FILIPINO MANUFACTURING CUSTOMIZED SPECIALTY PRODUCTS

B2B2C

D&L INDUSTRIES INVESTOR PRESENTATION Philstocks Stock Market Talk July 17, 2016

D&L INDUSTRIES is a Filipino company that makes customized specialty

ingredients for food and chemicals

The Businesses

% Of Proforma FY2015

Revenue

% Of Proforma FY2015

Net Income

3

52%

36%

33%

34% FOOD INGREDIENTS Fats, oils and other specialty food ingredients

SPECIALTY PLASTICS Pigment blends, color and additive masterbatches and engineered polymers

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

Net Income

Revenue Revenue

Net Income

3%

4% Revenue

Net Income

13%

23% Net Income

Revenue

OLEOCHEMICALS & OTHER SPECIALTY CHEMICALS Coco-biodiesel, oleochemicals, resins and powder coatings

Due to rounding, numbers may not add up precisely D&L parent is 0.1% of revenues through Management Service Fees / 3% of Net Income

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

As the leading B2B2C company in the Philippines, D&L has longstanding customer relationships, mostly with consumer companies across industries

4

>70% of sales are to

consumer companies

Length of Customer Relationships (in Years)

30 25

20 17

15 10

7 5

5

1963

1971

1976

1980

1987

1988

2000

2006

2012

2014

Colorants

Colorants, chemicals

and additives

for plastics and inks

Aerosol

Powder Coating

Food Ingredients

Engineered polymers

Corro-coat, Inc. IPO

Corro-Coat Inc.

becomes

IPO

acquisition POLYMER & COLOURS, INC.

Biodiesel

D&L has a 50+ year history in chemistry and manufacturing

6

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 value. Our products and services must always represent good value for money and be competitive in the market place

•  We will maintain our market leadership through creativity, 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 together enthusiastically to achieve our goal

•  We will contribute to the well-being of the communities in which we operate, and accept our responsibilities as citizens of the Philippines

We are research-oriented. We will keep abreast of the latest technology and have our fingers on the pulse of the market to identify the market needs that must be met

Shaped and driven by R&D

12% of our Staff are in R&D

0.6% R&D spend as % of revenues

7% R&D spend as % of non-raw material cost

62% of our revenues

is driven by R&D

Biggest source of

margin and

income

Allows us to have pass through pricing

mechanism

Greatest barrier to new

entrants/ competition

7

Mercedita Nolledo, 75 years old Lawyer and CPA Former Senior Managing Director & Corporate Secretary of Ayala Corp. Chairman, BPI Investment Management; Director of Xurpas, Inc. ; Trustee, - Ayala Foundation and BPI Foundation B.S. Business Administration & Bachelor of Laws from the University of the Philippines Diliman

Filemon Berba, 76 years old Member of Institute of Corporate Directors Former President of Globe and Manila Water B.S. Electrical Engineering from University of the Philippines Diliman Wharton MBA

Leon L. Lao, 73 years old Chairman & Director CO-FOUNDER Years of D&L experience: 53

Yin Yong L. Lao, 63 years old Vice Chairman Trustee - Association of Petrochemical Manufacturers of the Philippines B.A. in General Studies Ateneo de Manila University Years of D&L experience : 42

Alex L. Lao, 70 years old Director B.S. in Chemical Engineering Polytechnic Colleges of the Philippines Years of D&L experience: 45

John L. Lao, 61 years old Chairman/President Chairman/President – Aero-Pack B.S. in Business Administration University of the East Years of D&L experience: 42

Dean A. Lao, Jr., 48 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 D&L experience: 21

Alvin D. Lao, 44 years old EVP & CFO of D&L CFO and Treasurer of Chemrez; Director of Axis REIT; Independent Director of Xurpas 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 D&L experience: 19

Vincent D. Lao, 42 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 D&L experience: 22

Lester A. Lao, 46 years old Managing Director of FIC & DLPC B. A. S. in Information Business from Edith Cowan University Years of D&L experience: 26

Dean L. Lao, 77 years old Chairman Emeritus FOUNDER Years of D&L experience: 53

FAMILY MEMBERS IN SENIOR MANAGEMENT BOARD OF DIRECTORS

INDEPENDENT DIRECTORS

Founded by chemical engineers, now led by 2nd generation family members with average 22 years of experience in sales, marketing, & business development

Subsidiaries are focused on core activities such as R&D, sales, supply chain and manufacturing. Non-core activities* are handled by D&L

Jadel Holdings Co., Inc.

(Lao Family holding company)

8

Public

Lao Family

(Individual Family Members)

57.6%

31.3%

11.1%

FOOD INGREDIENTS

OLEOCHEMICALS, RESINS, & SPECIALTY CHEMICALS

SPECIALTY PLASTICS

AEROSOLS

POLYMER & COLOURS, INC.

100%

99.7%

100%

100% *(legal, MIS, accounting and finance, import/export)

Shifting revenue mix toward high margin specialties enabled by R&D

*Refined Vegetable Oils & Biodiesel

9

REVENUES % share to total group revenues

Examples of high margin specialties: 1)  customized frying fat for

Quick Service Restaurants

2)  soft serve mixes for convenience stores

3)  coconut oil-based ingredients for soaps and detergents

4)  raw materials for insulation for automotive wirings

5)  deodorants and body sprays

Raw Materials, 83%

Managing volatilities through price pass through

10

Efficient Cost Structure

Established and Fully-Integrated Supply Chain

Fixed costs account for ~10% costs

STORAGE CAPABILITY

33,000 MT capacity

FLEET OF BARGES 6 barges w/ an aggregate

capacity of 10,000 MT

INTERCONNECTED GROUND TRANSPORT

SYSTEM 42 road tankers w/ total

capacity of over 1,064 MT

         

Food Ingredients

Oleochemicals

& Other Specialty

Chemicals

         

Specialty Plastics

Aerosols

D&L Industries - Consolidated

FY2015 Net

Income

P826 million

P743 million

P526 million

P100 million

P2.26 billion

3Y CAGR +25% +42% +7% +23% +27%

Superior earnings growth

D&L parent is 0.1% of revenues through Management Service Fees / 3% of Net Income 11

12

P245mn NET DEBT

Payout Ratio

Cash Dividends (Pmn)

Very low gearing and minimal net debt High interest cover

Increase in Dividend Policy from 25% to 50% Payout Ratio*

2013 2014

714

536

2015

536

40% 51%

26%

2016

1,429

63%

Interest Cover 26x

Strong cash flow generation In PMN 1Q16 FY15

EBITDA (inc. non-recurring items) 801 3,233

Net Operating Cash Flow 958 3,743

Capex (66) (257)

Free Cash Flow 892 3,485

News and Developments

13

INCREASE IN DIVIDEND PAYOUT RATIO POLICY FROM 25% TO 50% INCREASE IN CAPITAL STOCK FROM P4BN TO P18BN

2015 2014

ACQUISITION OF CHEMREZ TECHNOLOGIES SUPPLY CONTRACT WITH VENTURA FOODS

APPOINTMENT OF ATTY. MERCEDITA NOLLEDO AS INDEPENDENT DIRECTOR 2016

News and Development

14

2013

Global Small Cap Index

Islamic Market ASEAN Index

Best Managed Company– Small Cap Category

(Philippines) candidate

2014

3rd Best Mid-Cap Company

Philippines Top 50 Best Performing Philippine-listed

Companies - ASEAN Corporate Governance

Scorecard

Top 10 Corporate Governance and

Sustainability 2014 report 2015

Global Equity Index Asia Pacific ex Japan All Cap &

Small Cap

Best Mid-Cap Company (Philippines) Alvin D. Lao as Best CFO – 2nd Place Best Investor Relations – 9th place

Top 50 Best Performing Philippine-

listed Companies - ASEAN Corporate

Governance Scorecard

DLNDY:US  Unsponsored ADR (BNY Mellon & Citi)

ALVIN D. LAO, CFO Best IR by a senior management team Small & mid-cap – South East Asia

2016

Best Mid-Cap Company

Philippines

Corporate Social Responsibility

15

CSR initiatives are carried out through the

AREAS OF FOCUS

Value formation

Education Leadership

Livelihood

1%  of D&L’s annual net income is commited to corporate social responsibility programs through the foundation

1,374 students  provided  with  workbooks  and  reviewers  2015  

P20mn spent  on  CSR  ini@a@ves  in  2015  

114  teachers’  salary  sponsored  2015  

927  Kinder  &  Grades  2-­‐3  non/slow  readers  taught  to  read  2015  

$1.8mn previous

Share Information

16

#38 Top 50 largest market cap among Philippine companies as of April 2016 according to PSE Monthly Report P64.3bn

$900k current

*As of July 11, 2016

*as of June 7, 2016

Price as of 07/12: P9.74 Market Cap as of 07/12: P69.57bn USD 1.47bn (USD1:P47.31)

3-Month Daily Trading Average*