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CORPORATE

PRESENTATION

3Q FY2018

RESULTS16 November 2018

3QFY18OPERATIONS REVIEW

3Q FY2018 Results Presentation

RM47.6m 43.6%

+3.1% yoy

Exports

56.4%

+10.3% yoy RM61.6m

3QFY18

RM109.2m

Exports

54.7%

3

Record quarterly revenue in 3QFY18 driven by increased sales to MNC

customers in the F&B and FMCG sectors…

3QFY18 CORE REVENUE (YOY CHANGE)

3QFY18 total exports rose 10.3% on higher deliveries to Australia

3QFY17

RM102.0m

45.7

42.5

38.0

37.7

42.1

40.3

42.9

41.9

42.8

39.6

46.2

47.0

47.1

43.8

47.6

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Quarterly Domestic Revenue(RM ‘mil)

3QFY18 domestic sales increased due to stronger demand from multinational corporations (MNC) in the food and beverage (F&B) and fast moving consumer goods (FMCG) sectors

DomesticDomestic

45.3%

40.5

47.2

48.0

45.5

47.6

56.7

51.2

48.5

51.3

47.2

49.4

51.8

49.5

54.6

55.1

6.5 6.8

8.1 8.0 6.5

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Quarterly Export Revenue(RM ‘mil)

Myanmar plant Exports (excl. Myanmar plant)


1.8

0.5

28.6%

8.0%

17.2%

3Q17 3Q18

Quarterly PBT & PBT MarginMyanmar Plant (RM ‘mil)

PBT

PBT Margin

Adjusted PBT Margin

6.5 6.5

3Q17 3Q18

Quarterly Revenue Myanmar Plant (RM ‘mil)

4

Daibochi Myanmar’s profitability impacted by forex losses in 3QFY18…

Myanmar plant in the process of obtaining Food Safety System Certification

DAIBOCHI MYANMAR UPDATE

3QFY18 revenue maintained y-o-y despite dampenedbusiness outlook due to stronger USD vs. Myanmar Kyat

Exports from Myanmar to Malaysia temporarily ceased

due to sales tax imposed on imported packaging

Received approval for sales tax exemption on certain

products from Daibochi Myanmar

3QFY18 PBT decreased y-o-y due to higher key rawmaterials cost and foreign currency exchange (forex) loss

3QFY18 adjusted PBT1 decreased 39.8% y-o-y to RM1.1million from RM1.8 million previously

Myanmar plant in the process of obtaining the Food SafetySystem Certification (FSSC); target to receive by 1QFY19

Secured the ISO 9001:2015 quality management and the

Hazard Analysis and Critical Control Point Food Safety

Management System certifications in October 2017

These certifications will allow Daibochi Myanmar to enter

into the qualification process with MNCs

1Adjusted PBT excludes forex loss of RM596,000 in 3QFY18 and loss of

RM1,400 in 3QFY17

+0.4%

-72.0%

GROWTH STRATEGIES

3Q FY2018 Results Presentation 6

Malaysia plant aiming to add more sustainable flexible packaging solutions

to its portfolio… Myanmar plant preparing to serve MNC customers

GROWTH STRATEGIES

Aiming to develop more innovative and sustainableflexible packaging solutions

Collaborating with customers for product R&D todevelop environmentally-friendly packaging that willhelp them meet their sustainability objectives

CAPEX

Planned CAPEX of RM9.0 mil in FY19 for extrusionmachine and other supporting equipment

MALAYSIA PLANT MYANMAR PLANT

Preparing to serve MNC’s expanding packagingrequirements in Southeast Asia (SEA)

Planning to enter into the qualification process withMNCs upon obtaining the FSSC

Encouraged by increasing enquiries from our MNCclientele

Targeting to increase customers from Myanmar andSEA

Pursuing contracts from F&B and FMCG producers inMyanmar

To leverage low-cost and geographical advantage tosecure export contracts from cost-sensitive customersin the SEA region

CAPEX

Planned CAPEX of USD3.4 mil (RM14.0 mil) in FY19comprising printing machine, dry lamination machineand other supporting equipment

3QFY18FINANCIAL REVIEW


9M18 Review (y-o-y comparison)

Revenue increased on higher sales to the domesticand export markets, and 9 months contribution fromDaibochi Myanmar (vs. 3 months in 9M17)

PBT decreased due to forex loss of RM2.9 mil,higher key raw materials cost, sales mix, and one-offtransitional cost for a new customer in Australia

Adjusted PBT excluding forex loss and share ofresults of an associate rose 2.4% to RM23.9 mil fromRM23.3 mil previously

Net profit decreased in line with reduced PBT

0

5

10

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Quarterly PATMI(RM ‘m)

8

3QFY18 revenue increased q-o-q led by higher domestic sales… profitability

improved q-o-q mainly due to reduced forex loss

INCOME STATEMENT

RM'mil3Q18 to

30.09.18

2Q18 to

30.06.18% chg qoq

9M18 to

30.09.18

9M17 to

30.09.17% chg yoy

Revenue 109.2 106.4 2.6% 320.3 283.0 13.2%

EBITDA 10.9 10.5 3.2% 34.2 36.6 (6.6%)

Operating Profit 7.4 7.1 4.1% 23.8 26.3 (9.6%)

Share of Associate Results 0.1 0.1 (56.6%) 0.2 0.4 (38.7%)

Profit Before Tax 6.4 6.3 2.1% 21.2 24.6 (13.6%)

Net Profit to Shareholders 5.7 4.7 22.3% 16.8 18.0 (6.7%)

Basic EPS (sen) 1.73 1.42 21.8% 5.13 5.50 (6.7%)

EBITDA margin 9.9% 9.9% 0.0 pt 10.7% 12.9% (2.2 pt)

PBT margin 5.9% 5.9% (0.0 pt) 6.6% 8.7% (2.1 pt)

Net margin 5.2% 4.4% 0.8 pt 5.2% 6.4% (1.2 pt)

0

50

100

150

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Quarterly Revenue(RM ‘m)

0

5

10

15

1Q

15

2Q

15

3Q

15

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15

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16

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17

1Q

18

2Q

18

3Q

18

Quarterly PBT(RM ‘m)


Net gearing increased slightly due to higher short-term borrowings for

working capital requirements… continues to deliver healthy returns

BALANCE SHEET

* The Group carried RM30.9 mil and RM35.1 mil in intangible assets in 30 September 2018 and 31 December 2017 respectively, associated with the acquisition of its 60% interest in

Daibochi Myanmar

** Based on net profit for the trailing twelve months

As at 30.09.2018 As at 31.12.2017

(Unaudited) (Audited)

Fixed Assets (excl associate investment & deferred tax)* 168.40 173.23

Associate Investment 19.59 19.36

Current Assets 186.49 173.42

Current Liabilities 121.74 110.42

Shareholders’ Equity 223.28 221.90

Total Borrowings 85.43 69.88Due to higher short-term borrowings for

working capital requirements

Cash & Bank Balances 10.64 18.31 Due to working capital requirements

Net Gearing 0.33 x 0.23 x Due to higher borrowings

Return on Average Shareholders’ Equity** 12.4% 13.3%

Return on Average Total Assets** 6.6% 7.7%

Remarks


Declares third interim single-tier dividend of 1.0 sen per share payable on

21 December 2018 (ex-date on 4 December 2018)…

DIVIDENDS

4.52 4.90 4.524.55

2.85

FY14 FY15 FY16 FY17 9M18

14.8 16.0 14.8 14.99.3

62.2%

60.0% 60.2%61.6% 62.1%

FY14 FY15 FY16 FY17 9M18

Total Dividend Payout Ratio^

Payment HistoryDividend Payout RM’m

Dividend Per Share* sen

Dividend policy to pay out at least 60% of

net profit attributable to shareholders, excluding

net profit contributions from Daibochi Myanmar

FY2017 FY2018 FY2017 FY2018

1st Interim (single tier) 1.10* 1.05 3.61 3.44

2nd Interim (single tier) 1.00 0.80 3.28 2.62

3rd Interim (single tier) 1.15 1.00 3.76 3.27

4th Interim (single tier) 1.30 4.26

Total 4.55 14.91

Dividend per share

(sen)

Dividend Payout

(RM 'm)

^Excludes net profit contribution from Daibochi Myanmar

*Adjusted to reflect the bonus issue of 2 for every 10 ordinary shares held by

the entitled shareholders, which was completed on June 28, 2017

INVESTMENTMERITS


Led by innovation and efficiency… a market leader in supplying top quality

consumer flexible packaging to MNCs in the region

VALUATIONS AND MERITS (as at 15 Nov 2018)

MNCs make up almost 80% of total revenue(benefitting from steady and large orders, strong creditworthiness)

Exports to SEA & ANZ exceed 50% of revenue

Supplier to renowned F&B and FMCG brands(supporting highly-resilient sectors)

Contribution from Myanmar to see earnings boost

Industry-leading R&D and product innovation

Highly-experienced management team

KEY MERITS

12.9x

2.8x

2.7%

Price Market Cap

P/E (ttm)

EV/EBITDA (ttm) FY17 Div. Yield

P/Net Assets

RM1.70 RM556.5m

22.5x

Contact Information

Investor Relations

Low Jin Wei, Executive Director

Daibochi Berhad

(formerly known as Diabochi Plastic and Packaging Industry Berhad)

+606-231 9779

[email protected]

Julia Pong, Manager

Aquilas Advisory (M) Sdn Bhd

+6012-390 9258

[email protected]

APPENDIX

CORPORATE

PROFILE


Leading consumer flexible packaging player in Malaysia and South East Asia

with 45-year track record… serving leading MNC F&B and FMCG brands

OVERVIEW

Daibochi established since 1972A leading provider of consumer flexible packaging to majorinternational brands in the F&B and FMCG industries

Focused on quality and innovationExperienced R&D team supported by well-equippedlaboratory testing facilities

Increasing exports prowessGrowing exports across South East Asia and Australiamarkets; exports make up >50% of group revenue


Daibochi’s Malaysia plant certificationsAttained ISO:9001 and ISO:14001 certifications

Hazard Analysis Critical Control Points (HACCP)compliant to ensure adherence to food safety requirements

Obtained Food Safety System Certification (FSSC:22000)

Daibochi’s Myanmar plant certificationsISO 9001:2015 accreditation

HACCP FSMS certification

17

Internationally-certified production facilities that comply with all factory

audits by MNC clientele… strength in innovation

PRODUCTION FACILITIES


Strategically located production facilities… sizable floor space allows

Daibochi to cater for increasing orders from MNCs

PRODUCTION FACILITIES (CONT’D)

Daibochi Plastic Plant 1Located in Ayer Keroh, Melaka, Malaysia

Production floor space of 385,000 sq ft

Daibochi Plastic Plant 2Located in Jasin, Melaka, Malaysia

Commenced operations in 2Q14

Production floor space of 135,000 sq ft


Addition of Myanmar operations since July 2017 represents the Group’s first

expansion of its manufacturing facilities outside of Malaysia…

PRODUCTION FACILITIES (CONT’D)

Yangon, Myanmar PlantDaibochi and Myanmar Smart Pack Industrial CompanyLimited (MSP) incorporated Daibochi Myanmar

MSP is a leading flexible consumer packaging manufacturerin Myanmar focusing on Home Personal Care products

Consumer packaging plant located 30 minutes from Yangon,with built-up of 6,000 sq m and land area of 36,000 sq m

Quick Facts on Myanmar

Population of >50 mil

Low flexible packaging consumption of<USD1 per capita (Indonesia USD13,Vietnam USD9, India <USD5)1

1PCI Wood Mackenzie, 2015


Leveraging strengths & synergies to accelerate expansion in high-growth

markets…

OPERATIONAL SYNERGIES

WIDER PRODUCT RANGE

• Daibochi Myanmar to benefit from technology transfer from Daibochi Malaysia (CPP & metalliser)

• Daibochi Malaysia to fulfil product line gap in the interim

• Expand F&B packaging line leveraging on Daibochi Malaysia’s strengths and long-term relationships with MNCs

SIGNIFICANT LOW-COST ADVANTAGE

• Capitalise on low manufacturing cost advantage to export to cost-sensitive customers in SEA

• Benefit from bulk purchases of raw materials (e.g. resin)

• Enjoy cost savings from production of in-house film

HUMAN CAPITAL DEVELOPMENT

• Access to ample workforce pool; opportunities for skillset upgrading and optimisation

• To tap into Daibochi’sR&D and specialty films, develop sales team, & enhance production efficiency

• To attain international certifications in food safety, quality & environment management

STRONG CASHFLOW & DIVIDENDS

• Able to fund future growth, without requiring additional capital injection from shareholders

• Targeting dividend payment from Year 3 onwards

• 5-year tax exempt status


Integrated end-to-end packaging process… equipped with specialized in-

house capabilities

PRODUCTION PROCESS

Prepress Gravure PrintingLamination

(Extrusion / Dry)Slitting / Bagging

CPP Film Metallizer

Up to 9-colour 2-sided printing Solvent-based/free Capabilities incl Standing Pouch

One of few players with metallizing and sealing films capabilities for quality assurance

and constant improvement at key stages

To build high barriersPolypropylene sealing films

In-house capabilities


Wide range of packaging solutions for various product functions…

constantly innovating for changing requirements

PRODUCT APPLICATIONS

Film Type Applications / Use

High Permeability Barrier / Performance Coffee, Nuts, Potato Chips

Cost Effective Barrier Snacks, Biscuits, Wafer, Chocolate,

Cakes

General Packaging Outer Pack, Noodles, Biscuits, Wafers

Specialty Application Labelling, Retort Packaging, Ice-cream,

Frozen Food, Cereal Peel Seal,

Seasoning Oil, Powder/Liquid Detergent,

Shower Foam, Tobacco, Pet food


Commendable track record in serving a wide number of MNC clientele in the

F&B industry with stringent quality control…

REGIONAL PRESENCE

Supplier to leading global brands

The Largest Supplier of Milo packaging in S.E.A

The Sole Supplier to Nestle’s Chembong confectioneryfactory in Malaysia

Daibochi is also the ONLY S.E.A company on Nestle’sRegional Food Safety Committee

Supplier of >90% of Cadbury’s flexible packaging inMalaysia

The Major Supplier of Mondelez International’s (formerlyknown as Kraft) biscuits and snacks packaging in Malaysia

Major Supplier of flexible packaging to PepsiCo’s ChiangMai plant for potato chips manufacturing


Diversified clientele of leading brands across various industries…

INDUSTRIES SERVED

Food

BeverageFMCG

Specialty

• Confectionary

• Biscuits

• Snack Foods

• Dairy

• Frozen Food

• Cereal

• Shampoo

• Detergent

• Personal Care

• Sanitary

• Coffee/Tea

• Dairy

• Soft Drink

• Tobacco

• Medical Packaging

• ESD / Anti-Static

• Pet Food


Worldwide consumer flexible packaging market worth $92 bil in 2015

Estimated to grow 4% p.a. to reach $114 bil in 2020

Growth to be led by Asia Pacific & other emerging regions (e.g. South & Central America)

Growth catalysts for Asia’s flexible packaging market

Higher demand for cheaper and smaller pack sizes in line with affordability of general population(especially post economic slowdown)

Increase in working mothers / dual-income households leading to preference for convenience packaging

Development of multinational food retailers and manufacturers in the region; indicating the long-termgrowth potential in Asia

25

Growth in flexible packaging to be led by the Asian region… penetration into

new product categories to bring next wave

INDUSTRY INSIGHT

Source: Smithers’ Pira – The Global Flexible Packaging Market – Trends and Forecasts

Source: The Asia Pacific Flexible Packaging Market to 2016 by PCI Consulting Films Ltd


Market cap of more than RM500 million…

CORPORATE INFORMATION

DAIBOCHI BERHAD

(formerly known as DAIBOCHI PLASTIC & PACKAGING INDUSTRY BERHAD)

Exchange Main Market, Bursa Malaysia since 1990

(transferred from Second Board in 2003)

Sector Industrial Products

Codes Bursa: 8125 / DAIBOCI

Bloomberg: DPP:MK

Reuters: DPPM.KL

Share Capital RM164.2 mil (327.3 mil shares)

Market Capitalization RM556.5 mil (RM1.70 as at 15 November 2018)


Experienced management with industry expertise…

MANAGEMENT TEAM

Thomas Lim Soo Koon, Managing Director

Holds a degree in Bachelor of Science Industrial Engineering and Management from Oklahoma State University, &

Master of Business Administration degree from Oklahoma State University.

Joined Daibochi in 1995, and was appointed as Managing Director in February 2005.

Played a key role in building Group’s MNC clientele.

Low Jin Wei, Executive Director

Holds a degree in Bachelor of Commerce (Major in Finance & Marketing) from University of Sydney, NSW, Australia.

Prior to this, Mr. Low was the Managing Director / Project Director of GlassKote (Malaysia) Sdn Bhd from 2005 to

September 2010.


Institutional investors holding approximately 33%...

MAJOR SHAREHOLDERS

No. of shares (‘mil)(30.9.2018)

Percentage

Low Chan Tian 33.8 10.3%

Apollo Asia Fund Ltd 30.7 9.4%

Lim Koy Peng 27.7 8.5%

Samarang UCITS – Samarang Asian

Prosperity19.3 5.9%

Datuk Wong Soon Lim 19.1 5.8%

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