sat production tai & fti prod forecast domestic sales export sales asia’s recovery thousand...

SATSAT... To Become the Auto Parts Manufacturing Leader in ASEAN... To Become the Auto Parts Manufacturing Leader in ASEAN……

2008 Operating Results2008 Operating Results

11stst April 2009April 2009

Agenda

• Industry Overview

• Group Business

• Performance Review

• Future Outlook

• Appendices

3

Thailand Car Production & Sales

906

(-35%)

1,394

1,2871,188

1,125

928

751

585

459412

327

158

360

1,080

(- 22.5%)

488,000

(-21%)

615,270631,251

682,161

703,261

626,026

533,176

409,362296,985

262,189

218,330144,065

363,156

690,100

538,966

440,705

332,053

235,122

775,652592,000

(-24% )

175,299

181,471

152,835125,70267,857

42,218

0400

800

1,200

1,600

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009F

Actual Production TAI & FTI Prod Forecast Domestic Sales Export Sales

Asia’s Recovery

Thousand units

Asia Financial Crisis of 1997-98

Source: 1997-2008 Federation of Thai Industry

Estimated by SAT

4

Thailand Auto Production : 2009F vs 2008A

Source: The Federation of Thai Industries

Production

Dom Exp Total Dom Exp Total Dom Exp Total

P/U & PPV 359,178 615,597 974,775 291,980 489,183 781,163 -19% -21% -19.9%

P/C 233,359 168,115 401,474 179,855 103,554 283,409 -23% -38% -29.4%

CV 17,780 - 17,780 16,129 - 16,129 -9% - -9.3%

Total 610,317 783,712 1,394,029 487,964 592,737 1,080,701 -20.0% -24.4% -22.5%

Production

Ratio Dom Exp Total Dom Exp Total

P/U & PPV 59% 79% 70% 60% 83% 72%

P/C 38% 21% 29% 37% 17% 26%

CV 3% 0% 1% 3% 0% 1%

Total 100% 100% 100% 100% 100% 100%

Growth2008A 2009F

2008A 2009F

5

2M09 Car Production & Sales

Source: TAIA

Units % Growth Units % Growth

Toyota 55,555 -42.3% 64,034 -23.6%

Isuzu/GM 14,854 -62.8% 24,109 -35.2%

Mitsubishi 18,220 -26.5% 18,353 -25.6%

Honda 17,455 -27.7% 19,758 -30.6%

Nissan 8,692 -38.6% 10,365 -15.6%

AAT (Ford&Mazda) 14,622 -34.2% 16,808 -14.7%

Others 4,125 -59.5% 7,082 -48.6%

133,523 -42.4% 160,509 -27.0%

2M09 Production Sales

(By Brand)

Total

Units % Growth Units % Growth

Domestic P/C 10,228 -47.2% 14,587 -19.4%

P/U 5,064 -86.1% 17,563 -37.4%

Others 1,166 -31.0% 2,211 -34.9%

16,458 -71.4% 34,361 -30.7%

Export P/C 5,721 -62.5% 5,721 -62.5%

P/U 38,888 -23.5% 38,888 -23.5%

44,609 -32.5% 44,609 -32.5%

Total P/C 15,949 -54.0% 20,308 -39.1%

P/U 43,952 -49.6% 56,451 -28.4%

Others 1,166 -31.0% 2,211 -34.9%

61,067 -50.6% 78,970 -31.7%

Total Domestic

Total Export

Grand Total

February 2009 Production Sales

(By Type) Units % Growth Units % Growth

Domestic P/C 20,398 -39.7% 28,499 -17.0%

P/U 16,735 -76.0% 33,785 -37.9%

Others 2,327 -32.0% 4,162 -36.5%

39,460 -63.2% 66,446 -30.3%

Export P/C 14,666 -49.2% 14,666 -49.2%

P/U 79,397 -17.1% 79,397 -17.1%

94,063 -24.5% 94,063 -24.5%

Total P/C 35,064 -44.1% 43,165 -31.7%

P/U 96,132 -41.9% 113,182 -24.6%

Others 2,327 -32.0% 4,162 -36.5%

133,523 -42.4% 160,509 -27.0%

Production Sales

(By Type)

2M09

Total Domestic

Total Export

Grand Total

2009 vs 2008 Jan Feb YTD Growth

%Production Growth -33.0% -50.6% -42.4%

%Sales Growth -21.8% -31.7% -27.0%

6

133,523

231,680

66,446

95,280 94,063

124,578

0

50,000

100,000

150,000

200,000

250,000

2M08 2M09

Production Domestic Sales Export Sales

Units

42%

-30%

-24%

Prod

Dom Sales

Exp Sales

Pick Up & PPV84%

Passenger16%

Pick Up & PPV51%

Passenger43%

Others6%

Pick Up & PPV72%

Passenger26%

Others2%

2M09 Car Production & Sales

Source: TAIA

7

2M09 Export Car Sales Destinations

Source: TAIA

19% 21%

35%

24% 24%

21%

23%24%

21%13%

12%

9%15% 13%

8%

7%6.99% 6.60%

0%

25%

50%

75%

100%

2M08 2008 2M09

124,578 Units%

Middle East (+40%)

Aus, NZ & Oceania (-32%)

Asia (-30%)

Central&S. America (-49%)

Europe (-62%)Africa (-28%)

775,652 Units

94,063 Units

8

Eco-car Projects UpdateSBG’s Order ProgressOEM UpdateCarmakers

• 2-Week temporarily shutdown expected in Feb 09 to setup machinery (postponed from 4Q08)

• Progress as plan and will launch ~ 4Q09

• Project will go as plan (2012)

• Evaluating industrial estates for 500-rai land for construction of the manufacturing facility

• Project will go as plan (2010)

• Insist to proceed eco-cars, but postpone

• Launching year may be postponed from 2010 to 2012

• Project remains on track • Expected to first launch~ Feb 10

• Launching to postpone from 10/2010 to 3/2011

• Land purchased but factory construction to be postponed another year

• Launching year may be postponed from 2010 to 2011

• Front & Rear spring confirmed• RFQ of another model from Japan

submitted (to launch ~ May 10)Nissan

• SBG’s technology does not support this model

AAT(B Car)

• Waiting for DrawingToyota

• Waiting for DrawingTATA

• Drawing expected ~ Mid 09Mitsubishi

• RFQ submitted• Confirmation expected ~ May 09

Honda

• RFQ receivedSuzuki

9

Strategies of Japanese Carmakers

Regional Training center

Global parts supply base

Productio

n base o

f

Compact

car

Production/Export

base of 1 ton

pick-up truck

R&D function

Recent

movements of

Compact car

• Cost competitiveness• Better products with lower costs

• Export opportunities to India with the expansion of Japanese carmakers operations

• Upgrading technical skills

• Paradigm shift may occur in terms of CO2emission

Implications to Thai auto industries

Source: JETRO, Bangkok as of March 2009

Agenda


• Group Business


• Future Outlook

• Appendices

11

BSK

28%NHK

71%

Other

1%

SMT

9%

Other

5%SAT

86%Market share

Y2008

Rear Axle Shaft Target 85 %Rear Axle Shaft Target 85 %

Customer Model

Toyota (100%) Fortuner, Vigo

Mitsubishi (100%) Strada, Triton

AAT (Mazda & Ford) (100%) BT-50, Everest

Isuzu (66%) D-Max 4x4, 2x4 , 4x2 (3,000cc. Only), MU-7

Market share

Y2008

Coil Spring Target 28 %Coil Spring Target 28 % Customer Model

Mitsubishi (29%) Lancer (Rear)

Toyota (6%) Camry (Rear)

Honda (8%) Jazz

Customer Model

Toyota (55%) Fortuner, Vigo 4x4


P/U

P/U

P/C

Market Share of Product Champions

12

SBM

27%

AISIN

50%

KIRIU

4%OTHER

15%

SBM

29%

AISIN

66%

OTHER

1%KIRIU

4%

Market share

Y2008

Disc Brake Target 27.7 %Disc Brake Target 27.7 %

Market share

Y2008

Drum Brake Target 35 %Drum Brake Target 35 %

Customer Model

Mitsubishi Fuso Truck (89%) Trucks

Customer Model

Honda (100%) Jazz/City, Civic, Accord, CR-V

Mitsubishi (22%) Space Wagon

Customer Model


Customer Model


Isuzu (66%) D-Max 4x4, 2x4, 4x2 (3,000 cc. only), MU-7

Customer Model

Honda (22%) Jazz/City

P/C

P/U

Commercial car

P/C

P/U


13

BSK

3 5 %

Ot her

1%

NHK

6 4 %

BSK

17%

NHK

83% Market share

Y2008

Leaf SpringLeaf Spring

Market share

Y2008

Stabilizer Bar Target 31%Stabilizer Bar Target 31%Customer Model

Mitsubishi (29%) Lancer

Honda (40%) Jazz/City/Accord (RR)

Toyota (23%) New Altis (FR)

Customer Model

Toyota (51%) Fortuner, Vigo 4x4


Nissan (93%) Frontier 4x2, Navara

Customer Model


Customer Model

Hino (1%) Bus

Mitsubishi Fuso Truck (100%) Trucks

P/U

P/C

P/U

Commercial car


14

SBM

20%AISIN

60%

CALSONIC

1%OTHER

19%

Exhaust ManifoldExhaust Manifold

Market share

Y2008

Customer Model

Mitsubishi (51%) Lancer

Customer Model


AAT (100%) BT-50, Everest


P/C

P/U

15Note : Full Capacity= 500 hrs./month

2009F2008

Per Month %utilization

(Revised as of Mar 09)

%utilization

(Revised as of Feb 09)

Pieces%utilizationPieces

63%

50%

76%

75%

65%

51%

72%

50%

60%

86%

80%

95%

89%

75%

65%

79%

60%

90%

1,500

11,000

46,000

95,000

100,000

109,000

255,000

210,000

1,500

11,000

46,000

95,000

100,000

109,000

255,000

240,000

50%Leaf Spring (tons)

51%Axle Shaft

45%Coil Spring

65%Exhaust Manifold

60%Drum Brake

54%Weighted Utilization rate

65%Fly Wheel

45%Stabilizer Bar

60%Disc Brake

Revised Full Capacity and Utilization Rate

Agenda


• Group Business


• Future Outlook

• Appendices

17

1,459

1,603

1,345 1,439

1,575

1,323

212202136 100

183168

0

250

500

750

1,000

1,250

1,500

1,750

2,000

4Q07 3Q08 4Q08

Bt.mn

Revenues Sales NOPAT Net Profit

Revenues and Profits

18

Leverage and Profitability Ratios

1.481.48

8.548.48

11.63

7.01

0

5

10

15

3Q08 4Q08

DER BVPS Interest Coverage

Times

0.90

0.74

20.85%

29.77%

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

3Q08 4Q08

15%

20%

25%

30%

35%

40%

EBITDA/CAPEX ROFA

Times %

19

17.36%

31.61%

23.34%

14.63%17.81%

10.78%

0%

15%

30%

45%

3Q08 4Q08

ROE ROCE ROIC

Return to Shareholders

ROCE = EBIT/(Total Assets-Current Liabilities)ROIC = NOPAT/(Net Debt+Equity)

20

Financial HighlightsUnit: Bt.mn 4Q07 3Q08 4Q08 YoY QoQ 2007 2008 YoY

Sales 1,323 1,575 1,439 9% -9% 4,979 5,814 17%

Total Revenue 1,345 1,603 1,459 8% -9% 5,078 5,935 17%

GP 312 323 233 -25% -28% 1,097 1,159 6%

SG&A 106 99 100 -6% 1% 359 371 4%

EBITDA 335 334 250 -25% -25% 1,158 1,263 9%

NOPAT 202 212 136 -33% -36% 715 768 7%

Net Profit 168 183 100 -41% -45% 591 635 7%

Total Assets 5,253 6,308 6,360 21% 1% 5,253 6,360 21%

Int. Bearing Debt 2,245 2,423 2,597 16% 7% 2,245 2,597 16%

Total Liabilities 3,207 3,765 3,800 18% 1% 3,207 3,800 18%

Equity 2,046 2,543 2,561 25% 1% 2,046 2,561 25%

Depreciation 102 89 94 -8% 6% 307 357 16%

CAPEX 177 373 337 91% -10% 577 1,025 78%

Effective Tax Rate 15.3% 15.3% 16.7% 18.7% 17.8%

21

4Q07 3Q08 4Q08 2007 2008

GPM (%) 23.59 20.50 16.19 22.03 19.94

EBITDAM (%) 24.87 20.86 17.14 22.80 21.27

NPM (%) 12.51 11.44 6.85 11.64 10.69

ROA (annualized) (%) 13.58 12.56 6.89 11.93 10.93

ROFA (annualized) (%) 35.17 29.77 20.85 29.20 26.62

EBITDA/CAPEX (Times) 1.89 0.90 0.74 2.01 1.23

ROE (annualized) (%) 34.16 31.61 17.36 30.00 27.55

ROCE (annualized) (%) 24.84 23.34 14.63 22.74 21.25

ROIC (annualized) (%) 19.81 17.81 10.78 17.54 15.25

IBD/Equity (Times) 1.10 0.95 1.01 1.10 1.01

DER (Times) 1.57 1.48 1.48 1.57 1.48

Int. Coverage (Times) 9.95 11.63 7.01 9.32 9.51

EPS (Bt.) 0.56 0.61 0.33 1.97 2.12

BVPS (Bt.) 6.82 8.48 8.54 6.82 8.54

Key Financial Ratios

SECTOR => AH, STANLY, SAT, TSC, YNP

9.1

10.8

0.5

12.6

16.5

6.3

22

Sales Breakdown

36% 35% 33% 31% 29%

13%10% 10% 11% 14%

14%12% 12% 11% 12%

5%

5% 4% 5% 4%

4%

4% 5% 4% 4%

6%

6% 7%7% 7%

6%

6% 6%

15%21% 21%

25% 25%

7%7%

0%

25%

50%

75%

100%

4Q07 1Q08 2Q08 3Q08 4Q08

Domestic94%

OEM97%

1,4011,398

Axle Shaft

Leaf Spring

Disc & Drum Brake

Exhaust ManifoldFly Wheel (+Comp)Stabilizer Bar

Coil Spring

Others (i.e. Big Hub, Bracket, Timing Cover, Camshaft)

1,323

Bt.mn

1,4391,575

23

Customer Base

29% 31% 32% 34% 32%

24% 24% 23% 21% 23%

5%8% 8% 8% 8%

7%

5%

27% 25% 26% 26%

7%10%

6%9%

5%5%5%

5%

23%

0%

25%

50%

75%

100%

4Q07 1Q08 2Q08 3Q08 4Q08

Mitsubishi

Toyota

Honda

IsuzuAAT

Others

Pickup+PPV~ 80%

Bt.mn

1,4011,3981,323 1,575 1,439

24

2009 Capital Expenditures

Unit: Million Baht

1Q09 2Q09 3Q09 4Q09

R&D (SBM) 55.0 Machinery 32.1

R&D (BSK) 60.0 Machinery 60.0

Kubota (10 new parts, 50K) 130.0 Machinery 125.0 48.3 33.1 13.0

Kubota (Rotary Blade) 135.0 Machinery 135.0

Kubota (Axle Shaft) 81.0 Machinery 27.0

Total Amount 461.0 81.9 379.1

Loans 319.6 81.9 259.6

Internal Cash Flow 119.5 119.5

Payment Plan

in 2009

Payment ScheduleProject DescriptionCapex Amount

Agenda


• Group Business


• Future Outlook

• Appendices

26

The Road Aheadtowards global crisis

ExploitOpportunity

Cost Reduction

FocusOn

“Value”

CashFlowMgt.

� Exploit Opportunities� Axle Shaft in US and Brazil� Coil Spring in India� More expanding to non-auto business

� Cost Reduction� Freeze manpower and cut overtime-pay� Reduce electricity expense by switching production from peak to non-

peak hours� Improve productivity� Lower inventory level� Global sourcing for RM competitive price

� Cashflow management: � Avoid pre-payment transaction � Obtain secured LT loan under favorable conditions

� Focusing on “Value”� R&D to enhance capability of product design and development

27

Backlogs and Projects on Hand

Axle Shaft

On plan2010749 (4)Hino

Postponed from May10

October 20111,190 (7)American Axle (for GM Thailand)

Axle Shaft

Rotary Blade

April 2010

4Q09

June 2009

Mass Run

3Q09

Mass Run

Confirmed1,820 (6)Kubota

audit approval done since 2008

500,000 (5)(~ Bt 2,250 mn)

Toyota (forging), USA

To be confirmed~ May09

190,000 (5)(~ Bt 900 mn)

American Axle (for VW, Brazil)

Coil Spring

sample to be submitted ~ September09

90,000 (5) (~ Bt 110 mn)

Toyota (Vigo), India

Progressunits/yr (yrs)Projects on hand

ProgressBt.mn. (yrs)Backlogs

Agenda


• Group Business


• Future Outlook

• Appendices

29

Details of 2008 Thailand Car Production & Sales

Quarterly OverviewQuarterly OverviewQuarterly Overview ProductionProductionProduction Domestic & Export SalesDomestic & Export SalesDomestic & Export Sales

Units % Units % %Growth

Pick-up 1 Ton

Toyota 363,658 38% 397,179 41% 9%

Isuzu 236,929 25% 227,366 23% -4%

Mitsubishi 163,566 17% 165,647 17% 1%

AAT 135,026 14% 128,242 13% -5%

Nissan 49,209 5% 55,638 6% 13%

Others 0% 570 0% n.a

Total Pick-up 948,388 100% 974,642 100% 3%

Passenger car

Toyota 138,084 44% 180,324 45% 31%

Honda 141,322 45% 162,982 41% 15%

Nisssan 14,314 5% 18,089 5% 26%

Mitsubishi 3,908 1% 7,152 2% 83%

Others 17,816 6% 32,762 8% 84%

Total Passenger 315,444 100% 401,309 100% 27%

Others

Total Others 23,514 17,791 -24%

1,287,346 1,393,742 8%

Production (YoY)

FY07 FY08


Pick-up 1 Ton

Toyota 173,205 42% 141,262 42% -18%

Isuzu&GM 155,782 38% 137,656 41% -12%

Nissan 32,587 8% 23,682 7% -27%

Mitsubishi 22,416 5% 19,632 6% -12%

Ford 25,261 6% 14,977 4% -41%

Others 0 0% 262 0% n.a

Total Pick-up 409,251 100% 337,471 100% -18%

Passenger car

Toyota 92,531 52% 106,856 45% 15%

Honda 58,525 33% 90,807 38% 55%

Nissan 4,564 3% 7,541 3% 65%

Mazda 3,237 2% 4,183 2% 29%

Mitsubishi 3,180 2% 3,749 2% 18%

Others 17,335 10% 23,629 10% 36%

Total Passenger 179,372 100% 236,765 100% 32%

Others

Total Others 42,628 100% 41,034 100% -4%

631,251 615,270 -3%

Domestic Sales (YoY)

FY07 FY08


Pick-up 1 Ton

Toyota 187,328 35% 240,863 40% 29%

Mitsubishi 145,139 27% 139,348 23% -4%

AAT 115,333 21% 113,065 19% -2%

Isuzu&GM 81,760 15% 80,329 13% -2%

Nissan 8,847 2% 32,945 5% 272%

Others 0 0% 0 0% n.a

Total Pick-up 538,407 100% 606,550 100% 13%

Passenger car

Honda 80,096 53% 72,497 43% -9%

Toyota 50,446 33% 72,259 43% 43%

Nissan 13,217 9% 9,616 6% -27%

Mitsubishi 1,113 1% 3,972 2% 257%

Others (GM,Bmw) 6,821 4% 10,758 6% 58%

Total Passenger 151,693 100% 169,102 100% 11%

690,100 775,652 12%

FY07 FY08

Export Sales (YoY)

2007 2008 ∆

1Q 293,635 365,623 25%

2Q 305,901 353,566 16%

3Q 333,870 349,243 5%

4Q 353,940 325,310 -8%

YTD 1,287,346 1,393,742 8%

2007 2008 ∆

1Q 292,790 359,286 23%

2Q 306,997 347,559 13%

3Q 345,053 353,344 2%

4Q 376,511 330,733 -12%

YTD 1,321,351 1,390,922 5%

2007 2008 ∆

1Q 138,270 161,736 17%

2Q 154,244 159,739 4%

3Q 158,812 139,783 -12%

4Q 179,925 154,012 -14%

YTD 631,251 615,270 -3%

2007 2008 ∆

1Q 154,520 197,550 28%

2Q 152,753 187,820 23%

3Q 186,241 213,561 15%

4Q 196,586 176,721 -10%

YTD 690,100 775,652 12%

Export Sales

Production

Total Sales

Domestic Sales

30

Group Development• A well established and reputable vehicle parts manufacturer, with

concentration on the OEM market.

• The Group started its automotive parts manufacturing business in1962, and is considered as one of Thai pioneers in the business.

• Establishment of Somboon Spring Ltd.

• Establishment of Somboon Malleable Iron (SBM)

• Establishment of Bangkok Spring Industrial (BSK)

• Began the move into OEM market

1962

• Establishment of Somboon Advance Technology (SAT)

• Start to supply TOYOTA

• Group Restructuring

• Listed on SET

1975

1977

1995

20022004 2005

2007

• Acquiring ICP by 100% shareholding

31

Group Structure and Business

SAT(Paid Up 300 mb)

SBM(Paid Up 160 mb)

BSK(Paid Up 130 mb)

Tsuchiyoshi Somboon Coated Sand(Paid Up 72 mb)

Yamada Somboon(Paid Up 150 mb)

Nishinbo Somboon Automotive(Paid Up 732.6 mb)

Somboon Somic Manufacturing(Paid Up 300 mb)

100% 100%

21.25% 20.00%

2.90%

1.80%

Somboon Holding 27%Kittapanich Family 26%Thailand Equity Fund 10%Others 37%

Sales ~232 mb, TA~225mb, GPM 10%, NPM 2.6%

Sales ~2,155 mb, TA~1,690 mb, GPM 16%, NPM 5%

Sales ~1,800 mb, TA~1,560mb, GPM 26%, NPM 20%

Sales ~1,830 mb, TA~1,400 mb, GPM 20%, NPM 13%

• Steering Column Assembly• Water Pump Assembly• Oil Pump

• Ball Jointed• Tie Rod End• Outer Track Rod• Stabilizer Linkage

• Brake System

• Casting(Rasin/Sand)

ICP(Paid Up 185 mb)

100%

32

Certificates and Awards• Group Company has been receiving many awards and accreditations of its

unique developing and its production quality-being rate as one of the finest in Supplier List.

• Proven performance since inception in 1972 i.e., QCD grading, Quality Award by MMth (zero defect), TPS (Toyota Production System), QCC award & network by HINO

• ISO 9002, QS 9000, ISO 14001, ISO/TS 16949 (OEMs required)

QQQ

MMM

DDD

CCCSBGSBG

EEE

Thank YouThank You

Somboon Advance Technology Public Company Limited –Investor Relations DepartmentTel. +66 728-8596, Fax. +66 2 728-8513, Email: [email protected], http://www.satpcl.co.th

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