tpbi public company limited · strictly private & confidential tpbi group overview page 3 •...

Strictly Private & Confidential

TPBI Public Company Limited

Opportunity Day Presentation

November 13, 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

Section 5 Acquisition of Intelipac Group


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 ( Jan 18 – Sep 18)

High (THB) 13.20

Low (THB) 8.00

Average (THB) 11.13

Average Market Capitalization (THB mm) 4,020.22

Average Daily Trading Value (THB mm) 1.34

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 Sep 30, 2018

Source: Company Data, Bloomberg

*Shareholder holding as of the latest book closing date

Borrisuttanakul family, 73.94%

BBLAM, 12.98%

Others, 13.08%


TPBI Group Products

Page 4

Revenue Breakdown by Product

TPBI Group’s total sales for 3Q18 is THB 1,228.96 mm, having sales proportion by products as follows:

Source: Company Data

Garbage bags27%

Fruit&vegetable bags7%

Vest carriers/t-shirt bags

19%

Soft Loop11%

Multi-layer blown film

9%

Flexible Packaging

15%

Others12%

Revenue Breakdown in 3Q18 Revenue Breakdown in 3Q17

Garbage bags28%

Fruit&vegetable bags

5%Vest

carriers/t-shirt bags

27%

Multi-layer blown film

10%

Flexible Packaging

15%

Others15%


Australia29%

Japan9%

UK6%USA

7%New Zealand

3%

Other countries4%

Thailand42%

Australia22%

Japan8%

UK6%

USA9%New Zealand

6%

Other countries7%

Thailand42%

Market Diversification

Page 5

Market Diversification

During 3Q18, approximately 61.34% of total sales are from exports to international markets while 38.66% 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 3Q18 In 3Q17


Agenda

Page 6







TPBI’s Business Divisions

Page 7

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.


67%

80%

62% 58%72% 73%

0%

20%

40%

60%

80%

100%

0

50

100

150

2013 2014 2015 2016 2017 3Q18

Mill

ion

Me

ters

pe

r ye

ar

Capacity Output Utilization rate

95%

76%

82%81% 84%

77%

0%

20%

40%

60%

80%

100%

0

2,000

4,000

6,000

8,000

10,000

12,000

2013 2014 2015 2016 2017 3Q18

Ton

s p

er

year

Historical Production Capacity and Utilization Rate

Page 8

74%84%

86% 85% 78%73%

0%

20%

40%

60%

80%

100%

0

20,000

40,000

60,000

80,000

100,000

2013 2014 2015 2016 2017 3Q18

Ton

s p

er

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 69 - 86%

• Multilayer blown film capacity is currently around 11,500 tons per year

• Utilization rate have been in range of 77 – 95%



Agenda

Page 9







31

32

33

34

TH

B

-400

100

600

0

50

100

Vo

lum

e (

'000)

USD

/Barr

el

Volume (RHS) Closing Px

Market Overview

Page 10

Foreign Exchange

Brent Crude Oil

Resin Price

Source: Bloomberg

• Thai Baht has been depreciated during the year, averaging at THB 32.97 per USD

• TPBI revenue and cost are partially natural-hedged

• Brent crude oil price has been increasing during the past year, averaging at USD75.84 per barrel in Q3/2018.

• The resin prices are somewhat influenced from crude oil price.

• The average prices of HDPE and LLDPE were 1,308.08 and 1,121.92 per MTrespectively in Q3/20181,000

1,100

1,200

1,300

1,400

1,500

ต.ค.-17 พ.ย.-17 ธ.ค.-17 ม.ค.-18 ก.พ.-18 มี.ค.-18 เม.ย.-18 พ.ค.-18 มิ.ย.-18 ก.ค.-18 ส.ค.-18 ก.ย.-18

USD

/MT

HDPE LLDPE


32

33

34

TH

BMarket Overview (Zoom-in Brent Crude Oil and FX rate 3Q18)

Page 11

Foreign Exchange

Brent Crude Oil

Source: Bloomberg

0

500

1000

1500

2000

70

72

74

76

78

80

82

84

Vo

lum

e (

'000)

USD

/Barr

el

Volume (RHS) Closing Px


14.9%

11.2%

5.2%7.7%

4.0%

-4.7%-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

3Q16 3Q17 3Q18

Profit Margin

Gross Profit Margin Net Profit Margin

1,302 1,161

1,229

-

500

1,000

1,500

3Q16 3Q17 3Q18

THB

mm

329 387 423

509 308357

97117

116

156179

186

211171

147

-200

400

600

800

1,000

1,200

1,400

3Q16 3Q17 3Q18

THB

mm

Garbage and fruit&vegetable bags Vest carriers/t-shirt bags

Multi-layer blown film Flexible packaging

Others

Operating Results

Page 12

Total Sales Revenue Gross Profit and Net Profit


• In 3Q18, the revenue was slightly increased compared to same period last year mostly due to higher sales of reusable bags, and Garbage and fruit & vegetable bags.

• In spite of remained constant sales in inflexible packaging andmulti-layer blown film during the period, the total revenue of thecompany still increase as a result of an increase in of Vest carriers/t-shirt bags, which are driven by reusable bags.

• 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, as well as fluctuation in Thai Baht currency.

Revenue Breakdown


Operating Results (Cont.)

Page 13

Operating Result in 3Q18

In THB mm 3Q18 3Q17YoY

THB mm %

Revenue 1,240.45 1,174.04 66.41 5.66%

Cost of Sales 1,165.55 1,030.62 134.93 13.09%

Gross Profit 82.05 111.35 -29.3 -26.32%

Other Income 11.49 13.48 -2.00 -14.76%

SG&A 125.04 81.13 43.93 54.12%

EBITDA 11.95 111.72 -99.77 -89.31%

Net Income -58.81 47.30 -106.11 -224.35%

EPS (THB) -0.12 0.11 -0.23 -224.35%

GP Margin (%) 5.20% 11.2% -6.00% -53.9%

EBITDA Margin (%) 0.96% 9.52% -8.55% -89.88%

NP Margin (%) -4.7% 4.00% -8.88% -217.7%

• Q3 2018, the lower profit margin compare to thesame period last year mainly due to followingfactors:• An appreciation of Thai Baht currency.• Dramatically depreciation in Myanmar Kyat

currency.• Non-recurring expenses from acquisition of

Intelipac Group in United Kingdom during thelast quarter

• Expenses occurred from production test-run ofnew factory of T.A.K. packaging



1,741

3,045

2,311

2,216

3Q17 3Q18

Total non-current assets Total current assets

2,645.8 2,528.1

1,181.82,140.9

223.8

592.0

3Q17 3Q18

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

57%

43%

42.1%

57.9%

Cash & ST Investment3Q18: THB 362 mm3Q17: THB 836 mm

Inventories3Q18: THB 904 mm3Q17: THB 710 mm

A/R3Q18: THB 918 mm3Q17: THB 707 mm

PP&E3Q18: THB 2,648 mm3Q17: THB 1,700 mm

Interest-bearing-debt3Q18: THB 1,741 mm3Q17: THB 778 mm

Net Debt3Q18: THB 1,442 mm3Q17: THB 236 mm

Share Capital3Q18: THB 400 mm3Q17: THB 400 mm

29.2%

65.3%

5.5%

11.3%

48.1%

40.7%


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

3Q18: 0.69x3Q17: 0.29x

3Q18: 0.57x3Q17: 0.09x

3Q18: 1.03x3Q17: 1.96x

3Q18: 299 mm3Q17: 542 mm

5,261

4,051

5,261

4,051


Agenda

Page 15







Product Transformations Progress

Page 16

The numbers shows a significant sales contribution of garbage, others bags, reusable soft loop to the Company THB 1,313 mn in during 9 months 2018

in line with company’s transformation policy

479

349

292

229

328

285 289

423

033

155128

109 123 112 116

160 163181 186

146170

195

147

0

100

200

300

400

500

600

4Q18 1Q18 2Q18 3Q18

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


Expansion Plan: New Flexible Packaging Factory

Page 17

• Construction was completed on September 2018

• Factory started operation.

• Ready to recognize sales revenue in 4Q18


Updated Actions and Future Plan

Page 18

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

Reusable Soft Loop with Post Consumer Recycle

• Expand transformation products capacity

Flexible Packaging & Film

• Expansion plan is on track• Expect to be operational

around June 2018

• Expected capacity (per year basis)• Current: 100 million meters • Sep'18: 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



Agenda

Page 19







Group Structure after Intelipac acquisition

Page 20

1/ APS Group consists of APS Co., Ltd. and Asia Packaging Center Co., Ltd.

“Manufacturer and distributor of flexible packaging”

Kanaoka Co., Ltd.(“Kanaoka”)

APS Group 1/

2.89%35.05%

“Manufacturer and distributor of plastic bags and multilayer blown film”

62.05%

“Manufacturer and distributer of paper cup”

“Distributor of bio-plastic resin”

70.00% 76.27%

P.P. Packaging Co., Ltd. (“P.P. Packaging”)

13.33%10.40%

Minima Technology Co., Ltd.(“Minima Tech”)

“Taiwan base, manufacturer of bio-plastic resin”

30.00%

3.20%

“Manufacturer of plastic resin from plastic waste”

100.00%

“TPBI’s Investment arm”

100.00%

Myanmar Star Group

Solution Creation Co.,Ltd.(Subsidiary of PTTGC)

“Manufacturer of plastic bags in Myanmar”

25.00%

10.00%

65.00%

TPBI Paper Ltd (IPM) TPBI UK (ITP)

Reynards Food Packaging Ltd

TPBI Australia (ITPA)

“Manufacturer and distributor of paper packaging”

“Distributor of plastic packaging”

“Distributor of Bakery supplies” “Distributor of plastic and Paper packaging”

100.00% 100.00%

100.00%100.00%

ProfileGroup Structure Key Products Historical Record

Strictly Private & Confidential Page 21Source: Edcawi

Intelipac Paper Manufacturing Ltd. (“IPM”) established in 2012,engaging in manufacture of paper packaging products withpaid-up capital £10

Established in 2003, Intelipac Ltd (“ITP”) engages in tradingbusiness including plastic and other packaging products withpaid-up capital £923,261.

Intelipac Australia Pty Ltd (“ITPA”), a subsidiary of Intelipac Ltd,established with paid-up capital AUD$4, engaging in thetrading business as same as ITP, plastic and other packagingproducts.

Renard Food Packaging Ltd (“RFP”), acquired by the group in2017 for trading of its existing stocks and utilize existingcustomer bases.

Company Overview Location

Operational details

Factory: 1 Warehouses: 3

Location: Newcastle and Lancashire, England and Victoria, Australia

Workers: 75, of which 55 workers are IPM’s.

Current Capacity: ~43 mn bags per month

Current utilization rate: ~70%

Market: United Kingdom, Hongkong, USA, Ireland

Intelipac Group Overview (cont.) Intelipac Group



Australia

United Kingdom


Intelipac Group Overview (cont.)Manufacturing Business: Intelipac Paper Manufacturing Ltd

Page 22Source: Edcawi

Brown and Bleached Kraft, With and without greaseproof, With and without die cut windows, Plain and printed

Sectors: Grocery Retailers, Plant Bakeries, Bakery Chains, Fast Food, Pharmacy

Flat and Satchel Bags

Tape Handle Carrier

Block Bottom Bags/ SOS

• Brown and Bleached Kraft, With and without greaseproof, Film front strip and offset window, 3 part bags, Wicketted bags

Sectors: Grocery Retailers, Plant Bakeries, Bakery Chains, Fast Food, Distributors

• Flat and twisted handles, Brown and Bleached Kraft, With and without print

Sectors: Fast Food, High Street Retail, Distributors




BOPP Reels and Bags

Intelipac Group Overview (cont.)Trading Business : Intelipac Ltd and Intelipac Australia Pty Ltd


Piping Bags

Reusable bags

Plastic Bags

• Perf and non perf, Plain and printed, Flat packed and wicketted

Sectors: Grocery Retailers, Plant Bakeries

• Tensile strengths Bulk Dispenser box

Sectors: Distributors, Plant Bakeries, Large Bakery Chains by Raynard’s

• Loop Handle, Patch Handle, Punch Handle

Sectors: Grocery Retailers, Hardware stores, Fashion Retailers

• Woven PP, Nylon, rPet, Jute, Juco, Hybrid, Canvas, Cotton

Sectors: Grocery Retailers, Fashion Retailers, Marketing Companies




Intelipac Group Overview (cont.)Trading Business : Intelipac Ltd and Intelipac Australia Pty Ltd


• Wine Carriers, Value Added Packaging

Sectors: Grocery Retailers, Plant Bakeries, Food and Drinks

Refuse Sack on Roll

Produce Bag on Roll

Corrugated

• Clear, Coloured

Sectors: Grocery Retailers, Food manufacturing, Distributors

• With and Without Handles

Sectors: Grocery Retailers, Distributors




3,307 5,473 6,240

21,577 19,603 15,359

24,884

1,043 530

25,076

1,481 747

21,599

1,514 925

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

May15 May15 May15 May16 May16 May16 May17 May17 May17

GB

P ‘0

00

4.2% 5.9% 7.0%

2.1% 3.0% 4.3%

-50%

-40%

-30%

-20%

-10%

0%

10%

Page 25Source: Company’s Audited Financial Statement

• Sales of plastic packaging from trading business has been declining over the past 3 years due to plastic bags restriction policy in UK where consumption of single-use plastic bags have been decreasing significantly over the past few years

• In contrast with a down trend in plastic packaging in UK, paper packaging industry moved in opposite direction toward an uptrend. As a result, sales from paper manufacturing has jumped rapidly from GBP3.3 mn in 2015 to GBP6.2 mn in 2017.

• Besides, D/E ratio of the group was 0.39x, 0.65x, and 0.53x over the historical years, which had been consistently low.

Intelipac Group Overview (cont.)Historical Performance: Proforma Consolidated Income statement (IPM, ITP and ITPA)


Strictly Private & Confidential Page 26

Summary of TransactionBenefits from this Transaction

• Horizontal integration and portfolio diversification

• Increase scale and global market position

• Potential immediate synergies

• Acquisition of well-experienced Iceland management team

Strong Earnings Synergy of Growth Enhance TPBI’s Valuation


Strong EarningsHorizontal Integration and Portfolio Diversification

Horizontal Integration and Portfolio Diversification

Increase Scale and Market Position

Potential Immediate Synergies

New products (Paper Packaging): Block Bottombag/SOS, Flat and Satchel bag, Tape Handlecarrier, Corrugated carrier

• An acquisition of Intelipac Group will enable TPBI to diversify its portfolio into paper packaging products and high value added products, and also increase economies of scales due to an increment of existing product volume from integrated products.

Integrated product: Vest carrier/ t-shirt bag,Produce bag on roll, Piping bag, BOPP real bag,Refuse sack on roll, Reusable bag


Strong EarningsIncrease Scale and Market Position


Increase Scale and Global Market Position


Existing Destination New Destination


Strong EarningsPotential Immediate Synergies


Increase Scale and Market Position


• Most of TPBI’s and Intelipac’s UK and Australian customers are different companies.

• Very minimal intercompany sale between TPBI and Intelipac.

• Good immediate impact for top and bottom line.


Synergy of GrowthAcquisition of Well-experienced Iceland Management Team

Acquisition of well-experienced Iceland management team

Experienced and seasoned management team

Mr. Edwards Duncan Anthony

• A founder owner of Intelipac with more than 35 years’ experience in the flexible packaging market.

• Responsible for all operation areas of the business, including logistics and commercial and technical decision making.

Mr. Wilkinson John Antony• A founder owner with more than 30 years' experience in the packaging industry.• Responsible for managing Intelipac's worldwide supply chain, matching

customer requirements to sourcing and engineering solutions for all products.

Potential Paper Packaging Production Base in Thailand Enhance TPBI’s Customer Base


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 31

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