Vedan International (holdings) Ltd. · HKEX:2317
Vedan International (holdings) — FY2003 Earnings Presentation
23 slides from Vedan International (holdings)'s earnings presentation, Mar 30, 2004
Slide 1: 2003 Annual Results
2003 Annual Results 30 March 2004 -1-
Slide 2: Highlights
Highlights
Slide 3: Summary of Final Results
Summary of Final Results Twelve months ended 31 December, USD million 2002 2003 Change (%) Turnover 182.8 203.8 +11.5% Gross Profit 45.6 54.6 +19.7% EBITDA 50.8 54.5 +7.6% Net Profit 16.4 22.1 +34.6% EPS (US cents) 1.43 +20.3% 1.72 Total Dividend for N/A the Year (US cent) 0.876 N/A - Interim divide
Slide 4: Summary of 2nd Half Results
Summary of 2nd Half Results Six Months Ended 31 December, USD Million 2002 2003 Change (%) Turnover 94.7 109.0 +15.1 Gross Profit 23.6 30.7 +30.1 Net Profit 7.8 12.2 +56.4 -4-
Slide 5: Analysis of Profitability Ratios
Analysis of Profitability Ratios % 30 26.8% 25.0% Unit: USD million 20 12 months ended 31 Dec 10.8% 2002 9.0% 12 months ended 31 Dec 10 54.6 M 2003 45.6 M 22.1 M 16.4 M 0 Gross Profit Net Profit Margin Margin -5-
Slide 6: Strong Balance Sheet
Strong Balance Sheet As of As of 31 Dec. 2002 31 Dec. 2003 (USD million) (USD million) Cash 19.7 35.4 Short-term Debt 85.4 31.5 Long-term Debt 19.5 24.3 Total Debt 104.9 55.8 Shareholders’ Equity 170.4 225.1 Debt to Equity Ratio 61.6% 24.8% -6-
Slide 7: Business Review
Business Review
Slide 8: Market Analysis
Market Analysis Turnover by Geographical Location •Sales in Vietnam grew significantly USD Million 119.0 120 92.6 100 Unit = USD million 2002 80 2003 60 46.6 42.9 40 22.3 21.6 20 4.7 5.7 0 Vietnam Japan PRC ASEAN -8-
Slide 9: Major Market Analysis
Major Market Analysis Vietnam 28.6% to US$119.0 million z 2003 economic growth at 7.2%, 2nd highest in the region z Leading market position strengthened further z Sales network further enlarged to cover more than 1,500 agents, 60,000 stalls, 13,500 restaurants and 1,200 food processing factories ASE
Slide 10: Major Market Analysis
Major Market Analysis Japan 8.6% to US$46.6 million z Sales up mainly due to price rise in MSG and lysine z Won new customers for starch products PRC 3.1% to US$21.6 million z MSG sales affected by SARS in first half; but gradually picked up in second half as food and beverage industry recovered z P
Slide 11: Market Analysis
Market Analysis Turnover by Geographical Location • Contribution from Vietnam grew significantly Taiwan & other Taiwan & other ASEAN countries ASEAN countries 13.6% 8.1% PRC Vietnam PRC Vietnam 10.6% 58.4% 12.2% 50.7% Japan Japan 22.9% 23.5% 2002 2003 For the year ended 31 December - 11 -
Slide 12: Product Analysis
Product Analysis Turnover by Products • MSG remained as the most important product USD Million +9.6% 160 140.6 140128.2 Unit = USD million 120 2002 100 2003 80 60 -12.3% +21.5% 40 22.6 27.4 +100% 14.6 12.8 12.9 20 6.4 0 MSG G.A Lysine Cassava starch based products - 12 -
Slide 13: Major Product Analysis
Major Product Analysis MSG 9.6% to US$140.6 million z Ability to substitute raw materials, positive pricing environment plus deeper market penetration resulted in better performance z Sales from ORSAN up 31.6% to 11,373 tons; more than doubled since acquisition in 2001 Lysine 21.5% to US$27.4 millio
Slide 14: Product Analysis
Product Analysis Turnover by Products • Significant growth in core product MSG Cassava starch Others Cassava starch Others based products 4.9% based products 5.9% 6.3% 3.5% MSG MSG 70.2% Lysine 69.0% Lysine 13.5% 12.4% G.A. 8.0% G.A. 6.3% 2002 For the year ended 31 December 2003 - 14 -
Slide 15: Summary of Performance
Summary of Performance z Achieved record high levels of turnover, EPS and net profit with all three areas attained double digit growth z Higher operational leverage and higher economies of scale resulted in higher gross and net profit margins z Dominant position in Vietnam further enhanced; also dee
Slide 16: Prospects For 2004
Prospects For 2004
Slide 17: Highly Favorable Market Environment
Highly Favorable Market Environment High Economic Growth Forecasts for 2004 Vietnam 8.0% Asia 6.1% PRC 7.0% Strong Demand for Vedan’s Products z ASEAN Free Trade Area (AFTA) promotes trade flow within the region z Low per capita MSG consumption in the PRC presents huge potential - 17 -
Slide 18: Boost Sales: Capacity Expansion
Boost Sales : Capacity Expansion z Phased expansion in various fast growth products: Existing Capacity Capacity After (Tons) Expansion (Tons) MSG 148,000 180,000 Starch Modified Starch 40,000 60,000 Native Starch 216,000 324,000 - 18 -
Slide 19: Lower Costs: Enhance Cost Structure
Lower Costs: Enhance Cost Structure Energy Source z Full switch to natural gas implemented in Vietnam: significant cost saving of at least US$4 million per year Materials z Cassava Set up 3 more starch raw material processing plants in central part of Vietnam and also near border area to Cambodia. z
Slide 20: Improve Margins: New Product Launch
Improve Margins: New Product Launch • Wide applications for food, cosmetic, agriculture, pharmaceutical, environmental and water treatment. PGA • Production to start by end of 2004 or early 2005 • 1st stage investment required: US$4M • Successful in-house laboratory pilot production • Versatile flav
Slide 21: Our PRC Expansion Strategy
Our PRC Expansion Strategy I) Growth by Mergers, Acquisitions and Strategic Alliances – fragmented MSG market with no dominating brands; growth by M & A and strategic alliances most desirable – Xiaman Mao Tai plant as base; to expand to other provinces along the coast – M & A strategy remained; seve
Slide 22: Mission
Mission “To be Asia’s leading manufacturer of fermentation - based amino acids, food additive products and cassava starch based products” - 22 -
Slide 23: 2003 Annual Results
2003 Annual Results 30 March 2004 - 23 -
Vedan International (Holdings) — FY2003 Earnings Presentation on 6ix