MICRO-MECHANICS (HOLDINGS) LTD. FY2013 Results Briefing 30 August 2013

Transcription

1 MICRO-MECHANICS (HOLDINGS) LTD. FY2013 Results Briefing 30 August 2013

2 CORPORATE HIGHLIGHTS Mr. Chris Borch, CEO Mr. Low Ming Wah, COO

3 Corporate Overview Perfect Parts and Tools. On-Time, Every Time Founded in 1983 in Singapore by CEO Chris Borch Listed on the Singapore Exchange (Main Board) since 2003 Design and manufacture high precision tools, parts and assemblies for the semiconductor, medical, aerospace and other high technology industries Serve a worldwide base of customers from six facilities in Asia and the USA Semiconductor tooling business serves nearly all the chip manufacturers/assembly and test companies Committed to generating shareholder returns 3

4 Worldwide markets Asia and USA bases Year-on-Year Growth Global Customer Base: China Malaysia USA Europe Philippines Taiwan Singapore Thailand Japan 4

5 High Precision Tools for Semiconductor A&T DIE-ATTACH Rubber and Plastic Pick-up Tips Ejector Needles & Needle Holders Dispensing Nozzles Die collets / ultra-fine tools with small holes from 0.10mm and features from 0.05mm. For eutectic die attach, MEMS. WIRE-BONDING Wire bond clamps Wedges Wire cutters Electronic Flame Offs CONSUMABLE PRODUCTS require regular replacement HUNDREDS OF CUSTOMERS in chip assembly & testing sector FOCUS ON CYCLE TIME from customer inquiry to delivery BROAD PRODUCT RANGE backed by strong proprietary know-how RAISING BARRIERS from developing finer tools in line with chip package miniaturization 5

6 Custom Machining & Assembly (CMA) Precision and complex parts / assemblies for Tier-1 capital equipment manufacturers 24/7 MACHINING LINE Factory in the USA Year-on-Year Growth Semiconductor industry CUSTOMER DIVERSIFICATION Semiconductor / Wafer Fabrication Laser Medical Aerospace 24/7 MACHINING Maximising 168 available hours Zero online tool and fixture set-up Repeatable processes INCREASED COMPETITIVENESS to meet customer needs in volatile marketplace DIVERSIFICATION into other high-tech industries GREATER REVENUE SCALABILITY than semiconductor tooling business 6

7 Market Landscape Semiconductor Tooling Jan to June 13 sales up 1.5% yoy ANNUAL DEMAND FOR TOOLS USED IN DIE-ATTACH AND WIRE-BONDING PROCESSES ~S$200M* Global monthly chip sales (US$ billion) Year-on-Year Growth 6% 4% 2% 0% -2% -4% -6% -8% Year-on-Year Growth % 80% of semiconductor A&T is carried out in Asia Source: Semiconductor Industry Association Installed Base of Die and Wire-bonding Machines* BUSINESS DRIVERS Chip production volumes Base of die- and wire-bonding machines Miniaturization of chip packages CAGR 8% Wedge Bonder Copper Wire Bonder Gold Wire Bonder Die Bonder * Based on internal estimates

8 Market Landscape CMA Business OUR TOP 10 CUSTOMERS ANNUAL DEMAND FOR MACHINED COMPONENTS Overall slower business conditions in the capital equipment market, particularly for semiconductor equipment during FY2013 Year-on-Year Growth >S$500M* BUSINESS DRIVERS Capital equipment spending Flexible manufacturing capabilities * Based on internal estimates SEMICONDUCTOR EQUIPMENT BOOK-TO-BILL RATIO At or above parity from Jan to Jul Source: SEMI 8

9 Consistent Efforts to Build Value MULTI- DIRECTIONAL Business Planning STRATEGIC Thinking and Planning Skills IN PEOPLE PRODUCTIVTY HIGHER AUTOMATION OPTIMAL SIZE of Skilled Personnel 24/7 FUNDAMENTALS IMPROVE Quality, Cost and Cycle Time PRODUCT Development SERVICE MARKETING CUSTOMER VALUE Perfect Parts and Tools, On-Time, Every Time based on scalable, repeatable and cost-effective processes 9

10 Consistent Efforts to Build Value LATEST UPDATES CMA R&D PROJECT Developing 24/7 Machining REACHED KEY MILESTONE with 100 parts engineered for production on new 24/7 Machining Line meeting market need for FAST, FLEXIBLE AND COST-EFFECTIVE MACHINING Optimizing headcount Achieve higher level of AUTOMATION AND IMPROVED production processes Jun-13 Jun RANKED AS BEST SUPPLIER by a key customer Semiconductor Tooling APPLY R&D KNOWLEDGE to factories in Asia to enhance productivity Jun-11 Production headcount Total heacount 10

11 Corporate Transparency SINGAPORE CORPORATE AWARDS (companies with market cap of less than S$300M) 2013 Best Investor Relations Award (Silver) 2012 Best Managed Board (Gold) 2012 Best Investor Relations Award (Silver) 2011 Best Investor Relations Award (Silver) 2010 Best Investor Relations Award (Bronze) 2008 Chief Financial Officer of the Year (Sesdaq) GTI - RANKED 18 th out of 664 listed companies on the SGX SECURITIES INVESTORS ASSOCIATION SINGAPORE 2011 Most Transparent Company (Mainboard Small Caps) 2010 Most Transparent Company (Mainboard Small Caps) 2009 Most Transparent Company (Mainboard Small Caps) 2008 Most Transparent Company (Mainboard Small Caps) 2006 Corporate Governance Award (Sesdaq) 2005 Most Transparent Company (Sesdaq) 2005 ASIAMONEY CORPORATE GOVERNANCE POLL 2010 Best for Shareholders' Rights and Equitable Treatment in Singapore 2009 Best for Shareholders' Rights and Equitable Treatment in Singapore FORBES 2006 Asia 200 Best Under A Billion Companies 11

12 FINANCIAL REVIEW Mr. Chow Kam Wing, CFO

13 FY2013 in Review REVENUE UP 0.9% FY2013 P&L Overview (S$ million) GROSS PROFIT MARGIN EXPANDED SIGNIFICANTLY TO 49.1% 39.2 NET PROFIT UP 21% EPS IMPROVED TO 3.7 CENTS FROM 3.0 CENTS SOUND BALANCE SHEET WITH CASH OF S$9.1 MILLION AND ZERO DEBT 0 TOTAL DIVIDENDS OF 3 CENTS PER SHARE FOR FY2013 Dividends totaling 31.9 cents since IPO 13

14 Group Revenue STEADY SALES IN FY2013 4Q 3Q 2Q 1Q Group Revenue (S$M) FY2009 FY2010 FY2011 FY2012 FY2013 Global Chip Sales Trend (US$B) Revenue Drivers FY2009 FY2010 FY2011 FY2012 FY2013 CMA Semiconductor Tooling Global Chip Sales Trend according to FY. Data from Semiconductor Industry Association (SIA) FY: Financial year ending 30 June 14

15 Quarterly Revenue By Business Segments TOOLING BUSINESS GREW 3.8% IN FY2013 (S$ mil) Semiconductor Tooling (S$ mil) CMA 4Q 3Q 2Q 1Q FY2009 FY2010 FY2011 FY2012 FY FY2009 FY2010 FY2011 FY2012 FY2013 Semiconductor tooling business improved in tandem with industry recovery 100% Percentage of Revenue CMA business affected by slower orders, especially from customers in the semiconductor equipment industry 80% 60% 40% 20% CMA Semiconductor Tooling 0% FY2009 FY2010 FY2011 FY2012 FY

16 Revenue by Geographical Market DIVERSIFIED REVENUE STREAMS Sales Breakdown for FY2013 USA, 15% KEY MARKET FOR CMA Europe, 5% Japan, 3% Taiwan, 10% Rest of world, 3% Singapore, 6% Malaysia, China, Taiwan, Philippines and Europe saw increased sales of semiconductor tools China, 21% Malaysia, 23% USA market experienced slower sales due to CMA business MAJOR MARKETS FOR SEMICONDUCTOR TOOLING Thailand, 5% Philippines, 9% 16

17 Gross Profit Margin MARGIN EXPANSION IN FY2013 Group GPM GPM by Business Segments FY2013 FY2012 FY2011 FY2010 FY % 46.3% 45.9% 47.5% 38.8% 0% 10% 20% 30% 40% 50% 60% FY2013 FY2012 FY2011 FY2010 FY % 55.8% 9.7% 53.4% 11.3% 53.7% -0.4% 59.2% -3.8% 54.2% -10% 10% 30% 50% 70% CMA Semiconductor tooling Semiconductor tooling GPM improved to 55.8% despite constant price pressure typical of the industry CMA GPM affected by low capacity utilisation due to fixed manufacturing overheads 17

18 Group Net Profit FY2013 NET PROFIT JUMPED 21.4% (S$ mil) Net Profit After Tax Operating Expenses / Revenue 4Q 3Q 2Q 1Q FY2013 FY2012 FY2011 FY2010 FY % 31.4% 26.8% 31.2% 34.1% 0% 10% 20% 30% 40% -0.4 FY2009 FY2010 FY2011 FY2012 FY2013 Net profit improved on higher gross profit margin Operating Expenses - Administrative, distribution and other operating expenses (inclusive of other income) Operating expenses / revenue Remained steady due to tight rein on expense structure 18

19 EBITDA and Operating Cash Flow (S$ mil) Track record of healthy operating cash flow (S$ mil) Positive Free Cash Flow FY2009 FY2010 FY2011 FY2012 FY FY2009 FY2010 FY2011 FY2012 FY2013 EBITDA Operating cash flow before interest and tax Free Cash Flow= net operating cashflow less capex 19

20 Balance Sheet 30 June June 2012 Cash Cash and cash equivalents S$9.2M # S$6.0 M Gearing Total borrowings Nil Nil Trade Receivables (Outstanding > 90days) / Total trade receivables Bad debt expense 0.2% Nil 0.2% Nil Inventory Inventory / Sales Inventory write-off 5.5% S$72k 5.7% S$78k Equity Shareholders equity NAV per share S$37.9M # cents # S$37.0M cents # Paid dividends of S$4.2M (Final dividend for FY2012 and interim dividend for FY2013) 20

21 OUTLOOK Mr. Chris Borch, CEO Mr. Low Ming Wah, COO

22 Industry Outlook Asia Pacific Japan Europe Americas Year-on-Year Growth Global Chip Sales (US$ mil) , , , , Growth 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% WSTS Spring 2013 Forecasts 2.1% growth in % growth in % growth in 2015 Integrated Circuits Sensors Optoelectronics , , , , There s no question the global semiconductor industry has picked up steam through the first half of We have now seen consistent growth on a monthly, quarterly, and year-to-year basis, with sales of memory products showing particular strength. -- SIA Press Release, 5 August 2013 Sources: Semiconductor Industry Association, World Semiconductor Trade Statistics 22

23 Group Outlook and Plans OPERATING ENVIRONMENT REMAINS CHALLENGING External headwinds and limited business visibility Sluggish semiconductor industry growth Cost, price and delivery lead time pressures SEMICONDUCTOR TOOLING Shifting towards automated processes Leverage strengths in proprietary design and materials to develop consumable tools for changing market needs CMA Developing new knowledge and improving unique recipe for repeatable, scalable and cost-effective machining Building stable customer base in USA 23

24 Investment Merits RECURRING INCOME STREAMS FROM PRECISION CONSUMABLE PRODUCTS Dividend per share (cents) Steady foundation and cost-effective operations which lead to high gross profit margin 5 Special dividend CASH-GENERATIVE MODEL WITH NO DEBT Sound balance sheet management and sensible cost structure 4 3 Final dividend Interim dividend LONG TRACK RECORD OF DIVIDENDS 2 Total dividends of over S$40M since public listing 1 POSITIONED TO RIDE ON SEMICONDUCTOR INDUSTRY RECOVERY Tooling business correlates with the volume of chip production 0 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 Developing CMA business to be a future growth catalyst 24

25 Safe Harbour for Forward-Looking Statements This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. Investors can identify 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 identifying forward-looking statements. These forward-looking statements are based on current expectations, projections and assumptions about future events. Although Micro-Mechanics (Holdings) Ltd. believes that these expectations, projections, and assumptions are reasonable, these forward-looking statements are subject to the risks (whether known or unknown), uncertainties and assumptions about Micro- Mechanics (Holdings) Ltd. 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 business or 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 the semiconductor industry 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 actual results 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. Micro- Mechanics (Holdings) Ltd. s business, financial conditions, results of operations and prospects may have changed since that day. Micro-Mechanics (Holdings) Ltd. 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. 25

26 MICRO-MECHANICS (HOLDINGS) LTD. Micro-Mechanics 31 Kaki Bukit Place Eunos Techpark Singapore Investor Relations Contact Octant Consulting Tel (65) / lisa@octant.com.sg