Techtronic Industries Co., Ltd. · HKEX:669
Techtronic Industries — Investor Presentation (February 2004)
24 slides from Techtronic Industries's investor presentation, February 2004
Slide 1: Investor presentation February 2004
Investor presentation February 2004
Slide 2: Company overview
Company overview Founded in 1985, Techtronic Industries Co. Ltd. (TTI) is a global leader in the design, manufacture and sale of home improvement products, with sales in 2002 of US$1.2 billion. TTI's principal areas of business are power tools, outdoor power equipment, floor care appliances, solar p
Slide 3: Milestones
Milestones TTI has enjoyed continuous growth since its listing on the HK Revenue Stock Exchange in 1990, achieving double-digit growth for the (HK$m) 2003 past eight years. Ø Partnership 10,000 2003 9,000 Ø Acquisition 8,000 2002 7,000 Ø Acquisition 1994 6,000 Ø ADR Level 1 program 2001 5,000 1990 Ø
Slide 4: Recognitions
Recognitions Today, TTI is a world leading manufacturer and marketer of home improvement products, ranking amongst the top 3 in North America: Ø Power tools Ø Outdoor products Ø Floor care appliance Recognitions Ø Ranked Top 10 in Asiamoney 2003 Awards for Overall Best Managed Company and 1st Runner
Slide 5: Business update
Business update 4
Slide 6: Expansion into professional power tools
Expansion into professional power tools Ø A new, comprehensive line of 35 RIDGID professional tools was launched in 2H03 and is nationally available in The Home Depot Ø The launch of RIDGID line positions TTI as a strong competitor in the professional power tool segment Ø Successful launch with sa
Slide 7: Outdoor power equipment
Outdoor power equipment Ø In Jan 2004, we have added the Ryobi brand for our outdoor products in North America, completing our branding strategy for the division Ø To relocate the final assembly operation from South Carolina to our China plant to further enhance the operation and cost efficiency Ø T
Slide 8: Floor care appliances
Floor care appliances Ø Royal’s integration was smooth since we completed the acquisition in end April 2003. Production relocation is scheduled for 2004. Ø Royal acquisition provides potential cross-marketing synergies and operational synergies in logistics and customers Ø Continuous improvement pro
Slide 9: Expansion of production facilities
Expansion of production facilities Ø Building new manufacturing and R&D complex in Dongguan providing substantial additional Guangzhou capacities in phases beginning in 2004 Dongguan City TTI Factory TTA1 & TTA2 Factories Ø Doubling our existing capacity upon completion of the whole project Shenzhen
Slide 10: Cost saving & logistics
Cost saving & logistics Ø Transferred more production to PRC (>90% in PRC) Ø Implementing a pan-European approach to increase efficiencies Ø Tighter integration of our inventory management, with particular focus in Europe Ø Centralisation of functions such as raw material purchasing, marketing and l
Slide 11: 1H03 Results Highlights
1H03 Results Highlights 10
Slide 12: Financial highlights
Financial highlights 1H03 1H02* Changes (HK$m) (HK$m) (%) Turnover 4,815 3,959 21.6 Net profit 211 170 24.1 Basic EPS (HK cents) 32.55 28.39 14.7 DPS (HK cents) 7.25 6.0 20.8 Book value per share (HK$) 3.12 2.52 23.8 *Restated following the revised SSAP12 on income tax 11
Slide 13: Analysis by products
Analysis by products For the six months ended 30 June, 2003 Sales contributions by products Power tools & Floor care 77% outdoor products * appliances (82%) Revenue ( HK$m) 3,693 1,122 Change (%YoY) 13.1 61.4 EBIT ( HK$m) 240 53 Change (%YoY) 16.7 140.1 Margin (%) - 1H03 6.5 4.8 Margin (%) - 1H02 6.
Slide 14: Analysis by location
Analysis by location For the six months ended 30 June, 2003 Sales contributions by location (84%) 79% North America Europe RoW Revenue ( HK$m ) 3,784 767 264 Change (%YoY) 14.4 51.5 82.0 EBIT ( HK$m ) 230 46 17 Change (%YoY) 15.0 174.3 56.5 16% Margin (%) - 1H03 6.1 6.0 6.4 (13%) Margin (%) - 1H02 6
Slide 15: Sales contribution by type
Sales contribution by type 1H 03 Private 1H02 label Private label 24% 27% OBM 46% OEM OEM 27% 20% OBM 56% Our brands (OBM) include : Power tools *as % of sales Outdoor products Floor care products 14
Slide 16: Financial position and working capital
Financial position and working capital YR 2002* (HK$m) 1H 2003 1,272 Non--current assets Non 2,028 5,151 Current assets 5,827 3,996 Current liabilities 4,209 1,155 Net current assets 1,618 580 Long--term liabilities Long 1,576 1,828 Shareholders’ funds 2,039 1.29 Current ratio 1.38 Net cash Gearing
Slide 17: Outlook
Outlook 16
Slide 18: Our target US$1billion turnover
Our target To grow each of our core businesses to at least US$1billion turnover 17
Slide 19: Objectives
Objectives ØStrengthen our position as a global player ØOptimize the Group structure for future growth ØConfirm TTI’s established position in the top section of its industry 18
Slide 20: Shareholder value creation
Shareholder value creation HK$bn Turnover (5-year CAGR 33%) 10 8 Our growth strategy 6 is built around offering better value products to consumers and this has 4 enabled us consistently to outperform 2 the overall industry 0 1998 1999 2000 2001 2002 HK$m Net profit (5-year CAGR 29%) HK cents EPS (5-
Slide 21: Shareholder value creation
Shareholder value creation % Return on equity 30 25 Our goal as a Group 20 remains to deliver value and quality 15 to our customers and to create value 10 for our shareholders 5 0 1998 1999 2000 2001 2002 HK cents Dividend per share HK$ Book value per share 18 3.0 15 2.5 12 2.0 9 1.5 6 1.0 3 0.5 0 0
Slide 22: Trading information
Trading information Trading information HK$ Shareprice performance Ø SEHK code : 669 TTI (RHS) 25 * Re-based, 01 Jan 00=HK$1.27 Ø ADR : TTNDY MSCI HK* 20 Ø Shares in issue : 662m Hang Seng SmallCap* 15 Ø Market Cap : HK$15,629m (or US$2,003m) FTSE World Index* 10 Ø Free Float : 65% 5 Ø 52-week high/
Slide 23: Thank you
– the power in brands Thank you 22
Slide 24: Disclaimer
Disclaimer This presentation includes forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Changes in the following important factors, among others, could cause Techtronic Industries Co. Ltd.’s actual results to diff
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