SET OPPORTUNITY DAY 2Q19 RESULTS PRESENTATION 13 SEPTEMBER 2019 1 - - PowerPoint PPT Presentation

SET OPPORTUNITY DAY 2Q19 RESULTS PRESENTATION 13 SEPTEMBER 2019

1

Disclaimer

Certain forward looking statements may be made in the course of the presentation. These forward-looking statements generally can be identified by use of statements that include words or phrases such as LST , UPOIC and UFC or we or our management “believe”, “expect”, “anticipate”, ”intend”, ”plan”, ”foresee”, ”project”, ”may”, “will”, “shall”, or other similar words or phrases. Similarly, statements that describe LST , UPOIC and UFC ’s objective, plans or goals also are forward-looking statements. These statements involve known and unknown uncertainties and risks that could differ materially from actual results, performance or events. The forward-looking statements contained in the slides are not and should not be constructed as representations of the future performance of LST , UPOIC and UFC and that such statements are an expression

• f the Company’s reviews based on its current view and certain assumptions including, but not limited to,

prevailing economic and market conditions and currently available information. The reader or the listener is cautioned to not unduly rely on these forward-looking statements. We do not undertake any duty to publish any update or revision of any forward looking statements. 2

Agenda

• Company Overview (LST)
• Company Overview (UPOIC)
• Industry Overview
• Financial Overview (UPOIC)

3

• Financial Overview (LST)
• Business Overview (UFC)
• Q&A

Philosophy of Lam Soon Group

Vision

“The leading food and food related company with sustainable growth and development”

Mission

• Manufacturing high quality and nutritious food product together.
• Employing advance technology.
• Building trust and confidence toward our customers.

4

Our Development

1974 1978 1996 1983 2004 2003 2008 2007 2006 2009 2011 2013 -2019

Corporate Milestone

1974 Bangkok Edible Oil was founded 1978 Established Vegetable Oil Refinery at Bang Poo Industrial Estate 1983 Lam Soon (Thailand) Co,. Ltd was established 1996 LST was listed on the Stock Exchange of Thailand 2003 Became a major shareholder of “UPOIC” 2004 Acquisition of “UFC” 2008

• Joined the Roundtable on Sustainable Palm Oil

(RSPO)

• Constructed Biogas power plant at Trang mill

2012 1974 1978 1996 1983 2004 2003 2008 2007 2006 2009 2011 2013 -2019

Product Development

5

2012 2006 Launched new product targeted at health conscious consumers under the brand “Naturel” 2007 Implemented Electricity power project under Clean Development Mechanism (CDM) and Carbon Credit Program 2009 “Jade” palm cooking oil was the first cooking oil awarded “Carbon Label” 2011 Launched soy milk products under the “UFC HomeSoy” 2012 UFC Launched Coconut water 2013 - 2019 LST & UFC launched various new products to serve customer needs In 2019, LST launched Yok Extra 100% Coconut Oil

Group Structure

Lam Soon (Thailand) UFC UPOIC

98.83% 69.96% 100.00% 50.00% 99.98%

Union Frost Siam Elite Palm Phansrivivat Phansri Prachakvivat

100.00% 50.00% 99.98% 99.99% 99.99%

6

Strong Fundamental i.e. Fully Integrated Supply Chain

Raw Material Acquisition Production Sales & Marketing Nursery Plant Oil Palm Plantation Crushing Mill Value Adding and Diversify Refinery Distribution Channel Start from 2 locations in Oil palm Total Diversifying Germinated Seeds JV with Start from nursery plant to ensure product quality 2 locations in Trang and Krabi with combined capacity 120 tons FFB / hr. Oil palm planted area Total capacity 255,500 tons /year Diversifying into food related businesses Cost saving from integrated distribution channel

• f LST and UFC

Fully Traceability – Quality & Profitable

JV with investment arm of CIRAD to develop

• wn palm

seeds species

7

Our Products

Upstream

Seedling

Core Products Diversify

Germinated Seeds

Other Products

Crude Palm Oil Crude Palm Kernel Oil Electricity Power from Biogas

8

Distributor

Frozen Dough

New Product – YOK EXTRA 100% Coconut Oil

9

New Product – New Package Zest Gold Margarine

10

New Product – Refined Palm Kernel Oil ( Moonlight)

Refined Palm Kernel Oil Refill ( Moonlight Brand ) 1 L.

เหมาะสําหรับอาหารประเภททอด ทีใช้ นํามันมาก

11

ทําให้อาหาร กรอบ อร่อย มีกลินหอม น่า รับประทาน

MasterFoods

12

Frozen Dough

13

Share Capital Information

Symbol LST Share Price ( 11 SEP 2019) 4.56 THB Historical price :

• 52-week high

5.10 THB

• 52-week low

3.86 THB

• No. of paid up shares :

820 Million Par value : 1 THB/Share Market Capitalization : THB 3,739.2 mn. Stock Information

Source: www.setsmart.com

Top 10 Shareholders (As of May 8, 2019) Percentage of Paid-up Capital (1) Lam Soon Holding Co., Ltd. 42.11 (2) Hap Seng Consolidated Berhad 20.00 (3) Lam Soon Cannery Pte Ltd. 7.48 (4) CGS-CIMB Securities (Singapore) Pte 6.47 (5) LGT Bank (Singapore) Ltd 4.65 (6) Mr. Suwit Laohapolwattana 2.88 (7) CGS-CIMB Securities (Hong Kong) Ltd 1.62 (8) Ms. Supaporn Smittinun 1.20 (9) Thai NVDR Co.,Ltd. 0.99 (10) Ms. Nalin Chongsawadchai 0.65 3 years share price performance (%) Dividend Payout Policy

The Company’ s policy is to pay dividends to shareholders of an amount not less than 40% of its net earnings after tax subject to the Company’s future investment and funding requirements.

Source: www.setsmart.com

14

0.34 0.25 0.17 0.29 0.41 0.20 0.15 0.10 0.18 0.25 58.8% 60.0% 59.4% 61.4% 60.3% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

• 0.20

0.40 0.60 0.80 2014 2015 2016 2017 2018

EPS (Baht/Share) DPS (Baht/Share) Dividend Payout Ratio (Based on operational year)

(10) Ms. Nalin Chongsawadchai 0.65

• 40.0%

0.0% 40.0% 80.0% 120.0% 160.0% LST Food SET

Agenda

• Company Overview (LST)
• Company Overview (UPOIC)
• Industry Overview
• Financial Overview (UPOIC)
• Financial Overview (LST)
• Business Overview (UFC)
• Q&A

15

UPOIC’s Philosophy

Vision

“The leading sustainable palm oil business company with operational excellence, international best practices, and world-class competitive strengths.”

16 Mission

• Building capacity in entire palm oil business value chain from seeding, germinating, plantation, crop oil extraction and related

business so as to be competitive and recognizing in the future

• Performing the high value palm oil business by focusing in research and development of palm seed breeding of seed with

high yield and adaptable to a range of cultivation area to fulfill grower requirements as well as providing the best services.

• Employing advanced technology in production, research and development with international management system as well as

taking care of the environment, biodiversity, communities, and society.

• Always ensuring the health, safety, and welfare of all employees and building trust and confidence among our customers,

grower/suppliers and generate return to shareholders and other stakeholders appropriately.

Corporate Milestones

1978 1991 1997 1994 2003 2006

UPOIC was established Issuing new share in exchange for an 100% stake in Phansrivivat UPOIC entered into a joint venture with CIRAD to form Siam Elite Palm Co., Ltd.

2008 1978 1991 1997 1994 2003 2006

UPOIC was listed company

• n the Stock

Exchange of Thailand (SET) 1997 LST began purchasing UPOIC shares 2003 LST acquired more shares in UPOIC , and as a result became the major shareholder of UPOIC Joined the Roundtable on Sustainable Palm Oil (RSPO)

2008

17

Share Capital Information

Stock Information

Symbol UPOIC Share Price ( 11 SEP 2019) 3.68 THB Historical price :

• 52-week high

5.95 THB

• 52-week low

3.52 THB

• No. of paid up shares :

324.05 Million Par value : 1 THB/Share Market Capitalization : THB 1,192.5 mn.

Major Shareholders as of May 8,2019 Percentage

• f Paid-up

Capital (1) Lam Soon (Thailand) Plc. 69.96 (2) Wattanachote Co., Ltd. 5.70 (3) Mr. Somkiat Peetakanonda 1.68 (4) Mr.Thammanoon Sahadithdamrong 1.17 (5) Wattanasophonpanich Co., Ltd. 1.12 (6) Ms.Duangkamol Thanissaranont 0.74 (7) GreenSpot Co., Ltd. 0.73

(8) Mr. Suwit Laohapolwattana

0.73

(9) Ms. Wallada Kritchayada

0.71 (10) Mrs. Nancy Chalermkanjana 0.63

Source: www.setsmart.com Source: www.setsmart.com

Dividend Payout Policy

Remark : Dividend payment for year 2015 and 2017 were paid from retain earning

18

UPOIC has a policy of paying not less than 50% of net profit after tax as dividend.

3 years share price performance (%)

0.52 (0.02) 0.28 (0.06) 0.12 0.30 0.15 0.15 0.10 0.08 57.7% 54.1% 65.7%

• 20.0%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% (0.2) 0.0 0.2 0.4 0.6 0.8 1.0 2014 2015 2016 2017 2018 EPS (Baht/Share) DPS (Baht/Share) Dividend Payout Ratio (Based on operational year)

• 60.0%
• 30.0%

0.0% 30.0% 60.0% UPOIC AGRI SET

Agenda

• Company Overview (LST)
• Company Overview (UPOIC)
• Industry Overview
• Financial Overview (UPOIC)
• Financial Overview (LST)
• Business Overview (UFC)
• Q&A

19

1.3 1.3 1.8 1.9 2.1 2.0 2.1 1.8 2.6 2.8 3.0 1.0 2.0 3.0 4.0

CPO Production

Million MT CAGR 2009-2018 CPO : 8.39%

FFB Output and CPO Production in Thailand (2009 – 2019F)

8.0 8.0 10.5 11.1 12.4 11.9 12.0 10.5 14.9 15.4 16.8 5.0 10.0 15.0 20.0 2.0 4.0 6.0 8.0

Harvested Area and FFB Output

CAGR 2009 - 2018 FFB : 7.51% Million MT Million Rai

• 20

Source: Internal Trade Department *Forecasted by Office of Agricultural Economics (OAE) as at April 2019

• Harvested Area (LHS)

FFB Output (RHS)

Since the late 2016 through 2018, the output of FFB in the Kingdom was improved significantly due to good weather condition with continual raining, and the expansion of harvesting areas. In 2019, the oil palm harvesting areas in the Kingdom is around 5.45 million rai.

CPO Stock Putting Pressure on Prices

15.0 20.0 25.0 30.0 35.0 40.0 200 300 400 500 600 CPO Safety Balance Line at the level 250,000 MT ‘000 MT THB / Kg

21

• 5.0

10.0

• 100

200 ม.ค.-14 เม.ย.-14 ก.ค.-14 ต.ค.-14 ม.ค.-15 เม.ย.-15 ก.ค.-15 ต.ค.-15 ม.ค.-16 เม.ย.-16 ก.ค.-16 ต.ค.-16 ม.ค.-17 เม.ย.-17 ก.ค.-17 ต.ค.-17 ม.ค.-18 เม.ย.-18 ก.ค.-18 ต.ค.-18 ม.ค.-19 เม.ย.-19 CPO Stock (LHS) FFB Price (RHS) CPO Price (RHS) FFB Production Cost Line Oil Palm Production Cost at average 3 THB./Kg.

During 2018 the excess supply caused by the accumulated higher production together with a series of negative news from global market, pushed the FFB and CPO price lower.

Source: Internal Trade Department

CPO Usage in Thailand (2009 – 2019F)

1,661 1,865 2,294 2,037 1,955 1,859 2,440 2,800 3,030 31% 40.0% 60.0% 80.0% 100.0% 2,000 3,000 4,000 5,000 ‘000 MT

B2 (Optional) B3 (Optional) Mar B2 May B3-5 B5 B4 B7 Jan : B3.5 April : B6 Aug : B6.5-7 July: B5 Aug : B3 Nov : B5 May : B6.5-7 Oct : B7 – 7 Plus B7 B20 for large truck

22

In the past 5-6 years, the Government (c/o the Ministry of Energy) could successfully manage to adjust the palm oil blending in biodiesel from time to time to optimise CPO stock level and balance pricing between palm oil consumption and biodiesel usage. The present the mandate of biodiesel B7 is the maximum warranty level of most automotive groups. However, to enlarge CPO usage for biodiesel, the Energy Ministry promotes B10, replacing the current formula B7, effective on 1 January 2020.

1,318 1,355 1,661 3% 23% 12% 23%

• 11%
• 4%
• 5%

31% 15% 8%

• 20.0%

0.0% 20.0%

• 1,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F* Food & Industrial Use Export Bio-Diesel Consumption Growth Source: Internal Trade Department *Forecasted by Office of Agricultural Economics (OAE) as at April 2019

World Palm Oil Production and Stock Balance

Million MT Million MT Million MT

World Palm Oil Stock Balance World Palm Oil Producers

23

• Growth is concentrated mainly in South-East Asia (87%)
• Indonesia (56%) + Malaysia (28%) = 84% of world’s production, being key players in the global palm oil trade
• Thailand is the 3rd largest producer (3%)
• Global palm oil stockpiles at the end of 2018 rose above 10.8 million MT., mainly contributed by 3.29 million MT. from Indonesia

and 3.3 Million MT. from Malaysia which was the highest record.

Source : USDA

Negative News from Major Importing Countries

EU CHINA

EU heading to “zero palm oil” in transport : In 2016, the EU updated the Renewable Energy Directive for the period from 2020 to 2030 (called as RED II), aimed at keeping the EU a global leader in renewables and achieving its emissions reduction Under this law, the use of palm oil in biofuels will be capped at 2019 level until 2023 and reduced to zero by 2030

24

INDIA CHINA

India changed import duties on vegetable oils : To protect local farmers in 2018 the Indian central government announced an increase of import tariffs imposed on almost types of vegetable oil, CPO in particular, setting back export sales to India. India currently imposes a 40 % import tax on CPO 50% and refined palm oil while refined palm oil imports from Malaysia were being taxed at 45%. As of 4 September 2019, India has raised the tax on refined palm oil from Malaysia to 50% for six months for safeguard domestic producers. Palm oil imports by China have been declining since 2012 : As the proportion on upper-middle and high incomes population has expanded ,Chinese consumers upgraded consumption behavior and switch to more soft oil and premium oil.

19.4 21.3 20.4 19.0 20.1 23.2 21.6 20.1 19.0 17.9 16.2 16.7 17.0 16.3 14.8 15.4 16.5 19.8

10.0 15.0 20.0 25.0 300 400 500 600

CPO Safety Balance Line

Policies to Reduce CPO Stock in Thailand in 2018 - 1H2019

Encouraging CPO exports of 300,000 MT by subsidising expenses at 1.75 THB/Kg (May 2018) Encouraging the usage of bio-diesel B20 for large trucks (July 2018) Using 160,000 MT of CPO by EGAT to produce electricity (Nov 2018) ‘000 MT THB/Kg. EGAT to purchase another 200,000 MT (May 2019)*

3.4 4.1 3.7 3.2 3.5 4.3 3.9 3.4 3.3 3.1 2.8 2.8 2.8 2.9 2.4 2.2 2.3 3.3

• 5.0

10.0

• 100

200 CPO Stock (LHS) FFB Price (RHS) CPO Price (RHS)

FFB Production Cost Line

25

The Government has taken efforts and launched several measures to reduce pressure on prices and bring the CPO stock to an

• ptimum level about 250,000 MT.

Remark : *In May 2019, EGAT has been instructed to purchase and other 200,000 MT but as of August 2019, only 66,250 MT was absorbed.

Policies and Support Measures from the Government Approved in August 2019

1

The National Oil Palm Policy Committee has agreed to set the FFB guaranteed price at 4 THB/Kg for registered farmers who occupy land of not more than 25 rai per household.

2

Enforcing the use of B10 in the transportation sector on 1 January 2020 EGAT is continuing to buy CPO to produce electricity at Bang Pakong Power Plant under the quota approved by the Cabinet of 200,000 MT but already bought only about 66,250 MT. EGAT will speed

3

approved by the Cabinet of 200,000 MT but already bought only about 66,250 MT. EGAT will speed up buying 133,750 MT of CPO to generate electricity.

4

Manage the nationwide palm oil stock by installing meters in palm oil mills to provide accurate palm

• il stock in real time, so the committee has up-to-date and verifiable data that helps with its decision-

making in the future.

5

Tackling palm oil smuggling : Security forces to step up efforts to prevent palm oil smuggling from Malaysia to keep the lid on local supply. 26

Comparison of CPO Wholesale Price Between Bangkok and Malaysian Market

24.33 29.10 36.59 30.86 25.24 28.57 27.33 31.95 24.88 19.57 16.64 21.96 27.02 32.63 28.89 23.27 24.05 19.24 22.72 22.17 18.05 15.53

• 10.00

20.00 30.00 40.00

THB/Kg.

27

• 2009

2010 2011 2012 2013 2014 2015 2016 2017 2018 1H19 CPO Wholesale Price in Bangkok market CPO Wholesale Price in Malaysian market

Source: Internal Trade Department

CPO price gap of Malaysia and Thailand getting narrow for 4 consecutive years, leading to export potential.

• 2017 : 303,126 MT
• 2018 : 372,950 MT
• 2019 (Jan – April) : 189,948 MT

Factors Affecting Palm Oil Industry

• The Ministry of Commerce has stressed the government’s efforts to solve low pricing of

FFB, bringing forward measures over the Q4/2019 to bring down the stock volume to a normal level.

Policies and Support Measures from the Government to reduce CPO stock in Thailand

• Domestic biodiesel mandates in Indonesia & Malaysia – to boost usage and reduce

inventories.

• Indonesia
• B20 biodiesel has kicked off in September 2018
• 2020: plan to increase to B30
• Malaysia
• B10 biodiesel has kicked off in Feb 2019

Biodiesel Mandates in Indonesia and Malaysia

28

• B10 biodiesel has kicked off in Feb 2019
• 2020: plan to increase to B20
• RED II : The use of palm oil in biodiesel will be capped at 2019 level until 2023 and reduce

to zero by 2030

• EU has proposed duties ranging between 8% and 18% on imports of biodiesel from

Indonesia.

• “Palm Oil Free” on food label in Europe

EU Policy

• Malaysia and Indonesia governments have conducted major PRs and promoted campaigns

to support palm oil including to increase domestic demand via biodiesel mandates.

To Strike Back “Palm Oil Free” Labels in EU

Palm Oil Free Label vs Love Palm Oil Campaign

29

Factors Affecting Palm Oil Industry

• Capacity utilisation of India's palm oil refining industry "dropped to very low levels" as a

result of the reduction of tariff from 50% to 45% in January 2019 given to Malaysia under the bilateral trade deal. Therefore, India has raised the tax on refined palm oil from Malaysia to 50% from 45% for six months to curb imports and boost local refining.

India Raised Import Tax

• China’s retaliatory tariffs on American soybeans may turn to the benefit for palm oil

producer.

• China’s palm oil usage rose more than 20% in the first seven months of 2019 due to its

price advantage.

Declined Trend of Palm Oil Usage in China , except 2018 - 2019

• Petroleum price is another factor to lead CPO price.

Petroleum Price and

• Petroleum price is another factor to lead CPO price.
• Soybean oil price is volatile due to the trade war that may impact to palm oil price.

Petroleum Price and Soy Bean Oil Price

• Malaysia and Indonesia to halt new oil palm plantation development but focusing on productivity
• MSPO : Malaysia targets to achieve 100% sustainable palm oil by January 2020 (Currently at 40%)
• ISPO : Indonesia targets to achieve 100% sustainable palm oil by December 2020 (Currently at

60%)

Trend of Sustainable Palm Oil

e.g. RSPO , MSPO , ISPO

• A prolonged drought usually causes FFB production and may hit oil extraction during

harvest in the next 6-12 months and it may control palm oil production and limit the downward trend.

The Impact of Drought

30

Impact of El Nino-La Nina on Soy bean oil and CPO Price

31

Extent of price recovery depends on the impact of the current El Nino on oilseed production in the coming season.

Agenda

• Company Overview (LST)
• Company Overview (UPOIC)
• Industry Overview
• Financial Overview (UPOIC)
• Financial Overview (LST)
• Business Overview (UFC)
• Q&A

32

Performance Summary (Consolidated)

• Sales Volume decreased by 16.5%

mainly from CPO- Sales Volume decreased and Avg. Selling Price per unit decreased by 20% and 16% respectively.

• COG decreased by 33.6% ,along with

Sales drop, besides that Avg. FFB cost per unit decreased by 19.6% and FFB

105.1 409.5 76.5 278.5 Gross Profit Sales revenue

1H19 Financial Summary

• 131.0 mTHB (-32%)
• 28.6 mTHB (-27%)

33 per unit decreased by 19.6% and FFB from own estate increased by 8.5%.

• Effects from Agriculture (TAS 41 ) 40.56

MB.

• Effects from Employee benefit (TAS 19)

6.9 MB

50.6 63.4 (4.1) (0.6) Net Income EBIT 1H19 1H18

• 64.0 mTHB (-101%)
• 54.7 mTHB (-108%)

FFB Crop 2016 – 1H2019

43% 43% 57% 61% 57% 60% 80% 100% 43% 58% 57% 60% 80% 100%

34

43% 39% 43% 0% 20% 40% 2016 2017 2018 Own Estates Out-grower 42% 43% 0% 20% 40% 1H18 1H19 Own Estates Out-grower

1H2019 Income Statement

(Million baht) 1H19 % to Sales 1H18 % to Sales Change Sales 278.51 100.0% 409.53 100.00%

• 31.99%

Cost of sales (202.00)

• 72.5%

(304.40)

• 74.33%
• 33.64%

Gross profit 76.51 27.5% 105.13 25.67%

• 27.22%

SG&A expense (44.16)

• 15.9%

(37.00)

• 9.03%

19.36%

Other income

11.27 4.0% 8.41 2.05% 34.05% Gain / (Loss) from change in fair value of biological assets (40.56)

• 14.6%

3.07 0.75%

• 1420.31%

Consolidated 35 assets (40.56)

• 14.6%

3.07 0.75%

• 1420.31%

Loss arising from impairment of assets 0.0% (28.54)

• 6.97%
• 100.00%

Share of profit (loss) from investment in joint venture (3.66)

• 1.3%

12.29 3.00%

• 129.77%

EBIT (0.60)

• 0.2%

63.37 15.47%

• 100.95%

Finance Cost (3.38)

• 1.2%

(3.49)

• 0.85%
• 3.10%

EBT (3.98)

• 1.4%

59.88 14.62%

• 106.65%

Tax (0.08) 0.0% (9.28)

• 2.27%
• 99.14%

Profit for the period (4.06)

• 1.5%

50.60 12.36%

• 108.02%

Earnings per share (0.01) 0.16

Statement of Financial Position as of 30 June 2019

(Million baht) 30-Jun-19 % to total assets 30-Jun-18 % to total assets Change Cash and cash equivalents 54.02 3.7% 64.97 4.3%

• 16.85%

Trade and other receivables 35.55 2.4% 85.39 5.6%

• 58.37%

Inventories 166.77 11.3% 146.86 9.7%

13.56%

Other current assets 94.57 6.4% 87.95 5.8%

7.53%

Fixed assets 851.87 57.8% 855.17 56.4%

• 0.39%

Other non-current assets 271.77 18.4% 274.93 18.1%

• 1.15%

Consolidated 36 Total assets 1,474.55 100.0% 1,515.26 100.0%

• 2.7%

Bank overdrafts and short-term loans 385.00 26.1% 370.00 24.4% 4.1% Trade and other payables 46.86 3.2% 32.21 2.1% 45.5% Other current liabilities 3.87 0.3% 8.91 0.6%

• 56.6%

Other non-current liabilities 18.57 1.3% 17.36 1.1% 7.0% Total liabilities 454.30 30.8% 428.47 28.3% 6.0% Paid-up capital 324.05 22.0% 324.05 21.4% 0.0% Paid-in surplus 321.55 21.8% 321.55 21.2% 0.0% Retained earnings 374.66 25.4% 441.19 29.1%

• 15.1%

Total shareholders' equity 1,020.25 69.2% 1,086.79 71.7%

• 6.1%

Total liabilities and shareholders' equity 1,474.55 100.0% 1,515.26 100.0%

• 2.7%

Profitability Analysis (Consolidated)

Return on Asset (ROA)

12.1% (0.8%) 4.7% (1.2%) 1.0% (0.3%) 2014 2015 2016 2017 2018 1H19

Return on Equity (ROE) 37

(1.2%) 2014 2015 2016 2017 2018 1H19 16.8% (1.1%) 6.3% (1.7%) 1.3% (0.4%) 2014 2015 2016 2017 2018 1H19

Financial Position Summary (As of 30 June 2019)

Total Asset (Million Baht)

Million Baht

383 273 307 351 231 351 919 976 921 879 851 852 258 332 319 290 280 272 1,560 1,582 1,547 1,520 1,361 1,475

• 500

1,000 1,500 2,000 2014 2015 2016 2017 2018 1H19

Total Debt & D/E Ratio Interest Coverage Ratio (Times)

Million Baht

Times

38

2014 2015 2016 2017 2018 1H19 Current Asset PP&E Other Asset

431 520 397 452 311 454 0.38 0.49 0.35 0.42 0.30 0.45

• 0.20

0.40 0.60

• 200

400 600 800 2014 2015 2016 2017 2018 1H19 Debt (Mil.Baht) D/E Ratio (times) 42 9 24 7 13 8 2014 2015 2016 2017 2018 1H19

Agenda

• Company Overview (LST)
• Company Overview (UPOIC)
• Industry Overview
• Financial Overview (UPOIC)
• Financial Overview (LST)
• Business Overview (UFC)
• Q&A

39

1H2019 Financial Summary

623 3,800 644 3,260 Gross Profit Sales revenue

Consolidated

• 540 mTHB (-14.2%)

+21 mTHB (+3.4) 297 2,636 425 2,249 Gross Profit Sales revenue

LST

• 387 mTHB(-14.7%)

+128 mTHB (+43.2%)

40

217 279 217 274 Net Profit EBIT 1H19 1H18

• 5 mTHB (-1.8%)

0 mTHB (0.0%) 193 213 271 310 Net Profit EBIT 1H19 1H18 +78 mTHB (+41.0%) +97 mTHB (+46.1%)

1H2019 Income Statement

(Million Baht) 1H19 % to Sales 1H18 % to Sales Change Sales 3,260.16 100.0% 3,799.50 100.00%

• 14.2%

Cost of sales (2,615.99)

• 80.2%

(3,177.27)

• 83.62%
• 17.7%

Gross profit 644.17 19.8% 622.23 16.38% 3.5% SG&A expense (361.25)

• 11.1%

(367.79)

• 9.68%
• 1.8%

Other income 35.63 1.1% 37.79 0.99%

• 5.7%

Gain / (Loss) from change in fair value of biological assets (40.56)

• 1.2%

3.07 0.08%

• 1420.3%

Loss arising from impairment of assets 0.0% (28.54)

• 0.75%
• 100.0%

Consolidated

41

Loss arising from impairment of assets 0.0% (28.54)

• 0.75%
• 100.0%

Share of loss from investment in joint venture (3.66)

• 0.1%

12.29 0.32%

• 129.8%

EBIT 274.33 8.4% 279.06 7.34%

• 1.7%

Finance Cost (7.42)

• 0.2%

(13.36)

• 0.35%
• 44.5%

EBT 266.91 8.2% 265.70 6.99% 0.5% Tax (50.21)

• 1.5%

(48.36)

• 1.27%

3.8% Profit for the period 216.70 6.6% 217.34 5.72%

• 0.3%

Net income (Loss) attribute to : Equity holder of the Company 221.89 6.8% 205.29 5.40% 8.1% Non-Controlling interests of the subsidiaries (5.19)

• 0.2%

12.05 0.32%

• 143.1%

Earnings per share 0.27 0.25 8.1%

Statement of Financial Position as of 30 June 2019

(Million Baht) 30-Jun-19 % to total assets 30-Jun-18 % to total assets Change Cash and cash equivalents 349.14 6.6% 271.89 4.9% 28.4% Trade and other receivables 883.12 16.6% 891.23 16.2%

• 0.9%

Inventories 1,094.33 20.6% 1,339.39 24.4%

• 18.3%

Other current assets 127.93 2.4% 115.85 2.1% 10.4% Fixed assets 2,266.73 42.6% 2,284.82 41.6%

• 0.8%

Other non-current assets 595.04 11.2% 594.53 10.8% 0.1% Total assets 5,316.29 100.0% 5,497.71 100.0%

• 3.3%

Bank overdrafts and short-term loans 550.00 10.3% 650.00 11.8%

• 15.4%

Consolidated

42

Bank overdrafts and short-term loans 550.00 10.3% 650.00 11.8%

• 15.4%

Trade and other payables 483.85 9.1% 577.92 10.5%

• 16.3%

Current portion of long-term loans 78.29 1.5% 182.05 3.3%

• 57.0%

Other current liabilities 81.17 1.5% 82.39 1.5%

• 1.5%

Long-Term Borrowings

• 0.0%

83.29 1.5%

• 100.0%

Other non-current liabilities 168.31 3.2% 132.40 2.4% 27.1% Total liabilities 1,361.62 25.6% 1,708.05 31.1%

• 20.3%

Paid-up capital 820.00 15.4% 820.00 14.9% 0.0% Paid-in surplus 240.66 4.5% 240.66 4.4% 0.0% Retained earnings 2,575.24 48.4% 2,391.08 43.5% 7.7% Non-Controlling interests of the subsidiaries 318.78 6.0% 337.92 6.1%

• 5.7%

Total shareholders' equity 3,954.68 74.4% 3,789.66 68.9% 2.0% Total liabilities and shareholders'equity 5,316.30 100.0% 5,497.71 100.0%

• 3.3%

Profitability Analysis (Consolidated)

Return on Asset (ROA)

8.5% 5.6% 6.0% 6.7% 6.9% 4.0% 2014 2015 2016 2017 2018 1H19

Return on Equity (ROE) 43

2014 2015 2016 2017 2018 1H19 14.8% 9.8% 10.6% 11.1% 10.1% 5.6% 2014 2015 2016 2017 2018 1H19

Financial Position Summary (As of 30 June 2019)

Total Asset (Million Baht)

591 620 655 612 597 594 2,085 2,425 2,413 2,351 2,240 2,267 2,448 2,826 2,880 3,078 2,316 2,455 5,124 5,871 5,948 6,040 5,153 5,316 2014 2015 2016 2017 2018 1H19

Total Debt & D/E Ratio Interest Coverage Ratio (Times)

Million Baht Times

44

2014 2015 2016 2017 2018 1H19 Other Asset PP&E Current Asset

2,030 2,648 2,455 2,310 1,192 1,362

0.66 0.82 0.70 0.62 0.30 0.34

• 0.20

0.40 0.60 0.80 1.00

• 1,000

2,000 3,000 4,000 2014 2015 2016 2017 2018 1H19 Debt (Mil.Baht) D/E Ratio (times) 16.2 14.5 17.0 18.9 31.9 52.1 2014 2015 2016 2017 2018 1H19

Agenda

• Company Overview (LST)
• Company Overview (UPOIC)
• Industry Overview
• Financial Overview (UPOIC)

45

• Financial Overview (LST)
• Business Overview (UFC)
• Q&A

Oman UAE Malaysia Singapore UK Germany Netherlands

America Asia Europe

China Japan Taiwan Hong Kong

Worldwide Customer Base

Singapore Brunei Philippines Australia New Zealand USA Canada

Australia Africa

46

Financial Summary (2016 -2018)

Sales Revenue

Million Baht

2,393 2,280 2,042 17.0 % (4.7)% (10.4)% (20.0)% (10.0)% 0.0 % 10.0 % 20.0 % 1,000 2,000 3,000 Y2016 Y2017 Y2018 Sale Sales Growth

47

Net Profit Gross Profit

Million Baht Million Baht

Sale Sales Growth 647 587 497 27.0 % 25.8 % 24.3 % 0.0 % 10.0 % 20.0 % 30.0 % 200 400 600 800 Y2016 Y2017 Y2018 Gross Profit GP Margin 230 214 138 9.5 % 9.4 % 6.8 % 0.0 % 2.0 % 4.0 % 6.0 % 8.0 % 10.0 % 50 100 150 200 250 Y2016 Y2017 Y2018 Net Profit GP Margin

1H2019 Income Statement

(Million baht) 1H19 % to Sales 1H18 % to Sales Change Sales 515.22 100.0% 542.70 100.0%

• 5.1%

Cost of sales (418.75)

• 81.3%

(410.50)

• 75.6%

2.0% Gross profit 96.47 18.7% 132.20 24.4%

• 27.0%

Consolidated

48

SG&A expense (60.16)

• 11.7%

(61.60)

• 11.4%
• 2.3%

Other income 3.87 0.8% 12.15 2.2%

• 68.2%

EBIT 40.18 7.8% 82.74 15.2%

• 51.4%

Finance Cost (1.58)

• 0.3%

(2.47)

• 0.5%
• 36.2%

EBT 38.60 7.5% 80.27 14.8%

• 51.9%

Tax (7.91)

• 1.5%

(15.36)

• 2.8%
• 48.5%

Net income 30.69 6.0% 64.91 12.0%

• 52.7%

Statement of Financial Position as of 30 June 2019

(Million Baht) 1H/19 % to total assets 1H/18 % to total assets Change Cash and cash equivalents 46.34 3.2% 51.35 3.4%

• 9.8%

Trade and other receivables 244.97 17.0% 226.92 15.2% 8.0% Inventories 349.98 24.3% 432.83 29.0%

• 19.1%

Other current assets 23.69 1.6% 16.76 1.1% 41.3% Fixed assets 709.66 49.2% 698.49 46.7% 1.6% Other non-current assets 66.60 4.6% 68.24 4.6%

• 2.4%

Total assets 1,441.23 100.0% 1,494.59 100.0%

• 3.6%

Bank overdrafts and short-term loans 165.00 11.4% 180.00 12.0%

• 8.3%

Consolidated 49 Bank overdrafts and short-term loans 165.00 11.4% 180.00 12.0%

• 8.3%

Trade and other payables 196.21 13.6% 156.73 10.5% 25.2% Current portion of long-term loans 78.29 5.4% 112.54 7.5%

• 30.4%

Other current liabilities 32.91 2.3% 37.57 2.5%

• 12.4%

Long-Term Borrowings

• 0.0%

33.27 2.2%

• 100.0%

Other non-current liabilities 70.72 4.9% 48.85 3.3% 44.8% Total liabilities 543.13 37.7% 568.96 38.1%

• 4.5%

Paid-up capital 525.00 36.4% 525.00 35.1% 0.0% Paid-in surplus 6.58

• 0.5%

6.58

• 0.4%

0.0% Retained earnings 218.25 15.1% 245.79 16.4%

• 11.2%

Other components 161.43 11.2% 161.43 10.8% 0.0% Total shareholders' equity 898.10 62.3% 925.63 61.9%

• 3.0%

Total liabilities & shareholders' equity 1,441.23 100.0% 1,494.59 100.0%

• 3.6%

Financial Position Summary (As of 30 June 2019)

Total Asset (Million Baht)

70 94 69 68 67 643 679 713 698 710 1,076 888 859 728 665 1,789 1,661 1,641 1,495 1,441 Y2015 Y2016 Y2017 Y2018 1H19

50

Total Debt & D/E Ratio ROA & ROE

Million Baht Times

Other Asset PP&E Current Asset 1,306 1,012 790 569 543 2.70 1.56 0.93 0.61 0.60 0.00 1.00 2.00 3.00 4.00 500 1,000 1,500 Y2015 Y2016 Y2017 Y2018 1H19 Debt (Mil.Baht) D/E Ratio (times) 15.6% 17.8% 16.5% 11.7% 2.7% 37.1% 40.6% 28.5% 15.5% 3.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Y2015 Y2016 Y2017 Y2018 1H19 ROA ROE

Growth Drivers

Innovations and New Products/ New Pack Size

• Add value to our portfolio with innovations to delight

customers eg. Watermelon Water, Plant-based milk alternatives.

• Invest in research and innovations.
• Invest in new line for new products

Consolidate Existing Markets and Explore New Markets Consolidate Existing Markets and Explore New Markets

• Strengthen leadership in key markets and expand to

new markets including Middle East and India New Channels

• Exploring new business channel eg. Online retailers ,

Food service and HORECA.

51

Q&A

Lam Soon (Thailand) Public Company Limited 64 Soi Bangna - Trad 25, Bangna Nuea, Bangna, Bangkok 10260

• Tel. +66 2361 8959/87
• Fax. (Management Dept.) +66 2361 8988/89

Thank You

For further information & enquiries, please contact us at: Anchalee Suebchantasiri Piyathida Sukchan Managing Director Executive Director Tel: +66-(0)2-361 8959/87 Tel: +66-(0)2-361 8959/87 Email: anchales@lamsoon.co.th Email: piyatida@lamsoon.co.th

• Fax. (Sales Dept.) +66 2361 8994/5

Email: secretary@lamsoon.co.th

52