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Investors Briefing 1H11 Financial Results & Corporate Update 9 August 2011
IR Adviser
AQUILAS
1H11 Operational Highlights 1H11 Financial Review 2H11 Prospects and Plans
Packaging segment expanded further while property division recognized more sales
2Q11 revenue increased 20%, attributable equally to packaging and property segments
Packaging segment sales increased by RM5.8 mil or 9.6% to RM67.0 mil (2Q10: RM61.2 mil) Property segment contributed RM6.2 mil (2Q10: nil)
Fluctuating raw material prices in 2Q11, but stable trend for the time being
Sharp spike in raw material prices (resin, solvent and ink) in April 2011 eased off in May June 2011, from resumption of supply chain after Japan earthquake PET prices stabilized in 1Q11, but PE, PP and OPP resumed uptrend 2Q11 net profit increased to RM5.0 mil (2Q10: 4.2 mil)
Margins compressed by higher costs 2H to be better from positive demand & firmer prices
2Q11 to 30.6.11 73.19 8.46 7.06 (0.13) 6.62 4.98 6.64 11.6% 9.0% 6.8%
2Q10 to 30.6.10 61.17 7.90 5.95 (0.01) 5.71 4.19 5.59 12.9% 9.3% 6.8%
RM'mil Revenue EBITDA Operating Profit Share of Associates Pre-tax Profit Basic EPS (sen) EBITDA margin PBT margin Net margin
1H11 to 30.6.11 140.86 16.33 13.34 (0.23) 12.51 9.62 12.84 11.6% 8.9% 6.8%
1H10 to 30.6.10 120.86 16.12 12.56 (0.10) 12.06 9.21 12.28 13.3% 10.0% 7.6%
16.5% 1.3% 6.2% n.m. 3.7% 4.5% 4.6% (1.7) (1.1) (0.8)
1H11 margin compression from higher cost of raw materials compared to 1H10
+19.6%
+18.8%
6.0 4.0
55.8
57.6
53.8
54.6
59.7
61.2
71.4
75.5
67.7
73.2
5.0
5.8
5.9
6.1
5.0
4.2
4.8
4.2
4.6
20.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
0.0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
5.0
40.0
2.0
Capacity expansion during 1H11, with RM4 million investment in new printing machine
RM mil As at 30.6.11
(Unaudited)
As at 31.12.10
(Audited)
Fixed assets (excl associate investment) Associate investment Current assets Current liabilities Shareholders equity Total borrowings Cash & Bank Balances Net gearing Return on Average Shareholders Equity Return on Average Total Assets
71.08 22.85 127.00 70.49 136.80 39.59 13.22 0.19 x 14.4%* 8.9%*
66.21 23.08 122.72 69.26 131.47 29.53 6.30 0.18 x 14.3% 9.1% Higher borrowings to finance higher working capital from larger volume of sales orders Additional printing machine commissioned in 2Q11
2nd
interim tax exempt dividend of 3.5 sen/share payable on 14 September 2011, translating to 51% payout
Dividend Payout
Dividend Payout (RM 'mil) Payout Ratio
RM mil
%
100.0% 75.0% 50.0% 25.0%
Dividend History
12.00
73.8%
9.00 6.00 3.00 0.00
sen
52.3%
55.9%
52.4%
55.8%
51.3%
51.6%
50.7%
1.52
2004
1.52
2005
3.04
2006
4.55
2007
4.55
2008
11.67
2009
9.38
2010
4.88
1H11
0.0%
16.0 12.0 8.0 4.0 0.0 2.0 2004 2.0 2005 4.0 2006 6.0 2007 6.0 2008 15.5 2009 12.5 2010 6.5 1H11
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Growth Strategies
Expanding scope for existing customers Increasing MNC clientele Making progress on new ventures
Adhering to pre-qualification stages for ESD packaging; targeting initial contributions in FY2012
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THANK YOU
Bursa: DAIBOCI/8125 Bloomberg: DPP:MK
IR Contacts: Thomas Lim Julia Pong
Reuters: DPPM.KL
E: tomlim@daibochiplastic.com E: julia@aquilas.com.my
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APPENDIX
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CORPORATE PROFILE
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packaging in SEA
Track Record
The SOLE supplier to Factory in Msia Supplier of >90% of The SOLE supplier of Kraft / Other important customers:
Chembong Confectionery
Listed since 1990, now on Main Market of Bursa Msia Market cap of RM212.5 mil (9.5.11) Dividend policy of paying minimum 50% of net profit to shareholders
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Corporate Information
Codes
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Leading flexible packaging solutions provider, with enviable reputation exceeding 35 years
2010 Obtained Letter of Validation from USA for electronic packaging 2009 - Acquired 9th printing machine; Obtained HALAL Certification; Regional supplier for BAT
Corporate Profile
2008 Acquired wide web polypropylene film making machine 2007 - Received Gold Award for the Colorpak Packaging Export Award at Australian Packaging Awards 2004 Acquired Msias 1st 5-layer-blown film machine to produce transparent barrier films 2003 Transfer to Main Board (now Main Market); Accredited with HACCP 2002 Acquired metallizer with Plasma Tech to produce high-barrier films; Regional Supplier to Nestle in SEA 2001 Incorporated Australian subsidiary; Accredited with ISO:9001 1999 Supplier to Nestle Msia 1996 - Moved to current premises with >325,000 sq ft built-up area 1994 Acquired fastest extrusion laminator in SEA 1990 Acquired metallizer to produce in-house metalized films; Listed on 2nd Board of KLSE (Bursa Msia) 1987 Acquired polypropylene film-making machine to produce in-house films 1984 Started in-house printing cylinder making 1972 Established in Melaka with 10,000 sq ft plant; Moved to larger premises with 165,527 sq ft
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Internationally-certified production facilities that comply with all factory audits by our MNC clientele
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Production Facilities
The only player with in-house cylinder-making, and one of the few with metallizing and sealing capabilities for quality assurance and constant improvement at key stages
In-house capabilities
Solvent-based/free
Prepress
Slitting / Bagging
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Wide range of packaging solutions for various product functions Constantly innovating for changing requirements
Film Type Applications / Use
Daibochi Products
Coffee, Nuts, Potato Chips Snacks, Biscuits, Wafer, Chocolate, Cakes Outer Pack, Noodles, Biscuits, Wafers Labelling, Ice-cream, Frozen Food, Cereal Peel Seal, Seasoning Oil, Powder / Liquid Detergent, Shower Foam, Tobacco, Pet food
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Customer Base
Food
Beverage
FMCG
Specialty
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Key Management
- Holds a degree in Bachelor of Science Industrial Engineering and Management from Oklahoma State University, & Master of Business Administration degree from Oklahoma State University. - Joined Daibochi in 1995, and was appointed as Managing Director in February 2005. - Played a key role in building Groups MNC clientele.
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Major Shareholders
6.69 4.93
* Excluding 439,800 shares bought back by the Company and retained as treasury shares
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INDUSTRY INSIGHT
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Flexible packaging perceived as the environmentally-friendly alternative poised to tap into large market potential
Environmental concerns allayed with flexible packaging
The greener alternative compared to rigid packaging
Industry Insight
Flexible packaging market, worth $1.41 bil in 2008, estimated to reach $2.22 bil in 2015* 2015
Robust growth in food processing sector Rising demand for food exports, i.e. higher food safety concerns Increasing affluence of urban population who favour packaged food
Source: Southeast Asia Plastic Flexible Packaging Market for Food, Frost & Sullivan, May 2009. Countries covered were Thailand, Indonesia, Malaysia, the Philippines, and Singapore
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