Analysts’ Briefing 3 rd Quarter 2019 Earnings Results November 19, 2019
01 Key Financial Highlights 02 Sales and Distribution 03 Latest Developments 04 Outlook 2
Key Financial Highlights • Revenue decline attributed to weaker average Revenues selling prices and peso appreciation o Current oil supply glut weighed down vegetable oil prices • United States operations up 5% 4,443 3,927 o Desiccated coconut volume up 16% 1,535 1,316 o Coconut milk powder volume up 72% 9M2018 9M2019 3Q2018 3Q2019 • Overall production volumes relatively maintained Revenues o Allocation of existing capacity for research and Amounts in PHP thousands development activities o Scheduled plant modernization projects 3
Key Financial Highlights Gross Profit Net Income 1,500 35% 20% 800 31% 16% 16% 28% 30% 25% 25% 15% 25% 600 11% 1,000 10% 20% 00 00 10% 00 400 00 15% 00 1,202 1,123 0 609 500 00 00 10% 476 5% 200 5% 377 375 205 155 0 0% 0 0% 9M2018 9M2019 3Q2018 3Q2019 9M2018 9M2019 3Q2018 3Q2019 Gross Profit Gross Profit Margin Net Income Net Income Margin Amounts in PHP thousands (except margins) Amounts in PHP thousands (except margins) • Controlled operating expenses due to cost • Significant margin improvement : containment efforts o Larger contribution of higher margin products • Effective tax rate of 9% o Steady prices of coconut inputs 4
Balance Sheet ASSETS LIABILITIES AND EQUITY Sep 2019 2018 Sep 2019 2018 (Php, thousands) (Php, thousands) Cash 266,900 257,111 Loans Payable 2,151,163 965,598 Other Current Liabilities 457,259 1,721,037 Receivables 572,606 615,987 Inventories 1,174,100 1,194,078 Total Current Liabilities 2,608,422 2,686,635 Long-Term Debt 83,848 92,252 Other Current Assets 647,020 478,063 Total Current Assets 2,660,626 2,545,239 Other Noncurrent Liabilities 185,835 213,061 Property, Plant and Equipment 3,415,972 3,070,470 Total Noncurrent Liabilities 269,683 305,313 Goodwill and Intangible Assets 1,673,388 1,673,303 TOTAL LIABILITIES 2,878,105 2,991,948 Other Noncurrent Assets 417,642 352,422 Retained Earnings 1,463,288 1,404,301 Total Noncurrent Assets 5,507,002 5,096,195 TOTAL EQUITY 5,289,523 4,649,486 TOTAL ASSETS 8,167,628 7,641,434 TOTAL LIABILITIES AND EQUITY 8,167,628 7,641,434 • PPE additions for new equipment • Short-term loan availment to fund certain asset acquisitions prior to IPO • Higher collection of receivables • Fixed-interest rate for long-term debt 5
Cashflow and Key Ratios CASHFLOW KEY RATIOS Sep 2019 2018 Sep 2019 2018 (Php millions, thousands) Income Before Income Tax 667,459 562,903 Current Ratio 1.02 0.95 Depreciation and Amortization 162,411 155,509 Debt-to-Equity 0.54 0.64 Finance Charges 77,618 116,666 Return on Equity 12% 10% Working Capital Changes (47,191) (112,701) Return on Assets 7% 5% Others 4,857 (166,603) Earnings Per Share (Basic)* P0.19 P0.24 Net Operating Cashflow 787,536 439,108 Earnings Per Share (Diluted)* P0.19 P0.19 Capital Expenditures (476,948) (292,257) *Based on weighted average outstanding shares pre-IPO Others (88,873) (287,666) • CAPEX investments for upgrading of Net Investing Cashflow (565,821) (579,923) manufacturing capabilities Loan and Finance Lease Availments 3,385,849 2,483,954 Payments of Loans and Other Liabilities (3,596,349) (2,580,519) • Healthy gearing levels Net Financing Cashflow (210,500) (96,565) • Double-digit return on equity Effect of Foreign Exchange Rate (1,426) 2,725 Net Increase (Decrease) in Cash 9,789 (234,655) Beginning Cash 257,111 439,260 ENDING CASH 266,900 204,605 6
Product Contribution and Area Sales Product Sales Contribution Sales per Territory 2% 7% 7% Desiccated Coconut USA 9% Coconut Water 14% 34% Europe Coconut Milk/Cream 11% Sweetened Coconut Philippines Coconut Milk Powder 5% 14% 68% Australia Cooking Oil (RBD) 5% Others Asia/Middle East 24% • Desiccated coconut continues to be largest sales • Majority of products are exported and distributed in the contributor United States • Coconut water remains as fastest growing product • 89% exports; 11% domestic category 7
Distribution Network Penetrate new territories; Company-owned Well-appointed distribution Expand within existing markets partners distribution facilities UHT Processing Plant Medina, Misamis Oriental 8
Latest Developments Spray Drying Line Expansion • Doubles annual capacity of coconut milk powder to 4,800 metric tons • Features agglomeration technology Renewal with Vita Coco • Higher minimum order quantity • Non-exclusive private labeling Partial Debt Settlement • Payment of P800M from use of proceeds • Immediately realize lower interest costs Axelum Production Facility 9 Medina, Misamis Oriental
4Q19 Outlook • Seasonality effect driven by Christmas consumption uptick • Additional debt payment before year-end • Stable prices of coconut raw materials and peso foreign exchange rate 10 2
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