Slide 1: K LASER (2461) 4Q17 Investor Conference
K LASER (2461) 4Q17 Investor Conference March 30, 2018 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: 4Q17 Results
4Q17 RESULTS 2 K LASER
Slide 4: 4Q17 Highlights
4Q17 Highlights ► Revenue decreased 12.4% in 4Q17 versus 4Q16 to NT$1,439 mn. ► Gross Margin decreased 1.1pp in 4Q17 versus 4Q16 to 23.4%. Core Gross Margin (excluding Optivision and Everest Display) decreased 1.7 pp in 4Q17 versus 4Q16 to 27.3%. ► Operating Margin decreased 3.5pp in 4Q17 versus 4Q1
Slide 5: 4Q17 & 2017 Revenue
4Q17 & 2017 Revenue ► 4Q17 revenue decreased as the core business was impacted by overall industry weakness. 4Q17 Revenue 2017 Revenue -12.4% YoY +2.7% YoY 1,642 5,080 5,218 1,439 4Q16 4Q17 2016 2017 Revenue NT$ million Revenue NT$ million 5
Slide 6: Hologram sales mix by customer industry
Hologram sales mix by customer industry Other Consumer Tobacco & Alcohol 15% 17% 17% 18% 19% 23% 22% 23% 28% 27% 31% 35% 27% 32% 33% 32% 57% 52% 55% 54% 45% 48% 45% 45% 2012 2013 2014 2015 2016* 2016** 2017* 2017** Note: Other includes glitters, decorations, materials…etc * China subsidiary, He Rui
Slide 7: 4Q17 Gross Profit & Gross Margin
4Q17 Gross Profit & Gross Margin ► In 4Q17, K Laser’s gross margin dropped as the margin of the core business decreased. ► 4Q17 core gross margin decreased 1.7pp to 27.3%. Gross Profit TSL as % of Revenues Gross Profit Core Gross Profit* TSL as % of core Revenues** Gross Margin Core Gross Margin* Gr
Slide 8: 4Q17 & 2017 Operating Expenses
4Q17 & 2017 Operating Expenses ► Operating expense ratio increased versus the same period last year. K Laser continues to control expenses. 4Q17 Operating Expenses 2017 Operating Expenses Operating Expenses Opearting Expenses Operating Expense Ratio Operating Expense Ratio 15.9% 16.7% 16.7% 14.2% 87
Slide 9: 4Q17 & 2017 Operating Profit
4Q17 & 2017 Operating Profit ► Operating profit decreased in 4Q17 versus 4Q16. 4Q17 Operating Profit 2017 Operating Profit Operating Profit Operating Profit Operating Profit Margin Operating Profit Margin 9.3% 7.9% 10.2% 473 6.7% 413 168 97 4Q16 4Q17 2016 2017 Operating Profit NT$ Million Operating
Slide 10: 4Q17 & 2017 Earnings
4Q17 & 2017 Earnings ► Net Income of NT$41 mn, a decrease of 57.9% versus 4Q16. EPS of NT$0.27, a decrease of 63.0% versus 4Q16. Net Income to Parent EPS 215 1.63 155 1.12 97 0.73 41 0.27 2016 2017 4Q16 4Q17 2016 2017 4Q16 4Q17 Net Income to Parent NT$ million EPS NT$ 10
Slide 11: K LASER
fi 11 K LASER
Slide 12: Appendix
APPENDIX 2 K LASER
Slide 13: 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 14: K Laser at a glance
K Laser at a glance Product sales mix ► Ticker: 2461 TT Hologram 65% ► Founded in 1988 Optical Film & 35% Projector ► 2017 Revenue: NT$5.2 bn (US$179 m) Hologram sales mix Holographic Market cap*: NT$2.68 bn (US$92 m) 28% ► paper ► Employee number **: 750+ Holographic film 18% Hot stamping 8 manufac
Slide 15: 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 Hong Kong India* Korea* * With manufacturing facilities 15
Slide 16: 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$3b
Slide 17: TSL – What is it?
TSL – What is it? Truly Seamless (TSL) Traditional TSL can solve the issues - end products with seams or inconsistent patterns 17
Slide 18: TSL – Benefits
TSL – Benefits Minimized disturbance Less limitations on to production specification Traditional Truly Seamless (TSL) Customers K Laser • Production speed/capacity improves significantly • Higher yield rate • Higher yield rate • Higher production rate • Cost-saving for Holographic Film by • Lower in
Slide 19: Strategy Focus
Strategy Focus Resource Gain Shares Optimization Truly Seamless Streamline operations products (TSL) Grow non-tobacco Rationalize global exposure operations 19
Slide 20: Our Goals
Our Goals We strive to enhance our No. 1 position in the world Increase ROE Improve efficiency & Expand gross expand margin in core operating Core revenue business margin in core CAGR superior business to the industry average 20
Slide 21: Income Statement (consolidated)
Income Statement (consolidated) NT$ Million 4Q17 4Q16 YoY (%) 2017 2016 YoY (%) Sales Revenue 1,439 1,642 (12.4) 5,218 5,080 2.7 Gross Profit 337 402 (16.3) 1,284 1,281 0.2 Operating Profit 97 168 (42.5) 413 473 (12.8) Income before Tax 57 147 (61.1) 275 343 (19.8) Net Income to Parent 41 97 (57.9)
Slide 22: Balance Sheet (consolidated)
Balance Sheet (consolidated) NT$ Million 4Q17 4Q16 YoY (%) 3Q17 QoQ (%) TOTAL ASSETS 6,834 7,030 (2.8) 6,604 3.5 Cash 1,472 1,190 23.7 1,194 23.3 NR & AR 1,667 2,029 (17.8) 1,668 (0.0) Inventory 865 890 (2.8) 850 1.8 Fixed Asset 1,292 1,340 (3.6) 1,276 1.3 TOTAL LIABILITIES 3,121 3,745 (16.7) 3,388
Slide 23: Dividend
Dividend 2014 2015 2016 Net Income (NT$ mn) 91 164 215 Cash Dividend (NT$ mn) 55 66 109 Dividend per Share (NT$) 0.42 0.50 0.815 Payout Ratio (%) 61% 40% 51% Cash Yield (%)* 2.9% 3.6% 5.2% *Cash yield is based on K Laser’s closing share price on the day before ex-dividend day (November 3, 2015 for 2
Slide 24: Thank You
THANK YOU 2 K LASER