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TPBI Public Company Limited

TPBI Public Company Limited. Opportunity Day Presentation May 21, 2019. Disclaimer.

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TPBI Public Company Limited

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  1. TPBI Public Company Limited Opportunity Day Presentation May 21, 2019

  2. Disclaimer • The information contained in this presentation is for information purposes only and does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in TPBI Public Company Limited (“TPBI”) in any jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever. • In addition, 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 and its directors. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future events. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results may differ from those forecast and projected or in the forward-looking statements as a result of various factors and assumptions.

  3. Agenda

  4. TPBI Group Overview Company Profile Share Summary • TPBI Public Company Limited (“TPBI”) was established by Borrisuttanakul family as a plastic-bag trader/producer • More than 30-year experience led the company become the leader of plastic-bag producer in Thailand • The company was listed on the Stock Exchange of Thailand in the beginning of 2Q16 TPBIis Thailand’s No. 1 total solution provider of plastic bag, providing complete services • product design and formula development • manufacturing and procurement • raw material and product testing *Shareholder holding as of the latest book closing date TPBI’s VISIONis “To be a leading packaging manufacturer who achieves sustainable growth together with all stakeholders” Source: Company Data, Bloomberg

  5. TPBI Group Products Revenue Breakdown by Product • TPBI Group’s total sales for 1Q19 is THB 1,372.82 mm, having sales proportion by products as follows: Revenue Breakdown in 1Q18 Revenue Breakdown in 1Q19 Source: Company Data

  6. Market Diversification Market Diversification • During 1Q19, approximately 63.33% of total sales are from exports to international markets while 36.67% are from domestic sales. In 1Q18 In 1Q19 “TPBI Group distributes their different types of products to various regions to diversify the risk of relying on a few market” Note: :*Other countries include South Korea, Singapore, Nigeria, Laos, Cambodia, etc. Source: Company Data

  7. Agenda

  8. TPBI’s Business Divisions Global Trading Flexibles Paper Consumables • Product Mix: • Flat & Satchel bag/ Block Bottom/ SOS / Tape Handle / die cut SOS bags • Production Capacity: • ~ 516 million bags per year • Key Markets: • UK. • Product Mix: • Lamination film/ Barrier film/ Stretch hood/ Shrink film • Packaging for frozen food, ready-to-eat food and others • New Products: Digital Printing • Production Capacity: • Multi Layer Film: ~ 11,500 tons per year • Flexible Packaging: ~ 150 million meters per year • Key Markets: • Thailand, Vietnam, Singapore, Australia, and etc. • Product Mix: • Reusable bags/ Piping bags/ All products from Consumable, Flexible, and Paper divisions. • Key Markets: • UK, Australia, and USA. • Product Mix: • Vest carrier bags/ T-shirt bags/ Bio compostable bags/ Fruit & Vegetable bags/ Garbage bags/ Loop- handle/ Die cut bags/ Fashion bags/ EMAP film bags • New Products: Roll Star/ New design garbage bags/ New design bags on roll for fruit and vegetable/ Mail Order bags/ Liner bags/ LLDPE food bags • Production Capacity: • ~62,000 tons per year • Key Markets: • Australia, UK, USA, New Zealand, Japanand etc.

  9. Historical Production Capacity and Utilization Rate General Packaging • General packaging capacity is currently around 62,000 tons per year • Utilization rate have been in range of 64 - 86% Multilayer Blown Film • Multilayer blown film capacity is currently around 11,500 tons per year • Utilization rate have been in range of 76 – 84% Flexible Packaging • With new factory, Flexible packaging capacity has been increased to over 150 million meters per year • Utilization rate have been in range of 49 – 80% • Capacity expansion requires longer lead time than other products Source: Company Data

  10. Agenda

  11. Market Overview Brent Crude Oil • Brent crude oil price has been increasing during the first quarter of 2019, averaging at USD63.83 per barrel in 1Q19. Resin Price • The resin prices are somewhat influenced from crude oil price. • The average prices of HDPE and LLDPE were 1,081 and 1,030 per MT respectively in 1Q19 Foreign Exchange (THB/USD) • Thai Baht has been quite fluctuated during 1Q19, averaging at THB 31.63 per USD • TPBI revenue and cost are partially natural-hedged Source: Bloomberg

  12. Operating Results Total Sales Revenue Gross Profit and Net Profit Revenue Breakdown • In 1Q19, the revenue was increased compared to same period last year mostly due to higher sales of Garbage bags as well as revenue from Intelipac group in 1Q19. • Besides the increase in sales of general packaging, there are also an increase in sales of Multi-layer blown film and flexible packaging products which is in line with the Company’s policy to shift into higher value-added products. • The gross profit margin was higher due to an increase in sales of higher value-added products such as garbage bags and film as well as a recognition of gross profit from an investment in Intelipac group. On the other hand, the Company has net loss since an increase in mainly depreciation and interest expenses from new investment to expand production capacity. Source: Company Data

  13. Operating Results (Cont.) Operating Result in 1Q19 • In 1Q19, the lower profit margin compare to last year mainly due to following factors: • Single-use plastic bag ban policies across many countries and quite low order for General Packaging because of garbage bag order opening process of new customer during beginning of this quarter • High production expenses occurred from production start-up and moving of all production capacity to new factory of the Company’s subsidiary for lower production cost (T.A.K. packaging) • An increase in depreciation expenses as a result of new product capacity expansion in General Packaging and an increase in production capacity of flexible packaging product • An increase in interest expense from an increase in bank loans as a result of an expansion in production capacity of general packaging and flexible packaging products Source: Company Data

  14. Operating Results (Cont.) Analysis of Net Loss in 1Q19 compares to 1Q18 Unit: THB ‘000 (175.73) Unit: THB ‘000 233.82 (76.32) (19.39) 5.98 5.98 (3.95) (9.71) 3.32 3.32 Note: :*SG&A in FY2018 includes non-recurring expense in total of THB 108 mn. Source: Company Data

  15. Balance Sheet Composition Assets Breakdown Liabilities and Equity Breakdown (THB mm) (THB mm) 5,040 5,040 Interest-bearing-debt 1Q19: THB 1,836 mm 1Q18: THB 851 mm Net Debt 1Q19: THB 1,637 mm 1Q18: THB 328 mm Share Capital 1Q19: THB 417 mm 1Q18: THB 400 mm Cash & ST Investment 1Q19: THB 199 mm 1Q18: THB 523 mm Inventories 1Q19: THB 860 mm 1Q18: THB 690 mm A/R 1Q19: THB 845 mm 1Q18: THB 702 mm PP&E 1Q19: THB 2,662 mm 1Q18: THB 2,207 mm 15.7% 4,228 4,228 5.7% 39.6% 35.1% 30.2% 53% 8.6% 1% 64.1% 49.2% 51.8% 46% Key Financial Ratios Cash on Hand Net Debt to Equity Current Ratio Gross Debt to Equity 1Q19: 0.66x 1Q18: 0.12x 1Q19: 1.11x 1Q18: 1.71x 1Q19: 199 mm 1Q18: 299 mm 1Q19: 0.74x 1Q18: 0.31x Source: Company Data

  16. Agenda

  17. TPBI 2019 Outlook Consumable Products • Continue to maintain market shares in existing market as well as obtain purchase orders from new customers in order to maximize production capacity Vest Carrier Bags/ T-Shirt Bags Reusable Bags • Utilize production capacity shifted from Vest Carrier in order to serve stronger demands from oversea countries such as USA, Australia and other European countries Garbage Bags • Increase production capacity to meet an increase in demands from oversea countries, especially from USA • Continue to increase market shares of other plastic bags in order to optimize product portfolio risk and support margins Other Plastic Bags • Invested in new Multilayer Blown Film. Focusing on sales to domestic manufacturer in food industry while looking for an opportunity in other market both domestic and overseas Flexible Packaging Multilayer Blown Film Flexible Packaging • New factory has been operated since Sept 2018. Currently focusing on utilize an increase in production capacity and enhance production efficiency • TPBI’s paper bags production and sale base in UK will continue to increase its market shares in UK and other nearby country. In addition, R&D and feasibility study are going to be conducted for an investment opportunity in Thailand Paper Bags TPBI UK - Paper TPBI UK - Trading Plastic and Other Bags • Utilize TPBI’s expertise in import and export in international market to serve customer’s demand for plastic and other bags

  18. Updated Actions and Future Plan Inorganic Growth Organic Growth Market Expansion Flexible Packaging & Film Merger & Acquisition • Focus in strengthen and expand M&A subsidiary companies. • Transformation project to divert into more new products and markets. New general packaging products will help to optimize product portfolio risk and support margins • Expand new designs garbage bag orders • Expand new bag on roll for vegetable and fruit orders • Expand mail order bags orders • Start production of pipping bags • Start production of Reusable Soft Loop with Post Consumer Recycle • Expand transformation products capacity • New flexible packaging factory started its operation • Expected capacity (per year basis) • Current: 150 million meters • Phase II: 200 million meters in 2019-2020 • Digital Printing is completely installed and already start commercial run. • Invested in new Multi Layer Blown Film machine • 11,500 tons per year Source: Company Data

  19. Investor Relations • TPBI Public Company Limited 42/174 Moo 5, Raiking Sampran Nakorn pathom 73210 Thailand • Tel: +66 (0)2 4290354-7 • Fax: +66 (0)2 4290358 • E-mail: ir@tpbi.co.th

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