9m16 corporate update & financial results 1 june 2016 · corporate presentation 9m16 corporate...
TRANSCRIPT
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Corporate Presentation9M16 Corporate Update & Financial Results
1 June 2016
IR Adviser
(Company No.: 7867-P)
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CONTENTS
• Operations Review & Growth Plans
• 9M16 Financial Review
• Investment Merits
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OPERATIONS REVIEW
& GROWTH PLANS
4
Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
Total average monthly sales tonnage
7.5
9.1
9.5
9.7
9.6
10
.8
12
.3
FY13 FY14 FY15 9M15 9M16 FY16* FY17*
3.0
3.3
4.4
4.4
5.9
7.1
13
.2
FY13 FY14 FY15 9M15 9M16 FY16* FY17*
Operations Review: Manufacturing
Consumer packaging leading manufacturing segment growth… industrial
packaging expected to post stable growth
Operations Review
Average monthly sales tonnage
(MT ‘000)
Products:
• Base film• Functional films
Prod. Output: 60,000 MT p.a.Location: Rawang & Ipoh
PE FilmPE Film
Prod. Output: 6,000 MT p.a.Location: Rawang
BOPP
Film
BOPP
Film
Output: 6,000 MT p.a.Location: Shah Alam & Indonesia
AdhesiveAdhesive
Consumer PackagingConsumer Packaging
Prod. Output: 120,000 MT p.a.Location: Pulau Indah, Klang
Stretch
Film
Stretch
Film
Prod. Output: 18,000 MT p.a.Location: Melaka
PP
Strapping
Band
PP
Strapping
Band
Prod. Output: 10,000 MT p.a.Location: Vietnam
RaffiaRaffia
Industrial PackagingIndustrial Packaging
10.5 25.5
Industrial Packaging
Consumer Packaging
13.912.4 17.915.514.1
(-1.0%) yoy
+34.6% yoy
Output: 12,000 MT p.a.Location: Melaka
CPP FilmCPP Film
*Estimation based on full capacity utilisation
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
9M15 9M16
Industrial 582.7 618.6
Consumer 383.4 558.2
40% 47%
60% 53%
Segment Revenue (RM ‘mil)
Industrial
Consumer
Total 966.1 1,176.8
+6.2%
yoy
Operations Review: Manufacturing
Consumer packaging revenue expanding rapidly on larger volume… while
industrial packaging revenue also higher on stronger USD versus MYR
Operations Review
� 3Q16 manufacturing revenue rose 20.1% yoy to RM382.8m
� Industrial Packaging
� 3Q16 revenue increased 3.8% y-o-y to RM198.9 mil
(3Q15: RM191.6 mil) on higher ASP due to the stronger
USD/MYR
� Consumer Packaging
� 3Q16 revenue jumped 44.6% y-o-y to RM183.9 mil
(3Q15: RM127.1 mil), on new contribution of RM40.1
mil from SGW Ipoh and larger orders from existing
business
� Minimal contribution from CPP production as plant
just commenced in January 2016
� Exports made up 52.3% of consumer packaging
revenue (3Q15: 45.5%)
+45.6%
yoy
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
Growth Plans: Manufacturing
CPP and BOPP to see increased revenue contribution in 2016… PE expansions also
well on track to allow Group to expand market share
Growth Strategies
30,000MT
Per Annum
24,000 MT PE
6,000 MT BOPP
150,000MT
Per Annum
78,000 MT PE
60,000 MT BOPP
12,000 MT CPP
End-2016
completion
2014 2016
Consumer packaging expansion plan
Mid-2016
commencement
� Existing expansion plans progressing smoothly
� CPP
Revenue contribution expected to increase in the
second half of calendar year 2016 onwards
� BOPP
Commercial run on track to commence in mid-2016
� PE
Overall production output to increase from 60,000 MT
p.a. to 78,000 MT p.a. by end-2016
� Rawang plant
o CAPEX of RM21 mil; to increase capacity by
25% to 60,000 MT p.a.
� SGW Ipoh
o CAPEX of RM30 mil; to increase production
capacity by 50% to 18,000 MT p.a.
New CPP production line in Melaka New BOPP plant in Pulau Indah
Commenced
Jan 2016
5XGrowth
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
Operations Review: Property
Unbilled sales of RM652.6 mil to be recognized over the next 2-3 years
Operations Review
Ongoing GDVRM328 mil
Ongoing GDVRM210 mil
� 9M16 property revenue rose 20.9% to RM463.1 mil
(9M15: RM383.1 mil), on higher revenue recognition across
all ongoing projects
� 3Q16 property development revenue rose 18.0% yoy
to RM161.1 mil (3Q15: RM136.5 mil)
� Launched 7 new projects worth RM401.5 mil GDV in 9M16
� Comprising mainly affordable residential properties
� 3Q16 launches amounted to RM302.9 mil, comprising
affordable homes, shop lots, and apartments
� Unbilled sales amounted to RM652.6 mil as at 30 Apr 2016
to be recognized over the next 2 to 3 years (31 Jul 2015:
RM584.9 mil)
Note: Data presented as at 30 April 2016
Ongoing GDVRM213 mil
Ongoing GDVRM284 mil
Ongoing GDVRM407 mil
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9M16 FINANCIAL REVIEW
9
Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
24
.9
25
.6
29
.5
27
.1
26
.0
33
.9
36
.3
48
.8
30
.3
36
.1
43
.0
48
.9
60
.9
64
.6
61
.3
Quarterly PATMI (RM ‘mil)
All-round growth in both manufacturing and property segments… on track for
record financial performance in FY2016
9M16 Income Statement Summary
Financial Highlights2
41
.6
27
1.1
34
5.1
37
1.2
36
4.8
38
3.5
42
6.8
41
5.4
43
1.1
46
2.9
45
5.3
45
2.5
55
0.6
54
5.4
54
3.9
Quarterly Revenue (RM ‘mil)
31
.3
33
.2
38
.2
40
.2
32
.9
44
.4
48
.1
56
.0
40
.2
47
.3
56
.5
77
.0
80
.8
79
.9
75
.8
Quarterly PBT (RM ‘mil)
3Q16 3Q15 Change RM'mil 9M16 9M15 Change Remarks
543.9 455.3 19.5% Revenue 1,639.9 1,349.2 21.5%Manufacturing and property segments reporting double-digi t
growth
91.3 69.4 31.7% EBITDA 278.9 180.3 54.7%
16.8% 15.2% 1.6 pt EBITDA margin 17.0% 13.4% 3.6 pt
75.8 56.5 34.1% PBT 236.4 144.0 64.2%
13.9% 12.4% 1.5 pt PBT margin 14.4% 10.7% 3.7 pt
61.3 43.0 42.6% PATMI 186.7 109.3 70.9%
11.3% 9.4% 1.7 pt Net margin 11.4% 8.1% 3.3 pt
26.86 19.02 41.2% Basic EPS (sen) 82.39 48.69 69.2%
Manufacturing segment's larger sa les volume provided higher
economies of sca le and operating effi ciency; a l so benefitted
from favourable product mix and higher export sa les
2Q16 & 3Q16 benefi tting from reinvestment a l lowances
*4Q15 and FY15 PBT and PATMI includes RM12.6 million fair value gain on investment properties
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
71.8%
28.2%
9M16 Group Revenue: RM1,639.9 mil
52.9%
47.1%
9M16 Group EBITDA: RM278.9 mil
Manufacturing Property
71.6%
28.4%
9M15 Group Revenue: RM1,349.2 mil
Manufacturing and property segments contributing equally to Group EBITDA…
Revenue & EBITDA Segmentation
+20.9% yoy
+21.8% yoy
+14.0% yoy
+126.6% yoy
Financial Highlights
36.1%
63.9%
9M15 Group EBITDA: RM180.3 mil
Manufacturing Property
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix5
4
56
58
77
10
7
91
65
14
8
9.9% 9.6% 9.1% 8.4% 9.0%7.1% 6.7%
12.5%
2010 2011 2012 2013 2014 2015 9M15* 9M16
RM’milEBITDA & EBITDA Margin
EBITDA EBITDA Margin
483 635 763 771583 619
153284
430 515
383558
2012 2013 2014 2015 9M15 9M16
RM’mil
Manufacturing Revenue (by Segment)
Industrial Packaging Consumer Packaging
Financial Review: Manufacturing
Benefitting from growing consumer packaging exports and expanded product
range… also seeing better operating efficiency
Financial Highlights5
45
58
5
63
7
91
9
1,1
92
1,2
86
96
6
1,1
77
12.2%11.3% 11.0% 11.1%
9.8%11.0%
9.9%
14.9%
2010 2011 2012 2013 2014 2015 9M15 9M16
RM’mil
Manufacturing Revenue & Gross Margin
Revenue Gross Margin
9M16 EBITDA grew
126.6% in line with higher
topline and better
product mix
9M16 EBITDA grew
126.6% in line with higher
topline and better
product mix
9M16 manufacturing
revenue grew 21.8%,
largely driven by
consumer packaging;
gross margins improved
on better efficiency,
favourable product mix,
and higher export sales
9M16 manufacturing
revenue grew 21.8%,
largely driven by
consumer packaging;
gross margins improved
on better efficiency,
favourable product mix,
and higher export sales
Industrial packaging revenue increased 6.2%
yoy due to higher ASP on stronger USD/MYR
Industrial packaging revenue increased 6.2%
yoy due to higher ASP on stronger USD/MYR
Consumer packaging revenue increased 45.6% with
expanded PE film capacity and clientele
Consumer packaging revenue increased 45.6% with
expanded PE film capacity and clientele
*9M15 EBITDA includes RM18.0 mil foreign exchangetranslation differences
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
15
0
21
9
24
5
31
0
39
8
51
6
38
3
46
3
37.8%42.6% 44.2% 47.0% 44.1% 42.3% 41.0% 39.9%
2010 2011 2012 2013 2014 2015 9M15 9M16
RM’milRevenue & Gross Margin
Revenue Gross Margin
34
63
73
10
0
12
2
16
5
11
5
13
1
22.8%
28.8% 29.8%32.3% 30.7% 32.0% 30.1% 28.4%
2010 2011 2012 2013 2014 2015* 9M15 9M16
RM’milEBITDA & EBITDA Margin
EBITDA EBITDA Margin
Financial Review: Property Development
Financial Highlights
Demand for affordable properties in Johor firmly intact…
Seeing higher progress billings and favourable demand for
new launches in Kulai, Senai, and Pasir Gudang
Seeing higher progress billings and favourable demand for
new launches in Kulai, Senai, and Pasir Gudang
*Excluding RM12.6 million fair value gain from investment properties
Higher profits consistent with revenue growth; EBITDA
margins maintained in the 28%-30% range on affordable-
skewed product mix
Higher profits consistent with revenue growth; EBITDA
margins maintained in the 28%-30% range on affordable-
skewed product mix
+20.9%
+14.0%
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
As at As at
30.4.2016 31.7.2015
Property, Plant & Equipment 919,626 642,791 In l ine with cons umer packaging expans ion
Inves tment Property & Other Investments 25,165 24,082
Land Held & Property Development Cos ts 624,136 405,115 Due to acquis i tion of land in Pula i , Johor
Inves tment in Jointly Control led Entity &
Associated Company48,260 41,524
Inventories 110,145 111,953
Trade & Other Receivables 385,817 321,698 In l ine with increa se in revenue
Cash & Bank Bala nces 74,222 90,626
Deferred Tax Ass ets & Ta x Recoverable 5,975 2,086 Due to reinvesment a l lowance from SGW Ipoh
TOTAL ASSETS 2,193,346 1,639,875
Trade & Other Payables 367,477 308,259 In l ine with enla rged operations
Borrowings (ST + LT) 531,203 225,431To fund working capi ta l requirements , machinery purchases for
consumer packaging expans ion, and landbanking
Tax & Deferred Tax 60,537 62,588
Shareholders ’ Equi ty 1,146,184 941,978 Due to higher reta ined ea rnings
Minori ty Interes t 65,830 62,784
Net Tangible Assets / Share (RM) 1 4.98 4.17
Net Gearing 0.40x 0.14xIn l ine with higher borrowings to fund working capi ta l requirements ,
machinery purchases , and landbanking
Balance Sheet (RM ‘000) Remarks
Net gearing still manageable despite expansion plans and land acquisition... strong
cashflow set to reduce net gearing going forward
1 Based on share capital of 230.0 mil shares
Financial Highlights
Balance Sheet (Highlights)
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
Corporate Exercise
1-for-1 bonus issue slated for completion in third quarter of 2016…
Share Capital
(RM)
No. of shares @
RM0.50 par
Current 115,000,000 230,000,000
1:1 Bonus Issue 115,000,000 230,000,000
After Corporate
Exercise
230,000,000 460,000,000
Changes in Share Capital� On 1 June 2016, shareholders approved a 1-for-1 bonus
issue of up to 230,000,000 million new ordinary shares to
be listed on the Main Market of Bursa Malaysia
� The bonus issue is targeted for completion in the third
quarter of 2016
� Enlarged number of shares would improve the liquidity
of Scientex shares; while the enlarged share capital
better reflects the current scale of operations
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INVESTMENT MERITS
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix
Investment Merits
A high-growth proposition all-round... attractive proxy to the burgeoning packaging sector
and Southern Malaysia’s affordable property market
Investment Merits
MANUFACTURING
• Top 3 stretch film producer in the world
• Consumer packaging segment facilitates
entry into burgeoning F&B and FMCG sectors
• Further integration and expansion initiatives
position Group to cater to larger regional
clientele and enhance competitiveness
PROPERTY DEVELOPMENT
• Reputable developer in the southern states
of Johor and Melaka
• Current projects of RM1.4 bil
• Pipeline GDV of RM6.0 bil on existing
landbank to sustain another 10 years
• Future projects displaying higher GDV/acre
• Strong fundamentals with strong upside to profit and margin expansion
• Dividend policy of minimum 30% payout
� 31.4% dividend payout in FY2015
• Valuations to be compressed with foreseeable earnings boost
• Trading at trailing 12-month PE of 12.7x and EV/EBITDA of 9.6x (as at 27 May 2016)
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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix2
.7
2.7
2.7
4.5
8.1
14
.2
4.2
17
.2
10
.8
19
.4
25
.8
30
.1
35
.4
47
.1
49
.7
27
.6
22
.1
49.2% 48.0%
74.0%
26.6%
36.6%
49.8%
28.7%36.1%
28.8%32.1% 33.4% 35.9%
52.1%
31.7%31.4%
14.8%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
RM’mil Dividend History
Net Dividend Payout Special Dividend Payout Ratio
Group has dividend policy of minimum 30% net profit payout…
Dividend History
� FY2015 Dividends (Total Dividend of 22 sen) :
• Paid interim dividend of 9 sen per share on 7 August 2015
• Paid final dividend of 13 sen per share on 25 January 2016
� FY2016 Dividend :
• Declared interim dividend of 12 sen per share
(Ex Date: 14 July 2016, Payment Date: 5 August 2016)
Dividend Policy:
Minimum 30% of Net Profit(effective FY2011)
Investment Merits
FY15 Dividend Payout
RM49.7Million
FY15 Dividend Payout
RM49.7Million
Share Dividend
5.9
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Thank You
Contacts:
Ms. Jocelyn Ng [email protected] T: 03-5519 1325
Ms. Julia Pong [email protected] T: 03-2711 1391