Presentation is loading. Please wait.

Presentation is loading. Please wait.

Tatung Company W. Y. Lin, President (2371 TT) Integrity, Honesty, Industry, Frugality March 2014.

Similar presentations


Presentation on theme: "Tatung Company W. Y. Lin, President (2371 TT) Integrity, Honesty, Industry, Frugality March 2014."— Presentation transcript:

1 Tatung Company W. Y. Lin, President (2371 TT) Integrity, Honesty, Industry, Frugality March 2014

2  We are Taiwan’s leading provider of integrated solutions for Mechatronic projects, including turnkey power generation, smart grid and corporate energy management systems.  We are expanding our Mechatronics turnkey solutions market presence to ASEAN and China.  We are in the midst of a corporate restructuring program aimed at reducing debt, improving cash flow and enhancing transparency.  We are actively managing our extensive real estate portfolio to realize hidden value and maximize cash flow. Over 95% of this portfolio is located in Northern Taiwan. Executive Summary 2

3  Consolidated Financial Structure: Our No. 1 priority is to significantly reduce Tatung’s consolidated net debt level over the long term. We also intend to deliver consistent debt reduction on an annual basis.  Core Business: Consistently maintain blended gross margin above 10%, and strive to reach 15%.  Investment Portfolio: Dispose of non-core related and/or underperforming business subsidiaries  Land Assets: Develop our land assets to their highest and best use. Our Top Priorities It is painfully clear to us that losses in our ODM monitor business, losses from key investment subsidiaries and high debt levels have prevented investors from recognizing the value of our core power business and our land bank. We set our top priorities for the next five years as: 3

4 Tatung’s Core Strategic Initiatives Structural Improvement in Core Business Operations Structural Improvement in Tatung Investment Portfolio Asset Development Improved Cash Flow and Reduced Debt 4

5 Tatung’s Core Strategic Initiatives Structural Improvement in Core Business Operations Structural Improvement in Tatung Investment Portfolio Asset Development Improve Cash Flow and Reduce Debt 5

6 6+ Years of Structural Improvement in Core Earnings By phasing out low-margin products, we have been able to achieve the following in our core business portfolio: 6 Core operations gross margin reached 9.9% in 9M13 from 5.7% in 2007. Higher Overall Gross Margin SG&A expenses peaked at NT$5.0bn in 2008, and have been held below NT$3.0bn for three straight years (2010-2012). In 9M13, SG&A expenses fell to NT$2.0bn. Reduced Operating Expenses In 2010-9M13, our core operations earned a cumulative operating profit of NT$352m versus a cumulative loss of NT$4.9bn in 2007-2009. Improved Operating Profits

7 Revenue Contribution 7

8 6+ Years of Structural Improvement in Core Earnings At the Business Group and Business Unit Level: Power and Systems Business Groups: Tatung’s core power and systems solutions groups accounted for 72% of revenues in 9M13, versus 40% in 2007. R&D spending devoted to these two groups now accounts for 55% of Tatung’s total core R&D outlay, versus only 25% in 2007. Power: Motor BU exports reached a 6-year high in 2012, growing by 33%, and leading to the best profit performance for the Motor BU in the past 6 years. In 9M13, Motor BU gross margin reached 18% and operating margin 7.2%, surpassing 2012 levels. Consumer: In the ODM business unit, unprofitable product lines have been cut (most notably PC monitors), resulting in the elimination of the large losses posted in previous years. In 2010-2012, losses were cut to below NT$300m annually, a big improvement over annual losses of NT$1bn+ in 2007-2009. The ODM business unit now contributes only 7% of total core revenue versus 48% in 2007. 8

9 Core Operations Business Performance RevenueOperating Profit 9 Note: Based on unaudited company accounts.

10 Tatung’s Core Strategic Initiatives Structural Improvement in Core Business Operations Structural Improvement in Tatung Investment Portfolio Asset Development Improve Cash Flow and Reduce Debt 10

11 Our Achievements: 11 We have shut down or disposed of 4 subsidiaries which posted a combined cumulative loss of NT$3.5bn in 2007-2011. Disposal of Money-Losing Subsidiaries CPT’s net debt fell to NT$22bn in 9M13, from its peak of NT$72bn in 2006. Significant Reduction in Debt at CPT We have reduced capex spending at subsidiaries that are in capital-intensive industries. CPT has not built a new plant since 2007, and monthly depreciation expense fell to NT$0.9bn in 9M13 from a peak of NT$2.2bn in 2009. In 2012-9M13, Green Energy Technology’s total capex spending was NT$0.7bn versus NT$11.8bn in 2010-2011. Disciplined Capex Spending at Key Subsidiaries 6+ Years of Structural Improvement in Investment Income

12 CPT Has Greatly Reduced its Capital Intensity 12 Source: CPT audited consolidated financial statements.

13 CPT: Capex Spending 13 Capex to Sales (x)FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 9M13 Average CPT (2475 TT) 3.9 7.7 7.9 4.4 4.7 9.9 5.0 6.4 Wintek (2384 TT) 37.1 24.5 9.6 15.2 13.6 13.0 5.8 17.0 AUO (2409 TT) 13.6 23.2 17.0 18.1 15.0 11.4 6.4 15.1 Innolux (3481 TT) 2.8 12.5 24.2 19.5 8.9 3.5 4.3 10.7 Hannstar Display (6116 TT) 4.8 6.6 2.9 8.9 30.4 16.5 15.5 10.7 E Ink (8069 TT) 2.4 7.6 3.6 5.3 6.9 5.3 6.9 5.1 CPT has maintained the local LCD industry’s 2 nd lowest capex-to- sales ratio since 2007

14 Investment Income Analysis 14 NT$m 2007200820092010201120129M13 Reported 5,431 (3,229) (9,634) (3,692) 1,563 (3,166) (1,034) Normalized 5,723 (2,778) (9,590) (3,137) (3,055) (3,166) (1,034)

15 Our Future Plans We will continue to dispose of non-core related and/or underperforming business subsidiaries. We will minimize our exposure to capital-intensive industries and seek continued reduction in debt levels. Shan Chih Asset Development (SCAD, a 100%-owned subsidiary) will continue to realize the value of our real estate assets via development projects. 15

16 Tatung’s Core Strategic Initiatives Structural Improvement in Core Business Operations Structural Improvement in Tatung Investment Portfolio Asset Development Improve Cash Flow and Reduce Debt 16

17 Tatung Land Assets - Taiwan Total area of land holdings: 464k pings or 1,534k sq meters Book value of land: NT$23.3bn (US$790M @ NT$1 = US$29.5) *’Northern Taiwan’ does not include Taipei City and New Taipei City. Note: 1 ping = 3.306 sq m = 35.575 sq ft Land AssetsArea (Ping)Area (Sq m)% of Total Total464,1651,534,431100 Taipei City35,506117,3767.6 New Taipei City90,243298,32319.4 Northern Taiwan*326,7701,080,23570.4 Mid-Taiwan2,7008,9250.6 Southern Taiwan8,94629,5721.9 Land ZoningArea (Ping)Area (Sq m)% of Total Land for Development154,079509,35433% Land for Production310,0861,025,07767% Total464,1651,534,431 17

18 Nankang Tatung Xiyuan Residential Project Land Area: 2,312 ping Gross Floor Area: 13,436 ping Floor Plan: 148 housing units, 239 parking spaces Completion: 1Q 2014 Revenues and profits to be booked in 1H2014. 18

19 Banchiao Phase I Plant Development Plan Land Area: 4,095 ping Gross Floor Area: 25,433 ping Expected Project Timeline: Pre-sale launch in 2H14, pending final regulatory approval. 19

20 Tatung’s Core Strategic Initiatives Structural Improvement in Core Business Operations Structural Improvement in Tatung Investment Portfolio Asset Development Improve Cash Flow and Reduce Debt 20

21 Our Achievements 21 Consolidated Net Debt peaked at NT$104bn in 2006, and has since been reduced to NT$55bn. Substantially Reduced Net Debt 9M13 monthly depreciation expense of NT$1.2bn is 47% lower than 2008 peak level of NT$2.3bn. Reduced Depreciation Expense 2012 Capex of NT$6.5bn was the lowest since 2004, and 9M13 capex was NT$3.2bn Disciplined Capex Spending

22 Lower debt, less capital spending 22 Source: Tatung audited consolidated financial statements.

23 The Tatung Vision 23

24 The Tatung Vision We aim to become one of Asia’s leading turnkey providers of integrated mechatronic systems and energy-saving power solutions. Our areas of concentration will be: *Mechatronics systems *Power distribution systems employing end-to-end AMI *Turnkey power generation systems in emerging market countries *Energy saving initiatives and products 24

25 Tatung Total Solutions for the Power Grid Smart Substation Advanced Metering Infrastructure Energy Management Renewable Energy Energy Saving Energy Storage Advanced Distribution Automation Smart Home 25

26 Tatung Integrated EMS Capabilities Central Control/ Energy Mgt. System Air Conditioning LED Lighting Power Systems Ancillary Systems Security Control 1. Commercial AC 2. Exhaust systems 3. Sophisticated water cooling systems 1. Distribution network 2. Turnkey power generation 3. End-to-end Advanced Metering Infrastructure (AMI) 1. Water purification 2. Waste water surveillance system 3. Air compressors 4. Industrial gasses 5.UPS systems 6.Reservoir water supply system 1. LED bulbs for commercial applications 2. Remote monitoring and management of energy use 1. Electronic security systems 2. Access control systems 3.Video surveillance systems Remote management Routers System Server Cloud ServiceRemote Backup Office Network Ethernet 26

27 Our Commitment to Shareholders We will minimize our exposure to capital- intensive industries and seek continued reduction in debt levels. We will continue to dispose of non-core related and/or underperforming business subsidiaries. SCAD will continue to realize the value of our real estate assets via development projects. We pledge to improve corporate governance and transparency. 27

28 Company Financials 28

29 EPS ( NTD)Net Income (NT$ million) Five-year Financial Highlights 29

30 NT$ million200820092010201120129M13(IFRS) Sales Revenue 187,247118,733157,911146,250107,356 84,494 Gross Profit 10,830(11,662)5,3257,127612 8,569 OP Profit (14,545)(33,298)(13,803)(11,550)(15,338) (3,257) Income Before Tax (17,456)(40,451)(14,325)(11,191)(15,142) (4,682) Net Income to Parent (6,855)(9,917)(3,481)1,380(3,512) (1,593) EPS (NTD$) (1.53)(2.10)(0.63)0.60(1.52) (0.68) Five-year P&L (Consolidated) YOY (%) 200820092010201120129M13 (18.2)(36.6)33.0(7.4)(26.6) 2.3 (67.7)--33.8(91.4) - -128.9(58.5)(16.3)32.8 (72.2) -131.7(64.6)(21.9)35.3 (61.7) -44.7(64.9)-- (48.9) -37.3(70.0)-- (48.9) 30

31 Five-year Balance Sheet (Consolidated) NT$ million 20082009201020112012 3Q13 (IFRS) YOY (%) 200820092010201120123Q13 TOTAL ASSETS284,267253,246238,050224,536201,282 204,085 (12.4)(10.9)(6.0)(5.7)(10.4) (6.2) Cash31,86433,31530,96231,18124,603 22,220 (14.2)4.6(7.1)0.7(21.1) (15.2) NR & AR24,25719,01219,02414,94014,027 17,429 (48.3)(21.6)0.1(21.5)(6.1) 8.8 Inventory26,99422,66525,86124,15124,494 22,108 0.6(16.0)14.1(6.6)1.4 (5.7) Fixed Asset157,590136,409124,205116,271105,994 97,077 (7.1)(13.4)(8.9)(6.4)(8.8) (6.4) TOTAL LIABILITIES181,305163,218155,865148,439141,529 142,555 (10.5)(10.0)(4.5)(4.8)(4.7) (3.5) Bank Loans118,253100,24093,05696,72889,996 86,162 (3.8)(15.2)(7.2)3.9(7.0) (8.7) NP & AP27,54425,77027,34121,11921,782 26,523 (35.7)(6.4)6.1(22.8)3.1 32.5 Accrued Exp12,69915,41512,2179,2169,673 8,608 (18.2)21.4(20.7)(24.6)5.0 14.0 TOTAL EQUITY102,96290,02882,18576,09759,753 61,530 (15.6)(12.6)(8.7)(7.4)(21.5) (12.0) Capital45,49555,51755,52123,395 1.422.00.0(57.9)0.0 Additional Paid-in Capital 12,09510,91911,4815,9585,945 856 0.9(9.7)5.1(48.1)(0.2) 30.9 Retained Earnings(18,538)(32,134)(36,112)(2,596)(6,378) 9,845 65.073.312.4(92.8)145.7 (27.0) Minority65,76157,20851,32243,33929,213 28,891 (15.4)(13.0)(10.3)(15.6)(32.6) (15.8) A/R Turnover Days 69 67 44 42 49 Inventory Turnover Days 56 70 58 66 83 A/P Turnover Days 73 75 64 73 31

32 Tatung Investment Income % heldInvestment Income Investment CompanyAs of 3Q13 2007 2008 2009 2010 2011 2012 9M13 CPT23.1 2,233 (3,595) (9,322) (3,603) (2,871) (2,716) (758) Green Energy Technology24.3 - 784 50 339 (419) (949) (423) Elitegroup Computer27.5 218 82 209 39 118 100 295 Shan Chih Asset Development100.0 1,122 150 728 459 6,742 824 231 Tatung Consumer Products (Taiwan)99.1 11 20 (13) (320) (160) (259) (192) Tatung Okuma49.0 86 73 3 42 54 118 152 Forward Electronics26.8 27 (21) (125) (7) (71) (89) (61) Tatung SM-Cycle85.3 31 45 39 55 57 87 61 Tatung System Technologies54.4 81 96 81 73 60 41 34 Tatung Fine Chemicals46.6 31 14 4 (93) 3 (32) Toes Opto-Mechatronics85.0 67 22 (26) 0 5 4 (28) San Chih Semiconductor58.2 2,106 185 176 216 56 (9) (14) Chunghwa Electronics Development99.9 (231) (111) 7 40 (31) (13) 13 Tatung Medical & Healthcare Technologies95.7 3 (8) 6 (18) (14) (4) Tatung Information Technology (Jiangsu)100.0 (129) (72) (395) (264) (57) (252) (114) Tatung Vietnam (TVN)100.0 (121) (152) (90) (96) (170) (136) (99) Tatung Czech0.0 (97) 49 20 198 30 (21) (29) Tatung Electric Technology (Vietnam)100.0 - (36) (42) (38) (24) (14) (12) Tatung (Thailand)100.0 9 (166) (66) 13 11 16 9 Tatung Science and Technology,Inc.100.0 5 (52) (604) (1) - - Tatung InfoComm0.0 (10) (214) (15) (554) (1,466) - - Tatung Netherlands B.V.0.0 (85) (165) (51) - - - - Tatung - Fanuc Robotics0.0 19 27 19 - - - - Tatung (U.K.)0.0 (239) (99) 4 - - - - Tatung Atherton0.0 23 - - - - - - Other Investment Income 272 (83) (226) (291) (191) 113 (62) Total Investment Income 5,431 (3,229) (9,634) (3,692) 1,563 (3,166) (1,034) Subsidiaries Overseas Production Subsidiaries Former Subsidiaries 32

33 33


Download ppt "Tatung Company W. Y. Lin, President (2371 TT) Integrity, Honesty, Industry, Frugality March 2014."

Similar presentations


Ads by Google