Golden Lime: Stability And Growth in Diversified Markets SET - - PowerPoint PPT Presentation

1

Golden Lime: Stability And Growth in Diversified Markets

SET Opportunity Day 2Q 2018

Bangkok, Sept 18th 2018

2

9/18/2018

Disclaimer

This presentation contains “forward-looking” statements of Golden Lime Public Company Limited (the “Company”) that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than statements of historical fact contained herein, including, without limitation, those regarding the future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where the Company participates or is seeking to participate and any statements preceded by, followed by or that include the words “target”, “believe”, “expect”, “aim”, “intend”, “will”, “may”, “anticipate”, “would”, “plan”, “could”, “should, “predict”, “project”, “estimate”, “foresee”, “forecast”, “seek” or similar words or expressions are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future and are not a guarantee of future performance. Such forward-looking statements speak only as at the date of this presentation, and the Company does not undertake any duty or obligation to supplement, amend, update or revise any such statements. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved. For an further enquiries please contact Investor Relations: Phone: +66 (0) 2017 7461 – 3 Email: irsutha@goldenlime.co.th

3

9/18/2018

PURPOSE OF THE PRESENTATION

Source : Golden Lime quarterly SET reporting

• Introduce Golden Lime
• Update on latest financial results H1 2018
• Share with you Golden Lime’s growth strategy

4

9/18/2018

Golden Lime Business Description and History

With + 45% domestic market share, One of Thailand’s largest lime players Headquartered in Nonthaburi, 3 legal entities, 4 production sites On the Thai Stock Exchange (SET) since 2014 (ticker : SUTHA) Company with a large technical knowhow back by Carmeuse Group using best available technologies. 9 vertical kilns and several hydrators and milled limestone units Committed to Sustainability

“Think Lime, Think Golden Lime”

• Established in 2003
• Main shareholder CE Lime

(Thailand) “Carmeuse Eastern”

• Current Managing Director Mr. Geza

Emil Perlaki

5

9/18/2018

How The Lime Making Process Works…….

6

9/18/2018

Golden Lime Has Manufacturing Facilities In Saraburi Which Is Well Positioned Close To Major Customers

Bangkok

Thai steel industry concentrated around Bangkok 95% of sugar industry is concentrated in the North and center of Thailand

Saraburi region

• The key tool for producing lime is the kiln which

come in various configurations

• Golden Lime has a number of European designed

kilns as well as an in-house designed ‘EOD’ kiln

• The EOD kiln has also been sold to external lime

producers in places like Indonesia through our subsidiary Golden Lime Engineering

7

9/18/2018

Supply Security Offers Our Customers Peace Of Mind While Fuel Flexibility Allows Management Of Variable Costs

Saraburi / Lopburi region

SQL Prabuthapaht GL HuayPaiWay GL ChongSarika

• Golden Lime has 9x150ktpd kilns located

across 3 different locations:

• Chongsarika: 6x150tpd kilns
• HuayPaiWay: 1 x 150tpd kiln
• Saraburi Quicklime: 2 x 150tpd kiln
• This gives supply security to our customers

that cannot afford to stop their manufacturing processes due to a lack of lime

• Alongside the supply security Golden Lime

also has fuel flexibility as the new acquisition

• f Saraburi Quicklime uses bituminous coal
• This allows Golden Lime to choose the most

efficient fuel source and given this is 20% of the input costs it’s a valuable lever versus those on only one fuel

• We also have operations in Napralan with

facilities for hydrating and milling

GL Napralan* *No kilns – downstream processing

8

9/18/2018

Golden Lime Has A Diversified Customer Base Operating Across A Wide Range Of Industries

• Golden Lime’s customer base is spread across a

wide variety of industries which means that if one industry is negatively impacted product can be switched to another industry with more positive conditions

• Although lime can be a small component of a

customers’ manufacturing process (eg steel 6%) it is at the same time a vital component therefore customer loyalty is high

• Along with traditional lime users such as steel,

sugar and construction Golden Lime is also now present in newer product segments such as water treatment and specialty chemicals

• Various

growth areas are also being developed in aero concrete blocks and specialty lime products for industries like steel that give better value in use versus standard lime or other products

9

9/18/2018

Golden Lime Has Two Large Strategic Shareholders With Vast Experience Both In Thailand And Globally

10

9/18/2018

PURPOSE OF THE PRESENTATION

Source : Golden Lime quarterly SET reporting

• Introduce Golden Lime
• Update on latest financial results H1 2018
• Share with you Golden Lime’s growth strategy

11

Golden Lime H1 2018 Financials

Revenue, EBITDA and Net Income

Golden Lime – Total Revenues

In million THB

Golden Lime – EBITDA

In million THB

Golden Lime – Net Income

In million THB

• Sales volume and revenue increase in 2017 was further

accelerated by the capacity addition and the SQL acquisition in H1

• Synergies via the integration of SQL into GL , and new

product developments from 2019, are expected to improve further the revenue and profit generation in 2019

• EBITDA also increased significantly particularly in the core

business which saw a 22mTHB yr-on-yr increase in 2Q after the full consolidation effect of Saraburi Quicklime

• Net Income was relatively stable as depreciation increased

with the addition of Kiln 7

428 548 518 436 505 549 429 534 424 369 414

2013 2014 2015 2016 2017 2018 2019

H1 H2

116 133 128 102 102 121 105 113 80 77 70

2013 2014 2015 2016 2017 2018 2019

H1 H2

57 74 70 45 48 46 44 54 26 23 23 36

2013 2014 2015 2016 2017 2018 2019

H1 H2

9/18/2018

12

9/18/2018

Golden Lime H1 2018 Financials

ROA (Return on Assets) And ROE (Return on Equity)

• While ROA (Return on Assets) was year-on-year this is a positive trend given that Golden Lime

has added significantly to its asset base in the form of a new kiln located in a new production facility

• ROE (Return on Equity) increased 28% due to the higher net income in H1 2018 vs H2 2017

15.0% 10.0% 7.0%7.4%7.5%

Golden Lime – Return on Assets

In million THB

28.3% 15.6% 11.3% 12.2% 15.6%

Golden Lime – Return on Equity

In million THB

13

Golden Lime H1 2018 Financials

Dividend: A Regular Cash Stream For Investors

Golden Lime Dividend History

• Since going public Golden Lime has paid a

regular dividend on a bi-annual basis

• The stated policy is for at least 40% of net

income to be paid out but as evidenced this has historically been higher

• In H1 the payout of 0.08THB was 24mTHB total

and the current plan is to be at least in line with 2017 in terms of total dividend payout for 2018 Future Plan For Dividends

• Golden Lime will continue to pay out regular dividend’s
• A board decision was taken to pay out quarterly as
• pposed to bi-annual
• Currently the size of the dividend will be decided on a

quarterly basis

• The aim is to have more regular sized dividend pay-
• uts so it becomes more predictable for investors

9/18/2018

Golden Lime – EBITDA/Dividend

2.84 1.13 3.79 4.05 2.51 1.78 3.22 1.55 2.64

2014 2015 2016 2017 2018

H1 H2

Golden Lime – Dividend History

In million THB 0.15 0.15 0.15 0.30 0.08 0.09 0.15 0.10 0.08

H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020

Golden Lime – Net Income/Dividend

1.56 0.50 1.78 1.53 1.20 0.59 0.94 0.50 0.81

2014 2015 2016 2017 2018

H1 H2

14

Acquisition Of Saraburi Quicklime And New Kiln 7

Increased Capacity And Customer Base

Additional Capacity EBITDA Impact Next Steps

New Kiln 7 Commissioned Saraburi Quicklime Acquisition

• 150 tonnes per day (50 kt/yr)
• Project ongoing to push the capacity higher
• 20-30mTHB*
• Low labor and SG&A cost
• Fuel optimization program started
• Plan to use this kiln for high value add products

9/18/2018

Additional Capacity EBITDA Impact Next Steps

• 300 tonnes per day (100 kt/yr)
• Project ongoing to push the capacity higher
• 40-50mTHB*
• Additional order book particularly in steel
• Further synergies in SG&A and variable costs

expected in 2019

* Internal forecast

15

9/18/2018

PURPOSE OF THE PRESENTATION

Source : Golden Lime quarterly SET reporting

• Introduce Golden Lime
• Update on latest financial results 2Q 2018
• Share with you Golden Lime’s growth strategy

16

9/18/2018

Golden Lime’s Growth Strategy

Three Key Drivers Of Golden Lime’s Mid-term Growth

1 2 3

Increase exports in Asia

• Versus other major lime players in Thailand Golden Lime has a limited number of exports
• Major growth in surrounding countries (Myanmar, Laos, Cambodia) will open up new markets
• Also developed markets in Taiwan and Korea present an opportunity particularly in

specialized niche products

Increase value provided on the domestic Thai market

• Thailand has one of the lowest average lime and hydrate prices in the region due to

commodity status of most of the products and relatively low level of customization and services

• For logistical reasons the Thai market experiences little or no imports
• A leading domestic market player like Golden Lime has room to improve the product value

and total-cost-of-ownership via customized products and higher added value services in logistics & application

• Opportunity for value and revenue increase

Development of New Products and Markets

• Leveraging on the technical know-how of Carmeuse there are a number of high value added

products being developed

• This along with South East Asian economies becoming more efficient, quality oriented,

focusing on total value instead of only price, and environmentally conscious, is resulting in new markets opening up for more sophisticated producers like Golden Lime

17

9/18/2018

Growth Opportunity: Increased Export Volume

Golden Lime Currently Has A Moderate Export Volume Of 10%

Myanmar Laos

Thailand

Cambodia

Vietnam Malaysia Indonesia Taiwan Philippines

: Core Market : Export market with presence : Expansion focus near term : Markets out of current scope

• Golden

Lime’s core market

• f

Thailand currently accounts for 90% of sales

• Most

export volumes are now going to Laos with initial volumes to Indonesia started in the last few months

• However,
• pportunities

exist particularly in the high growth neighboring countries like Myanmar that have little or no quality lime

• Opportunity also exists in markets

such as Taiwan which has a large potential market in steel (22 million mt of steel production)

1

18

9/18/2018

Growth Opportunity: Value Increase In Thailand

Thailand Has Lower Prices Compared To Other Markets In The Region

India

Sri Lanka Pakistan

Myanmar Laos Thailand

Cambodia

Vietnam Malaysia Indonesia Philippines

UAE

Saudi Arabia Oman Yemen Iran

Afghanistan

US$60-120↑ US$67 US$60-95↑ US$75↑ US$80-150↑ US$60-95↑ US$80↑ 2

: Markets with higher prices : Markets with equal prices : Core market

Note: Price estimates based on internal market intelligence

19

9/18/2018

Growth Opportunity: New Products And Markets

Specialty Products For The Steel And Power Industries

3

1. Specialized flux for the Steel Industry

• Replacement for imported products with

better cost and efficiency gains in Electric Arc Furnaces (EAFs)

• Low capex investment as current kiln can

be converted

• Market for both domestic and also SEA

Steel mills 2. Special product Flu Gas Treatment in power plants and Waste to Energy incinerators

• New potential in the Thai market as well

as SE-Asia

• Municipal Waste incineration is expected

to grow 50% year on year from current very low level to the

• ne

seen in Japan/Singapore in 20years

• High end market replacing commodity

products

20

9/18/2018

Golden Lime Conclusion

A Good Opportunity For Growth In Stable Diversified Markets

1. Golden Lime Backed By Key Strategic Investors

• Carmeuse with 160 years of experience in the lime business globally who bring expertise and knowledge
• f the latest engineering and processes
• GP Group with150 years of experience of doing business in Thailand and Asia

2. Demonstrated Growth Potential Over The Last Year

• Greenfield investment in a new kiln has come online successfully with product sold into the market
• Acquisition of Saraburi Quicklime being successfully integrated with further benefits to come

3. Financial Results Are In An Upward Trend

• Key financial indicators (EBITDA, Net Income, ROE, ROA) are rising
• We see this trend continuing

4. Dividend Policy Provides Regular Cashflow

• Historically Golden Lime has paid out a healthy dividend
• This policy is set to continue and to become more regularized – quarterly dividends

5. Opportunity For Growth In The Near Term

• Promising opportunities in export markets, in Thailand and through new products and markets

21

Questions?