Hartalega Holdings Berhad th Annual General Meeting 2020 AGM...Bestari Jaya Batang Berjuntai 12.9...

Growing Global

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Hartalega Holdings Berhad14th Annual General Meeting2020

Growing Global


Contents

Covid-19 Impact

Financial Performance &

Dividend Growth

Expansion Plans

What’s Next for Hartalega

Social Responsibility

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Covid-19 impact

Mid & long term outlook

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Current situation

Daily new cases hovering around

200k – 300k

Autumn starting in northern

Hemishpere

Upticks in new cases reported in

China, South Korea, Japan and

Europe (previously peaked)

Daily new cases still on the uptrend

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Current situation

PPE shortage still ongoing

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Current situation

FDA Medical Device Shortage List

Source: FDA website

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Potential demand based on actual need

Market outlook

With conservative growth assumptions

(30% - developed market; 100% -

developing market), actual gloves

needed could be as much as 120bil pcs.

Existing capacity expansion plans are

not sufficient to fulfill the potential surge

in demand

It will take time for industry to build new

capacity

A typical glove plant will take 9-12

months to build and further 4-6 months

to commission the production lines

Source: Trade Atlas import data (import code: HS401511 & HS401519), Company estimates

Est. 30%

growth

from 2019

Est. 100%

growth

from 2019

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Consistent growth in global consumption

Market outlook

The sector is expected to undergo a

structural step-up in demand post

pandemic

Expected post pandemic growth at higher

rate than the usual 8-10% growth per

annum

On the back of increased glove usage from

emerging markets with low gloves

consumption per capita and heightened

hygiene awareness due to the pandemic

Source: Trade Atlas import data (import code: HS401511 & HS401519), Company estimates

110122 124

140 150 148160 171 180

194210

228256 263

Global consumption of rubber gloves (bil pcs)

Potential Demand

Potential Supply

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Financial Performance & Dividend Growth

High growth glove company

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About us

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Sales Revenue & Profit

110 160 240 282 443

572 735

921 1,032 1,107 1,145

1,498

1,822

2,405

2,827 2,924

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20

Revenue (RM mil)

13 19 37 69 85

143 190 201

234 233 210

258 283

439 454 434

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20

Profit After Tax (RM mil)

Revenue

3.4%YoY Increase

Profit After Tax

4.2%YoY Decrease

FY20 Net Profit Margin

14.9%

Revenue CAGR

24.4%FY05-FY20

PAT CAGR

26.3%FY05-FY20

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EPS Growth

2.662.90

4.91

6.546.91

7.977.85

6.74

7.858.62

13.2813.69

12.88

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20

Earnings per Share (sen) EPS

6.0%YoY Decrease

EPS CAGR

14.0%FY08-FY20

Number of shares grew from 217m shares

(2008) to 3,365m shares (2020) as a result of

bonus issue of 1 for 2 in 2010, bonus issue of 1

for 1 in 2012, bonus issue of 1 for 1 in 2015 &

bonus issue of 1 for 1 in March 2018 which did

not hinder EPS from growing

Focus on sustaining EPS via expansion and

automation

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Hartalega’s Dividend Growth

Dividend per share is stated post-bonus issue*

1.67

2.633.13

3.63 3.633.25

4.00 4.25

7.95 8.207.75

33.9%

40.1%

45.3%45.7%47.0%49.9%50.9%49.3%

60.0%60.2%

60.5%

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

FY

19

FY

20DPS (sen) Payout Ratio

Dividend

Per Share

7.75senFor FY2020

Dividend

Payout Ratio

60.0%From FY2018 onwards

Pay-out Policy of minimum 60% instituted from

FY2018 onwards

Total dividend payout for the year amounts to

RM262 million, representing a payout ratio of

60.5%

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Quarterly Profit

56

96

125

94

221

71

113120

104

66

113 119121

89

116

91

115

FY17 FY18 FY19 FY20 FY21

Q1 Q2 Q3 Q4 1Q20

vs 1Q19 PAT

134.5%YoY Increase

1Q20

vs 4Q19 PAT

91.0%QoQ Increase

Higher profit YoY & QoQ mainly due to:

Higher sales volume: 8%

Higher average selling prices: 5%

Lower material cost & upkeep expenses

Expecting stronger quarters ahead due to

steeper increase in selling prices QoQ

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Expansion plans

NGC 1.5 & NGC 2.0 NGC

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NGC ongoing expansion

To date, 70 production lines are running at NGC. 5 out of 7 plants at NGC are in full operation

Plant 6 has commissioned 10 out of 12 lines since early January

First line of Plant 7 to start towards Q4 of CY2020.

Plant 7 - 6 high capacity lines to be completed by March’21.

RM2.0blnInvested at NGC to date

P6 P7

14production lines to be built

in NGC in coming years

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Beyond NGC

NGC 1.5: Plant 8-11

Located beside existing NGC

4 plants x 12 lines = 48 lines

Installed Capacity: 19 billion pcs p.a

Target to commence the first line towards Q4 of CY2021

NGC Sepang

Pond

Proposed land

60.57ac

P8 P9

P10 P11

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Beyond NGC

>45,000Pieces per hour

NGC 2.0: Replicating NGC

Fully digitized

factory floor

Expected reduction in

manual labour of 20%

Higher level of

automation

Located in Banting

7 plants with 82 production lines

Installed Capacity: 32 billion pcs p.a

Target to commence the first line towards Q1 of CY2022

As a responsible industry player, management is cognizant of maintaining a healthy supply and demand balance in our expansion plans

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Continuous Expansion

95 billion installed capacity by 2027

Facility Location Projected Installed Capacity

Bestari Jaya Batang Berjuntai 12.9 bil

NGC Sepang 31.0 bil

43.9 bil

NGC 1.5 Sepang 18.9 bil

NGC 2.0 Banting 32.3 bil

Total 95.1 bil

With the current expansion plans in place, we are on track to doubling capacity to 95 billion pcs p.a by 2027

Looking to acquire additional land bank for longer term expansion

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Social Responsibility

We care for our people

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Social compliance

Towards the later part of 2019, we decided to remediate migrant

workers who joined prior to Zero Recruitment Cost policy

Appointed a third-party non-profit organisation with a

proven track record in social compliance and recruitment fee

remediation to conduct interviews with affected workers

Despite a delay caused by the movement control order (MCO),

these interviews were concluded in June

Target to begin remediation by the fourth quarter of 2020, to

be completed over the span of up to 24 months.

Remediation Cost

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End of Presentation

Hartalega Holdings Berhad th Annual General Meeting 2020 AGM...Bestari Jaya Batang Berjuntai 12.9...

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