KOLON Industries September 08,

Transcription

1 KOLON Industries September 08,

2 Company Overview } 1. Performance Results } 2. Major Products - Industrial Materials - Chemical - Films/Electronic Materials - Fashion } 3. Changing KOLON } 4. Divisional Mid-term Strategies -2-

3 1. Performance Results 1 Sales Breakdown Sales Industrial Materials Chemical Films Others Fashion 21% % 13% % 21% % 22% % 23% 448 1, % 18% 23% 405 2,215 3, % 16% % % 15% 1, % % Operating Profits 29% % % % % % % 20% First Half Year % 35 27% % 33% % 35% % 2008~2009 : K-GAAP, 2010~2011 Fist Half Year : IFRS non-consolidated -3-

4 1. Performance Results(IFRS non-consolidated) 2 Overview of 2Q (Net) 11 Results Sales and Operating Profits IFRS non-consolidated ,032 Pre-tax Profits Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 l Kolon Industries sales in 2Q11 reached new highs with the sales growth at industrial material division including airbag, also increase in sales at fashion division as a result of the merger with Cambridge Kolon. l Operating profit grew thanks to strong sales of high value-added industrial materials, and the arrival of semi-peak season at fashion division. l Pre-tax profit rose on decline in financial expenses and increased operating profit. Ø 3Q11 results to be down QoQ due to low seasonality at fashion division and decrease in film demand. -4-

5 2-1. Major Products - Industrial Materials 1 Overview Product Applications Customers Competitors w Tire Cord Tires Goodyear, Bridgestone, Michelin, Continental, Kumho, Hankook Hyosung w Car airbag (fabric) Automobiles Hyundai Mobis, Autoliv, KSS, S&T Daewoo Ind. w Technical Yarn Automobiles Seatbelt, Tarpaulin and Conveyer belt makers w Aramid Bulletproof weaves, Automobiles, Cables Car brake, Gasket and MRG makers Defense industry / Optical fiber cable Hyosung Dupont, Teijin (Nylon, Aramid) Capply Inner liner (Rubber) Belt (Steel) Carcass Sales Tire cord - Global top 3 with 13% market share - Strong brand recognition in the tire industry Airbags, Seatbelts and PET Spunbonds - Airbags : 75% market share in Korea. - Seatbelts : 60% market share in Korea - PET Spunbonds : 60% market share in Korea * Expansion in China - Tire cord/airbag plant (2011) Aramid - Launch of Aramid business in 2005 (4Q) - Aramid plant was expanded in May Chamude H - Third largest production capacity in the world 9.6% 9.7% 12.5% 15.1% 12.5% 10.6% - Gateway into high-end markets * Watch cases, Cloth linings for bags OP Margin * Car seat covers 2006~2009 : K-GAAP, 2010~2011 Fist Half Year : IFRS non-consolidated -5-

6 2-1. Major Products - Industrial Materials 2 2Q (Net) 11 Results Sales Operating Profit (IFRS non-consolidated) (IFRS non-consolidated) OP OPM 12.6% 14.7% 10.3% 10.4% 10.3% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Ø Sales growth continued thanks to increased sales of airbag and aramid, and reflection of spunbond sales from expansion. Ø Operating profit increased QoQ due to stronger sales of high value-added products such as side airbag and aramid for bullet-proof use. ü 3Q11 sales to increase with favorable tendency of automobile industry, reflection of reduced raw material price, and P-MIX improvement. -6-

7 2-2. Major Products - Chemical 1 Overview Product Applications Customers Competitors whydrocarbon Resins Adhesives, Paint, Tires, Hot-melt road marking Henkel, Bostik, H.B.Fuller, 3M, DaeHwa Paint Exxon, Eastman Hydrocarbon Resin wphenol & Electronic Epoxy Resins Electronic materials, Automotive industry, Tires, Paint Antech, Hempel, Shinsai Shokai, Hyosung, Hankook Tire, Eko International Kangnam Chem, Kukdo Chem, Phenolic Resin Sales 806 KOLON Industries acquired KOLON Chemical, now a part of its chemical division, on June 1, 2007 Hydrocarbon Resins Capa. : 100,000MT/Year (Domestic 70%, Export 30%) <Except for by-product : Domestic 30%, Export 70%> Epoxy Resin Phenolic Resins - Capa. : 60,000MT/Year (Domestic 50%, Export 50%) H 5.7% 5.9% 5.9% 8.4% 8.6% 8.0% OP Margin Epoxy Resins - Launch of epoxy resins in Dec. 2007(Capa : 24,000MT/Year) GRP Pipe - Capa. : 3,000MT/Year (Domestic 100%) - Launch of GRP pipe in Dec ~2009 : K-GAAP, 2010~2011 Fist Half Year : IFRS non-consolidated -7- Glass Reinforced Plastic Pipe

8 2-2. Major Products - Chemical 2 2Q (Net) 11 Results Sales Operating Profit (IFRS non-consolidated) (IFRS non-consolidated) OP OPM 9.0% 10.2% 6.9% 7.9% 8.1% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 ü Despite sales and return sales reduced due to the overhaul in April, overall sales in 2Q11 remained stable QoQ due to increased naphtha price and the consequent rise in ASP(Average Selling Price). Ø Operating profit and OP margin increased due to an improvement of price spread by keeping ASP. ü 3Q11 sales to remain near 2Q11 s level due to stability of naphtha price, operating profit to improve by price spread improvement. -8-

9 2-3. Major Products - Films/Electronic Materials 1 Overview Film Product Applications Customers Competitors Packing Film Food packing Shrinkable film Youlchon Chem. SKC, TAMK Base Film Optical Film DFR, LDF, Prism Reflection film Release film Solar protect film Shinwha, SBK, LGE, LGC, LMS, Keiwa, MN-tech NittoDenko, SKC-Haas,Tohcello Toyo Aluminum, Krempel, Coveme SKC, TAMK IT materials DFR PCB, PDP Semiconductors 3M, SEMCO, Daeduck Elec, LGE, Anam Semicon, Samsung Techwin, Samsung SDI Asahi, Hitachi Prism, etc TFT-LCD LGD, SEC MN-tech Sales 672 World-class technology and production capacity * PET film: 5th in the world (production capacity) * Nylon film: 3rd in the world Investment focused on value-added films for IT industry * From DFR film to films for LCDs, PDPs and semiconductors Launch of optical thick film - Optical thick film launched in June line was expanded in Nov H -1.9% 3.3% 7.4% 10.0% 13.7% 14.5% OP Margin 2006~2009 : K-GAAP, 2010~2011 Fist Half Year : IFRS non-consolidated -9-

10 2-3. Major Products - Films/Electronic Materials 2 2Q (Net) 11 Results Sales Operating Profit (IFRS non-consolidated) (IFRS non-consolidated) OP OPM 12.9% 15.4% 14.2% 14.6% 14.2% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Ø Sales in 2Q11 remained stable QoQ due to increased sales of high value-added packaging film and film for industrial use, despite the demand for LCD/solar is is declined. Ø Operating profit decreased slightly QoQ due to weak demand in the LCD/solar and decreased ASP of general packaging film. ü Sales to decrease QoQ in 3Q11 due to demand reduction in the LCD/solar. -10-

11 2-4. Major Products - Fashion 1 Overview Outdoor & Sports Golf & Casual Brand Segment Competitors KOLON Sport Outdoor The North Face, K2, Columbia, Black Yak Head Sports Fila, EXR, K-Swiss, Puma Elord Golf Wolsey, Daks, Bean Pole-golf, Superior, Renoma, Munsingwear Henry Cotton s TD casual Hazzys, Bean Pole, Lacoste, Club Monaco, Ben Sherman, CP Suit Cambridge, Manstar Man Suit Galaxy, Rogadis Women s clothing Qua, Sandro Women s clothing Hazzys, Bean Pole Etc Sales H 8.1% 8.9% 7.6% 6.6% 8.3% 7.6% Leading fashion company * Well balanced brand portfolio * Various distribution channels - Dept., Disc., Agency, Direct, Outlet Focused on Sports * Outdoor & Sports has shown consistent high growth (averaged 30% YoY) * Sales from KOLON Sport, Head, and Jack Nicklaus Account for more than 50% of total sales * Man suit account for 30% KOLON Industries merged with Cambridge Kolon in May 2011 OP Margin 2006~2009 : K-GAAP, 2010~2011 Fist Half Year : IFRS non-consolidated -11-

12 2-4. Major Products - Fashion 2 2Q (Net) 11 Results Sales (IFRS non-consolidated) Operating Profit (IFRS non-consolidated) OP OPM % 8.0% 7.9% 7.2% 8.0% 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Ø Sales increased 53% YoY thanks to the merger with Cambridge Kolon and seasonality. Ø Operating profit and OP margin rose QoQ due to increased sales of high value added out-door brand such as KOLON SPORTS. ü Earnings to decline temporarily in 3Q11 due to low-seasonality, but 4Q11 results are expected to be the highest of the year on seasonality. -12-

13 3. Changing KOLON 1 Earnings: J-Curve Jumping up to global material company, Korea s first fashion company. 10) implementation of right issue for securing future growth 9) Switching to a holding company 2) Investments in new businesses (Aramid, PI film, Thick film, IT materials, etc.) 7) New businesses contributing to earnings (aramid, IT materials) 5) Merger with KOLON Chemical 8) Merger with FnC KOLON 11) Merger with Cambridge KOLON 3) Deterioration in the film market 6) Refine business structure (spin-off of fiber biz, high value-added film biz 1) Opposition of labor union; Restructuring delayed 4) Stabilization of relations btw labor and management

14 3. Changing KOLON 2 Earnings trend CAGR 31.6% 3,229 Sales OP EBITDA 1, , , , % 39.5% ~2009 : K-GAAP, 2010 : IFRS non-consolidated -14-

15 3. Changing KOLON 3 Non-operating Gains & Losses trend (IFRS non-consolidated) (Units: Wbn) 2Q10 3Q10 4Q Q11 2Q11 Operating profit Interest income Interest expense Gains on disposal of stakes in associated companies Pre-tax profit Ø Net interest expense declined in in 2Q11 due to to lower funding costs on on credit rating upgrade. Ø Gains from associated companies rose QoQ in in 2Q11 thanks to to sound earnings at at associated companies including SKC KOLON PI. PI. Net interest expense Net interest expense Interest expense Interest income 5 Gains on investments from associated companies (consolidated IFRS)

16 3. Changing KOLON 4 Changes in the financials Changes in Net debt/ebitda* 1,400 1,200 1, Net debt EBITDA Net debt / EBITDA Corporate bond Grade A Zone Change in borrowings & net debt ratio 1,427 1,415 1,463 1,456 1,234 1,205 1,054 1,121 1,169 1, % 158% 82% 83% 77% 2Q Q Q Q Q ~2009 : K-GAAP, 2010~2Q2011 : IFRS non-consolidated Total borrowings Net borrowings Ø Net Debt Ratio Since the right issue in in 4Q10, net debt ratio reduced thanks to to sharp decline in in borrowings Ø Non-consolidated IFRS (separate)- based borrowings higher than K-GAAP-based borrowings due to to additional recognition (W200bn) of of export bill bill purchase. Ø Borrowings likely to to rise going forward due to to CAPEX.

17 Financials } Holding Structures of Subsidiaries } Share trading of subsidiaries } Recent Dividends

18 Holding structure of subsidiaries Chairman & etc 52.9% KOLON Corp (Sep 8, 2011) 30.4% 20.0% 35.0% 20.4% 60.0% 96.6% 34.7% 47.5% 36.3% KOLON Industries KOLON BENIT KOLON E&C KOLON Life Science EFMC NEOVIEW KOLON KOLON I-net KOLON Pharm TissueGene KOLON Glotech 75.2% 100% 70% KFM KPL SKC KOLON PI 50% 100% KNC KOLON-GP 78.6% 78.8% KIN

19 Holding structure of subsidiaries (Stake ownership as of Sep 8, 2011, common shares) (Earnings as of end-jun 2011; Units: Wbn) Chairman Woong Yeul Lee and others KOLON KOLON INDUSTRIES 52.9% 30.4% 75.2% 100% 70% 50% 100% 78.6% 78.8% Glotech KFM KPL SKC KOLON PI KNC KOLON-GP KIN Business Car seat manufacturing, Imported car sales N/F and P/F yarn and fabric manufacturing Engineering plastic manufacturing PI film manufacturing T/C, airbag manufacturing Phenolic resin manufacturing packaging film manufacturing Sales Operating profit Net profit Gains on investment into associated companies

20 Appendix } Balance Sheet } Income Statement

21 Appendix [ Balance Sheet ] IFRS non-consolidated (separate) Q Q 2011 Total assets 3,182 3,446 Total assets 4,348 4,696 Current assets 1,189 1,265 Current assets 1,907 1,890 Non-current assets 1,993 2,181 Non-current assets 2,441 2,806 Liabilities 1,902 1,974 Liabilities 2,862 2,994 Current liabilities 1,176 1,453 Current liabilities 1,726 1,961 Non-current liabilities Non-current liabilities 1,136 1,033 Equity 1,279 1,472 Equity 1,485 1,701 Capital stock Controlling Shareholders' Equity 1,346 1,601 Capital surplus Capital stock Accumulated Other Comprehensive Capital surplus Other Reserves Accumulated Other Comprehensive Income IFRS consolidated Retained earnings Other Reserves Retained earnings Non-Controlling Interests Equity

22 Appendix [ Income Statement - IFRS non-consolidated] 1Q10 2Q10 3Q10 4Q Q11 2Q11 Sales , ,031 Ind. materials Chemical Film Fashion Others Operating profit Ind. materials Chemical Film Fashion Others Net financial gain and loss Pre-tax profit Net profit

23 Appendix [ Income Statement - IFRS consolidated] 1Q10 2Q10 3Q10 4Q Q11 2Q11 Sales 1,136 1,284 1,252 1,451 5,124 1,481 1,557 Ind. materials , Chemical Film Fashion , Others Operating profit Ind. materials Chemical Film Fashion Others Net financial gain and loss Gains (losses) from associates Pre-tax profit Net profit