Stamford Tyres Corporation Limited · SGX:S29
Stamford Tyres — H1 2005 Earnings Presentation
30 slides from Stamford Tyres's earnings presentation, Dec 8, 2004
Slide 1: 1H FY2005 Results Presentation
1H FY2005 Results Presentation December 8, 2004
Slide 2: Our Business
Our Business Value-added Services Distribution Retail Fleet Tyre Aluminium Management Alloy Wheel & Maintenance Manufacturing Services
Slide 3: Presentation Outline
Presentation Outline } Financial Highlights } Corporate Developments } Strategy and Outlook
Slide 4: Financial Highlights
Financial Highlights
Slide 5: Brief Summary
Brief Summary Group performance in 1H FY2005 affected by … } Start-up costs at wheel manufacturing plant in Thailand } Realignment of distribution structure } Start-up losses from setting up of dealers retail network by SRITP in China
Slide 6: Financial Highlights
Financial Highlights 1H FY2004 1H FY2005 Change (S$’m) (S$’m) (% ) Sales 91.8 90.5 (1.5) Gross Profit Margin 26.9 26.5 (1.5) Profit Before Tax 7.1 4.6 (35.2) Net Profit After Tax 5.9 3.0 (49.0) EPS - Basic (cents) 3.44 1.47 (57.3) EPS - Diluted (cents) 2.78 1.34 (51.8) Note: 1H = 6 months ended Oct
Slide 7: Sales
Sales S$m 120 } Sales growth flat 91.8 90.5 due to tight supply 100 72.6 situation 80 - Continued tightness in tyre 60 allocation from Falken, Continental and Chinese 40 manufacturers 20 0 1H FY2003 1H FY2004 1H FY2005 } Demand remains robust Note: 1H = 6 months ended Oct 31
Slide 8: Sales by Geographical Region
Sales by Geographical Region 1H FY2005 1H FY2004 Others North Asia 7% 17% North Asia Others 19% 2% Southeast Asia 76% Southeast Asia 79% Note: 1H = 6 months ended Oct 31
Slide 9: Gross Profit Margin
Gross Profit Margin S$m % 30 50 24.7 24.0 } Gross Profit Margin 25 40 maintained due to 20 18.4 30 15 25.3 26.9 26.5 - Focus on sales of higher 20 value added products 10 and services 5 10 - Improved sourcing 0 0 1H F2003 1H FY2004 1H FY2005 Gross Profit Gross Profit Margin Note: 1H = 6 months ended
Slide 10: Profit Before Tax
Profit Before Tax PBT declined due to : S$m 10 } Start-up costs from 7.1 8 investment initiatives - New wheel plant in Thailand 6 4.6 - Dealers retail network in 3.5 China 4 } Restructuring costs 2 - Realignment of distribution structure 0 1H FY2003 1H FY2004 1H FY2005 Note: 1H = 6 months ended Oct
Slide 11: Profit After Tax
Profit After Tax S$m 10 8 5.9 } 1HFY2005 PAT is 6 comparable to 2.9 3.0 4 1HFY2003 PAT 2 0 1H FY2003 1H FY2004 1H FY2005 Note: 1H = 6 months ended Oct 31 # 1H FY2004 PAT includes a S$1m tax write-back
Slide 12: New SSW Wheel Plant in Thailand
New SSW Wheel Plant in Thailand
Slide 13: Factory Size and Location
Factory Size and Location Total Land Size: 14,000 Square Metres Total Factory Size: 10,000 Square Meters Location: 60 km Northwest of Bangkok City (appr 1 hr from city)
Slide 14: Technology – Partnership with A*Star
Technology – Partnership with A*Star Partnership with: Singapore Institute of Manufacturing Technology (SIMTech) – a research institute under Agency for Science, Technology & Research “A*STAR”. Synergies: } Leverage on the pool of knowledge from the research scientists and engineers. } Technical sup
Slide 15: Wheel Production on Track
Wheel Production on Track Aug 2004 Sept 2004 Dec 2004 Jan 2005 May 2005 (Est) Completion Test Commercial Commercial Installation TOTAL of wheel Production of 1st Production of 2nd Line Commercial plant Line of 1st Line Production – 3,000 pieces – 13,000 (inclusive of Installation pieces line 1 and l
Slide 16: Strong Management Team for SSW
Strong Management Team for SSW Name Position Experience Roger Chang CEO • Roger joined the company since 1984 (from • Held various marketing positions within the Group in Singapore) the local and overseas markets and has contributed to the success of the Group’s Retail Operations Yasutake Saito Fact
Slide 17: Strong Management Team for SSW
Strong Management Team for SSW Name Position Experience Wang Huai Min Manager for • 18 years of experience in manufacturing (from Taiwan) QC Casting • Formerly Section Head of Vehicle Wheel Manufacturing at previous company • Has also provided consultancy services to gravity casting to factories in
Slide 18: Process
Process Casting Sand Full Heat Blast Treatment Machining Painting
Slide 19: Comprehensive Testing Facilities
Comprehensive Testing Facilities Spectrometer Tensile Strength Salt Spray Lab Testing Testing Dynamic Radial Cornering Bending Impacting Load Tester Endurance Testing Testing
Slide 20: Finished Product
Finished Product Wide Product Range
Slide 21: Strategy
Strategy
Slide 22: Increase Supply
Increase Supply 1) Increase supply volume through Sumo offtake arrangements - Truck Bus Bias from China, Thailand and Vietnam 2) Secured additional brands of passenger car radial and light truck tyres for distribution in selected territories - Maxxis from Taiwan and Thailand, and Amtel from Russia
Slide 23: Increase Supply
Increase Supply 3) New product development - Production of Truck Bus Radial to commence in January 2005 - Exploring sources for Passenger Car Radial and High Performance Car Radial Tyres from China and other countries in Asia
Slide 24: Strengthen our Territorial Presence
Strengthen our Territorial Presence Focus the distribution of our major international brands in South East Asia and China } Open new retail outlets in Singapore, Malaysia & Indonesia } Investment in more distribution points in China and South East Asia } Expand fleet management and related value add
Slide 25: Realignment of Distribution Structure
Realignment of Distribution Structure Direct Singapore Shipment to Central to overseas Warehousing operations } Realigning our business model to capitalise on a volume increase in the regional markets Advantages: - Reduces freight cost in the long run - Closer to the dealer-retail network
Slide 26: Increase Sales of SSW Wheels
Increase Sales of SSW Wheels Raise production of SSW wheels to strengthen presence in existing markets and penetrate new markets } Line 1 targeting 20% to Thai market and 80% to export markets like Singapore, Malaysia, Australia, Indonesia, Middle East and Greece } Line 2 to target new markets of US
Slide 27: Outlook
Outlook STAMFORD rynes
Slide 28: Healthy Outlook for 2H FY2005
Healthy Outlook for 2H FY2005 Expanding our Proprietary brands 3 Better product range 3 Less geographical restrictions 3 Increased supply base and volume 3 Wider market coverage
Slide 29: Healthy Outlook for 2H FY2005
Healthy Outlook for 2H FY2005 ¾ Outlook for second half is brighter than first half ¾ Groundwork being laid for the next level of growth from FY2006
Slide 30: Thank You
STAMFORD runes THANK YOU