Tipco Asphalt Public Co. Ltd. · SET:TASCO
Tipco Asphalt Public — Merger or Acquisition (November 2015)
27 slides from Tipco Asphalt Public's merger presentation, Nov 26, 2015
Slide 1: 2-2015 Bank Meeting: Performance & Acquisition
Tipco Asphalt Public Company Limited 2-2015 Bank Meeting Performance & Acquisition 26th November 2015 บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited 1
Slide 2: Agenda
Agenda 1 Performance Highlights 2 YTD 2015 Highlights and Outlook 3 2020 Mission / Vision 4 Acquisition of Business 5 Q&A บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited 2
Slide 3: Performance Highlights: Sales volumes vs Revenue and Gross margin
Performance Highlights: Sales volumes vs Revenue and Gross margin • Total asphalt sales remained high due to • Revenue was dropped due to the strong demand in both domestic and decrease in selling price. Stable selling export markets price, lower crude cost and efficient hedging resulted in high gro
Slide 4: International asphalt market selling price vs ICE Brent
International asphalt market selling price vs ICE Brent USD/Barrel 120 109 112 Avg. asphalt selling price 106 103 Ice Brent 100 95 86 80 70 67 63 63 64 58 55 60 53 52 54 48 50 87 87 86 85 87 88 87 82 40 62 65 64 60 60 58 53 57 54 56 20 0 • Asphalt prices moved in line with crude price บริ ษทั ทิปโก้
Slide 5: Performance Highlights: SG & A expense VS Financing cost
Performance Highlights: SG & A expense VS Financing cost • Administrative expenses increased due • Decrease in financing cost was due to mainly to one time major vessel repair improvement of net cash position in terms expenses of lower short term loan and prepayment of long term loan บริ ษทั ทิปโก้แ
Slide 6: Performance Highlights: Financing
Performance Highlights: Financing • Liquid assets is more than adequate to • Very strong EBITDA to cover debt service fund the revolving short term loan obligations and self-financing for investment, including prepayment of long term loan บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Com
Slide 7: YTD 2015 Highlights and Outlook
YTD 2015 Highlights and Outlook Crude • Brent price moved in range between 50-70 USD/bbl • Procure more crude cargoes under long term crude supply agreement to support export sales Refinery • 80%-90% refining utilization with 99.8% reliability, and will remain at this level in Q4 2015 • Benefited fr
Slide 8: YTD 2015 Highlights and Outlook
YTD 2015 Highlights and Outlook Domestic Market • Strong government budget disbursement during 9M 2015 • 35% sales volumes growth for 9M 2015 compared to 9M 2014 • With strong 2016 fiscal budget, Q4 domestic sales volumes is expected to be strong and will continue in 2016 International Market • 28%
Slide 9: YTD 2015 Highlights and Outlook: Ratings and Governance
YTD 2015 Highlights and Outlook From BBB+(THA) to A- (THA) FTSE SET INDEX SERIES TASCO-FTSE SET Mid Cap Index VERY GOOD CORPORATE GOVERNANCE SCORE บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Public Company Limited 9
Slide 10: New Mission/Vision 2020
New Mission/Vision 2020 2015 2020 To be a globally preferred A well-recognized leading integrated asphalt & Mission asphalt focused company in petroleum related Asia Pacific product company To distribute 2 million tons of asphalt products by 2015 and To distribute 6 million tons of be the key contri
Slide 11: 9 new corporate strategy statements
9 new corporate strategy statements 9 key strategies S1 S2 Adequate funding S3 S4: Expand and grow businesses (existing) S5: Explore new businesses S6: S7: KBC refinery upgrading S8: บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) S9: Tipco Asphalt Public Company Limited 11
Slide 12: Vietnam and Indonesia are the “Missing Jigsaws”
Vietnam and Indonesia are the “Missing Jigsaws” • Currently, Tipco Asphalt has strong local Bitumen refinery PMA plants presence in Thailand, Malaysia, Emulsion refinery Depot Cambodia, Laos, China, and India • The Company has almost 90% local market shares in Laos and high market Lang Fang share in
Slide 13: Vietnam and Indonesia are strong growth countries
Vietnam and Indonesia are strong growth countries Vietnam Indonesia Country direction • Plan to connect strategic • Focus on infrastructure social economic zones development by connecting and cities among six economic • MoT plans to construct corridors 2,347 km express ways 2015 – 2019 expected Real
Slide 14: M&A is more superior to greenfield approach
To penetrate into high growth markets instantly, M&A is more superior to greenfield approach Vietnam Indonesia Environment • Top 3 players (including target • Top 3 local players (including company) commands 71% target company) commands market share 44% market share • These players were established
Slide 15: Acquisition Highlight
Acquisition Highlight • BOD approved the final acquisition price is USD 61.80 million. Acquisition Equity Interest Shareholder’ Loan Country Proportion (Mil. USD) (Mil. US Asphalt Business 38% Thailand 7.00 - Raycol Asphalt Co., Ltd. (“Raycol”) - PT Asphalt Bangun Sarana and 100% Indonesia 9.50 subs
Slide 16: Overview of the transaction
Overview of the transaction Country Business AD Shipping Pte Ltd. (“ADS”) 100% Singapore Ship owner to engage in chartering services Reta Link Pte Ltd. Sale of Equity Interest (“RTL”) 100% Highway Resources Singapore Investment holding and trading asphalt Pte Ltd. (“HR”) and road construction materi
Slide 17: Target at a glance
Target at a glance Country Company Business ADS Owner of 3,690 tons cargo carrying capacity vessel Singapore RTL Owner of 1,713 tons cargo carrying capacity vessel • 2nd largest market shares of 22% • Total estimated 2015 asphalt volume at 200 KT Vietnam ADCo • Strong market coverage and distributio
Slide 18: Implied Acquisition Multiple
Implied Acquisition Multiple Price (mm USD) 2015 P/Book 2015 P/E 2015 EV/EBITDA AD Shipping 12.00 1.15x 9.51x 8.83x Reta Link 0.80 0.67x 1.57x 5.63x HR 20.00 1.65x 2.91x 2.76x ABS 9.50 1.06x 6.87x 5.56x Raycol 7.00 3.12x 7.00x 4.92x Total 49.30 1.41x 5.55x 3.91x 2015 figures are based on last 12 mon
Slide 19: Strong financial position of Target in Indonesia and Vietnam
Strong financial position of Target in Indonesia and Vietnam Attractive Sales Growth Rate Continuously Improving Gross Margin Sales volume Gross Profit Margin Unit: ‘000 tons Unit: % CAGR = 22% 14.00% 299 11.10% 215 9.00% 8.70% 203 75 12.50% 166 10.20% 89 78 8.70% 86 224 7.83% 114 137 80 2012 2013 2
Slide 20: After acquisition - A Complete Value Chain in Indonesia & Vietnam
After acquisition - A Complete Value Chain in Indonesia & Vietnam – adding 3 more value chains Crude & Product Refining & Bulk Storage & Wholesale & Road Supply Production Transportation Distribution Retail Sales Contractor Retail – Construction KBC Refinery site Crude & Ocean Going Terminals & Whol
Slide 21: 2015 business model in Vietnam
2015 business model in Vietnam Thailand • 2nd largest market Vietnam shares of 22% • Strong market coverage and Contractor ADCo facility distribution network 10% of supply Depot from KBC to ADCo ADCo PMA Plant Emulsion refinery Contractor Others • Account for 9% of market share Vietnam (through othe
Slide 22: 2015 business model in Indonesia
2015 business model in Indonesia Thailand Indonesia • 8% market share • Strong distribution network in Indonesia Contractor No supply from KBC ABS to ABS Contractor ABS facility Others • Account for 26% Depot PMA Plant Emulsion refinery market share in Indonesia 22 22
Slide 23: Benefit to TASCO once shareholder approves
Benefit to TASCO once shareholder approves Current After acquisition Fleet expansion No. of ship: 7 No. of ship: 9 Cargo carrying = 26,307 Tons Cargo carrying = 31,710 Tons Average age = 12.7 Average age = 12.0 Market expansion – incremental 290 KT 100 KT 300 KT 300 KT 390KT บริ ษทั ทิปโก้แอสฟัลท์ จ
Slide 24: After acquisition - ASIA Territory
After acquisition - ASIA Territory Asphalt refinery (1) Depot (17) PMA plants (20) Emulsion plants (22) Lang Fang Zhen Jiang Bahudurgarh Jhansi Baroda Xin Hui Haldia Haiphong Visakh Phitsanulok Vashi Korat Hue Phrapradaeng Poipet Cam Ranh Chennai Rayong Mangalore Suratthani Keo phos Ho Chi Minh Aceh
Slide 25: After acquisition – Expand in all areas
After acquisition – Expand in all areas Current ADS RTL ADCo ABS After acquisition Refinery 1 - - - - 1 AE plant 14 - - 3 3 20 PMA plant 16 - - 3 1 20 Depot 7 - - 4 6 17 Truck 273 - - 70 50 393 Vessel 7 1 1 - - 9 Employees 1,072 1 1 207 167 1,448 บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) Tipco Asphalt Pu
Slide 26: Strategic Acquisition – synergy and benefits
Strategic Acquisition – synergy and benefits • Grow TASCO asphalt sales by 15% immediately ( approximately 290,000 ton) • Allow refinery to run at full capacity at all time • Become Indonesia and Vietnam leading domestic player • Enjoy significantly wider integrated margin (both at Tipco and local l
Slide 27: THANK YOU and Q & A SESSION
THANK YOU and Q & A SESSION บริ ษทั ทิปโก้แอสฟัลท์ จำกัด (มหำชน) 27 Tipco Asphalt Public Company Limited
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