Growing Global - PowerPoint PPT Presentation

Growing Global ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 1

About us Growing Global ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 2

Growing Global Contents Financial Performance & Dividend Growth Industry Outlook Hartalega NGC Status Antimicrobial Gloves What’s Next for Hartalega 3 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 3

Growing Global Financial Performance & Dividend Growth High growth glove company 4 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 4

Sales Revenue & Profit Growing Global 2,827 Revenue Revenue CAGR Revenue (RM mil) 2,405 1,822 17.5 % 26.1 % 1,498 1,145 1,107 1,032 110 160 240 282 443 572 735 921 YoY Increase FY05-FY19 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Profit After Tax PAT CAGR 3.4 % 28.8 % 439 454 YoY Increase FY05-FY19 Profit After Tax (RM mil) 259 283 190 201 234 234 210 146 FY19 Net Profit Margin 85 13 19 37 40 16.0 % FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 5

EPS Growth Growing Global EPS EPS CAGR Earnings per Share (sen) 13.69 3.0 % 16.0 % 13.28 YoY Increase FY08-FY19 Net Earnings grew from RM40m (2008) to RM454m 8.62 7.977.85 7.85 (2019) or 11.3 times in 11 years 6.546.91 6.74 Number of shares grew from 243m shares (2008) to 4.91 3,345m shares (2019) as a result of bonus issue of 2.66 2.90 1 for 2 in 2010, bonus issue of 1 for 1 in 2012, bonus issue of 1 for 1 in 2015 & bonus issue of 1 for 1 in March 2018 which did not hinder EPS from growing FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Focus on sustaining EPS via combination of economies of scale and stable margins ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 6

Hartalega’s Dividend Growth Growing Global Dividend Dividend 60.2% 60.0% Per Share Payout Ratio 50.9% 49.9% 49.3% 47.0% 7.95 8.20 8.2 sen 60.0 % 45.7% 45.3% 40.1% For FY2019 From FY2018 onwards 34.4% 33.9% 4.00 4.25 3.63 3.63 3.25 2.63 3.13 Pay-out Policy of minimum 60% instituted from FY2018 onwards 1.67 1.00 Although number of shares have grown, DPS has grown to 8.20 sen to date FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Total dividend payout for the year amounts to DPS (sen) Payout Ratio RM274 million Dividend per share is stated post-bonus issue* ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 7

Quarterly Profit Growing Global 1Q20 1Q20 Q1 Q2 Q3 Q4 vs 1Q19 PAT vs 4Q19 PAT 125 120 24.6 % 3.1 % 119 116 113 113 YoY Decrease QoQ Increase 96 94 91 89 Lower profit YoY mainly due to lower 73 71 sales volume coupled with higher 66 63 62 60 packaging, heating and labour cost. 56 During the quarter, we have completed commissioning of NGC Plant 5. FY16 FY17 FY18 FY19 FY20 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 8

Malaysia Rubber Glove Exports: Jan-Apr (4M18 vs 4M19) Growing Global Rubber Gloves Export Rubber Gloves Export by Material (million pairs) Type (million pairs) Total rubber glove exports -3.1% have decreased by 2.7% YoY -2.7% in the first 4 months of 2019 17,156 16,621 27,154 -2.0% Natural rubber glove exports 26,423 have decreased by 2.0% in 9,998 9,802 the same period YoY Nitrile glove exports have also decreased by 3.1% in the Total Gloves Natural Rubber Nitrile same period YoY 4M2018 4M2019 4M2018 4M2019 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 9 Source: MREPC

Malaysia Rubber Glove Exports: Jan-Dec (2017 vs 2018) Growing Global Rubber Gloves Export Rubber Gloves Export by Material (million pairs) Type (million pairs) Total rubber glove exports 15.7% 11.8% have grown by 11.8% from 2017 mainly due to the China 81,801 51,239 5.7% vinyl supply disruption since 44,279 2017 30,562 28,916 73,195 Nitrile exports have grown by 15.7% from 2017 as global demand continue to switch from latex to nitrile gloves Total Gloves Natural Rubber Nitrile 2017 2018 2017 2018 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 10 Source: MREPC

Managing the Challenges Ahead Growing Global Continue to focus on cost optimization initiatives to mitigate impact from rising operational costs i.e. natural gas and labour cost Further R&D efforts into innovative products to fulfill demand gaps and differentiate from competitors Continuous improvement on process automation to improve efficiency and reduce dependency on manual labour Make headway and build foothold in high growth and highly populated markets ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 11

Growing Global Industry Outlook Long term potential from developing markets 12 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 12

Market outlook Growing Global Consistent growth in global consumption ? Global demand Malaysia is the 256 grew at a rate of largest supplier 228 210 8 % -10 % 63 % 140 150148 160171180194 per annum for the Market Share 84 92 94 102 110 122124 past 10 years 64 68 In the past 5 years, market continues to grow at a rate of 8%, fueled by increasing demand in regions such as Europe & Asia. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 13 Source: Trade Atlas import data, Company estimates

Market outlook Growing Global Nitrile glove export in Malaysia continues to grow NR, NR, NR NR, NR, 37% 40% NBR, 42% 43% 49% NBR, NBR, 51% NBR, NBR, 57% 58% 60% 63% Year 2014 Year 2015 Year 2016 Year 2017 Year 2018 Malaysia’s Export of Rubber Gloves (source MREPC) ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 14

Growing Global Hartalega NGC Status NGC Next generation integrated manufacturing complex 15 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 15

NGC ongoing expansion Growing Global 2.8bln 2.4 times P6 P7 1.1bln Revenue more than RM 1.8 bln 22 production lines to be built doubled in 4 years in NGC in coming years FY15 FY19 Invested at NGC to date To date, 60 production lines are running at NGC. 5 out of 6 plants at NGC are in full operation Plant 6 is targeted to start production in 1Q of 2020 while plant 7 in 2H 2020 Have set aside capital expenditure of RM630mil for the next 3 years for plant expansion Capacity will increase from current 34 billion pcs p.a. to 42 billion pcs p.a. by FY2022 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 16

Growing Global Antimicrobial Gloves World’s First Non -Leaching Antimicrobial Gloves ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 17