeration
Carrier
Multi-Splits
Midea VRF
Toshiba
Multi-Splits
Toshiba VRF
Commercial
System
Carrier Air Cooled Screw Carrier Water Cooled ScrewCarrier Centrifugal Chillers Carrier Tri-Rotor Screw
Refrigeration
Carrier Island Freezer Carrier Open Case
Carrier Compressors Carrier Condensers Carrier Cold Rooms
13
New Business Overview
Concepcion Midea Inc.
Concepcion Otis Philippines Inc.
 Distibute, installs and service complete line of Midea Appliances in the
Philippines
 Distributes, installs and services Otis Elevators and Escalators in the
Philippines
 Midea among one of the larget manufacturers of Home Appliances in
the World
 In addition to strengthening CIC’s air conditioning and refrigeration
product lineup, the JV with Midea will primarily allow CIC to enter a
wider spectrum of the white goods appliance market, thereby creating
new revenue streams and realizing further growth potential
 Php P 6 billion New Equipment market and highly profitable after Sales
business
 Synergy with existing business
 Create strategic growth platform
 Align with building solutions trends
 Leverage on key accounts
 Cost & integration synergies
March 28, 2014
 Leverage on construction & service discipline
 Php 27 billion market for other appliances that CIC will pursue
Joint Venture Signing
November 20, 2013
Office Opening
November 20, 2013
14
Combined Management Strength And
Experience With Proven Track Record
Raul Joseph Concepcion
Chairman, CEO and President of
CIC with over 25 years of
experience in the consumer
durables industry
Ma. Victoria A. Betita
Chief Finance and Information Officer
with over 20 years of Finance experience
in government and various private sector
industries
Rajan Komarasu
Renna Hechanova Angeles
Treasurer and Vice Chairman of CIC
with over 30 years of experience in
the consumer durables industry
Director of the Business Solutions Group
with over 20 years of multinational
experience primarily in the HVACR
industry
Harold Thomas Pernikar, Jr.
Raul Anthony Concepcion
President of CDI with over 20 years
of experience in the consumer
durables industry
Director of the Consumer Solutions Group
with over 15 years of multinational
experience in various industries
Alexander T. Villanueva
Director of Manufacturing and Supply Chain
Management of CCAC with over 15 years
of experience in Manufacturing, operations,
and supply chain management
Rafael C. Hechanova, Jr.
Vice President of Business
Development and Marketing with
over 20 years of experience in the
consumer durables industry
.
Phillip F. Trapaga
General Manager, Concepcion Midea In.
(CMIP) with over 20 years of experience in
Sales and Distribution in various industries
15
Key Financial Highlights
Net Sales & Gross Margin%
Profit before Tax & PBT%
(Php Mil)
5,606
+24% ▲
6,940
(Php Mil)
+9% ▲
7,588
+25% ▲
924
33.3%
32.4%
32.0%
2011
2012
2013
16.5%
2011
+5% ▲
1,218
973
14.0%
16.0%
2012
2013
Earnings Per Share
Profit After Tax / Net Margin
(Php Mil)
+6% ▲
647
11.5%
2011
+23% ▲ 841
1.95
684
+20% ▲
+9% ▲
9.9%
2012
PAT
1.49
1.63
511
391
426
7.0%
6.1%
6.7%
2012
2013
11.1%
2013
2011
PATAMI
2011
2012
Based on 261, 244,002 shares
2013
16
Key Financial Highlights
For the Period Ending
Dec 31, 2013
Dec 31, 2012
Gross Profit Margin (%)
32.4%
32.0%
Profit before Tax %
16.0%
14.0%
510.60
426.10
6.7%
6.1%
Return on Average Equity (%)
28.5%
29.8%
Return on Average Assets (%)
17.0%
15.0%
Earnings per Share
1.95
1.63
Net Income Attributable to
Shareholders (Php million)
Net Income Attributable to
Shareholders (% to Sales)
(261,244,002 shares)
As of End
Dec 31, 2013
Dec 31, 2012
Debt to Equity Ratio
0.57
1.46
Asset to Equity Ratio
1.57
2.46
Current Ratio
2.68
1.59
8.75
4.95
Book Value per Share
(261,244,002 shares)
17
STRATEGY
Position to capture growth
Strong Economic Fundamentals
Philippine GDP Growth (Nominal)
9.7
9.4
Philippine Remittances & BPO Revenues (US $ bn)
9.6
9.4
9.4
8.7
7.9
8.6
17
8.2
16
9
7
2009
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14
Source: BSP/ BPAP
Source: NSO
Breakdown By Sector
10.8
56% 57% 58% 56%
7.4
8.4
31% 31% 31% 32%
Agriculture
2011
2012
2013E
BPO Revenue
•
Improving governance and effective policymaking driving
political stability and increased economic competitiveness
with the Philippines improving its position in the World
Economic Forum Global Competitiveness Ranking by 26
spots from 2010 to 2013
•
Solid fiscal and government finances as evidenced by the
credit rating upgrades by S&P (BBB-) and Moody’s (Baa3)
in 2013
10.7
8.9
5.9
13% 12% 11% 12%
Service
4.7
2011 2012 2013 Q1
2014
Source: NSO
Remittance
11
Continuing current account surplus expected, supported
by robust remittances from overseas Filipino workers,
substantial BPO revenues and increasing tourism receipts
9.6
Industry
2010
13
•
Growth Rate
Services
23
21
20
19
Industry
10-11
11-12
12-13 Q1 2014
19
Changing Demographic Window
Source: NSO
Growing Middle Class Household
Income
GDP per capita (US $)
Source: NSO
Source: NSO
High Population Growth + Young
Population Driving Housing Demand
% Population Under Age Of 30
12th Most Populous Country
(100 mil) In The World
80%
Cambodia
70%
Indonesia
60%
50%
China
Vietnam
40% Germany
30%
20%
10%
0%
Japan
Philippines
Malaysia
US
UK
Median Age: 23 Years
0.5%
1.0%
1.5%
2.0%
Population Growth (2010 – 2030F)
20
…And Untapped Market Potential
Forecast office new supply (in million of sqm)
.61m
7.74m
.54m
6.18m
.4m
Other
Locations
Continuing Strong Housing Demand Expected
(units)
686,484
672,763
Alabang
659,306
646,128
Eastwood
633,209
620,548
Fort
Bonifacio
Ortigas
End of 2012
2013
2014F
2015F
Total
Makati
CBD
Forecast of residential new supply (units)
7,530
2011E
2012E
2013E
2014E
2015E
2016E
Source: Total Housing Needs / (Housing and Urban Development Coordinating Council)
Source: Colliers International Philippines Research
5,913
Low Penetration Rate / % of Households
owning
78,212
Eastwood
6,346
4,394
Ortigas
53,314
99%
82%
Fort
Bonifacio
Rockwell
Makati
CBD
End of
2012
2013
2014F
2015F
2016F
Source: Colliers International Philippines Research
Total
90%
73%
39%
35%
26%
15%
Indonesia
15%
Malaysia
Singapore
AC
Thailand
6%
Philippines
Ref
Source: Euromonitor (est. 21 million households)
21
Business Structure to Capture Growth
Air-conditioning
Refrigeration
 Redefinition of Core Business and Business Model
 Shift from Product / Company centric to consumer centric
 Building & Investing on Capabilities
22
Focus On Growing 2 Core Business
Largest Consumer Appliance
Company in the Philippines
Preferred Building & Industrial
Solution Provider
23
Overall Distribution
Holding Company
Legal Entity
Holding
Company
Entity
Building & Industrial
Solutions
Appliance
Ownership
Residential 60%
&
Products &
Airconditioning
Light Commercial
Services
& Refrigeration
Aircon
100%
40%
51%
Residential
Refrigeration
Commercial
Consumer
Appliances
Aircon & Ref
Elevators
& Escalators
Residential
Refrigeration
Laundry,
Kitchen,
Ref & Aircon
Elevators
& Escalators
Distribution
Retailers &
Dealers
Direct &
Contractors
24
Overall Group Strategy
Continue to invest and
expand in Airconditioning &
Refrigeration Markets to
maintain leadership position
and ensure sustainable
profitable growth
Expand Building &
Industrial Solutions
platform to related other
products besides airconditioning
Expand Product lines
and offerings in
Consumer Appliances
Sector
Strengthening
Presence in
Core Markets
Expansion into
New Markets
and Customer
Segments
Entering
Businesses for
Long Term
Growth
Synergize
Businesses to
Strengthen
Leadership,
and Increase
Profitability
Leverage scale, synergize
different business units to
strengthen market
leadership, improve
efficiency and increase
profitability
25
Strategically Focused Organization with
Core Capabilities
Consumer Appliances
End-to-End Building Solutions
Building best-in-class capabilities critical in supporting the core and being a key differentiator
26
Unlocking Synergies to improve
leadership and profitability
Shared
Back-end
Quality
Improvement
Sourcing
And
Purchasing
Synergies
Shared
Logistics &
Distribution
Infrastructure
Product
Development
&Technology
Go-to-Market
Strategy
Cost Efficiency &
Synergies
Market &
Sales
Organizational
Synergy
Market Leadership
Unlocked Synergies To Provide Cost Efficiency, Improving Quality & Strong Leadership
27
Leveraging Scale & Expertise to Create
Competitive Advantages
OPEX % of Sales
25.8%
Distribution
Reach
After Sales
30.0%
Organization
16.7%
CIC
Logistics
28.0%
Comp 1 (CIC
Scale)
AC Company
(only)
Alliance / Partners
China
Company
Technology/Skill
Purchasing
28
Directions
CORE BUSINESS
Growth & Expansion
60%
Leading Airconditioning Company
in the Philippines
CORE BUSINESS
Growth & Profitability
100%
Leading Consumer Refrigeration
Company in the Philippines
GROWTH PLATFORMS
Expansion
40%
Expanding brand offering in
Consumer Appliances Sector
51%
Expanded brand offering in
Building & Industrial Solutions
Sector
29
Medium Term Goals
Key Directions
Sales
7.6
6.9
Synergies for
Margin
Expansion
5.6
2011
2012
2013LE
.
..
…
Expand &
Grow Core
Businesses
Profit after Tax
Attributable Profit
0.8
0.7
0.6
0.4
2011
Acquisition and
Expansions in New
Businesses related
to the core
0.4
2012
0.5
2013LE
.
..
…
30
Key Partners
Midea
32
United Technologies Building & Industrial
Systems Directions
PRODUCTS & BRANDS
33
2014 Key Programs
CCAC Highlights
2014 Target
Revenue
PAT
: ~ 25% Growth
: ~ 25% Growth
Strategy
Strategy
•
Protect & Defend
•
Expand Solutions Offering
•
Leadership in all segments
•
End to End Capabilities
•
Expand Product Offering – Target
Product holes
•
Build & Leverage Engineering &
Service Expertise
•
New Products
•
Strategic business partnerships
•
Multiple Brands
•
•
Strengthen and Expand Distribution
Channel and Reach
Brand building and Relationship
events
•
Key Partnering activities
Strengthen front & back end capabilities
•
New Products
•
35
CCAC Highlights
Multibrand Offering
EVENTS
NEW PRODUCTS
Key Account Development & Partnership
36
CDI Key Directions
Strategy
•
Acceleration of Cost reduction activities
•
New Models with higher operating margin
•
Synergize with CCAC and CIC to reduce backend cost
•
Synergize with Midea for sourcing of FG and RM
1
3
4
5
Revenue
PAT
:~
Php
10%
500
Growth
mil
:~
Break
150%Even
Growth
Product Bench Marking & Cost Reduction
2
Increase
Profitability
Strategy
2014 Target
PROFIT AFTER TAX
Manufacturing Overhead Reduction
Purchasing Synergies And Alternative
Sourcing
Logistics And Warehousing Synergies
Complement Current Product Line Up With Highend Products With Higher Margins
37
CMIP Development
Strategy
2014 Target
•
Midea brand building
•
Introduction of key products
•
Set up key Organization
•
Distribution with key retails
•
Set up after sales infrastructure
•
Synergize distribution for HVAC
Revenue
PAT
: Php 300 mil
: ~10% loss
Introduction Schedule
Product Category
Air Conditioning
Target Launch Date
Feb 2014
OK
Washing Machine
June’ 2014 OK
Refrigeration
June’ 2014 OK
Small Kitchen Appliance
Large Kitchen Appliance
Q4’ 2014 OK
2015
Key Organization in Place
Dealer Trip to
Midea
38
JV Partnership with Otis
Strategy
•
•
•
New Equipment Focus
•
Tier 1 Developers Program
•
Synergize with CCAC / BIS team
•
New Product Gen 2 Elevator
2014 Target (9 months)
Revenue
PAT
: ~ Php 350 mil
: ~ 10% (attributable)
Rebuild Otis Brand
•
Focus on Core Processes
•
Develop key Talent
•
Recapture Program (3,200 units)
Service Excellence
•
90% Conversion Rate
•
Below 5% Cancellation Rate
39
Revenue & Margin
New Equipment Market
Total Revenue
Service & Maintenance
Revenue
+40%
61.4%
55.8%
55.6%
55.6%
302
323
331
-61%
7%
+40%
2%
+5.7%
2011
2012
2013
216
15%
CAGR
2010
Revenue
31% of Revenue
37% of Revenue
32% Revenue
9% Margin
56%
Margin
61%
45% Margin
Repair Sales & Margins
148
143
129
2011
Margin
49%
2012
2013
54%
43%
40
Strategic Directions
Sustainable Profitable Growth in Core Business
- Gain Market Share through Continuous Product Introduction
- Strengthen Capabilities
- Relentless Drive for Productivity
Acquisitions
- Execute the Midea Promise of Expanding to Consumer Appliances
- Growth in Building and Industrial Solutions through Related Acquisitions
Maximize Synergies
- “Go-to-Market” Efficiencies
- Shared Back-end Resources
CONFIDENTIAL
41
Status of Key Strategic Priorities
 Grow & Expand Core Business
•
Revenue up 24%
•
•
•
•
Consumer Segment up 19%
Building & Industrial Segment up 19%, (31% including off shore)
Backlog up 250%
Earnings up 36% (PAT), 36% (PATAMI)
•
•
Aircon up 27% (.6 pt. improvement)
Ref up 201% (2.1% to 5.5% PAT%)
 New Business Partnerships
•
Midea Joint Venture (Nov 2013)
• Washing Machine / AC / VRF / Ref / Small Kitchen
Appliances launched
•
Otis Elevators & Escalator (End March 2014)
o Unlocking Synergies
•
2nd half 2014 and 2015 focus
42
3Q 2014 Performance
3Q Highlights
-
+
•
•
•
•
•
Positive economy driven by strong
fundamentals
Growing consumption
Steady but increasing inflation
Strong liquidity
Overall consumer and business
optimism
•
•
•
Logistic & Port Issues
Weather
Peso Depreciation
44
Key Financial Highlights 3Q 2014
Net Sales & Gross Margin%
Profit before Tax & PBT%
(Php Mil)
+27% ▲
(Php Mil)
+15% ▲
1,816
2,092
1,433
34.2%
35.5%
2012
2013
36.0%
2014
+32% ▲
213
+34% ▲
377
286
14.9%
15.7%
18.0%
2012
2013
2014
Profit After Tax / Net Margin
KEY HIGHLIGHTS
(Php Mil)
+25% ▲
+30% ▲
▲ 20% growth in earnings
248
198
+20% ▲
152
10.6%
149
▲ 15% growth in reportable sales
6.8%
7.1%
▲ .3 pts higher net margin
2013
2014
+24% ▲
10.9%
100
11.9%
7.0%
124
2012
2013
PAT
2014
2012
PATAMI
45
3Q Revenue Performance
PhP Mil
2% Growth
10% Growth
2013
2014
2013
2014
P 924
P 943
P 1,275
P 1,397
Flat Residential
Sales driven by Q2
pull-in and weather
disturbances
11% growth including offshore
29% Growth
15% Growth
2013
2014
P1,816
2,092
16% growth including offshore
8% Growth
2013
2014
P541
P587
Driven new
models
2013
2014
P 351
P 455
32% Overall
Growth
P 373
P 494
Strong commercial
business with
rising backlog
32% growth
(including offshore
sales)
2014
P 109
46
3Q Earnings Performance
PhP Mil
20% Growth
2013
2014
P124
P 149
6.8%
7.1%
PATAMI
Profit After Tax
PATAMI
23% Growth
23% Growth
2013
2014
2013
2014
P 186
P229
P 112
P 138
14.6%
16.4%
107% Growth
107% Growth
2013
2014
2013
2014
P 20.4
P 42.2
P 20.4
P 42.2
3.8%
7.2%
Start Up
2013
2014
- P 38.7
Start Up
2013
2014
- P 15.5
2014
2014
P 15.8
P 8.1
Sales drop thru
Cost Reductions
Cost reductions
Higher Margin
Products
Start up Cost
Investing for the
future
14.6%
47
CCAC Highlights
Net Revenue
(Php Mil)
Overall
43.3%
CSG
42.8%
BIS
39.4%
924
1,397
1,275
943
+32% growth including Offshore
sales
932
351
+37%
2012
2013
Sales
+
14%
+2%
+ 10%
2013
2014
GM%
•
23% Growth in Earnings
8.8%
9.8%
•
1 pts. Net Margin improvement
138
•
Strong commercial business driven by backlog
•
Flat Residential Sales driven by Q2 pull-in and
weather disturbances
229
186
132
112
+6%
79
+42% +23%
2012
2013
PAT
2014
2012
2014
10% Overall Sales Growth
16.4%
8.5%
2013
•
(Php Mil)
14.6%
+29%
Key Highlights
Profit After Tax / Net Margin
14.1%
2014
454
+6%
+ 42%
+23%
2013
2014
PATAMI
48
CDI Highlight
Net Revenue
Key Highlights
(Php Mil)
26.4%
17.2%
18.4%
501
541
2012
•
8% Sales Growth
•
107% growth in earnings
587
+8%
+8%
•
due to improved focus on cost reductions
2013
2014
•
introduction of higher margin product
Profit After Tax / Net Margin
•
3.4 pts. net margin improvements
(Php Mil)
7.2%
3.9%
3.8%
42.2
19.5
2012
20.4
+5%
+107%
2013
2014
49
CMIP Highlights
Sales
Profit After Tax / Net Margin
(Php Mil)
Product Category
Air Conditioning
29
2014
2014
+
(39)
1
4
%
PAT
Target Launch Date
Feb 2014
OK
2014
Washing Machine
June’ 2014 OK
(15)
Refrigeration
June’ 2014 OK
Small Kitchen Appliance
Q4’ 2014
Large Kitchen Appliance
Q4’2014
OK
+48%
move to 2015
PATAMI
Store Activation
57
36
Q2
Q3
Total of 93 stores activated
SDA Launch in end Q3
50
Otis Highlights
Sales
Profit After Tax / Net Margin
(Php Mil)
108.6
14.6%
15.8
7.4%
8.1
2014
PAT
PATAMI
NEXT 90 DAYS FOCUS
Reinforcing the organization
Reorganize & improve service operations
Equipment sourcing options & negotiations
Post JV statutory completion
IT transition services
Commence ERP system implementation
March 28, 2014
51
Operating Performance Summary
2014
2013
Growth
2012
Net Sales
2,091,903
1,816,150
15%
1,432,906
Gross Profit
732,247
644,742
14%
489,438
Gross Margin
35.0%
35.5%
-0.5pts
34.2%
Opex
340,714
360,694
6%
288,069
Opex %
16.3%
19.9%
+3.6pts
20.1%
Profit before Tax
376,794
286,022
32%
212,867
PBT%
18.0%
15.7%
+ 2.3 pts
14.9%
Profit after Tax
248,462
198,455
25%
152,231
PAT%
11.9%
10.9%
+1 pts
10.6%
Attributable Profit
149,028
123,929
20%
99,607
PATAMI%
7.1%
6.8%
+ .3pts
7.0%
Earning per Share
Php0.44
Php0.36
20%
Php0.29
* Based on 339,617,226 shares
52
YTD 2014 Performance
Highlights
-
+
•
•
•
•
•
Positive economy driven by strong
fundamentals
Growing consumption
Steady but increasing inflation
Strong liquidity
Overall consumer and business
optimism
•
•
•
Logistic & Port Issues
Weather
Peso Depreciation
54
Key Drivers
Continued GDP Growth
Consumer Spending Growth
6.6%
5.2%
5.1%
5.5%
6.0%
4.4% 4.2% 4.6%
4.1%
5.7% 5.6%
5.6%
3.7%
3.4%
Increasing Per Capita Income
20141H
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
2.3%
More disposable income
($ per capita)
2014H1
2,919
2013
2,795
2012
2,613
2011
2,380
2010
2,155
2009
1,851
2008
1,919
2007
1,684
2006
1,405
2005
2004
1,209
1,093
2003
1,025
2002
1,015
2001
2000
970
1,055
Misc
6.2
Restaurants & Hotels
8.4
Education
4.5
Recreation
Communication
6.3
2.5
Transport
11.2
Health
11.0
Furnishings, household…
Housing, water, electricity, gas
5.6
4.2
Clothing & Footware
8.6
Alcoholic Beverage & Tabacco
Food & Beverage
9.6
4.2
Auto Industry Gallops
into 2014 with 27%
Year-on-Year Growth
Key Drivers
56
Key Market Drivers for 2014
First Time
Buyers
15% Growth
Increasing
Projects Backlog
& Funnel
Q3 Funnel P 6.2 Billion and
backlog of P 1.5 billion
Refrigeration
Cost reduction
gaining traction
Replacement
Market
>50% Growth
New
Acquisitions
57
Key Market Growth
(PHP billions)
Air-conditioning Market
Refrigeration Market
2014 Estimate
2014 Estimate
21.1
14.1
16.8
9.8
9.0
2008
2009
11.3
11.2
2010
2011
13.5
2012
11.4
2013
CCAC Estimate
Tracking 25% growth
2014
9.9
10.1
2008
2009
2010
10.6
2011
11.7
2012
12.6
2013
2014
Euromonitor
Tracking 12% growth
58
Key Financial Highlights YTD 2014
Net Sales & Gross Margin%
Profit before Tax & PBT%
(Php Mil)
(Php Mil)
+24% ▲
+15% ▲
4,838
+38% ▲
6,935
+18% ▲
5,585
748
32.7%
2012
1,222
886
35.2%
34.2%
15.5%
15.9%
17.6%
2013
2014
2012
2013
2014
Profit After Tax / Net Margin
KEY HIGHLIGHTS
(Php Mil)
+36% ▲
+14% ▲
530
10.9%
▲ 36% growth in earnings
824
+36% ▲
608
10.9%
+7% ▲
11.9%
495
338
363
7.0%
6.5%
7.1%
2013
2014
2012
2013
PAT
2014
2012
▲ 24% growth in reportable sales
▲ .6 pts higher net margin
PATAMI
59
YTD Revenue Performance
PhP Mil
21% Growth
22% Growth
2013
2014
P 3,986
P 4,858
2013
2014
P 3,108
P 3,774
25% growth including offshore
24% Growth
24% Growth
2013
2014
P 5,585
P 6,935
26% growth including offshore
16% Growth
2013
2014
P1,599
P1,848
2013
2014
P 877
P 1,084
35% Overall
Growth
P924
P 1,247
2014
P 229
60
YTD Earnings Performance
PhP Mil
36% Growth
2013
2014
P363
P 495
6.5%
7.1%
Profit After Tax
PATAMI
27% Growth
27% Growth
2013
2014
2013
2014
P 612
P777
P 367
P 466
15.4%
16.0%
201% Growth
201% Growth
2013
2014
2013
2014
P 33.6
P 101.2
P 33.6
P 101.2
2.1%
5.5%
Start Up
2013
2014
- P 81.3
Start Up
2013
2014
- P 32.5
2014
2014
P 37.7
P 19.2
16.4%
61
Operating Performance Summary - YTD
2014
2013
Growth
2012
Net Sales
6,935,024
5,585,268
24%
4,838,255
Gross Profit
2,368,561
1,967,455
20%
1,581,812
Gross Margin
34.2%
35.2%
- 1.0 pts
32.7%
Opex
1,175,758
1,090,637
-8%
867,283
Opex %
17.0%
19.5%
+.1.5pts
17.9%
Profit before Tax
1,222,160
885,655
38%
747,955
PBT%
17.6%
15.9%
+ 1.7 pts
15.5%
Profit after Tax
824,154
607,785
36%
529,704
PAT%
11.9%
10.9%
+1 pts
10.9%
Attributable Profit
495,040
362,832
36%
338,163
PATAMI%
7.1%
6.5%
+ .6pts
7.0%
Earning per Share
Php1.46
Php1.07
Php.99
* Based on 339,617,226 shares
62
YTD 2014 Key Performance Indicators
For the Period Ending
September 30, 2014 September 30, 2013
Gross Profit Margin (%)
34.2%
35.2%
Profit before Tax %
17.6%
15.9%
495.0
362.8
7.1%
6.5%
Return on Average Equity (%)
29.4%
28.4%
Return on Average Assets (%)
19.0%
18.0%
1.46
1.07
Net Income Attributable to
Shareholders (Php million)
Net Income Attributable to
Shareholders (% to Sales)
Earnings per Share
(339,617,226 shares)
As of End
September 30, 2014 Dec 31, 2013
Debt to Equity Ratio
0.94
0.71
Asset to Equity Ratio
1.94
1.71
Current Ratio
1.69
2.30
7.74
5.49
Book Value per Share
(339,617,226 shares)
63
Dividend Declarations
Dividend Policy : 30% of prior year’s Net Income of CIC
1. Cash Dividend declared of Php .59 / share for all shareholders on record as of
April 2, 2014. and payment date on April 30, 2014 (equivalent to 30% of 2013
Net Earnings)
2. Special Stock Dividend of 30% for all shareholders on records as of AUG. 22,
2014 and payment date of SEPT. 8, 2014
64
Share Price Performance
27-Nov-13
CIC vs. Philippine Composite Index
Key Market Statistics
Last Closing Price (11/07/2014)
Php 39.00
Share Price High (Adjusted)
Php 43.69
Share Price Low (Adjusted)
Php 16.54
Share price at listing (Adjusted)
Php 20.38
Share Performance Since Listing
27-Jan-14
27-Mar-14
CIC Price
27-May-14
27-Jul-14
CIC Volume
92%
Current Market Cap (Php)
Php 13.2
billion
Current Market Cap (US$)
USD 294
million
27-Sep-14
PSEi
65
2014
Guidance
2014 Guidance
FY Guidance
Segment
Sales Growth
Profit Change
~ 20 to 25% growth
~ 20 to 25% growth
Refrigeration
> 10% growth
~ 150 % growth
Organic Businesses
~ 20% growth
~ 25% growth
Midea (Combined)
~ P 300 million
~ 10% loss
Otis
~ P 350 million
~ 10% margin
~ 5% growth
~ % growth
~ 25%
growth
~ 25%
growth
Air Conditioning
New Businesses
Overall Consolidated
(After Minority Interest)
67
ONE Company. ONE Team. ONE Goal
68
CCAC YTD Highlights
Net Revenue
(Php Mil)
Overall
CSG
41.9%
39.7%
3,774
4,858
3,108
3,986
3,276
BIS
37.7%
+35% growth including Offshore
sales
877
+22%
2012
2013
Sales
+
14%
+ 22%
+21%
2013
2014
GM%
8.8%
2014
22% Overall Sales Growth
•
27% Growth in Earnings
9.6%
•
.4 pts. Net Margin improvement
466
•
Strong commercial business driven by backlog
16.0%
777
2013
•
(Php Mil)
15.4%
+24%
Key Highlights
Profit After Tax / Net Margin
14.6%
2014
1,084
9.2%
612
479
+6%
287
+28% +27%
2012
2013
PAT
2014
2012
367
+6%
+ 28%
+27%
2013
2014
PATAMI
69
CDI Highlight
Net Revenue
Key Highlights
(Php Mil)
23.9%
17.9%
18.6%
1,562
1,599
2012
1,848
•
16% Sales Growth
•
201% growth in earnings
+2%
+16%
•
due to improved focus on cost reductions
2013
2014
•
introduction of higher margin product
Profit After Tax / Net Margin
•
3.4 pts. net margin improvements
(Php Mil)
2.9%
2.1%
5.5%
101.2
45.5
2012
33.6
-26%
+201%
2013
2014
70
CMIP Highlights
Sales
Profit After Tax / Net Margin
Product Category
(Php Mil)
Air Conditioning
126
2014
2014
(32.5)
+
2014
1
4
%
+48%
(81.3)
PAT
Target Launch Date
Feb 2014
OK
Washing Machine
June’ 2014 OK
Refrigeration
June’ 2014 OK
Small Kitchen Appliance
Q4’ 2014
Large Kitchen Appliance
Q4’2014
OK
move to 2015
PATAMI
Total of 93 stores activated as of Sept
Media and Bloggers launch in Q2
71
JV Partnership with Otis
Sales
Profit After Tax / Net Margin
(Php Mil)
229
16.4%
37.7
8.4%
19.2
2014
PAT
PATAMI
NEXT 90 DAYS FOCUS
Reinforcing the organization
Reorganize & improve service operations
Tier 1 Developer Recovery Plan
March 28, 2014
72
For further inquiries contact:
Thank you
Grace Velasco
Investor Relations and Corporate Planning
[email protected]