Slide 1: K Laser Technology Inc. 2019 Q3 & 9M Investor Conference
K Laser Technology Inc.(2461) 2019 Q3 &9M Investor Conference 2019/11 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: 2019 Q3 and 3M Result
2019 Q3 and 3M Result 3
Slide 4: 2019 Q3 Highlight
2019 Q3 Highlight •Consolidated: Increased 9.2% in 3Q19 versus 3Q18 to NT$1,445 mn Revenue •Core(note): Increase 9.5% in 3Q19 versus 3Q18 to NT$ 943mn Gross •Consolidated: Increase 1.3% in 3Q19 versus 3Q18 to 23.7% Margin •Core: Incerease 1.7% in 3Q19 versus 3Q18 to 28.6% Operating •Consolidated:Dec
Slide 5: 2019 9M Highlight
2019 9M Highlight •Consolidate: Increased 2.0% in 9M 19 versus 9M 18 to NT$3,865 mn Revenue •Core(note):Increased 5.9% in 9M 19 versus 9M 18 to NT$2,652 mn Gross •Consolidated: Increased 2.2% in 9M 19 versus 9M 18 to 23.5% Margin •Core: Increased 2.1% in 9M 19 versus 9M 18 to 29.3% Operating •Consol
Slide 6: 3Q19 Revenue
3Q19 Revenue •Consolidated: Increased 9.2% in 3Q19 versus 3Q18 to NT$1,445 mn •Core:Increased 9.5% in 3Q19 versus 3Q18 to NT$943 mn Consolidated Core +9.2% YoY +9.5% YoY 1,445 1,323 943 861 3Q18 3Q19 3Q18 3Q19 Revenue NT$ million Revenue NT$ million note: K Laser core business only (excl. Optivision
Slide 7: 9M 19 Revenue
9M 19 Revenue •Consolidate: Increased 2.0% in 9M 19 versus 9M 18 to NT$3,865 mn •Core(note):Increased 5.9% in 9M 19 versus 9M 18 to NT$2,652 mn(majorly from KLUS and He-Rui Laser) Consolidated Core +2.0% YoY +5.9% YoY 3,790 3,865 2,503 2,652 9M18 9M19 9M18 9M19 Revenue NT$ million Revenue NT$ millio
Slide 8: Hologram sales mix by customer industry
Hologram sales mix by customer industry Other Consumer Tobacco & Alcohol 15% 17% 17% 18% 19% 21% 23% 26% 28% 27% 31% 35% 27% 25% 32% 23% 57% 52% 55% 54% 54% 51% 45% 48% 2012 2013 2014 2015 2016* 2017* 2018* 9M19* Note: Other includes anti-counterfeit product, decorations, materials…etc * China subsi
Slide 9: 3Q19 Gross Margin
3Q19 Gross Margin •Consolidated: Increase 1.3% in 3Q19 versus 3Q18 to 23.7% Core: Incerease 1.7% in 3Q19 versus 3Q18 to 28.6% Gross Margin TSL as % of Revenues Consolidated Core % of Consolidated % of Core 31.7% 32.2% 30.5% 29.1% 26.7% 28.6% 26.8% 24.7% 24.9% 23.7% 15.3% 14.0% 22.4% 13.2% 13.6% 342
Slide 10: 9M19 Gross Margin
9M19 Gross Margin •Consolidated: Increased 2.2% in 9M 19 versus 9M 18 to 23.5% • Core: Increased 2.1% in 9M 19 versus 9M 18 to 29.3 Gross Margin Consolidated Core TSL as % of Revenue % as Consolidated % as Core 29.3% 31.7% 32.2% 30.5% 27.2% 29.1% 23.5% 26.8% 21.2% 24.7% 24.9% 908 805 778 681 15.3% 1
Slide 11: 3Q19 Operating Expense
3Q19 Operating Expense •Consolidated: Increase 4.1% in 3Q19 versus 3Q18 to 21.5% •Core: Increased 1.1% in 3Q19 versus 3Q18 to 21.6% Consolidated Core Op. Exp. Op. Exp. % Op. Exp. Op. Exp. % 21.5% 17.4% 20.5% 21.6% 310 231 177 204 3Q18 3Q19 3Q18 3Q19 NT$ mn NT$ mn 11
Slide 12: 9M19 Operating Expense
9M19 Operating Expense •Consolidated: Increased 1.5% in 9M 19 versus 9M 18 to 19.8% • Core: decreased 2.1% in 9M 19 versus 9M 18 to 21.5% Consolidated Core Op. Exp. Op. Exp. % Op. Exp. 營業費用率 Op. Exp. % 18.4% 19.9% 21.9% 21.5% 769 697 570 547 9M18 9M19 9M18 9M19 NT$ mn NT$ mn 12
Slide 13: 3Q19 Operating Income
3Q19 Operating Income •Consolidated:Decrease 2.8% in 3Q19 versus 3Q18 to 2.2% •Core: Increased 2.4% in 9M 19 versus 9M 18 to 7.8% Consolidated Core Ope. Inc. Ope. Inc. % Ope. Inc. Ope. Inc. % 5.0% 6.1% 7.0% 2.2% 66 66 32 53 3Q18 3Q19 3Q18 3Q19 NT$ mn NT$ mn 13
Slide 14: 9M19 Operating Income
9M19 Operating Income •Consolidated: Increased 0.8% in 9M19 versus 9M18 to 3.6% Core: Increased 2.4% in 9M 19 versus 9M 18 to 7.8% Consolidated Core Ope. Inc. Ope. Inc. % Ope. Inc. Ope. Inc. % 2.8% 3.6% 7.8% 5.4% 208 107 139 134 9M18 9M19 9M18 9M19 NT$ mn NT$ mn 14
Slide 15: 3Q19 Net Income & EPS
3Q19 Net Income & EPS •Net Income of NT$20mn, a decrease of 25% versus 3Q18. •EPS of NT$0.13, a decrease of 23.5% versus 3Q18. Net Income EPS -25% YoY 27 -23.5% YoY 20 0.17 0.13 3Q18 3Q19 3Q18 3Q19 NT$ mn EPS NT$ 15
Slide 16: 9M19 Net Income & EPS
9M19 Net Income & EPS •Net Income of NT$ 46mn, a decrease of 14.5% versus 9M 18 •EPS NT$ 0.30, a decrease of 9.1% versus 9M 18 Net Income EPS -14.5% YoY 53 -9.1% YoY 46 0.33 0.30 9M18 9M19 9M18 9M19 NT$ mn EPS NT$ 16
Slide 17: Q&A
Q&A 17
Slide 18: Appendix
Appendix 18
Slide 19: About K Laser
About K Laser ► 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 provi
Slide 20: K Laser at a glance
K Laser at a glance Product sales mix • Ticker: 2461 TT Hologram 69% • Founded in 1988 Optical Film & 31% Projector • 2018 Revenue: NT$5.2 bn (US$173 m) Hologram sales mix Holographic 42% • Market cap*: NT$3.5 bn (US$114 m) paper Holographic film 27% • Employee number **: 750+ Hot stamping 24% • 8 m
Slide 21: Corporate Structure
Corporate Structure K Laser Hologram (2461 TT) 47% 76% Optivision* Everest K Laser(TW)* R&D center (US) (3666 TT) Display Projector China International Ningbo* Optical Film US Wuxi* Thailand* Dong Guan* Japan* Changsha* Dubai India* Hong Kong Korea* * With manufacturing facilities 21
Slide 22: 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$3b
Slide 23: TSL – What is it?
TSL – What is it? Truly Seamless (TSL) Traditional TSL can solve the issues - end products with seams or inconsistent patterns 23
Slide 24: TSL – Benefits
TSL – Benefits Minimized disturbance Less limitations on to production specification Traditional Truly Seamless (TSL) Customers K Laser • Production speed/capacity improves significantly • Higher yield rate • Higher yield rate • Higher production rate • Cost-saving for Holographic Film by • Lower in
Slide 25: Strategy Focus
Strategy Focus Resource Gain Shares Optimization Truly Seamless Streamline operations products (TSL) Grow non-tobacco Rationalize global exposure operations 25
Slide 26: Our Goals
Our Goals We strive to enhance our No. 1 position in the world Increase ROE Improve efficiency & Expand gross expand margin in core operating Core revenue business margin in core CAGR superior business to the industry average 26
Slide 27: 3Q19 Income Statement - Consolidated
3Q19 Income Statement - Consolidated NT$ mn 3Q19 3Q18 YoY (%) 9M19 9M18 YoY (%) Revenue 1,445 1,323 9.2 3,865 3,790 2.0 Gross Margin 342 296 15.4 908 805 12.8 Ope. Exp. 310 231 34.4 769 697 10.2 Ope. Inc. 32 66 (51.5) 139 107 29.7 Income before Tax 38 44 (13.1) 67 64 5.4 Net Income to Parent 20 27 (
Slide 28: 09/19 Balance Sheet - Consolidated
09/19 Balance Sheet - Consolidated Total Assest 6,760 6,538 3.4 6,606 2.3 Cash 1,365 1,190 14.7 1,329 2.7 NR & AR 1,601 1,596 0.3 1,581 1.2 Inventory 944 991 (4.8) 963 (1.9) Fixed Asset 1,164 1,229 (5.3) 1,204 (3.3) TOTAL LIABILITIES 3,429 3,107 10.4 3,251 5.5 Bank Loans 1,925 1,701 13.2 1,768 8.9 N
Slide 29: 3Q19 Income Statement - Core
3Q19 Income Statement -Core 3Q19 3Q18 YoY (%) 9M19 9M18 YoY (%) Revenue 943 861 9.5 2,652 2,503 5.9 Gross Margin 269 230 17.1 778 681 14.2 Ope. Exp. 204 177 15.1 570 547 4.2 Ope. Inc. 66 53 23.9 208 134 54.8 Income before Tax 43 43 0.2 104 95 9.1 Net Income to Parent 20 27 (25.4) 46 53 (14.5) EPS (N
Slide 30: 3Q19 Balance Sheet - Core
3Q19 Balance Sheet - Core NT$ mn 2019.09 2018.09 YoY (%) 2019.06 QoQ (%) Total Assest 6,760 6,538 3.4 6,606 2.3 Cash 1,365 1,190 14.7 1,329 2.7 NR & AR 1,601 1,596 0.3 1,581 1.2 Inventory 944 991 (4.8) 963 (1.9) Fixed Asset 1,164 1,229 (5.3) 1,204 (3.3) TOTAL LIABILITIES 3,429 3,107 10.4 3,251 5.5 B
Slide 31: Dividend
Dividend 2016 2017 2018 Net Income (NT$ mn) 215 155 66 Cash Dividend (NT$ mn) 109 91 62 Dividend per Share (NT$) 0.815 0.56 0.41 Payout Ratio (%) 51% 59% 94% Cash Yield (%)* 5.2%* 3.7%* 2.1%* *Cash yield is based on K Laser’s closing share price on the day before ex-dividend day (June 23, 2016 for 2
Slide 32: Thank You
Thank You 32