TOA PAINT (THAILAND) PCL

TOA PAINT (THAILAND) PUBLIC COMPANY LIMITED 0

Q1/2021

TOA PAINT

(THAILAND) PCL.


DISCLAIMER

IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by TOA Paint (Thailand) Public Company Limited (the “Company”) or any person on behalf of the Company, and any question-and-answer session that follows the oral presentation (collectively, the “Information”). In accessing the Information, you agree to be bound by the following terms and conditions, you represent that you are outside the United States, and if applicable, you consent to delivery of the attached document by electronic transmission.

The information contained in this presentation is intended solely for your reference.

This presentation contains “forward-looking statements”, which are based on current expectations and projections about future events, and include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “plans”, “could”, “should”, “predicts”, “projects”, “estimates”, “foresees”, “seek” or similar expressions or the negative thereof, as well as predictions, projections and forecasts of the economy or economic trends of the markets and the Company’s industry, which are not necessarily indicative of the future or likely performance of the Company or its industry, and projections and forecasts of their performance, which are not guaranteed. Such forward-looking statements, as well as those included in any other material discussed at the oral presentation or in this document, concern future circumstances and results and involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause its actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions and estimates regarding the Company’s present and future business strategies and the environment in which it will operate in the future. Forward-looking statements are not guarantees of future performance. These forward-looking statements speak only as at the date of this document, and the Company does not undertakes any obligation or undertakes to supplement, amend, update or revise any forward-looking statements as a result of new information or to reflect future events or circumstances, or otherwise.

The Company makes no representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one if many possible scenarios and should not be viewed as the most likely or standard scenario. No assurance given that future events will occur or our assumptions are correct. Actual results may materially differ from those provided in the forward-looking statements and indications of past performance are not indications of future performance. In no event shall the Company be responsible or liable for the correctness of any such material or for any damage or lost opportunities resulting from use of this material. The Company makes no representation whatsoever about the opinion or statements of any analyst or other third party. The Company does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or use of any such opinion or statement.

The Information contains certain non-GAAP measures, including EBITDA, that are not audited, not included in the Company’s audited financial statements and not presented in accordance with Thai Financial Reporting Standards. The measures have been used by management as a supplemental measure of the Company’s performance. Although these measures are either contained in or fully reconcilable to line items on the Company’s audited financial statements and/or based on management accounts, they may not be equivalent to similarly named measures used by other companies, and should not be considered as a measure comparable to income statement items for the relevant period in the financial statements.

The information set out herein is subject to change without notice, its accuracy is not guaranteed, has not been independently verified and it may not contain all material information concerning the Company.

The Information also contains certain statistical data and analyses (the “Statistical Information”) which have been prepared in reliance upon information furnished by the Company and/or third party sources for which the Company has either obtained or is in the process of obtaining the necessary consents for use. Numerous assumptions were used in preparing the Statistical Information, which assumptions may or may not appear herein. As such, no assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness in any particular context, nor as to whether the Statistical Information and/or the assumptions upon which they are based reflect present market conditions or future market performance. Moreover, any information from third party sources contained in the Information may not be used or relied upon by any other party, or for any other purpose, and may not, directly or indirectly, be reproduced, disseminated or quoted without the prior written consent of such third party. The Information does not purport to be a complete description of the terms of or the risks inherent in any actual or proposed transaction described herein.

The Company’s securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state of the United States, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of such act or such laws.

This presentation does not constitute an offer to sell or a solicitation of an offer to buy or sell the Company’s securities in any jurisdiction.


AGENDA OUTLINE

❖

KEY TAKEAWAYS AND PERFORMANCE

2021 TOA DIRECTION AND STRATEGY

❖

❖

FINANCIAL SUMMARY❖

COMPANY UPDATE❖

KEY OF SUSTAINABLE GROWTH & AWARDS❖

TOA GOING FORWARD❖


COMPANY

UPDATE

3


Q1/21 Marketing and Sales Activities (1)

1. Marketing Campaign “Why SuperShield?”

➢ To reinforce key benefits of SuperShield via experimental style commercial advertisement which is a strong reason for creating believe in product features.



2. 4 Seasons Summer Campaign

➢ To create brand excitement to consumer and dealer during high season of paint products. Also create awareness to younger generation for key selling words “สทีนได”้.

Phases#1 – 4Seasons partners with Tik Tok “สทีนได ้Challenge”



Phases#2 – Online Commercial Advertisement & Advertorial



3. Marketing Campaign “WHY TOA?” in January

➢ Expand reach of popular view Ads. on YouTube to reach more consumers.


13 Feb 2021: Mega Paint and Home Co., Ltd. (TOA’s subsidiary), was enter into the acquisition of shares 52% of the total issued shares of the two companies.

1. Phacha Enterprise Co., Ltd. (“PCE”) 2. Phawatri Intertrade Co., Ltd. (“PWT”)

PCE and PWT engaging in the businesses of import and selling tiles.

Q1/21 : The acquisition of Ceramic & Porcelain Tile Company


Q1/20 Q1/21

41.00

60.00

Protect & Repair Center

48%

P&R Sales Revenue (MB)

Protect & Repair Center

• + 52 stores in Q1/21• Total Protect & Repair Center 206 stores as

of 31 Mar 2021


Mega Paint Update

1ststore: City Home Mart Bang Bon2021 Target: 15 ShopsIn hand: 11 Shops


WHO Service Updated (1)

Before

After

Before

After


WHO Service Updated (2)


KEY TAKEAWAYS

AND

PERFORMANCE

13


Q1/21 Key Takeaways

▪ Q1/21 sales were 4,422 MB (+7.8% YoY and +6.1% QoQ)

Sales revenue higher sharply YoY mainly from the demand for construction materials recovery in Thailand and Vietnam. While sales surge QoQ mainly from construction

chemical products and gypsum products sales growth in Thailand.

▪ Satisfactory Gross Profit margin

Gross Profit margin slightly increased QoQ from the change in product mix in this quarter. But slightly softened YoY from higher of oil-linked raw material price.

▪ Extraordinary Items: Gain from fair value of financial asset recorded 42 MB and gain on exchange rates 13 MB.

▪ Selling Expenses decreased 26 MB YoY and 22 MB QoQ, mainly from lower advertising expenses.

▪ Administrative Expenses decreased 42 MB YoY and 47 MB QoQ, mainly from the operational efficiency.

Our Sales Revenue and Net Profit Hit All - Time High


Q1/21 Key Takeaways (CONT’D)

▪ EBITDA and EBITDA margin EBITDA recorded 1,008 MB (+37.8% YoY, +29.2 QoQ) and EBITDA margin 22.6% driven by the improved gross profit margin and decreased SG&A.

▪ *Core EBITDA (Excl. Extraordinary items) was 953 MB (+16.7% YoY, 21.6% QoQ) and EBITDA margin was 21.4%.

▪ Net Profit was 670 MB (+59.0% YoY, +36.0% QoQ)

▪ *Net Profit (Excl. Extraordinary items) was 615 MB (+21.4% YoY, +23.9% QoQ)


Group Sales Breakdown : By Product Segment

11,110 11,635 10,774

4,563 4,866

5,185

584 477 337

16,257 16,978

16,296

2018 2019 2020

Decorative Non-decorative Others

Sales Revenue (Million Baht)

YoY2020

-4.0%

YoY2019

+4.4%

2,790 2,708 2,880

1,221 1,357 1,401 90 102

141 4,101 4,167

4,422

Q1/20 Q4/20 Q1/21

68.3% 68.5% 66.1%

28.1% 28.7% 31.8%

3.6% 2.8% 2.1%

2018 2019 2020

68.0% 65.0% 65.1%

29.8% 32.6% 31.7%

2.2% 2.4% 3.2%

Q1/20 Q4/20 Q1/21

Sales Contribution (% to Total Sales Revenue)

QoQ YoY

+6.1% +7.8%............. Total .............

• Q1/21, sales revenue by product increased by 7.8% YoY, from all of the product segment due to the demand for construction materials in Thailand and Vietnam recover.

• Compared to Q4/20, sales revenue by product increased by 6.1% QoQmainly from decorative product and non-decorative product sales growth in Thailand.


13,927 14,651 14,050

1,339 1,410

1,247 991

917 999

16,257 16,978

16,296

2018 2019 2020

Thailand Vietnam Others

Group Sales Breakdown : By Geography


• Q1/21, sales revenue in Thailand increased QoQ and YoY supported by sales growth in retail dealers and modern trade channels.

• Sales revenue in Vietnam increased YoY mainly from sales in the retail channel but decreased QoQ from seasonality factor.

• Sales revenue in other countries increased YoY, mainly from sales growth in Cambodia. But slightly decreased in QoQ from seasonality factor.

3,633 3,514 3,867

213 338 262 255 315 293

4,101 4,167 4,422

Q1/20 Q4/20 Q1/21


85.7% 86.3% 86.2%

8.2% 8.3% 7.7%6.1% 5.4% 6.1%

2018 2019 2020

88.6% 84.3% 87.5%

5.2%8.1% 5.9%

6.2% 7.6% 6.6%

Q1/20 Q4/20 Q1/21

YoY2020

-4.0%

YoY2019

+4.4%

QoQ YoY

+6.1% +7.8%............. Total .............


11,649 11,864 11,923

2,729 3,220 2,862

1,879 1,894 1,511

16,257 16,978

16,296

2018 2019 2020

Retail Dealers Modern Trade Others

Group Sales Breakdown : By Distribution Channel


• Q1/21, sales revenue in retail dealer channels increased YoY due to the recovery of demand for the decorative products in Thailand and Vietnam. While sales revenue in modern trade channels increased YoY mainly from Thailand.

• Sales revenue in all channels increased QoQ with support by sales growth in Thailand.

2,935 3,000 3,171

724 786 844

442 381 407 4,101 4,167

4,422

Q1/20 Q4/20 Q1/21


71.7% 69.9% 73.2%

16.8% 19.0% 17.6%

11.5% 11.1% 9.2%

2018 2019 2020

71.6% 72.0% 71.7%

17.7% 18.9% 19.1%

10.7% 9.1% 9.2%

Q1/20 Q4/20 Q1/21

YoY2020

-4.0%

YoY2019

+4.4%

QoQ YoY

+6.1% +7.8%............. Total .............


Reinforced by Our Unique TOA Color World Solution Services

Increasing usage of our Auto Tinting Machines by retail dealers

and modern trade distributors.

Reduced inventory carrying costs

>10,000 different shade variations

Enhanced customization

TOA Auto Tinting

6,010 6,581 6,755 7,019 7,169

2017 2018 2019 2020 Q1/21

2017 2018 2019 2020 Q1/21

No. of Auto Tinting Machines



Construction Chemical Products

D-Cote Decorplast Skim Powder

Waterproof

201RoofsealPU

WaterproofWater Bloc Floorseal Water Repellent

Skim Coat

Filler & Sealant

Tile Adhesive & Tile Grout

Others

EpoxyJoint

Acrylic Filler Acrylic Sealant Silicone Sealant PU Sealant

Rebar Anchoring

TileAdhesive

TileGrout

Bonding & Admixture Microkill

Structure & Repair

Non- Shrink Grout

Fastbond

Roofsealsunblock

Smart tape 237 Cement membrane

200 Flooring plus

0.2-3 mm.

Non-shrink Grout ≥ 500 ksc


Construction Chemical Products

Waterproof

Structural Strengthening

Bitumen torch on 3 & 4 mm. Bitumen self adhesive 1.5 & 2.0 mm.Bitumen liquid

waterproof membrane

Carbon fiber wrap & plate type

StructureRepair

PU Foam Injection

Flooring

Others

PU Foam Spray

Floor Hardener

Epoxy Injection

Polyurea


FINANCIAL

SUMMARY

23


Q1/2021 Key Financial Highlights

4,101 4,167 4,422

Q1/20 Q4/20 Q1/21

+7.8% YoY+6.1% QoQ

1,551 1,504 1,613

37.8%36.1% 36.5%

Q1/20 Q4/20 Q1/21

SG&A (Million Baht and %)Gross Profit (Million Baht and %)

Net Profit (Million Baht and %)EBITDA (Million Baht and %)


Sales Growth (%) Q1/21vs Q1/20

Thailand +6.4%

VN +23.5%

Retail +8.0%

MT +16.6%

Dec +3.2%

Non-Dec +14.7%

422 493

670

10.2%

11.7%

15.0%

Q1/20 Q4/20 Q1/21

830 898 899

Q1/20 Q4/20 Q1/21

732 780

1,008

17.7% 18.6%

22.6%

Q1/20 Q4/20 Q1/21

-7.6% YoY-7.7% QoQ

+4.0% YoY+7.2% QoQ

+37.8% YoY+29.2% QoQ +59.0% YoY

+36.0% QoQ


Q1/2021 Key Financial Highlights* Excl. Extraordinary items

Net Profit* (Million Baht and %)EBITDA* (Million Baht and %)

Extraordinary Gain/(Loss)

Unit: MB Q1/20 Q4/20 Q1/21

Gain/(Loss) from fair value of financial asset (134) 63 42

Gain/(Loss) on exchange rates 48 (67) 13

*Extraordinary items were Gain/(Loss) from fair value of financial asset and Gain/(Loss) on exchange rates in Q1/20, Q4/20, Q1/21

507 497 615

12.3%11.8%

13.8%

Q1/20 Q4/20 Q1/21

817 784

953

19.8%18.7%

21.4%

Q1/20 Q4/20 Q1/21

+16.7% YoY+21.6% QoQ

+21.4% YoY+23.9% QoQ


16,257 16,978

16,296

2018 2019 2020

Sales Revenue & Gross Profit

Unit : Million Baht

• Q1/21, sales revenue increased by 7.8% YoY due to the demand for construction materials recovery both of Thailand and Vietnam.

• Compared to Q4/20, sales revenue by product increased by 6.1% QoQ mainly from decorative product and non-decorative product sales growth in Thailand.

Sales Revenue

5,385 5,952 6,009

33.1% 35.1% 36.9%

2018 2019 2020

Gross Profit and Gross Profit Margin• Q1/21, gross profit increased by 62 MB YoY

and 109 MB QoQ in line with an increase insales volume.

• While gross profit margin softened YoY, from the recovery of oil-linked raw material price, but slightly increased QoQ mainly from the change in product mix.

Unit : Million Baht

-4.0% YoY

+1.0% YoY

4,101 4,167 4,422

Q1/20 Q4/20 Q1/21

+7.8% YoY+6.1% QoQ

1,551 1,504 1,613

37.8%36.1% 36.5%

Q1/20 Q4/20 Q1/21

+4.0% YoY+7.2% QoQ


3,153 3,362 3,510

19.4% 19.8%

21.5%

2018 2019 2020

Selling and Administrative Expenses

2,637

3,099 3,191

16.1%18.1% 19.4%

2018 2019 2020

EBITDA and EBITDA Margin

Selling and Administrative Expenses & EBITDA

Unit : Million Baht

Unit : Million Baht

• Q1/21, SG&A decreased by 68 MB YoY and 69 MB QoQ mainly from advertising expenses.

• Q1/21, EBITDA and EBITDA margin increased YoY and QoQ mainly by higher sales revenue and gross profit margin, while SG&A fell sharply.

+4.4% YoY

+3.0% YoY

830 898 899

Q1/20 Q4/20 Q1/21

-7.6% YoY-7.7% QoQ

732 780

1,008

17.7% 18.6%

22.6%

Q1/20 Q4/20 Q1/21

+37.8% YoY+29.2% QoQ


0.90 1.07

1.00

2018 2019 2020

Earning per Share

0.21 0.24 0.33

Q1/20 Q4/20 Q1/21

1,825

2,162

2,031

11.2%

12.7% 12.4%

2018 2019 2020

Unit : Baht per share

Net Profit & Net Profit Margin

Net Profit & Net Profit Margin & Earning per Share

Unit : Million Baht

• Q1/21, net profit increased by 248 MB YoY and 177 MB QoQ mainly from higher sales revenue and gross profit margin, while SG&A fell sharply.

• Q1/21, earning per share was 0.33 Baht per share (+0.12 Baht per share YoY and +0.09 Bath per share QoQ).

-6.1% YoY

422 493

670

10.2%

11.7%

15.0%

Q1/20 Q4/20 Q1/21

+59.0% YoY+36.0% QoQ


Statement of Financial Position

Note:ROA = Annualized net profit divided by average total assets.ROE = Annualized net profit divided by average shareholders’ equity.

Total Assets (Million Baht) Total Liabilities (Million Baht) Total Equity (Million Baht)

15,707 16,486

18,308

2019 2020 Q1/2021

5,093 5,081

6,094

2019 2020 Q1/2021

10,613 11,405

12,214

2019 2020 Q1/2021

• At the end of 31 Mar 2021, total assets increased from the end of 2020 mainly due to an increase in financial assets measured at fair value through profit or loss by 1,202 MB and trade and other receivables by 342 MB.

• In Q1/21, ROA increased from FY2020 resulted from increased Annualized net profit.

• At the end of 31 Mar 2021, total liabilities increased from the end of 2020 mainly from an increase in trade and other payables by 663 MB, income tax payable by 184 MB and short-term borrowings from financial institutions by 138 MB.

• At the end of 31 Mar 2021 total equity increased from the end of 2020 as the result of an increase in unappropriated retained earnings from our operations profit.

• In Q1/21, ROE increased from 2020 resulted from higher Annualized net profit.

14.0% 12.6% 15.2%

ROA

21.4% 18.4% 22.4%

ROE


0.05

0.11 0.12

2019 2020 Q1/2021

Note:Current Ratio = Current assets / Current liabilities.Quick Ratio = (Cash + Investment in trading securities + Trade receivables) / Current liabilities.Interest-bearing debt to equity = Interest-bearing debt / Total shareholders’ equity.Net debt to EBITDA = (Total borrowings – Cash and cash equivalent) / Annualized EBITDA.

Interest-bearing Debt to Equity Ratio (x) Net Debt to EBITDA Ratio (x)

(0.3) (0.4) (0.3)

2019 2020 Q1/2021

• At the end of 31 Mar 2021, the Company had short-term loans from financial institutions 338 MB, Lease liabilities 1,071 MB, cash and cash equivalents 2,497 MB and total shareholders' equity 12,214 MB.

• Interest – bearing debt to equity ratio was 0.12 times.

• Net Debt to EBITDA ratio still in negative, shown the strong point in the ability of a company to cover its debt.

Liquidity & Leverage Ratios

Current Ratio (x) Quick Ratio (x)

2.6

3.2 2.9

2019 2020 Q1/2021

2.1

2.6 2.4

2019 2020 Q1/2021

• Current ratio and Quick ratio still in healthy level.

• Compared to 2020, Current ratio and Quick ratio decreased mainly from the higher trade and other payables, income tax and short-term loans from financial institutions in current liabilities, but higher financial assets measured at fair value through profit or loss and trade and other receivables in current asset as well.

Strong financial position amid challenging business environment


Cash Cycle Days

65 69 68

2019 2020 Q1/21

Average Collection Period (days)

35 34 32

2019 2020 Q1/21

Inventory Days (days)

93

81

76

2019 2020 Q1/21

Account Payable Days (days)

7

22 24

2019 2020 Q1/21

Cash Cycle (days)

Note:Cash cycle day = avg. inventory days + avg. collection days – avg. payment daysAverage inventory days = 360 / (annualized cost of sales/ avg. finished goods inventory after net of allowance of obsolete stocks Average collection days = 360 / (annualized sales / avg. trade receivables before allowance for doubtful accounts) Average payable days = 360 / (annualized cost of sales/ avg. trade payables)

• In 1Q21 Cash cycle days were longer than FY2020, due to avg. account payable days were 5 days shorter.

• For significant shorter payment days was primarily due to the higher cost of sales from sales surge in this quarter.


2,410

1,969

726

1,316

2019 2020 Q1/20 Q1/21

Operating Cash Flow (Million Baht) Investing Cash Flow (Million Baht)

Financing Cash Flow (Million Baht) Capital Expenditures (Million Baht)

Statement of Cash Flows & Capex

(1,393)

561 650

(1,291)

2019 2020 Q1/20 Q1/21

(1,261)

(1,683)

(166)20

2019 2020 Q1/20 Q1/21

812

276

69 28

2019 2020 Q1/20 Q1/21

• Key cash inflows: profit before tax 863 MB, depreciation, trade and other payables 624 MB and amortization 136 MB.

• Key cash outflows: trade and other receivables 323 MB.

• Key cash inflows: Proceeds from sales of financial assets measured at fair value through profit or loss 2,077 MB.

• Key cash outflows: Payments for purchase of financial assets measured at fair value through profit or loss 3,213 MB.

• Key cash inflows: Proceed from short-term loans from financial institutions 418 MB

• Key cash outflows: Payments on short-term loans from financial institutions 350 MB and payments on lease liabilities 47 MB.

• CAPEX 1Q/21 primarily derived from the machinery in Thailand plants. While CAPEX Q1/20 primarily derived from the machinery of new plants in Myanmar and Cambodia.


TOA

GOING

FORWARD

33


17,XXX+

2020F 2021F

Unit : Million Baht

+10%YoY

THAILAND

+5%YoY

Outside Thailand

+20%YoYTotal Sales Revenue

2020 2021F

2020 2021F

Sales Revenue 2021: Recover from 2020 to positive growth


2021 TOA

DIRECTION AND

STRATEGY

35


2021: A year of fully transition towards beyond color business


KEY OF

SUSTAINABLE

GROWTH

AND AWARDS

37


Environmental

Social

GOOD CORPORATE GOVERNANCE

COMPLIANCERISK MANAGEMENT

➢ A leader of “Green Innovation” by

creating eco-friendly products.

➢ Environmental management is

carried out in line with the

international standards.

- ISO 14001 (Environ. management system)

- ISO 50001(Energy management)Economic

➢ The Company has a process of engagement

creation to build a bond and respond each

group of stakeholders’ expectations.

➢ Generate sustainable and proper

profit and growth

➢ Generate a balanced return for all

stakeholders

Corporate Sustainable Development


Track Record of Achievements

Brand Age 2020 Thailand’s Most Admired Brand9 consecutive years for the construction

materials by Brand Age Magazine

No.1 Brand Thailand 2020 8 consecutive years for decorative paint

and coating category by Brand Age

Magazine

CSR-DIW Continuous Award 2020 7 consecutive years for Bangna Plant

6 consecutive years for Samrong Plant

by Department of Industrial Works, Ministry of

Industry

Outstanding Company Performance Awards from SET Award 2020

Outstanding CEO Awards from SET Award 2020

THAILAND SUSTAINABILITYINVESTMENT 2020

TOA’s CG score from National CG Committee

2019 ASEAN Corporate Governance Scorecard Award – ASEAN Asset Class PLCs (Thailand)


Q & A E-mail: [email protected]

Tel. +662 335 5555 Ext. 1520

www.toagroup.com

Documents

TOA PAINT (THAILAND) PCL