Companys Performance Q3/2019 6 Novem ber 2019 integration - - PowerPoint PPT Presentation

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Company’s Performance Q3/2019 6 November 2019

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AGENDA

Our Business 2 Q3/2019 Financial Performance 4 Business Outlook for Q4/2019 1 3 Performance Q3/2019 by BU

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Our Business

AIR FREIGHT SEA FREIGHT & INLAND TRANSPORT LOGISTICS MANAGEMENT CHEMICAL & SPECIALTY LOGISTICS

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▪ Cargo General Sales Agent (GSA): exclusive sales agent of

• Thai AirAsia & Thai AirAsiaX airline for all routes

from and to Thailand

• Sri Lankan, Lan Cargo, Bhutan, Jeju Airlines and

US Bangla Airlines for all routes from Thailand ▪Wholesale Freight Forwarder : providing domestic and international air freight services for co-loaders ▪Air Cargo Terminal : International and domestic cargo terminal at Don Muang Airport

AIR FREIGHT

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▪ Shipping Line Agencies :

• Thailand sole agent for Rizhao Port Shipping

Line

• Thailand Joint Venture : CK Line

▪Wholesale Freight Forwarder : Thailand Joint Venture with ECU Worldwide, global leader in Less-than Container Load (LCL) services with network in over 160 countries ▪Inland Container Trucking Services: transport containers to and from seaport / container depot

SEA FREIGHT & INLAND TRANSPORT

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▪Integrated Freight Forwarder : International freight forwarding services for both sea & air transport and customs clearance for retail customers ▪Warehousing : storage, inventory management, and real-time reporting ▪Distribution Management : modern trade, shops, home delivery ▪Fulfillment Service : focus on E-Commerce and end to end supply chain services

LOGISTICS MANAGEMENT

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▪Integrated Freight Forwarder : International freight forwarding services for both sea & air transport and customs clearance for chemical & dangerous goods ▪Dedicated Chemical Warehouse : storage, inventory management, and real-time reporting ▪Inland and Distribution Management : for industrial and B2B market ▪DG Packaging : sale of packing materials, DG declaration and repacking services ▪ISO Tank Business : as agent for Nippon Concept Co., Ltd, a Japanese based ISO tank

• perator for liquid chemical

CHEMICAL & SPECIALTY LOGISTICS

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AGENDA

Our Business 2 Q3/2019 Financial Performance 4 Business Outlook for Q4/2019 1 3 Performance Q3/2019 by BU

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734.4 669.3 711.8 669.3 Q3/18 Q3/19 Q2/19 Q3/19 2,037.5 2,063.7 9M18 9M19

Performance Q3/2019 – Revenue

Remark : 1/ After eliminating inter-company transactions.

Quarterly – Q3/18 Vs. Q2/19 Vs. Q3/19 YTD – 9M18 Vs. 9M19

Revenue 9M18 9M19 YoY Q3/18 Q3/19 YoY Q2/19 Q3/19 QoQ Airfreight 1,660.5 1,681.4 1% 596.9 539.4 (10%) 595.0 539.4 (9%) Sea freight 92.3 64.1 (31%) 33.8 20.7 (39%) 21.2 20.7 (3%) Logistics 101.4 139.3 37% 31.4 43.5 38% 47.5 43.5 (8%) Chemical 427.9 399.3 (7%) 151.2 137.4 (9%) 128.5 137.4 7% Total Revenue 2,282.2 2,284.1 0% 813.4 741.0 (9%) 792.2 741.0 (6%) Revenue Consol 1/ 2,037.5 2,063.7 1% 734.4 669.3 (9%) 711.8 669.3 (6%)

• 6%
• 9%

1%

Unit : Million Baht

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74% 3% 6% 17% 73% 4% 4% 19%

Revenue Composition Q3/2019

Remark : *The figures showed are gross numbers before eliminating Inter-company transactions.

Revenue Airfreight Sea freight Logistics Chemical Total 9M18 1,660.5 92.3 101.4 427.9 2,282.2 9M19 1,681.4 64.1 139.3 399.3 2,284.1

9M18 9M19

Airfreight Sea freight Airfreight

% Proportion Unit : Million Baht

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128.5 111.9 117.8 111.9 17.5% 16.7% 16.6% 16.7% 14.0% 16.0% 18.0% Q3/18 Q3/19 Q2/19 Q3/19

• 100.0

200.0 300.0 380.1 343.7 18.7% 16.7% 9M18 9M19

Performance Q3/2019 – Gross Profit

Quarterly – Q3/18 Vs. Q2/19 Vs. Q3/19 YTD – 9M18 Vs. 9M19

• 13%
• 5%
• 10%

Gross Profit 9M18 9M19 YoY Q3/18 Q3/19 YoY Q2/19 Q3/19 QoQ Airfreight 200.3 167.6 (16%) 65.7 54.8 (17%) 57.5 54.8 (5%) Sea freight 55.1 45.4 (18%) 22.0 14.3 (35%) 15.4 14.3 (7%) Logistics 28.5 39.5 39% 8.6 12.4 43% 12.0 12.4 3% Chemical 100.4 95.9 (5%) 33.4 32.9 (2%) 31.9 32.9 3% Total Gross Profit 384.3 348.4 (9%) 129.8 114.3 (12%) 116.8 114.3 (2%) Gross Profit Consol 1/ 380.1 343.7 (10%) 128.5 111.9 (13%) 117.8 111.9 (5%) GPM 18.7% 16.7% 17.5% 16.7% 16.6% 16.7%

Remark : 1/ After eliminating inter-company transactions.

Unit : Million Baht

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48% 13% 11% 28% 52% 14% 8% 26%

Gross Profit Composition Q3/2019

Remark : *The figures showed are gross numbers before eliminating Inter-company transactions.

Gross Profit Airfreight Sea freight Logistics Chemical Total 9M18 200.3 55.1 28.5 100.4 384.3 9M19 167.6 45.4 39.5 95.9 348.4

9M18 9M19

Chemical Airfreight Chemical Airfreight

% Proportion Unit : Million Baht

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43.2 42.8 50.4 42.8 5.9% 6.4% 7.1% 6.4%

• 20.0

40.0 60.0 Q3/18 Q3/19 Q2/19 Q3/19 0.0% 5.0% 107.4 136.1 5.3% 6.6%

• 1.2%

0.8% 2.8% 4.8% 6.8% 9M18 9M19

• 50.0

100.0 150.0

Unit : Million Baht

Net Profit 9M18 9M19 YoY Q3/18 Q3/19 YoY Q2/19 Q3/19 QoQ Net Profit 107.4 136.1 27% 43.2 42.8 (1%) 50.4 42.8 (15%) NPM 5.3% 6.6% 5.9% 6.4% 7.1% 6.4%

Quarterly – Q3/18 Vs. Q2/19 Vs. Q3/19 YTD – 9M18 Vs. 9M19

• 15%
• 1%

27%

Performance Q3/2019 – Net Profit

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Unit : Million Baht 9M18 9M19 Change % Change + / (-) Revenues from sales and services 2,037.5 2,063.7 26.2 1.3% Costs of sales and services 1,657.4 1,720.0 62.6 3.8% Gross profit 380.1 343.7 (36.4) (9.6%) Gross profit margin (%) 18.7% 16.7% (2.0%) Other income 14.3 8.2 (6.1) (42.7%) Selling expenses 78.8 61.2 (17.6) (22.3%) Administrative expenses 213.5 209.5 (4.0) (1.9%) Gain (loss) on exchange rate - net 3.8 10.0 6.2 161.5% Financial Cost 1.9 10.7 8.8 449.6% Share of profits from investment in Asso&JVs 20.0 71.5 51.5 257.9% Net profit 107.4 136.1 28.6 26.7% Net profit margin (%) 5.3% 6.6% 1.3% ▪ Share of profits from investment from DGPS and ALM for amount of 50.1 million baht, resulting in an increase of the Net Profit approximately 27% ▪ Gross Profit in 2019 decreased as a result of an increase in the cost of services, especially for Freight minimum guarantee of TAA and TAAX, where the growth of revenues could not catch up. Moreover, the reclassification of “Selling expenses” to “COGS” (equal to about 1% of GPM) affected the cost of sales ▪ Net - Gain from exchange rate of 10.0 million baht came mainly from the re-valuation of foreign investment, especially for DG Packaging Pte (DGPS) and Around Logistics Management (ALM) while the financial cost increase from Long term loan for investment in ALM

Overall Performance 9M2019

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Financial Status Financial Ratio

Liability Equity Asset

Ratio YE17 YE18 9M19 Company Performance ROE (%) 1/ 17.8% 13.0% 14.9% Collection Period (days) 56.9 42.1 47.4 Payment Period (days) 93.7 61.1 65.6 Debt Performance Current Ratio (times) 3.1x 2.1x 1.2x D/E Ratio (times) 0.4x 0.6x 0.8x IBD/E Ratio (times) (Bank Covenant <1.25x) 0.0x 0.0x 0.3x DSCR (times) (Bank Covenant >1.25x) 9.5x 14.5x 3.9x Profitability Performance Gross Profit Margin (%) 23.2% 17.5% 16.7% EBITDA Margin (%) 8.8% 7.9% 9.6% Net Profit Margin (%) 5.6% 5.4% 6.6% EPS (Baht per share) 0.21 0.25 0.22 Trailing 12M EPS (Baht per share) 2/ 0.21 0.25 0.30

Remark : 1/ Trailing 12M Net Profit 2/ Adjusted EPS based on existing shares at that time

Core Asset Million Baht Cash 253 AR 478 PPE 283 Investment (JV&Asso) 1/ 910 Core Liability Million Baht AP 422 IBD2/ 326 Unit : Million Baht

Financial Health Q3/2019

2,208 1,257 951 Asset Liability and Equity

Remark : 1/ DGP 266 Million Baht และ Around 512 Million Baht 2/ Current IBD 55 Million Baht

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AGENDA

Our Business 2 Q3/2019 Financial Performance 4 Business Outlook for Q4/2019 1 3 Performance Q3/2019 by BU

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63,340 60,588 23,906 21,526 9M/18 9M/19 Q3/18 Q3/19 2,219 1,983 455 546 48,829 51,485 18,728 18,509 51,048 53,468 19,183 19,055 9M/18 9M/19 Q3/18 Q3/19 1,731 1,764 323 559 11,992 11,548 3,926 3,532 13,723 13,312 4,249 4,090 9M/18 9M/19 Q3/18 Q3/19

AIR FREIGHT

Domestic International

Wholesale Freight Forwarder (Tons) Cargo General Sales Agent (GSA) (Tons) Air Cargo Terminal (Tons) ❑ For 9M2019, volume of iii Air Services slightly dropped YoY, but still generally better compared to the market

7% 9% 6% 10% 10% 9% 5% 0% 1% 4%

• 3% -6% -5%
• 16%
• 11%
• 16%-15%-15%-15%-13%-12%
• 20%
• 15%
• 10%
• 5%

0% 5% 10% 15%

• 50,000

100,000 150,000 200,000 JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP.

Total Volume of Air Cargo in Thailand (BKK, DMK, HKT, HDY, CNX and CEI) 2018 2019 (% YoY) Tons

Average growth -13% in 9M2019

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SEA FREIGHT & INLAND TRANSPORT

Liner Agencies (TEU) Trucking Services (Trips)

28,814 31,620 11,369 10,720 9M/18 9M/19 Q3/18 Q3/19

Shipping Line Management (TEU)

49,815 47,466 17,929 14,091 9M/18 9M/19 Q3/18 Q3/19 1,363 1,497 483 547 9M/18 9M/19 Q3/18 Q3/19 Inland Trucking (#Order) 1,119 866 351 322 9M/18 9M/19 Q3/18 Q3/19 Cross-border Trucking (TEU) 8% 5% 4% 4% 3% 0% 4% 1% 3%

• 1%

1% 4%

• 2%
• 6%

1%

• 5%
• 3%
• 2%
• 10%
• 5%

0% 5% 10% 500,000 600,000 700,000 800,000 900,000 1,000,000 APR. MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. Average growth -2% in 9M2019

Total Container Volume in Thailand

(% YoY) TEU.

2018 2019 ❑ Liner Agencies and Shipping Lines Management volume dropped in Q3/2019, but Liner Agencies service still maintain growth at 10% YoY. ❑ Trucking volume declined from Cross-border service since

• ne of the major accounts changed to domestic sourcing.

❑ Plan to acquire new Key accounts.

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81,717 298,165 36,051 112,277 9M/18 9M/19 Q3/18 Q3/19

Delivery (#Order) Distribution Management & Fulfillment Service

LOGISTICS MANAGEMENT

Integrated Freight Forwarder

1,044 1,244 432 283 9M/18 9M/19 Q3/18 Q3/19

Sea Freight (TEU)

253 289 60 77 9M/18 9M/19 Q3/18 Q3/19

Air Freight (Tons) ❑ Distribution Management & Fulfillment Services continuously increased both from related logistics services and E-Commerce ❑ Even though Air&Sea transportation market in Thailand declined, Integrated Freight Forwarder services still maintained growth, as a result of an increase in Key Accounts following the BU’s plan ❑ Maintained Warehouse space and focus on utilization and enhancing yield ❑ Improve in inventory management and real-time reporting Warehouse Services

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2,103 2,287 722 777 9M/18 9M/19 Q3/18 Q3/19 9,677 15,855 3,156 7,672 9M/18 9M/19 Q3/18 Q3/19

CHEMICAL & SPECIALTY LOGISTICS

DG Packaging & Services

Packing Sales (Box) Packing Service (Shipment)

Integrated Freight Forwarder

163,097 102,965 35,934 38,446 9M/18 9M/19 Q3/18 Q3/19

Air Freight (Kgs)

5,947 5,338 1,997 1,941 9M/18 9M/19 Q3/18 Q3/19

Sea Freight (TEU)

❑ Regarding the Warehouse Service, iii maintained warehouse space and retained high utilization rate (over 90%) ❑ Increase Space for Warehouse Expansion (1,700 m3) in September 2019 Warehouse Services ❑ Integrated Freight Forwarding services volume decreased following the negative Macro Economics factors ❑ DG Packaging & Services increased as the BU has a new development project for major clients and the Customized boxes has well feedback from customers

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AGENDA

Our Business 2 Q3/2019 Financial Performance 4 Business Outlook for Q4/2019 1 3 Performance Q3/2019 by BU

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Business Outlook Q4/2019

AIRFREIGHT SEA FREIGHT & INLAND TRANSPORT LOGISTICS MANAGEMENT CHEMICAL & SPECIALTY LOGISTICS

➢ Transportation volume in the 3rd and 4th quarters of the year usually is higher than the first six months. Nevertheless, the actual amount in the 3rd quarter of this year is not as high as expected due to the external economic factor, i.e., the appreciation of Thai Baht and a decrease in export and import volume of Thailand and regional. These factors resulted in a reduction in demand for transportation as well as the freight rate. The Company expect that the market condition in the 4th quarter will improve. ➢ In Q3/2019, the Company has continuously transacted business with partners as the followings ▪ In the stage of conclusion of the Joint Venture agreement with Teleport Everywhere Pte., Ltd. to cooperate and manage Air Transportation business for AirAsia Group. The negotiation is satisfactory and in accordance with the MOU. The Company expect to sign the official Joint Venture agreement within November this year, and will start operating the business since January 2020 ▪ On the 20th of August 2019, the Board of Directors approved the company to invest in the newly issued ordinary shares of SAL Group (Thailand) Co., Ltd., a company conducting the airline and passenger ground services. The Company formerly hold the shareholding ratio of 14.95, and presently increase to 15.86% of the total registered capital. ➢ The Company’s strategic plan regarding the overseas business expansion by investment to generate revenue and diversify the source of income has been greatly successful and following the target. The Company, hence, anticipate the growth of 20% as planned

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The New Business Model of Thai AirAsia’s GSA

Transition Period from MOU till 31 Dec 2019 TLP TAC

MAA MAAX IAA TAA TAAX IAAX PAA

“Operate as is under the existing agreement until end

• f Year 2019”

TLP JV Company 49% 51% 1 3 Cargo Sales Agent TLP will hold Master GSA Agreement of all AirAsia airlines 2 To invest in JV Company with TLP 1 2 3 TLP to acquire Master GSA Agreement from TAA (FD) and TAAX (XJ) TLP to grant CASA Agreement to JV Company

Commence Operation on 1 Jan 2020

Business Outlook – Future Business with Thai AirAsia

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GSA Business Analysis

Consideration iii - Existing iii – After Joint Venture AirAsia Network Only Thai AirAsia / Thai AirAsia X AirAsia Network Type of Agreement GSA Contract JV Partnership Freight Cost Annual minimum Guarantee Fixed Cost No minimum Guarantee New Potential Business

• E-Commerce – Asia Same day

DMK International Warehouse Service iii’s Internal Charge Services Revenue at Market Price

Note : Preliminary analysis, subject to further discussion with TLP

Business Outlook – Future Business with Thai AirAsia

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No. City, Country Existing Coverage JV and iii Coverage 1. Guangzhou, China  TAA / TAAX  All AirAsia 2. Da Nang, Vietnam   All AirAsia 3. Hanoi, Vietnam   All AirAsia 4. Hong Kong  TAA / TAAX  All AirAsia 5. Macau  TAA / TAAX  All AirAsia 6. Phnom Penh, Cambodia   All AirAsia 7. Siem Reap, Cambodia   All AirAsia 8. Yangon, Burma  TAA / TAAX  All AirAsia 9. Ho Chi Minh, Vietnam   All AirAsia 10. Shenzhen, China  TAA / TAAX  All AirAsia 11. Tokyo, Japan   All AirAsia

Additional Gain from existing coverage

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High Potential Countries to expand

No. City, Country Existing Coverage JV and iii Coverage 1. Sheng hai , Chaina   All AirAsia 2. All main station in Japan   All AirAsia 3. Seoul , Korea   All AirAsia