S.Kijchai Enterprise Public Company Limited (“SKN”) Opportunity Day Q1 2018 15 June 2018
Strictly Private & Confidential Disclaimer The information (“Confidential Information”) contained in this presentation is strictly confidential and is provided by S.Kijchai Enterprise Public Company Limited (the “Company”) to you solely for your reference. Neither this presentation nor any part thereof may be (i) used or relied upon by any other party or for any other purpose; (ii) copied, photocopied, duplicated or otherwise reproduced in any form or by any means; or (iii) redistributed, passed on or otherwise disseminated, to any other person either in your organization or elsewhere, without the prior written consent of the Company. By attending this presentation, participants agree not to remove this document, or any materials provided in connection herewith, from the conference room where such documents are provided without express consent from the Company. Although care has been taken to ensure that the Confidential Information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the Confidential Information is subject to change without notice, its accuracy is not guaranteed, has not been independently verified and it may not contain all material information concerning the Company. None of the Company, or any of their respective members, directors, officers, employees or affiliates nor any other person accepts any liability (in negligence, or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. This presentation is for information purposes only and does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or invitation of any offer to or recommendation to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract, commitment or investment decision in relation thereto in Thailand or any other jurisdiction. Any such purchase should be made solely on the basis of the information contained in the announcements to the Stock Exchange of Thailand relating to such securities. No reliance may be placed for any purposes whatsoever on the information set forth in this presentation or on its completeness. This presentation contains projections and forward‐looking statements that reflect the Company's current views with respect to future events and financial performance. These views are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over time and in many cases are outside the control of the Company. You are cautioned not to place undue reliance on these forward looking statements. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. Such forward‐looking statements are not guarantees of future performance and accordingly, the actual results, financial condition, performance or achievements of the Company may differ materially from those forecasted and projected or in the forward‐looking statements. Page 1
AGENDA Section 1 About SKN Section 2 Business Overview Section 3 Financial Highlights Section 4 Investment Projects
SECTION 1 : About SKN
Strictly Private & Confidential KEY MILESTONES S.Kijchai Family started to operate its sawmill plant under S.Kijchai Parawood Co., Ltd. in Rayong Province S.Kijchai MDF was awarded the ISO 14001 and was renamed to S.Kijchai Enterprise Plc. (SKN) and increased its registered capital from S.Kijchai Family and Sahakij Family started Plywood THB 600 mn to THB 800 mn for the IPO to operate plywood plant under S.Plywood Co., Ltd. S.Kijchai MDF started its commercial Sahakij Family started to operate S.Kijchai MDF was operation and exported its sawmill plant under Sahakij awarded BOI its first MDF Board Klaeng Co., Ltd. certificate S.Kijchai MDF was awarded S.Kijchai Parawood Co., Ltd. expanded its MDF S.Kijchai Family and Sahakij the ISO 9001 and MUTU business into furniture Family jointly established certification international manufacturing business and was S.Kijchai MDF Co., Ltd. renamed to S.Kijchai Co., Ltd. (“S.Kijchai MDF”) as a MDF 30% 70% Board manufacturer Sahakij S.Kijchai S.Kijchai Family established S.Kijchai Capital Family S.Kijchai Family started to operate Family Co., Ltd. (“SKC”) as a Particle its particle plant under holding company 3% 67% 30% S.Kijchai Wood Panel Co., Ltd. and restructure shareholding S.Kijchai SKC Sahakij structure in SKN Family Family Page 4
Strictly Private & Confidential PRODUCT AND MARKET OVERVIEW Products Overview SKN offers custom-made MDF Boards made by rubber woods. SKN’s customers can specify their desired size, thickness and class of formaldehyde. Thickness Class of Formaldehyde: Width ≤ 8 Feet Thin : 2.5 ‐ 4.0 mm Thick : 9.1 ‐ 25.0 mm European Standard: Medium : 4.1 ‐ 9.0 mm Density E1: formaldehyde ≤ 8/100 grams of glue • ≈700 -800 kg/m3 Key Features E2: formaldehyde ≤ 30/100 grams of glue • Uniform density properties ‐ resemble to US’s Standard: nature wood CARB P2: formaldehyde emission ≤ 0.11 ppm • Smooth surface for laminating Easy to work into shapes and finishing Key Current Market 1/ Major Customers North America East Asia South East Furniture Middle Asia Constructors Laminate Wholesalers / East Factory South Factory Distributors Asia Africa “With the capability to produce high quality MDF Board’s to meet customer’s expectation and requirement of most international environmental standard for wood-based panel, SKN’s potential markets cover most countries in the world ” Note: 1/ Based on sales in 2016 Page 5
Strictly Private & Confidential KEY CHARACTERISTICS AND APPLICATION MDF board is widely used for numerous interior functions and decoration purpose, such as furniture, door, casing and floor High screw holding strength & Bendable Smooth surface for laminating No grain or knots INTERIOR / BUILT‐IN CASING WALL FURNITURE FLOOR DOOR Strong load bearing Uniform density properties - Easy to work into resemble to nature wood shapes and finishing Page 6
Strictly Private & Confidential BUSINESS FLOWS Orders placement Orders Raw materials & procurement procurement placement & Confirmation Customers Production planning Suppliers Chip bin Raw materials Storage for the next 24 hours production Woods de-barking Woods chipping preparation Woods intake (First-in, First-out) Urea Formaldehyde Fiber bin Production Continuous Pre-heating Refiner Dryer Forming Automated pressing continuous process QC QC (Appearance) (Qualification) Master Board Sawing Delivery Packing Cooling Sanding & Cut-to-Side Page 7
Strictly Private & Confidential FACILITIES 144 Rai 3 Ngarn 13 Sq.Wa Area Custom‐made MDF Board Products Width: maximum of 8 feet • SKN Facilities located at Length: maximum of 18 feet • Klaeng, Rayong Thickness: 2.5 ‐ 25.0 mm • 240,000 m 3 /year Production Capacity Brand: Dieffenbacher Major Machinery Map Ta Phut Port 24/7 Operation Hour Laem Chabang Port Awarded BOI in 2011 BOI Privilege SKN , MDF Board manufacturer and exporter with the state-of-art facilities as well as strategic location adjacent to major ports Page 8
SECTION 2 : BUSINESS OVERVIEW
Strictly Private & Confidential GLOBAL MARKET Total global wood-based panel production volume 1 Million M 3 120 100 80 60 40 20 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Global upward trends for MDF board Thailand is among the fastest growing MDF exporters 11% CAGR 2 of MDF board production #4 Thailand ranks no. 4 for global MDF exports in 2016 volume (2000 – 2016) had outnumbered other wood‐based 10% CAGR 1 sales growth of Thai exporters in terms of value (2000 panels production volume with CAGR – 2016) had outperformed almost all players in the world top of 4% for the same period 10 1. Source: Food and Agriculture Organization of the United States 2. CAGR = Compounded annual growth rate Page 10
Strictly Private & Confidential OVERVIEW Utlization rate Sale Channel INCOTERM Agents SKN 100% FOB CNF 90% 80% 70% 60% 49% Q1 Q1 Q1 50% Q1 2017, 2018, 2017, 2018, 85% 40% 46% 46% 54% 54% 30% 20% 51% 10% 15% 0% Q1 2017 Q1 2018 Q1 2017 Q1 2018 Page 11
Strictly Private & Confidential OVERVIEW Country Distribution 3% 3% 7% Middle East 23% Asia 42% Q1 2017 Q1 2018 55% Others 35% Domestic 32% Page 12
Strictly Private & Confidential SECTION 2 : FINANCIAL HIGHLIGHTS
Strictly Private & Confidential HISTORICAL PERFORMANCE Performance of 1 st quarter 2018 -2017 Key Financial Ratios (THB mn) 400 377 Q1/2017 Q1/2018 330 350 Efficiency Ratios 300 6.67 7.41 250 Return on Assets (%) 200 18.42 8.91 Return on Equity (%) 150 124 97 100 51 32 50 Q1/2017 Q1/2018 0 Q1/2017 Q1/2018 Financial Policy Ratios 1.83 0.26 Revenue Gross Profit Margin Net Profit Margin Debt to Equity (times) 5.68 13.78 Interest Coverage Ratio (times) Q1/2017 Q1/2018 29.24% 32.89% Gross Profit Margin 9.69% 13.53% Net Profit Margin Page 14
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