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Global Connections Public Company Limited Opportunity day “2009 Performance Announcement” March 3, 2010 1 Today Content • • • • • Company Overview Plastic and Petrochemical Industry 2009 Performance AGM rating & CG Rating Result Q&A 2 Company Overview GC has been founded since 1994 by 5 experienced management Listed to SET 6th Dec.2005 Total Revenue 3,473 MB 4,000 3,390 3,429 3,500 2,665 3,000 GC is the distributor of 23 leading producers of plastics and petrochemical raw materials from around the world. 2,500 Most of these producers are among the top 3 in the world in that product in terms of technology & production capacity. 2,000 1,500 1,000 500 76 GC Revenue During 1995 – 2009 20 09 20 07 20 05 20 03 20 01 19 99 19 97 19 95 - Year GC is not an ordinary distributor. On top of ordinary distribution role, GC provide technical advice and useful information to customers since GC position itself to be Your best partner for solution and service in Industrial raw material supply. 3 GC role in the market World without distributor Suppliers S1 S2 S3 S4 S5 Sn Customers C1 C2 C3 C4 C5 Cn ) 4 GC role in the market World with distributor Economy of Scale to Suppliers Suppliers S1 ) S2 S3 S4 S5 Sn Global Connections Public Co., Ltd. Provided Customers Logistic : warehousing, small delivery, and repacking Sales & Marketing : end markets/customers Technical Services Financing & structuring solution C1 C2 C3 C4 C5 Economy of Scope to Customers Cn 5 Where we are in the value chain of Thai Petrochemical Industry Petrochemical and plastic producers Upstream Intermediate Olefin&Aromatic Producers Downstream Monomer producers (MEG, VCM) Polymer producers (PP, PE, PVC) Compounders Global Connections End users Compounders Masterbatch producers Converters 6 Organization Chart Board of Directors The Nomination and Remuneration Committee Audit Committee Executive Committee Internal Audit President The President Office Marketing Department 1 Marketing Department 2 Marketing Department 3 HR & Administration Operation Finance & Account 7 Board of Directors 1. Mr. Virah Mavichak Chairman of the Board and Independent Director 2. Dr. Pisit Leeahtam Independent Director and Chairman of Audit Committee 3. Assoc. Prof. Chawalee Pongpatirochna Independent Director and Audit Committee 4. Mr. Suchart Suphayak Independent Director and Audit Committee 5. Mr. Somchai Kulimakin Vice - Chairman and President 6. Mr. Sumruay Tichachol Director 7. Mr. Aikachai Sirijantanan Director 8. Mr. Siri Thirawattanawong Director 9. Mr. Bhiya Jriyasetapong Director 8 Major Shareholders Free Float Overview As of 31/12/2009 Minor Shareholders % Shares in Minor Shareholders (Free float) 393 (% Free float) Overview As of Total Shareholders Rank 1 2 3 4 5 25.40% 31/12/2009 438 Major Shareholders (as of 16/03/2009) Mr. Somchai Kulimakin Mr. Sumruay Tichachol Mr. Aikachai Sirijantanan Mr. Bhiya Jriyasetapong Mr. Siri Thirawattanawong Sub total # Shares % Shares 46,499,800 27,125,000 27,125,000 26,125,000 15,426,000 142,300,800 Current Low Liquidity of GC’s Stock 23.25 13.56 13.56 13.06 7.71 71.15 9 Business Unit GC 2. Specialty & Engineering Polymer 1. Commodity Polymer 1.1 Polyolefin SBU 3.1 Additive &Adhesive SBU 1.2 PET&PVC SBU 2.1 Engineer &Synthetic Rubber SBU 3. Specialty Chemical 2.2 Themo. Rubber& Transparency SBU 3.2 Petrochem. &Intermediate SBU 2.3 Styrenic Plastic SBU 10 Corporate Value • Ethics • Integrity • Professional & Focus • Partnership • Strive for better 11 Plastic and Petrochemicals Industry 12 ภาพรวมของธุรกิจอุตสาหกรรมปิ โตรเคมี ราคาสิ นค้ าปิ โตรเคมี และเม็ดพลาสติกแกว่ งตัวลดลงในช่วงปลายไตรมาสที่ 3/2552 จากราคาน้ ามันที่ อ่อนตัวลงและการชะลอการซื้อของจีนก่อนถึงวันชาติ 1 ตุลาคม แต่สถานการณ์เริ่ มกลับมาฟื้ นตัวดี ขึ้นในช่วงปลายไตรมาส 4/2552 จากราคาน้ ามันที่ปรับขึ้นแตะระดับ 80 เหรี ยญสหรัฐต่อบาร์เรล และ ทรงตัวในช่วงราคา 70 – 80 เหรี ยญสหรัฐต่อบาร์เรล ได้ตลอดไตรมาส 4/2552 เป็ นผลจากตัวเลข เศรษฐกิจโลกที่เริ่ มกลับมาขยายตัวดีข้ ึน ผลกระทบจากคาสัง่ ศาลปกครองสูงสุ ดที่ให้ระงับ 76 โครงการอุตสาหกรรมที่นิคมมาบตาพุด เมื่อ วันที่ 29 กันยายน 2552 เริ่ มส่ งผลกระทบต่ออุปทานของวัตถุดิบปิ โตรเคมี และเม็ดพลาสติก ทาให้ ผู้ประกอบการโรงงานแปรรูปทีล่ ดสิ นค้ าคงคลังของเม็ดพลาสติกลงจนต่ามาก ต้ องหันกลับมาซื้อ ก่ อนจะข้ ามปี เพื่อสร้างความมัน่ ใจว่าจะมีเม็ดพลาสติกป้ อนเครื่ องจักรในการผลิต และราคาเม็ด พลาสติกกลับสวนทางกับภาษี AFTA ที่จะปรับลดลงเป็ นศูนย์ มีผลตั้งแต่วนั ที่ 1 มกราคม 2553 เป็ นต้นไป กาลังซื้อกลับมาเพื่อเติมสิ นค้าคงคลังประกอบกับการฟื้ นตัวอย่างชัดเจนของอุตสาหกรรมหลักที่มี การใช้เม็ดพลาสติกเป็ นส่ วนประกอบเสริ ม เช่น อุตสาหกรรมรถยนต์ เครื่ องใช้ไฟฟ้ า และ อิเล็กทรอนิกส์ กลับมาดีต่อเนื่อง เกือบจะใกล้เคียงกับช่วงก่อนเกิดวิกฤติเศรษฐกิจในปี 2551 และคาด ว่าจะดีต่อเนื่องจนสิ้ นสุ ดไตรมาส 1/2553 13 กราฟแสดงราคาน้ ามันดิบระหว่างปี 2552 - ปัจจุบนั 14 Plastic Producer Type Portion Source : www.plastic.oie.go.th 15 Plastic Producer by Industry Source : www.plastic.oie.go.th 16 Product volume by process Source : www.plastic.oie.go.th 17 2009 Performance 18 Income Statement Actual Q4 Sales COGS Gross Profit Reversal of allowance for diminution in value of inventories Selling & Admin Expenses Loss(Gain) on Exchange EBITDA Depreciation Interest Expense Profit Before Other Income Other Income Profit before Tax Tax Net Profit 2009 712.15 657.18 54.97 0.00 19.66 (1.44) 36.75 2.90 1.23 32.62 2.88 35.50 8.17 27.33 2008 Change 534.90 33% 510.75 29% 24.15 128% 3.00 24.59 0.15 (3.59) 2.97 3.81 (10.37) 4.14 (6.23) 0.28 (6.51) -100% -20% -1060% -1124% -2% -68% -415% -30% -670% 2818% -520% Unit : Million Baht Actual Year 2009 2008 Change 2,647.35 3,410.03 -22% 2,459.78 3,168.53 -22% 187.57 241.50 -22% (21.00) 87.01 (3.57) 125.13 11.56 5.82 107.75 13.94 121.69 25.39 96.30 23.00 97.97 (1.36) 121.89 12.06 15.14 94.69 17.39 112.08 35.54 76.54 -191% -11% 163% 3% -4% -62% 14% -20% 9% -29% 26% 19 Sales Structure BU3 BU2 BU1 BU3 BU2 BU1 Sales Quantity 62.4 '000 T 1.4 70 60 50 40 30 20 10 7.8 59.1 58.9 1.2 1.7 8.9 12.0 53.9 52.0 1.3 1.3 Sales Quantity in Pecentage 2.3% 100% 12.6% 15.1% 85.1% 82.9% 20.3% 20.8% 18.2% 76.8% 76.8% 79.3% 9.5 49.0 45.3 41.4 41.2 40% 20% 2006 2007 2008 2009 Year 0% 2005 Sales Value 3,258 4,000 3,000 2.5% 60% 53.1 2005 3,500 2.4% 2.9% 80% 11.2 - BU3 BU2 BU1 2.1% 167 666 3,378 149 822 3,456 186 BU3 BU2 BU1 3,410 149 2,647 138 983 968 2006 2007 2008 2009 Sales Value in Percentage 5.1% 4.4% 5.4% 4.4% 5.2% 100% 20.5% 24.3% 28.4% 28.4% 27.6% 74.4% 71.2% 66.2% 67.2% 67.2% 80% 2,500 730 60% 2,000 1,500 40% 2,424 2,406 2,287 2,293 1,000 1,779 20% 500 0% 2005 0 2005 2006 2007 2008 2009 2006 2007 2008 2009 20 Gross Profit Structure BU3 Gros s Profit By BU BU2 BU1 ฿280 257 259 38 33 BU3 BU2 BU1 Gross Profit in Percentage 219 ฿260 ฿240 201 100% 17% 11% 41% 49% 43% 40% 15% 13% 52% 52% 33% 35% 12% 176 ฿220 25 80% ฿200 24 ฿180 29 ฿160 133 135 60% 107 ฿140 ฿120 85 72 40% ฿100 ฿80 ฿60 75 ฿40 42% 87 86 20% 92 91 ฿20 46% 0% ฿0 2005 2006 2007 2008 2005 2009 2006 2007 2008 BU1 BU2 BU3 Gross Profit Margin by SBU No. of Supplier BU1 BU2 BU3 9 12 6 2009 25.0% 22.4% 20.0% 17.5% 16.8% 20.3% 17.1% 15.0% 13.9% 13.0% 10.8% 13.6% 11.7% 10.0% 5.0% 3.6% 3.7% 5.2% 4.0% 3.1% 0.0% 2005 2006 2007 2008 2009 21 P&L Highlights Revenue & Net Profit 4000 120 Revenue (Million Baht) 3,390 3,272 3,429 96 108 3000 35100 2,665 2500 3080 77 2000 2560 67 20 1500 40 1000 37 15 20 500 Net Profit (Million Baht) 3,473 3500 10 0 0 2005 2006 2007 Revenue 2008 2009 5 Net Profit 2005 2006 2007 2008 2009 Profitability Ratio Profit Margin 8.0 ROE 35 31.81 7.0 6.00 6.94 7.08 6.0 21.35 21.74 20 3.64 4.0 3.14 15.99 2.0 1.0 30 25 5.01 5.0 3.0 7.09 25.82 15 2.24 1.97 10 1.12 5 0.0 2005 2006 Gross Profit Margin (%) 2007 2008 Net Profit Margin (%) 2009 ROE (%) Revenue and Net Profit In 2009, Sales decreased from 2008 around 22.37 % resulting from the impact of global economic downturn. Profit Margin GC’s gross profit amount has been decreased from THB 242 million in 2008 to be THB 188 million in 2009 because of the decrease in sales volume as well as the dropping of selling price in accordance with oil price fluctuation. However, the sales revenue and gross profit margin had been improving since ending Q2/2009 due to the improvement of purchasing power and the increase in selling price led by higher oil price. GC’s net profit margin of 2009 is around 3.64% higher than 2.24% in 2008. This was due to the allowance for diminution in value of inventory and allowance for doubtful debts made during 2008. 22 GC’s Performance over two years * All GP calculate before transportation cost Profit Margin GC's Sales & Gross Profit by Quarter in 2008-2009 9% 1,400 1,200 1,000 800 600 400 200 - 90 83 76 1,001 50 990 67 70 72 801 623 712 535 511 28 25 50 8.14% 30 (10) Sales 2008 Sales 2009 Q3 GP2008 Q4 GP2009 8.23% 5% 5.14% 4.96% 3% 3.87% 4.11% 3.84% 4.26% 3.25% 2% 2.24% 1% Q2 8.37% 7.64% 4% 10 Q1 8.03% 6% 59 885 8% 8.37% 7% 1.11% -1.22% 0% Q1 2008 Q2 Q3 Q4 Gross Profit Margin Q1 Q2 2009 Q3 Q4 Net Profit Margin Balance Sheet Unit : Million Baht Asset Accounts Receivable Inventory Net Fixed Assets Total Assets Liabilities Short Term Loan Accounts Payable Total Liabilities Equity Paid up Capital Share Premium Retained Earnings Total Equity 31/12/2009 385.57 266.31 145.20 828.09 31/12/2008 Change 283.23 102.34 305.69 -39.38 154.14 -8.94 771.52 56.57 % 36% -13% -6% 7% 220.00 174.95 432.95 290.00 102.34 420.67 -70.00 72.61 12.28 -24% 71% 3% 200.00 56.03 139.11 395.14 200.00 56.03 94.81 350.85 0.00 0.00 44.30 44.29 0% 0% 47% 13% 24 Balance sheet Highlight Debt to Equity Ratio 5.00 D/E ratio is relatively lower. D/E ratio is less than 2.0 which decreased after IPO proceeds . 4.35 4.00 3.00 2.00 2.00 1.70 1.58 1.20 1.10 2008 2009 1.00 2004 2005 2006 2007 Current Ratio 2.00 1.50 1.00 1.46 1.37 2006 2007 1.28 1.48 1.58 Continuous increase in current ratio GC current ratio has been improving to higher than 1.0x since GC got more working capital from IPO proceed. This higher liquidity can reduce GC’s financial costs. 0.94 0.50 2004 2005 2008 2009 25 CASH FLOW FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 (Unit : Thousand Baht) Cash flows from operating activities Net income before tax Adjustments to reconcile net income before tax to net cash provided by (paid from) operating activities :Income from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade accounts receivable Inventories Other current assets Other non-current assets Operating liabilities increase (decrease) Trade accounts payable Accrued expenses Other current liabilities Cash flow from operating activities Cash paid for interest expenses Cash paid for corporate income tax Net cash flows from operating activities 2009 2008 121,691 112,080 (3,965) 55,929 117,726 168,009 (102,347) 60,373 341 15 263,700 (116,199) (588) (806) 72,541 3,028 2,265 153,942 (5,773) (16,625) 131,544 (87,847) (1,067) (2,806) 222,396 (14,368) (45,386) 162,642 CASH FLOW FOR THE YEARS ENDED ENDED 31 DECEMBER 2009 AND 2008 (Unit : Thousand Baht) Cash flows from investing activities Acquisition of equipment Proceeds from sales of motor vehicles and equipment Net cash flows used in investing activities Cash flows from financing activities Decrease in short-term loans from financial institutions Cash paid for liabilities under finance lease agreements Decrease in long-term loan Dividend paid Interim dividend paid Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 2009 2008 (2,625) 425 (2,200) (3,536) 2,044 (1,492) (70,000) (4,439) 0 (24,000) (28,000) (126,439) 2,905 18,010 20,915 (40,000) (5,992) (19,950) (52,000) (40,000) (157,942) 3,208 14,802 18,010 Dividend Payout Dividend Payout Ratio 11th 10/03/08 100% 84% 80% 77% 75% 74% 2006 2007 source : SET news on 10.03.08 To be top 50 dividend yield stock 83% with continuous growth Positioning of GC Stock 60% 2005 2008 2009 Dividend Payment Record Operation Dividend Payment Period Ending (BPS.) Date 31-Dec-09 30-Jun-09 31-Dec-08 30-Jun-08 31-Dec-07 30-Jun-07 0.26 0.14 0.12 0.20 0.26 0.14 30-Apr-10 11-Sep-09 30-Apr-09 12-Sep-08 30-Apr-08 7-Sep-07 X-Date Price with X-Date before 19-Apr-10 27-Aug-09 16-Apr-09 26-Aug-08 17-Mar-08 21-Aug-07 Dividend Yield on x-date (cal. From X-Date N/A 3.28 2.40 4.84 N/A 3.18 2.40 4.60 4.06 3.46 3.90 3.32 N/A 4.27% 5.00% 4.13% 6.40% 4.05% 28 Competitors and Benchmarking 29 Competitor Analysis and Benchmarking Earning Result of 2009 and 2008 Stock GC UKEM WG Net profit (Bm) 2009 2008 96.3 49.5 134.1 76.5 47.3 140.4 EPS (B) %chng Q4/09 Q4/08 %QoQ Q3/09 %QoQ 2009 26% 5% -4% 27.3 - 6.5 8.8 - 16.0 30.5 22.2 519% 155% 37% 31.0 9.5 36.8 -12% -7% -17% 2008 2007 %chng 0.38 0.07 7.9 0.54 0.06 7.35 0.48 0.08 7.50 2008 %chng 0.38 0.07 7.86 26% 5% -5% The Year 2008 Stock Net Profit (Bm) 2009 GC UKEM WG 2008 2007 96.3 76.5 108.5 49.5 47.3 37.1 134.1 140.4 131.1 EPS (B) %chng 2009 26% 5% -5% 0.48 0.08 7.5 26% Par = THB 1 5% Par = THB 0.25 -5% Par = THB 10 30 CG & AGM Rating Result 31 CG Rating Result for the year 2009 Average score 90% 88% บริ ษทั SET 50 Index SET 100 Index 88% บริ ษทั จดทะเบียนโดยรวม 82% 78% 80% 82% 84% 86% 88% 90% 32 CG Rating Result for the year 2009 Corporate Governance Report of Thai Listed Companies 2009 120% 100% 91% 95% 95% 94% 83% 80% 93% 92% 88% 89% 86% 85% 90% 93% 94% 96% 88% 88% 79% 79% 77% 78% 90% 82% 68% 60% 40% 20% 0% บริ ษัทจดทะเบียนโดยรวม SET 100 Index SET 50 Index บริ ษัท 33 CG Rating Result for the year 2009 ผลการประเมินการกากับดูแลกิจการบริษัทจดทะเบียนประจาปี จากทั้งหมด 290 บริษทั 52 บริ ษทั 14 บริ ษทั GC 2009 86 บริ ษทั Below good 2552 Below good 60-0 Good 70-79 Very good 80-89 Excellent 90-100 Good Very Good 138 บริ ษทั 34 AGM Rating Result for the year 2009 Total 497 Companies 99.0 83.0 คะแนนสูงสุด คะแนนต่าสุด 36.3 คะแนนเฉลี่ย 100.0 - 20.0 40.0 60.0 80.0 คะแนน GC 100.0 35 Thank you, Questions are welcome 36 Credit Insurance • Start the fifth year agreement of Trade Credit Insurance with New Hampshire Insurance Company (AIG Thailand) • Threshold or non qualify loss at THB 300,000. • Cover 90% immediately of approved customer (maximum THB 100 Million) 37 Financial Ratio Liquidty Ratio Current Ratio Collection Period Inventory Turnover Period Payment Period Cash Cycle Profitability & Efficiency Ratio Gross Profit Margin Net Profit Margin ROE ROA Financial Policy Ratio D/E Ratio 2009 2008 Time Day Day Day Day 1.58 47.24 41.86 20.29 68.81 1.48 45.20 29.44 16.61 58.03 % % % % 7.09 3.64 25.82 12.04 7.08 2.24 21.35 8.91 Time 1.10 1.20 38 A/R as of December 2009 and it’s position after one month pass Not yet due Post due Up to 1 month 1-3 months 3-6 months 6-12 months Over 12 months Total 31/12/2009 % Receive 31/01/2010 271,837,979.64 68.2 106,961,670.81 164,876,308.83 101,877,116.18 8,777,691.51 4,450,986.75 810,433.63 10,819,236.65 25.6 2.2 1.1 0.2 2.7 96,054,559.50 8,717,664.51 621,490.00 0.00 0.00 5,822,556.68 60,027.00 3,829,496.75 810,433.63 10,819,236.65 398,573,444.36 100.0 212,355,384.82 186,218,059.54 Less : Allowance for doubtful (13,000,000.00) Trade accounts receivable-net 385,573,444.36 Balance 39 Purchase Portion % USD Purchase Portion Import Other Local SCG 100% 20.9% 19.1% 18.8% 26.8% 24.5% 80% 24.0% 27.1% 25.3% 23.0% 20.9% 55.1% 53.8% 55.9% 50.2% 54.6% 60% 40% 20% 0% 2005 2006 2007 2008 2009 40