Myeco Group Ltd · ASX:MCO
Myeco — Investor Presentation (April 2019)
20 slides from Myeco's investor presentation, Apr 2, 2019
Slide 1: Investor Presentation
Changing the World of Packaging Investor Presentation April 2019 (ASX: SES)
Slide 2: Agenda
Agenda Company Overview and Business Highlights Recent Achievements Market Growth Drivers Financial Performance Strategy and Outlook 2
Slide 3: Company overview
Company overview A leading global producer of eco-friendly bioplastics from its patented bio-based resin technology Snapshot SECOS is Australia’s leading $10.3 million revenue in H1 FY19 provider of renewable biopolymer Gross Profit $1.4m (before abnormal) 13.5% margin resin film and bags 80%
Slide 4: Board – Expanded & Strengthened
Board – Expanded & Strengthened • Joined SECOS in Oct. 2018; brings 15 years • Joined Board in Sep-2016 polymer experience, and significant turnaround • Former partner of Ernst & Young USA experience. • Previously CEO of Australian of Hoechst SA & Ian Stacey TOTAL Petrochemicals subsidiaries. Donald
Slide 5: Company Overview - Products
Company Overview - Products SECOS produces: Compostable/BioHybrid™ Traditional Blown Film Cast Film using Biopolymer resin Polyolefin resin and Bags Traditional Polyolefin Customers and End users include: Rigid & flexible Resin for Waste Bags for Councils, Waste Film for hygiene & convertors Managem
Slide 6: Blue-chip Global Customer Base in Environmental Plastics
Blue-chip Global Customer Base in Environmental Plastics 6
Slide 7: *Excluding Stellar Australia sales
7 *Excluding Stellar Australia sales
Slide 8: Recent Achievements
Recent Achievements • 80% growth in Biopolymer sales in H1 FY19 vs prior year, with plant start up • Sale and Lease Back of Malaysian Cast Film plant frees up $3.5m • Unlocked capital previously tied up in fixed assets is supporting sales growth • Closure of Australian cast film operations to reduce
Slide 9: Recent Achievements
Recent Achievements Reduced cost of operations FY 18 vs YTD Feb. 10% • Reduced Year on Year Fixed costs by 16% 5.30% 5% Improved Biopolymer margins 0% Fixed Cost Reduction Biopolymer Margin • Drive to increase contribution margin on sales of SECOS -5% Improvement biopolymer (bags & film) improved fr
Slide 10: Market Drivers
Market Drivers Significant upside in the Biopolymer market given the global shift to renewables Changing views towards traditional plastics driven by graphic evidence of plastic build-up in the sea and on land with growing awareness that it does not degrade Adverse reaction by public to plastics cre
Slide 11: Market Drivers
Market Drivers Sustainability Policies on plastic bans & recycling being introduced globally The use of recycled oil-based plastic waste is often not possible in food applications as impurities and contamination in waste streams prevent recycle use. China reduction of waste imports, is challenging t
Slide 12: Quarterly Sales Development
Quarterly Sales Development Strong Biopolymer sales growth supported by improving margins Quarterly Sales - Traditional* Quarterly Sales - Biopolymer 3,500 3,000 3,000 2,500 2,500 2,000 2,000 $'000 $'000 1,500 1,500 1,000 1,000 500 500 - - Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Sep-17 Dec-
Slide 13: SECOS Growth Strategy
SECOS Growth Strategy Focus sales growth on high-margin applications in Biopolymer resin, film & bags • Targeted sales growth of Biopolymer film & bags direct to Brand, Pet Shop Distributors, Counties, Councils, Waste Companies & hygiene film customers • Focus on Biohybrid & Compostable sales to lar
Slide 14: Expand Sales into High-Margin Applications
Expand Sales into High-Margin Applications • Sales growth strategy is focussed on 9 high-margin applications for Compostable & BioHybrid biopolymer products, which can drive sales over the next 6-12 months. • Opportunity to double existing product gross profit margins • Opportunities include: - Expa
Slide 15: New Biopolymer Applications & Markets
New Biopolymer Applications & Markets Short Term - (6-12 months) Market Size Geographic Opportunity Progress High speed digestor & organic waste bags Emerging USA., Aus. SECOS is aggressively pursuing Compostable cast film Significant Global a wide range of attractive new applications and markets fo
Slide 16: SECOS – Growth through Partnering
SECOS – Growth through Partnering • Strong interest from multiple major market participants are looking for new opportunities, applications and partnerships within the Biopolymer space. • Significant opportunities for SECOS to leverage its capabilities in Biopolymers through partnerships & supply op
Slide 17: Deliverables in H2 FY19
Deliverables in H2 FY19 • Relentless focus on further margin improvement and volume growth in Compostable Resins & Bags • Better asset utilization and fixed cost recovery as new Malaysian Biopolymer Plant reaches full utilization in H1 FY20 • Increase sales of high-margin compostable resin applicati
Slide 18: 50% p.a. Growth in Biopolymers Sales
50% p.a. Growth in Biopolymers Sales • Strategically positioned as a global supplier of biopolymer resin Sales* Development and finished products 30 • SECOS is benefitting from increasing global demand for 25 sustainable plastics 20 • Higher-margin biopolymer sales are expected to grow at 40% to $ m
Slide 19: Investment Highlights
Investment Highlights • Global supplier of sustainable Biopolymers - Selling to 14 Countries from production in Malaysia and China • Newly commissioned resin production in Malaysia provides capacity to drive higher margin resin sales • Biopolymer sales to grow at 40% to 50% p.a. for next 2 years to
Slide 20: DISCLAIMER
DISCLAIMER Forward Looking Statements Disclaimer This presentation contains “forward-looking statements.” Such forward-looking statements may include, without limitation: (i) estimates of future earnings; (ii) estimates of future production and sales; (ii) estimates of future cash costs; (iv) estima