Polyplex (Thailand) Public Limited Company Presentation at the SET Opportunity Day Monday, 19 th March 2012 Website : www.polyplexthailand.com
Contents BOPET Film Industry Polyplex group Polyplex Competitive Strength PTL : Financial Performance Current Industry Scenario & Outlook 2
PET Film business - Value Chain NATURAL RESOURCES BASIC PETROCHEMICALS RAW MATERIALS PLASTIC AND INTERMEDIATE PRODUCTS END PRODUCTS Natural Gas Ethylene Para Xylene Polypropylene MEG PTA PET Resin PP RESIN B A S E F I L M S C O A T I N G M E T A L L I Z I N G I N D U S T R I A L B U Y E R S & C O N V E R T E R S Oil Polyplex s area of operation
BOPET Film BOPET is mainly segmented into Thin & Thick Films Thin Film : 50 Micron & Under (75% of total BOPET) Thick Film : Over 50 Micron (25% of total BOPET) The industry capacity is mainly divided based on above Thickness segments. Some lines are designed to produce intermediate range of Films from 12µ to 100µ Major End use of BOPET Film are Imaging & Graphics Magnetic Tape Packaging & Metalizing : Main Segment for POLYPLEX Electronics / Electricals Other Industrial 4
BOPET Film Influencers on Price COST DRIVEN FACTORS MARKET DRIVEN FACTORS CRUDE OIL PRICE IMPACT ON POLYESTER FILM (60%) PTA MEG ENERGY COST (FUEL / POWER) LOGISTICS COST CURRENCY VOLATILITY COUNTRY EXPORT COMPETITIVENESS IMPORT INTENSITY CURRENCY WAR DEMAND SUPPLY BALANCE TRADE AGREEMENTS AND BARRIERS PROTECTIONISM, ANTI-DUMPING BILATERALISM & REGIONAL TRADE 5
BOPET Global Demand Supply BOPET Thin Film "KMT" 2004 2009 2014 E BOPET Thick Film "KMT" 2004 2009 2014 E Capacity 1,388 2,171 3,166 Capacity 626 847 1,137 Production 1,235 1,806 2,781 Production 479 587 829 Capacity Utilisation % 89% 83% 88% Capacity Utilisation % 77% 69% 73% Demand 1,235 1,806 2,843 Demand 479 587 829 Imaging & Graphics 8 6 4 Imaging & Graphics 203 161 133 Magnetic Tape 94 22 7 Magnetic Tape - - - Packaging & Metallising 730 1,232 1,998 Packaging & Metallising 4 17 32 Electrical / Electronics 59 90 187 Electrical / Electronics 142 248 443 Other Industrial 344 456 647 Other Industrial 131 161 221 *Source: Industry Sources Largest End use :Flexible Packaging - which accounts for more than two-third of total Thin Film used. Thin Film demand has witnessed a CAGR of about 8% Per Annum (2004-09) and expected to grow at CAGR of 9.5% (2010-2014). Thick Film market has grown at a CAGR of about 4% per annum (2004-09) and is expected to grow at CAGR of 7.2% (2010-2014). The above CUF is based on Name Plate Capacity. Achievable peak CUF is 85%- 90% for Thin Film and 70% - 75% for Thick Film against Name Plate Capacity. 6
Packaging :Sustainable Growth Diversified application of BOPET has resulted in Sustainable Growth at better than World GDP Growth rates. The growth in packaging segment proves it resilience to recessionary factors. 7
Segment wise Demand of BOPET Film 4000 3500 3000 2500 2000 1500 1000 500 9 11 140 15 147 575 17 154 508 28 22 160 444 32 167 389 820 42 172 178 766 55 333 338 293 710 94 181 198 255 659 211 222 617 638 201 616 568 524 474 1863 734 842 951 1046 1149 1249 1392 1545 1698 7 137 630 868 2030 0 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E Packaging Other Industrial Electrical Imaging Magnetic Tape BOPET (Thin + Thick) Film demand expected to grow @ CAGR of 9% Packaging is expected to grow @ CAGR of 10% 8
Contents BOPET Film Industry Polyplex group Polyplex Competitive Strength PTL : Financial Performance Current Industry Scenario & Outlook 9
USA : Plant 5 (Under Implementation) Polyplex Group Global Presence Turkey: Plant 3 India : Plant 1 & Plant 4 Thailand: Plant 2 Factories Warehouses Manufacturing Locations India (PCL), Thailand (PTL),Turkey (PE) & USA (under implementation) Distribution Companies USA (PA) & China (PTSL). Warehouses 12 in USA, 3 in Mexico, 1 in Poland & 1 in Guangzhou, China 10
Polyplex Group Structure Polyplex Corporation Limited INDIA 100% Polyplex (Asia) Pte. Ltd. SINGAPORE 9.88% 16.5%% 34.5% Private Investor 9.88% Polyplex (America) Inc. USA 80.24% Polyplex (Thailand) Public Company Ltd. THAILAND 49% Public/ Institutional Shareholders Polyplex Americas Holding, Delaware. USA 100% 100% 100% Polyplex (Singapore) Pte. Ltd. SINGAPORE 100% Polyplex Trading (Shenzhen) Co. Ltd. CHINA Polyplex USA LLC. Decatur, Alabama, USA 100% Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi TURKEY Outside Interest Investment Company Manufacturing Company Distribution Company 11
Polyplex Group: Serving Customers Worldwide More than 1,200 Customers in 80 countries Customer solution oriented sales and technical services teams (region specific ) & Global Innovation Centre PCL- SAARC, GCC and Africa PTL- SEA, Far East & Oceania PE - Europe & CIS countries Distribution subsidiaries in PA - North and South America, Canada & Mexico PTSL-China Distributors & agents increase reach and service small customers Customer centric customized delivery model: Container loads drop-shipped for costeffectiveness Local warehousing support for higher flexibility & security 12
Polyplex : Business Strategy Thailand India Turkey We re a fully integrated, global manufacturer of plastic films with Concentric Diversification into BOPP & CPP Our vision is to continuously grow, create value and establish global leadership in the plastic film business We re expanding to meet demand in new geographies and for new applications like Extrusion lamination, Silicone Coated release films etc. Continually balance our Product & Market Portfolio to increase stability of our Earnings. Judicious mix of On-shore, Off-shore and Near-shore strategy. 13
Polyplex Group: Existing Capacities PET FILM (151,000 TPA) MET FILM (42,500 TPA) 58000 51000 42000 INDIA THAILAND TURKEY Polyplex :Product Portfolio PET Film 151 KTPA,CPP 10KTPA, BOPP 35 KTPA 35000 10000 11000 16300 15200 INDIA THAILAND TURKEY PET RESIN 192,200 TPA 151000 Offline Coater 310 Mn SQM 57600 77600 150 160 57000 PET FILM (TPA) BOPP (TPA) CPP (TPA) SILICONE COATING (Mn Sqm)-India INDIA THAILAND TURKEY EXTRUSION COATING (Mn Sqm)-Thailand 14
Base Film, Resin and Metallizer (in tons) Coating Capacity (in Million Sqm) 100,000 90,000 Polyplex Group capacities: 2013 Polyplex Group - Projected Capacity 2013 PET BOPP CPP PET Chips Metallizer Coated Film 1400 80,000 70,000 60,000 50,000 35,000 10,000-1200 1000 800 40,000 600 30,000 20,000 10,000-160 650 51,000 77,600 11,500 70,800 52,500 15,200 58,000 57,600 11,000 31,000 57,600 8,600 Base Film Metallized Film Resin Coated Film Base Film Metallized Film Resin PCL, India PTL, Thailand PE, Turkey Polyplex USA LLC 400 200 0 The above capacities include Silicone Coated Film and Thick PET film under implementation in Thailand & Thin PET film line expansion ( Including metalized film line) under implementation in US 15
Polyplex: Continuous Growth From 20 KMT capacity in 2002, we have become a TOP 5 Manufacturer of Thin BOPET Film with capacity of 151 KMT and adding further 63.4KMT (Thin +Thick PET) by H1 of FY 2013-2014. In addition, existing BOPP capacity of 35 KMT and CPP Capacity of 10 KMT 16
Projects Under Implementation Snapshot of projects under implementation Sl No Project Details Location Project Capex - USD Million Capacity Start up period Expected Turnover (in year 3) - USD Million REMARKS 1 Silicone Coated Line Thailand 25.00 425 million SQM March'12 28.20 The capacity would depend upon the product mix. 2 Thick Polyester Film Line with Resin Plant Thailand 77.00 28,800 MT for Film. 28,000 MT for Resins April'13 57.60 3 Blown PP Line Thailand 7.00 4,645 MT April'13 12.70 4 Saralam Line 2 Thailand 8.00 215 million SQM April'13 12.00 Turnover is net of internal transfers 5 Thin Polyester Film Line with Metallizer and Resin Plant USA 111.00 31,000 MT for Film. 57,600 MT for Resins 8,700 MT for Met Film Jan'13 86.00 TOTAL 228.00 196.50 17
Projects Under Implementation SILCONE COATING LINE THAILAND Investment size USD 25 million, including working capital. Target markets Europe, US and Asia Applications Used as a release liner for Label liners, graphic arts, medical liners and Shingle Tapes Capacity Dependant on the product mix being run on the line and can vary significantly across different product types 200 million sq.mts to 600 million sq.mts Financial closure achieved. Trial runs are going on Will be capitalized in March 2012 18
Projects Under Implementation THIN PET FILM LINE and Resins Plant US Project initially planned for Turkey, relocated to the US Capital Investment size USD 111 million Capacity Thin PET film line 31,000 MT pa High speed Metallized Film line 8,600 MT pa PET Resins 57,600 MT pa Financing Pattern: Investment to be made by PTL and/or its 100% held subsidiaries in a new company to be incorporated in the US Debt Borrowing Approx. 75 Million USD Balance to be funded out of internal accruals Commercial start up expected in Q1 of 2013 19
Projects Under Implementation THICK PET FILM LINE THAILAND Investment size USD 90 million, including working capital. Capacity Integrated line with Backward integration into PET resin Thick PET film line 28,800 MT pa Polyester Resin plant 28,000 MT pa Financing Pattern: Debt Borrowing Approx. 60 Million USD Balance to be funded out of internal accruals Commercial operation expected to start in Q2 of 2013 20
Projects Under Implementation BLOWN PP FILM LINE THAILAND Investment size USD 10 million, including working capital. Capacity 4,650 MT per annum Financing Pattern: Debt Borrowing Approx. 6 Million USD Balance to be funded out of internal accruals Commercial operation expected to start in Q2 of 2013 Will be a base film for Silicone Coating line. End product known as Peel and Stick. 21
Projects Under Implementation EXTRUSION LAMINATION FILM LINE II THAILAND Investment size USD 13 million, including working capital. Capacity 215 million SQM per annum Financing Pattern: Debt Borrowing Approx. 8 Million USD Balance to be funded out of internal accruals Commercial operation expected to start in Q2 of 2013 After the positive experience of line 1, the company would like to increase its capacity to capture the additional markets in Europe. 22
Contents BOPET Film Industry Polyplex group Polyplex Competitive Strength PTL : Financial Performance Current Industry Scenario & Outlook 23
Polyplex : Competitive Strengths State-of-the-art machineries at all locations Backward Integration enables: Consistent quality Development of new and specialty application products Assured supplies Forward integration and Concentric diversification enables us to offer more value to customers. Customer engagement initiatives Benefits of Global presence Focus on Operational Excellence Better efficiencies, lower operating costs etc. 24
Contents BOPET Film Industry Polyplex group Polyplex Competitive Strength PTL : Financial Performance Current Industry Scenario & Outlook 25
Financial performance :FY 2010-11 PARTICULARS 9M 2010-11 9M 2011-12 YoY % Sales -MT (All types of film) 79,488 80,669 1% Total Revenues - Million THB 7,936 7,913 0% EBITDA - Million THB 3,030 1,576-48% Profit before Tax - Million THB 2,692 1,253-53% Profit after Tax (excluding minority interest) Million THB 2,611 1,215-53% Financial Figures in Mn THB 26
Million Baht Net Profit as a % of Sales Financial Performance Historical Data Historic Sales revenue & Net profits (Consolidated) 12,000 10,500 9,000 7,500 6,000 4,500 3,000 1,500 40% 35% 30% 25% 20% 15% 10% 5% - 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 (9M) Sales Revenue 3,300 4,719 6,399 6,860 7,125 11,183 7,913 Net Profits 561 342 814 1,042 1,039 3,883 1,215 NP margin 17.00% 7.24% 12.71% 15.19% 14.59% 34.72% 15.36% 0% Financial Year Sales Revenue Net Profits NP margin 27
In million baht Financial Performance Return on Assets 14,000 Total consolidated assets & ROA 40% 37% 12,000 35% 10,000 30% 8,000 24% 5,979 6,007 25% 20% 6,000 4,000 2,000-5,599 5,618 5,898 14% 12% 3,765 3,996 12% 12% 12% 5,954 2,257 5,273 6% 3,282 3,249 2,400 1,509 1,837 1,841 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 9M 2011-12 Other assets Net Fixed assets Return on Assets 15% 10% 5% 0% 28
Financial Performance GP Margin 29
Shareholder Equity Book Value per share Financial Performance Growth in Shareholder Equity Growth in Shareholder Equity 10,000 11 9,000 10 8,000 9 7,000 6,000 5,000 4,000 8 7 6 3,000 5 2,000 4 1,000 2004-05 2005-06 2006-07 20007-08 2008-09 2009-10 2010-11 9M 2011-12 Sh. Equity 3,267 3,469 3,508 4,315 4,576 4,993 8,363 8,150 Book Value 4.08 4.34 4.39 5.39 5.72 6.24 10.45 10.19 3 Financial Year Sh. Equity Book Value 30
Net Profits EPS -Baht/Share Historic Dividend Payout Net Profits (Mn Baht) - EPS & Dividend per share (DPS) in THB 5,000 5.00 4,500 4.50 4,000 4.00 3,500 3.50 3,000 3.00 2,500 2.50 2,000 2.00 1,500 1.50 1,000 1.00 500 0.50-2004-05 2005-06 2006-07 20007-08 2008-09 2009-10 2010-11 9M 2011-12 Net Profits 721 561 342 814 1,042 1,039 3,883 1,215 EPS 1.58 0.70 0.43 1.02 1.30 1.30 4.85 1.52 DPS 0.35 0.28 0.17 0.4 0.52 0.52 1.94 0.35 0.00 31
Sales Mix Region Wise Note: Above region wise break up is based on Film Sales Value for FY 2010-11 at Polyplex (Thailand) Consolidated level Significant presence in all leading markets The company s sales reach in premium markets of Europe & North America validate company s strategy to set up manufacturing facility in Turkey and acquire the distribution company in the US - Judicious mix of On-shore, Off-shore and Near-shore strategy Well balanced region wise mix no dependency on any single region 32
Sales Mix Increasing Value Added Products Note: Above data is for PTL (standalone) based on Sales quantity * Value added films include Chemically Coated films, Metallized Film (PET + CPP) and Thermal Laminated film which have higher value addition as compared with normal plain film. 33
Contents BOPET Film Industry Polyplex group Polyplex Competitive Strength PTL : Financial Performance Industry Outlook 34
Industry Outlook The expected global growth in flexible packaging for the year 2012 is estimated at about 8-10%. Dis-proportionate capacity additions in China and India have created an over supply situation. The over supply situation could last for 1 2 years Margins to remain under pressure during the over supply years Companies with low cost and global reach will have the advantage over the competition Low margins would discourage new investments in the region which would balance the demand supply situation from 2013-2014 Calendar Year 35
Industry Outlook Consumer preference for smaller and one time use packs are expected to increase which will bring in more demand for packaging material. Changing life style of consumers to result in increase in demand for ready to eat foods New applications like PV, Touch-screen panels etc will continue to drive the growth of Thick PET film. Raw Material price fluctuation as well as currency volatility would continue to remain a challenge 36
The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Polyplex (Thailand) Public Co., Ltd. Nothing in this release should be construed as either an offer to sell or a solicitation Disclaimer to buy or sell shares in any jurisdiction. 37