FY2010 Results Presentation
UMS Holdings Limited
24 January 2011
FY2010 Results Presentation
FY2010 Financial Highlights� Net profit soars to record S$28.7m, reversing from
FY2009 net loss
� Highest-ever total annual dividend payout of 5.0 cents per share
� Revenue up 173% to S$129.0m from S$47.3m in FY2009 on robust sales of higher-value systems, increased on robust sales of higher-value systems, increased outsourcing orders
� Semicon segment is largest revenue contributor at S$119.2m (from S$39.9m); Singapore is largest market at S$69.8m (from S$5.6m)
FY2010 Financial Highlights� Positive net cash from operations to S$31.3m from
$13.9m
� Strong cash balances of S$20.3m as at 31 December 2010
� EPS of 8.25 cents and NAV of 52.05 cents as at 31 December 2010December 2010
Financial Overview
UMS Holdings Limited
Financial Overview
4Q2010 Financial Highlights� Net profit soars 692% to S$9.1m, outpacing revenue
growth of 99% to S$33.8m
December 31
4Q2010S$’000
4Q2009S$’000
Change%
Turnover 33,803 16,996 99
CEM 1,479 340 335
Semicon 32,324 16,656 94Semicon 32,324 16,656 94
Net Profit
Before Tax 8,754 671 1205
After Tax 9,058 1,143 692
Basic EPS
(cents)2.63 0.32 722
FY2010 Financial Highlights� Net profit of S$28.7m reverses loss of S$24.3m in
FY2009 on 173% increase in FY2010 revenue to S$129.0m
December 31
FY2010S$’000
FY2009S$’000
Change%
Turnover 129,033 47,267 173
CEM 9,852 7,372 34
Semicon 119,181 39,895 199
Net Profit
Before Tax 33,289 (25,336)* N.M
After Tax 28,745 (24,328)* N.M
Basic EPS
(cents)8.25 (6.87) N.M
* Includes non-cash Goodwill write-off of S$20m
Financial Snapshot� Proposes final dividend of 2.0 cents and special
dividend of 1.0 cent, in addition 2Q10 and 3Q10 interim dividends of 1.0 cent each
� EPS rises to 2.63 cents in 4Q2010 from 0.32 cent in 4Q2009
� Net asset value per share increased to 52.05 cents as at � Net asset value per share increased to 52.05 cents as at 31 December 2010 from 45.97 cents as at 31 December 2009
� Cash flow from operations up 44.8% from S$9.1m in 4Q2009 to S$13.1m in 4Q2010
Financial Snapshot� S$53m capex FY2007-2009; reduced forward capex
(Malaysia expansion)
� Part of strategy to improve competency during downturn and now reaping success in improved profit, cash flow
31 Dec 2010 31 Dec 2009
Return of Asset 13.48% NM
Return on Equity 16.06% NM
Current Ratio 2.88 2.2
Debt Equity Ratio 0.04 0.13
Turnover
80
100
120
140
S$ in Million
0
20
40
60
80
4Q'09 4Q'10 FY'09 FY'10
CEM
SEMICON
Net Profit After Tax
10
20
30
1.1
9.1
28.7
S$ in Millions
-30
-20
-10
0
4Q2009 4Q2010 FY2009 FY2010
1.1
-24.3*
Goodwill write-off
* Includes non-cash Goodwill write-off of S$20m
Geographical Segment
40000
50000
60000
70000
Singapore
S$ ‘000
0
10000
20000
30000
40000
4Q2009 4Q2010 FY2009 FY2010
Singapore
United States
Others
Business Segment
4%
96%
4th Quarter 2010S$33.8m
4th Quarter 2009S$17.0m
2%98%CEM
Semicon
Business Segment
8%
92%
FY2010S$129.0m
FY2009S$47.3m
16%
84%
CEM
Semicon
Shareholder Value
2.63
8.25
2
4
6
8
10
2009
S$ cents
5254
52.05
Net Asset Value per share
0.32
-6.87-8
-6
-4
-2
0
2
4th Qtr Full Yr
2009
2010
424446485052
31 Dec 09 31 Dec 10
45.97
Earnings per share
Share Price
Cash Flow from Operations
20
25
30
3531.3
2009
S$ in Millions
0
5
10
15
20
4Q FY
9.1
13.913.1 2009
2010
Strategy Update
UMS Holdings Limited
Strategy Update
Strategy #1 From Components…
… To Systems
Significance of Strategy #1� Major customer is relocating more value-added
manufacturing to Asia
� Two years of process development with customer, reaping fruits only in 2H2010
� Strategic shift to position UMS as preferred supplier; commitment from customer to load business volumescommitment from customer to load business volumes
� Strategy lifted Semicon division revenue by 199% in FY2010, accounted for 92.4% of revenue in FY2010
Cont. Significance of Strategy #1� 11-fold hike in sales of Singapore reflects the shift to
systems from components (which are shipped to different markets)
� Singapore accounts for 54.09% of Group revenue for FY2010
� Moving forward, will seek to manufacture more � Moving forward, will seek to manufacture more systems to achieve higher economies of scale, improve margins
Strategy #2 Outsourcing Trend� Major Western semicon players are increasing
outsourcing of manufacturing and assembly to Asia
� Semicon support companies with presence in South Korea, Singapore positioned to benefit
� Outsourcing trend can offset any impact from global semicon slowdown if it happens in 2011semicon slowdown if it happens in 2011
Significance of Strategy #2� UMS has identified Korea as a market to expand its
spare parts and components business
� SME component players in Korea lack relationships with Western players or technology for advanced components
� UMS is exploring M&A of SMEs in Korea to raise their � UMS is exploring M&A of SMEs in Korea to raise their technological capabilities and increase market share in Korea
� Proposed dual listing in Korea is in line with this strategy
Why Korea?� Korea produces over 50% of the world’s DRAM
and flash chips and 10% of other chip types
� Korean government plans to more than double production of semiconductor output from US$29.1bn back in 2006 to US$61.2bn by 2015
� Korean Exchange has higher stock liquidity @ 149% vs 46.1% in SGX as of last year
� Strong valuation for IT and hi-tech industries
� Can increase P/E valuation of UMS share
� KDR is fungible compared to TDR
Forecast and Prospects� 1H2011 will remain on track with 2H2010
� Outlook for core business activities remains intact in FY2011, supported by ongoing growth initiatives, i.e. systems, outsourcing
� Customer orders for systems are strong for Q1,Q2 2011
� Pursue ongoing internal operating and financial � Pursue ongoing internal operating and financial efficiencies
� Korean expansion is new strategic thrust while proposed dual listing will raise funds and attract new group of investors
� On lookout for potential acquisitions in Korea to expand component business
Investment Merits� Leveraged competence in components to work with
major customer during financial crisis to develop higher-value integrated systems, expanding product portfolio
� Efforts began paying off significantly from 2H2010; major reason for profit increasemajor reason for profit increase
� South Korea will be area of focus for semiconductor spare parts and components; Proposed Korean secondary listing in line with this strategy
Corporate Profile
UMS Holdings Limited
Corporate Profile
About UMSFounded in 1984 by Chief Executive Officer Andy Luong atSilicon Valley, USA.
UMS Holdings Limited…
…the strategic integration partner in manufacturing andengineering for front-end original semiconductor equipmentmanufacturers in developing modular and integrationmanufacturers in developing modular and integrationsystems.
…also engaged in critical manufacturing of high-precisioncomponents, and complex electromechanical assembly andfinal testing for oil field precision component manufacturersand other industries.
…headquartered in Singapore, with production facilities in Singapore, Malaysia as well as an office in California, USA.
UMS Strengths� Ready Capacity
Our Penang Hub and Singapore headquarters provide more than 700,000 sq. ft. of space to expand production
� Entrenched Position
Our edge is in the semiconductor equipment industry, where we have a ready set of strategic customers and qualifications we have a ready set of strategic customers and qualifications to perform more than 70 special processes for the semiconductor industry.
� Close proximity to key customer
Upon the entry of its key customer into Singapore on April 2010, UMS has seen local sales growth.
Cont. UMS Strengths� Greater integration to shorten supply chain and improve margins
By integrating and testing systems as a one-stop shop, UMS shortens customers’ supply chains and provides them with cost efficiencies and faster time-to-end market. This increases customer-supplier reliance just as customers are streamlining their supplier base and also extending outsourcing activities.
� Cost Competitiveness, being located in Penang, Malaysia� Cost Competitiveness, being located in Penang, Malaysia
Since 2009, we have improved cost efficiencies by shifting part of production to the Penang Hub. Malaysian operations will enjoy 10-year tax holiday from 2011, better labour, utilities and land costs.
� Recurring Business from Spares
� Estimate of spares business to be about 15 - 20% of total revenue
� Reduce volatility in earnings
UMS’ Industry Positioning
Raw Materials / ComponentsSuppliers
>Electronic
Components
>Sheet Metal
>Robots
>Gas Box
>Standard Parts
Integrated CircuitProducers / Foundries
>Samsung
>TSMC
>Intel
Front End / Equipment Manufacturers
>Applied Materials
>Novellus
>Lam Research
Packaging Houses
>STATS
Machined ComponentsSubassemblies
>UMS
Back EndEquipment Manufacturers
>K&S
>ASM
>STATS
ChipPAC
>Amkor
>ASE
Soft ware
Corporate Data�Listed on 25 May 2001
� Share price at listing: S$0.21
� IPO Placement Shares: 33,800,000
Major Shareholders % of shares held
Andy Luong 32
Quest World Investment Limited
9
Applied Materials, Inc
6
Basic Share Data (as at 21 Jan 11)
Share Price (as at 21 Jan 11) S$0.605
Average Daily Volume (in
January 2011)
19,740,867
No. of Issued shares excluding
Treasury Shares
343,754,000
Estimated Free Float 52.68%
Market Capitalisation S$207.97M
Our Facilities
Factory in Penang(500,000 sq. ft.)for volume production
Headquarters in Singapore(211,500 sq. ft.)for R&D, engineering and other high-value activities
Our ProductsPrecision machined components, modular and
integration system for semiconductor and oil and
gas equipment manufacturers.
Q & A
UMS Holdings Limited
Thank You
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