GC Digital Roadshow Stock Exchange of Thailand Q1/19 Performance Presentation 6 June 2019 1
Disclaimer This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward- looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward- looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 2
Vision and Mission 3
PTTGC Sustainable Development WORLD MEMBERS IN CHEMICALS SECTOR FOR 6 th CONSECUTIVE YEAR 4
Agenda Financial Result 01 Strategic direction 02 5
2019 Business Environment - Tough but Challenge Oil US - China Global Economic Oil price Trade war Uncertainty Fluctuation World GDP revised to 3.3% ▪ ▪ Unpredictable game ▪ Supply cut from OPEC [3.8% in 2017, 3.6% in 2018] ▪ Trade flow has been changed Venezuela and Iran ▪ US, China forecasted to grow US PE divert its route into ▪ ▪ US crude output and stock hit but slowdown [US 2.3% , China other region i.e. EU, SEA, SAM new high record 6.3%] 6
Overview of business unit performance YoY QoQ (Unit: Million Baht) Q1/2018 Q4/2018 Q1/2019 % +/(-) % +/(-) Sales Revenue 120,939 128,874 112,783 -7% -12% EBITDA 16,308 5,747 11,194 -31% 95% EBITDA Margin (%) 13% 4% 10% -3% 6% Share of profit of investments in JV and Associates 2,024 1,426 1,186 -41% -17% Net Profit 12,388 4,060 6,443 -48% 59% EPS (Baht/Share) -48% 59% 2.75 0.90 1.43 Adjusted EBITDA* 16,319 12,271 9,768 -40% -20% Adjusted EBITDA Margin (%) 13% 10% 9% -4% -1% Stock gain/(loss) net NRV -11 (6,524) 1,426 >200% 122% FX gain (loss) 669 252 438 -35% 74% Note: * Adjusted EBITDA refers EBITDA excluding impact of oil stock value BU Q1/18 vs Q1/19 Q4/18 vs Q1/19 Refinery Mkt GRM 6.15 -> 3.22 $/BBL Mkt GRM 5.52 -> 3.22 $/BBL Aromatics BTX P2F 166 -> 206 $/T BTX P2F 238 -> 206 $/T Olefins & Derivatives EBITDA margin 32% -> 18% EBITDA margin 17% -> 18% Phenol Phenol P2F 467 -> 442 $/T Phenol P2F 540 -> 442 $/T 7
Performance comparison YoY Unit : MB Operating Profit from main BUs Sharing from 4,857 12,388 Subsidiaries, Stock Gain/(Loss) & JV & Associate NRV&Commodity Hedge Q1’19 = 1,834 FX Gain/(Loss) Q1’19 = 1,181 Q1’18 = 3,940 Q1’19 = 438 Q1’18 = (68) Q1’18 = 669 2,106 1,249 231 6,443 Q1-18 Q1-19 • Overall operating profit from GC in Q1’19 was soften from Q1’18, mainly from o REF performance decreased due to lower market GRM from 6.15$/BBL to 3.22$/BBL as decreasing in major product spread. o ARO performance increased from higher P2F on BTX from 166 $/T to 206 $/T as PX spread increased from gaining support of downstream demand, while Q1’18 market spread has pressure from expecting new supply to the market. o OLE & POL performance is softening from decreasing in PE price, while partial offset by increasing in selling volume. • Subsidiary was decreased mainly from less volume in MEG and Phenol because of schedule S/D and softening in MEG spread. • Sharing from JV&Associates was decreased mainly from softening in Acrylonitrile (AN) business and less effect from FX gain 8
Performance comparison QoQ Unit : MB Stock Gain/(Loss) & NRV&Commodity Hedge Q1’19 = 1,181 Q4’18 = (6,749) 1,355 186 7,930 Operating Profit Sharing from 6,443 from main BUs Subsidiaries, JV & Associate FX Gain/(Loss) 3,338 4,060 Q1’19 = 1,834 Extra Item Q1’19 = 438 Q4’18 = 2,874 Q4’18 Q4’18 = 252 Gain on bargain purchase = 1,355 1,040 Q4-18 Q1-19 • Overall operating profit from GC in Q1’19 was improved from Q4’18, mainly from no effect from stock loss in the period, while o REF performance decreased due to lower market GRM from 5.52$/BBL to 3.22$/BBL as Diesel spread and Jet spread decreased. o ARO performance decreased from lower P2F on BTX from 238 $/T to 206 $/T as PX spread and BZ spread decreased. o OLE & POL performance increased from higher PE sales volume as no schedule S/D in this period. • Subsidiary was decreased mainly from lower performance due to a decrease in products spread and volume of MEG and Phenol. • Sharing from JV&Associates was decreased mainly from softening in Acrylonitrile (AN) business and less effect from FX gain 9
Strong Financial Position Statements of Financial Position • Cash & ST Investment (50 billionTHB) and private fund and Mar 31,2019 Dec 31,2018 inhouse management of 3.0 billion THB at the end of Q1/2019 466 Bn 469 Bn Cash +ST Investment Liab. • In Q1/2019, the interest bearing debt is 61% on fixed rate and CA IBD 39% is float rate. THB debt is a major portion of 57% of our debt profile, while 43% is in USD, mainly from US Bond. PPE Share Holder’s Equity Non CA Cash Flow • In Q1/2019 CAPEX still based our core investment from ongoing THB Bn projects, including ORP, Propylene Oxide and ,Polyols project. • The repayment profile is around 10 billion THB per year on average but 2021 will increase from THB bond retirement (4-yr, 3.05%), as well as 2022 will increase from USD bond maturity. • The average loan life is ~3.03 years with average cost of long term debt ~3.87%. Note : Private Fund and In house management around 3,045MB 10
Agenda Financial Result 01 Strategic direction 02 11
Strategic direction To be a Leading chemical company for Better living Sustain Core Accelerate Growth levers Balance Business & Social Value Business Competitiveness International hub Sustainable development ▪ ▪ • Sustain benefit by Performance chemicals Effective CSR programs ▪ ▪ implementing Max infinity Green business Stakeholder management ▪ ▪ • Digitalization * Business / Technology / i.e. Digital assets / Data analytical / Digital People Transformation workforces / Cross-function collaboration • Launch new organization of Governance Risk and Compliance (GRC) 12
Supportive strategies through challenge year Set up war room group to closely monitor the economic situation, product prices trend and plant reliability, purpose to prepare the efficiency sales plans and production plans to suit the situation. Continue to implement MAX project and employed the concept in conducting MAX infinity by GC team to accelerate and increase the initiative in the organization's overall performance improvement 2019 program (Max Infinity + Enhancement). Profit Enhancement Digitalization module : Consideration on implementing 13 uses case Program i.e. Digital assets / Data analytical / Digital workforces / Cross- function collaboration. GC is also launch cost control program in this year in various aspect i.e. OPEX saving 10%, Tax and Interest reduction, Working capital management. Target approximately 5,600 MB 13
Strategic direction 1 st S-CURVE Existing Strong Base Performance Materials New S-CURVE ▪ Enhance GC ’ s feedstock position & flexibility Thailand’s New Targeted ▪ Strengthen Thailand capability for Economic Industries as the New & Social Sustainability development Engines of Growth NEXT-GENERATION AUTOMOTIVE SMART ELECTRONICS ROBOTICS & DIGITAL AUTOMATIONS EFFLUENT, MEDICAL & WELLNESS TOURISM Leverage international MEDICAL HUB AVIATION & BIOFUELS & partners advance BIOCHEMICALS LOGISTICS technology & expertise AGRICULTURE & to diversify product BIOTECHNOLOGY portfolio to high performance products FOOD FOR THE FUTURE 14
Strategic execution • Explore opportunity in EEC and alignment with policy • Resource preparation for investment roadmap i.e. GC Estate for land preparation • Opportunity in bio complex in Thailand • Balance portfolio and align with global trend i.e. potential investment in recycle plant, COD of ME II in April • Explore opportunity in international • strategic investment in the region that Integrating PET and PTA business can support existing value chain or new • Closing deal on Rotomolding share acquisition in March market opportunity in both green field and M&A • Executing 3 major projects as plan Private & Confidential | 15
Strategic execution Project progress Olefins Reconfiguration (ORP) 39% (Plan at 32%) New olefins plant Ethylene 500,000 TPA Propylene 250,000 TPA Propylene Oxide 51% (Plan at 45%) Propylene Oxide Propylene Oxide 200,000 TPA 200,000 TPA Polyols 54% (Plan at 55%) Joint Venture Company Polyols Polyether Polyols (PPG) 130,000 TPA Noted : As of 31 March 19 16
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