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Investor Day Presentation 18 May 2015

A World Leading Natural Rubber Player


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Disclaimer

Certain forward looking statements may be made in the course of the presentation. These forward-

looking statements generally can be identified by use of statements that include words or phrases such

as STA or We or our management “believe”, “expect”, “anticipate”, ”intend”, ”plan”, ”foresee”, ”project”,

”may”, “will”, “shall”, or other similar words or phrases. Similarly, statements that describe STA’s

objectives, plans or goals also are forward-looking statements. These statements involve known and

unknown uncertainties and risks that could differ materially from actual results, performance or events.

The forward-looking statements contained in the slides are not and should not be constructed as

representations of the future performance of STA and that such statements are an expression of the

Company’s reviews based on its current view and certain assumptions including, but not limited to,

prevailing economic and market conditions and currently available information. The reader or the

listener is cautioned to not unduly rely on these forward-looking statements. We do not undertake any

duty to publish any update or revision of any forward-looking statements.

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Our Directors Present for the Investor Day 2015

Dr. Viyavood Sincharoenkul

Chairman & Managing Director

Kitichai Sincharoenkul

Executive Director

Paul Sumade Lee

Executive Director

Founding member of Sri Trang and

appointed as Chairman in 2010

28 years of experience in the natural

rubber industry

Joined Sri Trang in 1988 and has served

as a Director since 1995


rubber industry

Joined Sri Trang in 2004 and appointed

as a Director in 2010


rubber industry

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Prakob Visitkitjakarn

Chairman of Audit Committee

Neo Ah Chap

Independent Director

Appointed as an independent director

since 1993

Appointed as an independent director

since 2010

Veerasith Sinchareonkul

Chairman of Risk Management Committee

Appointed as a Director since 2010

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I. Sri Trang Business Highlights

II. Natural Rubber Industry Snapshot

III. Financial Highlights

AGENDA


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Finished Products Rubber Plantation Processing Sales & Distribution

Fully Integrated and Globally Natural Rubber Supply Chain

• Having our own rubber

plantation in Thailand

• World leading capacity at

1.35 million tons per annum

in Thailand and Indonesia

• Cover full range of products

from RSS, TSR and

Concentrated Latex

• Largest glove manufacturer

in Thailand

• Produce both latex and

nitrile examination gloves

• Having trading and

distribution centers in key

strategic countries

Note: Information as of 31 March 2015


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Sri Trang’s Strengths

Fully-integrated NR supply chain business model 1

Plantation

Gain direct access to supply

information

Ability to control the quality of

supply

Sales & Distribution

First-hand understanding of

customer requirements

Quick access to reliable market

information

Processing

Be flexible to any market

conditions and able to manage

production and position

efficiently

Cost efficiency High quality product Well-managed

operation

High productivity High performance

Enhance

profitability


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Sri Trang’s Strengths (cont’d)

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TSR RSS Con. Latex

• Capture all possible market segments with full

range of Natural Rubber products

• Benefit from economies of scale

• Balance the bargaining power with suppliers and

customers

• Enhance accessibility to different sources of fund

to support operation and expansion

A world largest NR processing Company (10% market share) 2

Having production base in major NR producing countries 3

• Excellent diversification

• Advantage in secure raw material as Thailand

and Indonesia collectively contributed about 60%

of global production

• Well-balanced seasonal management

Thailand Indonesia


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• Led by a group of seasoned managements with almost 3-decade of experience in natural rubber industry

• Cover all class of customers to serve all demand from every corner of the word

• Good risk diversification as no single customer accounts more than 8% of our total sale volume

• Get direct access to end-users to gain demand flow and market sentiment

Well-balanced portfolio for coverage of sales and distribution 4

Sri Trang’s Strengths (cont’d)

Expand upstream to rubber plantation business

Continually expand business to the new territories

• Emphasize on cost leading position

• Enhance profitability and reduce volatility in earning

• Pinpoint strategic locations for midstream factories in the future

• A newly established company in Vietnam will enable us to expand market

coverage in Indochina and gain direct access to Vietnam, the world’s third

largest Natural Rubber producer

• Having a block rubber factory in Myanmar will create a business opportunity in

highly growing country for Natural Rubber

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Captained by highly experienced managements 7

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AGENDA


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9

7.9 8.7

9.2 9.7 10.1 10.2 9.3

10.8 11.0 11.0 11.4 11.9 12.3

8.1 8.8 9.0

9.9 10.1 10.1 9.7 10.4

11.2 11.6 12.2 11.8

12.4

0

2

4

6

8

10

12

14

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f

152 100

(194)

269

(81) (89)

434

(370)

219

568

831

(45)

77

(600)

(400)

(200)

0

200

400

600

800

1,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f

Demand Supply Supply Surplus

Supply deficit due to

the falling NR prices

lowered tapping &

delayed replanting

Unit : million tons

Unit : ‘000 tons

World Natural Rubber Balance


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World Major NR Producing and Consuming Countries

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4,170

3,101

1,097 946 811 667

0.0% 0.0% 0.6%

8.6%

10.8%

-4.9%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Thailand Indonesia Vietnam China India Malaysia

NR Production (tons) %growth from 2014

2015 NR production forecast 2015 NR consumption forecast

Major suppliers of Natural Rubber Major consumers of Natural Rubber

Indonesia 27%

Thailand 35%

China 7%

Malaysia 6%

Vietnam 8%

India 6%

Others 12%

(by tonnage) (by tonnage)

China 38%

USA 8%

Europe 9%

India 9%

Japan 6%

Thailand 5%

Others 26%

Source: IRSG,

4,669

1,148 1,069 988 674 567

3.9%

1.6%

5.4%

4.3%

-0.6%

4.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

China Europe India USA Japan Thailand

NR consumption (tons) %growth from 2014

Note: Information of year 2014


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Lower Supply Surplus

Unit : ‘000 tons

NR planting area of main producers Significant drop in supply surplus

Area for rubber plantation Global natural rubber production by country

Source: IRSG, ANRPC,

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Malaysia Indonesia Thailand India

PRC Vietnam Other

Unit : 000’Hectares

8,500

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

0

100

200

300

400

500

600

New planting (LHS)

Replanting (LHS)

Total area (RHS)

219

568

831

-45 77 51 85 73 71 95 86 71 75

(200)

0

200

400

600

800

1,000

Unit : 000’ tons

Lower supply surplus due to smaller new

planting area from 2009 onwards

3,016 2,755

720 650 575 473

115 115

640

62

428 429 405

341

247 25

3,656

2,817

1,148 1,079 980 814

362 140

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000 Immature area (000' Hectares)

Tapped area (000' Hectares)

Yield per hectare (Kg.)


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-15%

-10%

-5%

0%

5%

10%

15%

20%

-1%

0%

1%

2%

3%

4%

5%

6% GDP (LHS) NR consumption (RHS)

NR mainly used in tyre industry

Global tyre production trend (Million units)

NR demand mainly driven by world activities

Global vehicle trend (Million units)

NR Demand Driven by Tyre Industry

(by tonnage)

0%

1%

2%

3%

4%

5%

6%

0

300

600

900

1,200

1,500

1,800

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Vehicles in use (LHS)Vehicles production (LHS)%Growth vehicles in use (RHS)%Growth vehicles production (RHS)

Source: IRSG, IMF

0%

1%

2%

3%

4%

5%

6%

0

500

1,000

1,500

2,000

2,500

3,000

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Tyre production (LHS) %Growth (RHS)

Tyre 69%

Non-tyre 31%


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Natural Rubber Price Interaction

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NR price VS. fundamental demand/supply NR price VS. Oil price

NR price VS. global stock Key Factors Affected NR Prices

(Un

it : ‘00

0 to

ns) (U

SD

pe

r to

ns)

(Un

it : ‘00

0 to

ns) (U

SD

pe

r to

ns) • World economic conditions as it is directly affected

automobile industry and tyre industry

• The magnitude of demand and supply

• Exchange rate fluctuation especially US dollar, Japanese

Yen, and natural rubber exporting currencies such as Thai

Baht and Indonesian Rupiah as natural rubber is mainly

traded in US Dollars

• Oil price since natural rubber and synthetic rubber, which is

derivatives of crude oil, are substitute products

(400)(300)(200)(100)0100200300

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Supply surplus / (deficit) (RHS)

SICOM price (TSR20) (LHS)

0

500

1,000

1,500

2,000

2,500

3,000

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan-1

1

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-13

Jan

-14

Jul-

14

Total stock (RHS)

SICOM price (TSR20) (LHS)

-100%

-50%

0%

50%

100%

150%

200%

Brent Crude oil Butadiene-Rubber Natural Rubber

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AGENDA


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* Adjusting for (reversal) allowance of inventory, realised forex gains /(losses), and realised rubber futures gains/(losses)

(THB million) FY’13 FY’14 %YoY Q1’14 Q1’15 %YoY Q4’14 %QoQ

Revenue 92,185 75,530 ▼18% 22,765 14,512 ▼36% 17,543 ▼17%

Sale volume

(tons) 1,126,463 1,204,342 ▲7% 308,456 268,892 ▼13% 326,095 ▼18%

Avg. selling price

(Baht per ton) 79,600 60,583 ▼24% 71,777 48,265 ▼33% 51,665 ▼7%

Gross profit 5,198 3,348 ▼36% 599 1,040 ▲74% 1,130 ▼8%

Adj. gross profit* 6,049 4,642 ▼23% 1,708 1,077 ▼37% 1,343 ▼20%

EBITDA 3,747 2,568 ▼31% 708 788 ▲11% 413 ▲91%

Net profit 1,820 1,038 ▼43% 402 297 ▼26% 13 ▲2228%

Adj. GP margin* 6.6% 6.1% ▼50bps 7.5% 7.4% ▼10bps 7.7% ▼30bps

Net profit margin 2.0% 1.4% ▼60bps 1.8% 2.0% ▲20bps 0.1% ▲190bps

Financial Highlights


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100

200

300

400

01/0

2/1

3

02/0

2/1

3

03/0

2/1

3

04/0

2/1

3

05/0

2/1

3

06/0

2/1

3

07/0

2/1

3

08/0

2/1

3

09/0

2/1

3

10/0

2/1

3

11/0

2/1

3

12/0

2/1

3

01/0

2/1

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02/0

2/1

4

03/0

2/1

4

04/0

2/1

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05/0

2/1

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06/0

2/1

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07/0

2/1

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08/0

2/1

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09/0

2/1

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10/0

2/1

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11/0

2/1

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12/0

2/1

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01/0

2/1

5

02/0

2/1

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03/0

2/1

5

04/0

2/1

5

05/0

2/1

5

SIC

OM

Pri

ce

Mo

ve

me

nt

Cru

de

Oil

Pri

ce

Mo

ve

me

nt

RSS

TSR

(US

Cen

t / K

g)

2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

40

60

80

100

120

01/0

2/1

3

02/0

2/1

3

03/0

2/1

3

04/0

2/1

3

05/0

2/1

3

06/0

2/1

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07/0

2/1

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08/0

2/1

3

09/0

2/1

3

10/0

2/1

3

11/0

2/1

3

12/0

2/1

3

01/0

2/1

4

02/0

2/1

4

03/0

2/1

4

04/0

2/1

4

05/0

2/1

4

06/0

2/1

4

07/0

2/1

4

08/0

2/1

4

09/0

2/1

4

10/0

2/1

4

11/0

2/1

4

12/0

2/1

4

01/0

2/1

5

02/0

2/1

5

03/0

2/1

5

04/0

2/1

5

05/0

2/1

5

TH

B/U

SD

Mo

ve

me

nt

28

30

32

34

01/0

1/1

3

02/0

1/1

3

03/0

1/1

3

04/0

1/1

3

05/0

1/1

3

06/0

1/1

3

07/0

1/1

3

08/0

1/1

3

09/0

1/1

3

10/0

1/1

3

11/0

1/1

3

12/0

1/1

3

01/0

1/1

4

02/0

1/1

4

03/0

1/1

4

04/0

1/1

4

05/0

1/1

4

06/0

1/1

4

07/0

1/1

4

08/0

1/1

4

09/0

1/1

4

10/0

1/1

4

11/0

1/1

4

12/0

1/1

4

01/0

1/1

5

02/0

1/1

5

03/0

1/1

5

04/0

1/1

5

05/0

1/1

5

(US

D /

Bb

l)

1Q15

SICOM - Oil Prices - FX

1Q13

▼30% YoY

▼32% YoY

FY13 Avg.

279

251

FY14 Avg.

196

171


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560,570 574,932

427,070 500,647

84,363

75,534 50,356 52,350 4,102

879 1,126,462

1,204,343

FY 2013 FY 2014

PRC ASIA (Ex. PRC) USA Europe Others

157,286 132,735 126,780 158,131

111,016

115,432 120,441 128,958

135,816

123,848

21,577 17,648 17,617

18,692

20,024

13,813 13,693 11,388

13,457

13,843

348 396 134

0

161

308,456 284,913 284,877

326,095

268,892

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

PRC Asia (Ex PRC) USA Europe Others

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Sales Volume – Yearly (tons) Sales Volume – Quarterly (tons)

-12.8% -17.5%

+6.9%

Sale Volume Breakdown by Geography (Tons)


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12,846 9,819

70,774

57,512

6,047

5,631

2,519

2,567

92,185

75,530

FY 2013 FY 2014

RSS TSR Con. Latex Others

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Revenue – Yearly (THB mm) Revenue – Quarterly (THB mm)

-36.3% -17.3%

-18.1%

3,069 2,700 2,200 1,851 1,328

17,373

13,852 12,666 13,620

10,503

1,698

1,254 1,303 1,377

1,147

625

838 643

696

1,534

22,765

18,644 16,812

17,543

14,512

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

RSS TSR Con. Latex Others

Revenue Breakdown by Product


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6,049

4,642

6.6%

6.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY 2013 FY 2014

1,708

462

1,129

1,343

1,077

7.5%

2.5%

6.7%

7.7% 7.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

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Adjusted Gross Profit – Yearly (THB mm) Adjusted Gross Profit – Quarterly (THB mm)

Margin % THB mm Margin % THB mm

-37.0% -19.8%

-23.3%

* Adjusting for (reversal) allowance of inventory, realised forex gains /(losses), and realised rubber futures gains/(losses)

Adjusted GP and GPM*


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20

2,520

1,155

496

535

3,016

1,690

FY 2013 FY 2014

402

189

507

57

486

103

150

154

128

68 505

339

661

185

554

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

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EBIT – Yearly (THB mm) EBIT – Quarterly (THB mm)

Share of profits from associates & a Joint Venture

Operating profits

% of profits from

associates & a Joint

Venture to PBIT

-44.0%

Share of profits from associates & a Joint Venture

Operating profits

16.4% 31.7%

% of profits from

associates & a Joint

Venture to PBIT

+9.6% +199.0%

69.2% 23.3% 44.2% 20.4% 12.3%

EBIT


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Net Profit – Yearly (THB mm) Net Profit – Quarterly (THB mm)

Net profit Net profit margin %

-43.0%

Net profit Net profit margin %

-26.0% +2,228.0%

1,820

1,038

2.0%

1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0

400

800

1,200

1,600

2,000

FY 2013 FY 2014

402

167

456

13

297

1.8%

0.9%

2.7%

0.1%

2.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0

50

100

150

200

250

300

350

400

450

500

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Net profit and Net profit margin


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ROA ROE

3.36% 3.59%

4.50%

2.53%

FY2011 FY 2012 FY 2013 FY 2014

9.19%

7.46%

9.37%

5.11%

FY2011 FY 2012 FY 2013 FY 2014

Debt / equity Net debt / equity

1.22

0.94

1.21

0.84

FY2011 FY2012 FY2013 FY2014

1.10

0.86

1.12

0.73

FY2011 FY2012 FY 2013 FY 2014

Interest Coverage

3.74

4.00

3.48

3.87

FY2011 FY2012 FY2013 FY2014

Cash Cycle

64.1

75.2 78.3 83.3

FY2011 FY 2012 FY 2013 FY 2014

Financial Ratios


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Q&A

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