ADB Opportunity Day FY2018 Performance February 27, 2019 Content - PowerPoint PPT Presentation

ADB Opportunity Day FY2018 Performance February 27, 2019

Content Company Overview 1 Overall Performance of ADB for year 2018 2 3 Business Goal in 2019 and Our Strategic Plans 4 Project Update

1 Company Overview

Company Overview APPLIED DB Public Company Limited (ADB) was established since 2005, from the joint venture between D.B. Chemical Co., Ltd. (1983) and Applied Chemical Industry Co., Ltd. (1985). In 2017, The Company has listed on Market for Alternative Investment (mai).

ADB Our product line includes plastic compounds, professional adhesives, silicone sealants, and DIY products for household end-users. Adhesive & Sealant Plastic Compound • ADB Adhesives are specially • ADB is one of the leading manufacturer manufactured to meet international of plastic compound especially for standards for industrial use and household wire & cable industry. use. • Wire & Cable PVC compound • We sell under our house brand and OEM • General Grade PVC for customers well-known brand names. • ADB Sealant is currently repackaged • Medical PVC Compound from bulk package and resell in smaller package. • Polypropylene split yarn (PPY) • Future project supports the expansion of adhesive & sealant product line corresponding to increasing demand and profitability. *Products manufactured by the Company under OEM brands cannot be publicly disclosed due to non-disclosure agreements and confidentiality

Potential Competitive Market Nepal Pakistan Myanm Our Customer ar UAE Egypt Bangladesh Vietnam Laos India Our main customers are from the Philippines Thailand Yemen Cambodia industrial sectors, located in ASEAN, Middle Ethiopia Sri Lanka Malaysia East, Africa, Europe and South America that Kenya use our products in their production process Indonesia such as wire and cable industry, construction industry, shoe and leather industry, furniture Australia industry and automotive industry. Existing customers Existing customers with potential expansion Expansion of Sealant Business We have officially opened the 4 th factory on November 9, 2018. This new factory will expand the production capacity of sealant products for more than 500 tons per month, ADB has partly previously only re-packaged and sold to customer, we intend to become the silicone bulk provider to domestic and international customer. 6

2 Overall Performance of ADB FY 2018

Financial Performance: FY2018 Sales Revenue Adhesive & Sealant Plastic Compound Adhesive & Sealant Plastic Compound sales 705 MB (Million Baht) . Sales 716 MB (Million Baht). equivalent to 49.61% to total sales equivalent to 50.39% to total sales Adhesive and Sealant Plastic 49.61% Compound 50.39% Total Sale of FY2018 1,421 MB

Financial performance for FY 2018 Revenue structure The revenue in 2018 was increased as the growth of SIL products and DIY products sold to oversea markets; while the compound has been slow down during the ending of Q4 due to delay of goverment bidding project. (Unit: million Baht) 1600 1,434 1,412 1,372 1,421 1400 1200 722 686 706 679 1000 800 600 400 726 712 716 693 200 0 2015 2016 2017 2018 Plastic Compound Adhesive and Sealant

Financial performance for FY 2018 (Cont.) Revenue structure (domestic / international) In 2018, the growth of export was led by the higher SILICONE followed by Adhesive and DIY to oversea customers compared to compensate the slowdown of Compound Oversea Market. (Unit: million Baht) 2,000 1,421 1,500 1,434 1,412 1,372 409 465 32% 421 32% 400 30% 29% 1,000 500 1,012 991 969 972 71% 68% 68% 70% - 2015 2016 2017 2018 Domestic Export

Financial performance for year FY2018 (Cont.) Revenue structure - Plastic compound (Unit: million Baht) 800 712 724 716 693 700 179 186 29% 177 600 26% 25% 25% 208 500 400 The increase in sales of Plastic Compound in 2018 for THB 300 71% 23 million or +3% leading by 75% 74% 544 75% 525 516 507 growing demand of both General 200 Grade PVC including new products of Medical PVC and 100 other types of Compound sold to SHOWA 0 2015 2016 2017 2018 PVC GPVC

Financial performance for year FY2018 (Cont.) Revenue structure - Adhesive & Sealant (Unit: million Baht) 800 723 706 686 680 700 600 • Despite the slowdown of fashion segment, lower demand of shoes 378 56% 61% 56% 381 387 434 53% 500 adhesive, ADB gains higher market shares on SIL and DIY , accounted 400 for 61% of Adhesive & Sealant BU 300 • From the sales of THB 706 million, Adhesives contributes the 200 highest with THB 271 million, 48% 345 44% 43% 39% 305 293 followed by Silicone for THB 226 272 100 million, and DIY with THB 180 million and trading with THB 27 0 million 2015 2016 2017 2018 Adhesive SIL & DIY

Financial performance for year FY2018 (Cont.) Gross profit & gross profit margin The significant drop of gross margin in FY2018 is mainly due to: Lower sales from Industrial Adhesives (Slowdown in Shoe industry) & distributor channel due to price • competition • Silicone sealant material price has been driven by the major material providers The increase in pricing competition in Compound business led the lower GP • (Unit: million Baht) 20% 350 20% 18% 300 17 % 16% 286 250 260 14% 14% 12% 200 194 191 150 8% 100 4% 50 0 0% 2015 2016 2017 2018 Gross Profit Gross Profit Margin

Financial performance for year FY2018 (Cont.) Gross profit & gross profit margin - Plastic compound Gross Profit Margin of Plastic compound business was turnaround in 2018 due to • Growing demand of General Grade PVC to our local partners (Showa Group) Profit Margin of Soft graded PVC during 1 st Half of 2018 but slow down in 2 nd Half due to pricing competition • and government bidding projects (Unit: million Baht) 20% 120.00 100.00 15% 99 14% 14% 98 80.00 12% 11% 79 10% 10% 60.00 67 40.00 5% 20.00 32 0% 0.00 2015 2016 2017 2018 Gross Profit Gross Margin

Financial performance for year FY2018 (Cont.) Gross profit & gross profit margin - Adhesive & Sealant • The gross profit margin for adhesive & sealant is lower in FY2018 compared to last year due to the volatile raw materials for adhesive & sealant products, as well as pricing competition from both domestic and oversea markets (Unit: million Baht) 200 30% 27% 180 188 25% 22 % 160 160 22% 140 18% 20% 120 16% 123 100 114 15% 80 10% 60 40 5% 20 0 0% 2015 2016 2017 2018 Gross Profit Gross Margin

Financial performance for year FY2018 (Cont.) Net profit & net profit margin • The net profit margin for FY 2018 declined from 2017 performance due to the decline of margins in Adhesive and Sealant products as raw material price fluctuation. (Unit: million Baht) 80 8.0% 76 70 60 6.0% 5.4% 50 40 4.0% 34 2.7 % 30 2.4% 29 20 2.0% 2.1% 10 0.9% 13 0 0.0% 2015 2016 2017 2018 Net Profit Net Profit Margin

Financial performance for year FY2018 (Cont.) Assets The increase in asset size is contributed by • The significant increase in PPE in FY2018 mainly results of the increasing in machine and equipment and new factory expansion of Sealant project • An increase in AR of some oversea customers due to oversea customers’ cycle 1,253 1400 1,208 85 1200 1,072 125 948 76 1000 78 535 448 355 800 292 600 267 319 305 213 400 200 365 375 328 316 0 2015 2016 2017 2018 A/R Inventory PPE Others

Financial performance for year FY2018 (Cont.) Liabilities As at December 31, 2018, the Company had total liabilities of THB 666.86 million, the major liabilities are Short-term Loans, which is accounted for 53.8% of total liabilities (Unit: million Baht) 1000 775 800 667 675 120 623 135 600 49 134 416 400 359 330 277 200 239 210 212 202 0 2015 2016 2017 2018 A/P ST Loan Others

Financial performance for year FY2018 (Cont.) Shareholder’s equity Debt to equity Shareholders’ Equity of ADB in 2018 was stable After IPO proceeds and the partial debt from 2017, as the profit during the year is 13.0MB repayment, the Debt-to-Equity ratio decreased was attributed to the dividend paid during the to 1.14 at the end of 2018 and slightly year for 12.0MB in 2018 increased from 2017 (Unit: million Baht) 700 D/E 3.00 585 586 600 2.50 500 202 202 2.00 400 297 1.50 273 83 84 300 2.60 2.47 85 61 1.00 200 300 300 1.06 1.14 0.50 210 210 100 - 0 2015 2016 2017 2018 2015 2016 2017 2018 Paid-up capital R/E Share premium D/E

3 Business Goal in 2019 And Our Strategic Plans

Corporate Development Plan and Direction Growth Strategies Existing New Product Product Diversification Market Development *New product + New Market New * Expend markets for existing Related Business products Market Non-related Business Geographic expansion Joint Venture, Strategy Target new segment Alliance, M&A Product/ Market Matrix Product Existing Market Penetration Development * Increasing market share Market * Increase product usage *Product improvement Increase frequency of use * Product – line extension Increase quantity used New product for the same New application market

Corporate Development Plan and Direction Growth Strategies: Plastic Compound Plastic Compound Business Market Diversification Development Product/Market Matrix Market Product Penetration Development