CTCI Corporation The 1st Investor
Transcript of CTCI Corporation The 1st Investor
CTCI Corporation
The 1st Investor
Conference, 2020
2020.03.27
Copyright © 2016 CTCI All Rights Reserved.
Disclaimer
The consolidated financial statement is hereby based on International
Financial Reporting Standards (IFRS) and audited by CPA.
This presentation may include forward-looking statements with respect
to the operations and business of the company other than the
historical results. The actual results may differ from those indicated
forward-looking statements due to unknown risks and uncertainties.
Investors should make their own judgement and control the
investment risk.
Agenda
• Covid-19 Impact
• Operation Review – Year 2019
• Business Outlook
• Financial Highlights – Year 2019
3
Covid-19 Impact
4
Copyright © 2016 CTCI All Rights Reserved.
Covid-19 Epidemic PreventionGroup Coronavirus Prevention Center(GCPC) and information platform set up on Jan.29 initiating anti-
epidemic measures and enterprise continuous operation planning.
GCPC
Measures
• Attendance and travel
management
• Visitor control and
environment clean
• Health management &
care
Info and Supplies
• Epidemics(Site and
subsidiaries)• Personnel/good restrictions
• Government regulations
• Coordination of epidemic
prevention
materials
Care Bulletin
• Caring for home
quarantine
• Health tracking
IT Operations
• Information platform.
• Hardware and
software settings for
epidemic prevention
Operations
• Track impact on projects
• Contract rights protection
• Insurance claim evaluation
• Fiscal and tax relief
CTCI Group’s Enterprise Continuous
Operation Standards Planning Sheet
LVL Activate Timing PH LVL
AForeign cases of human-to-
human transmission is
reported, but not in domestic
Epid
em
ic
Pre
ventio
n P
hases
CPT
BImported infections and
confirmed cases at workplaceGCPC
C
C1 Confirmed cases of
Domestic human to human
transmission in workplace’s
country
Fe
w c
om
mu
nity
infe
ctio
ns
GCPC
BCPPlanning
Drills
C2 Confirmed cases of
Community infection in the
workplace’s country
C3 All employee at workplace
had a close contact with
infected patients
DHas 1 employee confirmed
case(Emergency response
commence) Com
munity
Spre
ad
GCPC
BCP
Activate
E
Some employees were
diagnosed as suspected cases
(shutdown suspected cases
office area/floors)
F
Medical center continues to
report that the employees was
diagnosed as COVID-19
(Workplace temporarily closed )
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Short-term Impacts of Covid-19 Epidemic
0% infection
Operation
Short-term Impacts:
• Mainland China equipment suppliers delay delivery of
equipment by 0.5 to 2 months
• Quarantine and lockdown measures have affected the
construction work and be be suspended around 2
months.
• Revenue and gross profit deferred
Response
• Protection by force majeure clause
• Government bailout subsidy policy (Taiwan, China.,
Macao, Malaysia, Thailand, USA, etc.)
• Clients subsidy and compensation
Employee care
Cared employees accumulated
up to Mar 20 : 175 person-times
Home
quarantine
Self-Health
Management20
115
22
18
已完成 持續中Completed Continuous
133
42
Operation Review – Year 2019
7
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Company Honors
• Winners of 2019
Taiwan Corporate
Sustainability
Awards (TCSA)
• Global Corporate
Sustainability
Awards (GCSA)
• Total 17 awards
Global Corporate
Sustainability Awards
• CSR Award -People
Development
Excellence
• ISO 9001 Plus Award
-QMS Knowledge
Management
Benchmark
• ISO 45001 Plus Award
- OHS Performance
Management
SGS
Award
CommonWealth
Magazine 2019
Excellence in CSR
Award Top100
• CTCI: 25th in Large
Enterprise
• ECOVE and CTCI
ASI: 1st and 7th in
Medium-sized
Enterprise
CSR
Award
• A member of DJSI
component for 5
consecutive years.
• Ranked 3rd in the
global engineering
industry
DJSI
Liwa project
Breaks Safety
Record of 70
million man-hours
without lost time
Injuries
Safety
Record
Three listed
companies of CTCI
Group evaluated as
Top 5% of the 5th
Corporate
Governance
Evaluation
Corporate
Governance
Evaluation
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Group Subsidiaries Grow Strongly
• The first Taiwan solar photovoltaic
facility investor to participate and obtain
Green-e® Energy certification
• Obtained the world's first BS 8001
circular economy standard verification
certificate
• Stable profit and steady rise in stock
prices
ECOVE EnvironmentCTCI Beijing CTCI Machinery
• The 1st pressure equipment and
steel structure manufacturing plant
in Taiwan with European and
American dual-gauge manufacturing
technology and service capabilities
(three certifications by TÜ V Rhein
Group in Germany)
• Offshore wind turbine business
opportunities
• First time to award ten billion-level
turnkey project independently.
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Group Integration Synergy
CTCI Americas
to be Regional
P&L Center
Regional P&L strategy in the
States. Target for US market
through local team and fuel up
energy to global expansion
CTCI Beijing
Acquired CTCI
Shanghai
Integration of
resources in China and
become local
engineering the leader
Wholly owned
Sub. in Vietnam
To have wholly-owned
subsidiary, CIMAS, as the
key for market development
in Vietnam where become
the major supplier in global
market.
CTCI ASI
Acquired CTCI REI
Strengthen the core business in
Intelligent Solutions,
In Smart Factory, Intelligent Traffic,
Smart Buildings
and Smart Parks
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Unit: NT$, Billion
11
New Contracts and Breakdown
✽ As of February 29, 2020, the new contract amount
reached NT$30.5 billion.
Taiwan 44%
China29%
Southeast Asia 12%
India 11%
US 2%
Middle East 2%
Hydrocarbon52%
Power 31%
Environmental 15%
Others 2%
64.5
85.6
44.4
101.7
46.3
0
20
40
60
80
100
120
2015 2016 2017 2018 2019
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Backlog and Breakdown
12
Taiwan 64%
Southeast Asia16%
China 10%
India 5%
US 3%
Middle East 2%
Environmental37%
Hydrocarbon33%
Power 12%
General Industry9%
Transportation 6%
Others 3%
Unit: NT$, Billion
191
203
166
208
195
0
50
100
150
200
250
2015 2016 2017 2018 2019
✽ As of February 29, 2020, the backlog amount
reached NT$219 billion.
Business Outlook
13
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Global Engineering Market Trends and Strategies - 1/2
The demand for gas-fired power plants and LNG terminals risen due to government
energy policy
Developing renewable energy policy promotes new business opportunities including
offshore wind, geothermal and energy storage.
Business opportunities for air pollution improvement projects for power plants,
decommissioning of incinerators, and water resources following the environmental
protection requirements.
Increased demand for wastewater, liquid waste and energy management for
semiconductor industry
New business from large-scale international enterprises database center in Taiwan
Taiwan
Global
Market
OutlookUS
Middle Eastern petrochemical giants(such as Sabic) intend to increase investment in
Ethane Crackers and related downstream plants in the United States.
Formosa Plastics Group continues to expand U.S. production capacity (investment
of US$10 billion US$)
Hon Hai Flying Eagle Project (investment of US$10 billion over next four years)
Taiwan downstream petrochemical companies are evaluating new investments in the
United States
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Global Engineering Market Trends and Strategies - 2/2
Southeast Asia
Focusing on the new southbound policy, combining resources from government and
Taiwanese firms to strengthen presence in Southeast Asia
Indonesian stated-owned oil company, Pertamina , initiates tender of expansion for
several refineries.(CTCI Indonesia subsidiary has been established)
CPC plans to relocate current refineries to Southeast Asia.
New LNG terminals, gas power plants and cogeneration plants in numerous countries
In response to release foreign investment restrictions in China, major international oil
companies (Exxon, BASF, Aramco, Sabic, etc.) and Taiwanese firms are preparing the
next wave of investment plans.
Coronavirus hits mainland economy, follow-up effects must be continuously traced.
Mainland China
Global
Market
Outlook
Middle East
Major petrochemical companies have carefully evaluated the cost-effectiveness of new
investment due to oil prices fallen. They are seeking for the feasibility in investing in the
United States or Asia countries due to lower cost compare to local construction
New launched plans of natural gas and solar power plants
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Global Clean Energy Trends
European Energy Policy(Target 2030)• Greenhouse gas emissions reduced at least 40% compared to 1990
• Green energy is not less than 32%
• Energy efficiency increase at least 32.5%
Taiwan Energy Policy(Target 2025)• Renewable energy power generation accounts for 20% of total power generation
• New solar capacity of 20 GW, offshore wind capacity at least 5.7GW
• No new coal-fired units and gas-fired instead.
Banks support Paris agreement• World Bank suspend investment and financing for fossil fuel
power plant after 2020
• HSBC and Standard Chartered Bank stopped their investments
and reduced financing to coal-fired power plants from 2018
• BNP, coal-fired power plant financing below 20% in 2018 and
target renewable energy investment to $ 18 billion
Giants lead the trend• Google reached 100% renewable energy target in 2017
• Apple announced 100% renewable sources in 2018 and
its goal of implementing 4 GW renewable energy to its
supply chains by 2020.
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Business Opportunities of Clean Energy
Sources: IEA, Last updated 29 Jan 2020
Installed power generation capacity by source in the Stated Policies Scenario, 2000-2040
Solar PV
Gas
Wind
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Worldwide Opportunities – 1/3
Projects won in 2019
(Around NT$14.5 Billion)
22 Solar Plants up
to 26MW(GDDC)
Opportunities in 2020
(Around NT$113 Billion)
Domestic Clean Energy Engineering Opportunities
Ho-Ping Power Station
HP-2 Coal-Fired Boilers
AQCS Upgrade Project
WPD Yun Lin phase II
Offshore Wind Farm
CIP Chang Fang & Xidao
Offshore Wind Farm
Offshore Wind Farm projects
are for wind turbine foundation
fabrication work. (Including
transition piece and pin pile
fabrication)
Other Stage II
Offshore Wind Farm to come
CPC 3rd LNG Receiving terminal and related
facilities(signed contract)
CSC Zhong Neng Offshore Wind
Farm (preferred bidder agreeent)
Orsted Great Chang Hua
Offshore Wind Farm (signed LOI)
Gas Fired Cogen plant Project
Gas Fired Turnkey Project
LNG Receiving terminal and related facilities
Coal-Fired Boilers AQCS Upgrade Project
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Worldwide Opportunities – 2/3
Potential Projects of NT$100Bn
Taiwan
• Petrochemical and Petroleum Product
Storage and Transportation Facilities
• Metro Line Extension Plan - System E&M
and Trackworks
• Metro MCT Line - System E&M and
Trackworks
• Refuse Incineration Revamping and
Operation
• Industrial Waste Incineration
• Municipal Waste Water Treatment Plant
(DBO)
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Worldwide Opportunities - 3/3
• India Petrochemical Plants in
Gujarat
• Thailand & Malaysia City
Metro and LRT System E&M
Projects
• Thailand & Malaysia IPP and
SPP Co-Generation Power
Plants
• Indonesia General Industry
Projects
• Qatar Gas Field Expansion
• Qatar Petrochemical Plant
• Qatar Waste Heat Recovery
System
• Louisiana Petrochemical
Complex
• Texas Petrochemical Plants
• Louisiana Carbon Black Plant
Air Pollution Control System
and Energy Center
• High-Tech Clean Room
Southeast Asia & India Middle East & North Africa
Potential Projects of NT$41Bn Potential Projects of NT$68Bn
Potential Projects of NT$450 Billion
US
Potential Projects of NT$128Bn
Financial Highlights – Year 2019
21
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Unit: NT$, Billion
Consolidated Revenue and Breakdown
22
Taiwan 34%
Southeast Asia 34%
US 11%
China 11%
Middle East 7%
India 3%
Hydrocarbon 49%
Power 18%
Environmental13%
General Industry 11%
Transportation 5%Others4%
67.170.5 71.6
64.1
58.2
0
10
20
30
40
50
60
70
80
2015 2016 2017 2018 2019
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Unit: NT$, Thousand
2019/12/31 2018/12/31 YOY
Sales Revenues 58,211,022 100% 64,069,542 100% -9.1%
Operating Costs (54,219,327) -93.1% (59,469,789) -92.8% -8.8%
Gross Profit 3,991,695 6.9% 4,599,753 7.2% -13.2%
Operating expenses (1,823,545) -3.1% (1,883,975) -2.9% -3.2%
Operating income 2,168,150 3.7% 2,715,778 4.2% -20.2%
Total non-operating
income and expenses62,165 0.1% 349,495 0.5% -82.2%
Profit before income
tax2,230,315 3.8% 3,065,273 4.8% -27.2%
Income tax expense (555,990) -1.0% (765,210) -1.2% -27.3%
Profit for the period 1,674,325 2.9% 2,300,063 3.6% -27.2%
Profit attributable to
Owners of the parent1,177,011 2.0% 1,827,537 2.9% -35.6%
Total basic earnings
per share1.54 2.40 -35.8%
23
2019 Consolidated Income Statement
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2019 Consolidated Balance Sheet
Unit: NT$, Thousand
2019/12/31 2018/12/31
Current assets* 49,174,593 71% 56,534,559 74%
Non-current assets 20,319,918 29% 19,962,774 26%
Total assets 69,494,511 100% 76,497,333 100%
Current liabilities 36,184,472 52% 51,420,086 67%
Nun-current liabilities 13,963,042 20% 4,451,088 6%
Total Liabilities 50,147,514 72% 55,871,174 73%
Equity attributable to owners of
The parent16,156,443 23% 17,458,729 23%
Non-controlling interest 3,190,554 5% 3,167,430 4%
Total equity 19,346,997 28% 20,626,159 27%
Total liabilities and equity 69,494,511 100% 76,497,333 100%
*Cash and cash equivalents: NT$ 20.8 billion
24
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Dividend Payout
2.91 3.22 3.32
2.22 2.51
2.69 2.92
3.68
2.40
1.54
2.42
2.76 2.84
1.99 2.23
2.40 2.60
3.23
2.26 2.00
83% 86% 85%90% 89% 89% 89% 88%
94%
130%
0%
20%
40%
60%
80%
100%
120%
140%
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
每股稅後盈餘 每股現金股利 現金股息發放率(%)
The unappropriated retained earnings is fully distributed, and the difference is covered by legal reserve.
EPS Dividend Cash Dividend yield(%)
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19.4
15.1
20.8
4.8
(4.4)
8.9
2017 2018 2019
Cash and cash equiv. Net cash flow from operating activities
Solid Financial Liquidity
Increase cash position,
strengthen financial structure
• Strong cash inflows from operating
activities
• New high in cash and cash
equivalents
• Support operating activities with
long-term stable funding
(Issuance of five-year unsecured
corporate bond of NT$6 billion)
Unit: NT$, Billion
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