2019 ANNUAL STOCKHOLDERS MEETING 1. OUR FINANCIALS 2. UPDATES 3. - - PowerPoint PPT Presentation

2019 Annual

Stockholders’ Meeting

• 1. OUR FINANCIALS

2019 ANNUAL STOCKHOLDERS’ MEETING

• 3. KEY TAKEAWAYS
• 2. UPDATES

72%

28%

BRANDY WHISKY

1.6b 11%

CONSOLIDATED REVENUES

NET INCOME MARGIN

REVENUE BREAKDOWN

*Attributable to parent

Php47.1b 14.2% 5.3% Php6.7b

OUR FINANCIALS

2018 Financial Highlights

REVENUES NET INCOME*

NET INCOME GROWTH

OUR FINANCIALS

Financial History Revenues (PHPm)

17,355 23,594 29,865 32,009 43,645 41,018 42,656 47,050 2011 2012 2013 2014 2015 2016 2017 2018

15% CAGR

OUR FINANCIALS

Financial History Gross profit (PHPm) & Margin

4,445 8,210 9,225 10,903 13,679 15,306 14,942 16,041 26% 35% 31%

34% 31%

38% 35% 35% 2011 2012 2013 2014 2015 2016 2017 2018

19% CAGR

OUR FINANCIALS

Financial History EBITDA (PHPm) & Margin

3,377 7,145 8,323 8,738 9,609 11,023

9,641 10,332

19% 30% 28% 27% 22% 27% 23% 22% 2011 2012 2013 2014 2015 2016 2017 2018

17% CAGR

OUR FINANCIALS

Financial History

* Attributable to parent 7

Net income* (PHPm) & Margin

2,305 5,000 5,831 6,204 6,960 7,693

6,322

6,658 13% 21% 20% 19% 16% 19% 15% 14% 2011 2012 2013 2014 2015 2016 2017 2018

16% CAGR

OUR FINANCIALS

Segment Breakdown

(PHPm) Revenues Gross Profit EBITDA Net Income FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Brandy 31,174 34,447 10,852 10,730 8,024 7,870 5,012 5,017 Whisky 12,571 13,527 4,090 5,311 1,617 2,462 1,320 1,812 EMP Inc. 42,656 47,050 14,942 16,041 9,641 10,332 6,332 6,829

• Revenues, net of intersegment
• Net income is before deducting non-controlling interest.

OUR FINANCIALS

1Q19 Performance Update

1Q18 1Q19 YoY Commentary REVENUES (PHPm) 9,744 11,025 13.2% Overall business driven by whisky and brandy with premium and luxury brands leading growth GROSS PROFIT (PHPm) 3,345 3,688 10.3% Overall gross profit margin remains in mid 30s: whisky, 42% and brandy, 30% GROSS PROFIT MARGIN 35.9% 34.2% EBITDA (PHPm) 2,414 2,538 5.1% EBITDA margin above 20%: 23% for whisky and 22.5% for brandy EBITDA MARGIN 24.8% 23.0% NET INCOME* (PHPm) 1,585 1,738 9.6% Net margin stable at around 16%: 19% for whisky, 14% for brandy NET INCOME MARGIN* 16.3% 15.8%

*Attributable to parent

OUR FINANCIALS

SEGMENT BREAKDOWN

(PHPm) Revenues Gross Profit EBITDA Net Income 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 Brandy 7,012 7,766 2,290 2,284 1,908 1,750 1,208 1,086 Whisky 2,847 3,372 1,055 1,404 507 788 454 656 EMP Inc. 9,744 11,025 3,345 3,688 2,414 2,538 1,661 1,743

• Revenues, net of intersegment
• Net income is before deducting non-controlling interest.

OUR FINANCIALS

Latest Financial Performance

Net Income (PHPm) & Margin* Gross Profit (PHPm) & Margin EBITDA (PHPm) & Margin Revenues (PHPm)

47,050 9,744 11,025 FY18 1Q18 1Q19 16,041 3,345 3,688 34.6% 35.9% 34.2% FY18 1Q18 1Q19 10,332 2,414 2,538 22.0% 24.8% 23.0% FY18 1Q18 1Q19 6,658 1,585 1,738 14.2% 16.3% 15.8% FY18 1Q18 1Q19

• Net income is before deducting non-controlling interest.

6.2 2.4 0.9 (0.9) (0.2) 0.2 8.6

OUR FINANCIALS

Solid Capital Position

(PHPm) Cash Debt Net Debt Net Debt to Equity Commentary 1Q19

8,613 38,838 30,225 47% Higher cash due to collections 8,613 33,541 24,928 39% Ex Equity-linked security

2018

6,228 39,274 33,046 54% Lower cash due to share buyback and dividend payout 6,228 34,015 27,787 45% Ex Equity-linked security

2017

10,162 38,150 27,988 48% Additional borrowings to fund investments

CASH POSITION (PHPb)

Cash Beginning EBITDA Change in Working Capital CAPEX & Acquisition Financing Others Cash End

• 2. UPDATES
• 1. OUR FINANCIALS
• 3. KEY TAKEAWAYS

2019 Annual Stockholders’ Meeting

UPDATES

Whyte and Mackay

53% 77% 67% 77% 70% 17% 13% 18% 12% 22% 30% 10% 14% 11% 8%

2011-2014 2015 2016 2017 2018 Branded Business Private Label Bulk

Revenue Mix

UPDATES

Whyte and Mackay

78% 76% 61% 53% 45% 2% 4% 7% 12% 23% 9% 9% 14% 16% 11% 11% 12% 18% 20% 21%

2014 2015 2016 2017 2018 EMEA Asia & Pacific Americas Travel Retail

Branded Business Breakdown

UPDATES

Whyte and Mackay

18.1% 19.7% 30.1% 32.7% 39.7% 2014 2015 2016 2017 2018

Gross Profit Margin

UPDATES

Whyte and Mackay

5 years ago

55%

• f branded business

Tod ay

65-70%

17

80-85%

V is ion

Strategy: Focus on Malts

UPDATES

Malt Hierarchy

Php1,250 Php1,700 Php1,900 Php2,500 Php3,580

DISCOVERED UNDER ICE SERVED OVER ICE

SHACKLETON

Short History

Legendary polar explorer Sir Ernest Shackleton went on an expedition to Antarctica.

1907

He left behind 2 crates of 1907 Mackinlay’s Rare Old Highland Malt in his hut.

2007

100 years later, the crates of whisky were discovered.

TODAY

Based on the antique whisky, Shackleton is a master class in the art of whisky blending.

UPDATES

Premiumization in Brandy Space

FUNDADOR SUPREMO

• A super-premium Brandy
• Introduced through the

Travel Retail channel in Europe and Asia, and is now available in the Philippines.

Php12,800

UPDATES

Brandy Hierarchy

Php120 Php350 Php260

T

UPDATES

Share Buyback

2017 45m shares @ P7.09 2018 212m shares @ P7.19

Announcement of Share Buyback 2019 30m shares @ P7.43

As of May 15, 2019 287m shares @ P7.20

6.60 8.25 7.00 8.74 6.92 7.75 7.18 7.50

01 '17 02 '17 03 '17 04 '17 05 '17 06 '17 07 '17 08 '17 09 '17 10 '17 11 '17 12 '17 01 '18 02 '18 03 '18 04 '18 05 '18 06 '18 07 '18 08 '18 09 '18 10 '18 11 '18 12 '18 01 '19 02 '19 03 '19 04 '19 05 '19

• 3. KEY TAKEAWAYS

2019 Annual Stockholders’ Meeting

• 2. UPDATES
• 1. OUR FINANCIALS

KEY TAKEAWAYS

Future-proofing, Premiumization and Profitability We want to secure our dominance in Philippine liquor while making a dent on global liquor. We are best positioned to do premiumization in the Philippines. We want margin sustainability and stability.

Future-proofing dominance Premiumization Profitability