Serial System Ltd · SGX:S69
Serial System — FY2018 Earnings Presentation
29 slides from Serial System's earnings presentation, Feb 28, 2019
Slide 1: 4Q2018 & FY2018 Results Presentation
4Q2018 & FY2018 RESULTS PRESENTATION Thursday, 28 February 2019 1 1
Slide 2: Agenda
AGENDA 3D CORPORATE OVERVIEW FINANCIAL RESULTS OUTLOOK & STRATEGIES 2 2
Slide 3: Corporate Overview
CORPORATE OVERVIEW © 2012 PRIVATE & CONFIDENTIAL 3 3
Slide 4: Serial System at a Glance
SERIAL SYSTEM AT A GLANCE The largest electronic One of Asia Pacific’s components largest electronic distributor distribution networks listed on SGX Total Shares: Electronic 896 million Components Free Float: 40% SERIAL (96%)* Market Capitalisation: S$73M FY2018 FY2017 (As at 27 February 2019) SYSTE
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 a dealer for a variety of consumer products. It is also a strategic investor in businesses in healthcare and managed print services. Electronic
Slide 6: Partnering Leading Suppliers: Electronic Components Distribution
PARTNERING LEADING SUPPLIERS Electronic Components Distribution … more than 90 Franchised Product Lines in Serial Group © 2012 PRIVATE & CONFIDENTIAL 6 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 6 6
Slide 7: Partnering Leading Suppliers: Consumer Products Distribution
PARTNERING LEADING SUPPLIERS Consumer Products Distribution © 2012 PRIVATE & CONFIDENTIAL 7 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 7 7
Slide 8: Consumer Products Distribution
Consumer Products Distribution Achieva Technology • The Group 100%-owned subsidiary: Achieva Technology Sdn. Bhd. • Major suppliers include Intel, Samsung and Asus • Achieva Technology works closely with partner brands to both fulfil their distribution needs and to create a one-stop solution for the
Slide 9: Consumer Products Distribution: Managed Print Services
Consumer Products Distribution Managed Print Services • Set up in 2008, PT SMI is 20% owned by Serial System since November 2018 • Listed on Development Board of Indonesia Stock Exchange • Started in 2014, Singapore-based Print-IQ is 70%-owned by Serial System since May 2017 • Provides managed print
Slide 10: Other Businesses
OTHER BUSINESSES Part of Group’s diversification into investment holding of high-margin companies Serial MultiVision Pte. Ltd. (100%-stake) • Core businesses: Hospitality and Healthcare solutions • Hospitality solutions: Build based on a core venue management application suite known as Venue360. • L
Slide 11: Financial Results
FINANCIAL RESULTS 11 11
Slide 12: Snapshot of 4Q2018 & FY2018 Performance
SNAPSHOT OF 4Q2018 & FY2018 PERFORMANCE US$’000 4Q2018 4Q2017 Change (%) FY2018 FY2017 Change (%) Sales 327,617 390,100 (16) 1,527,107 1,492,204 2 Gross Profit 23,387 28,380 (18) 118,609 105,119 13 Gross Profit Margin (%) 7.1 7.3 (0.2) pt 7.8 7.0 0.8 pt Net Profit After Tax 156 358 (56) 17,655 9,550
Slide 13: 4Q2018 Highlights
4Q2018 HIGHLIGHTS • Revenue of US$327.6M, a decrease of 16% from US$390.1M in 4Q2017 • Revenue for electronic components distribution declined 15% to US$316.6M mainly due to slowdown in demand for certain product lines in Hong Kong and China, which saw a decrease in turnover of 22% and 20% respectiv
Slide 14: FY2018 Highlights
FY2018 HIGHLIGHTS • Revenue at all time high of US$1.53B, up 2% from US$1.49B in FY2017 • Electronic components distribution rose 2% to US$1.47B on higher sales in Taiwan, South Korea and China, which saw an increase of 43%, 24% and 7% respectively, boosted by higher demand for certain product lines
Slide 15: Revenue Growth Trend
REVENUE GROWTH TREND SERIAL SYSTEM GROUP Revenue (US$' million) 1,600 1,527 1,492 1,403 1,400 2% 1,222 1,200 6% 1,036 15% 1,000 18% 817 800 658 27% 616 600 545 24% 7% 382 395.2 390.1 405.2 408.7 385.6 400 354 373.9 315 332.9 327.6 13% 228 186 184 183 200 43% 92 -16% 44 8% - © 2012 PRIVATE & CONFIDEN
Slide 16: Outperforming the Industry
OUTPERFORMING THE INDUSTRY Asia Pacific (including Japan) Semiconductor Revenue (US$' billion) Serial System Revenue (US$' million) 350 323 1,600 1,492 1,527 1,403 300 285 1,400 2% 1,222 241 13% 250 232 1,200 6% 229 209 1,036 205 207 205 19% 1,000 15% 200 4% 817 18% 800 1% 658 150 616 545 27% 9% 600
Slide 17: Profitability: Gross Profit & Margin
PROFITABILITY Gross Profit & Gross Profit Margin (US$' million) 10.0% 9.5% 140.0 9.3% 9.3% 9.0% 8.7% 7.8% 9.0% 8.7% 7.7% 7.8% 120.0 118.6 8.0% 7.5% 7.0% 7.2% 7.3% 6.9% 7.0% 8.2% 6.7% 100.0 7.0% 105.1 7.1% 97.4 6.0% 90.4 91.5 13% 80.0 8% 5.0% 73.5 6% 60.0 4.0% 62.6 57.5 50.7 1% 3.0% 40.0 23% 2.0% 33.
Slide 18: Profitability: Net Profit & Margin
PROFITABILITY Net Profit & Net Profit Margin (US$' million) 20.0 3.0% 2.7% 18.0 17.7 2.5% 16.0 2.2% 16.1 14.0 -31% 2.0% 11.2 12.0 1.6% 1.6% 85% 12.0 10.0 1.3% 11.0 1.5% 1.4% 1.3% 1.2% 1.2% 10.3 10.1 9.6 8.0 44% 0.9% 0.9% 7.9 110% 1.0% 6.0 0.8% 41% 0.6% 0.8% 5.2 0.5% 4.0 5.1 0.3% 4.6 3.4 3.1 2.7 0.5%
Slide 19: Profitability: EBITDA
PROFITABILITY EBITDA (US$' million) 50.0 45.0 43.2 40.0 35.0 30.8 65% 30.0 26.0 26.1 25.0 23.5 22.0 20.2 19.9 11% 20.3 20.0 18.9 -9% 15.0 -16% 11.1 10.0 8.8 8.1 40% 7.8 7.7 6.3 4.3 3.7 5.0 16% -14% - FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 19 19
Slide 20: Financial Position: Current Ratio
FINANCIAL POSITION Maintaining Healthy Current Ratio 1.6 500.0 1.5 1.4 1.4 468.6 458.5 430.6 1.4 1.3 1.2 400.0 1.2 1.2 1.2 1.2 1.2 347.8 371.5 382.6 397.5 324.1 372.0 1.0 300.0 277.0 295.6 0.8 218.3 211.5 218.7 200.0 173.8 0.6 147.5 147.0 120.7 0.4 100.0 0.2 - - FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY
Slide 21: Financial Position: Net Gearing Ratio
FINANCIAL POSITION Net Gearing Ratio 140% 180.0 166.5 116% 155.9 120% 160.0 112% 144.5 145.0 115% 140.0 98% 108% 138.0 139.3 89% 100% 119.4 124.8 120.0 122.2 120.2 104.5 80% 98.7 110.0 100.0 72% 86.5 97.9 80.0 54% 60% 71.2 43% 60.0 56.3 40% 40.0 37.6 20% 20.0 - 0% FY10 FY11 FY12 FY13 FY14 FY15 FY16
Slide 22: Financial Position: Cash Conversion Cycle
FINANCIAL POSITION Cash Conversion Cycle (days) 75 70 70 67 69 65 62 66 66 58 58 60 61 60 55 55 56 54 51 51 53 49 50 51 45 41 42 44 40 36 41 33 40 35 35 38 32 38 30 33 33 31 33 32 29 30 25 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Trade Receivable Turnover (days) Trade Payable Turnover (days) Inv
Slide 23: Dividend Yield
DIVIDEND YIELD 0.40 1.00 0.46 21.9% FY18 0.29 0.46 4.6% FY17 0.18 0.17 Total Dividend Payout FY16 2.4% (In Cent (SGD)) 0.35 0.50 6.3% (Interim & Final) each year FY15 0.30 0.75 8.0% FY14 0.24 0.25 0.30 6.3% FY13 0.22 0.30 FY12 5.0% 0.30 0.16 0.33 7.9% FY11 0.28 0.67 6.1% FY10 Singapore Cents 0.13 0.
Slide 24: Outlook & Strategies
OUTLOOK & STRATEGIES 24 24
Slide 25: Industry Outlook
INDUSTRY OUTLOOK Uncertainties ? Gartner: After a 13.4% increase in worldwide semiconductor revenue to US$476.7 billion in 2018 from 2017, sales in 2019 are likely to be less certain due to headwinds in global economy ? Uncertainty over progress of global 5G rollout amid challenges facing Huawei Bri
Slide 26: Group Outlook
GROUP OUTLOOK • Reviewing its growth strategies with a view to enhance its value proposition as a distribution intermediary between chipmakers and manufacturers of electronic end-products, taking into account the current uncertainty in the global economy, the competitive operating environment for el
Slide 27: Our Three-Pronged Strategy
OUR THREE-PRONGED STRATEGY Objectives: Increase revenue Drive greater internal efficiencies to improve margins Deepen value proposition to increase margins Deepen penetration in Improve internal Expand product portfolio existing markets & efficiencies to & increase higher-value widen geographi
Slide 28: 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 29: 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 Jordan Teo, jordanteo@wer1.net 29 29