global connections public company limited performance ... · plastic and petrochemical industry...

1

Global Connections Public Company Limited

Performance Announcement

Presentation

for year 2015

February 26 , 2016

2

Company Overview

Plastic and Petrochemical Industry

2015 Performance

IR report & Investment Highlight

Q&A

Today Content

0.00

1,000.00

2,000.00

3,000.00

4,000.00

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Commodity polymer Specialty & engineering polymer

Million THB

3,1723,7103,4733,3903,272

3,6783,429

2,665

3,792 3,659

Year

3,659

3

Company Overview

� GC has been founded since 1994 by experienced management

� GC is the distributor with over 30 leading producers of plastics and petrochemical raw materials from around the world.

� Most of these producers are among the top 3 in the world in that product in terms of technology & production capacity.

� 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.

GC Revenue During 2005 – 2015GC Revenue During 2005 – 2015

Listed to SET

6th Dec.2005

Sales was increased in 2015 YoY.

• Value 0%

• Quantity 15%

4

Where we are in the value chain of Thai Petrochemical Industry

Olefin&Aromatic

Producers

Monomer

producers

(MEG, VCM)

Global

ConnectionsConverters

Petrochemical and plastic producers

Upstream End usersIntermediate

Compounders

Master batch

producers

Compounders

Polymer

producers

(PP, PE, PVC)

Downstream

5

GC’s role and positioning in the market

Leads the differentiation

) Suppliers S1 S2 S3 S4 S5 Sn

Customers C1 C2 C3 C4 C5 Cn

Economy of Scope to Customers

Economy of Scale to Suppliers

Logistic : Warehousing, small delivery, and repacking

Sales & Marketing : Closely contact to end markets/customers

Technical Services : Troubleshooting / Product and Market Development

Financing & structuring solution : Extending our expertise to customer

Global Connections Public Co., Ltd.

Provided

6

Major Shareholders

Rank Major Shareholders # Shares % Shares

1 Mr. Somchai Kulimakin 44,499,900 22.25

2 Mr. Aikachai Sirijantanan 30,326,230 15.16

3 Mr. Sumruay Tichachol 28,892,800 14.45

4 Mr. Bhiya Jriyasetapong 26,125,000 13.06

Sub total 129,843,930 64.92

Free Float Overview As of 30 December 2015

Total Shareholders 1,340

Minor Shareholders (Free float) 1,230

% Shares in Minor

Shareholders

(% Free float)

31.69%

2009

Exxon Product :

Vistamaxx

2014

Distributing agent of

TechnoGreen

2004


ExxonMobil and Rio

Tinto Mineral Asia

Company History

1994

GC was established by 5 founders

with initial registered capital of 2

MB.

1996

Distributing agent of SCG Plastics Co., ltd. and

Eastman Chemical , which was the start of

specialty product distribution.

1997


DuPont Performance

Polymers and

Chi Mei

1998


OCV Reinforcement Co., Ltd

1999

Distributing agent of Siam Polystyrene

(Thailand) Co., ltd. and Cabot Plastic

Hong Kong Ltd.

2005

Listed company and paid-up capital to 200 MB

More Product from Exxon : Butyl & Vistamaxx

2008

Distributing agent of DIC

Exxon Product : PE PP

2010

Distributing agent of BST

Elastomers Co., Ltd.

1994 - 1999 2006 - Current 2000 - 2005

Start business with commodity

plastic

Diversify company portfolio from

commodity to specialty plastic

Create sustainable growth being the

best partner for solution and service

in industrial raw material supply

2011

Distributing agent of Miliken Chemical,

Imerys Meneral, Timcal Ltd.

Exxon Product : ENABLE, EXCEED

2006


Nanocor Inc.

1994 1996 1998 2000 2004 2006 2008 2010 2012 2014

2012

Change Distributing agent of SCG to PTTPM.

Exxon Product : Special Compound

8

Organization Chart

Finance & Accounting

Information

Communications

Technology (ICT)

Board of Director

Chief Executive Officer

Executive Committee

The Corporate

Governance Nomination

and Remuneration

Committee

Audit Committee

Chief Operating

Officer & President

Chief Marketing

Officer 4

Chief Marketing

Officer 3

Chief Marketing

Officer 2

Chief Marketing

Officer 1

Sale & Marketing 1 Sale & Marketing 2 Sale & Marketing 3 Sale & Marketing 4 Human resource and

Administration

Logistics

President Office

Internal Audit

9

Corporate Value

Ethics

Integrity

Professional & Focus

Partnership

Strive for better

Corporate Strategy

Maintain existing strong market positioning

Become solid partner with supplier and customer

Offer total professional solution

Be leader in advanced technology product

Grow towards the growing industries

Develop new application/market from initial stage

10

11

2016 Corporate Strategy : VUCA

V : Value creation thru Innovation and Differentiation

U : Uncompromisingness with Business Growth and Profit commitment

C : Cost management thru Efficiency and Effectiveness

A : Aligned investment for Future Growth and Sustainability

BU1

COMMODITY POLYMER

BU3

SPECIALTY

CHEMICALS & INTERMEDIATE

BU2 SPECIALTY

ENGINEERING POLYMER

& RUBBER

• Polyolefins

PE: HDPE, LDPE, LLDPE (C4,C8)

PP: Homo, Block Copo, Random

• PU

• Tie Layer Polymer

• Specialty Polyolefins

• Nylon, POM, PBT, TEEE, PCT, LCP, PC

• Black/White MB

• PETG/PCTG, CA

• PS, HIPS, ABS, SAN, SBC

• EVA for HMA, Hydrocarbon Resin

• PE Plastomer, PP Plastomer, TPO

• TPVs, TPU

• TPE, TPR, Reinforcement compound

• Glass Fiber (Chop Strand, Long glass)

• EPDM , BUTYL

• BR, SBR

• TALC, SILICA, CARBON BLACK

• FLAME RETARDANT (ZB, ATO)

• Plastic Additives

• Intermediate chemical

• Water and waste solutions

Our Business Unit

Industry Focus

CONSUMERS PRODUCTS

- Flexible Film & Packaging

- Rigid Packaging

- Shoes

- Medicals

- Others

INDUSTRIAL

- Electrical & Appliances

- Constructions

- Adhesives& Sealant

AUTOMOTIVE

- Interior Part

- Exterior Part

- Under hood

Customer segment by Sale Percent of Value

54,218 Tons 62,587 Tons

15

Plastic and Petrochemicals Industry

Have to watch out

2015 World Economic

Monetary policy used to stimulate its economy

take impact to global volatility.

The World Bank cut its global GDP, down from 3.1% to 2.4%.

Key World Economies country under recovering,

China downturn figure more than expected

and Emerging economies suffer recession.

Low price of commodities product both oil

and minerals and also agricultural

World Economic

World GDP =2.9%

Recovery

Eurozone emerges

from deflation; Japan

hints at more stimulus

China should launch

Stimulus Package to

maintain a pace of

growth.

The Risk or War; Middle East & The

Yellow Sea off the Korean peninsula has

become a potential flashpoint for a wider

conflict.

One way a country may stimulate its economy is through its

monetary policy. Many central banks attempt to control the

demand for currency by increasing or decreasing the money

supply and/or benchmark interest rates.

Thai Economic Performance in Q4 and 2015 and Outlook for 2016

19 Source : http://www.nesdb.go.th

Crude Oil Price Chart

Source : https://ycharts.com/indicators/average_crude_oil_spot_price

Capital Expenditure

21

Thailand Capacity Utilization

24 Source : http://www.tradingeconomics.com/thailand/capacity-utilization

25 25

2015 Performance

26

Statements of Comprehensive Income

Unit : Million Baht

2015 2014 Change 2015 2014 Change

Sales 934.00 831.42 12% 3,646.46 3,647.40 0%

COGS 881.52 788.87 12% 3,417.23 3,447.36 -1%

Gross Profit 52.48 42.55 23% 229.23 200.04 15%

Selling & Admin Expenses 31.37 26.31 19% 118.17 119.65 -1%

Reduction of inventory to net

realisable value (Reversal) 0.00 4.00 100% (1.00) 1.00 200%

EBITDA 21.11 12.24 72% 112.06 79.39 41%

Depreciation 2.91 3.06 -5% 11.67 11.91 -2%

Interest Expenses 3.62 4.47 -19% 14.19 19.32 -27%

Profit Before Other Income 14.58 4.71 210% 86.20 48.16 79%

Other Income 1.12 1.15 -3% 6.96 8.53 -18%

Gain (Loss) on exchange rate 2.17 0.50 334% 5.95 2.79 113%

Profit before Tax 17.87 6.36 181% 99.11 59.48 67%

Tax 3.54 2.10 69% 20.12 12.56 60%

Deferred Tax Expenses (0.12) (0.92) -87% (0.31) (0.69) -55%

Net Profit 14.45 5.18 179% 79.30 47.61 67%

Actual Q4 Actual Year

27

Sales Structure

-

10

20

30

40

50

60

70

2011 2012 2013 2014 2015

48.7 42.128.1 35.1 40.8

13.517.2

20.119.0

21.7

0.0 0.1

0.00.1

0.1

'000 T

Sales QuantityBU3

BU2

BU162.2 59.4

54.248.2

62.6

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015

78% 71%58% 65% 65%

22% 29% 42%35%

35%

0% 0% 0% 0% 0%

Sales Quantity in PercentageBU3

BU2

BU1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2011 2012 2013 2014 2015

2,416 2,041

1,405 1,937 1,915

1,357 1,632

1,737 1,692 1,707

13 27

17

18 24

Sales Value-Million BahtBU3BU2BU1

3,786 3,700

3,1593,647 3,646

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015

64%55%

44% 53% 52%

36%44%

55%46% 47%

0% 1% 1% 1% 1%

Sales Value in PercentageBU3

BU2

BU1

Gross Profit Structure

28 28

-

50

100

150

200

250

300

2011 2012 2013 2014 2015

99 80 55 51 67

168 164

177 162 170

4 6 4 5 8

Gross Profit By BUBU3 BU2 BU1

250

218236245

271

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015

37% 32% 23% 23% 27%

62% 66% 75% 74%70%

1% 2% 2% 3% 3%

Gross Profit in PercentageBU3 BU2 BU1

27.5%

21.5% 22.4%

30.1% 33.3%

12.4% 10.1% 10.2% 9.6% 9.9%

4.1% 3.9% 3.9% 2.6% 3.5%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2011 2012 2013 2014 2015

Gross Profit Margin by BUBU3BU2BU1

29 29

Statements of Comprehensive Income Highlights

Profitability Ratio

Revenue & Net Profit

Profit Margin

• GC ’s gross profit margin of 2015 was higher

than 2014 due to the higher selling price in

Q2/2015 resulting from short of supply in

some products caused our selling price more

competitive.

• GC ’s net profit margin of 2015 has been

increasing due mainly to the higher gross

profit margin in Q2/2015 including the lower

of warehouse rental and interest expenses.

Profit Margin

• GC ’s gross profit margin of 2015 was higher

than 2014 due to the higher selling price in

Q2/2015 resulting from short of supply in

some products caused our selling price more

competitive.

• GC ’s net profit margin of 2015 has been

increasing due mainly to the higher gross

profit margin in Q2/2015 including the lower

of warehouse rental and interest expenses.

Revenue and Net Profit

In 2015, Sales value decreased from 2014 ‘s

around 0.03% but sales quantity showed 15%

higher resulting from the strategy of

preserving high potential customer group.

3,793 3,710

3,172 3,659 3,659

80 76 70

48

79

-

30

60

90

120

150

0

500

1000

1500

2000

2500

3000

3500

4000

2011 2012 2013 2014 2015

Rev

enue

(M

illio

n B

aht)

Revenue Net Profit

6.73 6.31 6.93

5.48 6.29

2.12 2.06 2.211.31

2.17

19.93 19.28 17.44 12.08

19.56

-

5

10

15

20

25

30

35

40

45

50

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2011 2012 2013 2014 2015

Gross Profit Margin (%) Net Profit Margin (%) ROE (%)

ROEProfit Margin

30 30

Statements of Financial Position

Unit : Million Baht

Asset 31/12/2015 31/12/2014 Change %

Trade Receivables 690.51 566.49 124.02 22%

Inventory 501.80 435.58 66.22 15%

Net Fixed Assets 126.34 124.74 1.60 1%

Total Assets 1,378.40 1,171.04 207.36 18%

Liabilities

Short Term Loan 634.09 576.52 57.57 10%

Trade Payables 270.85 171.17 99.68 58%

Total Liabilities 956.30 782.24 174.06 22%

Equity

Paid up Capital 200.00 200.00 0.00 0%

Share Premium 56.03 56.03 0.00 0%

Retained Earnings 166.06 132.76 33.30 25%

Total Equity 422.10 388.80 33.30 9%

31 31

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.

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.

D/E ratio is relatively lower.� D/E ratio drop less than 2.0 which

was decreased after IPO proceeds. However, the higher D/E ratio in 2013-2015 were resulting from the increase in trade accounts payable and short term loan.

D/E ratio is relatively lower.� D/E ratio drop less than 2.0 which

was decreased after IPO proceeds. However, the higher D/E ratio in 2013-2015 were resulting from the increase in trade accounts payable and short term loan.

Statements of Financial Position Highlight

4.35

2.00 1.70 1.58

1.20 1.10 1.43

1.87 1.80 2.21 2.01

2.27

-

1.00

2.00

3.00

4.00

5.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Debt to Equity Ratio

0.94

1.28 1.46 1.37

1.48 1.58

1.46 1.37 1.38 1.32 1.36 1.33

-

0.50

1.00

1.50

2.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Current Ratio

32 32

Dividend Payment Record

Operation Dividend Payment X-Date Dividend Yield

Period Ending (BPS.) Date before on x-date (cal. From before X-

31-Dec-15 0.20 29-Apr-16 18-Apr-16 N/A N/A 4.59% *

30-Jun-15 0.15 04-Sep-15 19-Aug-15 4.00 3.85 3.75%

31-Dec-14 0.08 30-Apr-15 10-Apr-15 4.48 4.33 1.79%

30-Jun-14 0.15 04-Sep-14 18-Aug-14 4.39 4.25 3.42%

31-Dec-13 0.14 30-Apr-14 11-Apr-14 4.46 4.32 3.14%

30-Jun-13 0.18 05-Sep-13 20-Aug-13 4.83 4.60 3.73%

31-Dec-12 0.19 30-Apr-13 12-Apr-13 5.00 4.84 3.80%

30-Jun-12 0.17 06-Sep-12 21-Aug-12 4.96 4.76 3.43%

31-Dec-11 0.16 30-Apr-12 12-Apr-12 4.96 4.86 3.23%

30-Jun-11 0.24 09-Sep-11 25-Aug-11 5.90 5.55 4.07%

31-Dec-10 0.26 29-Apr-11 18-Apr-11 5.80 5.50 4.48%

30-Jun-10 0.24 10-Sep-10 26-Aug-10 5.50 5.20 4.36%

31-Dec-09 0.26 30-Apr-10 16-Apr-10 4.72 4.22 5.51%

30-Jun-09 0.14 11-Sep-09 27-Aug-09 3.28 3.28 4.27%

31-Dec-08 0.12 30-Apr-09 16-Apr-09 2.40 2.40 5.00%

30-Jun-08 0.20 12-Sep-08 26-Aug-08 4.84 4.60 4.13%

31-Dec-07 0.26 30-Apr-08 17-Mar-08 4.06 3.90 6.40%

30-Jun-07 0.14 7-Sep-07 21-Aug-07 3.46 3.32 4.05%

31-Dec-06 0.15 27-Apr-07 9-Mar-07 2.92 2.78 5.14%30-Jun-06 0.10 8-Sep-06 22-Aug-06 2.64 2.64 3.79%31-Dec-05 0.14 28-Apr-06 10-Mar-06 2.46 2.48 5.69%

* Calculated from closing price on 10/2/2016 @ 4.36 baht.

Price with X-Date

33 33

Dividend Payout Ratio

77%75%

74%

84% 83%80%

99%

94%91%

97%

88%

60%

80%

100%

120%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

34

GC Dividend Yield

Remark : Source Bank of Thailand http://www2.bot.or.th/statistics/ReportPage.aspx?reportID=409

*Interest rate is a average interest rate from Bank of Thailand

%

5.69

8.93

10.45

9.13

9.78

8.84

7.30 7.23

6.87

5.33

8.34

4.50 4.70

2.30

5.50

(0.90)

3.30 3.81

3.02

2.18

1.89

(0.90)

3.00

4.50

2.32 1.88 0.83

1.55

2.85 2.43 2.25 1.73 1.40

(2.00)

0.00

2.00

4.00

6.00

8.00

10.00

12.00

2548 2549 2550 2551 2552 2553 2554 2555 2556 2557 2558

GC's Dividend Yield Inflation Rate Avg 1 Year Deposit Interest Rate

35 http://www.moneychannel.co.th/news_detail/8854/

ข่าว Money Chanel : โผหุน้ปันผลเด่นสภาพคล่องดี จ่ายติดกนั 3 ปี สูงเกิน 5% เปิดขอ้มูล 16 หุน้ปันผลเด่นจาก Your first Stock ของตลาดหลกัทรัพย ์คดัหุน้ปันผลต่อเนื.อง 3 ปี (2013-2015) ใหผ้ลตอบแทนสูงกวา่ 5% มีฟรีโฟลทไม่ตํ.ากวา่ 15% น่าจะเป็นรายได้

Investor Relations Report

36

SET INDEX and GC Stock Price

4th Quarter of 2015GC Average Petro Industrial*

P/E Ratio 11.6 14.40

Dvd Yield 5.67 4.64

ROE 19.56 12.18

Source : Set Website as at 30st December 2015

Month Q4-15 Q3-15 Q2-15 Q1-15

High 5.05 4.12 4.60 5.30

Low 3.7 3.54 3.80 3.84

Average 4.18 3.81 4.00 4.12

Stock Volume

Month Q4-15 Q3-15 Q2-15 Q1-15

High 31,468,600 7,505,700 5,502,201 30,936,554

Low 6,200 1,700 2,300 300

Average 2,984,348 490,408 626,235 2,044,596

Tota l 185,029,592 30,859,700 35,695,403 124,731,679

3.00

3.50

4.00

4.50

5.00

1,200

1,250

1,300

1,350

1,400

1,450

01/10/2015 01/11/2015 01/12/2015

GC

Clo

sin

g P

rice

SE

T I

nd

ex

SET Index GC Closing Price

0

10,000,000

20,000,000

30,000,000

40,000,000

01/10/2015 01/11/2015 01/12/2015

No

. o

f S

ha

re /

Da

y

Trade Volume during Q4/2015

Trade Volume

31.5 Mil

25.7 Mil

37

Investment Highlight

No Fixed Cost ; due to all investment financing by long term loan (120 MB) already paid with in 4 years (2008) and no plan to investment in near term

A Leading and fast-growing with best solutions and service provider in Thai plastic and petrochemical Industry

Distributorship from most of the world leading producers.

Visionary, experienced, hands-on management team, Long term relation : Trade partner and also Financial Institute partner

Diversified and well balanced sources of revenue from various industries

Systematic risk control : Bad debt, foreign exchange exposure, price fluctuation

Regular Dividend payment with high yield. (Fully statutory reserve) Top 50’s dividend payment of SET Listing Companies

Good Corporate Governance : with very good level in 2011-2014(Corporate Governance Report of Thai Listed Companies excellent 2009-2010)

38 38

Thank you,

Questions are welcome

global connections public company limited performance ... · plastic and petrochemical industry...

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