Acer Incorporated · TWSE:2353
Acer — Q1 2006 Earnings Presentation
21 slides from Acer's earnings presentation, Apr 28, 2006
Slide 1: Acer Inc. Q1, Y2006 Investor Conference
Acer Inc. Q1, Y2006 Investor Conference April 28, 2006 www.acer.com
Slide 2: Legal Disclaimer
Legal Disclaimer The information is provided for informational purposes only, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security issued by Acer or other parties Acer’s statements that are not historical facts are forward-looking statements that indicate
Slide 3: Consolidated Financial Results
Consolidated Financial Results Howard Chan CFO & V.P.
Slide 4: Consolidated Income Statement (1st Quarter)
Consolidated Income Statement (1st Quarter) (NT$ Million) 1Q‘06 1Q‘05 Change Revenue 82,996 100% 65,710(b) 100% +26% Gross Profit 8,844 10.7% 7,981 12.1% +11% Operating Expenses 6,919 8.3% 6,041 9.2% +15% Operating Income 1,925 2.3% 1,940(b) 3.0% *(b) Non-Operating Income 3,307 4.0% 618 PBT 5,232 6.
Slide 5: Hit Rate of 2006 Financial Forecast
Hit Rate of 2006 Financial Forecast Actual Forecast Hit Rate Forecast Hit Rate (NT$ Million) 1Q'06 1Q'06 % Y2006 % Revenue 82,996 81,912 101.3% 400,029 20.8% Operating Income 1,925 2,059 93.5% 10,779 17.9% Non-Operating Income 3,307 1,734 2,535 PBT 5,232 3,793 137.9% 13,314 39.3% PAT 4,021 3,018 133
Slide 6: Consolidated Revenue and Gross Margin
Consolidated Revenue and Gross Margin Q1, 2006 Revenue Growth: +26% Y/Y 120,000 15.0% 90,000 (NT$ Million) 10.0% 60,000 5.0% 30,000 0 0.0% 1Q'03 2Q'03 3Q'03 4Q'03 1Q'04 2Q'04 3Q'04 4Q'04 1Q'05 2Q'05 3Q'05 4Q'05 1Q'06 Revenue 30,320 33,156 40,288 53,892 49,432 48,625 56,057 70,901 65,710 65,676 82,51
Slide 7: Consolidated Operating Income
Consolidated Operating Income 2,400 4.0% 1,800 (NT$ million) 1,200 2.0% 600 0 0.0% 1Q'03 2Q'03 3Q'03 4Q'03 1Q'04 2Q'04 3Q'04 4Q'04 1Q'05 2Q'05 3Q'05 4Q'05 1Q'06 Op. Income 277 231 298 1,035 893 672 720 1,521 1,940 1,659 1,778 2,272 1,925 Op. Margin - % 0.9% 0.7% 0.7% 1.9% 1.8% 1.4% 1.3% 2.1% 3.0% 2.
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet (NT$ Million) Mar. 31, 2006 Current Assets Cash and cash equivalence 29,692 17% Financial Assets-Current 7,876 4% Notes & Account receivable 71,771 41% Inventory 26,300 15% Others 7,618 4% Healthy Financial Ratio Total Current Assets 143,258 82% Current Ratio : 145% Long
Slide 9: Holding & Investment Business
Holding & Investment Business Percentage of Market Value Book Value Potential Gain Ownership (NT$ M) (NT$ M) (Apr. 26,2006) Major Shareholdings BenQ 5.3% 3,712 1,704 2,008 Wistron 23.8% 11,267 5,877 5,390 TSMC 0.1% 2,485 706 1,779 Hon Hai 0.1% 869 133 736 CDIB 1.0% 1,388 1,263 125 Taiwan Fixed Netwo
Slide 10: Dividend & Employee Bonus
Dividend & Employee Bonus Dividend Policy (NT$ per share ) Year EPS Stock Cash 2002 4.46 1.033 2.066 2003 3.61 0.505 2.525 2004 3.38 0.6 2.3 2005 3.83 0.2 3.0 Employee Bonus (Percentage of 90% PAT plus or minus Special Reserve) Year Stock Cash 2002 7% 1% 2003 6.4% 1.6% 2004 6.4% 1.6% 2005 4.0% 4.0
Slide 11: Business Review
Business Review Gianfranco Lanci President
Slide 12: IT Product Revenue Breakdown
IT Product Revenue Breakdown Q1, 2006 Q1, 2005 NT$71,782 Million NT$52,903 Million 7% 9% 19% 58% 59% 19% 15% 14% Notebook Desktop PC Notebook Desktop PC Display Others Display Others Note: Others include servers, projector and IA products 11
Slide 13: IT Product Revenue Breakdown by Geography
IT Product Revenue Breakdown by Geography Q1, 2006 Q1, 2005 NT$71,782 Million NT$52,903 Million 6% 6% 4% 5% 66% 56% 13% 15% 11% 18% EMEA Pan America EMEA Pan America Asia Pacific Taiwan & HK Asia Pacific Taiwan & HK China China Note: (a) Asia Pacific excludes Greater China (Taiwan, HK, and Mainland
Slide 14: Inventory Turnover Days (ADS)
Inventory Turnover Days (ADS) IT Products Business 40 32 30 22 19 19 20 19 17 18 15 15 14 13 10 12 12 1Q'03 2Q'03 3Q'03 4Q'03 1Q'04 2Q'04 3Q'04 4Q'04 1Q'05 2Q'05 3Q'05 4Q'05 1Q'06 13
Slide 15: Operating Expenses % Trend
Operating Expenses % Trend IT Product Business 16.0% 14.76% Y2002 Y2003 Y2004 Y2005 Y2006 12.81% 11.57% 11.13% 10.72% 9.97% 8.80% 8.75% 8.52% 8.07% 7.72% 8.02% 7.93% 7.61% 8.0% 7.65% 7.48% 6.58% 0.0% Q1 Q2 Q3 Q4 14
Slide 16: Acer Business Status & Strategy
Acer Business Status & Strategy J.T. Wang Chairman & CEO
Slide 17: Top PC Brands Worldwide (1Q'06)
Ⅰ. Top 5 PC Brands Worldwide (1Q’06) Market Share Unit Growth Rank 1Q’06 4Q’05 1Q’05 YoY 1 Dell 16.5% 16.3% 16.9% 10.2% 2 HP 14.9% 15.0% 13.8% 22.3% 3 Lenovo 6.0% 6.9% 6.1% 10.5% 4 5.0% 5.5% 3.9% 45.5% 5 F.S. 3.9% 3.9% 4.2% 6.6% Overall Market 13.1% Source: Gartner Dataquest (April, 2006) 16
Slide 18: Remarks
Remarks 1. Acer and HP gained market share from Q1’06 YoY for unit shipment; Acer’s growth was more than double of HP’s. Other top-five players experienced declining share. 2. Acer’s market share was 1% less than Lenovo, but our growth rate more than quadrupled Lenovo’s. We have the opportunity to b
Slide 19: Acer's 2006 Financial Forecast
II. Acer’s 2006 Financial Forecast 1. Consolidated revenue: NT$400 billion PAT: NT$10 billion 2. High confidence in achieving targets despite of intensive competition. 3. Revenue: Better-than-expected growth in the U.S. and China can compensate lower growth in other regions. 18
Slide 20: PAT: Better-than-target non-operating income
4. PAT: Better-than-target non-operating income gives Acer head start in achieving total PAT of NT$10 billion. 5. Operating Income: We consider it highly possible to keep within the range of ±10% compared with our 2006 financial forecast. 19
Slide 21: Business Growth Strategy
III. Business Growth Strategy We will continue to pursue fastest growth when operating margin can be maintained in the range of 3% for Acer’s IT product business by 2007. Balancing revenue growth and profit from the U.S. market is our key objective. 20