Tpi Polene Public Co. Ltd. · SET:TPIPL
Tpi Polene Public — H1 2023 Earnings Presentation
40 slides from Tpi Polene Public's earnings presentation, Sep 11, 2023
Slide 1: TPI Polene Company Update
TPI Polene Company Update 11 September 2023 1 Opportunity Day
Slide 2: Disclaimer
Disclaimer: The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in TPI Polene Public Company Limited ( “The Company”) in any jurisdictio
Slide 3: Topics
Topics Business Overview Financial Performance & Position Outlook and Guidance Sustainability and Other Matters Opportunity Day
Slide 4: The Corporate Structure
The Corporate Structure TPI Polene Public Company Limited Construction Specialty Polymers &Chemicals Agriculture & Others Energy/Utilities 70.24% TPI Concrete Co., Ltd. 99.99% TPI All Season Co., Ltd. 99.99% Thai Propoxide Co., Ltd. TPI Polene Power Plc. 99.99% 99.99% Thai Nitrate Co., Ltd. 25.00% B
Slide 5: Key Assets and Features
Key Assets and Features Construction Materials Specialty Polymers/Chemical Segment Energy & Utilities • Specialty Polymers – 158k tpy capacity • Total current capacity 440 MW as below comprising >65% • Cement - 4 lines totaling 13.5m tpy capacity − HVA, customized with in-house proven R&D Green powe
Slide 6: Comprehensive and diversified product suite
Comprehensive and diversified product suite > 5,000 SKUs Opportunity Day 6
Slide 7: Strong Innovation Culture – The Many Firsts In Thailand
Strong Innovation Culture – The Many Firsts In Thailand Innovation creates competitive moats and better-than peers’ margins Opportunity Day 7
Slide 8: EBITDA margin better; valuation cheaper relative to peers
EBITDA margin better; valuation cheaper relative to peers Peer comparison EBITDA margins Specialty Polymers’ superior spread profile 1Q22 2Q22 1H avg 3Q22 4Q22 1Q23 2Q23 ConsMat Company 1 12.0% 9.8% 10.9% 7.7% 4.0% 9.5% 9.9% Company 2 22.0% 25.0% 24.0% 13.0% 7.0% 15.2% 15.4% TPI Polene 13.0% 19.3% 1
Slide 9: Financial Performance & Position
Financial Performance & Position
Slide 10: Segment performance 1H 2023
Segment performance 1H 2023 ConsMat Division is 56% of TA, 57% of sales but 21% of EBITDA generation Specialty Polymer/Chemicals has small asset base but 2nd in sales and EBITDA generation YoY Growth YoY Growth 8% -43% -36% -55% -3% 12% -19% -60% -9% -32% Performance Profile 1H 2023 Sales YoY Growth
Slide 11: EBITDA margin sequentially better
EBITDA margin sequentially better Opportunity Day 11
Slide 12: Financial – falling leverage ratio; defensive cash positioning
Financial – falling leverage ratio; defensive cash positioning Funding costs 1H23: 3.79% TRIS rating A- 1st time ever @ A level * Based on 1) Accounts & other receivables + 2) Inventories - 3) Accounts & other payables Opportunity Day 12
Slide 13: 2Q23 Operating Backdrop
2Q23 Operating Backdrop Backdrop • CCM: Volume sales in the CCM division rose by 1% YoY driven by strong sales in cement, hydraulic cement and mortar. However, on a QoQ basis volume sales declined slightly due to slowing sales of hydraulic cement and mortar. These short term trends were tied to holi
Slide 14: 1H23 Operating Backdrop On a Sequential Basis
1H23 Operating Backdrop On a Sequential Basis Backdrop • In 1Q23 domestic cement sales growing positively QoQ; sales of mortar outperform, implying strong demand from small construction activities; selling price is up to offset higher costs. The export market improved QoQ but remained challenging du
Slide 15: Outlook and Guidance
Outlook and Guidance
Slide 16: Variables to watch
Variables to watch • CCM: Delay in the formation of the government has lead to up to eight months delay in the approval of FY23/24 budget according to press reports and this sets a lackluster backdrop for public sector investment and infrastructure. Slower flow of Chinese tourists could dampen renov
Slide 17: Operating rates of the power plant is key
Operating rates of the power plant is key * Adder expired August 2022 Opportunity Day 17
Slide 18: Power pricing - higher Ft compensates for adder expiry
Power pricing - higher Ft compensates for adder expiry * For SPP For IPS Based on 2022/2023 metrics Caveats to the scenario analysis: • Ft will be sequentially lower for the Sep-Dec 2023 power tariff • Coal-related saving is a function of coal price assumption Opportunity Day 18
Slide 19: Specialty Polymer – Manufacturing is the main growth driver
Specialty Polymer – Manufacturing is the main growth driver * Note: China proxy of global demand and supply Source: SCI-IBU, ICIS Opportunity Day 19
Slide 20: TPIPL continues to push HVA limits
TPIPL continues to push HVA limits High EVA - Adhesive & Cable HVA EVA EVA – Solar Film EVA – Foam & coating Profit LDPE Difficulty Opportunity Day 20
Slide 21: Polymer prices are still soft but improving
Polymer prices are still soft but improving Opportunity Day 21
Slide 22: Utilization rates in plastic conversion segment are improving
Utilization rates in plastic conversion segment are improving Operating rates of conversion segment – China the proxy market Product – 14-20% content spread Note: • In the Jan-Mar spike in spreads, plastic conversion industry saw sequential rise in utilization rate especially footwear (proxy for man
Slide 23: Baseline Assumptions – slight downside on Sales & EBITDA
Baseline Assumptions – slight downside on Sales & EBITDA Update: 1H23 sales is 44% of FY guidance 1H23 EBITDA is 39% of FY guidance 1H23 EBITDA margin was 23%, FY guidance 24-25% cheaper coal lower clinker cost Green Cement & Clinker Products Improved EVA spreads 1H23 Power EBITDA was 49% of FY guid
Slide 24: Operational strategic agenda: improving asset turnover
Operational strategic agenda: improving asset turnover Asset turnover (x, annualised basis) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Construction Materials 0.29 0.23 0.25 0.22 0.23 0.25 0.20 0.22 0.31 0.29 0.31 0.25 0.32 0.32 Specialty Polymer/Chemicals 0.91 0.76 0.81 0.
Slide 25: Allocated capex 2023-2024
Allocated capex 2023-2024 CAPEX Deployed 1Q23 1H23 TPIPL Acquisition of PPE 2,137 3,530 Group = THB12.1b Advances payment PME 287 714 2,423 4,244 * mainly in power TPIPP Acquisition of PPE 994 1,829 Advances payment PME 276 647 1,271 2,477 Capex in TPIPP/TPIPL consolidated* 52% 58% TG 8 Modification
Slide 26: Sustainability and Other Matters
Sustainability and Other Matters
Slide 27: Sustainability Scorecard
Sustainability Scorecard Highlights of 2022 Scorecard 1H 2023 1H 2023 Units % Remarks Enviromental Management WTE replacing coal - achievable level 25%** 17.41% 207,049 14.86% % of total 60-ton EV trucks 10 new delivery Reduction in energy consumption (GJ) 7.59% 638,593 3.56% YoY increase Reduction
Slide 28: Our Carbon Situation (Scope 1)
Our Carbon Situation (Scope 1) Opportunity Day 28
Slide 29: Carbon price trends
Carbon price trends Based on forecast: Voluntary market and hybrid scenario indicate that carbon prices will be higher by 2050 Note: SBTi requires that companies set targets based on emission reductions through direct action within their own boundaries or their value chains. Opportunity Day 29
Slide 30: Proud Moments That Validates Our ESG and BCG Efforts
Proud Moments That Validates Our ESG and BCG Efforts Recognitions in 2022 Recognitions 1H 2023 Opportunity Day 30
Slide 31: New Initiatives – Hinges on Strong R&D Capabilities
New Initiatives – Hinges on Strong R&D Capabilities Another Milestone 1 June Major launch of Green Cement and Building Materials Innovation creates competitive moats and better-than peers’ margins TPIPL builds-up from in-house R&D capability; no bolt-on acquisitions Opportunity Day 31
Slide 32: Green Cement (Low CO2 Emission)
Green Cement (Low CO2 Emission) EV Dump truck Hydraulic Cement • Decrease Clinker ratio Kiln Energy Efficiency Improvement • Modify Circulate Clinker cooler grate plate Coal Substitution • 25% MSW replacement Regeneration Downhill Belt Conveyor • Industrial Waste • Shale / Limestone belt conveyor Re
Slide 33: Conveyor Belt – Quarry to Facility
Conveyor Belt – Quarry to Facility Opportunity Day 33
Slide 34: MSW in Calciners
MSW in Calciners For more details: Link https://drive.google.com/file/d/1h3yYa8c2eoeSM7U2NZ-Ut_qmICfdJyU-/view?usp=share_link Opportunity Day 34
Slide 35: CDE for Limestone Scrap
CDE for Limestone Scrap For more details: https://www.cdegroup.com/about/case-studies/tpi-thailand Opportunity Day 35
Slide 36: EV Dump Trucks for Quarrying
EV Dump Trucks for Quarrying 2022 - 2023 On April 7, 2023 Yutong officially shipped 10 YTK90E battery electric mining trucks, which will be delivered to TPI Polene Public Company Limited (TPIPL), the second largest cement producer in Thailand, for transporting stone between mines. For more details h
Slide 37: TPI Green Products (Low CO2 Emission)
TPI Green Products (Low CO2 Emission) Opportunity Day 37
Slide 38: Green Cement – TGO Certified
Green Cement – TGO Certified Opportunity Day 38
Slide 39: Litigation Cases – Still At The Supreme Court
Litigation Cases – Still At The Supreme Court The Court ordered the Company by Case Charge/ Environmental Acts B.E. 2535 to either Case Plaintiff status Date Offense Refill Rocks Pay (Mil. Tons) OR (Mil. Baht) Sor Vor 4/2559 8/7/2015 Department of 31.52 4,047 Pending the Supreme Court Consideration
Slide 40: End of Presentation Q&A Thank You
End of Presentation Q&A Thank You
TPI Polene Public Company — H1 2023 Earnings Presentation on 6ix