Lite-On Technology Corp. · TWSE:2301
Lite-On Technology — Q1 2003 Earnings Presentation
45 slides from Lite-On Technology's earnings presentation, Apr 25, 2003
Slide 1: LITE-ON Technology 1Q 2003 Investor Conference
LITE-ON Technology 1Q 2003 Investor Conference April 25th, 2003 1
Slide 2: SARS Contingency Plan
SARS Contingency Plan… n Task Force – Led by each plant manager and HQ HR with weekly status update to to the HQ n Local Government Cooperation – Fully engaged with the local government on policies/guidelines, crisis management procedures and the Immune Operation Unit/hospital Unit/hospital location
Slide 3: SARS Contingency Plan
SARS Contingency Plan Europe: Products to be backed-up: - Power supply - PC system Arizona -Barebone Juarez Mexico: -Keyboard China Taiwan: Products to be Carbora -LCD monitor Products to be backed-up:Guadalajara backed-up: Thailand: -CRT/LCD Monitor -PC system Products to -Keypad -Enclosure, be bac
Slide 4: Safe Harbor Notice
Safe Harbor Notice Lite-On’s statement of its current expectations are forward-looking statements subject to significant risks and uncertainties and ac tual results may differ materially from those contained in any forwar d- looking statement. 4
Slide 5: Agenda
Agenda 1. Review of Financial Results (CFO) 2. 2003 Financial Forecast (CFO) 3. Review of Strategic Business Groups (SBG Presidents) 4. Summary Business Update (CEO) 5. Q&A (All) 5
Slide 6: 1. Review of Financial Results
1. Review of Financial Results 6
Slide 7: 1Q 2003 Results Highlight (Lite-On Tech Pro Forma)
1Q 2003 Results Highlight (Lite-On Tech Pro Forma ) 1Q’02 1Q’03 YoY (in NT$ million) Amount % Amount % % Net Sales 21,416 100.0 22,856 100.0 6.7 COGS 18,103 84.5 20,001 87.5 10.5 Gross Profit 3,313 3, 313 15.5 2,855 12.5 (13.8) Operating Expense 1,875 8.8 1,985 8.7 8. 7 5.9 Operating Income 1,437 1,
Slide 8: 1Q 2003 Results Highlight (Lite-On Tech Pro Forma)
1Q 2003 Results Highlight (Lite-On Tech Pro Forma ) 4Q’02 1Q’03 QoQ (in NT$ million) Amount % Amount % % Net Sales 28,905 100.0 22,856 100.0 (20.9) COGS 24,951 86.3 20,001 87.5 (19.8) Gross Profit 3,954 3, 954 13.7 2,855 12.5 (27.8) Operating Expense 2,445 2, 445 8.5 1,985 8.7 8. 7 (18.8) Operating
Slide 9: Sales Breakdown by Business Group
Sales Breakdown by Business Group 4Q 2002 1Q 2003 Total NT$28,905m Total NT$22,856m 12% 23% 9% 47% 9% 59% 20% 21% P&C Image Communication NBD Note : Sales of Silitech included in Image SBG 9
Slide 10: 1Q2003 Revenues Including LOIT
1Q2003 Revenues Including LOIT (in NT$ million) 40,000 32,920 10,064 30,000 22,856 20,000 10,000 0 Lite-On Tech LOIT Lite-On Tech Including LOIT 10
Slide 11: Financial Highlights for 1Q03
Financial Highlights for 1Q03 Growth Profitability Revenue = NT$22.9B PBT = NT$1.8B YoY Growth = 6.7% PBT Margin = 7.7% Peripherals & Image Components New Business Communications Development Liquidity Cash On Hand = NT$8.7B Debt to Equity Ratio = 12.9% Current Ratio = 135.4% CCC days = (9) days Note
Slide 12: 1Q 2003 In the Hindsight
1Q 2003 In the Hindsight n 1Q03 environment shift Highly uncertain overall market condition ASP erosion was much faster than projected Order visibility continue to shorten n 1Q revenues were down 21% QoQ on a pro forma basis Peripherals and components performance in- in-line with expectation
Slide 13: 2. 2003 Financial Forecast
2. 2003 Financial Forecast 13
Slide 14: 2003 Financial Forecast Assumptions
2003 Financial Forecast Assumptions n With SARS and uncertainty in the US, we are taking a more conservative approach in projecting our 2003 financial performance n Based on the March 21, 2003 newly issued accounting guideline in recognizing profits from overseas operations, we are using an average
Slide 15: 2003 Income Statement Forecast (Taiwan Standalone)
2003 Income Statement Forecast (Lite-On Tech Taiwan Standalone) 1Q’03 2Q’03 3Q’03 4Q’03 2003 (in NT$ million) Amount % Amount % Amount % Amount % Amount % Net Sales 19,677 100.0 21,033 100.0 31,166 100.0 35,839 100.0 107,715 100.0 COGS 17,399 88.4 18,540 88.2 27,611 88.6 31,721 88.5 95,271 88.5 Gros
Slide 16: 2003 Income Statement Forecast (Standalone Pro Forma)
2003 Income Statement Forecast (Lite-On Tech Standalone Pro Forma, Unaudited) 1Q’03 2Q’03 3Q’03 4Q’03 2003 (in NT$ million) Amount % Amount % Amount % Amount % Amount % Net Sales 22,856 100.0 23,085 100.0 33,689 100.0 41,652 100.0 121,282 100.0 COGS 20,001 87.5 20,147 87.3 29,166 86.6 35,893 86.2 10
Slide 17: 2003 Income Statement Forecast (Pro Forma, Unaudited)
2003 Income Statement Forecast (Lite-On Tech Pro Forma, Unaudited) 2002 2003 Change (in NT$ million) Amount % Amount % Amount % Net Sales 98,198 100.0 121,282 100.0 23,084 23.5 COGS 83,973 85.5 105,207 86.8 21,234 25.3 Gross Profit 14,225 14.5 16,075 13.3 1,850 13.0 Operating Expense 8,578 8.7 9,630
Slide 18: Financial Highlights for Full Year 2003
Financial Highlights for Full Year 2003 Growth Profitability Revenue = NT$121.3B PBT = NT$9.0B YoY Growth = 24% PBT = 7.5% Peripherals & ROE = 17.5% Image Components Capital turnover = 5.5x New Business Communications Development Liquidity Cash On Hand = NT$10.1B Debt to Equity Ratio = 13.5% Current
Slide 19: 3. Review of Strategic Business Groups
3. Review of Strategic Business Groups 19
Slide 20: Peripherals & Components
Peripherals & Components … n P&C SBG achieved NT$13.6 billion revenues in 1Q03, a 2% decrease QoQ and flat YoY n Continue to be the cash generator for the Company n Overall revenue split between 1H/2H is expected to be 36/64 Display n No. 2 monitor supplier in Taiwan n Shipped 927K CRT monitors and
Slide 21: Peripherals & Components
Peripherals & Component… Power Supply n No. 2 power supply maker in Taiwan n Shipped 2 million units for desktop powers, a 8% market share, and and 2.3 million units for notebook PC powers, a 28% market share 11% and 68% YoY growth, respectively n Generated revenues of NT$3.6 billion in 1Q03, a 6%
Slide 22: Peripherals & Components Strategy
Peripherals & Components Strategy n “Platformize Platformize”” P&C businesses P&C SBG Academic Design Center Resources Level 5 Peripherals Display Industrial Mechanical Thermal Mold Materials Electrical n Leverage our key strengths to grab a Design lion share of level 5 businesses for PC Level
Slide 23: Image
Image… Market Trend n Healthy Growth momentum remains in key product markets in 2003 Projected 25% growth for MFP and 11% growth for Scanner/scanner module 1Q03 Review n Revenues in 1Q03 showed a 25% decrease QoQ and 17% increase YoY Product transition / seasonality E-bidding 23
Slide 24: Image Business Outlook
Image… Business Outlook n Shipment in 2Q03 is expected to be slightly better than that in 1Q; however, revenue is expected to be 10% lower than that of 1Q03 Product transition continues n Stronger momentum is expected beginning 2H03 with a target of 7% YoY revenue growth for full year 2003 New p
Slide 25: Image Strategy
Image Strategy n On course for our technology Image Sensor Printing Engine Lens Scanning Module roadmap Roller Miniature parts Keypad Module Software n Continue Identifying next - Rubber Keypad Tooling Prototype Plating ASIC 3C generation “hot stuff ” to repeat SMT Convergence RF Fax the MFP success
Slide 26: New Business Development
New Business Development… Market Trend n A mild growth in 2003 is projected for both PC and data networking networki ng industries with better outlook in 2004 1Q03 Review n Network Access business is still in incubation stage 1Q03 revenues from Networking business were NT$1.1 billion, a 30% 30% de
Slide 27: New Business Development Strategy
New Business Development Strategy n Emphasize on building internal infrastructure first n Focus on 802.11a/g for WLAN NAT Firewall VPN SNMP Management Software solution Infrastructure n Develop layer 2 and layer 3 Operating System switch for LAN solution, with L3- product positioned as “value” Home
Slide 28: Communications
Communications… Market Trend n Worldwide handset market is projected to grow by 10% in 2003 Approximately 10% of total volume is expected to be manufactured by Taiwanese ODM/OEM service providers Further shrinkage in product life cycle – 6-9 months 1Q03 Review n 1.05 million units shipped in 1Q0
Slide 29: Communications Business Outlook
Communications… Business Outlook n Modest growth for 2Q03 with significant upside in 2H03 Partial recovery from 1Q03 delayed volume Shipment of first model of color handsets n Revenue and volume contribution between 1H and 2H is expected to be approximately 30/70 n Continue to aim at 8 million u
Slide 30: Communications Strategy
Communications Strategy Technology n Leverage both ODM/OEM and Disty business models Disty business is expected to EDGE/ WCDMA account for 15% of total SMART DEVICES revenues in 1H03 and 40% for the whole year Color 65k CSTN, TFT 4k/65k Camera n Continue to focus on the mass JAVA market - entry-to
Slide 31: 4. Summary Business Update
4. Summary Business Update 31
Slide 32: Balance of Business Management
Balance of Business Management Cash On Hand = NT$10.1B PBT = NT$9.0B Debt to Equity Ratio = 13.5% PBT = 7.5% Revenue = NT$121.3B Current Ratio = 151.8% ROE = 17.5% YoY Growth = 23.5% CCC days = (9) days Capital turnover = 5.5x Growth Profitability Liquidity Note: Cash Conversion Cycle = Accounts Pay
Slide 33: Summary Corporate Strategy
Summary Corporate Strategy n Continue to aggressively tackle cross- cross-selling opportunities Critical especially when customers have been consolidating Ensure a broad and deep penetration into existing customers’ customers’3C businesses Preliminary signs of success and contribution just beg
Slide 34: 5. Q & A
5. Q & A 34
Slide 35: Lightening Up the Digital World with Quality and Human Touch!
Lightening Lightening Up Up the the Digital Digital World World with with Quality Quality and and Human Human Touch! Touch! 35
Slide 36: Revenue Seasonality
Revenue Seasonality 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1Q 2Q 3Q 4Q 2001 2002 2003E 36
Slide 37: Identified Cross-Selling Opportunities
Identified Cross-Selling Opportunities Customer A Customer B Customer C Customer D SPS SPS CRT Monitor ODD ODD ODD ODD Modem Existing Keyboard Keyboard Keyboard Mobile Phone Product Modem Modem Power Supply Relationships PC System CRT Monitor CRT / LCD Monitor Barebone MFP Barebone PDA PC System Bar
Slide 38: Cross-Platform Product Development
Cross-Platform Product Development Digital Photo Solution Memory Cards VHS GPRS + Photo Printer DVR DSC TV System LCD TV DV Projector 38
Slide 39: Near-Term Product Roadmap
Near-Term Product Roadmap 2002 2003 2004 MFM HDTV 15” 15 ” 17” 17” 19” 19 ” 17” 17 ” W MFM (Page 42) 30 30”” W MFM (Page 43) Monitor: Bigger size and more function High Power Density DT NB Adapter Server Power Power: Smaller size and increase power density Ultra Portable (Page 44) High Brightness (P
Slide 40: Near-Term Product Roadmap
Near-Term Product Roadmap 2002 2003 2004 Phone with Camera Smart Device R600 T200 Color Bar Type Clam shell Handset: Mono to Color/ Square to Fashion/GSM to GPRS 2400x1200 dpi 2400x1200 dpi 4800x1200 dpi 4800x1200 dpi 9 Pages/min 5 Pages/min 12 Pages/min 6 Pages/min 12 Pages/min 6 Pages/min 19 Pages
Slide 41: Cost Savings on Track
Cost Savings on Track Expected Cost Saving In 12 Months 3,018M 3,018M 2,171M 479M 1,049 243M 878 125M 125 33 13 Admin/IT Mfg. Cost Indirect Material Total purchasing procurement Achieved cost saving Note : All figures in NT$. Pro Forma consolidated 41
Slide 42: 17" W MFM/LCD TV Product
17”W MFM/LCD TV Product • 16:9 Wide Multi Function Monitor • 450 cd/m2 • WXGA (1280 * 768) • Y/Cb/Cr • Audio Ouput 5W • PIP • AV/S-Video, D-Sub • Plug-in Tuner • Composite Video • 3D Y/C Comb Filter • Video Noise Reduction • 3D De-interlacing • 3:2 / 2:2 Pull down Detection • PIP/POP • CC/V-Chip • O
Slide 43: 30" MFM/LCD TV Product
30”MFM/LCD TV Product • 450 cd/m2 • HDTV Ready • WXGA (1280 * 720) • Y/Pb/Pr,and Y/Cb/Cr • Audio Output 7 W • PIP/POP/PBP • AV/S-Video, D-Sub • 3D Y/C Comb Filter • Video Noise Reduction • 3D De-interlacing • 3:2 / 2:2 Pull down Detection • PIP/POP • CC/V-Chip • OSD a) Alpha blending • b) Bit-mapped
Slide 44: FP320D Ultra-Portable DLP Projector
FP320D Ultra-Portable DLP Projector 0.7” XGA DDR by TI DLP Tech. • Brightness: 1500 ANSI Lumens • Contrast ratio: 900:1 • Optical Zoom Lens • Lamp: 150W VIP • Weight: 3.5 lbs • Uniformity: 85% • Digital Keystone Correction • HDTV Signal Input à480i/480p/720p/1080i • Magnesium Chassis • Extended Mult
Slide 45: FP520D High Brightness Network Projector
FP520D High Brightness Network Projector 0.7” XGA DDR by TI DLP Tech. • Brightness: 2500 ANSI Lumens • Contrast ratio: 1800:1 • Optical Zoom Lens • Lamp: 250W VIP •Weight: 7.5 lbs • Uniformity: 80% • Digital Keystone Correction • HDTV Signal Input à480i/480p/720p/1080i • Ultra Silence< 34 dBA • Exte