Slide 1: K LASER 1Q17 Investor Conference
K LASER (2461) 1Q17 Investor Conference May 11, 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: 1Q17 Results
1Q17 RESULTS 3
Slide 4: 1Q17 Highlights
1Q17 Highlights ► Revenue decreased 8.5% in 1Q17 versus 1Q16 to NT$1,059 mn. ► Gross Margin declined 1.3pp in 1Q17 versus 1Q16 to 24.8%. Core Gross Margin (excluding Optivision and Everest Display) increased 4.4 pp in 1Q17 versus 1Q16 to 31.0%. ► Operating Margin decreased 2.5pp in 1Q17 versus 1Q16
Slide 5: 1Q17 & 2016 Revenue
1Q17 & 2016 Revenue ► 1Q17 revenue declined was a result of high inventory levels of our Chinese tobacco customers in our core business and the underperformance of our subsidiary, Optivision. 1Q17 Revenue 2016 Revenue 5,080 -8.5% YoY +25.2% YoY 1,157 1,059 4,057 1Q16 1Q17 2015 2016 Revenue NT$ milli
Slide 6: Hologram sales mix by customer industry
Hologram sales mix by customer industry Other Consumer Tobacco & Alcohol 15% 16% 21% 20% 20% 25% 28% 31% 33% 30% 36% 37% 33% 37% 54% 51% 50% 43% 43% 42% 35% 2012 2013 2014 2015 2016* 1Q17* 1Q17** Note: Other includes glitters, decorations, materials…etc * China subsidiary, He Rui Laser is consolidat
Slide 7: 1Q17 Gross Profit & Gross Margin
1Q17 Gross Profit & Gross Margin ► In 1Q17, K Laser’s gross margin decreased mainly due to Optivision. ► Gross margin of the core business* expanded 4.4pp to 31.0% in 1Q17 versus 1Q16 thanks to improvements in the manufacturing processes and higher-margin TSL products. Gross Profit TSL as % of Reven
Slide 8: 1Q17 & 2016 Operating Expenses
1Q17 & 2016 Operating Expenses ► Operating expense ratio slightly increased due to lower revenue while the amount was kept at the same level. K Laser continues to control expenses. 1Q17 Operating Expenses 2016 Operating Expenses Operating Expenses Operating Expenses Operating Expenses - Core Operati
Slide 9: 1Q17 & 2016 Operating Margin
1Q17 & 2016 Operating Margin ► Operating profit in 1Q17 decreased mainly due to Optivision. However, Operating Profit for our core business remained at the same level as 1Q16.。 1Q17 Operating Profit 2016 Operating Profit Operating Profit Opearting Profit Operating Profit - Core Operating Margin Oper
Slide 10: 1Q17 Earnings
1Q17 Earnings ► Net Income of NT$7 mn and EPS of NT$0.05 in 1Q17, a decreased of 78% YoY. Net Income to Parent EPS 215 1.63 164 1.12 31 0.23 7 0.05 2015 2016 1Q16 1Q17 2015 2016 1Q16 1Q17 Net Income to Parent NT$ million EPS NT$ 10
Slide 11: Dividend
Dividend 2014 2015 2016 Net Income (NT$ mn) 91 164 215 Cash Dividend (NT$ mn) 55 66 109 Dividend per Share (NT$) 0.42 0.50 0.815** Payout Ratio (%) 61% 40% 51% Cash Yield (%) 2.9%* 3.6%* 5.2%** *Cash yield is based on K Laser’s closing share price on the day before ex-dividend day (November 3, 2015
Slide 12: K LASER
fi 12 K LASER
Slide 13: Appendix
tml APPENDIX
Slide 14: About K Laser
About K Laser ► We are the largest fully integrated holographic material supplier in the world, ranking No. 1 in Consumer Packaging and top 3 in Tobacco Security in China. The global market we target is over US$ 3 bn. ► With in-house design and origination capabilities, we are a total solution provi
Slide 15: K Laser at a glance
K Laser at a glance Product sales mix ► Ticker: 2461 TT Hologram 66% ► Founded in 1988 Optical Film & 34% Projector ► 2016 Revenue: NT$5.1 bn (US$168 m) Hologram sales mix Holographic Market cap*: NT$2.08 bn (US$69 m) 27% ► paper ► Employee number **: 750+ Holographic film 18% Hot stamping ► 8 manuf
Slide 16: 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 16
Slide 17: 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$3b
Slide 18: TSL – What is it?
TSL – What is it? Truly Seamless (TSL) Traditional TSL can solve the issues - end products with seams or inconsistent patterns 18
Slide 19: TSL – Benefits
TSL – Benefits Minimized disturbance Less limitations on to production specification Traditional Truly Seamless (TSL) Customers K Laser • Production speed/capacity improves significantly • Higher yield rate • Higher yield rate • Higher production rate • Cost-saving for Holographic Film by • Lower in
Slide 20: Strategy Focus
Strategy Focus Resource Gain Shares Optimization Truly Seamless Streamline operations products (TSL) Grow non-tobacco Rationalize global exposure operations 20
Slide 21: Our Goals
Our Goals We strive to enhance our No. 1 position in the world Increase ROE Improve efficiency & Expand gross expand margin in core operating Core revenue business margin in core CAGR superior business to the industry average 21
Slide 22: 1Q17 Income Statement (consolidated)
1Q17 Income Statement (consolidated) NT$ Million 1Q17 1Q16 YoY (%) 2016 2015 YoY (%) Sales Revenue 1,059 1,157 (8.5) 5,080 4,057 25.2 Gross Profit 263 302 (12.9) 1,281 1,013 26.5 Operating Profit 65 100 (35.4) 473 290 63.4 Income before Tax 4 62 (93.9) 343 249 37.8 Net Income to Parent 7 31 (78.2) 2
Slide 23: 1Q17 Balance Sheet (consolidated)
1Q17 Balance Sheet (consolidated) NT$ Million 1Q17 1Q16 YoY (%) 2016 2015 YoY (%) TOTAL ASSETS 6,489 6,434 0.9 7,030 5,996 17.2 Cash 1,211 1,174 3.1 1,190 1,242 (4.2) NR & AR 1,569 1,789 (12.3) 2,029 1,548 31.1 Inventory 877 698 25.7 890 564 57.8 Fixed Asset 1,281 1,425 (10.1) 1,340 1,329 0.9 TOTAL
Slide 24: Thank You
THANK YOU 2 K LASER