tpbi public company limited · ต.ค.-16 พ.ย.-16 ธ.ค.-16 ม.ค.-17 ก.พ.-17...
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Strictly Private & Confidential
TPBI Public Company Limited
Opportunity Day Presentation
November 20, 2017
Strictly Private & Confidential
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.
Strictly Private & Confidential
Agenda
Page 2
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
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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
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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%
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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
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Agenda
Page 6
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
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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
Source: Company Data
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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
Source: Company Data
Others
Product Mix: • Compound resin/ Bioplastic
product / Paper cup Sales Proportion (3Q17): • International: 12.7% • Domestic: 87.3% Key Markets: • Focuses on domestic market
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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%
Source: Company Data
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Agenda
Page 10
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
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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
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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
Source: Company Data
• 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
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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
Source: Company Data
Strictly Private & Confidential
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
Source: Company Data
• 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
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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%
Source: Company Data
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
Strictly Private & Confidential
Agenda
Page 16
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
Strictly Private & Confidential
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
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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
Strictly Private & Confidential
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
Source: Company Data
Strictly Private & Confidential
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]
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