Micro-Mechanics (Holdings) Ltd. Board of Directors

Transcription

1 New Capabilities Wide Product Range FY2005 AGM FY2005 AGM October 14th Sustainable & Profitable Growth Global Presence

2 Micro-Mechanics (Holdings) Ltd. Board of Directors

3 Operating Results

4 FY2005 at a glance FY2005 AGM Generated S$7.0 million operating cash flow Cash balance of S$10.1 million with zero gearing Group revenue grew 14.4% Higher sales in the USA, Europe and China Net profit rose 15% Maintained gross profit and net profit margins Enhanced shareholder value Doubled total dividend to 3 cents per share Proposed 1-for-4 bonus issue Moderation in growth of global semiconductor industry More subdued business sentiment from October 2004 to March 2005

5 FY2005 Financial Results FY2005 AGM (S$ million) FY2005 FY2004 Change Turnover % Profit before tax % Net profit % Gross profit margin (%) Net profit margin (%) Earnings per share (cents) %

6 Steady revenue growth Steady performance despite weaker industry conditions as customers worked off excess inventories Revenue Revenue H02 2H02 1H03 2H03 1H04 2H04 1H05 2H05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 Half-on-half growth Quarter-on-quarter growth

7 Revenue Drivers USA grew fastest at 67% deeper market penetration Europe up 43% - higher sales of CMA products Well-diversified customer markets accounted for doubledigit growth of Singapore, Malaysia and Philippines operations Malaysia 19% Singapore 10% Philippines 13% ROW 6% Taiwan 6% Thailand 6% Japan 7% China 12% Europe 8% USA 13% Spotlight China Sales in China leaped 58% (y-o-y) to S$3.2m in FY2005 New plant in Suzhou commenced operations in Nov H04 2H04 1H05 2H05

8 Expanding footprint in China Sales Office Manufacturing Plant Tianjin Suzhou Shanghai Shenzhen Our 13,000 square foot Suzhou plant commenced production in November 2004 FY2005 AGM Currently manufacturing nozzles (die-attach) and clamps (wire-bond) Already shipped our first Suzhou-made products More than 70 customers there presently, including MNCs and local firms Revenue contribution of 12% in FY2005, up from 9% in FY2004

9 Increasing contribution from new products Custom Tool 8% Encapsulation 0.5% CMA 5.5% S$0.5 m to S$1.4 m Wire Bond 23% Die Attach 63% S$0.1 m to S$0.2 m CUSTOM MACHINING & ASSEMBLY (CMA) Precision manufacturing of modules and components Initial customers from semiconductor industry Optimistic about entering into medical, instrumentation, or other technology-based industries with CMA

10 Consistent and high gross profit margin 62.8% 58.7% 59.9% 59.7% Gross profit margin maintained above target of 50% - credited to consistent focus on quality, cost and cycle-time improvements 1Q05 2Q05 3Q05 4Q05 Achieved 60.4% GP margin for FY2005 despite start-up production cost of S$0.4m at Suzhou plant increase in total production headcount from 178 to 222 increase of $300k for depreciation

11 Profitable growth FY02 FY03 FY04 FY05 1H02 2H02 1H03 2H03 1H04 2H04 1H05 2H05 FY2005 net profit up 15% y-o-y In tandem with growth of revenue, thanks to cost containment efforts Consistent net profit margin of 20%

12 Strengthened manufacturing capabilities FY2005 AGM Spent S$4.4 million in FY2005 on new machinery in Singapore, Malaysia (for CMA division), and China production plants Expect to spend S$4.5 million in capital expenditure in FY2006 S$1.5 million on new machinery for CMA division to enhance capacity and capability

13 A sound balance sheet FY2005 AGM (S$ million) End June 2005 End June 2004 Trade Receivables * Receivables Outstanding > 90 Days 2.1% 1.3% Inventories Inventory turnover (% of sales) 2.6% 2.8% Cash and equivalents 10.1* 10.5 FY FY2004 FY2005 Shareholders equity NTA per share (cents) Bank Borrowings 0 0 Trade Receivables of S$102,000 Operating cash flow for FY2005 S$7.0 million Capital Expenditure S$5.2 million FY2003 FY2004 FY2005

14 Increased shareholder value DIVIDEND (cents per share) FY2005 FY2004 % Increase Interim Dividend 1.0 Proposed Final Dividend Total Dividend % PROPOSED BONUS ISSUE 1-for-4 bonus shares - Higher dividend payout reflects a combination of a strong balance sheet and efficient use of capital Bonus issue rewards shareholders, helping to improve trading liquidity on the SGX-Sesdaq and widen spread of shareholders

15 Steady, sustainable and profitable growth A look behind the numbers

16 Enhancing shareholder value FY2005 AGM Goal: Steady, sustainable and profitable growth Committed and motivated personnel Strong culture and work ethic Quality, Cost, Cycle Time Corporate Governance Die Attach Wire Bonding Custom Tools CMA Encapsulation Singapore Malaysia Philippines Thailand China Solidify Foundation

17 PBI People make things happen FY2005 AGM Skills Experience + Creativity Commitment Long-term Success Growth - Profitability Quality Liquidity Generate

18 Corporate governance = Another quality system Investors Choice Award in the Singapore Corporate Governance Merit Award 2005 Accountability Deliver accurate, timely, and complete information Certification

19 Outlook and Strategies

20 Industry Outlook FY2005 AGM Global semiconductor industry grew 6.5% during first half 2005 Industry estimated to grow at 5-10% for a full year Asia, in particular China, expected to outpace the global industry

21 Growth Strategies To become a one-stop supplier FY2005 AGM Continue product development to enter new process areas Semiconductor Assembly and Test Process Dicing Die Attach Wire Bond Mold Plate Mark Test Pack Continue expanding product range for our traditional segments Re-evaluating strategy to accelerate progress of encapsulation products

22 Growth Strategies Singapore Malaysia Penang Thailand Bangkok China Shanghai China Suzhou Taiwan Hsin Chu Philippines Manila USA California Switzerland Cham Build on success of CMA division Build on presence in key markets Invest in new machinery To ensure fast and effective local support and acquire new customers Continue to expand customer base, including entry into new sectors Leverage on Suzhou plant to make further inroads into China

23 In summary Steady, sustainable and profitable growth Double-digit growth in Group revenue and net profit despite a slower semiconductor industry Firm gross profit margin of 60.4%, above our target of 50% Strong cash position with no bank borrowings Doubled total dividend for FY2005 to 3 cents per share compared to 1.5 cents per share in FY2004 Built new competencies in CMA and Encapsulation Enhanced global presence with a fifth manufacturing facility in Suzhou to further penetrate the China market Strengthened existing operations by increasing sales and production personnel Positive long term prospects of semiconductor industry FY2005 AGM