Slide 1: 2023 Interim Results Presentation
Stock Code: 1286 2023 INTERIM RESULTS PRESENTATION August 8, 2023
Slide 2: Disclaimer
Disclaimer The information set forth in this presentation is relating to the business of Impro Precision Industries Limited (the “Company” which, together with its subsidiaries, the “Group”) for the six months ended June 30, 2023. This presentation is intended to provide updated information on the G
Slide 3: 1H/2023 Results Summary
1H/2023 Results Summary Resilient Revenue Growth Increase in EBITDA & Reported Profit • Group revenue up 9.7% y-on-y to HK$2,404.8M, in local currency the • Despite headwinds of surface treatment division loss mainly due to growth rate is 11.0% Nantong plant fire incident in early June 2022 and high
Slide 4: Revenue by End-Market
Revenue by End-Market 1H/2022 1H/2023 Aerospace, Energy & Aerospace, Medical Energy & 8.7% Medical 13.2% Diversified Diversified Industrials Industrials Automotive Automotive 48.9% 49.3% 42.4% 37.5% 1H/2022 1H/2023 Inc/Dec By End-Market HK$ mil HK$ mil HK$ mil Change Diversified Industrials 1,071.8
Slide 5: Revenue by End-Market
Revenue by End-Market 1H/2022 1H/2023 Inc/Dec By End-Market HK$ mil HK$ mil HK$ mil Change Diversified Industrials 1,071.8 1,184.1 112.3 10.5% - Construction Equipment 314.9 402.2 87.3 27.7% - High Horsepower Engine 208.6 251.8 43.2 20.7% - Agricultural Equipment 177.2 206.0 28.8 16.3% - Recreationa
Slide 6: Revenue by Business Segment
Revenue by Business Segment 1H/2022 1H/2023 1H/2022 1H/2023 Inc/Dec By Business Segment HK$ mil HK$ mil HK$ mil Change Investment Casting 933.8 994.9 61.1 6.5% Precision Machining & Others 754.8 948.7 193.9 25.7% Sand Casting 380.6 433.8 53.2 14.0% Surface Treatment 123.5 27.4 (96.1) -77.8% Total 2,
Slide 7: Revenue by Geographical Area
Revenue by Geographical Area 1H/2022 1H/2023 1H/2022 1H/2023 Inc/Dec By Geographical HK$ mil HK$ mil HK$ mil Change Americas 1,046.4 1,140.5 94.1 9.0% - United States 963.1 1,023.3 60.2 6.3% - Others 83.3 117.2 33.9 40.7% Europe 672.2 790.1 117.9 17.5% Asia 474.1 474.2 0.1 0.0% - The PRC 417.3 405.6
Slide 8: 1H/2023 Financial Review
1H/2023 Financial Review
Slide 9: 1H/2023 Financial Review
1H/2023 Financial Review 1H/2022 1H/2023 Financial Highlights HK$ mil HK$ mil Change Revenue 2,192.7 2,404.8 9.7% Gross Profit 643.3 624.1 -3.0% Gross Profit Margin 29.3% 26.0% -3.3% Other revenue 12.6 14.8 17.5% Other net (loss)/income (49.6) 25.7 -151.8% Selling and distribution expenses (103.3) (
Slide 10: Gross Profit
Gross Profit HK$ mil 29.3% 900 30.0% 26.0% 0.3 25.0% 36.4 29.5% 1.1% 600 91.1 21.0% 115.8 30.4% 20.0% 28.0% 217.2 211.7 22.9% 300 15.0% 29.9% 315.6 31.7% 279.4 0 10.0% 1H/2022 1H/2023 Investment Casting Precision Machining and Others Sand Casting Surface Treatment Gross Profit Margin Gross profit ma
Slide 11: Cost of Sales Analysis
Cost of Sales Analysis HK$ mil 2,400 1,780.7 1,800 1,549.4 294.0 16.4% 284.9 18.4% 111.7 6.3% 7.4% 158.0 8.9% 1,200 115.3 124.7 8.1% 433.7 24.4% 404.1 26.1% 600 783.3 44.0% 620.4 40.0% 0 1H/2022 1H/2023 Cost of RM and consumables Staff Costs Depreciation Fuel Expenses and Utilities Others Percentage
Slide 12: Operating Expenses Analysis
Operating Expenses Analysis Administrative and Other Operating HK$ mil Selling and Distribution Expenses Expenses HK$ mil 150 250 4.7% 4.5% 7.0% 7.0% 4.0% 6.5% 200 103.3 6.5% 3.5% 3.5% 6.0% 100 3.0% 153.5 +1.7% 156.1 83.9 150 5.5% 2.5% 5.0% 2.0% 100 50 4.5% 1.5% 1.0% 4.0% 50 0.5% 3.5% 0 0.0% 0 3.0%
Slide 13: Key Working Capital Ratios
Key Working Capital Ratios Inventory Turnover Day (Average) Trade and Bills Receivables Turnover Days (Average) HK$ mil HK$ mil 1,500 135 150 1,800 105 121 84 88 121 86 1,000 100 1,200 70 974.6 1,152.1 1,044.6 972.2 500 50 600 1,091.2 1,160.9 35 0 0 0 0 12/31/2021 12/31/2022 6/30/2023 12/31/2021 12/
Slide 14: Capital Expenditure
Capital Expenditure HK$ mil Actual FY2021-2022 and Budget Capex in FY2023 1,500.0 12.3% 1500 8.3% 1,200.0 1200 1,054.1 5.7% 900.0 900 695.1 599.7 600.0 2H/2023: 600 464.0 312.3 382.8 396.5 300.0 246.6 199.9 1H/2023: 196.6 300 382.8 199.9 0.0 0 FY2021 FY2021 FY2022 FY2022 1H/2023 1H/2023 FY2023 FY202
Slide 15: Key Financial Ratios
Key Financial Ratios Adjusted Return on Equity Net Gearing Ratio 14.9% 13.8% 40.0% 39.2% 15.0% 35.0% 10.1% 30.0% 10.0% 22.1% 20.0% 5.0% 10.0% 0.0% 0.0% FY2021 FY2022 1H/2023 (Annualized) FY2021 FY2022 1H/2023 Net Debt / Adj. EBITDA Adjusted Interest Coverage Ratio 2.0 20.0 18.5 1.5 1.4 1.3 15.0 13.4
Slide 16: Business Outlook
Business Outlook
Slide 17: Mexico SLP Campus Construction Update
Mexico SLP Campus Construction Update SC-SM SC-SM Aerospace & Aerospace & ST Plant ST Plant SC Plant SC Plant PM Plant PM Plant IC Plant IC Plant (Photo taken on Aug 2, 2023) (Photo taken on Mar 2, 2023) ⚫ Mexico SLP Campus Precision Machining (PM), Sand Casting (SC) and Sand Casting (IC) plants are
Slide 18: Business Outlook
Business Outlook ⚫ Global economy remains exposed to a number of uncertainties: high inflation, high interest rate, ongoing Russia-Ukraine war and slowdown in the recovery of China market would dampen near term revenue growth rate ⚫ The Group’s “Global Footprint” and “Diversified End-markets” strate
Slide 19: Q&A Session
Q&A Session
Slide 20: Appendices – Financials Summary
Appendices – Financials Summary
Slide 21: Reconciliation of Adjusted Profit Attributable to Shareholders and Adjusted EBITDA
Appendix 1 - Reconciliation of Adjusted Profit Attributable to Shareholders and Adjusted EBITDA 1H/2022 1H/2023 HK$ mil HK$ mil Change Reconciliation to Adj. Profit Attr. to Shareholders Profit after tax 268.0 303.5 Adjustments (net of tax): - Impairment loss prov./(reversal) of PPE & inv. re: Nanto
Slide 22: Consolidated Statement of Profit or Loss
Appendix 2 – Consolidated Statement of Profit or Loss 1H/2022 1H/2023 HK$ mil HK$ mil Revenue 2,192.7 2,404.8 Cost of sales (1,549.4) (1,780.7) Gross Profit 643.3 624.1 Other revenue 12.6 14.8 Other net (loss)/income (49.6) 25.7 Selling and distribution expenses (103.3) (83.9) Administrative and oth
Slide 23: Consolidated Statement of Financial Position
Appendix 3 – Consolidated Statement of Financial Position 12/31/2022 6/30/2023 HK$ mil HK$ mil Non-current assets Property, plant and equipment 4,050.2 4,336.3 Prepayments for property, plant and equipment 46.8 75.2 Intangible assets 248.4 226.2 Goodwill 230.8 223.6 Deferred expenses 163.3 157.0 Oth
Slide 24: Consolidated Statement of Financial Position
Appendix 3 – Consolidated Statement of Financial Position 12/31/2022 6/30/2023 HK$ mil HK$ mil Current liabilities Bank loans 942.4 1,051.6 Lease liabilities 14.4 10.4 Trade payables 457.8 488.7 Other payables and accruals 303.1 293.9 Taxation payable 94.4 121.7 Total current liabilities 1,812.1 1,9
Slide 25: Consolidated Statement of Financial Position
Appendix 3 – Consolidated Statement of Financial Position 12/31/2022 6/30/2023 HK$ mil HK$ mil Capital and reserves Share capital 188.5 188.5 Reserves 4,190.8 4,486.0 Total equity attributable to equity shareholders of the Company 4,379.3 4,674.5 Non-controlling interest 18.7 18.6 TOTAL EQUITY 4,398
Slide 26: Condensed Consolidated Cash Flow Statement
Appendix 4 – Condensed Consolidated Cash Flow Statement 1H/2022 1H/2023 HK$ mil HK$ mil Operating activities Cash generated from operations 500.9 718.7 Tax paid (57.9) (41.2) Net cash generated from operating activities 443.0 677.5 Investing activities Payment of property, plant and equipment (420.4
Slide 27: Condensed Consolidated Cash Flow Statement
Appendix 4 – Condensed Consolidated Cash Flow Statement 1H/2022 1H/2023 HK$ mil HK$ mil Financing activities Proceeds from bank loans 876.7 673.4 Repayment of bank loans (524.1) (607.2) Lease rentals paid (5.2) (7.2) Dividends paid (135.6) (150.8) Interest paid (20.4) (56.8) Proceeds from exercise o
Slide 28: Thank You
Impro Reliable - Flexible - Global THANK YOU