Tatung Co. · TWSE:2371
Tatung — Investor Presentation (March 2014)
33 slides from Tatung's investor presentation, March 2014
Slide 1: Tatung Company
Tatung Company (2371 TT) Integrity, Honesty, Industry, Frugality March 2014 W. Y. Lin, President
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 mid
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:
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
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
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 9.9% in 9M13 from 5.7% in 2007. Reduced Operating Expenses • SG&A expe
Slide 7: Revenue Contribution
Revenue Contribution 100% 80% 35% 41% 44% 42% 44% 46% 53% 60% 40% 61% 45% 45% 45% 41% 28% 51% 20% 19% 11% 12% 11% 13% 5% 7% 0% 2007 2008 2009 2010 2011 2012 9M13 Systems Group Consumer Group Power Group 7
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 72% of revenues in 9M13, versus 40% in 2007. R&D spending devoted to these two groups now accounts fo
Slide 9: Core Operations Business Performance
Core Operations Business Performance Revenue Operating Profit NT$ mn Revenue NT$ mn Operating Profit 50,000 500 379 235 43,072 37,276 38,609 38,408 - 40,000 (64) 32,185 (197) 30,264 (500) 30,000 (1,000) 17,750 (992) 20,000 (1,500) 10,000 (2,000) (1,951) (1,930) - (2,500) 2007 2008 2009 2010 2011 201
Slide 10: 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 10
Slide 11: 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$22bn in
Slide 12: CPT Has Greatly Reduced its Capital Intensity
CPT Has Greatly Reduced its Capital Intensity NT$ 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 2,000 10,000 - - FY2008 FY2009 FY2010 FY2011 FY2012 9M13 FY2008 FY2009 FY2010 FY2011 FY2012 9M13 NT$ mn CPT - Depreciation CPT - Net Profit NT$ mn FY2008
Slide 13: 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 9M13 Average CPT (2475 TT) 3.9 7.7 7.9 4.4 4.7 9.9 5.0 6.4 Wintek (2384 TT) 37.1 24.5 9.6 15.2 13.6 13.0 5.8 17.0 AUO (2409 TT) 13.
Slide 14: Investment Income Analysis
Investment Income Analysis NT$m 8,000 6,000 4,000 2,000 0 Reported Investment Income (2,000) Normalized: Ex-2011 Beitou property (4,000) sale, ex-discontinued/disposed subsidiaires (6,000) (8,000) (10,000) (12,000) 2007 2008 2009 2010 2011 2012 9M13 1H13 NT$m 2007 2008 2009 2010 2011 2012 9M13 Repor
Slide 15: 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
Slide 16: 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 16
Slide 17: 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
Slide 18: 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 • Completion: 1Q 2014 • Revenues and profits to be booked in 1H2014. 18
Slide 19: 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. 19
Slide 20: 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 20
Slide 21: Our Achievements
Our Achievements Substantially Reduced Net Debt • Consolidated Net Debt peaked at NT$104bn in 2006, and has since been reduced to NT$55bn. Reduced Depreciation Expense • 9M13 monthly depreciation expense of NT$1.2bn is 47% lower than 2008 peak level of NT$2.3bn. Disciplined Capex Spending • 2012 Cap
Slide 22: Lower debt, less capital spending
Lower debt, less capital spending NT$ 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 9M13 FY2008 FY2009 FY2010 FY2011 FY2012 9M13 NT$ mn NT$ mn Tatung - Depreciation Tatung - Net Profit 5,00
Slide 23: The Tatung Vision
23 The Tatung Vision TATUNG
Slide 24: 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
Slide 25: Tatung Total Solutions for the Power Grid
Tatung Total Solutions for the Power Grid Renewable Energy Smart Substation System Advanced Distribution Integration Automation Energy Management Advanced Metering Infrastructure Energy Storage Energy Saving 25 Smart Home
Slide 26: 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
Slide 27: 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
Slide 28: Company Financials
28 Company Financials TATUNG
Slide 29: Five-year Financial Highlights
Five-year Financial Highlights EPS ( NTD) Net Income (NT$ million) ROE % 0.60 4.3 (0.63) (0.69) (1.53) -10.9 -10.2 (2.10) 1,380 (1.52) -16.8 -11.1 -1,593 -3,481 -3,512 -28.3 -6,855 -9,917 2008 2009 2010 2011 2012 9M13 2008 2009 2010 2011 2012 9M13 29 29
Slide 30: Five-year P&L (Consolidated)
Five-year P&L (Consolidated) YOY (%) 9M13 NT$ million 2008 2009 2010 2011 2012 (IFRS) 2008 2009 2010 2011 2012 9M13 Sales 187,247 118,733 157,911 146,250 107,356 84,494 (18.2) (36.6) 33.0 (7.4) (26.6) 2.3 Revenue Gross Profit 10,830 (11,662) 5,325 7,127 612 8,569 (67.7) - - 33.8 (91.4) - OP Profit (
Slide 31: Five-year Balance Sheet (Consolidated)
Five-year Balance Sheet (Consolidated) 3Q13 YOY (%) NT$ million 2008 2009 2010 2011 2012 (IFRS) 2008 2009 2010 2011 2012 3Q13 TOTAL ASSETS 284,267 253,246 238,050 224,536 201,282 204,085 (12.4) (10.9) (6.0) (5.7) (10.4) (6.2) Cash 31,864 33,315 30,962 31,181 24,603 22,220 (14.2) 4.6 (7.1) 0.7 (21.1)
Slide 32: Tatung Investment Income
Tatung Investment Income % held Investment Income Investment Company As of 3Q13 2007 2008 2009 2010 2011 2012 9M13 CPT 23.1 2,233 (3,595) (9,322) (3,603) (2,871) (2,716) (758) Green Energy Technology 24.3 - 784 50 339 (419) (949) (423) Elitegroup Computer 27.5 218 82 209 39 118 100 295 Shan Chih Ass
Slide 33: ng.com TATUNG
ng.com TATUNG