concepcion industrial corporation (“cic”)...

Concepcion Industrial Corporation (“CIC”)

Presentation November 2014

TODAY’S PRESENTERS

2

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

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

Ownership 60% 100% 40% 51%

Products &

Services

Airconditioning

& Refrigeration

Residential

Refrigeration

Consumer

Appliances

Elevators

& Escalators

Holding

Company

Entity

5

• 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

Company Overview

Ownership 60% 100% 40% 51%

Products &

Services

Airconditioning

& Refrigeration

Residential

Refrigeration

Consumer

Appliances

Elevators

& Escalators

Holding

Company

Entity

6

Brands

• 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

Foresight

22.7%

• 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

Horizons

22.7%

• 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

Hy-land

22.7%

Ownership Structure

68%

7

Proven Track Record Spanning More

Than 50 Years

8

Concepcion Carrier Air Conditioning Corporation Concepcion Durables, Inc. (“CDI”)

Manufactures, sells, distributes, installs and provides comprehensive

air conditioning products and services

Involves in 3 market segments:

Joint Venture with Carrier Corporation1 and a trademark agreement on

Kelvinator2

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

Operates the largest air conditioner manufacturing facility in Philippines

Offers multiple market leading product brands, including:

Manufactures, assembles, wholesells, retails, purchases and trades

refrigeration equipments

Involves in 1 market segment:

Trademark agreement on Kelvinator for the use of certain trademarks

related to Kelvinator brand equipments

Market leader and largest distribution network in the Philippines

Operates the largest refrigeration manufacturing facility in Philippines

Offers multiple market leading product brands, including:

% 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 2012 2013

Residential & Light Commercial 33.8% 31.1%

Business Overview

% 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

24/7 Customer Care

Nationwide Service &

Install Capability

Highly Trained Service

Technicians

Dedicated Parts Stores

Nationwide Logistic

Network

Nationwide Retail

Coverage

In-store Merchandisers

12

Over 1000+

disers

90% retail

store

coverage

8 parts stores

strategically

located

Nationwide

distribution

Refrigeration

Commercial

System

Light

Commercial

Residential

Carrier Air Cooled Screw Carrier Water Cooled ScrewCarrier Centrifugal Chillers Carrier Tri-Rotor Screw

Carrier Island Freezer Carrier Open Case Carrier Compressors Carrier Condensers Carrier Cold Rooms

Condura

WRAC

Carrier

iCoolCarrier

Optima

Carrier X-

Power

Carrier

Multi-Splits

Toshiba

Hi-Wall Single

Inverter

Toshiba

Multi-Splits

Carrier

Ceiling

Mounted

Carrier Floor

Mounted

Carrier

CassettesToshiba Digital

Inverter

Toshiba VRFMidea VRF

Largest Range of Product Offerings

Airconditioning Refrigeration

13

Concepcion Midea Inc. Concepcion Otis Philippines Inc.

Distibute, installs and service complete line of Midea Appliances 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 27 billion market for other appliances that CIC will pursue

Distributes, installs and services Otis Elevators and Escalators in the

Philippines

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

Leverage on construction & service discipline

New Business Overview

14

Joint Venture Signing

November 20, 2013 Office Opening

November 20, 2013

March 28, 2014

Combined Management Strength And

Experience With Proven Track Record Ma. Victoria A. Betita

Chief Finance and Information Officer

with over 20 years of Finance experience

in government and various private sector

industries

Director of Manufacturing and Supply Chain

Management of CCAC with over 15 years

of experience in Manufacturing, operations,

and supply chain management

Director of the Consumer Solutions Group

with over 15 years of multinational

experience in various industries

Director of the Business Solutions Group

with over 20 years of multinational

experience primarily in the HVACR

industry

Rajan Komarasu

Harold Thomas Pernikar, Jr.

Alexander T. Villanueva

General Manager, Concepcion Midea In.

(CMIP) with over 20 years of experience in

Sales and Distribution in various industries

Phillip F. Trapaga

Raul Joseph Concepcion

Chairman, CEO and President of

CIC with over 25 years of

experience in the consumer

durables industry

Treasurer and Vice Chairman of CIC

with over 30 years of experience in

the consumer durables industry

President of CDI with over 20 years

of experience in the consumer

durables industry

Vice President of Business

Development and Marketing with

over 20 years of experience in the

consumer durables industry

.

Renna Hechanova Angeles

Raul Anthony Concepcion

Rafael C. Hechanova, Jr.

15

5,606 6,940

7,588

33.3% 32.0% 32.4%

2011 2012 2013

Profit After Tax / Net Margin (Php Mil)

+9% ▲

647 684

841

391 426 511

11.5% 9.9% 11.1% 7.0% 6.1% 6.7%

2011 2012 2013 2011 2012 2013

Net Sales & Gross Margin% (Php Mil)

Key Financial Highlights

+24% ▲

924 973 1,218

16.5% 14.0%

16.0%

2011 2012 2013

Profit before Tax & PBT% (Php Mil)

+5% ▲

+25% ▲

PATAMI PAT

+6% ▲ +23% ▲

+9% ▲

+20% ▲

16

Earnings Per Share

1.49 1.63

1.95

2011 2012 2013

Based on 261, 244,002 shares

Key Financial Highlights

17

Dec 31, 2013 Dec 31, 2012

Gross Profit Margin (%) 32.4% 32.0%

Profit before Tax % 16.0% 14.0%

Net Income Attributable to

Shareholders (Php million)510.60 426.10


Shareholders (% to Sales)6.7% 6.1%

Return on Average Equity (%) 28.5% 29.8%

Return on Average Assets (%) 17.0% 15.0%

Earnings per Share (261,244,002 shares)

1.95 1.63

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

Book Value per Share (261,244,002 shares)

8.75 4.95

For the Period Ending

As of End

STRATEGY Position to capture growth

7.9 8.2

9.7 9.4 9.4

8.7

9.6 9.4

8.6

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

Philippine GDP Growth (Nominal)

17 19 20 21

23

7 9

11 13

16

2009 2010 2011 2012 2013E

Remittance BPO Revenue

7.4

10.8 10.7

9.6

4.7

8.4 8.9

5.9

10-11 11-12 12-13 Q1 2014

Service

Industry

Philippine Remittances & BPO Revenues (US $ bn)

Breakdown By Sector

13% 12% 11% 12%

31% 31% 31% 32%

56% 57% 58% 56%

2011 2012 2013 Q12014

Services

Industry

Agriculture

Growth Rate

Source: NSO

Source: NSO

Source: BSP/ BPAP

Strong Economic Fundamentals

• Continuing current account surplus expected, supported

by robust remittances from overseas Filipino workers,

substantial BPO revenues and increasing tourism receipts

• 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

19

Changing Demographic Window

Growing Middle Class Household

Income

High Population Growth + Young

Population Driving Housing Demand

0%

10%

20%

30%

40%

50%

60%

70%

80%

0.5% 1.0% 1.5% 2.0%

Japan

Germany

China

Indonesia

UK

US

Vietnam

Cambodia

Malaysia

Philippines

Median Age: 23 Years

Population Growth (2010 – 2030F)

% P

op

ula

tion

Un

der A

ge

Of

30

12th Most Populous Country

(100 mil) In The World GDP per capita (US $)

20

Source: NSO Source: NSO

Source: NSO

…And Untapped Market Potential

6.18m .4m

.54m

.61m 7.74m

End of 2012 2013 2014F 2015F Total

OtherLocations

Alabang

Eastwood

FortBonifacio

Ortigas

MakatiCBD

Forecast office new supply (in million of sqm)

53,314 4,394

6,346

7,530 5,913 78,212

End of2012

2013 2014F 2015F 2016F Total

Eastwood

Ortigas

FortBonifacio

Rockwell

MakatiCBD

Forecast of residential new supply (units)

Source: Colliers International Philippines Research

Source: Colliers International Philippines Research

620,548

633,209

646,128

659,306

672,763

686,484

2011E 2012E 2013E 2014E 2015E 2016E

Continuing Strong Housing Demand Expected

(units)

Source: Total Housing Needs / (Housing and Urban Development Coordinating Council)

15%

39%

73%

15% 6%

26%

82%

99% 90%

35%

Indonesia Malaysia Singapore Thailand Philippines

AC Ref

Source: Euromonitor (est. 21 million households)

Low Penetration Rate / % of Households

owning

21

Business Structure to Capture Growth

22

Air-conditioning Refrigeration

Redefinition of Core Business and Business Model

Shift from Product / Company centric to consumer centric

Building & Investing on Capabilities

Focus On Growing 2 Core Business

Largest Consumer Appliance

Company in the Philippines Preferred Building & Industrial

Solution Provider 23

Overall Distribution

Ownership 60% 100% 40% 51%

Products &

Services

Airconditioning

& Refrigeration

Residential

Refrigeration

Consumer

Appliances

Elevators

& Escalators

Holding

Company

Entity

24

Legal Entity Appliance Building & Industrial

Solutions

Residential &

Light Commercial

Aircon

Commercial

Aircon & Ref

Residential

Refrigeration

Laundry,

Kitchen,

Ref & Aircon

Elevators

& Escalators

Holding Company

Distribution Retailers &

Dealers

Direct &

Contractors

Overall Group Strategy

Strengthening Presence in

Core Markets

Expansion into New Markets and Customer

Segments

Synergize Businesses to

Strengthen Leadership,

and Increase Profitability

Entering Businesses for

Long Term Growth

Continue to invest and

expand in Airconditioning &

Refrigeration Markets to

maintain leadership position

and ensure sustainable

profitable growth

Expand Product lines

and offerings in

Consumer Appliances

Sector

Expand Building &

Industrial Solutions

platform to related other

products besides air-

conditioning

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

Unlocked Synergies To Provide Cost Efficiency, Improving Quality & Strong Leadership

Sourcing And

Purchasing

Synergies

Cost Efficiency & Synergies

Shared

Back-end

Product Development &Technology

Quality Improvement

Shared Logistics & Distribution

Infrastructure

Market & Sales

Organizational Synergy Market Leadership

Go-to-Market Strategy

Unlocking Synergies to improve

leadership and profitability

27

Logistics

Leveraging Scale & Expertise to Create

Competitive Advantages

16.7%

25.8% 28.0%

30.0%

CIC Comp 1 (CICScale)

AC Company(only)

ChinaCompany

OPEX % of Sales

Distribution

Reach

After Sales Purchasing

Technology/Skill

Organization

Alliance / Partners 28

Directions

GROWTH PLATFORMS

Expansion CORE BUSINESS

Growth & Profitability

CORE BUSINESS

Growth & Expansion

60% 100%

51%

40%

Leading Airconditioning Company

in the Philippines

Leading Consumer Refrigeration

Company in the Philippines Expanding brand offering in

Consumer Appliances Sector

Expanded brand offering in

Building & Industrial Solutions

Sector

29

Medium Term Goals

5.6 6.9

7.6

2011 2012 2013LE . .. …

Sales

Acquisition and Expansions in New Businesses related

to the core

Expand & Grow Core Businesses

Synergies for Margin

Expansion

Key Directions

0.6 0.7 0.8

0.4 0.4 0.5

2011 2012 2013LE . .. …

Profit after Tax

Attributable Profit

30

Key Partners

Midea

32

United Technologies Building & Industrial

Systems Directions

33

PRODUCTS & BRANDS

2014 Key Programs

Strategy

Revenue : ~ 25% Growth

PAT : ~ 25% Growth

2014 Target

• Protect & Defend

• Leadership in all segments

• Expand Product Offering – Target

Product holes

• New Products

• Multiple Brands

• Strengthen and Expand Distribution

Channel and Reach

• Strengthen front & back end capabilities

CCAC Highlights

Strategy

• Expand Solutions Offering

• End to End Capabilities

• Build & Leverage Engineering &

Service Expertise

• Strategic business partnerships

• Brand building and Relationship

events

• Key Partnering activities

• New Products

35

CCAC Highlights

Multibrand Offering

NEW PRODUCTS

EVENTS

Key Account Development & Partnership

36

Strategy

Revenue : Php 500 mil

PAT : Break Even

Revenue : ~ 10% Growth

PAT : ~ 150% Growth

2014 Target • 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

CDI Key Directions

Increase

Profitability

Strategy

Product Bench Marking & Cost Reduction

Manufacturing Overhead Reduction

Purchasing Synergies And Alternative Sourcing

Logistics And Warehousing Synergies

Complement Current Product Line Up With High-end Products With Higher Margins

1

2

3

4

5

PROFIT AFTER TAX

37

CMIP Development

• Midea brand building

• Introduction of key products

• Set up key Organization

• Distribution with key retails

• Set up after sales infrastructure

• Synergize distribution for HVAC

Strategy

Key Organization in Place

Dealer Trip to

Midea

Revenue : Php 300 mil

PAT : ~10% loss

2014 Target

Introduction Schedule

38

Product Category Target Launch Date

Air Conditioning Feb 2014 OK

Washing Machine June’ 2014 OK

Refrigeration June’ 2014 OK

Small Kitchen Appliance Q4’ 2014 OK

Large Kitchen Appliance 2015

JV Partnership with Otis

• New Equipment Focus

• Tier 1 Developers Program

• Synergize with CCAC / BIS team

• New Product Gen 2 Elevator

• Rebuild Otis Brand

• Focus on Core Processes

• Develop key Talent

• Recapture Program (3,200 units)

• Service Excellence

• 90% Conversion Rate

• Below 5% Cancellation Rate

Strategy

Revenue : ~ Php 350 mil

PAT : ~ 10% (attributable)

2014 Target (9 months)

39

Revenue & Margin

2011 2012 2013

129

143148

54%49% 43%Margin

Repair Sales & Margins

40

+40%

216 302 323 331

61.4%55.8% 55.6% 55.6%

2010 2011 2012 2013

Service & Maintenance

-61% +40% +5.7%

Revenue

Revenue

Total Revenue New Equipment Market

15%

CAGR

31% of Revenue 37% of Revenue 32% Revenue

9% Margin 56% Margin 45% Margin

7% 2%

61%

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

213

286

377

14.9% 15.7% 18.0%

2012 2013 2014

1,433 1,816

2,092

34.2% 35.5% 36.0%

2012 2013 2014

Profit After Tax / Net Margin (Php Mil) KEY HIGHLIGHTS

▲ 20% growth in earnings

▲ 15% growth in reportable sales

▲ .3 pts higher net margin

+15% ▲

152

198

248

-

100 124

149

10.6% 10.9% 11.9%

7.0% 6.8% 7.1%

2012 2013 2014 2012 2013 2014


Key Financial Highlights 3Q 2014

+27% ▲


+34% ▲

+32% ▲

PATAMI PAT

+30% ▲

+25% ▲

+20% ▲

45

+24% ▲

3Q Revenue Performance PhP Mil

46

15% Growth

2013 2014

P1,816 2,092

10% Growth

2013 2014

P 1,275 P 1,397

8% Growth

2013 2014

P541 P587

2% Growth

2013 2014

P 924 P 943

29% Growth

2013 2014

P 351 P 455

32% Overall

Growth

P 373 P 494

2014

P 109

16% growth including offshore


Flat Residential

Sales driven by Q2

pull-in and weather

disturbances

Driven new

models

Strong commercial

business with

rising backlog

32% growth

(including offshore

sales)

3Q Earnings Performance PhP Mil

47

20% Growth

2013 2014

P124 P 149

6.8% 7.1%

23% Growth

2013 2014

P 186 P229

14.6% 16.4%

107% Growth

2013 2014

P 20.4 P 42.2

3.8% 7.2%

Start Up

2013 2014

- P 38.7

2014

P 15.8

14.6%

23% Growth

2013 2014

P 112 P 138

107% Growth

2013 2014

P 20.4 P 42.2

Start Up

2013 2014

- P 15.5

2014

P 8.1

Profit After Tax PATAMI

PATAMI

Sales drop thru

Cost Reductions

Cost reductions

Higher Margin

Products

Start up Cost

Investing for the

future

Net Revenue (Php Mil)

+6% +6%

CCAC Highlights

48

+

14%

932

1,275 1,397

43.3% 42.8% 39.4%

2012 2013 2014

Sales GM%

Overall

924 943

351 454

2013 2014 2013 2014

CSG BIS


132

186

229

79 112

138

14.1% 14.6% 16.4%

8.5% 8.8% 9.8%

2012 2013 2014 2012 2013 2014

+23% +23%

PAT PATAMI

+ 42% +42%

• 10% Overall Sales Growth

• 23% Growth in Earnings

• 1 pts. Net Margin improvement

• Strong commercial business driven by backlog

• Flat Residential Sales driven by Q2 pull-in and

weather disturbances

Key Highlights

+ 10% +37% +2% +29%

+32% growth including Offshore

sales


501 541 587

17.2% 18.4%

26.4%

2012 2013 2014

+8%

19.5 20.4

42.2

3.9% 3.8% 7.2%

2012 2013 2014


+8%

+5% +107%

CDI Highlight

• 8% Sales Growth

• 107% growth in earnings

• due to improved focus on cost reductions

• introduction of higher margin product

• 3.4 pts. net margin improvements

Key Highlights

49

CMIP Highlights






Large Kitchen Appliance Q4’2014 move to 2015

50

+

1

4

%

29

2014

Sales Profit After Tax / Net Margin

(Php Mil)

(39)

(15)

2014 2014

+48%

PAT PATAMI

Total of 93 stores activated SDA Launch in end Q3

36

57

Q2 Q3

Store Activation

http://3.bp.blogspot.com/-b7d2nuNL9l8/VClCT3txuxI/AAAAAAAAgsc/Em9gPQVNwpY/s1600/Guest+Chef+Rob+Pengson+performs+a+live+kitchen+demonstration+using+Midea's+latest+line+of+kitchen+appliances+titled+A+New+Wave+of+Cooking+which+aims+.jpg

Otis Highlights

2014

108.6

Sales

March 28, 2014 51

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


15.8

8.1

PAT PATAMI

14.6%

7.4%

Operating Performance Summary

52

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

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

1,055

970

1,015

1,025

1,093

1,209

1,405

1,684

1,919

1,851

2,155

2,380

2,613

2,795

2,919

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014H1

Increasing Per Capita Income ($ per capita)

5.2%

4.1%

5.1% 5.5%

6.0%

4.4% 4.2% 4.6%

3.7%

2.3%

3.4%

5.6%

6.6%

5.7% 5.6%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

20141H

Consumer Spending Growth

4.2

9.6

8.6

4.2

5.6

11.0

11.2

2.5

6.3

4.5

8.4

6.2

Food & Beverage

Alcoholic Beverage & Tabacco

Clothing & Footware

Housing, water, electricity, gas

Furnishings, household…

Health

Transport

Communication

Recreation

Education

Restaurants & Hotels

Misc

More disposable income

Auto Industry Gallops

into 2014 with 27%

Year-on-Year Growth

Key Drivers

56

First Time

Buyers

15% Growth

Replacement

Market

>50% Growth

Increasing

Projects Backlog

& Funnel

Key Market Drivers for 2014

Refrigeration

Cost reduction

gaining traction

57

New

Acquisitions

Q3 Funnel P 6.2 Billion and

backlog of P 1.5 billion

Key Market Growth

58

9.9 10.111.4

10.611.7

12.6

14.1

2008 2009 2010 2011 2012 2013 2014

9.8 9.011.3 11.2

13.516.8

21.1

2008 2009 2010 2011 2012 2013 2014

Air-conditioning Market 2014 Estimate

(PHP billions)

Refrigeration Market 2014 Estimate

Tracking 25% growth Tracking 12% growth

Euromonitor CCAC Estimate

748 886

1,222

15.5% 15.9% 17.6%

2012 2013 2014

4,838 5,585

6,935

32.7% 35.2% 34.2%

2012 2013 2014

Profit After Tax / Net Margin (Php Mil) KEY HIGHLIGHTS

▲ 36% growth in earnings

▲ 24% growth in reportable sales

▲ .6 pts higher net margin

+24% ▲

530 608

824

-

338 363 495

10.9% 10.9% 11.9%

7.0% 6.5% 7.1%

2012 2013 2014 2012 2013 2014


Key Financial Highlights YTD 2014

+15% ▲


+18% ▲

+38% ▲

PATAMI PAT

+14% ▲

+36% ▲

+36% ▲

59

+7% ▲

YTD Revenue Performance PhP Mil

60

24% Growth

2013 2014

P 5,585 P 6,935

22% Growth

2013 2014

P 3,986 P 4,858

16% Growth

2013 2014

P1,599 P1,848

21% Growth

2013 2014

P 3,108 P 3,774

24% Growth

2013 2014

P 877 P 1,084

35% Overall

Growth

P924 P 1,247

2014

P 229



YTD Earnings Performance PhP Mil

61

36% Growth

2013 2014

P363 P 495

6.5% 7.1%

27% Growth

2013 2014

P 612 P777

15.4% 16.0%

201% Growth

2013 2014

P 33.6 P 101.2

2.1% 5.5%

Start Up

2013 2014

- P 81.3

2014

P 37.7

16.4%

27% Growth

2013 2014

P 367 P 466

201% Growth

2013 2014

P 33.6 P 101.2

Start Up

2013 2014

- P 32.5

2014

P 19.2

Profit After Tax PATAMI

Operating Performance Summary - YTD

62

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

YTD 2014 Key Performance Indicators

63

September 30, 2014 September 30, 2013

Gross Profit Margin (%) 34.2% 35.2%

Profit before Tax % 17.6% 15.9%


Shareholders (Php million) 495.0 362.8


Shareholders (% to Sales) 7.1% 6.5%

Return on Average Equity (%) 29.4% 28.4%

Return on Average Assets (%) 19.0% 18.0%

Earnings per Share (339,617,226 shares)

1.46 1.07

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

Book Value per Share (339,617,226 shares)

7.74 5.49

For the Period Ending

As of End

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

Dividend Declarations

Share Price Performance

65

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 92%

Current Market Cap (Php) Php 13.2

billion

Current Market Cap (US$) USD 294

million

27-Nov-13 27-Jan-14 27-Mar-14 27-May-14 27-Jul-14 27-Sep-14

CIC Price CIC Volume PSEi

2014

Guidance

2014 Guidance

Segment Sales Growth Profit Change

Air Conditioning ~ 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

New Businesses ~ 5% growth ~ % growth

Overall Consolidated

(After Minority Interest)

~ 25%

growth

~ 25%

growth

67

FY Guidance

68

ONE Company. ONE Team. ONE Goal


+6% +6%

CCAC YTD Highlights

69

+

14%

3,276 3,986

4,858

39.7% 41.9% 37.7%

2012 2013 2014

Sales GM%

Overall

3,108 3,774

877 1,084

2013 2014 2013 2014

CSG BIS


479

612

777

287 367

466

14.6% 15.4% 16.0%

8.8% 9.2% 9.6%

2012 2013 2014 2012 2013 2014

+27% +27%

PAT PATAMI

+ 28% +28%

• 22% Overall Sales Growth

• 27% Growth in Earnings

• .4 pts. Net Margin improvement

• Strong commercial business driven by backlog

Key Highlights

+ 22% +22% +21% +24%

+35% growth including Offshore

sales


1,562 1,599 1,848

17.9% 18.6% 23.9%

2012 2013 2014

+16%

45.5 33.6

101.2

2.9% 2.1% 5.5%

2012 2013 2014


+2%

-26% +201%

CDI Highlight

• 16% Sales Growth

• 201% growth in earnings

• due to improved focus on cost reductions

• introduction of higher margin product

• 3.4 pts. net margin improvements

Key Highlights

70

CMIP Highlights

71

+

1

4

%

2014

126

Sales Profit After Tax / Net Margin (Php Mil)

(81.3)

(32.5)

2014 2014

+48%

PAT PATAMI

Total of 93 stores activated as of Sept

Media and Bloggers launch in Q2






Large Kitchen Appliance Q4’2014 move to 2015

JV Partnership with Otis

229

2014

Sales

March 28, 2014 72

NEXT 90 DAYS FOCUS

Reinforcing the organization

Reorganize & improve service operations

Tier 1 Developer Recovery Plan


37.7

19.2

PAT PATAMI

16.4%

8.4%

Thank you For further inquiries contact:

Grace Velasco

Investor Relations and Corporate Planning

[email protected]

concepcion industrial corporation (“cic”)...

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