Slide 1: 3Q'2017 & YTD 3Q'2017 Results Presentation
3Q’2017 & YTD 3Q’2017 RESULTS PRESENTATION Friday, 03 November 2017 1 1
Slide 2: Agenda
AGENDA 1. CORPORATE OVERVIEW 2. CORPORATE HIGHLIGHTS 3. FINANCIAL RESULTS 4. 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 Electronic Total Shares: Components 896 million (96%)* Free Float: 42% 3Q2017 FY2016 Market Capitalisation: S$151M SERIAL Hong Kong 62% 61% (As at 31 Oct
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 the F&B, Healthcare, Industrial Laundry, M
Slide 6: Partnering Leading Suppliers
PARTNERING LEADING SUPPLIERS Electronic Components Distribution … more than 90 Franchised Product Lines in Serial Group 6 6
Slide 7: Partnering Leading Suppliers
PARTNERING LEADING SUPPLIERS Consumer Products Distribution 7 7
Slide 8: Other Businesses - Diversification into investment holding
OTHER BUSINESSES - Part of Group’s diversification into investment holding of high-margin companies Serial MultiVision Pte. Ltd. Contract Sterilization Services Pte Ltd (100%-stake) (100%-stake) Core businesses: hospitality solutions Assembly and distribution of medical devices Hospitality solutions
Slide 9: Strategic Investment – South Pacific Laundry
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
Slide 10: Strategic Investment - Tong Chiang Group
STRATEGIC INVESTMENT - Tong Chiang Group 21% stake in food manufacturer and caterer Tong Chiang Group (“TCG”) TCG comprises 14 wholly-owned subsidiaries and three separate property investment holding entities, operating in five factories and three warehouse units in Singapore Products and services c
Slide 11: Strategic Investment – Musang Durian Frozen Food
STRATEGIC INVESTMENT – Musang Durian Frozen Food (M) Sdn. Bhd. The Group has an effective 27.5% stake in durian processing and distribution company Musang Durian Frozen Food (M) Sdn. Bhd. Operates in 2 sites: Kuala Lumpur, Malaysia (office and warehouse) and Pahang, Malaysia (GMP-certified processin
Slide 12: Corporate Highlights
CORPORATE HIGHLIGHTS © 2012 PRIVATE & CONFIDENTIAL 12 © 2011 A.S. LOUKEN BRANDING PTE LTD. PRIVATE & CONFIDENTIAL | 12 12
Slide 13: Corporate Highlights: Electronic Components Distribution
CORPORATE HIGHLIGHTS CORPORATE DEVELOPMENTS Proposed spin-off and separate listing of Serial Microelectronics (HK) Limited group June 2017 Serial Microelectronics (HK) group to be listed on main board of the Stock Exchange of Hong Kong Limited ELECTRONIC COMPONENTS DISTRIBUTION Strategies : Expand P
Slide 14: Corporate Highlights: Consumer Products Distribution
CORPORATE HIGHLIGHTS CONSUMER PRODUCTS DISTRIBUTION Strategies : Rationalise Operations & Explore New Profitable Investments June 2017 Acquired 100% equity interest in Inkcarts Pte. Ltd. (“Inkcarts”) Inkcarts is principally engaged in the business of trading and distribution of computers and periphe
Slide 15: Corporate Highlights: Other Businesses
CORPORATE HIGHLIGHTS OTHER BUSINESSES Strategies : Diversify Risk and Generate Recurring Income August 2017 Entry into JV agreement with Datuk Philip Ting Ding Ing in relation to Bast Investment Pte Ltd, which has a 50% stake in issued and paid-up capital of Musang Durian Frozen Food Sdn Bhd Musang
Slide 16: Financial Results
FINANCIAL RESULTS 16 16
Slide 17: Snapshot of 3Q2017 & YTD'3Q2017 Performance
SNAPSHOT OF 3Q2017 & YTD’3Q2017 PERFORMANCE Change Change US$’000 3Q2017 3Q2016 YTD’3Q2017 YTD’3Q2016 (%) (%) Sales 395,240 346,266 14 1,102,104 1,057,634 4 Gross Profit 26,636 24,524 9 76,739 71,756 7 Gross Profit Margin (%) 6.7 7.1 (0.4 pt) 7.0 6.8 0.2 pt Net Profit After Tax 3,114 3,789 (18) 9,19
Slide 18: 3Q2017 Highlights
3Q2017 HIGHLIGHTS • Revenue of US$395.2M compared to US$346.3M in 3Q2016 Revenue from electronic components distribution business increased 20% to US$382.1M, mainly due to higher product demand from Hong Kong and China Revenue from consumer products distribution business down 55% to US$12.0 million
Slide 19: YTD'3Q2017 Highlights
YTD’3Q2017 HIGHLIGHTS • Revenue of US$1.1B compared to US$1.06B in YTD’3Q2016 Electronic components distribution business rose 18% to US$1.06B on higher revenue contributions from Hong Kong, China and South Asia Consumer products distribution business declined 75% to US$39.4M due to lower overall pr
Slide 20: Revenue Growth Trend – Serial System Group
REVENUE GROWTH TREND – SERIAL SYSTEM GROUP Revenue (US#039; million) 1,600.0 1,403 1,400.0 1,222 1,200.0 1,036 15% 1,000.0 18% 817.1 800.0 27% 658.1 616.4 600.0 545.0 24% 7% 353.6 381.9 378.6 346.3 344.9 373.9 395.2 400.0 315.3 13% 332.8 332.9 227.7 43% 185.6 184.5 182.9 200.0 8% 14% 92.0 43.7 12% - 20
Slide 21: Outperforming the Industry
OUTPERFORMING THE INDUSTRY Asia Pacific (including Japan) Semiconductor Revenue (US#039; billion) Serial System Revenue (US#039; million) 250 1,600 241 1,403 240 1,400 232 1,222 229 1,200 230 1,036 1,000 15% 4% 817 220 18% 209 1% 800 658 207 616 210 205 205 27% 545 9% 600 24% 200 2% 400 7% -0.9% 190 200 1
Slide 22: Revenue
REVENUE Hong Kong & China Revenue (US#039; million) 900.0 853.4 800.0 700.0 661.8 663.0 600.0 29% 500.0 461.4 0.2% 400.0 370.2 43% 344.1 322.3 282.9 300.0 25% 267.5 242.4 219.0 217.8 224.8 214.2 196.3 180.8 8% 168.4 200.0 115.9 81.0 100.0 57.0 31.8 26% 3.4 14.4 - FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08
Slide 23: Profitability: Gross Profit & Gross Profit Margin
PROFITABILITY Gross Profit & Gross Profit Margin (US#039; million) 10.0% 9.5% 120.0 9.3% 9.3% 9.0% 8.7% 8.7% 9.0% 7.5% 100.0 8.0% 7.4% 7.2% 97.4 7.1% 7.0% 6.7% 6.7% 6.6% 7.0% 90.4 91.5 6.9% 80.0 6.0% 6% 73.5 5.0% 1% 60.0 62.6 57.5 23% 4.0% 50.7 17% 40.0 3.0% 33.4 2.0% 24.9 25.6 26.1 26.6 20.0 22.4 24.5
Slide 24: Profitability: Net Profit & Net Profit Margin
PROFITABILITY Net Profit & Net Profit Margin 18.0 2.2% (US#039; million) 2.5% 16.0 2.0% 1.6% 14.0 1.3% 1.6% 1.4% 1.2% 1.5% 12.0 1.2% 1.1% 12.0 16.1 0.8% 0.9% 0.9% 0.9% 0.8% 10.0 11.2 1.0% 10.1 8.0 11.0 0.5% 7.9 44% 0.3% 6.0 3.8 4.0 0.0% 4.0 5.1 -31% 3.3 3.4 3.1 41% 4.6 2.7 2.0 -0.5% -59% - -1.0% FY09 F
Slide 25: EBITDA (US$ million)
EBITDA (US#039; million) 35.0 30.8 30.0 26.0 25.0 23.5 22.0 20.2 19.9 -9% 20.0 18.9 -16% 15.0 40% 16% 10.0 8.8 8.6 8.9 7.9 7.8 7.7 6.3 5.0 -11% - FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 (1.8) (5.0) 25 25
Slide 26: Financial Position: Current Ratio
FINANCIAL POSITION Maintaining Healthy Current Ratio 450.0 1.5 430.6 435.3 1.6 1.4 1.4 400.0 382.6 1.4 1.3 372.0 369.4 347.8 1.2 1.2 1.2 350.0 1.2 324.1 1.2 300.0 295.6 277.0 1.0 250.0 218.3 211.5 218.7 0.8 200.0 173.8 147.5 147.0 0.6 150.0 120.7 0.4 100.0 50.0 0.2 - - FY10 FY11 FY12 FY13 FY14 FY15
Slide 27: Financial Position: Net Gearing Ratio
FINANCIAL POSITION Net Gearing Ratio 140% 160.0 116% 120% 138.0 112% 139.3 137.7 137.2 140.0 122.2 120.2 124.8 119.4 100% 120.0 110.0 104.5 98% 100% 98.7 97.9 100.0 80% 86.5 72% 89% 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 YTD3Q17 Shareholders' E
Slide 28: Financial Position: Cash Conversion Cycle
FINANCIAL POSITION Cash Conversion Cycle (days) 75 70 69 70 67 65 62 61 66 58 60 56 55 60 55 53 51 55 51 49 51 50 45 44 41 40 36 39 33 40 35 38 38 35 32 31 30 33 33 33 32 30 25 FY10 FY11 FY12 FY13 FY14 FY15 FY16 YTD3Q17 Trade Receivable Turnover (days) Trade Payable Turnover (days) Inventory Turnove
Slide 29: Dividend Yield
DIVIDEND YIELD Total Dividend Payout (In Cent (SGD)) 0.29 3.2% (Interim & Final) each year FY17 0.18 0.17 2.4% FY16 0.35 0.50 6.3% FY15 0.30 0.75 8.0% FY14 0.24 0.25 0.30 6.3% FY13 0.22 0.30 5.0% FY12 0.30 0.16 0.33 7.9% FY11 0.28 0.67 6.1% FY10 Singapore 0.13 0.38 8.5% Cents FY09 Interim Special Fi
Slide 30: Outlook & Strategies
OUTLOOK & STRATEGIES 30 30
Slide 31: Industry Outlook
INDUSTRY OUTLOOK According to a report by Gartner, the semiconductor industry is projected to reach US$411.1 billion in global sales this year, with projections for 2018 rising to US$427.4 billion. This growth will be driven mainly by memory products. The Group stands to benefit from its close ties
Slide 32: Group Outlook
GROUP OUTLOOK • The Group will spin off its Hong Kong electronic components distribution entity, Serial Microelectronics (HK) Limited group (“SMHK group”) through a listing on the mainboard of the Stock Exchange of Hong Kong Limited. • The proposed listing will enable the SMHK group to independently
Slide 33: Our Three-Pronged Strategy
OUR THREE-PRONGED STRATEGY Objectives: - Increase revenue - Deepen value proposition - Drive greater internal efficiencies to improve margins Deepen penetration in Improve internal Expand product existing markets & efficiencies to achieve portfolio & increase widen geographical greater economies hig
Slide 34: 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 35: 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 Grace Yew, graceyew@wer1.net 35 35