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

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

August 2016

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

August 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, … Public Float, 15.20% Institutional holders, 10.89%

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 – Jun 16) High (THB) 19.2 Low (THB) 13.0 Average (THB) 16.5 Market Capitalization (THB mm) 6,560 Average Daily Turnover (THB mm) 244 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 August 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 June

2016 is THB 1,161 mm, having sales proportion by products as follows:

• Vest carrier bag is the main product which contributes

approximately 43% of the Group’s total sales. It is mainly exported to Australia, EU, USA, and Japan.

19.9% 43.0% 6.7% 13.6% 16.9%

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 18% JAPAN 12% EU 22% USA 20% OTHER COUNTRIES 4% THAILAND 24%

Market Diversification

• In the quarter ending 30 June 2016, approximately

60% of total sales are from exports to international markets while 40% are from domestic sales.

Note:*Other countries include New Zealand, Korea, Singapore, Nigeria, Laos, Cambodia, etc. AUSTRALIA 24% JAPAN 9% EU 12% USA 14% OTHER COUNTRIES* 3% THAILAND 38%

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:

• ~ 60,000 tons per year

Sales Proportion (1H16) :

• International: 93%
• Domestic: 7%

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 (1H16):

• 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 (2Q16):

• International: 1%
• Domestic: 99%

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 (2Q16):

• International: 3%
• Domestic: 97%

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

General Packaging Multilayer Blown Film Flexible Packaging

• Flexible packaging capacity has been increased

to 100 million meters per year

• Utilization rate have been in range of 62 – 80%
• Capacity expansion requires longer lead time

than other products

• General packaging capacity is around 60,000

tons per year

• Utilization rate have been in range of 74 – 89%
• Multilayer blown film capacity is around 9,000

tons per year

• 1H16 capacity decreased due to machine

relocation

• 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

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 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 Volume ('000) USD/Barrel Volume (RHS) Closing Px 33 34 35 36 37 38 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 THB/USD

Foreign Exchange Brent Crude Oil Resin Price

Source: Bloomberg

• The exchange rate were relatively stable

averaging at THB 35.26 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 2Q16

• The resin prices are somewhat influenced

from crude oil price

• The average price of resins have increased

since the beginning of the year, averaging at USD 1,166 per MT in 2Q16

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Plastic Bags Trends Around the World

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Source: Company Data

• We are aware of environmental concern for plastic bags
• There are 2 generally acceptable substitute products for normal plastic bags
• Bio Degradable plastic bags (can be degraded naturally, less environmental issue)
• Thick bags (can be re-used, hence reduce plastic waste)
• TPBI is capable to manufacture both bio degradable plastic bags and thick bags with minimal additional investment

required

• In some developed country such as France and some area of the USA, we observe a spike-up in thick bags demand as

the charts shown below;

10 20 30 40 50 60 70 80 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Tons Normal Bag (Tons) Thick Bag (Tons) 50 100 150 200 250 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Tons Normal Bag (Tons) Thick Bag (Tons)

Thick Bags Demand in Hawaii, USA Thick Bags Demand in France

Strictly Private & Confidential 201 270 295 380 499 702 326 364 66 89 137 184 250 380 183 191 100 200 300 400 500 600 700 800 2010 2011 2012 2013 2014 2015 1H15 1H16

THB mm

Gross Profit Net Profit 2,935 3,149 3,734 3,881 4,784 4,806 2,187 2,339 1,000 2,000 3,000 4,000 5,000 6,000 2010 2011 2012 2013 2014 2015 1H15 1H16

THB mm

Operating Results

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Total Revenue Gross Profit and Net Profit

Source: Company Data

• The revenue is growing at 10.4 % CAGR
• Gross and net profit are growing at 28.4% and 41.9% CAGR, respectively
• Performance outlook is promising as illustrated in the next session

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Operating Results (Cont.)

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For Second Quarter of 2016 For First Half of 2016

In THB mm 2Q16 2Q15 YoY THB mm % Sales 1,161.4 1,123.1 38.3 3.4% Cost of Sales 989.0 947.0 42.1 4.4% Gross Profit 172.4 176.1

• 3.7
• 2.1%

Other Income 17.2 14.2 3.1 21.6% SG&A 69.0 54.7 14.3 26.1% EBITDA 147.4 173.4

• 26.0
• 15.0%

Net Income 94.0 104.1

• 10.1
• 9.7%

EPS (THB) 0.24 0.26

• 0.03
• 9.7%

GP Margin (%) 14.8% 15.7%

• 0.8%
• 5.3%

EBITDA Margin (%) 12.7% 15.4%

• 2.7%
• 17.8%

NP Margin (%) 8.1% 9.3%

• 1.2%
• 12.7%

In THB mm 1H16 1H15 YoY THB mm % Sales 2,338.7 2,187.2 151.5 6.9% Cost of Sales 1,974.7 1,860.9 113.8 6.1% Gross Profit 364.0 326.3 37.7 11.6% Other Income 14.0 20.4

• 6.4
• 31.4%

SG&A 138.1 107.7 30.4 28.2% EBITDA 301.8 305.6

• 3.8
• 1.2%

Net Income 190.9 182.5 8.4 4.6% EPS (THB) 0.48 0.46 0.02 4.3% GP Margin (%) 15.6% 14.9% 0.6% 4.3% EBITDA Margin (%) 12.9% 14.0%

• 1.1%
• 7.6%

NP Margin (%) 8.2% 8.3%

• 0.2%
• 2.2%
• The company recorded the sales in 2Q16 at THB 1,161 million, increasing from THB 1,123 million or 3.4% in the year

earlier due to the robust demand from key customers

• However, The company’s net profit in 2Q16 decreased 9.7% from the year earlier as
• Temporary effect from the usual lag in pricing adjustment, as a result from increasing resin price; and
• Higher SG&A expense which mainly consists of one-time expenses such as machine relocation cost, consulting

fee, and sale promotion

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% 14.9% 15.6% 2.2% 2.8% 3.7% 4.7% 5.2% 7.9% 8.3% 8.2% 5.2% 6.4% 6.2% 9.0% 9.2% 13.0% 14.0% 12.9% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 2010 2011 2012 2013 2014 2015 1H15 1H16 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

• Profit margins improvement slightly slow down this year, as compound resin effect is mostly realized
• 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 1,371 1,558 2,390

2015 2Q16

Total non-current assets Total current assets 1,512 2,542 1,161 1,061 142 157

2015 2Q16

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% 63.6% 36.4%

Cash & ST Investment 2Q16: THB 1,008 mm 2015: THB 117 mm Inventories 2Q16: THB 637 mm 2015: THB 567 mm A/R 2Q16: THB 716 mm 2015: THB 842 mm PP&E 2Q16: THB 1,139 mm 2015: THB 1,028 mm Gross Debt 2Q16: THB 624 mm 2015: THB 633 mm Net Debt 2Q16: THB – 384 mm 2015: THB 516 mm Share Capital 2Q16: THB 400 mm 2015: THB 300 mm

41.2% 53.7% 5.0% 4.2% 67.6% 28.2%

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: - 0.15x 2015: 0.34x 2Q16: n.a. 2015: 0.83x 2Q16: 2.25x 2015: 1.34x 2Q16: 1,008 mn 2015: 117 mn

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Agenda

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Section 1 About TPBI Group Section 2 Business Overview Section 3 Shareholding Structure Section 4 Financial Highlights Section 5 Future Plan

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Future Plan: Outlook & Expansion Plan

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Market Expansion

• Start to focus more on Cambodia,

Laos, Myanmar, and Vietnam (CLMV) market

• Already received some orders
• Explore more opportunities in UK

and EU

• Appointed a new agent to

focus on UK and EU market

• Already received some orders

for both general packaging

• Potential for flexible

packaging

• Explore more opportunities in

Africa region

• Leverage on existing trade

partner relationship 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 2108

• 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

• Expected growth sales
• Existing customers
• New customers in food and

consumer sector

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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