Serial System Ltd · SGX:S69
Serial System — H1 2018 Earnings Presentation
31 slides from Serial System's earnings presentation, Aug 14, 2018
Slide 1: 2Q2018 / 1H2018 Results Presentation
2Q2018 / 1H2018 RESULTS PRESENTATION Tuesday, 14 August 2018 1 1
Slide 2: Agenda
AGENDA 3D CORPORATE OVERVIEW CORPORATE HIGHLIGHTS 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 One of Asia Pacific’s electronic largest electronic component distribution network distributor listed on SGX Total Shares: Electronic 896 million Components (96%)* Free Float: 41% Market Capitalisation: S$115M (As at 13 August 2018) SERIAL 1H2018 FY2017 Hong Kon
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 fast-growing dealer for a variety of consumer goods. It is also a strategic investor in businesses in Healthcare, Managed Print Services, Indust
Slide 6: Partnering Leading Suppliers
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
PARTNERING LEADING SUPPLIERS Consumer Products Distribution © 2012 PRIVATE & CONFIDENTIAL 7 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 7 7
Slide 8: 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. Leading
Slide 9: Strategic Investment
STRATEGIC INVESTMENT South Pacific Laundry 27.34% stake in SPL Holdings (Australia) Pty Ltd, a nationwide laundry provider in Australia, servicing the hospitality industry (hotels, resorts, hospitals, care centres, and restaurants) in Melbourne, Sydney, Brisbane, Cairns, Canberra, Adelaide, Perth an
Slide 10: Strategic Investment
STRATEGIC INVESTMENT Musang Durians Frozen Food (M) Sdn. Bhd. The Group has an effective 27.5% stake in durian processing and distribution company Musang Durians Frozen Food (M) Sdn. Bhd. Operates in 2 sites: Kuala Lumpur, Malaysia (office and warehouse) and Pahang, Malaysia (GMP-certified processin
Slide 11: Corporate Highlights
CORPORATE HIGHLIGHTS © 2012 PRIVATE & CONFIDENTIAL 11 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 11 11
Slide 12: Corporate Highlights (2018)
CORPORATE HIGHLIGHTS (2018) CORPORATE April In-principle approval from SGX-ST for proposed transfer of listing DEVELOPMENTS 2018 from Mainboard to Catalist in relation to proposed spin-off of Serial Microelectronics (HK) Limited (“SMHK”) in Hong Kong Shareholders of Serial System voted in favour of
Slide 13: Financial Results
FINANCIAL RESULTS 13 13
Slide 14: Snapshot of 2Q2018 & 1H2018 Performance
SNAPSHOT OF 2Q2018 & 1H2018 PERFORMANCE Change Change US$’000 2Q2018 2Q2017 1H2018 1H2017 (%) (%) Sales 408,703 373,927 9 813,923 706,864 15 Gross Profit 33,608 26,144 29 65,001 50,103 30 Gross Profit Margin (%) 8.2 7.0 1.2 pt 8.0 7.1 0.9 pt Net Profit After Tax 2,042 3,370 -39 7,232 6,078 19 (Attri
Slide 15: 2Q2018 Highlights
2Q2018 HIGHLIGHTS • Revenue of US$408.7M, an increase of 9% compared to US$373.9M in 2Q2017 Revenue from electronic components distribution business up 9% to US$394.4M, due to higher sales in all markets except South Asia Revenue from consumer products distribution business up 24% to US$13.0M due to
Slide 16: 1H2018 Highlights
1H2018 HIGHLIGHTS • Revenue of US$813.9M, an increase of 15% from 1H2017 Electronic components distribution business rose 15% to US$780.9M on higher revenue contributions from Hong Kong and China, Taiwan and South Korea Consumer products distribution business increased 11% to US$30.6M due to higher
Slide 17: Revenue Growth Trend
REVENUE GROWTH TREND SERIAL SYSTEM GROUP Revenue (US$' million) 1,600 1,492 1,403 1,400 6% 1,222 1,200 15% 1,036 1,000 18% 817 800 27% 658 616 24% 600 545 7% 395.2 405.2 408.7 382 13% 373.9 390.1 400 354 332.9 315 43% 228 186 184 183 8% 200 92 9% 44 - © 2012 PRIVATE & CONFIDENTIAL 17 © 2011 A.S. LOU
Slide 18: Outperforming the Industry
OUTPERFORMING THE INDUSTRY Asia Pacific (including Japan) Semiconductor Revenue (US$' billion) Serial System Revenue (US$' million) 300 285 1,600 1,492 1,403 1,400 250 241 229 232 1,222 207 209 1,200 205 205 19% 1,036 6% 200 1,000 4% 15% 817 150 1% 800 18% 658 616 27% 9% 545 600 100 2% 24% 400 -0.9%
Slide 19: Profitability
PROFITABILITY Gross Profit & Gross Profit Margin (US$' million) 10.0% 9.5% 120.0 9.3% 9.3% 9.0% 8.7% 9.0% 8.7% 8.2% 105.1 7.7% 100.0 8.0% 7.5% 97.4 7.0% 7.2% 7.0% 7.3% 6.9% 6.7% 7.0% 90.4 91.5 80.0 6.0% 8% 73.5 5.0% 6% 60.0 62.6 57.5 4.0% 50.7 1% 40.0 3.0% 23% 33.4 31.4 33.6 2.0% 28.4 24.0 26.1 26.6
Slide 20: Profitability
PROFITABILITY Net Profit & Net Profit Margin (US$' million) 18.0 2.5% 2.2% 16.0 16.1 2.0% 14.0 1.6% -39% 1.6% 12.0 11.2 12.0 1.3% 1.4% 11.0 1.5% 1.3% 10.0 1.2% 44% 9.6 8.0 10.1 0.9% 7.9 0.9% 1.0% 0.8% 6.0 -31% 0.8% 0.6% 41% 5.2 0.5% 5.1 4.0 4.6 2.7 0.3% 3.4 3.1 0.5% 2.0 110% 0.4 -59% 2.0 0.1% - 0.0%
Slide 21: Profitability
PROFITABILITY EBITDA (US$' million) 35.0 30.8 30.0 26.0 26.1 25.0 23.5 22.0 20.2 19.9 20.0 18.9 11% 15.0 -9% 11.1 -16% 10.0 8.8 7.8 7.7 8.1 40% 6.3 4.3 5.0 16% 3% - FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 21 21
Slide 22: Financial Position
FINANCIAL POSITION Maintaining Healthy Current Ratio 500.0 1.6 1.5 1.4 1.4 468.6 467.3 450.0 430.6 1.4 1.3 390.7 400.0 382.6 397.5 1.2 1.2 1.2 1.2 1.2 372.0 1.2 350.0 347.8 324.1 295.6 1.0 300.0 277.0 250.0 0.8 218.3 218.7 211.5 200.0 173.8 0.6 147.5 147.0 150.0 120.7 0.4 100.0 0.2 50.0 - - FY10 FY1
Slide 23: Financial Position
FINANCIAL POSITION Net Gearing Ratio 140% 166.5 160.0 147.3 149.3 116% 145.0 120% 138.0 139.3 140.0 101.4% 124.8 114.8% 122.2 120.2 112% 89% 119.4 100% 120.0 104.5 110.0 98% 100.0 98.7 72% 97.9 80% 86.5 80.0 71.2 54% 60% 60.0 43% 56.3 40% 40.0 37.6 20% 20.0 - 0% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY
Slide 24: Financial Position
FINANCIAL POSITION Cash Conversion Cycle (days) 75 70 70 67 69 65 62 66 58 58 60 61 60 55 56 55 56 51 51 53 49 52 50 51 45 44 41 42 40 36 33 40 35 36 35 38 38 33 32 32 30 33 33 31 32 30 25 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 1H18 Trade Receivable Turnover (days) Trade Payable Turnover (days) Inv
Slide 25: Dividend Yield
DIVIDEND YIELD Total Dividend Payout (In Cent (SGD)) FY18 0.40 5.4% (Interim & Final) each year 0.29 0.46 4.6% FY17 FY16 0.18 0.17 2.4% 0.35 0.50 6.3% FY15 FY14 0.30 0.75 8.0% FY13 0.24 0.25 0.30 6.3% FY12 0.22 0.30 5.0% 0.30 0.16 0.33 7.9% FY11 FY10 0.28 0.67 6.1% FY09 0.13 0.38 8.5% Interim Specia
Slide 26: Outlook & Strategies
OUTLOOK & STRATEGIES 26 26
Slide 27: Industry Outlook
INDUSTRY OUTLOOK The global semiconductor industry achieved its highest annual growth in 14 years in 2017 with revenue up 21.7% at US$429.1 billion, driven in part by strong demand for memory integrated circuits, according to business information provider IHS Markit. Growth is likely to continue in
Slide 28: Group Outlook
GROUP OUTLOOK • The Group is mindful of ongoing trade tensions between the United States and its key trading partners, especially China, and the potential impact on global supply chains. • As part of efforts to better position itself to seize growth opportunities, the Group is pushing ahead to spin
Slide 29: 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 geographical ac
Slide 30: 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 31: 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 31 31