Analyst Meeting Synergy and Equity Offering July 30 th , 2019 1 - - PowerPoint PPT Presentation

1

July 30th, 2019

GLOBAL POWER SYNERGY PUBLIC COMPANY LIMITED

Analyst Meeting

Synergy and Equity Offering

2 2

Over ervi view ew and Strategi egic c Direct ection

• n

Synergy & Integration Equity Offering

3

Target get within thin 2025 025

GPS PSC Elec ectri tricity city Growth

• wth Pi

Pipeline

202 020 20 2019 19 2023 023 202 021

Growth th along ng with h PTT Group up GLOW SPP Repl eplac acem ement ent Convent nventiona nal Ener ergy gy (Thailand and International) Renew newab able e Energy ergy (Solar and Wind)

FUTURE GROWTH

Inorg rgani anic Growth th

4,748 48 MW

MW

Equity ty Capa pacity ty

4,766 66 MW

MW

Equity ty Capa pacity ty

5,026 26 MW

MW

Equity ty Capacity ty COD of proje jects ts

4,776 76 MW

MW

Equity ty Capa pacity ty COD of proje jects ts

Selective ctive Growth th

COD of proje jects ts ERU +250 250MW MW Rayong ng WTE +10MW MW Expa pans nsion+1 +18MW +2,771MW MW COD of proje jects ts

CUP 4 4 +45MW NL1P 1PC +26MW CUP 3 3 Expans ansion n +15MW XPCL +321MW

+39.5 .5MW

Note: Base on 100% in GLOW

4

SELECTIVE IVE GRO ROWTH

Growth along with PTT Group Domestic and International Renewable Battery Business Energy Storage System Integrator Energy Management Solution Provider

Strategic tegic Direct ection

• n

and nd Growth wth Strategy egy 3 3 Pi Pillars

SYNERGY Y & INTEGR GRATIO ION

Synergy Capture Operation Excellence & Asset Optimization Corporate & Business Infrastructure

S-CURV RVE

5 5

Overview and Strategic Direction Syner ergy gy & I Integr egrati tion

• n

Equity Offering

6

• Better

er Load d Managem nagement ent (shift ftin ing g loads ads between ween plant nts) )

1

HIGHER ER RELIAB IABILIT LITY

2

HIGHER ER AVAI AILAB ABILIT LITY

3

HIGHER ER EFFICIENCY

• More
• re integ

egrat ated ed powe wer plant nt netwo work k under er a well ll- establ ablis ished hed backb kbon

• ne system

em

• Capac

pacit ity Sharin ing

• Heat

at rate impro provem vement ent and transm nsmiss issio ion n loss ss reduc uctio ion

Single power plant output fluctuate according to changes in demand Several power plant outpu put remain at

• ptimal

al point nt despite changes in demand Longer distribution network to customers Closer distribution network to customers

Combined ed capaci city ty Utilization ation Back up capaci city ty

Additiona itional l Cap apac acity ity  Acquire more customers to generate higher revenue  Potential investment savings for CUP-4 Phase II CUP-5, EEC

GPSC C power wer pla lant t per erfor forman mance ce im improv

• ves

s after er Integrati egration

• n

7 Note: 1. Data source from companies’ website and ERC as of July 2019

Solid Growth Platform form

2

Stronger er HR capabiliti ties

3

Leadership Positi tion

• n in SPP
• Thailand large

gest SPP Player with stron

• ng

resou

• urces

es and netwo work k relia iabi bili lity

GPSC + GLOW 15%

EGCO BGRIM GULF RATCH

Other

1

SPP market share by Installed Equity MW/1

Operat atio ions ns and Mai aint ntena enanc nce

A

Proc

• cess

ess and Busines siness s Initia iatio ion

C

Proc

• cure

urement ent and Corpo porat ate e Functio ions ns

B

Larger and Strong nger Power r House se Synergy y Way Forwar ard

PTT group’s local l power wer and utili lities ies expertise ise Inter ernatio national nal best practic ice e previously capped by investment policy constraints Netwo work k Integr egrat atio ion Alignin gning g main intenanc enance e best practic ice CAPE PEX Avoi

• idanc

dance Optim imiz ize Proc

• cure

urement ent Combine

• mbine corpo

porat ate e functio ions ns and best practic ice Optimiz imize Cash h & Debt Managem nagement ent New w too

• ols

ls to impr prov

• ve

e effic icie ienc ncy New w business ness ideas as and inno novat vatio ion PTT Growth Pipel elin ine SPP Repla lacem ement ent EEC EEC Indus ustria ial Grow

• wth

Growth wth Pla latfor tform m Str trengthe ngthene ned d by Syne nergi gies

8

1. . Lea eade dersh ship ip Posit sition ion in in SPP

15%

GPSC + GLOW RATCH EGCO BGRIM GULF Others

SPP Mark rket et Share by Insta tall lled ed Equity ty MW/1

/1

SPP Replace laceme ment t Proje ject: ct: Stage ge 1 1 and 2 2 Proje jects cts (Tenta tative tive only)

Plant Power (MW) Steam (TPH)

• Max. EGAT

PPA PPA Notic ice to proceed SCOD Stage 1 GEN Phase 2 192 300 30 x 2 2020 2022 Stage 2 GSPP2 192 300 30 x 2 2022 2024 GSPP3 (Coal) 120 168 30 x 2 2022 2024, 25 GSPP11#1 80

• 30 x 1

2023 2025 Total 584 584 768 768

Source: Glow Analyst Meeting Q1/2019

Thailand’s largest SPP player yer

with strong resources and network reliability

Note:

• 1. Data source from companies’ website and ERC as of July 2019
• 2. SPP Includes Cogen (ERU)

GPSC’s Committed Portfolio

49%

VSPP & Renewables 48% IPP SPP/2 3%

Committ tted Equity ty

5,026 6 MW MW

with th SPP

2,442 2 MW MW

9

2. . Soli lid d Gr Growth wth Pla latform tform

Stra rategi gic locati ation in MTP P allows ws GPSC to to captu pture e solid d growth in EEC

CHPP RPCL TSR (SSE1)

THAIL ILAN AND

EEC EC

CHPP (Solar) r) Glow Energy y Solar r PV Rooftop

• p

Rayong

Glow IPP CCE CCE

Glow Energy Phas ase 1,2,4,5

Gheco-one

Glow SPP 2,3

Glow SPP 11 Phase 1-3 Glow Energy Solar PV Rooftop

Glow Energy CFB 3 Glow Energy Solar ar Plant ant

CUP CUP1-4 IRPC-CP Phase1-2 Srirac acha

Source: PEA, MEA, Ministry of energy

GRP

ERU Rayong WTE

44% 44% 38% 38% 18% 18% 27 31 2018 2022F

“ Utility ity demand nd in EEC expect ected to to grow w

3.42 3.42% CAGR R ”

Rayong Chachoengsao Chonburi (TWh) )

10 10

3. . Str tronge

• nger

r HR capab abil ilities ities

Select cted Growth

• Core and project management Expertise
• Technical Expertise
• International BD talents
• M&A, Legal & Financial

S Curv rves and Digitizati ation

• n
• Dedicated digital energy team
• Technical Expertise
• System integrator / micro-grid
• New Initiatives

Thailand Laos Vietnam Myanmar Renewable

Human Resource ce Key Enablers Group’s s Objecti tives ves

+

• Culture Alignment
• Growth Mindset
• Leadership Development
• Strengthening Core Competencies
• Employee Engagement
• People System Alignment

Local al pool

• ls of

prof

• fessional

al talents Internati ationa

• nal

standard ard and power expe pert rtise se

11 11

Syne nergy gy Real ealizati ization

• n Tim

imel eline ine and d Proc

• cess

Synergy ergy Identifi tificati cation

• n

(Phas ase 1)

Initi tiat atives es Launch nch Full ll Implement lementati ation

Baselining perfor

• rmanc

mance Enhan anci cing and prior

• ritizing

synergy y initiati atives Devel elopin

• ping

g business cases and action

• n plan

ans Launchin ching select ct Quick ck-win initiati atives Launching all Quick ck-wins Preparing to launch all remaining synergy initiatives Launching all initiati atives Driving full integrat gration

• n plan

impleme mentat ation

• n

Monitoring, controlling and reporting progress on financial and other metrics

May – July 2019 2019 Aug – Oct Oct 2019 2019 Nov 2019 Onwards

12 12

Expect cted d Syne nergy gy Be Benefit fit

Note: 1. Recurring EBITDA synergy value based on current portfolio

Identifi tified ed syner ergy gy benefit fit equivale lent t to to THB ~ 1.6 bn per annum

EBITD TDA A Contr tribution bution Per Annum um/1

/1

+1.6 bn

Additi tional nal uplift t fro rom Growt rowth h Initiat tiativ ives

Ramp mp up with full EBITDA/1

/1

contribution by 2024

Operations & Maintenance Procurement Corp. Function & IT

A B1 B2

~20+50 mm Corporate Function by 2019 and 2020

Quick wins

~50 mm Steam Integration by 2020 ~70 mm Procurement Integration by 2020

89% 89% 8% 8% 3%

~1.6 6 bn bn

+2.5 bn

One-tim time CAPE PEX X Avo void idan ance ce

• For

r 200 0 MW gro rowth th in MTP

• 4.0 bn

One One-tim time initi tial al inve vestme stment nt

13 13

• A. O

. Operat eration ion Syne nergy gy

Big Big-win in Quick-win in Strategi rategic Location tion in MTP P allows lows GPSC and GLOW W to achie ieve ve cost t effecti ective ve integr gration tion

Immediat ate benefits fro rom Power r and Ste team am Inte tegrat ration

• n
• Reduce standby time

 Engineering option selected

Full Inte tegrati ration

• n fro

rom Power r and Ste team am Inte tegrati ration

• n
• Rebalance production

to optimize cost

Illustr ustrati ative ve Only

14 14

• A. O

. Operat eration ion Syne nergy gy

Power er and Ste team m Inte tegr gration tion leads ds to to cost t savings ings and more capaciti cities es to to serve new demand

Substitute GPSC supply by GLOW’s lower r cost t of producti uction

• n

1

Marginal cost per unit (THB / MWheq)

Spare Capacity GPSC Utilized Cap. Glow Utilized Cap.

Spare Capacity

Additional ditional capacity ity for new demand Share re backup capacity ity Utiliz lize lower-cost st capacity ity first st

1 2

CAPEX EX avoidanc idance

3 Utilized Capacity

Optimize Back ck-Up Up Capaci acity ty and Cost t

2

Avoid or Delay ay Power Plant and Distribution Network CAPEX

3

Increase Supply y Opportun rtunities from proximity of Glow’s network

4

For Illustrative purpose only

15 15

• A. O

. Operat eration ion Syne nergy: gy: Quic ick-Win Win Stea eam m Net etwork

• rk Integration

egration

Duct Firing Aux Boiler 31 Aux Boiler 32 Duct Firing Duct Firing Aux Boiler 31 Aux Boiler 32 Duct Firing

Before

• re

After

Legend Glow Plant GPSC plant

Steam Production Steam Production

Exam ample: : Tie-in n steam am interc rconn nnect cting header from Glow

• w SPP2/3

3 to reduce uce stan andby y time of CUP3 3 boiler ers Source ce of Synergy: y:

• Fuel cost reduction
• Maintenance cost reduction

Synergy y benefit:

THB ~50 mm recurr rring g EBITD TDA by 2020

SPP2/3

Aux Boiler 33 Aux Boiler 33

CUP-3 CUP-3 CUP-3 CUP-1 CUP-3 CUP-3 CUP-3 CUP-1

• r

SPP2/3

16 16

• A. M

. Maint intenan nance ce synergy gy

Aligning best practice to increase internal maintenance productivity

1

Optimize use of external maintenance services across firms

2

Implement preventive tools to reduce maintenance cost

3

“35% reduction in maintenance of gas turbine if reduced to average level”

G D E F I P N J L H O M K A B C

2016 2016

Good d example to reduce cost

• ver

r the years

With th to tools ls implem emented d and knowhow

• w inte

tegr grated ed, , maintenance e cost st can be improved

• ved

Room for Improve- ment for raising ing cost

2017 2017 2018 2018

3-Yr r Ave verage age

Exam ample: : Turbin rbine Mainte ntenance ance cost st of GPSC and Glow

• w powerplants

ants Turb rbine ne Mainte ntenance ance cost st

17 17

B.

• B. Procu
• curement

nt and d Corp rporat

• rate Function

nction & IT Syne nergy gy

Introduce dig igital ital procu curement t best t practice ctices for optimal l biddin ing proce cess Optim imiz ize cash levels ls

• f combined balance

sheet Combin ine proje jects ts & contr tractor ctors of departments (legal, recruitment, audit…) Alig ign best t practice ctices & processes across both

• rganizations

Reduce inventory costs through inventory y consolid lidation tion and setup of Open Invento tory y digital igital platf tform between plants Leveraging volu lume synergies and PTT group’s fuel l expertis tise (i.e. coal) l)

Pro rocur cure- ment Corp. Functi ction &IT

B1 B2

THB 90 90 mm target t savin ing for non-fuel spending THB 35 35 mm target t savin ing for coal spending

18 18 18 18

Overview and Strategic Direction Synergy & Integration Equity ty Offerin ring

19 19

14 March h 19 Deal al Clo losin ing GPSC SC holds lds 69.11% of GLOW OW shares es

Timel eline e : Equity y Offer ering and GLOW Delisti sting

22 May 19 Tender der Offer er (MTO) TO) com

• mpl

plet etio ion n and GPSC SC holds lds 95.25% of GLOW OW shares es

MTO 25 25-Mar ar to 17-May ay

28 Aug 19 19 EGM GM : Equit ity Offer erin ing 4 4 Sep 19 19 RD RDRO

RO Subsc scri ription 30 30-Sep to 4-Oc Oct

15 Oct 19 19 1st Trading ding Day 19 Jun 19 GPSC SC BoD

• D :

: Deli listin ing 20 Jun 19 GLOW OW BOD OD : Deli listin ing 13 Aug 19 GLOW OW EGM M : Deli listin ing

Subsc scri ription Sep to Nov Delist sting Tender r Offe fer r (DTO) O) 45 45 busin siness ss days s Sep to Dec

Dec 19 19 GLOW OW Deli listin ing

SET appro roval al within 30 30 days

26 Jul 19 19 BoD : : Equit ity Offer erin ing 9 Aug 19 RD RDMeeting

ng

30 Jul 19 Analy lyst st Meet etin ing

20 20

SOUR URCE CE OF FUN UND AND DELEVERAGIN GING G PLAN FOR FUTU TURE GROWTH OWTH USE OF FUND ND Deleveraging plan Loan and Debentures Equit ity ≤74 74 Bn Bn

USE OF FUND FOR FUTURE GROW OWTH

• GPSC acquired shares of GLOW, equivalent to

69.11% from ENGIE Global Developments.

• GPSC completed the payment amounting to

THB 93,000 million in total.

• GPSC has obtained accumulatively 95.25% and

will tender the remaining shares via Delisting Tender Offer by Dec 2019 GPSC secured the short- term loan at THB 134,500 million from PTT, GC and Financial institutions.

SHORT ORT-TERM M PLAN

• After the capital restructuring plan, GPSC will repay

short-term loan with debentures/ long-term loan, equity injection, and net dividend payment from GLOW

• The fund will also be used in investments for future

growth, including ERU, Malacca and SPP Replacement Projects

LONG-TERM M FINANCIAL CIAL PLAN

Consideration

• f

GLOW's shares for 69.11% Consideration for Mandatory Tender Offer 26.14% Consideration for Delisting Tender Offer 4.75% GPSC Bridging loan

Bridge e loan from Financi cial Institutions 99.5 Bn Loan from PTT and GC 35 Bn

Use and S Source e of Fund wi with Delev ever eragi ging g Plan

Target Net D/E 1X Net D/E 1.96X 134.5 Bn Bn

Note: Use FX = 31.975 THB/USD ; the w.a. selling rate announced by the BOT on 22 May 2019

(USD 4.2 Bn Bn) (or r USD 1.1 Bn Bn) (or USD 3.1 Bn Bn) (or r USD 2.3 Bn Bn)

21 21

Rights Offer erings s Key y Terms rms

RO RO Amount nt THB 74,000 million RO Subscr crip iptio ion Price ce THB 56 per share Disco count nt from 30D VWAP (THB B 70) 20% Number of Allott

• tted Shares

1,321 million shares Allocatio

• cation

n Ratio io (Old ld : New) 1 : 0.8819 Allocatio cation n Metho hod

• Allocate to existing shareholders proportionate to their respective

shareholdings

• Oversubscription is allowed – allocate until there are no remaining or no

shareholder subscribes for the remaining shares Object ctiv ive of Capital ital Increase ase

• Repayment of the short-term loan (Bridge Financing) to financial institutions

and the major shareholders (i.e. PTT and PTTGC)

• Maintaining financial ratio to be comparable with peers and financial

structure which is suitable for the investment in the current and future projects Recor

• rd date for EGM

9 Aug 2019 EGM Date te 28 Aug 2019 Recor

• rd date for RO

4 Sep 2019 RO Subscr crip iptio ion Perio iod 30 Sep – 4 Oct 2019 First st Trad ading ing Date Oct 2019

22 22

Equity y Offer ering ing Summary

Objec ectives tives: Right t Offeri ferings

• Achieve

eve THB 74 bn as required ed

• Compl

pleti tion by 2019

• Optimiz

timize e Free-fl float at

• Giving ri

rights ts to to existi ting g shareholde ders s (no control diluti tion if ri rights s are exe xerci cised) ed)

• Allow ove

versubscr scription tion for r fund ra raising compl pletion etion objecti ective ve

• Offer

fered d at disco counted d mark rket et pri rice ce to to attra ract ct existi ting g shareholder ers s to to sub ubscr crib ibe

• Appropr

priat ate e method for r meetin ting g fund ra raising in timel ely y manner er 1 2 3 1 2 3 4

23 23

THA HANK NK YO YOU

IR Conta ntact ct

Pongs gsak ak Plain ingam am Suth thath athip ip Char aroenkij kij +662 140 4646 +662 140 5318 ir@gpscgroup.com www.gpscgroup.com

24 24

Discla laimer imer The information contained here is being furnish on a confidential basis for discussion purposes only and only for the use of the recipient, and may be subject to completion or amendment through the delivery of additional

• documentation. Except as otherwise provided herein, this document does not constitute an offer to sell or

purchase any security of engage in any transaction. The information contained herein has been obtained from sources that Global Power Synergy Public Company Limited (“GPSC”) considers to be reliable; however, GPSC makes no representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information contained herein. Any projections, valuations and statistical analyses contained herein have been provided to assist the recipient in the evaluation of the matters described herein; such projections, valuations and analyses may be based on subjective assessments and assumptions and may utilize one among alternative methodologies that produce differing results; accordingly, such projections, valuations and statistical analyses are not to be viewed as facts and should not be relied upon as an accurate representation of future events. The recipient should make an independent evaluation and judgement with respect to the matters contained herein.