Sri Trang Agro-industry Public Co. Ltd. · SET:STA
Sri Trang Agro-industry Public — Investor Day (May 2014)
35 slides from Sri Trang Agro-industry Public's investor day presentation, May 15, 2014
Slide 1: A World Leading Natural Rubber Player
Investor Day Presentation 15 May 2014 A World Leading Natural Rubber Player
Slide 2: Disclaimer
Disclaimer Certain forward looking statements may be made in the course of the presentation. These forward- looking statements generally can be identified by use of statements that include words or phrases such as STA or We or our management “believe”, “expect”, “anticipate”, ”intend”, ”plan”, ”fore
Slide 3: Our Directors Present for the Investor Day 2014
Our Directors Present for the Investor Day 2014 Dr. Viyavood Sincharoenkul Kitichai Sincharoenkul Paul Sumade Lee Chairman & Managing Director Executive Director Executive Director Founding member of Sri Trang and Joined Sri Trang in 1988 and has served Joined Sri Trang in 2004 and appointed a
Slide 4: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Business Strategy & Growth Plan
Slide 5: Fully Integrated and Globally Natural Rubber Supply Chain
Fully Integrated and Globally Natural Rubber Supply Chain Rubber Plantation Procurement Processing Sales & Distribution Finished Products • Own 6,000 • 64 raw materials • 1,300,000 tons • Established trading • 14 billion pieces procurement capacity per annum and distribution capacity of glove hectar
Slide 6: Sri Trang - Dominant Natural Rubber Processors
Sri Trang - Dominant Natural Rubber Processors 2012 2013 Market share of world consumption 9% 10% Market share of Thailand’s production 18% 21% volume Market share of China import 13% 15% contributed by Sri Trang Sales volume (tons) 975,600 1,126,500 5
Slide 7: Our Midstream Business Strategy
Our Midstream Business Strategy Full range of natural rubber products Strategic Production base TSR RSS Con. Latex Thailand Indonesia • Serve all downstream businesses & capture all • Excellent diversification possible market segments • More than sufficient raw material to secure from • Create produ
Slide 8: 2013 Capacity Expansion Project
2013 Capacity Expansion Project Palembang, Indonesia Ubon Ratchathani, Thailand Trang, Thailand Palembang – Capacity Ubon Ratchathani – Sikao – Capacity expansion expansion New factory • Additional capacity 50,000 ton • Additional capacity 60,000 ton • Capacity 60,000 ton per annum per annum per ann
Slide 9: Upstream Rubber Plantation
Upstream Rubber Plantation Balance location mix for long- 6,000 hectare rubber plantation term management in Thailand Ensure sufficiency of saplings from both suppliers and in-house > 60% with an average development gestation period of 2 years Synergise across natural Will mature for first commercia
Slide 10: Income Diversification through Investment in Downstream Business
Income Diversification through Investment in Downstream Business High-pressure Examination Gloves Escalator handrails hydraulic hoses Latex / nitrile examination Operated through 42.5%- 10%-owned entity in PRC gloves for medical and owned associate in Thailand Production capacity of 1.4 indu
Slide 11: Distinctive Advantage - Capture Value throughout the Supply Chain
Distinctive Advantage - Capture Value throughout the Supply Chain Enhance Profitability High High productivity performance Cost efficiency High quality Well-managed product operation Sale & Supplier Plantation Procurement Processing Distribution Customer Gain direct access Reduce Be flexible t
Slide 12: Sri Trang's Key Strengths
Sri Trang’s Key Strengths 1 A world largest NR processing Having production base in major 4 Company (10% market share) NR producing countries • Capture all possible market segments with full range of Natural • Advantage in secure raw material as Thailand and Indonesia Rubber products collectively co
Slide 13: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Business Strategy & Growth Plan
Slide 14: Natural Rubber Industry Supply Chain
Natural Rubber Industry Supply Chain NR supply by type of plantation NR demand by end use Market Segmentation Estates Original 21% equipped Replacement Non-tyre market market Tyre 30% 70% 30% Small 70% Holdings 79% Source: IRSG, 13
Slide 15: World Major NR Producing and Consuming Countries
World Major NR Producing and Consuming Countries Overall NR demand and supply Demand trend moves to emerging market Unit : million tons 75% Advanced¹ Emerging 65% 55% 45% 35% 25% 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Major suppliers of Natural Rubber Major consumers of Natural Rubbe
Slide 16: Supply Limited in Equator Countries
Supply Limited in Equator Countries Rubber tree grows well in tropical area Thailand - the world largest NR supplier Unit : ‘000 tons Area for rubber plantation Global natural rubber production by country Unit : ‘000 tons 4,000 Immature area (Hectares) 4,500 3,492 4,000 3,500 Tapped area (Hectares)
Slide 17: Demand Driven by Tyre Industry
Demand Driven by Tyre Industry NR Demand mainly driven by world activities China – world largest NR consumer Unit : ‘000 tons 6% GDP (LHS) NR consumption (RHS) 20.0% 5% 15.0% 4% 10.0% 3% 5.0% 2% 0.0% 1% 0% -5.0% -1% -10.0% Global vehicle growth trend (Million units) Forecasted growth of NR demand by
Slide 18: Consistent Demand for Natural Rubber
Consistent Demand for Natural Rubber Share of natural rubber in rubber consumption (%) 60 50 39-50% 40 Synthetic Natural 30 Rubber Rubber 20 Jul-09 Jan-07 Oct-07 Jul-07 Jan-08 Jul-08 Jan-09 Jan-10 Jan-12 Oct-08 Oct-09 Jul-10 Jan-11 Oct-10 Apr-11 Jul-11 Oct-11 Jul-12 Jan-13 Oct-12 Jul-13 Oct-13 Apr-0
Slide 19: Natural Rubber Price Interaction
Natural Rubber Price Interaction NR price VS. fundamental demand/supply (USD per tons) (Unit : ‘000 tons) NR price VS. global stock (Unit : ‘000 tons) (USD per tons) 18
Slide 20: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Business Strategy & Growth Plan
Slide 21: Financial Highlights
Financial Highlights (THB million) FY’12 FY’13 %YoY Q4'13 Q1'13 Q1'14 %YoY %QoQ Revenue 99,639 92,185 ▼7% 23,930 24,240 22,765 ▼6% ▼5% Sale volume 975,604 1,126,463 ▲15% 315,186 269,706 308,456 ▲14% ▼2% (tons) Avg. selling price 99,966 79,600 ▼20% 74,053 87,260 71,777 ▼18% ▼3% (Baht per ton) Gross p
Slide 22: Revenue Breakdown by Product
Revenue Breakdown by Product Quarterly (THB mm) Yearly (THB mm) RSS TSR Con. Latex Others RSS TSR Con. Latex Others -6.1% -7.5% -4.9% 99,639 2,112 92,185 6,436 24,240 2,518 23,930 22,765 6,047 22,519 706 21,495 590 1,568 543 2,057 625 911 680 1,698 1,511 77,500 70,774 18,299 17,907 18,097 17,373 16,
Slide 23: Revenue Breakdown by Geography
Revenue Breakdown by Geography Quarterly (THB mm) Yearly (THB mm) PRC ASIA (Ex. PRC) USA Europe Others -6.1% -7.5% -4.9% 24,240 23,930 22,519 22,765 99 21,495 102 39 1,370 848 27 2,020 1,050 91 1,575 1,011 1,999 907 1,811 1,698 8,396 8,547 8,630 9,231 9,173 12,355 12,921 11,399 10,137 9,513 Q1 2013
Slide 24: Sale Volume Breakdown by Geography (Tons)
Sale Volume Breakdown by Geography (Tons) Quarterly (tons) Yearly (tons) PRC Asia (Ex PRC) USA Europe Others total PRC Asia (Ex PRC) USA Europe Others +14.4% +15.5% -2.1% 1,126,463 4,102 975,604 50,356 84,364 4,005 315,185 67,834 308,456 536 348 92,443 269,706 279,687 10,791 261,883 1,240 19,767 13,
Slide 25: Adjusted GP and GPM
Adjusted GP and GPM* Quarterly (tons) Yearly (tons) THB mm Margin % THB mm Margin % -8.3% +34.4% +13.9% 7,000 10% 6,000 8% 5,804 5,000 6.3% 6% 4,000 4,318 4.3% 3,000 4% 2,000 2% 1,000 0 0% FY 2012 FY 2013 * GP and GPM after adjusting for (reversal) allowance of inventory and realised forex gains / l
Slide 26: SICOM Price and F/X
SICOM Price and F/X SICOM Price Movement Avg. price 259 253 225 RSS 236 (US cent : Kg.) 234 231 198 TSR 190 316 291 296 245 THB/USD Movement 32.3050 Avg. = 32.5210 25
Slide 27: Net profit and Net profit margin
Net profit and Net profit margin Quarterly (THB mm) Yearly (THB mm) Net profit Net profit margin % Net profit Net profit margin % -52.7% +31.4% -5.6% 26
Slide 28: Return on Assets and Return on Equity
Return on Assets and Return on Equity EBITDA (THB mm) EBITDA margin 4,877 5.8% 3,747 4.1% 3,311 2,840 2.5% 2.9% FY 2010 FY 2011 FY 2012 FY 2013 FY2010 FY2011 FY 2012 FY 2013 ROA ROE 12.57% 43.01% 4.47% 3.36% 3.59% 9.19% 7.46% 9.29% FY2010 FY2011 FY 2012 FY 2013 FY2010 FY2011 FY 2012 FY 2013 27
Slide 29: Healthy leverage and coverage ratios
Healthy leverage and coverage ratios Debt / equity Net debt / equity Interest Coverage Debt = Total liabilities Equity = Total equity Assets = Total assets Net debt = debt – cash 12.26 Cash = cash and cash equivalents + fixed deposits at financial institutions Interest Coverage = EBITDA/finance cost
Slide 30: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Business Strategy & Growth Plan
Slide 31: Our Business Strategy
Our Business Strategy Enhance Continuously Expand Create Enter into Upstream Procurement Expand Customer Footprint Rubber Plantation Stronghold Capacity Coverage in New Territories • To procure raw • To have an excellent • To gain higher • To ride on growth in • To enhance materials at more integrat
Slide 32: Target & Future Growth Plan
Target & Future Growth Plan 2014 Target Rubber plantation: Midstream business: Capacity : 1.4 mil tons Achieve 8,000 h.a. (50,000 rai ) Continue our aggressive in Thailand by the end of 2014 expansion plan domestically Sale volume : 1.2 mil tons and internationally Adj. GP margin : 5 - 7% NP margin
Slide 33: Synergy between Upstream and Midstream Business
Synergy between Upstream and Midstream Business Increase profitability Benefits from expansion Benefits from midstream to Rubber Plantation business expansion Higher profit margin and Maintain world largest reduce volatility in fully-integrated Natural earning Plantation Rubber processor Creat
Slide 34: Our Vision: the green rubber company
Our Vision Passionately, we drive possibilities >> the green rubber company >> Green Rubber Green Product Company Green Green Supply Factory 33
Slide 35: Q&A
member of SRI TRANG Q& A GROUP ember ot SRITRANG ‘oROu Le
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