Highlights on Samyang Packaging
Transcript of Highlights on Samyang Packaging
Highlights on Samyang Packaging
IR meeting
May 2018
Samyang Packaging Co., Ltd.
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3 /13
Ⅰ. Executive Summary
Ⅱ. Who we are
Ⅲ. Business performance
Ⅳ. Growth potential
Table of contents
4 /13 Executive Summary
Samyang packaging is running 2 main businesses. One is PET bottle/preform
manufacturing business and the other is aseptic beverage OEM/ODM
manufacturing business
All two businesses are growing along with Korean PET beverage market at a speed
around 5% per annum with a strong market leadership position in both businesses
Regarding upside potential, Samyang is expected to grow faster in both sales and
profit with the capacity expansions underway
∙ Market share of PET bottle/preform business and aseptic beverage business
recorded 58% and 100% respectively in 2017
∙ Expansions in aseptic beverage manufacturing plants expected to add up KRW 60
billion sales/year after completing lamping up periods for 4 years
∙ Expansion in high speed preform injection plant expected to add up KRW 20
billion sales/year from 2019
- The 4th PET aseptic line and the cartocan aseptic line
- The 144 cavity high speed injection lines
5 /13 Table of contents
Ⅰ. Executive Summary
Ⅱ. Who we are
Ⅲ. Business performance
Ⅳ. Growth potential
6 /13 History of company
After the merger in 2015, Samyang Packaging Co., Ltd. obtained an overwhelming
leadership position of over 50% market share in both PET Packaging business
and Aseptic beverage business
1979
Production of PET
bottle for the first time
in Korea
1983
Developed pressure vessel
for the first time in Korea
1988
Developed heat resistant
container
for the first time in Korea
2002
Developed Multi-layer PET
bottle for the first time in
Korea
April 5, 2014
SCPE acquired Hyosung
PET biz and launched
Asepsys global Co., Ltd.
1995
Start to export PET
bottle to Japan
2007
Launched Aseptic
beverage
business
Nov. 1, 2014
Samyang carved out PET biz
division and established
Samyang Packaging Co., Ltd.
November 2017
listed on KOSPI
July 1, 2015
Samyang
Packaging /
Asepsys
global merger
Samyang Corporation / Hyosung Corporation SYC/ SCPE
(51%) (49%)
Main
shareholders
SYC(51%)/SCPE
(16.7%)/Others
(32.3%)
7 /13 Business domain
• Overall market MS 38%
• Competitive market MS 58%
Market
Leader-
ship
Key
Charact-
eristics
• Holds 3 times more PET bottle molds
and production lines than the 2nd
largest competitor
• Korean PET beverage market is
growing at 5% per annum
• Overall market MS 83%
• Competitive market MS 100%
PET bottle/preform manufacturing and Aseptic Beverage OEM/ODM
manufacturing are the two major business pillars
* Source : Industry expert interview
PET Aseptic Beverage OEM/ODM
business
PET Packaging business
• Holds a world class hygiene & quality
control standard required for operating
highly sensitive aseptic facilities
- proved for 12 years’ accident
free operation record
• Korean aseptic beverage market is
growing at 12% per annum
8 /13 Table of contents
Ⅰ. Executive Summary
Ⅱ. Who we are
Ⅲ. Business performance
Ⅳ. Growth potential
9 /13 Sales / Profit Trend
Company’s sales/profit performance reflects the strong seasonality of the Korean
beverage market
668
915 872
646
732
961 969
672
755
8
180
164
58 45
189 175
18 18
0
50
100
150
200
250
300
0
200
400
600
800
1000
1200
16.1Q 16.2Q 16.3Q 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q 18.1Q
Sales & Operating profit
(Unit : 100 million won ) Sales Operating
profit
10 /13 Balance sheet, Cash Flow
(Unit : 100 million won )
The company’s balance sheet is getting healthier
(Unit : %, 100 million won )
Total Assets(2015~2017)
Key figures(2015~2017)
710 710 710
71 313
591 383
484
440
2,531 2,256 1,966
2015 2016 2017
* IB dept : Interest bearing dept
* 2015FY performance is sum of Samyang Packaging, Asepsys global Co., Ltd.
* Asepsys global Co., Ltd’s performance from 01/2015~06/2015 is written in K-GAAP
2,510
2,081
1,716
2015 2016 2017
150
8.5
11.1 11.4
2015 2016 2017
ROE(%)
126 102
Commercial dept
Dept ratio(%) IB dept*
Retained earning
Paid in capital
Net dept(%)
11 /13 Table of contents
Ⅰ. Executive Summary
Ⅱ. Who we are
Ⅲ. Business performance
Ⅳ. Growth potential
12 /13 Capacity expansions underway
Aseptic PET/preform
* Assumed 4 years lamp-up period for aseptic expansions
• KRW 20 billion
• Sales KRW 20 billion/year
• Building/utility completed
• 1st line machine installation
completed and under verifying
operation
• KRW 55 billion
• Sales KRW 40 billion/year
• Building/utility completed
• Machine installation scheduled
to complete Dec, 2018
• KRW 12 billion
• Sales KRW 20 billion/year
• 1st machine installation completed
• 2nd machine installation scheduled
to complete Jul, 2018
Capex
Incremental
Sales&Profit*
Status
For upcoming 4~5 years, Samyang expects to add KRW 80 billion
sales with decent profit on top of an organic growth
13 /13 Overseas export
From 2017, Samyang’s export of figures are taking off
21 18 14 - 21
2015 2016 2017 2018(F) 2019(F)
Export sales trend
21
(Unit : 100 million won )
35 18
The company is expecting to hold a competitive cost advantage over a
potential new comer in aseptic business with the increasing exporting volume
Bottle&Preform
Aseptic
Appendix
15 /13 Financial Statements
Title 2017 2016 2015
Current assets 102,635 89,688 65,105
Non-current assets 394,759 402,265 420,173
Total assets 497,394 491,953 485,278
Current liabilities 78,473 73,457 35,099
Non-current
liabilities 173,151 200,476 256,286
Total liabilities 251,624 273,933 291,385
Capital 71,049 71,049 71,049
Capital surplus 115,703 115,706 115,706
Accumulated other
comprehensive
income
1 1 1
Profit surplus 59,017 31,264 7,137
Total capital 245,770 218,020 193,893
Total liabilities and
capital 497,394 491,953 485,278
* NOTE : 2015FY is non-audited financial statements
Summary balance sheet
(Unit: Million Won)
Title 2017 2016 2015
Sales 333,440 310,125 184,943
Sales cost (258,063) (238,154) (150,626)
Total sales profit 75,377 71,971 34,317
Distribution cost (18,838) (18,716) (12,090)
Management cost (13,885) (12,300) (6,616)
Operating profit 42,654 40,955 15,611
Financial income 224 76 936
Financial cost (8,095) (9,867) (6,279)
Other non-operating
income 2,777 2,461 2,569
Other non-operating
expenses (1,434) (2,348) (1,595)
Net income before
corporate income
taxes
36,126 31,277 11,242
Corporation tax (8,187) (7,057) (2,544)
Current net income 27,939 24,220 8,698
Summary income statement
(Unit: Million Won)
16 /13 PET Packaging business market leadership
Market share status (as of 2016) Comments from Beverage Clients
Overall
market 1)
Competitive
market 2)
* Source: Samyang Packaging Sales Team Market Survey
* Note:
1) Beverage company's PET bottles are included
2) PET bottle specialized manufacturer production only
Samyang holds overwhelming share and acclaiming reputations from beverage
clients
“ I can`t imagine to develop a new PET Packaging
design without supports from Samyang Packaging.”
- Beverage client (K company) marketer
“ Samyang Packaging is the unrivaled trustworthy
PET Packaging supplier especially for the peak season.”
- Beverage company (L company) procurement team leader
38%
58%
17 /13 Aseptic beverage business market leadership
Samyang Packaging
83%
Market share status
in Aseptic beverage market
Samyang Packaging
100%
Competiti
ve market
Entire
market
7%
14%
48%
전체음료시장대비 PET음료시장대비 음료OEM시장대비
Samyang Aseptic Beverage
Supply Contribution
Samyang holds dominant leadership position not only in Aseptic beverage
OEM/ODM market but also in total Korean OEM beverage market
* Source: Samyang Packaging Planning Team Analysis
Total Korean
market
PET beverage
market
OEM beverage
market
18 /13 PET Packaging business market leadership Sustainability (Ⅰ)
Capacity of major PET Packaging suppliers
Sum of 4
companies
2.16 billion
Major
5 companies
21.3
Samyang
Packaging
6.7
No. 2
Company
6.5
No. 3
Company
5.7
2.7
No. 4
Company No. 5
Company
42.9
PET beverage Market Seasonality vs. Capacity
Samyang
Packaging
Beverage
company's own
production
volume
No. 4 Company
No. 5 Company
No. 3 Company
No. 2 Company
Considering the seasonality of Korea the beverage market,
Samyang Packaging selected as the top PET Packaging supplier
Competitors
Annual sales
(100 Million EA)
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
* Source: Samyang Packaging Sales Team Market Survey, Planning Team Analysis
Monthly market demands for PET bottle
Capacity
19 /13 PET Packaging business market leadership Sustainability(Ⅱ)
-
10
20
30
40
50
60
70
80
90
100
Annual beverage sales volume by SKU
Samyang
Packaging
No. 2
Company
No. 3
Company
No. 4
Company
No. 5
Company
Number of
Production
line
35 5 8 8 6
Number of
Bottle
molds
113 39 16 32 4
Utilization 73% 48% 55% 61% 43%
Flexibility / Operational efficiency
Samyang Packaging has been successfully responding to the domestic beverage
industry, which is characterized by a long-tailed market
with a superior flexible production management capability
Annual sales
volume (million EA)
SKU
10
30
50
100
28%
16%
14%
15%
28%
* Source: Samyang Packaging Sales Team Market Survey, Planning Team Analysis
% of section
20 /13 Aseptic Beverage Business Market Leadership Sustainability
Samyang`s Aseptic production lines Preoccupation status
in PET beverage OEM market
Unit 1 Unit 2 Unit 3 Unit 4
Production
CAPA 150 Million EA 150 Million EA 150 Million EA 150 Million EA
Utilization 95% 77% 69% -
Investment
timing Sept. 2007 Feb. 2010 March 2014 Dec. 2018
Through the preemptive capacity investment and preoccupancy of Aseptic market,
Samyang successfully built up a strong entry barrier
Teas
(3.1)
Juice
(1.6)
Children
(0.9)
Carbonic
acid
(0.6)
Coffee
(0.5)
Others
(0.8) Demand
(100 Million EA)
* Source: Samyang Packaging Sales Team Market Survey, Planning Team Analysis
Other
Coca POWERade
Lotte
Delmont
Others
Other
Others
(Dongseo Boricha, Woongin
Oksusu tea and others)
Paldo
Pororo Binggrae
Acafera
Namyang 17cha
Woogin
Victoria
CJ Hutgaesu
Others
(Lotte Delmont) Woongjin Haneulbori
Woongjin Kaya Farm
Kwangdong
Hutgae tea
Kokatoreta
Coca
Jamong
Soda
Others
(Crude oil,
soy milk,
and others)
Coca
minutemaid
Others
Others
Others
Others
Kwangdong
Oksusu Suyeomcha
Coca
home style
Samyang`s share
21 /13 Aseptic beverage business market leadership (Ⅰ)
“Longer
Shelf Life”
135OC
35~120 Sec.
Sterilization Cooling Cooling
Hot
filling
Aseptic
filling
Aseptic
benefit
Cool down to
85~90OC
Non-aseptic
environment,
85~90OC filling
135OC
5~65 Sec.
Cool down to
25~30OC
Fill in the sealed chamber
Maintain aseptic condition
Hot filling Vs. Aseptic filling
“Lower
Packaging Cost”
Filling
Cooling to 35~40OC,
about 30~40 minutes
“Better
Taste”
Samyang has successfully grown the Aseptic business
by replacing existing hot-fill beverages and launching new beverage categories
* Source: Industry expert interview
22 /13 Organic growth potential
41.1% 42.6% 44.2% 47.0% 49.1%
25.2% 25.3% 26.3% 24.4% 23.3%
13.1% 12.4% 11.2% 10.7% 10.1%
8.1% 7.5% 6.7% 6.0% 5.3%
12.5% 12.2% 11.6% 11.9% 12.2%
2012 2013 2014 2015 2016
Others Glass bottle Pack Can PET
Korean beverage market growth trend Trend of proportion by container type
0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.5 0.6 0.7
3.0 3.1 3.3 3.4 3.6 4.0
4.3 3.8
4.0
4.5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Soft drick (soda) Natural water
* Source: National Statistical Office and Korea Spring Water Association, AC Neilsens survey data
4.6%
9.8%
3.3 3.4 3.6
3.7 3.9
4.4
4.7
4.3 4.6
5.2
(Unit : Trillion Won)
Samyang, as a dominant market leader expected to enjoy a stable organic growth
With the steady growth of Korean beverage market and growing proportion of PET
Packaging