Slide 1: K LASER (2461) 2Q17 Investor Conference
K LASER (2461) 2Q17 Investor Conference August 10, 2017 1
Slide 2: Disclaimer
Disclaimer • The information contained in this confidential document ("Presentation") has been prepared by K LASER (the "Company"). It has not been fully verified and is subject to material updating, revision and further amendment. • While the information contained herein has been prepared in good f
Slide 3: 2Q17 Results
tml 2Q17 RESULTS
Slide 4: 2Q17 Highlights
2Q17 Highlights ► Revenue increased 24.4% in 2Q17 versus 2Q16 to NT$1,244 mn. ► Gross Margin declined 4.0pp in 2Q17 versus 2Q16 to 23.4%. Core Gross Margin (excluding Optivision and Everest Display) increased 0.7 pp in 2Q17 versus 2Q16 to 29.1%. ► Operating Margin decreased 0.9pp in 2Q17 versus 2Q16
Slide 5: 2Q17 Revenue
2Q17 Revenue ► 2Q17 revenue increased thanks to the improvement in core business and the revenue growth of our subsidiary, Optivision. 2Q17 Revenue +24.4% YoY 1,244 1,000 2Q16 2Q17 Revenue NT$ million 5
Slide 6: Hologram sales mix by customer industry
Hologram sales mix by customer industry Other Consumer Tobacco & Alcohol 15% 17% 17% 18% 21% 23% 22% 25% 28% 26% 31% 36% 28% 31% 32% 33% 57% 52% 56% 51% 46% 47% 46% 42% 2012 2013 2014 2015 2016* 2016** 1H17* 1H17** Note: Other includes glitters, decorations, materials…etc * China subsidiary, He Rui
Slide 7: 2Q17 Gross Profit & Gross Margin
2Q17 Gross Profit & Gross Margin ► In 2Q17, K Laser’s gross margin increased mainly due to Optivision. ► Gross margin of the core business* expanded 0.7pp to 29.1% in 2Q17 versus 2Q16 thanks to improvements in the manufacturing processes and higher-margin TSL products. Gross Profit TSL as % of Reven
Slide 8: 2Q17 Operating Expenses
2Q17 Operating Expenses ► Operating expense ratio decreased versus the same period last year. K Laser continues to control expenses. 2Q17 Operating Expenses Operating Expenses Operating Expense Ratio 19.4% 16.3% 195 203 2Q16 2Q17 Operating expenses NT$ Million 8
Slide 9: 2Q17 Operating Profit
2Q17 Operating Profit ► Operating profit in 2Q17 increased versus 2Q16.。 2Q17 Operating Profit Operating Profit Operating Profit Margin 8.0% 7.1% 80 89 2Q16 2Q17 Operating Profit NT$ Million 9
Slide 10: 2Q17 Earnings
2Q17 Earnings ► Net Income of NT$34 mn, an increase of 20.9% YoY. EPS of NT$0.25 in 2Q17, an increase of 19.0% YoY. Net Income to Parent EPS 34 0.25 28 0.21 7 0.05 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 Net Income to Parent NT$ million EPS NT$ 10
Slide 11: K LASER
fi 11 K LASER
Slide 12: Appendix
tml APPENDIX
Slide 13: About K Laser
About K Laser ► We are the largest fully integrated holographic material supplier in the world, ranking No. 1 in Consumer Packaging and top 3 in Tobacco Security in China. The global market we target is over US$ 3 bn. ► With in-house design and origination capabilities, we are a total solution provi
Slide 14: K Laser at a glance
K Laser at a glance Product sales mix ► Ticker: 2461 TT Hologram 64% ► Founded in 1988 Optical Film & 36% Projector ► 2016 Revenue: NT$5.1 bn (US$169 m) Hologram sales mix Holographic Market cap*: NT$2.04 bn (US$68 m) 25% ► paper ► Employee number **: 750+ Holographic film 19% Hot stamping ► 8 manuf
Slide 15: Corporate Structure
Corporate Structure K Laser Hologram (2461 TT) 47% 74% Optivision* Everest K Laser(TW)* R&D center (US) (3666 TT) Display Projector China International Ningbo* Optical Film US Wuxi* Thailand* Dong Guan* Japan* Changsha* Dubai India* Hong Kong Korea* * With manufacturing facilities 15
Slide 16: Industry Leader
Industry Leader Products K Laser The largest fully integrated holographic Hologram material supplier in the world is the sole supplier No. 1 in Consumer Packaging Market Our and top 3 in Tobacco Security Market Consumer focus Security in China & Tobacco labels, industry packaging & Capturing a US$3b
Slide 17: TSL – What is it?
TSL – What is it? Truly Seamless (TSL) Traditional TSL can solve the issues - end products with seams or inconsistent patterns 17
Slide 18: TSL – Benefits
TSL – Benefits Minimized disturbance Less limitations on to production specification Traditional Truly Seamless (TSL) Customers K Laser • Production speed/capacity improves significantly • Higher yield rate • Higher yield rate • Higher production rate • Cost-saving for Holographic Film by • Lower in
Slide 19: Strategy Focus
Strategy Focus Resource Gain Shares Optimization Truly Seamless Streamline operations products (TSL) Grow non-tobacco Rationalize global exposure operations 19
Slide 20: Our Goals
Our Goals We strive to enhance our No. 1 position in the world Increase ROE Improve efficiency & Expand gross expand margin in core operating Core revenue business margin in core CAGR superior business to the industry average 20
Slide 21: 2Q17 Income Statement (consolidated)
2Q17 Income Statement (consolidated) NT$ Million 2Q17 2Q16 YoY (%) 1H17 1H16 YoY (%) Sales Revenue 1,244 1,000 24.4 2,304 2,158 6.8 Gross Profit 291 274 6.2 555 576 (3.8) Operating Profit 89 80 11.0 154 180 (14.8) Income before Tax 74 57 29.0 78 120 (35.0) Net Income to Parent 34 28 20.9 40 59 (30.9
Slide 22: 2Q17 Balance Sheet (consolidated)
2Q17 Balance Sheet (consolidated) NT$ Million 2Q17 2Q16 YoY (%) 1Q17 QoQ (%) TOTAL ASSETS 6,476 6,398 1.2 6,489 (0.2) Cash 1,206 1,328 (9.2) 1,211 (0.4) NR & AR 1,537 1,528 0.6 1,569 (2.0) Inventory 835 734 13.7 877 (4.9) Fixed Asset 1,267 1,404 (9.8) 1,281 (1.1) TOTAL LIABILITIES 3,391 3,163 7.2 3,
Slide 23: Dividend
Dividend 2014 2015 2016 Net Income (NT$ mn) 91 164 215 Cash Dividend (NT$ mn) 55 66 109 Dividend per Share (NT$) 0.42 0.50 0.815 Payout Ratio (%) 61% 40% 51% Cash Yield (%)* 2.9% 3.6% 5.2% *Cash yield is based on K Laser’s closing share price on the day before ex-dividend day (November 3, 2015 for 2
Slide 24: Thank You
THANK YOU 2 K LASER