S.Kijchai Enterprise Public Company Limited (SKN) Opportunity Day Q1 - - PowerPoint PPT Presentation

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S.Kijchai Enterprise Public Company Limited (SKN) Opportunity Day Q1 - - PowerPoint PPT Presentation

S.Kijchai Enterprise Public Company Limited (SKN) Opportunity Day Q1 2018 15 June 2018 Strictly Private & Confidential Disclaimer The information (Confidential Information) contained in this presentation is strictly confidential


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S.Kijchai Enterprise Public Company Limited (“SKN”)

Opportunity Day Q1 2018 15 June 2018

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Strictly Private & Confidential

The information (“Confidential Information”) contained in this presentation is strictly confidential and is provided by S.Kijchai Enterprise Public Company Limited (the “Company”) to you solely for your reference. Neither this presentation nor any part thereof may be (i) used or relied upon by any other party or for any other purpose; (ii) copied, photocopied, duplicated

  • r otherwise reproduced in any form or by any means; or (iii) redistributed, passed on or otherwise disseminated, to any other person either in your organization or elsewhere, without

the prior written consent of the Company. By attending this presentation, participants agree not to remove this document, or any materials provided in connection herewith, from the conference room where such documents are provided without express consent from the Company. Although care has been taken to ensure that the Confidential Information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the Confidential Information is subject to change without notice, its accuracy is not guaranteed, has not been independently verified and it may not contain all material information concerning the Company. None of the Company, or any of their respective members, directors, officers, employees or affiliates nor any other person accepts any liability (in negligence, or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. This presentation is for information purposes only and does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or invitation of any offer to or recommendation to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto in Thailand or any other jurisdiction. Any such purchase should be made solely on the basis of the information contained in the announcements to the Stock Exchange of Thailand relating to such securities. No reliance may be placed for any purposes whatsoever on the information set forth in this presentation or on its completeness. This presentation contains projections and forward‐looking statements that reflect the Company's current views with respect to future events and financial performance. These views are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over time and in many cases are outside the control of the Company. You are cautioned not to place undue reliance on these forward looking statements. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. Such forward‐looking statements are not guarantees of future performance and accordingly, the actual results, financial condition, performance or achievements of the Company may differ materially from those forecasted and projected or in the forward‐looking statements.

Disclaimer

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AGENDA

Section 1 About SKN Section 2 Business Overview Section 3 Financial Highlights Section 4 Investment Projects

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SECTION 1 : About SKN

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KEY MILESTONES

S.Kijchai MDF was awarded the ISO 9001 and MUTU certification international S.Kijchai Parawood Co., Ltd. expanded its business into furniture manufacturing business and was renamed to S.Kijchai Co., Ltd. S.Kijchai Family started to operate its sawmill plant under S.Kijchai Parawood Co., Ltd. in Rayong Province S.Kijchai MDF started its commercial

  • peration and exported

its first MDF Board S.Kijchai MDF was awarded BOI certificate S.Kijchai Family and Sahakij Family jointly established S.Kijchai MDF Co., Ltd. (“S.Kijchai MDF”) as a MDF Board manufacturer

MDF

S.Kijchai Family started to operate its particle plant under S.Kijchai Wood Panel Co., Ltd.

Particle

S.Kijchai Family and Sahakij Family started to operate plywood plant under S.Plywood Co., Ltd.

Plywood

S.Kijchai MDF was awarded the ISO 14001 and was renamed to S.Kijchai Enterprise Plc. (SKN) and increased its registered capital from THB 600 mn to THB 800 mn for the IPO Sahakij Family started to operate its sawmill plant under Sahakij Klaeng Co., Ltd.

Sahakij Family

70%

30% S.Kijchai Family

S.Kijchai Family established S.Kijchai Capital Co., Ltd. (“SKC”) as a holding company and restructure shareholding structure in SKN

67% 30% 3%

Sahakij Family S.Kijchai Family SKC

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PRODUCT AND MARKET OVERVIEW

Products Overview Key Current Market1/ “With the capability to produce high quality MDF Board’s to meet customer’s expectation and requirement

  • f most international environmental standard for wood-based panel, SKN’s potential markets

cover most countries in the world”

North America Africa South East Asia East Asia South Asia Middle East

Note: 1/ Based on sales in 2016

  • Thin: 2.5 ‐ 4.0 mm
  • Medium: 4.1 ‐ 9.0 mm

Thickness

Width ≤ 8 Feet

  • European Standard:
  • E1: formaldehyde ≤ 8/100 grams of glue
  • E2: formaldehyde ≤ 30/100 grams of glue
  • US’s Standard:
  • CARB P2: formaldehyde emission ≤ 0.11 ppm

Class of Formaldehyde:

Density ≈700-800 kg/m3

Key Features

  • Uniform density properties ‐ resemble to

nature wood

  • Smooth surface for laminating
  • Easy to work into shapes and finishing

SKN offers custom-made MDF Boards made by rubber woods. SKN’s customers can specify their desired

size, thickness and class of formaldehyde.

  • Thick: 9.1 ‐ 25.0 mm

Furniture Factory Constructors Laminate Factory

Major Customers

Wholesalers / Distributors

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KEY CHARACTERISTICS AND APPLICATION

BUILT‐IN CASING INTERIOR / WALL FURNITURE FLOOR DOOR

Easy to work into shapes and finishing High screw holding strength & Bendable Uniform density properties - resemble to nature wood Strong load bearing No grain or knots

MDF board is widely used for numerous interior functions and decoration purpose, such as furniture, door, casing and floor

Smooth surface for laminating

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Customers Production planning Orders placement & Confirmation Raw materials procurement Suppliers Raw materials preparation Woods intake

(First-in, First-out)

Woods de-barking Woods chipping Chip bin

Storage for the next 24 hours production

Production

Automated continuous process

Pre-heating Refiner Dryer Orders placement & procurement Forming Sawing Master Board Cooling Sanding & Cut-to-Side Continuous pressing Packing Delivery QC

Fiber bin Urea Formaldehyde

BUSINESS FLOWS

QC

(Appearance) (Qualification)

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FACILITIES

SKN, MDF Board manufacturer and exporter with the state-of-art facilities as well as strategic location adjacent to major ports

Area

  • 144 Rai 3 Ngarn 13 Sq.Wa

Products

  • Custom‐made MDF Board
  • Width: maximum of 8 feet
  • Length: maximum of 18 feet
  • Thickness: 2.5 ‐ 25.0 mm

Production Capacity

  • 240,000 m3/year

Major Machinery

  • Brand: Dieffenbacher

Operation Hour

  • 24/7

BOI Privilege

  • Awarded BOI in 2011

SKN Facilities located at Klaeng, Rayong

Map Ta Phut Port Laem Chabang Port

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SECTION 2 : BUSINESS OVERVIEW

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Global upward trends for MDF board

CAGR2 of MDF board production volume (2000 – 2016) had

  • utnumbered other wood‐based

panels production volume with CAGR

  • f 4% for the same period

11%

1. Source: Food and Agriculture Organization of the United States 2. CAGR = Compounded annual growth rate

Thailand is among the fastest growing MDF exporters

Thailand ranks no. 4 for global MDF exports in 2016

#4

CAGR1 sales growth of Thai exporters in terms of value (2000 – 2016) had outperformed almost all players in the world top 10

10%

GLOBAL MARKET

20 40 60 80 100 120 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million M3

Total global wood-based panel production volume1

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51% 15% 49% 85%

Q1 2017 Q1 2018

INCOTERM

FOB CNF

OVERVIEW

Q1 2017, 54% Q1 2017, 46% Q1 2018, 46% Q1 2018, 54%

Sale Channel

Agents SKN

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2017 Q1 2018

Utlization rate

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55% 35% 7% 3%

Q1 2017

42% 32% 23% 3%

Q1 2018

Middle East Asia Others Domestic

OVERVIEW

Country Distribution

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SECTION 2 : FINANCIAL HIGHLIGHTS

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HISTORICAL PERFORMANCE

(THB mn)

Performance of 1st quarter 2018 -2017

330 377 97 124 32 51 50 100 150 200 250 300 350 400 Q1/2017 Q1/2018 Revenue Gross Profit Margin Net Profit Margin

Q1/2017 Q1/2018 Gross Profit Margin

29.24% 32.89%

Net Profit Margin

9.69% 13.53%

Key Financial Ratios

Q1/2017 Q1/2018 Efficiency Ratios Return on Assets (%)

6.67 7.41

Return on Equity (%)

18.42 8.91

Q1/2017 Q1/2018 Financial Policy Ratios Debt to Equity (times)

1.83 0.26

Interest Coverage Ratio (times)

5.68 13.78

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BALANCE SHEET COMPOSITION

Assets Breakdown Liabilities and Equity Breakdown

2,940 2,940 2,599 2,599

(THB mn) (THB mn)

50 60 194 141 2,242 1,596 59 46 48 30 347 726 Mar'2018 Dec'2017 Cash and Cash Equivalent Account Receivable Inventory PPE Advance payment for purchase machinery Other Assets 304 252 1226 1226 800 800 78 71 77 10 30 39 425 201 Mar'2018 Dec'2017 Account Payable Cash Advance Received from Customers Long‐term Loan Other Liabilities Paid‐up Capital Premium on share capital Retained Earnings

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2017 2018 Q1-2017 Q1-2018 million million million % million million million % Exporting Revenue USD 41.35 45.46 4.11 9.94 9.10 11.45 2.35 25.82 Baht 1,451.58 1,529.93 78.35 5.40 318.85 358.72 39.87 12.50 Change Change

35.5 35.11 34.68 35.22 34.94 34.14 33.22 32.78 31.37 29 30 31 32 33 34 35 36 Q1 Q2 Q3 Q4

Exchange rate USDTHB

Year 2016 Year 2017 Year 2018

Action

1. Closely monitor to any situations that might affects the exchange rate 2. Use hedging tools such as Forward Contact

Appreciation of Baht

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SECTION 4 : Investment Projects

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2nd Production Line

25% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Installation Infrastructure

Progress

Finish Ongoing

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Glue Project

Main Purposes Key investment

‐ SKN internal consumption ‐ R&D Center ‐ Sell to Other wood processing ‐ 100 MB. Registered Capital ‐ 300 MB. investment cost ‐ 3 Years BOI privilege

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Q&A

Strictly Private & Confidential