Top Glove Corporation Bhd Corporate presentation docx

Top Glove Corporation Bhd
Corporate presentation
Bursa Malaysia 7113 Reuters TPGC.KL Bloomberg TOPG MK ADR CUSIP 890534100
T h e W o r l d ’ s L a r g e s t R u b b e r G l o v e M a n u f a c t u r e r
To p G l o v e , To p Q u a l i t y,
To p E f f i c i e n c y,
G o o d H e a l t h , S a f e t y F i r s t ,
B e H o n e s t
Presented by : CG Lim
Prepared by: See SF
Date: 27 March 2013
At a glance
• Commenced operations in 1991.
Listed in 2001
• Comprehensive product range
with 13 major types of rubber
gloves
• 80% of production for health care
sector and 20% for non-health
care sector
• Produce 76% natural rubber glove
and 24% synthetic rubber glove
• Target balance capacity mix of
natural rubber and synthetic
rubber glove
Page 2 / 22
2QFY13 product mix by volume
Powdered
latex
52%
Nitrile

17%
Vinyl
7%
Surgical
2%
Powder free latex
22%
Strong growth momentum
Estimate Global annual demand:
Approx. 165 bil pcs p.a for year 2013
No. of gloves (billion pcs)
Year
Top Glove exponential growth in capacity
(CAGR : 28%)
Expansion in global market share
Current market share
Target market share by Dec 2015
Page 3 / 22
1.4
2.4
3.2
5.1
7.2
9
15
22
28.2
30
31.5
33

35.25
40
41.9
0
5
10
15
20
25
30
35
40
45
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 13
25%
0
20
40
60
80
100
120
140
160
180
'99 '01 '03 '05 '07 '09 '11 '13
No. of gloves (billion pcs)
Year
As at April’13
Global rubber glove usage

(by region, 2000 – 2009)
USA
EU27
Asia Ex Japan
Latin America
Japan
11%
89%
32%
% of global
glove usage
in 2009
% of world
population
in 2009
* Source from Malaysian Rubber Export Promotion Council and Company
%
Page 4 / 22
68%
• USA and EU27 with only 11% of world population consumed 68% of
global glove usage.
• Other regions with 89% of world population consumed only 32% of
global glove usage.
Geographically diversified
• Exports to 185 countries with
more than 1,800 customers
• Geographically diversified and
no single biggest customer
constitutes more than 4% of
revenue

• Customers are mainly
distributors in the respective
countries
• Preferred OEM manufacturer
Page 5 / 22
Europe 34%
North
America
27%
Latin
America
20%
Asia 11%
Middle East
5%
Rest of the
World 3%
2QFY13 revenue by geography
1. Medical gloves is a necessity in
healthcare industry
 As a barrier of protection
2. Increasing healthcare and hygiene
awareness
 Especially in developing countries
3. Ageing population
 As elderly are more susceptible to
higher risk diseases
4. Health regulations
 Healthcare reforms, eg. US, China
 Healthcare regulations eg. OSHA in US,

EU-OSHA in Europe, SESI in Brazil
5. Emergence of health threats
 E.g. A(H1N1), SARS, bird flu, Bio-
terrorism threats, Anthrax
Key industry drivers
Page 6 / 22
24 manufacturing facilities across 3 countries
(as at April 2013)
• 22 glove factories
40.3 bil capacity p.a.
from 462 production
lines
• 2 latex concentrate/
processing plants
supply 60% to 70% of
Top Glove’s
requirement
China
2 glove factories
Produce:
• Vinyl glove
• PE glove
Thailand
2 glove factories
2 latex plants
Produce:
• Latex examination
glove
• Latex concentrate
Malaysia

18 glove factories
Produce:
• Latex examination
glove
• Nitrile examination
glove
• Surgical glove
• Household glove
• Cleanroom glove
Page 7 / 22
Production capacity expansion plan
No. of
production
lines
Capacity p.a. Target
completion
Current: 22 glove factories 462 lines 40.3 bil pcs p.a.
Expansion plan :
F28 (Banting, Malaysia)
(formerly known as F18, phase 2)
F25 (Klang, Malaysia) New factory
F23 (Ipoh, Malaysia) Phase 2
F27 (Lukut, Malaysia) Phase 2
F29 (Klang, Malaysia) New factory
Total expansion by April 2014
16 lines
20 lines
16 lines
8 lines
16 lines

76 lines
1.6 bil pcs p.a.
2.0 bil pcs p.a.
1.6 bil pcs p.a.
0.8 bil pcs p.a.
1.6 bil pcs p.a.
7.6 bil pcs p.a.
April 2013
July 2013
November 2013
December 2013
April 2014
Total by April 2014 : 25 glove factories 538 lines 47.9 bil pcs p.a.
Page 8 / 22
New Venture : Rubber Plantation
Page 9 / 22
Bangka
1. Plantation land located in Indonesia, south
of Sumatera; Land size 30,772 ha
2. Concessions land tenure for 60 years,
renewal for another 60 years.
3. Target commencement of first phase of
planting in Oct 2013.
4. Expecting first tapping in 2020.
5. With progressive planting over 8 years and
a gestation period of 7 years, full
development is expected within 14 years.
6. Estimated investment cost around RM450m
over 14 years period. Positive cash flow
expected from year 10.

Belitung
Natural Rubber Supply vs Demand
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0
2
4
6
8
10
12
14
2007 2008 2009 2010 2011 2012F 2013F 2014F
mmt
mmt
Supply (LHS) Demand (LHS) Supply surplus (RHS)
Source : International Rubber Study Group
Page 10 / 22
Costs breakdown
Average latex prices
2
3
4
5
6

7
8
9
10
11
12
Sep-03
Mar-04
Sep-04
Mar-05
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
RM per kg
FY05
RM3.28
FY07

RM4.78
FY06
RM4.94
FY04
RM3.14
FY08
RM5.62
FY09
RM4.34
RM7.20
(03/07/08)
RM6.85
(30/06/06)
RM7.75
(23/04/10)
FY10
RM6.12
RM10.99
(11/04/11)
FY11
RM8.92
• Able to pass majority of latex cost increases to customers
• On-going internal cost improvement and efficiency measures offset cost increases
• Upstream production (latex concentrate plant) to provide greater control over latex supply
Page 11 / 22
Latex
53%
Labour
11%
Chemical

9%
Fuel 8%
Packaging
6%
Overhead
and
others
13%
Breakdown of production costs
(from Sept'12 to Nov'12)
FY12
RM7.36
RM6.45
(10/10/12)
RM6.18
(27/03/12)
1QFY13
RM5.83
Natural rubber (NR) latex, nitrile latex &
crude oil price trend (in USD)
Page 12 / 22
0.93
1.86
1.00
2.19
1.00
2.37
3.61
2.07
2.05

2.01
2.00
1.29
2.39
1.19
2.91
2.20
1.85
1.78
1.89
55.40
74.40
140
41.68
86.15
112.79
82.92
99.74
103.02
78.4
91.64
97.53
91.86
0
20
40
60
80
100
120

140
0.5
1.5
2.5
3.5
4.5
5.5
6.5
7.5
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10

Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Crude Oil Price (WTI)
(USD/bbl)
NR Latex & Nitrile Price
(USD/KG)
Crude
Oil
NR
Latex
Nitrile
Note: NR Latex & Nitrile Latex based on 60% TSC
Challenges in glove industry
$
2
3
4
5
6
7

8
9
10
11
Aug-03
Feb-04
Aug-04
Feb-05
Aug-05
Feb-06
Aug-06
Feb-07
Aug-07
Feb-08
Aug-08
Feb-09
Aug-09
Feb-10
Aug-10
Feb-11
• Due to weather impact, crude oil
price movement, speculation,
competition with other usage
• Time lag in passing on to customers
when prices move up sharply
• Majority sales in USD,
subject to USD currency
movement
• Time lag in passing on to
customers when USD

weakens sharply
• Impact on energy cost, other
raw materials and logistic cost
• Inflation
Page 13 / 22
Currency exposure
Raw material price fluctuation
Crude oil price fluctuation/
speculation
3 months performance comparison
2Q13
1 Dec 12 –
28 Feb 13
2Q12
1 Dec 11 –
29 Feb 12
Variance
(2Q13 vs
2Q12)
1Q13
1 Sep 12 –
30 Nov 12
Variance
(2Q13 vs
1Q13)
Total sales (RM’mil) 576.4 549.0 5% 584.6 (1%)
EBITDA (RM’mil) 82.1 85.8 (4%) 89.6 (8%)
EBITDA margin 14.2% 15.6% 15.3%
PBT (RM’mil) 61.4 68.8 (11%) 70.4 (13%)
PBT margin 10.7% 12.5% 12.0%

Profit attributable to equity
(RM’mil)
50.3 53.5 (6%) 57.5 (13%)
PAT (RM’mil) 51.3 54.2 (5%) 58.9 (13%)
PAT margin 8.9% 9.9% 10.1%
EPS (sen) 8.1 8.6 (6%) 9.3 (13%)
• Sales volume (quantity of gloves) up 20% 2Q13 vs 2Q12, up 3% 2Q13 vs 1Q13
• Latex price down 15% 2Q13 vs 2Q12, down 1% 2Q13 vs 1Q13
• Margin affected by the time lag of passing the minimum wage impact.
Page 14 / 22
Half yearly performance comparison
1H13
1 Sep 12 –
28 Feb 13
1H12
1 Sep 11 –
29 Feb 12
Variance
(1H13 vs
1H12)
2H12
1 Mar 12 –
31 Aug 12
Variance
(1H13 vs
2H12)
Total sales (RM’mil) 1,161.0 1,103.8 5% 1,210.6 (4%)
EBITDA (RM’mil) 171.7 143.9 19% 166.0 3%
EBITDA margin 14.8% 13.0% 13.7%
PBT (RM’mil) 131.8 110.4 19% 130.3 1%

PBT margin 11.4% 10.0% 10.8%
Profit attributable to equity
(RM’mil)
107.8 84.9 27% 117.8 (8%)
PAT (RM’mil) 110.2 86.7 27% 120.6 (9%)
PAT margin 9.5% 7.9% 10.0%
EPS (sen) 17.4 13.7 27% 19.0 (8%)
• Sales volume (quantity of gloves) up 22% 1H13 vs 1H12, up 8% 1H13 vs 2H12
• Latex price down 23% 1H13 vs 1H12, down 19% 1H13 vs 2H12
• Improvement in margin
• Lower tax expense due to recognition of deferred tax assets
Page 15 / 22
Financial highlights since listing in 2001
(12 years)
Income statement
Per share data
* Based on par value of RM0.50, adjusted for share split and bonus issue
# Restated to comply with FRS112 (deferred tax)
Page 16 / 22
(in RM’mil) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CAGR
12 yrs
Avg
Sales 138.9 180.2 265.1 418.1 641.8 992.6 1,228.9 1,377.9 1,529.1 2,079.4 2,053.9 2,314.4 31% -
EBITDA 23.9 27.1 39.5 60.6 89.2 130.3 175.7 197.8 287.5 364.7 207.3 310.0 30% -
EBITDA margin 17.2% 15.0% 14.9% 14.5% 13.9% 13.1% 14.3% 14.4% 18.8% 17.5% 10.1% 13.4% - 14.8%
PBT 17.2 20.2 29.3 45.2 65.7 91.8 118.6 134.6 222.0 305.0 145.5 240.7 33% -
PBT margin 12.4% 11.2% 11.0% 10.8% 10.2% 9.2% 9.7% 9.8% 14.5% 14.7% 7.1% 10.4% - 10.9%
# PAT Equity 15.9 18.1 25.3 39.5 58.1 84.1 89.6 110.1 169.1 245.2 113.1 202.7 32% -
PAT margin 11.4% 9.9% 9.7% 9.5% 9.1% 8.5% 7.2% 7.8% 11.0% 12.0% 5.6% 8.9% - 9.2%
ROE 17.0 16.1 17.8 24.3 26.9 27.8 14.0 16.0 20.0 22.0 9.9 15.8 - -

(in RM) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CAGR
* Net Assets 0.183 0.221 0.275 0.312 0.409 0.561 1.067 1.141 1.393 1.808 1.853 2.068 26% -
* EPS 0.03 0.04 0.05 0.08 0.11 0.16 0.16 0.19 0.29 0.40 0.18 0.33 30% -
Strong and healthy balance sheet
1HFY13
As at 28 Feb 13
FY2012
As at 31 Aug 12
Net cash flow from operating activities (RM’mil) 158.0 277.9
Capital expenditure and investment (RM’mil) 156.3 145.6
Free cash flow before dividend (RM’mil) 1.7 132.3
Net cash and short term investment (RM’mil) 256.9 308.5
Shareholders equity (RM’mil) 1,341.6 1,279.9
Net assets per share (RM) 2.17 2.07
Return on equity * 16.1 15.8
Inventory turnover days 31 28
Receivable turnover days 47 44
Payable turnover days 41 37
* Annualised
Page 17 / 22
Dividend – sustainable and steady growth
Financial
year
Dividend per share
(sen)
Total
dividend
(RM’000)
2012 16.00 99,038
2011 11.00 68,035

2010 16.00 98,877
2009 11.00 65,873
2008 5.50 32,389
2007 4.61 27,435
2006 3.67 21,173
2005 2.66 14,110
2004 2.36 12,295
2003 1.85 9,550
2002 0.56 2,808
2001 0.80 4,000
Total payout since listing 455,538
* Dividend per share has been adjusted for share split and bonus issue
Target dividend payout ratio is around 50% of profit
attributable to equity
Dividend payout ratio : FY12 at 50%
: FY11 at 60%
: FY10 at 40%
: FY09 at 40%
Page 18 / 22
0.80
0.56
1.85
2.36
2.66
3.67
4.61
5.50
11.00
16.00
-

2
4
6
8
10
12
14
16
18
20
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Dividend per share (sen)
Financial Year
Dividend (sen)
(Financial year ended 31 August)
16.00
11.00
Return on investment
Page 19 / 22
Date
Closing share
price (RM)
Number of
shares held
Total market
value (RM)
Accumulated
dividend
received (RM)
Cost of

investment
(RM)
Capital
appreciation
(RM)
Total
s/holders
return %
27-Mar-01 2.70 (IPO) 1,000 2,700 - 2,700 - -
02-Jan-04 4.90 1,820 * 8,918 209 2,700
6,427
238%
03-Jan-05 8.65 1,820 * 15,743 415 2,700
13,458
498%
03-Jan-06 6.80 3,640 * 24,752 673 2,700
22,725
842%
03-Jan-07 13.80 3,640 * 50,232 962 2,700
48,494
1796%
03-Jan-08
6.50 5,096 * 33,124
1,412 2,700
31,836
1179%
02-Jan-09
3.64 5,096 * 18,549
1,933 2,700
17,782

659%
04-Jan-10
10.06 5,096 * 51,266
2,595 2,700
51,161
1895%
03-Jan-11
5.05 10,192 * 51,470
4,073 2,700
52,842 1957%
03-Jan-12
5.12 10,192 * 52,183
5,500 2,700
54,983 2036%
02-Jan-13
5.75 10,192 * 58,604
6,830 2,700
62,734 2323%
27-Mar-13
5.35 10,192 * 54,527
7,745 2,700
59,572 2206%
2206% since IPO in Mar’01, assuming initial investment of 1,000 shares was made
during initial public offering price of RM2.70 on 27/03/01
* Adjusted for bonus issue and share split
If the bonus issues and share split are not taken into consideration, the share price should be
RM5.35 x 1.3 x 1.4 x 1.4 x 2 x 2 = RM54.53 per share
Corporate culture
Must know, Must do, Must teach
Business direction

1. To produce consistently high
quality gloves at efficient low cost.
Investment direction
1. To earn 2 healthy dollars and invest 1
efficient dollar.
Business rules
1. Do not lose our shareholders’ money;
2. Do not lose our health;
3. Do not lose our temper;
4. Do not lose our customers.
Business philosophies
1. We work for our customers;
2. We take care of the interest of our
shareholders;
3. We ensure that our employees continue
to contribute positively to the company
and we care for their well-being; and
4. We work closely with our bankers,
suppliers, business associates and friends.
Business ethics
1. Honesty
2. Integrity
3. Transparency
Page 20 / 22
Business Direction, Ethics, Rules & Philosophies
Management focus going forward
Page 21 / 22
• Further automate production line to reduce
workers & improve the efficiency
• Target balance capacity mix of natural

rubber and synthetic rubber glove
• Move upstream to rubber plantation
• Capture growth in emerging market demand
• Target 30% global market share
Thank you
Q & A Session
Top Glove Corporation Berhad
www.topglove.com.my

+603 5022 2110
Page 22 / 22