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AZTECH SYSTEMS LTDAZTECH SYSTEMS LTDFY2004 FINANCIAL RESULTSFY2004 FINANCIAL RESULTS
Analysts and Media Briefing17 February 2005
Contents of Presentation
• FY2004 Financial Performance
• Corporate Update
• Factory Expansion Plan
• Outlook for Year 2005
• Growth Plans & Strategies
• Q & A
Financial ResultsFinancial Results
Ø Turnover
Ø EBITA
Ø Profit from Operations
Ø Profit Before Tax
Ø Net Profit After Tax
• Depreciation & Amortization• Interest expenses
• Tax
$152.14 m
$ 13.68 m
$ 8.36 m
$ 7.21 m
$ 6.84 m
FY2004 FY2003 Change
$118.04 m
$ 9.87 m
$ 3.17 m
$ 2.91 m
$ 2.83 m
$5.85 m$0.62 m
$6.22 m$0.74 m
164%
$0.37 m $0.08 m
29%
39%
148%
142%
TurnoverTurnover
152,135
118,042
161,113151,756
-
50,000
100,000
150,000
200,000
YR 2001 YR 2002 YR 2003 YR 2004
S$'000
+29%
Net Profit / LossNet Profit / Loss
2,828
6,841
(17,924)(18,830)(20,000)
(15,000)
(10,000)
(5,000)
-
5,000
10,000
YR 2001 YR 2002 YR 2003 YR 2004
S$'000
+142%
Turnover by Geographical SegmentTurnover by Geographical Segment
FY2004Others
3%Asia Pacific
23%
Europe40%
North andSouth
Americas34%
FY2003Others1%Asia Pacific
25%
North andSouth
Americas17%
Europe57%
Balance SheetBalance SheetFY2004 FY2003 Change
Ø Total Current Assets
Ø Non-Current Assets
Ø Total Current Liabilities
Ø Non Current Liabilities
$ 67.25 m
$ 40.79 m
$ 44.58 m
$ 8.28 m
$ 47.36 m
$ 39.84 m
$ 30.00 m
Ø Total Assets $108.04 m $ 87.20 m 24%
42%
2%
49%
Ø Capital and Reserves
Ø Total Liabilities & equity
$ 55.18 m
$108.04 m
$ 8.81 m
$ 48.39 m
$ 87.20 m
(6)%
14%
24%
Ø Working Capital $ 22.67 m $ 17.35 m 31%
Key Financial IndicatorsKey Financial IndicatorsProfitability FY2004 FY2003
Gross Profit Margin 16.4% 15.6%Net Profit Margin 4.5% 2.4%
Rate of return (%)ROE 12.4% 5.8%ROA 6.3% 3.2%
EPS (diluted shares) 1.70 cents 0.71 centCapital Expenditure
Property, plant and equipment $4.97 m $3.76 mR & D $2.12 m $2.96 m
Balance SheetDebtors $29.69 m $15.31 mDebtors turnover 71 days 47 days Creditors $30.12 m $24.28 mCreditors turnover 86 days 89 daysInventory $25.47 m $20.76 mInventory turnover 73 days 76 days
Liquidity ratioCurrent ratio 1.5 1.6 Quick ratio 0.9 0.9
5 Sales Offices :5 Sales Offices :
Our Offices & FacilitiesOur Offices & Facilities
* Singapore* Hong Kong* USA, Fremont, California* Germany, Frankfurt* Malaysia, Petaling Jaya
2 factories in Dong Guan :2 factories in Dong Guan :* Aztech DG1 (Set-up in 1994) – 8,560 sq m* Aztech DG2 (Set-up in 2001) – 13,042 sq m
4 R&D 4 R&D CentresCentres ::* Singapore
* Shenzhen, China
Total employees = 1,700 people
* Hong Kong
* Dong Guan, China
Key ProductsKey Products
Data CommunicationData Communication* 56 kbps Analog Modem
* ADSL2 + Modem
* Wireless 802.11g devices
* HomePlug
Voice CommunicationVoice Communication
* DECT Phone
* Walkie Talkie
ADSL Ethernet Modem
Voice over IP
HomePlug
Data Communication Products Data Communication Products
Wireless ADSL Router
56K External USB Modem
Voice Communication ProductsVoice Communication Products
SMS Colour DECT
PMR 5000 With Desktop Charger PMR 3000 R
Entry level DECT
ADSL Router GSM/GPRS Module
Bluetooth Carkit
Powerline Modem
Video Conferencing
CPU Test Board
Contract ManufacturingContract Manufacturing
Shiro Shiro Lifestyle ProductsLifestyle Products
MP3 Digital Audio Players Telecom Voice Products
Digital Camera Products Computer Peripherals
Sales ChannelSales Channel
• OEM / ODM Customers
• Contract Manufacturing
* Shiro (100% Aztech Subsidiary)- Sales of Aztech Brand Products
- Shiro Lifestyle Products
• Retail Distribution
- DG1 is located at Dong Guan
Shi, Chang Ping, Jiu Jiang Shui
- Occupied land area of about
6,900 sq metres
Aztech Dong Guan (China) Aztech Dong Guan (China) –– Plant 1 & 2 Plant 1 & 2
- DG2 is located at Dong Guan
Shi, Chang Ping, Shang Keung
- Total built up area: 13,042 sq m
TL9000 + ISO 9001 – Manufacturing facilities in Dong Guan (China)
• 21 x High Speed SMT lines
• 2 x X-Ray & SRT BGA rework station
• 5 x Manual Insertion Lines
• 5 x Teradyne 1850/1820 ICT testers
• 2 x HP3070 Series II ICT testers
• Burn-In Facilities (static)
• 8 x Test Lines w/X900, Hi-Pot
• 5 x DECT Testing Lines
• 6 x Assy & Packing Lines
Manufacturing EquipmentManufacturing Equipment
Chip On Board (COB)Chip On Board (COB)
COB Wire Bonder
þ AC servo control Bond head
Z travel resolution 1um(0.039mil), high speed 14ms for 1mm Z travel
þ High throughput: 6 wires/sec for 80mil wire length
þ Fine Pitch cap: pad pitch 80um/3.15mil
pad size:70um/2.8 mil@1mil wire diameter
þ Large substrate: 4”x6”, multiple die device with max of 100 dice.
Plastics Mold FabricationPlastics Mold Fabrication
• CNC machines x 2 (Maximart, Rapid 032 V-8D)• EDM x 6 (Acro II, P/ZNC S-430)• Radial Miller x 15 (Manford)• Horizontal millers x 2• Wire cutters x 4 (Gold Sun)• Drill Press x 2 (TF 750S)• Lathe x 1 (GapBed C6232A)• Grinders x 4, Saw x 1
Plastics Injection FactoryPlastics Injection Factory
• 24 Plastics Injection Machines (80T-250T)
• Complete services
* Plastics parts injection molding
* Spray painting
* Silkscreen
* EMC coating
• Secondary services
* Industrial design
* Mechanical design
* Tooling production management
10 New SMT Equipment Investment10 New SMT Equipment Investment
• 10 units of DEK ELA auto-paste printers
• 25 units of UIC Advantis AC30L
• 5 units of UIC Advantis AC72
• 10 units of Vitronic-Soltec XPM2 Reflow ovens
Universal Instruments Advantis Platforms
Market SituationMarket Situation
•• Components Inventory starts to ease off recently Components Inventory starts to ease off recently
* Expects rapid growth in emerging countries
•• General economy remains stable and healthyGeneral economy remains stable and healthy
* Matured ADSL countries moving into wireless, Video on Demand and VOIP
•• PPC market expects to grow 10% in FY 05 to 208 million unitsC market expects to grow 10% in FY 05 to 208 million units
•• Broadband ADSL lines expect to hit 100 million in early 2005 :Broadband ADSL lines expect to hit 100 million in early 2005 :
* More users will upgrade their analog cordless phones to DECT
* Growing demand for SMS Colour DECT Phones
•• DectDect Phone market expects to grow: Phone market expects to grow:
* Market size expects to be 40 million units in FY 2005
New Products In FY 2005New Products In FY 2005Data CommunicationData Communication
* ADSL2 + with VoIP & 802.11g wireless Residential Gateway* ADSL2 + with 85Mbps HomePlug* 85Mbps and 200Mbps Audio/Video HomePlug* IP Set Top Box* Entering into Wireless Broadband Internet Access
(3G Modem, Wi-max)
* VOIP ATA AdaptorVoice CommunicationVoice Communication
* VOIP DECT Phone
Moving IntoMoving IntoConsumer Electronics:Consumer Electronics:
* MP3 Player* Digital Weather Station* Baby Monitor
* IP Phone
New Products in FY 2005New Products in FY 2005
Flash MP3 Hard Disk Jukebox VoIP DECT
ADSL + Homeplug Router
IP Set Top Box ADSL + VoIP + Wireless
Baby Monitor Personal Mobile Radio
Digital Weather Station
Growth Strategies in FY 2005
* Aztech DECT Phone and Walkie Talkie available in Qtr 4 2004
* Expect sales of Shiro Lifestyle Products to increase after 1 year in the market
FY 2005 : Diversify into more products and gain market share
- Expect Voice Communication to contribute higher sales in FY05* Gain more sales in Data Communication from emerging markets such as Latin
America and Eastern Europe * Expand our Contract Manufacturing customer base
FY2004
ContractManufacturing
33%
Shiro3%
VoiceCommunication
2%
DataCommunication
62%
FY2005 Forecast
ContractManufacturing
20%
Shiro5%Voice
Communication34%
DataCommunication
41%
Challenges in FY 2005
• Increase in oil price
• Power shortage in China
• Price competition from local Chinese companies
• Strengthening of RMB
What are the challenges that we face in 2005?
• Rising manpower costs
• Shortage of manpower