Songwon Industrial Co., Ltd. · KRX:004430
Songwon Industrial — Investor Day (March 2014)
34 slides from Songwon Industrial's investor day presentation, Mar 7, 2014
Slide 1: Investors Day 2014
Investors Day 2014 March 7, 2013 Ulsan, Korea
Slide 2: Disclaimer / forward-looking statements
2 Disclaimer / forward-looking statements This presentation contains forward-looking statements about circumstances and events that have not yet taken place. Accordingly, there can be no assurance that projected financial results, future plans or strategies will be attained. In particular, no repres
Slide 3: Status financial information disclosed
3 Status financial information disclosed The financial information disclosed within this presentation represents audited results of Songwon Industrial Group (the Group). Nevertheless, the audited numbers for 2013 are subject to approval by the shareholders’ meeting taking place on March 21, 2014 and
Slide 4: Agenda
4 Agenda 1. Welcome 2. Songwon Industrial Group 3. Financial Performance 2013 4. Outlook 5. Plant tour 6. Farwell
Slide 5: Agenda
5 Agenda 1. Welcome 2. Songwon Industrial Group 3. Financial Performance 2013 4. Outlook 5. Plant tour 6. Farwell
Slide 6: Company profile – Overview
Company profile – Overview 6 Founded: 1965 Headquarters: Ulsan, Korea CEO: Jongho Park Employees: 661 Global presence: 17 entities in 9 countries Revenue: KRW 692bn Public listing: Korea stock exchange Market cap.: KRW 258,000m (as of 2/25/2014) Stock price: KRW 10,750 (as of 2/25/2014) Products: Sp
Slide 7: Company profile – Products
Company profile – Products 7 Leader in additives Songwon Industrial Group SAP / PU Flocculants Tin Plasticizers Alkylphenols PVC Intermediates and Alkylcresols Polymer Stabilizers Stabilizers Plastics, Diapers, Synthetic Personal Plastics PVC Leather, Care and Intermediates Base for Stabilizers, Adh
Slide 8: Company profile – Revenue snapshot
Company profile – Revenue snapshot 8 In 2006, Songwon decided to go global and has since become a key player in the specialty chemicals business. … with solid growth! … to a key global specialty chemical Revenue in KRWbn player… From a vision of success to a major regional polymer additives supplier
Slide 9: Company profile – Global locations
Company profile – Global locations 9 Headquarters/Affiliates Manufacturing Applications Technical service R&D Ulsan, Korea Ulsan, Korea Ulsan, Korea Ulsan, Korea Ulsan, Korea Frauenfeld, Switzerland Maeam, Korea Brussels, Belgium Frauenfeld, Sw itzerland Mumbai, India Suw on, Korea Manama, Kingdom o
Slide 10: Company profile – Group structure
Company profile – Group structure 10 Songwon Industrial Co. Ltd (Ulsan, Korea) 50% Chem Service Asia (Seoul Korea) 100% 55.8% 100% 100% Songwon Songwon Songwon Holdings AG 44.2% International Japan Songwon China Ltd International AG (Frauenfeld, Switzerland) K.K. (Hong Kong PRC) (Frauenfeld, Switzer
Slide 11: Agenda
11 Agenda 1. Welcome 2. Songwon Industrial Group 3. Financial Performance 2013 4. Outlook 5. Plant tour 6. Farwell
Slide 12: Key developments 2013
12 Key developments 2013 Organic sales growth • Overall sales growth of 1.8% despite a continuing depressed and volatile global economic situation • Strong organic growth of our core business Polymer Stabilizers more than compensate reduced sales due to discontinuation of certain products Manufactur
Slide 13: Key developments 2013
13 Key developments 2013 Operating profit decreased mainly due to specific, non-recurring impacts • Significant lower capacity variance adjustment within COGS due to change in calculation method • Various corporate development projects expensed within SG&A Net profit increase • While higher gross pr
Slide 14: Key developments 2013
14 Key developments 2013 Development and implementation of OPS business continued • Start up of operations of OPS plant in the USA • Addition of new Hot Extrusion technology to the OPS plant in Germany • Legal establishment of sales and production entities in the Middle East • Ground breaking of OPS
Slide 15: Key financial data
15 Key financial data in Mil. KRW 2013 2012 ∆% Sales 692,164 679,637 1.8% Gross profit 133,291 131,999 1.0% Gross profit margin 19.3% 19.4% Operating profit 44,045 57,652 -23.6% EBITDA 78,653 67,495 16.5% EBITDA margin 11.4% 9.9% EBIT 47,387 37,147 27.6% EBIT margin 6.8% 5.5% Profit before tax 31,86
Slide 16: Sales development – By region
Sales development – By region 16 • Solid sales performance achieved quarter over quarter despite challenging market conditions in different regions • Q4/2013 and Q3/2013 impacted by discontinuation of certain products 03/07/2014
Slide 17: Sales development – By products
Sales development – By products 17 • Total sales increase of 1.8% to 692 billion KRW • Core business Polymer Stabilizers grew 12.5% (despite discontinuation of AO FR/RD) • Tin Intermediates sales temporary decreased due to plant outage (expansion of DOTO and reduction of DBTO) • Alkyl Phenols decrea
Slide 18: Sales development – Key impacts 2013
Sales development – Key impacts 2013 18 Polymer Stabilizers • Again strong year over year performance (+12.5%), with a particularly strong growth of the new HALS and thioester product groups based on back- integration (joint venture with Tangshan Baifu) and distribution agreements (Sabo) despite: •
Slide 19: Discontinued products – Sales development
Discontinued products – Sales development 19 • Discontinued products accounted for approx. 45 bn KRW in 2012 and 34 bn KRW in 2013 • Sales growth of continued products is with 2.8% above overall sales growth of 1.8% 03/07/2014
Slide 20: Gross profit development
20 Gross profit development • Solid business performance of 2012 is confirmed 2013 • Gross profit margin for the year 2013 is with 19.3% slightly below prior year (19.4%) due to change in capacity variance calculation 03/07/2014
Slide 21: Discontinued products – Gross profit development
Discontinued products – Gross profit development 21 • Discontinuation of products is mainly driven by negative gross profit margins of respective products • Therefore gross profit excluding contribution of discontinued products is higher compared to overall gross profit 03/07/2014
Slide 22: FX development – Korean Won vs. USD
FX development – Korean Won vs. USD 22 • Although the Korean Won against the US Dollar as of Dec. 31, 2013 is at a similar level than as of Dec. 31, 2012, significant fluctuations occurred during the year 2013 • If the US Dollar is getting stronger (against Korean Won), the results of Songwon Indust
Slide 23: FX development – Impact on profit 2013
FX development – Impact on profit 2013 23 FX impact on net profit for the year 2013 FX impact Mil. KRW As reported Net of FX impact included Operating profit 44,045 - 44,045 Other income 17,757 11,534 6,223 Other expenses -14,415 -10,844 -3,571 EBIT 47,387 690 46,697 Share of result from invest. acc
Slide 24: Profit for the period – 2013 vs. 2012
Profit for the period – 2013 vs. 2012 24 • Increase gross profit due to sales growth as well as productivity improvements • Investments in global expansion and further development of the Group lead to higher SG&A expenses • Higher Other income (net) due to lower capacity variance and income from sal
Slide 25: Financing structure - Improvement 2013
25 Financing structure - Improvement 2013 • With the restructuring of borrowings performed in Q1/2013 (signing of syndicated loan agreement), the financing structure improved significantly • Current borrowings were converted into non-current borrowings • Significant savings on interest expenses due
Slide 26: Agenda
26 Agenda 1. Welcome 2. Songwon Industrial Group 3. Financial Performance 2013 4. Outlook 5. Plant tour 6. Farwell
Slide 27: Outlook – Global & regional markets
Outlook – Global & regional markets 27 Global market trends • Expected global GDP growth of 3.6% for 2014 • Major growth driver still Asia (China, India and ME) • US economy to improve overall • European economy showing signs of recovery • Polymer industry expected to pick up momentum. ME to continu
Slide 28: Outlook – Product portfolio
Outlook – Product portfolio 28 Continue to establish a balanced portfolio of profitable businesses • Discontinuation of non-core/non-profitable businesses started in 2013 – further optimizations under constant evaluation • Key resources in place (R&D, business development, application development) t
Slide 29: Outlook – Product portfolio
Outlook – Product portfolio 29 Tin Intermediates • Growth expected for 2014: expansion of DOTO production put us in position to offer to the market the product of choice to substitute DBTO, going to be phased out progressively for Regulatory reasons. Other Product Groups • The other product groups (
Slide 30: Outlook – Financial targets
Outlook – Financial targets 30 • Compared to sales, disproportionately low development of SG&A is expected as main investments in resources for the future were made in past two years • Continued focus on the achievement of the strategic objectives and milestones announced in February 2013. Financial
Slide 31: Outlook – Financial targets
Outlook – Financial targets 31 • Due to continued uncertainties regarding the global economic recovery, our Financial targets remain unchanged but achievement is not expected before 2016 (instead of 2015) 03/07/2014
Slide 32: Agenda
32 Agenda 1. Welcome 2. Songwon Industrial Group 3. Financial Performance 2013 4. Outlook 5. Plant tour 6. Farwell
Slide 33: Agenda
33 Agenda 1. Welcome 2. Songwon Industrial Group 3. Financial Performance 2013 4. Outlook 5. Plant tour 6. Farwell
Slide 34: Thank you for your attention!
감사합니다 34 Thank you for your attention! Further information including our Annual Financial & Sustainability Report 2013 can be downloaded on www.songwon.com