ROADSHOW WITH PHATRA : INVESTOR PRESENTATION MAY 31, 2016 2 - - PowerPoint PPT Presentation

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ROADSHOW WITH PHATRA : INVESTOR PRESENTATION MAY 31, 2016 2 - - PowerPoint PPT Presentation

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ROADSHOW WITH PHATRA : INVESTOR PRESENTATION MAY 31, 2016 2 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

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ROADSHOW WITH PHATRA : INVESTOR PRESENTATION

MAY 31, 2016

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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. 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.

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Agenda

PTTGC’s BUSINESS OVERVIEW 2016 HIGHTLIGHT STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS

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Agenda

PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS

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Overview of PTTGC

  • PTT Group’s Chemical Flagship
  • Thailand’s largest ethane-base cracker with integrated aromatics and refining business
  • Highly competitive cost structure with pricing arrangement for gas feedstock based

upon equitable return on investment for both PTT and PTTGC

  • Fully integrated petrochemical and refinery operations with diversified product

portfolio covering full hydrocarbon chain

  • Committed to operational excellence targeting best in class/ first quartile business

efficiency

  • Ranked in Dow Jones Sustainability Indices’ Chemicals Sector for the 3rd Consecutive

Year

PTTGC at a Glance

Strong footprint in fast growing regions with 6 operating countries Historical Dividend Payment

Dividend Policy >=30% Foreign Limit <=37%

  • Incorporated on October

19, 2011 from the amalgamation of PTTAR and PTTCH

  • 2015 Sales : $11.7 bn;
  • Adj. EBITDA: $1.5 bn
  • Asset size: $11.0 bn

(as of Dec 31, 15)

  • Number of employees:

6,113 persons

4,509 mil shares Shareholding Structure

1.68 0.95 1.62 1.00 1.50 1.30 2.45 1.78 1.37 1.30 2.98 3.40 3.40 2.37 2.80 45% 45% 46% 71% 61% 0% 10% 20% 30% 40% 50% 60% 70% 80% 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 2011 2012 2013 2014 2015 1st Half 2nd Half Payout Ratio

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Agenda

PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS

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2016 Highlight : New capacity on stream

ARO II Expansion

  • n stream

Phenol II commissioning

  • Commission : Dec 2015
  • COD : May 2016
  • Capacity :
  • PX 115 KTA,
  • BZ 35 KTA,
  • OX 20 KTA
  • CAPEX : 128.8 MUSD
  • EBITDA Uplift /Y*: 24 MUSD

VCR TH ready for commissioning VCR FR ready for commissioning

  • Commission : 2Q/2016
  • COD : 3Q/2016
  • Capacity :
  • HDI Deriv. 12 KTA
  • CAPEX : 43 MUSD
  • Product : HDI derivative
  • EBITDA Uplift /Y*: 9 MUSD
  • Commission : 2Q/ 2016
  • COD : 3Q/2016
  • Capacity :
  • HDI Mono. 70 KTA
  • CAPEX : 18 MUSD
  • Product : HDI monomer
  • EBITDA Uplift /Y*: 24 MUSD
  • Commission : Feb 2016
  • COD : May 2016
  • Capacity :
  • PH 250 KTA
  • AC 155 KTA
  • CAPEX : 345 MUSD
  • EBITDA Uplift /Y*: 63 MUSD

*EBITDA Uplift per year at mid cycle price

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PTTGC is anticipated to benefit from on stream of new capacity of expansion / debottleneck project in this year . By including MEG plant improvement project that completed since late of last year, this will deliver additional volume by 7%.

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2016 Highlight : Operation improvement

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Maximize benefit by expecting to receive high ethane flow average 264T/h, maximum 280T/h in May, with 95% run rate in olefins plant.

Positive trend in projected oil price

 Rebound in oil price is anticipated to support HDPE price to be average at 1,160$/T. This also translated to downside risk on stock loss.

2016 Highlight

Improved in Ethane flow and OLE U-rate Upside in Aromatic

Aromatic is expected to benefit from higher utilization rate, from 74% last year to 88%, which based on higher BTX nameplate capacity since early of this year. This translated to fully benefit on surge in BTX spread especially in 1H of this year.

Refinery Outlook

 Lower utilization rate mainly due to planned shutdown in 2Q/16. GRM is expected to slightly decrease to approximately $ 4.7/bbl

51.9 61.3 49.7 40.7 30.4 42.2 39.7

10 30 50 70

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16(F) 2016 (F)

241 236 249 251 264

Ethane Flow (Ton/hour)

2012 2013 2014 2015 2016 (F)

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Overview of Business Unit’s Performance

% Adj. EBITDA Margin 1Q/15 4Q/15 1Q/16 Business Unit : Refinery 6 15 8 Aromatics 13 11 14 Olefins and Derivative 19 22 20 Green 6 11 8 HVS 12 3 (3) Average 12 16 12

1Q/16 Revenue and Adjusted EBITDA Structure

80,764 M.Baht 9,789 M.Baht

(Unit: Million Baht) 1Q/15 4Q/15 1Q/16 YoY % + /(-) QoQ % + /(-) Sales Revenue 99,251 96,088 80,764

  • 19%
  • 16%

EBITDA 10,473 10,387 9,515

  • 9%
  • 8%

EBITDA Margin (%) 11% 11% 12% 1% 1% Net Profit 5,631 4,690 4,707

  • 16%

0% EPS (Baht/Share) 1.25 1.04 1.06

  • 16%

1% Adjusted EBITDA* 11,606 14,970 9,789

  • 16%
  • 35%

Adjusted EBITDA Margin (%) 12% 16% 12% 0%

  • 3%

Note: * Adjusted EBITDA refers EBITDA excluding impact of inventory value (Inventory and NRV)

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Agenda

PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS

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Strategic Direction

Sustain Core Accelerate Growth levers Balance Business & Social Value

To be a Leading chemical company for Better living

  • Performance

excellence

  • Maximize value

creation

  • Map Ta Phut retrofit
  • International hub
  • Performance

chemicals

  • Green business
  • Sustainable

development

  • Effective CSR programs
  • Stakeholder

management

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Implementation Detail Study

Sustain Core : Value Creation

Plant Operational Excellence Top Down Study

  • Due diligence

process to estimate project potential

  • Develop initiatives and

execution plans

  • Execute per plan to

capture value

6 Weeks 12 Weeks 18 Months

Commercial & Marketing Excellence Procurement Excellence Capex Excellence Asset Performance Excellence

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  • Build new Cracker 500 KTA

ethylene for flexible feed cracker to utilize internal naphtha

  • Maximize utilization of the existing

utilities and support facilities to reduce investment cost

Project Scope

  • Issued pre qualification enquiry

package to prospect bidders.

  • Awarded project manager

contractor

  • Issued conceptual design to

licensors

  • Completed EPCa Scope package
  • Submitted BOI application

Sustain Core :MTP Retrofit

Project Update Timeline :

2018 2020

1Q/18 Construction COD 2020

2016

ITB

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Captive and Committed 80%

Merchant Volume 20%

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200 KTA

Merchant Market

≈ 80% Reserved Volume

PO Market Survey Polyols Market Survey

  • Completed PO & Polyols market survey
  • Building sale & marketing strategy
  • Ongoing FEED work and preparing ITB
  • Preparing EIA report
  • Negotiating feedstock arrangement
  • Engaged FA and expect FID in 4Q/16

Project Update

Market survey result concluded that SEA and India are the target market.

  • Target market growth rate average

at 5 - 7 % during 2014 - 2023

  • The highest growth rate is in

Automotive segment 6.8 % Marketing strategy is to focus on high value application segment

Timeline :

Accelerate Growth Levers : PO & Polyols Project

Construction

Polyols 130 KTA System House 40 KTA

  • Licensor

E&E Automotive

After surveyed 106 customers, we have arrived to Potential Customers

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Accelerate Growth Levers : US Petrochemical Complex

  • Investment cost justify investment return
  • Enough ethane capacity with competitive

pricing structure

  • Partner can distribute products in N. America

Key Criteria for FID Project Update

  • FEED : FEED contractors on schedule to deliver cost

estimates within 3Q/16

  • Feedstock : In discussion with specific names of

ethane supplier to finalize contract terms

  • Marketing & Logistic :
  • Preparing marketing and sale plan as well as key

terms in offtake agreement

  • Received proposals from barge, railcar leasing,

and packing service

  • Discuss with potential offtaker.
  • Permit: Signed off on the First Energy land option

agreement

  • Partner : Approached FA in the process to short list of

potential partner

Project Overview

Marcellus Shale Gas Reserve

United States

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  • Sign MOU with Sahapat

and DITP to collaborate in product development, area development and market development

  • Introduce InnoPlus’

customer to the area and conduct survey for investment interest

  • Three customers have

confirmed to expand business in Mae Sot area

Accelerate Growth Levers : Growing in AEC Market

  • Indo Thai Trading (ITT) – Trading

company, a JV between PTTGC and Pertamina to penetrate into Indonesia polymer market. Sales of ITT has been increasing with volume

  • f approx. 9,500 / month.

1500 1,500 1200 1100 600 200 60 24 11

Estimated Demand for PE Product (KTA) in 2015

Potential demand in AEC with high growth rate

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Strategic Investment

Existing Non Captive Upstream and Downstream

HDI Deriv. 12 KTA Phenol II 405 KTA Aromatics 170 KTA HDI Monomer 70 KTA mLLDPE 400 KTA PO/Polyol 250 KTA MTP Retrofit 761 KTA 8,000 8,500 9,000 9,500 10,000 10,500 11,000 2015A 2016F 2017F 2018F 2019F 2020F

ARO2 Phenol2 HDI Thailand HDI France MLLDPE PO/Polyol MTP Retrofit CAPEX 128.8 MUSD 345 MUSD 43 MUSD 18 MUSD 288.2 MUSD TBC TBC Additional PetChem* (per year) PX 115 KTA BZ 35 KTA OX 20 KTA PH 250 KTA AC 155 KTA HDI Derivative 12 KTA HDI Monomer 70 KTA MLLDPE 400 KTA Hexene-1 34 KTA PO 200 KTA Polyol 130 KTA Ethylene 500 KTA Propylene 261 KTA Period Q2’16 Q2’16 Q3’16 Q3’16 2018 2019 2020 EBITDA

Uplift/Year**

24 MUSD 63 MUSD 9 MUSD 24 MUSD 59 MUSD

  • 100% stake of additional capacity

** Estimate EBITDA uplift with 100% stake at mid cycle price

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Agenda

PTTGC’s BUSINESS OVERVIEW 2016 Highlight STRATEGIC EXECUTION 1Q/2016 FINANCIAL RESULTS

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1Q/2016 Income Statements Consolidated

1Q/2015 (restate) 4Q/2015 (restate) 1Q/2016 YoY QoQ MB % MB % MB % MB % MB % Sales Revenue 99,251 100 96,088 100 80,764 100 (18,487)

  • 19%

(15,324)

  • 16%

Feedstock Cost (75,721) (76) (71,547) (74) (59,635) (74) (16,086)

  • 21%

(11,912)

  • 17%

Product to Feed Margin 23,530 24 24,541 26 21,129 26 (2,401)

  • 10%

(3,412)

  • 14%

1 Variable Cost (6,809) (7) (6,586) (7) (5,898) (7) (911)

  • 13%

(688)

  • 10%

2 Fixed Cost (3,685) (4) (4,827) (5) (4,178) (5) 493 13% (649)

  • 13%

3 Stock Gain/(Loss) & NRV (1,133) (1) (2,053) (2) (274) (0) 859 76% 1,779 87% 4 Gain/(Loss) Commodity Hedging (188) (0) 2,853 3 43 231 123% (2,810)

  • 98%

5 Other Income 1,097 1 2,024 2 978 1 (119)

  • 11%

(1,046)

  • 52%

6 SG&A (2,339) (2) (3,035) (3) (2,285) (3) (54)

  • 2%

(750)

  • 25%

7 Extraordinary Item (2,531) (3) N/A (2,531) N/A EBITDA 10,473 11 10,386 11 9,515 12 (958)

  • 9%

(871)

  • 8%

Depreciation & Amortization (3,979) (4) (4,208) (4) (4,141) (5) 162 4% (67)

  • 2%

EBIT 6,494 7 6,178 6 5,374 7 (1,120)

  • 17%

(804)

  • 13%

Finance Cost (1,076) (1) (937) (1) (822) (1) (254)

  • 24%

(115)

  • 12%

8 FX Gain/(Loss) 526 1 510 1 632 1 106 20% 122 24% 9 Shares of profit/(loss) from investments 301 (209) (0) 178 (123)

  • 41%

387 185% 10 Income Tax Expense (499) (1) (769) (1) (623) (1) 124 25% (146)

  • 19%

Net Profit 5,746 6 4,773 5 4,739 6 (1,007)

  • 18%

(34)

  • 1%

Profit/(loss) attributable to: Owners of the Company 5,631 6 4,690 5 4,707 6 (924)

  • 16%

17 0% Non-controlling interests 115 83 32 (83)

  • 72%

(51)

  • 61%

Adjusted EBITDA * 11,606 12 14,970 16 9,789 12 (1,817)

  • 16%

(5,181)

  • 35%

Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (excludes Inventory gain/(loss) and NRV) and Extraordinary Item

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Strong Financial Position

20 Repayment Profile

Interest Rate Currencies 52% Fixed 60% THB 48% Float 40% USD & Others

Loan Type

  • Cost of long term debts ~ 4.17% (Include W/H Tax)
  • Average loan life after refinancing - 4.51 Years

Treasury policy

Net IBD to EBITDA ratio of ≤ 2.4x Net IBD to Equity ratio of ≤ 0.7x

THB Bn

* After Refinance

Key Financial Ratios Statements of Financial Position

As of Dec 31, 2015 As of Mar 31, 2016

THB 378 Bn THB 386 Bn

Cash +ST Investment CA Non CA PPE Liab. IBD Share Holder’s Equity

THB 106 Bn ST Bank Loan, 0% LT Bank Loan, 53% Debenture, 47%

1.59 1.28 1.72 1.30 1.12 0.23 0.21 0.26 0.25 0.21

31 Mar 15 30 Jun 15 30 Sep 15 31 Dec 1531 Mar 16

Net IBD/EBITDA NET IBD/Equity 6.40% 7.57% 4.80% 8.99% 8.38% 4.92% 6.10% 4.27% 7.36% 6.92%

31 Mar 15 30 Jun 15 30 Sep 15 31 Dec 15 31 Mar 16

ROE ROA THB Bn

* After Refinance

9.8 16.0 11.2 9.0 13.5 12.8 1.2 1.3 1.4 1.4

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Total USD Bond THB Bond EUR Loan USD Loan THB Loan 35.4

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For further information & enquiries, please contact our Investor Relations Team at IR@pttgcgroup.com

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 Prang Chudasring IR Analyst Prang.c@pttgcgroup.com +662-265-8327 4 Nattchanon Chawinsittangkul IR Analyst Nattchanon.c@pttgcgroup.com +662-265-8364 5 Pantaree Nantanakom IR Analyst Pantaree.n@pttgcgroup.com +662-140-8714 6 Chutima Jarikasem IR Coordinator Chutima.j@pttgcgroup.com +662-140-8713

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Shut Down Schedule

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