ENTORNO GERENCIAL, MANAGERIAL ENVIROMENT Enviroment, BY LIC. SALVADOR ALFARO GOMEZ, MARCH, 2009.
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YOUR LOGO Hollysys Automation Technologies Ltd. Investors Presentation Nov 2016 Automation for Better Life
Transcript of Automation for Better Life - Amazon S3 · Automation for Better Life . ... Striving to be a world...
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Hollysys Automation Technologies Ltd.
Investors Presentation
Nov 2016
Automation for Better Life
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Safe Harbor
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This presentation may contain forward-looking statements within the meaning of the private securities litigation
reform act of 1995. Forward looking statements are statements that are not historical facts. Such forward-looking
statements, based upon the current beliefs and expectations of Hollysys' management, are subject to risks and
uncertainties, which could cause actual results to differ from the forward looking statements. The following factors,
among others, could cause actual results to differ from those set forth in the forward-looking statements: business
conditions in China; continued compliance with government regulations; legislation or regulatory environments,
requirements or changes adversely affecting the businesses in which Hollysys is engaged; cessation or changes in
government incentive programs: potential trade barriers affecting international expansion; fluctuations in customer
demand; management of transitions to new markets; intensity of competition from or introduction of new and
superior products by other providers of automation and control system technology; timing, approval and market
acceptance of new product introductions; as well as other relevant risks detailed in Hollysys' filings with the
securities and exchange commission. The information set forth herein should be read in light of such risks. Hollysys
does not assume any obligation to update the information contained in this presentation or filings.
* All $ amounts in this presentation are in USD unless otherwise noted.
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NASDAQ: HOLI Approximately 60MM shares outstanding
Founded in 1993 The leading provider of automation & control technologies in China
Headquartered in Beijing Nationwide presence in 60 cities Worldwide subsidiaries and offices in Singapore, Dubai, Malaysia,
India, etc.
Proprietary technologies and products tailored to Industrial, Rail, Subway and Nuclear Industries
Market Data
History
Operation
Offerings
Corporation Overview
3,600 employees world wide 800 in R&D Headcounts
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Highly Attractive Markets
Market Leadership Position
Scalable Business Model
Proprietary Technology & Strong R&D Capability
Effective and Efficient Marketing through Partnership and Alliance
Solid Financial Performance
Investment Highlights
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1
2
Business Overview
Industrial Automation
Rail Transportation 3
Overseas 4
Management & Market Leadership Position 5
Financials 6
Agenda
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33.6%
31.9%
24.5%
0.1%
Revenue by sector for FY2017Q1
Industrial AutomationRail TransportationM&E SolutionMiscellaneous
Business Overview
Industrial Automation: • Total solution: DCS, PLC, etc; • Nuclear power automation
HOLLiAS-NMS
Rail Transportation: • High-speed rail signaling
system: ATP, TCC, and etc. • Subway SCADA
Mechanical & Electrical Solution and others:
• Design, electrification and engineering service
• Other businesses
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Safety
Concern
Environment
Protection
Energy
Conservation
Industrial Automation Growth Drivers
Accelerated Automation and
Control Technologies Demand
Production
Efficiency
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Offering:
Proprietary technologies in solution, design,
manufacture and installation.
Products:
DCS, Batch, MES (Manufacturing Execution
System), AMS (Asset Management System),
SIS (Safety Instrumentation System), etc.
Track record:
More than 20,000 projects completed.
China market share:
Around 13 -15%
Clients:
6,000 customers, including SOEs, Multinationals,
and SMEs.
Competitors:
ABB, Siemens, Emerson, Honeywell,Supcon
DCS (Distributed Control System)
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Industrial Automation – Process Control
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Distributed Control System
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Industrial Automation – Competitive Advantages
Items HOLI Multis Local
Brand Name
Pricing
Service
Customization
Quality
Industry leading brand name recognition through more than 20 years’ operation.
Continuous investment in R&D to deliver advanced technology.
Extensive service network in more than 60 industrial cities across China, focusing on service and long-term client relationship.
Cost structure advantage enables Hollysys deliver pricing competitive solution and products.
Advantages of Hollysys
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16 20
24
30
36
43
50
57
65
China Nuclear Market
In # reactors
Nuclear
Electricity
(TWh)
Total
Electricity
(TWh)
Nuclear
Utilization
(%)
France 418 544 76.9%
World 2,410 20,956 11.5 %
China 123.8 5,158 2.4 %
(As of May, 2015. Source: World Nuclear Association, IAEA)
76.9%
11.5%
2.4%
France
World
China
Industrial Automation – Nuclear Power Control
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Projects
Qin Shan I/II/III, Da Yawan, Ling Ao, Tian Wan, Hong Yanhe, Ning De, Yang Jiang
Offerings
Proven proprietary nuclear power plant control systems.
Engineering design, procurement, integration, installation, support, and specialized services for the safe, reliable, and economical operation of the nuclear power plant
The only proven domestic company to supply control systems to nuclear power automation market in China
J/V with the China’s largest nuclear station operator: China General Nuclear Power Group (CGNPG)
Market Position
Competitors
SIEMENS/AREVA
Nuclear Power – Business Overview
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• Improved Production
Procedure Management
• Energy Conservation
• Enviroment Protection
• Product Quality
Improvement
Software
Advanced
Control Solutions
Process Control
DCS, PLC, SIS, etc.
Instrumentation
Transmitters, Actuators, Valves, Analyzer, etc.
Industrial Automation – Turn-key Solution
Achievements
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AMS, MES, Batch,
EMS, APC, etc.
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PLC (Programmable Logic Controller)
Chinese Medicine Dispensing Machine Sewage Treatment Coal Mining Safety
According to doctor’s prescription of medication, automatically complete the traditional chinese medicine granules dispensing .
Leader & founder
Participation in the formulation of this industry standard
Supply intergrate solution of sewage treatment, including SCADA, LM PLC, LK PLC etc.
Major player
Plenty of successful completed projects
Provide SCADA application in coal mining industry, as well as intrinsic safety device, explosion-proof switch etc.
JV with Shenhua Group
Safety management
Industrial Automation - Discrete Control
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8,358
19,000
30,000
38,000
45,000
2010 2015 2020E 2025E 2030E
KM
China High Speed Railway Market Growth
High-speed Rail Market of China
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(As of July, 2016. Source: National Development and Reform Commission)
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High-speed Rail – Signaling System
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High-speed Rail Signaling System
HSR signaling products: ATP , TCC, LEU and etc.
In China:
Market Position:
1 of the only 2 approved providers in 300-350km/h segment;
1 of the only 3 approved providers in 200-250km/h segment,
more than 60% of 200-250km/h ATP Market share of China.
Competitors: China Railway Signal & Communication Corp.
(CRSC)
Overseas:
Market Position: First international contract win from Hong Kong
MTR for HongKong-Shenzhen High-speed rail line
Competitors: Bombardier, Siemens, Ansaldo, Hitachi.
High-speed Rail – Business Overview
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City In operation
(km)
Total Length
by 2020 (km)
Beijing 604 1,000
Shanghai 643 900
Tianjin 147 304
Guangzhou 247 700
Shenzhen 179 425
Nanjing 187 330 2014 2016 2020E
3,173
4,630
8,314
China Subway Market Growth
In # kilometers
China Subway Market
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(As of the end of 2015. Source: China Association of Metros)
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Placeholder for text
Clients:
Beijing, Shenzhen, Guangzhou, Hong Kong MTR
Market position:
The leading SCADA(Supervisory Control and Data
Acquisition) system supplier
Competitor:
Nanjing Automation Research Institute (NARI)
SCADA
Clients:
China and international subway construction
authorities
Market position:
One of the key proprietary subway signaling
system provider
Competitors:
Siemens, Alstom, Thales
Signaling
System
SCADA
Subway Automation – Business Overview
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Beijing Headquarter
Hangzhou Facility
Bond
Xi’an Facility
Singapore Office
Concord
Internationalization Presence
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Photo Name &
Title
Industry
Working
Years
Previous Experience
Dr. HE Jianfeng
Chairman
27 years
• General Manager of Hollysys Group
• PHD in Automation from South China University of
Technology
Mr. SHAO Baiqing
CEO
22 years
• Vice President of Hollysys Group
• Master of Computer Science from the 6th Research
Institute of China Electronics Corporation and MBA
from Peking University
Ms. QU Herriet
CFO
22 years
• Financial controller for Hollysys
• Financial controller for Chum Capital Group Ltd.
(“Chum”)
• MBA degree from Oklahoma City University
Hollysys Management Team
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Market Leadership Position
6,000 customers
20,000 projects
Serving a broad customer base
Industry leading automation and
control brand name
JV with China General Nuclear
Power Holding Corp
JV with Shen Hua Group
Successful integration of rail team
Acquisition of Concord and Bond
Early entry to high-speed rail
Early entry to nuclear
Re-focusing in industrial automation
Increasing R&D investment
Wide range of core technologies
Various industry expert solutions
800 R&D engineers
Market
Leadership
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State of the Art Production Line
In-house Production
State of the art production line
Almost fully automated production process
Enough capacity for accelerated growth
Multiple round of precise testing
Flexible and efficient in house production for different demand
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Solid Business Fundamentals Driving Robust Financial Performance
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174.1
262.8
321.7 349.1
521.3 531.4 544.3
565- 600
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017E
Revenue by Fiscal Year
In US$ million
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Solid Business Fundamentals Driving Robust Financial Performance
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26.2
42.0
57.4 57.6
86.9
103.3
121.5
130-140
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017E
Net Income by Fiscal Year
In US$ million
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10.0
14.3
16.7
20.5
43.0
50.4
66.5
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
After Sales Revenue In US$ million
5.7% 5.4% 5.2% 5.9%
8.2% 9.5%
12.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
FY2010FY2011FY2012FY2013FY2014FY2015FY2016
After Sales of Total Revenue
National Spread Service Network, Professional & High Quality Service
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Stable and Sustainable Gross Margin & EBIT Margin Performance
16.0%
17.8%
16.5%
16.7%
19.4%
22.3%
17.8%
20.5%
19.3%
21.3%
25.2%
26.7%
34.7%
39.3%
36.2%
34.9%
41.2%
37.9%
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
Non-GAAP Gross Margin Non-GAAP EBIT Margin
Non-GAAP Net Margin
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Gross Margin of Each Business Sector
Industrial
Automation
Total Solution 35% - 40%
Nuclear 60% - 75%
Rail
Transportation
High-speed Rail
Signaling 40% - 50%
Subway
SCADA 15% - 20%
M&E Solution
and others
Design,
electrification,
installation
15%- 20%
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13.1
20.1
25.6
32.5 36.5 35.8 36.6
FY2010FY2011FY2012FY2013FY2014FY2015FY2016
R&D Expenditure
Heavy R&D Investment to Continuously Deliver Leading Technologies
New Products Development
Motion Control
Energy Conservation Environment Protection
Subway Signaling
Automated Food Production Safety Control
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7.5% 7.6%
8.0% 9.3%
7.0% 6.7% 6.7%
% of Total Revenue
In US$ million
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16.0
5.0 8.8 7.5
3.8 7.8
(1.8)
57.2
30.7
84.8 79.5
46.7
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
CAPEX Operating Cash Flow
Sufficient Cash On-hand & Solid Operating Cash Flow Performance
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In $MM 30.3
31.1
28
36.1
32.6
271.5
257.5
190.5
131.1
117.9
FY2016
FY2015
FY2014
FY2013
FY2012
Debt Cash In $MM
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296.4
389.8
488.7
556 568.5 527.2
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Backlog
Historical High Backlog Ensures Another Strong Year Ahead
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174.6
218.7
132.0 IndustrialAutomation
RailTransportation
M&E Solution
Backlog Breakdown for FY2017Q1
In US$ million In US$ million
Total Backlog: US$525.2 million
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Automation for Better Work , Life and Environment
Dedicated customized solutions Customized control system:
• Alternative energies: Nuclear power, wind power etc. • Water process
Demographic Change, shortage
of labor
Environmental protection
Urbanization Process of China
Customer’s buying behavior
change
Automation solutions to offset labor cost increase
Dedicated customized solutions for energy conservation and efficiency improvment
Leading position in China’s high-speed rail and subway automation control market
Customer- centric approach, enlarge service team and enhance service capabilities
Striving to be a world leading automation and control system provider
Macro Enviroment Strategy
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Contact Information:
Investor Relations
(8610) 5898-1386
Automation for Better Life
