INVESTOR PRESENTATION 2017 “ TO BE A REGIONAL LEADER IN STARCH & STARCH- RELATED FOOD PRODUCTS”
DISCLAIMERS “ DISCLAIMERS : THIS REPORT HAS BEEN PREPARED BY THAI WAH PUBLIC COMPANY LIMITED (TWPC) PRELIMINARILY AS A PROPOSAL FOR INFORMATION PURPOSES ONLY ” This information is given in summary form and does not purport to be complete. Information is this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transaction, currency risk. This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to TWPC’s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements, TWPC does not undertake any obligation to publicly release the result of any revisions to these forward looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside TWPC’s control. Past performance is not a reliable of future performance. This Presentation is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly to any other person or published, in whole or in part, for any purpose. No part of this presentation may be reproduced or taken or transmitted. The distribution of this presentation in other jurisdictions may be restricted by law, and persons into whose possession this presentation comes should inform themselves about, and such restrictions. By accepting this presentation you agree to be bound by the foregoing restrictions. Private for Investor Forum 1
AGENDA Business Highlights Business Overview Industry Overview Financial Performance Going Forward & Opportunities Appendix Private for Investor Forum 2
Business Highlights
BUSINESS HIGHLIGHTS IN 2017 • Volume growth across business despite challenging raw material in Q4 • Successful set up of Thai Wah Biopower Plant / Thai Wah Shanghai / Thai Wah Vietnam / Thai Wah Cambodia • Successful first M&A with TDC • Maintain strong operating cash flow, improve cash position and book value Private for Investor Forum 4
Business Overview
COMPANY FACTSHEET NAME Thai Wah Public Company Limited Thai Institution NVDR - Thai SYMBOL TWPC 6.7% 7.5% Institution - LRH Foreigner 10.1% 8.9% SECTOR / INDUSTRY Agribusiness / Agro & Food Industry MARKET Stock Exchange of Thailand (SET) Retail - Thai 19.8% Ho Family PAID-UP CAPITAL THB 880.42 million 40.4% Retail - Foreigner 880,420,930 shares (Par THB 1.00) 6.7% COMMON STOCK 5 th October 2015 LISTED DATE Shareholder structure** Free float 50%** DIVIDEND POLICY Increase in absolute dividend payout Market Cap : around 8,584 MB** ** SET as of 29 Sep 2017 Private for Investor Forum 6
THAI WAH BUSINESS OVERVIEW Starch and Related Business Food Products Business Native Starch High-Value Added Vermicelli Rice Noodle Others Native tapioca starch Dry & fresh mung Glucose/Sweetener Dry & fresh rice noodles Bean Sheet for:- bean vermicelli (Shanghai noodle) Coarse Flour Food Industry / MSG Tapioca starch Sago (Pearl) Paper Industry Pearl / Sago Pharmaceutical Modified tapioca starch Textile Industry Alpha starch Adhesive Industry “Native Starch” “Glucose” “Alpha Brand” “Pearl / Sago” “Double Dragon” “Phoenix” “Double Kilin ” “New Grade” Production Base : 1 factory in TH & 1 factory in VN Production Base : 5 factories in TH, 2 factories in VN & 1 factory in CBD Capacity : 22,000 tons for Vermicelli and 4,000 tons for Noodles Capacity : 450,000 tons for Tapioca Starch and 50,000 tons for Glucose Customer Base : ~92% Domestic and ~8% Export Customer Base : ~78% Export and ~22% Domestic (TH only) Private for Investor Forum 7
BALANCE PORTFOLIO Thai Wah Business Breakdown by GP Food, 27% Food, 35% Native, 30% Food, 33% Native, 39% Native, 47% 2016 2017 2020 E HVA*, 26% HVA*, 28% HVA*, 35% 2018 – 2019 2020 Target HVA Capacity 70 % Food & HVA Expansion contribution to enhance margins BALANCE PORTFOLIO to TWPC Group GP and improve ROIC *HVA products – Glucose, Coarse flour, Pearl, Alpha starch Source : The Company Private for Investor Forum 8
STARCH APPLICATION PREMIUM FOOD GRADE Pearl Thai Dessert Pharmaceutical Fabric Sweetener Animal Feed Syrup & Dessert Starch Cassava Root Industrial Instant Meal MSG Carton Glue & Adhesive BIO Application Biodegradable Sauces Cosmeti Carton Modified Products c Starch Metal Paper Beverage Industry Private for Investor Forum 9
STARCH BUSINESS AFTER 1 ST M&A Volume Contribution 2017 HVA Growing Volume Contribution 2016 – 2018 E HVA 28 % +8 – 10% Native Starch 38% 72 % 26% 28% 2016 2017 2018E Strategies Synergies Increase Utilization Distribution Channels Gear Up to HVA / Niche Market Brand Leverage Improve Margin Product Line Extension Expand Customer Base Penetration Support Function / R&D Private for Investor Forum 10
OUR FOOD PRODUCT 1 Dry Vermicelli Fresh Vermicelli Bean Sheet High product quality 2 Dry Rice Noodle Fresh Rice Noodle No chemical preservatives & FOODS gluten-free contents 3 Sago / Pearl Noodle Kit New Grade Product & Food Hygiene certification processes Private for Investor Forum 11
FOOD DISTRIBUTION AND GO-TO MARKET STRATEGY Phitsanulok Chiang Mai Udon Thani 44 % Roi Et growth YoY for 2017 Nationwide Distribution Coverage Korat First Hub at Chiang Mai in Q2’17 Banglan Chonburi Bangkok Key long term driver Surat Thani Leveraging a Technology - Enabled platform to build through Thailand and ASEAN Private for Investor Forum GPS-handheld 12
FOOD EXPORT OPPORTUNITY 8 % Contributions for 2017 Mainly Food Export to EU, USA, and CLMV Expansion more “Volume” especially in CLMV / Exploring more on “New Products” especially in EU and USA Private for Investor Forum 13
Industry Overview
NATIVE STARCH EXPORT PRICE MARKET Lower GP margin in Q4 given by Compression of ASP & Higher raw material costs USD/Ton 445 440 425 2017 400 408 386 380 378 368 363 360 358 2015 365 360 339 338 329 328 328 328 328 323 318 320 315 315 315 2016 320 328 280 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Year 2015 2016 2017 2018 421 350 445 AVG FOB / tons 345 Source : The Thai Tapioca Trade Association Private for Investor Forum 15
NATIVE STARCH MARGIN GAP Lower GP margin in Q4 given by Compression of ASP & Higher raw material costs Baht/Kg. 14 12 10 8 6 Lower GP margin in Q4 4 2 Jan/16 Mar/16 May/16 Jul/16 Sep/16 Nov/16 Jan/17 Mar/17 May/17 Jul/17 Sep/17 Nov/17 Jan/18 Selling price (Month-1) Selling price (Month) Raw Material Source : The Thai Tapioca Trade Association Private for Investor Forum 16
TAPIOCA STARCH EXPORTED FROM THAILAND 2017 TWPC Tapioca Export Industry + 10% - 4% %Growth %Growth YoY 20 16 2017 YoY Volume + 10% - 4% 3,275,985 3,133,778 (‘000 Ton) Value + 3% - 12% 39,981 35,059 (MB) Source : Company and Thai Customs Department Private for Investor Forum 17
MARKET OPPORTUNITIES 9 % of Total Native Indonesia, Starch Export 11% CHINA Malaysia, in 2017 9% • The largest importer of Tapioca Starch in the world • Thai Wah market share Other, was 9% in 2017 11% China, 51% TAIWAN Taiwan, • The 3 rd largest importer of 10% Tapioca Starch in the world • Thai Wah market share Japan, was 17% in 2017 5% USA, 3% Source : The Company and The Thai Tapioca Trade Association Note : Data was by Volume Private for Investor Forum 18
Financial Performance
FINANCIAL HIGHLIGHTS IN Q4’17 Q4’17 QoQ Sales growth Q4 ’17 +30% QoQ 1,476 Sales 1,921 GP Margin Q4’17 vs. Q3’17 337 Gross profit 16.5% vs. 22.8% 317 204 EBITDA EBITDA 224 Q4’17 +10% QoQ 109 NP (after MI) 145 NP growth Q4’17 +33% QoQ Q3'17 Q4'17 Source : The Company Private for Investor Forum 20
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