TPBI Public Company Limited · Strictly Private & Confidential TPBI Group Overview Page 3 • TPBI...
Transcript of TPBI Public Company Limited · Strictly Private & Confidential TPBI Group Overview Page 3 • TPBI...
Strictly Private & Confidential
TPBI Public Company Limited
Opportunity Day Presentation
November 13, 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 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.
Strictly Private & Confidential
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
Strictly Private & Confidential
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%
Strictly Private & Confidential
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%
Strictly Private & Confidential
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
Strictly Private & Confidential
Agenda
Page 6
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
Section 5 Acquisition of Intelipac Group
Strictly Private & Confidential
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.
Strictly Private & Confidential
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%
Source: Company Data
Strictly Private & Confidential
Agenda
Page 9
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
Section 5 Acquisition of Intelipac Group
Strictly Private & Confidential
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
Strictly Private & Confidential
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
Strictly Private & Confidential
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
Source: Company Data
• 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
Strictly Private & Confidential
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
Source: Company Data
Strictly Private & Confidential
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%
Source: Company Data
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
Strictly Private & Confidential
Agenda
Page 15
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
Section 5 Acquisition of Intelipac Group
Strictly Private & Confidential
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
Strictly Private & Confidential
Expansion Plan: New Flexible Packaging Factory
Page 17
• Construction was completed on September 2018
• Factory started operation.
• Ready to recognize sales revenue in 4Q18
Strictly Private & Confidential
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
Source: Company Data
Strictly Private & Confidential
Agenda
Page 19
Section 1 About TPBI Group
Section 2 Business Overview
Section 3 Financial Highlights
Section 4 Future Plan
Section 5 Acquisition of Intelipac Group
Strictly Private & Confidential
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
Source: Company Data
ProfileGroup Structure Key Products Historical Record
Australia
United Kingdom
Strictly Private & Confidential
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
Source: Company Data
ProfileGroup Structure Key Products Historical Record
Strictly Private & Confidential
BOPP Reels and Bags
Intelipac Group Overview (cont.)Trading Business : Intelipac Ltd and Intelipac Australia Pty Ltd
Page 23Source: Edcawi
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
Source: Company Data
ProfileGroup Structure Key Products Historical Record
Strictly Private & Confidential
Intelipac Group Overview (cont.)Trading Business : Intelipac Ltd and Intelipac Australia Pty Ltd
Page 24Source: Edcawi
• 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
Source: Company Data
ProfileGroup Structure Key Products Historical Record
Strictly Private & Confidential
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)
ProfileGroup Structure Key Products Historical Record
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
Strictly Private & Confidential Page 27
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
Strictly Private & Confidential Page 28
Strong EarningsIncrease Scale and Market Position
Horizontal Integration and Portfolio Diversification
Increase Scale and Global Market Position
Potential Immediate Synergies
Existing Destination New Destination
Strictly Private & Confidential Page 29
Strong EarningsPotential Immediate Synergies
Horizontal Integration and Portfolio Diversification
Increase Scale and Market Position
Potential Immediate Synergies
• 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.
Strictly Private & Confidential Page 30
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
Strictly Private & Confidential
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