fy16 corporate update & financial results 26 september 2016 · fy16 corporate update &...

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Corporate PresentationFY16 Corporate Update & Financial Results

26 September 2016

IR Adviser

(Company No.: 7867-P)

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CONTENTS

• Operations Review & Growth Plans

• FY16 Financial Review

• Investment Merits

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OPERATIONS REVIEW

& GROWTH PLANS

4

Operations Review Growth Strategies Financial Highlights Investment Merits Appendix

7.5

9.1

9.5

9.4

11

.0

12

.3

FY13 FY14 FY15 FY16 FY17^ FY18*

Operations Review: Manufacturing

Manufacturing sales tonnage set to rise substantially in FY2017 as newly expanded

capacities start being utilised…

Operations Review

Products:

• Base film• Functional films

Prod. Output: 60,000 MT p.a.Location: Rawang & Ipoh

PE FilmPE Film

Prod. Output: 60,000 MT p.a.Location: Rawang & Pulau Indah

BOPP

Film

BOPP

Film

Output: 6,000 MT p.a.Location: Shah Alam & Indonesia

AdhesiveAdhesive

Consumer PackagingConsumer Packaging

Prod. Output: 120,000 MT p.a.Location: Pulau Indah

Stretch

Film

Stretch

Film

Prod. Output: 18,000 MT p.a.Location: Melaka

PP

Strapping

Band

PP

Strapping

Band

Prod. Output: 10,000 MT p.a.Location: Vietnam

RaffiaRaffia

Industrial PackagingIndustrial Packaging

Prod. Output: 12,000 MT p.a.Location: Melaka

CPP FilmCPP Film

Total average monthly sales tonnage

3.0

3.3

4.4

6.0

9.0

14

.0

FY13 FY14 FY15 FY16 FY17^ FY18*

Average monthly sales tonnage

(MT ‘000)

10.5

Industrial Packaging

Consumer Packaging

13.912.4 20.015.4

(-1.1%) yoy

+34.3% yoy

*Estimation based on full output

26.3

^Internal estimates

5


FY15 FY16

Industrial 770.5 803.7

Consumer 515.4 745.8

40%48%

60%52%

Segment Revenue (RM ‘mil)

Industrial

Consumer

Total 1,286.0 1,549.5

+4.3%

yoy

Operations Review: Manufacturing

Consumer packaging now contributing almost 50% of Group manufacturing

revenue…

Operations Review

� 4Q16 manufacturing revenue rose 16.5% yoy to RM372.7 mil

� Industrial Packaging

� 4Q16 revenue dipped 1.4% yoy to RM185.2 mil (4Q15:

RM187.9 mil) in line with lower plastic resin prices

� Consumer Packaging

� 4Q16 revenue rose 42.0% yoy to RM187.6 mil (4Q15:

RM132.0 mil), on new contribution of RM40.2 mil from

SGW Ipoh and larger orders from existing business

� Minimal contribution from CPP production as plant

just commenced in January 2016

� Exports made up 55.5% of consumer packaging

revenue (4Q15: 47.2%)

+44.7%

yoy

6


Growth Plans: Manufacturing

Consumer packaging expansions to fully complete in 2017…

Growth Strategies

30,000MT

Per Annum

24,000 MT PE

6,000 MT BOPP

156,000MT

Per Annum

84,000 MT PE

60,000 MT BOPP

12,000 MT CPP

2017

Completion

2014 2017

Consumer packaging expansion plan

Commenced

Sept 2016

� Existing expansion plans progressing smoothly

� CPP

Commercial run commenced in January 2016 and

currently conducting trial runs with potential

customers; target to fill up capacity in 2017

� BOPP

Commercial run commenced in September 2016;

currently undergoing trial runs with potential customers

� PE

Overall production output to increase from 60,000 MT

p.a. to 84,000 MT p.a. in 2017

� Rawang plant

o CAPEX of RM21 mil; to increase production

output by 25% to 60,000 MT p.a.

� SGW Ipoh

o CAPEX of RM50 mil; to increase production

output to 24,000 MT p.a.

New CPP production line in Melaka New BOPP plant in Pulau Indah

Commenced

Jan 2016

5XGrowth

7


Operations Review: Property

New launches and sales performance remain strong despite weaker property

market… seeing resilient demand from affordable segment

Operations Review

FY15 FY16

RM606.8m

RM794.0m

+30.8%

yoy

FY15 FY16

RM667.4m RM657.8m

New Sales

new launches maintainedattributed to resilient demand

for affordably priced homes

New Launches

Acacia – 2½ -storey terrace houses

Aster – 2-storey terrace houses

New launch at Pulai, Johor

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Operations Review: Property

Property unbilled sales of RM717.2 mil to be recognized over the next 2-3 years…

Operations Review

Ongoing GDVRM293 mil


� FY16 property revenue rose 26.3% to RM651.2 mil

(FY15: RM515.7 mil), on higher revenue recognition across

all ongoing projects

� 4Q16 property development revenue rose 42.1% yoy

to RM188.4 mil (4Q15: RM132.6 mil)

� Launched 12 new projects worth RM657.8 mil GDV in FY16

� Comprising mainly affordable residential properties

� 4Q16 launches amounted to RM256.3 mil

� Includes launch at newly acquired Pulai land

worth RM128.8 mil comprising 341 units of

2-storey and 2½-storey terrace houses

� Unbilled sales amounted to RM717.2 mil as at 31 Jul 2016

to be recognized over the next 2 to 3 years (31 Jul 2015:

RM584.9 mil)

Note: Data presented as at 31 July 2016





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FY16 FINANCIAL REVIEW

10


24

.9

25

.6

29

.5

27

.1

26

.0

33

.9

36

.3

48

.8

30

.3

36

.1

43

.0

48

.9

60

.9

64

.6

61

.3

54

.1

Quarterly PATMI (RM ‘mil)

Successfully doubled up top and bottomline in 3 years from 2014…

FY16 Income Statement Summary

Financial Highlights2

41

.6

27

1.1

34

5.1

37

1.2

36

4.8

38

3.5

42

6.8

41

5.4

43

1.1

46

2.9

45

5.3

45

2.5

55

0.6

54

5.4

54

3.9

56

1.1

Quarterly Revenue (RM ‘mil)

31

.3

33

.2

38

.2

40

.2

32

.9

44

.4

48

.1

56

.0

40

.2

47

.3

56

.5

77

.0

80

.8

79

.9

75

.8

69

.9

Quarterly PBT (RM ‘mil)

4Q16 4Q15 Change RM'mil FY16 FY15 Change Remarks

561.1 452.5 24.0% Revenue 2,201.0 1,801.7 22.2%Manufacturing and property segments reporting double-digi t

growth

88.2 88.5 (0.3%) EBITDA 367.1 268.8 36.6%

15.7% 19.6% (3.9 pt) EBITDA margin 16.7% 14.9% 1.8 pt

69.9 77.0 (9.2%) PBT 306.3 221.0 38.6%

12.5% 17.0% (4.5 pt) PBT margin 13.9% 12.3% 1.6 pt

54.1 48.9 10.7% PATMI 240.9 158.2 52.3%

9.6% 10.8% (1.2 pt) Net margin 10.9% 8.8% 2.1 pt

23.54 21.66 8.7% Basic EPS (sen) 105.88 70.43 50.3%

Saw stronger profi tabi l i ty as enlarged manufacturing

operations benefi tted from operating leverage, better product

mix, and more export sa les

Record high net profi t from best-ever revenue and reinvestment

a l lowance benefi ts

*4Q15 and FY15 PBT and PATMI includes RM12.6 million fair value gain on investment properties

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70.4%

29.6%

FY16 Group Revenue: RM2,201.0 mil

48.2%

51.8%

FY16 Group EBITDA: RM367.1 mil

Manufacturing Property

71.4%

28.6%

FY15 Group Revenue: RM1,801.7 mil

Manufacturing division makes up more than 50% of Group EBITDA…

Revenue & EBITDA Segmentation

+26.3% yoy

+20.5% yoy

15.4% yoy

+93.5% yoy

Financial Highlights

35.7%

64.3%

FY15 Group EBITDA*: RM256.2 mil

Manufacturing Property

*Excluding RM12.6 million fair value gain on investment properties

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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix5

4

56

58

77

10

7

92

17

7

9.9% 9.6% 9.1% 8.4% 9.0%7.1%

11.4%

FY10 FY11 FY12 FY13 FY14 FY15* FY16

RM’mil

EBITDA & EBITDA Margin

EBITDA EBITDA Margin

483 635 763 771 804153

284430 515

746

FY10 FY11 FY12 FY13 FY14 FY15 FY16

RM’mil

Manufacturing Revenue (by Segment)

Industrial Packaging Consumer Packaging

Financial Review: Manufacturing

Financial Highlights5

45

58

5

63

7

91

9

1,1

92

1,2

86

1,5

49

12.2%11.3% 11.0% 11.1%

9.8%11.0%

14.6%


RM’mil

Manufacturing Revenue & Gross Margin

Revenue Gross Margin

FY16 EBITDA grew 93.5%

in line with higher topline

and better product mix

FY16 EBITDA grew 93.5%

in line with higher topline

and better product mix

FY16 manufacturing

revenue grew 20.5%,

largely driven by

consumer packaging;

gross margins improved

on better efficiency,

favourable product mix,

and higher export sales

FY16 manufacturing

revenue grew 20.5%,

largely driven by

consumer packaging;

gross margins improved

on better efficiency,

favourable product mix,

and higher export sales

Industrial packaging revenue increased 4.3%

yoy due to higher ASP on stronger USD/MYR

Industrial packaging revenue increased 4.3%

yoy due to higher ASP on stronger USD/MYR

Consumer packaging revenue increased 44.7% with

expanded PE film capacity and clientele

Consumer packaging revenue increased 44.7% with

expanded PE film capacity and clientele

*Includes RM27.2 mil foreign exchange translationdifferences

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15

0

21

9

24

5

31

0

39

8

51

6

65

2

37.8%42.6% 44.2% 47.0% 44.1% 42.3%

38.5%


RM’milRevenue & Gross Margin

Revenue Gross Margin

34

63

73

10

0

12

2

16

5

19

0

22.8%

28.8% 29.8%32.3% 30.7% 31.9%

29.2%

FY10 FY11 FY12 FY13 FY14 FY15* FY16

RM’milEBITDA & EBITDA Margin

EBITDA EBITDA Margin

Financial Review: Property Development


Property division thriving on sturdy demand for affordable homes in Johor…

Seeing higher progress billings and favourable demand for new

launches in Pasir Gudang, Kulai, Skudai, Senai, and Melaka

Seeing higher progress billings and favourable demand for new

launches in Pasir Gudang, Kulai, Skudai, Senai, and Melaka

*Excluding RM12.6 million fair value gain from investment properties

Higher profits consistent with revenue growth; EBITDA

margins maintained in the 28%-30% range on affordable-

skewed product mix

Higher profits consistent with revenue growth; EBITDA

margins maintained in the 28%-30% range on affordable-

skewed product mix

+26.3%

+15.4%

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As at As at

31.7.2016 31.7.2015

Property, Plant & Equipment 952,519 642,791 In line with consumer packaging expansion

Investment Property & Other Investments 24,967 24,082

Land Held & Property Development Costs 621,752 405,115 Due to acquisition of land in Pulai, Johor

Investment in Jointly Controlled Entity & Associated Company 48,666 41,524

Inventories 137,010 111,953 In line with enlarged operations

Trade & Other Receivables 350,675 321,698 In line with increase in revenue

Cash & Bank Balances 100,601 90,626

Deferred Tax Assets & Tax Recoverable 4,506 2,086 Due to reinvesment allowance from SGW Ipoh

Intangible Assets 12,134 - Due to acquisition of SGW Ipoh

TOTAL ASSETS 2,252,830 1,639,875

Trade & Other Payables 458,846 328,586 In line with enlarged operations

Borrowings (ST + LT) 471,608 225,431To fund working capital requirements, machinery purchases for

consumer packaging expansion, and landbanking

Tax & Deferred Tax 56,932 62,588

Shareholders’ Equity 1,175,167 941,978 Due to higher retained earnings

Minority Interest 66,495 62,784

Net Tangible Assets / Share (RM) 1 5.11 4.17

Net Gearing 0.32x 0.14xIn line with higher borrowings to fund working capital

requirements, machinery purchases, and landbanking

Balance Sheet (RM ‘000) Remarks

Net gearing increased in line with capacity expansions and land acquisition… set to

reduce in near term due to strong operational cashflow

1 Based on share capital of 230.0 mil shares


Balance Sheet (Highlights)

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INVESTMENT MERITS

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Investment Merits

A high-growth proposition all-round... attractive proxy to the burgeoning packaging sector

and Southern Malaysia’s affordable property market

Investment Merits

MANUFACTURING

• One of the world’s largest stretch film

producers

• Consumer packaging segment facilitates

entry into burgeoning F&B and FMCG sectors

• Further integration and expansion initiatives

position Group to cater to larger regional

clientele and enhance competitiveness

PROPERTY DEVELOPMENT

• Reputable developer in the southern states

of Johor and Melaka

• Current projects of RM1.5 bil

• Pipeline GDV of RM5.7 bil on existing

landbank to sustain another 10 years

• Future projects displaying higher GDV/acre

• Strong fundamentals with strong upside to profit and margin expansion

• Dividend policy of minimum 30% payout

� 30.6% dividend payout in FY2016

• Valuations to be compressed with foreseeable earnings boost

• Trading at trailing 12-month PE of 11.8x and EV/EBITDA of 8.9x (as at 20 September 2016)

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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix2

.7

2.7

2.7

4.5

8.1

14

.2

4.2

17

.2

10

.8

19

.4

25

.8

30

.1

35

.4

47

.1

49

.7

73

.6

22

.1

49.2% 48.0%

74.0%

26.6%

36.6%

49.8%

28.7%36.1%

28.8%32.1% 33.4% 35.9%

52.1%

31.7%31.4%

30.6%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

RM’mil Dividend History

Net Dividend Payout Special Dividend Payout Ratio

Group has dividend policy of minimum 30% net profit payout…

Dividend History

� FY2015 Dividends (Total Dividend of 11* sen) :

• Paid interim dividend of 4.5* sen per share on 7 August 2015

• Paid final dividend of 6.5* sen per share on 25 January 2016

� FY2016 Dividend (Total Dividend of 16 sen):

• Paid interim dividend of 6* sen per share on 5 August 2016

• Proposed final dividend of 10 sen per share on 26 September 2016 subject to shareholders

approval (Ex-date: 30 December 2016; Payment date: 13 January 2017)

Dividend Policy:

Minimum 30% of Net Profit(effective FY2011)

Investment Merits

Share Dividend

5.9

*adjusted based on 460,000,000 ordinary

shares of RM0.50 each after 1:1 bonus issue completed on 15 August 2016

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Thank You

Contacts:

Ms. Jocelyn Ng [email protected] T: 03-5519 1325

Ms. Julia Pong [email protected] T: 03-2711 1391

fy16 corporate update & financial results 26 september 2016 · fy16 corporate update &...

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