tpbi public company limited · during 2017, approximately 59.4% of total sales are from exports to...

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

March 12, 2018


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 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, 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.


Agenda

Page 2

Section 1 About TPBI Group

Section 2 Business Overview

Section 3 Financial Highlights

Section 4 Future Plan


TPBI Group Overview

Page 3

• 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 profitTPBI 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


Group Structure

Page 4

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 ChittichangChairman of the Board

2. Wichai BorrisuttanakulDirector

3. Somsak BorrisuttanakulChief Executive Officer

4. Kamol BorrisuttanakulChief Financial Officer

5. Saksit BorrisuttanakulChief Operating Officer(High Value Added Products)

6. Sittichai BorrisuttanakulChief Operating Officer(General Products)

7. Thanwa LaohasiriwongDirector

8. Prinya SaniwalwaroonDirector

9. Krit PhanratanamalaDirector

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%


TPBI Group Products

Page 5

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 bags25%

Vest carriers/t-shirt bags36%

Multi-layer blown film

9%

Flexible Packaging14%

Others16%

Revenue Breakdown in 2017 Revenue Breakdown in 2016

Garbage and other bags24%

Vest carriers/t-shirt bags41%

Multi-layer blown film

7%

Flexible Packaging13%

Others15%


Australia24%

Japan9%

UK11%

USA14%

France1%

New Zealand2%

Other countries2%

Thailand37%

Australia29%

Japan9%

UK6%

USA7%

France0%New Zealand

4%

Other countries4%

Thailand41%

Market Diversification

Page 6

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


Agenda

Page 7






Strong Presence in Plastic Packaging Value Chain through Backward Integration

Page 8

“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-IndustrialPlastic Scrap

Post-Industrial Recycle Resin

Post-Consumer Recycle Resin

CompoundRecycle Resin

Bio-Plastic Resin

PE Resin (Virgin)

Other Plastic Resin

CompoundBio-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


Digital Printing


Company Operations

Page 9

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


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


Others

Product Mix:• Compound resin/ Bioplastic

product / Paper cup


Key Markets:• Focuses on domestic market


63%67%

80%

62% 58%

72%

0%

20%

40%

60%

80%

100%

0

50

100

150

2012 2013 2014 2015 2016 2017

Mill

ion

Me

ters

pe

r ye

ar

Capacity Output Utilization rate

92% 95%76% 82% 81% 84%

0%

20%

40%

60%

80%

100%

0

2,000

4,000

6,000

8,000

10,000

12,000

2012 2013 2014 2015 2016 2017

Ton

s p

er

year

Historical Production Capacity and Utilization Rate

Page 10

74% 74% 84% 86%85%

78%

0%

20%

40%

60%

80%

100%

0

20,000

40,000

60,000

80,000

100,000

2012 2013 2014 2015 2016 2017

Ton

s p

er

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%



Agenda

Page 11






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

TH

B/U

SD

Market Overview

Page 12

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

0

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

Vo

lum

e (

'000)

USD

/Barr

el

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


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 347423

546 623666

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

Page 13

Total Revenue Gross Profit and Net Profit


• 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 overthe last year from the plastics bags restriction in severalcountries, sale portions of flexible packaging andtransformation products were increased during the sameperiod in order to gradually shift product mix of theCompany 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


Operating Results (Cont.)

Page 14

Operating Result in 2017

In THB mm 2017 2016YoY

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 thedemands of Vest carriers/t-shirt bags has decreased.However, under product transformation policy, theCompany currently promotes sales of transformationproducts in order to compensate this downtrend ofVest 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



Operating Results (Cont.)

Page 15

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 2017Gross Profit Margin EBITDA Margin Net Profit Margin


• 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 outlook 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


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 Investment2017: THB 778 mm2016: THB 958 mm

Inventories2017: THB 653 mm2016: THB 665 mm

A/R2017: THB 754 mm2016: THB 725 mm

PP&E2017: THB 1,952 mm2016: THB 1,378 mm

Interest-bearing-debt2017: THB 764 mm2016: THB 408 mm

Net Debt2017: THB -15 mm2016: THB -550 mm

Share Capital2017: THB 400 mm2016: THB 400 mm

27.1%

64.9%

4.0% 5.5%

64.1%

28.1%


Gross Debt to Equity Net Debt to Equity Net Debt to EBITDA Current Ratio Cash on Hand

2017: 0.56x2016: 0.42x

2017: -0.01x2016: -0.20x

2017: -0.03x2016: -0.84x

2017: 1.75x2016: 2.53x

2017: 482 mm2016: 454 mm

4,2083,888

4,2083,888


Agenda

Page 17






Product Transformations

Page 18

• 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 bagsLiner bags

LLDPE food bags

Transformation Products - 4,770 tons sold during 2017

Reusable Soft Loop bags


Expansion Plan: New Flexible Packaging Factory

Page 19

• Construction has been completed on track and over 70%.

• Machines has been ordered and under manufactured.

• Expected COD: April or May 2018


Expansion Plan: Digital Printing

Page 20

• 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.


Expansion Plan : Establishment of Joint Venture Company

Page 21

• 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

Strictly Private & Confidential Page 22

Expansion Plan : Establishment of Joint Venture Company (Cont’d)Key products & Key markets

Soft Loop Handle

Garbage bags

Shopping bags


Updated Actions and Future Plan

Page 23

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

orders• 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



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: [email protected]

Page 24

tpbi public company limited · during 2017, approximately 59.4% of total sales are from exports to...

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