TPBI Public Company Limited - set.or.th · During 2Q18, approximately 57.1% of total sales are from...

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

September 3, 2018


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 Products

Page 4

Revenue Breakdown by Product

TPBI Group’s total sales for 2Q18 is THB 1,224.34 mm, having sales proportion by products as follows:

Source: Company Data

Garbage and fruit&vetgeta

ble bags 23%

Vest carriers/t-shirt bags

24%

Reusable Soft Loop

[PERCENTAGE]

Multi-layer blown film

9%

Flexible Packaging

15%

Others 16%

Revenue Breakdown in 2Q18 Revenue Breakdown in 2Q17

Garbage and fruit&vetgeta

ble bags 20%

Vest carriers/t-shirt bags

42%

Multi-layer blown film

9%

Flexible Packaging

14%

Others 15%


Australia 30%

Japan 10%

UK 6%

USA 6%

0% New Zealand

2%

Other countries 4%

Thailand 42%

Australia 25%

Japan 8%

UK 5%

USA 8%

0%

New Zealand 5%

Other countries 6%

Thailand 43%

Market Diversification

Page 5

Market Diversification

During 2Q18, approximately 57.1% of total sales are from exports to international markets while 42.9% 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 2Q18 In 2Q17


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

Compound Recycle Resin

Bio-Plastic Resin

PE Resin (Virgin)

Other Plastic Resin

Compound Bio-Plastic

Resin

General Packaging

(Shopping Bags, Garbage Bag,

etc.)

Flexible Packaging

(Food Goods)

Other Types of Film

Bio-Based Feedstock

Petroleum-Based Feedstock

Post-Consumer Recycle Resin

Multilayer Blown Film


Digital Printing


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: • ~ 62,000 tons per year

Sales Proportion (2Q18): • 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: • ~ 11,500 tons per year Sales Proportion (2Q18): • International: 18.9% • Domestic: 81.1%

Key Markets: • Domestic, Vietnam, Singapore ,

Australia, and etc.

Product Mix: • Packaging for frozen food,

ready-to-eat food and others

• New Products: Digital Printing

Production Capacity: • ~ 100 million meters per year • Will be 150 million meters per

year after Sep’18

Sales Proportion (2Q18): • International: 1.4% • Domestic: 98.6% Key Markets: • Domestic market

Sample of Customers Sample of Customers Sample of Customers


Others

Product Mix: • Compound resin/ Bioplastic

product / Paper cup Sales Proportion (2018): • International: 5.6% • Domestic: 94.4% Key Markets: • Focuses on domestic market


67%

80%

62% 58% 72% 70%

0%

20%

40%

60%

80%

100%

0

50

100

150

2013 2014 2015 2016 2017 2Q18

Mill

ion

Me

ters

pe

r ye

ar

Capacity Output Utilization rate

95%

76%

82% 81% 84%

74%

0%

20%

40%

60%

80%

100%

0

2,000

4,000

6,000

8,000

10,000

12,000

2013 2014 2015 2016 2017 2Q18

Ton

s p

er

year

Historical Production Capacity and Utilization Rate

Page 9

74% 84%

86% 85% 78%

66%

0%

20%

40%

60%

80%

100%

0

20,000

40,000

60,000

80,000

100,000

2013 2014 2015 2016 2017 2Q18

Ton

s p

er

year

General Packaging

Multilayer Blown Film

Flexible Packaging

• Flexible packaging capacity will be increased to over 150 million meters per year after Sep’18

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

• Capacity expansion requires longer lead time than other products

• General packaging capacity is around 60,000 tons per year

• Utilization rate have been in range of 66 - 86%

• Multilayer blown film capacity is around 11,500 tons per year

• Utilization rate have been in range of 74 – 95%



Agenda

Page 10






31

32

33

34

Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18

THB

0

100

200

300

400

500

600

0

20

40

60

80

100

Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018

Vo

lum

e ('

00

0)

US

D/B

arre

l

Volume (RHS) Closing Px

Market Overview

Page 11

Foreign Exchange

Brent Crude Oil

Resin Price

Source: Bloomberg

• Thai Baht has been depreciated during the year, averaging at THB 31.93 per USD

• TPBI revenue and cost are partially natural-hedged

• Brent crude oil price has been increasing during tis year, averaging at USD 75.19 per barrel in Q2/2018

• The resin prices are somewhat influenced from crude oil price

• The average prices of HDPE and LLDPE were 1,357.69 and 1,181.15 per MT respectively in Q2/2018

1,000

1,100

1,200

1,300

1,400

1,500

พ.ค.-17 มิ.ย.-17 ก.ค.-17 ส.ค.-17 ก.ย.-17 ต.ค.-17 พ.ย.-17 ธ.ค.-17 ม.ค.-18 ก.พ.-18 มี.ค.-18 เม.ย.-18 พ.ค.-18 มิ.ย.-18

US

D/M

T

HDPE LLDPE


14.8%

9.5%

6.7% 8.0%

2.9% 1.4%

0.0%

5.0%

10.0%

15.0%

20.0%

2Q16 2Q17 2Q18

Profit Margin

Gross Profit Margin Net Profit Margin

1,179 1,182 1,246

-

500

1,000

1,500

2Q16 2Q17 2Q18

THB

mm

231 238 289

499 486 447

77 101 112 158 165 181 196 179 195

-

200

400

600

800

1,000

1,200

1,400

2Q16 2Q17 2Q18

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 2Q18, the revenue was slightly increased compares to same period last year mostly due to higher sales of garbage bags and reusable soft loop

• Although the single-used plastic bag sale portion has decreased over the last quarter from the plastics bags restriction in several countries, sale portions of flexible packaging, multi-layer blown film and reusable soft loop 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 and shifting some of production capacity to transformation products making production cost higher for this short period

Revenue Breakdown


Operating Results (Cont.)

Page 13

Operating Result in 2018

In THB mm 2Q18 2Q17 YoY

THB mm %

Sales 1,248.85 1,182.26 66.59 5.63%

Cost of Sales 1,142.29 1,057.56 84.73 8.01%

Gross Profit 82.05 111.35 -29.3 -26.32%

Other Income 21.44 13.35 8.09 60.63%

SG&A 80.03 78.00 2.03 2.61%

EBITDA 83.26 93.10 (9.85) (10.57%)

Net Income 17.22 34.68 (17.45) (50.33%)

EPS (THB) 0.04 0.08 (0.04) (52.85%)

GP Margin (%) 6.70% 9.53% -2.83% -29.70%

EBITDA Margin (%) 6.67% 7.88% -1.21% -15.34%

NP Margin (%) 1.38% 2.93% -1.55% -52.98%

• The company recorded the revenue in 2Q18 at THB 1,248.9 million. The revenue for the year was slightly increased compares to last year as a result of a decrease in sales of garbage bags and reusable soft loop

• Gross profit for the year was lower since the demands of single-used plastic 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 2Q18 was THB 17.2 million, decreasing from THB 34.7 million from 2Q17

• 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 transformation products and value-added product



Operating Results (Cont.)

Page 14

Gross Profit Margin and Net profit Margin

7.9%

9.8% 10.4%

14.7% 14.3%

10.5%

6.7% 6.2%

9.0% 9.2%

13.0% 13.1%

8.9%

6.7%

3.7%

4.7% 5.2%

7.9% 7.9%

4.0%

1.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2012 2013 2014 2015 2016 2017 2Q18 Gross Profit Margin EBITDA Margin Net Profit Margin


• In terms of profitability, the margins were lower during 2Q18

• The decrease in profit margin was a result from the decrease in sales of single-used plastic 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 will be recovered and the export sales shall return into its normal situation shortly.


1,634 2,520

2,320

2,220

2Q17 2Q18

Total non-current assets Total current assets

2,595.6 2,612.7

1,137.1 1,690.5

221.2

436.5

2Q17 2Q18

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

58.7%

41.3%

53.2%

46.8%

Cash & ST Investment 2Q18: THB 598 mm 2Q17: THB 863 mm

Inventories 2Q18: THB 792 mm 2Q17: THB 660 mm

A/R 2Q18: THB 795 mm 2Q17: THB 776 mm

PP&E 2Q18: THB 2,435 mm 2Q17: THB 1,595 mm

Interest-bearing-debt 2Q18: THB 1,488 mm 2Q17: THB 776 mm Net Debt 2Q18: THB 1,114 mm 2Q17: THB 405 mm Share Capital 2Q18: THB 400 mm 2Q17: THB 400 mm

34.4%

65.6%

5.6%

7.2%

55.1%

37.5%


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

2Q18: 0.81x 2Q17: 0.52x

2Q18: 0.16x 2Q17: 0.09x

2Q18: 13.38x 2Q17: 4.36x

2Q18: 1.31x 2Q17: 2.04x

2Q18: 374 mm 2Q17: 369 mm

4,740

3,954

4,740

3,954


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

Reusable Soft Loop bags


Expansion Plan: New Flexible Packaging Factory

Page 18

• Construction has been completed on track and over 90%.

• Machines has been ordered and under manufactured.

• COD: September 2018


Updated Actions and Future Plan

Page 19

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

• Start production of Reusable Soft Loop with Post Consumer Recycle

• Expand transformation products capacity

Flexible Packaging & Film

• New factory is expected to be operational around Sep 2018

• Expected capacity (per year basis) • Current: 100 million meters • Sep18: 150 million meters • Phase II: 200 million meters

in 2019-2020

• Digital Printing is completely installed and already start commercial run.

• Invested in new Multi Layer Blown

Film machine • 11,500 tons per year

Merger & Acquisition

• The initial M&A is focusing for partners in both South East Asia and Europe

Organic Growth Inorganic Growth


Strictly Private & Confidential Page 20


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 30

TPBI Public Company Limited - set.or.th · During 2Q18, approximately 57.1% of total sales are from...

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