CB Industrial Product Holding Berhad Equipping Palm Oil Industries Around The World Investor Presentation
Our History and Background History and Background Historical Share Performance RM CBIP Shares Established in 1980s and listed on the Main Board 3 6000000 of Bursa Malaysia Securities Berhad in 2005 2.5 5000000 2 4000000 Primarily involved in 3 business segments: 1.5 3000000 Palm oil engineering; 1 2000000 0.5 1000000 Special purpose vehicle retrofitting; and 0 0 Aug 13 Nov 16 Oil palm plantation and milling Adjusted CBIP Price Adjusted CBIP Volume The first publicly-listed player in the palm oil RM Index Point engineering sector globally CAGR: -3.79% 3 10000 2.5 8000 Joint-holders of the Modipalm Continuous 2 6000 Sterilization milling system patent together with the 1.5 4000 Malaysian Palm Oil Board CAGR: 13.12% 1 2000 0.5 0 0 Markets are centralised in Indonesia, Malaysia and the African/Central American region Adjusted CBIP Price Bursa Plantation Index Aug 13 Nov 16 2
Key Group Financial Highlights Revenue Profit Before Taxation (RM million) (RM million) 700 160 140 600 140 601 120 590 500 554 126 522 100 107 400 99 80 300 60 71 323 200 40 20 100 0 0 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Shareholders’ Funds PATAMI (RM million) (RM million) 800 300 700 250 600 669 200 599 500 530 484 150 400 240 381 300 100 200 105 50 98 94 91 100 0 0 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 3
⃰ Key Group Financial Highlights Attractive Dividend Payout Low Gearing Ratio RM’000 % of PATAMI Times sen 90% 20 100% 0.5 25,000 80% 0.46 15 0.45 56% 60% 0.4 20,000 10 32% 17.5 40% 0.35 27% 17% 5 15,000 0.3 20% 7.5 5 5.5 10 0.25 0 0% FY11º FY12 FY13 FY14 FY15* 0.2 10,000 Gross Dividend Per Share^ Payout Ratio 0.15 Notes: 5,000 0.1 0.05 0.04 ^ After adjusting for bonus issue of 134,445,974 amd 272,008,473 new 0.03 0.05 0.05 ordinary shares 0 0 º Includes special dividend of 15 sen per share FY11 FY12 FY13 FY14 FY15 Includes special dividend of 4 sen per share Borrowings Gross Gearing Ratio • Stable dividend policy with a target of • Funding flexibility approximately 30% PATAMI payout ratio • • Capability to undertake strategic acquisitions Attractive annual reward to shareholders while and/or organic expansion maintaining growth momentum 4
Latest Quarter Review Third Quarter Results Review Continuing Operations Quarter ended % change 9 months period ended % change 30 September 30 September 2016 2015 2016 2015 (RM’000) (RM’000) (RM’000) (RM’000) Revenue 140,691 124,013 13.44 391,673 357,278 9.62 Profit from operations 35,566 21,810 63.07 77,355 72,089 7.30 Share of results of associates and 5,510 3,385 62.77 6,599 2,460 168.25 Movement of CBIP mimics the movement of the Bursa Malaysia Plantation jointly-controlled entity Index, which is largely dependent upon the price of CPO Profit before taxation 40,831 24,873 64.16 83,087 73,617 12.86 Profit after taxation 32,787 16,127 100.33 61,310 56,360 8.78 Profit after taxation was higher for the Revenue for the quarter and 9 months quarter and 9 months period ended 30 period ended 30 September 2016 September 2016 mainly due to higher increased 13.44% and 9.62% revenue and margin for the special respectively mainly due to higher billing purpose vehicles division offset by lower for both the palm oil engineering and profit margin from the palm oil special purpose vehicles division engineering division 5
Latest Quarter Review Revenue Breakdown 9 months period ended 30 September 2016 9 months period ended 30 September 2015 Special Special Purpose Purpose Vehicles Vehicles 17% 20% Palm Oil Palm Oil Engineering Engineering 83% 80% Profit Before Taxation Breakdown Profit Before Taxation 9 months period ended 30 September % change 2016 2015 (RM’000) (RM’000) Palm Oil Engineering 64,622 70,112 (7.77) Oil Palm Plantation (3,345) (3,806) (12.11) Special Purpose Vehicles 15,211 4,851 213.56 Share of results of associates and jointly-controlled entity 6,599 2,460 168.25 Total 83,087 73,617 12.86 6
Palm Oil Engineering Palm Oil Engineering – Services One stop centre turnkey contractor for Modipalm Continuous Sterilization palm oil mills Our services and products encompass the following: Earthwork/site preparation; Civil construction; Mill engineering; and Supply, installation, testing and commissioning of machineries and equipment Screw Press Palm Oil Engineering – Core Products Digester Continuous Sterilizer 7
Palm Oil Engineering Palm Oil Engineering - Robust Performance PBT margin has grown from 17.07% in 500,000 30.00% FY11 to 26.64% for FY15 26.64% 450,000 25.67% 25.00% 22.72% 400,000 The significant improvement over the 20.63% years can be mainly attributable to: 350,000 20.00% Proven and exclusive technology in 17.07% 300,000 our Modipalm Continuous Sterilization mills; 250,000 15.00% 447,428 428,593 200,000 Economies of scale; 341,379 10.00% 317,621 150,000 Declining steel price; and 265,057 100,000 Improvement in project 5.00% implementation 114,181 50,000 92,286 81,535 77,551 45,234 0 0.00% FY11 FY12 FY13 FY14 FY15 Revenue PBT PBT Margin 8
Palm Oil Engineering Palm Oil Engineering - Robust Performance RM’000 Orderbook growth is underpinned by a backlog of RM493million as at 3Q2016 520,000 Despite declining trend in CPO price, 510,000 product branding and global recognition 500,000 surrounding our Modipalm Continuous 490,000 Sterilization palm oil mill have been 517,000 480,000 sustaining our orderbook 495,000 493,000 470,000 478,000 477,000 460,000 450,000 There has been an influx of 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 new clients, being clients Orderbook other than Astra, Wilmar, Felda, TH Plantations, New Recurring Clients Clientele Tradewinds and Sime Darby Clients 29% 30% Expansion New Recurring Notable new clients secured Clients Clients 70% include Jaya Tiasa, TDM, 71% Sime Darby, Sinarmas Group, United Plantations Bumitama Agri, Ahmad Zaki 2011 2014 and Rimbunan Hijau 9
Palm Oil Engineering Historical Performance Post Higher Oil Recovery Conversion Our Modipalm Continuous Oil Extraction Rate (%) Sterilization palm oil mills utilizes a continuous conveyor chamber for sterilization process, as 20.6 20.4 opposed to conventional batch 20.2 20 processing 19.8 20.4 20.27 19.6 19.4 19.47 19.2 Mill 1 19 In conventional batch process, oil Before Year of After are loss during extraction process Conversion Conversion Conversion as spillage of oil occurs during mobilization process for the batch Oil Extraction Rate (%) processing 21 20.5 20 Our Modipalm mill also 19.5 eliminates the need for 19 20.4 recovery of empty bunch oil, 18.5 18.89 18 18.51 Mill 2 which are low quality oil with 17.5 high wax content Before Year of After Conversion Conversion Conversion 10
Palm Oil Engineering Operator Cost Savings Estimated Operator Requirement (No.) Operator requirement for the Continuous Mill Size Conventional Modipalm Continuous Sterilization mill is minimal Mills Sterilization Mills 20 Tonnes/Hour 40 16 Automation of mill reduces role of operator’s to 30 Tonnes/Hour 45 20 supervision only 45 Tonnes/Hour 50 24 Performance of mill is not highly dependent on 60 Tonnes/Hour 55 24 labour performance Estimated Cost Savings for Conventional Mills Continuous Continuous Sterilizer Mills(RM) Sterilization Mills 800,000 600,000 400,000 200,000 - 20 30 45 60 Tonnes/Hour Tonnes/Hour Tonnes/Hour Tonnes/Hour Savings (Monthly Wage including OT: RM1000) Savings (Monthly Wage including OT: RM1500) Savings (Monthly Wage including OT: RM2000) 11
Palm Oil Engineering Maintenance Cost Savings Conventional Mills Continuous Sterilization Mills Machineries Horizontal sterilizers, cages, tractors, Fresh fruit bunch conditioner skid-steer loaders, railway tracks, and Continuous Sterilizer cages, transfer carriages, winches, capstans and mono-rail hoists or cage tippers Approximate Annual 700,000 600,000 Maintenance Cost 600,000 500,000 500,000 400,000 400,000 300,000 300,000 250,000 300,000 200,000 150,000 200,000 100,000 - 20 Tonnes/Hour 30 Tonnes/Hour 45 Tonnes/Hour 60 Tonnes/Hour Estimated Maintenance Cost For Machineries Conventional Mills Continuous Sterilizer Mills (RM) 12
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