TPBI Public Company Limited Opportunity Day Presentation November - - PowerPoint PPT Presentation

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

November 2016

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

November 2016

Strictly Private & Confidential

Disclaimer

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The information contained in this presentation is for information purposes only and does not constitute an offer 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

• f, 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

• f any subsequent developments, information or events, or 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 2016

Borrisuttanakul Family, 73.9% BBLAM, 10.0% Others, 16.1%

Number of Shares Outstanding (mm) 400 Registered Shares (THB mm) 400 Paid-up Capital (THB mm) 400 Par Value per Share (THB) 1 Share Movement ( Mar – Sep 16) High (THB) 19.20 Low (THB) 12.70 Average (THB) 15.86 Market Capitalization (THB mm) 6,520 Average Daily Turnover (THB mm) 184 Dividend Payout Policy (%) At least 50% of net profit

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

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

stakeholders”

Company Profile Share Summary

As of November 2016

Source: Company Data, Bloomberg

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TPBI Group Products

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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

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

With printing Without printing Rolled bags Flat bags

Revenue Breakdown by Product

• TPBI Group’s total sales for the quarter ending 30

September 2016 is THB 1,302 mm, having sales proportion by products as follows:

• Vest carrier bag is the main product which contributes

approximately 39.1% of the Group’s total sales. It is mainly exported to Australia, EU, USA, and Japan.

25.3% 39.1% 7.5% 12.0% 16.2%

Garbage bags Vest carriers/t-shirt bags Multi-layer blown film Flexible Packaging Others

Products by Category

Source: Company Data

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Market Diversification

Page 6 AUSTRALIA 40% JAPAN 15% UK 18% USA 22% FRANCE 1% NEW ZEALAND 4%

AUSTRALIA 24% JAPAN 9% UK 11% USA 13% FRANCE 1% NEW ZEALAND 2% OTHER COUNTRIES 2% THAILAND 38%

Market Diversification

• Until the quarter ending 30 September 2016,

approximately 62% of total sales are from exports to international markets while 38% are from domestic sales.

Note:*Other countries include Korea, Singapore, Nigeria, Laos, Cambodia, etc.

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

• TPBI group’s international markets composed of

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

• Export destinations include USA, UK, Germany, France,

Nigeria, Indonesia, Australia, CLMV, New Zealand, etc.

Source: Company Data * * Remark – TPBI also captures in CLMV market

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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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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

       

Source: Company Data

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Company Operations

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Plastic Bags Multilayer Blown Film Flexible Packaging

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 Production Capacity:

• ~ 64,000 tons per year

Sales Proportion (3Q16):

• International: 92%
• Domestic: 8%

Key Markets:

• Australia, UK, France, USA,

Japan and etc. Product Mix:

• Lamination film/ Barrier

film/ Stretch hood/ Shrink film Production Capacity:

• ~ 9,000 tons per year

Sales Proportion (3Q16):

• International: 8%
• Domestic: 92%

Key Markets:

• Domestic, Singapore,

Australia, the Philippines, Vietnam and etc. Product Mix:

• Packaging for frozen food,

ready-to-eat food and

• thers

Production Capacity:

• ~ 100 million meters per

year Sales Proportion (3Q16):

• International: 0%
• Domestic: 100%

Key Markets:

• Focuses on domestic market

Sample of Customers Sample of Customers Sample of Customers

Source: Company Data

Others

Product Mix:

• Compound resin/ Bioplastic

product / Paper cup Sales Proportion (3Q16):

• International: 14%
• Domestic: 86%

Key Markets:

• Focuses on domestic market

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Historical Production Capacity and Utilization Rate

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74% 74% 84% 86% 85% 85% 65% 70% 75% 80% 85% 90% 20,000 40,000 60,000 80,000 100,000 2012 2013 2014 2015 1H16 9M16 Tons per year 92% 95% 76% 82% 82% 83% 0% 20% 40% 60% 80% 100% 2,000 4,000 6,000 8,000 10,000 12,000 2012 2013 2014 2015 1H16 9M16 Tons per year 63% 67% 80% 62% 62% 60% 0% 20% 40% 60% 80% 100% 50 100 150 2012 2013 2014 2015 1H16 9M16 Million Meters per year Capacity Output Utilization rate

General Packaging(1) Multilayer Blown Film(1) Flexible Packaging(1)

• Flexible packaging capacity has been increased

to over 100 million meters per year

• Utilization rate have been in range of 60 – 80%
• Capacity expansion requires longer lead time

than other products

• General packaging capacity is around 64,000

tons per year

• Utilization rate have been in range of 74 - 85%
• Multilayer blown film capacity is around 9,000

tons per year

• Utilization rate have been in range of 76 – 95%

Note: (1) 1H16 and 9M16 capacity and utilization were annualized to be yearly basis 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

Page 12 950 1,000 1,050 1,100 1,150 1,200 1,250

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016

USD/MT HDPE LLDPE 100 200 300 400 500 600 10 20 30 40 50 60

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016

Volume ('000) USD/Barrel Volume (RHS) PX_LAST 33 34 35 36 37 38

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016

THB/USD

Foreign Exchange Brent Crude Oil Resin Price

Source: Bloomberg

• The exchange rate were relatively stable

averaging at THB 34.83 per USD

• TPBI revenue and cost are partially natural-

hedged

• Brent crude oil has been rebounding from

the beginning of the year, averaging at USD 47.03 per barrel in 3Q16

• The resin prices are somewhat influenced

from crude oil price

• The average prices of HDPE and LLDPE

were 1,150 and 1,164 per MT respectively in 3Q16

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Product Diversification

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Source: Company Data

• The company plans to expand product line into the new sector for diversifying its business risk and increase portion of

high-value-added product in the revenue contribution

• Regarding the plan, it has expanded into the medical sector as the details below since all of blood-bag containers and

colostomy bags in the market were entirely imported;

• 280,000 blood-bag containers have been supplied into the market since September by the collaboration with

TPBI, PTTGC and Thai Red Cross Society

• Additionally, there is another project in the pipeline in which TPBI has also collaborated with Plastic Institute of

Thailand, PTTGC, and Thai Red Cross Society to supply colostomy bag into the market instead of import; however, the project is still in the R&D process

• Both projects have potential to increase profit margins as they are high-value-added products

Strictly Private & Confidential 201 270 295 380 499 702 499 557 66 89 137 184 250 380 274 293 100 200 300 400 500 600 700 800 2010 2011 2012 2013 2014 2015 9M15 9M16

THB mm

Gross Profit Net Profit 2,935 3,149 3,734 3,881 4,784 4,806 3,460 3,668 1,000 2,000 3,000 4,000 5,000 6,000 2010 2011 2012 2013 2014 2015 9M15 9M16

THB mm

Operating Results

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Total Revenue Gross Profit and Net Profit

Source: Company Data

• The revenue for nine-month of 2016 is growing at 6.0 % YoY from 9M15
• Gross profit and net profit for nine-month of 2016 are growing at 11.8% and 6.7% YoY from 9M15, respectively
• Financial performance is expected to be uptrend in the next session

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Operating Results (Cont.)

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For Third Quarter of 2016 For Nine-month of 2016

In THB mm 3Q16 3Q15 YoY THB mm % Sales 1,301.7 1,240.8 60.9 4.9% Cost of Sales 1,108.4 1,068.6 39.8 3.7% Gross Profit 193.3 172.1 21.2 12.3% Other Income 13.3 11.6 1.7 14.7% SG&A 76.7 62.8 13.9 22.1% EBITDA 172.6 145.9 26.7 18.3% Net Income 101.7 91.7 10.0 10.9% EPS (THB) 0.25 0.23 0.02 8.7% GP Margin (%) 14.9% 13.9% 1.0% 7.2% EBITDA Margin (%) 13.3% 11.8% 1.5% 12.7% NP Margin (%) 7.8% 7.3% 0.5% 6.8% In THB mm 9M16 9M15 YoY THB mm % Sales 3,640.4 3,428.0 212.4 6.2% Cost of Sales 3,083.0 2,929.5 153.5 5.2% Gross Profit 557.4 498.5 58.9 11.8% Other Income 27.2 32.0

• 4.8
• 15.0%

SG&A 214.8 170.4 44.4 26.1% EBITDA 474.4 451.7 22.7 5.0% Net Income 292.6 274.2 18.4 6.7% EPS (THB) 0.73 0.69 0.04 5.8% GP Margin (%) 15.3% 14.5% 0.8% 5.5% EBITDA Margin (%) 13.0% 13.2%

• 0.2%
• 1.5%

NP Margin (%) 8.0% 8.0%

• The company recorded the sales in 3Q16 at THB 1,302 million, increasing from THB 1,241 million or 4.9% in the year

earlier due to the robust demand from key customers

• Net income in 3Q16 was recorded at THB 102 million, or increasing from THB 92 million from the year earlier
• Additionally, The company’s net profit in 9M16 was THB 293 million or increasing 6.7% from the year earlier as
• Product mix has been changed by increase in sales from high-valued products, which is in line with the

company’s policy to increase the proportion of high-valued products over the time

Source: Company Data

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Operating Results (Cont.)

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Gross Profit Margin and Net profit Margin

6.9% 8.6% 7.9% 9.8% 10.4% 14.6% 14.5% 15.3% 2.2% 2.8% 3.7% 4.7% 5.2% 7.9% 8.0% 8.0% 5.2% 6.4% 6.2% 9.0% 9.2% 13.0% 13.2% 13.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2010 2011 2012 2013 2014 2015 9M15 9M16 Gross Profit Margin Net Profit Margin EBITDA Margin

Source: Company Data

• The Company has chosen to focus on improving its long-term profit margins. The Company was able to do this

through adjustments in the product mix and implementing new production technologies

• Gross profit margin in 9M16 has well performed to become 15.3%, which was increased from the year earlier
• The long-term outlook of profit margin is still in the uptrend from development of its production process, post

consumer recycle resin, and larger scale of flexible packaging products.

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1,257 1,536 1,558 2,381

2015 3Q16

Total non-current assets Total current assets 1,512 2,643 1,161 1,100 142 174

2015 3Q16

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

Assets Breakdown

Balance Sheet Composition

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Liabilities and Equity Breakdown

(THB mm)

Key Financial Ratios

55.3% 44.7% 60.7% 39.3%

Cash & ST Investment 3Q16: THB 909 mm 2015: THB 117 mm Inventories 3Q16: THB 647 mm 2015: THB 567 mm A/R 3Q16: THB 800 mm 2015: THB 842 mm PP&E 3Q16: THB 1,272 mm 2015: THB 1,028 mm Interest-bearing-debt 2Q16: THB 640 mm 2015: THB 633 mm Net Debt 3Q16: THB - 269 mm 2015: THB 516 mm Share Capital 3Q16: THB 400 mm 2015: THB 300 mm

41.2% 53.7% 5.1% 4.4% 67.5% 28.1%

Source: Company Data

Gross Debt to Equity Net Debt to Equity Net Debt to EBITDA Current Ratio Cash on Hand 2Q16: 0.48x 2015: 0.86x 2Q16: - 0.10x 2015: 0.34x 2Q16: n.m. 2015: 0.83x 3Q16: 2.16x 2015: 1.34x 3Q16: 909 mn 2015: 117 mn

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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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Future Plan: Outlook & Expansion Plan

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Market Expansion

• Explore more opportunities in UK,

EU and New Zealand

• Already received some orders

from the appointed agent in UK and EU

• Recorded the significant

increase in sales of plastic bags in New Zealand in 3Q16

• Start the new production line of

fruit and vegetable bag for US market

• Installing new compounding line

to respond the stronger demand

• f compounded resin
• Receiving large orders of

compound resin from partner in Nigeria

Flexible Packaging

• Expansion plan is on track
• Land is secured
• Currently in designing phase
• Construction will begin within

2016

• Expect to be operational end

2017 – early 2018

• Expect to install automated

warehouse systems in order to

• Minimize staff costs and;
• Utilize space in the

warehouses

• Expected capacity (per year basis)
• Current: 100 million meters
• Phase I: 150 million meters

in 2017-2018

• Phase II: 200 million meters

in 2019-2020

Merger & Acquisition

• Actively looking for new

partnerships/ acquisitions in both vertical (up and down our value chain) and horizontal (to expand

• ur footprint and market share)
• The initial M&A is focusing for

partners especially in South East Asia.

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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