Slide 1: K LASER (2461) 3Q16 Investor Conference
K LASER (2461) 3Q16 Investor Conference November 2016 1
Slide 2: Disclaimer
Disclaimer • The information contained in this confidential document ("Presentation") has been prepared by K LASER (the "Company"). It has not been fully verified and is subject to material updating, revision and further amendment. • While the information contained herein has been prepared in good f
Slide 3: 3Q16 Results
tml 3Q16 RESULTS
Slide 4: 3Q16 Highlights
3Q16 Highlights ► Revenue increased 20.9% in 3Q16 versus 3Q15 to NT$1,281 mn. ► Gross Margin declined 1.2pp in 3Q16 versus 3Q15 to 23.7%. Excluding Optivision and He Rei Laser, Gross Margin increased 3.2 pp in 3Q16 versus 3Q15 to 30.4%. ► Operating Margin improved 2.6pp in 3Q16 versus 3Q15 to 9.7%.
Slide 5: 3Q16 Revenue
3Q16 Revenue ► 3Q16 revenue increased versus 3Q15 as a result of consolidating He Rui Laser and on the back of strong revenue growth from Optivision. Core revenue excluding He Rei Laser was flat versus 3Q15 but increased significantly versus 2Q16 due to improving inventory levels of Chinese Tobacco
Slide 6: 3Q16 Gross Margin
3Q16 Gross Margin ► K Laser’s gross margin slightly decreased due to consolidating He Rei Laser and the impact from Optivision, while core gross margin* continued to rise. ► Gross margin of the core business* expanded 3.2pp to 30.4% in 3Q16 versus 3Q15 thanks to improvements in the manufacturing pro
Slide 7: 3Q16 Operating Expenses
3Q16 Operating Expenses ► K Laser continued to control costs. 3Q16 operating expenses and operating expense ratio both decreased versus 3Q15. Operating Expenses Operating Expenses Operating Expense ratio 17.7% 19.4% 13.9% 188 195 178 3Q15 2Q16 3Q16 Operating Expenses NT$ million 7
Slide 8: 3Q16 Operating Margin
3Q16 Operating Margin ► 3Q16 Operating Margin was 9.7%, up 2.6pp versus 3Q15, up 1.7pp versus 2Q16. ► 3Q16 Operating Profit rose 65.9% versus 3Q15 and rose 56.0% versus 2Q16. Operating Profit Operating Profit Operating Margin 9.7% 7.1% 8.0% 125 75 80 3Q15 2Q16 3Q16 Operating Profit NT$ million 8
Slide 9: 3Q16 Earnings
3Q16 Earnings ► 3Q16 Net Income of NT$60 mn, down 8.7% versus 3Q15, up 115.8% versus 2Q16. ► 3Q16 EPS of NT$0.46, flat versus 3Q15, up 119.0% versus 2Q16. Net Income to Parent EPS 66 0.46 0.46 60 28 0.21 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 Net Income to Parent NT$ million EPS NT$ 9
Slide 10: 3Q16 Income Statement (consolidated)
3Q16 Income Statement (consolidated) NT$ Million 3Q16 3Q15 YoY (%) 9M16 9M15 YoY (%) Sales Revenue 1,281 1,059 20.9 3,438 2,954 16.4 Gross Profit 303 263 15.2 879 725 21.3 Operating Profit 125 75 65.9 305 184 66.2 Income before Tax 75 92 (18.4) 195 171 14.2 Net Income to Parent 60 66 (8.7) 119 132 (
Slide 11: About K Laser
ABOUT K LASER 11
Slide 12: Executive Summary
Executive Summary ► We are the largest fully integrated holographic material supplier in the world, ranking No. 1 in Consumer Packaging and top 3 in Tobacco Security in China. The global market we target is over US$ 3 bn. ► With in-house design and origination capabilities, we are a total solution p
Slide 13: K Laser at a glance
K Laser at a glance Product sales mix ► Ticker: 2461 TT Hologram 69% ► Founded in 1988 Optical Film 31% ► 2015 Revenue: NT$4.1 bn (US$125 m) Hologram sales mix Holographic Market cap*: NT$2.3 bn (US$71 m) 30% ► paper ► Employee number **: 750+ Holographic film 20% Hot stamping ► 8 manufacturing site
Slide 14: Corporate Structure
Corporate Structure K Laser (2461 TT) Hologram 47%** Optical Optivision* K Laser(TW)* R&D center (US) (3666 TT) China International Ningbo* US Wuxi* Thailand* Dong Guan* Japan* Changsha* Dubai Hong Kong India* Korea* * With manufacturing facilities ** K Laser holds 47% of Optivision as of end of 3Q1
Slide 15: Industry Leader
Industry Leader Products K Laser The largest fully integrated holographic Hologram material supplier in the world is the sole supplier No. 1 in Consumer Packaging Market Our and top 3 in Tobacco Security Market Consumer focus Security in China & Tobacco labels, industry packaging & Capturing a US$3b
Slide 16: TSL – What is it?
TSL – What is it? Truly Seamless (TSL) Traditional TSL can solve the issues - end products with seams or inconsistent patterns 16
Slide 17: TSL – Benefits
TSL – Benefits Minimized disturbance Less limitations on to production specification Traditional Truly Seamless (TSL) Customers K Laser • Production speed/capacity improves significantly • Higher yield rate • Higher yield rate • Higher production rate • Cost-saving for Holographic Film by • Lower in
Slide 18: Strategy Focus
Strategy Focus Resource Gain Shares Optimization Truly Seamless Streamline operations products (TSL) Grow non-tobacco Rationalize global exposure operations 18
Slide 19: Hologram sales mix by customer industry
Hologram sales mix by customer industry 15% 16% 21% 20% 21% 26% 31% 33% 36% 37% 32% 38% 54% 51% 43% 43% 47% 36% 2012 2013 2014 2015 9M16* 9M16 Note: Other includes glitters, decorations, materials…etc * Excluding the newly consolidated China subsidiary, He Rui Laser 19
Slide 20: Our Goals
Our Goals We strive to enhance our No. 1 position in the world Increase ROE Improve efficiency & Expand gross expand margin in core operating Core revenue business margin in core CAGR superior business to the industry average 20
Slide 21: K LASER
fi 21 K LASER
Slide 22: Appendix
APPENDIX 2 K LASER
Slide 23: 3Q16 Balance Sheet (consolidated)
3Q16 Balance Sheet (consolidated) NT$ Million 3Q16 3Q15 YoY (%) 2Q16 QoQ (%) TOTAL ASSETS 6,337 5,938 6.7 6,398 (0.9) Cash 1,111 963 15.4 1,328 (16.3) NR & AR 1,595 1,630 (2.2) 1,528 4.4 Inventory 748 570 31.2 734 1.9 Fixed Asset 1,370 1,361 0.7 1,404 (2.4) TOTAL LIABILITIES 3,149 2,727 15.5 3,163 (
Slide 24: Dividend
Dividend 2013 2014 2015 Net Income (NT$ mn) 228 91 164 Cash Dividend (NT$ mn) 105 55 66 Dividend per Share (NT$) 0.65 0.42 0.50 Payout Ratio (%) 46% 61% 40% Cash Yield (%)* 3.8% 2.9% 3.6% * Cash yield is based on K Laser’s closing share price on the day before ex-dividend day (August 6, 2014 for 201
Slide 25: Thank You
THANK YOU 2 K LASER