fgl analyst briefing...

FRENCKEN GROUP LIMITEDINCORPORATED IN SINGAPORE

2011

1H11 Results Presentation


2

Agenda

FRENCKEN GROUP LIMITED

• Financial Review• 1H11

• Business Review and Outlook• Mechatronics Division

• EMS Division

• Questions and Answers

1H11 Results Presentation1H11 Results - Revenue

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FGL Group Revenue (SGD)

160

170

180

1H10 Change excludingcurrency impacts

CurrencyTranslation

Impacts

1H11

Sales

+2.3% at constant exchange rates

S$173.5m

S$4.0m -S$6.1m

S$171.4m

2.3%-3.5%

-1.2%

1H11 Results Presentation1H11 Results – Division Revenue Analysis

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(S$ m) 1H11 1H10 Chg y-o-y MechatronicsSemiconductor 40.4 37.7 7%Medical 28.5 25.9 10%Analytical 31.8 22.9 39%Industrial Automation 20.7 40.8 -49%Others 15.2 12.5 22%

136.6 139.8 -2%EMSTelco (Keypads & Others) - 2.5 N.M.Office Automation 16.3 18.0 -9%Automotive 14.8 9.2 61%Others (Include Telco) 3.7 4.0 -7%

34.8 33.7 3%Total 171.4 173.5 -1%

*N.M. – Not Meaningful

1H11 Results Presentation1H11 Results – Consolidated Results 1H11 vs 1H10

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1H11 1H10 YOY% Change

Sales Profit/ (Loss) * Sales Profit/

(Loss) * Sales Profit/ (Loss)

FGL Ltd SGD 171.4 7.3 173.5 8.8 -1% -18%

Mechatronics SGD 136.6 9.3 139.8 10.0 -2% -7%

EMS SGD 34.8 (2.0) 33.7 (1.0) 3% -105%

*Excludes Investment Division

1H11 Results Presentation1H11 Results – P&L Snapshot

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(S$ m) 1H11 1H10 Chg y-o-y

Revenue 171.4 173.5 -1%

Gross Profit (GP) 20.1 23.3 -14%

Profit Before Tax 9.2 11.2 -17%

Net Profit 7.3 8.8 -18%

NP Margin 4.2% 5.1% -17%

Effective Tax Rate 21.1% 21.0% 1%

1H11 Results Presentation1H11 Results – Group Revenue Analysis

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Breakdown by Business Segment

12%

Breakdown by Division:Mechatronics – 80%EMS – 20%

Medical

Semiconductor

Automotive

Office Automation

17%

9%

9%

Analytical19%

Others2%

Others8%

Industrial Automation

24%

MechatronicsEMS

1H11 1H109.2

4.0

18.0

2.5

12.5

40.8

22.9

25.9

37.740.4

31.8

20.7

15.2

0

16.3

14.8

3.7

28.5

Ot hers

A ut o mo t ive

Of f iceA ut o mat io n

T elco ( Keyp ad &Ot hers)

Ot hers

Ind ust r ialA ut o mat io n

A nalyt ical

M ed ical

Semico nd uct o r

MECHATRONICS (S$ m)

EMS (S$ m)

22%

N.M.

61%

7%

39%

10%

49%

9%

7%

*N.M. – Not Meaningful

1H11 Results PresentationWorking Capital Management

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(S$ m) 30 Jun 11

31 Dec 10

Inventories 75.2 62.0

Trade Receivables 64.1 69.7

Trade Payables 40.3 39.6

Cash Conversion Cycle (Days)(S$ m) 6 months to 30th Jun 2011

Net Profit 7.3

Non-Cash 7.8Working Capital (4.9)Taxes & Interest (1.3)

Net cash flow from operations 8.9Capital expenditure (10.1)Free cash flow (1.2)Cash Conversion Cycle (Days) = Days sales outstanding +

Days inventory outstanding – Days payables outstanding

Turnover Days

PayablesReceivables

Inventories82

9290

79

68

63

85

74 75

68 72

646367

77

55

65

75

85

95

30 Jun 10 30 Sep 10 31 Dec 10 31 Mar 11 30 Jun 11

84

93

83

96 95

30 Jun 10 30 Sep 10 31 Dec 10 31 Mar 11 30 Jun 11

1H11 Results PresentationStrong Balance Sheet

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Balance Sheet (S$ m) 30 Jun 11 31 Dec 10Shareholders’ equity 199.2 196.3

Total borrowings 17.8 19.5

Cash and cash equivalents 45.8 53.0

Net Cash 28.0 33.5

Financial Indicators 30 Jun 11 31 Dec 10Gross gearing (%) 8.9 9.9

Net asset value per share (S$ cents) 54.15 53.64

Financial Indicators 30 Jun 11 30 Jun 10

EPS (S$ cents) 1.98 2.35

Mechatronics DivisionBusiness Review & Outlook

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1H11 Results PresentationForex EURO/SGD

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Mechatronics Division

1.78291.73771.73221.7973 1.7748

1.50

1.70

1.90

2.10

2.30

2Q10 3Q10 4Q10 1Q11 2Q11

Euro

/SGD

- 0.8%

+ 2.6%


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Mechatronics DivisionForex USD/SGD

1.24671.28

1.371.391.3033

1.00

1.20

1.40

1.60

1.80

2.00

2Q10 3Q10 4Q10 1Q11 2Q11

USD

/SGD

- 10.3%

- 2.6%

1H11 Results PresentationSales

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136.6156.0

281.7

157.3

FY2008 FY2009 FY2010 1H FY2011

56.47

99.57

139.83 141.85 136.57

1H09 2H09 1H10 2H10 1H11

-2%-4%

Currency: SGD million

1H11 Results PresentationNet Profit & Net Profit Margin

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NP margin 2.5% 3.6% 7.2% 6.7% 6.8%

9.279.5510.01

3.59

1.40

1H09 2H09 1H10 2H10 1H11

12.9

5.1

19.6

9.3

FY2008 FY2009 FY2010 1H FY2011NP margin 8.2% 3.2% 6.9% 6.8%

-7%Currency: SGD million-3%

1H11 Results PresentationSales Analysis – Medical Segment

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28.5331.20

25.9530.37

23.48

1H09 2H09 1H10 2H10 1H11

28.6

57.253.9

67.8

FY2008 FY2009 FY2010 1H FY2011

+10%

-9%Currency: SGD million

1H11 Results PresentationSales Analysis – Semiconductor Segment

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5.90

17.86

37.6540.95 40.38

1H09 2H09 1H10 2H10 1H11

40.4

78.6

23.829.0

FY2008 FY2009 FY2010 1H FY2011

+7%

-1%Currency: SGD million

1H11 Results PresentationSales Analysis – Analytical Segment

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16.9521.02 22.86

27.9731.79

1H09 2H09 1H10 2H10 1H11

31.8

50.8

37.947.3

FY2008 FY2009 FY2010 1H FY2011

+39%

+14%


1H11 Results PresentationSales Analysis – Industrial Automation Segment

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22.0

67.0

20.7

FY2009 FY2010 1H FY2011

3.21

18.86

40.84

26.1620.68

1H09 2H09 1H10 2H10 1H11

-49%

-21%

1H11 Results PresentationProject Plans

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Mechatronics Industrialisation / Development Medical Europe

• Taken over customisation activities of patient table from Philips Healthcare.• Various ongoing projects for enhanced versions of existing products.Asia• Completed engineering prototype (EP) parts for a new diagnostic product.

Follow-on beta orders expected before end 2011 while series production isexpected in Year 2013.

• New oncology module for an existing customer will commence series production in 2H11.

Semiconductor Europe• Secured new projects for advanced lithography equipment.• Nearing completion of an improved version of a module for a lithography

machine. Analytical Europe

• Working on an enhanced version of a newly launched product to expand its application space.

• Completed proprietary development (ODM) of a critical module for potential deployment into customers’ products.

• Secured a new development project from a US based customer.Asia• Series production of parts and modules for 2 new instruments for an existing

customer to commence in 2H11.• Secured initial order for a process instrument from a new customer.

1H11 Results PresentationProject Plans

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Mechatronics Industrialisation / DevelopmentIndustrial Automation Asia

• Commencing production of a new automation station in 3Q11.

Others Asia• Series production for 2 key projects for an existing customer experienced

market delay to 2H11.• Completed first article and secured initial series production order of a module

for a process equipment used in renewable energy application.

1H11 Results PresentationDivision Outlook

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• Steady flow of enquiries and RFQs for new projects from existing and potential customers.

•Forecast from customers indicate an increasing trend in demand for the medical and analytical business segments.

• Short term softness and volatility is expected in the semiconductor business segment.

•Barring any unforeseen circumstances and given the uncertain macro economic climate, outlook is one of “cautious optimism”.

EMS DivisionBusiness Review & Outlook

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EMS DivisionSales

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Currency: RM million +7%

161.3

122.6

162.5

83.9

FY2008 FY2009 FY2010 1H FY2011

83.92

54.01

68.62

78.6183.86

1H09 2H09 1H10 2H10 1H11

+0.1%


EMS DivisionNet Profit & Net Profit Margin

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Currency: RM million -77%

5.1

-9.8

-6.0-5.1

FY2008 FY2009 FY2010 1H FY2011

-5.07

-3.04

-6.74

-2.86 -3.19

1H09 2H09 1H10 2H10 1H11

-59%


EMS DivisionSales Analysis – Office Automation Segment

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37.9 37.7

79.1

39.2

FY2008 FY2009 FY2010 1H FY2011

17.3920.33

41.8637.25 39.17

1H09 2H09 1H10 2H10 1H11

-6%Currency: RM million

+5%


EMS DivisionSales Analysis – Automotive Segment

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32.2 35.4

56.2

35.8

FY2008 FY2009 FY2010 1H FY2011

35.7534.75

21.4521.89

13.52

1H09 2H09 1H10 2H10 1H11

+67%Currency: RM million+3%


EMS DivisionSales Analysis – Others (Includes Telco) Segment

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24.3

10.4

23.7

9.0

FY2008 FY2009 FY2010 1H FY2011

9.00

11.8611.86

6.094.26

1H09 2H09 1H10 2H10 1H11

-24%Currency: RM million

-24%Exclude Telco

Exclude Telco


EMS DivisionProject Plans

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EMS Division Industrialisation / Development

Office Automation •Ongoing industrialisation of a significant project is on schedule.

•Due to design and technical issues at customer’s end, targeted commercial production in 4Q11 is likely to be delayed to end 1Q/2Q 2012.

Automotive •Commercial production of a significant project was launched in May 2011 (originally slated for 4Q11).

•Commercial production of another significant project is anticipated in 4Q 2011.

•A number of smaller industrialisation projects are proceeding as scheduled with commercial production anticipated to commence by 4Q11.


EMS DivisionDivision Outlook

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• Prospects of securing new projects and customers in the automotive business segment remain positive

•Revenue from the automotive segment is anticipated to increase from 2H11 onwards

•Growth should continue into FY2012 with the commercial production of two significant projects

•Revenue from the office automation segment is expected to remain stable

•Higher growth of office automation segment anticipated from 2H12 onwards when commercial production of a significant industrialisation project reaches its targeted volumes

•Unfavourable exchange rate regime continues to pose a challenge

1H11 Results PresentationSafe Harbour For Forward-Looking Statements

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This presentation contains certain statements that are not statements of historical fact, i.e. forward-lookingstatements. 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. Theseforward-looking statements are based on current expectations, projections and assumptions about futureevents. Although Frencken Group Limited believes that these expectations, projections, and assumptions arereasonable, these forward-looking statements are subject to the risks (whether known or unknown),uncertainties and assumptions about Frencken Group 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 jurisdictionswhere 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 theseconditions;•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 presentationmay not occur and actual results may differ materially from those expressly or impliedly anticipated in theseforward-looking statements. Investors are advised not to place undue reliance on these forward-lookingstatements.Investors should assume that the information in this presentation is accurate only as of the date it is issued.Frencken Group Limited’s business, financial conditions, results of operations and prospects may havechanged since that day. Frencken Group Limited has no obligation to update or revise any forward-lookingstatement, whether as a result of new information, future events or otherwise, except as required by law.

1H11 Results PresentationThank You

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Q&AFrencken Group LimitedPlot 410, Lorong Perusahaan 8BPrai Industrial EstatePrai 13600, Malaysia

Investor Relations ContactOctant ConsultingTel (65) 6220 [email protected]@octant.com.sg

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