FRENCKEN GROUP LIMITED INCORPORATED IN SINGAPORE

Transcription

1 FRENCKEN GROUP LIMITED INCORPORATED IN SINGAPORE

2 FRENCKEN GROUP LIMITED Global Contract Manufacturer of High Tech Capital and Consumer Equipment 1Q FY2010 Results Presentation

3 FRENCKEN GROUP LIMITED AGENDA Financial Review 1Q10 Business Review and Outlook Mechatronics Division EMS Division Questions and Answers

4 FRENCKEN GROUP LIMITED 1Q10 RESULTS DIVISION REVENUE ANALYSIS (S$ m) Mechatronics Europe Semiconductor Medical Analytical Others Mechatronics Asia Semiconductor Medical Analytical Industrial Automation Others EMS Telco (Keypads & Others) Office Automation Automotive Others Total * N.M. Not Meaningful 4Q Q Q Chg y-o-y 333% (13%) (21%) (9%) 15% N.M. N.M. N.M. N.M. N.M. N.M. (33%) 159% 81% (34%) 53% 83% AB/4

5 FRENCKEN GROUP LIMITED 1Q10 RESULTS P&L SNAPSHOT (S$ m) 1Q10 1Q09 Chg y-o-y Revenue % Gross Profit (GP) % Profit Before Tax % Net Profit % NP Margin 4.3% 0.3% 1266% Effective Tax Rate 28.7% 65.2% (56%) AB/5

6 FRENCKEN GROUP LIMITED 1Q10 RESULTS P&L SNAPSHOT Division Revenue Division Net Profit* Mechatronics (Europe) Mechatronics (Asia) EMS Mechatronics (Europe) Mechatronics (Asia) EMS % % % % 1Q09 1Q10 1Q09 1Q10 1Q09 1Q10 1Q09 1Q10 1Q09 1Q10 1Q09 1Q *Note: Excludes Investment Division AB/6

7 FRENCKEN GROUP LIMITED 1Q10 RESULTS GROUP REVENUE ANALYSIS MECHATRONICS (S$ m)* Breakdown by Business Segment Semiconductor Medical Analytical Industrial Automation Others EMS (S$ m) Telco (Keypad & Others) Office Automation Automotive Others % % % 81% N.M. 22% 159% 9% 16.8 Mechatronics EMS 605% 1Q09 12% Analytical 14% Industrial Automation 1Q10 Others 8% Others * Include Mechatronic Asia s numbers with no corresponding 1Q09 numbers 1% Automotive Medical 18% Breakdown by Division: Mechatronics 76% EMS 24% Semiconductor Telco (Keypad & Others) 4% Office Automation 6% 13% 24% AB/7

8 FRENCKEN GROUP LIMITED WORKING CAPITAL MANAGEMENT Turnover Days 150 (S$ m) 31 Mar Dec Inventories Receivables Payables Inventories Trade Receivables Trade Payables Jun Sept Dec Mar 10 Cash Conversion Cycle (Days) (S$ m) 31 Mar Mar Net cash flow from operations Capital expenditure (4.7) (0.7) 3.6 (0.8) 30 Jun Sept Dec Mar 10 Free cash flow (5.4) 2.8 Cash Conversion Cycle (Days) = Days sales outstanding + Days inventory outstanding Days payables outstanding AB/8

9 FRENCKEN GROUP LIMITED STRONG BALANCE SHEET Balance Sheet (S$ m) 31 Mar Dec 09 Financial Indicators 31 Mar Mar 09 Shareholders equity Gross gearing (%) Total borrowings Net asset value per share (S$ cents) Cash and cash equivalents EPS (S$ cents) AB/9

10 MECHATRONICS DIVISION BUSINESS REVIEW & OUTLOOK Mechatronics Division Business Review & Outlook AB/10

11 MECHATRONICS DIVISION SALES Revenue: +95% Currency: SGD million Mechatronics Europe Mechatronics Asia Q09 2Q09 3Q09 4Q09 1Q FY2007 FY2008 FY2009 YTD Mar 10 1Q10 Review Sales increased 95% y-o-y due to recovery of technology sector and contribution from ETLA Sales steady q-o-q despite seasonally slower period Sales from the European operations increased 15% y-o-y and almost flat q-o-q Figures are inclusive of additional contributions from the Asia operations i.e. 7 months in FY2009 and 3 months in FY2010 AB/11

12 MECHATRONICS DIVISION NET PROFIT & NET PROFIT MARGIN Division Net Profit: +351% Currency: SGD million Mechatronics Europe Mechatronics Asia Q09 2Q09 3Q09 4Q09 1Q NP margin 2.7% 2.3% 0.2% 6.5% 6.2% Q10 Review Net profit increased 351% y-o-y Q-o-q decrease of 2.9% as net profit in 4Q09 included a tax credit of S$1.3m from the Asia operations FY2007 FY2008 FY2009 YTD Mar 10 NP margin 11.0% 8.2% 3.2% 6.2% Figures are inclusive of additional contributions from the Asia operations i.e. 7 months in FY2009 and 3 months in FY2010 AB/12

13 MECHATRONICS DIVISION SALES ANALYSIS MEDICAL SEGMENT Revenue: -9% Currency: SGD million Mechatronics Europe Q10 Review Mechatronics Asia Sales declined 9% y-o-y and 22% q-o-q Europe Sales was lower by 13% y-o-y and 22% q-o-q Slower sales of key medical customer at the beginning of 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10-22% Asia Figures are not significant. Still at a low base but with emerging business potential for the Singapore and China operations FY2007 FY2008 FY2009 YTD Mar 10 Figures are inclusive of additional contributions from the Asia operations i.e. 7 months in FY2009 and 3 months in FY2010 AB/13

14 MECHATRONICS DIVISION SALES ANALYSIS SEMICONDUCTOR SEGMENT Revenue: +605% Q09 2Q09 3Q09 4Q09 1Q % Europe Currency: SGD million 1Q10 Review Mechatronics Europe Mechatronics Asia Sales increased 605% y-o-y and 66% q-o-q Strong growth due to the marked improvement in market conditions Sales increased 333% y-o-y and 72% q-o-q FY2007 FY2008 FY2009 YTD Mar 10 Asia Sales increased 58% q-o-q Figures are inclusive of additional contributions from the Asia operations i.e. 7 months in FY2009 and 3 months in FY2010 AB/14

15 MECHATRONICS DIVISION SALES ANALYSIS ANALYTICAL SEGMENT Revenue: +22% Q10 Review Currency: SGD million Mechatronics Europe Mechatronics Asia Sales increased 22% y-o-y but decreased 7% q-o-q y-o-y sales growth due to contribution from Asia operations Q09 2Q09 3Q09 4Q09-7% 1Q FY2007 FY2008 FY2009 YTD Mar 10 Europe Sales down 21% y-o-y and 10% q-o-q Although on a slight decline, demand remained fairly stable Asia Sales decreased 1% q-o-q despite strong demand due mainly to shorter number. of working days in February 2010 Growth prospects remain positive for the mid to long term Figures are inclusive of additional contributions from the Asia operations i.e. 7 months in FY2009 and 3 months in FY2010 AB/15

16 MECHATRONICS DIVISION (ASIA) SALES ANALYSIS INDUSTRIAL AUTOMATION SEGMENT Currency: SGD million 1Q10 Review Q09 3Q09 4Q09 1Q Asia Sales decreased 16% q-o-q despite strong demand due to shipment in transit awaiting to be invoiced in April 2010 Revenue from this segment continues to be subject to high volatility 8.5 FY2009 YTD Mar 10 * Figures comprises sales contribution of 7 months in FY2009 and 3 months in FY2010 from the Asia operations. AB/16

17 MECHATRONICS DIVISION NEW PROJECT PLANS Mechatronics Europe Medical Semiconductor Redesign project for enhancement of an existing product now in prototype phase, with a succeeding project in definition phase. Ongoing development project for pathology market with commercial production anticipated in 4Q10 (prototype presented at a major exhibition in March 2010). Engagement in next generation (EUV) lithography tools is continuing. Ongoing projects for improvement and enhancement of complex key modules for lithography equipment and pick & place machines. Analytical Finalising development project commercial production set for 3Q10. New development project for market introduction targeted for 4Q10. Mechatronics Asia Medical Semiconductor Analytical Ind Automation Others Increasing production in Wuxi, China of imaging modules for an existing customer. Increasing volume production of parts for existing in-vitro diagnostic and surgical microscope products. Ongoing engagement in prototype parts for 2 new diagnostic products. Completed qualification and pilot production of a module for a new customer. Series production expected to commence in 3Q10. Ongoing qualification of new parts and modules for 2 new instruments for an existing customer. Expect completion by end 2Q10 and commercial production in 3Q10. Co-development projects for new automation stations for an existing customer. Prototype build completed and expect commercial production in 2H10. Ongoing evaluation stage of new projects for sheet-metal modules for a number of new customers AB/17

18 MECHATRONICS DIVISION NEW PROJECT LAUNCH OF PATHOLOGY SCANNER Source: Extract from Link Magazine, April 2010 AB/18

19 MECHATRONICS DIVISION STRATEGIC INITIATIVES Market Segments Medical Medical Analytical Analytical Semiconductor Semiconductor Industrial Industrial Automation Automation Others Others such such as as energy energy and and environment environment Strategic Initiatives Accelerate and enhance design and development capability and capacity in Europe to support the enlarged manufacturing facilities in Asia Strengthen New Product Introduction (NPI) team in Asia for smooth transfer of projects from customers and also within the Group Accelerate sales expansion opportunities via strategic partnerships with existing and new customers by leveraging the Group s value chain proposition and enlarged geographical footprint Strengthen overall manufacturing capability in Asia to capitalise on new opportunities in key and emerging markets Build up global sourcing, procurement and total supply chain seek out best value components and strategic suppliers worldwide to enhance Group s overall competitiveness AB/19

20 MECHATRONICS DIVISION DIVISION OUTLOOK Continue to see positive outlook for the technology sector due to recovery in demand for capital equipment Increased interest and order intake from existing and potential customers due to the expansion of the Mechatronics Division New projects and order forecasts from customers continue on an increasing trend at both Europe and Asia operations Prospects for FY2010 look positive barring any unforeseen circumstances AB/20

21 EMS DIVISION BUSINESS REVIEW & OUTLOOK EMS Division Business Review & Outlook AB/21

22 EMS DIVISION SALES Revenue: +57% Currency: RM million Q09 2Q09 3Q09 4Q09 1Q10 1Q10 Review Sales increased 57% y-o-y and 8% q-o-q due to strong performance of office automation and automotive business segments FY2007 FY2008 FY2009 YTD Mar 10 AB/22

23 EMS DIVISION NET PROFIT & NET PROFIT MARGIN Division Net Profit: +74% Currency: RM million 1Q09 2Q09 3Q09 4Q09 1Q Net Profit Margin 1Q09-4.0% 2Q09-7.1% 3Q09-6.9% 4Q % 1Q10-0.7% FY2007 FY2008 FY2009 YTD Mar Net Profit Margin FY % FY % FY % YTD Mar % AB/23

24 EMS DIVISION SALES ANALYSIS KEYPAD SEGMENT -38% Currency: RM million Q09 2Q09 3Q09 4Q09-38% 1Q10 1Q10 Review Sales declined 38% y-o-y and 38% q-o-q Decline due to strategic decision to cease this business from 1st February FY2007 FY2008 FY2009 YTD Mar 10 AB/24

25 EMS DIVISION SALES ANALYSIS OFFICE AUTOMATION SEGMENT +155% Currency: RM million Q10 Review Sales increased 155% y-o-y and 83% q-o-q Growth driven by the production ramp up of a project from an existing customer 1Q09 2Q09 3Q09 4Q09 1Q10 +83% FY2007 FY2008 FY2009 YTD Mar 10 AB/25

26 EMS DIVISION SALES ANALYSIS AUTOMOTIVE SEGMENT +78% Currency: RM million Q10 Review Sales increased 78% y-o-y but decreased 8% q-o-q q-o-q decline is due to the traditionally lower first quarter of each year 1Q09 2Q09 3Q09 4Q09 1Q10-8% FY2007 FY2008 FY2009 YTD Mar 10 AB/26

27 EMS DIVISION NEW PROJECT PLANS Office Automation Commercial production of a delayed industrialisation project will commence in 2Q10 albeit lower volumes than originally forecasted Commercial production of another project will now start in May 2010 instead of end 2Q10 New industrialisation project launched in 1Q10 with target for commercial production in mid FY2011 is currently on track Automotive Awarded a significant project for serial production from an existing customer. Industrialisation phase launched with commercial production anticipated in 2Q/3Q 2011 A number of potential new projects with existing and new customers in the pipeline AB/27

28 EMS DIVISION STRATEGIC INITIATIVES Consolidation of the 3 manufacturing companies into one single integrated EMS entity under Precico Electronics Sdn. Bhd. completed on 1 st May 2010 Continuing to realign the division s operations to better support and focus on the growing automotive and niche office automation business segments Exploring geographical expansion of the automotive business into China AB/28

29 EMS DIVISION DIVISION OUTLOOK Progressive commercial production launch of existing industrialisation projects in FY2010 and FY2011 are expected to provide a stable and growing revenue base for the subsequent years Making good progress in securing new projects for the automotive business segment from new and existing customers In the short term, contribution from the office automation and automotive product segments are not expected to fully offset the loss of contribution from the keypad product segment in FY2010 AB/29

30 FRENCKEN GROUP LIMITED 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 forwardlooking statements. These forward-looking statements are based on current expectations, projections and assumptions about future events. Although Frencken Group Limited believes that these expectations, projections, and assumptions are reasonable, these forwardlooking statements are subject to the risks (whether known or unknown), uncertainties and assumptions about Frencken Group Limited 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 our customers industries 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. Frencken Group Limited s business, financial conditions, results of operations and prospects may have changed since that day. Frencken Group Limited 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. AB/30

31 FRENCKEN GROUP LIMITED THANK YOU Q&A Frencken Group Limited Plot 410, Lorong Perusahaan 8B Prai Industrial Estate Prai 13600, Malaysia Investor Relations Contact Octant Consulting Tel (65) AB/31