TPBI Public Company Limited Opportunity Day Presentation Aug 15, - - PowerPoint PPT Presentation

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TPBI Public Company Limited

Opportunity Day Presentation

Aug 15, 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

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

Source: Company Data, Bloomberg

*Shareholder holding as of the latest book closing date

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 19 – June 19) High (THB) 5.10 Low (THB) 4.88 Average (THB) 5.19 Average Market Capitalization (THB mm) 2,179.93 Average Daily Trading Value (THB mm) 0.23 Dividend Payout Policy (%) At least 50% of net profit

Borrisuttanakul family, 79.23% BBLAM, 11.53% Others, 9.24%

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TPBI Group Products

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Revenue Breakdown by Product

▪ TPBI Group’s total sales for 2Q19 is THB 1,383.33 mm, having sales proportion by products as follows:

Source: Company Data

Garbage bags 29% Fruit&vegetable bags 4% Vest carriers/t- shirt bags 15% Soft Loop 0% Multi-layer blown film 10% Flexible Packaging 12% TPBI UK - Paper 5% TPBI UK - Trading 11% Others 14%

Revenue Breakdown in 2Q19 Revenue Breakdown in 2Q18

Garbage and fruit&vetgetable bags 23% Vest carriers/t-shirt bags 24% Soft Loop 13% Multi-layer blown film 9% Flexible Packaging 15% Others 16%

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Australia 12% Japan 6% UK 15% USA 20% Myanmar 3% New Zealand 2% Other countries 7% Thailand 35%

Market Diversification

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Market Diversification

▪ During 2Q19, approximately 64.93% of total sales are from exports to international markets while 35.07% 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 2Q19 In 2Q18

Australia 25% Japan 8% UK 5% USA 8% New Zealand 5% Other countries 6% Thailand 43%

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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

• 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% 45% 0% 20% 40% 60% 80% 100% 50 100 150 2014 2015 2016 2017 2018 2Q19 Million Meters per year Capacity Output Utilization rate 76% 82% 81% 84% 80% 91% 65% 70% 75% 80% 85% 90% 95% 2,000 4,000 6,000 8,000 10,000 12,000 2014 2015 2016 2017 2018 2Q19 Tons per year

Historical Production Capacity and Utilization Rate

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84% 86% 85% 78% 67% 70% 0% 20% 40% 60% 80% 100% 20,000 40,000 60,000 80,000 100,000 2014 2015 2016 2017 2018 2Q19 Tons per year

Consumables Multilayer Blown Film Flexibles

• With new factory, Flexibles capacity has been

increased to over 150 million meters per year

• Utilization rate have been in range of 45 – 80%
• Capacity expansion requires longer lead time

than other products

• Consumables 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 – 91%

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 depreciated during

2Q19, averaging at THB 31.61 per USD

• TPBI revenue and cost are partially natural-

hedged

• Brent crude oil price has been increasing

during the second quarter of 2019, averaging at USD 68.47 per barrel in 2Q19.

• The resin prices are somewhat influenced

from crude oil price.

• The average prices of HDPE and LLDPE

were 1,061 and 1,005 per MT respectively in 2Q19

Brent Crude Oil

100 200 300 400 500 600 20 40 60 80 100 Jul 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19

Volume ('000) USD/Barrel

Volume (RHS) Closing Px 900 1,100 1,300 1,500 ก.ค.-18 ก.ค.-18 ส.ค.-18 ก.ย.-18 ต.ค.-18 พ.ย.-18 ธ.ค.-18 ม.ค.-19 ก.พ.-19 มี.ค.-19 เม.ย.-19 พ.ค.-19 มิ.ย.-19

USD/MT

HDPE LLDPE

31 32 33 34

Jul-18 Aug-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19

THB THB/US

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1,169 1,224 1,383

• 400

800 1,200 2Q17 2Q18 2Q19 THB mm

Operating Results

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Total Sales Revenue Gross Profit and Net Profit

Source: Company Data

• In 2Q19, the revenue was increased compared to same period last

year mostly due to higher sales of Garbage bags as well as revenue from TPBI UK, TPBI Paper and TPBI Australia.

• There are an increase in sales of Multi-layer blown film and new

products of TPBI UK, TPBI Paper and TPBI Australia 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 TPBI UK, TPBI Paper and TPBI Australia.

Revenue Breakdown

724 736 680 101 112 141 165 181 171 73 145 179 195 173 400 900 1,400 Q2/2017 Q2/2018 Q2/2019

THB mn

Revenue by Product

Consumables Multi-layer blown film Flexibles Paper packaging Trading Others 9.5% 6.7% 10.5% 2.9% 1.4% 0.1%

• 5.0%

10.0% 15.0% 20.0% Q2/2017 Q2/2018 Q2/2019

Profit Margin

Gross Profit Margin Net Profit Margin

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Operating Results (Cont.)

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Operating Result in 2Q19 compare 2Q18

In THB mm 2Q19 2Q18 YoY THB mm % Sales

1,383.33 1,224.34 158.99 12.99%

Cost of Sales

1,237.68 1,141.65 96.03 8.41%

Gross Profit

145.65 82.69 62.96 76.14%

Other Income

18.50 21.44 (2.94) (13.71%)

SG&A

149.57 80.00 69.57 86.97%

EBITDA

85.71 80.86 4.85 6.00%

Net Income

0.84 17.73 (16.89) (95.26%)

EPS (THB)

0.017 0.040 (0.023) (57.92)

GP Margin (%)

10.53% 6.75% 3.78% 56.00%

EBITDA Margin (%)

6.20% 6.60% (0.4%) (0.06%)

NP Margin (%)

0.06% 1.45% (1.39%) (95.86%)

In 2Q19, the Company has lower profit margin compare to the same period last year mainly due to following factors:

• single-use plastic bag ban policies across many countries.

However, the Company received garbage bags’ orders from a new foreign customer since the beginning of the second quarter which cause positive effect to the

• Company. This is also in line with business transformation

policy of the Company as a result of change in customer’s demand of global packaging industry

• High production expenses occurred from relocating of all

production capacity to new factory of the Company’s subsidiary for lower production cost (T.A.K. packaging) Despite of these factors, the company had net profit in this

• quarter. However, profitability in this second quarter is

lesser compare to the same period of previous year

Source: Company Data

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Operating Results (Cont.)

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Operating Result in 2Q19 compare 1Q19

In THB mm 2Q19 1Q19 YoY THB mm % Sales

1,383.33 1,356.10 27.23 2.00%

Cost of Sales

1,237.68 1,223.50 14.18 1.16%

Gross Profit

145.65 132.60 13.05 9.84%

Other Income

18.50 16.72 1.78 10.66%

SG&A

149.57 154.82 (5.25) (3.39%)

EBITDA

85.71 68.86 16.85 24.47%

Net Income

0.84 (19.39) 20.23 104.33%

EPS (THB)

0.017 (0.038) 0.055 144.74%

GP Margin (%)

10.53% 9.78% 0.75% 7.67%

EBITDA Margin (%)

6.20% 5.08% 1.12% 22.05%

NP Margin (%)

0.06% (1.43%) 1.49% 104.20%

To clearly reflect operating results of the Company during the transformation period, the Company intends to compare

• perating results between the current quarter and the

previous quarter (between 2Q19 and 1Q19). the Company has higher profit margin compare to 1Q19 due to following factors.

• the Company reduces the dependence of selling single-

use plastic bag in the international markets and replace such by expanding to new products and new markets. Production capacity of the Company has been expanded to produce garbage bags, soft-loop bags, paper packaging and trading business.

• The Company is able to control better production cost

and SG&A because of receiving many orders of consumables from foreign customers.

Source: Company Data

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2,435 2,657 85 444 2,220 1,893 2Q18 2Q19 PP&E Other non-current assets Total current assets

2,610 2,478 1,694 1,737 437 780

2Q18 2Q19

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 2Q19: THB 165 mm 2Q18: THB 374 mm Inventories 2Q19: THB 929 mm 2Q18: THB 792 mm A/R 2Q19: THB 758 mm 2Q18: THB 795 mm PP&E 2Q19: THB 2,657 mm 2Q18: THB 2,434 mm Interest-bearing-debt 2Q19: THB 1,701 mm 2Q18: THB 1,488 mm Net Debt 2Q19: THB 2,516 mm 2Q18: THB 2,130 mm Share Capital 2Q19: THB 417 mm 2Q18: 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 2Q19: 0.69x 2Q18: 0.57x 2Q19: 0.13x 2Q18: 0.43x 2Q19: 1.09x 2Q18: 1.31x 2Q19: 165 mm 2Q18: 374 mm 5,040 5,040 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 consumables

products will help to optimize product portfolio risk and support margins

• Expand new designs

garbage bag orders

• Expand transformation

products capacity

Flexible Packaging & Film

• Relocation of all production

capacity to the new factory

• Expected capacity (per year basis)
• Current: 150 million meters
• Phase II: 200 million meters
• Expand Digital Printing orders.
• 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@tpbigroup.com

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