Analyst Conference Q2/18 Wednesday, July 25, 2018
P.2 Agenda I. Consolidated Results - Q2/18 Consolidated Results - H1/18 Summary - Financial Updates II. Cement - Building Materials Business III. Chemicals Business IV. Packaging Business V. Summary
P.3 Q2/18 Revenue from Sales Revenue increased +11% y-o-y from higher volume and prices from all businesses, while the 2% q-o-q gain was led by increased chemicals sales volume. +11% y-o-y MB +2% q-o-q 150,000 120,447 118,250 116,268 113,400 120,000 112,428 108,825 90,000 60,000 30,000 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
P.4 Q2/18 EBITDA EBITDA decreased -4% y-o-y from the drop in dividends from the associates, but gained +19% q-o-q, following seasonal dividends from associates. EBITDA MB -4% y-o-y 30,000 +19% q-o-q 28,108 27,564 26,593 26,446 2,543 25,000 Dividend from 7,502 22,303 5,925 6,321 Associates 19,815 1,289 20,000 78 EBITDA from 15,000 Operations 25,565 +2% y-o-y 21,014 20,521 20,272 10,000 20,062 19,737 -2% q-o-q 5,000 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Note : EBITDA = EBITDA from Operations + Dividend from Associates
P.5 Q2/18 Equity Income Chemicals associates were the primary factor to the both the +13% q-o-q gain and -4% y-o-y drop in equity income. -4% y-o-y MB +13% q-o-q 6,000 5,558 5,000 4,394 4,254 4,203 4,006 4,000 3,734 4,677 3,000 3,438 3,183 Chemicals 3,523 3,188 2,704 2,000 1,000 1,030 Non-Chemicals 1,020 956 881 818 731 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18
P.6 Q2/18 Profit for the Period Earnings of 12,402 MB was solid q-o-q, but dropped -6% y-o-y on higher naphtha costs in the chemicals business and the stronger Thai Baht FX. -6% y-o-y MB flat q-o-q 20,000 17,386 15,000 13,252 12,567 12,40 2 12,406 11,836 10,000 5,000 0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Key Non-recurring 2,830 (1,810) 1,210 870 220 380 1) Inventory Gain (Loss)* 930 (1,860) 900 140 220 380 2) Sale of Investment and 1,900 50 310 730 0 0 assets Note: *SCG Chemicals (Sub + Asso.)
P.7 Agenda I. Consolidated Results - Q2/18 Consolidated Results - H1/18 Summary - Financial Updates II. Cement - Building Materials Business III. Chemicals Business IV. Packaging Business V. Summary
P.8 H1/18 Financials Sales growths of +6%, but EBITDA dropped -12% y-o-y, and earnings declined -19% y-o-y on lower performance from the chemicals business. Revenue from Sales EBITDA Profit for the Period MB MB MB 250,000 238,697 60,000 40,000 55,672 225,093 48,749 EBITDA 10,045 200,000 30,638 7,214 Dividend 30,000 Eq Inc. 40,000 24,808 9,952 150,000 Eq Inc. 20,000 7,937 45,627 EBITDA 100,000 from 41,535 Sub. 20,000 Operations 20,686 Sub. 10,000 50,000 16,871 0 0 0 H1/17 H1/18 H1/17 H1/18 H1/17 H1/18 EBITDA 20% 17% EPS: 25.5 20.7 Margin:
P.9 H1/18 Segmented Revenue from Sales Chemicals and non-Chemicals sales were 46% and 54%, respectively. H1/17 H1/18 225,093 MB 238,697 MB Cement- Cement- Building Materials Building Materials Chemicals Chemicals 36% 36% 46% 46% Packaging Packaging 1 8 % 18% MB 120,000 109,920 103,856 91,119 100,000 87,481 80,000 60,000 43,773 39,275 40,000 20,000 0 H1/17 H1/18 H1/17 H1/18 H1/17 H1/18 Cement - Building Chemicals Packaging Materials
P.10 H1/18 Segmented Profit for the Period Chemicals profits dropped to 65% of earnings, compared to 72% in H1/17. H1/17 H1/18 30,638 MB 24,808 MB Cement- Cement- Building Materials Building Materials 13% Packaging 17% 9% Packaging Chemicals Chemicals Others 12% Subsidiaries Subsidiaries 6% 41% 46% Others Chemicals 6% Chemicals Equity Income Equity Income (65%) 26% 24% (72%) MB 25,000 22,250 20,000 Eq Inc. 16,266 8,115 15,000 Eq Inc. 5,887 10,000 Sub. 4,161 3,843 14,135 Sub. 5,000 3,110 2,682 1,986 10,379 1,362 0 H1/17 H1/18 H1/17 H1/18 H1/17 H1/18 H1/17 H1/18 Cement - Building Chemicals Packaging Other Materials
P.11 H1/18 Segments: Export Sales and ASEAN Operations ASEAN exports and operations were 24% of total sales. Sales Segments (by markets) Export Segments (by markets) 60,689 MB 64,993 MB 225,093 MB 238,697 MB Others Others 17% Others 18% 15% 17% N. Asia N. Asia 11% 8% 24% S. Asia 24% ASEAN (ex-Thailand) S. Asia 14% 13% China/HK China/HK 24% 24% Thailand 59% 58% (domestic) ASEAN ASEAN 37% 37% H1/17 H1/18 H1/17 H1/18 Export as 27% 27% % of Sales
H1/18 HVA’s Revenue from Sales P.12 MB 200,000 175,541 169,071 161,851 160,910 149,924 150,000 136,762 117,992 (+6 y-o-y) 91,101 100,000 85,768 59,461 54,865 H1/17 50,000 38,837 86,291 7,783 0 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1/18 HVA as a % of 4% 17% 19% 25% 29% 32% 34% 35% 35% 37% 38% 39% 38% Revenue from Sales Business 2013 2014 2015 2016 2017 H1/18 Cement-Building Materials 41% 42% 41% 41% 43% 39% Chemicals 27% 27% 31% 31% 30% 31% 50% 50% 53% 54% 54% 52% Chemicals (Includes associates) Packaging 38% 39% 39% 43% 47% 49%
P.13 Agenda I. Consolidated Results - Q2/18 Consolidated Results - H1/18 Summary - Financial Updates II. Cement - Building Materials Business III. Chemicals Business IV. Packaging Business V. Summary
P.14 H1/18 EBITDA on Assets, and EBITDA Margin EBITDA on Assets Percent (%) 25 20 20 18 18 16 15 15 14 14 14 15 13 12 12 10 5 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1/18 EBITDA Margin (%): 16 14 18 14 11 10 13 13 18 21 19 17 Note: EBITDA on Assets = EBITDA / Consolidated Assets EBITDA margin = EBITDA from Operations / Consolidated Sales
P.15 H1/18 Net Debt Leverage rose slightly to 1.5 times (x). Billion Baht Times (x) (Net Debt) (Leverage) 200 10.0 164.4 162.5 157.8 8.0 146.9 145.0 150 137.6 137.6 122.0 120.5 6.0 112.1 99.9 100 83.6 4.0 3.1 50 3.0 2.6 2.6 2.0 2.5 2.4 2.0 2.0 1.8 Net Debt on EBITDA 1.5 1.5 1.4 0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1/18 Net Debt to Equity = 0.4x
P.16 H1/18 CAPEX & Investments Amounted to 17,866 MB in H1/18, as investments accounted for 43% of the total. H1/18 SBU: Types: Others Greenfield 4% & Expansion Others 2% 11% Packaging Maintenance Investment 23% Chemicals 12% Billion Baht 43% 50% 80.0 Cement- Efficiency Building Projects Materials 70.0 32% 23% 60.0 50.0 50.0 47.0 46.1 45.2 45.0 42.4 40.0 34.8 34.5 32.0 30.0 27.2 18.4 17.9 20.0 10.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1/18 - CAPEX includes debottlenecking, expansion projects, and major turnaround. - Investments are acquisitions and purchase of shares (EV basis).
P.17 H1/18 Interest and Finance Costs Amounted to a total of 3,416 MB, while interest cost was 3.3%, with 98% at fixed rate. MB 10,000 9,076 9,000 8,193 8,000 7,573 7,266 7,112 7,000 6,321 6,089 6,048 6,000 5,649 5,273 5,000 4,670 4,000 3,416 3,000 2,000 1,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1/18
P.18 Financial Highlights & Outlook H1/18 dividend of 8.5 Bt/sh (10,200 MB), and is payable on Aug 22/18 (XD date is Aug 8/18). FY2018 CAPEX & Investments of approx. 40,000-50,000 MB, with forecast of approx. 60,000 MB in FY2019 .
P.19 Agenda I. Consolidated Results - Q2/18 Consolidated Results - H1/18 Summary - Financial Updates II. Cement - Building Materials Business III. Chemicals Business IV. Packaging Business V. Summary
P.20 Q2/18 Market situation ASEAN (ex-Thailand) markets in Q2/18: The demand of grey cement in ASEAN was positive. (details in page 21) Thailand market in Q2/18: Grey cement demand increased +2% y-o-y in Q2/18 from the continuous growth of megaprojects. Ready-mixed concrete (RMC) demand increased +6% y-o-y in Q2/18 while the average prices remained in the range of 1,600 – 1,650 Baht per cubic meter. Housing products demand (roof ceiling & wall) decreased -2% y-o-y in Q2/18. Ceramic tiles demand dropped -6% y-o-y in Q2/18.
P.21 ASEAN market insight Grey Cement Demand Growth ( y-o-y ) Q1/17 Q2/17 Q3/17 Q4/17 2017 Q1/18 Q2/18 H1/18 Cambodia +5% +5% +7% +16% +8% +14% +15% +14% Indonesia +1% -3% +22% +10% +8% +6% +1% +4% Myanmar 0% +1% -6% -6% -3% +1% -2% 0% Vietnam +4% -4% -6% -2% -1% +5% +1%* +3%* Thailand -7% -7% -2% -3% -5% 0% +2% +1% Note: Indonesia’s grey cement demand is based on the data from Indonesian cement association (ASI). * Vietnam’s grey cement demand in Q2/18 included only Apr-May, H1/18 included only the first five months of 2018.
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