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

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

February 27, 2019

Strictly Private & Confidential

Disclaimer

Page 1

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.

Strictly Private & Confidential

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 ( Jan 18 – Dec 18) High (THB) 13.20 Low (THB) 5.75 Average (THB) 9.41 Average Market Capitalization (THB mm) 3,766.73 Average Daily Trading Value (THB mm) 1.07 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, 73.94% BBLAM, 12.98% Others, 13.08%

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TPBI Group Products

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Revenue Breakdown by Product

§ TPBI Group’s total sales for 2018 is THB 4,980.35 mm, having sales proportion by products as follows:

Source: Company Data

Garbage bags 23% Fruit&vegetable bags 4% Vest carriers/t- shirt bags 21% Soft Loop 8% Multi-layer blown film 10% Flexible Packaging 15% TPBI UK - Paper 1% TPBI UK - Trading 4% Others 14%

Revenue Breakdown in 2018 Revenue Breakdown in 2017

Garbage bags 20% Fruit&vegetable bags 5% Vest carriers/t- shirt bags 36% Multi-layer blown film 9% Flexible Packaging 14% Others 16%

Strictly Private & Confidential Australia 29% Japan 9% UK 6% USA 7% New Zealand 4% Other countries 4% Thailand 41% Australia 19% Japan 8% UK 9% USA 10% Myanmar 3% New Zealand 6% Other countries 5% Thailand 40%

Market Diversification

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Market Diversification

§ During 2018, approximately 59.77% of total sales are from exports to international markets while 40.23% 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 2018 In 2017

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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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Consumable Flexible 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.
• Int. Commercial

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% 72% 67% 0% 50% 100% 50 100 150 2013 2014 2015 2016 2017 2018 Million Meters per year Capacity Output Utilization rate 95% 76% 82% 81% 84% 80% 0% 20% 40% 60% 80% 100% 2,000 4,000 6,000 8,000 10,000 12,000 2013 2014 2015 2016 2017 2018 Tons per year

Historical Production Capacity and Utilization Rate

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74% 84% 86% 85% 78% 67% 0% 20% 40% 60% 80% 100% 20,000 40,000 60,000 80,000 100,000 2013 2014 2015 2016 2017 2018 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 58 – 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 67 - 86%
• Multilayer blown film capacity is currently

around 11,500 tons per year

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

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 the

year, averaging at THB 32.32 per USD

• TPBI revenue and cost are partially natural-hedged
• Brent crude oil price has been decreasing during

the last quarter of 2018, averaging at USD 71.92 per barrel in 2018.

• The resin prices are somewhat influenced from

crude oil price.

• The average prices of HDPE and LLDPE were

1,300.19 and 1,148.75 per MT respectively in 2018

• 400

100 600

50 100 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18Dec 18

Volume ('000) USD/Barrel

Volume (RHS) Closing Px

900 1,000 1,100 1,200 1,300 1,400 Jan-18 Jan-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

USD/MT

HDPE LLDPE

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

THB

1,200 1,400 1,600 1,800 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

MMK

Foreign Exchange (MMK/USD)

• Myanmar Kyat has been appreciate during 1Q18,

averaging at MMK 1,331 per USD

• However, during 2H18 Myanmar kyat has been

greatly depreciation to the peak at MMK 1,620 per USD (+19% from Jan18)

Brent Crude Oil

Strictly Private & Confidential 14.3% 10.5% 5.8% 7.9% 4.0% (3.3%)

(5.0%) (0.0%) 5.0% 10.0% 15.0% 20.0% 2016 2017 2018

Profit Margin

Gross Profit Margin Net Profit Margin

4,897 4,729 4,980

• 1,000

2,000 3,000 4,000 5,000 2016 2017 2018 THB mm

1207 960 1128 2000 1708 1072 218 205 391 347 423 494 623 666 734 75 203 719 754 680

• 1,000

2,000 3,000 4,000 5,000 2016 2017 2018 THB mm

Garbage and fruit&vegetable 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 2018, the revenue was slightly increased compared to same

period last year mostly due to higher sales of soft loop, and Garbage bags as well as revenue from Intelipac group in 4Q18.

• 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 profit margin was lower due to a shift in production capacity to

follow the change in the demand and trend of world plastic packaging industry, test-run and start-up of new flexible packaging factory as well as an occurrence of non-recurring expenses mainly from an investment on Intelipac group and impairment cost in subsidiaries.

Revenue Breakdown

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Operating Results (Cont.)

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Operating Result in 2018

In THB mm 2018 2017 YoY THB mm % Revenue

5,011.02 4,783.90 227.12 4.75%

Cost of Sales

4,692.56 4,231.24 461.32 10.90%

Gross Profit

287.78 498.07 (210.29) (42.22%)

Other Income

30.67 54.58 (23.91) (43.80%)

SG&A

444.57 310.10 134.47 43.46%

EBITDA

126.22 428.03 (301.81) (70.51%)

Net Income

(164.30) 192.91 (357.21) (185.17%)

EPS (THB)

(0.36) 0.44 (0.80) (181.82%)

GP Margin (%)

5.78% 10.53% (4.75%) (45.13%)

EBITDA Margin (%)

2.52% 8.95% (6.43%) (71.85%)

NP Margin (%)

(3.28%) 4.03% (7.31%) 181.31%)

• 2018, the lower profit margin compare to last year

mainly due to following factors:

• Dramatically depreciation in Myanmar Kyat

currency from 1,360 to 1,540 Kyat/USD at the end of 2018. Even though selling price was increased, it’s still lower than increased cost due to Kyat depreciation and high cost raw material inventory

• Non-recurring expenses in total of THB 108.21

million comprising of following items;-

• Acquisition of Intelipac Group in United

Kingdom,

• Change in provision for retirement in UK

from 300 days to 400 days,

• Cost from impairment of the Company’s

investment in subsidiaries during the year, and

• Other items
• Expenses occurred from production test-run

and start-up of new factory of T.A.K. packaging

Source: Company Data

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Operating Results (Cont.)

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Analysis of Net Loss in 2018 compares to 2017

Unit: THB ‘000

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

192,907 (164,301) 251,033 (461,319) (132,738) 8,351 (33,992) (17,027) 28,484 NP 2017

• Chg. in

Revenue

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

incomes

• Chg. In profit

(loss) from Forex

• Chg. In interest

expenses

• Chg. In

Corporate Tax NP2018

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1,952 2,643 41 441 2,216 2,021

2017 2018

PP&E Other non-current assets Total current assets 2,700 2,511 1,270 1,792 239 802

2017 2018

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

Assets Breakdown

Balance Sheet Composition

Page 14 (THB mm)

Liabilities and Equity Breakdown

(THB mm)

Key Financial Ratios

53% 46% 39.6% 51.8%

Cash & ST Investment 2018: THB 248 mm 2017: THB 778 mm Inventories 2018: THB 872 mm 2017: THB 653 mm A/R 2018: THB 870 mm 2017: THB 754 mm PP&E 2018: THB 2,643 mm 2017: THB 1,952 mm Interest-bearing-debt 2018: THB 1,850 mm 2017: THB 839 mm Net Debt 2018: THB 1,602 mm 2017: THB 60 mm Share Capital 2018: THB 417 mm 2017: 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 2018: 0.74x 2017: 0.31x 2018: 0.64x 2017: 0.02x 2018: 1.13x 2017: 1.75x 2018: 248 mm 2017: 482 mm 5,104 4,208 5,104 4,208 1% 8.6%

Strictly Private & Confidential

Agenda

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

Strictly Private & Confidential

• 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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