Results Briefing (HOLDINGS) LTD.micromechanics.listedcompany.com/newsroom/20110829... · 4Q11...

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FY2011 Results Briefing 29 August 2011 MICRO-MECHANICS (HOLDINGS) LTD.

Transcript of Results Briefing (HOLDINGS) LTD.micromechanics.listedcompany.com/newsroom/20110829... · 4Q11...

Page 1: Results Briefing (HOLDINGS) LTD.micromechanics.listedcompany.com/newsroom/20110829... · 4Q11 Revenue 5.7% to S$11.1 million Net Profit 4.0% to S$1.4 million Record revenue performance

FY2011 Results Briefing

29 August 2011

MICRO-MECHANICS(HOLDINGS) LTD.

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BUSINESS HIGHLIGHTS Mr Chris Borch, CEO

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REVIEW OF FY2011

FINANCIAL PERFORMANCE

FY2011 Revenue 10.6% to S$45.3 million

Net Profit 43.0% to S$6.8 million

4Q11 Revenue 5.7% to S$11.1 million

Net Profit 4.0% to S$1.4 million

Record revenue performance - Higher sales from both business divisions

Balance Sheet S$7.5 million in cash and no borrowings

Affected by decline in the USD - 48% of sales denominated in the USD

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REVIEW OF FY2011

BUSINESS PROGRESS

Precision tools and consumable products used in the assembly and testing of semiconductors

• Completed outfitting of a larger factory in Suzhou, China• New micro-manufacturing processes• Singapore factory turned into a Product Development

Centre with higher level of automated work centres

Semiconductor Tooling

• Grew our CMA business• Realising business diversification and growth beyond

semiconductor tooling business• Upgrading and improving manufacturing capability• On a more stable footing

Custom Machining and Assembly (CMA)

Complex machined components for equipment manufacturers in laser, medical, aerospace, and wafer-fabrication industries

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SHAREHOLDER VALUE

(IPO price = 18.4 cents after adjusting for 1-for-4 bonus issue in FY2006)

cents per share

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

Special dividendProposed final dividendInterim dividend

2.4

0.81.2

3.5

5.0 5.0

2.0

3.0 3.0

TOTAL DIVIDENDS OF 25.9 CENTS PER SHARE SINCE LISTING

FY2011 dividends –3 cents per share or S$4.2M in total

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CORPORATE HIGHLIGHTS

Source: Asiamoney publication, Dec 2010/Jan 2011 Issue

CORPORATE GOVERNANCE AND TRANSPARENCY

“Best Investor Relations Award - Silver” (less than $300 million market cap)

Singapore Corporate Awards 2011

Ranked 20th out of 657 listed companiesSource: The Business Times, 12 July 2011

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FY2011 FINANCIAL REVIEW

Mr Chow Kam Wing, CFO

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Full year revenue growth supported by both core businesses.4Q11 revenue affected by depreciation of USD against the SGD.

GROUP REVENUE

8.9 9.5 11.7 9.3 11.7

8.8 9.7 9.09.8

11.48.1

9.2 5.4 10.111.18.9

9.87.0

11.811.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

FY2007 FY2008 FY2009 FY2010 FY2011

4Q3Q2Q1Q

(S$ mil)

34.738.2

33.1

41.0 +10.6%

45.3

FY: Financial year ending 30 June

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8.7 8.2 7.7 9.6

9.0 6.4 8.09.5

8.2

3.98.0

9.0

8.2

5.8

9.28.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

FY2008 FY2009 FY2010 FY2011

4Q3Q2Q1Q

(S$ mil)

34.1

24.3

32.9

TOOLING BUSINESS

+12.5%

Revenue growth supported by improved orders from customers in semiconductor industry.

37.0

FY: Financial year ending 30 June

Affected by weaker USD and slower sales to major customer in Thailand which has since normalised

Exceptionally strong quarter

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0.9

3.41.6 2.00.7

2.6

1.82.0

1.0

1.6

2.12.1

1.5

1.2

2.6 2.2

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

FY2008 FY2009 FY2010 FY2011

4Q3Q2Q1Q

(S$ mil)

4.1

8.88.1

CMA BUSINESS

+3.1%

Sales from USA factory increased to US$6.5M, compared to US$4.5M in FY2010. Overall sales growth was affected by currency translation and closure of Europe office.

8.3

FY: Financial year ending 30 June

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(S$ mil)

REVENUE BY GEOGRAPHICAL MARKET

FY11 FY10 ChangeSingapore 1.9 1.7 9.1%Malaysia 9.3 8.1 14.2%Philippines 3.1 3.4 (8.3%)Thailand 3.6 2.8 30.4%China 7.5 7.0 6.7%

USA 10.3 8.1 26.9%Sales grew a higher 38.1% in USD terms

Europe 1.7 2.8 (37.5%) Ceased CMA sales

Japan 1.8 1.9 (3.3%)Taiwan 3.9 3.4 14.9%Rest of world 2.2 1.8 23.4%

Total 45.3 41.0 10.6%

Singapore, 4%

Malaysia, 20%Philippines,

7%

Thailand, 8%

China, 17%

USA, 23% Europe, 4%

Japan, 4%

Taiwan, 8%

Rest of world, 5%

Steady revenue growth across most of our geographical markets. USA market growth was driven mainly by our CMA business.

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FY: Financial year ending 30 June

GROSS PROFIT MARGIN

48.3%

36.2%

22.5%

39.1%

50.9%44.0%

47.2% 48.0% 48.9% 46.4% 45.4% 42.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

Full year GPM of 45.9% in FY2011 compared to 47.5% in FY2010. Impact of higher salary costs from increase in production headcount; higher depreciation; and weaker USD.

Target GPM : 50%

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FY: Financial year ending 30 June

GROSS PROFIT MARGIN

59.7% 54.8%41.5%

55.1% 60.3% 58.8% 58.6% 59.3% 56.8% 54.3% 53.1% 50.1%21.2%

-9.4%

-26.2%-38.3%

4.9%

-23.4%

3.7% 8.6% 11.4% 8.0% 12.8% 12.6%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11Semiconductor Tooling CMA

Tooling GPM in FY2011 was 53.7%, above target of 50%, and down from 59.2% in FY2010 due to weaker USD and usual price pressure. CMA GPM in FY2011 improved to 11.3%.

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2.3 2.5 2.1 1.4 2.0

2.1 2.6

0.2 0.71.8

1.72.1

-1.4

1.3

1.6

2.21.7

-0.4

1.4

1.4

-4

-2

0

2

4

6

8

10

FY2007 FY2008 FY2009 FY2010 FY2011

4Q3Q2Q1Q

(S$ mil)

8.38.9

0.5

GROUP NET PROFIT

4.8 +43.0%

1Q2Q

3Q4Q

28.6% 29.5%34.1% 31.2%

26.8%

FY2007 FY2008 FY2009 FY2010 FY2011

OPERATING EXPENSES / SALES

FY2011 net profit gained 43% to S$6.8 million.

Target ratio : 20%

6.8

FY: Financial year ending 30 June

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BALANCE SHEET (30 JUN 11)

30 Jun 2011 30 Jun 2010

CASH Operating cash flowCash and cash equivalents% of total assets

S$8.7M (FY11)S$7.5m17.1%

S$8.7M (FY10)S$10.0m

23.1%

GEARING Total borrowings Nil Nil

TRADE RECEIVABLES

(Outstanding > 90days) / Total trade receivablesBad debt expense

1.1%Nil (FY11)

1.7%S$0.3k (FY10)

INVENTORY Inventory / Sales Inventory write-off

4.6%S$61k (FY11)

5.1%S$65k (FY10)

EQUITY Shareholders’ equityNAV per share

S$36.8m26.50 cents

S$35.4m25.50 cents

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CAPITAL INVESTMENT PLANCapital expenditure to increase production capacity, enhance capability and upgrade information systems

FY2011 – S$6.7M (Expect to maintain same level of capex in FY2012, i.e.~S$6M, excluding S$3M new investment in US plant)FY2011 S$4.9M � Purchase of new machinery to enhance capacity and

capability of factories in Singapore, Malaysia, Thailand and the USA; and other equipment

S$0.8M � Outfitting new factory in SuzhouS$1.0M � Upgrading of information systems

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OUTLOOKMr Chris Borch, CEO

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SEMICONDUCTOR INDUSTRY

-40%-30%-20%-10%0%10%20%30%40%50%60%70%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Jan-09

Feb-0

9Ma

r-09

Apr-0

9Ma

y-09

Jun-09

Jul-09

Aug-0

9Sep-0

9Oc

t-09

Nov-0

9De

c-09

Jan-10

Feb-1

0Ma

r-10

Apr-1

0Ma

y-10

Jun-10

Jul-10

Aug-1

0Sep-1

0Oc

t-10

Nov-1

0De

c-10

Jan-11

Feb-1

1Ma

r-11

Apr-1

1Ma

y-11

Jun-11

Global chip sales (US billion)

Industry watchers expecting chip industry to grow around 5% in 2011

Source: Semiconductor Industry Association (SIA)

Y-O-Y Sales Growth

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CLEAR LONG TERM PLANS

UNSTABLE ENVIRONMENT WITH LOW VISIBILITY...

1.Doing More with the Same• Control headcount• Invest in equipment and IT that enhances efficiency• Work to raise Group GP margin to 50%, and reduce overheads to 20% of sales

…BUT OUR BUSINESS DIRECTION REMAINS CLEAR

2 d i v e r s e b u s i n e s s e s6 factories inAsia and theUSA600 people worldwide

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CLEAR LONG TERM PLANS

UNSTABLE ENVIRONMENT, BUT OUR BUSINESS DIRECTION REMAINS CLEAR

2. The Right Things, The Right Way

3. Build a Compelling Offering for CMA customers

• Larger factory in China to enable expansion as semiconductor manufacturing concentrates in China

• Build on CMA foundation to achieve diversification and growth for the Group• Maintain strong balance sheet

• Investing S$3M in fully automated system to machine complex parts quicklyand enable production flexibility

• Work on knowledge transfer to our plants in Asia with the goal of buildingCMA capability in both the USA and Asia

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This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. Investors can identifysome of these statements by forward-looking items such as ‘expect’, ‘believe’, ‘plan’, ‘intend’, ‘estimate’, ‘anticipate’, ‘may’, ‘will’, ‘would’, and‘could’ or similar words. However, you should note that these words are not the exclusive means of identifying forward-looking statements.These forward-looking statements are based on current expectations, projections and assumptions about future events. Although Micro-Mechanics (Holdings) Ltd. believes that these expectations, projections, and assumptions are reasonable, these forward-looking statements aresubject to the risks (whether known or unknown), uncertainties and assumptions about Micro-Mechanics (Holdings) Ltd. and its businessoperations.

Some of the key factors that could cause such differences are, among others, the following:• changes in the political, social and economic conditions and regulatory environment in the jurisdictions where we conduct business or expectto conduct business;• the risk that we may be unable to realise our anticipated growth strategies and expected internal growth;• changes in and new developments in technologies and trends;• changes in currency exchange rates;• changes in customer preferences and needs;• changes in competitive conditions in the semiconductor industry and our ability to compete under these conditions;• changes in pricing for our products; and• changes in our future capital needs and the availability of financing and capital to fund these needs.

Given these risks, uncertainties and assumptions, the forward-looking events referred to in this presentation may not occur and actual resultsmay differ materially from those expressly or impliedly anticipated in these forward-looking statements. Investors are advised not to placeundue reliance on these forward-looking statements.

Investors should assume that the information in this presentation is accurate only as of the date it is issued. Micro-Mechanics (Holdings) Ltd.’sbusiness, financial conditions, results of operations and prospects may have changed since that day. Micro-Mechanics (Holdings) Ltd. has noobligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except asrequired by law.

SAFE HARBOUR FOR FORWARD-LOOKING STATEMENTS

Page 22: Results Briefing (HOLDINGS) LTD.micromechanics.listedcompany.com/newsroom/20110829... · 4Q11 Revenue 5.7% to S$11.1 million Net Profit 4.0% to S$1.4 million Record revenue performance

Micro-Mechanics31 Kaki Bukit PlaceEunos TechparkSingapore 416209www.micro-mechanics.com

THANK YOUInvestor Relations ContactOctant ConsultingTel (65) 6220 [email protected] / [email protected]