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(Assumes 100% ownership of Chemrez Technologies for both 1Q15 and 1Q14 periods)

D&L Industries Announces First Quarter 2015 Results

•  Consolidated Net Income at P512 million, 16% higher y-o-y,

or EPS of P0.14•  Consolidated revenues up 15% y-o-y on higher volume

•  Proposal to increase capital to P18 billion

•  Stock dividend of 100%

May 12, 2015 – D&L Industries net income reached P512 million, or earnings per share of P0.14,

in the first three months of 2015. This is 16% higher from the same period last year.

First quarter revenues were up 15%, driven by volume growth in food ingredients and

oleochemicals. High margin specialties, which accounted for 59% of revenues, improved margins

during the period.

Commodities outgrowing specialties resulted in gross profit margin of 16.9% versus 17.9% in

same period in 2014 and 15.9% in FY14. Post-acquisition of Chemrez Technologies in October

2014, the Company generated return on equity and return on invested capital of 17.8% and

16.9%, respectively.

Moving forward, the rest of the year will build on the progress made in the first quarter, bolstered

by sustained strength of the food ingredients and oleochemicals businesses and abating logistical

headwinds in the specialty plastics business.

Product Mix 

FY14 1Q15

High-Margin Specialty Products 59% 59%

Low-Margin Commodity Products 41% 41%

Food Ingredients

High margin specialties grew volume and revenues by double digits, among which, specialty

ingredients grew considerably, supported by new product developments mostly in the food

service industry.

Growth in volume of commodities was still robust, with expected impact of lower commodity

prices reflected in revenues. Margins for both commodities and specialties were steady, resultingin 35% growth in net income. Sales were up 12% year-on-year.

Domestic consumption of the end markets continues to strengthen and outgrow exports. Several

initiatives have been undertaken in the past two years to boost Oleo-Fats’ presence overseas.

These new businesses are expected to have meaningful progress within the mid-term.

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Specialty Plastics 

Since latter half of 2014, congestion at the ports created a challenging operating environment for

the specialty plastics business and hampered results. Some residual impact affected volumes in

the first quarter. Sales were down 14% year-on-year.

The focus remains on meeting the demands of customers, drawing on the Company’s deeptechnical and customer insights to navigate through such challenges. This resulted in gains in

higher margin businesses. Overall, net income was up 2% year-on-year.

Oleochemicals and other specialty chemicals

Oleochemicals continue to drive volume and margin growth in the business. Biodiesel

performance was still strong, supported by significant and steady progress in oleochemical

specialties as emphasis on sustainability in home care and personal care industries, as well as

health and wellness, gains greater momentum globally.

With lower revenues and margins, the other specialty chemical segment underperformed during

the period. Moving ahead, the Company has developments in place to deliver volume growth andmargin expansion across segments. Overall, revenues were up 31% and net income was higher

20% year-on-year.

Aerosols

Aerosols delivered outstanding results year-on-year, with revenues and net income up 42% and

38%, respectively. Home care is recovering strongly, complemented by solid growth in personal

care. Relying on its full range of R&D and manufacturing capabilities, the Company is looking

to sustain gains in volume and profitability as it extends its leadership position in these high

value, high growth markets.

Increase in capitalization to P18 billion and 100% stock dividend declaration

The Company is also announcing today a proposed increase in capitalization and declaration of

stock dividends, subject to approval by shareholders at the Company’s Annual Stockholders’

Meeting on June 8, 2015.

The Board approved the declaration of a stock dividend totaling 3,571,428,995 shares or a 100%

stock dividend. The stock dividends will be issued from the proposed increase in capitalization

from P4.0 billion divided into 4.0 billion shares with a par value of P1.00 to P18.0 billion divided

into 18.0 billion shares with a par value of P1.00.

Currently, D&L Industries’ authorized capital is 90% subscribed. The proposed increase will

ensure the Company has adequate fundraising options in the future at its disposal for growth.

“In order to remain financially flexible, we need to increase our capitalization. Implementing this

through stock dividends instead of equity sales, we avoid shareholder dilution. There’s little

incentive for us today to undertake such dilutive means of raising capital as our current cost of

debt and gearing are low,” said D&L Industries CFO Alvin Lao.

The Company is also seeking shareholder approval of the sale of Chemrez Technologies’

property to associate LBL Prime Properties. The proposed transaction comprises a 6,000 square

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meter of land with building and other improvements. Removing land ownership by Chemrez

allows the Company to not have any foreign ownership restrictions.

Commenting on the proposed sale, CFO Alvin Lao explains, “It's a property owned by Chemrez,

and D&L outside of Chemrez does not hold any property. This step is being done to continue our

focus on ensuring that the resources of the group are deployed into the assets of the core business.

Property ownership is clearly not a core business of D&L.”

LBL Prime Properties is the property company of the Lao family, which specializes in the

development of land and properties for industrial, commercial, and hospitality use. The

Company’s industrial assets include areas located in major gateway cities in the Philippines,

including Manila and Cebu.

D&L Industries is a Filipino company engaged in product customization and specialization for

the food, plastics, and aerosol industries. The company’s principal business activities includemanufacturing of customized food ingredients, specialty raw materials for plastics, and

oleochemicals for personal and home care use. Established in 1963, D&L has the largest market

share in each of the industries it serves, as well as longstanding customer relationships with the

Philippines’ leading consumer and chemical companies. It was listed on the Philippine Stock

Exchange in December 2012. For more information please visit www.dnl.com.ph 

INVESTOR RELATIONS CONTACT

Nikka Maloles

Investor Relations Officer

D&L Industries

+632 635 0680

debmaloles@dnl.com.ph