Export Cut Leather Mazda Ford Ihlq1

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Interhides Public Company Limited

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Presentation Outline

Part I: Company Overview

Part II: Business Overview

Part III: Industry Overview

Part IV: Financial Highlights

Part V: Business Opportunity

Part VI: Offering Summary

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Part I: Company Overview

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Historical Development

1998 2000 2001 2002 2004

• Established under the named “Inter-Hide & Leather” with Baht 5 mn registered capital

• Production line was the tannery leather for furniture

• Develop and expand the production line to the car seat leather for automotive industry

• Launch the production of cut part leather for TOYOTA, SUBARU and MITSUBISHI

• ISO 9002:1994/QS-9000:1998 accredited by TUV

• Export the cut part leather for Ford and Mazda to Philippines

• Debt restructuring plan approved by Thai Asset Management (TAMC)

• Cease the production line for furniture

• Launch the production of cut part leather for NISSAN

• Launch the production of cut part leather for FORD, MAZDA, HONDA and ISUZU

• Export the cut part leather for TOYOTA to Indonesia

1992

• Sumitomo Corp. (TH) invested in IHL for 1.85%

• Thai Automotive VCF invested in IHL for 9.00%

• ISO/TS 16949:2002 accredited by TUV

20052003

• Sumitomo Corp. (TH) increased its investment in IHL to 6.67%

• Sumitomo Corp. (JP) invested in IHL for 20%

• Increased registered capital to Bt. 300 mn

• JAIC (JP) invested in IHL for 1.33%

• Transformed to a Public Company Limited on Aug 24

• Listed in SET on Dec 22

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Shareholding Structure

IPO25.00%

43.51% 25.73% 5.75%

Core Shareholders Strategic Partners Others

• Mr.Ongart Thumrongsakunvong

18.31%• Ms.Chutima Busayapoka

25.20%

• Sumitomo Corp (JP)

15.00%• Sumitomo Corp. (TH)

5.00%• Thai Automotive VCF

4.73%• JAIC

1.00%

• Mr.Tanat Busayapoka

2.95%• TPP International Co., Ltd.

1.97%• Thuannavarat Family

0.63%• Mr.Somchart Limpanuphap

0.14%• Mr.Wattana Busayapoka

0.06%

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Competitive Strengths

Reliable second tier supplier with strong track record• Maintain long term relationship with suppliers and car makers in product

development• Qualified under vendor list of car makers• Possess modern technology in machinery and equipment• Emphasized on research development with modern test laboratory room• Received ISO 9002:1994/QS-9000:1998 from TUV institution

Highly experience management team to ensure the accuracy of future sales order and cost controlling

• More than 30 years experience of management team in tannery business

• Ensure the accuracy of future sales order• Expert in cost control in each production

planning process

Mirror with rapid growth automotive industry• Benefit from aggressive expansion of car

markers such as Toyota, Honda and Nissan to build more automotive manufacturing in Thailand

• Change in consumer behavior toward leather car seat compared to textile seat cover

• FTA is expected to help increase the car production in the future with no tax burden

Strong Strategic Partner• Received strong support from strategic partners Sumitomo and

Thai Automotive and JAIC• Absorb know how from alliance with such 3 strategic partners

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Mission and Business Goals

“To be the fore-runner of leather manufacturing technology and production management in Asia.”

Mission

• The Company aims the continuous growing revenues and profits with the focus on the automotive industry by training the human resource, developing the most practical production process and services as well as efficiently

controlling the production cost.

• The Company becomes the technical leader in leather and interior related product manufacturing technology.

• The Company is capable of responding to and meeting with client requirements in terms of product development, process development, and prompt and effective response to quality or delivery problems (if any).

• Corporate management and staffs are well coordinated and in line with the Corporate Vision, actions are properly taken to ensure achievement of the Corporate Mission.

• Employee training shall be conducted consistently and systematically to ensure and support Corporate growth targets, as well as achievements of individual career path.

Business Goals

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Part II: Business Overview

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Products and Services

Products

Leather

To be the raw material for car seat maker

Leather Cut Parts

For car seat, steering wheel, gear knob and others

Services

Sewing

For car seat, steering wheel, gear knob and others

Car Seat Replacement

Made-to-Order car seat

Products and Services

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Marketing Strategies and Clients

Clients

Marketing Strategies

1. Product: High quality products that meets ISO/TS 16949: standard from TUV.

2. Service: Best services with on-time delivery is the key factor of the Company’s success.

3. Pricing: Competitive pricing by efficient cost control management in production process and skilled labors.

4. Marketing: Focus on target group with the right marketing plan.

5. Customer Relation: Build up the good relation with clients by the best product and services to meet their most satisfactory.

6. Human Resource and Technology Development: Human resource development by on the job training with the international standard technology learning to form the Company’s own production guideline.

• The Company’s direct clients are 1st tier OEM both in Thailand and in foreign countries such as Indonesia and Philippines. The Company aims to expand the client base in foreign countries in the near future.

• The Company also treats the car makers, such as TOYOTA, HONDA, NISSAN, FORD, MITSUBISHI, ISUZU, MAZDA, SUBARU and others, as the Company’s indirect clients since the Company has close relationship with the car makers in developing the products and preparing the production plan together.

2002 2003 2004 2005

Million Baht % Million Baht % Million Baht % Million Baht %

Domestic Sales 433.95 90.94 446.13 94.70 540.49 83.31 875.08 87.73

Foreign Sales 43.25 9.06 24.95 5.30 108.28 16.69 122.36 12.27

Total 477.20 100.00 471.08 100.00 648.77 100.00 997.43 100.00

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Mad

e to

Ord

er

Supply Chain

2nd Tier OEM 1st Tier OEM Car Maker

Automotive Interiors Corp

Thai Automotives Seating & Interior

Toyoda Gosei (Thailand)

Summit Autoseat Industry

Approved from Car Maker Under vendor list Pass quality test Bidding process Well-trained staffs

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Past Record and Confirmed Orders in Pipeline

Export SalesDomestic SalesRemarks: Projects on hand shows only the car seat products and services

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

TOYOTA

Altis

Camry

Vios

Fortuner

Wish

Ventury

Yaris

New Camry

New Altis

Camry

Innova

New Camry

NISSAN

Neo

Almera

Exciter

Cefiro

Frontier

Tida

New Frontier

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Past Record and Confirmed Orders in Pipeline (Cont’d)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FORD

Tiera

Ranger

Everest

Escape

Tiera

Focus

HONDA

Civic

MAZDA

Fighter

Tribute

Mazda 3

ISUZU

Adventure

MITSUBISHI

Cedia

20172017

Export SalesDomestic SalesRemarks: Projects on hand shows only the car seat products and services

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Part III: Industry Overview

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Industry Overview: Increasing Trend of Car Sales

Yearly Production Domestic Sales and Export

571 589363

144 218 262 297 409 533 626 6971,000

126 153 175181

235332

402

800

526 559

360

158327

412 459585

751

928

1,099

1,800

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005F 2010F

CBU export

Domestic sales

Production

'000 units

Year 2000 2001 2002 2003 2004 2005F 2010F

% growth (Production) 26.0% 11.40% 27.45% 28.37% 23.56% 18.42% 63.78%

“Production growth of more than 18.42% expected in 2005 and more than 63.78% cumulative growth expected in the year 2010”

Source: Thailand Automotive Institute

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Most Popular Car Brand and Model in Thailand

Market Share of Car Sales in 2004

7.30% 5.89%

23.95%

3.95%

49.41%

33.82%

0.74%2.26%

37.32%

11.98%

0.49%0.00%4.29% 2.64%

Toyota Honda Nissan Mitsubishi Mazda Isuzu Ford

Market Share of Car Sales in 2005

All types of cars

Passenger cars

All types of cars

Passenger cars

Most popular cars (all types) Most popular passenger cars

2004 1H/2005 2004 2005

Isuzu (Dmax) Isuzu (Dmax) Toyota (Vios) Toyota (Vios)

Toyota (Hilux) Toyota (Hilux Vigo) Honda (Jazz) Toyota (Fortuner)

Toyota (Hilux Vigo) Toyota (Vios) Toyota (Altis) Toyota (Altis)

Toyota (Vios) Mitsubishi (Strada) Honda (Civic) Honda (Jazz)

Nissan (Frontier) Nissan (Frontier) Toyota (Wish) Honda (Civic)

Honda (Jazz) Toyota (Altis) Honda (City) Honda (City)

Mitsubishi (Strada) Chevlolet(Colorado) Toyota (Camry) Toyota (Camry)

Toyota (Altis) Ford (Ranger) Honda (Accord) Chevlolet (Optra)

Honda (Civic) Honda (Jazz) Chevlolet (Optra) Toyota (Wish)

Ford (Ranger) Mazda (Fighter) Toyota (Avanza) Mazda 3

Toyota (Wish) Honda (Civic) Ford (Escape) Mitsubishi (Lancer)

Honda (City) Honda (City) Honda (CRV) Toyota (Avanza)

Model currently producing by the Company for Car seat

Top 12 most popular cars of the yearSource: The Company

Source: Toyota motor Thailand

Source: Toyota motor Thailand

“Interhides supplies car seat leathers to most of the popular

car brands in Thailand”

6.42% 6.26%

25.40%

3.34%

51.27%

25.99%

3.18%2.58%

40.52%

7.07%

0.70%0.00%4.79% 4.86%

Toyota Honda Nissan Mitsubishi Mazda Isuzu Ford

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Part IV: Financial Highlight

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758

525454

454

76%80%94%

94%

0

200

400

600

800

2002 2003 2004 20050%

20%

40%

60%

80%

100%

Financial Summary

Total Revenue Cost of Good Sold

SG&A

Bt.mn.1,003

654486

481

35%

1%

0

200

400

600

800

1,000

1,200

2002 2003 2004 2005-5%

5%

15%

25%

35%

% of Rev.

6953

2429

7%8%

5%6%

0

20

40

60

80

2002 2003 2004 20050%

2%

4%

6%

8%

10%

Net Profit

12139

132

-22

12%

6%

27%

-4%

-50

0

50

100

150

2002 2003 2004 2005-10%-5%0%5%10%15%20%25%30%

Bt.mn. g (%)

Bt.mn. % of Rev.Bt.mn. % of Rev.

Net Profit yr. 2003 Bt. 132 mn.Gain fr. Restructuring Bt. 461 mn. …….(A)Loss fr.Obsolete&damage stock Bt. 304 mn. …….(B)Net loss before (A) & (B) Bt.(24) mn.

Note: Growth in 1H2005 using estimated annualized revenue

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172

7997107

4650

7961

0

50

100

150

200

2002 2003 2004 20050

20

40

60

80

100

Financial Summary

Total Assets Account Receivables

Inventory

Bt.mn.

995

616

573

804

62%

8%

-29%0

200400600

8001,0001,200

2002 2003 2004 2005-40%-20%0%20%40%60%80%Bt.mn.

Bt.mn.

Days

300256237

434 134169

266324

0

100

200

300

400

500

2002 2003 2004 2005050100150200250300350

Days

• Inventory and total assets in year 2003 were significantly decreased since IHL realized loss from obsolete and damage stock of Bt.304 million

• Even inventory in 2005 are continuously increased according to the increased in revenue but IHL’s inventory management are more efficient reflecting through shorten days inventory to 134 days

• Account receivables at 2005 are double compared with year 2004 but IHL’s days receivables are 46 days in average , which are almost the same as the former year.

g (%)

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130124122

16265

87113

86

0

50

100

150

200

2002 2003 2004 2005020406080100120

Financial Summary

Account Payable Loans

Total Liabilities

232 29640

514 178155

227357

0

200

400

600

800

2002 2003 2004 2005

Bt.MB Days

457

603668

1,028

0200

400600800

1,000

1,200

2002 2003 2004 2005

Bt.MB

Bt.MB

OD& Short term loans Long term loans

Loans Restructuring: Hair cut Loans and Acc.interests of

Bt.460.67 mn.

Debt to Equity Ratio

44.6

0.9

-4.6 -7.0-10

0

10

20

30

40

50

2002 2003 2004 2005

Significantly decreased due to the increased in Equity from Net Profit and Capital increased

from IPO

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-314

-185-146

27

-400

-300

-200

-100

0

100

2002 2003 2004 2005

Financial Summary

Paid up Capital Retained Earnings

Shareholders Equity

90

160190

225

300

90

050

100150200250300350

2002 2003 2004 2Q/2005 1Sep.05 2005

538

14

-95-224-400

-200

0

200

400

600

2002 2003 2004 2005

Bt.MB Bt.MB

Bt.MB

Retained loss turned to positive after realized

Q42005 net profit and share premium

ROA

19%

6%

12%

-3%-5%

0%

5%

10%

15%

20%

2002 2003 2004 2005

Bt.MB

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Part V: Business Opportunity

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Future Projects

• Capacity Expansion (By 2006)

• New plant with utilized area of 15,000 sq.m.

• Capacity enhancement from 12 million sq.feet per year to 24 million sq.feet per year

• Estimated Bt. 200-240 million of investment (exclude land)

• Signed contract on January 25, 2006

• Objectives for expansion

• To support the incremental demand from automotive industry.

• To support the incremental demand through new distribution channels in both domestic and

foreign markets.

• To support new production lines e.g. Chrome-free Leather.

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Question and Answer