TPBI Public Company Limited Opportunity Day Presentation May 21, - - PowerPoint PPT Presentation

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TPBI Public Company Limited

Opportunity Day Presentation

May 21, 2019

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Disclaimer

• The information contained in this presentation is for information purposes only and does not constitute an
• ffer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in TPBI

Public Company Limited (“TPBI”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever.

• In addition, 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 and its directors. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future

• events. No assurance can be given that future events will occur, that projections will be achieved, or that the

Company's assumptions are correct. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events,

• r otherwise. These statements can be recognized by the use of words such as “expects,” “plans,” “will,”

“estimates,” “projects,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results may differ from those forecast and projected or in the forward-looking statements as a result of various factors and assumptions.

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Agenda

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

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TPBI Group Overview

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• TPBI Public Company Limited (“TPBI”) was

established by Borrisuttanakul family as a plastic-bag trader/producer

• More than 30-year experience led the company

become the leader of plastic-bag producer in Thailand

• The company was listed on the Stock Exchange of

Thailand in the beginning of 2Q16

Number of Shares Outstanding (mm) 416.88 Registered Shares (THB mm) 416.88 Paid-up Capital (THB mm) 416.88 Par Value per Share (THB) 1 Share Movement ( Apr 18 – Mar 19) High (THB) 13.00 Low (THB) 4.98 Average (THB) 8.16 Average Market Capitalization (THB mm) 3,200.21 Average Daily Trading Value (THB mm) 0.37 Dividend Payout Policy (%) At least 50% of net profit

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

ü product design and formula development ü manufacturing and procurement ü raw material and product testing

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

stakeholders”

Company Profile Share Summary

Source: Company Data, Bloomberg

*Shareholder holding as of the latest book closing date

Borrisuttanakul family, 71.01% BBLAM, 11.59% Others, 17.40%

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TPBI Group Products

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Revenue Breakdown by Product

§ TPBI Group’s total sales for 1Q19 is THB 1,372.82 mm, having sales proportion by products as follows:

Source: Company Data

Garbage bags 22% Fruit&vegetable bags 4% Vest carriers/t- shirt bags 14% Soft Loop 2% Multi-layer blown film 11% Flexible Packaging 15% TPBI UK - Paper 6% TPBI UK - Trading 12% Others 14%

Revenue Breakdown in 1Q19 Revenue Breakdown in 1Q18

Garbage bags 22% Fruit&vegetable bags 4% Vest carriers/t-shirt bags 31% Soft Loop 3% Multi-layer blown film 11% Flexible Packaging 14% Others 15% Soft Loop

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Australia 25% Japan 9% UK 4% USA 9% New Zealand 5% Other countries 4% Thailand 44% Australia 12% Japan 6% UK 16% USA 17% Myanmar 3% New Zealand 2% Other countries 7% Thailand 37%

Market Diversification

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Market Diversification

§ During 1Q19, approximately 63.33% of total sales are from exports to international markets while 36.67% are from domestic sales.

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

Note: :*Other countries include South Korea, Singapore, Nigeria, Laos, Cambodia, etc. Source: Company Data

In 1Q19 In 1Q18

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Agenda

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

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TPBI’s Business Divisions

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Consumables Flexibles Paper Product Mix:

• Vest carrier bags/ T-shirt bags/

Bio compostable bags/ Fruit & Vegetable bags/ Garbage bags/ Loop- handle/ Die cut bags/ Fashion bags/ EMAP film bags

• New Products: Roll Star/ New

design garbage bags/ New design bags on roll for fruit and vegetable/ Mail Order bags/ Liner bags/ LLDPE food bags Production Capacity:

• ~ 62,000 tons per year

Key Markets:

• Australia, UK, USA, New

Zealand, Japan and etc. Product Mix:

• Lamination film/ Barrier film/

Stretch hood/ Shrink film

• Packaging for frozen food,

ready-to-eat food and others

• New Products: Digital Printing

Production Capacity:

• Multi Layer Film: ~ 11,500 tons

per year

• Flexible Packaging: ~ 150 million

meters per year Key Markets:

• Thailand, Vietnam, Singapore ,

Australia, and etc. Product Mix:

• Flat & Satchel bag/ Block

Bottom/ SOS / Tape Handle / die cut SOS bags Production Capacity:

• ~ 516 million bags per year

Key Markets:

• UK.

Global Trading Product Mix:

• Reusable bags/ Piping bags/ All

products from Consumable, Flexible, and Paper divisions. Key Markets:

• UK, Australia, and USA.

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67% 80% 62% 58% 67% 49% 0% 50% 100% 50 100 150 2014 2015 2016 2017 2018 1Q19 Million Meters per year Capacity Output Utilization rate 76% 82% 81% 84% 80% 84% 70% 75% 80% 85% 2,000 4,000 6,000 8,000 10,000 12,000 2014 2015 2016 2017 2018 1Q19 Tons per year

Historical Production Capacity and Utilization Rate

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84% 86% 85% 78% 67% 64% 0% 20% 40% 60% 80% 100% 20,000 40,000 60,000 80,000 100,000 2014 2015 2016 2017 2018 1Q19 Tons per year

General Packaging Multilayer Blown Film Flexible Packaging

• With new factory, Flexible packaging capacity

has been increased to over 150 million meters per year

• Utilization rate have been in range of 49 – 80%
• Capacity expansion requires longer lead time

than other products

• General packaging capacity is currently around

62,000 tons per year

• Utilization rate have been in range of 64 - 86%
• Multilayer blown film capacity is currently

around 11,500 tons per year

• Utilization rate have been in range of 76 – 84%

Source: Company Data

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Agenda

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

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Market Overview

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Foreign Exchange (THB/USD) Resin Price

Source: Bloomberg

• Thai Baht has been quite fluctuated during

1Q19, averaging at THB 31.63 per USD

• TPBI revenue and cost are partially natural-

hedged

• Brent crude oil price has been increasing

during the first quarter of 2019, averaging at USD 63.83 per barrel in 1Q19.

• The resin prices are somewhat influenced

from crude oil price.

• The average prices of HDPE and LLDPE

were 1,081 and 1,030 per MT respectively in 1Q19

Brent Crude Oil

200 400 600 50 100 Apr 18 May 18May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18Dec 18 Jan 19 Feb 19 Mar 19 Volume ('000) USD/Barrel Volume (RHS) Closing Px

1,000 1,200 1,400 1,600

Apr 18 May 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 USD/MT

HDPE LLDPE

31 32 33 34 Apr 18 May 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 THB

THB/US

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11.5% 6.6% 9.8% 9.5% 5.1% 5.0% 5.0% 0.3% (1.4%) (5.0%) (0.0%) 5.0% 10.0% 15.0% 20.0% 1Q17 1Q18 1Q19

Profit Margin

Gross Profit Margin EBITDA Margin Net Profit Margin

1,185 1,137 1,373

• 400

800 1,200 1Q17 1Q18 1Q19 THB mm

226 243 295 435 349 194 42 56 33 20 96 123 149 163 163 209 78 160 258 170 195

• 400

800 1,200 1Q17 1Q18 1Q19 THB mm

Garbage bags Vest carriers/t-shirt bags Fruit&vetgetable bags Soft Loop Multi-layer blown film Flexible packaging TPBI UK - Paper TPBI UK - trading Others

Operating Results

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Total Sales Revenue Gross Profit and Net Profit

Source: Company Data

• In 1Q19, the revenue was increased compared to same period last

year mostly due to higher sales of Garbage bags as well as revenue from Intelipac group in 1Q19.

• Besides the increase in sales of general packaging, there are also an

increase in sales of Multi-layer blown film and flexible packaging products which is in line with the Company’s policy to shift into higher value-added products.

• The gross profit margin was higher due to an increase in sales of

higher value-added products such as garbage bags and film as well as a recognition of gross profit from an investment in Intelipac

• group. On the other hand, the Company has net loss since an

increase in mainly depreciation and interest expenses from new investment to expand production capacity.

Revenue Breakdown

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Operating Results (Cont.)

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Operating Result in 1Q19

In THB mm 1Q19 1Q18 YoY THB mm % Revenue

1,372.82 1,136.98 235.84 20.74%

Cost of Sales

1,223.50 1,047.77 175.73 16.77%

Gross Profit

132.60 74.52 58.09 77.95%

Other Income

6.15 10.11 (3.95) (39.12%)

SG&A

154.82 78.50 76.32 97.21%

EBITDA

68.86 57.66 11.21 19.44%

Net Income

(19.39) 3.21 (22.60) n.a.

EPS (THB)

(0.038) 0.002 (0.04) n.a.

GP Margin (%)

9.78% 6.64% 3.14% 47.27%

EBITDA Margin (%)

5.02% 5.07% (0.05%) (1.08%)

NP Margin (%)

(1.41%) 0.28% (1.69%) n.a.

• In 1Q19, the lower profit margin compare to last year

mainly due to following factors:

• Single-use plastic bag ban policies across many

countries and quite low order for General Packaging because of garbage bag

• rder
• pening

process

• f

new customer during beginning of this quarter

• High

production expenses

• ccurred

from production start-up and moving

• f

all production capacity to new factory of the Company’s subsidiary for lower production cost (T.A.K. packaging)

• An increase in depreciation expenses as a result
• f new product capacity expansion in General

Packaging and an increase in production capacity of flexible packaging product

• An increase in interest expense from an increase

in bank loans as a result of an expansion in production capacity of general packaging and flexible packaging products

Source: Company Data

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Operating Results (Cont.)

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Analysis of Net Loss in 1Q19 compares to 1Q18

Unit: THB ‘000

Note: :*SG&A in FY2018 includes non-recurring expense in total of THB 108 mn. Source: Company Data

233.82 5.98 3.32 Unit: THB ‘000

NP 1Q18

• Chg. In Revenue
• Chg. in COGS
• Chg. in SG&A
• Chg. In

Other Incomes

• Chg. In

Profit (loss) from F/X

• Chg. In

Interest expenses

• Chg. In

Corporate tax NP 1Q19

3.21 (175.73) (76.32) (3.95) 5.98 (9.71) 3.32 (19.39)

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2,207 2,662 84 444 1,937 1,934 1Q18 1Q19 PP&E Other non-current assets Total current assets

2,754 2,492 1,131 1,746 343 802

1Q18 1Q19

Total shareholders' equity Total current liabilities Total non-current liabilities

Assets Breakdown

Balance Sheet Composition

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(THB mm)

Liabilities and Equity Breakdown

(THB mm)

Key Financial Ratios

53% 46% 39.6% 51.8%

Cash & ST Investment 1Q19: THB 199 mm 1Q18: THB 523 mm Inventories 1Q19: THB 860 mm 1Q18: THB 690 mm A/R 1Q19: THB 845 mm 1Q18: THB 702 mm PP&E 1Q19: THB 2,662 mm 1Q18: THB 2,207 mm Interest-bearing-debt 1Q19: THB 1,836 mm 1Q18: THB 851 mm Net Debt 1Q19: THB 1,637 mm 1Q18: THB 328 mm Share Capital 1Q19: THB 417 mm 1Q18: THB 400 mm

30.2% 64.1% 5.7% 15.7% 49.2% 35.1%

Source: Company Data

Gross Debt to Equity Net Debt to Equity Current Ratio Cash on Hand 1Q19: 0.74x 1Q18: 0.31x 1Q19: 0.66x 1Q18: 0.12x 1Q19: 1.11x 1Q18: 1.71x 1Q19: 199 mm 1Q18: 299 mm 5,040 4,228 5,040 4,228 1% 8.6%

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Agenda

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

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• Utilize TPBI’s expertise in import and export in international market to serve

customer’s demand for plastic and other bags

• TPBI’s paper bags production and sale base in UK will continue to increase its

market shares in UK and other nearby country. In addition, R&D and feasibility study are going to be conducted for an investment opportunity in Thailand

• New factory has been operated since Sept 2018. Currently focusing on utilize

an increase in production capacity and enhance production efficiency Vest Carrier Bags/ T- Shirt Bags

TPBI 2019 Outlook

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Consumable Products

Flexible Packaging TPBI UK - Trading Reusable Bags Garbage Bags Other Plastic Bags Multilayer Blown Film Flexible Packaging Paper Bags Plastic and Other Bags

• Continue to maintain market shares in existing market as well as obtain

purchase orders from new customers in order to maximize production capacity

• Utilize production capacity shifted from Vest Carrier in order to serve stronger

demands from oversea countries such as USA, Australia and other European countries

• Increase production capacity to meet an increase in demands from oversea

countries, especially from USA

• Continue to increase market shares of other plastic bags in order to optimize

product portfolio risk and support margins

• Invested in new Multilayer Blown Film. Focusing on sales to domestic

manufacturer in food industry while looking for an opportunity in other market both domestic and overseas TPBI UK - Paper

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Updated Actions and Future Plan

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Market Expansion

• Transformation project to divert

into more new products and

• markets. New general packaging

products will help to optimize product portfolio risk and support margins

• Expand new designs

garbage bag orders

• Expand new bag on roll for

vegetable and fruit orders

• Expand mail order bags
• rders
• Start production of pipping

bags

• Start production of

Reusable Soft Loop with Post Consumer Recycle

• Expand transformation

products capacity

Flexible Packaging & Film

• New flexible packaging factory

started its operation

• Expected capacity (per year basis)
• Current: 150 million meters
• Phase II: 200 million meters

in 2019-2020

• Digital Printing is completely

installed and already start commercial run.

• Invested in new Multi Layer Blown

Film machine

• 11,500 tons per year

Merger & Acquisition

• Focus in strengthen and expand

M&A subsidiary companies.

Organic Growth Inorganic Growth

Source: Company Data

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Investor Relations

• TPBI Public Company Limited

42/174 Moo 5, Raiking Sampran Nakorn pathom 73210 Thailand

• Tel: +66 (0)2 4290354-7
• Fax: +66 (0)2 4290358
• E-mail: ir@tpbi.co.th

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