SET - ADB Opportunity Day

ADB

Opportunity Day

FY2018 Performance

February 27, 2019

Company Overview

Overall Performance of ADB for year 2018

Business Goal in 2019 and Our Strategic Plans

2

3

1

Content

Project Update 4

1 Company Overview

APPLIED DB Public Company Limited (ADB) was established since 2005, from the joint venture

between D.B. Chemical Co., Ltd. (1983) and Applied Chemical Industry Co., Ltd. (1985). In 2017, The

Company has listed on Market for Alternative Investment (mai).

Company Overview

Adhesive & Sealant Plastic Compound

• ADB Adhesives are specially

manufactured to meet international

standards for industrial use and household

use.

• We sell under our house brand and OEM

for customers well-known brand names.

*Products manufactured by the Company under OEM brands cannot be publicly disclosed due to non-disclosure agreements and confidentiality

• ADB Sealant is currently repackaged

from bulk package and resell in smaller

package.

•Future project supports the expansion

of adhesive & sealant product line

corresponding to increasing demand and

profitability.

Our product line includes plastic compounds, professional adhesives, silicone sealants, and DIY products for household end-users.

•ADB is one of the leading manufacturer

of plastic compound especially for

wire&cable industry.

• Wire & Cable PVC compound

• General Grade PVC

• Medical PVC Compound

• Polypropylene split yarn (PPY)

ADB

India

Pakistan

Bangladesh

Nepal

Myanm

ar

Thailand

Laos

Cambodia

Vietnam

Indonesia

Malaysia

Philippines

Australia

Ethiopia

Kenya

Egypt

Yemen

UAE

Sri Lanka

6

Our main customers are from the

industrial sectors, located in ASEAN, Middle

East, Africa, Europe and South America that

use our products in their production process

such as wire and cable industry, construction

industry, shoe and leather industry, furniture

industry and automotive industry.

Our Customer

Expansion of Sealant Business

Potential Competitive Market

Existing customers

Existing customers

with potential

expansion

We have officially opened the 4th factory on

November 9, 2018. This new factory will expand

the production capacity of sealant products for

more than 500 tons per month, ADB has partly

previously only re-packaged and sold to customer,

we intend to become the silicone bulk provider to domestic and international customer.

2 Overall Performance of ADB FY 2018

Adhesive & Sealant sales 705 MB (Million Baht).

equivalent to 49.61% to total sales

Plastic Compound Sales 716 MB (Million Baht).

equivalent to 50.39% to total sales

Financial Performance: FY2018 Sales Revenue

Plastic Compound

50.39%

Adhesive and Sealant 49.61%

Total Sale of FY2018

1,421 MB

Adhesive & Sealant Plastic Compound

Financial performance for FY 2018

712 726 693 716

722 686 679 706

0

200

400

600

800

1000

1200

1400

1600

2015 2016 2017 2018 Plastic Compound Adhesive and Sealant

(Unit: million Baht)

1,434 1,412

Revenue structure

The revenue in 2018 was increased as the growth of SIL products and DIY products sold to oversea markets;

while the compound has been slow down during the ending of Q4 due to delay of goverment bidding project.

1,372 1,421

Financial performance for FY 2018 (Cont.)

Revenue structure (domestic / international)

969 991 972 1,012

465 421 400 409

-

500

1,000

1,500

2,000

2015 2016 2017 2018

Domestic Export

68%

32%

68%

32%

70%

30%

1,434 1,412 1,421


In 2018, the growth of export was led by the higher SILICONE followed by Adhesive and DIY to oversea customers compared to compensate the slowdown of Compound Oversea Market.

29%

71%

1,372

525 544 516 507

186 179 177 208

0

100

200

300

400

500

600

700

800

2015 2016 2017 2018

PVC GPVC

74%

26%

75%

25% 25%

75% 71%

29%

712 724 716

Revenue structure - Plastic compound


The increase in sales of

Plastic Compound in 2018 for THB

23 million or +3% leading by

growing demand of both General

Grade PVC including new

products of Medical PVC and

other types of Compound sold to SHOWA

Financial performance for year FY2018 (Cont.)

693

345 305 293 272

378 381 387 434

0

100

200

300

400

500

600

700

800

2015 2016 2017 2018

Adhesive SIL & DIY

48% 44% 43%

53% 56% 56%

723 686 680

706

Revenue structure - Adhesive & Sealant


• Despite the slowdown of fashion

segment, lower demand of shoes

adhesive, ADB gains higher market

shares on SIL and DIY, accounted

for 61% of Adhesive & Sealant BU

• From the sales of THB 706

million, Adhesives contributes the

highest with THB 271 million,

followed by Silicone for THB 226

million, and DIY with THB 180

million and trading with THB 27

million


39%

61%

260 286

191 194

18%

20%

14% 14%

0%

4%

8%

12%

16%

20%

0

50

100

150

200

250

300

350

2015 2016 2017 2018

Gross Profit Gross Profit Margin

The significant drop of gross margin in FY2018 is mainly due to:

• Lower sales from Industrial Adhesives (Slowdown in Shoe industry) & distributor channel due to price

competition

• Silicone sealant material price has been driven by the major material providers

• The increase in pricing competition in Compound business led the lower GP

Gross profit & gross profit margin



17%

99 98

67 79

14% 14%

10% 11%

0%

5%

10%

15%

20%

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2015 2016 2017 2018

Gross Profit Gross Margin

Gross Profit Margin of Plastic compound business was turnaround in 2018 due to

• Growing demand of General Grade PVC to our local partners (Showa Group)

• Profit Margin of Soft graded PVC during 1st Half of 2018 but slow down in 2nd Half due to pricing competition

and government bidding projects

Gross profit & gross profit margin - Plastic compound



32

12%

Gross profit & gross profit margin - Adhesive & Sealant

• The gross profit margin for adhesive & sealant is lower in FY2018 compared to last year due to the volatile

raw materials for adhesive & sealant products, as well as pricing competition from both domestic and oversea

markets



22% 160

188

123 114

22%

27%

18% 16%

0%

5%

10%

15%

20%

25%

30%

0

20

40

60

80

100

120

140

160

180

200

2015 2016 2017 2018

Gross Profit Gross Margin

34

76

29

13

2.4%

5.4%

2.1%

0.9%

0.0%

2.0%

4.0%

6.0%

8.0%

0

10

20

30

40

50

60

70

80

2015 2016 2017 2018

Net Profit Net Profit Margin

Net profit & net profit margin

• The net profit margin for FY 2018 declined from 2017 performance due to the decline of margins in Adhesive and

Sealant products as raw material price fluctuation.



2.7%

Assets

The increase in asset size is contributed by

• The significant increase in PPE in FY2018 mainly results of the increasing in machine and equipment and new

factory expansion of Sealant project

• An increase in AR of some oversea customers due to oversea customers’ cycle

365 375 316 328

213 267 319 305

292 355 448 535 78

76

125 85

0

200

400

600

800

1000

1200

1400

2015 2016 2017 2018 A/R Inventory PPE Others

948

1,072

1,208

1,253


210 239 212 202

330 416

277 359

135 120

134 49

0

200

400

600

800

1000

2015 2016 2017 2018

A/P ST Loan Others

667


675

775

623

Liabilities

As at December 31, 2018, the Company had total liabilities of THB 666.86 million, the major liabilities are Short-term Loans, which is accounted for 53.8% of total liabilities


210 210 300 300

61 85

83 84

0

100

200

300

400

500

600

700

2015 2016 2017 2018 Paid-up capital R/E Share premium

585 586

273 297


202

Shareholder’s equity

Shareholders’ Equity of ADB in 2018 was stable

from 2017, as the profit during the year is 13.0MB

was attributed to the dividend paid during the year for 12.0MB in 2018


202

Debt to equity

After IPO proceeds and the partial debt

repayment, the Debt-to-Equity ratio decreased

to 1.14 at the end of 2018 and slightly

increased from 2017

2.47 2.60

1.06 1.14

-

0.50

1.00

1.50

2.00

2.50

3.00

2015 2016 2017 2018

D/E

D/E

3 Business Goal in 2019 And Our Strategic Plans

Corporate Development Plan and Direction

Market Development

* Expend markets for existing products

Geographic expansion

Target new segment

Diversification

*New product + New Market

Related Business

Non-related Business

Joint Venture, Strategy Alliance, M&A

Market Penetration * Increasing market share * Increase product usage Increase frequency of use Increase quantity used New application

Product Development

*Product improvement

* Product –line extension

New product for the same market

Product/

Market Matrix

Existing Product

New Product

Existing Market

New Market

Growth Strategies


Market Development

Diversification

Market Penetration

Product Development

Product/Market Matrix

Growth Strategies: Plastic Compound

Plastic Compound Business


Market Penetration:

Commodity product, competitive prices

Market development:

Gain new customers in oversea

Product development:

OEM in medical grade market - Showa

Growth Strategies: Plastic Compound

Plastic Compound Business


Market Development

Diversification

Market Penetration

Product Development


Adhesive & Sealant Business

Growth Strategies: Adhesive


Market Penetration:

competitive prices, intensive promotions

Market development:

Attending exhibitions, expending

customer base, extending OEM customer

product portfolio

Product development:

New Solvent Base Product – O-MCR

New products – Lunching MS

sealant/adhesive and solvent free Super

Nail

Growth Strategies: Adhesive

Adhesive & Sealant Business


Market Development

Diversification

Market Penetration

Product Developmen

t


Sealant Bulk Material Business

Growth Strategies: Sealant Bulk Material Business

https://www.google.com/imgres?imgurl=https://www.steel-plastic-fibre-drums.com/wp-content/uploads/2016/06/30GalSteel2.jpg&imgrefurl=https://www.steel-plastic-fibre-drums.com/&docid=Yt92IUgjgKjddM&tbnid=VNzVcRWpBfuQ_M:&vet=12ahUKEwiiz5T1jq7dAhUQTI8KHXIWA-k4ZBAzKBcwF3oECAEQGA..i&w=544&h=306&bih=498&biw=1093&q=metal drums&ved=2ahUKEwiiz5T1jq7dAhUQTI8KHXIWA-k4ZBAzKBcwF3oECAEQGA&iact=mrc&uact=8



Diversification Vertical integration Moving upward – becoming

bulk material supplier

Polymer maker

Compounder

Re-packer

Distributor/Retailer

End user

Upper Stream

Lower Stream




Target product segment: Silicone sealant

Acrylic sealant

MS Polymer Sealant

Constructing adhesive (Super Nail)

Target customer: Sealant re-packers and sealant distributors

who plan to become re-packer. Region – SEA,

AUS & NZ, South Asia, Middle East, Africa.




Sealant Bulk material business – Potential Customers

SEA 24+

South Asia 21+

AUS & NZ

2+

Middle East 12+

Africa 8+



Sealant Bulk material business





Low High

Level of engagement

AUS & NZ No. of customer contacted: 0 Phase: None

SEA No. of customer contacted: 5 Phase: 1

South Asia No. of customer contacted: 3 Phase: 1

Middle East No. of customer contacted: 1 Phase: 3

Africa No. of customer contacted: 2 Phase: 2



ADB Curves

in the next 3 years

Sealant Bulk Medical PVC O-MCR

Growth Strategic Plan


ADB S-Curves in the next 3 years

Sealant Bulk





Medical PVC


Effective cost

management strategies

has driven growth and

increased profit

37

Boosting PVC compound Capacity by upgrading machine

Searching for new market

opportunities, expand distribution

channel and customer base



New product

meeting

new demand from customers

R&D

New project

boosting capacity

Production Sales &

Marketing Expanding

construction related

business

Finance Sound and solid

Capital foundation



4 Project Update

Plastic Compound Product Expansion

40

1

Our Projects

We plan to expand our PVC product for

applying in the field of electrical and

electronic equipment. We expect that the

demand of PVC for electronic market will

continue to play a critical roles in the

production of electronic component.

We continually develop plastic compound

for automotive parts, vehicle wiring and

accessories for automotive application to

serve a growing trend of automotive industry

both in Thailand and overseas.

PVC Compound for

Electrical and

Electronic Products

Plastic Compound for

Automotive Parts

ADB strictly complies with the EU’s Restriction of

Hazardous Substances (RoHS) directive to avoid using

restricted phathalate plasticizer.

Adhesive and Sealant Product Development

41

2

Our Projects

Research and develop adhesive for specific application such

as furniture and automotives.

Expand business to be semi-product provider of Graft

adhesive(O-MCR) to serve adhesive

manufacturer.

Modify Formulation Of PU adhesive in order to offer

competitive price in shoes industrial

both in local and international market.

Sealant green products We focus on developing green

products or environmentally friendly

products with green building

standard.

APPLIED DB PUBLIC COMPANY LIMITED

APPLIED DB PUBLIC COMPANY LIMITED

ADB Investor Relations Section

E-mail: [email protected]

Tel: 02-409-4040 Ext.1403

Website: www.adb.co.th

THANK YOU

Disclaimer

-The information contained in this presentation is for information purposes only and does not constitute an offer or

invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for share in Applied DB Public

Company Limited (“ADB” and shares in ADB, “shares”) in any jurisdiction nor should it or any part of it form the basis of, or

be relied upon in any connection with, any contract or commitment whatsoever.

-This presentation may include information which is forward-looking in nature. Forward-looking information involve known

and unknown risks, uncertainties and other factors which may impact on the actual outcomes, including economic

conditions in the markets in which ADB operates and general achievement of ADB business forecasts, which will cause the

actual results, performance or achievements of ADB to differ, perhaps materially, from the results, performance or

achievements expressed or implied in this presentation.

-This presentation has been prepared by the ADB. The information in this presentation has not been independently

verified. No representation, warranty, express or implied, is made as to, and no reliance should be placed on, the

fairness, accuracy, completeness or correctness of the information and opinions in this presentation. None of the ADB or

any of its agents or advisers, or any of their respective affiliates, advisers or representatives, shall have any liability (in

negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise

arising in connection with this presentation.

-This presentation is made, furnished and distributed for information purposes only. No part of this presentation shall be

relied upon directly or indirectly for any investment decision-making or for any other purposes.

-This presentation and all other information, materials or documents provided in connection therewith, shall not, either in

whole or in part, be reproduced, redistributed or made available to any other person, save in strict compliance with all

applicable laws.

SET - ADB Opportunity Day

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