sta 4q20 & fy20 presentation
TRANSCRIPT
STA4Q20 & FY20 Presentation
17 February 2021
Agenda
1. Financial Performance
3. Natural Rubber Market Situation
2. STA Business Highlights
2
FINANCIAL PERFORMANCE1
3
100
140
180
220
260
300
02
-Jan
-19
02
-Feb
-19
02
-Mar-
19
02
-Ap
r-1
9
02
-May
-19
02
-Ju
n-1
9
02
-Ju
l-1
9
02
-Au
g-1
9
02
-Se
p-1
9
02
-Oct-
19
02
-No
v-1
9
02
-De
c-1
9
02
-Jan
-20
02
-Feb
-20
02
-Mar-
20
02
-Ap
r-2
0
02
-May
-20
02
-Ju
n-2
0
02
-Ju
l-2
0
02
-Au
g-2
0
02
-Se
p-2
0
02
-Oct-
20
02
-No
v-2
0
02
-De
c-2
0
02
-Jan
-21
RSS3 TSR20
High Volatility of Rubber Price in 2020
ABBREVIATIONSRSS : Ribbed smoked sheet TSR : Technically specified rubber, which includes STR and SIR
134.7 (-11.0%) 137.0 (+1.7%) 133.5 (-2.5%) 110.8 (-17.0%)AVG. of TSR20
4
128.1 (+15.6%) 154.5 (+20.6%)
SIC
OM
Pri
ce
(US
cen
t :
Kg
.)
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
151.3 (+8.5)139.4
AVG FY19
140.6 cent/kg
AVG FY20
131.5 cent/kg [-6.5%YOY]
29
30
31
32
33
Jan
-19
Fe
b-1
9
Ma
r-1
9
Ap
r-19
Ma
y-1
9
Ju
n-1
9
Ju
l-19
Au
g-1
9
Se
p-1
9
Oct-
19
No
v-1
9
Dec-1
9
Jan
-20
Fe
b-2
0
Ma
r-2
0
Ap
r-20
Ma
y-2
0
Ju
n-2
0
Ju
l-20
Au
g-2
0
Se
p-2
0
Oct-
20
No
v-2
0
Dec-2
0
Jan
-21
USD/THB
USD/THB Movement
5
Cu
rren
cy
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
AVG FY19
30.94 cent/kg
AVG FY20
31.31THB/USD [+1.2%YOY]
285,594 214,873 273,303
1,103,934 1,032,284
4Q19 3Q20 4Q20 FY19 FY20
5,483 7,077 7,275
19,913
28,043
4Q19 3Q20 4Q20 FY19 FY20
Natural Rubber Products (tons)
Sales Volume
-4.3% +27.2%
6
-6.5%
Glove Products (million pieces)
+32.7% +2.8%
+40.8
– NR’s Sales Volume Stronger than Market Demand– Glove’s Sales Volume Running at Full Capacity
Domestic11%
China36%
Asia (Exculding China&Thailand)
25%
America15%
Europe11%
TSR50%
RSS6%
LTX3%
Gloves41%
9,474 6,926 10,042
39,020 37,658
1,213819
1,256
6,1174,336
987
655
1,060
2,907
2,684
3,193 8,084
13,876
12,195
30,750
1413
12
48
50
14,881 16,496
26,246
60,286
75,479
4Q19 3Q20 4Q20 FY19 FY20
Others
Gloves
LTX
RSS
TSR
8%
Sales Revenue – Gloves Contributed 41% of Total RevenuesSales Revenue by Product (THB million)
+76.4%+59.1%
Sales Breakdown by Product
Sales Breakdown by Region
ABBREVIATIONSRSS : Ribbed smoked sheet LTX: Concentrated LatexTSR : Technically specified rubber, which includes STR and SIR
75,479Mil.Baht
7
+25.2%
53%
4%5%
38%
41%
3%6%
50%
20%
10%
65%
5%
49%4%5%42%
21%7%
64%
75,479Mil.Baht
Others 2%
Blended Gross Profit (THB million)NR’s Gross Profit (THB million)
Gross Profit – Continued Breaking GPM Record
8
Glove’s Gross Profit (THB million)
947 625
998
3,057
4,145
8.1%
7.4%
8.1%
6.4%
9.3%
0%
3%
6%
9%
12%
-
1,000
2,000
3,000
4,000
5,000
4Q19 3Q20 4Q20 FY19 FY20
432
4,991
10,229
1,793
17,632
13.5%
61.7%
73.7%
14.7%
57.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
5,000
10,000
15,000
20,000
4Q19 3Q20 4Q20 FY19 FY20
20,000
25,000
1,379 5,617
11,228
4,854
21,781
9.3%
34.1%
42.8%
8.1%
28.9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-
5,000
10,000
15,000
20,000
25,000
4Q19 3Q20 4Q20 FY19 FY20
EBIT (THB million) - Quarterly
EBIT – Growing Stronger
EBIT
9
EBIT (THB million) – YearlyEBIT
185 1,109 1,526
4,553
10,347
37
99 22
25
22
222 1,208 1,548
5,306
10,369
1.5%
6.9%
10.1%
32.2%
39.5%
0%
10%
20%
30%
40%
-
5,000
10,000
15,000
4Q19 1Q20 2Q20 3Q20 4Q20
Share of profit (loss) from investments in associates & JV
EBIT margin (%)
470
17,535
132
169
788
17,704
1.3%
23.5%
0%
5%
10%
15%
20%
25%
-
5,000
10,000
15,000
20,000
FY19 FY20
Share of profit (loss) from investments in associates & JV
EBIT margin (%)
Net Profit – New Normal of Net Profit
10
Net Profit (THB million) – Quarterly Net Profit (THB million) – Yearly
74 854 1,094
2,084
5,499
0.5%
4.9%
7.2%
12.6%
21.0%
0%
5%
10%
15%
20%
25%
0
1,000
2,000
3,000
4,000
5,000
6,000
4Q19 1Q20 2Q20 3Q20 4Q20
Net profit (loss) Net profit margin (%)
(149)
9,531
-0.2%
12.6%
-5.0%
0.0%
5.0%
10.0%
15.0%
-500
1,500
3,500
5,500
7,500
9,500
FY19 FY20
Net profit (loss) Net profit margin (%)
Financial Highlight
*Adjusting for (reversal) allowance of inventory and realized gains /(losses) from hedging activities**Reclassified according to TFRS 7-- Just only FX gains/ (losses) related to AP, AR, loans can be shown in this item***Reclassified according to TFRS related to financial instruments of currency and commodities
11
(Unit : THB million) 4Q20 4Q19 %YoY 3Q20 %QoQ FY20 FY19 %YoY
Revenue 26,246 14,881 76.4% 16,496 59.1% 75,479 60,286 25.2%
NR Sales volume (tons) 273,303 285,594 -4.3% 214,873 27.2% 1,032,284 1,103,934 -6.5%
NR Avg. selling price (USD per ton) 1,477 1,379 18.4% 1,248 9.4% 1,383 1,402 -1.3%
Gloves Sales volume (million pieces) 7,275 5,483 32.7% 7,077 2.8% 28,043 19,913 40.8%
Gloves Avg. selling price (USD per 1,000 pieces) 62.3 19.2 223.9% 36.6 70.9% 35.0 19.7 77.6%
Gross profit 11,228 1,379 714.4% 5,384 108.5% 21,781 4,635 370.0%
Adj. gross profit** 11,288 1,279 782.6% 5,384 109.7% 22,014 4,589 379.7%
SG&A (1,338) (210) 536.8% 4,553 N/A (4,783) (4,571) 4.6%
Gains (loss) on exchange rate, net** 77 126 -38.6% 5,306 -98.5% 268 355 -24.5%
Other gains (loss)* 277 (210) N/A 4,578 -94.0% (81) (261) -69.1%
Operating profit (loss) 10,347 185 5482.3% 2,084 396.4% 17,535 656 N/A
Share of profit (loss) from investments in JV 22 37 -39.9% 25 -10.2% 169 132 27.4%
EBITDA 11,084 858 1192.5% 5,306 108.9% 20,505 3,274 526.2%
EBIT 10,369 222 4569.2% 4,578 126.5% 17,704 788 2146.7%
Finance costs, net (166) (195) -14.8% (146) 13.8% (691) (891) -22.4%
Tax Income (expense) (1,129) 76 N/A (373) 203.1% (1,667) 16 N/A
Net profit 5,499 74 7328.8% 2,084 163.8% 9,531 (149) N/A
GP margin 42.8% 9.3% 335.15 32.6% 101.40 28.9% 7.7% 211.70
Adj. GP margin* 43.0% 8.6% 344.14 32.6% 103.71 29.2% 7.6% 215.54
Operating profit margin 39.4% 1.2% 381.79 12.6% 267.89 23.2% 1.1% 221.44
EBITDA margin 42.2% 5.8% 364.68 32.2% 100.67 27.2% 5.4% 217.35
Net profit margin 21.0% 0.5% 204.54 12.6% 83.16 12.6% -0.2% 128.74
Balance Sheet – Very Strong Financial Status
27,802 27,243
3,175 3,175
2,247 2,390 1,196 1,133 1,369 1,801
1,689 2,637
13,494 19,032
4,978
9,260
2,382
26,447
31-Dec-19 31-Dec-20
Cash and cash equivalent
AR
Inventories
Other current assets
Other non-current assets
Investments
Rubber and Palm plantations
Goodwills
PPE
Asset (THB million)
58,331
Liability & Equity (THB million)
25,488
53,397 1,053
1,166
9,345
6,134
324
1,723
2,529
4,636
2,642
3,899
16,949
22,162
31-Dec-19 31-Dec-20
ST-Debt
Current Portion of LT-Debt
AP
Other Current Liability
LT-Debt
Other Non-Current Liability
Equity
ROA ROE D/E Net Interest Bearing Debt/ Equity
FY20 12.59X 24.16X 0.74X 0.25X
FY19 -0.25X -0.57X 1.29X 1.20X
58,331
12
93,17793,117
*Adjusting for (reversal) allowance of inventory and realized gains /(losses) from hedging activities**Reclassified according to TFRS 7-- Just only FX gains/ (losses) related to AP, AR, loans can be shown in this item***Reclassified according to TFRS related to financial instruments of currency and commodities
13
Historical Dividend Payment
Operating YearDividend per Share
(Baht)Dividend Payout Ratio (%)
Final Dividend 2020 1.75 36.23Special Dividend 2020 [Payment Date 9 December 2020]
0.50 19.0
2019 0.35 N/A
2018 0.65 46.52
2017 Omitted dividend payment
2016 0.40 N/A
2015 0.40 45.79
2014 0.40 49.34
2013 0.65 45.93
2012 0.50 46.41
2011 0.50 48.99
Record Date 16 April 2021[last day that shareholders are entitled to receive the dividend is 9 April 2021]
Payment Date 29 April 2021
Dividend Payment Thanks to The Strong Financial Result
Total Dividend for FY2020 2.25 Baht per share
Payout Ratio 36.23%
STA Business Highlights2
14
45procurement centers
8% market share of global natural rubber consumption in 2020
About STA: The World’s Leading Fully Integrated Natural Rubber Company
USA Indonesia Singapore ChinaMyanmarThailand
45,000 rai(7,200 hectares) of rubber plantations
36 NR processing plants in Thailand, Indonesia and Myanmar
Established in 1987
2.8 million tons in production capacity per year 33 billion pieces of gloves in production
capacity per year
Rubber Plantations Rubber Processing Rubber Gloves
1.0 million tons sold in 2020
3 locations of glove factories in Thailand
STA’s Global Presence
> 6,000Rubber farmers and dealers being members of mobile application “SRITRANG Friend”
28.0 billion pieces of gloves sold in FY20
15
Upst
ream
Mids
tream
Down
stre
am
Vietnam
26%market share of Thailand rubber production in 2020
140+countries sold over the world
TappingTrees58%
Immature Trees42%
2.37million trees
Upstream Operations – Rubber Plantations
LampangSukothaiPichitPhitsanulokPetchaboonChiang RaiChiang MaiSakon NakhornUtaraditSakaeo
PhraeKalasinPhayaoNanSongkhlaSurat ThaniKrabiChumpornBungkan
Provinces in Thailand
19
Number of Rubber Trees (2021F)
Estimated Mature Plantations
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
20
17
20
18
20
19
20
20
F
20
21
F
20
22
F
20
23
F
20
24
F
20
25
F
20
26
F
20
27
F
Production (tons) Tapping, trees (RHS)
Note: The green provinces are where our factories located in.
Note: Information as of 31 December 2020
~1,40
0 Ton
s
16
Lomsak - Phetchabun
Hang Chat -Lumpang
Upstream Operations – Hemp Plantation Project
Sakon Nakhon
Chaiyaphum
Nan
Expected Area
100 – 200 Rai
at the initial stage
Source: Thai FDA 17
Midstream Operations – NR Processing
processing facilities36 Utilization Rate (%)
24 processing facilitiesCapacity*: 2.10 mil. tons/annumTSR
RSS
LTX
5 processing facilitiesCapacity*: 0.21 mil. tons/annum
7 processing facilitiesCapacity*: 0.53 mil. tons/annum
Capacity*: 2.84 mil. tons/annum
Note: *Total engineering capacity
18Note: Information as of 31 December 2020
66.9%62.0%
54.8%
66.0%
52.0%
54.5%
62-65%66.8%
69.6%
0%
20%
40%
60%
80%
100%
2017
2018
2019
3M20
20
9M20
20
2020
2021
F
2022
F
2023
F
Technically Specified
Rubber [TSR]
Ribbed Smoked Sheet
[RSS]
50%of total sales revenue in
FY20
6%of total sales revenue in
FY20
Concentrated Latex [LTX]
4%of total sales revenue in
FY20
Major Customers in Midstream Business
Global Brands
19
Expansion of Concentrated Latex Plants
20
Chumporn[Expected commercial run in 3Q2022]
Kanjanadit, Suratthani[Expected commercial run in 1Q2023]
Bueng Karn[Expected commercial run in 1Q2022]
Increase LTX Capacity
111,549 Tons/Year[+39% from FY20]
Investment Budget
900 Million Bath
Strategy for Midstream Operations – NR Processing
Objective: To buy raw materials from rubber farmers and dealers in Thailand anywhere and anytime
No. of Members: > 10,000 rubber farmers & dealers in SRITRANG network
Launch mobile application “SRITRANG FRIENDS”
Enhance production efficiency
Acquire higher market share
➢Implement automation & censoring system in production process
➢Reduce energy consumption e.g. adapting production process to be shorter & smarter, using more biomass and reducing the use of LPG etc.
➢Keep our position as the reliable supplier for rubber users all over the world
➢Gain more market share among ambiguous market environment
market share24%
of Thailand production in 2019
market share 26% of Thailand production in 2020
STA
STA
21
STA ≠ Industry
33bn. pcs.installed
capacity per annum
Downstream Operations – Finished Products
+40.6%from sales volume
in 2019
28.0bn. pcs.
sold in 2020
3locations of glove
factories in Thailand
22
STGT, is a Flagship Company of Sri Trang Group with 56% shares owned by STA
Established in 1989
STU
ABBREVIATIONSSTU : Sri Trang USASDME : Shi Dong Shanghai Medical Equipment
SDME
STGT
Our Gloves Products
- Heavy 6.2 g- Balance 4.8 g- Comfort 3.5 g- Comfort Plus 3.0 g- Sense 2.5 g
Examination/ Non-Examination Gloves
Latex
Powdered Powder-Free
Nitrile
Powder-Free
- Comfort 4.8 g - Balance 5.0 g- Premium 5.8 g
- Comfort 5.0 g - Balance Comfort 5.5 g- Balanced Plus 5.6 g - Balance 5.8 g- Premium 6.2 g
Product Range
Our Brands [OBM]
23
Various distribution channels
Exhibition Selling Agent
Retail Business Online
Revenue breakdown
84% 80%
16% 20%
FY19 FY20
OBM
OEM
Note: There is a reclassification of OBM products.
Sales Revenue Breakdown by Region
Information as of 31 December 2020
Sales Volumein FY20
+40.6% YoY
28.0bn. pcs.
sold in FY20
North America
25%
Africa3%
EU21%
South America
10%
MiddleEast4%
Oceania1%
Asia36%
9%
8%
9%
5%
24
Product Mix by Revenue
35% 36%
27% 24%
38% 40%
FY19 FY20
NBR
NRPF
NRPD
19.9 bn.pcs.
sold in FY19
94%utilization rate
in FY20
212 233 268 300360
585
10%15%
12% 20%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
0
100
200
300
400
500
600
700
800
2016F 2017F 2018F 2019F 2020F
Billio
n p
cs
Glove demand YoY growth
50%
Global Glove Market Outlook
Average growth during 2016-2019,
at 10-12% per annum
Global Glove Demand
Source: MARGMA, HIDA Research & Analytics, and Company’s forecast
25
[bn. pcs.]
Global Glove Supply is Limited!
26
Gloves Are Necessity!
Gloves25%
Suits or Coveralls
22%Face
Masks and Hats14%
Footwear and
Overshoes13%
Aprons8%
Protective Eyewear and Cleanroom
Googles8%
Other Products
5%
Wipes4%
Global Market Share in
PPE Product in 2018
Source: Mordor Intelligence 2020, adb and Company
“1/4 of PPE Spending
come to Glove Sector”
27
Lead Time of Product Shipment
Glove Prices Still Increase Even Vaccine Come Out
ASP (THB, USD per 1,000 pcs)
28
Strategic Location for Key Suppliers and Tax Privileges
Capacity & CAPEX
32,619 32,619 35,853 50,406
71,320 82,029
90,683
3,234 14,553
20,914
10,708
8,654 11,861
32,619 35,853
50,406
71,320 82,029
90,683 102,544
1,799
11,419 10,209 6,487
3,661 5,782
4,183
(50,000)
(40,000)
(30,000)
(20,000)
(10,000)
-
10,000
(10,000)
10,000
30,000
50,000
70,000
90,000
110,000
130,000
150,000
2020 2021 2022 2023 2024 2025 2026
Additional mn pcs. (LHS)
Installed capacity mn pcs. (LHS)
Installed capacity
CAPEX THB mn. (RHS)
NATURAL RUBBER MARKET SITUATION
3
29
Demand (LHS)
Global NR Situation (Unit : million tons) Supply (LHS) Supply Surplus / (Deficit) (RHS)
Natural Rubber Demand & Supply(Unit : ‘000 tons)
30Source : IRSG, December 2020
IRSG’s forecastBefore COVID
[mil.tons]2020 forecast in
Jul-2020 [mil.tons]2020 forecast in
Dec-2020 [mil.tons]2021 forecast
[mil.tons]% Change
Demand 14.01 12.12 12.53 13.41 7.0%Supply 14.05 12.98 12.90 13.51 4.7%Oversupply 0.04 0.86 0.37 0.10 ▼73.0%
12.2 12.112.7 13.2 13.8 13.6
12.513.4
14.114.8 15.2 15.6 15.9 16.1 16.4 16.9
12.1
12.3
12.6
13.513.9
13.712.9 13.5
14.2
14.8 15.2 15.5 15.8 16.1 16.4 16.6
(52)
122
(82)
331
123
61
367
102 62
(18) (23) (39)(67)
(35) (47)
(299) -300
100
500
0
3
6
9
12
15
18
201
4
201
5
201
6
201
7
201
8
201
9
202
0F
202
1F
202
2F
202
3F
202
4F
202
5F
202
6F
202
7F
202
8F
202
9F
5,4
20
1,4
33
1,0
19
80
2
76
4
56
8
58
4
52
4
33
3
30
5
5,6
02
1,5
08
1,1
91
89
1
82
4
61
7
60
2
59
4
34
8
35
8
China EU India USA Thailand Japan Indonsia Malaysia Brazil SouthKorea
2020 2021
4,5
06
2,8
00
1,2
13
68
8
93
1
66
2
73
3
52
5
19
1
10
4
4,6
63
2,9
39
1,2
34
76
0
96
7
71
8
78
9
54
3
19
3
12
4
2020 2021
NR Supply & Demand
Indonesia 22%
Thailand 35%
Vietnam 9%
Cote d'Ivorie 7%
China 6%
CAMAL 6%
India 5%
Malaysia 4%
Others 7%
13.51mil. tons
2021F global production growth = +4.7% YoY
2021F Major NR Producers
31
NR Production from Top 10 Producers .+3.5%
+5.0%
+1.7%+10.5% +3.9% +8.5% +7.6% +3.4% +1.0% +19.2%
Source : IRSG, December 2020
China 42%
EU 11%India 9%
USA 7%
Thailand 6%
Japan 5%
Indonesia 4%
Malaysia 4%
Others 12%
2021F Major NR Consumers2021F global growth in consumption = +7.0% YoY
NR Consumption from Top 10 Customers
13.41mil. tons
.+3.4%
+5.2% +16.9%+11.1% +7.9% +8.6% +3.1% +13.4% +4.5% +17.4%
News Update
32
Rubber Price Guarantees for Farmers
60 Baht/Kg.
57 Baht/Kg.
23 Baht/Kg.
RSS3
Fresh Latex with DRC 100%
Cup Lump with DRC 50%
Period: 6 Months [Oct 2020 – Mar 2021]
Condition: 20 kg./Rai/Monthfor farmers registered with RAOT with over 7 years of rubber plantation.
U.S. DEPARTMENT OF COMMERCE INITIATES ANTIDUMPING DUTYAND COUNTERVAILING DUTY INVESTIGATIONS OF IMPORTS OF PASSENGER VEHICLE AND LIGHT TRUCK TIRES FROM THE REPUBLIC OF KOREA, TAIWAN, THAILAND, AND THE SOCIALIST REPUBLIC OF VIETNAM
Please click here the full version of Press Release
Korea
Taiwan
Thailand
Vietnam
42.95% – 195.20%
20.57% – 116.14%
106.36% – 217.50%
5.48% – 22.30%
In the AD investigations, Commerce will determine whether imports of PVLT tires from Korea, Taiwan, Thailand, and Vietnam are being dumped in the U.S. market at less than fair value. The alleged dumping margins are as follows:
