Greenheart Group Limited · HKEX:94
Greenheart — Investor Presentation (May 2012)
38 slides from Greenheart's investor presentation, May 2012
Slide 1: Investor Presentation
INVESTOR PRESENTATION May 2012 Private & Confidential | Greenheart Group
Slide 2: Disclaimer
DISCLAIMER Disclaimer This document and subsequent discussion may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of Greenheart Group Limited and its subsidiaries (“the Group”). These forward-looking statements represents the Gr
Slide 3: Table of Content
TABLE OF CONTENT 1. Greenheart Executive Summary Group - Overview 4-5 4 2. 2-1. Ownership New & –Current Zealand Assets Softwood Plantations 5 7 2-2. Suriname - Natural Hardwood 16 3. Market Dynamics 25 4. Operating Strategy 27 A. Appendix 28 3 Private & Confidential | Greenheart Group
Slide 4: Message from our CEO
Message from our CEO 1. GREENHEART GROUP - OVERVIEW ‘Taking Root’ was the message in our 2010 Annual Report, a year of change - in Suriname – sustainable tropical hardwood ownership, in strategy and most importantly, in people. In 2011, we acted on the changes made, developing the core management te
Slide 5: Greenheart Today
Greenheart Today 1. GREENHEART GROUP - OVERVIEW 3. Corporate Headquarters Headquartered and listed in Hong Kong Maintain group cash balance (Approximately US$36 million as of 31st December 2011) 1. Natural Hardwood Leads pipeline of Global Growth West Suriname: East Suriname: Central Suriname: (184,
Slide 6: Greenheart Team
Greenheart Team 1. GREENHEART GROUP - OVERVIEW Hong Kong W. Judson Martin Andrew Fyfe Daphne Tse Chief Executive Officer Chief Operating Officer Chief Financial Officer David Wu Grant Fenton Edwin Tam Craig Penfold Shirley Wong Ivy Ching Vice President of Corporate Director of Project Planning Direc
Slide 7: New Zealand - Softwood Plantations
New Zealand - Softwood Plantations 2-1. SOFTWOOD PLANTATIONS Photo: Northland Port– Greenheart Photos 7 Private & Confidential | Greenheart Group
Slide 8: Overview of Asset
Overview of Asset 2-1. SOFTWOOD PLANTATIONS New Zealand has a long and established forestry industry Our forests are located in Northland region, 2nd largest forestry region in New Zealand 13,000 ha. of freehold land with 11,000 ha. of high quality radiata pine plantation Mangakahia Mature f
Slide 9: Overview of Radiata Pine
Overview of Radiata Pine 2-1. SOFTWOOD PLANTATIONS History Financials Radiata Pine (Pinus Radiata or Monterey Pine) was Average China CNF price of US$140 per m3 for first introduced to New Zealand in 1859 radiata pine (2011) Originally from North America, radiata pine is now Biggest factors
Slide 10: Radiata Pine Cycle – a renewable resource
Radiata Pine Cycle – a renewable resource 2-1. SOFTWOOD PLANTATIONS Nursery Pruning Thinning Inventory Harvesting / Replanting • Seeds are planted in a • Between 4-8 years, the • This is conducted when • At around 12-13 years, a • Radiata pine is fully nursery in September / trees undergo selective
Slide 11: Environment & Sustainability
Environment & Sustainability 2-1. SOFTWOOD PLANTATIONS Radiata pine plantation forestry is an established business in New Zealand due to its suitable climate and land availability Our operations are sustainably managed by Northland Forest Managers, who conduct operations to the highest standards
Slide 12: Export Logistics
Export Logistics 2-1. SOFTWOOD PLANTATIONS Northport 2011 Northport Export Destinations Greenheart exports its logs from Northport in 250,000 Marsden Point 200,000 Northport is the second largest exporting port in 150,000 New Zealand and is a key strategic asset for 100,000 Expected to increas
Slide 13: Radiata Pine Market
Radiata Pine Market 2-1. SOFTWOOD PLANTATIONS China CNF Price and Shipping Costs in 2011 (US$/m3) 4 3 180 2 Radiata pine 160 reached a high of 1 US$162 per m3 in Average Price 7 2011 (China CNF) 140 6 120 Shipping costs have decreased 100 80 China remains key market but 60 1 Zhangzhou, China sales h
Slide 14: China's Demand for Radiata Pine
China’s Demand for Radiata Pine 2-1. SOFTWOOD PLANTATIONS China Import Volume (‘000 m3) China Radiata pine is an 14,000 Since 2007, radiata pine has had a major increase in increasingly popular timber 12,000 significance with a five year CAGR of 46.3% CAGR: used in forming, CAGR: 10,000 -7.94% 4
Slide 15: New Zealand Radiata Pine Markets
New Zealand Radiata Pine Markets 2-1. SOFTWOOD PLANTATIONS New Zealand Radiata Pine Export Volume (m3) India and South Korea 8,000,000 South Korea and India are the second and third 7,000,000 largest markets for New Zealand radiata pine, 6,000,000 respectively 5,000,000 South Korea and India are
Slide 16: Suriname – Tropical Hardwood
Suriname – Tropical Hardwood 2-2. NATURAL HARDWOOD Photo: Aerial View of Suriname Forests, Greenheart Photos (for more photos, please visit http://www.greenheartgroup.com/en_ir_ho.php) 16 Private & Confidential | Greenheart Group
Slide 17: Suriname Overview
Suriname Overview 2-2. NATURAL HARDWOOD KEY STATS GDP (2011) US$4.7 billion Key Resources Bauxite, gold, oil, iron ore, forestry Suriname is located in South America, bordering the Population 500,000 Guyana, French Guiana and Brazil Capital Paramaribo Official Language Dutch Suriname has a wealt
Slide 18: Suriname Forest Overview
Suriname Forest Overview 2-2. NATURAL HARDWOOD Countries with high percentages of Forest Coverage 14.8 million ha. of forest Suriname Wood Production & Export (m3) 300,000 100% 98% 86% Natural Forest 98% 250,000 (not available for harvesting) 96% 200,000 95% 94% 150,000 92% 92% 2.03 million ha. avai
Slide 19: 403,750 hectares under Management in Suriname
Greenheart Group – 403,750 hectares under Management in Suriname 2-2. NATURAL HARDWOOD Road Barge Container Stuffing Paramaribo Processing Facility GH Concession Log Yard Container Port West Suriname Concessions East Suriname Concessions Central Suriname Concessions 184,000 ha. Concessions Harvestin
Slide 20: Sustainable Forestry Management
Sustainable Forestry Management 2-2. NATURAL HARDWOOD Four Steps in Sustainable Harvesting Process Forest Stewardship Council (FSC) Benefits of FSC 1. Surveying of the Greenheart is aiming for full FSC harvesting area certification for our assets and - Using topographical operations. There are two s
Slide 21: Sawmill Progress
Sawmill Progress 2-2. NATURAL HARDWOOD May 2011 July 2011 September 2011 November 2011 December 2011 January 2012 February 2012 March 2012 21 Private & Confidential | Greenheart Group
Slide 22: Key Hardwood Markets
Key Hardwood Markets 2-2. NATURAL HARDWOOD Caricom U.S. Banana Pallets Europe & Middle East Certified Logs & Lumber Taiwan Vietnam India China Logs and lumber Domestic Sales Major importing ports: Lesser known species Zhangjiagang (Shanghai) Greenheart Housing & Guangdong Construction – building low
Slide 23: Global Demand for Hardwood
Global Demand for Hardwood 2-2. NATURAL HARDWOOD Hardwood Log Exports (‘000 m3) Hardwood Log Prices (US$/m3) 7,000 500 450 6,000 5,000 400 350 Hardwood exports have 4,000 300 generally decreased in the 3,000 250 past decade particularly in 200 2,000 150 South-East Asian countries 1,000 100 50 0 0
Slide 24: Corporate Social Responsibility
Corporate Social Responsibility 2-2. NATURAL HARDWOOD Greenheart Housing and Construction N.V. Climate Compatible Development Agency (CCDA) Local Community In Q3 2011, we launched Greenheart Housing & CCDA is a Suriname Government group that Greenheart works closely with the local Construction
Slide 25: China's Dilemma – the increasing wood deficit
China’s Dilemma – the increasing wood deficit 3. MARKET DYNAMICS China Change in Forest Area 2000-2010 (ha.) China’s urbanization 30,000,000 Between 1995 to 2007, residents in rural areas dropped from 71.4% to 57%. It is estimated that 20,000,000 Global demand for timber between 2005 to 2025, 35
Slide 26: Global Demand and Supply of Timber
Global Demand and Supply of Timber 3. MARKET DYNAMICS Global timber dynamics have changed in the last decade China and other Asian economies demanding more imported timber as supply within their own countries are limited Tropical Hardwood Region Global decrease in tropical hardwood as some exp
Slide 27: Greenheart Step Strategy
Greenheart 4 Step Strategy 4. OPERATING STRATEGY Safety, sustainability, corporate governance & financial stability Maintain high standards of safety in all harvesting and processing operations 1 Ensure that operations are carried out sustainably by adhering to strict environmental guidelines an
Slide 28: Appendix
APPENDIX A. Historical Financial Results 29 B. Investor Trip: Suriname 32 c. Board of Directors & Senior Management 33 D. Key Biographies 34 28 Private & Confidential | Greenheart Group
Slide 29: Historical Financial Results
Income Statement Balance Sheet A. HISTORICAL FINANCIAL RESULTS US$’000 FY2011 FY2010 US$’000 FY2011 FY2010 Revenue 41,921 2,183 Non-current Assets 212,507 174,791 Cost of Sales (22,077) (1,081) Cash & Cash Equivalents 36,541 78,680 Gross Profit 19,844 1,102 Other income and gains 1,079 2,935 Current
Slide 30: Historical Financial Results
A. HISTORICAL FINANCIAL RESULTS Revenue – Full Year (US$’000) Revenue – Quarterly Breakdown (US$’000) 45,000 41,921 16,000 14,629 40,000 14,000 12,000 11,386 Greenheart is still in ramp- 35,000 10,747 10,000 up stage 30,000 25,000 8,000 20,000 6,000 5,159 New Zealand currently the 4,000 15,000 m
Slide 31: Historical Financial Results
A. HISTORICAL FINANCIAL RESULTS Revenue by Source (US$’000) Revenues by Country (US$’000) 45,000 296 40,000 3,375 326 83 New Zealand contributed to 35,000 92% of 2011 total revenue 3,439 30,000 Ramp up of Suriname 6,195 operations starting to pay 25,000 off with a 52% increase in annual revenue
Slide 32: Suriname Investor Trip 2011 - Summary
Suriname Investor Trip 2011 - Summary B. INVESTOR TRIP: SURINAME Investors & Analysts from: Map of Site Visits Site visit to Greenheart’s Suriname operations for key Overview investors Greenheart Group conducted its first investor trip to Day One Suriname in November 2011 The trip was held on
Slide 33: Board of Directors & Senior Management
C. BOARD OF DIRECTORS & SENIOR MANAGEMENT Name Title Judson Martin (Canadian) Chairman, Chief Executive Officer & Executive Director Hui Tung Wah, Samuel (Hong Kong) Executive Director Simon Murray (British) Non-Executive Director Focused on strong corporate Wong Kin Chi (Hong Kong) Independent Non-
Slide 34: Key Biographies
D. KEY BIOGRAPHIES Key Management Biography Mr. Martin is the Chairman, Chief Executive Officer and an executive director of Greenheart Mr. Martin is the Chief Executive Officer and an executive director of Sino-Forest and had been an independent non executive director of Sino-Forest since 2006
Slide 35: Key Biographies
D. KEY BIOGRAPHIES Key Management Biography Mr. Wood is the Director of Operations for Greenheart Group and has over 15 years of forestry management experience He previously held the position of President Director at PT Pöyry Indonesia Prior to that, he was the Forestry General Manager at Asia
Slide 36: Key Biographies
D. KEY BIOGRAPHIES Board Member Biography Simon Murray Mr. Murray is a non-executive director of Greenheart and joined the Board in August 2010 Mr. Murray is the Chairman and Director of General Enterprise Management Services Limited and is an independent non-executive Director of Sino-Forest an
Slide 37: Slide 37
Slide 38: www.greenheartgroup.com
www.greenheartgroup.com Contact: David Wu, Vice President of Corporate Development & Investor Relations davidwu@greenheartgroup.com 38 Private & Confidential | Greenheart Group