Kumpulan Perangsang Selangor Bhd. · MYX:KPS
Kumpulan Perangsang Selangor Bhd — Q1 2019 Earnings Presentation
40 slides from Kumpulan Perangsang Selangor Bhd's earnings presentation, May 31, 2019
Slide 1: Investor Briefing 1st Quarter 2019 Results
KUMPULAN PERANGSANG SELANGOR BERHAD INVESTOR BRIEFING 1ST QUARTER 2019 RESULTS “Stronger Contribution by Core Businesses” 31 May 2019
Slide 2: Table of Contents
Table of SECTION 1 : The KPS That Was 4-6 Contents SECTION 2 : Business Transformation Plan (“BTP”) 8 - 11 SECTION 3 : Sector Reclassification 13 SECTION 4 : 1Q19 Financial Results a. Sectoral Performance Review 17 – 26 b. BTP Earnings Translation 28 c. Group Financial Results 30 -32 SECTION 6 : Fut
Slide 3: Section 1: The KPS That Was
SECTION 1 I THE KPS THAT WAS
Slide 4: Core Interest in Challenging Sectors
Core Interest in Challenging Sectors Resulting in Unfavourable Market Perception Investments in 2015 Infrastructure Utilities Hospitality Telco Oil & Gas Trading (30.0%) (90.8%) (100%) Ceres Telecom (40.0%) (36.0%) (20.0%) (34.3%) (30.0%) PHP (100%) Perception Non Controlling Products / Services Del
Slide 5: Unsustainable Growth Due to Absence of Core Catalysts
Unsustainable Growth Due to Absence of Core Catalysts Declining Share Price & Dependability of Dividend Distribution on Sale of Assets 2 Negotiations in relation to water assets continuing from 2013 gave rise to speculative share price performance 1.8 1.6 Oct 2015: Announcement - proposed disposal o
Slide 6: Sustained Business Challenges
Sustained Business Challenges Called for a Paradigm Shift in How We Do Business Imminent Divestment of SPLASH Continued Decline Unfavourable in Share Price Sentiment Amongst Investors Business Transformation Plan (“BTP”) 6
Slide 7: Section 2: Business Transformation Plan
SECTION 2 I BUSINESS TRANSFORMATION PLAN (“BTP”) “Creating Sustainable Value to Shareholders”
Slide 8: A More Robust Strategy under BTP
A More Robust Strategy under BTP Before & After Business Transformation Plan 2016 BEFORE AFTER Sector Agnostic Sector-specific Over-exposure to single sector Balanced exposure over core sectors Generalist approach to investment Focused investment parameters Selangor-centric business Boundaryless inv
Slide 9: Ensuring Sustainable Growth & Enhancing Shareholders' Value
Ensuring Sustainable Growth & Enhancing Shareholders’ Value Four Pillars Crafted to Support BTP Objectives Acquisition of Strategic Assets Creating Value in Subsidiary Companies ▪ Majority stake ▪ Setting Value Creation Plans ▪ Mature / Market Leader for pre and post acquisition ▪ Financially Stable
Slide 10: BTP in Action
BTP in Action Acquisitions and Corporate Exercises Since Emerged as Emerged as major major shareholder for Disposed: Acquired shareholder KPS-HCM (51%), Acquired 51% stake in for Aqua-Flo Smartpipe (60%) & 100% stake Brisdale Hotel, Smartpipe (51%) Disposed: Century Bond (98.9%) in CPI Cengren Globa
Slide 11: Our Business Today
Our Business Today Controlling Stake in Market Leaders in High Growth Industries Manufacturing Licensing Trading Infrastructure Associates 98.9% 100% 51% 51% 60% 40% 20% 60% 100% KKLC 60% KKMW 11
Slide 12: Section 3: Sector Reclassification
SECTION 4 I SECTOR RECLASSIFICATION
Slide 13: Bursa Sector Reclassification
Bursa Sector Reclassification Providing Accurate Business Benchmarking & Valuation With departure of SPLASH, FROM UTILITIES KPS has no direct exposure in the water sector To reflect KPS’ existing investment TO INDUSTRIAL PRODUCTS & SERVICES* focus, business appeal and future business direction *Effe
Slide 14: Section 4: 1Q19 Financial Results
SECTION 5 I 1Q19 FINANCIAL RESULTS
Slide 15: Sectoral Performance Review
I SECTORAL PERFORMANCE REVIEW
Slide 16: Manufacturing
I Manufacturing
Slide 17: Century Bond Bhd
Century Bond Bhd Revenue Driven Mainly by Carton Division 1Q19 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ 80% utilisation AS AT 31 MAR 2019 (RM’M) ✓ Paper Bags (3 - Medan, Senai, Ipoh) 189.9 ✓ Carton Box (2 – Senai, Nilai) 174.1 3.6 161.6 19.4.0 ▪ 50% utilisation 6.0 ✓ Plastics (1 - Senai) 6.7 19.3 13.4 12.
Slide 18: CPI (Penang) Sdn Bhd
CPI (Penang) Sdn Bhd Higher than Expected Sales, Maintained High Margins 1Q19 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ 80% utilisation AS AT 31 MAR 2019 (RM’M) ✓ Location : Bayan Lepas, Penang 151.8 ▪ Steady revenue contribution driven by higher- 135.4 17.8 127.3** than-expected ETP’s tooling and EMS sale
Slide 19: King Koil Manufacturing West
King Koil Manufacturing West Lower Overall Sales on 16% Capacity Utilisation 1Q19 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ 16% utilisation AS AT 31 MAR 2019 (USD’M) ✓ Location : Phoenix, Arizona ▪ Manufactured products contributed to 62% of 10.0 sales, which included new design showcased at Winter Market
Slide 20: Trading
I Trading
Slide 21: Aqua-Flo Sdn Bhd
Aqua-Flo Sdn Bhd Lower Chemicals Sales Due to Dry Weather & WTP Commissioning Delay 1Q19 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ In addition to RM162 million by Air Selangor, AS AT 31 MAR 2019 (RM’M) secured 7 new projects from SADA, PBA, SAINS & Laku Sarawak worth ~RM16 million ▪ Sales of chemicals shor
Slide 22: Licensing
I Licensing
Slide 23: King Koil Licensing Company Inc
King Koil Licensing Company Inc Higher Royalty Fees from International Markets Q1 2019 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ International royalties were higher due to AS AT 31 MAR 2019 (USD’M) additional FY2018 fees from China and Indonesia which was reported and recognised this quarter 9.0 8.4 ▪ Inte
Slide 24: Infrastructure
I Infrastructure
Slide 25: KPS-HCM Sdn Bhd
KPS-HCM Sdn Bhd Lower Revenue due to Delayed Works 1Q19 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ Lower revenue due to delayed M&E and elevated AS AT 31 MAR 2019 (RM’M) tank works in Pulau Indah Phase 3C Project ▪ Remaining orderbook from Central Spectrum ~ 72.2 RM50 million. ▪ New orderbook from Central S
Slide 26: Smartpipe Technology Sdn Bhd
Smartpipe Technology Sdn Bhd Start-up investment in Compact Pipe Providing NRW-reduction solutions 1Q19 HIGHLIGHTS FINANCIAL PERFORMANCE ▪ Orderbook : RM20.0 million. To replace existing AS AT 31 MAR 2019 (RM’M) 16.3 km pipework in Hulu Langat and Kuala Lumpur, ending October 2019 ▪ Lower revenue as
Slide 27: BTP Earnings Translation
I BTP Earnings Translation
Slide 28: Enlarged Earnings Base
Enlarged Earnings Base Core Business Strengthening Dynamics CPI, 1Q19 PBT (RM mil) RM45.6m 10 8 6 CBB, KPS-HCM, RM46.2m KKLC, 4 RM11.6m RM11.2m 2 AquaFlo, RM25.9m 1Q19 Revenue (RM mil) 0 Smartpipe, RM2.6m KKMW, -2 RM13.8m 28
Slide 29: Group Financial Results
I GROUP FINANCIAL RESULTS
Slide 30: Continued with Growth Trajectory
Continued with Growth Trajectory Stronger Overall Financial Performance 01 Revenue Healthy Growth 02 Streamlining Focus Concentration in Manufacturing Sector 03 Operating Profits Strong Turnaround 04 New Earnings Dynamics Moving On Without SPLASH 30
Slide 31: Revenue Growth
Revenue Growth Stronger Manufacturing Contribution by CBB, CPI and KKMW REVENUE BREAKDOWN SECTOR Q1 2019 Q1 2018 Manufacturing 105.6 44.0 Infrastructure , 11.8 Investment Properties 8% 2.9, 2% Trading 25.9 26.3 Licensing, 11.2 7% Licensing 11.2 7.8 Q1 2019 Infrastructure 11.8 14.9 Trading, Revenue 2
Slide 32: Key Highlights
KEY HIGHLIGHTS Stronger Contribution from Core Businesses REVENUE + 64% PBT - 54% 157.5 Group revenue recorded higher due to: Group PBT recorded lower due to: 15.5 ▪ Strong manufacturing contribution ▪ Higher finance cost of +145% from 95.8 7.2 of 67% to total group revenue previous year ▪ New reven
Slide 33: Section 6: Future Plans & Prospect
SECTION 6 I FUTURE PLANS & PROSPECT
Slide 34: Organic Business Catalysts
Organic Business Catalysts Manufacturing to Lead Growth & Value Creation Optimising product mix and margins with offset printing and shrink plastic Expansion plan is underway to cater for higher demand from ETP and Electronics The planned increase in mattress retailers expected to boost sales for KK
Slide 35: New Growth Catalyst via M&A
New Growth Catalyst via M&A Proposed Acquisition of Toyoplas Manufacturing (M) Sdn Bhd Why Malaysian-Based Manufacturing?* • Higher Sector Contribution to GDP Relative to Regional Peers. Historically ~ 22% • Ranked 8th in Asia for Innovation & Technology • To benefit Further from Has Has strong Indu
Slide 36: Recent Proposed Acquisition – Toyoplas Manufacturing (M) Sdn Bhd
Recent Proposed Acquisition – Toyoplas Manufacturing (M) Sdn Bhd Bolt-on acquisition, creating a major player in the plastic injection moulding industry OVERVIEW FINANCIAL PERFORMANCE (USD’ mil) ▪ Toyoplas is involved in the plastic injection moulding industry with an integrated capability from moul
Slide 37: 2019 Capex Guidance
2019 Capex Guidance Mainly for CBB, CPI & KKMW for Capacity and Business Expansion Company RM million Utilisation Perangsang Selangor 50 - 60 Plaza Perangsang Development Phase 2 CBB 6-8 Machine Upgrade for Improved Capacity CPI 50 - 60 Land Acquisition & EMS Expansion KKMW ~1 New Machineries TOTAL*
Slide 38: Strategies for Continued Success
Strategies for Continued Success Growth from New Earnings Base Market Cap Expected to Reflect TARGETED RESULTS 2021 Increased Earnings Base Earnings Base to Increase ONGOING BTP in Line with BTP Value Creation & New ONGOING BTP Investments Opportunities LOWER EARNINGS BASE 2019 Departure of SPLASH 2
Slide 39: Thank You
THANK YOU
Slide 40: Disclaimer on Forward Looking Statement
Disclaimer on Forward Looking Statement Kumpulan Perangsang Selangor Berhad (“Perangsang Selangor” or “the Group”) makes no representation or warranty, whether expressed or implied, as to the accuracy or completeness of the facts highlighted in this presentation, disclaiming responsibility from any
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