Golden Lime: Stability And Growth in Diversified Markets - SET Opportunity Day 2Q 2018
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Golden Lime: Stability And Growth in Diversified
Markets
SET Opportunity Day 2Q 2018
Bangkok, Sept 18th 2018
1
Disclaimer This presentation contains “forward-looking” statements of Golden Lime Public Company Limited (the “Company”) that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements, other than statements of historical fact contained herein, including, without limitation, those regarding the future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets where the Company participates or is seeking to participate and any statements preceded by, followed by or that include the words “target”, “believe”, “expect”, “aim”, “intend”, “will”, “may”, “anticipate”, “would”, “plan”, “could”, “should, “predict”, “project”, “estimate”, “foresee”, “forecast”, “seek” or similar words or expressions are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future and are not a guarantee of future performance. Such forward-looking statements speak only as at the date of this presentation, and the Company does not undertake any duty or obligation to supplement, amend, update or revise any such statements. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved. For an further enquiries please contact Investor Relations: Phone: +66 (0) 2017 7461 – 3 Email: irsutha@goldenlime.co.th 9/18/2018 2
PURPOSE OF THE PRESENTATION
Introduce Golden Lime
Update on latest financial results H1 2018
Share with you Golden Lime’s growth strategy
Source : Golden Lime quarterly SET reporting
9/18/2018 3
Golden Lime Business Description and History
With + 45% domestic market share,
One of Thailand’s largest lime players
Headquartered in Nonthaburi,
3 legal entities, 4 production sites
“Think Lime,
Think Golden Lime” On the Thai Stock Exchange (SET) since 2014
• Established in 2003
(ticker : SUTHA)
• Main shareholder CE Lime
(Thailand) “Carmeuse Eastern”
• Current Managing Director Mr. Geza
Emil Perlaki Company with a large technical knowhow back by
Carmeuse Group using best available technologies.
9 vertical kilns and several hydrators
and milled limestone units
Committed to Sustainability
9/18/2018 4
How The Lime Making Process Works……. 9/18/2018 5
Golden Lime Has Manufacturing Facilities In Saraburi
Which Is Well Positioned Close To Major Customers
95% of sugar industry is
The key tool for producing lime is the kiln which concentrated in the
come in various configurations North and center of
Thailand
Golden Lime has a number of European designed
kilns as well as an in-house designed ‘EOD’ kiln
The EOD kiln has also been sold to external lime
producers in places like Indonesia through our
subsidiary Golden Lime Engineering
Bangkok
Thai steel industry
concentrated Saraburi region
around Bangkok
9/18/2018 6
Supply Security Offers Our Customers Peace Of Mind While
Fuel Flexibility Allows Management Of Variable Costs
Saraburi / Lopburi region Golden Lime has 9x150ktpd kilns located
across 3 different locations:
Chongsarika: 6x150tpd kilns
HuayPaiWay: 1 x 150tpd kiln
Saraburi Quicklime: 2 x 150tpd kiln
GL ChongSarika
This gives supply security to our customers
that cannot afford to stop their manufacturing
processes due to a lack of lime
GL Napralan*
SQL Prabuthapaht Alongside the supply security Golden Lime
also has fuel flexibility as the new acquisition
GL
of Saraburi Quicklime uses bituminous coal
HuayPaiWay
This allows Golden Lime to choose the most
efficient fuel source and given this is 20% of
the input costs it’s a valuable lever versus
those on only one fuel
We also have operations in Napralan with
facilities for hydrating and milling
*No kilns – downstream processing
9/18/2018 7
Golden Lime Has A Diversified Customer Base Operating
Across A Wide Range Of Industries
Golden Lime’s customer base is spread across a
wide variety of industries which means that if one
industry is negatively impacted product can be
switched to another industry with more positive
conditions
Although lime can be a small component of a
customers’ manufacturing process (eg steel 6%) it
is at the same time a vital component therefore
customer loyalty is high
Along with traditional lime users such as steel,
sugar and construction Golden Lime is also
now present in newer product segments such
as water treatment and specialty chemicals
Various growth areas are also being
developed in aero concrete blocks and
specialty lime products for industries like steel
that give better value in use versus standard
lime or other products
9/18/2018 8
Golden Lime Has Two Large Strategic Shareholders With Vast Experience Both In Thailand And Globally 9/18/2018 9
PURPOSE OF THE PRESENTATION
Introduce Golden Lime
Update on latest financial results H1 2018
Share with you Golden Lime’s growth strategy
Source : Golden Lime quarterly SET reporting
9/18/2018 10Golden Lime H1 2018 Financials
Revenue, EBITDA and Net Income
Golden Lime – Total Revenues Golden Lime – EBITDA
In million THB In million THB
113
534 105 80
424 414 77 70
429 369
548 549 116 133 128 121
428 518 436 505 102 102
2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019
H1 H2
H1 H2
Golden Lime – Net Income
In million THB Sales volume and revenue increase in 2017 was further
accelerated by the capacity addition and the SQL acquisition
in H1
54 Synergies via the integration of SQL into GL , and new
44 26 product developments from 2019, are expected to improve
23 23 36 further the revenue and profit generation in 2019
74 70 EBITDA also increased significantly particularly in the core
57 45 48 46
business which saw a 22mTHB yr-on-yr increase in 2Q after
the full consolidation effect of Saraburi Quicklime
2013 2014 2015 2016 2017 2018 2019
H1 H2
Net Income was relatively stable as depreciation increased
with the addition of Kiln 7
9/18/2018 11Golden Lime H1 2018 Financials
ROA (Return on Assets) And ROE (Return on Equity)
Golden Lime – Return on Assets Golden Lime – Return on Equity
In million THB In million THB
28.3%
15.0%
10.0% 15.6% 15.6%
7.0% 7.4% 7.5% 11.3%12.2%
While ROA (Return on Assets) was year-on-year this is a positive trend given that Golden Lime
has added significantly to its asset base in the form of a new kiln located in a new production
facility
ROE (Return on Equity) increased 28% due to the higher net income in H1 2018 vs H2 2017
9/18/2018 12Golden Lime H1 2018 Financials
Dividend: A Regular Cash Stream For Investors
Golden Lime – Dividend History
In million THB Golden Lime – EBITDA/Dividend
0.30 2.64
1.55
1.78
3.22
2.84 3.79 4.05
2.51
1.13
2014 2015 2016 2017 2018
0.15 0.15 0.15 0.15 H1 H2
0.10 Golden Lime – Net
0.08 0.09 0.08 Income/Dividend
0.59 0.50 0.81
1.56 0.94 1.78 1.53
1.20
0.50
H1 H2 H1 H2 H1 H2 H1 H2 H1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2014 2015 2016 2017 2018
H1 H2
Golden Lime Dividend History Future Plan For Dividends
Since going public Golden Lime has paid a Golden Lime will continue to pay out regular dividend’s
regular dividend on a bi-annual basis
A board decision was taken to pay out quarterly as
The stated policy is for at least 40% of net opposed to bi-annual
income to be paid out but as evidenced this has
historically been higher Currently the size of the dividend will be decided on a
quarterly basis
In H1 the payout of 0.08THB was 24mTHB total
and the current plan is to be at least in line with The aim is to have more regular sized dividend pay-
2017 in terms of total dividend payout for 2018 outs so it becomes more predictable for investors
9/18/2018 13Acquisition Of Saraburi Quicklime And New Kiln 7
Increased Capacity And Customer Base
New Kiln 7 Commissioned
150 tonnes per day (50 kt/yr)
Additional
Capacity Project ongoing to push the capacity higher
EBITDA 20-30mTHB*
Impact Low labor and SG&A cost
Fuel optimization program started
Next Steps
Plan to use this kiln for high value add products
Saraburi Quicklime
Acquisition 300 tonnes per day (100 kt/yr)
Additional
Capacity Project ongoing to push the capacity higher
EBITDA 40-50mTHB*
Impact Additional order book particularly in steel
Further synergies in SG&A and variable costs
Next Steps expected in 2019
* Internal forecast
9/18/2018 14PURPOSE OF THE PRESENTATION
Introduce Golden Lime
Update on latest financial results 2Q 2018
Share with you Golden Lime’s growth strategy
Source : Golden Lime quarterly SET reporting
9/18/2018 15Golden Lime’s Growth Strategy
Three Key Drivers Of Golden Lime’s Mid-term Growth
1 Increase exports in Asia
Versus other major lime players in Thailand Golden Lime has a limited number of exports
Major growth in surrounding countries (Myanmar, Laos, Cambodia) will open up new markets
Also developed markets in Taiwan and Korea present an opportunity particularly in
specialized niche products
2 Increase value provided on the domestic Thai market
• Thailand has one of the lowest average lime and hydrate prices in the region due to
commodity status of most of the products and relatively low level of customization and
services
• For logistical reasons the Thai market experiences little or no imports
• A leading domestic market player like Golden Lime has room to improve the product value
and total-cost-of-ownership via customized products and higher added value services in
logistics & application
• Opportunity for value and revenue increase
3 Development of New Products and Markets
• Leveraging on the technical know-how of Carmeuse there are a number of high value added
products being developed
• This along with South East Asian economies becoming more efficient, quality oriented,
focusing on total value instead of only price, and environmentally conscious, is resulting in
new markets opening up for more sophisticated producers like Golden Lime
9/18/2018 161 Growth Opportunity: Increased Export Volume
Golden Lime Currently Has A Moderate Export Volume Of 10%
Golden Lime’s core market of
Thailand currently accounts for
Taiwan 90% of sales
Most export volumes are now
going to Laos with initial volumes to
Indonesia started in the last few
Myanmar Laos months
Philippines
However, opportunities exist
Thailand
particularly in the high growth
Cambodia neighboring countries like
Vietnam Myanmar that have little or no
quality lime
Opportunity also exists in markets
Malaysia such as Taiwan which has a large
potential market in steel (22 million
mt of steel production)
Indonesia
: Core Market
: Export market with presence
: Expansion focus near term
: Markets out of current scope
9/18/2018 172 Growth Opportunity: Value Increase In Thailand
Thailand Has Lower Prices Compared To Other Markets In The Region
Afghanistan
Iran
Pakistan US$80-150↑
Saudi Arabia
UAE
US$80↑ Myanmar Philippines
India Laos
Oman
Yemen
Thailand US$60-95↑
Cambodia
Vietnam
US$60-120↑
US$67
US$75↑
Malaysia
Sri Lanka
Indonesia
Note: Price estimates based on internal
market intelligence
: Markets with higher prices
US$60-95↑
: Markets with equal prices
: Core market
9/18/2018 183 Growth Opportunity: New Products And Markets
Specialty Products For The Steel And Power Industries
1. Specialized flux for the Steel Industry
Replacement for imported products with
better cost and efficiency gains in Electric
Arc Furnaces (EAFs)
Low capex investment as current kiln can
be converted
Market for both domestic and also SEA
Steel mills
2. Special product Flu Gas Treatment in
power plants and Waste to Energy
incinerators
New potential in the Thai market as well
as SE-Asia
Municipal Waste incineration is expected
to grow 50% year on year from current
very low level to the one seen in
Japan/Singapore in 20years
High end market replacing commodity
products
9/18/2018 19Golden Lime Conclusion
A Good Opportunity For Growth In Stable Diversified Markets
1. Golden Lime Backed By Key Strategic Investors
Carmeuse with 160 years of experience in the lime business globally who bring expertise and knowledge
of the latest engineering and processes
GP Group with150 years of experience of doing business in Thailand and Asia
2. Demonstrated Growth Potential Over The Last Year
Greenfield investment in a new kiln has come online successfully with product sold into the market
Acquisition of Saraburi Quicklime being successfully integrated with further benefits to come
3. Financial Results Are In An Upward Trend
Key financial indicators (EBITDA, Net Income, ROE, ROA) are rising
We see this trend continuing
4. Dividend Policy Provides Regular Cashflow
Historically Golden Lime has paid out a healthy dividend
This policy is set to continue and to become more regularized – quarterly dividends
5. Opportunity For Growth In The Near Term
Promising opportunities in export markets, in Thailand and through new products and markets
9/18/2018 20Questions? 21
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