opportunity day epg: financial results q3...

Opportunity DayEPG: Financial Results

Q3 2017/18

Disclaimer

This document has been prepared by Eastern Polymer Group Public Company Limited (“EPG”) solely for the reference of intended recipients only.

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Agenda

Operational Highlights

Q3 2017/18 Financial Results

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9M 2016/17 9M 2017/18 Q3 2017/18

Revenue from sale 7,075.8 7,183.5 2,371.2

Gross Profit Margin

32.5% 28.3% 24.7%

Net Profit 1,109.6 761.3 182.9

Revenue from sale Q3 2017/18 is at 2,371.2 MB decrease 2.4 % QoQ and increase 3.0% YoY

Gross Profit Margin Q3 2017/18 is at 24.7 %.

Q3 2017/18 SG&A to sale is at 19.4% which is in the relatively higher than 19.2% in Q2 2017/18 but lower than 20.1% in Q3 2016/17

Share of Profit from Investments in Associates is at 63.1 MB decrease 7.8% QoQ but adjust up at 15.5% YoY

Net Profit Q3 2017/18 is at 183 MB decrease 37.3% QoQ and soften 44.9 % YoY

Note: Q3 2017/18 Fiscal year ends on 31 Dec 2017

Q3 2017/18 Operational Highlights

• International sale continue to be the driver for the elastomeric insulation product. During Q3 17/18 Aeroflex expanded its operation in Vietnam and China using product that has relatively lower margin.

• Our innovation allow the production of AEROROOF to be competitive in the roof insulation market.

• Aeroklas continue to grow with the support of the Canopy, sidestep and TJM.• Aeroklas is under the process of co-developing various products for Automakers. • TJM now have two corporate store in Perth and Brisbane, Australia.• TJM launches Supplier Partnership Program (SPP) to increase the selective products to meet customer’s expectation

• Revenue from sale of Eastern Polypack softens due to continuous contraction in plastic packaging business since October 2016. • Progressing on increase marketing activity in both “eici” and food packaging product. • EPP has the total capacities of 32,000 tons per year, if the plastic packaging show a clear sign of recovery, our high speed and

automation technology can catch up with large amount of orders

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Agenda



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Statement of Comprehensive Dec-16 Sep-17 Dec-17 9M 9MIncome (Million Baht) Q3-2016/17 Q2-2017/18 Q3-2017/18 2016/17 2017/18Revenue from sales 2,302.8 2,430.0 2,371.2 -2.4% 3.0% 7,075.8 7,183.5 1.5%

AEROFLEX 636.0 748.6 709.6 -5.2% 11.6% 1,994.1 2,185.7 9.6%AEROKLAS 1,042.0 1,130.3 1,093.3 -3.3% 4.9% 3,190.5 3,276.9 2.7%

EPP 624.8 551.1 568.3 3.1% -9.0% 1,891.3 1,720.9 -9.0%Cost of goods sold 1,565.2 1,715.0 1,784.4 4.0% 14.0% 4,775.2 5,150.7 7.9%Gross Profit 737.7 715.0 586.7 -17.9% -20.5% 2,300.7 2,032.8 -11.6%Other gains-net gain on exchange rate 8.9 -11.9 -17.4 46.8% -296.6% -1.6 -41.3 2547.4%SG&A 463.1 467.2 458.9 -1.8% -0.9% 1,301.8 1,376.5 5.7%Share of Profit from Investments in Associates 54.7 68.5 63.1 -7.8% 15.5% 189.9 180.5 -4.9%EBIT 357.5 316.3 181.1 -42.7% -49.3% 1,223.9 821.8 -32.9%Depre & Amor 161.7 163.2 162.0 -0.7% 0.2% 466.2 488.2 4.7%Finance cost 22.9 2.1 -0.6 -127.5% -102.5% 61.8 5.2 -91.7%Income Tax 2.6 22.3 -1.3 -105.7% -149.8% 52.5 55.3 5.4%EBITDA 436.2 411.0 289.8 -29.5% -33.6% 1,465.1 1,144.5 -21.9%EBITDA incl. equity sharing 490.8 479.4 352.9 -26.4% -28.1% 1,655.0 1,325.0 -19.9%Net Profit 332.0 291.9 182.9 -37.3% -44.9% 1,109.6 761.3 -31.4%

YoYYoYQoQ


7Note: Q3 2017/18 Fiscal year ends on 31 Dec 2017

9M 9M2016/17 2017/18

32.5% 28.3%20.7% 15.9%23.4% 18.4%15.7% 10.6%15.7% 10.5%12.9% 8.6%

0.32 0.30

Ratios Dec-16 Sep-17 Dec-17Q3-2016/17 Q2-2017/18 Q3-2017/18

Gross Profit Margin 32.0% 29.4% 24.7%EBITDA Margin 18.9% 16.9% 12.2%EBITDA Margin incl. equity sharing 21.3% 19.7% 14.9%Net Profit Margin 14.4% 12.0% 7.7%ROE 15.7% 12.0% 10.5%ROA 12.9% 9.9% 8.6%D/E 0.32 0.29 0.30

Statement of Financial Dec-16 Sep-17 Dec-17Status (Million Baht) Q3-2016/17 Q2-2017/18 Q3-2017/18Current Asset 4,243.7 4,479.0 4,429.6 Non - Currrent Asset 8,446.1 8,523.1 8,531.1 Total Asset 12,689.8 13,002.1 12,960.7 Interest bearing debt 1,642.5 1,396.4 1,458.9 Current Liabilities 2,231.0 2,261.0 2,386.0 Non - Current Liabilities 781.0 668.9 617.2 Total Liabilities 3,012.0 2,929.8 3,003.2 Paid Up Capital 2,800.0 2,800.0 2,800.0 Retained earnings (unappropriate) 2,747.4 3,156.2 3,043.8 Total Equity 9,677.9 10,072.3 9,957.5


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4,138.1 4,298.6 8,459.9 8,486.7

12,598.0 12,785.3 2,050.0 1,464.7 2,396.1 2,144.3

990.5 716.7 3,386.5 2,861.0 2,800.0 2,800.0 2,289.0 3,019.9 9,211.5 9,924.3

FY2015/16 FY2016/17


636.0 748.6 709.6

1,994.1 2,185.7

Q3-2016/17Q2-2017/18Q3-2017/18 9M-2016/179M-2017/18

• Q3 2017/18 revenue decrease by 5.2 % QoQ but increase 11.6 % YoY.

• Revenue from sale and Margin squeeze QoQ due to Strong THB and increase in raw material.

AEROFLEX Revenue break down by regionAEROFLEX Revenue (MB)

11.6% YOY


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9.6% YOY

-5.2 % QoQ


Domestic, 27.1%

International, 72.9%

1,042.0 1,130.3 1,093.3

3,190.5 3,276.9

Q3-2016/17 Q2-2017/18 Q3-2017/18 9M-2016/17 9M-2017/18

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• Q3 2017/18 Revenue decrease by 3.3 % QoQ but increase 4.9% YoY

• Gross Profit Margin slightly narrow down due to 1) Raw Material 2) Strong Thai Baht and 3) Ramping up period for new

product

AEROKLAS Revenue break down by regionAEROKLAS Revenue (MB)


4.9% YOY

-3.3 % QoQ

2.7% YOY


Domestic, 27.5%

International, 72.5%

624.8 551.1 568.3

1,891.3 1,720.9

Q3-2016/17 Q2-2017/18 Q3-2017/18 9M-2016/17 9M-2017/18

EPP Revenue break down by regionEPP Revenue (MB)

• Q3 2017/18 revenue increase 3.1 % QoQ but decrease 9.0% YoY

• Gross Profit margin soften due to 1) Contraction in demand for plastic and Packaging 2) Market Competition 3) Shift in Economic of scale and 4) increase in raw material price


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-9.0% YOY

3.1 % QoQ

-9.0% YOY


Domestic, 92.9%

International, 7.1%

The new S-Curve of EPG

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Building the new S-Curve1. Deploy New Technologies for

every BU2. New Innovation: Process /

Material / and Design3. Launching New Products4. Price Adjustment5. Trend of material is stabilize

and possible going down proportional with oil price and increase of supply Capacities worldwide.

Competitive Advantage

Time

2017/18 Outlook

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Innovation Marketing Growth

Established the new fire testing center .

Implement high speed and automation technology in USA and Thailand

In the FY 17/18 Aeroflex will continue to expand further in South East Asian Market that seem to experience growth especially in Vietnam while maintain the strong growth in Other Asian countries such as Japan China Indonesia and Philippines.

Start to see the recovery from the middle east market.

The marketing of Aero-Roof is according to market plan.

US Plant expansion begins in Jan 18

The high speed production line shall increase capacities to support growth in the Americas

Utilized product and matrix model to expand new product such as AEROROOF and ACOUSTIC for Automotive

.

Innovation Marketing Growth• Working with automotive OEM’s

in Europe and Asia to develop new products

• Working on new materials and alternative manufacturing processes to drive growth for Bedliners, Deck covers, side steps and canopies

• The product that was initially delay is now confirmed to soft launching in November (Ex: Pro Locker)

• Continue to Expand Market in Asia / Oceania / Middle East / Africa and Eastern Europe area

• Expected Canopy and sidestep to able to carry strong momentum of growth throughout FY17/18

• Launched TJM Corporate Store in Perth and Brisbane.

• New Facilities allow us to have training facilities for staff

• Current No. of TJM Distribution channel is at 64 Stores

• Series of Promotional campaign to lift the brand TJM

• Expand TJM Product in licensed Store from less than 20% to 20-30% in FY 2018/19

• Increased capacity in canopy, sidestep and Development product for EV (Electrical Vehicle)

• Increase key product capacities to serve the growth in the new stores of TJM .

• Increase sale of TJM and SPP (Supplier Partnership Program Product) in the network

• Completed “Flexiglass” deal Which shall strengthen distribution network in Australia.

2017/18 Outlook

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Innovation Marketing Growth

Continue to do R&D packaging product to serve customers needs

Expanding Product categories under “Food Liner”

• Encourage its brand building through Regional marketing activity and expand its export market in Asean market

• Marketing “eici” EPP secondary brand into the market to capture Segment C and D Market Segment (Advertise and add more product categories)

• Expand food package product on both industry and retail through new product such as Microwave Safe food tubs, plates and bowl.

• Food-delivery service becoming more popular, helps create a demand in food packaging sector.

• Engaging the international food industrial clients which require a top hygienic production standards that EPP already certified.

• EPP Phase II enhance margin. and is expecting to continue to ramp up production capacities to reach economy of scale.

• Focus on Utilized Production capacities via the marketing of “eici” and food packaging Product

2017/18 Outlook

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Capital Expenditure

E2017/18 E2018/19 E2019/20 Total

THB 100 mmTHB 250 mm

N/A THB 350 mm

THB 400 mmN/A

THB 100 mm

THB 500 mm

N/A N/ATHB 300 mm

THB 300 mm

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