electroelectrotech investments limitedtech...

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3Q FY2008 Results Briefing

ELECTROELECTROTECH INVESTMENTS LIMITEDTECH INVESTMENTS LIMITED

3Q FY20083Q FY2008Results PresentationResults Presentation

International Contract Manufacturer to CapitalEquipment and Consumer Industries

International Contract Manufacturer to CapitalInternational Contract Manufacturer to CapitalEquipment and Consumer IndustriesEquipment and Consumer Industries

13 November 200813 November 2008

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Financial ReviewFinancial Review

3Q FY20083Q FY2008

YTD Sept 2008YTD Sept 2008

Business Review and OutlookBusiness Review and Outlook

MechatronicsMechatronics DivisionDivision

EMS Division EMS Division

Questions and AnswersQuestions and Answers

AGENDAElectroTech Investments Limited

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ElectroTech Investments Limited

(S$ m) 3Q08 3Q07 Chg y-o-y Revenue 58.2 64.3 (10%)Gross Profit (GP) 8.9 10.2 (13%)Profit Before Tax 6.0 7.4 (18%)

Effective Tax Rate 18.1% 17.5% -

Net Profit (NP) 4.9 6.1 (19%)NP Margin 8.5% 9.5% -

22.3

42.0

20.0

38.1

3Q08 – P&L Snapshot

Division Revenue

10%

9%

3Q07 3Q08 3Q07 3Q08

Mechatronics EMS

3.2

7.0

3.1

5.8

Division Gross Profit*

17%

Mechatronics EMS

3Q07 3Q08 3Q07 3Q08

*Note: Excludes Investment Division

2.1

4.1

1.6

3.2

Division Net Profit*

22%

Mechatronics EMS

3Q07 3Q08 3Q07 3Q08

5% 23%

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12.1

4.1

3.5

2.6

2.9

4.7

4.1

8.3

Others

Automotive

OfficeAutomation

Telco (Keypad& Others)

MECHATRONICS (S$ m)

3Q08 - Division Revenue Analysis

EMS (S$ m)

11.4

2.8

15.2

12.6

5.6

18.0

11.5

3.0Others

Analytical

Medical

Semiconductor

18%18%

32%32%

3Q07 3Q08MechatronicsEMS

6%6%

85%85%


2%2%

55%55%

19%19%

N.M.N.M.

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(S$ m) YTD Sept 08 YTD Sept 07 Chg y-o-y

Revenue 178.2 182.5 (2%)

Gross Profit (GP) 26.6 30.9 (14%)

Profit Before Tax 17.1 21.7 (21%)

Effective Tax Rate 21.9% 19.7% -

Net Profit (NP) 13.4 17.4 (23%)

NP Margin 7.5% 9.5% -

125.9

56.6

123.1

55.2

YTD Sept 08 – P&L Snapshot

Division Revenue

YTD Sept 07

YTD Sept 08

Mechatronics EMS


YTD Sept 07

YTD Sept 08

8.0

22.9

6.8

19.8

Division Gross Profit*

Mechatronics EMS

YTD Sept 07

YTD Sept 08

YTD Sept 07

YTD Sept 08

3.9

13.6

2.3

11.1

Division Net Profit*

Mechatronics EMS

YTD Sept 07

YTD Sept 08

YTD Sept 07

YTD Sept 08

*Note: Excludes Investment Division

3%

2%

15%

14%

42%

18%

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YTD Sept 08 – Group Revenue AnalysisElectroTech Investments Limited

5.1

9.0

10.6

32.0

8.5

34.3

40.0

43.1

51.4

36.3

10.0

23.0

11.9

11.2

9.0

25.4

Others

Automotive

Office Automation

Telco (Keypad & Others)

Others

Analytical

Medical

SemiconductorBreakdown by Business Segment

20%

MECHATRONICS (S$ m)

EMS (S$ m)

Breakdown by Division:Mechatronics – 69%, EMS – 31%

29%29%

28%28%

Medical

Semiconductor

Telco (Keypad & Others)

Office Automation

14%

13%

7%Automotive

6%

Analytical29%

17%17%

13%13%

119%119%

6%6%

41%41%

Others5%

YTD Sept 07

MechatronicsEMS

YTD Sept 08N.M.N.M.

Others6%

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Working Capital Management ElectroTech Investments Limited

919389

85

31 Dec 07 31 Mar 08 30 Jun 08 30-Sep-08

87

7672

8891

94

727372

67

75

81

60

70

80

90

100

31 Dec 07 31 Mar 08 30 Jun 08 30-Sep-08

Cash Conversion Cycle (Days)

Turnover Days

PayablesReceivables

Inventories

Cash Conversion Cycle (Days) = Days sales outstanding + Days inventory outstanding – Days payables outstanding

(S$ m) 3Q08 3Q07

Net cash flow from operations

6.6

2.2

4.4

2.92.9

Capital expenditure

2.12.1

Free cash flow 0.80.8

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15.0ctsNet Cash

44.5ctsOther

Assets

Balance Sheet Highlights

Balance Sheet (S$ m) 30 Sept 08 31 Dec 07

Cash and cash equivalents * 46.1 44.0

Shareholders’ equity 181.1 178.3

Net asset value per share (Scents) 59.4 58.5

Total borrowings 0.5 0.8

Net gearing Net cash Net cash

25%75%

* Included short term fund with a financial institution


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Key Valuation MetricsElectroTech Investments Limited

*Annualised figures

**Based on sum of earnings per share of last four quarters ended 3Q08

30 Sept 08 31 Dec 07

Return-On-Average Equity 9.9%* 13.6%

Return-On-Average Equity (ex-Net Cash) 13.2%* 18.4%

Share Price (as at 30 Oct ‘08)Market Capitalisation (S$ m)

S$0.2576.2

Trailing earnings per share (Scents)**Trailing Price/earnings ratioTrailing Price/earnings ratio (ex-Net cash)

6.22 4.01.6

Price/NAV 0.4


MechatronicsMechatronics DivisionDivisionBusiness Review & OutlookBusiness Review & Outlook

Business Review & OutlookMechatronics Division

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61.2

83.370.8

58.1

FY2005 FY2006 FY2007 YTD Sep08

5.2

9.27.66.8

20.321.6 21.1

19.0 18.0

3Q07 4Q07 1Q08 2Q08 3Q08

1.51.5

2.32.5

2.0

Sales and Net ProfitMechatronics Division

Net Profit Margin3Q07 10.0%4Q07 11.6%

2Q08 7.9%3Q08 8.3%

1Q08 10.9%

Net Profit MarginFY2005 11.1%FY2006 10.7%FY2007 11.0%

YTD Sept 08 9.0%

Revenue: -11%Net Profit: -25%

Currency: Euro millionRevenueNet profit

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7.368.48

7.87 7.878.51

3Q07 4Q07 1Q08 2Q08 3Q08

24.328.0

21.319.3


Sales Analysis – Medical SegmentMechatronics Division

Currency: Euro million

+16%

+8% 3Q08 Review: • Revenue driven mainly by increased

orders for a product launched in 3Q07 for an existing customer

• Growth hampered by the delayed market introduction of a new product for another customer

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6.09 5.995.31

3.99

2.67

3Q07 4Q07 1Q08 2Q08 3Q08

12.0

27.123.8

14.7


Sales Analysis – Semiconductor SegmentMechatronics Division

-56%


-33%

3Q08 Review: • Revenue continued to be

impacted by the cyclical downturn in the semiconductor equipment industry

• Certain components were built into only new equipment during 3Q08, compared to both new and existing equipment in 3Q07

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5.48 5.376.22

5.46 5.45

3Q07 4Q07 1Q08 2Q08 3Q08

17.1

22.218.7

21.1


Sales Analysis – Analytical SegmentMechatronics Division

-0.5%


3Q08 Review:

• Revenue remains relatively stable in spite of current global market conditions

+/-0%

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New Project PlansMechatronics Division

Analytical

Semiconductor

Medical

FrenckenNetherlands

• Ongoing development project - commercial production expected by 4Q09

•New design & development project for lithography equipment

•Recently completed project for a new customer - commercial production expected in 3Q/4Q08

•2 new development projects –commercial production anticipated in 4Q09

•Redesign project for enhancement of an existing product

Analytical

Semiconductor

Medical

Frencken Malaysia

•Ongoing qualification for the transfer of a higher integration level of an existing module from Frencken Netherlands

•Qualification of a range of modules for a new customer has commenced – date of commercial production to be determined closer to full product approval

•Qualification of the next transfer module to commence in 4Q08

•Volume ramp-up of an existing module transferred from Frencken Netherlands expected in 4Q08

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Strategic InitiativesMechatronics Division

Strategic Initiatives Strategic Alliances

Semiconductor Medical

Analytical Others – such as energy and environment

Semiconductor Medical

Analytical Others – such as energy and environment

Market Segments

– Focus on design and assembly projects while increasing outsourcing of machined components

– Continuous product transfers to Frencken Malaysia

– M&As for geographical expansion and faster time-to -market

– Build global presence in strategic, key and emerging markets

– CFRR alliance with 3 other ‘best in class’technology companies

– Progressing on 3 new projects for new and existing customers

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EMS Division

EMS DivisionEMS DivisionBusiness Review & OutlookBusiness Review & Outlook

EMS DivisionBusiness Review & Outlook

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186.2 182.1

127.3

165.1


5.59.7

27.529.9

49.6

40.437.6

42.547.2

3Q07 4Q07 1Q08 2Q08 3Q08

3.82.2

-0.50.8

4.9

Net Profit Margin3Q07 9.9%4Q07 2.0%1Q08 -1.3%

3Q08 8.1%2Q08 5.2%

EMS DivisionSales and Net Profit

Net Profit Margin

FY2005 16.1%

FY2006 15.1%

FY2007 5.9%

YTD Sept 08 4.3%

Revenue: -5%Net Profit: -22%

RevenueNet profit

Currency: RM million

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110.9122.1

84.1

48.2


18.17

13.7116.34

19.45

24.43

3Q07 4Q07 1Q08 2Q08 3Q08

-26%

Sales Analysis – Keypad SegmentEMS Division


+33%

3Q08 Review: • Business conditions in the global handset

market remained challenging

• 3Q is traditionally stronger than 2Q

• Commercial production of “sputtering”type keypads commenced in 3Q08 and help contribute to higher turnover

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39.5

22.529.2 28.4


10.0011.33

7.07

5.13

9.40

3Q07 4Q07 1Q08 2Q08 3Q08


+6%

Sales Analysis – Office Automation SegmentEMS Division

-12% 3Q08 Review:

• Revenue driven by the recent commercial production launch of mailing system products for a major customer

• Actual shipments in 3Q08 were lower than customer’s original forecast as sales designated for USA market softened

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3.56.3

17.4

26.6


11.41

8.60

6.615.815.85

3Q07 4Q07 1Q08 2Q08 3Q08

+95%

Sales Analysis – Automotive SegmentEMS Division


+33%3Q08 Review:

• Revenue driven by a higher number of industrialisation projects that went into commercial production

• Growth hampered by a general slowdown in orders from our customers as the USA economy weakens

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Project PlansEMS Division

Keypad •Capping production capacity of keypads and strategically allocating more capacity to the Automotive segment – in line with our longer term plan to reduce dependence on the keypad business segment

• New models/projects with anticipated commercial production phasing in from 4Q08

OfficeAutomation

Automotive

•2 ongoing industrialisation projects with anticipated commercial production in 1Q09 and 4Q09

•1 new industrialisation project to commence in 4Q08 with commercial production targeted for 4Q10

•Ongoing industrialisation projects with anticipated production launches in 2H08 and 1H09

•Building up assembly and test facilities for a new module assembly project with mass production anticipated by 2Q/3Q09

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This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. Investors can identify some of these statements by forward-looking items such as ‘expect’, ‘believe’, ‘plan’, ‘intend’, ‘estimate’, ‘anticipate’, ‘may’, ‘will’, ‘would’, and ‘could’ or similar words. However, you should note that these words are not the exclusive means of identifying forward- looking statements. These forward-looking statements are based on current expectations, projections and assumptions about future events. Although ElectroTech Investments Limited believes that these expectations, projections, and assumptions are reasonable, these forward-looking statements are subject to the risks (whether known or unknown), uncertainties and assumptions about ElectroTech Investments Limited and its business operations.

Some of the key factors that could cause such differences are, among others, the following:•changes in the political, social and economic conditions and regulatory environment in the jurisdictions where we conduct business or expect to conduct business;•the risk that we may be unable to realise our anticipated growth strategies and expected internal growth;•changes in and new developments in technologies and trends;•changes in currency exchange rates;•changes in customer preferences and needs;•changes in competitive conditions in our customers’ industries and our ability to compete under these conditions;•changes in pricing for our products; and•changes in our future capital needs and the availability of financing and capital to fund these needs.

Given these risks, uncertainties and assumptions, the forward-looking events referred to in this presentation may not occur and ctualresults may differ materially from those expressly or impliedly anticipated in these forward-looking statements. Investors are advisednot to place undue reliance on these forward-looking statements.

Investors should assume that the information in this presentation is accurate only as of the date it is issued. ElectroTech Investments Limited’s business, financial conditions, results of operations and prospects may have changed since that day. ElectroTech Investments Limited has no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Safe Harbour for Forward-Looking StatementsElectroTech Investments Limited

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ThankThank YouYou

ElectroTech Investments LimitedEnd of Presentation

Investor Relations ContactOctant Consultingtel (65) 6220 [email protected] or [email protected]

ElectroTech Investments LimitedPlot 410, Lorong Perusahaan 8BPrai Industrial EstatePrai 13600, MalaysiaWebsite : www.electrotechgroup.com

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