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Interhides Public Company LimitedInterhides Public Company Limited
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Presentation OutlinePresentation Outline
Part I: Company Overview
Part II: Business Overview
Part III: Industry Overview
Part IV: Financial Highlights
Part V: Business Opportunity
Part VI: Offering Summary
5
Part I: Company OverviewPart I: Company Overview
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Historical DevelopmentHistorical Development
19981998 20002000 20012001 20022002 20042004
• Established under the named “Inter-Hide & Leather” with Baht 5 mn registered capital
• Production line was the tannery leather for furniture
• Established under the named “Inter-Hide & Leather” with Baht 5 mn registered capital
• Production line was the tannery leather for furniture
• Develop and expand the production line to the car seat leather for automotive industry
• Develop and expand the production line to the car seat leather for automotive industry
• Launch the production of cut part leather for TOYOTA, SUBARU and MITSUBISHI
• ISO 9002:1994/QS-9000:1998 accredited by TUV
• Launch the production of cut part leather for TOYOTA, SUBARU and MITSUBISHI
• ISO 9002:1994/QS-9000:1998 accredited by TUV
• Export the cut part leather for Ford and Mazda to Philippines
• Debt restructuring plan approved by Thai Asset Management (TAMC)
• Export the cut part leather for Ford and Mazda to Philippines
• Debt restructuring plan approved by Thai Asset Management (TAMC)
• Cease the production line for furniture
• Launch the production of cut part leather for NISSAN
• Cease the production line for furniture
• Launch the production of cut part leather for NISSAN
• Launch the production of cut part leather for FORD, MAZDA, HONDA and ISUZU
• Export the cut part leather for TOYOTA to Indonesia
• Launch the production of cut part leather for FORD, MAZDA, HONDA and ISUZU
• Export the cut part leather for TOYOTA to Indonesia
19921992
• Sumitomo Corp. (TH) invested in IHL for 1.85%
• Thai Automotive VCF invested in IHL for 9.00%
• ISO/TS 16949:2002 accredited by TUV
• Sumitomo Corp. (TH) invested in IHL for 1.85%
• Thai Automotive VCF invested in IHL for 9.00%
• ISO/TS 16949:2002 accredited by TUV
2005200520032003
• Sumitomo Corp. (TH) increased its investment in IHL to 6.67%
• Sumitomo Corp. (JP) invested in IHL for 20%
• Increased registered capital to Bt. 300 mn
• JAIC (JP) invested in IHL for 1.33%
• Transformed to a Public Company Limited on Aug 24
• Listed in SET on Dec 22
• Sumitomo Corp. (TH) increased its investment in IHL to 6.67%
• Sumitomo Corp. (JP) invested in IHL for 20%
• Increased registered capital to Bt. 300 mn
• JAIC (JP) invested in IHL for 1.33%
• Transformed to a Public Company Limited on Aug 24
• Listed in SET on Dec 22
7
Shareholding StructureShareholding Structure
IPO25.00%
IPO25.00%
43.51% 25.73% 5.75%
Core ShareholdersCore Shareholders Strategic PartnersStrategic Partners OthersOthers
• Mr.Ongart Thumrongsakunvong
18.31%• Ms.Chutima Busayapoka
25.20%
• Mr.Ongart Thumrongsakunvong
18.31%• Ms.Chutima Busayapoka
25.20%
• Sumitomo Corp (JP)
15.00%• Sumitomo Corp. (TH)
5.00%• Thai Automotive VCF
4.73%• JAIC
1.00%
• Sumitomo Corp (JP)
15.00%• Sumitomo Corp. (TH)
5.00%• Thai Automotive VCF
4.73%• JAIC
1.00%
• Mr.Tanat Busayapoka
2.95%• TPP International Co., Ltd.
1.97%• Thuannavarat Family
0.63%• Mr.Somchart Limpanuphap
0.14%• Mr.Wattana Busayapoka
0.06%
• Mr.Tanat Busayapoka
2.95%• TPP International Co., Ltd.
1.97%• Thuannavarat Family
0.63%• Mr.Somchart Limpanuphap
0.14%• Mr.Wattana Busayapoka
0.06%
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Competitive Strengths Competitive Strengths
Reliable second tier supplier with strong track record• Maintain long term relationship with suppliers and car makers in product
development• Qualified under vendor list of car makers• Possess modern technology in machinery and equipment• Emphasized on research development with modern test laboratory room• Received ISO 9002:1994/QS-9000:1998 from TUV institution
Reliable second tier supplier with strong track record• Maintain long term relationship with suppliers and car makers in product
development• Qualified under vendor list of car makers• Possess modern technology in machinery and equipment• Emphasized on research development with modern test laboratory room• Received ISO 9002:1994/QS-9000:1998 from TUV institution
Highly experience management team to ensure the accuracy of future sales order and cost controlling
• More than 30 years experience of management team in tannery business
• Ensure the accuracy of future sales order• Expert in cost control in each production
planning process
Highly experience management team to ensure the accuracy of future sales order and cost controlling
• More than 30 years experience of management team in tannery business
• Ensure the accuracy of future sales order• Expert in cost control in each production
planning process
Mirror with rapid growth automotive industry• Benefit from aggressive expansion of car
markers such as Toyota, Honda and Nissan to build more automotive manufacturing in Thailand
• Change in consumer behavior toward leather car seat compared to textile seat cover
• FTA is expected to help increase the car production in the future with no tax burden
Mirror with rapid growth automotive industry• Benefit from aggressive expansion of car
markers such as Toyota, Honda and Nissan to build more automotive manufacturing in Thailand
• Change in consumer behavior toward leather car seat compared to textile seat cover
• FTA is expected to help increase the car production in the future with no tax burden
Strong Strategic Partner• Received strong support from strategic partners Sumitomo and
Thai Automotive and JAIC• Absorb know how from alliance with such 3 strategic partners
Strong Strategic Partner• Received strong support from strategic partners Sumitomo and
Thai Automotive and JAIC• Absorb know how from alliance with such 3 strategic partners
9
Mission and Business GoalsMission and Business Goals
“To be the fore-runner of leather manufacturing technology and production management in Asia.”
“To be the fore-runner of leather manufacturing technology and production management in Asia.”
MissionMission
• The Company aims the continuous growing revenues and profits with the focus on the automotive industry by training the human resource, developing the most practical production process and services as well as efficiently
controlling the production cost.
• The Company becomes the technical leader in leather and interior related product manufacturing technology.
• The Company is capable of responding to and meeting with client requirements in terms of product development, process development, and prompt and effective response to quality or delivery problems (if any).
• Corporate management and staffs are well coordinated and in line with the Corporate Vision, actions are properly taken to ensure achievement of the Corporate Mission.
• Employee training shall be conducted consistently and systematically to ensure and support Corporate growth targets, as well as achievements of individual career path.
• The Company aims the continuous growing revenues and profits with the focus on the automotive industry by training the human resource, developing the most practical production process and services as well as efficiently
controlling the production cost.
• The Company becomes the technical leader in leather and interior related product manufacturing technology.
• The Company is capable of responding to and meeting with client requirements in terms of product development, process development, and prompt and effective response to quality or delivery problems (if any).
• Corporate management and staffs are well coordinated and in line with the Corporate Vision, actions are properly taken to ensure achievement of the Corporate Mission.
• Employee training shall be conducted consistently and systematically to ensure and support Corporate growth targets, as well as achievements of individual career path.
Business GoalsBusiness Goals
10
Part II: Business OverviewPart II: Business Overview
11
Products and ServicesProducts and Services
ProductsProducts
Leather
To be the raw material for car seat maker
Leather
To be the raw material for car seat maker
Leather Cut Parts
For car seat, steering wheel, gear knob and others
Leather Cut Parts
For car seat, steering wheel, gear knob and others
ServicesServices
Sewing
For car seat, steering wheel, gear knob and others
Sewing
For car seat, steering wheel, gear knob and others
Car Seat Replacement
Made-to-Order car seat
Car Seat Replacement
Made-to-Order car seat
Products and ServicesProducts and Services
12
Marketing Strategies and ClientsMarketing Strategies and Clients
ClientsClients
Marketing StrategiesMarketing Strategies
1. Product: High quality products that meets ISO/TS 16949: standard from TUV.
2. Service: Best services with on-time delivery is the key factor of the Company’s success.
3. Pricing: Competitive pricing by efficient cost control management in production process and skilled labors.
4. Marketing: Focus on target group with the right marketing plan.
5. Customer Relation: Build up the good relation with clients by the best product and services to meet their most satisfactory.
6. Human Resource and Technology Development: Human resource development by on the job training with the international standard technology learning to form the Company’s own production guideline.
• The Company’s direct clients are 1st tier OEM both in Thailand and in foreign countries such as Indonesia and Philippines. The Company aims to expand the client base in foreign countries in the near future.
• The Company also treats the car makers, such as TOYOTA, HONDA, NISSAN, FORD, MITSUBISHI, ISUZU, MAZDA, SUBARU and others, as the Company’s indirect clients since the Company has close relationship with the car makers in developing the products and preparing the production plan together.
2002 2003 2004 2005
Million Baht % Million Baht % Million Baht % Million Baht %
Domestic Sales 433.95 90.94 446.13 94.70 540.49 83.31 875.08 87.73
Foreign Sales 43.25 9.06 24.95 5.30 108.28 16.69 122.36 12.27
Total 477.20 100.00 471.08 100.00 648.77 100.00 997.43 100.00
13
Mad
e to
Ord
er
Supply ChainSupply Chain
2nd Tier OEM2nd Tier OEM 1st Tier OEM1st Tier OEM Car MakerCar Maker
Automotive Interiors CorpAutomotive Interiors Corp
Thai Automotives Seating & InteriorThai Automotives Seating & Interior
Toyoda Gosei (Thailand)Toyoda Gosei (Thailand)
Summit Autoseat IndustrySummit Autoseat Industry
Approved from Car Maker Under vendor list Pass quality test Bidding process Well-trained staffs
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Past Record and Confirmed Orders in PipelinePast Record and Confirmed Orders in Pipeline
Export SalesDomestic SalesRemarks: Projects on hand shows only the car seat products and services
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
TOYOTA
Altis
Camry
Vios
Fortuner
Wish
Ventury
Yaris
New Camry
New Altis
Camry
Innova
New Camry
NISSAN
Neo
Almera
Exciter
Cefiro
Frontier
Tida
New Frontier
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Past Record and Confirmed Orders in Pipeline (Cont’d)Past Record and Confirmed Orders in Pipeline (Cont’d)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FORD
Tiera
Ranger
Everest
Escape
Tiera
Focus
HONDA
Civic
MAZDA
Fighter
Tribute
Mazda 3
ISUZU
Adventure
MITSUBISHI
Cedia
20172017
Export SalesDomestic SalesRemarks: Projects on hand shows only the car seat products and services
16
Part III: Industry OverviewPart III: Industry Overview
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Industry Overview: Increasing Trend of Car SalesIndustry Overview: Increasing Trend of Car Sales
Yearly Production Domestic Sales and Export
571 589363
144 218 262 297 409 533 626 697
1,000
126 153 175181
235332
402
800
526 559
360
158
327412 459
585
751
928
1,099
1,800
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005F 2010F
CBU export
Domestic sales
Production
'000 unitsYearly Production Domestic Sales and Export
571 589363
144 218 262 297 409 533 626 697
1,000
126 153 175181
235332
402
800
526 559
360
158
327412 459
585
751
928
1,099
1,800
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005F 2010F
CBU export
Domestic sales
Production
'000 units
Year 2000 2001 2002 2003 2004 2005F 2010F
% growth (Production) 26.0% 11.40% 27.45% 28.37% 23.56% 18.42% 63.78%
“Production growth of more than 18.42% expected in 2005 and more than 63.78% cumulative growth expected in the year 2010”
Source: Thailand Automotive Institute
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Most Popular Car Brand and Model in ThailandMost Popular Car Brand and Model in Thailand
Market Share of Car Sales in 2004Market Share of Car Sales in 2004
7.30% 5.89%
23.95%
3.95%
49.41%
33.82%
0.74%2.26%
37.32%
11.98%
0.49%0.00%4.29% 2.64%
Toyota Honda Nissan Mitsubishi Mazda Isuzu Ford
7.30% 5.89%
23.95%
3.95%
49.41%
33.82%
0.74%2.26%
37.32%
11.98%
0.49%0.00%4.29% 2.64%
Toyota Honda Nissan Mitsubishi Mazda Isuzu Ford
Market Share of Car Sales in 2005Market Share of Car Sales in 2005
All types of cars
Passenger cars
All types of cars
Passenger cars
Most popular cars (all types) Most popular passenger cars
2004 1H/2005 2004 2005
Isuzu (Dmax) Isuzu (Dmax) Toyota (Vios) Toyota (Vios)
Toyota (Hilux) Toyota (Hilux Vigo) Honda (Jazz) Toyota (Fortuner)
Toyota (Hilux Vigo) Toyota (Vios) Toyota (Altis) Toyota (Altis)
Toyota (Vios) Mitsubishi (Strada) Honda (Civic) Honda (Jazz)
Nissan (Frontier) Nissan (Frontier) Toyota (Wish) Honda (Civic)
Honda (Jazz) Toyota (Altis) Honda (City) Honda (City)
Mitsubishi (Strada) Chevlolet(Colorado) Toyota (Camry) Toyota (Camry)
Toyota (Altis) Ford (Ranger) Honda (Accord) Chevlolet (Optra)
Honda (Civic) Honda (Jazz) Chevlolet (Optra) Toyota (Wish)
Ford (Ranger) Mazda (Fighter) Toyota (Avanza) Mazda 3
Toyota (Wish) Honda (Civic) Ford (Escape) Mitsubishi (Lancer)
Honda (City) Honda (City) Honda (CRV) Toyota (Avanza)
Model currently producing by the Company for Car seat
Top 12 most popular cars of the year
Source: The Company
Source: Toyota motor Thailand
Source: Toyota motor Thailand
“Interhides supplies car seat leathers to most of the popular
car brands in Thailand”
“Interhides supplies car seat leathers to most of the popular
car brands in Thailand”
6.42% 6.26%
25.40%
3.34%
51.27%
25.99%
3.18%2.58%
40.52%
7.07%
0.70%0.00%4.79% 4.86%
Toyota Honda Nissan Mitsubishi Mazda Isuzu Ford
6.42% 6.26%
25.40%
3.34%
51.27%
25.99%
3.18%2.58%
40.52%
7.07%
0.70%0.00%4.79% 4.86%
Toyota Honda Nissan Mitsubishi Mazda Isuzu Ford
19
Part IV: Financial HighlightPart IV: Financial Highlight
20
758
52545
4
454
76%80%94%
94%
0
200
400
600
800
2002 2003 2004 2005
0%
20%
40%
60%
80%
100%
Financial SummaryFinancial Summary
Total RevenueTotal Revenue Cost of Good SoldCost of Good Sold
SG&ASG&A
Bt.mn.1,003
654
486
481
35%
1%
0
200
400
600
800
1,000
1,200
2002 2003 2004 2005
-5%
5%
15%
25%
35%
% of Rev.
6953
2429
7%8%
5%6%
0
20
40
60
80
2002 2003 2004 2005
0%
2%
4%
6%
8%
10%
Net ProfitNet Profit
12139
132
-22
12%
6%
27%
-4%
-50
0
50
100
150
2002 2003 2004 2005-10%-5%0%5%10%15%20%25%30%
Bt.mn. g (%)
Bt.mn. % of Rev.Bt.mn. % of Rev.
Net Profit yr. 2003 Bt. 132 mn.Gain fr. Restructuring Bt. 461 mn. …….(A)Loss fr.Obsolete&damage stock Bt. 304 mn. …….(B)Net loss before (A) & (B) Bt.(24) mn.
Note: Growth in 1H2005 using estimated annualized revenue
21
172
7997
10746
50
79
61
0
50
100
150
200
2002 2003 2004 2005
0
20
40
60
80
100
Financial SummaryFinancial Summary
Total AssetsTotal Assets Account ReceivablesAccount Receivables
InventoryInventory
Bt.mn.
995
616
573
804
62%
8%
-29%0
200
400
600
800
1,000
1,200
2002 2003 2004 2005
-40%
-20%
0%
20%
40%
60%
80%Bt.mn.
Bt.mn.
Days
300256237
434 134169
266
324
0
100
200
300
400
500
2002 2003 2004 2005
050100150200250300350
Days
• Inventory and total assets in year 2003 were significantly decreased since IHL realized loss from obsolete and damage stock of Bt.304 million
• Even inventory in 2005 are continuously increased according to the increased in revenue but IHL’s inventory management are more efficient reflecting through shorten days inventory to 134 days
• Account receivables at 2005 are double compared with year 2004 but IHL’s days receivables are 46 days in average , which are almost the same as the former year.
• Inventory and total assets in year 2003 were significantly decreased since IHL realized loss from obsolete and damage stock of Bt.304 million
• Even inventory in 2005 are continuously increased according to the increased in revenue but IHL’s inventory management are more efficient reflecting through shorten days inventory to 134 days
• Account receivables at 2005 are double compared with year 2004 but IHL’s days receivables are 46 days in average , which are almost the same as the former year.
g (%)
22
130124122
16265
87
11386
0
50
100
150
200
2002 2003 2004 2005
0
20
40
60
80
100
120
Financial SummaryFinancial Summary
Account PayableAccount Payable LoansLoans
Total LiabilitiesTotal Liabilities
232 296
40
514 178155
227357
0
200
400
600
800
2002 2003 2004 2005
Bt.MB Days
457
603668
1,028
0
200
400
600
800
1,000
1,200
2002 2003 2004 2005
Bt.MB
Bt.MB
OD& Short term loans Long term loans
Loans Restructuring: Hair cut Loans and Acc.interests of
Bt.460.67 mn.
Debt to Equity RatioDebt to Equity Ratio
44.6
0.9
-4.6 -7.0-10
0
10
20
30
40
50
2002 2003 2004 2005
Significantly decreased due to the increased in Equity from Net Profit and Capital increased
from IPO
23
-314
-185
-146
27
-400
-300
-200
-100
0
100
2002 2003 2004 2005
Financial SummaryFinancial Summary
Paid up CapitalPaid up Capital Retained EarningsRetained Earnings
Shareholders EquityShareholders Equity
90
160190
225
300
90
050
100150200250300350
2002 2003 2004 2Q/2005 1Sep.05 2005
538
14
-95-224-400
-200
0
200
400
600
2002 2003 2004 2005
Bt.MB Bt.MB
Bt.MB
Retained loss turned to positive after realized
Q42005 net profit and share premium
ROAROA
19%
6%
12%
-3%
-5%
0%
5%
10%
15%
20%
2002 2003 2004 2005
Bt.MB
24
Part V: Business OpportunityPart V: Business Opportunity
25
Future ProjectsFuture Projects
• Capacity Expansion (By 2006)
• New plant with utilized area of 15,000 sq.m.
• Capacity enhancement from 12 million sq.feet per year to 24 million sq.feet per year
• Estimated Bt. 200-240 million of investment (exclude land)
• Signed contract on January 25, 2006
• Objectives for expansion
• To support the incremental demand from automotive industry.
• To support the incremental demand through new distribution channels in both domestic and
foreign markets.
• To support new production lines e.g. Chrome-free Leather.
• Capacity Expansion (By 2006)
• New plant with utilized area of 15,000 sq.m.
• Capacity enhancement from 12 million sq.feet per year to 24 million sq.feet per year
• Estimated Bt. 200-240 million of investment (exclude land)
• Signed contract on January 25, 2006
• Objectives for expansion
• To support the incremental demand from automotive industry.
• To support the incremental demand through new distribution channels in both domestic and
foreign markets.
• To support new production lines e.g. Chrome-free Leather.
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Question and Answer