Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
1
1
2Q2019 / 1H2019
RESULTS PRESENTATIONWednesday, 7 August 2019
2
2
AGENDA
By Moving forward and thinking
forward,
Serial System helps its partners to be
more competitive in the marketplace,
today and in the future
CORPORATE OVERVIEW
FINANCIAL RESULTS
OUTLOOK & STRATEGIES
3
3Your Integral Component to Success
CORPORATE OVERVIEW
4
4Your Integral Component to Success
One of Asia Pacific’s
largest electronic distribution
networks
Wide product range and diversified
customer portfolio
The largest electronic
components distributor
listed on SGX
Total Shares: 896 million
Free Float: 40%Market Capitalisation: S$69M
(As at 6 Aug 2019)
Dividend yield: 2-22% p.a. over 10 years
(HY2019: 5.5%)P/B: 0.34 PE: 4.55
SERIAL SYSTEM AT A GLANCE
1H2019 FY2018
Hong Kong 51% 61%
China 11% 11%
South Asia 26% 17%
South Korea 4% 5%
Taiwan 8% 6%
100% 100%
1H2019 FY2018
South
Asia 100% 100%
SERIAL
SYSTEM
listed in
Singapore
in 1997
Consumer Products
(4%)*
Electronic Components
(95%)*
* Group Revenue
5
5Your Integral Component to Success
Supporting a network of global brands, Serial System is a leading distributor of electronic components in Asia and a dealer
for a variety of consumer products. It is also a strategic investor in businesses in healthcare and managed print services.
EXTENSIVE NETWORK & DIVERSIFIED BUSINESS
Electronic ComponentsDistribution
Consumer ProductsDistribution
Managed PrintServices
Hospitality and Healthcare Solutions
Medical DeviceManufacturingand Distribution
Durian Distribution
6
6Your Integral Component to Success
… more than 90 Franchised Product Lines in Serial Group
PARTNERING LEADING SUPPLIERSElectronic Components Distribution
7
7Your Integral Component to Success
PARTNERING LEADING SUPPLIERSConsumer Products Distribution
8
8Your Integral Component to Success
CONSUMER PRODUCTS DISTRIBUTION
• The Group’s 100%-owned subsidiary: Achieva Technology Sdn. Bhd.
• Major suppliers include AMD, Intel and Asus
• Achieva Technology works closely with partner brands to both fulfil their distribution needs and to create a one-stop solution for their customer needs in both end-user and enterprise markets.
• In the modern e-commerce market, Achieva Technology already maintains key channels on online platforms such as Qoo10 and Lazada.
Achieva Technology Pte Ltd
• The Group’s 100%-owned subsidiary: Swift-Value Business Pte. Ltd.
• Major suppliers include Hewlett-Packard (HP), Epson and Canon. Also the authorized reseller of products from major brands such as Fuji Xerox, Samsung, Oki and Panasonic.
• Swift-Value is the largest HP printer supplies distributor, having captured over 45% of the Singapore market. They keep their top spot by maintaining close relationships with hundreds of customers, ranging from heartland operators to large retail superstores such as Popular.
• Providing fast and value-added service and having the ability to retain customer loyalties help Swift-Value offers an extensive and consistent network for their suppliers and partner brands.
Swift-Value Business Pte. Ltd.
9
9Your Integral Component to Success
• Started in 2014, Singapore-based Print-IQ is 70%-owned by Serial System since May 2017
• Provides managed print services and maintains and distributes copiers and printers
• Premier partner for HP copiers
CONSUMER PRODUCTS DISTRIBUTIONManaged Print Services
Under the managed print services business model, companies outsource their printing, scanning and copying functions, as well as the management of the equipment, to external service providers like Print-IQ and PT SMI. This reduces their operating costs and wastage.
• Set up in 2008, PT SMI is 20% owned by Serial System since November 2018
• Listed on Development Board of Indonesia Stock Exchange
10
10Your Integral Component to Success 10
OTHER BUSINESSESPart of Group’s diversification into investment holding of high-margin companies
• Core businesses: Hospitality and Healthcare solutions
• Hospitality solutions: Build based on a core venue management application suite known asVenue360.
• Leading edge modules within Venue360: Electronic meal ordering system (eMOS), IntelligenceRoom Infotainment Solution, Digital Media Content Management System, and IncidentTracking and Reporting System.
• Clients: Khoo Teck Puat Hospital, Ng Teng Fong General Hospital, Jurong Community Hospital,Changi General Hospital, Institute of Mental Health, St Andrew’s Hospital, Gleneagles Hospital,Mount Elizabeth Orchard, Parkway East Hospital, Parkway Mount Elizabeth Novena, YishunCommunity Hospital, Sengkang Hospital, Sengkang Community Hospital and AlexandraIntegrated Health.
Serial MultiVision Pte. Ltd. (100%-stake)
• Assembly and distribution of medical devices
• Offers full range of standard and customised perfusion tubingpacks marketed over the Asia-Pacific region: • Customized Heart Lung Pack• Blood Cardioplegia Set• Angio Pack• Sterile Procedural Pack • SurgiAid ® Collagen Wound Dressing
• Company is ISO 13485-certified and its perfusion products bear the coveted CE certification mark.
Contract Sterilization Services Pte Ltd (100%-stake)
11
11Your Integral Component to Success
FINANCIAL RESULTS
12
12Your Integral Component to Success
US$’000 2Q2019 2Q2018 Change (%) 1H 2019 1H 2018 Change (%)
Sales 201,367 408,703 (51) 431,252 813,923 (47)
Gross Profit 13,411 33,608 (60) 30,086 65,001 (54)
Gross Profit Margin (%) 6.7 8.2 (1.5 pt) 7.0 8.0 (1.0 pt)
Net Profit After Tax(Attributable to shareholders)
2,251 2,042 10 5,429 7,232 (25)
EPS - fully diluted (US cents)(1) 0.25 0.23 9 0.61 0.81 (25)
NAV per share (US cents)(2) 30/06/2019: 15.53 31/12/2018: 15.26
(1) Earnings per ordinary share on a fully diluted basis is computed based on the weighted average number of shares in issue during the period of 895,841,914 (2Q2018/1H2018:
895,841,914).
(2) Net asset value per ordinary share as at 30 June 2019 and 31 December 2018 is calculated based on the net assets value attributable to the equity holders of the Company as at
the end of the respective period and the respective aggregate number of ordinary shares of 895,841,914.
SNAPSHOT OF 2Q2019 & 1H2019 PERFORMANCE
13
13Your Integral Component to Success
• Revenue of US$201.4M in 2Q2019, a decrease of 51% from US$408.7M in 2Q2018• Mainly due to the termination of the electronic components distribution business with Texas Instruments (“TI”)
• Excluding the impact of decline in turnover due to TI termination and discontinuation of a product line in March 2018, turnover for the electronic components distribution business would have increased by 9%, despite the on-going US-China trade tensions which have affected demand in China and Hong Kong. This was attributable to increased sales for certain existing product lines as the Group focused its resources to grow these product lines following TI termination
• Consumer products distribution sales also negatively impacted due to weak demand in the markets (Singapore and Malaysia) in which the Group operates, as well as the Group’s continued rationalisation and exit of non-profitable products
• Gross profit margin declined to 6.7% in 2Q2019 from 8.2% in 2Q2018
• Lower margin achieved by the electronic components distribution and consumer products distribution business resulting from keen market
competition in a challenging environment
• NPAT increased by 10% to US$2.3M in 2Q2019 from US$2.0M in 2Q2018
2Q2019 HIGHLIGHTS
14
14Your Integral Component to Success
• Revenue of US$431.3M in 1H2019, a decrease of 47% from US$813.9M in 1H2018• Mainly due to the termination of the electronic components distribution business with Texas Instruments (“TI”) which has impacted sales in all
markets in Asia
• Excluding the impact of decline in turnover due to TI termination and discontinuation of a product line in March 2018, turnover for the electronic components distribution business would have increased by 8%, amid the US-China trade tensions. This was attributable to conscientious efforts to grow some of its existing product lines post TI termination which saw an increase in sales for these product lines in 1H2019
• Consumer products distribution sales also negatively impacted due to weak demand in the markets (Singapore and Malaysia) in which the Group operates, as well as the Group’s continued rationalisation and exit of non-profitable products
• Gross profit margin declined to 7.0% in 1H2019 from 8.0% in 1H2018
• Lower margin achieved by the electronic components distribution and consumer products distribution business resulting from keen market
competition in a challenging environment
• NPAT decreased by 25% to US$5.4M in 1H2019 from US$7.2M in 1H2018
1H2019 HIGHLIGHTS
15
15Your Integral Component to Success
-
200
400
600
800
1,000
1,200
1,400
1,600
44 92
186 184 183 228
315 354
382
545
616 658
817
1,036
1,222
1,403
1,492 1,527
405.2 408.7 385.6 327.6
229.9 201.4
Revenue (US$' million)
2%
REVENUE GROWTH TRENDSERIAL SYSTEM GROUP
-51%
6%
15%
18%
27%
24%
7%
13%
43%
8%
16
16Your Integral Component to Success
-
200
400
600
800
1,000
1,200
1,400
1,600
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
545 616
658
817
1,036
1,222
1,403
1,492 1,527
-
50
100
150
200
250
300
350
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
205 207 205 209
229 232 241
285
323
-0.9%
Asia Pacific (including Japan)Semiconductor Revenue (US$' billion)
Source : World Semiconductor Trade Statistics/
Semiconductor Industry Association
1.0%
2%
Serial System Revenue (US$' million)
24%
27%
18%
9%
1%
7%
13%
4%
15%19%
6%
OUTPERFORMING THE INDUSTRY
13%
2%
17
17Your Integral Component to Success
PROFITABILITY
33.4
50.7
57.5 62.6
73.5
90.4 91.5
97.4 105.1
118.6
31.4 33.6 30.2 23.4
16.7 13.4
8.7%
9.3%9.3% 9.5%
9.0% 8.7%
7.5% 6.9%7.0%
7.8%
7.7%8.2%
7.8%
7.1%7.3%
6.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Gross Profit & Gross Profit Margin(US$' million)
GP GP%
17%
1%
6%
13%
8%
23%
9%
13%
52%
-60%
18
18Your Integral Component to Success
PROFITABILITY
5.1
12.0
10.1
7.9
11.2
16.1
11.0
4.6
9.6
17.7
5.2
2.0
10.3
0.2
3.12.3
1.3%
2.2%
1.6%
1.2%1.4%
1.6%
0.9%
0.3%
0.6%
1.2% 1.3%
0.5%
2.7%
0.05%
1.4%
1.1%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
Net Profit & Net Profit Margin(US$' million)
Net Profit Net Profit Margin (%)
-21%
10%
133%
-16%
41%
44%
-31%
-59%
110%
85%
19
19Your Integral Component to Success
PROFITABILITY
8.8
20.2 19.9 18.9
22.0
30.8
26.0 23.5
26.1
43.2
11.1
8.1
20.3
3.7
7.2 6.0
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
EBITDA (US$' million)
-5%
130%
-2%
17%
40%
-16%
-9%
11%
65%
-26%
20
20Your Integral Component to Success
173.8
218.3 211.5
277.0
347.8
382.6
430.6
468.6 458.5
337.7
120.7
147.5 147.0
218.7
295.6 324.1
372.0
397.5
371.5
240.5
1.4 1.5
1.4
1.3
1.2 1.2 1.2
1.2
1.2
1.4
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
-
100.0
200.0
300.0
400.0
500.0
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YTDJun19
Maintaining Healthy Current Ratio
Current Assets Current liabilities Current Ratio
FINANCIAL POSITION
21
21Your Integral Component to Success
FINANCIAL POSITION
86.5
98.7
104.5 110.0
122.2 119.4
124.8
145.0
144.5
146.0
37.6
71.2
56.3
97.9
120.2
138.0 139.3
166.5
155.9
101.0
43%
72%
54%
89%
98%
116%112%
115%
108%
69%
0%
20%
40%
60%
80%
100%
120%
140%
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YTDJun19
Net Gearing Ratio
Shareholders' Equity Net Borrowings Net Gearing Ratio
22
22Your Integral Component to Success
38
55
61
62
67
53 49 51 54
84
31 36
33
32 33
33
33 35
29
34
44 51 41
30 32
38 40
42
41
59
51
70 69
60
66
58 56 58
66
109
25
35
45
55
65
75
85
95
105
115
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YTDJun19
Cash Conversion Cycle (days)
Trade Receivable Turnover (days) Trade Payable Turnover (days) Inventory Turnover (days) Cash Conversion Cycle (days)
FINANCIAL POSITION
23
23Your Integral Component to Success
- 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
1H19
0.33
0.13
0.28
0.30
0.22
0.24
0.30
0.35
0.18
0.29
0.40
0.22
0.16
0.25
1.00
0.25
0.38
0.67
0.33
0.30
0.30
0.75
0.50
0.17
0.46
0.46
Interim Special Final
Total Dividend Payout
(In Cent (SGD))
(Interim & Final) each year
DIVIDEND YIELD
21.9%
4.6%
2.4%
6.3%
8.0%
Singapore
Cents
6.3%
5.0%
7.9%
6.1%
8.5%
8.9%
5.5%
24
24Your Integral Component to Success
OUTLOOK & STRATEGIES
25
25Your Integral Component to Success
Uncertainties
? Greater uncertainty in the global market due to escalating US-China trade tensions
? Global economic slowdown and keen market competition
? Uncertainty over progress of global 5G rollout
Bright spots
Launch of new smartphones in 2019 by Samsung, Huawei, Xiaomi, LG and other brands
Growing acceptance of electric cars in Asia
INDUSTRY OUTLOOK
26
26Your Integral Component to Success
• Two-prong strategy for electronic components distribution business:• Reallocating resources and personnel to more efficiently support existing suppliers• Proactively and aggressively unlocking potential partnerships with other suppliers, customers and channel partners
• Reviewing its operations and rightsizing its workforce in view of the lower turnover for the electronic components distribution business
• Exploring opportunities to diversify income streams to reduce risk and protect the Group from unforeseen developments
• Barring unforeseen circumstances, the Group expects to remain profitable in 2019
GROUP OUTLOOK
28
28Your Integral Component to Success
The presentation herein may contain forward-looking statements by the management of Serial System Ltd (“Serial System”) that pertain to expectations for financial performance of future periods versus past periods.
Forward–looking statements involve certain risks and uncertainties because they relate to future events. Actual results may vary materially from those targeted, expected or projected due to several factors. Such factors are, among others, general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures as well as changes in tax regimes and regulatory developments. Such statements are not and should not be construed as management’s representation on the future performance of Serial System. Therefore, the actual performance of Serial System may differ significantly from expressions provided herein.
This presentation does not constitute an invitation or an offer to sell, or solicitation of an offer to buy any securities in connection with, any contract or commitment whatsoever.
This presentation has been prepared exclusively for the parties presently being invited for the purposes of discussion. Information contained in this presentation does not constitute a prospectus or offering circular in whole or in part.
Thank You