global invacomgroup limited

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Presentation Materials

Global Invacom Group Limited(formerly known as Radiance Group Limited)

August 2012

1

Business Description Evolution of Global Invacom Group Limited

� Global Invacom Group Limited is a fully integrated supplier of high‐tech

satellite communications peripheral equipment for satellite operators

and EMS provider to OEMs/ODMs

� One of seven companies worldwide involved in R&D, design and supply

of SatCom products to large scale satellite broadcasters (e.g. BSkyB and

DISH Networks)

� 31 patent applications filed to date (of which 9 are granted)

� Major markets are in the US and Europe with manufacturing base in

China

� Able to capitalize on strong growth opportunities in the SatCom industry

Corporate Structure Key Financial Information (Proforma)

Financial Performance (S$ mn) FY2009 FY2010 FY2011

Revenue 150 118 138

Profit before Income Tax 13 2* 16

EPS (Cents) 4.6 (0.6)* 6.3

Snapshot – Global Invacom Group Limited

Global Invacom Group Limited

Global Invacom Radiance

Financial Position (S$ mn) As at 31 Dec 2011

Total Assets 103

Total Liabilities [ net debt] 47

1985

Global

Communications

was established

Leading

manufacturer of

satellite

equipment

////////2000

Invacom was

founded

Specialist

manufacturer

of volume

VSAT and LNB

equipment

2008

Global

Communications

and Invacom

merged to form

Global Invacom

2012

Reverse

takeover of

Radiance by

Global Invacom

to create Global

Invacom Group

Limited

A specialist EMS provider to OEMs

or ODMs of products in the

satellite communications,

TV/cable peripherals, and

consumer electronics industries

A world‐leading designer,

manufacturer and supplier of LNB,

switches, VSAT, fibre, wireless HD

transmission and dishes

A vertically integrated, high-tech enterprise with design, R&D

and manufacturing expertise across various industries

* PBIT and EPS are stated net of a one‐off S$11.7m cost associated with past services received. Without

this one‐off cost, PBIT would have been S$13.8m and EPS would have been 5.6 cents

2

Satellite Communications – Our Core Business

Broadcasting Satellite

Transmission

Footprint

Transmission

from Satellite

to dish and

from dish to

satellite

Transmission

from Satellite

to dish only

Satellite BroadbandSatellite TV

Broadcasting Satellite

www.globalinvacom.com Commercial & Confidential

DBS triple play solution to the Residence

VSAT & DBS Dish

Set Top Box

Telephony H/W & S/W

IP Satellite ModemTelevision

Internet

Telephone


Fibre DBS isolated Solution

Stacker

Wavelength

Division

Multiplexer

Combiner

Ethernet SwitchIP Satellite Modem

GTU

GTU

GTU

GTU

GTUGTU

Pon and Passive Splitter

Fibre Headend

VSAT Headend

ADSL

The Vision: Wireless Enabled The Vision: Wireless Enabled The Vision: Wireless Enabled The Vision: Wireless Enabled

HomeHomeHomeHome


HD content throughout the home over 802.11n Wi-Fi

Wireless Satellite Wireless Satellite Wireless Satellite Wireless Satellite

around the homearound the homearound the homearound the home


7

An Integrated Platform for the Satellite Communications

Industry

Extensive portfolio (> 400 products) used in satellite-related

transmissions of video/audio signals and other types of data across

various market segments

Well equipped manufacturing facilities coupled with value-added

product development and testing capabilities

Manufacturing Capability

� Undertakes EMS activities for

high/moderate/low volume customer

� Shanghai factory (11,000m2 with 10 SMT

lines and c.800 staff / Shenzhen factory

(6,000m� with 5 SMT lines and c.600 staff)

Test and Engineering

� In‐Circuit Testing, Functional

Testing and diagnostic to

ensure final products meet

customer requirements

Materials and Logistics

� Sourcing for reliable/price competitive

vendors for materials/components

procurement

� Offers customers flexible, just‐in‐time

delivery and direct shipment of

packaged products to customers

Direct Broadcast Satellite

� Switches and LNB

products for OEM

customers

� Began supplying satellite

dishes to BSkyB in 2010

Fibre

� Optical products that convert

RF analogue signals at the

satellite dish via laser into fibre

optic transmission

VSAT and accessories

� VSAT satellite components in

the Ka and Ku frequency bands

such as LNBs, transmitters and

OMTs

� Installers and distributors such

as the tvLink® range and the

Stacker De‐Stacker

8

Satellite Communications – Our Core Business

Europe:

• Satellite is the leading TV infrastructure

• During the period 2008 – 2012:

o Satellite TV subscriber growth rate of 22%

o Terrestrial TV lost 16mn homes

o Cable lost 2mn households

o Satellite reaches 44% of all 186mn digital TV homes

and is still growing

Good Prospects for SatCom Business

USA:

• 34% Pay TV households Satellite

• 58% Pay TV Cable (but reducing YoY)

9

With a Globally Integrated Value Chain

Services highly attractive US and European markets with high quality European products sourced from low cost Asian base

North America

Europe

Major Markets

Future growth markets

Singapore head office

� Althorne facility –

Switch and optical

products

� Stevenage facility –

Satellite dishes,

LNBs and VSAT

products

� Birmingham facility

Satellite dishes

manufacture

� Bristol ProVision

Wireless products

� Shanghai facility –

Focused on

manufacturing

SatCom products

� Shenzhen facility –

Focused on EMS

provision for 3rd

party OEMs or

ODMs

� Denver-

Warehousing

� Washington-

Warehousing

� Atlanta-

Warehousing


Locations


Strategic Partners

12

Built through Acquisitions and Integration

Notes:

(1) Most of the manufacturing activities are outsourced to third-party contract manufacturers in Asia, with Radiance Group Limited being the largest of them.

(2) Marconi and Grundig were market leaders in electronic research and product development in the 1960’s

2008

Merger between Global Communications (UK) Ltd

and Invacom Ltd

� Founded in 1985

as a designer and

manufacturer of

products for the

nascent satellite

market

� A leading

manufacturer of

satellite switching

and distribution

equipment

� Formed in the year

2000 by 2 former

employees of the

Marconi/Grundig(2)

DBS Group

� Specialist

manufacturer of

volume LNB and

VSAT equipment

2012

Acquisition of Global Invacom by

Radiance Group Limited (RTO)

� A world‐leading

designer,

manufacturer(1) and

supplier of LNB,

switches, VSAT, fibre,

wireless HD

transmission and dishes

� One of only 7 approved

major suppliers to the

DirecTV group and DISH

� A specialist EMS

provider to OEMs or

ODMs of products in

the satellite

communications,

TV/cable peripherals,

and consumer

electronics industries

Global

Invacom

Group

Limited

Strategic Rationale

� Increase diversity of product and service offerings

� Achieve economies of scale through expanding production

volumes

� Derive meaningful synergies with improved supply chain

coordination and cost sharing

� Expand into new markets with significant growth opportunities

� Inject experienced management team into Enlarged Group

13

Significant Milestones

1998 2001

Invention of

tvLINK® for

BSkyB Launch of

the world’s

first

integrated

VSAT‐LNB

2004

Launch of

the world’s

first circular

polar/linear

polar LNB

2007

Launch of

one cable

frequency

extenders

2009

The first cost

effective

optical LNB

20062003

Upgraded to

SGX

Mainboard

Listed on

SGX‐SESDAQ

Awarded 1st prize in

the ASTRA

Innovation Contest

2006

1988 1990

Design and

manufacture

of the first DBS

multiswitch First

satellite TV

frequency

extender

First LNB

stacker

First Mini

Magic

Switch

19931992

Technology leader with many industry firsts

� US$13.8mn R&D investments from 2009 to 2011

� 31 patent applications filed to date

� 30 design staff

14

� Existing management of Global Invacom

possesses in‐depth knowledge of the SatCom

and TV peripherals industries

� Transfer of technical expertise and industry

knowledge to the Enlarged Group

� Streamline supply chain as Global Invacom

had a significant trading relationship with

Radiance since 1999

� Transfer of valuable IPs and patents from

Global Invacom to Radiance leads to better

margins as compared to the low value, high

volume EMS market

� Improved value proposition to end‐customers

with additional conceptualising and design

functions (“Low tech to High tech”)

� DBS market

– There are 34mn and 84mn subscribers in

the US and Europe respectively

– Continued expansion as pay‐TV is

increasingly being viewed as a basic home

service

� Satellite broadband market – Around 6 million

subscribers are expected by 2020

� Fibre market – Expanding MDU market

presents opportunities for Global Invacom’s

fibre solutions where it faces little competition

� Allows Radiance to capitalize on Global

Invacom’s well‐established foundations to

venture into the SatCom and TV peripherals

industries

� Growth potential for SatCom, VSAT and Fibre

� Margin sustainability

� Marine market

� US satellite broadband

� Expansion in Asia PacificPowerful Synergies to be derived

Listed through a Reverse Takeover

Rationale for the Reverse Takeover

Acquisition of Global Invacom Holdings Limited for US$49m to be satisfied by US$18.5m cash and US$30.5m in new Radiance Group

Limited sharesTransaction

Create an attractive high tech integrated entity listed on SGX

Provides a platform to venture into new

growth markets Inject experienced management team Outlook

15

FY2011 Total Sales Breakdown FY2011 Total Purchases Breakdown

70.2%

7.7%

Others(1)

22.1%

The premier global provider

of satellite operations and

video delivery solutions

Key Financials

(USDmn)

Revenue: 584

Net Assets: 6,518

Net Profit: 128

The largest pay‐TV

broadcaster in the UK with

over 11 million subscribers.

Key Financials

(USDmn)

Revenue: 4,914

Net Assets: 8,455

Net Profit: 634

72.5%

5.1%

Others(2)

26.1%

A UK based steel stockholder

that provides cold steel

pressing, powder coating

and assembly services

Solid Customer Relationships and Reliable Supply

Notes:

(1) Comprises of Hughes, Alltrade Aerial and Satellite Ltd, Draco Ltd, Bauckhage Sat-Fachgroßhandlung and DISH, each accounting for less than 5% of total revenue

(2) Comprises of third-party contract manufacturers based in the People’s Republic of China, each accounting for less than 5% of total purchases

(3) The information contained in this slide is based on GIHL’s consumer and supplier information

� Strong business relationship with EchoStar that exceeds 10 years

� Significant increase in sales to BSkyB over FY2009‐11, primarily due to

supply of satellite dishes that commenced in early FY2010

� Engaged Radiance for manufacturing services for more than 13 years

� Global Invacom is the largest customer of Radiance

� Contributed more than 50% of Radiance’s revenue from FY2009‐2011

Solid relationships with reputable customers and reliable manufacturing base

16

Experienced and Capable Management Team

� Professional career spent working within international high

technology business with diverse commercial propositions

� Over 12 years experience in senior executive leadership roles of

different information technology companies

� Founding Director of

Invacom in 2000

� Experience in designing and

developing products based

on microwave systems

� Business Development

Director at Global Invacom

since 2007

� Currently has 35 patents

under his name

� Chartered Engineer with a

proven track record in

systems engineering

� Responsible for the

development of switches

and fibre products at Global

Invacom since 1997

� 32 years cumulative

experience in this industry

Gary Stafford, Director

(New Business

Development)

Board of Directors

Malcolm Burrell, Technical

Director (Fibre and

Switches)

David Smith, Technical

Director (LNB, VSAT and

Antennas)

Goh Boon Leng, General

Manager (EMS Division)

Anthony Taylor,

Chief Executive Officer

David Newcombe, Chief

Financial Officer

� Founding Director of

Invacom and the original

designer of key early LNB

products

� Responsible for the

development of LNB and

VSAT products

� Has been with GIHL for

more than a decade

� Has more than 27 years of

experience in quality

control, production

engineering and operations

� Responsible for overall

operations and strategic

development of the EMS

business

� Has over 21 years of

management experience in

finance, strategy and

business development

across various industries

� Responsible for finance and

accounting, corporate

development, and investor

relations

Experienced management team with in-depth industry knowledge and expertise

17

Revenue Breakdown (Proforma) SatCom Revenue Mix

Profit before Income Tax (Proforma) Revenue Breakdown by Geography

13

2

16

8.7%

*1.8%

11.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0

2

4

6

8

10

12

14

16

18

FY2009 FY2010 FY2011Profit before Income Tax PBT Margin

S$ mn

Summary of Financials

Source: Unaudited proforma consolidated financial statements of the Enlarged Group for the financial years ended 31 December 2009, 2010 and 2011.

105

73 79

45

4559

0

20

40

60

80

100

120

140

160

FY2009 FY2010 FY2011

Contract Manufacturing SatCom

118

138150

90%

2%

8%

FY2009

84%

8%

8%

FY2010

84%

10%

6%

FY2011

68%

15%

17%

FY2009

64%

28%

8%FY2010

65%

26%

9%

FY2011

DBS Fibre VSAT

America Europe Rest of the World

S$ mn

* PBIT and EPS are stated net of a one‐off S$11.7m cost associated with past services received. Without this one‐off cost, PBIT

would have been S$13.8m and EPS would have been 5.6 cents

18

Balance Sheet Highlights as at 31 December 2011 (Proforma)

Summary of Financials

Source: Unaudited proforma consolidated financial statements of the Enlarged Group for the financial years ended 31 December 2009, 2010 and 2011.

S$ mn

Key Assets

Cash and bank balances 29

Inventories 25

Goodwill on consolidation 21

Trade receivables 16

Key Liabilities

Other payables 32

Trade payables 14

Equity

Share capital 44

19

� GIGL operates in a fast growing and attractive market

� GIGL is expanding its business through product innovation, customer acquisition and regional expansion

� GIGL enjoys potential synergies through this RTO (e.g. supply chain coordination, sharing of costs and new platform to venture into new industries)

which helps in product offering, control on supply chain, increase margins and expansion into new geographies

� GIGL possesses a strong and proven R&D capability (30+ patents, pioneered various products over the last 20 years) – first to market in Fibre

� GIGL is managed by an experienced team (many in the management team have more than 20 years’ experience in respective fields, and most of the

technical staff are engineers)

Summary

� The core businesses of GIGL are experiencing robust growth. The flagship product for DBS provides a solid base while VSAT and Fibre (higher margins

and higher revenue growth) provides growth

� New products (viz. IP Digital LNB’s, HDMI distribution Optical, Wireless IP distribution, VSAT ODU’s) are being developed and launched. These products

can drive growth for GIGL – either by expanding the market, and/or by tapping the replacement market for existing consumers (e.g. when IP digital

LNB’s replace existing LNB’s)

� GIGL is undertaking customer acquisition and regional expansion into Asia Pacific and Latin America (already made some inroads into these 2 regions)

� GIGL intends to add ‘bolt‐on’ businesses that have the potential to grow the business in complementary area’s (through further acquisitions)

– Announced the acquisition of The Waveguide Solution Limited (“TWS”), a UK microwave waveguide transmission specialist, for £4.75 mn (c. S$9.27

mn) on 4 August 2012;

– With manufacturing facilities in Newton Abbott, Devon, TWS is an approved military and marine supplier having a prestigious list of customers; and

– Besides being earnings accretive, the acquisition of TWS offers synergies as well as access to new sub‐sectors in the SatCom industry for GIGL.

Why should I invest in Global Invacom Group Limited as a business?Why should I invest in Global Invacom Group Limited as a business?

What are the growth drivers for Global Invacom Group Limited?What are the growth drivers for Global Invacom Group Limited?

20

Valuation

Name

Country of

Listing

Share

Price

Local

CCY

52-week

Mkt Cap

US$m

EV

US$m

P/E

EV/

EBITDA P/B EV/Sales(1) EV/EBITDA(1) P/E(1)

High Low Current Current Current CY12E CY13E CY14E CY12E CY13E CY14E CY12E CY13E CY14E

SGX-Listed Peers in Contract Manufacturing

Huan Hsin Holdings Singapore 0.1 0.20 0.05 19 56 ‐0.8x 8.4x 0.1x NA NA NA NA NA NA NA NA NA

Valuetronics Holdings Singapore 0.2 0.26 0.19 61 29 4.3x 1.7x 1.0x 0.1x 0.1x NA 1.1x 1.0x NA 3.4x 3.2x NA

CEI Contract Manufacturing Singapore 0.11 0.12 0.09 31 42 10.4x 6.9x 1.2x NA NA NA NA NA NA NA NA NA

Advanced Integrated

Manufacturing Corp. Singapore 0.07 0.14 0.06 36 37 5.7x 4.2x 1.0x NA NA NA NA NA NA NA NA NA

Mean 4.9x 5.3x 0.8x 0.1x 0.1x NA 1.1x 1.0x NA 3.4x 3.2x NA

Median 5.0x 5.5x 1.0x 0.1x 0.1x NA 1.1x 1.0x NA 3.4x 3.2x NA

Listed Peers in Satellite Equipment

CAlAmp Corp. US 7.39 8.42 2.61 213 211 58.2x 28.5x 9.1x 1.3x 1.2x NA 11.0x 9.3x NA 13.8x 11.3x NA

Microelectronics Technology Taiwan 11.25 12.80 4.60 155 191 ‐2.5x ‐3.6x 1.6x NA NA NA NA NA NA ‐4.5x 6.8x 5.7x

Prime Electronics & Satellites Taiwan 25.50 26.55 21.17 138 142 8.9x 5.1x 1.4x 0.3x 0.3x NA 5.0x 4.9x NA 8.8x 8.6x NA

Wistron NeWeb Corp. Taiwan 59.60 89.80 42.75 575 559 10.5x 5.5x 1.9x 0.5x 0.4x 0.4x 5.8x 5.4x 5.0x 11.8x 11.3x 10.9x

Zinwell Corp. Taiwan 28.80 40.80 28.05 305 185 11.4x 5.1x 1.5x 0.4x NA NA NA NA NA 10.7x 10.7x NA

Mean 17.3x 8.1x 3.1x 0.6x 0.7x 0.4x 7.3x 6.5x 5.0x 8.1x 9.7x 8.3x

Median 10.5x 5.1x 1.6x 0.4x 0.4x 0.4x 5.8x 5.4x 5.0x 10.7x 10.7x 8.3x

Global Invacom Group

LimitedSingapore 0.3087 0.43 0.29 57 42 6.0x 2.6x 1.3x NA NA NA NA NA NA NA NA NA

Source: Factset as at 6th August 2012.

Note (1): Based on market consensus estimates.

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