Corporate Presentation 1Q15 Corporate Update & Financial Results

Transcription

1 (Company No.: 7867-P) Corporate Presentation 1Q15 Corporate Update & Financial Results Powered by Twin Engines 17 December 2014 IR Adviser

2 CONTENTS Powered by Twin Engines Operations Review & Growth Plans 1Q15 Financial Review Investment Merits 2

3 OPERATIONS REVIEW & GROWTH PLANS Powered by Twin Engines

4 Consumer packaging grew steadily on expanded PE film capacity and larger clientele slower stretch film exports offset by higher ASPs 1Q15 Stretch Film Revenue RM157.5 mil Sales tonnage: (4.1%) yoy Stretch Film RM157.5 mil 1Q15 Consumer, PP Strapping & Other Revenue RM162.8 mil Stretch film 1Q15 revenue marginally declined 1.2% to RM157.5 mil Due to lower sales volume (-4.1% yoy) for the quarter Consumer packaging1q15 revenue up 55.1% yoyto RM96.7 mil As a result of increased PE film productioncapacity, and small contribution from BOPP film PP strapping band1q15 revenue increased 2.5% yoy to RM20.9 mil on stable regional demand PP Strapping RM20.9 mil Others RM45.2 mil Revenue from other niche manufacturing products amounted to RM45.2 mil, ie. 14.1% of manufacturing segment sales Consumer RM96.7 mil Operations Review: Manufacturing 4

5 Sizeable unbilled sales of RM631.1 million to be recognized over the next 2-3 years 1Q15 Property Update Ongoing GDV RM283 mil Ongoing GDV RM135 mil Ongoing GDV RM300 mil Ongoing GDV RM539 mil Ongoing GDV RM192 mil Property development revenue up 46.5% yoy to RM110.8 milin1q15 UnbilledsalesstoodatRM631.3miltoberecognizedover the next 2 to 3 years, versus RM537.5 mil as at 31 July newlaunchesworthRM241.9milGDVin1Q14 Consisted of mixture of affordable and niche residential properties in Kulai, Skudai, and Melaka Note: data presented as at 31 October 2014 Operations Review: Property 5

6 Operations Review Growth Strategies Financial Highlights Investment Merits Appendix On track to become the largest blown film manufacturer in Malaysia by 2015 embarking on vertical expansion in consumer packaging ,000MT Per Annum 24,000 MT PE 6,000 MT BOPP ,000MT Per Annum 48,000 MT PE 60,000 MT BOPP 12,000 MT CPP New blown film lines currently in installation phases, on track to double PE film production to 48,000 MT p.a. by end layer film production to commence soon 10-color printing machine to be installed in mid-2015 To install CPP film lines with capacity of 12,000 MT p.a. in 2015 Commercial run targeted by end-2015 To complement PE and BOPP businesses and leverage on existing clientele in Malaysia and South East Asia RM60 mil RM40 mil RM200 to be funded by internally generated fund and bank borrowings over 2 years injected by Futamura in return for 5% of SGW invested to expand PE film business during FY2014 Established partnership with Futamura Chemicals to build worldclassboppplantinpulauindahby2016 BOPP production to be increased from 6,000 MT p.a. currently to 60,000 MT p.a. Commercial run expected to commence in May 2016 InvestingRM300millioninCAPEXfrom To expand consumer packaging production capacity to 120,000 MT p.a. by 2017 to support wider range of products, clientele, and penetrate new export markets Growth Plans: Manufacturing 6

7 1Q15 FINANCIAL REVIEW Powered by Twin Engines

8 Revenue records double-digit growth from higher manufacturing and property sales 1Q15 1Q14 Change RM'mil Remarks % Revenue Driven by higher property development and consumer packaging sales % EBITDA 12.1% 13.4% (1.3 pt) EBITDA margin % PBT 9.3% 10.4% (1.1 pt) PBT margin % PATMI 7.0% 8.0% (1.0 pt) Net margin % Basic EPS (sen) Dampened margins due to market penetration strategy with increase in capacity... Property segment margins largely sustained Also impacted by RM5 mil provision for unrealised forex loss from USD borrowings Quarterly Revenue (RM mil) Quarterly PBT (RM mil) Quarterly PATMI (RM mil) Q15 Income Statement Summary 8

9 Strong growth in property segment from affordable housing demand offsets weaker manufacturing earnings for the quarter... 1Q14 Group Revenue: RM364.8 mil 1Q15 Group Revenue: RM431.1 mil 20.7% +46.5% yoy 25.7% +10.8% yoy 79.3% 74.3% Manufacturing Property Manufacturing Property 1Q14 Group EBITDA: RM49.1 mil 1Q15 EBITDA: RM52.2 mil 45.9% 54.1% +44.0% yoy 62.1% 37.9% (25.5%) yoy Revenue & EBITDA Segmentation 9

10 Manufacturing sales mainly driven by consumer packaging although penetration strategy to increase market share resulted in temporarily softer margins RM mil 12.2% 545 Manufacturing Revenue & Gross Margin 11.3% 11.0% 11.1% % 10.5% 1,192 Revenue growth on higher consumer packaging sales % 8.8% 320 RM mil Stretch Film Sales Marginal decline in stretch film sales due to lower export sales; however ASP improved yoy. (1.2%) Q14 1Q15 Revenue Gross Margin Margin declined due to market EBITDA & EBITDA Margin RM mil penetration strategy with increased capacity, and provision for RM5 mil unrealized forex loss 9.9% 9.6% 9.1% 8.4% 9.0% 9.2% 6.2% (25.5%) Q14 1Q15 EBITDA EBITDA Margin Q14 1Q15 Consumer & Other Packaging Sales RM mil Higher consumer packaging 189 sales with expanded capacity and clientele Q14 1Q15 Strapping Band Consumer Packaging Other Industrial Products Financial Review: Manufacturing 10

11 Property segment continues commendable performance growth going forward to be enhanced by demand for affordable housing in Johor RM mil 37.8% Revenue & Gross Margin 42.6% 44.2% 47.0% 44.1% 44.2% 42.2% Steady demand for affordable housing, particularly in Senai Q14 1Q15 Revenue Gross Margin RM mil 22.8% 28.8% 29.8% EBITDA & EBITDA Margin 32.3% 30.7% 29.8% 29.3% Q14 1Q15 EBITDA EBITDA Margin Financial Review: Property Development 11

12 Net gearing at comfortable level even as capacity expansions are ongoing larger asset base reflecting recent landbanking and expanded manufacturing operations Balance Sheet (RM 000) As at As at Property, Plant & Equipment 550, ,100 In line with capacity expansion Inves tment Property & Other Inves tments 9,554 9,571 La nd Hel d & Property Devel opment Cos ts 388, ,019 Investment in Jointly Controlled Entity & Associated Company 38,060 37,465 Inventori es 83, ,998 Trade & Other Receivables 303, ,459 In line with higher sales volume and deposits for CAPEX Cash & Bank Balances 102,862 83,766 TOTAL ASSETS 1,475,811 1,400,378 Trade & Other Payables 246, ,441 Borrowings (ST + LT) 364, ,420 Due to higher bank borrowings for capacity expansion Ta x & Deferred Ta x 35,596 35,059 Shareholders Equity 769, ,718 Due to retained profits, net of dividend paid Mi nority Interes t 41,274 22,705 Net Tangible Assets / Share (RM) Net Gea ring 0.34x 0.36x Remarks Due to equity participation of Futamura Chemical Co., Ltd into Scientex Great Wall Sdn Bhd 1 Based on share capital of mil shares after deducting treasury shares of 8.2 mil shares Balance Sheet (Highlights) 12

13 INVESTMENT MERITS Powered by Twin Engines

14 A high-growth proposition all-round... attractive proxy to the burgeoning packaging sector and Southern Malaysia property market MANUFACTURING Top3stretchfilmproducerintheworld 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 the southern states of Johor and Melaka Current projects of RM1.4 bil Pipeline GDV of RM4.1 bil on existing landbank to sustain another 8 years Future projects displaying higher GDV/acre Strong fundamentals with strong upside to profit and margin expansion Dividend policy of minimum 30% payout 31.7% dividend payout in FY2014 Valuations to be compressed with foreseeable earnings boost Tradingattrailing12-monthPEof10.4xandEV/EBITDAof8.0x Investment Merits 14

15 Declared final single tier dividend of 13 sen per share RM mil 74.0% Dividend History FY14 Dividend Payout RM47.1Million 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% RM29.4 mil payable on 6 Feb Net Dividend Payout Special Dividend Payout Ratio FY2013 Dividends (Total dividend of 26 sen): Paid interim dividend of 7 senper share on 16 August 2013 Paid special dividend of 10 senper share on 25 November 2013 Final dividend of 9 senper share paid on 21 January 2014 FY2014 Dividends (Total dividend of 21 sen): Paid interim dividend of 8 senper share on 8August 2014 Final dividend of 13 senper share payable on 6 February 2015 Share Dividend Dividend Policy: Minimum 30% of Net Profit (effective FY2011) Dividend History 15

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