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BG Container Glass Public Company Limited
FY18 Opportunity Day
5th March 2019
FY18 Opportunity Day 5 th March 2019 1 Disclaimer Disclaimer - - PowerPoint PPT Presentation
BG Container Glass Public Company Limited FY18 Opportunity Day 5 th March 2019 1 Disclaimer Disclaimer Disclaimer Disclaimer The information contained in this presentation is strictly confidential and is provided by BG Container Glass Public
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BG Container Glass Public Company Limited
5th March 2019
Disclaimer Disclaimer Disclaimer Disclaimer
The information contained in this presentation is strictly confidential and is provided by BG Container Glass Public Company Limited (“BGC” or the "Company") to you solely for your information. Neither this presentation nor any part hereof may be (i) used or relied upon by any other party or for any other purpose; (ii) copied, photocopied, duplicated or otherwise reproduced in any form or by any means; or (iii) redistributed, passed on or otherwise disseminated, to any other person either in your organization or elsewhere, without the prior written consent of the Company and its respective affiliates or advisors. By attending this presentation, participants agree not to remove this document, or any materials provided in connection herewith, from the conference room where such documents are provided without express consent from the Company and its respective affiliates or advisors. Although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, no representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this
information concerning the Company and its subsidiaries. None of the Company nor any of its respective affiliates or advisors nor any of its or their respective members, directors, officers, employees or affiliates assumes any responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained
presentation or its contents. This presentation is for information purposes only and does not constitute or form part of any offer or invitation by or on behalf of the Company for sale or subscription of or solicitation or invitation of any offer to or recommendation to buy or subscribe for any securities of the Company, nor shall it or any part of it form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto (“Securities”) in Thailand, the United States or any other jurisdiction. Any recipient considering a purchase of Securities is hereby reminded that any such purchase should be made solely on the basis of the information contained in a final offering document (which may be different from the information contained in this presentation ) and subject to the selling restrictions set out therein. No public offering of the Securities will be made in the United States or in any other jurisdiction outside of Thailand where such an offering is restricted or prohibited. This presentation should not be construed as legal, tax, investment or other advice. The information contained herein does not take into consideration the investment objectives, financial situation or particular needs of any particular investor, and should not be treated as giving investment advice. In addition, this presentation contains certain financial information and results of operation, and may also contain certain projections, plans, strategies, and objectives of the Company, that are not statements of historical fact which would be treated as forward looking statements that reflect the Company's current views with respect to future events and financial performance. These views are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks which are in many cases beyond the control of the Company, and which may change over time and may cause actual events and the Company's future results to be materially different than expected or indicated by such statements. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. Such forward‐looking statements are not guarantees of future performance and accordingly, the actual results, financial condition, performance or achievements of the Company may differ materially from those anticipated by the Company in the forward looking
In providing this presentation, the Company does not undertake to provide any recipient with access to any additional information or to update the information contained in this presentation or to correct any inaccuracies herein which may become apparent.
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Agenda Outline
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1 3 4 5 2
Company Overview Business Update Financial Highlights Outlook for 2019 Q & A
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Bangkok Glass Public Company Limited (“BG”) was established by a group
pharmaceutical and beverage industry and financial institutions with registered capital
2009 2010
BG Container Glass Company Limited (“BGC”) was established by BG with registered capital
April 2017 April 2017 April 2017 April 2017 BGC increased its paid-up capital to THB 2,500.0 mm to undertake its corporate group restructuring by acquiring all companies in glass packaging business Oct 2018 Oct 2018 Oct 2018 Oct 2018 Initial Public Offering on
newly-issued shares were
at Bt 10.20 per share
Nov 2018 Nov 2018 Nov 2018 Nov 2018
Ratchaburi plant started commercial run with capacity at 400 tons/day
December 2017 December 2017 December 2017 December 2017
Rayong plant ceased its operation
1983
Boonrawd Brewery became a major shareholder
1996
Khon Kaen plant has commenced its operation Initiation of “Door to Door” strategy by locating its production facilities close to customers’ facilities, starting at Khon Kaen and followed by Prachinburi
“With the vision of experienced management “With the vision of experienced management “With the vision of experienced management “With the vision of experienced management team, the continued expansion of production team, the continued expansion of production team, the continued expansion of production team, the continued expansion of production capacity has resulted in growth expansion capacity has resulted in growth expansion capacity has resulted in growth expansion capacity has resulted in growth expansion
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Key Milestones
Ayutthaya plant has commenced its operation The 1st furnace located at Pathumthani Province commenced its operation Prachinburi plant, jointly invested with T.C. Pharmaceutical Co., Ltd, has commenced its
Rayong plant has commenced its operation
2017 2007 1974 1980 2018 2016
6 As of 29 Nov 2018
BGC Shareholders
Shareholder Structure
100%
100% 100% 100% 100%
72.0% 6.5% 67.5%
51%
49%
72.0%
Institutions 14.3% 14.3% 14.3% 14.3% Individual 13.7%
PTI KGI AGI PGI RBI
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The Company aims to satisfy our stakeholders in these areas;
Financial To maximize benefits and returns to all stakeholder Customers To deliver quality products with world-class standards and services at a competitive price Business Partnership To work with our partners based
relationship Work Process To utilize modern technology in every work process with professional teams Personnel To build people competency, promote team work and employee engagement with an entrepreneurial spirit
“BGC is committed to be the ASEAN leader in manufacturing and selling quality glass and packaging as well as other related products and services.”
Company Overview
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Current Production Base Quality Standard
PTI AGI KGI PGI RBI
Q2’2019 Q4’2019
4 Furnaces 1,620 tons/day (46% of group capacity) 3 Furnaces 560 tons/day (16% of group capacity) 1 Furnace 400 tons/day (12% of group capacity) 1 Furnace 180 tons/day (5% of group capacity) 2 Furnaces 735 tons/day (21% of group capacity)
Khon Kaen Plant (KGI) Prachinburi Plant (PGI) Ratchaburi Plant (RBI) Pathumthani Plant (PTI) Ayutthaya Plant (AGI)
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Largest manufacturer of glass containers both in Thailand and the ASEAN region Optimize production process with stability and flexibility State of the Art Machine with continuous improvement and experienced engineering team Long relationship with customers and suppliers Network in Key Strategic Locations
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RBI Expansion resulting to 13% increase in production capacity
Double digit growth in Export volume Total investment 81M over 8 projects for Cost Optimization 109% growth vs. 17 in Net Profit
Debt to Equity improved to 1.9 after IPO
BoD approved dividend payment at 62% Payout Ratio
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Beer Soft Drinks (Non-Alcohol) Food Insecticides & Drugs Other Products
34% 43% 1% 9% 13% 2017
Beer Soft Drinks
2018
Food Insec. & Drug Others Unit: Mil Bt.
Sales Breakdown 2018
Sales Revenue
Total sales dropped by 6% VS FY17, mainly from Beer (dropped by 11% VS FY17). Total Sales to Boonrawd = 59% of total sales, decreased by 106 bps from FY17 Food dropped because of less capacity (RGI closed) Export volume increased 14.5% YoY
‘17 = 46% ‘17 = 30% ‘17 = 14%
Sales Update
Sales distribution Domestic = 93% Export = 7%
40 50 60 70 80 90 Jan'17 Apr'17 Jul'17 Oct'17 Jan'18 Apr'18 Jul'18 Oct'18 Jan'19 13
Production & Major Raw Materials Update
Production Cullet Price
3 4 5 Jan'17 Apr'17 Jul'17 Oct'17 Jan'18 Apr'18 Jul'18 Oct'18
Brent Crude Oil Price
Decreased in Oil price since Oct 2018, leads BGC has lower energy cost in 4th quarter 2018 and extending to 2019. Cullet price decreased since the beginning of the year Both utilization and efficiency improved from 2017
233,984 222,345 894,728 888,567 88.6% 85.8% 88.0% 89.1% 86.9% 87.2% 86.0% 87.6%
20.00% 40.00% 60.00% 80.00% 100.00% 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,0004Q17 4Q18 2017 2018
Actual Production (Ton Packed) Utilization Rate (%) Efficiency Rate (%)
USD/ Barrel
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Water Conservation
โครงการเผยแพรMความรูQองคSกร และงานรัฐกิจสัมพันธS
บีจีซีรักษSนํ้า visits
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3,011 2,280 3,057 11,164 10,400
4Q17 3Q18 4Q18 2017 2018
Financial Performance
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Sales
Sales improved in Q4’18 4Q18: Sales slightly increased YoY from Soft Drink and also from Export Channel. However, sales significant increase QoQ from Beer and Soft Drink FY18: Drop in sales was mainly a result of decreasing demand in Local Beer bottle
Gross Profits & GPM
+1.5% YoY
Net Profits after Tax & NPM
Higher GP even sales drop in both as resulted from; (1) Enhanced the negotiation to achieve the lower cullet price (2) Improved production efficiency (3) Shutdown of inefficiency facility i.e. Rayong plant More than 100% growth in Net profit SG&A Expenses: Transportation expenses decreased align with sales Less CSR Activities and lower management fee Non recurring item: In both periods, gain on fixed asset disposal were able to compensate for provision reserved on fixed asset impairment
+34% QoQ
Unit: Mil.Bt.
395 369 494 1,483 1,692 13.1% 16.2% 16.2% 13.3% 16.3%
4Q17 3Q18 4Q18 2017 2018 +25% YoY +34% QoQ +14.3% YoY
Unit: Mil.Bt. Unit: Mil.Bt.
+185% YoY +84% QoQ +109% YoY
54 84 155 237 496
2% 4% 5% 2% 5%
4Q17 3Q18 4Q18 2017 2018
Financial Performance
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Asset Liabilities & Equities Key Ratio
Working Capital Day ROA ROE Debt to Equity
34.2 40.5 days
2017 2018
Working capital day = AR days + Inv days – AP days
1.9% 3.8%
2017 2018
5.1% 12.8%
2017 2018
3.3x 1.9x
2017 2018
Total asset growth by 14% was driven by investment in new furnace at Ratchaburi plant. Total liabilities decreased from previous year from loan repayment in 4th quarter 2018 after IPO, associated with increase in Shareholder’s Equity 8,999 10,853 1,993 2,110 1,594 1,351 385 415
2017 2018
PPE Inventory Account Receivables Other assets
8,250 7,986 1,686 1,586 3,034 5,158
2017 2018
Loan Other liabilities Shareholders'Equity
4% 14%
Financial Performance
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Dividend
Dividend payout for net profit for the period of Jul – Dec ’18, after IPO
= 62% payout ratio = 0.18 Baht per share (based on 694,444,000 Shares)
Dividend Policy: BGC has policy to pay dividend not less than 40% of net profit while BGC’s subsidiaries has policy to pay dividend not less than 80% of net profit after deduction of legal and general reserves We aim to provide investors with a good dividend together with capital growth.
Cash Flow from Operation
Strong and stable cash flow (around 2,000 Mil.Bt. per year) enable for future expansion and consistent dividend
To be paid in May’19 = 0.12 Baht per share
478 602 2,532 2,638 1,959 2,194
4Q17 4Q18 2015 2016 2017 2018
Unit: Mil.Bt.
Already paid in Dec’ 18 = 0.06 Baht per share
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Cost reduction by increasing Utilization and Efficiency rate with new technology and information system Enhance portfolio through Export and High value products Export from 7% to 10% of total port Actively look for M&A
packaging and related businesses
Short-Term 2019-2020 2019-2020 2020-2022 2022 onwards Medium-Term Long-Term
We aim for solid growth outlook with consistent dividend
Across BGC businesses
employers
awareness
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Accelerate Export Growth in 4 focus areas Drive High Value Products
Incremental volume in
Food Jar i.e. Brand’s & Vietnam Birdnest
Build Platform NNPB product
Transition Phase to convert Returnable to One-Way
Geographical Focus Segment / Product Focus
Expand in Non-BRB Beer
Winning Market Leader
standard to ensure customer satisfaction
export markets
in every country
and proactively cooperate with customer to redesign the bottle with improved technology
Market Strategies 2019
Fanta 50% Sprite 20% Est 11.4% Mirinda 6% Others 12.6%
Soft Drink-Artificial
Sponsor 80%
Sanvo 1.8%
M-Sport 12% Gatorade 3% Start Plus 1.6% Sporade 1.6%
Sport Drink
Singha 95% Chang 5%
Soda
Spy 75% Full Moon 17% Smirnoff 4% Breezer 4%
RTD-Alcohol
KTD 16% M-150 57% Carabao 21% Others 6%
Energy Drink
Brand's 60% Scotch 40%
Bird Nest
Cocal-Cola 52% Pepsi 30% est 10% Others 8%
Soft Drink-Cola
Scotch 10% Brand's 90%
Chicken Essence
Leo 53% Singha 5% Heineken 4% Others 1% Chang 37%
Beer
Brand's 75% Scotch 25%
Fruit Essence Market share of domestic F&B
BGC has several customers mainly from brand leaders in each category.
Domestic Market:
Market share & Opportunities
Source: Company research
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Target Growth at 70% Key driver:
Wine market growth
both countries
Australia & New Zealand
12%
Target Growth at 100% Key driver:
Packaging in India
Market
India
12%
Europe
Target Growth at 27% Key driver:
Agent
import value approximately to 1,528 Mil USD
5%
CLMV
Target Growth at 45% Key driver:
Cambodia
countries and high value product
60%
* % of total BGC export Export Market:
Market share & Opportunities
Export market aims to increase from 7% to 10% of total sales in 2019
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Key Drivers
product varieties and flexibility to maximize utilization
Key Drivers
applied in 5 production lines
Avg, Efficiency Rate
Target Efficiency Target Utilization
Profitability Improvement : 2019 Targets
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ES III Expert System Ultrasonic Mold Cleaning
Close loop Control IR-D Intensity Weight Control
IR-D & IGC
at Furnace or approximately 6 Mil.Bt. /Year
control process
Profitability Improvement : New Projects 2019
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Profitability Improvement : New Projects 2019
Gob Assist - BTC Swabbing Robot
which is the key of bottle forming and bottle quality
INVENT TO INSPIRE
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Continuous improvement in our production efficiency Growth in higher value products Cost management and sales mix Stable and strong Cash Flow
Profit improvement
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