Corporate Presentation 4Q17 Corporate Update & Financial Results 19 September 2017

Transcription

1 (Company No.: 7867-P) Corporate Presentation 4Q17 Corporate Update & Financial Results 19 September 2017 Powered by Twin Engines IR Adviser

2 OPERATIONS REVIEW & GROWTH PLANS Powered by Twin Engines

3 Newly expanded production capacities to support future growth in both industrial and consumer packaging segments.. targeting full utilization in FY2019 Industrial Packaging Consumer Packaging Average monthly sales tonnage (MT 000) Industrial Packaging Stretch Film PP Strapping Band Raffia Prod. Output: 150,000 MT p.a. Location: Pulau Indah, Malaysia & Arizona, USA Prod. Output: 18,000 MT p.a. Location: Melaka Prod. Output: 10,000 MT p.a. Location: Vietnam PE Film Products: Base film Functional films BOPP Film CPP Film Prod. Output: 84,000 MT p.a. Location: Rawang & Ipoh Prod. Output: 60,000 MT p.a. Location: Rawang & Pulau Indah Prod. Output: 12,000 MT p.a. Location: Melaka -0.7% yoy FY14 FY15 FY16 FY17 FY18(E)^ FY19(E)* Consumer Packaging Adhesive Output: 10,000 MT p.a. Location: Malaysia & Indonesia +17.3% yoy FY14 FY15 FY16 FY17 FY18(E)^ FY19(E)* ^Internal estimates * Estimation based on full output Total average monthly sales tonnage Operations Review: Manufacturing 3

4 Growing CPP and BOPP sales push consumer packaging revenue beyond industrial packaging for the first time Segment Revenue (RM mil) FY17 manufacturing revenue rose 7.8% yoy to RM1,669.6 mil (FY16: RM1,549.5 mil) Industrial Packaging Industrial Consumer % yoy % yoy FY16 FY17 Industrial Consumer Total 1, ,669.6 FY17 revenue increased 3.6% to RM832.3 mil (FY16: RM803.7 mil) driven by exports of stretch film and PP strapping band; muted growth attributed to slower exports in 1Q17 which has since normalized 4Q17 revenue grew 14.1% to RM211.3 mil (4Q16: RM185.2 mil) on the back of higher domestic and export sales of stretch film Consumer Packaging FY17 revenue grew 12.3% to RM837.3 mil (FY16: RM745.7 mil) from higher CPP and BOPP sales in line with production ramp up Exports made up 58.7% of FY17 consumer packaging revenue(fy16: 52.8%) 4Q17 revenue rose 19.5% to RM224.0 mil (4Q16: RM187.5 mil) mainly on higher uptake of BOPP film Operations Review: Manufacturing (cont d) 4

5 Operations Review Growth Strategies Financial Highlights Investment Merits Appendix Completed expansion to consumer packaging segment focusing on ramping up production and growing sales 30,000MT Per Annum 24,000 MT PE 6,000 MT BOPP Consumer packaging expansion plan New CPP production line in Melaka 5X 2014 Growth ,000MT Per Annum 84,000 MT PE 60,000 MT BOPP 12,000 MT CPP New BOPP plant in Pulau Indah Completed Aug 2017 Commenced Dec 2016 Commenced Jan 2016 CPP Growing demand from local and export markets TargettofillupcapacityinFY19 BOPP Increasing sales to local and export markets Commissioned 2 nd production line in 2Q17; bringing total BOPP capacity to 60,000 MT p.a. TargettofillupcapacityinFY19 PE Overall production output increased from 60,000 MT p.a. to84,000mtp.a.in2017 Rawang plant o CAPEX of RM21 mil; expansion completed in end-2016 with production output increased to60,000mtp.a. SGWIpoh o CAPEX of RM50 mil; expansion completed in August 2017 with production output increased to 24,000 MT p.a. Growth Plans: Manufacturing 5

6 Operations Review Growth Strategies Financial Highlights Investment Merits Appendix USD25 mil investment in U.S. stretch film plant on track for completion in early On 10 November 2016, Scientex announced CAPEX of USD25 mil to set up new stretch film manufacturing plant in Arizona, U.S. Newly established wholly-owned subsidiary Scientex Phoenix, LLC to undertake the venture New plant to house two stretch film lines with capacity of 30,000 MT p.a. Stretch film Scientex to tap new growth opportunities in North, Central, and South Americaswithestimatedmarketsizeofabout1milMT Currently exporting small volume of stretch film to US; new Arizona plant positions Scientex close to market, allowing for better service and shorter delivery lead time To see synergistic benefits from Scientex s highly-efficient manufacturing operations with savings in logistics costs Expect to benefit from anticipated ample supply of shale gas-based resin Completed acquisition of factory building; operations targeted to commence in early rewinders arrived in April 2017; to ship jumbo stretch film rolls to the U.S. for rewinding into smaller rolls 2 new extruder machines to arrive in Oct & Dec 2017; operations targeted to commence in early-2018 Growth Plans: Manufacturing (cont d) 6

7 Launched RM616.9 mil worth of new properties in FY17 unbilled sales of approximatelyrm500miltoberecognizedoverthenext2to3years FY17 property revenue rose 12.6% to RM733.5 mil (FY16: RM651.5 mil) Group s development projects seeing stable sales and construction progress 4Q17 property revenue increased 11.9% to RM210.8 mil(4q16: RM188.4 mil) Launched 16 new projects worth RM616.9 mil GDV in FY17 (FY16: RM657.8 mil) Mainly for affordable residential properties as well as maiden launch in Ipoh Launched6projectsin4Q17withRM221.9milGDVin Johor and Ipoh Unbilled sales amounted to RM500.0 mil as at 31 July 2017 toberecognizedoverthenext2to3years Operations Review: Property 7

8 Recent landbanking to sustain future launches for next 10 years Recent land acquisition announcements Location: Size: Cost: Acquired: Est. GDV: Ipoh (Meru & Klebang) 80.0 acres RM76.7 mil 2H CY2016 RM600 mil Location: Size: Cost: Acquired: Est. GDV: Rawang 65.3 acres RM85.4 mil Est. 1H CY2018 RM1,000 mil Location: Size: Cost: Acquired: Est. GDV: Melaka (Durian Tunggal) acres RM44.5 mil 1H CY2017 RM600 mil Peninsular Malaysia Location: Size: Cost: Acquired: Est. GDV: Senai (Mukim Kulai) acres RM123.6 mil 2H CY2017 RM2,000 mil Growth Plans: Property 8

9 4Q17 FINANCIAL REVIEW Powered by Twin Engines

10 4Q17 performance reaches record high in corporate history eyeing further growth on the back of increasing sales in manufacturing and property segments 4Q17 4Q16 Change RM'mil FY17 FY16 Change Remarks % Revenue 2, , % Driven by higher contribution in both manufacturing and property devel opment s egments % EBITDA % 15.8% 15.7% 0.1 pt EBITDA margin 16.2% 16.7% (0.5 pt) % PBT % FY17 EBITDA and PBT increased in line with revenue; profit margins slightly dampened due to lower product margin and penetrative pricing strategy in manufacturing segment 13.0% 12.5% 0.6 pt PBT margin 13.2% 13.9% (0.7 pt) % PATMI % 11.2% 9.6% 1.5 pt Net margin 10.6% 10.9% (0.3 pt) Net profit increased in line with above % Basic EPS (sen) % *percentages presented might not reflect absolute figures due to rounding Quarterly Revenue (RM mil) Quarterly PBT (RM mil) Quarterly PATMI (RM mil) *4Q15 and FY15 PBT and PATMI includes RM12.6 million fair value gain on investment properties 4Q/FY17 Income Statement Summary 10

11 Operations Review Growth Strategies Financial Highlights Investment Merits Appendix Property EBITDA increased on the back of rising demand for affordable homes manufacturing segment expected to improve in FY2018 on higher utilization FY16 Group Revenue: RM2,201.0 mil FY17 Group Revenue: RM2,403.2 mil 29.6% 12.6% yoy 30.5% 7.8% yoy 70.4% 69.5% FY16 Group EBITDA: RM367.1 mil FY17 Group EBITDA: RM388.3 mil 51.8% 48.2% 21.0% yoy 59.2% 40.8% (10.6)% yoy Manufacturing Property Manufacturing Property Revenue & EBITDA Segmentation 11

12 Consumer packaging segment leading growth EBITDA declined due to lower product margin RM mil 11.0% 11.1% 637 Manufacturing Revenue & Gross Margin 919 RM mil Manufacturing Revenue (by Segment) FY12 FY13 FY14 FY15 FY16 FY17 Industrial Packaging Consumer Packaging EBITDA & EBITDA Margin RM mil 11.4% 9.1% 8.4% 9.0% 7.1% 9.5% % 1, % 1, % 1, % 1,670 FY17 manufacturing revenue grew 7.8%; lower product margin and penetrative pricing to gain market share Consumer packaging rose 12.3% on increasing contribution from BOPP and CPP lines FY12 FY13 FY14 FY15 FY16 FY17 Revenue Gross Margin FY17 EBITDA declined 10.6% mainly due to lower product margin and penetrative pricing Industrial packaging revenue increased 3.6% attributable to stretch film exports FY12 FY13 FY14 FY15* FY16 FY17 EBITDA EBITDA Margin *Includes RM27.2 mil foreign exchange translation differences Financial Review: Manufacturing 12

13 Property division benefitting from sturdy demand for affordable homes RM mil 44.2% 47.0% Revenue & Gross Margin 44.4% 42.3% 38.5% 39.8% Property segment revenue rose 12.6% due to stable sales and construction progress of Group s development projects FY12 FY13 FY14 FY15 FY16 FY17 Revenue Gross Margin RM mil EBITDA & EBITDA Margin 29.8% 32.3% 30.7% 31.9% 29.2% 31.4% Property segment EBITDA increased 21.0% on higher revenue and product mix FY12 FY13 FY14 FY15* FY16 FY17 EBITDA EBITDA Margin *Excluding RM12.6 million fair value gain from investment properties Financial Review: Property Development 13

14 Strong operational cashflow to reduce borrowings and fund future plans Balance Sheet (RM 000) As at As at Property, Plant & Equipment 1,012, ,519 Due to investments into new manufacturing machinery Inves tment Property & Other Inves tments 25,552 24,967 Land Held & Property Development Costs 665, ,752 Due to acquisition of land in Ipoh and Melaka Investment in Jointly Controlled Entity & Associated Company 55,295 48,666 Inventori es 168, ,010 Trade & Other Receivables 427, ,801 In line with enlarged packaging business Cash & Bank Balances 191, ,601 Deferred Ta x As s ets 18,925 2,651 Intangible Assets 12,134 12,134 TOTAL ASSETS 2,577,789 2,251,101 Tra de & Other Pa ya bles 419, ,754 Borrowi ngs (ST + LT) 467, ,608 Ta x & Deferred Ta x 58,967 55,077 Shareholders Equity 1,535,464 1,175,167 Due to enlarged share capital and retained earnings Mi nori ty Interes t 68,416 66,495 Net Tangible Assets / Share (RM) Remarks Net Gearing 0.18x 0.32x In line with lower borrowings 1 based on mil ordinary shares as at 31 July based on mil ordinary shares after adjusting for 1-for-1 bonus issue completed on 15 August 2016 Balance Sheet (Highlights) 14

15 INVESTMENT MERITS Powered by Twin Engines

16 A high-growth proposition all-round... attractive proxy to the burgeoning packaging sector and Southern Malaysia s affordable property market MANUFACTURING One of the world s largest stretch film producers Consumer packaging segment facilitates entry into burgeoning F&B and FMCG sectors Further integration and expansion initiatives position Group to cater to larger regional clientele and enhance competitiveness PROPERTY DEVELOPMENT Reputable developer in Southern Peninsular Malaysia (Johor & Melaka); extended footprint to Central& Northern region(rawang& Ipoh) Current projects and near-term launches till FY2018 amounting to RM2.4 bil GDV Pipeline GDV of RM8.0 bil on existing landbank to sustain another 10 years Future projects displaying higher GDV/acre Strong fundamentals with strong upside to profit and margin expansion Dividend policy of minimum 30% payout 30.2% dividend payout in FY2017 Valuations to be compressed with foreseeable earnings boost Tradingattrailing12-monthPEof17.9xandEV/EBITDAof12.7x (asat14september2017) Investment Merits 16

17 Group has dividend policy of minimum 30% net profit payout RM mil 74.0% Dividend History 49.2% 48.0% 49.8% 52.1% 26.6% 36.6% 28.7% 36.1% 28.8% 32.1% 33.4% 35.9% 31.7% 31.4% 30.7% 30.2% Net Dividend Payout Special Dividend Payout Ratio FY2016 Dividend (Total Dividend of 16* sen): Paid interim dividend of 6* senper share on 5 August 2016 Paid final dividend of 10 senper share on 13 January 2017 FY2017 Dividends (Total Dividend of 16 sen): Paid interim dividend of 6 senper share on 20 June 2017 Proposed final dividend of 10 senper share on 19 September 2017 subject to shareholders approval Share Dividend Dividend Policy: Minimum 30% of Net Profit (effective FY2011) *adjusted based on enlarged share capital after 1:1 bonus issue completed on 15 August 2016 Dividend History 17

18 Powered by Twin Engines Thank You Contacts: Ms. Jocelyn Ng T: Ms. Julia Pong T: