TPBI Public Company Limited · ต.ค.-16 พ.ย.-16 ธ.ค.-16 ม.ค.-17 ก.พ.-17...

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

November 20, 2017


Disclaimer

Page 1

The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in TPBI Public Company Limited (“TPBI”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever.

In addition, this presentation contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over time and in many cases are outside the control of the company and its directors. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future events. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results may differ from those forecast and projected or in the forward-looking statements as a result of various factors and assumptions.


Agenda

Page 2

Section 1 About TPBI Group

Section 2 Business Overview

Section 3 Financial Highlights

Section 4 Future Plan


TPBI Group Overview

Page 3

• TPBI Public Company Limited (“TPBI”) was established by Borrisuttanakul family as a plastic-bag trader/producer

• More than 30-year experience led the company become the leader of plastic-bag producer in Thailand

• The company was listed on the Stock Exchange of Thailand in the beginning of 2Q16

Number of Shares Outstanding (mm) 400

Registered Shares (THB mm) 400

Paid-up Capital (THB mm) 400

Par Value per Share (THB) 1

Share Movement ( Sept 16 – Sept 17)

High (THB) 17.70

Low (THB) 11.30

Average (THB) 15.31

Average Market Capitalization (THB mm) 5,762.44

Average Daily Trading Volume (THB mm) 11.19

Dividend Payout Policy (%) At least 50% of net profit TPBI is Thailand’s No. 1 total solution provider of plastic bag, providing complete

services

product design and formula development

manufacturing and procurement

raw material and product testing

TPBI’s VISION is “To be a leading packaging manufacturer who achieves sustainable growth together with all stakeholders”

Company Profile Share Summary

As of Sept 2017

Source: Company Data, Bloomberg

Borrisuttanakul family, 73.91%

BBLAM, 11.54%

Other institutions,

0.68% Others, 13.87%

*Shareholder holding as of the latest book closing date


TPBI Group Products

Page 4

Revenue Breakdown by Product

TPBI Group’s total sales for 3Q17 is THB 1,174.04 mm, having sales proportion by products as follows:

Source: Company Data

Garbage and other bags

33%

Vest carriers/t-shirt bags

27%

Multi-layer blown film

10%

Flexible Packaging

15%

Others 15%

Revenue Breakdown in 3Q17 Revenue Breakdown in 3Q16

Garbage and other bags

25%

Vest carriers/t-shirt bags

39%

Multi-layer blown film

8%

Flexible Packaging

12%

Others 16%


Australia 24%

Japan 9%

UK 11%

USA 13%

France 1%

New Zealand 2%

Other countries 2%

Thailand 38%

Australia 29%

Japan 9%

UK 6% USA

7% France

0% New Zealand 3%

Other countries 4%

Thailand 42%

Market Diversification

Page 5

Market Diversification

During 3Q17, approximately 57.6% of total sales are from exports to international markets while 42.4% are from domestic sales.

“TPBI Group distributes their different types of products to various regions to diversify the risk of relying on a few market”

Note: :*Other countries include South Korea, Singapore, Nigeria, Laos, Cambodia, etc. Source: Company Data

In 3Q17 In 3Q16


Agenda

Page 6






Strong Presence in Plastic Packaging Value Chain through Backward Integration

Page 7

“TPBI group is one of a few converters who integrates backward into its value chain; creating competitive advantages and enjoying higher margin whilst lowering the risk of reliance on external suppliers”

Feedstock Resin Producers Compound Resin Producers

Film Producers Converters

Post-Consumer Plastic Scrap

Post-Industrial Plastic Scrap

Post-Industrial Recycle Resin

Post-Consumer Recycle Resin

Compound Recycle Resin

Bio-Plastic Resin

PE Resin (Virgin)

Other Plastic Resin

Compound Bio-Plastic

Resin

Multilayer Blown Film

General Packaging

(Shopping Bags, Garbage Bag,

etc.)

Flexible Packaging

(Food Goods) Other Types of

Film

Bio-Based Feedstock

Petroleum-Based Feedstock



Company Operations

Page 8

Plastic Bags Multilayer Blown Film Flexible Packaging

Product Mix: • Vest carrier bags/ T-shirt bags/

Bio compostable bags/ Fruit & Vegetable bags/ Garbage bags/ Loop- handle/ Die cut bags/ Fashion bags/ EMAP film bags

• New Products: Roll Star/ New design garbage bags/ New design bags on roll for fruit and vegetable/ Mail Order bags/ Liner bags/ LLDPE food bags

Production Capacity: • ~ 64,000 tons per year

Sales Proportion (3Q17): • International: 89.8% • Domestic: 10.2%

Key Markets: • Australia, UK, USA, New

Zealand, Japan and etc.

Product Mix: • Lamination film/ Barrier film/

Stretch hood/ Shrink film

Production Capacity: • ~ 9,000 tons per year Sales Proportion (3Q17): • International: 19.1% • Domestic: 80.9%

Key Markets: • Domestic, Singapore and etc.

Product Mix: • Packaging for frozen food,

ready-to-eat food and others

Production Capacity: • ~ 100 million meters per year

Sales Proportion (3Q17): • International: 1% • Domestic: 99% Key Markets: • Focuses on domestic market

Sample of Customers Sample of Customers Sample of Customers


Others

Product Mix: • Compound resin/ Bioplastic

product / Paper cup Sales Proportion (3Q17): • International: 12.7% • Domestic: 87.3% Key Markets: • Focuses on domestic market


63% 67%

80%

62% 58% 56% 68%

0%

20%

40%

60%

80%

100%

0

50

100

150

2012 2013 2014 2015 2016 3Q16 3Q17

Mill

ion

Me

ters

pe

r ye

ar

Capacity Output Utilization rate

92% 95% 76% 82% 81% 85% 92%

0%

20%

40%

60%

80%

100%

0

2,000

4,000

6,000

8,000

10,000

12,000

2012 2013 2014 2015 2016 3Q16 3Q17

Ton

s p

er

year

Historical Production Capacity and Utilization Rate

Page 9

74% 74% 84% 86% 85% 87%

79%

0%

20%

40%

60%

80%

100%

0

20,000

40,000

60,000

80,000

100,000

2012 2013 2014 2015 2016 3Q16 3Q17

Ton

s p

er

year

General Packaging

Multilayer Blown Film

Flexible Packaging

• Flexible packaging capacity has been increased to over 100 million meters per year

• Utilization rate have been in range of 58 – 80%

• Capacity expansion requires longer lead time than other products

• General packaging capacity is around 64,000 tons per year

• Utilization rate have been in range of 74 - 87%

• Multilayer blown film capacity is around 9,000 tons per year

• Utilization rate have been in range of 76 – 95%



Agenda

Page 10






32

33

34

35

36

37

ต.ค.-16 พ.ย.-16 ธ.ค.-16 ม.ค.-17 ก.พ.-17 มี.ค.-17 เม.ย.-17 พ.ค.-17 มิ.ย.-17 ก.ค.-17 ส.ค.-17 ก.ย.-17

TH

B/U

SD

1,000

1,200

1,400

ต.ค.-16 พ.ย.-16 ธ.ค.-16 ม.ค.-17 ก.พ.-17 มี.ค.-17 เม.ย.-17 พ.ค.-17 มิ.ย.-17 ก.ค.-17 ส.ค.-17 ก.ย.-17

USD

/MT

HDPE LLDPE

-400

100

600

0

50

100

Vo

lum

e (

'000)

USD

/Barr

el

Volume (RHS) Closing Px

Market Overview

Page 11

Foreign Exchange

Brent Crude Oil

Resin Price

Source: Bloomberg

• Thai Baht has been appreciated during the quarter, averaging at THB 33.37 per USD

• TPBI revenue and cost are partially natural-hedged

• Brent crude oil price has been increasing during the quarter, averaging at USD 52.17 per barrel in 3Q17

• The resin prices are somewhat influenced from crude oil price

• The average prices of HDPE and LLDPE were 1,151 and 1,142 per MT respectively in 3Q17


13.9% 14.9%

11.2%

7.3% 7.7%

4.0%

0.0%

5.0%

10.0%

15.0%

20.0%

3Q15 3Q16 3Q17

Profit Margin

Gross Profit Margin Net Profit Margin

1,252 1,315

1,174

-

200

400

600

800

1,000

1,200

1,400

3Q15 3Q16 3Q17

THB

mm

267 329 387

584 509 308

110 97

117

147 156 179

133 211 171

-

200

400

600

800

1,000

1,200

1,400

3Q15 3Q16 3Q17

THB

mm

Garbage and others bags Vest carriers/t-shirt bags Multi-layer blown film

Flexible packaging Others

Operating Results

Page 12

Total Revenue Gross Profit and Net Profit


• In 3Q17, the revenue was decreased compares to the same period of last year

• The t-shirt bag sale portion has decreased over the last year from the plastics bags restriction in several countries. However, sale portions of flexible packaging and transformation products were increased during the same period in order to gradually shift product mix of the Company according to transformation policy

• The profit margin was lower due to a decrease in sales of plastics bags making production cost higher

• The sales portion of Fruit & Vegetable bags has significantly increased compare to previous year

Revenue Breakdown


Operating Results (Cont.)

Page 13

Operating Result in 3Q17

In THB mm 3Q17 3Q16 YoY

THB mm %

Sales 1,174.0 1,315.0 -141.0 -10.7%

Cost of Sales 1,030.6 1,108.4 -77.7 -7.0%

Gross Profit 129.9 193.4 -63.4 -32.8%

Other Income 13.5 13.3 0.2 1.7%

SG&A 81.1 76.7 4.5 5.9%

EBITDA 111.7 172.6 -60.8 -35.3%

Net Income 47.3 101.7 -54.4 -53.5%

EPS (THB) 0.11 0.24 -0.13 -55.0%

GP Margin (%) 11.2% 14.9% -3.7% -24.6%

EBITDA Margin (%) 9.5% 13.1% -3.6% -27.5%

NP Margin (%) 4.0% 7.7% -3.7% -47.9%

• The company recorded the revenue in 3Q17 at THB 1,174.0 million. The revenue of the quarter was decreased compares to last year as a result of a decrease in sales of plastics bags

• Gross profit for the quarter was lower since the demands of Vest carriers/t-shirt bags has decreased. However, under product transformation policy, the Company currently promotes sales of transformation products in order to compensate this downtrend of Vest carriers/t-shirt bags sales.

• Net income in 3Q17 was THB 47.3 million, decreasing from THB 101.7 million from the year earlier

• The Company has been aware of the change in world market trend of plastics. Due to the plastic bags restriction in several countries, product mix has gradually shifted to other products according to a product transformation policy of the Company



Operating Results (Cont.)

Page 14

Gross Profit Margin and Net profit Margin

8.6% 7.9%

9.8% 10.4%

14.7% 14.3%

11.2%

6.4% 6.2%

9.0%

9.2%

13.0%

13.1%

9.5%

2.8% 3.7%

4.7% 5.2%

7.9% 7.9%

4.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2011 2012 2013 2014 2015 2016 3Q17Gross Profit Margin EBITDA Margin Net Profit Margin


• In terms of profitability, the margins were lower during the third quarter of 2017

• The decrease in profit margin was a result from the decrease in sales of vest carriers/t-shirt bags which makes cost of production higher. However, a continuously increase in sales portion of flexible packaging and transformation products shall be able to recover the Company’s profit margins

• Although profit margins in this quarter were affected by external factors arisen, TPBI is confident that long-term outlook of profit margin is still in an up trend and the export sales shall return into its normal situation shortly. In addition, sales from other products under product transformation policy are still in the introduction stage which could be expanded much further in the future


1,536 1,741

2,381 2,311

3Q16 3Q17

Total non-current assets Total current assets

2,644 2,646

1,100 1,182

174 224

3Q16 3Q17

Total shareholders' equity Total current liabilities

Total non-current liabilities

Assets Breakdown

Balance Sheet Composition

Page 15

(THB mm)

Liabilities and Equity Breakdown

(THB mm)

Key Financial Ratios

60.8%

39.2%

57.0%

43.0%

Cash & ST Investment 3Q17: THB 836 mm 3Q16: THB 909 mm

Inventories 3Q17: THB 710 mm 3Q16: THB 647 mm

A/R 3Q17: THB 765 mm 3Q16: THB 800 mm

PP&E 3Q17: THB 1,700 mm 3Q16: THB 1,272 mm

Interest-bearing-debt 3Q17: THB 696 mm 3Q16: THB 578 mm Net Debt 3Q17: THB -140 mm 3Q16: THB -331 mm Share Capital 3Q17: THB 400 mm 3Q16: THB 400 mm

27.1%

64.9%

4.0% 5.5%

64.1%

28.1%


Gross Debt to Equity Net Debt to Equity Net Debt to EBITDA Current Ratio Cash on Hand

3Q17: 0.26x 3Q16: 0.22x

3Q17: -0.05x 3Q16: -0.13x

3Q17: -1.3x 3Q16: -1.9x

3Q17: 2.0x 3Q16: 2.2x

3Q17: 542 mm 3Q16: 457 mm

4,051 3,918


Agenda

Page 16






Product Transformations

Page 17

• Due to the change in world market trend of plastics and the plastic bags restriction in several countries, the Company has implemented a product transformation policy in order to diversify product mix of the Company.

Roll Star

New design garbage bags

New design bags on roll for fruit and vegetable

Mail Order bags

Liner bags

LLDPE food bags

Jul - Sept 1,635 tons (41%)

Jan - Jun 2,350 tons (59%)

Sales of Transformation Products during the first nine months of 2017

3,985 tons sold during the first nine months of 2017


Expansion Plan : Establishment of Joint Venture Company

Page 18

• Shareholder Agreement has been signed for the purpose of establishing a joint venture company

• Myanmar is one among highest GDP growth nations in Asia with over 50 million of populations

• Strengthen general packaging position by teaming up with strong Myanmar local producer • Capacity around 350 tons per month • Long experience in Myanmar market more

than 25 years • Strong brands • Nation wide distributor network • Expected COD : Early 2018

• Opportunity to open up the new market thru

Myanmar border trade such as India and China.

• Synergy strategy • Utilizing partner’s local team, facility, and

network as a start up platform • Utilizing TPBI’s production expertise and raw

material purchasing volume to improve production efficiency and cost

Myanmar Star Group Company Limited

TPBI International Co., Ltd. PTTGC’s subsidiary

Joint Venture Company

65%

25%

10%

Strictly Private & Confidential Page 19

Expansion Plan : Establishment of Joint Venture Company (Cont’d) Key products & Key markets

Soft Loop Handle

Garbage bags

Shopping bags

Joint Venture

Company


Updated Actions and Future Plan

Page 20

Market Expansion

• Transformation project to divert into more new products and markets. New general packaging products will help to optimize product portfolio risk and support margins • Expand new designs

garbage bag orders • Expand new bag on roll for

vegetable and fruit orders • Expand mail order bags

orders • Start production of pipping

bags • Expand transformation

products capacity

Flexible Packaging & Film

• Expansion plan is on track • Construction started and on

track • Expect to be operational

around April or May 2018

• Expected capacity (per year basis) • Current: 100 million meters • Phase I: 150 million meters

in 2018 • Phase II: 200 million meters

in 2019-2020

• Invested in new Multi Layer Blown Film machine

• Current: 9,000 tons per year • New Capacity: 11,500 tons

per year

Merger & Acquisition

• The initial M&A is focusing for partners especially in South East Asia

• Additional M&A projects which consist of both South East Asia and domestic projects are currently on the negotiation

Organic Growth Inorganic Growth



Investor Relations

TPBI Public Company Limited

42/174 Moo 5, Raiking Sampran Nakorn pathom 73210 Thailand

Tel: +66 (0)2 4290354-7

Fax: +66 (0)2 4290358

E-mail: [email protected]

Page 21

TPBI Public Company Limited · ต.ค.-16 พ.ย.-16 ธ.ค.-16 ม.ค.-17 ก.พ.-17...

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