Tipco Asphalt Public Co. Ltd. · SET:TASCO
Tipco Asphalt Public — Q3 2015 Earnings Presentation
35 slides from Tipco Asphalt Public's earnings presentation, Nov 16, 2015
Slide 1: Tipco Asphalt Public Company Limited (TASCO) Q3 2015 Analyst meeting
Tipco Asphalt Public Company Limited (TASCO) Q3 2015 Analyst meeting 16th November 2015 บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited
Slide 2: Disclaimer
Disclaimer This presentation material has been prepared solely for informational purposes only. TASCO is furnishing it solely for use by prospective investors / analysts in the proposed event. TASCO makes no representations or warranties as to the accuracy or completeness of such information. By acc
Slide 3: Agenda
Agenda 1 Q3 2015 Highlights 2 Q3 Performance Highlights 3 Q4 2015 outlook 4 2020 Mission/Vision 5 Acquisition of business บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited 2
Slide 4: YTD Q3 2015 Highlights: Volume & revenue
YTD Q3 2015 Highlights: Volume & revenue Volume Revenue Unit: Mil. Ton Unit: Bil. Baht 2.50 Revenue Volume 60.0 2.03 2.29* 50.0 2.00 40.0 1.50 1.33 1.25 1.68 30.0 1.00 45.7 37.6 20.0 Gross Profit vs. Net profit 33.9 0.50 28.0 Unit: Bil. Baht 10.0 0.00 0.0 Gross Profit Net Profit 5.5 6.0 2012 2013 20
Slide 5: Q3 2015 Highlights: Key ratios
Q3 2015 Highlights: Key ratios (Unit : %) ROE* (Unit : %) ROA* 58.7% 31.8% 23.9% 50.3% 12.3% 8.0% 6.4% 8.8% 6.0% 38.2% 2010 2011 2012 2013 2014 Q2 Q3 21.4% 2015** 2015** 21.3% 15.5% 17.2% * Based on www.set.or.th ** Annualized based on last 12 months profit interest and tax (Unit : Baht/share) 2010
Slide 6: Q3 2015 Highlights: TASCO Shares Trading Statistics
Q3 2015 Highlights: TASCO Shares Trading Statistics 4 Nov 2015 30 Sep 2015 30 June 2015 31 Dec 2014 No. of ordinary shares (‘000 shares) 1,542,931 1,542,931 1,540,397 153,277 Par value (Baht/share) 1 1 1 10 Market Cap (THB million) 67,731 45,516 35,275 9,963 Price (Baht/share) 43.25 29.50 22.90 6.53
Slide 7: Q3 2015 Highlights: FTSE SET Index Series
Q3 2015 Highlights From BBB+(THA) to A- (THA) FTSE SET INDEX SERIES TASCO-FTSE SET Mid Cap Index VERY GOOD CORPORATE GOVERNANCE SCORE บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited 6
Slide 8: Q3 2015 Highlights: Crude, Refinery, Marine
Q3 2015 Highlights Crude • Brent price decreased from USD64 and to USD50 per barrel during Q3 • Procure more crude cargoes under long term crude supply agreement to support export sales Refinery • 80% refining utilization and 99.8% reliability • Still Benefited from efficiency in fuel and energy con
Slide 9: Q3 2015 Highlights: Domestic and International Market
Q3 2015 Highlights Domestic Market • Strong government second budget disbursement in Q3 2015 • 24% sales volumes growth in Q3 2015 compared to Q3 2014 • Healthy GP margin was driven by high margin Asphalt Emulsion and PMA sales International Market • 20% sales volumes growth in Q3 2015 compared to Q
Slide 10: Q3 2015 Highlights: Total sales volumes
Q3 2015 Highlights: Total sales volumes Sales volume Sales volume concentration by market Unit: Mil tons Unit: % Domestic International 2.03 83% 84% 85% 83% 0.66 0.60 0.50 17% 16% 15% 17% Q3/2014 2014 Q2/2015 Q3/2015 Q3/2014 2014 Q2/2015 Q3/2015 • Total sales volume in Q3/2015 increased 20% • Intern
Slide 11: Asphalt Volume & Asphalt revenue structure
Q3 2015 Highlights: Asphalt Volume & Asphalt revenue structure Asphalt Volume by market Main International markets Unit: % Domestic International 2.03 Mil tons 0.43 Mil tons 0.66 Mil tons 0.60 Mil tons China 64% 84% 85% 83% Indonesia 36% 16% 15% 17% 2014 Q1 2015 Q2 2015 Q3 2015 Asphalt Revenue (Exc.
Slide 12: International asphalt selling price vs Ice Brent
Q3 2015 Highlights: International asphalt market selling price vs Ice Brent USD/Barrel 120 109 112 Avg. asphalt selling price 106 103 Ice Brent 100 95 86 80 70 67 63 63 64 58 55 60 53 52 54 48 50 87 87 86 85 87 88 87 82 40 62 65 64 60 60 58 53 57 54 56 20 0 • Asphalt prices moved in line with crude
Slide 13: Sales & Services Revenue
Q3 2015 Performance Highlights: Sales & Services Revenue (Unit : THB Million) Sales & services Revenue • Sales and services stood at Baht 9,290 45,727 million, reflecting a decrease of 18% from the same period last year • This decrease was mainly attributable to the drop in selling price in line wit
Slide 14: Operating Gross Profit
Q3 2015 Performance Highlights: Operating Gross Profit (Unit : THB Million) Operating Gross Profit • The significantly improvement of the overall gross profit margin was mainly due to the increase in high margin product in domestic 2,005 2,055 market, conventional product in international 1,908 mark
Slide 15: EBITDA & Net Profit
Q3 2015 Performance Highlights: EBITDA & Net Profit (Unit : THB Million) EBITDA 2,630 • The Group cashflow generated from operations improved significantly to Baht 1,331 million compared to Baht 757 1,902 million in the corresponding quarter in 1,331 2014. This has positive impact to the consolidate
Slide 16: Debt to Equity Ratio
Q3 2015 Performance Highlights: Debt to Equity Ratio ST loan vs Current asset Unit: THB million ST loan Current asset • Increase in short term loan was normal 11,920 crude working capital 9,423 8,409 8,097 7,676 4,094 1,298 98 Q3 2014 Q4 2014 Q2 2015 Q3 2015 Debt/ Equity Ratio Total debt/Total equit
Slide 17: Q4 2015 outlook – Refinery and marine
Q4 2015 outlook – Refinery and marine Refinery • 80% - 90% refining capacity utilization, the Group continued to enjoy high efficiency in fuel consumption and production cost • Maintain high reliability at 99.8% Marine • Tightness of asphalt vessel availability still continue • Long term charter thr
Slide 18: Q4 2015 outlook
Q4 2015 outlook • With strong 2016 fiscal budget, Q4 domestic sales volumes is expected to be strong and will continue into 2016 • Overall international volumes still maintain while Indonesia and Vietnam showed strong growth บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited 1
Slide 19: New Mission/Vision 2020
New Mission/Vision 2020 2015 2020 To be a globally preferred A well-recognized leading integrated asphalt & Mission asphalt focused company in petroleum related Asia Pacific product company To distribute 2 million tons of asphalt products by 2015 and To distribute 6 million tons of be the key contri
Slide 20: 9 new corporate strategy statements
9 new corporate strategy statements 9 key strategies S1 S2 S3 S4: Expand and grow businesses (existing) S5: Explore new businesses S6: S7: KBC refinery upgrading S8: บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) S9: Tipco Asphalt Public Company Limited 19
Slide 21: Vietnam and Indonesia are the “missing jigsaws”
Vietnam and Indonesia are the “missing jigsaws” Bitumen refinery PMA plants • Currently, TASCO has strong Local Emulsion refinery Depot presence in Thailand, Malaysia, Cambodia, Laos, China, and India Lang Fang • TASCO has almost 90% local market shares in Laos and high market share in Bahudurgarh Z
Slide 22: Vietnam and Indonesia are strong growth countries
Vietnam and Indonesia are strong growth countries Vietnam Indonesia Country direction • Plan to connect strategic • Focus on infrastructure social economic zones development by connecting and cities among six economic • MoT plans to construct corridors 2,347 km express ways 2015 – 2019 expected Real
Slide 23: M&A is more superior to greenfield approach
To penetrate into high growth markets instantly, M&A is more superior to greenfield approach Vietnam Indonesia Environment • Top 3 players (including target • Top 3 local players (including company) commands 71% target company) commands market share 44% market share • These players were established
Slide 24: Acquisition Highlight
Acquisition Highlight • BOD approved the final acquisition price is USD 61.80 million. Acquisition Equity Interest Shareholder’ Loan Country Proportion (Mil. USD) (Mil. US Asphalt Business 38% Thailand 7.00 - Raycol Asphalt Co., Ltd. (“Raycol”) - PT Asphalt Bangun Sarana and 100% Indonesia 9.50 subs
Slide 25: Overview of the transaction
Overview of the transaction Country Business AD Shipping Pte Ltd. (“ADS”) 100% Singapore Ship owner to engage in chartering services Reta Link Pte Ltd. Sale of Equity Interest (“RTL”) 100% Highway Resources Singapore Investment holding and trading asphalt Pte Ltd. (“HR”) and road construction materi
Slide 26: Target at a glance
Target at a glance Country Company Business ADS Owner of 3,690 tons cargo carrying capacity vessel Singapore RTL Owner of 1,713 tons cargo carrying capacity vessel • 2nd largest market shares of 22% • Total estimated 2015 asphalt volume at 200 KT Vietnam ADCo • Strong market coverage and distributio
Slide 27: Implied Acquisition Multiple
Implied Acquisition Multiple Price (mm USD) 2015 P/Book 2015 P/E 2015 EV/EBITDA ADS 12.00 1.15x 9.51x 9.70x Reta Link 0.80 0.67x 1.57x 5.92x ADCo 20.00 1.65x 2.76x 2.36x ABS 9.50 1.05x 4.23x 4.28x Raycol 7.00 3.11x 6.93x 4.69x Total 49.30 1.40x 4.02x 3.93x 2015 figures are based on last 12 months ca
Slide 28: Strong financial position of Target in Indonesia and Vietnam
Strong financial position of Target in Indonesia and Vietnam Attractive Sales Growth Rate Continuously Improving Gross Margin Sales volume Gross Profit Margin Unit: ‘000 tons Unit: % CAGR = 22% 14.00% 299 11.10% 215 9.00% 8.70% 203 75 12.50% 166 10.20% 89 78 8.70% 86 224 7.83% 114 137 80 2012 2013 2
Slide 29: After acquisition - A Complete Value Chain in Indonesia & Vietnam
After acquisition - A Complete Value Chain in Indonesia & Vietnam – adding 3 more value chains Crude & Product Refining & Bulk Storage & Wholesale & Road Supply Production Transportation Distribution Retail Sales Contractor Retail – Construction KBC Refinery site Crude & Ocean Going Terminals & Whol
Slide 30: 2015 business model in Vietnam
2015 business model in Vietnam Thailand • 2nd largest market Vietnam shares of 22% • Strong market coverage and Contractor ADCo facility distribution network Depot 10% of supply from KBC to ADCo ADCo PMA Plant Emulsion refinery Contractor Others • Account for 9% of market share Vietnam (through othe
Slide 31: 2015 business model in Indonesia
2015 business model in Indonesia Thailand Indonesia • 8% market share • Strong distribution network in Indonesia Contractor No supply from KBC ABS to ABS Contractor Others ABS facility • Account for 26% market share in Depot PMA Plant Emulsion refinery Indonesia บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน)
Slide 32: Benefit to TASCO once shareholder approves
Benefit to TASCO once shareholder approves Current After acquisition Fleet expansion No. of ship: 7 No. of ship: 9 Cargo carrying = 26,307 Tons Cargo carrying = 31,710 Tons Average age = 12.7 Average age = 12.0 Market expansion – incremental 290 KT 100 KT 300 KT 300 KT 390KT บริ ษทั ทิปโก้แอสฟัลท์ จ
Slide 33: After acquisition - ASIA Territory
After acquisition - ASIA Territory Asphalt refinery (1) Depot (17) PMA plants (20) Emulsion plants (22) Lang Fang Zhen Jiang Bahudurgarh Jhansi Baroda Xin Hui Haldia Haiphong Visakh Phitsanulok Vashi Korat Hue Phrapradaeng Poipet Cam Ranh Chennai Rayong Mangalore Suratthani Keo phos Ho Chi Minh Aceh
Slide 34: After acquisition – Expand in all areas
After acquisition – Expand in all areas Current ADS RTL ADCo ABS After acquisition Refinery 1 - - - - 1 AE plant 14 - - 3 3 20 PMA plant 16 - - 3 1 20 Depot 7 - - 4 6 17 Truck 273 - - 70 50 393 Vessel 7 1 1 - - 9 Employees 1,072 1 1 207 167 1,448 บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Pu
Slide 35: Strategic Acquisition – synergy and benefits
Strategic Acquisition – synergy and benefits • Grow TASCO asphalt sales by 15% immediately ( approximately 290,000 ton) • Allow refinery to run at full capacity at all time • Become Indonesia and Vietnam leading domestic player • Enjoy significantly wider integrated margin (both at Tipco and local l
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