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Growing Global
……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality1
Hartalega Holdings Berhad14th Annual General Meeting2020
Growing Global
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Contents
Covid-19 Impact
Financial Performance &
Dividend Growth
Expansion Plans
What’s Next for Hartalega
Social Responsibility
Growing Global
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Covid-19 impact
Mid & long term outlook
Growing Global
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Current situation
Daily new cases hovering around
200k – 300k
Autumn starting in northern
Hemishpere
Upticks in new cases reported in
China, South Korea, Japan and
Europe (previously peaked)
Daily new cases still on the uptrend
Growing Global
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Current situation
PPE shortage still ongoing
Growing Global
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Current situation
FDA Medical Device Shortage List
Source: FDA website
Growing Global
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Potential demand based on actual need
Market outlook
With conservative growth assumptions
(30% - developed market; 100% -
developing market), actual gloves
needed could be as much as 120bil pcs.
Existing capacity expansion plans are
not sufficient to fulfill the potential surge
in demand
It will take time for industry to build new
capacity
A typical glove plant will take 9-12
months to build and further 4-6 months
to commission the production lines
Source: Trade Atlas import data (import code: HS401511 & HS401519), Company estimates
Est. 30%
growth
from 2019
Est. 100%
growth
from 2019
Growing Global
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Consistent growth in global consumption
Market outlook
The sector is expected to undergo a
structural step-up in demand post
pandemic
Expected post pandemic growth at higher
rate than the usual 8-10% growth per
annum
On the back of increased glove usage from
emerging markets with low gloves
consumption per capita and heightened
hygiene awareness due to the pandemic
Source: Trade Atlas import data (import code: HS401511 & HS401519), Company estimates
110122 124
140 150 148160 171 180
194210
228256 263
Global consumption of rubber gloves (bil pcs)
Potential Demand
Potential Supply
Growing Global
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Financial Performance & Dividend Growth
High growth glove company
Growing Global
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About us
Growing Global
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Sales Revenue & Profit
110 160 240 282 443
572 735
921 1,032 1,107 1,145
1,498
1,822
2,405
2,827 2,924
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18
FY
19
FY
20
Revenue (RM mil)
13 19 37 69 85
143 190 201
234 233 210
258 283
439 454 434
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18
FY
19
FY
20
Profit After Tax (RM mil)
Revenue
3.4%YoY Increase
Profit After Tax
4.2%YoY Decrease
FY20 Net Profit Margin
14.9%
Revenue CAGR
24.4%FY05-FY20
PAT CAGR
26.3%FY05-FY20
Growing Global
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EPS Growth
2.662.90
4.91
6.546.91
7.977.85
6.74
7.858.62
13.2813.69
12.88
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18
FY
19
FY
20
Earnings per Share (sen) EPS
6.0%YoY Decrease
EPS CAGR
14.0%FY08-FY20
Number of shares grew from 217m shares
(2008) to 3,365m shares (2020) as a result of
bonus issue of 1 for 2 in 2010, bonus issue of 1
for 1 in 2012, bonus issue of 1 for 1 in 2015 &
bonus issue of 1 for 1 in March 2018 which did
not hinder EPS from growing
Focus on sustaining EPS via expansion and
automation
Growing Global
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Hartalega’s Dividend Growth
Dividend per share is stated post-bonus issue*
1.67
2.633.13
3.63 3.633.25
4.00 4.25
7.95 8.207.75
33.9%
40.1%
45.3%45.7%47.0%49.9%50.9%49.3%
60.0%60.2%
60.5%
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18
FY
19
FY
20DPS (sen) Payout Ratio
Dividend
Per Share
7.75senFor FY2020
Dividend
Payout Ratio
60.0%From FY2018 onwards
Pay-out Policy of minimum 60% instituted from
FY2018 onwards
Total dividend payout for the year amounts to
RM262 million, representing a payout ratio of
60.5%
Growing Global
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Quarterly Profit
56
96
125
94
221
71
113120
104
66
113 119121
89
116
91
115
FY17 FY18 FY19 FY20 FY21
Q1 Q2 Q3 Q4 1Q20
vs 1Q19 PAT
134.5%YoY Increase
1Q20
vs 4Q19 PAT
91.0%QoQ Increase
Higher profit YoY & QoQ mainly due to:
Higher sales volume: 8%
Higher average selling prices: 5%
Lower material cost & upkeep expenses
Expecting stronger quarters ahead due to
steeper increase in selling prices QoQ
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Expansion plans
NGC 1.5 & NGC 2.0 NGC
Growing Global
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NGC ongoing expansion
To date, 70 production lines are running at NGC. 5 out of 7 plants at NGC are in full operation
Plant 6 has commissioned 10 out of 12 lines since early January
First line of Plant 7 to start towards Q4 of CY2020.
Plant 7 - 6 high capacity lines to be completed by March’21.
RM2.0blnInvested at NGC to date
P6 P7
14production lines to be built
in NGC in coming years
Growing Global
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Beyond NGC
NGC 1.5: Plant 8-11
Located beside existing NGC
4 plants x 12 lines = 48 lines
Installed Capacity: 19 billion pcs p.a
Target to commence the first line towards Q4 of CY2021
NGC Sepang
Pond
Proposed land
60.57ac
P8 P9
P10 P11
Growing Global
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Beyond NGC
>45,000Pieces per hour
NGC 2.0: Replicating NGC
Fully digitized
factory floor
Expected reduction in
manual labour of 20%
Higher level of
automation
Located in Banting
7 plants with 82 production lines
Installed Capacity: 32 billion pcs p.a
Target to commence the first line towards Q1 of CY2022
As a responsible industry player, management is cognizant of maintaining a healthy supply and demand balance in our expansion plans
Growing Global
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Continuous Expansion
95 billion installed capacity by 2027
Facility Location Projected Installed Capacity
Bestari Jaya Batang Berjuntai 12.9 bil
NGC Sepang 31.0 bil
43.9 bil
NGC 1.5 Sepang 18.9 bil
NGC 2.0 Banting 32.3 bil
Total 95.1 bil
With the current expansion plans in place, we are on track to doubling capacity to 95 billion pcs p.a by 2027
Looking to acquire additional land bank for longer term expansion
Growing Global
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Social Responsibility
We care for our people
Growing Global
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Social compliance
Towards the later part of 2019, we decided to remediate migrant
workers who joined prior to Zero Recruitment Cost policy
Appointed a third-party non-profit organisation with a
proven track record in social compliance and recruitment fee
remediation to conduct interviews with affected workers
Despite a delay caused by the movement control order (MCO),
these interviews were concluded in June
Target to begin remediation by the fourth quarter of 2020, to
be completed over the span of up to 24 months.
Remediation Cost
Growing Global
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End of Presentation