Tatung Co. · TWSE:2371
Tatung — Investor Presentation (November 2015)
34 slides from Tatung's investor presentation, November 2015
Slide 1: Tatung Company
Tatung Company (2371 TT) Integrity, Honesty, Industry, Frugality November 2015
Slide 2: Executive Summary
Executive Summary We are Taiwan’s leading provider of integrated solutions for Mechatronic projects, including turnkey power generation, smart grid and corporate energy management systems. We are expanding our Mechatronics turnkey solutions market presence to ASEAN and China. We are in the mid
Slide 3: Our Top Priorities
Our Top Priorities It is painfully clear to us that losses in our ODM monitor business, losses from key investment subsidiaries and high debt levels have prevented investors from recognizing the value of our core power business and our land bank. We set our top priorities for the next five years as:
Slide 4: Tatung's Core Strategic Initiatives
Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improved Cash Flow and Development Reduced Debt 4
Slide 5: Tatung's Core Strategic Initiatives
Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 5
Slide 6: 3+ Years of Structural Improvement in Core Earnings
3+ Years of Structural Improvement in Core Earnings By phasing out low-margin products, we have been able to achieve the following in our core business portfolio: Higher Overall Gross Margin • Core operations gross margin increased to 9.3% in 9M15 from 8.3% in 9M14, much higher than 5.7% in 2007. Re
Slide 7: Revenue Contribution
Revenue Contribution 100% 80% 42% 44% 46% 49% 47% 53% 60% 40% 29% 30% 45% 45% 41% 28% 20% 19% 21% 22% 12% 11% 13% 0% 2010 2011 2012 2013 2014 9M15 Systems Group Consumer Group Power Group 7
Slide 8: 3+ Years of Structural Improvement in Core Earnings
3+ Years of Structural Improvement in Core Earnings At the Business Group and Business Unit Level: • Power and Systems Business Groups: Tatung’s core power and systems solutions groups accounted for 69% of revenues in 9M15, versus 59% in 2012. • Systems Business Group: Gross margin improved to 16.2%
Slide 9: Core Operations Business Performance
Core Operations Business Performance Revenue Operating Profit NT$ mn Revenue Operating Profit NT$ mn 50,000 500 379 235 43,072 37,276 38,60938,408 - 40,000 (64) 32,185 (257) 30,264 (500) 30,000 24,088 (619) 21,295 (1,000) (875) (992) 20,000 13,719 (1,500) 10,000 (2,000) (1,951)(1,930) - (2,500) 2007
Slide 10: Tatung's Core Strategic Initiatives
Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 10
Slide 11: 5+ Years of Structural Improvement in Investment Income
5+ Years of Structural Improvement in Investment Income Our Achievements: Disposal of Money-Losing Subsidiaries • We have shut down 3 subsidiaries in 2014 which posted a combined cumulative loss of NT$ 804mn in 2010-2014. Significant Reduction in Debt at CPT • CPT’s net debt fell to NT$36.5bn in 201
Slide 12: CPT Has Greatly Reduced its Capital Intensity
CPT Has Greatly Reduced its Capital Intensity NT$ mn CPT - Net Debt NT$ mn CPT - Capex 5,000 35,000 30,000 4,000 25,000 3,000 20,000 15,000 2,000 10,000 1,000 5,000 - - 2010 2011 2012 2013 2014 9M15 2010 2011 2012 2013 2014 9M15 NT$ mn CPT - Depreciation CPT - Net Profit 25,000 NT$ mn 2010 2011 2012
Slide 13: Investment Income Analysis
Investment Income Analysis NT$m 3,000 2,000 1,000 0 -1,000 -2,000 -3,000 -4,000 2010 2011 2012 2013 2014 9M15 Reported Investment Income Normalized: Ex-2011 Beitou Property Sale, ex-discontinued/disposed subsidiaries NT$m 2010 2011 2012 2013 2014 9M15 Reported (3,692) 1,563 (3,166) (838) 2,018 (1,18
Slide 14: Our Future Plans
Our Future Plans • We will continue to dispose of non-core related and/or underperforming business subsidiaries. • We will minimize our exposure to capital-intensive industries and seek continued reduction in debt levels. • Shan Chih Asset Development (SCAD, a 100%-owned subsidiary) will continue to
Slide 15: Tatung's Core Strategic Initiatives
Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 15
Slide 16: Tatung Land Assets – Taiwan
Tatung Land Assets – Taiwan Land Assets Area (Ping) Area (Sq m) % of Total Total 438,331 1,449,028 100 Taipei City 35,506 117,376 8.1 New Taipei City 64,409 212,920 14.7 Northern Taiwan* 326,770 1,080,235 74.6 Mid-Taiwan 2,700 8,925 0.6 Southern Taiwan 8,946 29,572 2.0 Total area of land holdings: 4
Slide 17: Nankang Tatung Xiyuan Residential Project
Nankang Tatung Xiyuan Residential Project • Land Area: 2,312 ping • Gross Floor Area: 13,436 ping • Floor Plan: 148 housing units, 239 parking spaces • Handing over flats successively since 1H14 • Contributing revenue and profits in 2014/2015 17
Slide 18: Tatung Smart Manor (Banchiao Phase I Plant Development Plan)
Tatung Smart Manor (Banchiao Phase I Plant Development Plan) • Land Area: 4,095 ping • Gross Floor Area: 25,433 ping • Total Sales: NT$10bn • Expected project timeline: - Pre-sale launched in June 2015 - Construction expected to begin in December 2015 - Completion and revenue booking: 4Q 2018 18
Slide 19: Banchiao Phase II & III Plant Development Plan
Banchiao Phase II & III Plant Development Plan Site layout plan: 1號公園 4米人行步道 2號公園 • Land area: 4,970 ping for phase II, 8 米 第二期 8 米 7,220 ping for phase III 道 道 路 路 • Gross Floor Area: around 75,000 ping in total 12米道路 10 米 • Expected timeline for phase II: 道 第三期 路 19 3號公園(兒童遊樂場) The timing for pre-
Slide 20: Tatung's Core Strategic Initiatives
Tatung’s Core Strategic Initiatives Structural Structural Improvement in Improvement in Tatung Core Business Investment Operations Portfolio Asset Improve Cash Flow and Development Reduce Debt 20
Slide 21: Our Achievements
Our Achievements Substantially Reduced Net Debt • Consolidated Net Debt peaked at NT$104bn in 2006, and has since been reduced to NT$57bn in 9M15. Reduced Depreciation Expense • Monthly depreciation expense of NT$0.9bn in 9M15 is 60% lower than 2008 peak level of NT$2.3bn. Disciplined Capex Spending
Slide 22: Lower debt, less capital spending
Lower debt, less capital spending NT$ mn Tatung - Net Debt NT$ mn Tatung - Capex 18,000 80,000 15,000 60,000 12,000 40,000 9,000 6,000 20,000 3,000 - - 2010 2011 2012 2013 2014 9M15 2010 2011 2012 2013 2014 9M15 NT$ mn Tatung - Depreciation Tatung - Net Profit NT$ mn 30,000 2,000 25,000 1,000 20,000
Slide 23: The Tatung Vision
23 The Tatung Vision TATUNG
Slide 24: The Tatung Vision
The Tatung Vision • We aim to become one of Asia’s leading turnkey providers of integrated mechatronic systems and energy-saving power solutions. • Tatung’s IoT Approach • Become a major player in Smart City in Taiwan • Use the deployment experiences in Taiwan to expand to global market by working w
Slide 25: Tatung Hardware Devices for IoT
Tatung Hardware Devices for IoT 25
Slide 26: TATUNG Smart Solutions for Smart City
TATUNG Smart Solutions for Smart City 26
Slide 27: The 3-Tier Plans for Tatung IoT Business
The 3-Tier Plans for Tatung IoT Business 27
Slide 28: Our Commitment to Shareholders
Our Commitment to Shareholders • We will minimize our exposure to capital- intensive industries and seek continued reduction in debt levels. • We will continue to dispose of non-core related and/or underperforming business subsidiaries. • SCAD will continue to realize the value of our real estate as
Slide 29: Company Financials
29 Company Financials TATUNG
Slide 30: Financial Highlights
Financial Highlights ROE % EPS ( NTD) Net Income (NT$ million) 0.60 4.3 0.16 1.1 (0.63) (0.70) (0.91) -4.8 1,380 -8.4 (1.74) 364 -10.9 -12.1 -1,611 -2,072 2010 2011 2012 2013 2014 9M15 -3,481 -4,019 2010 2011 2012 2013 2014 9M15 Source: Tatung financial reports 30 30
Slide 31: Five-year P&L (Consolidated)
Five-year P&L (Consolidated) YOY (%) 2012 2013 2014 9M15 NT$ million 2010 2011 (IFRS) (IFRS) (IFRS) (IFRS) 2010 2011 2012 2013 2014 9M15 Sales 157,911 146,250 106,099 112,927 112,609 71,698 33.0 (7.4) (27.5) 6.4 (0.3) (15.2) Revenue Gross Profit 5,325 7,127 525 12,278 15,884 4,326 - 33.8 (92.6) 2,23
Slide 32: Five-year Balance Sheet (Consolidated)
Five-year Balance Sheet (Consolidated) 2012 2013 2014 9M15 YOY (%) NT$ million 2010 2011 (IFRS) (IFRS) (IFRS) (IFRS) 2010 2011 2012 2013 2014 9M15 TOTAL ASSETS 238,050 224,536 206,143 203,655 213,827 199,665 (6.0) (5.7) (8.2) (1.2) 5.0 (4.8) Cash 30,962 31,181 24,401 23,193 30,140 21,843 (7.1) 0.7 (
Slide 33: Tatung Investment Income
Tatung Investment Income % held Investment Income Investment Company % 2010 2011 2012 2013 2014 9M15 CPT 23.1 (3,603) (2,871) (2,716) (699) (933) (1,374) Green Energy Technology 26.9 339 (419) (949) (561) (477) (397) Elitegroup Computer 27.4 39 118 100 996 381 318 Shan Chih Asset Development 100.0 4
Slide 34: ng.com TATUNG
ng.com TATUNG
Tatung Company — Investor Presentation (November 2015) on 6ix