Nordic Group Limited · SGX:MR7
Nordic — 3Q2018 Earnings Presentation
27 slides from Nordic's earnings presentation, Nov 30, 2018
Slide 1: Nordic Group Limited 3Q2018 Results Briefing
Building Momentum, Capturing Opportunities Nordic Group Limited 3Q2018 Results Briefing 30 November 2018 www.n o rdicgro uplimited .co m 1
Slide 2: Disclaimer
Disclaimer • This presentation (this “Presentation”) has been prepared by Nordic Group Limited (“Nordic” or the “Company”) for information purposes only and has not been independently verified. It is not the intention to provide, and you may not rely on this Presentation as providing, a complete or
Slide 3: Outline
Outline 1. Financial Review 2. Business Outlook 3. Investment Merits 3
Slide 4: Key Highlights
Key Highlights 3Q2018 Revenue -20% to S$21.4 million 3Q2018 Net Profit -24% to S$3.3 million 9M2018 Revenue -1% to S$70.2 million 9M2018 Net Profit +2% to S$11.1 million Outstanding Order Book of S$104.3 million. 2018 Contract Winning Momentum of S$75.7 million Net Profit CAGR of 43% from FY2011 to
Slide 5: Financial Review
Financial Review Unaudited Unaudited Change Unaudited Unaudited Change S$'000 9M2018 9M2017 (%) 3Q2018 3Q2017 (%) Revenue 21,385 26,814 (20) 70,169 70,784 (1) Gross Profit 5,688 9,065 (37) 19,693 23,233 (15) Gross Profit Margin (1) 26.6% 33.8% (7)Ppts 28.1% 32.8% (5)Ppts Net Profit after Tax 3,317 4
Slide 6: Financial Review: Revenue and Profit Margin
Financial Review Revenue and Profit Margin 100 40 1.4 90 35 34 80 33 33 31 28 30 1.4 70 28 3.8 27 26 26 53.5 25 60 24 20 50 58.9 60.5 20 43.9 38.7 48.4 57.4 17 40 44.1 16 16 16 16 15 15 13 30 39.9 11 10 9 20 8 36.6 16.4 11.8 27.7 21.6 21.4 25.5 5 10 4 16.2 17.8 15 9.9 10.4 9.6 0 0 FY2011 FY2012 FY20
Slide 7: Financial Review: Revenue breakdown by segment
Financial Review Revenue breakdown by segment Unaudited Unaudited Change Unaudited Unaudited Change S$ ‘000 3Q2018 3Q2017 (%) 9M2018 9M2017 (%) Project Services 11,828 16,394 (28) 38,683 43,899 (12) Maintenance Services 9,557 10,420 (8) 27,699 25,498 9 Others - - - 3,787 1,387 173 Total 21,385 26,81
Slide 8: Financial Review: Revenue Breakdown by Segment
Financial Review Revenue Breakdown by Segment FY2016 9M2018 FY 2015 FY2017 3.80 , 5% 1.4, 2% 21.6, 27% 21.5, 26% 36.7, 40% 27.7 , 40% 38.7 , 55% 53.5, 58% 58.8, 73% 60.5, 74% Project Maintenance Carbon allowances • Revenue from Maintenance Services is boosted by contributions from Ensure in FY2017 8
Slide 9: Projected CAGR – for Illustrative Purposes only
Projected CAGR – for Illustrative Purposes only Target Net Profit 30 25 20 15 26.3 10 21.9 15.3 5 10.5 12.7 11.1 6.1 7.9 4.6 0 1.8 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Actual Projected Note: CAGR projection is based on our internal target net profit growth of 20% per
Slide 10: Financial Review: Balance Sheet Highlights
Financial Review Balance Sheet Highlights Unaudited as at Audited as at S$'000 30 September 31 December 2017 2018 Current Assets (1) 92,583 99,041 Non-current Assets 58,331 52,268 Current Liabilities (2) 56,095 57,922 Non-current Liabilities 13,914 16,773 Total Equity 80,905 76,614 Cash and Cash Equ
Slide 11: Financial Review: Borrowings and Net Gearing
Financial Review As at end of 30 S$’000 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 September 2018 Total Borrowings 26,834 21,539 25,320 32,155 28,085 46,612 48,373 Cash and Cash 23,965 14,852 32,799 35,566 32,325 40,291 35,748 Equivalents Net Debt/(Cash) 2,869 6,687 (7,479) (3,411) (4,240) 6,321 12,6
Slide 12: Financial Review: Order Book Summary
Financial Review Order Book Summary (S$’m) 60 55.7 50.4 48.3 48.6 50 39.7 39.2 40 30 30.9 30 21.6 19.4 20 10 0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 30-Sep-18 - Project - Maintenance Note: The order book from FY2011 to FY2016 does not include maintenance contracts as they do not have a co
Slide 13: Recent Contract Winning Momentum
Financial Review Recent Contract Winning Momentum Nov 9, 2018 - Total value: S$29.1m Scaffolding, Insulation and Petrochemical: ad-hoc and maintenance contracts from new customers from the infrastructure industries for insulation works, scaffolding and maintenance of mechanical equipment. Precis
Slide 14: Recent Contract Winning Momentum
Financial Review Recent Contract Winning Momentum Feb 26, 2018 - Total value: S$6.9m System Integration : supply of valve remote control and tank gauging systems for repeat customers Precision Engineering : machining and mechanical assembly for several repeat and new customers Jan 4, 2018 - Tota
Slide 15: Sale of Properties
Sale of Properties • 42 Tech Park sold on 12 Jan 2018 at $3.425m. Valuation: $3.3m • 5 Kwong Min Road sold in August 2018. Offer price: $2.425m. Valuation: $2m • 24 Benoi Place (land area: 39,052 sq ft; gross floor area: 45,090 sq ft; current market value: $5.8 million; Tenure: 13 years) • 133 Tuas
Slide 16: Business Outlook: Upstream Oil & Gas
Business Outlook 31/10/2017 31/10/2018 Global 2077 2271 Asia 213 222 Source: Baker Hughes Oil Rig Count, Bloomberg, 27 November 2018 Source: Brent Crude 5-Year Chart , Macro trends, 27 November 2018 Upstream Oil & Gas Outlook • Brent crude oil prices hit a high of approximately US$86 per barrel in e
Slide 17: Business Outlook: Marine & Shipbuilding
Business Outlook Monthly 30/9/2017 30/9/2018 Total No. of New Build 83 82 Orders Legend: Number of Vessels V Total DWT Source: Global New Build Orders, E World Ship, September 2018 Marine & Shipbuilding Outlook • Total number of new build orders have remained stable over approximately 12 months • Ho
Slide 18: General Business Outlook
Business Outlook General Business Outlook • Nordic Group serves largely the marine, oil and gas industries whose operating environment and business conditions remained challenging. • Sustainability of oil price recovery, • Fluctuations in the exchange rate of the US dollar against the Singapore doll
Slide 19: Acquisition Track Record
Acquisition Track Record 2011 2015 2017 Multiheight Austin Energy Ensure Engineering • Acquired for around S$29m • Acquired for around S$26m • Acquired for around S$17m • Design, erection, • Specialize in thermal • Specialize in engineering modification dismantling insulation, fireproofing and repai
Slide 20: Diversified Model – Improved Earnings Quality
Diversified Model – Improved Earnings Quality Revenue Contribution by Businesses FY2017 9M2018 FY2016 1.4, 2% 3.8, 5% 8.9, 13% 12.5, 11.9, 13% 12.3, 13% 21.8, 10.1, 14% 15% 27% 15.6, 17% 14.1, 20% 19.2, 21% 17.4, 30.3, 15.4, 22% 21% 37% 31.1, 34% 17.9, 26% System Integration / MRO & Trading Scaffold
Slide 21: Diversified Model – Improved Earnings Quality
Diversified Model – Improved Earnings Quality Revenue Contribution by Industry FY2016 9M2018 FY2015 FY2017 6% 6% 3% 2%3% 3% 3% 8% 4% 4% 4% 20% 18% 4% 4% 4% 5% 6% 36% 3% 5% 7% 7% 50% 5% 3% 31% 8% 43% 42% 53% Onshore/Downstream Marine/Upstream Electronics Manufacturing System Onshore/Infrastructure An
Slide 22: Investment Merits
Investment Merits Established Market Player Healthy Order Book Strong track record, performing above Order book of approximately S$104.3 industry average million on hand, including maintenance contracts. Contract winning momentum of S$75.7 million secured up to 9 Nov 2018. Established Management wit
Slide 23: Investment Scorecard
Investment Scorecard 3Q2018 2Q2018 1Q2018 FY2017 FY2016 FY2015 FY2014 FY2013 Share price (cents) 0.41 0.495 0.55 0.56 0.25 0.19 0.11 0.11 Market Capitalisation 159 196 216 220 98 75 43 42 EPS (cents) 4(4) 4(4) 4 (4) 3.9 3.2 2.6 2.0 1.5 PE Ratio 10.38 12.38(4) 13.75(4) 14.36 7.81 7.27 5.40 7.07 Divid
Slide 24: Dividend Payout
Dividend Payout Final / Interim / Amount per share Payment date Financial Year Payout ratio Special (cents) Sep 5, 2018 2018 Interim 0.779 May 14, 2018 Final 0.873 2017 Sep 5, 2017 Interim 0.653 May 12, 2017 Final 0.731 40% 2016 Sep 2, 2016 Interim 0.5372 May, 13 2016 Final 0.65 2015 Sep 8, 2015 Int
Slide 25: Nordic's Share Buyback
Nordic’s Share Buyback – renewed on 26 April 2018 AGM CUMULATIVE % OF TOTAL NO OF MONTH OF ACQUISITION QUANTITY CUMULATIVE VOLUME ISSUED SHARES ** Share Buyback by way of Market Acquisition January 2016 479,000 5,148,200 1.29 March 2016 352, 000 5,500,200 1.37 April 2016 397,500 5,897,700 1.47 6,172
Slide 26: Directors' and Executive Officer's Share Purchases
Directors’ and Executive Officer’s Share Purchases 9 November 2010 – IPO : Director No. of shares held % shareholdings Chang Yeh Hong 200,480,625 50.12% Eric Lin Choon Hin 43,500,000 10.88% Dorcas Teo Ling Ling 29,000,000 7.25% 272,980,625 68.25% 27 November 2018 : Director / Executive Officer No. o
Slide 27: Thank You
Building Momentum, Capturing Opportunities Thank You For more information, please contact Financial PR Pte Ltd Investor Relations Consultants Romil Singh / Colin Lum nordic@financialpr.com.sg Tel: (65) 6438 2990 Fax: (65) 6438 0064 www.n o rdicgro uplimited .co m 27