Sri Trang Agro-industry Public Co. Ltd. · SET:STA
Sri Trang Agro-industry Public — Investor Day (May 2013)
34 slides from Sri Trang Agro-industry Public's investor day presentation, May 16, 2013
Slide 1: A World Leading Natural Rubber Player
Investor Day Presentation 16 May 2013 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 2013
Our Directors Present for the Investor Day 2013 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. Growth Strategy
Slide 5: Fully Integrated and Globally Natural Rubber Supply Chain
Fully Integrated and Globally Natural Rubber Supply Chain Upstream Midstream Downstream Plantation Procurement Processing Sales & Distribution Finished Products TSR Examination gloves Cup Lump Unsmoked RSS Hydraulic Hoses sheets Fresh Con. Latex Escalator Handrail Latex Thailand is the world Thailan
Slide 6: Sri Trang - Dominant Natural Rubber Processors
Sri Trang - Dominant Natural Rubber Processors Sri Trang vs. leading natural rubber producing Global NR market share countries (By tonnage) Sri Trang (‘000 tons) 9% Sri Trang 976 Vietnam (#3) 955 Malaysia (#4) 932 India (#5) 913 Rest of the PRC (#6) 795 world 91% 0 500 1000 Thailand NR production sh
Slide 7: World Largest Midstream Natural Rubber Producer
World Largest Midstream Natural Rubber Producer Ribbed Smoked Sheet (RSS) 23 factories, 21 in Thailand and 2 in Indonesia Technically Specified Rubber (TSR) 1.2 million tons per annum for production capacity 61 procurement units, 40 in Thailand and 21 in Indonesia Concentrated Latex Existing plants
Slide 8: 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 9: Strategic Expansion to Upstream Business
Strategic Expansion to Upstream Business Chiang Mai Chiang Rai Lampang Thailand as our focus for upstream Prae Sukhothai Utaradit > 4,700 hectare rubber Pitsanulok Sakon Nakhorn plantation in Thailand Pichit Petchaboon Sakaeo > 60% with an average gestation period of 2 years Chumporn Surat Thani Wil
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 Be flexible to any market Plantation Gain direct access to supply conditions and able to manage information production and position Ability to control the quality of efficiently supply Sale & Distribution Procurement First-han
Slide 12: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Growth Strategy
Slide 13: Natural Rubber Industry Supply Chain
Natural Rubber Industry Supply Chain NR supply by type of plantation NR demand by end use Market Segmentation Other Estates uses Original 22% 17% equipped Replacement market market 30% 70% Small Latex Holdings 13% 78% Tyre 70% 12 Source: IRSG,
Slide 14: 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 14.0 Demand Supply Supply surplus/(deficit) Advanced¹ Emerging 11.8 65% 12.0 11.6 11.011.0 11.4 10.2 10.8 10.9 10.2 10.1 10.4 10.0 9.7 9.8 9.9 9.39.7 9.2 55% 8.7 8.
Slide 15: 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 Thailand 3,522 Indonesia 3,015 Vietnam 955 Malaysia 932 India 913 China 795 Others 1,274 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Area for rubber plantation Gl
Slide 16: 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% China 3,765 5% 15.0% America 1,092 4% Europe 1,058 10.0% 3% India 1,001 5.0% 2% Japan 740 0.0% Thailand 502 1% -5.0% Others 2,789 0% 2
Slide 17: Consistent Demand for Natural Rubber
Consistent Demand for Natural Rubber Share of natural rubber in rubber consumption (%) 60 50 39-49% 40 Synthetic Natural 30 Rubber Rubber 20 Jan-07 Jul-07 Jan-08 Oct-07 Jul-08 Jan-09 Oct-08 Jul-09 Jan-10 Oct-09 Jul-10 Jan-11 Oct-10 Jul-11 Jan-12 Oct-11 Jul-12 Oct-12 Apr-07 Apr-08 Apr-09 Apr-10 Apr-1
Slide 18: Natural Rubber Price Interaction
(USD per tons) (USD per tons) 1,000 2,000 3,000 4,000 6,000 0 5,000 0 2,000 4,000 6,000 Jan-07 Jan-07 Apr-07 Apr-07 Jul-07 Jul-07 Oct-07 Oct-07 Jan-08 Jan-08 Apr-08 Apr-08 Jul-08 Jul-08 Oct-08 Oct-08 Jan-09 Jan-09 Apr-09 Apr-09 Total stock (RHS) Jul-09 Jul-09 Oct-09 Oct-09 Supply surplus / (deficit)
Slide 19: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Growth Strategy
Slide 20: Financial Highlights
Financial Highlights • Achieved 975,604 tons sold in FY 2012, 3% increase from FY 2011 A record sale volume • 269,706 tons sold in Q1 2013, up 2% YoY and 6% QoQ • Total revenue of THB 99,639 mm in FY 2012, down 26% YoY due to downward movement of NR price Revenues & ASP • Average selling price decre
Slide 21: Revenue Breakdown by Product
Revenue Breakdown by Product Quarterly (THB mm) Yearly (THB mm) RSS TSR Con. Latex Others RSS TSR Con. Latex Others -17.2% -25.5% +6.3% 133,704 2,386 10,236 29,266 99,639 2,112 485 6,436 1,932 24,240 24,618 22,960 22,794 517 706 1,534 598 512 1,568 96,139 1,508 1,462 21,940 77,500 19,236 18,299 18,2
Slide 22: Revenue Breakdown by Geography
Revenue Breakdown by Geography Quarterly (THB mm) Yearly (THB mm) PRC ASIA (Ex. PRC) USA Europe Others -17.2% -25.5% +6.3% 29,266 133 2,222 24,618 24,240 145 22,960 22,794 3,882 99 1,781 82 53 1,370 2,636 1,699 1,282 2,020 2,337 1,744 12,309 8,396 10,999 7,865 9,033 10,720 11,851 12,355 9,057 9,809
Slide 23: Adjusted GP and GPM
Adjusted GP and GPM* Quarterly (THB mm) Yearly (THB mm) THB mm Margin % THB mm Margin % +109.4% -39.5% +11.3% 6.6% 1,600 7% 7,000 10% 1,598 7,139 1,400 1,436 6.3% 6% 6,000 8% 1,200 5% 5,000 1,168 4.7% 1,000 4.1% 6% 950 4% 4,000 4,318 5.3% 800 763 3% 3,000 4.3% 4% 600 2.6% 2% 2,000 400 2% 1% 1,000 20
Slide 24: SICOM Price and F/X
SICOM Price and F/X (US cent / Kg.) Avg. price SICOM Price Movement 297 310 316 RSS 275 288 296 TSR 386 359 370 330 THB/USD Movement 29.0706 Avg. = 29.5710 23
Slide 25: 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 % +113.9% +5.6% +33.8% 1,379 900 3.5% 4% 1,400 3.0% 3.4% 1,306 850 700 787 3% 1,200 2.8% 2.5% 636 2% 500 1.4% 1,000 398 2.0% 1% 300 800 0% 1.4% 1.5% 100 600 (1)% 1.0% 1.0%
Slide 26: Return on Assets and Return on Equity
Return on Assets and Return on Equity EBITDA (THB mm) EBITDA margin 8.4% 5,579 6.7% 3,883 3,311 2,840 2.9% 2.5% FY 2009 FY 2010 FY 2011 FY 2012 FY2009 FY2010 FY2011 FY 2012 ROA ROE 12.59% 43.21% 11.74% 36.08% 3.36% 3.59% 9.19% 7.46% FY2009 FY2010 FY2011 FY 2012 FY2009 FY2010 FY2011 FY 2012 25
Slide 27: Healthy leverage and coverage ratios
Healthy leverage and coverage ratios Debt / equity Net debt / equity 2.62 2.45 2.16 2.03 1.22 1.10 0.94 0.86 FY2009 FY2010 FY2011 FY2012 FY2009 FY2010 FY2011 FY2012 Interest Coverage 18.85 Debt = Total liabilities Equity = Total equity Assets = Total assets Net debt = debt – cash 10.90 Cash = cash a
Slide 28: Agenda
AGENDA I. Sri Trang Business Highlights II. Natural Rubber Industry Snapshot III. Financial Highlights IV. Growth Strategy
Slide 29: 2013 Target & Future Growth Strategy
2013 Target & Future Growth Strategy 2013 2014 2015 Target Capacity : 1.2 mil tons Sale volume : 1.15 mil tons Gross profit : 5-7% Net profit : 2-3% Dividend policy : 30% of net profit Rubber plantation: Midstream business: Achieve 50,000 rai Achieve production (approx. 8,000 hectares) capacity of m
Slide 30: Upstream strategy update
Upstream strategy update Achieve 50,000 rai of rubber plantation Unit :Rai 50,000 29,385 Enhance profitability and reduce volatility in earning 17,300 Create procurement 10,600 networks for potential raw material from neighboring area Mar'11 Mar'12 Mar'13 Dec'14 (f) Pinpoint strategic location
Slide 31: Midstream strategy update
Midstream strategy update Capacity expansion to increase market share tons p.a. 1,800,000 14% 1,500,000 12% Increase profitability 1,200,000 10% Maintain world largest 900,000 8% fully-integrated Natural 600,000 Rubber processor 300,000 6% position - 4% Benefit from economies of scale RSS Late
Slide 32: Sale & Marketing Strategy
Sale & Marketing Strategy Well-balanced portfolio of customers worldwide Increase coverage of customers in China Nokian Tyres 4,000 Contribution of STA on China NR Import 16% P.L.C Finland Hangzhou Zhongce Rubber Co. Ltd. Double Coin Holdings Ltd. 14% Toyo Tire & Rubber Co. Ltd. Continental A.G. Sha
Slide 33: 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 32
Slide 34: Q&A
member of SRI TRANG Q&A GROUP ember ot SRITRANG ‘onour meee 33
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