STA 2Q18 SET Opportunity Day September 13, 2018 at The Stock - PowerPoint PPT Presentation

SRI TRANG AGRO-INDUSTRY PUBLIC COMPANY LIMITED STA 2Q18 SET Opportunity Day September 13, 2018 at The Stock Exchange of Thailand SETTHSI Index SET100 Index

CONTENTS 1. STA Business Highlights 2. 2Q18 & 1H18 Performance 3. Natural Rubber Market Situation 4. Looking Ahead 2

1. STA BUSINESS HIGHLIGHTS 3

Our Global Presence 45,000 rai of rubber plantations 59 China procurement centers Thailand 36 USA NR processing plants 6 Vietnam sales & distribution Myanmar centers 4 Singapore Gloves production facilities Indonesia in Thailand 10% share of global 8% 353,773 tons 675,471 tons 31% share of Thailand’s share of global glove consumption in FY17 NR consumption in FY17 in sales volume in 2Q18 in sales volume in 6M18 NR production in 6M18 4

Upstream Operations – Rubber Plantations Area of Rubber Plantations Immature Area 81% Tapping Area Approx. 6% 45,000 rai 7,200 HA Infrastructure 13% Estimated Mature Plantations 19 Production, tons (LHS) Tapping, trees (RHS) 14,000 2,500,000 12,000 Provinces in Thailand 2,000,000 Lampang Phrae 10,000 Sukothai Kalasin Pichit Phayao 1,500,000 8,000 Phitsanulok Nan Petchaboon Songkhla 6,000 1,000,000 Chiang Rai Surat Thani Chiang Mai Krabi 4,000 Sakon Nakhorn Chumporn 500,000 Utaradit Bungkan 2,000 Sakaeo 0 0 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f 2026f 2027f Note: Information as of 30 June 2018 5

Midstream Operations – NR Processing 36 Production Capacity (mil. tons) Optimum capacity (LHS) processing facilities Engineering capacity (LHS) Capacity*: 2.82 mil. tons/annum % optimum capacity to global NR production (RHS) % optimum capacity to global NR consumption (RHS) Technically Specified Rubber 3.2 21% 24 processing facilities 2.8 18% TSR Capacity*: 2.10 mil. tons/annum 16% 16% 15% 2.4 15% 15% 5 processing facilities 16% 13% 15% 15% 14% RSS Capacity*: 0.21 mil. tons/annum 2.0 12% 10% 12% 7 processing facilities Rubber Sheet 2.9 2.9 1.6 9% LTX Capacity*: 0.51 mil. tons/annum 2.6 10% 2.4 2.2 2.2 2.1 1.2 1.9 6% 1.8 1.5 1.3 0.8 3% 1.1 0.4 0% Concentrated Latex 2011 2015 2016 2017 2018E 2019E [Information as at 30 June 2018] Note: *Total engineering capacity 6

Downstream Operations – Finished Products Product Range Medical Application • Powdered Latex Examination Glove • Powder-Free Latex Examination Glove • Powder-Free Nitrile Examination Glove STGT aiming to be among the world’s top three glove producers 30 years in operation, since 1989. STGT takes meticulous attention to detail at every stage of production, from the careful selection of raw materials to R&D. Lifestyle Application 4 production facilities in Thailand, FOOD TATTOO the world’s largest source of concentrated latex • Powdered Latex Disposable Glove • Powder-Free Latex Disposable Glove 16.3 billion pieces of gloves • Powder-Free Nitrile Disposable Glove HAIR sold in 2017 CLEANiING GROOMIN G 15.7 billion pieces per annum in production capacity as at 30 June 2018 ARTS & PETS CRAFTS 8% market share of global glove consumption in 2017 7

Global Glove Consumption & STA’s Markets Global Glove Demand [bn pcs.] STA Sales Volume by Market Average growth at 8-10% per annum 370 400 EU Asia* 350 USA 24% 287 268 300 20% 28% [-5%] 228 250 201 [+6%] 194 China [+1%] 180 171 200 160 150 148 7% 150 [-1%] 100 50 Thailand 0 13% 2010 2011 2012 2013 2014 2015 2016 2017f 2018f 2019f 2020f Others [+2%] 11% Source: MARGMA Industry Brief 2018 on the Rubber Glove Industry [+2%] Gloves Consumption Per Capita [2017] Note: Accumulated data as at Key Drivers June 2018 compared with the end of December 2017. China 6  Increasing health and hygiene awareness *Asia excluding Thailand and China India 8  Emerging new health threats Asia 11  Aging population Nitrile Japan 76 40% Latex  Being indispensable & disposable products Product Mix Note: 6-month data as of 30 June 2018 EU 100 60% USA 150 0 50 100 150 200 8

Capacity Expansion of Top Five Glove Producers Robust growth in demand Global Market Share provides large producers with opportunities for expansion. [estimates for the year 2018] Capacity in Capacity expansion Company % Increase 2017 [bn. pcs.] in 2018F [bn. pcs.] 51.9 8.6 Top Glove 16.6% 28.0 4.7 Hartalega 16.8% 23.4 2.0 Supermax 8.5% 22.0 4.5 Kossan 20.5% 14.0 3.2 22.9% Sri Trang Gloves Total 139.3 23.0 16.5% Note: Information as disclosed by each company 9

Our Gloves Marketing Communications Encourage a wide variety of applications Lifestyle Medical Application Application 10

Our Gloves Marketing Activities Africa Health Exhibition, South Africa Food & Hotel Thailand 2018 9th International Rubber Glove Conference and Exhibition 2018, Malaysia Hospitalar Fair, Brazil Medical Fair India 2018 Follow Your Heart Power Medical Fair Asia, Singapore Your Life, Thailand 11

Our Gloves Distribution Channels 12

2. 2Q18 & 1H18 PERFORMANCE 13

Financial Highlights (THB million) 2Q18 2Q17 %YoY 1Q18 %QoQ 6M18 6M17 %YoY FY17 -27% 89,387 Revenue 19,755 22,875 -14% 17,689 12% 37,444 51,394 Sales volume (tons) 353,773 297,824 19% 321,698 10% 675,471 686,118 -2% 1,323,873 -30% 46,772 2% 47,217 68,123 Avg. selling price (Baht per ton) 47,622 67,886 -31% 59,765 Gross profit 2,261 (811) N/A 1,510 50% 3,771 1,088 247% 3,776 Adj. gross profit* 2,639 1,227 115% 2,196 20% 4,835 3,791 28% 4,322 EBITDA 1,581 (1,627) N/A 1,811 -13% 3,392 (895) N/A 1,650 N/A (202) EBIT 1,000 (2,083) N/A 1,264 -21% 2,264 (1,689) N/A (1,437) Net profit 592 (2,080) N/A 832 -29% 1,424 (2,072) GP margin 11.4% -3.5% 1,490bps 8.5% 290bps 10.1% 2.1% 795bps 4.2% Adj. GP margin* 13.4% 5.4% 799bps 12.4% 108bps 12.9% 7.4% 547bps 4.8% Net profit margin 3.0% -9.1% 1,210bps 4.7% -171bps 3.8% -4.0% 783bps -1.6% *Adjusting for (reversal) allowance of inventory and realized gains /(losses) from hedging activities 14

SICOM – Oil Prices - Butadiene 2Q17 3Q17 4Q17 1Q18 2Q18 Avg. = 153.7 (+0.6%) Avg. = 143.7 (-6.5%) Avg. = 152.8 Avg. = 146.5 (+1.9%) Avg. = 140.0 (-4.4%) 300 (US cent : Kg.) SICOM Price RSS TSR 250 200 150 100 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Crude Oil Prices Avg. = 50.8 Avg. = 61.7 (+18.4%) Avg. = 67.3 (+9.1%) Avg. = 52.1 (+2.6%) Avg. = 75.0 (+11.5%) 90 80 (USD : Bbl.) 70 60 50 40 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Latex & Butadiene Avg. = 159.7 ( +15.4% ) Avg. = 138.3 ( +24.7% ) Avg. = 124.6 ( +11.9% ) Avg. = 110.9 ( -11.0% ) Avg. = 111.4 ( -58.2% ) 200 113.8 ( -3.4% ) 117.7 ( +6.1% ) 123.6 ( -10.4% ) 111.0 ( -10.2% ) Price (US cent : Kg.) 137.9 ( -18.0% ) 150 100 Butadiene-SEA* Butadiene-China LTX 50 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Note: *SEA stands for South East Asia 15

FOREX 2Q17 3Q17 4Q17 1Q18 2Q18 Avg. = 33.22 (-2.7%) Avg. = 34.14 Avg. = 32.79 (-1.3%) Avg. = 31.39 (-4.3%) Avg. = 31.72 (+1.1%) 35 34 USD/THB Movement 33 32 33.01 31 32.58 30 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Baht and the region USD/THB USD/MYR USD/IDR +9.6% 12.0% 10.0% 8.0% +5.0% 6.0% 4.0% 2.0% +0.2% 0.0% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 -2.0% -4.0% -6.0% 16

Sales Revenue Sales Revenue by Product (THB million) Sales Revenue by Geography (THB million) -38.0% -38.0% 51,394 51,394 1% 6% 1% 5% 11% 8% -13.6% -13.6% 8% 37,444 5% 25% 2% 8% 10% 8% 15% +11.7% +11.7% Others 22,875 24% 22,875 19,755 4% 19,755 Europe 1% 17,689 4% 11% 17,689 4% 74% 44% 7% 2% 12% Others 9% 8% 7% USA 1% 8% 15% 11% 5% 22% 8% LTX 15% 70% 24% 42% 25% Asia (Exculding RSS China&Thailand) 73% 72% 48% 42% China 67% 44% Gloves 17% 16% TSR Domestic 18% 17% 16% 2Q17 1Q18 2Q18 6M17 6M18 2Q17 1Q18 2Q18 6M17 6M18 17

Gross Profit Gross Profit (THB million) - 6M18 Gross Profit (THB million) - 2Q18 GP GPM GP GPM 3,000 16.0% 4,000 16.0% 2,500 11.4% 3,500 12.0% 2,000 3,771 3,000 12.0% 8.5% 1,500 7.2% 7.0% 8.0% 10.1% 2,261 2,500 1,000 1,510 1,375 1,314 2,000 8.0% 500 4.0% 1,500 - (811) 1,000 4.0% (500) 0.0% 2.1% 500 (1,000) -3.5% 1,088 (1,500) -4.0% - 0.0% 2Q17 3Q17 4Q17 1Q18 2Q18 6M17 6M18 18

EBIT EBIT (THB million) - 2Q18 EBIT (THB million) - 6M18 Share of profit (loss) from investments in associates and joint ventures Share of profit (loss) from investments in associates and joint ventures Operating profit (loss) Operating profit (loss) 3,000 3,000 2,264 137 1,264 2,000 2,000 1,000 80 712 775 57 2,127 47 1,000 1,000 83 1,184 943 728 1 629 - - (1,689) (1,000) (1,000) (2,026) (2,000) (2,000) (1,689) (57) (2,083) (3,000) (3,000) 6M17 6M18 2Q17 3Q17 4Q17 1Q18 2Q18 19