Nanofilm Technologies International Ltd. · SGX:MZH
Nanofilm Technologies International — H1 2023 Earnings Presentation
28 slides from Nanofilm Technologies International's earnings presentation, August 2023
Slide 1: Nanofilm Technologies International 1H2023 Results Announcement
NANOFILM TECHNOLOGIES INTERNATIONAL 1H2023 Results Announcement August 2023 MAKING THE WORLD A BETTER PLACE Through ubiquitous applications of our deep technology capabilities
Slide 2: Important Notice
IMPORTANT NOTICE This presentation is for information purposes only and does not constitute or form part of an offer, invitation or solicitation of any offer to purchase or subscribe for any securities of Nanofilm Technologies International Limited (the “Company”) in Singapore or any other jurisdict
Slide 3: Management Panel
Management Panel Mr Gary Ho Hock Mr Kay Lim Mr Gian Yi-Hsen Mr Ian Howe Yong Group Chief Financial Officer Group Chief Strategy Officer Group Chief Commercial Officer Executive Director and Group Chief Executive Officer 2 | CONFIDENTIAL
Slide 4: Agenda
Agenda ▪ Overview ▪ Financial Highlights ▪ ESG Update ▪ Outlook ▪ Q&A
Slide 5: Overview
1 | Overview Mr Gary Ho Hock Yong Executive Director and Group Chief Executive Officer
Slide 6: 1H2023 At a Glance: Revenue lower due to seasonality and soft 3C market
1H2023 At a Glance: Revenue lower due to seasonality and soft 3C market Fundamentals remain sound while the Group navigates macro challenges 1% 1H2023 10 127m 12% S$ m S$ 6% 1H2023 -72% YoY as at 30 June 2023 S$ 73m ADJUSTED EBITDA TOTAL CASH BALANCE (1) -34% YoY 1H2023 81% S$ m (8) 0.33₵ S$16m per
Slide 7: 1H2023 BU Review: Consumer demand, lower seasonality, customer capex tightening and FX impacted revenue
1H2023 BU Review: Consumer demand, lower seasonality, customer capex tightening and FX impacted revenue Double digit growth in AMBU non-consumer sub-segments and positive momentum in Sydrogen ▪ Consumer (Communication, Wearables & ▪ Consumer (Communication, Wearables & NFBU Accessories and Computer)
Slide 8: Financial Highlights
2 | Financial Highlights Mr Kay Lim Group Chief Financial Officer
Slide 9: 1H2023 Revenue Breakdown
1H2023 Revenue Breakdown AMBU consumer and NFBU negatively impacted by weaker consumer electronics market Encouraging growth from other AMBU sub-segments ▪ Group revenue declined 34% YoY to S$73m (in S$m) o AMBU consumer and NFBU negatively impacted by a weaker 15 0.0 13 0.0 consumer electronics mar
Slide 10: Core Expenses Review
Core Expenses Review Renewed focus on operational efficiency and cost management (in S$m) 55.1% ▪ Lower COGS YoY due to lower cost incurred for lower sales 90 .0 70 .0% 80 .0 51.3% 68.0% 60 .0% 70 .0 50 .0% while COGS as a percentage of revenue is higher YoY primarily attributed to three factors: 60
Slide 11: Investing in Technology & Innovation
Investing in Technology & Innovation Higher portion of R&D and Engineering activities moving closer to commercialisation R&D and Engineering Expenses (1) (2) (in S$m) 25 .0 (2) (2) 8.7% 7.8% 7.7% 10 .0% 20 .0 5.0 % 15 .0 6.5 4.1 8.6 0.0 % 10 .0 -5.0% 5.0 8.7 9.7 6.3 - -10.0 % 1H2022 2H2022 1H2023 R&
Slide 12: EBITDA and PATMI Overview
EBITDA and PATMI Overview EBITDA and PATMI impacted by higher fixed costs attributed to fixed asset expansion Adjusted EBITDA Change PATMI Change 40 .0 37.6 22.9 25 .0 18.8 22.9 35 .0 20 .0 30 .0 15 .0 25 .0 10 .0 20 .0 15 .0 4.3 0.0 10.4 5.0 10 .0 - PATMI Lower revenue Product Mix Others 5.0 PATMI
Slide 13: PPE Update
PPE Update Continuing investments in strategic priorities to drive future growth 40 (in S$m) PPE in 1H2023 35 34 2 ▪ Total PPE for 1H2023 was S$20.7m: 30 o S$3.5m acquired under right-of-use assets under the leasing arrangements 25 23 o Additions of property, plant and equipment 15 2 21 amounted to
Slide 14: Positive Operating Cash Flow Generation
Positive Operating Cash Flow Generation Cash generation despite challenging market Positive operating cash flow Total cash balance as at 30 Jun 2023 (in S$m) (in S$m) 20 0 OCF 18 0 after WC, 17 16 0 interest & taxes 16 14 0 12 0 36 10 0 80 161 6 30 60 127 40 20 21 35 0 Cash (prior to PPE PPE Share b
Slide 15: ESG Update
3 | ESG Update Mr Gian Yi-Hsen Group Chief Strategy Officer
Slide 16: Sustainability – Operations
Sustainability – Operations Moving towards renewable energy in Shanghai with Solar Panels and Hydropower ▪ Taking proactive steps Installing Solar Panels in Shanghai towards sustainability: o Moving towards renewable energy in Shanghai with Solar Panels and Hydropower o Replacing electroplating PLAN
Slide 17: Sustainability – Technology
Sustainability – Technology Replacing electroplating with Green Plating, another sustainable innovation by Nanofilm ▪ Electroplating produces heavy ▪ Self-developed coating ▪ Zero Waste Discharge metal waste systems ▪ Developed to relieve: ▪ Capable of integrating with clients’ production lines ▪ En
Slide 18: Outlook
4 | Outlook Mr Gary Ho Hock Yong & Mr Ian Howe Executive Director and Group Chief Commercial Officer Group Chief Executive Officer
Slide 19: Our Strategic Priorities of BU in Key Focused Areas
Our Strategic Priorities of BU in Key Focused Areas Focused on longer-term objectives including strategic expansion, market diversification and investment in R&D to unlock greater opportunities and grow revenues AMBU IEBU NFBU Sydrogen Diversification ▪ 3C expansion to new sites ▪ Continue to suppor
Slide 20: 2H2023 Business Outlook
2H2023 Business Outlook MARKET ENVIRONMENT • Challenging business climate – particularly on IEBU business where customers remain tight on capex spending / investments • 3C consumer business (AMBU and NFBU) inventory rebalancing is improving • Demand and production volume for 2H peak season will be p
Slide 21: Q&A
5 | Q&A
Slide 22: Thank You
THANK YOU
Slide 23: Appendices
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Slide 24: Strategic Focus Areas: Progress & Updates
Strategic Focus Areas: Progress & Updates Fully focused on improving performance by pursuing opportunities to expand product offering and diversifying customer base New Segments & Joint Ventures R&D and STRATEGIC Geographical $ Product Engineering Product / M&A AREAS Expansion Diversification Develo
Slide 25: AMBU: Soft 3C market, partially offset by an increased Industrial contribution
AMBU: Soft 3C market, partially offset by an increased Industrial contribution Financial performance (in S$m) YoY drop 30% 90 80 70 60 50 Margins Margins 40 85 34% 15% 30 59 29 20 10 9 - 1H2022 1H2023 Revenue Adjusted EBITDA Key operating data 1H2022 1H2023 Coating equipment (no.) (1) 238 (4) 248 In
Slide 26: IEBU: Customers remained cautious with Capex spend
IEBU: Customers remained cautious with Capex spend Financial performance (in S$m) YoY drop 25 55% 20 Margins 15 Margins 19 37% 25% 10 7 9 2 5 - 1H2022 1H2023 Revenue Adjusted EBITDA Key operating data 1H2022 1H2023 Equipment produced (no.) (1) 10 5 Equipment sold (no.) 8 3 Equipment used internally
Slide 27: NFBU: Similarly, soft 3C market affecting our components BU
NFBU: Similarly, soft 3C market affecting our components BU Financial performance (in S$m) YoY drop 10 36% 8 Margins 6 Margins 4 7 39% -1% 5 3 2 - (2) 1H2022 1H2023 (0) Revenue Adjusted EBITDA Source: Company information, numbers may not tie due to rounding (refer to results announcement) 26 | C O N
Slide 28: Sydrogen: Continue gaining traction with encouraging customer feedback
Sydrogen: Continue gaining traction with encouraging customer feedback Financial performance (in S$m) YoY growth 2 2,443% 2 1 Margins Margins 0 1 n.m. n.m. 0 - 1H2022 1H2023 (1) (1) (1) (1) (2) Revenue Adjusted EBITDA Source: Company information, numbers may not tie due to rounding (refer to results
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