CB Industrial Product Holding Berhad Equipping Palm Oil Industries - - PowerPoint PPT Presentation

CB Industrial Product Holding Berhad

Equipping Palm Oil Industries Around The World

Investor Presentation

2000 4000 6000 8000 10000 0.5 1 1.5 2 2.5 3

Adjusted CBIP Price Bursa Plantation Index

Our History and Background

2

History and Background

• Established in 1980s and listed on the Main Board
• f Bursa Malaysia Securities Berhad in 2005
• Primarily involved in 3 business segments:

 Palm oil engineering;  Special purpose vehicle retrofitting; and  Oil palm plantation and milling

• The first publicly-listed player in the palm oil

engineering sector globally

• Joint-holders
• f

the Modipalm Continuous Sterilization milling system patent together with the Malaysian Palm Oil Board

• Markets are centralised in Indonesia, Malaysia and

the African/Central American region

Historical Share Performance

1000000 2000000 3000000 4000000 5000000 6000000 0.5 1 1.5 2 2.5 3

Adjusted CBIP Price Adjusted CBIP Volume

RM CBIP Shares RM Index Point Aug 13 Nov 16 Aug 13 Nov 16 CAGR: -3.79% CAGR: 13.12%

323 522 590 601 554 100 200 300 400 500 600 700

Key Group Financial Highlights

3 (RM million)

Revenue

FY11 FY12 FY13 FY14 FY15

Profit Before Taxation

(RM million)

71 99 126 107 140 20 40 60 80 100 120 140 160 FY11 FY12 FY13 FY14 FY15

Shareholders’ Funds

(RM million)

381 484 530 599 669 100 200 300 400 500 600 700 800 FY11 FY12 FY13 FY14 FY15

PATAMI

(RM million)

105 240 98 91 94 50 100 150 200 250 300 FY11 FY12 FY13 FY14 FY15

0.46 0.05 0.05 0.04 0.03

0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5

5,000 10,000 15,000 20,000 25,000 FY11 FY12 FY13 FY14 FY15 Borrowings Gross Gearing Ratio

Notes: ^ After adjusting for bonus issue of 134,445,974 amd 272,008,473 new

• rdinary shares

º Includes special dividend of 15 sen per share ⃰ Includes special dividend of 4 sen per share

Key Group Financial Highlights

4 RM’000 Times

Low Gearing Ratio Attractive Dividend Payout

• Funding flexibility
• Capability to undertake strategic acquisitions

and/or organic expansion

• Stable

dividend policy with a target

• f

approximately 30% PATAMI payout ratio

• Attractive annual reward to shareholders while

maintaining growth momentum

17.5 7.5 5 5.5 10

90% 17% 27% 32% 56% 0% 20% 40% 60% 80% 100% 5 10 15 20 FY11º FY12 FY13 FY14 FY15* Gross Dividend Per Share^ Payout Ratio

sen % of PATAMI

Latest Quarter Review

5

Movement of CBIP mimics the movement of the Bursa Malaysia Plantation Index, which is largely dependent upon the price of CPO

Third Quarter Results Review

Continuing Operations Quarter ended 30 September % change 9 months period ended 30 September % change 2016 2015 2016 2015 (RM’000) (RM’000) (RM’000) (RM’000) Revenue 140,691 124,013 13.44 391,673 357,278 9.62 Profit from operations 35,566 21,810 63.07 77,355 72,089 7.30 Share of results of associates and jointly-controlled entity 5,510 3,385 62.77 6,599 2,460 168.25 Profit before taxation 40,831 24,873 64.16 83,087 73,617 12.86 Profit after taxation 32,787 16,127 100.33 61,310 56,360 8.78

• Revenue for the quarter and 9 months

period ended 30 September 2016 increased 13.44% and 9.62% respectively mainly due to higher billing for both the palm oil engineering and special purpose vehicles division

• Profit after taxation was higher for the

quarter and 9 months period ended 30 September 2016 mainly due to higher revenue and margin for the special purpose vehicles division offset by lower profit margin from the palm

• il

engineering division

Latest Quarter Review

6

Revenue Breakdown Profit Before Taxation Breakdown

9 months period ended 30 September 2016 9 months period ended 30 September 2015

Palm Oil Engineering 83% Special Purpose Vehicles 17% Palm Oil Engineering 80% Special Purpose Vehicles 20% Profit Before Taxation 9 months period ended 30 September % change 2016 2015 (RM’000) (RM’000) Palm Oil Engineering 64,622 70,112 (7.77) Oil Palm Plantation (3,345) (3,806) (12.11) Special Purpose Vehicles 15,211 4,851 213.56 Share of results of associates and jointly-controlled entity 6,599 2,460 168.25 Total 83,087 73,617 12.86

Palm Oil Engineering

7

Palm Oil Engineering – Services

• One stop centre turnkey contractor

for Modipalm Continuous Sterilization palm oil mills

• Our

services and products encompass the following:  Earthwork/site preparation;  Civil construction;  Mill engineering; and  Supply, installation, testing and commissioning of machineries and equipment

Palm Oil Engineering – Core Products

Screw Press Digester Continuous Sterilizer

Palm Oil Engineering

8

Palm Oil Engineering - Robust Performance

265,057 341,379 317,621 447,428 428,593 45,234 77,551 81,535 92,286 114,181 17.07% 22.72% 25.67% 20.63% 26.64% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 FY11 FY12 FY13 FY14 FY15 Revenue PBT PBT Margin

• PBT margin has grown from 17.07% in

FY11 to 26.64% for FY15

• The significant improvement over the

years can be mainly attributable to:  Proven and exclusive technology in

• ur Modipalm Continuous Sterilization

mills;  Economies of scale;  Declining steel price; and  Improvement in project implementation

Palm Oil Engineering

9

Palm Oil Engineering - Robust Performance

RM’000

• Orderbook growth is underpinned by a

backlog of RM493million as at 3Q2016

• Despite declining trend in CPO price,

product branding and global recognition surrounding our Modipalm Continuous Sterilization palm oil mill have been sustaining our orderbook

Recurring Clients 71% New Clients 29% Recurring Clients 30% New Clients 70%

Clientele Expansion

2011 2014

• There has been an influx of

new clients, being clients

• ther than Astra, Wilmar,

Felda, TH Plantations, Tradewinds and Sime Darby

• Notable new clients secured

include Jaya Tiasa, TDM, Sime Darby, Sinarmas Group, United Plantations Bumitama Agri, Ahmad Zaki and Rimbunan Hijau

478,000 517,000 495,000 477,000 493,000 450,000 460,000 470,000 480,000 490,000 500,000 510,000 520,000 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 Orderbook

Palm Oil Engineering

10

Higher Oil Recovery

• Our

Modipalm Continuous Sterilization palm oil mills utilizes a continuous conveyor chamber for sterilization process, as

• pposed to conventional batch

processing

• In conventional batch process, oil

are loss during extraction process as spillage of oil occurs during mobilization process for the batch processing

19.47 20.27 20.4 19 19.2 19.4 19.6 19.8 20 20.2 20.4 20.6 Before Conversion Year of Conversion After Conversion Mill 1 18.51 18.89 20.4 17.5 18 18.5 19 19.5 20 20.5 21 Before Conversion Year of Conversion After Conversion Mill 2

Oil Extraction Rate (%) Oil Extraction Rate (%)

Historical Performance Post Conversion

• Our

Modipalm mill also eliminates the need for recovery of empty bunch oil, which are low quality oil with high wax content

Palm Oil Engineering

11

Operator Cost Savings

• 200,000

400,000 600,000 800,000

20 Tonnes/Hour 30 Tonnes/Hour 45 Tonnes/Hour 60 Tonnes/Hour

Savings (Monthly Wage including OT: RM1000) Savings (Monthly Wage including OT: RM1500) Savings (Monthly Wage including OT: RM2000)

Estimated Cost Savings for Continuous Sterilizer Mills(RM)

• Operator

requirement for the Continuous Sterilization mill is minimal

• Automation of mill reduces role of operator’s to

supervision only

• Performance of mill is not highly dependent on

labour performance Conventional Mills Continuous Sterilization Mills

Estimated Operator Requirement (No.) Mill Size Conventional Mills Modipalm Continuous Sterilization Mills 20 Tonnes/Hour 40 16 30 Tonnes/Hour 45 20 45 Tonnes/Hour 50 24 60 Tonnes/Hour 55 24

Palm Oil Engineering

12

Maintenance Cost Savings

Machineries Horizontal sterilizers, cages, tractors, skid-steer loaders, railway tracks, cages, transfer carriages, winches, capstans and mono-rail hoists or cage tippers Fresh fruit bunch conditioner and Continuous Sterilizer Approximate Annual Maintenance Cost Conventional Mills Continuous Sterilization Mills

300,000 400,000 500,000 600,000 150,000 200,000 250,000 300,000

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 20 Tonnes/Hour 30 Tonnes/Hour 45 Tonnes/Hour 60 Tonnes/Hour Conventional Mills Continuous Sterilizer Mills

Estimated Maintenance Cost For Machineries (RM)

Palm Oil Engineering

13

Total Cost Savings

• A

45 tonnes per hour Continuous Sterilization mill;

• Total operator for mill is 24;
• Average monthly wage including overtime

reimbursement is approximately RM1,500.00; and

• Total maintenance cost for the machineries

involved in sterilization process is approximately RM250,000 per annum We assume based on the following scenarios:

• A 45 tonnes per hour conventional mill;
• Total operator for mill is 50;
• Average monthly wage including overtime

reimbursement is approximately RM1,500.00; and

• Total maintenance cost for the machineries

involved in sterilization process is approximately RM500,000 per annum Conventional Sterilizer Continuous Sterilizer Savings (RM) Estimated annual labour cost 900,000 432,000 468,000 Estimated annual maintenance cost 500,000 250,000 250,000 Total (200,000 MT FFB per annum) 718,000 Cost Savings (RM/FFB) 3.59

Palm Oil Engineering

14

Conventional Mills

Continuous Sterilization Mills

• Eliminates

arduous manual tasks and labour requirement is strictly for supervision purposes

• Oil spillage is close to non-

existent which allows for a clean working environment

• Non-pressurized

and relatively safe sterilization process

• Zero accident track record

Safety

Palm Oil Engineering

15

Quality

• Deterioration of bleachability index

(DOBI), is an analytical procedure intended for quality control of crude palm oil

• Indicates the ease of refining and

predicts its oxidative status

• 0.50

1.00 1.50 2.00 2.50 3.00 3.50 4.00 DOBI Value Sludge Oil Poor Fair Good Excellent

DOBI Performance of Modipalm Continuous Sterilizer Mills

Environment

Conventional Mills Continuous Sterilization Mills

• Smoke

emissions from Continuous Sterilization mills are generally cleaner as

• pposed to intermittent black smokes from

conventional mills

• Steam

consumption for Continuous Sterilization mills are also relatively constant

Palm Oil Engineering

16

Our Projects In Malaysia (2008 – Present)

Palm Oil Engineering

17

Our Projects In Indonesia (2008 – Present)

Palm Oil Engineering

18

Our Projects In Central America/Africa (2008 – Present)

Palm Oil Engineering

19

Major Customers and Project References

Continuous Sterilisation Country Customer

• No. of

mills Malaysia/Indonesia Felda Group 13 Wilmar 11 Sime Darby 9 TH Plantations 9 Astra Agro Lestari 8 London Sumatra 5 Tradewinds 4 TDM 3 PT Smart 2 Bumitama 2 Others 20 Subtotal 86 Thailand, Papua New Guinea, Africa and Central America 16 Total Modipalm continuous sterilisation mills 102 Total conventional mills 41 Grand total 143

Country/Region Market breakdown Indonesia 45% Malaysia 40% Central America/Africa 15%

Market Breakdown

Special Purpose Vehicles

20

Special Purpose Vehicles

• A 51% owned subsidiary, our special

purpose vehicles division has grown from contributing RM57 million in revenue in 2011 to more than RM262 million in 2013 and RM152 million in 2014

• Focused primarily in bulky supply of

specialised vehicles for government authorities and agencies

262,054 152,423 123,363 41,139 20,885 25,797 15.70% 13.70% 20.91% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 50,000 100,000 150,000 200,000 250,000 300,000 FY13 FY14 FY15 Revenue PBT PBT Margin RM’000

• Orderbook for the special purpose vehicles

as at 3Q2016 is RM530 million

RM’000 90,000 35,000 35,000 217,000 530,000 100,000 200,000 300,000 400,000 500,000 600,000 3Q20154Q20151Q20162Q20163Q2016

Orderbook

Special Purpose Vehicles

21

Special Purpose Vehicles

• The special purpose vehicles division is

gradually expanding its products portfolio, with products ranging from helicopters, machine gun stabilizers and military related vehicles

• Successfully secured a contract to

supply 2 units of AW189 helicopters for a total contract amount of RM201 million as at 1Q2016

Sarawak

Kumpulan Kris Jati Land area: 16,567 ha Planted: 11,492 ha Solar Green Land area: 5,567 ha Planted: 4,638 ha Bahtera Bahagia Land area: 4,269 ha Planted: 4,214 ha

Plantation and Milling

22

Jointly- controlled entity/ Associate Total planted area Effective equity interest Effective group planted area (ha) (%) (ha) Solar Green Sdn Bhd 4,638 50.0 2,319 Kumpulan Kris Jati Sdn Bhd 11,492 30.0 3,448 Bahtera Bahagia Sdn Bhd 4,214 30.0 1,264 Total 20,344 7,031

Effective Group Interest Breakdown

Oil Palm Cultivation – Mature Plantation Assets

Plantation and Milling

23

Oil Palm Cultivation – Immature Plantation Assets

• We

have a greenfield landbank

• f

approximately 86,000 hectares, mostly situated in Kalimantan Tengah, Indonesia, of which 8,877 hectares has been planted as at 3Q 016

• Future planting to be targeted

at approximately 2,000 hectares per year

Registered Office

Further Information

24

Registered Office

CB Industrial Product Holding Berhad Lot 4, Jalan Waja 15 Kawasan Perusahaan Telok Panglima Garang 42500 Telok Panglim Garang Selangor Darul Ehsan Telephone No.: 03 3122 2786 Facsimile No.: 03 2122 1336 E-mail: info@cbip.com.my Website: www.cbip.com.my

Contact Person

Lim Zee Yang Investor Relations & Corporate Affairs CB Industrial Product Holding Berhad Telephone No.: 03 3122 2823 Cellphone No.: 012 6303451 Facsimile No.: 03 2122 1336 E-mail: zeeyang@cbip.com.my

Disclaimer

Certain statements in this presentation are based on historical results which may not be reflective of future results. Other statements, including without limitation, those regarding

• ur future prospects, strategies and objectives of our Group, which are forward-looking in

nature, are subject to uncertainties and contingencies. Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time, there can be no assurance that such expectations will subsequently materialise. The inclusion in this presentation should not be regarded as a representation or warranty by our Group or

• ur management team that the plans and objectives of our Group will be achieved.