Slide 1: 2Q'2017 & 1H'2017 Results Presentation
2Q’2017 & 1H’2017 RESULTS PRESENTATION Friday, 04 August 2017 1 1
Slide 2: Agenda
AGENDA 1. CORPORATE OVERVIEW 2. CORPORATE HIGHLIGHTS 3. FINANCIAL RESULTS 4. OUTLOOK & STRATEGIES 2 2
Slide 3: Corporate Overview
CORPORATE OVERVIEW © 2012 PRIVATE & CONFIDENTIAL 3 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 3 3
Slide 4: Serial System at a Glance
SERIAL SYSTEM AT A GLANCE The largest One of Asia Pacific’s electronic largest electronic component distribution network distributor listed on SGX Electronic Total Shares: Components 896 million (96%)* Free Float: 42% 1H2017 FY2016 Market Capitalisation: S$161M SERIAL Hong Kong 61% 61% (As at 3 Augu
Slide 5: Extensive Network & Diversified Business
EXTENSIVE NETWORK & DIVERSIFIED BUSINESS Supporting a network of global brands, Serial System is a leading distributor of electronic components in Asia and fast-growing dealer for a variety of consumer goods. It is also a strategic investor in businesses in the F&B, Healthcare, Industrial Laundry an
Slide 6: Partnering Leading Suppliers
PARTNERING LEADING SUPPLIERS Electronic Components Distribution … more than 90 Franchised Product Lines in Serial Group 6 6
Slide 7: Partnering Leading Suppliers
PARTNERING LEADING SUPPLIERS Consumer Products Distribution 7 7
Slide 8: Other Businesses
OTHER BUSINESSES - Part of Group’s diversification into investment holding of high-margin companies Serial MultiVision Pte. Ltd. Contract Sterilization Services Pte Ltd (100%-stake) (100%-stake) Core businesses: hospitality solutions Assembly and distribution of medical devices Hospitality sol
Slide 9: Strategic Investment – South Pacific Laundry
STRATEGIC INVESTMENT – South Pacific Laundry 27.34% stake in SPL Holdings (Australia) Pty Ltd, a laundry provider servicing the hospitality industry (hotels, resorts, hospitals, care centres, and restaurants) in Melbourne, Sydney, Brisbane, Cairns, Canberra, Adelaide, Perth and other Australian citi
Slide 10: Strategic Investment - Tong Chiang Group
STRATEGIC INVESTMENT - Tong Chiang Group 21% stake in food manufacturer and caterer Tong Chiang Group (“TCG”) TCG comprises 13 wholly-owned subsidiaries and three separate property investment holding entities, operating in five factories and three warehouse units in Singapore Products and services c
Slide 11: Corporate Highlights
CORPORATE HIGHLIGHTS © 2012 PRIVATE & CONFIDENTIAL 11 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 11 11
Slide 12: Corporate Highlights
CORPORATE HIGHLIGHTS CORPORATE DEVELOPMENTS June 2017 Proposed spin-off and separate listing of Serial Microelectronics (HK) Limited group Serial Microelectronics (HK) group to be listed on the main board of the Stock Exchange of Hong Kong Limited ELECTRONIC COMPONENTS DISTRIBUTION December 2016
Slide 13: Corporate Highlights
CORPORATE HIGHLIGHTS CONSUMER PRODUCTS DISTRIBUTION June 2017 Strategies : Rationalise Operations & Explore New Profitable Investments Acquired 100% equity interest in Inkcarts Pte. Ltd. (“Inkcarts”) Inkcarts is principally engaged in the business of trading and distribution of computers and per
Slide 14: Corporate Highlights
CORPORATE HIGHLIGHTS OTHER BUSINESSES February 2017 Strategies : Diversify Risk and Generate Recurring Income Increased investment of US$1.5 million in 21%-owned associated company, Tong Chiang Group Pte. Ltd. (“TCG”), which is engaged in food manufacturing and catering in Singapore March 2016 I
Slide 15: Financial Results
FINANCIAL RESULTS 15 15
Slide 16: Snapshot of 2Q2017 & 1H2017 Performance
SNAPSHOT OF 2Q2017 & 1H2017 PERFORMANCE US$’000 2Q2017 2Q2016 Change (%) 1H2017 1H2016 Change (%) Sales 373,927 378,572 (1) 706,864 711,368 (1) Gross Profit 26,144 24,875 5 50,103 47,232 6 Gross Profit Margin (%) 7.0 6.6 0.4 pt 7.1 6.6 0.5 pt Net Profit/(Loss) After Tax 3,370 3,280 3 6,078 (3,279) 2
Slide 17: 2Q2017 Highlights
2Q2017 HIGHLIGHTS • Revenue of US$373.9M compared to US$378.6M in 2Q2016 Revenue from electronic components distribution business increased 14% to US$362.3M, mainly due to higher product demand from Hong Kong and China Revenue from consumer products distribution business down 83% to US$10.4 mill
Slide 18: 1H2017 Highlights
1H2017 HIGHLIGHTS • Revenue of US$706.9M compared to US$711.4M in 1H2016 Electronic components distribution business rose 17% to US$677.3m on higher product demand from Hong Kong, China and South Asia Pacific Consumer products distribution business declined 79% to US$27.5M due to lower overall p
Slide 19: Revenue Growth Trend – Serial System Group
REVENUE GROWTH TREND – SERIAL SYSTEM GROUP Revenue (US#039; million) 1,600.0 1,403 1,400.0 1,222 1,200.0 1,036 15% 1,000.0 18% 817.1 800.0 27% 658.1 616.4 600.0 545.0 24% 7% 400.0 353.6 381.9 13% 332.8 378.6 346.3 344.9 332.9 373.9 315.3 227.7 43% 185.6 184.5 182.9 200.0 8% 92.0 -1% 43.7 12% - 19 19
Slide 20: Outperforming the Industry
OUTPERFORMING THE INDUSTRY Asia Pacific (including Japan) Semiconductor Revenue (US#039; billion) Serial System Revenue (US#039; million) 250 1,600 241 1,403 240 1,400 232 1,222 229 1,200 230 1,036 1,000 15% 4% 817 220 18% 209 1% 800 658 207 616 210 205 205 27% 545 9% 600 24% 200 2% 400 7% -0.9% 190 200 1
Slide 21: Revenue
REVENUE Hong Kong & China Revenue (US#039; million) 900.0 853.4 800.0 700.0 661.8 663.0 600.0 29% 500.0 461.4 0.2% 400.0 370.2 344.1 322.3 43% 300.0 267.5 25% 242.4 219.0 217.8 224.8 214.2 180.8 196.3 8% 168.4 200.0 115.9 81.0 100.0 57.0 23% 31.8 3.4 14.4 - FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Slide 22: Profitability
PROFITABILITY Gross Profit & Gross Profit Margin 10.0% 9.5% (US#039; million) 120.0 9.3% 9.3% 9.0% 8.7% 9.0% 8.7% 7.5% 97.4 100.0 8.0% 7.4% 7.2% 6.9% 7.1% 7.0% 6.7% 6.6% 7.0% 90.4 91.5 80.0 6.0% 6% 73.5 5.0% 1% 60.0 62.6 57.5 23% 4.0% 50.7 40.0 3.0% 17% 33.4 2.0% 24.9 25.6 24.0 26.1 20.0 22.4 24.5 1.0%
Slide 23: Profitability
PROFITABILITY Net Profit & Net Profit Margin 18.0 2.2% (US#039; million) 2.5% 16.0 1.6% 16.1 2.0% 1.6% 14.0 1.3% 1.1% 1.2% 1.5% 12.0 1.2% 1.4% 0.9% 0.8% 0.9% 12.0 0.9% 10.0 11.2 11.0 1.0% 10.1 8.0 0.3% 0.5% 7.9 -31% 6.0 3.8 4.0 0.0% 4.0 5.1 44% 3.3 4.6 2.0 3.4 -0.5% 41% -59% 2.7 - -1.0% FY09 FY10 FY11
Slide 24: Profitability
PROFITABILITY EBITDA (US#039; million) 35.0 30.8 30.0 26.0 25.0 23.5 22.0 20.2 19.9 -9% 20.0 18.9 -16% 15.0 40% 16% 10.0 8.8 8.6 8.9 7.9 7.8 6.3 5.0 -1% - FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 -1.8 (5.0) 24 24
Slide 25: Financial Position
FINANCIAL POSITION Maintaining Healthy Current Ratio 450.0 430.6 436.5 1.6 1.5 1.4 1.4 400.0 382.6 1.4 1.3 372.0 370.7 347.8 1.2 1.2 1.2 350.0 1.2 324.1 1.2 295.6 300.0 277.0 1.0 250.0 218.3 211.5 218.7 0.8 200.0 173.8 147.5 147.0 0.6 150.0 120.7 0.4 100.0 50.0 0.2 - - FY10 FY11 FY12 FY13 FY14 FY15
Slide 26: Financial Position
FINANCIAL POSITION Net Gearing Ratio 140% 158.9 160.0 116% 139.3 117% 120% 140.0 138.0 112% 122.2 135.3 119.4 100% 120.0 110.0 124.8 104.5 98.7 98% 100.0 72% 80% 86.5 89% 120.2 80.0 97.9 54% 60% 60.0 43% 71.2 40% 56.3 40.0 37.6 20% 20.0 - 0% FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 Shareholders' Equi
Slide 27: Financial Position
FINANCIAL POSITION Cash Conversion Cycle (days) 75 70 69 70 67 65 62 66 58 60 61 61 60 55 55 53 55 51 56 51 49 50 45 44 41 42 40 36 36 33 40 35 38 38 32 30 33 31 33 33 32 30 25 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 Trade Receivable Turnover (days) Trade Payable Turnover (days) Inventory Turnover (
Slide 28: Dividend Yield
DIVIDEND YIELD Total Dividend Payout (In Cent (SGD)) 0.29 3.2% (Interim & Final) each year FY17 0.18 0.17 2.4% FY16 0.35 0.50 6.3% FY15 0.30 0.75 8.0% FY14 0.24 0.25 0.30 6.3% FY13 0.22 0.30 5.0% FY12 0.30 0.16 0.33 7.9% FY11 0.28 0.67 6.1% FY10 Singapore 0.13 0.38 8.5% Cents FY09 Interim Special Fi
Slide 29: Outlook & Strategies
OUTLOOK & STRATEGIES 29 29
Slide 30: Industry Outlook
INDUSTRY OUTLOOK The semiconductor industry is expected to fare better in 2017, surpassing Gartner’s initial projections to reach US$401.4 billion in sales this year. This growth will be driven mainly by memory products. The Group stands to benefit from its close ties with chip suppliers and electro
Slide 31: Group Outlook
GROUP OUTLOOK • The Group is looking to spin off its Hong Kong electronic components distribution entity, Serial Microelectronics (HK) Limited group (“SMHK group”) through a listing on the mainboard of the Stock Exchange of Hong Kong Limited. The proposed listing will enable the SMHK group to indepe
Slide 32: Our Three-Pronged Strategy
OUR THREE-PRONGED STRATEGY Objectives: - Increase revenue - Deepen value proposition - Drive greater internal efficiencies to improve margins Deepen penetration in Improve internal Expand product existing markets & efficiencies to achieve portfolio & increase widen geographical greater economies hig
Slide 33: Forward-looking statements disclaimer
The presentation herein may contain forward-looking statements by the management of Serial System Ltd (“Serial System”) that pertain to expectations for financial performance of future periods versus past periods. Forward–looking statements involve certain risks and uncertainties because they relate
Slide 34: Thank You
Thank You Media and Investor Contact Information: WeR1 Consultants Pte Ltd 3 Phillip Street #12-01 Royal Group Building Singapore 048693 Tel: (65) 6737 4844 | Fax: (65) 6737 4944 Frankie Ho, frankieho@wer1.net Grace Yew, graceyew@wer1.net 34 34