GC Digital Roadshow Stock Exchange of Thailand Q1/19 Performance - - PowerPoint PPT Presentation

6 June 2019 1

GC Digital Roadshow Stock Exchange of Thailand

Q1/19 Performance Presentation

This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward- looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward- looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

Disclaimer

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Vision and Mission

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PTTGC Sustainable Development

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WORLD MEMBERS IN CHEMICALS SECTOR FOR 6th CONSECUTIVE YEAR

Agenda

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02 01

Strategic direction Financial Result

Global Economic Uncertainty US - China Trade war Oil price Fluctuation

Oil

▪ Unpredictable game ▪ Trade flow has been changed ▪ US PE divert its route into

• ther region i.e. EU, SEA, SAM

▪ World GDP revised to 3.3% [3.8% in 2017, 3.6% in 2018] ▪ US, China forecasted to grow but slowdown [US 2.3% , China 6.3%] ▪ Supply cut from OPEC Venezuela and Iran ▪ US crude output and stock hit new high record

2019 Business Environment - Tough but Challenge

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(Unit: Million Baht) Q1/2018 Q4/2018 Q1/2019 YoY % +/(-) QoQ % +/(-) Sales Revenue 120,939 128,874 112,783

• 7%
• 12%

EBITDA 16,308 5,747 11,194

• 31%

95% EBITDA Margin (%) 13% 4% 10%

• 3%

6% Share of profit of investments in JV and Associates 2,024 1,426 1,186

• 41%
• 17%

Net Profit 12,388 4,060 6,443

• 48%

59% EPS (Baht/Share) 2.75 0.90 1.43

• 48%

59% Adjusted EBITDA* 16,319 12,271 9,768

• 40%
• 20%

Adjusted EBITDA Margin (%) 13% 10% 9%

• 4%
• 1%

Stock gain/(loss) net NRV

• 11 (6,524)

1,426 >200% 122% FX gain (loss) 669 252 438

• 35%

74%

Note: * Adjusted EBITDA refers EBITDA excluding impact of oil stock value

Overview of business unit performance 7

BU Q1/18 vs Q1/19 Q4/18 vs Q1/19 Refinery Mkt GRM 6.15 -> 3.22 $/BBL Mkt GRM 5.52 -> 3.22 $/BBL Aromatics BTX P2F 166 -> 206 $/T BTX P2F 238 -> 206 $/T Olefins & Derivatives EBITDA margin 32% -> 18% EBITDA margin 17% -> 18% Phenol Phenol P2F 467 -> 442 $/T Phenol P2F 540 -> 442 $/T

12,388 4,857 2,106 231 1,249 6,443

Q1-18 Q1-19

Performance comparison YoY 8

Stock Gain/(Loss) & NRV&Commodity Hedge Q1’19 = 1,181 Q1’18 = (68) FX Gain/(Loss) Q1’19 = 438 Q1’18 = 669 Unit : MB Operating Profit from main BUs Sharing from Subsidiaries, JV & Associate Q1’19 = 1,834 Q1’18 = 3,940

• Overall operating profit from GC in Q1’19 was soften from Q1’18, mainly from
• REF performance decreased due to lower market GRM from 6.15$/BBL to 3.22$/BBL as decreasing in major product spread.
• ARO performance increased from higher P2F on BTX from 166 $/T to 206 $/T as PX spread increased from gaining support of

downstream demand, while Q1’18 market spread has pressure from expecting new supply to the market.

• OLE & POL performance is softening from decreasing in PE price, while partial offset by increasing in selling volume.
• Subsidiary was decreased mainly from less volume in MEG and Phenol because of schedule S/D and softening in MEG spread.
• Sharing from JV&Associates was decreased mainly from softening in Acrylonitrile (AN) business and less effect from FX gain

4,060 3,338 1,040 1,355 7,930 186 6,443

Q4-18 Q1-19

Performance comparison QoQ 9

Stock Gain/(Loss) & NRV&Commodity Hedge Q1’19 = 1,181 Q4’18 = (6,749) FX Gain/(Loss) Q1’19 = 438 Q4’18 = 252 Unit : MB Operating Profit from main BUs Extra Item Q4’18 Gain on bargain purchase = 1,355 Sharing from Subsidiaries, JV & Associate Q1’19 = 1,834 Q4’18 = 2,874

• Overall operating profit from GC in Q1’19 was improved from Q4’18, mainly from no effect from stock loss in the period, while
• REF performance decreased due to lower market GRM from 5.52$/BBL to 3.22$/BBL as Diesel spread and Jet spread decreased.
• ARO performance decreased from lower P2F on BTX from 238 $/T to 206 $/T as PX spread and BZ spread decreased.
• OLE & POL performance increased from higher PE sales volume as no schedule S/D in this period.
• Subsidiary was decreased mainly from lower performance due to a decrease in products spread and volume of MEG and Phenol.
• Sharing from JV&Associates was decreased mainly from softening in Acrylonitrile (AN) business and less effect from FX gain

Strong Financial Position

Cash Flow

THB Bn

Statements of Financial Position

Cash +ST Investment CA PPE Liab. IBD Share Holder’s Equity Mar 31,2019 466 Bn Dec 31,2018 469 Bn

• Cash & ST Investment (50 billionTHB) and private fund and

inhouse management of 3.0 billion THB at the end of Q1/2019

• In Q1/2019, the interest bearing debt is 61% on fixed rate and

39% is float rate. THB debt is a major portion of 57% of our debt profile, while 43% is in USD, mainly from US Bond.

• In Q1/2019 CAPEX still based our core investment from ongoing

projects, including ORP, Propylene Oxide and ,Polyols project.

• The repayment profile is around 10 billion THB per year on

average but 2021 will increase from THB bond retirement (4-yr, 3.05%), as well as 2022 will increase from USD bond maturity.

• The average loan life is ~3.03 years with average cost of long

term debt ~3.87%.

Note : Private Fund and In house management around 3,045MB

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Non CA

Agenda

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02 01

Strategic direction Financial Result

Sustain Core Accelerate Growth levers Balance Business & Social Value To be a Leading chemical company for Better living

▪ International hub ▪ Performance chemicals ▪ Green business ▪ Sustainable development ▪ Effective CSR programs ▪ Stakeholder management Business Competitiveness

• Sustain benefit by

implementing Max infinity

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• Digitalization

* Business / Technology / People Transformation

• Launch new organization of Governance Risk

and Compliance (GRC) i.e. Digital assets / Data analytical / Digital workforces / Cross-function collaboration

Strategic direction

2019 Profit Enhancement Program

Digitalization module : Consideration on implementing 13 uses case i.e. Digital assets / Data analytical / Digital workforces / Cross- function collaboration. Continue to implement MAX project and employed the concept in conducting MAX infinity by GC team to accelerate and increase the initiative in the organization's overall performance improvement program (Max Infinity + Enhancement).

Supportive strategies through challenge year

GC is also launch cost control program in this year in various aspect i.e. OPEX saving 10%, Tax and Interest reduction, Working capital management.

Target approximately 5,600 MB

Set up war room group to closely monitor the economic situation, product prices trend and plant reliability, purpose to prepare the efficiency sales plans and production plans to suit the situation.

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Existing Strong Base New S-CURVE Performance Materials 1st S-CURVE

▪ Enhance GC’s feedstock position & flexibility ▪ Strengthen Thailand capability for Economic & Social Sustainability development

Leverage international partners advance technology & expertise to diversify product portfolio to high performance products

Thailand’s New Targeted Industries as the New Engines of Growth

NEXT-GENERATION AUTOMOTIVE EFFLUENT, MEDICAL & WELLNESS TOURISM AGRICULTURE & BIOTECHNOLOGY ROBOTICS & AUTOMATIONS MEDICAL HUB AVIATION & LOGISTICS BIOFUELS & BIOCHEMICALS DIGITAL SMART ELECTRONICS FOOD FOR THE FUTURE

Strategic direction

Private & Confidential | 15

Strategic execution

• Integrating PET and PTA business
• Closing deal on Rotomolding share acquisition in March
• Executing 3 major projects as plan
• Explore opportunity in EEC and alignment

with policy

• Resource preparation for investment

roadmap i.e. GC Estate for land preparation

• Explore opportunity in international

strategic investment in the region that can support existing value chain or new market opportunity in both green field and M&A

• Opportunity in bio complex in Thailand
• Balance portfolio and align with global

trend i.e. potential investment in recycle plant, COD of ME II in April

Strategic execution

39% 51% 54%

Olefins Reconfiguration (ORP) Propylene Oxide Polyols

Project progress

(Plan at 32%) (Plan at 45%) (Plan at 55%)

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Noted : As of 31 March 19

Joint Venture Company New olefins plant Ethylene 500,000 TPA Propylene 250,000 TPA Propylene Oxide 200,000 TPA Polyols Polyether Polyols (PPG) 130,000 TPA Propylene Oxide 200,000 TPA

Key Global Trend

Coca-Cola pledges to recycle all packaging by 2030 Nestlé aiming at 100% recyclable or reusable packaging by 2025

Plastic Ban

What we are doing?

Shift from film BioPlastics Development Create Awareness PBS PLA

BioComplex

Thank You

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1 Thitipong Jurapornsiridee VP-Corporate Finance & IR Thitipong.j@pttgcgroup.com +662-265-8574 2 Jittasak Soonthornpan IR Manager Jittasak.s@pttgcgroup.com +662-265-8172 3 Nattchanon Chawinsittangkul IR Analyst Nattchanon.c@pttgcgroup.com +662-265-8364 4 Pantaree Nantanakom IR Analyst Pantaree.n@pttgcgroup.com +662-140-8714 5 Krittin Sawasdeewongsa IR Analyst Krittin.s@pttgcgroup.com +662-265-8637 6 Panit Yamprasert IR Analyst Panit.y@pttgcgroup.com +662-265-8513 7 Pavena Thongpan Coordinator zPavena.T@pttgcgroup.com +662-265-8421