D&L Industries

Strictly Private & Confidential

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Filipino Manufacturing Customized Specialty Products

Indirect consumer play

D&L Industries


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makes

CUSTOMIZED SPECIALTY INGREDIENTS for food and plas:cs


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0

5

10

15

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25

30

>10 years 10-20 years 21- 30 years

Leng

th o

f Rel

atio

nshi

p in

Yea

rs

Customers

Longstanding Customer Relationships

Indirect consumer play

76% of sales are to Food & Beverage companies


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Fats, oils and other specialty food ingredients

Pigment blends, color and additive masterbatches and engineered polymers

Customize aerosol products for homecare, personal care and maintenance chemicals

C o c o - b i o d i e s e l , o l e o -c h e m i c a l s , r e s i n s a n d powder coatings

D&L’s 50+ years history of innovation

The D&L portfolio today

Colorants

Colorants, chemicals and additives for plastics and inks

specialty fats

engineered polymers

Aerosol

Corro-Coat, Inc. becomes

Biodiesel

C o r r o -Coat, Inc. IPO

Powder Coating

Pioneer Pioneer Pioneer

IPO

2012 2006 2000 1988 1987 1980 1976 1971 1963

Food ingredients Specialty Plastics Aerosols Oleochemicals & Other Specialty Chemicals

Fats, oils and other specialty food ingredients

Pigment blends, color and additive masterbatches and engineered polymers

Aerosol & non-aerosol products for homecare, personal care and maintenance chemicals

C o c o - b i o d i e s e l , o l e o -c h e m i c a l s , r e s i n s a n d powder coatings

72% / 41% 23% / 38% 4% / 6% equity investment / 8%

% of FY2013 Revenue / Net Income(1)

(1) The remaining 1% and 7% of revenues and net income, respectively, are D&L’s standalone, which are management fees from its related parties


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Our vision is to excel and be the

leader in the industries we serve

OUR MISSION Dedication to Growth Not complacent with status quo

Research orientation Finger on the pulse of the market

Productivity & Profitability But not at the expense of ethics

Quality & Value Good value for money and competitiveness in the marketplace

Market leadership Through creativity, innovation, and excellence

Pride in our employees They are our most valuable asset

Well-being of our communities As responsible citizens of the Philippines

Vision & Mission


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Established and Fully-Integrated Supply Chain

Key Benefits of Supply Chain Process §  Know-how of entire supply chain process ensures that the company can anticipate and allocate the optimal

resources for transportation of its products §  Not dependent upon third-parties to provide logistics

33,000 MT of oil storage capacity; 300,000 MT per annum refining capacity

6 barges with aggregate capacity of 10,000 MT for

raw material transportation

42 road tankers with total capacity of over 1,064 MT ensuring just-in-time

customer delivery

D&L’s integrated supply chain maximizes efficiency of working capital management

Fleet of barges Storage capability Interconnected ground transport system


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refined vegetable oils, specialty fats and oils, specialty ingredients

Colorants, Additives, and Engineered Polymers

Aerosol and non-aerosol products for homecare, personal care & maintenance

chemicals

Philippine Economic Zone Authority (PEZA) registered

44.5%

57.4%

100% 100% 99. 7%

55.5%

Jadel Holdings Co., Inc. (Lao family holding company)

Lao Family (Individual Family Members)

100%

11.1%

Public

31.5%

FOOD INGREDIENTS SPECIALTY PLASTICS AEROSOLS

OLEOCHEMICALS, RESINS, & SPECIALTY

CHEMICALS

Listed in 2000 as Corro Coat; Secondary Offering in 2006

Organizational Structure


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Dean L. Lao, 75 years old Chairman Emeritus §  President of Oleo-Fats, Inc. §  Founder of the Lao group of companies §  Years of experience in D&L: 50 years

Yin Yong L. Lao , 61 years old Vice Chairman §  T r u s t e e - A s s o c i a t i o n o f

Petrochemical Manufacturers of the Philippines

§  B.A. in General Studies from the Ateneo de Manila University

§  Years of experience in D&L: 39 years

John L. Lao, 59 years old President & Director § EVP/Director – Chemrez; Director –DLPC, D&L Powder Coating, FIC Marketing Co, FIC, OFI; Chairman/President – Aero-pack § B.S. in Business Administration from the University of the East in 1974 § Years of experience in D&L: 39 years

Dean A. Lao, Jr., 46 years old - Managing Director of Chemrez § Chairman - United Coconut Association of the Phils, Director - ASEAN

Oleochemical Manufacturing Group, President - Philippine Oleochemical Manufacturers Association & Philippine Biodiesel Association

§  Advanced Management Program of Harvard Business School §  Years of experience in D&L: 18 years

Vincent D. Lao, 40 years old - Managing Director of Oleo-Fats §  Previously Assistant Trader at Shuwa Co. Ltd. In Japan ,1994-1995 §  B.A. in Economics and Japanese Studies from the University of Western

Australia §  Years of experience in D&L: 18 years

Leon L. Lao, 71 years old Chairman & Director §  President and CEO of Chemrez § Co-founder of D&L Industries, Inc. where he

currently serves as Director, President of First in Colours, Inc. and D&L Polymer Colours, Inc.


Alex L. Lao, 68 years old Director §  Alternate Director of Axis REIT §  B.S. in Chemical Engineering from

Polytechnic Colleges of the Philippines in 1969


Alvin D. Lao, 42 years old – EVP & CFO of D&L §  CFO and Treasurer of Chemrez Technologies Inc.; Director of Axis REIT; VP of the Technology Club of the Philippines § B.S. in IT (Honours) and Statistics from the University of Western Australia, MBA from the MIT Sloan School of Management. § Years of experience in D&L: 16 years

Lester A. Lao, 44 years old Managing Director of First in Colours, Incorporated. §  B. A. S. in Information Business from Edith Cowan University §  Years of experience in D&L: 23 years

Senior management members have an average of 40 years of industry experience

Cesar Bautista, Independent Director - member of Institute of Corporate Directors -  Director of Pilipinas Shell; Former UK

Ambassador; Former Chair and President Unilever Phils.

-  Univ of Philippines Diliman & MS in Chemical Engineering from Ohio State

Filemon Berba Independent Director - member of Institute of Corporate Directors - Former President of Globe and Manila Water -  University of the Philippines Diliman &

Wharton MBA

Seasoned and Experienced Management


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•  One of the world’s leading chemical engineering companies

•  Petrochemical, chemicals, aluminum, electronics, inorganic materials

DLPC Compounding manufacturing and distribution for local sales and exports

Bionolle Starcla

Starch-based eco-friendly

compound that is completely

biodegradable

BIOPOLYMERS Market potential in

Europe and Japan;

alternative to non-biodegradable plastic bags

DLPC DLPC to do

compounding and modification

FIC to handle marketing and

distribution

Ingeo - Plant-based

replacement for petrochem-based plastics & fibers

- results in 75% less greenhouse gases

than the oil-based PET plastic

•  first to offer commercially available biopolymers derived from 100% annually renewable resources

News and Developments New Business Partnerships


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Oleo-Fats, Inc.

sales, marketing &

distribution of canola and

wheat products in

the Philippines

Canola Leading soft oil in the Philippine

market Consumption to

increase as disposable

income increases

Wheat

Noodles, Bakery, biscuits, snacks

Privately-‐owned Australian company principally engaged in wheat processing

a JV between the MacSmith brothers and the Manildra Group; into oilseed processing and packaging

Oleo-Fats, Inc. development & production of specialty oils & specialty

ingredients for the foodservice, retail and

ingredient manufacturing industries in the Asia-

Pacific region

Specialty Oils & Specialty Food

Ingredients

mayo, sauces, dressings, popcorn

oil, etc.

largest maker of vegetable oil-‐based products in the U.S

News and Developments New Business Partnerships


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2014 voted 3rd Best Mid-‐Cap Company in the Philippines

2013 added to the Global Small Cap Index

added to the Islamic Market ASEAN Index

candidate for Best Managed Company– Small Cap Category (Philippines)

one of the Top 50 Best Performing Philippine-‐listed Companies – ASEAN Corporate Governance Scorecard

News and Developments


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D&L Industries is commiDed to dona:ng 1% of its annual net income to corporate social responsibility programs through the Lao Founda:on

P16.9 million Amount spent on CSR initiatives in 2013

CSR initiatives are carried out through the

Lao Foundation

Education Value Formation

Leadership Livelihood

AREAS OF FOCUS

1,143 student and 28 teacher beneficiaries

Corporate Social Responsibility


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PROGRAM BENEFICIARIES Adopt-A-School Bagumbayan Elementary School

Teachers Salary Sponsorship Philippine Christian Foundation, Inc.

College Sponsorship Charity First Foundation, Inc.

LBL Educational Excellence Award Children of D&L Employees

ELL Teachers Welfare Program Retired teachers of Grace Christian College

English Literacy Project Various elementary schools in partnership with Binhi English Literacy Foundation

Community Outreach Communities where D&L plants are located

Corporate Social Responsibility


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Shifting sales mix: 66% High-Margin Specialties, 34% Low Margin Commodities

Gross Profit Margin

1H2013 Y-o-Y change

High Margin Specialty Products

25.1% +4.0 ppts

Low Margin Commodity Products

5.2% +1.1 ppts *Refined Vegetable Oils & Low Margin Specialty Fats

In line with strategic priorities

9M2014 Financials - Summary


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*Refined Vegetable Oils

Gross Profit Margin

9M2014 Y-o-Y Change

High Margin Specialty Products

23.6% -0.8 ppt

Low Margin Commodity Products

4.1% flat

PROGRESS ON OUR STRATEGIC PRIORITIES HMSP still key revenue driver

9M2014 Financials - Summary


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In Pmn

9M2014 Financials – Quarterly Net Income Perfomance


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In Pmn 9M14 9M13 Y-o-Y

Sales 10,624 7,685 +38% COGS & Cost of Services 8,859 6,254 +42% Gross Profit 1,765 1,430 +23% OPEX 322 241 +34% Operating Profit 1,444 1,190 +21% Equitized Earnings from Chemrez 131 79 +65% EBITDA 1,749 1,421 +23% Taxes 260 194 +34%

Net Income 1,293 1,043 +24% EPS* (in cents) 36.2 29.2 +24% GPM 16.6% 18.6% -2.0ppts

EBITDAM 16.5% 18.5% -2.0ppts

NIM 12.2% 13.6% -1.4ppts

*average number of outstanding shares: 3,571,428,995

9M2014 Financials


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In Pmn 3Q14 vs 3Q13 vs 2Q14

Sales 4,399 +60% +41% COGS & Cost of Services 3,724 +66% +43% Gross Profit 675 +33% +30% OPEX 133 +71% +138% Operating Profit 541 +26% +17% Equitized Earnings from Chemrez 60 +102% +59% EBITDA 663 +31% +19% Taxes 102 +55% +45%

Net Income 494 +28% +17% EPS* (in cents) 13.8 +28% +17% GPM 15.3% -3.1ppts -1.3ppts

EBITDAM 15.1% -3.4ppts -2.8ppt

NIM 11.2% -2.9ppts -2.3ppts

*average number of outstanding shares: 3,571,428,995

3Q2014 Financials


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Food Ingredients

43% Specialty Plastics

35%

Aerosols 5%

Management Service Fees

7%

Oleochemicals and Other Specialty

Chemicals 10%

Net Income Breakdown Management Service Fees

1%

Specialty Plastics

20%

Food Ingredients

76%

Aerosols 3%

Revenue Breakdown

9M2014 Group Results at a Glance


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Export/Sales

12% 13% 16% 17%

(Pmn)

12% 17%

+28% y-‐o-‐y

Exports


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In Pmn As of end Sep 2014

As of end Dec 2013

In Pmn As of end Sep 2014

As of end Dec 2013

Cash 2,260 3,438 Book Value 9,447 8,860

Current Assets 7,860 8,016 BVPS (in P) 2.65 2.48

Total Assets 11,279 11,403 Debt-to-equity (Borrowings/Equity)

0.12x 0.19x

Borrowings 1,143 1,662 Return on Equity 18.3% 15.9%

Total Liabilities 1,832 2,543 Return on Invested Capital1

25.3% 24.7%

1 Return on Invested Capital = (Recurring Opera>ng Profit + Equity earnings from Chemrez) / Invested Capital Invested Capital = Total Assets – Cash – Non-‐interest bearing liabili>es *Free Cash = Net Opera>ng Cash Flow – Capex

Group Balance Sheet and Cash Flow


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In Pmn

P1.12 billion NET CASH

Group Capital Structure


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Ex-Date 13 June 2014

Record Date 18 June 2014

Payment Date 30 June 2014

2.0% yield based on 24 June 2014 price of P9.82

D&L INDUSTRIES*

Dividend per Share

2013 2014

Total P0.15 P0.20

Regular P0.10 P0.10

Special P0.05 P0.10

CHEMREZ TECHNOLOGIES

Dividend per Share

2013 2014

Total P0.09 P0.12

Regular P0.06 P0.06

Special P0.03 P0.06

2.7% yield based on 24 June 2014 price of P4.40

Ex-Date 13 June 2014

Record Date 18 June 2014

Payment Date 30 June 2014

Dividends Dividend Policy* of 25% Payout Ratio


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Price as of 12/16 : P16.12

(+275% since listing, +167% y-o-y)

Market Cap as of 12/16: P57.6bn ; USD 1.29bn (USD1:P44.71)

All time high : P17.14 All time low: P4.32 Last 3-month average daily volume: 5.0 mn shares Last 3-month average daily turnover: P71.6 mn (USD 1.6mn)

Date Event Venue November 25-29 2014 JP Morgan Asia Rising Dragons Kuala Lumpur, Singapore, Hong Kong

February 2-3 2015 JP Morgan Philippines 1x1 Conference Manila

February 5 2015 Maybank Kim Eng Philippine Corporate Day Kuala Lumpur

March 4-6 2015 UBS Philippines CEO Forum Manila

March 11-13 2015 CLSA Asean Access Day Bangkok

Investor Relations

D&L Industries

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