ADB Opportunity Day FY2018 Performance February 27, 2019 Content - - PowerPoint PPT Presentation

ADB Opportunity Day

FY2018 Performance February 27, 2019

Company Overview Overall Performance of ADB for year 2018 Business Goal in 2019 and Our Strategic Plans

2 3 1 Content

Project Update

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Company Overview

APPLIED DB Public Company Limited (ADB) was established since 2005, from the joint venture

between D.B. Chemical Co., Ltd. (1983) and Applied Chemical Industry Co., Ltd. (1985). In 2017, The Company has listed on Market for Alternative Investment (mai).

Company Overview

Adhesive & Sealant Plastic Compound

• ADB Adhesives are specially

manufactured to meet international standards for industrial use and household use.

• We sell under our house brand and OEM

for customers well-known brand names.

*Products manufactured by the Company under OEM brands cannot be publicly disclosed due to non-disclosure agreements and confidentiality

• ADB Sealant is currently repackaged

from bulk package and resell in smaller package.

• Future project supports the expansion
• f adhesive & sealant product line

corresponding to increasing demand and profitability. Our product line includes plastic compounds, professional adhesives, silicone sealants, and DIY products for household end-users.

• ADB is one of the leading manufacturer
• f plastic compound especially for

wire&cable industry.

• Wire & Cable PVC compound
• General Grade PVC
• Medical PVC Compound
• Polypropylene split yarn (PPY)

ADB

India Pakistan Bangladesh Nepal Myanm ar Thailand Laos Cambodia Vietnam Indonesia Malaysia Philippines Australia Ethiopia Kenya Egypt Yemen UAE Sri Lanka 6

Our main customers are from the industrial sectors, located in ASEAN, Middle East, Africa, Europe and South America that use our products in their production process such as wire and cable industry, construction industry, shoe and leather industry, furniture industry and automotive industry.

Our Customer Expansion of Sealant Business

Potential Competitive Market

Existing customers Existing customers with potential expansion

We have officially opened the 4th factory on November 9, 2018. This new factory will expand the production capacity of sealant products for more than 500 tons per month, ADB has partly previously only re-packaged and sold to customer, we intend to become the silicone bulk provider to domestic and international customer.

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Overall Performance of ADB FY 2018

Adhesive & Sealant sales 705 MB (Million Baht). equivalent to 49.61% to total sales Plastic Compound Sales 716 MB (Million Baht). equivalent to 50.39% to total sales

Financial Performance: FY2018 Sales Revenue

Plastic Compound 50.39% Adhesive and Sealant 49.61%

Total Sale of FY2018

1,421 MB

Adhesive & Sealant Plastic Compound

Financial performance for FY 2018

712 726 693 716 722 686 679 706 200 400 600 800 1000 1200 1400 1600

2015 2016 2017 2018

Plastic Compound Adhesive and Sealant

(Unit: million Baht)

1,434 1,412

Revenue structure

The revenue in 2018 was increased as the growth of SIL products and DIY products sold to oversea markets; while the compound has been slow down during the ending of Q4 due to delay of goverment bidding project. 1,372 1,421

Financial performance for FY 2018 (Cont.)

Revenue structure (domestic / international) 969 991 972 1,012 465 421 400 409

• 500

1,000 1,500 2,000 2015 2016 2017 2018

Domestic Export

68% 32% 68% 32% 70% 30%

1,434 1,412 1,421

(Unit: million Baht) In 2018, the growth of export was led by the higher SILICONE followed by Adhesive and DIY to oversea customers compared to compensate the slowdown of Compound Oversea Market. 29% 71%

1,372

525 544 516 507 186 179 177 208 100 200 300 400 500 600 700 800

2015 2016 2017 2018

PVC GPVC

74% 26% 75% 25% 25% 75% 71%

29%

712 724 716

Revenue structure - Plastic compound

(Unit: million Baht)

The increase in sales of Plastic Compound in 2018 for THB 23 million or +3% leading by growing demand of both General Grade PVC including new products of Medical PVC and

• ther types of Compound sold to

SHOWA

Financial performance for year FY2018 (Cont.)

693

345 305 293 272 378 381 387 434 100 200 300 400 500 600 700 800 2015 2016 2017 2018

Adhesive SIL & DIY

48% 44% 43% 53% 56% 56%

723 686 680 706

Revenue structure - Adhesive & Sealant

(Unit: million Baht)

• Despite the slowdown of fashion

segment, lower demand of shoes adhesive, ADB gains higher market shares on SIL and DIY , accounted for 61% of Adhesive & Sealant BU

• From the sales of THB 706

million, Adhesives contributes the highest with THB 271 million, followed by Silicone for THB 226 million, and DIY with THB 180 million and trading with THB 27 million

Financial performance for year FY2018 (Cont.)

39% 61%

260 286 191 194 18% 20% 14% 14%

0% 4% 8% 12% 16% 20%

50 100 150 200 250 300 350

2015 2016 2017 2018

Gross Profit Gross Profit Margin

The significant drop of gross margin in FY2018 is mainly due to:

• Lower sales from Industrial Adhesives (Slowdown in Shoe industry) & distributor channel due to price

competition

• Silicone sealant material price has been driven by the major material providers
• The increase in pricing competition in Compound business led the lower GP

Gross profit & gross profit margin

(Unit: million Baht)

Financial performance for year FY2018 (Cont.)

17%

99 98 67 79 14% 14% 10% 11% 0% 5% 10% 15% 20% 0.00 20.00 40.00 60.00 80.00 100.00 120.00 2015 2016 2017 2018 Gross Profit Gross Margin

Gross Profit Margin of Plastic compound business was turnaround in 2018 due to

• Growing demand of General Grade PVC to our local partners (Showa Group)
• Profit Margin of Soft graded PVC during 1st Half of 2018 but slow down in 2nd Half due to pricing competition

and government bidding projects

Gross profit & gross profit margin - Plastic compound

(Unit: million Baht)

Financial performance for year FY2018 (Cont.)

32

12%

Gross profit & gross profit margin - Adhesive & Sealant

• The gross profit margin for adhesive & sealant is lower in FY2018 compared to last year due to the volatile

raw materials for adhesive & sealant products, as well as pricing competition from both domestic and oversea markets (Unit: million Baht)

Financial performance for year FY2018 (Cont.)

22%

160 188 123 114 22% 27% 18% 16% 0% 5% 10% 15% 20% 25% 30% 20 40 60 80 100 120 140 160 180 200

2015 2016 2017 2018

Gross Profit Gross Margin

34 76 29 13 2.4% 5.4% 2.1% 0.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10 20 30 40 50 60 70 80

2015 2016 2017 2018

Net Profit Net Profit Margin

Net profit & net profit margin

• The net profit margin for FY 2018 declined from 2017 performance due to the decline of margins in Adhesive and

Sealant products as raw material price fluctuation. (Unit: million Baht)

Financial performance for year FY2018 (Cont.)

2.7%

Assets

The increase in asset size is contributed by

• The significant increase in PPE in FY2018 mainly results of the increasing in machine and equipment and new

factory expansion of Sealant project

• An increase in AR of some oversea customers due to oversea customers’ cycle

365 375 316 328 213 267 319 305 292 355 448 535 78 76 125 85

200 400 600 800 1000 1200 1400

2015 2016 2017 2018

A/R Inventory PPE Others

948 1,072 1,208 1,253

Financial performance for year FY2018 (Cont.)

210 239 212 202 330 416 277 359 135 120 134 49

200 400 600 800 1000

2015 2016 2017 2018

A/P ST Loan Others 667

(Unit: million Baht)

675 775 623

Liabilities

As at December 31, 2018, the Company had total liabilities of THB 666.86 million, the major liabilities are Short-term Loans, which is accounted for 53.8% of total liabilities

Financial performance for year FY2018 (Cont.)

210 210 300 300 61 85 83 84 100 200 300 400 500 600 700

2015 2016 2017 2018

Paid-up capital R/E Share premium

585

586 273 297

(Unit: million Baht)

202

Shareholder’s equity

Shareholders’ Equity of ADB in 2018 was stable from 2017, as the profit during the year is 13.0MB was attributed to the dividend paid during the year for 12.0MB in 2018

Financial performance for year FY2018 (Cont.)

202

Debt to equity

After IPO proceeds and the partial debt repayment, the Debt-to-Equity ratio decreased to 1.14 at the end of 2018 and slightly increased from 2017

2.47 2.60 1.06

1.14

• 0.50

1.00 1.50 2.00 2.50 3.00

2015 2016 2017 2018

D/E

D/E

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Business Goal in 2019 And Our Strategic Plans

Corporate Development Plan and Direction

Market Development * Expend markets for existing

products Geographic expansion Target new segment

Diversification

*New product + New Market Related Business Non-related Business Joint Venture, Strategy Alliance, M&A

Market Penetration

* Increasing market share * Increase product usage Increase frequency of use Increase quantity used New application

Product Development

*Product improvement * Product –line extension New product for the same market

Product/ Market Matrix

Existing Product New Product Existing Market New Market

Growth Strategies

Corporate Development Plan and Direction

Market Development

Diversification

Market Penetration Product Development

Product/Market Matrix

Growth Strategies: Plastic Compound

Plastic Compound Business

Corporate Development Plan and Direction

Market Penetration: Commodity product, competitive prices Market development: Gain new customers in oversea Product development: OEM in medical grade market - Showa

Growth Strategies: Plastic Compound

Plastic Compound Business

Corporate Development Plan and Direction

Market Development

Diversification

Market Penetration Product Development

Product/Market Matrix

Adhesive & Sealant Business

Growth Strategies: Adhesive

Corporate Development Plan and Direction Market Penetration: competitive prices, intensive promotions Market development: Attending exhibitions, expending customer base, extending OEM customer product portfolio Product development: New Solvent Base Product – O-MCR New products – Lunching MS sealant/adhesive and solvent free Super Nail

Growth Strategies: Adhesive

Adhesive & Sealant Business

Corporate Development Plan and Direction

Market Development

Diversification

Market Penetration Product Developmen t

Product/Market Matrix

Sealant Bulk Material Business

Growth Strategies: Sealant Bulk Material Business

Growth Strategies: Sealant Bulk Material Business

Corporate Development Plan and Direction

Diversification

Vertical integration

Moving upward – becoming bulk material supplier

Polymer maker Compounder Re-packer Distributor/Retailer End user

Upper Stream Lower Stream

Sealant Bulk Material Business

Growth Strategies: Sealant Bulk Material Business

Corporate Development Plan and Direction

Target product segment:

Silicone sealant Acrylic sealant MS Polymer Sealant Constructing adhesive (Super Nail)

Target customer:

Sealant re-packers and sealant distributors who plan to become re-packer. Region – SEA, AUS & NZ, South Asia, Middle East, Africa.

Sealant Bulk Material Business

Corporate Development Plan and Direction

Sealant Bulk material business – Potential Customers

SEA 24+

South Asia 21+

AUS & NZ

2+ Middle East 12+ Africa 8+

Growth Strategies: Sealant Bulk Material Business

Corporate Development Plan and Direction

Sealant Bulk material business

Growth Strategies: Sealant Bulk Material Business

Corporate Development Plan and Direction

Low High

Level of engagement

AUS & NZ

• No. of

customer contacted: 0 Phase: None SEA

• No. of

customer contacted: 5 Phase: 1 South Asia

• No. of

customer contacted: 3 Phase: 1 Middle East

• No. of

customer contacted: 1 Phase: 3 Africa

• No. of

customer contacted: 2 Phase: 2

Sealant Bulk Material Business

Corporate Development Plan and Direction

ADB Curves in the next 3 years

Sealant Bulk Medical PVC O-MCR

Growth Strategic Plan

Corporate Development Plan and Direction

ADB S-Curves in the next 3 years

Sealant Bulk

Growth Strategic Plan

Corporate Development Plan and Direction

ADB S-Curves in the next 3 years

Medical PVC

Growth Strategic Plan

Corporate Development Plan and Direction

ADB S-Curves in the next 3 years

Growth Strategic Plan

Corporate Development Plan and Direction

ADB S-Curves in the next 3 years

Growth Strategic Plan

Effective cost management strategies has driven growth and increased profit

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Boosting PVC compound Capacity by upgrading machine Searching for new market

• pportunities, expand distribution

channel and customer base

Growth Strategic Plan

Corporate Development Plan and Direction

New product meeting new demand from customers

R&D

New project boosting capacity

Production

Sales & Marketing

Expanding construction related business

Finance

Sound and solid Capital foundation

Corporate Development Plan and Direction

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Project Update

Plastic Compound Product Expansion

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Our Projects

We plan to expand our PVC product for

applying in the field of electrical and electronic equipment. We expect that the demand of PVC for electronic market will continue to play a critical roles in the production of electronic component.

We continually develop plastic compound

for automotive parts, vehicle wiring and accessories for automotive application to serve a growing trend of automotive industry both in Thailand and overseas.

PVC Compound for Electrical and Electronic Products

Plastic Compound for Automotive Parts

ADB strictly complies with the EU’s Restriction of Hazardous Substances (RoHS) directive to avoid using restricted phathalate plasticizer.

Adhesive and Sealant Product Development

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Our Projects

 Research and develop

adhesive for specific application such as furniture and automotives.

Expand business

to be semi-product provider of Graft adhesive(O-MCR) to serve adhesive manufacturer.

Modify Formulation

Of PU adhesive in order to offer competitive price in shoes industrial both in local and international market.

 Sealant green products

We focus

• n

developing green products or environmentally friendly products with green building standard.

APPLIED DB PUBLIC COMPANY LIMITED

APPLIED DB PUBLIC COMPANY LIMITED

ADB Investor Relations Section E-mail: adb_ir@adb.co.th Tel: 02-409-4040 Ext.1403 Website: www.adb.co.th

THANK YOU

Disclaimer

• 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 Applied DB Public Company Limited (“ADB” and shares in ADB, “shares”) 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.

• This presentation may include information which is forward-looking in nature. Forward-looking information involve known

and unknown risks, uncertainties and other factors which may impact on the actual outcomes, including economic conditions in the markets in which ADB operates and general achievement of ADB business forecasts, which will cause the actual results, performance or achievements of ADB to differ, perhaps materially, from the results, performance or achievements expressed or implied in this presentation.

• This presentation has been prepared by the ADB. The information in this presentation has not been independently
• verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the

fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the ADB or any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.

• This presentation is made, furnished and distributed for information purposes only. No part of this presentation shall be

relied upon directly or indirectly for any investment decision-making or for any other purposes.

• This presentation and all other information, materials or documents provided in connection therewith, shall not, either in

whole or in part, be reproduced, redistributed or made available to any other person, save in strict compliance with all applicable laws.