Opportunity Day Stock Exchange of Thailand Quarter 1, 2017 - - PowerPoint PPT Presentation

Opportunity Day

Stock Exchange of Thailand

Quarter 1, 2017 Enhances lives everyday with The Green Chemical Concept

Disclaimer

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. GGC 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 GGC

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.

Agenda

Page 3

GGC Business Overview Strategic Direction 1Q/17 Financial Highlights

Agenda

Page 4

GGC Business Overview Strategic Direction 1Q/17 Financial Highlights

GGC – Green Flagship

A Prominent Player in Oleochemical Business Aiming to Become a Leading Green Chemical Company

GGC’s Post-IPO Shareholding Structure Key Milestones

TETSO JV Biocomplex

Public 72.29(1) - 75.00% >99.99%(3) 30.00%(4) 50.00% 50.00%(5) 25.00 – 27.71%(1)

2015 2008 2005 2006

Founded TOL and TFA Commenced Operations Completed corporate restructuring for spin-off Converted into a PLC and renamed to GGC Acquired 50% in TEX Invested in 30% interest in TETSO

2016

LEADING GREEN CHEMICAL COMPANY ME Plant 2 COD(7)

2018 2017

Kernel Nut Extraction Plant COD(7) Biocomplex Phase 1 COD(7)

2019

Biocomplex Phase 2

50.00%(2)

Note: (1) In the case that full over–allotment options are exercised (2) Held by BASF Thai Company Limited (3) Other 2 shares are held by individuals (4) Remaining 70.00% are held by Eastern Palm Oil Company Limited (5) Remaining 50.00% are to be held by Kaset Thai International Company Limited (KTIS) (7) Scheduled COD

Page 5

Overview of GGC’s Value Chain

Strong Foothold of Upstream Businesses and Integrating into Downstream Businesses

Home Care Industrial Aids Personal Care Chewing Gum / Candy Personal Care Pharmaceuticals

End Use

B100 (used to produce Biodiesel, transportation fuel)

GGC’s Product TEX’s Product

Raw Material Basic Oleochemicals Oleochemicals Derivative Methyl Ester Fatty Alcohols Fatty Alcohols Ethoxylates Refined Glycerine

Fatty Alcohols Ether Sulfates Fatty Alcohols Sulfates

(FAEO) (ME) (FA) Palm Kernel Oil Palm Oil (CPO) (CPKO) (Glycerine or GL)

Operating Performance Overview

62% 38%

Sales Revenue Breakdown By Business Unit 1Q/17 : Total 4,246 MB Adjusted EBITDA Breakdown By Business Unit 1Q/17 : Total 345 MB ME Business Unit (ME + GL) FA Business Unit

Page 6

47% 53%

GGC’s Key Strengths

• Advanced technology from international manufacturer
• Feedstock flexibility
• Cost competitiveness
• Production yield competitiveness
• Reliability – minimal unplanned downtime
• ME and FA positioned as premium products with high quality
• Internationally recognizable brand renowned for its quality
• Strong operational standard highly recognized and awarded
• RSPO certified in line with global trends

GGC, the Designated Green Chemical Flagship Company of the PTTGC Group, a Leading Oleochemical Player with Growth Opportunities in the Downstream Businesses

Technologically advanced production plants and commitment for continuous improvement Strong brand equity with high-quality products and service standards

99.78% 99.64% 99.99% 2014 2015 2016 Plant Operating Period

High Reliability- Minimal Downtime(1) Superior ME Profitability

2,936 3,147 2,847

7.5% 9.0% 7.2%

2014 2015 2016

EBITDA per ton EBITDA Margin

1

Brand Sustainability Awards Certifications

2

THB / ton

Note: (1) Operating period is based on amount of time without unplanned shutdown over total hours in a year (365 days * 24 hours)

Page 7

GGC’s Key Strengths (cont’d)

GGC, the Designated Green Chemical Flagship Company of the PTTGC Group, a Leading Oleochemical Player with Growth Opportunities in the Downstream Businesses

• Located in Rayong with proximity to various partners, suppliers, customers etc.
• Connecting pipelines to supplier (for hydrogen) and customer (for FA to TEX)

allows cost and quality advantages

• Advantage in developing new products and quality of existing product that requires

Hydrogen as raw material

• Designated green chemical flagship of PTTGC
• Long-standing business relationships with PTT Group, PTTGC Group and
• ther business partners i.e. Shell, Esso, SPRC and Unilever

Strategic Location in the Map Ta Phut Industrial Complex with Proximity to Suppliers and Customers Strategic relationship with PTT Group, PTTGC and global industry leaders

TEX 10% Others 45% PTT Group 45%

2016 Sales Breakdown by Customer PTT Group

Current facilities Future projects

3 4

CLMV

Biocomplex ME plant II

ME & FA plant

Page 8

Agenda

GGC Business Overview Strategic Direction 1Q/17 Financial Highlights

Page 9

Aspiration to Become a Leading Green Chemical Company

Our Strategies in Completing the Three Pillar Growth Roadmap

Product Portfolio Aspiration Under the Three Pillar Strategy Maintaining leadership position in our current business

1

Continuously pursuing operational excellences to improve profitability

2

Expanding customer base and maintaining relationship with existing valuable customers

3

Emphasizing on R&D for high value products

4

Expansion into specialty oleochemicals

5

Moving toward biochemicals and bioplastics

6 Biofuel

ME

Ethanol FAEO

GL FA

Special- ties

Bioplastics

Our Strategies

Palm Base Biochemicals Sugar Base

Page 10

Bio chemicals Bio Plastics

Oleo Specialties Refined Glycerine Plant 2 20 KTA

Projects in the pipeline

Project Kernel Nut Extraction (TETSO) Methyl Ester Plant 2 Refined Glycerine Plant 2 Oleo Specialties Biocomplex Phase 1

Capacity Feedstock Intake 90 KTA Methyl Ester 200 KTA Methyl Ester 20 KTA TBA Sugarcane : 2.4 mm TPA Ethanol : 186 mm LPA CAPEX 380 MB (GGC holds 30%) 1,650 MB TBA TBA 7,615 MB (GGC will hold 50%) Project Progress Update Under Construction Under Construction Feasibility Study Feasibility Study FID : 4Q/17 Scheduled COD 4Q/17 4Q/18 Targeted : 4Q/18 Targeted : 4Q/19 4Q/19

2017 2018 2019

Kernel Nut Extraction 90 KTA Feed Intake Methyl Ester Plant 2 200 KTA Biocomplex Phase 1

Sugarcane : 2.4 mm TPA Ethanol : 186 mm LPA

2020

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Agenda

GGC Business Overview Strategic Direction 1Q/17 Financial Highlights

Page 12

1Q/16 4Q/16 1Q/17 % YoY % QoQ Sales Revenue (Millon Baht) 3,124 2,111 2,642

• 15%

25% Plant Utilization Rate (%) (1) 102% 59% 86%

• 16%

27% Sales Volume (Tons) (2) 88,345 53,038 69,205

• 22%

30% Sales Volume (Million Litres) 102 61 80

30% Adjusted EBITDA (Million Baht)(3) 303 143 163

• 46%

14% Adjusted EBITDA Margin (%) 9.7% 6.8% 6.2%

• 3.5%
• 0.6%

Note : (1) Nameplate Capacity 300,000 Tons per year (2) Coversion ratio: 0.865 Tons = c.1,000 Litres (3) Adjusted EBITDA refers to EBITDA excluding impact of Stock Gain/(Loss) and NRV

1Q/16 4Q/16 1Q/17 % YoY % QoQ Sales Revenue (Millon Baht) 1,211 2,009 1,604 32%

• 20%

Plant Utilization Rate (%) 98% 105% 89%

• 8%
• 16%

Sales Volume (Tons) 25,321 28,048 19,890

• 21%
• 29%

Adjusted EBITDA (Million Baht)(1) 19 91 181 833% 99% Adjusted EBITDA Margin (%) 1.6% 4.5% 11.3% 9.7% 6.8%

Note : (1) Adjusted EBITDA refers to EBITDA excluding impact of Stock Gain/(Loss) and NRV

Quarter 1/2017 Highlights by Business Unit

Fatty Alcohols Business Unit Highlights

B5-B3 B5 B7 B7-B3

*Biodiesel mandate B7 – effective from May 8, 2017

Methyl Ester Business Unit (B100) Highlights

Page 13 Biodiesel Mandates & Trend of CPO DIT Price Trend of CPKO MPOB Price

Biodiesel mandate

• Gradual growth of regional CPKO supply,
• CPKO price started to declined mid 1Q/17
• Gradual growth of local CPO supply
• Biodiesel mandate was B5 during 1Q/17

GGC’s Fatty Alcohols Business Unit Performance GGC’s Methyl Ester Business Unit Performance

B7*

Consolidated Operating Performance

Page 14

4,335 4,120 4,246 1Q/16 4Q/16 1Q/17

Sales Revenue (MB) EBITDA & Adjusted EBITDA* (MB) EBITDA Margin & Adjusted EBITDA* Margin (%)

407 272 312 323 234 345 9.4% 6.6% 7.3%

7.5% 5.7% 8.1%

1Q/16 4Q/16 1Q/17

EBITDA Adjusted EBITDA EBITDA Margin Adjusted EBITDA Margin

YoY: -2% QoQ: +3% EBITDA YoY: -23% QoQ: +15% Adjusted EBITDA YoY: +7% QoQ: +48%

269 142 145

6.2% 3.4% 3.4%

1Q/16 4Q/16 1Q/17

Net Profit Net Profit Margin

Net Profit (MB) & Net Profit Margin (%) 1Q/16 4Q/16 1Q/17

Adjusted EBITDA Breakdown By Business Unit Sales Revenue Breakdown By Business Unit ME Business Unit FA Business Unit

Note : Adjusted EBITDA refers to EBITDA excluding impact of Stock Gain/(Loss) and NRV

Performance Quarter 1/2017 vs. Quarter 4/2016 142 145

72 71 47 49

Q4/2016 Operating Profit Stock Gain FX Other Q1/2017 Stock Gain/(Loss)

Page 15

Overall operating profit in Q1/17 was higher than Q4/16,mainly from increasing in spread of Fatty Alcohols following market P2F. Stock Gain (Loss) in Q1/17 was loss of 33 MB while there was stock gain in Q4/2016 of 38 MB ,mainly from Fatty Alcohols due to the continuous rise in price of crude palm kernel oil during the whole quarter. Gain/(Loss) from FX in Q1/17 was loss 24 MB against gain in Q4/2016 of 23 MB due to baht appreciation in Q1/17 while baht depreciation in Q4/16.

Net Profit : Million Baht

Performance Quarter 1/2017 vs. Quarter 1/2016

Page 16

269 145

33 128 23 6

Q1/2016 Operating Profit Stock Gain FX Other Q1/2017

Overall operating profit in Q1/17 was slightly higher than Q1/16,mainly from increasing in spread of Fatty Alcohols following market P2F while there was decrease in sales volume of Methyl Ester as a result of biodiesel mandate being B5 in Q1/16 while it was B7 in quarter 1/2016. Stock Gain (Loss) in Q1/17 was loss of 33 MB while there was stock gain in Q1/2016 of 95 MB , mainly from Fatty Alcohols due to the continuous rise in price of crude palm kernel oil during the whole quarter. Gain/(Loss) from FX in Q1/17 was loss 24 MB against loss in Q1/16 due to baht appreciation in Q1/17 more than Q1/16.

Stock Gain/(Loss)

Net Profit : Million Baht

Strong Financial Position

Page 17

Statements of Financial Position

Cash and Cash Equivalent Account Receivable, Inventory, and other Current Assets PP&E Non-current Assets Other Liabilities Interest Bearing Debt Shareholders’ Equities

December 31, 2016 Baht 11,631 million March 31, 2017 Baht 11,845 million

Key Financial Ratios

0.7 1.0 1.0 1.8 1.9 0.1 0.2 0.2 0.3 0.3

31 Mar 16 30 Jun 16 30 Sep 16 31 Dec 16 31 Mar 17

Net IBD/EBITDA Net IBD/Equity

10.7 12.8 13.2 11.0 10.1 9.4 11.1 10.7 8.7 7.3

31 Mar 16 30 Jun 16 30 Sep 16 31 Dec 16 31 Mar 17

ROE ROA

Repayment Plan Cash Flows

231 280 338 441 567 765

2017 2018 2019 2020 2021 2022 Million Baht Million Baht

528 916

631 159 84

Beg Cash OperCF CA+In Financing Ending Cash

Million Baht

Beginning Cash Operating Cash Flows Ending Cash Financing CAPEX & Investment

Appendix

Page 18

Consolidated Income Statement

Page 19 Unit (Million Baht) MB % MB % MB % MB % MB % Sales Revenue 4,335 100 4,120 100 4,246 100 (89) (2) 126 3 Feedstock (3,483) - 80 (3,354) - 81 (3,347) - 79 135 (4) 7 (0) NRV (11) - 0

• - 11 (100) (0) (100)

Product to Feed Margin 841 19 766 19 899 21 58 7 133 17 Other Variable Costs (363) - 8 (302) - 7 (355) - 8 8 (2) (52) 17 Fixed Costs (130) - 3 (130) - 3 (139) - 3 (9) 7 (9) 7 Stock Gain/(Loss) 95 2 38 1 (33) - 1 (128) (135) (71) (187) SG&A (49) - 1 (112) - 3 (71) - 2 (21) 43 41 (37) Other Income 13 12 10 (3) (20) (2) (14) EBITDA 407 9 272 7 312 7 (95) (23) 40 15 Depreciation and Amortization (130) - 3 (139) - 3 (138) - 3 (8) 6 1 (1) EBIT 278 6 133 3 174 4 (8) (3) 1 1 Finance Costs (7) - 0 (22) - 1 (22) - 1 (15) 219 (1) 3 FX Gain/(Loss) (1) (1) - 0 22 1 (24) - 1 (23) 2,089 (46) (208) Shares of profit/(loss) from investment 24 1 24 1 30 1 6 25 6 26 Income Tax Expenses (15) - 0 (12) - 0 (13) (4,967) 3 (18) Net Profit 293 7 142 3 145 3 (148) (51) 3 2 Profit/(Loss) attributable to

• - - - - - - - - -

Owners of the company 269 6 142 3 145 3 (124) (46) 3 2 Non-controlling interest 24 1

• - - - (24) (100) -

n.a. Net Profit 293 7 142 3 145 3 (148) (51) 3 2

Note : (1) Including Gain/(Loss) from FX and Derivatives

Adjusted EBITDA (2) 323 7 234 6 345 8 22 7 111 48

Note : (1) Including Gain/(Loss) from FX and Derivatives (2) Adjusted EBITDA refers to EBITDA excluding impact of Stock Gain/(Loss) and NRV

1Q/16 4Q/16 1Q/17 YoY QoQ

One-Time Expenses in 4Q/16 and 1Q/17

(1) One-Time Expenses in 4Q/16 : 45 MB

Page 20

407 272 312 323 234 345 9.4% 6.6% 7.3% 7.5% 6.8% 8.3%

1Q/16 4Q/16 1Q/17

EBITDA Adjusted & Normalized EBITDA EBITDA Margin Adjusted & Normalized EBITDA Margin

45(1) 8(2)

(2) One-Time Expenses in 1Q/17 : 8 MB

IPO Related Expenses : c.7 MB Asset Write-Off Expenses : c.23 MB Litigation Expenses : c.15 MB

(primarily recorded in 3Q/17 : 5 MB)

IPO Related Expenses : c.8 MB

Adjusted & Normalized EBITDA (MB) Adjusted & Normalized EBITDA Margin (%)

Value Chain of the Chemical Industry

Page 21

Note: Value chain is simplified and exemplified for educational purposes, therefore it does not reflect the whole chain

Petrochemical(1) Feedstock Upstream Downstream End Applications

High Value Add

Oil fracking 3D/4D Printing

E&E Construction Durable Packaging Film / Fiber Auto

Green Chemical(1) Feedstock Upstream Downstream End Applications

High Value Add

Oil fracking Phama/Cosme tic Ingredient 3D/4D Printing

E&E Construction Durable Packaging Film / Fiber Auto Biofuel HPC Additives Agro-Green Solutions Lubricants E&P (Crude Oil Base) Refinery/ Aromatics/ Olefin LDPE, LLDPE, HDPE Phenol, Acetone, PU, PC Cellulosic (Sugar Base) Oleo (Palm Base) Biochemical Bioplastics Ethanol Biofuel Bioplastics/ Biochemical ME FA Gycerine Fatty Acid FAEO FAES Oleo specialties Biochemical

Phama/Cos- metic Ingredients

Overcoming Capacity Limitation via Expansion of ME Plant 2

Expanding GGC’s ME Plant to Future Capture Demand while Maximizing Profitability

Plant Optimization

Serve as base plant as can

• perate at

low cost Support demand at different mandate level by alternating feed type

Maximize Profitability

ME Plant 1 ME Plant 2

 Feed Flexibility when deemed economical  Optimal feed use  Minimize initial investments and operating cost

Refined Palm Oil (RPO)

Crude Palm Oil (CPO)

Methyl Ester 300 KTA Methyl Ester 200 KTA Refine Glycerine 31 KTA Crude Glycerine

123.9%

Utilization(1)

ME Plant 1

ME Plant 2

Crude Palm Oil (CPO) Others i.e. palm stearin or mixed feed

Map Ta Phut, Rayong Nongyai, Chonburi

Flexibility Efficiency

Jul/16 FID

Project Timeline

Project Progress

CAPEX 1,650 MB

Apr/17 4Q/18

COD

Foundation Stone Placement Ceremony Page 22

Applications

By Product Value Added to ME Plant 2 (RGL)

CGL captive use to produce RGL with higher value Project Timeline CAPEX TBA

4Q/18

Targeted : COD

Under Feasibility Study ME Plant 2 Refined Gylcerine Plant 2 20 KTA Refined Glycerine Crude Glycerine

• Integrated project with ME Plant 2
• Enhance value of by-product, Crude Glycerine from ME production
• Capture market growth of high volume industries

Page 23

CPKO

Profitability Enhancement thru’ vertical integration

JV with experienced partner in Kernel Nut Extraction for Fatty Alcohols feedstock security and cost saving

Started Construction

Project Timeline CAPEX 380 MB

4Q/17

COD

3Q/16 Kernel Nut Extraction (TETSO) 90 KTA (Feedstock Intake Cap) Kernel Nut Fatty Alcohols

• GGC holds 30% in JV (TETSO) with Eastern Palm Oil, experienced partner
• Location : Nongyai, Chonburi (Close to palm oil plantation)
• Security of CPKO supply
• Competitiveness enhancement
• Competitive CPKO cost
• Logistic cost saving from better proximity to FA plant

Project Progress

Page 24

Higher - Value Downstream Products

Specialty Oleochemicals Development towards higher profitability Project Timeline CAPEX TBA

4Q/19

Targeted COD

Fatty Alcohols Multi Purpose Reactor Specialty Oleochemicals

“Recipe”

Special Feedstocks Raw Materials For Property Enhancement

Ingredients in HPC products

• Downstream integration with high margin products,
• Help reduce country import
• Target markets: Thailand, and CLMV

Under Feasibility Study Page 25

Biocomplex - Leveraging on Thailand’s Bioeconomy

Integrated Complex to Produce Biofuel, Biochemicals, Bioplastics from Sugarcane and Electricity/Steam from Biomass

Phase 2

Biochemical / Bioplastic Plant Cane Juice

• r other RMs

Crushing Mill Ethanol Plant 186 mm litre per annum 2.4 mm tons / annum Cane Juice Ethanol

• ther RMs;

HTM, Molasses

Sugar cane Plantation

Electricity to grid Utility & Waste Co-Generation Sugar cane

Phase 1

Electricity Bagasses Waste Electricity End Applications

Oil Fracking

E&E Construction

Durable Packaging Film / Fiber Auto High Value Added Pharma/Cosmetic Ingredient

Bioplastics Biochemicals 4Q/17 FID

Project Timeline Biocomplex Phase 1 CAPEX 7,615 MB

4Q/19

COD

Start Construction 4Q/17 Phase 1 Location : Nakornsawan GGC will hold 50% in JV with KTIS Under EIA approval process Key Investment Decision Criteria:

• Amendment of Sugar Act
• Approval to procure electricity by PEA

Page 26

T H A N K Y O U

Global Green Chemicals Public Company Limited

555/1 , Energy Complex, Building A, 4th Floor, Vibhavadi Rangsit Road, Chatuchak, Chatuchak, Bangkok 10900, Thailand Tel: +66(0) 2 558 7300 Fax: +66(0) 2 558 7301 www.ggcplc.com

For further information or enquiries, please contact our Investor Relations Team Contact: Puvadol Vasudhara (IR Manager) Email: IR@ggcplc.com Tel: +66(0) 2 558 7307