TPBI Public Company Limited Opportunity Day Presentation March 12, - - PowerPoint PPT Presentation

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

March 12, 2018

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) 400 Registered Shares (THB mm) 400 Paid-up Capital (THB mm) 400 Par Value per Share (THB) 1 Share Movement ( Dec 16 – Feb 18) High (THB) 16.00 Low (THB) 10.50 Average (THB) 13.85 Average Market Capitalization (THB mm) 5,268.21 Average Daily Trading Volume (THB mm) 4.22 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 Feb 2018

Source: Company Data, Bloomberg

Borrisuttanakul family, 73.91% BBLAM, 11.54% Other institutions, 0.68% Others, 13.87%

*Shareholder holding as of the latest book closing date

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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/ 7.00% 33.00% 60.00% 76.27% 70.00% 3.20% 100.00% 30.00% P.P. Packaging Co., Ltd. (“P.P. Packaging”) 13.33% 10.40% “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

100.00% “TPBI’s Investment arm” 65.00% “Manufacturer of plastic bags in Myanmar” Myanmar Star Group Solution Creation Co.,Ltd. (Subsidiary of PTTGC) 25.00% 10.00%

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TPBI Group Products

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Revenue Breakdown by Product

• TPBI Group’s total sales for 2017 is THB 4,729.31 mm, having sales proportion by products as follows:

Source: Company Data

Garbage and other bags 25% Vest carriers/t-shirt bags 36% Multi-layer blown film 9% Flexible Packaging 14% Others 16%

Revenue Breakdown in 2017 Revenue Breakdown in 2016

Garbage and other bags 24% Vest carriers/t-shirt bags 41% Multi-layer blown film 7% Flexible Packaging 13% Others 15%

Strictly Private & Confidential Australia 24% Japan 9% UK 11% USA 14% France 1% New Zealand 2% Other countries 2% Thailand 37% Australia 29% Japan 9% UK 6% USA 7% France 0% New Zealand 4% Other countries 4% Thailand 41%

Market Diversification

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Market Diversification

• During 2017, approximately 59.4% of total sales are from exports to international markets while 40.6% 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 2017 In 2016

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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

Digital Printing



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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

• 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:

• ~ 64,000 tons per year

Sales Proportion (2017):

• International: 91.1%
• Domestic: 8.9%

Key Markets:

• Australia, UK, USA, New

Zealand, Japan and etc. Product Mix:

• Lamination film/ Barrier film/

Stretch hood/ Shrink film Production Capacity:

• ~ 9,000 tons per year

Sales Proportion (2017):

• International: 18.9%
• Domestic: 81.1%

Key Markets:

• Domestic, Singapore and etc.

Product Mix:

• Packaging for frozen food,

ready-to-eat food and others

• New Products: Digital Printing

Production Capacity:

• ~ 100 million meters per year

Sales Proportion (2017):

• International: 0.7%
• Domestic: 99.3%

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 (2017):

• International: 12.8%
• Domestic: 87.2%

Key Markets:

• Focuses on domestic market

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63% 67% 80% 62% 58% 72% 0% 20% 40% 60% 80% 100% 50 100 150 2012 2013 2014 2015 2016 2017 Million Meters per year Capacity Output Utilization rate 92% 95% 76% 82% 81% 84% 0% 20% 40% 60% 80% 100% 2,000 4,000 6,000 8,000 10,000 12,000 2012 2013 2014 2015 2016 2017 Tons per year

Historical Production Capacity and Utilization Rate

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74% 74% 84% 86% 85% 78% 0% 20% 40% 60% 80% 100% 20,000 40,000 60,000 80,000 100,000 2012 2013 2014 2015 2016 2017 Tons per year

General Packaging Multilayer Blown Film Flexible Packaging

• Flexible packaging capacity has been increased

to over 100 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 around 62,000

tons per year

• Utilization rate have been in range of 74 - 86%
• Multilayer blown film capacity is around 9,000

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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32 33 34 35 36 37 Jan-17 Feb-17 Mar-17 Apr-17 May- 17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov- 17 Dec-17 THB/USD

Market Overview

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Foreign Exchange Brent Crude Oil Resin Price

Source: Bloomberg

• Thai Baht has been appreciated during the

year, averaging at THB 33.93 per USD

• TPBI revenue and cost are partially natural-

hedged

• Brent crude oil price has been increasing

during tis year, averaging at USD 54.73 per barrel in 2017

• The resin prices are somewhat influenced

from crude oil price

• The average prices of HDPE and LLDPE

were 1,180 and 1,167 per MT respectively in 2017

• 400

100 600 50 100 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Volume ('000) USD/Barrel Volume (RHS) Closing Px 1,000 1,100 1,200 1,300 1,400 ม.ค.-17 ก.พ.-17 มี.ค.-17 เม.ย.-17 พ.ค.-17 มิ.ย.-17 ก.ค.-17 ส.ค.-17 ก.ย.-17 ต.ค.-17 พ.ย.-17 ธ.ค.-17 USD/MT HDPE LLDPE

Strictly Private & Confidential 14.7% 14.3% 10.5% 7.9% 7.9% 4.0%

0.0% 5.0% 10.0% 15.0% 20.0% 2015 2016 2017

Profit Margin

Gross Profit Margin Net Profit Margin

4,806 5,025 4,784

• 1,000

2,000 3,000 4,000 5,000 6,000 2015 2016 2017 THB mm

1014 1207 1178 2254 2000 1708 403 347 423 546 623 666 550 719 754

• 1,000

2,000 3,000 4,000 5,000 6,000 2015 2016 2017 THB mm

Garbage and others bags Vest carriers/t-shirt bags Multi-layer blown film Flexible packaging Others

Operating Results

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Total Revenue Gross Profit and Net Profit

Source: Company Data

• In 2017, the revenue was slightly decreased compares to

last year mostly due to lower demand of general packaging

• Although the t-shirt bag sale portion has decreased over

the last year from the plastics bags restriction in several countries, sale portions

• f

flexible packaging and transformation products were increased during the same period in order to gradually shift product mix of the Company according to transformation policy

• The profit margin was lower due to a decrease in sales of

plastics bags making production cost higher

• The sales portion of Fruit & Vegetable bags has significantly

increased compare to previous year

Revenue Breakdown

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Operating Results (Cont.)

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Operating Result in 2017

In THB mm

2017 2016

YoY

THB mm %

Sales

4,729.3 4,897.1

• 241.1
• 4.8%

Cost of Sales

4,231.2 4,198.7 32.5 0.8%

Gross Profit

498.1 698.4

• 200.3
• 28.7%

Other Income

54.6 127.9

• 73.3
• 57.3%

SG&A

310.1 309.5 0.6 0.2%

EBITDA

428.0 657.8

• 229.8
• 34.9%

Net Income

192.9 396.1

• 203.2
• 51.3%

EPS (THB)

0.44 1.06

• 0.62
• 58.49%

GP Margin (%)

10.5% 14.3%

• 3.7%
• 26.15%

EBITDA Margin (%)

8.9% 13.1%

• 4.1%
• 13.1%

NP Margin (%)

4.0% 7.9%

• 3.9%
• 48.9%
• The company recorded the revenue in 2017 at THB

4,729.3 million. The revenue for the year was slightly decreased compares to last year as a result of a decrease in sales of plastics bags

• Gross profit for the year was lower since the

demands of Vest carriers/t-shirt bags has decreased. However, under product transformation policy, the Company currently promotes sales of transformation products in order to compensate this downtrend of Vest carriers/t-shirt bags sales.

• Net income in 2017 was THB 192.9 million,

decreasing from THB 396.1 million from the year earlier

• The Company has been aware of the change in world

market trend of plastics. Due to the plastic bags restriction in several countries, product mix has gradually shifted to other products according to a product transformation policy of the Company

Source: Company Data

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Operating Results (Cont.)

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Gross Profit Margin and Net profit Margin

8.6% 7.9% 9.8% 10.4% 14.7% 14.3% 10.5% 6.4% 6.2% 9.0% 9.2% 13.0% 13.1% 8.9% 2.8% 3.7% 4.7% 5.2% 7.9% 7.9% 4.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 2011 2012 2013 2014 2015 2016 2017 Gross Profit Margin EBITDA Margin Net Profit Margin

Source: Company Data

• In terms of profitability, the margins were lower during 2017
• The decrease in profit margin was a result from the decrease in sales of vest carriers/t-shirt bags which makes cost of

production higher. However, a continuously increase in sales portion of flexible packaging and transformation products shall be able to recover the Company’s profit margins

• Although profit margins in this quarter were affected by external factors arisen, TPBI is confident that long-term
• utlook of profit margin is still in an up trend and the export sales shall return into its normal situation shortly. In

addition, sales from other products under product transformation policy are still in the introduction stage which could be expanded much further in the future

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1,521 1,992 2,366 2,216

2016 2017

Total non-current assets Total current assets 2,739 2,700 937 1,270 212 239

2016 2017

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

Assets Breakdown

Balance Sheet Composition

Page 16 (THB mm)

Liabilities and Equity Breakdown

(THB mm)

Key Financial Ratios

60.8% 39.2% 57.0% 43.0%

Cash & ST Investment 2017: THB 778 mm 2016: THB 958 mm Inventories 2017: THB 653 mm 2016: THB 665 mm A/R 2017: THB 754 mm 2016: THB 725 mm PP&E 2017: THB 1,952 mm 2016: THB 1,378 mm Interest-bearing-debt 2017: THB 764 mm 2016: THB 408 mm Net Debt 2017: THB -15 mm 2016: THB -550 mm Share Capital 2017: THB 400 mm 2016: THB 400 mm

27.1% 64.9% 4.0% 5.5% 64.1% 28.1%

Source: Company Data

Gross Debt to Equity Net Debt to Equity Net Debt to EBITDA Current Ratio Cash on Hand 2017: 0.56x 2016: 0.42x 2017: -0.01x 2016: -0.20x 2017: -0.03x 2016: -0.84x 2017: 1.75x 2016: 2.53x 2017: 482 mm 2016: 454 mm

4,208 3,888 4,208 3,888

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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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Product Transformations

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• Due to the change in world market trend of plastics and the plastic bags restriction in several countries, the Company has

implemented a product transformation policy in order to diversify product mix of the Company.

Roll Star New design garbage bags New design bags on roll for fruit and vegetable Mail Order bags Liner bags LLDPE food bags

Transformation Products - 4,770 tons sold during 2017

Reusable Soft Loop bags

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Expansion Plan: New Flexible Packaging Factory

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• Construction has been completed on track and
• ver 70%.
• Machines has been ordered and under

manufactured.

• Expected COD: April or May 2018

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Expansion Plan: Digital Printing

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• Installation completed
• Target group:
• Brand owner who emphasize on Marketing

tool.

• SME and OTOP with short printing lot.
• Advertising agency who has demand for

marketing packaging

• Start first commercial run in November 2017 and

expect the first commercial delivery in early December.

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Expansion Plan : Establishment of Joint Venture Company

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• Shareholder Agreement has been signed for the

purpose of establishing a joint venture company

• Myanmar is one among highest GDP growth nations

in Asia with over 50 million of populations

• Strengthen general packaging position by teaming

up with strong Myanmar local producer

• Capacity around 350 tons per month
• Long experience in Myanmar market more

than 25 years

• Strong brands
• Nation wide distributor network
• COD : 15 February 2018
• Opportunity to open up the new market thru

Myanmar border trade such as India and China.

• Synergy strategy
• Utilizing partner’s local team, facility, and

network as a start up platform

• Utilizing TPBI’s production expertise and raw

material purchasing volume to improve production efficiency and cost Myanmar Star Group Company Limited TPBI International Co., Ltd. PTTGC’s subsidiary

65% 25% 10%

TPBI & Myanmar Star

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Expansion Plan : Establishment of Joint Venture Company (Cont’d)

Key products & Key markets

Soft Loop Handle

Garbage bags Shopping bags

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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 Soft

Loop bags

• Expand transformation

products capacity

Flexible Packaging & Film

• Expansion plan is on track
• Expect to be operational

around April or May 2018

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

in 2018

• 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

• Current: 9,000 tons per year
• New Capacity: 11,500 tons

per year

Merger & Acquisition

• The current M&A is focusing for

partners in both South East Asia and Europe

• Additional M&A projects are

currently on the negotiation

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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