GC SET Digital Roadshow Stock Exchange of Thailand 20 March 2019 1 - - PowerPoint PPT Presentation

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GC SET Digital Roadshow Stock Exchange of Thailand 20 March 2019 1 - - PowerPoint PPT Presentation

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GC SET Digital Roadshow Stock Exchange of Thailand 20 March 2019 1 Disclaimer This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be

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GC SET Digital Roadshow

Stock Exchange of Thailand

20 March 2019 1

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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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PTTGC Sustainable Development

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WORLD MEMBERS IN CHEMICALS SECTOR FOR 6th CONSECUTIVE YEAR

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Agenda

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02 01

2018 Highlight Strategic Direction

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Agenda

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02 01

2018 Highlight Strategic Direction

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2018 Key achievement

2018 Achievement

Another record year of net profit of 40,069 Million bath Maintain high operating rate in all major units

REF 102%

(103% in 2017)

ARO 93%

(80% in 2017 )

OLE 101%

(96% in 2017 )

POL 100%

(113% in 2017)

Execution of downstream integration

  • Acquisition of PTA 970KTA and PET 147KTA
  • Acquisition of Rotomolding Compound 61KTA

Achieved sale target in CLMV

Achieved polymer sale volume > 250KT

DPS

7

  • JV in PA9T and HSBC business
  • Full year benefit from realizing JV

performance from asset injection deal, which closed in July 2017.

  • Enhance performance from surging in

Phenol, Acrylonitrile and PP chain. Achieved polymer sale volume through JV in Myanmar ~3KT in the past year

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Sustainable Growth

Strengthen production home base

  • Joint venture in Myanmar with strategic partner
  • Establish sale office in Myanmar and Vietnam
  • Establish logistic business in Vietnam
  • Achieved MAX target of 10,800MB
  • Kick off digitalization module
  • Establish GC Treasury Center for fx management

and USD fund raising

  • Production flexibility of LLDPE/HDPE in 1H19
  • Establish Customer Solution Center to

support marketing strategy to grow as a partner with customer

3Rs Concept

(Reduce / Reuse / Recycle)

Efficiency enhancement Market Strategy & Intelligence Expand market portfolio in high growth region Sustainable development

Bio- packaging

Fashion Items

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Overview of Business Performance

Note : ** Adjusted EBITDA refers to EBITDA excluding impact of oil stock value *** Reported only portion attributable to the Company and actual realization after the asset injection

9

MB MB

Revenue Adjusted EBITDA

Dividend Payment

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Strong Financial Position

Cash Flow

THB Bn

Statements of Financial Position

Cash +ST Investment CA PPE Liab. IBD Share Holder’s Equity Dec 31,2018 469 Bn Dec 31,2017 435 Bn

  • Cash & ST Investment (54 billionTHB) and private fund

and inhouse management of 6.8 billion THB at the end

  • f 2018.
  • In 2018, 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.

  • 2018 CAPEX still based our core investment from
  • ngoing projects, including ORP, PO (GCO) ,Polyols

(GCP).

  • 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 ~3.43 years with average cost of

long term debt ~3.85%.

Note : Private Fund and In house management around 6,800MB

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Non CA

80 75 245 220 90 85 54 55 303 280 97 98 69 57

55 54 54 28 27

Beginning Cash + S/T Investment Operating Cash Flow CAPEX Financing Ending Cash + S/T Investment

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Agenda

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02 01

2018 Highlight Strategic Direction

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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

Strategic Direction

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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

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Long term strategic execution

  • Constructing new 1.1MTA of new capacity
  • Project progress
  • ORP

~32% (COD 2H20)

  • Propylene oxide ~36% (COD 2H20)
  • Polyols

~41% (COD 2H20)

  • KRR

COD 2022

  • Considering investment opportunity through

Joint venture, Green field and M&A

Strategic investment through the value chain Opportunity to strengthen investment base

  • Explore opportunity in EEC and

alignment with policy

  • Resource preparation for

investment roadmap i.e. GC Estate for land preparation

International strategic investment Future opportunity in green business

  • Explore opportunity in

international strategic investment in the region that can support existing value chain or new market

  • pportunity 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

  • f ME II in Q1’19

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Downstream Integration

Acquired share in RGL for rotomolding compound business

Acquired share in SMPC and TPRC to capture downstream opportunity in aromatic chain

Establishment of Joint Venture Company “Kuraray GC Advance Material Co.,Ltd”.

GC continue to have more present in downstream business through extending the value chain

Extending propylene value chain by investing in PO and JV in polyols project

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Committed investment project

Consistent Volume Growth

2019 2021 2020

Digit gitaliza lizati tion

2022

SMPC: PTA (970 KTA) TPRC: PET (147 KTA) RGL: Rotomolding compound (61KTA) Modification LLDPE to swing plant for HDPE production PO/Polyols (330 KTA) Olefins Reconfiguration (750 KTA) PA9T : 13 KTA HSBC : 16 KTA ME Plant 2 (200 KTA)

Potential investment and project under study

EO-Based Derivatives Performance Chemical & Material Expansion Olefins & derivatives Biocomplex

Digit italiza alizatio ion

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Key Global Trend

Plastic Ban

What we are doing?

Shift from film BioPlastics Development Create Awareness PBS PLA

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Agenda

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Appendix

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Maintenance Shutdown Schedule 2019

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cracker HDPE LDPE LLDPE I LLDPE II PS TOCGC Phenol I Phenol II BPA

REF

Refinery Aromatics I Aromatics II

ARO

Plant

2019

PHN OLE POL EOB

54 53 15 12 15 HDPE1

HDPE2

43 22

HIPS 10 15 GPPS

20 12

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Consolidated income statement

Unit : Million Baht Q4/2017 Q3/2018 Q4/2018 YoY % + /(-) QoQ % + /(-) 2017 2018 YoY % + /(-) Sales Revenue 118,743 136,712 128,874 9%

  • 6%

436,745 515,449 18% Feedstock cost (88,964) (106,082) (102,054) 15%

  • 4%

(325,553) (400,501) 23% Product to Feed Margin 29,779 30,630 26,820

  • 10%
  • 12%

111,192 114,948 3% 1 Variable Cost (6,579) (7,153) (7,012) 7%

  • 2%

(25,123) (27,920) 11% 2 Fixed OH (4,807) (4,385) (4,390)

  • 9%

0% (16,186) (16,478) 2% 3 Stock Gain/(Loss) and NRV1 2,488 804 (6,524)

  • 362%
  • 911%

2,858 (3,059)

  • 207%

4 Gain/(Loss) on Hedging Commodity (1,506) (226) (225)

  • 85%

0% (1,475) (272) 82% 5 Other Revenue 2 1,151 1,423 1,236 7%

  • 13%

4,594 4,686 2% 6 SG&A Expenses (3,933) (3,459) (4,158) 6% 20% (12,380) (13,642) 10% EBITDA 16,593 17,634 5,747

  • 65%
  • 67%

63,480 58,263

  • 8%

7 Depreciation & Amortization (4,842) (4,800) (5,048) 4% 5% (20,085) (19,278)

  • 4%

8 Loss from impairment of assets (2,296)

  • 100%

0% (2,296)

  • 100%

9 Inventory Loss (GGC) 3 0% 0% (2,004) 0% 10 Gain on Bargain Purchase 1,355 0% 0% 1,355 0% EBIT 9,455 12,834 2,054

  • 78%
  • 84%

41,099 38,336

  • 7%

11 Net financial expense (679) (531) (483)

  • 29%
  • 9%

(2,991) (2,418)

  • 19%

12 FX Gain(Loss) 292 167 252

  • 14%

51% 2,301 407

  • 82%

13 Share of gain/(loss) from investment 1,704 1,967 1,426

  • 16%
  • 28%

5,574 6,932 24% Share of gain/(loss) from investment (Owners of the parent) 4 1,704 1,967 1,426

  • 16%
  • 28%

3,360 6,932 106% 14 Corporate Income Tax (1,020) (1,471) 1,061 204% 172% (3,863) (2,986)

  • 23%

15 Net Profit after Tax 9,752 12,966 4,310

  • 56%
  • 67%

42,120 40,271

  • 4%

Profit/(loss) attributable to: 16 Non-controlling interests 193 173 250 29% 44% 2,822 202

  • 93%

17 Owners of the Company5 9,559 12,793 4,060

  • 58%
  • 68%

39,298 40,069 2% 18 Adjusted EBITDA6 14,105 16,830 12,271

  • 13%
  • 27%

60,622 61,322 1%

Note: 1 In 2018, stock gain/(loss) and NRV was -3,059MB from average crude oil price of December 2017 at 62 USD/barrel to average crude oil price of December 2018 at 57 USD/barrel 2 Profit of sale of all remaining shares in API 291 MB / 3 Expenses from raw materials derogation (net of tax expense) from GGC for 1,261 MB per shareholding of 72.29% 4 Reported only portion attributable to the Company and actual realization after the Asset injection / 5 In 2017, there was a total of Baht 2,370 million of former shareholder before the business

  • restructuring. For comparison of financial statements from the acquisition of Asset Injection from PTT Public Company Limited on 3 July 2017 /6 Adjusted EBITDA includes the impact of

commodity hedging but excludes the impact of oil stock (Stock Gain/Loss and NRV) and extraordinary items

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(3.1) (1.8) (1.4) (3.1) (5.0) (4.5) (2.6) 1.3 (2.4) (2.7)

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

11.8 11.4 13.9 13.0 14.8 14.6 14.4 14.8 12.5 14.6

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

Refinery Performance

Petroleum Products - Dubai Spread (USD/BBL) Refinery Sales Volume (KBD) Gross Refinery Margin (USD/BBL) Refinery Intake (KBD)

ULG 95 - DB Diesel - DB FO - DB

14.8 14.2 16.1 14.4 13.7 12.1 11.6 4.7 14.9 10.5

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

  • 67% YoY
  • 59% QoQ

+143% YoY +151% QoQ

  • 29% YoY

+13% YoY +3% QoQ +17% YoY

  • 13% YoY

147.9 149.5 149.7 148.1 147.7 146.8 147.7 147.3 148.8 147.4 30.5 28.9 32.3 34.3 34.4 35.9 33.0 31.3 31.5 33.6 178.4 178.4 182.0 182.4 182.1 182.7 180.7 178.6 180.3 181.0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

Crude Condenstate Residue

102% 103% 103% 102% 102% 101% 102% 102%

CDU U-Rate

  • 2% YoY
  • 1% QoQ

+0% YoY

103% 102%

10% 8% 8% 7% 9% 10% 9% 9% 8% 9% 13% 13% 14% 15% 15% 15% 14% 13% 14% 14% 51% 52% 57% 57% 52% 53% 55% 56% 55% 54% 13% 12% 11% 12% 15% 13% 14% 12% 12% 13% 13% 15% 10% 8% 10% 8% 9% 10% 12% 9% 173 180 170 175 176 171 176 187 175 178 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Others Fuel Oil Diesel Jet Naphtha+Ref.

+7% YoY +6% QoQ +2% YoY

6.02 6.11 8.08 6.76 6.15 6.20 6.44 5.52 6.74 6.08 0.72 (1.59) 0.86 3.38 (0.01) 3.26 0.95 (6.17) 0.84 (0.51) 0.02 0.03 (0.04) (2.84) (0.10) 0.08 0.13 0.31 (0.70) 0.11

6.76 4.55 8.90 7.30 6.04 9.54 7.51 (2.61) 6.88 5.11

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Market GRM Stock Gain/(Loss) Net NRV Hedging Gain/(Loss) Accounting GRM

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458 338 320 311 318 212 214 115 357 215

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

420 383 360 356 381 354 501 569 380 451

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

Aromatics Performance

Aromatics Products Prices and Spread (USD/Ton) BTX U-Rate (%) Aromatics Sales Volume (KTons)

PX FECP - Cond BZ Spot - Cond

Products to Feed Margin (USD/Ton BTX)

  • 63% YoY
  • 46% QoQ

+60% YoY +13% QoQ

  • 40% YoY

+19% YoY

78% 66% 82% 93% 91% 94% 94% 93% 80% 93%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 6% 6% 6% 9% 11% 11% 11% 10% 7% 11% 31% 34% 24% 29% 29% 30% 30% 28% 30% 29% 39% 35% 42% 39% 36% 38% 35% 37% 39% 37% 24% 25% 28% 23% 24% 21% 24% 24% 25% 23%

758 728 730 967 939 1,014 1,015 1,003 3,183 3,970

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Other By-Products Naphtha Group PX Group BZ Group

+4% YoY

  • 1% QoQ

+25% YoY

321 212 185 194 166 130 247 238 226 197 6.50 (15.93) 31.18 0.13 48.55 15.05 (92.11) 14.15 (8.22) 0.00 0.00 1.54 3.33 0.21 10.30 (15.25) 1.34 (6.53)

327 196 215 228 167 188 247 121 241 181

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Market P2F Stock Gain/(Loss) Net NRV Hedging Gain/(Loss) Accounting P2F

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Olefins and Derivatives Performance

Olefins Prices and Spread (USD/Ton) Olefins U-Rate (%) Olefins Adjusted EBITDA Margin

MEG – 0.65Ethy Product Price Butadiene Price

1,176 1,133 1,138 1,225 1,379 1,384 1,350 1,207 1,168 1,330 1,176 1,133 1,090 1,195 1,243 1,222 1,217 883 1,091 1,141 1,215 1,158 791 828 987 1,003 1,028 936 824 988 1,078 940 980 1,060 1,142 1,147 1,100 1,045 1,015 1,108 499 446 468 570 581 641 667 568 496 614 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 HDPE (FILM) SEA LLDPE CFR SEA LDPE CFR SE Asia MEG ACP Naphtha MOPJ 2,545 1,094 1,165 1,076 1,310 1,524 1,597 1,097 1,470 1,382 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

370 296 271 283 334 353 309 471 305 367

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

+67% YoY +53% QoQ +2% YoY

  • 15% QoQ

+24% YoY +20% YoY

32% 26% 28% 29% 32% 29% 26% 17% 29% 26%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Olefins 95% 89% 96% 103% 101% 104% 98% 101% 96% 101% HDPE 120% 114% 110% 119% 107% 119% 113% 109% 116% 112% LLDPE 106% 83% 117% 115% 99% 92% 76% 84% 105% 88% LDPE 118% 125% 118% 106% 108% 112% 107% 80% 117% 102% Total PE 116% 108% 113% 115% 105% 107% 97% 94% 113% 100% MEG 67% 90% 111% 110% 111% 91% 95% 102% 94% 100%

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56% 57% 53% 54% 52% 48% 47% 47% 55% 48% 23% 23% 25% 26% 29% 35% 36% 36% 24% 34% 20% 20% 22% 20% 19% 17% 18% 17% 20% 18%

401 405 435 421 433 470 486 454 1,662 1,843

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 HDPE LLDPE LDPE

Olefins and Derivatives Performance

Olefins Intake (Ktons) PE Sales Volume (Ktons) Olefins Sales Volume (Ktons) MEG Sales Volume (Ktons)

61% 67% 53% 57% 57% 56% 58% 56% 59% 57% 28% 24% 28% 32% 33% 32% 29% 32% 28% 31% 12% 9% 19% 11% 11% 11% 13% 12% 13% 12%

981 900 1,026 1,098 1,048 1,098 1,036 1,096 4,004 4,278

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Ethane Other Gas Naphtha

  • 0% YoY

+6% QoQ +7% YoY +8% YoY

  • 7% QoQ

PE U-Rate

+11% YoY

116% 108% 113% 115% 105% 107% 97% 94% 113% 100%

149 131 130 152 122 123 106 139 562 490

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

  • 9% YoY

+30% QoQ

95% 89% 96% 103% 101% 104% 98% 101% 96% 101%

Olefins U-Rate

  • 13% YoY

88 101 117 119 110 108 110 113 426 441

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

MEG U-Rate

67% 90% 111% 110% 111% 91% 95% 102% 94% 100%

  • 5% YoY

+3% QoQ +3% YoY

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301 322 307 261 392 475 437 201 298 376

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

95 91 120 288 370 462 484 602 149 480

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

Phenol Performance

Phenol/ BPA Prices and Spread (USD/Ton) Phenol U-Rate Phenol Sales Volume (KTons) Phenol Adjusted EBITDA Margin

BPA-Phenol

Phenol-BZ

+109% YoY +24% QoQ

  • 23% YoY
  • -54% QoQ

+223% YoY +26% YoY

39% 36% 27% 29% 30% 33% 29% 21% 32% 28% 61% 64% 73% 71% 70% 67% 71% 79% 68% 72%

109 121 141 138 145 138 144 141 509 567

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 BPA Phenol

+2% YoY

  • 2% QoQ

+11% YoY

U-Rate Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018 Phenol 84% 101% 114% 115% 118% 112% 118% 121% 104% 117% BPA 118% 116% 99% 108% 114% 120% 119% 83% 110% 109% 11% 7% 9% 17% 18% 23% 19% 18% 12% 20%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 2017 2018

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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 Jinthip Prakobwit IR Analyst Jinthip.p@pttgcgroup.com +662-265-8361 6 Preeyapa Asarangchai IR Analyst Preeyapa.a@pttgcgroup.com +662-265-8213 7 Pavena Thongpan Coordinator zPavena.T@pttgcgroup.com +662-265-8421