integration innovation intimacy Company’s Performance Year 2018 27 February 2019
integration
innovation
intimacy
Company’s Performance Year 2018
27 February 2019
integration
innovation
intimacy
integrationinnovationintimacy
AGENDA
Our Business
2 YE2018 Financial Performance
3 Performance YE2018 by BU
4 Business Outlook for 2019
1
22
Our Business
AIR FREIGHT
SEA FREIGHT& INLAND
TRANSPORT
LOGISTICSMANAGEMENT
CHEMICAL& SPECIALTY
LOGISTICS
3
▪ Cargo General Sales Agent (GSA): exclusive sales agent of
• Thai AirAsia & Thai AirAsiaX airline for all routes from and to Thailand
• Sri Lankan, Lan Cargo, Bhutan and Jeju Airlinesfor all routes from Thailand
▪ Wholesale Freight Forwarder : providing domestic and international air freight services for co-loaders
▪ Air Cargo Terminal : International and domestic cargo terminal at Don Muang Airport
AIR FREIGHT
4
▪ Shipping Line Agencies :
• Thailand sole agent for Rizhao Port Shipping Line
• Thailand Joint Venture : CK Line
▪ Wholesale Freight Forwarder : Thailand Joint Venture with ECU Worldwide, global leader in Less-than Container Load (LCL) services with network in over 160 countries
▪ Inland Container Trucking Services: transport containers to and from seaport / container depot
SEA FREIGHT &INLAND TRANSPORT
5
▪ Integrated Freight Forwarder : International freight forwarding services for both sea & air transport and customs clearance for retail customers
▪ Warehousing : storage, inventory management, and real-time reporting
▪ Distribution Management : modern trade, shops, home delivery
▪ Fulfillment Service : focus on E-Commerce and end to end supply chain services
LOGISTICS MANAGEMENT
6
▪ Integrated Freight Forwarder : International freight forwarding services for both sea & air transport and customs clearance for chemical & dangerous goods
▪ Dedicated Chemical Warehouse : storage, inventory management, and real-time reporting
▪ Inland and Distribution Management : for industrial and B2B market
▪ DG Packaging : sale of packing materials, DG declaration and repacking services
▪ ISO Tank Business : as agent for Nippon Concept Co., Ltd, a Japanese based ISO tank operator for liquid chemical
CHEMICAL & SPECIALTYLOGISTICS
integration
innovation
intimacy
integrationinnovationintimacy
AGENDA
Our Business
2 YE2018 Financial Performance
3 Performance YE2018 by BU
1
4 Business Outlook for 2019
8
2,294.6
2,770.6
YE17 YE18
YoY 21%
Performance YE2018 – Revenue
YE17 vs YE18
Revenue YE17 YE18 YoY
Airfreight 1,863.9 2,279.6 22%
Sea freight 87.0 116.6 34%
Logistics 105.4 135.0 28%
Chemical 539.7 561.9 4%
Total Revenue 2,596.1 3,093.1 19%
Revenue Consol 1/ 2,294.6 2,770.6 21%
Remark : 1/ After eliminating inter-company transactions.
Unit : Million Baht
YE17
YE18
▪ Overall revenue grew from increasing services
▪ BU Chemical revenue slightly grew due to decreasing of Packaging sale business
% Revenue Contribution YE17 vs YE18YE17 vs YE18
9
YoY -9%
Performance YE2018 – Gross Profit
Remark : 1/ After eliminating inter-company transactions.
YE17 vs YE18
Unit : Million Baht
Gross Profit YE17 YE18 YoY
Airfreight 320.7 249.9 (22%)
Sea freight 38.5 71.7 86%
Logistics 37.2 36.1 (3%)
Chemical 142.1 132.9 (7%)
Total Gross Profit 538.5 490.6 (9%)
Gross Profit Consol1/ 531.4 484.6 (9%)
GPM 23.2% 17.5%
YE17
YE18
▪ Sea freight BU shows outstanding performance in terms of GP growth
▪ Impacts to GP from Airfreight BU
▪ Change of cost recognition (Selling expense to COGS)
▪ Adjustment of accrued expenses in 2017
% Gross Profit Contribution YE17 vs YE18
531.4484.6
23.2%17.5%
YE17 YE18
10
Performance YE2018 – Net Profit
YE17 vs YE18
Unit : Million Baht
129.6150.7
5.6% 5.4%
YE17 YE18
YoY 16%
Unit : Million Baht YE17 YE18 % Change
Total Revenue 2,294.6 2,770.6 20.7%
Gross Profit 531.4 484.6 (8.8%)
GPM (%) 23.2% 17.5% (5.7%)
Other Income 15.5 18.7 20.8%
Selling Expense 110.9 77.2 (30.4%)
Admin Expense 281.0 295.2 5.0%
(Loss) Gain – Exchange rate (10.2) 7.0 n.m.
P/L from JV & Associate 16.7 33.1 98.2%
EBITDA 202.9 219.1 8.0%
Net Profit Consol 129.6 150.7 16.2%
NPM(%) 5.6% 5.4% (0.2%)
EPS (Baht per share) 0.21 0.25 16.2%
11
Quarterly Performance Since Y2017
Net Profit
Gross Profit Margin
Daily THB:USD
Gross Profit
36.07 THB:USD
Cancel domestic airfreight of Thai Post
Appreciation of Thai Baht
26.8% 25.4%22.4%
17.5% 20.2%16.6%
YoY 113%
16.5%17.3%
32.61THB:USD
Note : Exchange rate as of 26 Feb 2019 = 31.29 THB:USDExchange rate Average Y17 = 34.10 THB:USD Exchange rate Average Y18 = 32.49 THB:USD
32.85THB:USD
40.3 43.1
26.1 20.1 25.938.4 43.7 42.7
146.5 143.2
123.6 117.8 120.4 116.2 121.0 126.9
Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18
Net Profit Total Gross Profit
12
1,900
1,202
698
Asset Liability andEquity
YE2018
Financial Health YE2018
Financial Status Financial Ratio
Liability
EquityAsset
Ratio YE17 YE18
Company Performance
ROE (%) 1/ 17.8% 13.0%
Collection Period (days) 56.9 42.1
Payment Period (days) 93.7 61.1
Debt Performance
Current Ratio (times) 3.1x 2.1x
D/E Ratio (times) 0.4x 0.6x
IBD/E Ratio (times) 0.0x 0.0x
Interest Coverage Ratio (times) 27.0x 89.7x
Profitability Performance
Gross Profit Margin (%) 23.2% 17.5%
EBITDA Margin (%) 8.8% 7.9%
Net Profit Margin (%) 5.6% 5.4%
EPS (Baht per share) 0.21 0.25
Trailing 12M EPS (Baht per share) 2/ 0.21 0.25
Remark : 1/ Trailing 12M Net Profit2/ Adjusted EPS based on existing shares at that time
Asset THB mm
Cash 732
AR 420
PPE 239
Lia THB mm
AP 443
IBD 33
integration
innovation
intimacy
integrationinnovationintimacy
AGENDA
Our Business
2 YE2018 Financial Performance
3 Performance YE2018 by BU
1
4 Business Outlook for 2019
14
9,6882,186
17,196
16,257
26,884
18,444
Y2017 Y2018
▪ Start operating in January 2018
▪ Continuously grow in both volume and profitability
AIR FREIGHT
7,840 2,802
49,93468,976
57,774
71,779
Y2017 Y2018
17,133
22,656 24,390 25,208
Q1/18 Q2/18 Q3/18 Q4/18
Domestic
InternationalWholesale Freight Forwarder
▪ Domestic volume sharply decreased but able to maintain Gross Profit by increasing E-Commerce services
Cargo General Sales Agent (GSA)
▪ International volume increased, despite decreasing of domestic volume
Unit : Tons Unit : Tons
Unit : Kgs
Air Cargo Terminal
15
59,951
91,189
Y2017 Y2018
1,375
7,453
Y2017 Y2018
Shipping Line Agencies (TEU)
▪ Outstanding growth through partnership with Rizhao
Inland Container Trucking Services (Trips)
▪ Significant growth from related services provided to Shipping line agencies
SEA FREIGHT &INLAND TRANSPORT
16
LOGISTICS MANAGEMENT
744
2,367
Y2017 Y2018
505 639
Y2017 Y2018
Integrated Freight Forwarder
▪ Volume increased from acquiring new key account customers
Delivery (#Order/Year)
Warehousing (M2/Month)
97,683
144,909
Y2017 Y2018
4,347 3,496
Y2017 Y2018
▪ Volume increased from new customers in E-Commerce business
▪ Streamlined operation processes into one warehouse and reduced unutilized space to support costs control program
Sea Freight (TEU) Air Freight (Tons)
Distribution Management & Fulfillment Service
17
167,307
216,329
Y2017 Y2018
CHEMICAL & SPECIALTYLOGISTICS
Sea Freight (TEU) Air Freight (Kgs)
6,577
7,786
Y2017 Y2018
Integrated Freight Forwarder
▪ Increased volume from acquiring new customers through synergy and support from other BUs (Sea freight-Rizhao and Air freight)
DG Packaging & Services
Packing Service (Shipment)Packing Sales (Box)
19,057
12,083
Y2017 Y2018
4,184 2,867
Y2017 Y2018
▪ Intense competition reduced profit margin and change from UN to LQ boxes for some key customers
18
4,491
5,173
Y2017 Y2018
CHEMICAL & SPECIALTYLOGISTICS
21,454 21,454
Y2017 Y2018
▪ maintained warehouse space and retained high utilization rate (over 90%)
Warehousing (Pallet) ISO Tank Operator (TEU)
▪ Stable growth for both export/import volumes
integration
innovation
intimacy
integrationinnovationintimacy
AGENDA
Our Business
2 YE2018 Financial Performance
3 Performance YE2018 by BU
1
4 Business Outlook for 2019
20
Triple I Logistics 2021 Aspirations and Strategy
Enablers • IT/Operations: Leverage digital technology to increase efficiencies, reduce costs and provide services to customers and provide business intelligence for decision making
• HR/People: Fill key critical positions, review governance model
BUStrategy
Strategic directions
Aspirations
Leading Thai Logistics House with sustainable growth in SEA and achieving significant growth by 2021
Partner-driven growth:• Lock in key long term partners (airlines,
network, authorities)• Wholesale business model and related services• Create new innovative products with partners
(master piece for Thailand)
Organic growth
Inorganic Growth
Customer-driven growth:• Maintain leadership position in DG as integrated
logistics provider and grow regionally• Integrated logistics provider for import
businesses
• Partnership with Air Asia (grow and maximize utilization)
• Air cargo terminal at DMK and HKT
Inorganic
• Growth with CK Line and Rizhao
• Growth by further penetration of its current customer base and acquisition of new customers
1. Air Freight 2. Sea Freight 3. Chemical 4. Logistics
• Growth via the current customer base and new customers in import businesses by leveraging new IT platform
Inorganic Inorganic Inorganic
21
Business Outlook - Air Freight Business (1)
▪ Continually expand customer based in International E-Commerce business from
China and Hong Kong
▪ Expect to regain Domestic business from Thailand Post in 2H/2019
Cargo General Sales Agent
(GSA)
▪ Anticipating an increase in revenue at a higher growth rate from services inDMK
▪ Intend to expand and duplicate its services to other domestic airports inThailand
WholesaleFreight
Forwarder
▪ Increase volume from the expansion of new routes and number of flights of main alliance airlines ― Thai AirAsia & Thai AirAsia X
▪ Maximize the utilization capacity of existing service routes
Inorganic Growth- SAL
▪ In January 2019, the company invested in 14.95% shares of SAL Group, a company conducting airline and passenger ground services, as our strategic partner to increase opportunities and grow our businesses.
Airport Cargo Terminal
22
Business Outlook - Air Freight Business (2)
Inorganic GrowthII
▪ Acquisition of 50% shares in Around Logistics Management Co., Ltd, a company
is registered in Hong Kong
Benefits to iii
Expansion and Growth
1
Diversification
2
▪ A remarkable stepping stone to further expand Air GSA regional network
▪ To capture growth and volume of transportation and logistics services in one of the
biggest trading hub in the world, Hong Kong and Singapore
▪ To expand Airline Services coverage, covering 24 countries and more than 22 airlines,
with Hubs in Hong Kong, Singapore and high economic growth country like Vietnam
▪ To boost iii’s net profit by an estimated 50% of HKD 20 mm through accounting
consolidation of the JV
▪ Manage iii’s risk of reliance on one airline (Thai Air Asia and Thai Air Asia X) and diverse
its revenue stream
23
Airline Services Coverage
III’s and Around Logistics ’s Airline services coverage
24
▪ Continual growth in 2019. Surge in services due to an increase in vessel space by 30%, and expand new servicing ports
▪ Plan to expand businesses related to containers transportation by utilizing partners’ strengths and opportunities in EEC project
▪ Thai― China sisters ports
Rizhao Port
Business Outlook – Sea Freight & Inland Transport
Sea Freight
25
▪ Focus on acquiring Key Accounts ― export/import―customers, especially
importers that are potential user of other related logistics services.
▪ Plan to develop services for E-Commerce customers with domestic
distributions through Air transportations.
International Freight
Forwarding Service
Warehouse and Distribution
Service
Business Outlook – Logistics Management
26
▪ Looking for new strategic location for warehouse expansion since the existing one is already fully utilized.
▪ Develop warehousing and related services specialized for Hazardous and Chemical goods by focusing on areas with service potentials such as East Economic Corridor (EEC)
▪ Company will fully recognize profit from its investment in DG Packaging (DGP) Pte. (Singapore) from 2019 and onward.
Warehouse Expansion
Performance from JV
Business Outlook – Chemical & Specialty Logistics
27
▪ In 2019, despite a more active transportation volume in both Air and Sea, the international freight rates trend is expected to maintain and holds close to the rates in the latter half of 2018.
▪ Nonetheless, the Company concentrates on its Logistics Management, which focuses on service qualities, and profits from the selling margin allowing the Company to reduce the impact from the declining freight rates.
▪ Exchange rates is still in fluctuation. Nevertheless, the Company manages it exchange rate risks by engaging in forward FX contracts and balancing its foreign incomes and expenses (Natural hedging)
▪ Moreover, the Company will also focuses on increasing THB income from export and domestic services.
International Freight Trends
Exchange Rate
Business Outlook – Ongoing Business