President Asia Pacific Multi-Color Corporation Market Trends in - PowerPoint PPT Presentation

Brenton Barrett President Asia Pacific Multi-Color Corporation

Market Trends in South East Asia and Worldwide • What are some of them and Where are they • What’s our market look like • What are some current Converter / Industry challenges • Where are the growth opportunities in the Region

ASEAN Macroeconomic Overview ASEAN ‘18 - ’25 2017 2018 CAGR (weighted average) Annual GDP Growth 5.1% 5.0% 4.6% Private Consumption YoY 4.9% 5.1% 4.9% Consumer Price Index YoY 2.7% 2.7% 3.7% Retail Sales YoY 3.8% 4.3% 4.3% Industrial Production YoY 4.7% 4.2% 4.5% Export of Goods & Services 9.7% 6.7% 5.6% YoY 2017 average 2018 average 2020 Manufacturing PMI 50.8 51.2 51.8 Source: IHS; FSG; Trading Economics;

ASEAN PS Label Industry Overview ASEAN PS Label Industry Overview ASEAN 840M PS Industry Size, m 2 1.5 ฀ Per Capita 18-25 CAGR 4.6% GDP 6.2% PS Industry 5% 0.2% Pressure-Sensitive 30% Glue applied 45% Thailand Malaysia Singapore Sleeving PS Industry Size: 260M m 2 PS Industry Size: 143M m 2 PS Industry Size: 51M m 2 Per Capita: 3.8 m 2 Per Capita: 4.6 m 2 Per Capita: 8.8 m 2 IML ‘18 - ’25 GDP growth: 3.3% ‘18 - ’25 GDP growth: 5.1% ‘18 - ’25 GDP growth: 2.5% Others Vietnam Indonesia Philippines PS Industry Size: 202M m 2 PS Industry Size: 134M m 2 PS Industry Size: 50M m 2 Per Capita: 2.1 m 2 Per Capita: 0.5 m 2 Per Capita: 0.5 m 2 ‘18 - ’25 GDP growth: 6.3% ‘18 - ’25 GDP growth: 5.1% ‘18 - ’25 GDP growth: 5.8% (CAGR ‘17 - ’25) 20% Est. Total Market 1870 m 2 All Decorations Data Source: AWA, Avery Dennsion, Internal Data

ASEAN End User Segment Trends & Insights By value Packaged Food is the largest E-Commerce the fastest growing Health -consciousness + Natural/Organic Products = key theme Market Segment in ASEAN (~35% of total) across categories in ASEAN consumers category 2017 Market Size (Retail Value, US$ 150+Billion) PS Penetration (2017) (US$ 55.6 Bn) Largest 8% segment (US$ 24.4 Bn) 72% (US$ 22.3 Bn) 2% (US$ 16.9 Bn) 1% (US$ 11.1 Bn) 80% 5% (US$ 7.7 Bn) 100%* (US$ 8.2 Bn) 20% (US$ 5.9 Bn) Smallest segment *) Penetration in e-commerce assumes VI label being used Source: EuroMonitor International; e-Marketer Research; internal analysis

North Asia Label North Asia Industry 2012 – 2017 – CAGR 2017 2022 PS Industry Size, m 2 5,860M Markets China 7.8% 7.6% Various Per Capita Korea 4.6% 1.9% 18-25 CAGR All to Grow GDP Japan -0.1% 0.1% All to Grow PS Industry Total 5.5% 5.7% PSL 4,258(+8.3%) PSL 281(+1.0%) PSL 1,321(+0.0%) 252(+4.0%) Shrink Sleeve 4,443(+6.0%) Shrink Sleeve 812(+2.0%) Wet Glue 172(+2.0%) Wet Glue 2,787(+4.5%) Wet Glue 173 (+1.2%) 146(+3.5%) Wraparound 2,417(+5.3%) Wraparound 155 (+1.2%) IML 2(+2.0%) IML IML 40(+15%) 41(+0.6%) China Korea Japan PS Industry Size, m 2 PS Industry Size, m 2 4,258M 281M PS Industry Size, m 2 1,321M 3.0 ฀ 5.5 ฀ Per Capita Per Capita 10.4 ฀ Per Capita 12-17 17-22 12-17 17-22 12-17 17-22 CAGR CAGR CAGR CAGR CAGR CAGR 2.8% 2.6% GDP 7.3% 6.3% GDP 1.2% 1.0% GDP 4.6% 1.9% PS Industry 7.8% 7.6% PS Industry -0.1% 0.1% PS Industry Data Source: AWA, Avery Dennsion, Internal Data

China PS Label Industry Segmentation Label Market Structure by Label Technology IML Segment Size (M SQM & 17-22 CAGR) WA 0% PSL 17% VI 1,894(+10.6%) 31% Pharma 360 (+5.4%) Total Size Food 349 (+5.2%) WG 13,945M More than 80% of parcels delivered 20% Durables 311 (+3.6%) in China come from e-commerce, and SQM volume increased a robust 56.4% to HPC 292 (+4.4%) 5.77 billion in the first quarter of 2017 in China. SS B&B 119 (+5.4%) 32% Wine 74 (+7.0%) Others 859 (+5.0%) Data Source: AWA, Avery Dennsion Internal Data

8 Trends

Industry In ry Trends 1 Still coming from emerging markets – Growth China, India, Brazil and South East Asia. 2 Material Prices, Pricing Pressures and Rising Costs Cost Containment. 3 Shorter run lengths, product lifecycles Speed and lead times, more SKU proliferation. 4 Compliance, Sustainability, Waste Environmental Requirements, Scorecards

In Industry ry Trends 5 M & A Activity Over a Billion US$ in M&A activity / Creating a larger footprint maximizes the value proposition / no longer can you be in one location and service a region / Leverage best practice – costs & supply chain 6 Global Brand Owners Coordinating there decisions globally / want and expect the same levels of service in developing markets as developed markets / Plant Contingency / Look and Feel / Tenders.

Industry In ry Trends 7 Integrity – Value is in the intangibles, Brand Protection Looking for solutions to protect there brand . 8 Add Value or Diversify - QR Codes / Late Technology Stage Differentiation

Label Trends

Consumption Frequency & Purchase Behaviour - Personal Care Products 75% Chinese Category – Shampoo China Buy or try Age Groups 15 – 65 All Income Levels something different Male and Female Datamonitor Survey China July 2017

Label Trends

Trends 2018 • Shrink • Track and Trace • Brand Protection and Security Labelling • Flexible Packaging • Augmented Reality • E Commerce and Data Mining • Internet of things • Tubes Pic Source – AWA /MCC

Global Budweiser Metalized PS Opportunity ABI > 85% PS in USA

Variable Labels 17

Can Growth

Can Labeling Cans with PS

Shrink on Cans

Single Serve Wine

Blue Tooth Labels Electronic Labels

PET Cans

Near Field Communications NFC

Challenges • Change • Pricing reduction pressures • Shorter lead times • SKU proliferation and shorter run lengths • Sustainability • Raw Material Price Increases • Finding Qualified Press Operators • Lean Source – TLMI, Internal Data 2016

Why would you want to be any where else Global Label Market Value (All decorating Technologies) US$ 2% In 2016 34.5B Pressure Sensitive (44%) Forecast 2021 44.8B 36% Others(3%) 44% Shrink Sleeves (15%) So in 5 years Projected to Add US$ 10B in Wet Glue (35%) Market Value In Mould Labels (3%) 15% 3% Asia is 40+% of the Global Label Volume Source - Smithers Information Ltd 2016

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