Tatung Co. · TWSE:2371

Tatung — Investor Presentation (October 2013)

39 slides from Tatung's investor presentation, October 2013

  1. Slide 1: Tatung Company

    Tatung Company (2371TT) Integrity, Honesty, Industry, Frugality October 2013 W. Y. Lin, President

  2. Slide 2: Executive Summary

    Executive Summary We are Taiwan’s leading provider of integrated solutions for Mechatronic projects, including turnkey power generation, smart grid and corporate energy management systems. We are expanding our Mechatronics turnkey solutions market presence to ASEAN and China. We are in the midst of

  3. Slide 3: Our Top Priorities

    Our Top Priorities It is painfully clear to us that losses in our ODM monitor business, losses from key investment subsidiaries and high debt levels have prevented investors from recognizing the value of our core power business and our land bank. We set our top priorities for the next five years as:

  4. Slide 4: Tatung's Core Strategic Initiatives

    Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improved Cash Flow and Development Reduced Debt 4

  5. Slide 5: Tatung's Core Strategic Initiatives

    Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 5

  6. Slide 6: 6+ Years of Structural Improvement in Core Earnings

    6+ Years of Structural Improvement in Core Earnings By phasing out low-margin products, we have been able to achieve the following in our core business portfolio: Higher Overall Gross Margin • Core operations gross margin reached 9.7% in 1H13 from 5.7% in 2007. Reduced Operating Expenses • SG&A expe

  7. Slide 7: Revenue Contribution

    Revenue Contribution 100% 80% 35% 41% 44% 42% 44% 46% 55% 60% 40% 61% 45% 45% 45% 41% 51% 28% 20% 12% 13% 17% 7% 11% 11% 0% 5% 2007 2008 2009 2010 2011 2012 1H13 Systems Group Consumer Group Power Group 7

  8. Slide 8: 6+ Years of Structural Improvement in Core Earnings

    6+ Years of Structural Improvement in Core Earnings At the Business Group and Business Unit Level: • Power and Systems Business Groups: Tatung’s core power and systems solutions groups accounted for 83% of revenues in 1H13, versus 40% in 2007. R&D spending devoted to these two groups now accounts fo

  9. Slide 9: Core Operations Business Performance

    Core Operations Business Performance Revenue Operating Profit NT$ mn NT$ mn Revenue Operating Profit 50,000 500 379 235 43,072 38,609 38,408 0 40,000 37,276 (64) (127) 32,185 (500) 30,264 30,000 (1,000) (992) 20,000 (1,500) 11,871 10,000 (2,000) (1,951) (1,930) (2,500) - 2007 2008 2009 2010 2011 201

  10. Slide 10: Power Group Performance

    Power Group Performance NT$ mn Power Group Sales Power Group Operating Income NT$ mn 19,000 600 535 17,063 503 16,394 492 14,899 15,401 14,833 500 457 16,000 429 423 13,382 400 13,000 300 10,000 200 6,516 97 7,000 100 4,000 - 2007 2008 2009 2010 2011 2012 1H13 2007 2008 2009 2010 2011 2012 1H13 % Po

  11. Slide 11: Consumer Group Performance

    Consumer Group Performance NT$ mn Consumer Group Sales NT$ mn Consumer Group Operating Income 30,000 26,063 200 30 52 25,000 0 18,999 (200) (79) 20,000 17,534 17,132 (400) (237) 15,000 13,620 13,150 (600) (800) 10,000 (1,000) (909) 5,000 3,380 (989) (1,200) - (1,400) (1,254) 2007 2008 2009 2010 2011

  12. Slide 12: Systems Group Performance

    Systems Group Performance NT$ mn Systems Group Sales NT$ mn Systems Group Operating Profit 5,000 4,637 250 4,188 4,171 199 4,000 200 3,237 150 3,000 2,427 2,098 100 83 1,959 2,000 51 50 30 34 7 1,000 0 - (50) (17) 2007 2008 2009 2010 2011 2012 1H13 2007 2008 2009 2010 2011 2012 1H13 % Systems Group

  13. Slide 13: Tatung's Core Strategic Initiatives

    Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 13

  14. Slide 14: 6+ Years of Structural Improvement in Investment Income

    6+ Years of Structural Improvement in Investment Income Our Achievements: Disposal of Money-Losing Subsidiaries • We have shut down or disposed of 4 subsidiaries which posted a combined cumulative loss of NT$3.5bn in 2007-2011. Significant Reduction in Debt at CPT • CPT’s net debt fell to NT$20bn in

  15. Slide 15: CPT Has Greatly Reduced its Capital Intensity

    CPT Has Greatly Reduced its Capital Intensity NT$ mn CPT - Net Debt NT$ mn CPT - Capex 10,000 60,000 50,000 8,000 40,000 6,000 30,000 4,000 20,000 10,000 2,000 - - FY2008 FY2009 FY2010 FY2011 FY2012 1H13 FY2008 FY2009 FY2010 FY2011 FY2012 1H13 NT$ mn CPT - Depreciation CPT - Net Profit 30,000 NT$ mn

  16. Slide 16: CPT: Capex Spending

    CPT: Capex Spending CPT has maintained the local LCD industry’s 2nd lowest capex-to- sales ratio since 2007 Capex to Sales (x) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 1H13 Average CPT (2475 TT) 3.9 7.7 7.9 4.4 4.7 9.9 6.8 6.5 Wintek (2384 TT) 37.1 24.5 9.6 15.2 13.6 13.0 6.5 17.1 AUO (2409 TT) 13.

  17. Slide 17: Investment Income Analysis

    Investment Income Analysis NT$m 8,000 6,000 4,000 2,000 Reported Investment Income 0 2007 2008 2009 2010 2011 2012 1H13 (2,000) Normalized: Ex-2011 Beitou property (4,000) sale, ex-discontinued/disposed subsidiaires (6,000) (8,000) (10,000) (12,000) NT$m 2007 2008 2009 2010 2011 2012 1H13 Reported 5

  18. Slide 18: Our Future Plans

    Our Future Plans • We will continue to dispose of non-core related and/or underperforming business subsidiaries. • We will minimize our exposure to capital-intensive industries and seek continued reduction in debt levels. • Shan Chih Asset Development (SCAD, a 100%-owned subsidiary) will continue to

  19. Slide 19: Tatung's Core Strategic Initiatives

    Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 19

  20. Slide 20: Tatung Land Assets - Taiwan

    Tatung Land Assets - Taiwan Land Assets Area (Ping) Area (Sq m) % of Total Total 464,165 1,534,431 100 Taipei City 35,506 117,376 7.6 New Taipei City 90,243 298,323 19.4 Northern Taiwan* 326,770 1,080,235 70.4 Mid-Taiwan 2,700 8,925 0.6 Southern Taiwan 8,946 29,572 1.9 Total area of land holdings: 4

  21. Slide 21: Nankang Tatung Xiyuan Residential Project

    Nankang Tatung Xiyuan Residential Project • Land Area: 2,312 ping • Gross Floor Area: 13,436 ping • Floor Plan: 148 housing units, 239 parking spaces • Estimated Completion: 1Q 2014 21

  22. Slide 22: Banchiao Phase I Plant Development Plan

    Banchiao Phase I Plant Development Plan •Land Area: 4,095 ping •Gross Floor Area: 25,433 ping •Expected Project Timeline: Pre-sale launch in 2H14, pending final regulatory approval. 22

  23. Slide 23: Tatung's Core Strategic Initiatives

    Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 23

  24. Slide 24: Our Achievements

    Our Achievements Substantially Reduced Net Debt • Consolidated Net Debt peaked at NT$104bn in 2006, and has since been reduced to NT$56bn. Reduced Depreciation Expense • 1H13 monthly depreciation expense of NT$1.2bn is 47% lower than 2008 peak level of NT$2.3bn. Disciplined Capex Spending • 2012 Cap

  25. Slide 25: Lower debt, less capital spending

    Lower debt, less capital spending NT$ mn Tatung - Net Debt NT$ mn Tatung - Capex 18,000 100,000 15,000 80,000 12,000 60,000 9,000 40,000 6,000 20,000 3,000 - - FY2008 FY2009 FY2010 FY2011 FY2012 1H13 FY2008 FY2009 FY2010 FY2011 FY2012 1H13 NT$ mn Tatung - Depreciation Tatung - Net Profit 30,000 NT$

  26. Slide 26: The Tatung Vision

    26 The Tatung Vision @QTATUNG

  27. Slide 27: The Tatung Vision

    The Tatung Vision • We aim to become one of Asia’s leading turnkey providers of integrated mechatronic systems and energy-saving power solutions. • Our areas of concentration will be: *Mechatronics systems *Power distribution systems employing end-to-end AMI *Turnkey power generation systems in emer

  28. Slide 28: Tatung Total Solutions for the Power Grid

    Tatung Total Solutions for the Power Grid Renewable Energy Smart Substation Advanced Distribution Automation Energy Management Advanced Metering Infrastructure Energy Storage Energy Saving 28 Smart Home

  29. Slide 29: Tatung Integrated EMS Capabilities

    Tatung Integrated EMS Capabilities Remote Remote management Cloud Service System Server Backup Central Control/ Energy Mgt. System Office Network Routers Ethernet Air Power Ancillary Security Conditioning LED Lighting Control Systems Systems 1. Commercial AC 1. LED bulbs for 1. Distribution 1. Water

  30. Slide 30: Our Commitment to Shareholders

    Our Commitment to Shareholders • We will minimize our exposure to capital- intensive industries and seek continued reduction in debt levels. • We will continue to dispose of non-core related and/or underperforming business subsidiaries. • SCAD will continue to realize the value of our real estate as

  31. Slide 31: Company Financials

    31 Company Financials @QTATUNG

  32. Slide 32: Five-year Financial Highlights

    Five-year Financial Highlights EPS ( NTD) Net Income (NT$ million) ROE % 0.60 4.3 (0.63) (0.63) (1.53) 1,380 (1.52) -8.3 (2.10) -10.9 -1,456 -16.8 -11.1 -3,481 -3,512 -28.3 -6,855 -9,917 2008 2009 2010 2011 2012 1H13 2008 2009 2010 2011 2012 1H13 32 32

  33. Slide 33: Five-year P&L (Consolidated)

    Five-year P&L (Consolidated) YOY (%) 1H13 NT$ million 2008 2009 2010 2011 2012 (IFRS) 2008 2009 2010 2011 2012 1H13 Sales 187,247 118,733 157,911 146,250 107,356 54,084 (18.2) (36.6) 33.0 (7.4) (26.6) 3.7 Revenue Gross Profit 10,830 (11,662) 5,325 7,127 612 4,391 (67.7) - - 33.8 (91.4) - OP Profit (

  34. Slide 34: Five-year Balance Sheet (Consolidated)

    Five-year Balance Sheet (Consolidated) 1H13 YOY (%) NT$ million 2008 2009 2010 2011 2012 (IFRS) 2008 2009 2010 2011 2012 1H13 TOTAL ASSETS 284,267 253,246 238,050 224,536 201,282 211,396 (12.4) (10.9) (6.0) (5.7) (10.4) (2.7) Cash 31,864 33,315 30,962 31,181 24,603 26,000 (14.2) 4.6 (7.1) 0.7 (21.1)

  35. Slide 35: Tatung Investment Income

    Tatung Investment Income Investment Income Investment Company % held 2007 2008 2009 2010 2011 2012 1H13 CPT 23.1 2,233 (3,595) (9,322) (3,603) (2,871) (2,716) (1,289) Green Energy Technology 25.7 - 784 50 339 (419) (949) (332) Shan Chih Asset Development 100.0 1,122 150 728 459 6,742 824 487 Tatung

  36. Slide 36: Appendix

    36 Appendix © TATUNG

  37. Slide 37: Tatung is Taiwan's only Turnkey AMI System Provider

    Tatung is Taiwan’s only Turnkey AMI System Provider Taichung AMI System Tatung Designed and Implemented Control & Data Center Taiwan’s Island-Wide AMI System Internet Taipei Headquarters M M M M M M M M M M M M M M M M Track and Record M M M M M Power M MM Consumption Internet M M M Internet M M MM

  38. Slide 38: What is Mechatronics?

    38 What is Mechatronics? Control Systems TATUNG

  39. Slide 39: ve oS rr x J Hi SS TATUNG

    ve oS rr x J Hi SS 7 TATUNG 39

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