Analyst Conference Q2/19 Friday, July 26, 2019 Agenda P.2 I. - - PowerPoint PPT Presentation

Analyst Conference Q2/19

Friday, July 26, 2019

P.2

Agenda

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

P.3

Q2/19 Revenue from Sales

Revenue decreased q-o-q from all businesses, and dropped y-o-y from mainly lower chemicals price.

• 9% y-o-y
• 3% q-o-q

118,250 120,447 122,518 117,223 112,379 109,094

30,000 60,000 90,000 120,000 150,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 MB

P.4

Q2/19 EBITDA

EBITDA dropped y-o-y on lower chemicals margins, while seasonal dividend helped q-o-q.

Note: EBITDA = EBITDA from Operations + Dividend from Associates Dividend from Associates

EBITDA

EBITDA from Operations 21,014 20,521 17,671 16,246 18,229 14,456 1,289 5,925 140 3,835 1,326 5,349

5,000 10,000 15,000 20,000 25,000 30,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 MB

22,303

• 25% y-o-y

+1% q-o-q

26,446 17,811 20,081 19,555

• 30% y-o-y
• 21% q-o-q

19,805

P.5

Q2/19 Equity Income

Equity income declined -25% y-o-y, mainly from chemicals segments. .

1,030 1,020 812 1,002 1,398 1,059 2,704 3,183 3,141 2,155 2,206 2,102

1,000 2,000 3,000 4,000 5,000 6,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Chemicals Non-Chemicals MB

3,734 4,203 3,953 3,157 3,604 3,161

• 25% y-o-y
• 12% q-o-q

P.6

5,000 10,000 15,000 20,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19

Q2/19 Profit for the Period

Earnings of 9,079 MB is without the severance pay adjustment of 2,035 MB.

Note: *Without Employee benefit expense from the amended severance pay of Labor Law ** Chemicals Business (Sub + Asso.) *** CBM 1,320 MB and 350 MB from others. (CBM = 820 MB from Indonesian operations, and 500 MB from Precast Thailand)

Key Items 220 380 (830) (1,410) 430 (3,185)

1) severance pay adjustment (Labor Law)

• (2,035)

2) Inventory Gain (Loss)** 220 380 110 (2,200) 430 (1,150) 3) Sale of Investment and assets

• 730

790

• 4) Impairments
• (1,670)***
• MB

12,406 12,402

• 43% y-o-y
• 40% q-o-q

9,473

10,468 11,662

7,044

11,143

(w/o impairments)

9,079

(w/o severance pay adjustment)

• 27% y-o-y*
• 22% q-o-q*

2,035 1,670

P.7

Agenda

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

P.8

50,000 100,000 150,000 200,000 250,000

H1/18 H1/19

MB

221,473 238,697

Revenue from Sales

41,535 32,685 7,214 6,675 20,000 40,000 60,000

H1/18 H1/19

Dividend EBITDA from Operations

MB

EBITDA 39,360 48,749 EBITDA 17% 15% Margin:

EBITDA

16,871 11,941 7,937 6,765 10,000 20,000 30,000 40,000

H1/18 H1/19

MB

EPS: 20.7 15.6 17.3*

Profit for the Period

24,808

2,035

Sub. Eq Inc. Eq Inc. Sub.

H1/19 Financials

Revenue, EBITDA, and Profit for the period dropped -7% y-o-y, -19% y-o-y, and -16% y-o-y, respectively

• n lower performance from the chemicals business, following trade war concerns and stronger Thai baht.

20,741*

Note: *Without Employee benefit expense from the amended severance pay of Labor Law

P.9

H1/19 Segmented Revenue from Sales

Chemicals and non-Chemicals sales were 42% and 58%, respectively. H1/19 221,473 MB (-7% y-o-y)

42% 19% 39% Cement- Building Materials Packaging Chemicals

91,119 109,920 43,773 94,238 92,235 41,529 20,000 40,000 60,000 80,000 100,000 120,000 MB

H1/18 H1/19 Cement – Building Materials* H1/18 H1/19 Chemicals* H1/18 H1/19 Packaging*

H1/18 238,697 MB

Cement- Building Materials 36% Packaging 18% Chemicals 46% Note: *figures are before elimination of intersegment transactions.

P.10

H1/19 Segmented Profit for the Period

Chemicals was 51% of earnings, down from 65% in H1/18.

4,161 16,266 3,110 1,362 4,877 10,530 3,056 2,351 5,000 10,000 15,000 20,000 MB

H1/19* 20,741 MB (-16% y-o-y)

30% 21% 11% 15% 23% Chemicals Equity Income Chemicals Subsidiaries Cement- Building Materials Packaging Sub. 10,379 Sub. 6,178 Eq Inc. 4,352 Eq Inc. 5,887 Other H1/18 H1/19 Cement - Building Materials** H1/18 H1/19* Chemicals** H1/18 H1/19 Packaging** H1/18 H1/19 Other**

H1/18 24,808 MB

41% 24% 6% 12% 17% Chemicals Equity Income Chemicals Subsidiaries Cement- Building Materials Packaging Other

(51%) (65%)

Note: *Without Employee benefit expense from the amended severance pay of Labor Protection Act **figures are before elimination of intersegment transactions.

P.11

H1/19 Segments: Export Sales and ASEAN Operations

ASEAN exports and operations were 25% of total sales.

58% 60% 24% 25% 18% 15% H1/18 H1/19

Export as % of Sales 27% 24%

Sales Segments (by markets)

Thailand (domestic)

ASEAN* (ex-Thailand)

Others

Export Segments (by markets)

221,473 MB 238,697 MB

ASEAN (ex- Thailand) 37% ASEAN (ex-Thailand) 40%

China/HK 24% China/HK 21%

• S. Asia

13%

• S. Asia

13%

• N. Asia

11%

• N. Asia

11%

Others 15% Others 15%

H1/18 H1/19

64,993 MB 53,882 MB

Note: *ASEAN = ASEAN Operations + Export to ASEAN

P.12

H1/19 HVA’s Revenue from Sales

7,783 38,837 54,865 59,161 85,768 117,992 136,762 149,924 169,071 161,851 160,910 175,541 184,965 92,628

50,000 100,000 150,000 200,000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1/19

HVA as a % of 4% 17% 19% 25% 29% 32% 34% 35% 35% 37% 38% 39% 39% 42% Revenue from Sales

MB

(+2% y-o-y)

P.13

Agenda

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

P.14

H1/19 EBITDA on Assets, and EBITDA Margin

Note: EBITDA on Assets = EBITDA / Consolidated Assets EBITDA margin = EBITDA from Operations / Consolidated Sales

EBITDA Margin (%):

14 18 14 11 10 13 13 18 21 19 16 15

13.6 14.9 13.0 12.0 12.0 14.0 14.0 16.2 17.8 17.8 14.7 11.5*

10 12 14 16 18 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1/19

12.0

Percent (%)

15.2 12.6 EBITDA on assets (excluding projects under construction and Fajar’s assets) EBITDA on assets (excluding Fajar’s assets) EBITDA on assets *Note:

• Q2/19 consolidation of Fajar’s assets.
• Fajar’s EBITDA will be consolidated in Q3/19

P.15

H1/19 Net Debt

Leverage rose to 2.0 times (excluding Fajar’s net debt).

120.5 122.0 83.6 112.1 137.6 157.8 164.4 162.5 146.9 145.0 147.5 174.3 3.1 2.6 1.8 2.4 3.0 2.6 2.5 2.0 1.5 1.4 1.7 2.5*

1 2 3 4 5 6 20 40 60 80 100 120 140 160 180

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1/19

Billion Baht

(Net Debt)

Times (x)

(Leverage)

Net Debt to Equity = 0.5

1.6 1.5 2.0 Net debt to EBITDA Net debt to EBITDA (excluding Fajar’s net debt) Net debt to EBITDA (excluding projects under construction and Fajar’s net debt) *Note:

• Q2/19 consolidation of Fajar’s net debt.
• Fajar’s EBITDA will be consolidated in Q3/19

P.16

H1/19 CAPEX & Investments

Registered 39,768 MB in H1/19, as investments were 53% of the total.

27.2 42.4 34.5 18.4 32.0 47.0 50.0 45.0 45.2 34.8 46.1 45.8 39.8

10 20 30 40 50 60 70 80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1/19

Billion Baht

28% 10% 60% 2%

Others Cement-Building Materials Packaging Chemicals

• CAPEX includes debottlenecking, expansion projects, and major turnaround.
• Investments are acquisitions and purchase of shares (EV basis).

53% 28% 13% 5% 1%

Efficiency Projects Others Greenfield & Expansion Maintenance

H1/19

SBU: Types:

Investment

P.17

H1/19 Interest and Finance Costs

Amounted to a total of 3,202 MB, while interest cost stood at 3.1%.

5,273 6,089 5,649 4,670 6,048 6,321 8,193 7,266 9,076 7,573 7,112 6,836 3,202 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1/19

MB

P.18

Financial Highlights & Outlook

Highlights:

• H1/19 dividend of 7.0 Bt/sh (8,400 MB), and payable on Aug 23/19 (XD date on

Aug 8/19).

• Q2/19 one-time provisions of 2,035 MB to net profit, as a result of the severance

pay adjustment (Labour Law).

• Cash & cash under management of 42,573 MB at the end of Q2/19, following the

closure of the Fajar acquisition at the end of June 2019. Outlook:

• FY2019 CAPEX & Investments of approx. +70,000 MB, which includes the recent

acquisition of Fajar in Indonesia, and ongoing construction of the LSP chemicals project in Vietnam,

• Fajar’s earnings will be consolidated into SCG Packaging’s financials beginning

Q3/19, following the Q2/19 consolidation of the balance sheet.

P.19

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

Agenda

P.20

Q2/19 Market situation

ASEAN (ex-Thailand) markets in Q2/19:

• The demand of grey cement were generally positive.
• Continued high competition across ASEAN, less in Cambodia.

Thailand market in Q2/19:

• Grey cement demand increased +3% y-o-y from the continuous growth of megaprojects,

while the average prices increased y-o-y to be within the range of 1,750 – 1,800 Baht/ton.

• Ready-mixed concrete (RMC) demand decreased -4% y-o-y, the average prices remained

in the range of 1,650–1,700 Baht per cubic meter.

• Demand of housing products (roof, ceiling & wall) and ceramic tiles were flat y-o-y.

P.21

ASEAN market insight

Grey Cement Demand Growth ( y-o-y )

Q1/18 Q2/18 Q3/18 Q4/18 2018 Q1/19 Q2/19 H1/19

Cambodia

+14% +15% +37% +22% +22% +39% +33% +36%

Indonesia

+6% +1% +7% +4% +5%

• 1%
• 5%
• 3%

Myanmar

+1%

• 2%
• 6%
• 8%
• 3%

+2% +5% +3%

Vietnam

+5% +1% +3% +5% +4% +1% +7%* +4%*

Thailand

0% +2% +7% +4% +3% +2% +3% +3% Note: Indonesia’s grey cement demand is based on the data from Indonesian cement association (ASI).

* Estimated demand growth.

P.22

65% 62% 63% 63% 66% 64% 28% 30% 29% 29% 27% 30% 7% 8% 8% 8% 7% 6%

10,000 20,000 30,000 40,000 50,000

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19

Revenue from Sales

Q2/19 revenue increased y-o-y from sales in Thailand. Others ASEAN Thailand MB

Note: Thailand : Revenue from sales in Thailand market

ASEAN : Revenue from sales in ASEAN market (ex Thailand) Others : Revenue from sales in Non-ASEAN market

46,461 44,658 46,105 +3% y-o-y

• 5% q-o-q

45,728 48,310

64% 65% 29% 28% 7% 7% H1/18 H1/19

Revenue H1/2019 (+3% y-o-y)

91,119 94,238 45,928

P.23

6,458 5,367 4,095 5,324 7,099 5,591 2,484 1,677 265 1,558 3,040

873

2,000 4,000 6,000 8,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19

EBITDA and Profit for the Period

Q2/19 EBITDA and profit increased y-o-y from higher sales in Thailand.

EBITDA Margin* Total 13% 12% 9% 11% 14% 12% ASEAN and Others 11% 12% 7% 12% 11% 12% Thailand only 14% 12% 10% 11% 16% 12%

Cement & Construction Sol.**

22% 20% 15% 16% 26% 21%

EBITDA Portion ASEAN and Others 29% 38% 31% 39% 25% 37% MB

Note: *EBITDA margin = EBITDA from Operations, excludes dividend from associates. **Cement and Construction Solution: Grey cement, RMC, and Others (Mortar, White cement, Refractory) ***Without Employee benefit expense from the amended severance pay of Labor Law

EBITDA Q2/19

+4% y-o-y

• 21% q-o-q

Profit Q2/19***

+10% y-o-y

• 40% q-o-q

Profit H1/19 +17% y-o-y*** EBITDA H1/19 +7% y-o-y H1/18 H1/19

11,825 12,690

H1/18 H1/19

4,161 3,913

1,837***

4,877***

P.24

ASEAN and others sales segmentation

Q2/19 sales growth decreased y-o-y caused by weak demand in Indonesia.

Note: ASEAN = ASEAN Operations, exports from Thailand to ASEAN, and Trading business in ASEAN market

Others = Exports from Thailand to Non-ASEAN, and Trading business in Non-ASEAN market

• 3% y-o-y

+2% q-o-q 56% 56% 59% 59% 56% 59% 24% 23% 20% 20% 23% 24% 20% 21% 21% 21% 21% 17% 3,000 6,000 9,000 12,000 15,000 18,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 MB 16,228 17,049 17,075 16,789 Others Exports to ASEAN ASEAN Operations 16,174 56% 58% 24% 23% 20% 19% H1/18 H1/19

ASEAN and Others Sales H1/2019 (-2% y-o-y)

33,277 32,653

16,479

P.25 46 46 45 46 45 46

• 10

20 30 40 50 60 70 80 90 100 20 40 60 80 100 120 140 160 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19

(Baht/Sqm.) (M.Sqm.)

Sales volume & prices for all ASEAN subsidiaries

Flat y-o-y +3% q-o-q

Volume change

Ceramic Tiles (all markets)

Q2/19 selling price decreased owing to high competition.

Average Prices Sales volume

P.26

Thailand sales segmentation

Q2/19 sales in Thailand improved y-o-y from higher volume of cement sales.

47% 47% 48% 48% 46% 47% 27% 27% 25% 25% 26% 25% 26% 26% 27% 27% 28% 28% 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 MB +7% y-o-y

• 8% q-o-q

30,233

Note: Cement and Construction Solution: Grey cement, RMC, and Others (Mortar, White cement, Refractory) Housing Products and Living Solution: Roofing products, Board & Wood sub, Lightweight concrete blocks, Domestic ceramics. Distribution and Retail: Including Home improvement.

27,609 29,030 28,939

Distribution and Retail Housing Products and Living Solution Cement and Construction Solution

32,136 47% 47% 27% 26% 26% 27% H1/18 H1/19

Thailand Sales H1/2019 (+6% y-o-y)

57,842 61,585

29,449

P.27

Thailand grey cement segment

Grey cement demand growth in Q2/19 mainly driven by infrastructure projects.

Q1/18 Q2/18 Q3/18 Q4/18

2018

Q1/19 Q2/19

H1/19 Total Market* (100%) 0% +2% +7% +4% +3% +2% +3% +3% Commercial

(Approximately 15%)

• 3%

0% +5% +3% +1% +1% +1% +1% Gov’t

(Approximately 40%)

+6% +8% +12% +6% +8% +6% +7% +7% Residential

(Approximately 45%)

• 3%
• 1%

+3% +2% 0% 0% 1% 0%

Note: * Estimated volume market distribution

% Growth ( y-o-y )

P.28

Outlook

Outlook:

• ASEAN (ex-Thailand) demand for grey cement and building materials products in 2019 is

expected to see growths in selected markets.

• Thailand’s domestic demand of grey cement is forecasted to grow approximately +3% in 2019

from demand from government projects and residential in provincial areas.

• Thailand’s domestic demand of housing products and ceramic tiles are projected to be flat in 2019.

Company updates:

• FY2019 installation of 5.5 MW solar power capacity remains on track. This is in addition to the

recently approved 24.5 MW capacity, which will start-up by mid-2020.

• SCG Nichirei Logistics invested in the 2nd phase of the temperature-controlled warehouse which

increases the warehouse’s total service area to 21,890 sq.m. by 2020.

• The retail franchise format achieved the official opening of 3 stores in H1/2019.

P.29

Agenda

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

P.30

Q2/19 Q-o-Q Change Notes Crude (Brent) $68/bbl +$4/bbl (+6%) Crude price buoyed from escalating tensions in the Middle East and end of Iran’s waivers; upside was capped by concerns over U.S.-China trade disputes. Naphtha $541/ton +$22/ton (+4%) Naphtha price increased after crude accordingly. Ethylene $824/ton

• $104/ton (-11%) Market flooded by ample supply from downstream production cuts in Asia and Middle

East. Propylene $796/ton

• $43/ton (-5%) Price declined from mute demand caused by U.S.-China trade disputes.

HDPE $1,080/ton

• $13/ton (-1%) Market subdued from ongoing U.S.-China trade disputes and Ramadan holiday.

PP $1,140/ton +$10/ton (+1%) Several outages in Asia supported PP market amidst unclear U.S.-China trade disputes and Ramadan holiday. EDC $378/ton

• $33/ton (-8%) EDC price declined due to more supply coming from the U.S. and Middle East.

PVC $835/ton

• $50/ton (-6%) PVC price declined from overall subdued demand.

PVC-EDC/C2 $335/ton +$0/ton (0%) Gap sees no change. MMA-Naphtha $1,389/ton

• $224/ton (-14%)

Gap strongly squeezed from weak downstream demand supported by U.S.-China trade disputes. BD-Naphtha $463/ton

• $119/ton (-20%)

Q2/19 Market Situation

All resin products were sluggish due to U.S.-China trade disputes and Ramadan holiday.

P.31

HDPE-Naphtha Price Gap

Market subdued from ongoing U.S.-China trade disputes and Ramadan holiday.

300 600 900 1,200 1,500

Note: Prices refer to SEA regional prices

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 To Date This Week HDPE- Naphtha 677 687 670 656 798 743 683 639 573 539 484 491 Spread ($/ton) HDPE-C2 86 143 48 31 135 163 133 324 165 256 272 235 C2-Naphtha 591 544 622 625 663 581 550 315 408 283 212 256 Brent ($/bbl) 55 51 52 62 67 75 76 68 64 68 64 64 Naphtha ($/ton) 499 446 468 570 581 641 667 567 519 541 518 514

$/ton HDPE-N Naphtha Ethylene HDPE

673 716

Q2/19 HDPE-N

• 28% y-o-y
• 6% q-o-q

556 HD-N = 771 $/ton HD-N = 556 $/ton

P.32

PP-Naphtha Price Gap

Several outages in Asia supported PP market amidst unclear U.S.-China trade disputes and Ramadan holiday.

300 600 900 1,200 1,500

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 To Date This Week PP-Naphtha 661 667 682 625 690 658 623 650 611 599 566 576 Spread ($/ton) PP-C3 226 372 359 367 284 296 262 282 292 344 228 220 C3-Naphtha 435 295 323 258 406 362 360 369 320 255 338 356 Brent ($/bbl) 55 51 52 62 67 75 76 68 64 68 64 64 Naphtha ($/ton) 499 446 468 570 581 641 667 567 519 541 518 514 659

PP-N Naphtha Propylene PP

655

$/ton Q2/19 PP-N

• 9% y-o-y
• 2% q-o-q

Note: Prices refer to SEA regional prices

605 PP-N = 674 $/ton PP-N = 605 $/ton

P.33

300 600 900 1,200 1,500 1,800

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 To Date PVC- EDC/C2 421 374 429 436 453 398 370

332 335 335 435

Spread ($/ton)

PVC

Despite subdued demand, margin remained stable from lower feedstock costs.

415

Note: Prices refer to CFR ASIA

PVC EDC PVC-EDC/C2 Ethylene

388

$/ton

335

Q2/19 PVC-EDC/C2

• 16% y-o-y

flat q-o-q

P.34

300 600 900 1,200 Q2/19 Toluene-N

• 6% y-o-y

+19% q-o-q Q2/19 Benzene-N

• 67% y-o-y

+43% q-o-q

Note: Benzene prices refer to SEA regional prices, toluene prices refer to NEA regional prices

Benzene & Toluene

BZ-N: Spread picked up from more exports to the U.S. following outages of aromatic units. TL-N: Gap increased supported by stronger gasoline blending demand.

Naphtha Toluene Benzene $/ton

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 To date BZ-Naphtha 428 317 289 260 304 181 174 96 41 59 145 TL-Naphtha 200 170 160 109 137 117 122 119 92 110 127 BZ-Spread TL-Spread 324 189 160 124

P.35

500 1,000 1,500 2,000 2,500 3,000

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 To date MMA-N 1,465 1,754 1,871 1,882 1,913 2,012 2,070 1,911 1,613 1,389 1,204 BD-N 2,127 669 742 522 769 922 945 551 582 463 590

Price Gaps of Associates

MMA-N / BD-N : Gap squeezed from weak demand supported by U.S.-China trade disputes.

Note: MMA price refers to SEA regional prices BD prices refer to Asian regional prices

BD-Naphtha MMA-Naphtha

$/ton Q2/19 MMA-N

• 31% y-o-y
• 14% q-o-q

Q2/19 BD-N

• 50% y-o-y
• 20% q-o-q

P.36

Polyolefin Sales Volume

Q2/19 sales volume slightly improved q-o-q amidst uncertainty from U.S.-China trade disputes.

255,000 276,000 250,000 280,000 265,000 266,000 531,000 530,000 196,000 215,000 210,000 197,000 206,000 208,000 411,000 414,000

451,000 491,000 460,000 477,000 471,000 474,000 942,000 944,000

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 H1/18 H1/19

Ton

• 3% y-o-y

+1% q-o-q

flat

PP PE

P.37

PVC Sales Volume

Despite weak overall demand, sales volume in Q2/19 increased +5% q-o-q , due to tight supply in China from strict environmental inspection.

208,000 205,000 202,000 225,000 208,000 218,000

100,000 200,000 300,000 400,000 500,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 ASEAN operations Domestic operation 413,000 426,000 H1/18 H1/19

Note: *ASEAN Operations = Sales volume from PVC operations in Vietnam and Indonesia

Ton

34% 37% 66% 63% 41% 59% 35% 65% 35% 65% 36% 64% 36% 64% 37% 63%

+6 % y-o-y +5 % q-o-q

P.38

Revenue from Sales

Q2/19 revenue decreased -1% q-o-q and -19% y-o-y from lower product prices.

56% 51% 53% 49% 56% 53% 16% 19% 20% 21% 19% 21% 28% 30% 27% 30% 25% 26% 20,000 40,000 60,000 80,000 100,000 120,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Others ASEAN (ex-Thailand) Domestic (Thailand) 54% 54% 17% 20% 29% 26% H1/18 H2/19 MB 52,867

109,920 92,235

57,053 57,713 53,905

• 19% y-o-y
• 1% q-o-q

46,240 45,995

P.39

EBITDA

EBITDA decreased -1% q-o-q and -49% y-o-y to 8,209 MB from decline in product spreads.

21,509 11,635 5,739 4,838

H1/18 H1/19

11,002 10,507 9,689 5,476 7,267 4,368 80 5,659 129 3,575 997 3,841

5,000 10,000 15,000 20,000 25,000 30,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Dividend from Associates EBITDA from Operations

Note: *EBITDA margin excluded sale of investment.

EBITDA 21% 18% 15%* 8%* 16% 9% 20% 13% Margin MB 11,082 16,473 27,248 16,166 9,818 9,051 8,264

• 49% y-o-y
• 1% q-o-q

8,209

P.40

Profit for the Period

Earnings decreased -28% q-o-q and -46% y-o-y from lower product margins and inventory loss.

5,887 4,308

10,379 5,740

H1/18 H1/19

2,704 3,183 3,141 2,155 2,206 2,102 5,431 4,948 4,344 3,260 3,900 1,840

5,000 10,000 15,000 20,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Subsidiaries Equity Income

Note: *Without Employee benefit expense from the amended severance pay of Labor Law

MB 8,135 16,266 10,530* 8,131 7,485

NCI (2,500) (2,500) (2,100) 300 (800) 200 (5,000) (600) (Non controlling interest) Inventory 220 380 110 (2,200) 430 (1150) 600 (720) Gain (Loss)** Sale of investment and asset

• 730

790 -

• 5,415

6,106

• 46% y-o-y*
• 28% q-o-q*

4,424*

**Sub/Asso: 67% / 33%

P.41

H1/2019 Q1/19: Q2/19:

Outlook drivers

Continue soft demand with expected soft margins in mid-cycle. (+) PVC – improved demand in India post-election (+) Aromatics – limited supply in North America (+) Seasonal buying period in Q3 (-) Global economic downturn risk (-) New regional supply

• Inventory loss
• Additional severance payment
• Sharp drop in PE&PP margins (U.S.-China trade disputes)
• Thai Baht appreciated against U.S. Dollar

H2/2019

P.42

Company Update

• Long Son Petrochemicals in Vietnam (LSP) – Land development progress is on plan
• New HVA Products towards Circular Economy
• New HDPE by SMX TechnologyTM – On-going customer validation with target

brand owners & key converters; target to commercialize 2 products in this year

• CIERRA – Opening of SCG advanced material laboratory - Oxford UK, for product

prototyping in recyclable food packaging, flame retardant, and catalyst

VDO

P.43

Agenda

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

P.44

Q2/19 Market Situation

Overall demand dropped q-o-q mainly due to long holiday.

Market Segment Situation (Q-o-Q) Market situation Food & Beverage

• Demand decreased from lower production during long holiday.

Consumer

• Demand dropped due to less working day and less promotional.

Electronics and electrical appliances (E&E)

• Demand increased owing to higher production as a result of E&E producer's

reallocation production base. Country Situation (Q-o-Q) Market situation Vietnam

• Overall demand grew owing to Footwear and Food & Beverage segment.

Indonesia

• Demand dropped due to lower export of Footwear segment and long holiday

(Hari Raya) Philippines

• Overall demand decreased as a result of slow demand in Consumer

segment.

Domestic market ASEAN market

P.45

Packaging prices

Packaging paper prices decreased due to regional demand softness. AOCC prices continued to drop mainly from high supply and sluggish demand of paper and board industry.

Note: Based on published regional prices

150 300 450 600 750 $/Ton

Packaging Paper Recovered Paper (AOCC)

Jul/19

150-160 430-440

Q2

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 565 190 Q2/18 565 215 Q3/18 565 220 Q4/18 545 200 Q1/19 510 165 Q2/19 450 135

P.46

Revenue from Sales by Industry

H1/19 Total sales 41,529 MB

Packaging, 77% Others paper (Fibrous), 23%

H1/19 Packaging’s sales 32,128 MB

Note: Others industry including of Auto parts, petroleum product, construction materials, Footwear, and garment. Food and Beverage, 41% Consumer, 14% Electronics and electrical appliances (E&E), 11% Others industry, 34%

P.47

Revenue from Sales by Country

In H1/19, Vietnam, Philippines, and Indonesia sales were 16%, 4% and 2%, respectively. H1/18 Portfolio Total sales: 43,773 MB H1/19 Portfolio Total sales : 41,529 MB

Thailand, 61% Vietnam, 17% Philippines, 5% Indonesia, 3% Other in ASEAN, 4% Other, 10% Thailand, 63% Vietnam, 16% Philippines, 4% Indonesia, 2% Other in ASEAN, 4% Other, 11%

P.48

Packaging Paper, 54% Paper-based packaging, 39% Advanced materials and polymer packaging, 7%

Revenue from Sales by Product type

Packaging paper, Paper-based packaging, and Advanced materials and polymer packaging sales were 54%, 39% and 7%, respectively. H1/19 Portfolio Total sales : 41,529 MB

Packaging , 77% Others paper (Fibrous), 23%

Note: Packaging paper is external sales Advanced materials and polymer packaging including of Flexible packaging and Rigid plastic packaging

P.49

Packaging paper sales volume

Total sales volume in Q2/19 increased +3% q-o-q owing to higher export sales volume, while flat y-o-y.

Note: *Sales Volume from Philippines and Vietnam 55% 53% 53% 54% 55% 51% 18% 16% 18% 18% 18% 21% 27% 31% 29% 28% 28% 28%

643 638 642 611 616 637

100 200 300 400 500 600 700 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 ’000 tons

54% 53% 17% 19% 29% 28%

1,281 1,253

200 400 600 800 1,000 1,200 1,400 H1/18 H1/19

ASEAN Operations* Thailand Export Thailand Domestic

’000 tons

Packaging Paper Volume

• 4% y-o-y
• 4% q-o-q

Flat y-o-y +3% q-o-q

P.50

Paper-based packaging (Box) sales volume

Total sales volume in Q2/19 dropped -5% q-o-q due to soften domestic demand, and -2% y-o-y.

Note: *Sales Volume from Vietnam and Indonesia Paper-based packaging includes Corrugated container, Folding cartons, and others packaging related. 84% 82% 82% 83% 84% 84% 16% 18% 18% 17% 16% 16%

213 203 203 203 209 199

50 100 150 200 250 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 ’000 tons

83% 84% 17% 16%

416 409

50 100 150 200 250 300 350 400 450 500 H1/18 H1/19

ASEAN Operations* Thailand Domestic

’000 tons

Paper-based packaging Volume

Flat y-o-y

• 5% q-o-q
• 2% y-o-y
• 5% q-o-q

Flat

P.51

Advanced materials and polymer packaging sales volume

Total sales volume in Q2/19 increased +8% q-o-q and +9% y-o-y mainly from ASEAN operation.

Note: *Sales Volume from Vietnam Advanced materials and polymer packaging includes Flexible and Rigid packaging 56% 52% 54% 54% 54% 51% 2% 2% 3% 2% 3% 2% 42% 46% 43% 44% 43% 47%

7,864 7,864 7,805 7,981 7,913 8,556

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 ton

54% 52% 2% 2% 44% 46%

15,728 16,469 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 H1/18 H1/19

ASEAN Operation* Thailand Export Thailand Domestic

Advanced materials and polymer packaging volume

+6% y-o-y +1% q-o-q +9% y-o-y +8% q-o-q

ton

P.52

34,148 32,128 9,625 9,401

43,773 41,529

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

H1/18 H1/19

Revenue from Sales by Business

Revenue from sales in Q2/19 decreased -3% q-o-q and -6% y-o-y mainly due to demand softness in both Packaging and Others paper (Fibrous).

17,057 17,091 17,346 16,722 16,179 15,949 4,924 4,701 4,853 4,561 4,948 4,453

21,981 21,792 22,199 21,283 21,127 20,402

5,000 10,000 15,000 20,000 25,000

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Others paper (Fibrous) Packaging MB

• 6% y-o-y
• 3% q-o-q

MB 78% 78% 78% 79% 77% 78% Packaging as percent

• f total

P.53

7,332 7,253 H1/18 H1/19 3,110 2,718 H1/18 H1/19

EBITDA and Profit for the Period

EBITDA and Profit decreased -11% and -18% q-o-q, and dropped -10% and -14% y-o-y because of lower sales volume and higher maintenance cost.

3,549 3,783 3,880 3,654 3,841 3,412 1,512 1,598 1,717 1,492 1,681 1,037 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19

MB EBITDA

Profit for the period (MB) EBITDA (MB)

Profit for the period

• 10% y-o-y
• 11% q-o-q

17% 17% EBITDA Margin

• 14% y-o-y*
• 18% q-o-q*

EBITDA Margin Packaging 18% 19% 19% 18% 20% 19% All segment 16% 17% 17% 17% 18% 17%

1,375*

Note: *Without Employee benefit expense from the amended severance pay of Labor Law

3,036*

P.54

Outlook

Outlook :

• Domestic packaging demand is expected to increase supported by promotional

campaign especially Food & Beverage and Consumer segment.

• Regional packaging demand expects to grow moderately driven by higher

production of E&E segment.

• Potential seasonal price rebound of recovered paper (AOCC).

Company update :

• Following the acquisition 55% stake in PT. Fajar Surya Wisesa Tbk., a leading

Indonesian packaging paper company and is also listed on Indonesia Stock Exchanges, with valued at approximately 9.6 trillion Rupiah.This transaction is completed at the end of June and is expected to consolidate earning in Q3/19.

P.55

Agenda

• I. Consolidated Results
• Q2/19 Consolidated Results
• H1/19 Segments
• Financial Updates

II. Cement - Building Materials Business

• III. Chemicals Business
• IV. Packaging Business
• V. Summary

P.56

Summary

SCG’s emphasis

• Focused on timely execution of efficiency projects and committed CAPEX plans.
• Cement-Building Materials: Reinforce operational strengths in the recovering ASEAN

markets, in addition to the continued expansions within the retail and services segments.

• Chemicals: Roll out of new HVA products and continued innovations commitment,

especially related to Circular Economy.

• Packaging: Leverage existing position to expand with speed and efficiency, in the

growing regional market spaces.

P.57

Thank You

For further details, please contact invest@scg.com