Sri Trang Agro-Industry Public Co. Ltd. · SET:STA
Sri Trang Agro-Industry Public — Q2 2019 Earnings Presentation
32 slides from Sri Trang Agro-Industry Public's earnings presentation, Aug 20, 2019
Slide 1: 2Q19 Analyst Presentation
STA 2Q19 Analyst Presentation 1
Slide 2: Contents
CONTENTS 1. Financial Performance 2. STA Business Highlights 3. Natural Rubber Market Situation 2
Slide 3: Financial Performance
1 FINANCIAL PERFORMANCE 3
Slide 4: SICOM – Oil Prices
SICOM – Oil Prices 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Avg. = 146.5 (+1.9%) Avg. = 140.0 (-4.4%) Avg. = 132.9 (-5.7%) Avg. = 126.7 (-4.6%) Avg. = 139.4 (+10.0%) Avg. = 151.3 (+8.6%) 220 200 SICOM Price 180 (US cent : Kg.) 160 140 120 RSS TSR 100 Feb-18 Feb-19 Mar-18 Aug-18 Mar-19 Aug-19 May-18 May-19 Jan-
Slide 5: Latex – Butadiene – Acrylonitrile - Forex
Latex – Butadiene – Acrylonitrile - Forex 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Avg. = 138.3 (+24.7%) Avg. = 159.7 (+15.4%) Avg. = 159.0 (+18.6%) Avg. = 109.8 (-30.9%) Avg. = 107.5 (-2.1%) Avg. = 103.3 (-4.0%) 117.7 (+6.1%) 113.8 (-3.4%) 102.3 (-13.3%) 99.2 (-3.0%) 112.7 (+14.7%) 128.4 (+14.0%) 240 179.5 (-
Slide 6: Financial Highlight
Financial Highlight (Unit : THB million) 2Q19 2Q18 %YoY 1Q19 %QoQ FY18 [Restated] Revenue 15,151.1 19,754.8 -23.3% 14,870.7 1.9% 73,492.8 Sales volume (tons) 260,783 353,773 -26.3% 285,334 -8.6% 1,336,649 Avg. selling price (Baht per ton) 47,000 47,593 -1.2% 41,404 13.5% 45,907 Gross profit 1,453.1
Slide 7: Sales Revenue
Sales Revenue Sales Revenue by Product (THB million) Sales Revenue by Geography -19.8% 37,444 2% 2% 1% 2% 1% 90 7% 9% 9% 8% 9% 5,470 30,022 1,978 -23.3% 22 1% Others 25% 24% 3,634 5,929 30% 31% 20% 31% Europe 1,134 4% 19,755 +1.9% 3,176 10% Others 60 USA 2,857 15,151 Gloves 795 14,871 1,749 13 9 Asi
Slide 8: Gross Profit
Gross Profit Gross Profit (THB million) – 2Q19 Gross Profit (THB million) – 6M19 4,500 15.0% 2,500 15.0% 4,000 12.4% 13.3% 3,500 12.0% 2,000 12.0% 10.6% 3,000 9.4% 8.6% 9.0% 1,500 9.0% 2,500 6.4% 2,000 2,261 3,771 6.0% 1,000 1,970 6.0% 1,500 4.2% 1,367 1,453 2,506 1,000 3.0% 500 1,053 3.0% 500 - 0.0
Slide 9: EBIT
EBIT EBIT (THB million) – 2Q19 EBIT (THB million) – 6M19 Share of profit (loss) from investments in associates and joint ventures Share of profit (loss) from investments in associates and joint ventures Operating profit (loss) Operating profit (loss) EBIT margin (%) EBIT margin (%) 1,000 869 883 6.0
Slide 10: Net Profit
Net Profit Net Profit (THB million) – 2Q19 Net Profit (THB million) – 6M19 Net profit (loss) Net profit margin (%) Net profit (loss) Net profit margin (%) 800 5.0% 1,500 3.8% 5.0% 600 3.0% 2.7% 3.0% 3.0% 400 1.8% 1,000 592 502 0.8% 200 1.0% 1,424 1.0% 139 270 - 500 -1.1% -1.0% -1.0% (200) (614) (400
Slide 11: STA Business Highlights
2 STA Business Highlights | az
Slide 12: STA's Global Presence
STA’s Global Presence 45,000 rai (7,200 hectares) of rubber plantations China 48 procurement centers USA Thailand 36 NR processing plants 5 Myanmar Vietnam Gloves production facilities in Thailand Indonesia Singapore 7sales & distribution centers 546,117 tons in 1.34 mill. tons in 26% 10% share of g
Slide 13: Upstream Operations – Rubber Plantations
Upstream Operations – Rubber Plantations Area of Rubber Plantations Immature Area Tapping Area 77% Approx. 10% 45,000 rai 7,200 HA Infrastructure 13% Estimated Mature Plantations Thoen 1, Lampang 19 14,000 Production, '000 kg. (LHS) Tapping, trees (RHS) 2,500,000 Provinces in Thailand 12,000 Lampang
Slide 14: Midstream Operations – NR Processing
Midstream Operations – NR Processing 36 processing facilities Production Capacity (mil. tons) Global NR Consumption (RHS) Engineering capacity (LHS) Capacity*: 2.86 mil. tons/annum Sales volume (LHS) 3.00 Technically Specified Rubber [TSR] 15.00 24 2.10processing facilities 2.50 12.00 TSR Capacity*:
Slide 15: STA's Tire Manufacturer Customers
STA’s Tire Manufacturer Customers 15
Slide 16: Downstream Operations – Finished Products
Downstream Operations – Finished Products 21.2 17 Exporting 3 Since to 6% locations in 1989 billion pieces per annum in production billion pieces of gloves sold in 2018 120+ Global Market the South of capacity Countries Share Thailand [Information as at 30 June 2019] 8
Slide 17: STA's Gloves Products
STA’s Gloves Products Product Range Product Mix by Volume Examination/ 15% 11% 39% 32% Non-Examination Gloves Nitrile Own Brands 85% 89% Latex Nitrile Latex 61% 68% OEM Powdered Powder-Free Powder-Free FY18 6M19 FY18 6M19 - Comfort 4.8 g - Comfort 5.0 g - Heavy 6.2 g - Balance 5.0 g - Balance Comfor
Slide 18: STA's Glove Markets by Volume
STA’s Glove Markets by Volume Widely Used in Developed Markets, Gaining Ground in Emerging Markets Encourage EU Japan 8% a wide variety of applications 28% China 9% America 25% India Food RoW 7% 4% Thailand Industry 10% Household Consumption ASEAN** Asia* 4% 5% Medical Industry Note: *Asia excluding
Slide 19: STA's Glove Capacity Expansion Plan
STA’s Glove Capacity Expansion Plan Capacity Expansion Processing Facilities Location [bn. pcs.] +76% 30 30 +42% 24 25 21 Suratthani 20 17 Trang Songkhla 14 14 14 15 12 10 5 0 1H2019 End-2016 End-2012 End-2014 End-2017 End-2018 End-2019 End-2020 Organic Growth Note: Inorganic Growth [The Amalgam
Slide 20: The Completion of the Amalgamation
The Completion of the Amalgamation Area: 487 rai in Trang, Thailand Expansion: Facilities ~ 6,000 m.pcs. in Production Capacity Existing: Warehouse 4,000 m.pcs. in Production Capacity The amalgamation of STGT and TK was completed as of 1 April 2019. The new company is named “Sri Trang Gloves (Thaila
Slide 21: STGT's IPO Plan
STGT’s IPO Plan Pre-IPO Post-IPO STA and RBL(1) STH(2) Dr. Viyavood Sincharoenkul Others Sincharoenkul Family(3) STA and RBL(1) STH(2) Dr. Viyavood Family(3) Others Public 81.08% 5.39% 7.09% 1.93% 4.51% 55.95% 3.72% 4.89% 1.33% 3.11% 31.00% Remark: (1) Rubberland Products Company Limited (2) Sri Tra
Slide 22: Global Glove Market Outlook
Global Glove Market Outlook Demand Keeps Growing & Hidden Consumption in Emerging Markets Global Glove Demand Gloves Consumption Per Capita [bn. pcs.] 350 324 Average growth at 8-10% per annum 295 160 150 300 268 250 233 120 100 Golden Opportunity 210 200 180 194 for Growth 160 171 76 150 148 80 150
Slide 23: Glove Capacity Expansion
Glove Capacity Expansion Robust growth in demand Highlights: •The expansion will focus on “Nitrile Gloves.” provides large producers with opportunities for expansion. •Old & inefficient machines will be decommissioned and replaced by new capacity. [bn. pcs.] •The publicly-listed glove producers toge
Slide 24: Natural Rubber Market Situation
3 NATURAL RUBBER MARKET SITUATION 24
Slide 25: Global NR Situation
Global NR Situation Natural Rubber Demand & Supply (Unit : million tons) Demand (LHS) Supply (LHS) Supply Surplus / (Deficit) (RHS) (Unit : ‘000 tons) 20 911 800 15 16.4 16.7 612 15.3 15.6 16.0 14.1 14.3 14.6 15.0 13.2 13.8 10 12.1 12.1 12.6 10.8 11.0 11.0 11.4 341 400 15.1 15.5 15.8 16.1 16.4 16.7
Slide 26: NR Supply
NR Supply 2019F Major Producers by Country ~80% of NR output came from ASEAN 2019F global production growth = 2.2% 100% America Malaysia 5% Others 6% 80% CAMAL 4% Africa 60% India 5% Thailand 37% Other ASIA Cote d'Ivorie 5% 14.18 40% mil. tons 20% ASEAN China 6% 0% Vietnam 9% Indonesia 23% 2016 2017
Slide 27: NR Demand
NR Demand 2019F Major NR Consumers NR Consumption Diversification 2019F global growth in consumption = 2.3% 100% Others 12% 80% Malaysia 4% Indonesia 4% China 60% America EU Japan 5% 14.09 39% 40% ASEAN Other Asia Thailand 6% mil. tons 20% China USA 7% 0% India 9% EU 12% 2016 2017 2018 2019 2020 NR
Slide 28: Thailand NR Situation
Thailand NR Situation NR Plantation Area Plantation Area [mil.rai] Tapping Area [mil.rai] North, 5% 24 • 22 mil. rai 22 Northeast, 23% of plantation area 20 Central, 11% • 28% 18 of global plantation 16 • 37% 2014 2015 2016 2017 2018f 2019f of global production Production & Consumption • 5.25 mil. t
Slide 29: Commodity Price Movement & Qingdao and SHFE Stocks
Commodity Price Movement & Qingdao and SHFE Stocks Commodity Price Movement SICOM - TSR20 Brent Crude Oil Price Bloomberg Commodity Index 35% 25% 15% 5% -5% Jan-19 Jan-19 May-19 May-19 Feb-19 Feb-19 Jun-19 Jun-19 Aug-19 Apr-19 Apr-19 Mar-19 Mar-19 Jul-19 Jul-19 Qingdao & SHFE Stocks, China [tons] 70
Slide 30: TSR20 Historical Prices Movement [2004 – 2019]
100 150 - 200 250 300 350 400 450 500 550 600 50 Jan-04 Apr-04 ABBREVIATION Jul-04 Source : Bloomberg Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 AET : Agreed Export Tonnage Scheme Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 102 cent/kg. Jan
Slide 31: News Update
News Update The US announced an increase in tariff on 6th of Agreed Exports rubber products imported from China, from 10% to 25%, effective from Tonnage Scheme (AETS): 10 May 2019 onwards. Cut Exports of The US’s Tariff Schedule for Gloves NR ~240,000T Product Country of Origin Thailand Malaysia Chi
Slide 32: Contact Investor Relations
Contact Investor Relations Tel: (+66)2-207-4500 Ext. 1402 E-Mail: IR@sritranggroup.com 32
Sri Trang Agro-Industry Public Company — Q2 2019 Earnings Presentation on 6ix