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CORPORATE
PRESENTATION
2Q FY2020
RESULTS9 March 2020
2Q FY2020FINANCIAL REVIEW
2Q FY2020 Results Presentation 3
Strong 1H20 performance sets a good base for the year ahead… benefiting
from increasing sales and enhanced operating efficiency
GROUP PERFORMANCE
310 345 345 371 389
699
312
36 31 36 30 36 25 35
11.7%9.0% 10.4%
8.1% 9.2%
3.6%
11.2%
FY13 FY14 FY15 FY16 FY17 19M FY19* 1H20*
RM’m
Revenue Profit before tax PBT Margin
Group revenue and profit before tax
*Following a change in year end, 19M FY19 ended on 31 July while previous years ended
on 31 December; 1H20 spans the six months ended 31 January 2020
2Q FY2020 Results Presentation
2Q FY20 vs 1Q FY20 (Q-o-Q Comparison)
Quarterly revenue reaches record high on:
Resilient sales to existing customers
Substantially improved profitability due to:
Enhanced operating efficiency
Foreign exchange gain of RM1.0 millioncompared to RM0.8 million loss previously
PBT margin rose to 12.6%
-5
0
5
10
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
19
2Q
19
3Q
19
4Q
19
5Q
19
6Q
19^
7Q
19
1Q
20
2Q
20
Quarterly PATMI (RM ‘m)
4
Charting new heights in 1H20 following successful turnaround… efficiency
improvements contributing to enhanced profitability
INCOME STATEMENT
RM'm2Q FY20 to
31.01.20
1Q FY20 to
31.10.19
% chg
qoq
1H FY20 to
31.01.20
Revenue 159.0 152.6 4.2% 311.5
EBITDA 26.7 21.8 22.2% 48.5
Operating Profit 21.2 16.5 28.3% 37.7
Share of Associate Results 0.0 0.0 n/m 0.0
Profit Before Tax 20.0 15.0 33.9% 35.0
Net Profit/(Loss) to Shareholders 14.6 11.0 33.3% 25.6
Basic EPS (sen) 4.47 3.35 33.4% 7.82
EBITDA margin 16.8% 14.3% 2.5 pt 15.6%
PBT margin 12.6% 9.8% 2.8 pt 11.2%
Net margin 9.2% 7.2% 2.0 pt 8.2%
0
50
100
150
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
19
2Q
19
3Q
19
4Q
19
5Q
19
6Q
19^
7Q
19
1Q
20
2Q
20
Quarterly Revenue (RM ‘m)
-5
5
15
25
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
19
2Q
19
3Q
19
4Q
19
5Q
19
6Q
19^
7Q
19
1Q
20
2Q
20
Quarterly PBT (RM ‘m)
^6Q19 results span a 1-month period ended 30 April 2019
2Q FY2020 Results Presentation 5
Net gearing maintained at below 0.5x… borrowings to be reduced in
subsequent quarters
BALANCE SHEET
* Daibochi held RM81.8 mil in intangible assets as at 31 January 2020, due to goodwill recognized on the acquisition of 60% interest in Daibochi Packaging (Myanmar)
as well as the acquisition of Mega Printing & Packaging
As at 31.1.2020 As at 31.07.2019
(Unaudited) Audited
Fixed Assets (excl associate investment,
deferred tax & right of use assets)*275.94 171.87 Due mainly to MPP acquisition
Associate Investment 11.11 19.14
Current Assets 189.13 174.01Due to higher trade receivables and cash balance
following MPP acquisition
Inventories 64.60 62.44
Current Liabilities (excl. borrowings & lease
liabilities)94.43 54.75
Due mainly to increased trade and other payables
from MPP acquisition
Shareholders’ Equity 231.89 206.17 Increase in retained earnings
Total Borrowings 102.73 62.63Due mainly to increased borrowings to fund MPP
acquisition
Cash & Bank Balances 23.22 18.56 Due to MPP acquisition
Net Gearing 0.34 x 0.21 x In line with higher borrowings
Remarks
2Q FY2020OPERATIONS REVIEW
2Q FY2020 Results Presentation
RM159.0m
RM172.2m 55.3%
Exports
44.7% RM139.4m
RM311.5m
Exports
44.7% RM71.0m
7
Uptrending sales to both domestic and international markets on
strengthened base and enlarged manufacturing footprint…
REVENUE SEGMENTATION
42.1
40.3
42.9
41.9
42.8
39.6
46.2
47.0
47.1
43.8
47.6
52.0
55.2
16.0
57.9 84.2
87.9
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
19
2Q
19
3Q
19
4Q
19
5Q
19
6Q
19^
7Q
19
1Q
20
2Q
20
Quarterly Domestic Revenue(RM ‘mil)
DomesticDomestic
RM87.9m 55.3%
47.6
56.7
51.2
48.5
51.3
47.2
55.8
58.6
57.6
62.6
61.6
58.4
55.6
18.4
65.4
68.3
71.0
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
19
2Q
19
3Q
19
4Q
19
5Q
19
6Q
19^
7Q
19
1Q
20
2Q
20
Quarterly Export Revenue(RM ‘mil)
1H FY20202Q FY2020
^ 6Q19 results span a 1-month period ended 30 April 2019
2Q FY2020 Results Presentation
Integration of MPP to Daibochi operations ongoing
Implementation of Daibochi’s enhanced production system toMPP operations began in October 2019; on track for completion in3Q FY2020
Group to benefit from integrated and real time production databetween Daibochi and MPP operations, as well as sharedprocurement under the Scientex Group
Enhanced market strategy as Daibochi focuses on complex highperformances structures (e.g. multi-layered / special requirementsand customisation); MPP on high-quality cost-effective solutions(e.g. single-layered / bi-laminated structures)
Addition of MPP site to manufacturing footprint further diversifiesoperating risks; fulfilling MNCs preferences for more robustbusiness continuity planning
8
MPP strengthens group capabilities and competitive advantages…
undertaking further enhancements to production system
OPERATIONS UPDATE
2Q FY2020 Results Presentation
Completed new state-of-the-art bagging section at AyerKeroh plant in February 2020
Increased capacity to supply larger orders after adding severalnew high-speed machinery with approx. 100% higher output
Equipped with 13 bag making machines, and fully air-conditioned,humidity and hygiene-controlled environment
Integrated lab for seal strength & tensile strength testing
Featuring integrated visitors walkway to showcase customersDaibochi’s capabilities, stringent hygiene and quality control
9
Group continues to invest in expanding and upgrading facilities…
OPERATIONS UPDATE (CONT’D)
View from visitors’ walkway
New bagging section, Ayer Keroh plant
GROWTH STRATEGIES
2Q FY2020 Results Presentation 11
Integrated capabilities strengthens footing as a leading regional player to
F&B and FMCG brands… ongoing optimisation to drive growth engine
GROWTH STRATEGIES
MNCs
Film
Manufacturing
Converting
R&D
& Innovation
Global
Reach
Quality
& Efficiency
Vertically integrated model
+16.68mmeters
+9.33mmeters
Integrated operations with Scientex and ongoingoptimisation to improve competitiveness anddrive Group’s growth engine
Improved operational efficiencies via expandedcapacity, reduced wastage, and better inventorycontrols
Scientex’s upstream film production capabilitiesenable Group to focus on converting business toservice customer better and more competitively
Working closely with customers on migration tonew and innovative printing systems that offergreater efficiency
Collaborating with major local and internationalbrands towards adoption of fully-recyclablelaminates in line with global sustainability trends
2Q FY2020 Results Presentation
Developed sustainable flexible mono-material laminates
Fully recyclable sustainable packaging solution based onhomogenous resin type, replaces multi-layered laminatedpackaging based on mixed materials which are non-recyclable
Commercialized first sustainable mono-material laminatedpackaging to a prominent local beverage customer in 1Q FY2020
Daibochi proposed and trialed new 3-layered mono-materiallaminate structure (PP-based) to replace customer’s complex 5-layer structure (made of PP, PE, aluminum foil, and paper)
Solution fulfills PP or PE labelling requirements, ensuring productrecyclability while meeting barrier and performance specifications
Commenced delivery to customer since September 2019
Ongoing completion of rigorous trials with several renownedmultinational customers
New innovations to be rolled out for wider range of packagingformats, catering to customers’ food and beverage, as well as fastmoving consumer goods brands in regional markets
Expecting commercialization and to secure orders in 2H20
12
Group’s sustainable innovation sees encouraging test results among major
brands… to benefit from increasing pace of global sustainability initiatives
SUSTAINABILITY INITIATIVE
PP
5
PE
4
INVESTMENTMERITS
2Q FY2020 Results Presentation 14
Targeting to be a super regional FPP supplier for MNCs…
VALUATIONS AND MERITS (as at 5 March 2020)
Supplier to renowned F&B and FMCG brands(supporting highly-resilient sectors)
Targeting Southeast Asia’s expanding market
Collaboration with Scientex and MPP for synergiesand to leverage high-growth platform
Industry-leading R&D and product innovation
Highly-experienced management team
KEY MERITS
Share Price Performance (1 Yr)
DAIBOCHI
KLCI
RM2.47
5/3/2020
RM1.57
6/3/19
Share Price 2.47
Market Cap (RM 'mil) 808.5
P/B 3.5
Valuations @ 5 March 2020
Dividend Policy
To pay out not less than 30% of normalised
net profit attributable to shareholders
Contact Information
Investor Relations
Low Jin Wei, Executive Director
Daibochi Berhad
+606-231 9779
Julia Pong, Manager
Aquilas Advisory (M) Sdn Bhd
+6012-390 9258
