Nordic Group Limited · SGX:MR7
Nordic — Q1 2016 Earnings Presentation
45 slides from Nordic's earnings presentation, May 2016
Slide 1: Nordic Group Limited 1Q2016 Results Briefing
Building Momentum, Capturing Opportunities Nordic Group Limited 1Q2016 Results Briefing
Slide 2: Disclaimer
Disclaimer • This presentation (this “Presentation”) has been prepared by Nordic Group Limited (“Nordic” or the “Company”) for information purposes only and has not been independently verified. It is not the intention to provide, and you may not rely on this Presentation as providing, a complete or
Slide 3: Outline
Outline 1. Business Overview 2. Financial Review 3. Growth Strategies 4. Investment Merits 3
Slide 4: Business Overview
Business Overview OUR BUSINESSES 1. System 2. Maintenance, Repair, 3. Scaffolding 4. Insulation 5. Precision Integration Overhaul (MRO) & Trading Services Services Engineering 4
Slide 5: System Integration – Overview
System Integration – Overview With safety at sea as our priority, we offer a holistic and comprehensive suite of integrated solutions in areas of Flow, Navigation and Automation, customised to cater to various vessel needs. 5
Slide 6: System Integration – Vessels
System Integration – Vessels Types of Vessels using Nordic’s Systems Semi-Submersible FPSO Drillship Jack-Up Container Vessel Submersible Barge LNG Pipe laying Vessel Bulk Carrier Chemical Tanker Oil Tanker AHTS 6
Slide 7: System Integration – Clients
System Integration – Clients 7
Slide 8: System Integration – Target Shipyards List
System Integration – Target Shipyards List Based on China’s White List Total number of targeted shipyards: 39 shipyards Shipyards secured: 24 shipyards, 61.5% (wordings in Blue) Shipyards to be secured: 10 shipyards, 25.6% (wordings in Red) Shipyards to be followed-up: 5 shipyards 8
Slide 9: System Integration – Target Shipyards List
System Integration – Target Shipyards List Based on China’s White List SN SHIPYARD SN SHIPYARD SN SHIPYARD Bohai Shipbuilding Heavy Industry Penglai Bo Jing Lu Shipbuilding Co., Hudong-Zhonghua 1 13 27 Co., Ltd. Ltd Shipbuilding (Group) Co., Ltd. 2 COSCO Dalian Shipyard Co., Ltd. Qingdao Beihai Ship
Slide 10: MRO and Trading – Overview
MRO and Trading – Overview As part of our after-sales service, our dedicated team of consultants provides service support and oversees after-sales requests for maintenance, repairs and overhauls. Spares Enclosure Customisation MRO & with Control Trading Conversion / Upgrading Maintenance / Services
Slide 11: MRO and Trading – Clients
NORDIC NA MRO and Trading - Clients © MODEC QE Lundin _| BUMIARMADA a a Gli] PETROBRAS “Wransocean Reema iwi A PETRONAS Petrofac OERSHORE PETROV/ETNAM ie El gnon ER Saipem €9 Prosafe MAERSK BERNHARD ScHu.TE Wal te = —— SHIPMANAGEMENT al VShips SAIPEM 11
Slide 12: MRO and Trading – Global Network
MRO and Trading –Global Network Nordic Offices Existing Presence (Agents) 12
Slide 13: Scaffolding Services – Overview
Scaffolding Services – Overview One of the market leaders in metal scaffolding works with 25 years track record servicing the Oil & Gas, Petrochemical, Construction and Marine Industry. Business Activities Quality Standing • Design, Erection, Modification • Ministry Of Manpower (MOM) approved scaffo
Slide 14: Scaffolding Services – Projects Summary
Scaffolding Services – Projects Summary Daily Plant Maintenance Project Turnaround / Shutdown Maintenance * • BASF Southeast Asia Pte Ltd • Aurora Project – ExxonMobil • Chevron Oronite • Invista Fibres • Celanese Expansion Project – • Celanese • Stolthaven Terminal Celanese • Lucite • Chemical Indu
Slide 15: Scaffolding Services - Clients
Scaffolding Services - Clients 15
Slide 16: Insulation Services – Overview
Insulation Services – Overview Acquired by the Group on June 2, 2015, Austin Energy Asia Pte Ltd and its subsidiary, Austin Energy Offshore Pte Ltd (formerly known as KKH (2003) Engineering Enterprises Pte Ltd), specialises in comprehensive Insulation (primarily in Thermal Insulation) and Passive Fi
Slide 17: Insulation /PFP/Coating Services - Clients
Insulation /PFP/Coating Services - Clients 17
Slide 18: Precision Engineering - Overview
Precision Engineering - Overview We specialise in the design and building of tooling systems, and provision of turnkey production solutions. Our customers are mainly from the marine, oil and gas, aerospace, medical and electronic manufacturing services industries. Manufacturing of components for: Ae
Slide 19: Precision Engineering - Clients
Precision Engineering - Clients 19
Slide 20: Oil and Gas Upstream and Downstream Value Chain
Oil and Gas Upstream and Downstream Value Chain Upstream Downstream - Nordic Flow Control - Nordic Flow Control - Multiheight - Multiheight - Austin Energy - Austin Energy - Avitools 20
Slide 21: Awards and Accreditations
Awards and Accreditations Subsidiary List of some awards and accreditations received Nordic Flow Control • ANSI-ASQ accredited Pte Ltd • ISO9001 certified • OHSAS18001 certified • Singapore SME500 Awards (2008- current) • Singapore Enterprise 50 Awards (2009) • Raad voor Accreditatie (Dutch Accredit
Slide 22: Outline
Outline 1. Business Overview 2. Financial Review 3. Growth Strategies 4. Investment Merits 22
Slide 23: Financial Review – Financial Highlights
Financial Review Financial Highlights Unaudited Unaudited Change S$'000 1Q2016 1Q2015 (%) Revenue 19,810 16,613 19 Gross Profit 6,289 4,001 57 Gross Profit 31.7% 24.1% 7.6 ppts Margin Profit After Tax 2,315 1,451 60 Net Profit Margin 11.7% 8.7% 3.0 ppts EBITDA 3,733 2,471 51 EPS (cents)* 0.6 0.4 50
Slide 24: Financial Review – Revenue breakdown by segment
Financial Review Revenue breakdown by segment Unaudited Unaudited Change S$ million S$'000 1Q2016 1Q2015 (%) 20.0 15.1 Project Services 15,145 13,060 16.0 15.0 13.1 Maintenance 4,665 3,553 31.3 10.0 Services 5.0 4.7 Total 19,810 16,613 18.7 3.6 0.0 Project Services Maintenance Services 1Q2016 1Q2015
Slide 25: Financial Review – Revenue and Profit Margin
Financial Review S$ million Revenue and Profit Margin 90 32% 35% 80 30% 26% 28% 70 26% 24% 24% 25% 60 19% 50 20% 40 13% 15% 11% 12% 30 9% 9% 8% 10% 20 4% 10 5% 0 0% FY11 FY12 FY13 FY14 FY15 1Q15 1Q16 Revenue Gross Margin Net Profit Margin 25
Slide 26: Financial Review – Balance Sheet Highlights
Financial Review Balance Sheet Highlights Unaudited as at Audited as at S$'000 31 March 2016 31 December 2015 Current Assets 71,761 71,455 Non-current Assets 40,447 40,995 Current Liabilities 39,582 40,941 Non-current Liabilities 11,212 12,129 Total Equity [1] 61,414 59,380 Cash and Cash Equivalents
Slide 27: Financial Review – Balance Sheet Highlights
Financial Review Balance Sheet Highlights As at end of S$’000 FY2012 FY2013 FY2014 FY2015 1Q2016 Total Borrowings 26,834 21,539 25,320 32,155 30,393 Cash and Cash 23,965 14,852 32,799 35,566 35,871 Equivalents Total Equity 40,703 46,190 53,291 59,380 61,414 Net Gearing Ratio* 0.07 0.14 (0.14)** (0.0
Slide 28: Financial Review – Order Book Summary
Financial Review S$ million Order Book Summary 45 40 35 30 25 20 39.7 38.9 39.2 32.5 34.0 15 30.0 10 19.4 5 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16* Note: The order book summary does not include maintenance contracts from Scaffolding Services and Insulation Services which are typically contracted over
Slide 29: Recent Contract Winning Momentum
Financial Review Recent Contract Winning Momentum Apr 25, 2016 - Total value: S$7.2m NFC : conversion contracts from a repeat customer for the supply, installation flushing and commissioning of tubing for remote control valves, water ballast tank level, gas sampling and oxygen analyzer NFC: several
Slide 30: Growth Strategies – Organic
Growth Strategies – Organic System Integration Precision Scaffolding Services Insulation Services Engineering and MRO & Trading • Continue to develop • Cope with market • Bundle and cross-sell • Expand into contract new products and uncertainties and Scaffolding with manufacturing, systems to meet e
Slide 31: Growth Strategies – System Integration
Growth Strategies – System Integration We expanded our product and service offerings under Nordic Integrated Solutions, such as through securing OEM agreements and more. 31
Slide 32: Ship Building Market Outlook
Growth Strategies – System Integration Ship Building Market Outlook Increase in demand for specialised vessels , mainly product oil tankers, stainless steel chemical vessels, container ships, LNG, LPG etc. Actual Delivery & Estimated Delivery by Ship-types (based on present order book) +164% +200% +
Slide 33: Enclosure Customisation with Control
Growth Strategies – System Integration Enclosure Customisation with Control • Turnkey solution for Enclosure/Console fabrication, Installation of 3rd party equipment and Engineering Design • Compliant with the requirements for use in all industries • Target customers: System Integrator and System So
Slide 34: Growth Strategies - Scaffolding Services
Growth Strategies - Scaffolding Services For a more comprehensive range of products and services, we are introducing alternative access solutions to our existing scaffolding products and services. With a strong existing customer base and excellent safety track records, the multi- disciplinary servic
Slide 35: Growth Strategies - Insulation Services
Growth Strategies - Insulation Services Current capability Future phases for growth Insulation Industrial Coating (Thermal Spray) Passive Fireproofing • Used for protection against Corrosion, Erosion, Wear & Tear • Potential markets include Oil & Gas, Petrochemical, and Offshore industries • High de
Slide 36: Synergy between Scaffolding and Insulation businesses
Growth Strategies – Synergy between Scaffolding and Insulation businesses • Multiheight provides scaffolding service that Austin Energy requires • Typically, Insulation packages are coupled with Scaffolding packages Companies providing both these services have an competitive edge over others 36
Slide 37: Growth Strategies – Precision Engineering
Growth Strategies – Precision Engineering Formation of strategic alliances and partnerships to expand capabilities for further growth of the assembly business. Current capability Future phases for growth Machining Sheet Metal Surface Treatment Growth in Cable / Assembly Electrical Business Control 3
Slide 38: Growth Strategies – M&A
Growth Strategies – M&A Continue to acquire successful businesses when opportunities arise, with a focus on businesses that are - Relevant to us and within our footprint - Offers the potential to broaden our product and service range in Marine, Oil & Gas, Petrochemical and Pharmaceutical sectors - O
Slide 39: Outline
Outline 1. Business Overview 2. Financial Review 3. Growth Strategies 4. Investment Merits 39
Slide 40: Highlight of Investment Merits
Highlight of Investment Merits Healthy Order Book Established Market Player Order book of approximately S$34.0 Strong track record, performing above million on hand, excluding scaffolding industry average and insulation unit rate maintenance contracts Improved Dividend Established Management Payout
Slide 41: Investment Merits- Improved Earnings Quality
Investment Merits- Improved Earnings Quality Revenue Contribution by Segment FY2015 (S$’M) 1Q2016 (S$’M) 12.8, 9.3, 3.1, 5.0, 16% 12% 15.6% 25% 23.7, 29% 6.8, 34.8, 5.0, 34% 43% 25% System Integration / MRO & Trading Acquisition of AE was completed on 2 Jun 2015. Scaffolding Services Insulation Serv
Slide 42: Nordic's Share Buyback
Nordic’s Share Buyback Share Buyback Mandate* approved on 29 April 15 – EGM (renewed on 27 April 2016 – AGM): CUMULATIVE % OF CUMULATIVE MONTH OF ACQUISITION QUANTITY TOTAL NO OF ISSUED VOLUME SHARES ** Share Buyback by way of Market Acquisition September 2015 1,086,500 1,086,500 0.27 October 2015 1
Slide 43: Directors' Share Purchases
Directors’ Share Purchases 09 November 2010 – IPO : Director No. of shares held % shareholdings Chang Yeh Hong 200,480,625 50.12% Eric Lin Choon Hin 43,500,000 10.88% Dorcas Teo Ling Ling 29,000,000 7.25% 272,980,625 68.25% 30 April 2016 : Director No. of shares held % shareholdings * Chang Yeh Hong
Slide 44: Dividend Payout
Dividend Payout Final / Interim / Amount ($) Payment date Financial Year Payout ratio Special per share 13 May 2016 2015 Final 0.0065 40% Sept 8, 2015 2015 Interim 0.004 May 21, 2015 2014 Special 0.0025 25% May 21,2015 2014 Final 0.0025 May15, 2014 2013 Final 0.0025 16% May 15, 2013 2012 Final 0.002
Slide 45: Thank You
Building Momentum, Capturing Opportunities Thank You For more information, please contact Financial PR Pte Ltd Investor Relations Consultants Romil Singh / Colin Lum romil@financialpr.com.sg colinlum@financialpr.com.sg Tel: (65) 6438 2990 Fax: (65) 6438 0064 www. n o rdicgro uplimited . co m