TPBI Public Company Limited Opportunity Day Presentation May 2016 - - PowerPoint PPT Presentation

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

May 2016

Strictly Private & Confidential

Agenda

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Section 1 About TPBI Group Section 2 Business Overview Section 3 Shareholding Structure Section 4 Financial Highlights Section 5 Future Plan

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TPBI Group Overview

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TPBI’s VISION is “To be a leading packaging manufacturer who achieves sustainable growth together

with all stakeholders” TPBI is Thailand’s No. 1 total solution provider of plastic bag, providing complete services

 product design and formula development  manufacturing and procurement  raw material and product testing Products in groups Highlighted customers: A Global Market of TPBI

New Zealand USA France UK Japan Australia Nigeria German Italy Korea Indonesia

Plastic bags

• Vest-carrier/T-shirt bags/Bio Compostable

bags/Fruit & Vegetable bags

• Garbage bags
• Loop-handle/ Die cut bags/ Fashion bags
• EMAP film bags

Multilayer Blown Film

• Lamination film
• Barrier film
• Stretch hood
• Shrink film

Flexible Packaging

• Flexible packaging for frozen food, ready-to-

eat, sandwiches bags, etc. Others

• Plastic/bio-plastic coated paper cups
• V bags

Overseas Domestic

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Group Structure

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1/ APS Group consists of APS Co., Ltd. and Asia Packaging Center Co., Ltd.

Minima Technology Co., Ltd. (“Minima Tech”) “Manufacturer of plastic resin from plastic waste” “Manufacturer and distributor of flexible packaging” “Taiwan base, manufacturer of bio-plastic resin” “Distributor of bio-plastic resin” “Manufacturer and distributer of paper cup” Kanaoka Co., Ltd. (“Kanaoka”) APS Group 1/

• Mr. Somchai Borrisuttanakul

(“Mr. Somchai”)

• Mr. Carsten Paeslack

(“Mr. Carsten”) 7.00% 33.00% 60.00% 66.67% 70.00% 3.20% 40.00% 30.00% 30.00% 30.00% P.P. Packaging Co., Ltd. (“P.P. Packaging”) 13.33% 20.00% “Manufacturer and distributor of plastic bags and multilayer blown film”

Board of Directors

1. Banchong Chittichang Chairman of the Board 2. Wichai Borrisuttanakul Director 3. Somsak Borrisuttanakul Chief Executive Officer 4. Kamol Borrisuttanakul Chief Financial Officer 5. Saksit Borrisuttanakul Chief Operating Officer (High Value Added Products) 6. Sittichai Borrisuttanakul Chief Operating Officer (General Products) 7. Thanwa Laohasiriwong Director 8. Prinya Saniwalwaroon Director 9. Krit Phanratanamala Director

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Agenda

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Section 1 About TPBI Group Section 2 Business Overview Section 3 Shareholding Structure Section 4 Financial Highlights Section 5 Future Plan

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Strong Presence in Plastic Packaging Value Chain through Backward Integration

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“TPBI group is one of a few converters who integrates backward into its value chain; creating competitive advantages and enjoying higher margin whilst lowering the risk of reliance on external suppliers”

Feedstock Resin Producers Compound Resin Producers Film Producers Converters

Post-Consumer Plastic Scrap Post-Industrial Plastic Scrap Post-Industrial Recycle Resin Post-Consumer Recycle Resin Compound Recycle Resin Bio-Plastic Resin PE Resin (Virgin) Other Plastic Resin Compound Bio-Plastic Resin Multilayer Blown Film General Packaging (Shopping Bags, Garbage Bag, etc.) Flexible Packaging (Food Goods) Other Types of Film Bio-Based Feedstock Petroleum-Based Feedstock

       

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Items Details Sample of Customers Product mix

• Vest carrier bags/

T-Shirt bags/Bio Compostable bags/Fruit & Vegetable bags Made by virgin, recycle and/or Bio Compostable plastic resin. Used in modern trade, supermarket, convenient store

• Garbage bags

Made by virgin, recycle and/or bioplastic resin. Used as house brands and used in garbage handling of modern trade, supermarket, convenient store

• Loop-handle/

Die cut bags/ Fashion bags Used in shopping malls, gift shops

• EMAP film bags

Used in logistic of vegetable & fruits to extend life

Production Capacity

 55,920 ton/year

Sales proportion

Plastic Bags: Export 94%, domestic 6% (as of 1Q16)

Export to countries

Australia, United Kingdom, France, U.S.A., Japan, etc.

TPBI Group’s Products: Plastic Bags

Page 9

“TPBI’s plastic bags are categorized as an essential plastic packaging people use in everyday life including in retailers business (modern trade, supermarket, convenient store and shopping mall) and garbage handling”

“Customers only has to specify the required usage and/or properties, functions, and appearance of bags, TPBI delivers the rest”

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TPBI Group’s Products: Plastic Bags (Cont.)

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Bioplastic garbage bags Bioplastic loop-handle bags Bioplastic die cut bags

Vest carrier bags / T-shirt bags Garbage Bags Loop-handle / Die cut bags / Fashion bags

With printing Without printing Rolled bags Flat bags

We have been No. 1 in plastic bags … … and are ready to be No. 1 in green products.

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Items Details Sample of Customers Product mix Lamination film  Mostly used to produce flexible packaging for food

• Emphasize on the hygiene in production

Flexible packaging manufacturers

Barrier film

• Mostly used as packaging for fresh foods to extend shelf-life
• It can protect packed goods from oxygen, humidity and any

contaminations.

• Emphasize on the hygiene in production

Flexible packaging manufacturers

Stretch hood

• Used to cover goods packed in pallet
• To keep packed goods clean, stay in good shape, and easy for

shipment Petrochemical industry, cement manufacturers

Shrink film

• Used to wrap goods for amount wanted such as wrapping 12

bottles of water in one pack Bottled water manufacturers

Production Capacity

 9,000 ton/year

Customers Sales proportion

Multilayer blown film: Export 7.4%, domestic 92.6% (as of 1Q16)

Export to countries

Singapore, Japan, Philippines, Vietnam , etc.

TPBI Group’s Products: Multilayer Blown Film

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“TPBI manufactures 4 main types of multilayer blown film, with a capacity of  9,000 Ton/Year”

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Items Details Production Capacity

 100 million meter/year

Printing Machines Spec.

Run up to 250 meter per minute 9-colour printing

Package Types

3-side-sealed, center-sealed, side-sealed, corner-sealed, 4-side-sealed, sandwiches bag etc.

Quality Control

 Auto VDO inspection  Food safety grade  Physical properties tests ex. water and heat resistant

Customers

Food manufacturers, traders/distributers

Sales proportion

Flexible Packaging: Export 0.2%, domestic 99.8% (as of 1Q16)

TPBI Group’s Products: Flexible Packaging

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“Flexible packaging for frozen food, ready-to-eat food, and others are operated under TAK, a company within TPBI Group”

Strictly Private & Confidential AUSTRALIA 18% JAPAN 12% EU 22% USA 20% OTHER COUNTRIES 4% THAILAND 24%

TPBI Group’s Product & Market Diversification

Product Diversification Market Diversification

“TPBI Group distributes their different types of products to various regions to diversify the risk of relying on a few market”

• TPBI Group’s total sales for quarter ending 31 March 2016 is THB

1,177.32 mm, having sales proportion by products as follows:

• Vest carrier bag is the main product which contributes

approximately 47% of the Group’s total sales. It is mainly exported to Australia, Europe, USA, and Japan.

• In the quarter ending 31 March 2016, approximately 64% of

total sales are from exports to international markets while 36% are from domestic sales.

• TPBI group’s international markets composed of different

countries in various regions, i.e. Asia, Australia, America, Europe, and Africa

Note:*Other countries include New Zealand, Korea, Belgium, Indonesia, Nigeria, India, etc. Page 13

20.3% 47.0% 6.7% 12.4% 13.6%

Garbage bags Vest carriers/t-shirt bags Multi-layer blown film Flexible Packaging Others AUSTRALIA 24% JAPAN 9% EU 13% USA 16% OTHER COUNTRIES 2% THAILAND 36%

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Companies Total revenue (THB mn) 2013 2014 2015

TPBI PCL. 3,881 4,784 4,806

King Pac Industrial Co., Ltd. 3,117 2,969 N/A Naraipak Co., Ltd. 2,229 2,391 N/A Thantawan Industry PCL. 1,667 2,095 2,376 Multibax PCL. 1,479 1,760 1,732 Thai Griptech Co., Ltd. 960 918 N/A

Industry Overview & Competition

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International

Top 5 global exporters of plastic sacks & bags 2015 (full-year)

Rank Exporters Value (USD mn) % 1st China 2,797 27 2nd Germany 882 9 3rd U.S. 709 7 4th Thailand 583 6 5th Vietnam 529 5 6th Canada 465 5

• Top 5 competitors of Thai exporters are exporters from China,

Germany, U.S.A., Vietnam, and Canada

• Germany and U.S.A. mainly exports plastic bags for medical industry
• r other special types of plastic bags
• Thus, key competitors of Thai exporters who exports similar type of

plastic bags are China, Vietnam, and Malaysia (7th)

Source: International Trade Centre as of 26 Apr 2016

Domestic

Plastic Bag Market

Example of domestic players with similar type of plastic bags

Source:BOL, 26 Apr 2016

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Industry Overview & Competition (Cont.)

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Multilayer Blown Film Market Flexible Packaging Market

Companies Revenue (THB mn) 2013 2014 2015 Unique Plastic Industry Co., Ltd. 1,490 1,520 N/A Sunsea Plastics P.S. Co., Ltd. 1,001 1,009 N/A

TPBI PCL. 392* 400* 499*

W&H Film Co., Ltd. 70 175 N/A

Source: BOL Note: *Revenue from sales of multilayer blown film

Group of Manufacturer Companies Revenue (THB mn) 2013 2014 2015 Large Fuji Ace Co., Ltd. 3,723 1/ 3,723 3,611 Huhtamaki (Thailand) Co., Ltd. 3,226 3,676 N/A Amcor Flexibles Chonburi Co., Ltd. 2,532 2/ 2,532 2,263 Dai-ichi Packaging Co., Ltd. 1,861 1,889 N/A Medium

T.A.K. Packaging Co., Ltd. 460 518 590

Example of domestic players for multilayer blown film market Example of domestic players for flexible packaging market W&H W&H

W&H Film Co., Ltd.

Source: BOL Note:

1/ For fiscal year ended 31 March 2014 2/ For fiscal year ended 30 June 2014

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Facilities & Resources

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“TPBI Group has 2 fully-equipped plants located in Sampran and Rayong”

Sampran Site Rayong Site

Area

•  14 Rai

Products

• Plastic bags and multilayer blown film

(with more details, lesser volume)

• Flexible packaging
• Paper cups

Production Capacity

•  12,840 ton/year (plastic bags + films)
•  100 million meter/year (flexible packaging)

Workforce

• 436 people

Note: * Production capacity of plastic bags at  55,920 tons per year Production capacity of multilayer blown films at  9,000 tons per year

TPBI, a plastic packaging manufacturer with a production capacity of  64,920 tons/year* to serve the needs of customers worldwide

Area

•  93 Rai

Products

• Plastic bags and multilayer blown film

(mass production) Production Capacity

•  52,080 ton/year

(plastic bags + films) Workforce

• 909 people
• New facilities of TGRT on land of  24 rai
• Expected to start operation in Quarter 1 of 2016

with expected minimum capacity of 7,200 ton/year

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Strategies for Competitive Advantages

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PRODUCT & SERVICE QUALITY 1

 Quality check and control starting since the selection of raw material, production process, and finished products  TPBI Group production process and quality of products is certified by several standards  Products are delivered on time with sales & marketing team that can promptly response to customers’ needs

VARIED PRODUCTS & HIGH CAPACITY 2

 Capability to offer and develop various designs and types of plastic packaging to serve different customers’ needs  Total production capacity of  64,920 tons a year for plastic bags and multilayer blown film and  100 million meters per year for flexible packaging to support local and international demand

Example of various products

HIGH EXPERTISE & VAST EXPERIENCE

“Strong management team with > 30 years of experience in plastic packaging industry with comprehensive knowledge to serve different customers’ requirement”

HIGH MANAGEMENT SYSTEM EFFICIENCY 4

 Ability to build/ modify machines to be suitable with different designs and types of products required by customers  Ability to develop or mix formula of plastic resins, and produce recycled plastic resins, in order to meet customers’ requirement  Ability to initiate new product developments that support or serve market trends, e.g. bio- products and other go green products

Bioplastic

3

 Continuously improving and developing internal management system in order to

• Enhance production efficiency,
• Reduce production cost,
• Significantly decrease workforce dependence, and
• Minimise defects/losses from production

 Enhancing current research and development department and

• ther technical department to support efficient production

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Agenda

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Section 1 About TPBI Group Section 2 Business Overview Section 3 Shareholding Structure Section 4 Financial Highlights Section 5 Future Plan

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Shareholding Structure

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Pre-IPO Structure

73.91% 21.04% 5.05%

Borrisuttanakul Family Public Float Institutional holders

Post-IPO Structure

As of 21 March 2016 Registered Capital 400,000,000 shares Par Value THB 1.0 per share Free Float 26.09% Minor shareholders (free float) 3,508 98.55% 1.45%

Borrisuttanakul Family Marubeni Group

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Agenda

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Section 1 About TPBI Group Section 2 Business Overview Section 3 Shareholding Structure Section 4 Financial Highlights Section 5 Future Plan

Strictly Private & Confidential 201.2 269.5 295.3 380.2 499.1 702.4 150.2 191.7 66.0 89.3 137.2 184.0 249.9 380.2 74.8 96.9 100 200 300 400 500 600 700 800 2010 2011 2012 2013 2014 2015 1Q2015 1Q2016

THB mm

Gross Profit Net Profit 2,935.1 3,148.8 3,734.2 3,881.3 4,784.2 4,805.7 1,064.1 1,177.3 1,000 2,000 3,000 4,000 5,000 6,000 2010 2011 2012 2013 2014 2015 1Q2015 1Q2016

THB mm

Total Revenue, Gross Profit, & Net Profit Growth

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Total Revenue Gross Profit and Net Profit

2010 2011 2012 2013 2014 2015 1Q15 1Q16 Gross Profit Margin 6.9% 8.6% 7.9% 9.8% 10.4% 14.6% 14.1% 16.3% Net Profit Margin 2.2% 2.8% 3.7% 4.7% 5.2% 7.9% 7.0% 8.2%

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Assets Breakdown

Balance Sheet Composition

Page 22 (THB mm)

Liabilities and Equity Breakdown

(THB mm)

2013 2014 2015 1Q16 Efficiency ratios Return on Assets 8.64% 10.54% 14.30% Return on Fixed Assets 36.34% 44.22% 55.33% n.a. Return on Equity 19.58% 21.67% 27.27% Leverage ratios Debt to Equity (times) 1.17 0.96 0.86 0.41 Interest Bearing Debts to Equity (times) 0.71 0.61 0.42 0.19

Key Financial Ratios

Cash Accounts Receivable Inventories PPE Pledged deposits Others Short-term loan Accounts payable Long-term loan Other liabilities Paid-up capital Retained earnings Other equity

108 121 119 150 139 140 504 567 585 808 1,028 1,062 767 842 697 166 117 1,156

2014 2015 1Q2016

176 190 1148 860 1022 1116 239 300 400 97 75 93 126 187 173 398 595 496 607 446 333

2014 2015 1Q2016

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Agenda

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Section 1 About TPBI Group Section 2 Business Overview Section 3 Shareholding Structure Section 4 Financial Highlights Section 5 Future Plan

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Future Plan: Organic & Inorganic Growth

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Expansions M&As

ORGANIC GROWTH through EXPANSIONS 1) 100% Revenue Growth for Flexible Packaging

• We are planning to invest additional THB 800 mm to

expand our flexible packaging capabilities at T.A.K.

• The preliminary plan is to start the investment in

2H2016 (this year CAPEX shall be approx. THB 200 mm)

• 1st phase shall be operational in 2018

EXPANSIONS and MERGERS & ACQUISITIONS are our growth engines.

1 2 3 4 5 6

2) 3% - 5% Revenue Growth p.a. for General Packaging (i.e. Plastic Bags & Multilayer Films)

• We plan to invest approximately THB 100 mm p.a. to continue to expand our general packaging businesses

3) New Market Expansion

• In addition to our strong customer base in Australia, U.S.A., Europe, and Japan, we are actively pursuing new

markets such as Cambodia, Lao, Myanmar, and Vietnam (“CLMV”) as well as new “frontier” markets in Africa INORGANIC GROWTH through MERGERS & ACQUISITIONS

• We are actively looking for new partnerships/acquisitions in both vertical (up and down our value chain) and horizontal

(to expand our footprint and market share)

• Our initial M&A focus is for partners in Asia (especially in South East Asia)