COSCO CAPITAL GROUP

INVESTOR PRESENTATION
FY 2015 RESULTS & PERFORMANCE

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.

CONGLOMERATE MAP

Lucio Co & Family

73%
Cosco Capital Inc.

51%
Grocery
Retailing

100%

100%

Liquor
Distribution

Commercial
Real Estate

100%
Specialty
Retail
100%

Oil &
Minerals

90%

One of the leading retail holding companies in the Philippines

CORPORATE RESTRUCTURING

CORPORATE HIGHLIGHTS

2013

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.

2014

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

2015

August 12: Cosco Capital, Inc. through

its wholly-owned subsidiary, Ellimac
Prime Holdings, Inc., acquired
Maunlad mall situated at Malolos
Bulacan
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 5: through wholly-owned
subsidiary,
Ellimac Prime Holdings,
Inc. acquired RFC mall located along
Alabang, Zapote, Las Pinas City
February 3
Puregold Price Club, Inc. acquired
nine (9) supermarkets from NE
Incorporated.
Cosco Capital, Inc. through its
wholly-owned subsidiary, Ellimac
Prime Holdings, Inc., acquired four
(4) commercial properties from NE
Incorporated
5

INVESTMENT SUMMARY

1. Sustained economic growth of the Philippines

2. Exposure to growing & robust consumer sector
3. Visible growth pipeline in the next 5 years

4. Focused core target market per brand

5. Management focused on the sustainable and Long-Term growth of
the company

REVENUE CONTRIBUTION BY BUSINESS SEGMENT

FY 2015

4%
11%

1%

0%

9%

FY 2014
0%

2%
Grocery retail

4%
GROCERY RETAIL

Real estate and property

leasing

LIQUOR DISTRIBUTION

Liquor Distributions

83%

Specialty retail

REAL ESTATE

86%

SPECIALTY RETAIL
PARENT, OIL & MINING

Oil and Gas

PATMI CONTRIBUTION BY BUSINESS SEGMENT

-5%

FY 2015

FY 2014
3%

10%

1%

24%

15%
Grocery retailing

57%
23%

GROCERY RETAIL

Real estate

57%

Liquor distribution
Specialty retail
Parent, mining and oil

LIQUOR DISTRIBUTION
REAL ESTATE
SPECIALTY RETAIL

15%

PARENT, OIL & MINING

PATMI Net income attributable to equity holders of the parent company

8

FY 2015 CONSOLIDATED FINANCIAL PERFORMANCE

Revenues (in Php Millions)

98,787

Gross Profit and Margin (in Php Millions)

25,000

116,752

17,287

20,000
15,000

48,976

10,000
5,000

19,964

38%
28%

9,534
19%

17%

17%

18%
8%

FY 2013

FY 2014

FY 2013

FY 2015

EBITDA and Margin (in Php Millions)

15,000
10,000

10,179

11,675

30%

8,000
6,000
4,000

5,000

10%

10%

12%

FY 2014
FY 2015
GP Margin

Net Profit and Margin (in Php Millions)

20%

5,733

GP

10%

2,000

6,236

6,987

20%

3,731

15%
10%

8%

6%

6%

FY 2014
EBITDA

FY 2015

EBITDA Margin

FY 2013

FY 2014
NIAT

5%
0%

0%

FY 2013

25%

NIAT Margin

FY 2015

Stores roll-out through FY 2015

298

215

248

158
102
1

16

20

30

41

1998

2001

2006

2007

2008

2009

First store
Opened in
Mandaluyong
City, Metro
Manila

First format
introduction

Expansion
Launched loyalty
program in 2001;
renamed as
Tindahan ni Aling
Puring in 2004
Between 2002 and
2006, launched an
average of 3 new
stores every year
and expanded
operations in North
and South Luzon

Brand recognition
Readers Digest
Asias Most
Trusted Brands

New format
introduction

64

2010

Market leadership
The 2nd largest
hypermarket and
supermarket
retailer in the
Philippines in terms
of net sales

New format
introduction - 2010

2011

2012

2013

Rapid expansion via organic

new Puregold stores roll-out
and acquisitions
2011 - Opened 38 new
Puregold stores
2012 Opened 31 new
Puregold stores; Acquired
Parco supermarkets with 19
stores and S&R warehouse
membership shopping club
with 6 stores

Rapid store expansion from 1 to 298 stores in 17 years

2014

2015

Continuing new stores rollout via organic geographic

expansion and
acquisitions
Opened 40 new Puregold
and 2 new S&R stores in
2013
Acquired Company E with
15 stores in 2013
NE Bodega 9 stores and
Budgetlane 8 stores
acquisitions in 2015

GROCERY RETAIL SEGMENT HIGHLIGHTS

Opened 27 new PGOLD stores; 1 S&R Warehouse; 10 S&R New York Style
Pizza (QSR) in 2015; acquired 9 Stores NE Bodega, 8 Stores Budgetlane
Supermarket and closed 5 PGOLD stores
Operating 281 stores in 2015; with consolidated NSA of more than 426,000
sqm.; excluding acquisition NE Bodega of around 15,000 sqm and Budgetlane
of around 18,000 sqm.
Consolidated net sales expanded by 14.7% in 2015; Puregold stores sales
accounted for about 81.7% of consolidated net sales
Gross profit grew by 11.7% in 2015; with gross profit margin posted 17.0%
Operating income increased by 10.4% in 2015; with operating margin at 7.4%
Consolidated Net income grew by 10.6% in 2015; consolidated net profit margin
at 5.1% PGOLD only net margin is at 4.6% while S&R net margin is 10.1%.

11

GROCERY RETAIL OPERATING PERFORMANCE

Format

Hypermarket, supermarket, extra

Membership shopping

Revenue contribution

Gross profit (PHP million) & Margin (%)

12,480 (15.7%)

4,008 (22.5%)

Total traffic (million)

143.6

5.5

Average net ticket (PHP)

543

3,584

15.3%

6.6%

Traffic growth (%)

7.5%

11.9%

Average net ticket growth (%)

5.0%

-4.7%

Same Store net sales growth (%)*

3.8%

-0.1%

-1.8%

3.0%

5.7%

-3.0%

Net sales growth (%)

Same Store traffic growth (%)*

Same Store average net ticket growth (%)*

*Same Stores Growth for 2015 are based on stores opened as of end December 2013.

12

GROCERY RETAIL OPERATING PERFORMANCE

Breakdown of Stores (per format)

Group
Hypermarket
Supermarket
Extra
S&R
S&R QSR
TOTAL

2012 2013 2014 2015

87
113
121 134
47
64
83
93
16
28
29
28
6
8
9
10
2
2
6
16
158
215
248 281

Net Selling Area of Stores (in sqm)

306,753
26,413

280,340
2012

426,559

369,708

404,914

37,857

44,046

1,720
50,963

331,851

360,868

373,876

2013
2014
2015
Puregold
S&R only
S&R QSR

Traffic and Ave Ticket Size

Puregold Only
Metro Manila
North Luzon
South Luzon
Visayas
Mindanao
TOTAL

2012 2013 2014 2015

69
88
102 104
37
48
58
64
44
63
67
74
0
1
1
6
0
5
5
7
150
205
233 255

*excludes NE Bodega and Budgetlane stores with a total of 17 stores

and 33,000 sqm NSA

Traffic (in M)
2012
2013
2014
2015

Puregold
93.7
119.5
133.6
143.6

S&R
3.0
3.9
4.9
5.5

Ave Ticket (in Php)

2012
2013
2014
2015

Puregold
548
511
517
543

S&R
3,754
3,798
3,763
3,584

13

GROCERY RETAIL SEGMENT HIGHLIGHTS

GUIDANCE FOR FY 2016

Consolidated net sales targeted to grow by 12 to 15% driven by the
following:
Net sales growth from organic Puregold and S&R stores
Positive SSSG for Puregold (3%) and S&R (4 to 5%)
Opening of 25 new Puregold stores; 2 S&R stores
Full year operations of NE Bodega & Budgetlane Supermarket
Lower PGOLD inventory days between 45 to 50 days
Sustain PGOLD consolidated gross and net profit margins
Pursue acquisitions and expand into new geographic locations

14

GROCERY RETAIL SEGMENT HIGHLIGHTS

CAPEX GUIDANCE FOR FY 2016

CAPEX Budget of Php 2.6 billion in 2016
Php 1 billion for 25 new Puregold Stores
Php 1 billion for 2 S&R stores
Php 150 million for 10 S&R QSR
Php 450 million for 75 Lawsons Stores
To be funded by internally generated cash and short term
untapped bank credit lines if necessary.

15

GROCERY RETAIL SEGMENT FINANCIAL PERFORMANCE

Revenues (in Php Millions)

84,697

Gross Profit and Margin (in Php Millions)

20,000

97,172

14,760

15,000

46,024

10,000
5,000

7,871
17.1%

17.4%

16,489

23.0%

17%

18.0%
13.0%
8.0%

FY 2013

FY 2014

FY 2013

FY 2015

8,133

8,000
6,000
4,000
2,000

4,012
8.7%

6,000

8,847

20.0%

9.1%

15.0%

4,000

10.0%

3,000

9.6%

5.0%

GP

FY 2015

GP Margin

Net Profit and Margin (in Php Millions)

EBITDA and Margin (in Php Millions)

10,000

FY 2014

4,520

5,000

2,000

2,548
5.5%

5,002

5.1%
5.3%

FY 2014
EBITDA

FY 2015

EBITDA Margin

7.0%
5.0%
3.0%
1.0%

1,000

0.0%

FY 2013

9.0%

-1.0%

FY 2013

FY 2014
NIAT

FY 2015

NIAT Margin

16

LIQUOR SEGMENT HIGHLIGHTS

Products

Rhum
Bacardi
Tequila
Cuervo
Whisky
Bushmills whiskies
Chivas
Cognac
Vodka
Liquers

Brandy
Fundador light
Fundador

Whisky
JB/Grants

Brandy
Alfonso
Alfonso light
Exelente
Carlos
Tequila
Patron
Whisky
Johnnie walker

17

LIQUOR SEGMENT HIGHLIGHTS

SALES MIX

CATEGORY
Brandy
Other spirits
Wines
Specialty beverages

2015

2014

952,289
306,487
1,258,776
185,260
113,628
298,888
1,557,664

860,048
253,833
1,113,881
187,228
88,792
276,020
1,389,901

INCREASE
(DECREASE)

92,241
52,654
144,895
(1,968)
24,836
22,868
167,763

%
10.73%
20.74%
13.01%
-1.05%
27.97%
8.28%
12.07%

18

LIQUOR DISTRIBUTION FINANCIAL PERFORMANCE

Revenues (in Php Millions)

3,565

4,841

Gross Profit and Margin (in Php Millions)

5,677

1,500

1,188

1,003

1,299

1,000

28.0%

28.1%

24.5%

500

FY 2013

FY 2014

22.9%

GP

FY 2014

GP Margin

FY 2015

Net Profit and Margin (in Php Millions)

EBITDA and Margin (in Php Millions)

680

800
600

838

731

919

30.0%

660

660

20.5%

17.3%

16.2%

10.0%

200
0.0%

FY 2013

FY 2014
EBITDA

FY 2015
EBITDA Margin

620
600

25.0%
20.0%

640
20.0%

400

18.0%
8.0%

FY 2015
FY 2013

1,000

38.0%

16.7%

594

15.0%

603
12.5%

11.6%

10.0%

580

5.0%

560

0.0%

FY 2013

FY 2014
NIAT

NIAT Margin

FY 2015

19

REAL ESTATE SEGMENT HIGHLIGHTS

Total of 38 properties in 2015 and 32 in 2014.

Gross Leasable Area (GLA) in 2015 414,405 sqm and
378,756 sqm in 2014 (up 9%).
Acquisitions of six (6) commercial properties in 2015 adding
GLA of 35,649 sq. m.

20

REAL ESTATE SEGMENT HIGHLIGHTS

Portfolio of Properties

1.

2.

3.

Land under Lease

Number of properties
Total area in sqms
Book value
Commercial Buildings
Number of buildings
Total GLA in sqms
Investment costs
Divisoria 999
Number of buildings
Total GLA in sqms
Investment cost
TOTALS
Number of properties
Investment costs
Total in GLA

December 2014

December 2015

9
145,980
Php4,243mm

9
145,980
Php4,243mm

21
177,476
Php7,549mm

27
213,125
Php8,811mm

2
55,300
Php4,162mm

2
55,300
Php4,162mm

32
Php15,954mm
378,756 sq.m

38
Php17,216mm
414,405 sq.m

Up by 7.9%
Up by 9.4%
21

REAL ESTATE SEGMENT HIGHLIGHTS

FY 2015 Occupancy rates

Branches

Rate

Branches

Rate

Sto. Cristo, Baliuag

98.1%

Taguig

100.0%

Cabanatuan

94.4%

Taytay

100.0%

Candelaria

93.1%

Tayuman

95.1%

Cubao

98.9%

Valenzuela

94.4%

Dau

95.5%

Don Antonio Heights

100.0%

Tabang, Guiguinto

95.5%

Anabu, Cavite

96.1%

Caloocan, Monumento

98.8%

Subic Harbor Point

63.0%

100.0%

Fairview Terraces

59.0%

Pasig
Q.I.

95.7%

Angeles, Pampanga

100.0%

San Juan, Batangas

100.0%

Cabanatuan, NE

99.7%

Sucat

100.0%

Las Pinas (RFC Mall)

47.6%

22

REAL ESTATE SEGMENT HIGHLIGHTS

Selected Financial Ratios

2015

2014

A. Ebitda / Rentals

81.1%

95.0%

B. Rentals / Property & Eqpt

12.2%

12.2%

C. Ebitda / Property & Eqpt

10.5%

11.5%

D. Debt : Equity

0.58

0.47

E. NIAT / Equity

7.7%

8.0%

23

REAL ESTATE FINANCIAL PERFORMANCE

Revenues (in Php Millions)

1,838

2,210

Gross Profit and Margin (in Php Millions)

2,000

2,423

1,500
1,000
500

FY 2013

FY 2014

980

1,305
59.1%

1,504

FY 2013

56.0%

FY 2014GP Margin FY 2015

GP

Net Profit and Margin (in Php Millions)

90.0%

771

62.0%

70.0%

800

60.0%

600

50.0%
40.0%

44.3%

30.0%

975

1,000

80.0%

62.1%

50.1%

563

44.1%

1,028

FY 2014
EBITDA

FY 2015
EBITDA Margin

60.0%
50.0%

42.4%

40.0%
30.0%

400

20.0%

200

10.0%

20.0%

FY 2013

60.0%
58.0%

56.4%

1,200

1,370

60.4%

54.0%

FY 2015

EBITDA and Margin (in Php Millions)

1,600
1,400
1,200
1,000
800
600
400
200

1,464

62.0%

0.0%

FY 2013

FY 2014
NIAT

FY 2015
NIAT Margin

24

SPECIALTY RETAIL SEGMENT HIGHLIGHTS

Liquigaz Philippine Corporation

423, 151 mT volume sold in 2015 and 432,995 mT in 2014

Operates in 5 business segments
Current market share of around 30%.
Acquisition of G&G and Velgas refiling tank in 2015.
Infrastructures:
Bataan Terminal
Five Business Segments
North hub 75 mT tank size
1. Wholesale
South hub 40 mT tank size
2. Commercial
Tanks at customer premises
3. Industrial
Cylinders
4. Autogas
Auto gas stations
5. Cylinders
Bulk trucks
Cylinder truck
25

SPECIALTY RETAIL SEGMENT HIGHLIGHTS

Office Warehouse, Inc.

A total 59 stores in December 2015 and 48 in 2014
Net selling area of 11,036 sq.m.
63% of outlets are mall based and 37% are stand alone

26

SPECIALTY RETAIL FINANCIAL PERFORMANCE

Revenues (in Php Millions)

Gross Profit and Margin (in Php Millions)

1,400
1,200

13,157

8,727

1,000
800

576

600

1,286

12.0%

9.8%

8.0%

10.0%

6.0%
4.0%

400

2.9%

200

2.0%
0.0%

FY 2013

FY 2014

FY 2013

FY 2015

FY 2014
GP

EBITDA and Margin (in Php Millions)

718

800
700
500

5.5%

400

209

300

600
14.0%

400

8.0%

300

6.0%

200

4.0%

100

2.0%

FY 2013

FY 2014
EBITDA

508

500

10.0%

200

2.3%

GP Margin

Net Profit and Margin (in Php Millions)

12.0%

600

FY 2015

8.0%

3.9%

100

2.0%

1.5%

EBITDA Margin

FY 2013

0.0%

FY 2014
NIAT

6.0%
4.0%

132

0.0%

FY 2015

10.0%

FY 2015

NIAT Margin

27

Thank you

28