Investors Presentation 2018 - PowerPoint PPT Presentation

Growing Global Investors Presentation 2018 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 1

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

Growing Global Contents Financial Performance Dividends & Share Price Performance Industry Outlook Hartalega NGC Status Antimicrobial Gloves (AMG) 3 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 3

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

Sales Revenue & Profit Growing Global 2,405 Revenue Revenue CAGR 1,822 1,498 32.0 % 26.7 % Revenue (RM mil) 1,145 1,107 110 160 240 282 443 572 735 921 1,032 YoY Increase FY05-FY18 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Profit After Tax PAT CAGR 55.2 % 31.0 % 439 YoY Increase FY05-FY18 Profit After Tax (RM mil) 259 283 190 201 234 234 210 146 FY18 Net Profit Margin 85 40 37 19 18.2 % 13 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 5

EPS Growth Growing Global EPS EPS CAGR Earnings per Share (sen) 13.28 54.0 % 17.4 % YoY Increase FY08-FY18 8.62 7.97 7.85 7.85 6.54 6.91 6.74 Net Earnings grew from RM40m (2008) to RM439m (2018) or 10.9 times in 10 years 4.91 Number of shares grew from 243m shares (2008) to 2.66 2.90 3,311m shares (2018) as a result of bonus issue of 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 not hinder EPS from growing FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Focus on sustaining EPS via combination of economies of scale and stable margins ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 6

Quarterly Profit & Corporate Exercise Growing Global 1Q19 1Q19 Q1 Q2 Q3 Q4 vs 1Q18 PAT vs 4Q18 PAT 125 29.7 % 7.4 % 116 113 113 YoY Increase QoQ Increase 96 89 Increase in Q1 due to higher revenues from 73 71 higher ASP and capacity utilization rates. 66 62 63 60 57 56 55 50 We are currently commissioning lines in NGC 48 Plant 5. These lines will contribute to our Q2- Q4 growth. FY15 FY16 FY17 FY18 FY19 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 7

Growing Global Dividend & Share Price Performance Good growth prospects 8 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 8

Hartalega’s Dividend Growth Growing Global Dividend Dividend 60.0% Per Share Payout Ratio 45.3%45.7%47.0%49.9%50.9% 49.3% 7.95 sen 60.0 % 7.95 40.1% For FY2018 From FY2018 onwards 34.4% 33.9% 4.25 4.00 3.63 3.63 3.25 3.13 Pay-out Policy of minimum 60% instituted from 2.63 FY2018 onwards 1.67 1.00 Although number of shares have grown, DPS has grown to 7.95 sen to date FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 DPS (sen) Payout Ratio Dividend per share is stated post-bonus issue* ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 9

Hartalega Share Price Performance - FY2018 Growing Global 2,000.00 7 1,900.00 6 1,800.00 5 1,700.00 1,600.00 4 1,500.00 3 1,400.00 Share Price 1,300.00 2 + 146 % 1,200.00 1 1,100.00 Over FY2018 1,000.00 0 Hartalega (RHS) FBMKLCI (LHS) ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 10

Most valuable glove manufacturer Growing Global Market capitalization exceeding RM20 billion Market capitalisation (RM mil) 20,037 Most valuable glove company with market capitalisation of RM20 billion as of 30 th Mar 2018 Market cap appreciated by approx. 46 times from RM436 million (IPO of RM1.80 adjusted 6,934 7,959 8,139 for bonus issues) to current market cap of RM20 billion (as of 30 th Mar 2018) 5,116 2,902 3,623 Hartalega commands a premium for its 1,987 1,981 healthy financials, sales growth, innovation 606 436 and productivity FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 11

Growing Global Industry Outlook Healthy growth in 2019/2020 12 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 12

Market outlook Growing Global Consistent growth in global consumption World demand for rubber gloves grow at an Global consumption of rubber gloves (bil pcs) average of 6% to 8% per annum 287 Malaysia is the largest supplier of rubber 265 246 gloves to the world – 63% market share 228 64 68 84 92 94 102110122124140150148160 171 180194210 Demand for glove is inelastic, a basic necessity in healthcare and other sectors that require hand protection Global consumption growth will continue stemming from increase from developing nations where existing per capita 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f consumption is significantly lower than developed countries ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 13

Market outlook Growing Global Attractive opportunities in high growth and highly populated developing countries Gloves per capita consumption (pieces) 276 259 250 230 226 208 201 198 197 185 180 163 156 153 124 120 106 90 88 83 67 66 58 32 30 10 6 4 2 Market statistics show big disparity in per capita consumption between developed and developing nations Countries with low per capita consumption of gloves that have huge population and high GDP growth indicate big opportunities for demand growth for gloves ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 14

Market outlook Growing Global Supply and demand remains healthy Global consumption projected to grow more Malaysia Big Four Global demand than industry’s capacity expansion Malaysia competitiveness relative to China in glove production has improved due to China’s government clamp down on environmental compliance Rubber glove expected to take market share from PVC glove PVC glove market size is about equal to rubber glove ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 15

Market outlook Growing Global Nitrile glove export in Malaysia continues to grow NR, NR NR, NR, 40% 42% NBR, 43% 49% NBR, NBR, NBR, 51% 57% 58% 60% Year 2017 Year 2014 Year 2015 Year 2016 Malaysia’s Export of Rubber Gloves (source MREPC) ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 16

Growing Global Hartalega NGC Status NGC Next generation integrated manufacturing complex 17 ……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 17