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ELECTROELECTROTECH INVESTMENTS LIMITEDTECH INVESTMENTS LIMITED
3Q FY20073Q FY2007Results PresentationResults Presentation
International Contract Manufacturer to CapitalEquipment and Consumer Industries
International Contract Manufacturer to CapitalInternational Contract Manufacturer to CapitalEquipment and Consumer IndustriesEquipment and Consumer Industries
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This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. Investors canidentify some of these statements by forward-looking items such as ‘expect’, ‘believe’, ‘plan’, ‘intend’, ‘estimate’, ‘anticipate’, ‘may’,‘will’, ‘would’, and ‘could’ or similar words. However, you should note that these words are not the exclusive means of identifyingforward- looking statements. These forward-looking statements are based on current expectations, projections and assumptionsabout future events. Although ElectroTech Investments Limited believes that these expectations, projections, and assumptions arereasonable, these forward-looking statements are subject to the risks (whether known or unknown), uncertainties and assumptionsabout ElectroTech Investments Limited and its business operations.
Some of the key factors that could cause such differences are, among others, the following:
•changes in the political, social and economic conditions and regulatory environment in the jurisdictions where we conduct businessor expect to conduct business;
•the risk that we may be unable to realise our anticipated growth strategies and expected internal growth;
•changes in and new developments in technologies and trends;
•changes in currency exchange rates;
•changes in customer preferences and needs;
•changes in competitive conditions in our customers’ industries and our ability to compete under these conditions;
•changes in pricing for our products; and
•changes in our future capital needs and the availability of financing and capital to fund these needs.
Given these risks, uncertainties and assumptions, the forward-looking events referred to in this presentation may not occur and ctualresults may differ materially from those expressly or impliedly anticipated in these forward-looking statements. Investors are advised
not to place undue reliance on these forward-looking statements.
Investors should assume that the information in this presentation is accurate only as of the date it is issued. ElectroTech InvestmentsLimited’s business, financial conditions, results of operations and prospects may have changed since that day. ElectroTechInvestments Limited has no obligation to update or revise any forward-looking statement, whether as a result of new information,future events or otherwise, except as required by law.
3Q FY2007 Results Briefing
Important Notice
ElectroTech Investments Limited
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Financial ReviewFinancial Review
3Q FY20073Q FY2007
YTD Sept 2007YTD Sept 2007
Business Review and OutlookBusiness Review and Outlook
MechatronicsMechatronics DivisionDivision
EMS DivisionEMS Division
Questions and AnswersQuestions and Answers
3Q FY2007 Results Briefing
AGENDA
ElectroTech Investments Limited
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RevenueRevenue
(S$m)(S$m)
Gross Profit
Profit before Tax
Net ProfitNet Profit
64.3 54.464.3 54.4
Net Profit Margin
10.2 12.0
7.4 8.6
6.1 6.36.1 6.3
10% 12%
Effective Tax Rate 18% 26%
3Q FY2007 3Q FY2006 Chg3Q FY2007 3Q FY2006 Chg YoYYoY
18%18%18% MechatronicsDivision’s
revenue growthaffected by
higherproduction
costs and newproduct
introduction aswell as softpricing of
keypads atEMS
MechatronicsMechatronicsDivisionDivision’’ss
revenue growthrevenue growthaffected byaffected by
higherhigherproductionproduction
costs and newcosts and newproductproduct
introduction asintroduction aswell as softwell as softpricing ofpricing of
keypads atkeypads atEMSEMS
-15%-15%
-14%-14%
-4%-4%
-19%-19%
-33%-33%
3Q FY2007 – Financial Highlights
ElectroTech Investments Limited
3Q FY2007 Results Briefing
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Sequential Performance
ElectroTech Investments Limited
3Q FY2007 Results Briefing
(S$ million)
6.085.86
5.48
7.58
6.356.416.01
51.17
57.3954.43
59.16 56.79
61.4364.29
0
2
4
6
8
10
12
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
0
10
20
30
40
50
60
70
Net Profit Revenue
Caused by volatilityCaused by volatilityof keypad segmentof keypad segment
Structural shift in product mix forlong term stability at EMS Division
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+ 24%
+ 17%
33.9
3.5
10.3%
42.0
4.1
9.7%
Revenue
NPAT
Net ProfitMargin
3Q FY2007 3Q FY2006 % ChangeMechatronics(S$m)
% Contribution toMechatronics Division
30%
36%
27%
% Change
+ 12%
+ 44%
+ 29%
Semiconductor
Medical
Analytical
Revenue Breakdown by Business Segment
+ 8%
- 30%
20.6
3.0
14.7%
22.3
2.1
9.5%
Revenue
NPAT
Net ProfitMargin
3Q FY2007 3Q FY2006 % ChangeEMS(S$m)
% Contribution toEMS Division
48%
7%
18%
11%
% Change
- 22%
- 3%
+ 86%
+ 185%
Telco - Keypad
- Others
Office Automation
Automotive
Revenue Breakdown by Business Segment
3Q FY2007 – Division Highlights
ElectroTech Investments Limited
3Q FY2007 Results Briefing
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23.7%
19.7%
17.7%
18.8%
6.4%4.0%
9.7%
Revenue Breakdown by Division Revenue Breakdown by BusinessSegment
Semiconductor
Analytical
Telecommunications
Medical
Others
Automotive OfficeAutomation
65.3%
34.7%
Mechatronics
EMS
3Q FY2007 – Revenue Breakdown
ElectroTech Investments Limited
3Q FY2007 Results Briefing
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RevenueRevenue
(S$m)(S$m)
Gross Profit
Profit before Tax
Net ProfitNet Profit
182.5 163.0182.5 163.0
Net Profit Margin
30.9 34.7
21.7 24.7
17.4 18.817.4 18.8
10% 12%
Effective Tax Rate 20% 24%
YTD SeptYTD Sept20072007
MechatronicsDivision’s
revenue andnet profit
growth on trackwhile EMS
undergoes shiftin sales mix for
longer termearningsstability
MechatronicsMechatronics
DivisionDivision’’ssrevenue andrevenue and
net profitnet profitgrowth on trackgrowth on track
while EMSwhile EMSundergoes shiftundergoes shiftin sales mix forin sales mix for
longer termlonger termearningsearnings
stabilitystability
-11%-11%
-12%-12%
-7%-7%
-17%-17%
-17%-17%
YTD SeptYTD Sept20062006
Chg YOYChg YOY
12%12%12%
YTD Sept 2007 – Financial Highlights
ElectroTech Investments Limited
3Q FY2007 Results Briefing
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+ 22%
+ 24%
103.6
11.0
10.6%
125.9
13.6
10.8%
Revenue
NPAT
Net ProfitMargin
YTD Sept2007
% ChangeMechatronics(S$m)
% Contribution toMechatronics Division
34%
32%
27%
% Change
+ 26%
+ 28%
+ 24%
Semiconductor
Medical
Analytical
Revenue Breakdown by Business Segment
- 5%
- 52%
59.4
8.1
13.6%
56.6
3.9
7.0%
Revenue
NPAT
Net ProfitMargin
% ChangeEMS(S$m)
% Contribution toEMS Division
50%
6%
19%
9%
% Change
- 27%
- 25%
+ 52%
+ 150%
Telco - Keypad
- Others
Office Automation
Automotive
Revenue Breakdown by Business Segment
YTD Sept2006
YTD Sept2007
YTD Sept2006
YTD Sept 2007 – Division Highlights
ElectroTech Investments Limited
3Q FY2007 Results Briefing
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30 Sep 200730 Sep 2007 31 Dec 2006 % Change31 Dec 2006 % ChangeBalance Sheet HighlightsBalance Sheet Highlights (S$m)(S$m)
Shareholders’ Equity 171.3 159.8
Cash & Cash Equivalents * 38.8 46.2
Total Borrowings 1.5 1.0
3.0 17.4Net cash flow from operations
Capital expenditure 5.6 5.7
YTD Sep 07YTD Sep 07 YTD Sep 06YTD Sep 06 % Change% ChangeCash Flow HighlightsCash Flow Highlights (S$m)(S$m)
Balance Sheet HighlightsBalance Sheet Highlights (Days)(Days)
Inventories Turnover
Accounts Receivables Turnover
Accounts Payables Turnover
30 Sep 2007 31 Dec 200630 Sep 2007 31 Dec 2006
87 77
85 75
82 88
* Include short term funds with a financial institution
-83%-83%
-16%-16%
7%7%7%
Financial Highlights
ElectroTech Investments Limited
3Q FY2007 Results Briefing
50%50%50%
-2%-2%
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4%4%4%
14.0 17.2ROAE (%) - Annualised
EBIT interest coverage *
Earnings per share (cents)
Net assets per share (cents)
* EBIT interest coverage = Profit before interest & tax / Interest on borrowings
YTD SepYTD Sep 0707
290.2 278.2
5.71 6.16
56.22 49.57
Key Financial IndicatorsKey Financial Indicators
Represented by
Other Assets (78%)43.98 cts
Net Cash (22%)12.24 cts
-7%-7%
-19%-19%
18.7 23.4ROAE (ex-Net Cash) (%) - Annualised
YTD Sep 06YTD Sep 06 % Change% Change
-20%-20%
13%13%13%
Key Financial Indicators
ElectroTech Investments Limited
3Q FY2007 Results Briefing
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Business ReviewBusiness ReviewMechatronics DivisionMechatronics Division
Mechatronics DivisionBusiness Review
3Q FY2007 Results Briefing
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13.514.8 15.5
16.8 16.415.7
13.7
15.416.4
18.8
16.7
18.9
20.6 20.8 20.3
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(Euro millions)
+22%
Mechatronics DivisionSales – Quarterly Performance
2004 2005 2006 2007
3Q FY2007 Results Briefing
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1.4
1.6 1.6 1.6
2.1
1.9
1.3
1.5
1.7
2.1
1.7
2.1
2.32.4
2.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(Euro millions)
+18%
3Q FY2007 Results Briefing
Mechatronics DivisionNet Profit After Tax – Quarterly Performance
2004 2005 2006 2007
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4.00
4.56 4.705.08
4.58
3.47
2.39
4.22
5.21
6.42
5.56
6.59
7.347.66
6.09
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(Euro millions)
+10%
Revenue growth of +10% yoy and -20% over the previous quarter
In line with previous guidance that 2H FY2007 sales expected to be lower than 1H FY2007
3Q FY2007 Results Briefing
Mechatronics DivisionSales Analysis – Semiconductor Segment
2004 2005 2006 2007
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4.01 3.82 3.90
4.53
3.85
4.484.92
6.00
5.025.44 5.23
5.60
6.13 6.06
7.36
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(Euro millions)
+41%
Revenue growth of +41% yoy and +21% over the previous quarter
Launched mass production of major project for existing customer
3Q FY2007 Results Briefing
Mechatronics DivisionSales Analysis – Medical Segment
2004 2005 2006 2007
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4.02
4.61 4.75
5.31
6.29 6.22
4.83
3.73
4.44
5.05
4.37
4.84
5.64 5.67 5.48
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(Euro millions)
+25%
Revenue growth of +25% yoy and -3% over the previous quarter
3Q FY2007 Results Briefing
Mechatronics DivisionSales Analysis – Analytical Segment
2004 2005 2006 2007
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3Q FY2007 Results Briefing
Mechatronics DivisionCurrent Plans & Development (status update as at Nov 2007)
Expanded Assemblyand Warehouse
Facilities atFrencken
Mechatronics
Fully operational since June 2007
New facility is fully dedicated to the expanding medical business segment
CompletedRenovation and
Expansion ofFrencken Malaysia
Commercial production launch of assembly modules for the medicalbusiness segment has started in Oct 2007, with volume expected to growgradually from 4Q FY2007 onwards
Various new assembly projects are planned to be launched over the nextfew years
Operational andCapital Investments
Upgrading ERP system for optimized planning, inventory control and overalldelivery performance
Expanding “turning” process capacity to fulfill expectations of higherrequirements from existing customer
New investment in sheet metal CNC laser cutting machine to improveproductivity, precision and automation of operations
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Outlook remains good
Revenue in FY2007 expected to be around 15% to 20% higher than FY2006
Near-term concern that weakening USD could translate into selling price pressure
3Q FY2007 Results Briefing
Mechatronics DivisionOutlook for FY2007 (status update as at Nov 2007)
Semiconductor
Sales revenue in 4Q FY2007 is expected to be marginally higher than 3Q FY2007
Revenue in FY2007 to be higher than FY2006
Medical
Strong growth in 3Q FY2007 is expected to continue into 4Q FY2007
Orders for a new customer and mass production launch of a major project for an existing customer
Revenue in FY2007 expected to be significantly higher than FY2006
Analytical
Current visibility indicates revenue in 4Q FY2007 to be at similar level to 3Q FY2007
Revenue in FY2007 to be higher than FY2006
Based on current visibility,
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To be the first choice design, development and production partner of highaccuracy industrial systems/equipment for OEMs
To do our utmost to enable our clients to be successful in their market
Mission Statement
Strategy
Market Focus:
Semiconductor Medical Analytical Others – such as energy and environment
Sustainable revenue growth of 10% to 20% year-on-year
Growth based on development and re-engineering products for existing and new customers Focus on assembly projects to expand revenue, while increasing outsourcing of machined components
Focus on the 3 Best OEM companies in each business and market segment
Aim to be the Best in Class Mechatronics company and stay ahead of our competitors
3Q FY2007 Results Briefing
Mechatronics DivisionBusiness Strategy
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EMS Division
Business ReviewBusiness ReviewEMS DivisionEMS Division
3Q FY2007 Results Briefing
EMS DivisionBusiness Review
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22.2
35.839.5
42.3 41.3
51.5
46.8 46.642.9 44.3
46.7 48.2
33.8
41.3
49.6
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(RM millions)
+6%
3Q FY2007 Results Briefing
EMS DivisionSales – Quarterly Performance
2004 2005 2006 2007
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0.4
4.3
7.6 7.7
5.9
7.4
8.9
7.7
6.7
5.3
7.4
8.1
2.0 2.0
4.9
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(RM millions)
-34%
3Q FY2007 Results Briefing
EMS DivisionNet Profit After Tax – Quarterly Performance
2004 2005 2006 2007
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7.30
20.14
23.72
25.53
23.20
28.23 28.54
30.88
28.98 28.75
31.66 32.71
20.9319.33
24.43
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(RM millions)
-23%
Dip of 23% yoy and +26% as compared to the previous quarter
Improved turnover over the previous quarters of 2007 but market conditions remainchallenging due to volatile revenue, short visibility and lower margins
3Q FY2007 Results Briefing
EMS DivisionSales Analysis – Keypad Segment
2004 2005 2006 2007
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9.13
7.45
8.72
9.74
11.82
14.82
9.53
3.33
5.48 5.415.16
6.40
4.97
9.68 9.40
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
(RM millions)
+82%
Revenue growth of 82% yoy and -3% as compared to the previous quarter
Revenue growth in FY2007 derived from existing products and customers
3Q FY2007 Results Briefing
EMS DivisionSales Analysis – Office Automation Segment
2004 2005 2006 2007
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ContinuousUpgrading of
Facilities to matchFuture Business
Needs
New final test and assembly area with ESD flooring completed in October 2007.
Planning further expansion of the assembly area to cater for expected growth of
electro-mechanical products in the coming years.
New production area for “sputtering” process expected to be completed andoperational by December 2007.
IntegratedManufacturingServices (IMS)
Capital Investmentsto Expand our
Service Offerings
3Q FY2007 Results Briefing
EMS DivisionCurrent Plans & Development (status update as at Nov 2007)
Target date of official integration may be delayed, subject to readiness of theERP system.
Completed consolidation of the Technical & Engineering departments which areundergoing expansion to cater for new projects in the automotive and officeautomation business segments.
Supply Chain, Human Resource and Quality Departments – transiting towardsthe consolidated group structure.
Two (2) units of sputtering machines together with supporting facilities will becommissioned and tested in Dec 2007/Jan 2008. Commercial productionscheduled to commence in 1QFY2008.
Additional 2 units of double injection moulding machine commissioned in earlyNovember 2007 (bringing the total no. to 4) to cater for additional demand fromthe automotive business segment.
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FY2007 revenue estimated to be lower than FY2006
Current visibility indicates 2H FY2007 revenue to be higher than 1H FY2007
Keypads
Anticipate slight improvement in sales revenue in 2H FY2007 as compared to 1H FY2007
Revenue in FY2007 estimated to be about 25% lower than FY2006
Envisage a more stable start in 1H FY2008 based on new models secured/under negotiation
Office Automation
Automotive
3Q FY2007 Results Briefing
EMS DivisionOutlook for FY2007 (status update as at Nov 2007)
Revenue in FY2007 expected to be higher than FY2006
Mass production of one current development project to launch in Dec 2007.
New industrialisation programmes in the pipeline
Optimistic of longer term growth prospects
Steady revenue growth in FY2007, compared to FY2006
Progressive mass production launch of various new projects over the next 12 months will enhance revenuegrowth in 2008 and beyond
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To be the first choice supplier to our customers
Continuously strive to be the Best in Class in the markets we operate in
Mission Statement
Strategy
Market Focus:
Telecommunications Office Automation Automotive
In the midst of transition to achieve longer term stability
Continued focus on the automotive and high end office automation business segments requires longer industrialisation and qualification period for stable revenue and longer product life cycles
Shaping these two segments as the key growth drivers of the EMS Division in coming years
Short term decline – transiting to longer term stability
3Q FY2007 Results Briefing
EMS DivisionBusiness Strategy
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3Q FY2007 Results Briefing
EMS DivisionProgressive Shift in Revenue Mix (status update as at Nov 2007)
3.4%
12%19.2%
65.4%
FY2006 (Actual) FY2010 (Projected)
Keypads
OthersOA
Automotive
Keypads
Automotive
Others
OA
FY2007 (Estimated)
Keypads
Others
OA
Automotive
~ 50%
~ 10%
~ 20%
~ 30%
~ 20%
~ 20%
~ 30%
~ 20%
ENHANCE LONG-TERM STABILITYWITH A MORE BALANCED
REVENUE MIX
ENHANCE LONG-TERM STABILITYWITH A MORE BALANCED
REVENUE MIX
TRANSITIONALDIP
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3Q FY2007 Results Briefing
EMS DivisionProjects in OA and Automotive segments
Some of the industrialisation programs include :
2008 2009 20102007
OA #1
OA #2
RM 15 – 20 million
RM 4 - 5 million
OA #3RM 14 - 17 million
RM 20 - 22 million
OA #4RM 10 – 12 million
Auto #1
RM 6 – 8 millionAuto #2
RM 12 – 14 million
Auto #3
ProductLife Cycle
5-7 years
5-7 years
5-7 years
5-7 years
5 years
3-5 years
5 years
*Estimated start of production and revenues are subject to change
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ThankThank YouYou
ElectroTech Investments LimitedEnd of Presentation
3Q FY2007 Results Briefing
Investor Relations ContactOctant Consultingtel (65) 6220 2842herman@octant.com.sg or lisa@octant.com.sg
ElectroTech Investments LimitedPlot 410, Lorong Perusahaan 8BPrai Industrial EstatePrai 13600, MalaysiaWebsite : www.electrotechgroup.com
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