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FILIPINO MANUFACTURING CUSTOMIZED B2B2C

SPECIALTY
PRODUCTS

D&L INDUSTRIES
INVESTOR PRESENTATION
May 2018

A-
Table of contents
Company Overview Financial and Operating Results
• Business segment overview 4 • 1Q18 highlights 23
• Key business strategies 5 • Net Income 1Q18 Breakdown 24
• 50+ year history 6 • Condensed Income Statement 25
• Key customers 7 • Product mix 26
• Board of Directors 8 • HMSP volume growth 27
• Senior Management 9 • Segment Volume Growth and GPM 28
• Ownership structure 10 • Commodity Margins QoQ 29
• Mission / R&D in perspective 11 • Commodity Segment Overview 30
• Integrated supply chain 12 • HMSP Segment Overview 31
• Asset light model 13 • Exports 32
• Dividend policy 14 • Pass-through pricing mechanism 33
• Historical Returns 15 • Financial and Operating Highlight 34
• Public float and liquidity 16 • 1Q18 Group Results Summary 35
• IR conferences 17 • Food Ingredients Group Results 36
• Net foreign flows 18 • Oleochemicals Group Results 37
• Corporate awards 19 • Specialty Plastics Group Results 38
• CSR initiatives 20/21 • Aerosols Group Results 39
• Balance Sheet 40

A- 2
Table of contents
Financial and Operating Results
• Cash Flows 41
• Capital Structure 42
• Cost Structure & R&D Spend 43
• Working Capital Cycle 44
Appendix
• Food ingredients overview 46
• Oleochemicals overview 47
• Specialty plastics overview 48
• Aerosols overview 49
• News and developments 2017 50
• News and developments 2016 51
• Bunge soft oil products 52
• News and developments 2015 53
• News and developments 2014 54
• Comparing ROE, PEG Ratio, and Div Yield 55

A- 3
D&L INDUSTRIES is a Filipino company that makes customized, specialty
ingredients for food and chemicals

% FOOD INGREDIENTS
50%
Revenue OLEOCHEMICALS & OTHER
34%
Revenue

33% 32%
Of Proforma 1Q18 Fats, oils and other specialty SPECIALTY CHEMICALS
food ingredients Coco-biodiesel, oleochemicals,
Revenue Net Income resins and powder coatings Net Income

%
Of Proforma 1Q18 Net
Income

13% 3%
Revenue Revenue
SPECIALTY PLASTICS AEROSOLS
Pigment blends, color and
additive masterbatches and 27% Aerosol & non-aerosol products
for homecare, personal care 6%
engineered polymers Net Income and maintenance chemicals Net Income

Due to rounding, numbers may not add up precisely


D&L parent is 0.2% of revenues through Management Service Fees / 2% of Net Income A- 4
Except for the D&L Industries consolidated balances, which are already net of eliminations, the rest are presented gross of intercompany sales and other elimination
KEY BUSINESS STRATEGIES

Maintain Market Innovate


Leadership Continuously

Capitalize on Growing Enhance Production and Expand


Domestic Consumer Market Business Processes Globally

A- 5
Our history of serving customers spans across 50+ years

POLYMER & COLOURS, INC.

Colorants Specialty Engineered Polymers


Aerosols Oleochemicals Fats IPO
For Plastics
1963 1976 1984 1987 2000 2006 2012

Corro-coat, Corro-Coat Inc.


1971 early 1985 1988 becomes 2014
Inc. IPO
Colorants, 1980s
Powder Polystyrene Color
Chemicals and Resins Masterbatches
Additives For Coating Biodiesel
Emulsion & Additives Acquisition
Plastics, Paints
and Inks Dispersion

A- 6
As the leading B2B2C company in the Philippines, we have longstanding customer
relationships with mostly consumer companies
Shortening
Flavored Toppings
Length of Customer Relationships Flavored Glazes
Icings
(in Years)
34 Frying Oils
Gravy Mixes
27
>70%
Breading
Dipping Sauces
of sales are to 23 Body Fragrance
consumer companies Sprays
19 Insect Control Sprays
Spray Paints

15
Brake Cleaners
Flavored Coatings

11
Syrups & Fudges
Whipped Cream
Soft Ice Cream
9 Mix
Pancake Mix
6 Butter Compounds
Margarines
Maple Flavored
Syrups

A- 7
Majority of the Board are independent directors while 3 out of 7 board
members are female – highlights the importance we place on good
corporate governance and gender diversity.
BOARD OF DIRECTORS*
Alvin D. Lao,
Yin Yong L. Lao, John L. Lao, 46 years old
65 years old 63 years old CEO & President
Chairman & Director Vice Chairman Director of Axis REIT; Former
Trustee - Association of Chairman/President – President of EO Philippine
Petrochemical Manufacturers Aero-Pack Chapter, member since 2000
of the Philippines B.S. in IT (Honours) and
B.S. in Business Statistics from the University of
B.A. in General Studies Administration Western Australia
Ateneo de Manila University University of the East MBA from the MIT Sloan School
Years of D&L experience : 43 Years of D&L experience: 42 of Management.
Years of D&L experience: 19

INDEPENDENT DIRECTORS
Mercedita Nolledo, 77 years old
Filemon Berba, 79 years old
Lawyer and CPA
Member of Institute of Corporate Directors
Former Senior Managing Director & Corporate
Former President of Globe and Manila Water
Secretary of Ayala Corp.
B.S. Electrical Engineering from the University
Chairman, BPI Investment Management;
of the Philippines
Director of Xurpas, Inc. ; Trustee, - Ayala
MBA from the Wharton School of the University
Foundation and BPI Foundation
of Pennsylvania
B.S. Business Administration & Bachelor of
Laws from the University of the Philippines

Corazon S. Dela Paz-Bernardo, 77 years old Lydia Balatbat-Echauz, 70 years old


CPA Former President of Far Eastern University
Former President & CEO of Social Security Director of Metro Pacific Investments
System A.B. in Economics and Mathematics from
Former Senior Partner and Chair at Joaquin St. Theresa’s College
Cunanan & Co (PricewaterhouseCoopers MBA from Ateneo de Manila University
Philippines) DBA from De La Salle University
First non-European President of the
International Social Security Association
B.S. Accountancy from University of the East
MBA from Cornell University

*Mr. Dean L. Lao and Mr. Leon L. Lao, D&L’s founders, together with Mr. Alex L. Lao stepped down as directors of
D&L. Nonetheless, all three continue to attend Board meetings as part of the newly created Advisory Board. Mr. Dean A- 8
L. Lao remains as Chairman Emeritus.
Professional managers and second generation family members with
more than 20 years of experience in sales, marketing & business
development compose our Senior Management team.

SENIOR MANAGEMENT

Amorsolo M. Rosario, 57 years old Joselito P. Rivera, 55 years old


Chief Financial Officer, Treasurer, & Chief Chief Operating Officer
Compliance Officer Former Global Head for Leadership at Ericsson
Former SVP of Finance of Nestle Phils. Corporate HQ in Sweden
27 years in Nestle (PHL, AUS, UK, & SWI) Lead Adviser for Marikina Local Government
B.S. Bus Admin & Accountancy from the Chairperson, Board of Trustees, and OIC
University of the Philippines President of Pamantasan Lungsod ng Marikina
Executive Development Program of Switzerland A.B. Psychology from Ateneo de Manila
International Institute for Management University
Development
Years of D&L experience: 7

Dean A. Lao, Jr.


50 years old Vincent D. Lao,
Managing Director of Chemrez Lester A. Lao, 44 years old
Chairman - United Coconut Association of the 49 years old Managing Director of Oleo-Fats
Phils; Director - ASEAN Oleochemical Managing Director of FIC & DLPC Previously Assistant Trader at Shuwa Co.
Manufacturing Group, President - Philippine B. A. S. in Information Business from Ltd. In Japan ,1994-1995
Oleochemical Manufacturers Association & Edith Cowan University B.A. in Economics and Japanese Studies
Philippine Biodiesel Association, Advanced Years of D&L experience: 28 from the University of Western Australia
Management Program of Harvard Business Years of D&L experience: 23
School
Years of D&L experience: 22

A- 9
Our wholly owned subsidiaries are focused on core activities such as R&D,
sales, supply chain, and manufacturing, with shared services* handled by the
D&L group
Lao Family
58.5% Jadel Holdings Co., Inc.
(Lao Family holding company)
100%

10.9% Individual Family Members FOOD INGREDIENTS

Foreign Ownership as %
69.4%
of Outstanding Shares 100%
OLEOCHEMICALS, RESINS,
& SPECIALTY CHEMICALS

Public

30.6% 100% 55.5% POLYMER & COLOURS, INC.

SPECIALTY PLASTICS

100%
AEROSOLS
*(legal, MIS, accounting and finance, HR)

A- 10
We are shaped and driven by R&D and disciplined innovation

OUR MISSION
• We are dedicated to growth. We are not complacent, timid, or
satisfied with status quo
• We are committed to increase productivity and profitability, but


not at the expense of ethics
We will continuously enhance our reputation for quality and
14% 1.4%
value. Our products and services must always represent good Tech staff
value for money and be competitive in the market place as % of Tech spend as
• We will maintain our market leadership through creativity, total
manpower
% of revenues
innovation and excellence in performance tempered with
experience
• We are proud of our employees. We consider them as our most
valuable asset. We will maintain an atmosphere where our
people can develop their abilities and potential while working
12% 61%
Tech spend as of revenues is
together enthusiastically to achieve our goal
% of non-raw driven by R&D
• We will contribute to the well-being of the communities in which material cost
we operate, and accept our responsibilities as citizens of the
Philippines

We are research-oriented. We will keep abreast of


Allows us Greatest
Biggest to have barrier
the latest technology and have our fingers on the source of
margin and
pass
through
to new
entrants/
pulse of the market to identify the market needs income pricing competition
mechanism
that must be met

A- 11
We have an integrated supply chain that maximizes efficiency of working capital
management

> >
INTERCONNECTED
FLEET OF BARGES STORAGE CAPABILITY GROUND TRANSPORT
Direct access to fleet of 6 Ability to store 33,000 metric SYSTEM
barges with an aggregate tons of oil; refining facility of Superior ground logistics of 42
capacity of 10,000 metric 300,000 metric tons per road tankers with total
tons to transport crude oils annum is strategically capacity of over 1,064 metric
and raw materials to its located near port, optimizing tons; ensures just-in-time
refineries and storage tanks transportation efficiency delivery to customer, thereby
near the port increasing supply chain
efficiency

Key Benefits • Know-how of entire supply chain process ensures that the company can
anticipate and allocate the optimal resources for transportation of its
of Supply products
Chain
Process • Not dependent upon third-parties to provide logistics

A- 12
ASSET-LIGHT MODEL

Rental expenses Management and Shared Service Fees


(paid to affiliates) (MSSF)

D&L provides management and shared services to its


subsidiaries and affiliates, including executive
management and admin support such as legal, MIS,
accounting, human resource, and finance
land, facilities, warehouses, and barges

MSSF from subsidiaries


are eliminated in consolidation

1Q18: P59 mn 1Q18: P13 mn


1% of total costs and expenses 0.2% of total revenues

A- 13
Our dividend policy increased from a 25% to 50% payout ratio* (effective 2016)

Cash Dividends (Pmn)

Dividend
Payout Ratio*
64%
Per 2013 2014 2015 2016 2017
Share 63% 1,679
1,429
Total P0.15 P0.20 P0.15 P0.20 P0.235 51%
714
Regular P0.10 P0.10 P0.15 P0.16 P0.185 40% 26%
Special P0.05 P0.10
100%
P0.04 P0.05 536 536
stock

Dividends Cash
Ex-Date July 24, 2017

Record Date July 27, 2017


2013 2014 2015 2016 2017
Payment Date August 10, 2017

Dividend yield of 2.2% based on April 30, 2018


closing price of Php10.84/sh.

*based on previous year’s recurring net income A- 14


We consistently achieve earnings growth and continue to
improve on returns

Food Ingredients Oleochemicals & Specialty Aerosols D&L Industries –


Other Specialty Plastics Consolidated
Chemicals

FY2017
Net P1.04 P939 P674 P173 P2.91
Income billion million Million Million billion
3Y CAGR +14% +17% +7% +22% +13%
28%
25%

19% 20% 19% 20% 19% 19%


17% 17% 18%
16%
Return on Equity
Return on Invested Capital

2012 2013 2014 2015 2016 2017

D&L parent is 0.2% of revenues through Management Service Fees / 3% of Consolidated Net Income
A-15
Assumes 100% ownership of all subsidiaries
INVESTOR RELATIONS

12-Month Daily Trading Average*

#45
P77 bn* w US$1.0mn
Rank 45 among
Philippines’
largest companies
by market cap

*as of May 24, 2018 A- 16


INVESTOR RELATIONS
Return since IPO as of 04/27/2018
Price Change Total Return
DNL PM +398% +444%

PCOMP Index +32% +47% Price as of 04/27: P10.70


Market Cap as of 04/27: P76bn
DNL USD 1.47bn (USD1:P51.98)
+398% Outstanding Shares: 7,142,857,990

DLNDY:US
Unsponsored ADR
PCOMP
(BNY Mellon & Citi)
+32% 1ADR = 25 Ordinary

DATE EVENT VENUE


June 6-7, 2018 Nomura Investment Forum Asia Singapore

August 21-22, 2018 Nomura PH Corporate Day Tokyo

August 23-24, 2018 Nomura PH Corporate Day Hong Kong

September 24-28, 2018 JP Morgan Rising Dragon Conference Kuala Lumpur, Singapore, Hong Kong

A- 17
NET FOREIGN FLOWS
FY15 FY16 FY17 Jan ‘18 Feb ‘18 Mar ‘18 Apr ‘18 4M18
1,167 1,449 2,212 759 2,201
391 78 113 307
FY2015 FY2016 FY2017 Jan '18 Feb '18 Mar '18 Apr '18 4M18

(275)

(8,870)
(12,729) (13,679)
(19,314)

(39,662)

(57,612)

DNL (Php mn) PSE (Php mn)

A- 18
We have been awarded and recognized both locally and internationally

2018 – 2nd Best Mid-Cap


Company
2017 – Most Honored 2017 – Top 50 Global 2015 & 2016 – Best Mid-Cap 2015 – Alvin D. Lao, CFO
Company; Alvin D. Lao as Challengers (2nd place) Company Best IR by a senior
Best CEO; 3rd Best 2015 –Alvin D. Lao as Best management team
Investor Relations CFO – 2nd Place; Best Investor Small & mid-cap – South
Program Relations – 9th place East Asia
2014 – 3rd Best Mid-Cap

2014- Best Managed 2014 - Top 10 2013- Islamic Market


2016 & 2015 - Asia’s Company– Small Cap Corporate Governance ASEAN Index 2014 & 2015 - Top 50
200 Best Under a Category (Philippines) and Sustainability Best Performing
Billion candidate Report Philippine-listed
Companies - ASEAN
Corporate Governance
Scorecard

2015 - Global Equity Index 2013 - Global


Asia Pacific ex Japan All Small Cap
Cap & Small Cap Index

A- 19
CORPORATE SOCIAL RESPONSIBILITY
of D&L’s annual net

1% income is commited to
corporate social
responsibility programs
through the foundation

AREAS OF FOCUS
2017
P30mn 96
donation to the teachers’ salary
Education foundation sponsored

366 677
Educational Indigent students
Assistance scholars sponsored for
Values formation Livelihood Christmas gift-giving

A- 20
Our CSR projects focus on education and values formation

PROGRAM BENEFICIARIES
Partner Based Educational Program College, TechVoc, High School, Elementary
and Hearing Impaired students nationwide

Community Based Educational Program Various communities and elementary schools


where D&L plants are located

ELL Teachers Welfare Program Retired teachers of Grace Christian High


School and teachers of Purple Centers
Foundation

LBL Educational Excellence Awards Program Children of D&L employees

A- 21
1Q18 Results

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1Q18 Highlights

1 1Q18 net income at Php 744mn, up 12% YoY

HMSP revenue share improved to 64%,


2 HMSP volume up 13% y-o-y

Commodity margins showed significant recovery,


3 reached 6.5% in 1Q

4 Exports revenue contribution stood at 22%

HMSP = High Margin Specialty Products A- 23


1 1Q18 Net Income at Php 744 mn, up 12% YoY

13%

A- 24
Condensed Income Statement

*number of outstanding shares: 7,142,857,990 A- 25


2 HMSP revenue share improved to 64%

REVENUES
% share to total group revenues

**

*Commodities = Refined Vegetable Oils & Biodiesel


**2015 figures recently corrected due to calculation errors A- 26
HMSP Volume up 13% y-o-y

3-yr average quarterly YoY


growth = 7%

High base effect from election-


related spending in 1H16

HMSP = High Margin Specialty Products A- 27


1Q18 Segment volume growth and GP margin

Significant improvement vs
4% growth in FY17

*excludes Aerosols, which are measured in unit pieces A- 28


3 Commodity margins showed significant recovery in 1Q18

Blended Commodity Margin

A- 29
Commodity segment overview

A- 30
HMSP segment overview

Oleochemicals

HMSP = High Margin Specialty Product A- 31


4 Exports revenue contribution stood at 22%

EXPORT
/ SALES 18% 18% 18% 25% 24% 22%

+68%
y-o-y

In P bn

A- 32
Pass-through pricing mechanism as natural hedge against
volatility in forex and commodity prices

GP Margin
EBIT Margin We’ve seen margins improve since
NI Margin 2010 due to our investment in R&D.

High Margin Specialty Products drive


margin expansion

Coconut Oil ($/mt)


Average 1Q18 Prices
Coconut Oil -25% y-o-y
Palm Oil -9% y-o-y
Palm Oil ($/mt)

USDPHP exchange rate

Average PhP:US$
1Q18: P51.48
1Q17: P50.00

Source: D&L data, Bloomberg A- 33


1Q18 Financial and Operating highlights
1Q18 y-o-y FY17 y-o-y Historical ROE & ROIC

Revenue growth +2% +25%

Recurring income growth +12.3% +10.6%

Blended GPM 17.9% 16.7%

64% HMSP 58% HMSP


Sales Mix 36% CMTDY 42% CMTDY

Free Cash Flows +P941mn +P147mn

Net Gearing 18% 25%

ROE 18.7% 19.1%

ROIC 20.2% 19.2%

A- 34
1Q18 Group Results

Food Ingredients Oleochemicals & Specialty Aerosols D&L Industries -


Other Specialty Plastics Consolidated
Chemicals

% of
Revenues 50% 34% 13% 3% 100%
% of Net
Income* 33% 32% 27% 6% 100%
Sales P3.2 bn -11% P2.2 bn +18% P839 mn +23% P215 mn +15% P6.4 bn +2%

GPM 14.8% +1.7 ppts 16.3% 0.7 ppt 28.4% -2.6 ppts 28% -2.6 ppts 17.9% +1.2 ppts

Net
P245 mn - P240 mn +30% P202 mn +15% P43 mn +5% P744 mn +12.3%
Income

Due to rounding, numbers may not add up precisely


*D&L parent is 0.2% of revenues through Management and Shared Service Fees / 2% of Net Income A- 35
Except for the D&L Industries consolidated balances, which are already net of eliminations, the rest are presented gross of intercompany sales and other elimination
FOOD INGREDIENTS
1Q18 Overall
• Volume -11% GPM
• Sales -11% at P3.2 bn +1.7 ppts
• Net Income flat at P245 mn to 14.8 %

REFINED FOOD
SPECIALTY FATS SPECIALTY
VEGETABLE SAFETY
AND OILS INGREDIENTS
OILS PRODUCTS

43% Volume +11% 52% Volume -25% 4% Volume +32% 1% Volume +54%

54% Revenue +8% 39% Revenue -30% 6% Revenue +8% 1% Revenue +89%

20.9% GPM -2.4 ppts 2.8% GPM +1.0ppt 32.8% GPM +0.4 ppt 35.5% GPM -0.1 ppt

A- 36
OLEOCHEMICALS & OTHER
SPECIALTY CHEMICALS
1Q18 Overall
• Volume +10% GPM
• Sales +18% to P2.2 bn +0.7 ppt
• Net Income +30% at P240 mn to 16.3%

OLEOCHEMICALS OTHER SPECIALTY CHEMICALS

72% Volume +19% 28% Volume -7%

73% Revenue +25% 27% Revenue +1%

17.1% GPM +4.4 ppts 14.2% GPM -7.5ppts

A- 37
SPECIALTY PLASTICS POLYMER & COLOURS, INC.

1Q18 Overall
• Volume +9% GPM
• Sales +23% to P839 mn -2.6ppts
• Net Income +15% to P202 mn to 28.4%

ENGINEERED POLYMERS COLORANTS,


ADDITIVES & OTHERS

64% Volume +16% 36% Volume -3%

50% Revenue +28% 50% Revenue +18%

16.9% GPM -6.5 ppt 39.7% GPM +1.9ppts

A- 38
AEROSOLS
1Q18 Overall
• Volume +11% GPM
• Sales +15% to P215 mn -2.6ppts
• Net Income +5% to P43 mn to 28.0%

HOME CARE PERSONAL MAINTENANCE


CARE CHEMICALS
AND OTHERS

26% Volume +8% 45% Volume +3% 29% Volume +32%

46% Revenue +8% 17% Revenue -2% 36% Revenue +35%

23% GPM -5.8ppts 36.5% GPM +2.9ppts 30.2% GPM -1.2 ppts

A- 39
Balance Sheet remains robust
As of end As of end As of end As of end
In Pmn In Pmn
Mar-18 Dec-17 Mar-18 Dec-17
Cash 2,160 2,855 Book Value 15,955 15,186

Current Assets 16,451 16,177 BVPS1 (in P) 2.23 2.13

Debt-to-
equity
Total Assets 22,683 23,224 0.31x 0.43x
(Borrowings/
Equity)
Return on
Borrowings 4,970 6,600 18.7% 19.1%
Equity
Return on
Total Liabilities 6,727 8,036 Invested 20.2% 19.2%
Capital2
In Pmn

1number of outstanding shares: 7,142,857,990


2Returnon Invested Capital = Pre tax income / Invested Capital A- 40
Invested Capital = Total Assets – Cash – Non-interest bearing liabilities
CASH FLOWS
In PMN 1Q18 FY17
EBITDA
(including non-recurring 1,050 4,107
items)

Interest Received 3 10

Paid taxes (131) (662)

Non cash items (41) (24)


Change in working
267 (2,820)
capital
Net Operating Cash
1,148 611
Flow
Lower commodity
prices Capex (207) (464)

Free Cash Flow 941 147

A- 41
CAPITAL STRUCTURE

interest
21x cover

P2.8 net
Billion debt

~4.06% average
p.a. cost of debt*

Numbers are as of March 31, 2018 A- 42


*inclusive of DST
COST STRUCTURE AND R&D SPEND

50% OF RAW
MATERIALS ARE
IMPORTED
Mostly denominated in USD

Tech Spend as % of FY17 1Q18

non-raw material costs 9.9% 6.7%

group revenues 0.7% 0.6%

HMSP* revenues 1.2% 0.9%

*High Margin Specialty Products

*salaries, wages, and professional fees A- 43


WORKING CAPITAL CYCLE

Account balance (P mn) Cycle (in days)

Working Capital Cycle in prior periods were recalculated to exclude impact of VAT A- 44
Due to rounding, numbers may not add up precisely
APPENDIX

A- 45
FOOD INGREDIENTS
Leading manufacturer of industrial fats and oils, specialty fats
and oils and food ingredients in the Philippines

REVENUE BREAKDOWN
REFINED VEGETABLE OILS By product
Refined, bleached and deodorized
palm oil, palm olein, palm stearin,
palm kernel oil and coconut oil.

SPECIALTY FATS AND OILS


Straight Oils,
Margarines, confectionary fats, cocoa 39%
butter & milk fat substitutes, creaming
fats, ice cream fats, culinary fats, Specialty
frying fats, shortenings & customized Fats, 54%
fats

SPECIALTY INGREDIENTS Specialty


Ingredients, Food Safety,
Dry mixes (e.g. flour mixes, seasoning 6% 1%
mixes & soft serve ice cream mixes); liquid PRODUCTION CAPABILITIES
mixes (e.g. chocolate coatings, syrups &
ripples); Condiments (e.g. mayonnaise and
ketchup) No. of Rated Capacity Capacity
Facility Name Products Produced
Production Lines (MTPA) Utilization

FOOD SAFETY PRODUCTS high-value food


Mercury ingredients, marine
Kitchen & food preparation cleaners, 29 100,000
(Quezon City) fats, refined vegetable
maintenance cleaning & degreasing >60% for
materials & heavy-duty clean-in-place oils, hydrogenated oils Mercury and
cleaners, dishwashing machine MRI
cleaners & housekeeping & room care combined
products MRI Refined vegetable oils,
4 200,000
(Manila) fractionated oils

A- 46
OLEOCHEMICALS & OTHER SPECIALTY CHEMICALS
Extensive line of oleochemicals (Philippines’ first continuous-process biodiesel plant +
integrated oleochemical plant for specialties), resins, and powder coating for domestic
and export markets
REVENUE BREAKDOWN
OLEOCHEMICALS - BIODIESEL By Product
Philippines’ largest Coconut Methyl Ester
(CME) or biodiesel producer in terms of
installed capacity e.g. BioActiv (mainly
used as diesel fuel additive); marketable Other
by-products include crude and refined Specialty
glycerin Chemicals,
27%
OLEOCHEMICALS - OTHER
Glycerin and other CME derivatives used
mainly as surfactants or foaming agents
Oleochemicals,
for soaps, lotions and detergents, and 73%
sold principally in the export markets

OTHER SPECIALTY CHEMICALS


PRODUCTION CAPABILITIES
Resin and additives used in paints and
coatings, foam, t e x t i l e , adhesives, No. of Rated Capacity Capacity
construction and fiberreinforced Facility Name Products Produced
Production Lines (MTPA) Utilization
plastics

Amides, Methylesters,
Oleo-chemicals 6 110,000 44%
POWDER COATING Glycerides

Powder coatings and protective coating


materials used in home appliances,
Polystyrene, Emulsions,
metal and other surfaces which is Resins 3 55,000 61%
Unsaturated Polyesters
applied through an electrostatic coating
process

A- 47
SPECIALTY PLASTICS
Go-to supplier in the Philippines for custom designed and formulated pigment
blends, color and additive masterbatches and engineered polymers for a wide
range of plastics applications
REVENUE BREAKDOWN
COLORANTS
By Product
Color compounding for various resins
and soft and rigid PVC compounds
Colormate – a proprietary line of color
concentrate. Applications include film
and tapes, moldings, wires and cables
and high-end fibers
Colorants, Engineered
Additives & Polymers, 50% Automotive,
ADDITIVES Others, 50%
50%
Additive materials dispersed into a
plastic base to produce a material with a
variety of desired qualities, such as a
particular texture
e.g BIOmate, Polymate, POLYMIX,
POLYBLEND, FRESHMATE

PRODUCTION CAPABILITIES

ENGINEERED POLYMERS
Premix of a wide range of resins and
compounds, additives, fillers and
colorants PVC compounds for
automotive wiring, building wires, bottle
cap liners, semi-conductor packaging,
rigid bottles and building applications

A- 48
AEROSOLS
First and only company in the Philippines to design and develop
customized aerosol products focusing on home care, personal care and
the maintenance chemicals

REVENUE BREAKDOWN
HOME CARE
Insect control spray; furniture
polish; air fresheners &
disinfectants; fabric
fresheners; ironing aide;
upholstery and carpet
cleaners; and pan sprays.

Maintenance Home Care,


Chemicals 46%
PERSONAL CARE
and others,
Body sprays; antiperspirant 36%
sprays; deodorant body sprays;
insect repellants; face mist; hair
color; hair structuring spray;
disinfectant sprays; gel and Personal
mousse sprays. Care, 17%

MAINTENANCE
PRODUCTION CAPABILITIES
CHEMICALS
No. of Filling Aggregate Annual Capacity
Location
Spray paints; brake cleaners; Production Lines Production Capacity Utilization
degreasers; penetrating oil;
mould release sprays; chain Quezon City,
3 18,000,000 pieces 72%
lubricants; chain grease; Metro Manila
aircon-cleaners; automotive
interior dressing

A- 49
NEWS AND DEVELOPMENTS
2017
APPOINTMENT OF NEW INDEPENDENT DIRECTORS

Corazon S. Dela Paz-Bernardo, 76 years old


CPA
Former President & CEO of Social Security System
Former Senior Partner and Chair at Joaquin Cunanan & Co (PricewaterhouseCoopers Philippines)
First non-European President of the International Social Security Association
B.S. Accountancy from University of the East
MBA from Cornell University

Lydia Balatbat-Echauz, 69 years old


Former President of Far Eastern University
Director of Metro Pacific Investments
A.B. in Economics and Mathematics from St. Theresa’s College
MBA from Ateneo de Manila University
DBA from De La Salle University

A- 50
NEWS AND DEVELOPMENTS
2016
OLEO-FATS premium soft oils,
Distribution agreement with
including coconut • Exports within Asia Pacific
(FOOD Bunge Limited
oil (under Bunge’s • Food service and retail
INGREDIENTS) (NYSE:BG)
Farm Origin brand)

• Dean L. Lao, one of D&L’s founders, stepped down as Director. He remains as


Chairman Emeritus.
• John L. Lao stepped down as President and Chief Executive Officer. He remains
Effective
as Director.
August 1
• Alvin D. Lao is the new President and CEO and joins the board as Director.
• Amorsolo M. Rosario is the new CFO.
Management
Changes
Effective • Mercedita S. Nolledo joins the Board of Directors as Independent Director
April 4

A- 51
BUNGE SOFT OIL PRODUCTS

Source: Bunge Commercial Brochures A- 52


NEWS AND DEVELOPMENTS

2015
INCREASE IN CAPITAL STOCK
Dividends taken
from retained
earnings as of
March 31, 2015
No changes in
equity
Capital Stock Pre - Inc in ACS Post - Inc in ACS

Authorized ₱4,000,000,000 ₱18,000,000,000 Issued and


Outstanding
Subscribed ₱3,571,428,995 ₱7,142,857,990 shares doubled
effective
Paid-up ₱6,826,595,440 ₱10,398,024,435 September 17,
2015
Issued & Outstanding Shares 3,571,428,995 7,142,857,990

Non-recurring
gain of P83
SALE OF CHEMREZ PROPERTY million from sale
of land booked in
66 INDUSTRIA – 6,000 sqm
4Q2015

A- 53
NEWS AND DEVELOPMENTS
2014
• buying 65.3% of Chemrez for • Taking Chemrez private for
P6/share competitive reasons
Strategic
Transaction • Chemrez now wholly-owned • New product innovations
subsidiary Rationale with large potential for
Details
• funded with 2/3s short-term margin improvement
debt, 1/3 cash
ACQUISITION
OF CHEMREZ • Transaction completed on
• Valued Chemrez at 13x 2015
October 10
PER
• D&L now owns 99.7% of
Financial • Offer price at 24% premium
Status Chemrez Technologies
Rationale over Chemrez’s 60-day moving
• Full consolidation started
average before the
October 7
announcement (Aug 29)

OLEO-FATS Supply contract


• Exports within Asia Pacific
with specialty fats and oils & specialty
(FOOD • Food service
Ventura Foods ingredients
INGREDIENTS) (US)

A- 54
COMPARING ROE, PEG RATIO, & DIVIDEND YIELD
22.0 Dividend
Company PEG ROE Yield
20.0
DNL 2.2 19.5 2.1
18.0
ROE (%)

URC 4.3 13.9 2.0


16.0
JFC 4.2 18.7 0.9
14.0
CNPF 3.1 18.9 1.1
12.0
MAXS 3.8 12.1 0.9
10.0
PIZZA 2.3 20.8 0.7
8.0
1.0 2.0 3.0 4.0 5.0 PCOMP 2.4 11.1 1.6
PEG Ratio Source: Bloomberg consensus estimates, data as of May 15, 2018
Size of bubble represents dividend yield

A- 55