Global Connections Public Company Limited Opportunity day Q1/2012 Performance Announcement May 14 th, 2012 1
Today Content Company Overview Plastic and Petrochemical Industry Q1/2012 Performance IR report & Investment Highlight Q&A 2
Company Overview Listed to SET 6 th Dec.2005 GC has been founded since 1994 by 5 experienced management 4000 3500 3000 2500 MB Total Revenue 3,272 2,665 3,678 3,792 GC is the distributor of 32 leading producers of plastics and petrochemical raw materials from around the world. 2000 1500 1000 500 0 76 1,091 Most of these producers are among the top 3 in the world in that product in terms of technology & production capacity. GC Revenue During 1995 2012 Sales growth in 2011 YoY QoQ Value 3.49% 27.33% Quantity 4.64% 25.06% Year GC is not an ordinary distributor. On top of ordinary distribution role, GC provide technical advice and useful information to customers since GC position itself to be Your best partner for solution and service in Industrial raw material supply. 3
GC s role and positioning in the market Leads the differentiation Economy of Scale to Suppliers Suppliers S1 S2 S3 S4 S5 Sn ) Global Connections Public Co., Ltd. Provided Logistic : Warehousing, small delivery, and repacking Sales & Marketing : Closely contact to end markets/customers Technical Services : Troubleshooting / Product and Market Development Financing & structuring solution : Extending our expertise to customer Customers C1 C2 C3 C4 C5 Cn Economy of Scope to Customers 4
Where we are in the value chain of Thai Petrochemical Industry Petrochemical and plastic producers Upstream Intermediate Downstream Compounders End users Olefin&Aromatic Producers Monomer producers (MEG, VCM) Polymer producers (PP, PE, PVC) Global Connections Compounders Master batch producers Converters 5
Organization Chart 6
Major Shareholders Free FloatOverview As of 19/04/2012 Minor Shareholders (Free float) 780 Overview As of 19/04/2012 Total Shareholders 854 % Shares in Minor Shareholders (% Free float) 30.98% Rank Major Shareholders as of 21/04/2011 # Shares % Shares 1 Mr. Somchai Kulimakin 44,499,900 22.25 2 Mr. Aikachai Sirijantanan 28,470,730 14.24 3 Mr. Sumruay Tichachol 27,125,000 13.56 4 Mr. Bhiya Jriyasetapong 26,125,000 13.06 5 Mr. Somkiat Terdtultaveedey 9,200,000 4.60 6 Mr. Siri Thirawattanawong 8,226,000 4.11 Sub total 143,646,630 71.82 More Liquidity for GC s Stock 7
Corporate Value Ethics Integrity Professional & Focus Partnership Strive for better 8
Company History 1994-1999 2000-2005 2006 - Current Start business with commodity plastic Diversify company portfolio from commodity to specialty plastic Create sustainable growth being the best partner for solution and service in industrial raw material supply 1996 Distributing agent of SCG Plastics Co., ltd. and Eastman Chemical, which was the start of specialty product distribution. 1994 GC was established by 5 founders with initial registered capital of 2 MB. 1997 Distributing agent of DuPont Performance Polymers and Chi Mei Corporation 1998 Distributing agent of OCV Reinforcement Co., Ltd 2004 Distributing agent of ExxonMobil and Rio Tinto Mineral Asia Pte., Ltd. 1999 Distributing agent of Siam Polystyrene (Thailand) Co., ltd. and Cabot Plastic Hong Kong Ltd. 2006 Distributing agent of Nanocor Inc. 2010 Distributing agent of BST Elastomers Co., Ltd. 2008 Distributing agent of DIC International Chemicals PTE Ltd. 1994 1996 1998 2000 2004 2006 2008 2010 2011 Distributing agent of Miliken Chemical, Imerys Meneral, Timcal Ltd. 2005 Listed company and paid-up capital to 200 MB
Corporate Strategy Maintain existing strong market positioning Become solid partner with supplier and customer Offer total professional solution Be leader in advanced technology product Grow towards the growing industries Develop new application/market from initial stage 10
2012 Corporate Strategy Knowledge Organization : -Build atmosphere, Record experience and expertise, Transfer knowledge to others Electronic Aided Management : - Simple understanding, Effective practice, Efficient process Experience Leverage : - Explore new endeavor, Develop new platform Performance Oriented : - Competitiveness, Staff retention, Fair treatment 11
GC Business Unit BU1 COMMODITY POLYMER BU2 SPECIALTY & ENGINEERING POLYMER BU3 SPECIALTY CHEMICALS & INTERMEDIATE 1. Polyolefin 2. PET & PVC 3. Specialty Polyolefin 1. Engineering Plastics 2. Industrial Products 1. Additives & Adhesives 2. Petro Chemicals & Intermediate - Automotive parts Car & Motorcycle : Interior and exterior parts Console, Bumper, Door trim, Body side Engine covered, Muffler covered, Trunk tray, Liner, etc. - Electronic and Appliance Parts Washing machine, Refrigerator, Air-Con, Fan - Transparency packaging - Cosmetic packaging - Office equipment - Compounding &color Master batch - Resin Producers - Refinery plant - Industrial product - Packaging Product - Adhesive Product (Solvent based, HMA) - Tire & Rubber House - Ink - Flexible Hose/Tube - Woven bag, Film - Toys, Furniture Plastic Pallet - House ware - Road Marking Paint - Industrial product -Tape & Label PSA
Marketing Structure GC Business Unit BU1 COMMODITY POLYMER Polyolefins PE: HDPE, LDPE, LLDPE (C4,C8) PP: Homo, Block Copo, Random PVC PET PU BU2 SPECIALTY & ENGINEERING POLYMER Nylon, POM, PBT, TEEE, PCT, LCP, PC Black/White MB EPDM, Butyl EO, EB Plastomer, PP-Plastomer TPVs, TPU PETG/PCTG, CA PS, HIPS, ABS, SAN, SBC TPE, FR, Reinforcement compound Talc, Zinc Borate FR, Nano-Clay Glass Fiber EVA for HMA, Hydrocarbon Resin BU3 SPECIALTY CHEMICALS & INTERMEDIATE Plastic Additive Intermediate chemical
Automotive E&E Appliance Packaging Toys & Stationery Personal Care Products Industrial Market furniture, construction, shoes, adhesive, Road marking
Plastic and Petrochemicals Industry 15
Crude Oil Price Chart
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Key Strategic Market Automotive E&E Appliance Packaging Toys & Stationery Personal Care Products Industrial Market furniture, construction, shoes, adhesive, Road marking
Thailand Auto Production 2012 (E) 2012 (Mar) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 2,000,000 499,560 1,457,795 1,645,304 999,378 1,391,728 1,301,149 1,193,885 1,125,316 960,371 750,512 564,392 454,797 405,761 Car Production Forecast of 2012 around 2 Mil Unit more than 30% from the last year. Production in Q1/2012 is 499,560 units, 6.52% increase from year 2011. The factories in the flood area are recovered about 73% (bangkokbiznews) 0 500,000 1,000,000 1,500,000 2,000,000 Source : Thailand Automotive Institute
Thailand Auto Production Source: THE OFFICE OF INDUSTRIAL ECONOMICS 20
Plastic in Auto Industry 21
Economic Growth Rate by The National Economic and Social Development Board 2011 Source : Office of The National Economic and Social Development Board http://www.nesdb.go.th/ 2011 GDP = 0.1% Export Growth = 16.4% Inflation rate = 3.8% 2012 Growth Forecast GDP = 5.5-6.5% Export = 17% Inflation = 3.5-4.0% Updated from BOT (11/5/2012) GDP = 6% (2%for Q1) Export decline = 4% Inflation = 3.39% Capacity Utilization Automotive from 31.7% in Q4 11 to 97.0% in Q1 12 Electronics was from 35.4% to 56.8% only. 22
Fire Incident at BSTE Facility in Maptaphut The fire incident at BSTE facility in Maptaphut Industrial Estate in Rayongon 5 th of May 2012. There are 11 fatalities and 141 injury cases BSTE is declaring force majeure and expect the downtime of the BR Unit of 6 months and the SBR unit of 2 months 23
Q1/2012 Performance 24
Statements of Comprehensive Income Unit : Million Baht Actual Q1 2012 2011 Change Sales 1,088.15 1,051.42 3% COGS 1,022.75 968.87 6% Gross Profit 65.40 82.55-21% Selling & Admin Expenses 28.70 26.99 6% Loss on diminution in value of inventories (2.00) 0.00-100% EBITDA 38.70 55.56-30% Depreciation 3.51 3.45 2% Interest Expense 4.15 2.26 84% Profit Before Other Income 31.04 49.85-38% Other Income 1.16 1.80-36% Gain (Loss) on exchange rate 1.54 0.37 316% Profit before Tax 33.74 52.02-35% Tax 7.63 15.99-52% Net Profit 26.11 36.03-28% 25
Sales Structure BU3 BU2 BU1 Sales Quantity 64.8 62.2 53.9 52.0 0.2 0.0 0.1 0.1 13.1 13.5 12.4 10.7 41.4 41.2 51.5 48.7 18.3 0.0 4.1 14.2 '000 T 70 60 50 40 30 20 10 - BU3 BU2 BU1 Sales Quantity in Percentage 0% 0% 0% 0% 0% 23% 21% 20% 22% 22% 77% 79% 80% 78% 78% 100% 80% 60% 40% 20% 0% 2008 2009 2010 2011 Q1_2012 2008 2009 2010 2011 Q1_2012 BU3 BU2 BU1 4,500 4,000 3,500 3,000 3,410 62 1,055 Sales Value 3,662 3,786 79 13 2,647 60 1,157 1,357 BU3 BU2 BU1 100% 80% 60% Sales Value in Percentage 2% 2% 2% 0% 0% 31% 31% 32% 36% 37% 2,500 2,000 1,500 1,000 2,293 808 1,779 2,426 2,416 1,088 3 400 40% 20% 67% 67% 66% 64% 63% 500 0 685 2008 2009 2010 2011 Q1_2012 0% 2008 2009 2010 2011 Q1_2012 26 26
Gross Profit Structure BU3 BU2 BU1 Gross Profit By BU BU3 BU2 BU1 Gross Profit in Percentage 295 245 195 145 95 45-5 286 271 259 19 20 4 201 100% 16 80% 168 168 149 60% 93 70 40% 20% 91 92 98 99 42 0% 30 (2) -20% 2008 2009 2010 2011 Q1_2012 7% 8% 7% 1% 57% 46% 60% 62% 59% 35% 46% 34% 37% 43% -2% 2008 2009 2010 2011 Q1_2012 No. of Supplier BU1 10 BU2 16 BU3 6 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% -60% Gross Profit Margin by BU 31.1% 26.2% 25.5% 27.5% 14.1% 11.5% 14.6% 12.4% 10.4% 4.0% 5.2% 4.0% 4.1% 4.3% -50.0% 2008 2009 2010 2011 Q1_2012 BU3 BU2 BU1 27
Statements of Comprehensive Income Highlights Revenue (Million Baht) 4000 3500 3000 2500 2000 1500 1000 500 0 Profit Margin 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 3,429 77 Revenue & Net Profit 2,665 96 3,678 3,793 124 80 Profitability Ratio 1,091 26 2008 2009 2010 2011 Q1_2012 Revenue 7.08 7.09 7.36 21.35 2.24 25.82 30.51 3.64 3.39 Net Profit 6.73 19.93 2.12 26.05 140 120 100 80 60 40 20-6.01 2.40 2008 2009 2010 2011 Q1_2012 Gross Profit Margin (%) Net Profit Margin (%) ROE (%) ROE 50 45 40 35 30 25 20 15 10 5 - Revenue and Net Profit In Q1/2012, sales increased from Q1/2011 around 3% due to the gradual economic recovery from heavy flooding across the country in Q4/2011. Profit Margin GC s gross profit margin of Q1/2012 has been decreasing due to higher competition as well as slow moving products sold out with negative margin. GC s net profit margin of Q1/2012 has been increasing from 2011. This was due to the loss on exchange rate and higher corporate income tax rate in 2011. 28
Statements of Financial Position Unit : Million Baht Asset 31/3/2012 31/12/2011 Change % Trade Receivables 774.88 566.47 208.41 37% Inventory 456.37 358.54 97.83 27% Net Fixed Assets 138.93 142.15-3.22-2% Total Assets 1,400.21 1,112.39 287.82 26% Liabilities Short Term Loan 610.00 466.41 143.59 31% Trade Payables 327.73 212.78 114.95 54% Total Liabilities 986.28 724.56 261.72 36% Equity Paid up Capital 200.00 200.00 0.00 0% Share Premium 56.03 56.03 0.00 0% Retained Earnings 157.91 131.80 26.11 20% Total Equity 413.94 387.83 26.11 7% 29
Statements of Financial Position Highlight 5.00 4.00 3.00 2.00 1.00 4.35 2.00 Debt to Equity Ratio 1.70 1.58 1.43 1.20 1.10 1.87 2.38 D/E ratio is relatively lower. D/E ratio drop less than 2.0 which was decreased after IPO proceeds. However, the higher D/E ratio in Q1/2012 was resulting from the increase in short-term loan and trade payables. - 2004 2005 2006 2007 2008 2009 2010 2011 Q1_2012 2.00 1.50 1.00 0.50 0.94 1.28 1.46 Current Ratio 1.58 1.48 1.37 1.46 1.37 1.30 Continuous increase in current ratio GC current ratio has been improving to higher than 1.0x since GC got more working capital from IPO proceed. This higher liquidity can reduce GC s financial costs. - 2004 2005 2006 2007 2008 2009 2010 2011 Q1_2012 30
CASH FLOW STATEMENTS FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2012 AND 2011 (Unit : Thousand Baht) 2012 2011 Cash flows from operating activities Profit before tax 33,738 52,025 Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities : 6,496 5,965 Profit from operating activities before changes in operating assets and liabilities 40,234 57,990 Operating assets (increase) decrease Trade and other receivables (208,352) (180,933) Inventories (95,836) (69,995) Other current assets (7,656) (2,508) Other non-current assets 0 (15) Operating liabilities increase (decrease) Trade and other payables 111,070 94,089 Other current liabilities (1,007) (719) Cash flows used in operating activities (161,547) (102,091) Cash paid for interest expenses (3,898) (2,082) Cash paid for corporate income tax (11) (16) Net cash flows used in operating activities (165,456) (104,189) 31
CASH FLOW STATEMENTS (continued) FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2012 AND 2011 (Unit : Thousand Baht) 2012 2011 Cash flows from investing activities Acquisition of equipment (280) (1,670) Proceeds from sales of motor vehicles 0 146 Net cash flows used in investing activities (280) (1,524) Cash flows from financing activities Increase in short-term loans from financial institutions 143,585 107,680 Cash paid for liabilities under finance lease agreements (647) (1,162) Net cash flows from financing activities 142,938 106,518 Net increase (decrease) in cash and cash equivalents (22,798) 805 Cash and cash equivalents at beginning of period 41,387 26,394 Cash and cash equivalents at end of period 18,589 27,199 32
120% 100% 80% 60% 74% Dividend Payout Ratio 84% 83% 80% Dividend Payment Record Dividend Payout 99% 2007 2008 2009 2010 2011 To be top 50 dividend yield stock with continuous growth Positioning of GC Stock Operation Dividend Payment X-Date Price with X-Date Dividend Yield Period Ending (BPS.) Date before on x-date (cal. from before X-Date Price) 31-Dec-11 0.16 30-A pr-12 12-A pr-12 4.96 4.86 3.23% 30-Jun-11 0.24 09-Sep-11 25-A ug-11 5.90 5.55 4.07% 31-Dec-10 0.26 29-A pr-11 18-A pr-11 5.80 5.50 4.48% 30-Jun-10 0.24 10-Sep-10 26-A ug-10 5.50 5.20 4.36% 31-Dec-09 0.26 30-A pr-10 16-A pr-10 4.72 4.22 5.51% 30-Jun-09 0.14 11-Sep-09 27-A ug-09 3.28 3.28 4.27% 31-Dec-08 0.12 30-A pr-09 16-A pr-09 2.40 2.40 5.00% 30-Jun-08 0.20 12-Sep-08 26-A ug-08 4.84 4.60 4.13% 31-Dec-07 0.26 30-A pr-08 17-Mar-08 4.06 3.90 6.40% 30-Jun-07 0.14 7-Sep-07 21-A ug-07 3.46 3.32 4.05% 33
Dividend Payment Record Operation Dividend Payment X-Date Price with X-Date Dividend Yield Period Ending (BPS.) Date before on x-date (cal. From before X-Date Price) 31-Dec-11 0.16 30-Apr-12 12-Apr-12 4.96 4.86 3.23% 30-Jun-11 0.24 09-Sep-11 25-Aug-11 5.90 5.55 4.07% 31-Dec-10 0.26 29-Apr-11 18-Apr-11 5.80 5.50 4.48% 30-Jun-10 0.24 10-Sep-10 26-Aug-10 5.50 5.20 4.36% 31-Dec-09 0.26 30-Apr-10 16-Apr-10 4.72 4.22 5.51% 30-Jun-09 0.14 11-Sep-09 27-Aug-09 3.28 3.28 4.27% 31-Dec-08 0.12 30-Apr-09 16-Apr-09 2.40 2.40 5.00% 30-Jun-08 0.20 12-Sep-08 26-Aug-08 4.84 4.60 4.13% 31-Dec-07 0.26 30-Apr-08 17-Mar-08 4.06 3.90 6.40% 30-Jun-07 0.14 7-Sep-07 21-Aug-07 3.46 3.32 4.05% 31-Dec-06 0.15 27-Apr-07 9-Mar-07 2.92 2.78 5.14% 30-Jun-06 0.10 8-Sep-06 22-Aug-06 2.64 2.64 3.79% 31-Dec-05 0.14 28-Apr-06 10-Mar-06 2.46 2.48 5.69% Regular Dividend payment with high yield. 34
Source : SET News on March 13, 2012 GC s ranking at 22 nd -Dividend Paid 80MB -Dividend Yield 8.03% 35
Dividend Yield 12.00% 10.00% 8.93% 10.45% 9.13% 9.78% 8.84% 8.00% 5.69% 7.30% 6.00% 4.53% 4.00% 4.67% 5.48% 3.28% 3.80% 2.00% 1.72% 0.00% 4.26% 2.80% 2.14% 2.56% 0.93% 1.00% -0.79% 2.40% -2.00% Dividend Yield Average Inf. Rate* Average Int. Rate* Remark * Both of the rate are collected from Bank of Thailand (BOT) Average interest rate is a deposit interest rate for 12 months Annualize in 2011 36
Investor Relations Report 3 Month price Performance 1250 1200 1150 1100 1050 1000 5.20 5.15 5.10 5.05 5.00 4.95 4.90 4.85 4.80 4.75 4.70 GC Average Petro Industrial P/E Ratio 12.18 12.14 Dvd Yield 8.16 5.58 ROE 19.93 17.69 Source: SET s website as of April 30, 2012 Stock Price Unit : BPS SET INDEX Closing Price Month Q1-12 Q1-11 Apr-12 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Volume Trade (3 months) 1,267,300shares on17 Feb12 Volume (share) High 5.20 6.10 5.05 Low 4.88 5.15 4.80 Average 5.01 5.49 4.92 Stock Volume Unit : Shares per day Month Q1-12 Q1-11 Apr-12 High 1,267,300 1,479,200 540,300 Low 1,600 7,500 5,600 Average 97,129 206,523 138,053 Total 6,022,000 12,804,000 2,346,900 37
Investment Highlight A Leading and fast-growing with best solutions and service provider in Thai plastic and petrochemical Industry Exclusive distributorship from most of the world leading producers. Visionary, experienced, hands-on management team, Long term relation : Trade partner and also Financial Institute partner Diversified and well balanced sources of revenue from various industries Systematic risk control : Bad debt, foreign exchange exposure, price fluctuation No Fixed Cost ; due to all investment financing by long term loan (120 MB) already paid with in 4 years (2008) and no plan to investment in near term Regular Dividend payment with high yield. (Fully statutory reserve) Top 50 s dividend payment of SET Listing Companies Good Corporate Governance : with very good level in 2011 (Corporate Governance Report of Thai Listed Companies excellenct 2009-2010) 38
Thank you, Questions are welcome 39