Serial System Ltd · SGX:S69
Serial System — Q1 2014 Earnings Presentation
32 slides from Serial System's earnings presentation, Apr 26, 2014
Slide 1: 1Q2014 Analyst Briefing
1Q2014 Analyst Briefing 26 April 2014 1 1
Slide 2: Outline
Outline 1. Serial System Highlights 2. 1Q2014 Financial Highlights 3. Corporate & Business Update – Initial Results 4. 1Q2014 Results Overview 5. Outlook & Investment Merits 2 2
Slide 3: Serial System Highlights
Serial System Highlights 3 3
Slide 4: Serial At a Glance
Serial At a Glance The largest 1Q14 FY2013 electronic Greater China 61% 57% South East component Asia and India 17% 18% distributor South Korea 13% 17% listed on SGX Taiwan 6% 6% Japan 3% 2% Total Shares: 896 million Free Float: 44% Market Capitalisation: SERIAL Rank among S$123.6M (As at 25 Apr mar
Slide 5: Electronic Components Distribution Network
Electronic Components Distribution Our Growth Drivers - Strong Asian Presence Extensive Distribution Network 50 Sales Offices, 7 Warehouses & > 900 employees in Asia Pacific Europe China USA (25 Offices) South Korea (3 Offices) Japan Hong Kong (2 Offices) Thailand Taiwan India (2 Offices) (3 Offices
Slide 6: Other Businesses
OTHER BUSINESSES E-Laundry & Dry Cleaning Services Pty Ltd Contract Sterilization Services Pte Ltd and SPL Investments Pty Limited (20%-stake) (100%-stake) Australia-based progressive industrial Assembly and distribution of medical laundry servicing hotels, resorts, devices in the medical indust
Slide 7: Other Businesses
OTHER BUSINESSES Serial MultiVision Pte. Ltd. Bull Will Co., Ltd (65%-stake) (43.03%-stake) 2 core businesses: outdoor advertising Headquartered in Taipei, Taiwan, Bull Will media and hospitality solutions has been listed on Taiwan Stock Exchange since 2003 Outdoor advertising consists of larg
Slide 8: 1Q2014 Financial Highlights
1Q2014 Financial Highlights 8 8
Slide 9: 1Q2014 Financial Highlights
1Q2014 Financial Highlights • Net profit soared 31% to US$2.1 million outpacing revenue growth of 24% to US$212.4 million – on track to achieve US$1 billion sales target for FY2014 o Propelled by higher sales due to expansion of product offerings and improved internal efficiencies • Stronger 1Q2014
Slide 10: Geographical Contribution
Geographical Contribution 1Q2014 • North Asia (83% of 1Q2014 Group turnover) recorded 32% increase in 1Q2014 sales compared to 1Q2013 • Driven by 45% revenue growth in Greater China due to a surge in orders from a leading Chinese domestic smartphone, television and router manufacturer embarking on a
Slide 11: 1Q2014 Results Snapshot
1Q2014 Results Snapshot US$ (‘000) 1Q2014 1Q2013 Change (%) Sales 212,360 171,573 24 Gross Profit 19,045 15,644 22 Gross Profit Margin (%) 9.0 9.1 (0.1 pt) Other Operating Income 1,243 741 68 Net Profit After Tax 2,110 1,608 31 Attributable to Equity Holders Net Profit Margin (%) 1.0 0.9 0.1 pt EPS
Slide 12: Corporate & Business Update Initial Results
Corporate & Business Update Initial Results 12 12
Slide 13: Corporate & Business Update Recap
Corporate & Business Update Recap • Corporate & Business update announced on 27 Jan 2014 • Objectives: - Increase revenue, - Deepen value proposition - Improve internal efficiencies to improve margins Expand product portfolio Deepen penetration in & increase higher‐value Improve internal existing ma
Slide 14: Corporate & Business Update Initial Results
Corporate & Business Update Initial Results Expand product portfolio Deepen penetration in & increase higher‐value Improve internal existing markets & widen components efficiencies geographical expansion • Established 3rd and 4th JV • 1Q2014 inventory • Solidified footprint in with Chinese total tur
Slide 15: 1Q2014 Results Overview
1Q2014 Results Overview 15 15
Slide 16: Robust Revenue Growth
Robust Revenue Growth Revenue (US$' million) 1,000 1,000.0 900.0 817.1 800.0 22% 700.0 658.1 616.4 600.0 545.0 24% 500.0 7% 381.9 400.0 353.6 315.3 13% 300.0 227.7 222.7 216.8 43% 212.4 185.6 184.5 182.9 171.6 206.0 200.0 92.0 8% 100.0 43.7 24% 12% ‐ FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
Slide 17: Our Performance – Asia Pacific Semiconductor Industry
Our Performance – Asia Pacific Semiconductor Industry Asia Pacific (excludes Japan) Semiconductor Revenue (US$' billion) Serial System Revenue (US$' million) 1,000 200 181 174 1,000 180 160 164 163 900 817 160 4% 800 140 7% 658 22% 120 700 616 120 ‐0.6% 545 600 24% 100 500 382 7% 80 400 60 300 40 20
Slide 18: Right Growth Strategies
Right Growth Strategies 25% 8% 7% 45% 18 18
Slide 19: Right Growth Strategies
Right Growth Strategies 66% 37% ‐8% ‐14% 19 19
Slide 20: Right Growth Strategies
Right Growth Strategies 18% 21% 56% 1% 20 20
Slide 21: Profitability Potential: Gross Profit & Margin
Profitability Potential Gross Profit & Gross Profit Margin (US$' million) 9.6% 9.5% 80.0 9.4% 9.3% 73.5 70.0 9.3% 9.2% 62.6 60.0 9.2% 9.1% 57.5 9.0% 50.7 50.0 9.0% 9.0% 8.9% 8.8% 40.0 8.8% 8.7%33.4 30.0 8.6% 17% 20.0 19.0 19.6 19.3 19.0 8.4% 15.6 9% 10.0 22% 8.2% ‐ FY09 FY10 FY11 FY12 FY13 1Q13 2Q13
Slide 22: Profitability Potential: EBITDA
Profitability Potential EBITDA (US$' million) 25.0 22.0 20.2 19.9 20.0 18.9 16% 15.0 ‐5% 10.0 8.8 6.5 5.7 5.6 5.3 5.0 4.3 23% ‐ FY09 FY10 FY11 FY12 FY13 1Q13 2Q13 3Q13 4Q13 1Q14 22 22
Slide 23: Profitability Potential
Profitability Potential 42% ‐22% 31% 23 23
Slide 24: Healthy Balance Sheet: Current Ratio
Healthy Balance Sheet Recap Maintaining Healthy Current Ratio 350.0 2.0 18 r 16 » 14 r L2 r 10 » 08 0.6 0.4 0.2 FY10 FY11 Fy12 Fy13 YTD MAR14 Sema Current Assets mamma Current liabilities “teeCurrent Ratio
Slide 25: Healthy Balance Sheet: Net Gearing Ratio
SERIAL Healthy Balance Sheet are wl] Net Gearing Ratio 120.0 - 100.0 80.0 60.0 —— 40.0 - 20.0 — FYos Fyo9 FY1O FY11 Fy12 Fy13 YTD MAR14 Shareholders’ Equity ui Net Borrowings “=i Net Gearing Ratio
Slide 26: Healthy Balance Sheet: Cash Conversion Cycle
SERIAL Healthy Balance Sheet are wl] Cash Conversion Cycle (days) Fyos FYO9 FY10 FY11 Fy12 FY13 YTD MAR14 weer Trade Receivable Turnover (days) =i Trade Payable Turnover (days) © “=r Inventory Turnover (days) © =~» Cash Conversion Cycle (days)
Slide 27: Attractive Dividend Yield
Attractive Dividend Yield At least Two Dividend payout (Interim & Final) each year 6.3% 5.0% 7.9% 6.1% 8.5% SGD Cents 8.9% 27 27
Slide 28: Outlook & Investment Merits
Outlook & Investment Merits 28 28
Slide 29: Outlook
Outlook On track to achieving FY2014 revenue target: US$1B 1H traditionally weaker than 2H; continue to expand customer base and product lines and drive internal efficiencies Reasonably confident that 1H2014 will exceed 1H2013 in both revenue and gross profit on year‐on‐year basis 29 29
Slide 30: Why Serial: Investment Merits
Investment Merits Consistently strong revenue Low P/E & P/B amongst growth distributors High gross profit margin Attractive dividend yield of amongst distributors 5%-9% p.a. Why Solidified footprint in Asia – huge Serial electronic component distribution market Healthy balance sheet Ex
Slide 31: Forward looking statements disclaimer
The presentation herein may contain forward looking statements by the management of Serial System Ltd (“Serial”) that pertain to expectations for financial performance of future periods versus past periods. Forward–looking statements involve certain risks and uncertainties because they relate to fut
Slide 32: Thank You
Thank You Media and Investor Contact Information: WeR1 Consultants Pte Ltd 38A Circular Road, Singapore 049394 Tel: (65) 6737 4844 | Fax: (65) 6737 4944 Amelia Lee, Amelia@wer1.net Lai Kwok Kin, Laikkin@wer1.net 32 32