Sri Trang Agro-Industry Public Co. Ltd. · SET:STA
Sri Trang Agro-Industry Public — Q1 2019 Earnings Presentation
31 slides from Sri Trang Agro-Industry Public's earnings presentation, May 21, 2019
Slide 1: 1Q19 Analyst Presentation
STA 1Q19 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 200 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%) 180 (US cent : Kg.) 160 SICOM Price 149 143 140 133 RSS 120 125 121 TSR 100 Feb-18 Feb-19 Mar-18 Aug-18 Mar-19 May-18 Jan-18 Jun-18 Apr-18 Sep-18
Slide 5: Latex – Butadiene – Acrylonitrile - Forex
Latex – Butadiene – Acrylonitrile - Forex 1Q18 2Q18 3Q18 4Q18 1Q19 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%) 240 117.7 (+6.1%) 113.8 (-3.4%) 102.3 (-13.3%) 99.2 (-3.0%) 113.4 (+14.2%) 179.5 (-0.6%) 193.0 (+7.5%) 212.8 (+18.5%) 179.8
Slide 6: Financial Highlight
Financial Highlight (Unit : THB million) 1Q19 1Q18 %YoY 4Q18 %QoQ FY18 Revenue 15,248.0 17,689.1 -13.8% 17,189.6 -11.3% 73,492.8 Sales volume (tons) 289,984 321,698 -9.9% 317,876 -8.8% 1,336,649 Avg. selling price (Baht per ton) 41,175 46,772 -12.0% 43,530 -5.4% 45,907 Gross profit 1,009.9 1,510.4 -
Slide 7: Sales Revenue
Sales Revenue Sales Revenue by Product (THB million) Sales Revenue by Geography -13.8% 1% 2% 2% 2% 2% 19,755 60 18,859 -11.3% 8% 7% 8% 9% 9% 17,689 2,857 91 17,190 30 795 3,128 164 1% 24% 25% 2,613 15,248 27% 23% 1,749 1,504 3,189 19% 264 1% 30% 1,184 Others 1,885 1,722 1,055 7% 3,044 20% 1,459 9% 9
Slide 8: Gross Profit
Gross Profit Gross Profit (THB million) Gross Profit – Adj.* (THB million) 2,500 15.0% 3,000 15.0% 13.3% 2,500 11.3% 2,000 11.4% 12.0% 12.0% 10.4% 10.6% 2,000 9.4% 8.5% 1,500 9.0% 9.0% 8.0% 1,500 2,261 6.6% 2,631 1,000 1,970 6.0% 6.0% 1,000 2,000 2,001 1,510 1,367 1,622 3.8% 500 1,010 3.0% 3.0% 500
Slide 9: EBIT & Net Profit
EBIT & Net Profit ‘amma Share of profit (loss) from investments in associates and joint ventures imeem Net profit (loss) ce ——Net profit margin (%) mE Operating profit (loss) ==EBIT margin (%) 4.7% 5.0% 1,800 > 6.9% 8.0% 1,295 3.0% 6.0% 4.0% 1.0% 2.0% f -1.0% 0.0% + -3.0% + -2.0% L 4.0% {5.0% 1018 2
Slide 10: STA Business Highlights
2 STA Business Highlights | az
Slide 11: 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 289,984 tons in 1.34 mill. tons in NR’s 26% 10% share
Slide 12: Upstream Operations – Rubber Plantations
Upstream Operations – Rubber Plantations Area of Rubber Plantations Thoen 1, Immature Area Tapping Area Lampang 77% Approx. 10% 45,000 rai 7,200 HA Infrastructure 13% Estimated Mature Plantations Watbot, Phitsanulok 19 14,000 Production, tons (LHS) Tapping, trees (RHS) 2,500,000 Provinces in Thailan
Slide 13: Midstream Operations - NR Processing
of momber ‘SRI TRANG CROLP, Midstream Operations - NR Processing 3 G i Production Capacity (mil. tons) Optimum capacity (LHS) processing facilities 2 Z apacity*: 2.86 mil. tons/annum Reeresened capaci tee) ***®*= % optimum capacity to global NR production (RHS) —#— % optimum capacity to global NR co
Slide 14: STA's Tire Manufacturer Customers
STA’s Tire Manufacturer Customers 14
Slide 15: Downstream Operations – Finished Products
Downstream Operations – Finished Products Since 21.2 17 Exporting to 6% The world’s 1989 billion pieces per annum in production billion pieces of gloves sold in 2018 120+ Global Market 5th capacity Countries Share Largest [Information as at 1 April 2019] 15
Slide 16: STA's Gloves Products
STA’s Gloves Products Product Range Product Mix by Volume Examination/ 33% 15% 12% 39% Non-Examination Gloves Nitrile Own Brands 85% 88% Latex Nitrile Latex 61% 67% OEM Powdered Powder-Free Powder-Free FY18 1Q19 FY18 1Q19 - Comfort 4.8 g - Comfort 5.0 g - Heavy 6.2 g - Balance 5.0 g - Balance Comfor
Slide 17: STA's Glove Markets by Volume
STA’s Glove Markets by Volume Widely Used in Developed Markets, Gaining Ground in Emerging Markets America Encourage 24% EU Japan a wide variety of applications 6% 30% China 7% India Lifestyle RoW 6% Thailand 8% 11% ASEAN** Foods Industry Asia* 3% 5% Medical Industry Note: *Asia excluding Thailand,
Slide 18: 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 19: Key Drivers
Key Drivers Increasing awareness of health and hygiene around the world USA Impose tariffs on Nitrile Rubber from Korea and USP800: Double gloves usage China Japan - a boon to Latex Gloves US-China Trade war Vision: Universal health coverage by 2020– to establish an effective social health security
Slide 20: 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 21: STA's Glove Capacity Expansion Plan
STA’s Glove Capacity Expansion Plan Capacity Expansion Processing Facilities Location [bn. pcs.] +73% 30 30 24 25 +41% 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 Note: Inorganic Growth [The Amalgamation Process] Organic G
Slide 22: 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 23: Natural Rubber Market Situation
3 NATURAL RUBBER MARKET SITUATION 23
Slide 24: 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 16.1 16.4 16.7 612 15.1 15.4 15.8 14.6 14.8 13.2 13.9 10 12.1 12.1 12.6 14.2 10.8 11.0 11.0 11.4 341 16.8 400 14.8 15.2 15.4 15.8 16.1
Slide 25: NR Supply
NR Supply 2019F Major Producers by Country 2019F NR Production 2019F global production growth = 2.6% (Unit: ‘000 tons) Others 6% 6,000 NR Production (000'tons) %growth from 2018 Malaysia 5% +0.9% CAMAL 4% 5,000 India 5% Thailand 5,193 +1.7% 4,000 36% Cote d'Ivorie 5% 14.26 3,000 3,547 China 6% mil.
Slide 26: NR Demand
NR Demand 2019F Major NR Consumers NR Consumption [2017-2027F] 2019F global growth in consumption = 2.6% (Unit: ‘000 tons) NR:Tire NR: Non-Tire Others 16% 16,000 Malaysia 4% China 12,000 Indonesia 4% Japan 5% 14.23 39% 8,000 mil. tons Thailand 6% 4,000 USA 7% 0 India 9% EU 9% 2017 2018 2019 2020 202
Slide 27: Commodity Price Movement & Qingdao and SHFE Stocks
10% 20% 30% 0% - 200,000 300,000 400,000 500,000 600,000 700,000 100,000 Jan-14 Jan-19 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jan-19 Jul-14 Aug-14 Source : IRSG, December 2018 and Bloomberg Sep-14 Oct-14 Nov-14 Dec-14 Jan-19 Jan-15 Feb-15 Mar-15 Apr-15 SICOM - TSR20 May-15 Jan-19 Jun-15 Jul-15 Aug-15 Se
Slide 28: TSR20 Historical Prices Movement [2004 – 2019]
100 200 300 400 500 600 - 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-10 Apr-10 Jul-10 Oct-1
Slide 29: 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 30: Contact Investor Relations
Contact Investor Relations Tel: (+66)2-207-4500 Ext. 1402 E-Mail: IR@sritranggroup.com 30
Slide 31: 2019 Target & CAPEX
2019 Target & CAPEX 2019 Target CAPEX [mil. Baht] 2018 2019F 2018 2019F NR production capacity [mil tons] 2.86 2.86 RSS 20 20 NR sales volume [mil tons] 1.37 1.45 TSR 786 450 Gloves production capacity [mil pieces] 17,200 22,600 LTX 458 40 Gloves sales volume [mil pieces] 16,500 21,000 Plantations 1
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