Slide 1: 2Q2019 / 1H2019 Results Presentation
2Q2019 / 1H2019 RESULTS PRESENTATION Wednesday, 7 August 2019 1 1
Slide 2: Agenda
CORPORATE OVERVIEW AGENDA FINANCIAL RESULTS By Moving forward and thinking forward, Serial System helps its partners to be more competitive in the marketplace, OUTLOOK & STRATEGIES today and in the future 2 2
Slide 3: Corporate Overview
CORPORATE OVERVIEW 3 Your Integral Component to Success 3
Slide 4: Serial System at a Glance
SERIAL SYSTEM AT A GLANCE One of Asia Pacific’s largest electronic distribution networks The largest Electronic Components (95%)* electronic 1H2019 FY2018 components Hong Kong 51% 61% distributor China 11% 11% listed on SGX South Asia 26% 17% South Korea 4% 5% Taiwan 8% 6% SERIAL 100% 100% SYSTEM To
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 a dealer for a variety of consumer products. It is also a strategic investor in businesses in healthcare and managed print services. Electronic
Slide 6: Partnering Leading Suppliers
PARTNERING LEADING SUPPLIERS Electronic Components Distribution … more than 90 Franchised Product Lines in Serial Group 6 Your Integral Component to Success 6
Slide 7: Partnering Leading Suppliers
PARTNERING LEADING SUPPLIERS Consumer Products Distribution 7 Your Integral Component to Success 7
Slide 8: Consumer Products Distribution
CONSUMER PRODUCTS DISTRIBUTION Achieva Technology Pte Ltd • The Group’s 100%-owned subsidiary: Achieva Technology Sdn. Bhd. • Major suppliers include AMD, Intel and Asus • Achieva Technology works closely with partner brands to both fulfil their distribution needs and to create a one-stop solution f
Slide 9: Consumer Products Distribution
CONSUMER PRODUCTS DISTRIBUTION Managed Print Services • Set up in 2008, PT SMI is 20% owned by Serial System since November 2018 • Listed on Development Board of Indonesia Stock Exchange • Started in 2014, Singapore-based Print-IQ is 70%-owned by Serial System since May 2017 • Provides managed print
Slide 10: 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. • L
Slide 11: Financial Results
FINANCIAL RESULTS 11 Your Integral Component to Success 11
Slide 12: Snapshot of 2Q2019 & 1H2019 Performance
SNAPSHOT OF 2Q2019 & 1H2019 PERFORMANCE US$’000 2Q2019 2Q2018 Change (%) 1H 2019 1H 2018 Change (%) Sales 201,367 408,703 (51) 431,252 813,923 (47) Gross Profit 13,411 33,608 (60) 30,086 65,001 (54) Gross Profit Margin (%) 6.7 8.2 (1.5 pt) 7.0 8.0 (1.0 pt) Net Profit After Tax 2,251 2,042 10 5,429 7
Slide 13: 2Q2019 Highlights
2Q2019 HIGHLIGHTS • Revenue of US$201.4M in 2Q2019, a decrease of 51% from US$408.7M in 2Q2018 • Mainly due to the termination of the electronic components distribution business with Texas Instruments (“TI”) • Excluding the impact of decline in turnover due to TI termination and discontinuation of a
Slide 14: 1H2019 Highlights
1H2019 HIGHLIGHTS • Revenue of US$431.3M in 1H2019, a decrease of 47% from US$813.9M in 1H2018 • Mainly due to the termination of the electronic components distribution business with Texas Instruments (“TI”) which has impacted sales in all markets in Asia • Excluding the impact of decline in turnove
Slide 15: Revenue Growth Trend
REVENUE GROWTH TREND SERIAL SYSTEM GROUP Revenue (US#039; million) 1,600 1,527 1,492 1,403 2% 1,400 1,222 6% 1,200 15% 1,036 1,000 18% 817 800 27% 658 616 600 545 24% 7% 405.2 408.7 385.6 382 400 354 315 327.6 13% 228 229.9 186 184 183 201.4 43% 200 92 44 8% -51% - 15 Your Integral Component to Success
Slide 16: Outperforming the Industry
OUTPERFORMING THE INDUSTRY Asia Pacific (including Japan) Semiconductor Revenue (US#039; billion) Serial System Revenue (US#039; million) 350 1,600 1,492 1,527 323 1,403 1,400 2% 300 285 1,222 13% 6% 241 1,200 250 232 229 1,036 209 19% 15% 205 207 205 1,000 200 4% 817 18% 800 1% 658 150 616 27% 545 9% 600
Slide 17: Profitability: Gross Profit & Margin
PROFITABILITY Gross Profit & Gross Profit Margin (US#039; million) 10.0% 9.3% 9.5% 140.0 9.3% 9.0% 8.7% 8.7% 9.0% 7.8% 8.2% 7.7% 120.0 7.8% 8.0% 7.5% 6.9% 7.3% 7.0% 7.1% 6.7% 7.0% 118.6 100.0 97.4 105.1 6.0% 91.5 90.4 13% 80.0 8% 5.0% 73.5 6% 60.0 4.0% 62.6 1% 57.5 50.7 23% 3.0% -60% 40.0 17% 2.0% 33.4
Slide 18: Profitability: Net Profit & Margin
PROFITABILITY Net Profit & Net Profit Margin (US#039; million) 20.0 3.0% 18.0 17.7 2.7% 16.1 2.5% 16.0 2.2% 85% 14.0 44% 2.0% 11.2 12.0 1.6% 1.6% 12.0 1.3% 1.4% 10.0 1.4% 11.0 1.5% 1.2% 1.2% 1.3% -31% 9.6 1.1% 8.0 10.1 7.9 0.9% 10.3 1.0% 6.0 41% -59% 0.6% 5.1 -21% 5.2 0.5% 4.0 4.6 0.3% 3.1 0.5% -16% 2.
Slide 19: Profitability: EBITDA
PROFITABILITY EBITDA (US#039; million) 50.0 45.0 43.2 40.0 35.0 30.8 65% 30.0 26.0 26.1 23.5 25.0 22.0 -16% 20.2 19.9 20.3 18.9 11% 20.0 40% -9% 15.0 17% -26% 11.1 10.0 8.8 -5% 8.1 7.2 6.0 -2% 5.0 3.7 130% - FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 19 Your Integra
Slide 20: Financial Position: Current Ratio
FINANCIAL POSITION Maintaining Healthy Current Ratio 1.6 500.0 1.5 1.4 1.4 468.6 458.5 1.4 430.6 1.4 1.3 1.2 400.0 382.6 397.5 1.2 1.2 1.2 372.0 371.5 1.2 1.2 347.8 337.7 324.1 295.6 1.0 300.0 277.0 240.5 0.8 218.3 211.5 218.7 200.0 173.8 0.6 147.5 147.0 120.7 0.4 100.0 0.2 - - FY10 FY11 FY12 FY13 F
Slide 21: Financial Position: Net Gearing Ratio
FINANCIAL POSITION Net Gearing Ratio 140% 180.0 166.5 116% 160.0 112% 155.9 120% 115% 146.0 145.0 98% 138.0 139.3 108% 140.0 144.5 100% 89% 122.2 124.8 120.2 120.0 119.4 104.5 110.0 101.0 80% 100.0 98.7 97.9 72% 86.5 69% 80.0 54% 60% 71.2 60.0 43% 56.3 40% 40.0 37.6 20% 20.0 - 0% FY10 FY11 FY12 FY13
Slide 22: Financial Position: Cash Conversion Cycle
FINANCIAL POSITION Cash Conversion Cycle (days) 115 109 105 95 85 84 75 70 69 67 62 66 65 58 58 56 55 66 59 55 61 51 54 60 49 51 53 45 51 41 42 44 40 38 33 41 32 35 35 38 33 34 36 31 33 32 33 29 25 30 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YTDJun19 Trade Receivable Turnover (days) Trade Payabl
Slide 23: Dividend Yield
DIVIDEND YIELD 0.22 5.5% 1H19 0.40 1.00 0.46 21.9% FY18 FY17 0.29 0.46 4.6% FY16 0.18 0.17 2.4% Total Dividend Payout (In Cent (SGD)) 0.35 0.50 6.3% FY15 (Interim & Final) each year FY14 0.30 0.75 8.0% FY13 0.24 0.25 0.30 6.3% FY12 0.22 0.30 5.0% FY11 0.30 0.16 0.33 7.9% 0.28 0.67 6.1% FY10 Singapor
Slide 24: Outlook & Strategies
OUTLOOK & STRATEGIES 24 Your Integral Component to Success 24
Slide 25: Industry Outlook
INDUSTRY OUTLOOK Uncertainties ? Greater uncertainty in the global market due to escalating US- China trade tensions ? Global economic slowdown and keen market competition ? Uncertainty over progress of global 5G rollout Bright spots Launch of new smartphones in 2019 by Samsung, Huawei, Xiaomi, LG
Slide 26: Group Outlook
GROUP OUTLOOK • Two-prong strategy for electronic components distribution business: • Reallocating resources and personnel to more efficiently support existing suppliers • Proactively and aggressively unlocking potential partnerships with other suppliers, customers and channel partners • Reviewing i
Slide 27: 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 28: Thank You
Your Integral Component to Success