AAPICO HITECH PLC [AH] FY2017 Performance & Business Update - - PowerPoint PPT Presentation

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AAPICO HITECH PLC [AH] FY2017 Performance & Business Update - - PowerPoint PPT Presentation

AAPICO HITECH PLC [AH] FY2017 Performance & Business Update Opportunity Day March 13, 2018 The Stock Exchange of Thailand Disclaimer The information contained in this material has been prepared by AAPICO Hitech PLC (AH or


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SLIDE 1

AAPICO HITECH PLC [AH]

FY2017 Performance & Business Update

Opportunity Day March 13, 2018 The Stock Exchange of Thailand

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SLIDE 2

Disclaimer

2

The information contained in this material has been prepared by AAPICO Hitech PLC (“AH” or “AAPICO”) solely for information purpose and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in AAPICO. Some statements made in this material are forward-looking statements. These statements typically contain words such as “expects” and “anticipates” and words of similar import. Any statement in these materials that are not a statement of historical fact is a forward-looking statement that involves various risks and uncertainties. These include statements with respect to our corporate plans, strategies, and beliefs. These statements are based on our management assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct and exhaustive or, in the case of the assumptions, fully stated in the presentation. We assume no

  • bligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors

affecting these statements. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of AAPICO or any of its shareholders, directors,

  • fficers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this
  • presentation. None of AAPICO nor any of its shareholders, directors, officers or employees accepts any liability (in negligence or otherwise)

whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. Individual situations and local practices and standards may vary, so viewers and others utilizing information contained within a presentation are free to adopt differing standards and approaches as they see fit. Products and names mentioned in materials or presentations are the property of their respective owners and the mention of them does not constitute an endorsement by AAPICO. The information contained in this presentation is

  • nly current as of the date its date. In giving this presentation, neither AAPICO nor its respective advisers and/or agents undertake any obligation

to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. You must make your own assessment of the relevance, accuracy, and adequacy

  • f the information contained in this presentation and must make such independent investigation as you may consider necessary or appropriate

for such purpose. The presentation should not be construed as legal, tax, investment or other advise. ir@aapico.com | +66-(0)-2613-1504

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Today’s Agenda

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1. Company Information 2. Automotive Industry Updates 3. Financial Performance 4. Strategy & Direction

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SLIDE 4

Company Information

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SLIDE 5

AAPICO HITECH PLC [AH]

5

AAPICO HITECH PUBLIC COMPANY LIMITED

  • Established in 1996 and listed on SET in 2002.
  • Main businesses: OEM Auto Parts, Jigs and Dies,

Car Dealerships and Car Navigation.

  • Main locations: Thailand, Malaysia and China.
  • Comprising of 36 companies (26 subsidiaries and

10 associates).

  • Registered and paid-up capital of Baht 322.58

million, comprising of 322,583,844 ordinary shares at par value of Baht 1 each.

Industry/Sector : Auto Current price : Baht 33.00* 52 weeks range : Baht 15.60 – 38.25 Market Cap : Baht 10,645 million P/E (YTD) : 11.30* P/BV : 1.59* Dividend yield : 2.00%** TRIS / CG Rating : BBB+ /

* Data as of February 28, 2018 ** Dividend yield is calculated based on current share price

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SLIDE 6

AH Shareholding Structure

6 Data from Share Register Book as of August 31, 2017 Sojitz Corp. 15.76% AH; 1.86% NVDR; 9.25% Institution - Foreign 2.34% Institution - Thai 7.25% Individual - Thai 25.20% Individual - Foreign 0.09% Yeap Family 38.24%

AH Shareholding Structure

AH’s main shareholders are Yeap Swee Chuan and family holding 38.24% of total capital and Sojitz Corporation holding 15.76% of total capital.

4,710 4,452 3,387 5,161 11,129 2013 2014 2015 2016 2017*

Market Capitalization +136%

*Based on share price as of December 29, 2017

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SLIDE 7

AH Board of Directors

7

  • Mr. Yeap Swee Chuan

Present & CEO Executive Director

  • Mr. Kenneth Ng

Independent Director Audit Committee Ex ING Head of Research

  • Mrs. Teo Lee Ngo

Executive Director

  • Mr. Pipat R. Punya

Independent Director Chairman of Audit Committee Lawyer

  • Mr. John Parker

Independent Director Chairman of Risk Committee Ex Chairman of Ford Asia Pacific

  • Mr. Wichian Mektrakarn

Independent Director Audit Committee Ex CEO of AIS

  • Mrs. Vachira Na Ranong

Independent Director Risk Committee Chairman of TIA

  • Mr. Kai Taraporevala

Independent Director Audit Committee Ex President of TATA Capital

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SLIDE 8

AAPICO’s Vision

8

Where do we want to go? How do we want people to remember us?

MANUFACTURING RESEARCH & DEVELOPMENT CAR RETAILING

TO BECOME A LEAN, GREEN, HAPPY, DIGITAL WORLD-CLASS CORPORATION

  • S : Safety
  • Q : Quality
  • C : Cost
  • D : Delivery
  • E : Engineering
  • M : Management

(Focus Digital)

  • Teamwork
  • Look at problems as
  • pportunities
  • Love Family, Company

and Country

  • Loyalty and Honesty
  • Mutual Respect
  • Profitability
  • Reasonable Dividend
  • Corporate Social

Responsibility

Happy Employees Happy Shareholders Happy Public Happy Customers AAPICO Key Fundamental Values

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SLIDE 9

Core Pillars of AAPICO Business

9

Auto Part Manufacture Car Dealerships IOT Connectivity & Mobility Business

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SLIDE 10

Business Segments

10

Manufacture of Auto Parts

(Thailand & China)

Car Dealerships

(Thailand & Malaysia)

Technology

(Thailand) ~62% of total revenue ~38% of total revenue <1% of total revenue

Thailand Malaysia

Stamping & Assemblies Forging & Machining Plastic Jigs and Dies

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SLIDE 11

Countries of Operations

11

Thailand 70% Malaysia 26% China 4%

2017

Sales by Country

CHINA

Kunshan Production: Connecting rods and Copper Forging

MALAYSIA

Kajang & Petaling Jaya Car dealers: Honda car

THAILAND

Ayutthaya, Chonburi, Rayong, Samutprakarn

Hitech Industrial Estate

Production: Stamping parts and Stamping Dies & Jigs

Amata Nakorn Industrial Estate

Production: Stamping & Chassis Frames and Forging & Machining Parts

Bangpli Industrial Estate

Production: Plastic Parts

Amata City Industrial Estate

Production: Stamping Parts Plastic Washers & Fuel Tanks

Mitsubishi Dealers

Navanakorn & Ramindra

Ford Dealers

Samutprakarn & Ladprao

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SLIDE 12

OEM Customers

12

Isuzu 40%

AAT* 15% Nissan 7%

FORD 4% GKN 4% AAM 4% TOYOTA 3%

Others- Parts 23%

2017 Top OEM Customer Profile

*Auto Alliance (Thailand) Co., Ltd – a JV between Ford and Mazda.

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Our Partners

13

Technical Partners

Joint Ventures

Strategic Partner

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Thailand Automotive Industry

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SLIDE 15

Thailand Car Production Volume

15

312 271 254 266 276 264 302 288 188 207 219 191 200 192 214 213

507 487 483 468 486 465 527 511

  • 100

200 300 400 500 600

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Pick-Up/PPV Passenger Others Domestic Sales Export Sales

1,103 1,130 812 827

1,944 1,989 2016 2017

Total Car Production by Quarter

Jan-Dec Car Production Total car production volume in 2017 grew by 2.3% year-on-year to 1,988,823 units. Growth in domestic market was partly offset with export volume declines.

‘000 Units

Source: The Federation of Thai Industry (Automotive Industry)

+2.3% yoy

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SLIDE 16

394 424 280 346

95 101

769 872 2016 2017

Domestic Car Sales Volume

16

Domestic Car Sales by Quarter

Jan-Dec Domestic Sales

+13.4% yoy

99 93 90 111 107 94 102 121 58 71 75 76 80 81 83 102

24 23 23 25 23 24 25 28

182 187 188 212 210 199 211 251

  • 100

200 300

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1-Ton Pick-Up/PPV Passenger cars Other vehicles

‘000 Units

Domestic sales grew year-on-year by 13.4%, driven mainly by the recovering economy, increased spending, as well as introduction of new models.

Source: The Federation of Thai Industry (Automotive Industry)

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Domestic Car Sales by Brand

17 50 100 150 200 250 Toyota Isuzu Honda Mitsubishi Nissan Ford Mazda Suzuki Chevrolet Benz Hyundai

Unit: Thousands

2016 2017

Domestic Car Sales by Brand

  • 2.0%

+12% +19% +26% +40% +37% +21% +9% +26% +21% +30% 2017 1 2 3 4 5 6 7 8 9 10 14

2016 1 2 3 4 5 7 6 8 9 10 14

Source: Toyota

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Export Volume

18

Export Volume by Quarter

Jan-Dec Export Volume

1,189 1,140 2016 2017 308 287 306 288 284 252 314 290

  • 100

200 300 400

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Export Volume

  • 4.1%

yoy

Export sales volume dropped by 4.1% yoy, due to weak demand in major export markets.

Source: The Federation of Thai Industry (Automotive Industry)

‘000 Units

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SLIDE 19

Malaysia Total Industry Volume

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SLIDE 20

Financial Performance

January – December 2017

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Financial Highlights

21

  • Solid revenue growth, driven by increased sales in

line with industry growth, interest income from SGAH and gains on sale of equity investments in SG.

  • Gross profit improved driven by improved efficiency

and cost reduction measures.

  • SG&A expenses increased due to unrealized FX loss

and expenses related to SGAH Investment.

  • Higher share of profit from associates, mainly from

Hyundai, Able Sanoh, and SGAH.

  • Net profit significantly improved, driven by

improved efficiency, increased earnings and SGAH

  • contribution. Net profit margin improved yoy, from

3.8% to 7.1% of sales, hence improving ROE and ROA.

FY 2017 Results

In Million Baht

2016 2017 Revenues

Growth%

15,139

+1.0%

16,642

+9.9%

Gross Profit

GP Margin (%)

875

5.9%

998

6.3%

SG&A 780 928 Associate 225 488 Interest & Tax 158 180 Net Profit

NP Margin (%)

570

3.8%

1,182

7.1%

ROE (%) 9.3% 17.6% ROA (%) 5.0% 9.2% D/E (x) 0.40 0.69

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SLIDE 22

15,139 16,642

2016 2017

Jan-Dec Revenues

AAPICO Group : Total Revenues

22 3,910 3,681 3,619 3,929 3,946 3,903 4,284 4,509

  • 1,000

2,000 3,000 4,000 5,000 6,000 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Total Revenues by quarter

Auto parts Car dealers Non-op income

  • FY2017 Revenue grew 9.9% yoy, driven by growth in both auto parts

and dealerships, in line with industry growth.

  • Non-operating income in 2017 included THB160 gain from sale of

equity investments in Singapore and THB191 million of interest from loan to SGAH.

THB million

+9.9% yoy

Auto parts 61% Car dealers 37% Non-op income 2%

2017

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SLIDE 23

Auto Parts : Sales & EBIT

23 5.5% 5.0% 3.7% 2.7% 8.3% 4.9% 3.5% 5.6%

  • 1,000

2,000 3,000 4,000 5,000 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Sales and EBIT by quarter

Thailand China EBIT% 9,313 9,699 4.3% 5.6%

2016 2017

Jan-Dec Sales & EBIT

  • FY2017 Sales grew 4.1% yoy, driven by growth in China and Thailand,

in line with industry growth. EBIT margin improved from 4.3% to 5.6%

  • f sales, despite the impact from unrealized FX loss related to loan to

SGAH and one-off expenses related to new projects.

THB million

+4.1% yoy

TH 93% CN 7%

2017

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Car Dealers : Sales & EBIT

24 2.3% 2.2% 1.8% 1.9% 1.3% 1.3% 1.2% 1.3%

  • 1,000

2,000 3,000 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Sales and EBIT by quarter

Thailand Malaysia EBIT% 5,386 6,068 2.0% 1.3%

2016 2017

Jan-Dec Sales & EBIT

  • FY2017 Sales growth was driven mainly by strong car sales in Malaysia

and higher sales in Thailand, driven by increased domestic demands. EBIT margin dropped from 2.0% to 1.3% of sales, due to high competition in domestic market.

THB million

12.7% yoy TH 34% MY 66%

2017

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SLIDE 25

AAPICO Group : EBITDA improved yoy

25 347 321 286 272 321 451 339 396

  • 200

400 600 800 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: in Million Baht

EBIT Depreciation 1,226 1,507

2016 2017

EBIT Depreciation 3.9% 2.7% 2.4% 3.9% 7.5% 4.3% 5.5% 8.7% 7.9% 6.9% 8.1% 11.6% 7.9% 8.8% 0% 5% 10% 15%

2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: as % of revenue

EBIT% EBITDA% 3.3% 5.3% 8.1% 9.1%

2016 2017

EBIT% EBITDA% 22.9% yoy

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Net Profit: Significant improvement

26 156 133 132 149 228 323 248 383

  • 100

200 300 400 500 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: in Million Baht

Profit from operations Associate income 570 1,182

2016 2017

Operations Associate 4.0% 3.6% 3.7% 3.8% 5.8% 8.3% 5.8% 8.5%

0% 5% 10% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: as % of revenue

Net Profit % 3.8% 7.1%

2016 2017

Net Profit % 107% yoy

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Profitability continually increased

27 5.8% 4.6% 4.9% 5.8% 6.6% 8.1% 8.4% 9.3% 10.2% 12.9% 14.7% 17.6%

0% 10% 20% 30% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: in percentage

ROE (In the Quarter) ROE (Seasonally adjusted)

R O E R O A

2.7% 2.2% 2.4% 2.9% 3.3% 4.1% 4.4% 5.0% 5.5% 6.3% 7.3% 9.1%

0% 5% 10% 15% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: in percentage

ROA (In the Quarter) ROA (Seasonally adjusted)

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Ability to service debt improved

28 2.8 2.5 2.7 3.1 3.6 4.5 4.8 5.6 6.4 8.1 8.4 9.2

0.0 4.0 8.0 12.0 16.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: times

Interest Coverage Ratio (In the Quarter) Interest Coverage Ratio (Seasonally adjusted)

I C R Debt / EBITDA

3.4 3.6 3.2 3.1 2.8 2.6 2.5 2.4 2.2 3.2 2.9 2.5

0.0 2.0 4.0 6.0 8.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Unit: times

Debt to EBITDA (In the Quarter) Debt to EBITDA (Seasonally adjusted)

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Net gearing in line with target

29

  • Net interest-bearing debt to equity ratio as of Dec 2017 was

0.69x, in line with the Company’s target of less than 1.00x.

  • Total liabilities net cash (Net debt) to equity ratio as end of Dec

2017 was 0.99x, which was also below the financial covenant target of less than 2.00x.

ST Loan 10% CPLTD 33% LT Loan 45% LT Bond 12%

Interest-bearing Debt

Interest-bearing debts as

  • f Dec 2017 was THB 4.9

billion, of which mainly related to SGAH investment.

1.07 0.85 0.67 0.55 0.40 0.36 0.81 0.78 0.69 1.74 1.26 1.07 0.87 0.74 0.71 1.12 1.10 0.99

0.0 0.5 1.0 1.5 2.0 0.0 2.0 4.0 6.0 8.0 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 4Q17 Unit: in Billion Baht

Debts Equity D/E (L-C)/E

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AH Share Price since Jan 5, 2016

30 29/12/2017 34.50 30/12/2016 16.00 5/1/2016 9.15 5 10 15 20 25 30 35 40 45

29/12/2017 15/12/2017 29/11/2017 15/11/2017 1/11/2017 16/10/2017 29/9/2017 15/9/2017 1/9/2017 18/8/2017 3/8/2017 19/7/2017 4/7/2017 20/6/2017 6/6/2017 23/5/2017 8/5/2017 21/4/2017 4/4/2017 21/3/2017 7/3/2017 21/2/2017 6/2/2017 23/1/2017 9/1/2017 22/12/2016 7/12/2016 22/11/2016 8/11/2016 25/10/2016 10/10/2016 26/09/2016 9/12/2016 29/08/2016 15/08/2016 29/07/2016 13/07/2016 28/06/2016 14/06/2016 31/05/2016 16/05/2016 27/04/2016 8/4/2016 24/03/2016 10/3/2016 25/2/2016 10/2/2016 27/1/2016 13/1/2016

+277%

AH Share price (in Baht)

AH Ranked No.6 among the Top 10 of the highest share price growth in 2017.

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SLIDE 31

Dividend Payment History

31 0.49 0.30 0.30 0.66 1.20** 2.3% 2.0% 2.2% 5.3% 5.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40

2013 2014 2015 2016 2017

History of Dividend Payment

Dividend per share (DPS) Dividend Yield*

Dividend Policy

The Company has set a policy to pay dividend of not less than 10% of net profit after taxes. However, the decision for dividend payment is subjected to future investment plans and

  • ther necessities as

the Company deems appropriate.

* Dividend Yield is calculated based on average share price in the period. ** Dividend per share (DPS) for 2017 is subjected to shareholders’ approval at AGM 2018.

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Strategy & Direction

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Thailand Car Industry Outlook

33

0.46 0.58 0.75 0.93 1.13 1.19 1.29 1.39 1.00 1.65 1.46 2.45 2.46 1.88 1.91 1.94 1.99

  • 0.5

1.0 1.5 2.0 2.5 3.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 …. Production Forecast Domestic Export

Unit: Million

2.3%

In the past 4 years, Thailand Car Industry showed no growth. Total car production in 2017 grew by 2.3% yoy to 1.988 million units.

Global Financial Crisis Flood First car campaign

Source: The Federation of Thai Industry (Automotive Industry)

2018 target to reach 2.0-2.1 million units.

0.6%

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Thailand and Global Car Industry

34

USA 16 Million CHINA 30 Million EUROPE 17 Million

OTHERS 20 Million

Thailand Volume 2 Million

Major OEM Brands in Thailand Global Opportunities

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Business Strategy – To be Global

35

CHINA INDIA EUROPE USA JAPAN THAILAND MALAYSIA

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Current Global Footprints

36 Detroit, USA Durango, México Coimbatore/Erode, India Rushan, China Porto, Portugal Thailand Malaysia Singapore Kunshan, China London, UK AAPICO Facilities Sakthi Facilities Other JV partners

Japan Taiwan Germany

New York, USA

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SLIDE 37

Reasonable return to shareholders Improve profitability through cost management

Finance Strategy

37

Finance management Cash flow management

4.9% 5.9% 6.3% 2.3% 3.8% 7.1%

2015 2016 2017

Profitability Trend

GP% NP%

0.97 1.70 3.66 0.30 0.66 1.20 30.9% 38.9% 32.8%

2015 2016 2017

Dividend Payment

EPS DPS % Payout

3.28 2.52 3.54 0.80 1.10 1.40

2015 2016 2017

Debt Profile

Bank Bond

Profita- bility Liquidity Equity

Maximize shareholder value

927 1,214 1,208 273 167 173

2015 2016 2017

Cash flow

Cash from operations Capex

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Attributes of AAPICO

38

1 10 9 8 7 6 5 4 3 2

The 1st Thai listed company having a global footprint to expand through strategic partnership with Sakthi, a strong Indian company with footprints in India, Portugal, USA, China and Mexico. A professionally managed company with good corporate governance and integrity. An independent and competent board to guide and provide good strategy. A strong family company in strong partnership with other strong family companies in India, Japan, Spain, Portugal, and China. Ability to combine with its global partners and make larger strategic acquisitions. Many strong global JV partners and successful operations in Thailand. The only listed company in the auto sector to issue bond with a BBB+ rating. A top Tier 1 automotive supplier in Thailand with proven record of good Quality, Cost, and Delivery. Ability to win more business when a new model is being introduced by the OEMs. A strong financial planning company.

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SLIDE 39

Basically AAPICO has stable sales volume with steady future growth.

Sample orders for current & new models

39

100 200 300 400 500 Y02 Y03 Y04 Y05 Y06 Y07 Y08 Y09 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28

Global Financial Crisis Flood First car campaign

Unit: ‘000

Previous model Current model New model

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SLIDE 40

Outlook 2018

40

11,116 4,029 631

Thailand Malaysia China

Sales by Country

(Unit : Million Baht) 2015 2016 2017 2018

9,699 6,068

Auto Parts Car Dealers

Sales by Segment

(Unit : Million Baht) 2015 2016 2017 2018

Improvements are expected in all core pillars of our businesses.

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