9M16 Corporate Update & Financial Results 1 June 2016 · Corporate Presentation 9M16 Corporate Update & Financial Results 1 June 2016 IR Adviser (Company No.: 7867-P) 2 Powered by

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Corporate Presentation9M16 Corporate Update & Financial Results

1 June 2016

IR Adviser

(Company No.: 7867-P)

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CONTENTS

• Operations Review & Growth Plans

• 9M16 Financial Review

• Investment Merits

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OPERATIONS REVIEW

& GROWTH PLANS

4

Operations Review Growth Strategies Financial Highlights Investment Merits Appendix

Total average monthly sales tonnage

7.5

9.1

9.5

9.7

9.6

10

.8

12

.3

FY13 FY14 FY15 9M15 9M16 FY16* FY17*

3.0

3.3

4.4

4.4

5.9

7.1

13

.2

FY13 FY14 FY15 9M15 9M16 FY16* FY17*

Operations Review: Manufacturing

Consumer packaging leading manufacturing segment growth… industrial

packaging expected to post stable growth

Operations Review

Average monthly sales tonnage

(MT ‘000)

Products:

• Base film• Functional films

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

PE FilmPE Film

Prod. Output: 6,000 MT p.a.Location: Rawang

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, Klang

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

10.5 25.5

Industrial Packaging

Consumer Packaging

13.912.4 17.915.514.1

(-1.0%) yoy

+34.6% yoy

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

CPP FilmCPP Film

*Estimation based on full capacity utilisation

5


9M15 9M16

Industrial 582.7 618.6

Consumer 383.4 558.2

40% 47%

60% 53%

Segment Revenue (RM ‘mil)

Industrial

Consumer

Total 966.1 1,176.8

+6.2%

yoy

Operations Review: Manufacturing

Consumer packaging revenue expanding rapidly on larger volume… while

industrial packaging revenue also higher on stronger USD versus MYR

Operations Review

� 3Q16 manufacturing revenue rose 20.1% yoy to RM382.8m

� Industrial Packaging

� 3Q16 revenue increased 3.8% y-o-y to RM198.9 mil

(3Q15: RM191.6 mil) on higher ASP due to the stronger

USD/MYR

� Consumer Packaging

� 3Q16 revenue jumped 44.6% y-o-y to RM183.9 mil

(3Q15: RM127.1 mil), on new contribution of RM40.1

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 52.3% of consumer packaging

revenue (3Q15: 45.5%)

+45.6%

yoy

6


Growth Plans: Manufacturing

CPP and BOPP to see increased revenue contribution in 2016… PE expansions also

well on track to allow Group to expand market share

Growth Strategies

30,000MT

Per Annum

24,000 MT PE

6,000 MT BOPP

150,000MT

Per Annum

78,000 MT PE

60,000 MT BOPP

12,000 MT CPP

End-2016

completion

2014 2016

Consumer packaging expansion plan

Mid-2016

commencement

� Existing expansion plans progressing smoothly

� CPP

Revenue contribution expected to increase in the

second half of calendar year 2016 onwards

� BOPP

Commercial run on track to commence in mid-2016

� PE

Overall production output to increase from 60,000 MT

p.a. to 78,000 MT p.a. by end-2016

� Rawang plant

o CAPEX of RM21 mil; to increase capacity by

25% to 60,000 MT p.a.

� SGW Ipoh

o CAPEX of RM30 mil; to increase production

capacity by 50% to 18,000 MT p.a.

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

Commenced

Jan 2016

5XGrowth

7


Operations Review: Property

Unbilled sales of RM652.6 mil to be recognized over the next 2-3 years

Operations Review

Ongoing GDVRM328 mil


� 9M16 property revenue rose 20.9% to RM463.1 mil

(9M15: RM383.1 mil), on higher revenue recognition across

all ongoing projects

� 3Q16 property development revenue rose 18.0% yoy

to RM161.1 mil (3Q15: RM136.5 mil)

� Launched 7 new projects worth RM401.5 mil GDV in 9M16

� Comprising mainly affordable residential properties

� 3Q16 launches amounted to RM302.9 mil, comprising

affordable homes, shop lots, and apartments

� Unbilled sales amounted to RM652.6 mil as at 30 Apr 2016

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

RM584.9 mil)

Note: Data presented as at 30 April 2016




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9M16 FINANCIAL REVIEW

9


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

Quarterly PATMI (RM ‘mil)

All-round growth in both manufacturing and property segments… on track for

record financial performance in FY2016

9M16 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

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

Quarterly PBT (RM ‘mil)

3Q16 3Q15 Change RM'mil 9M16 9M15 Change Remarks

543.9 455.3 19.5% Revenue 1,639.9 1,349.2 21.5%Manufacturing and property segments reporting double-digi t

growth

91.3 69.4 31.7% EBITDA 278.9 180.3 54.7%

16.8% 15.2% 1.6 pt EBITDA margin 17.0% 13.4% 3.6 pt

75.8 56.5 34.1% PBT 236.4 144.0 64.2%

13.9% 12.4% 1.5 pt PBT margin 14.4% 10.7% 3.7 pt

61.3 43.0 42.6% PATMI 186.7 109.3 70.9%

11.3% 9.4% 1.7 pt Net margin 11.4% 8.1% 3.3 pt

26.86 19.02 41.2% Basic EPS (sen) 82.39 48.69 69.2%

Manufacturing segment's larger sa les volume provided higher

economies of sca le and operating effi ciency; a l so benefitted

from favourable product mix and higher export sa les

2Q16 & 3Q16 benefi tting from reinvestment a l lowances

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

10


71.8%

28.2%

9M16 Group Revenue: RM1,639.9 mil

52.9%

47.1%

9M16 Group EBITDA: RM278.9 mil

Manufacturing Property

71.6%

28.4%

9M15 Group Revenue: RM1,349.2 mil

Manufacturing and property segments contributing equally to Group EBITDA…

Revenue & EBITDA Segmentation

+20.9% yoy

+21.8% yoy

+14.0% yoy

+126.6% yoy

Financial Highlights

36.1%

63.9%

9M15 Group EBITDA: RM180.3 mil

Manufacturing Property

11

Operations Review Growth Strategies Financial Highlights Investment Merits Appendix5

4

56

58

77

10

7

91

65

14

8

9.9% 9.6% 9.1% 8.4% 9.0%7.1% 6.7%

12.5%

2010 2011 2012 2013 2014 2015 9M15* 9M16

RM’milEBITDA & EBITDA Margin

EBITDA EBITDA Margin

483 635 763 771583 619

153284

430 515

383558

2012 2013 2014 2015 9M15 9M16

RM’mil

Manufacturing Revenue (by Segment)

Industrial Packaging Consumer Packaging

Financial Review: Manufacturing

Benefitting from growing consumer packaging exports and expanded product

range… also seeing better operating efficiency

Financial Highlights5

45

58

5

63

7

91

9

1,1

92

1,2

86

96

6

1,1

77

12.2%11.3% 11.0% 11.1%

9.8%11.0%

9.9%

14.9%

2010 2011 2012 2013 2014 2015 9M15 9M16

RM’mil

Manufacturing Revenue & Gross Margin

Revenue Gross Margin

9M16 EBITDA grew

126.6% in line with higher

topline and better

product mix

9M16 EBITDA grew

126.6% in line with higher

topline and better

product mix

9M16 manufacturing

revenue grew 21.8%,

largely driven by

consumer packaging;

gross margins improved

on better efficiency,

favourable product mix,

and higher export sales

9M16 manufacturing

revenue grew 21.8%,

largely driven by

consumer packaging;

gross margins improved

on better efficiency,

favourable product mix,

and higher export sales

Industrial packaging revenue increased 6.2%

yoy due to higher ASP on stronger USD/MYR

Industrial packaging revenue increased 6.2%

yoy due to higher ASP on stronger USD/MYR

Consumer packaging revenue increased 45.6% with

expanded PE film capacity and clientele

Consumer packaging revenue increased 45.6% with

expanded PE film capacity and clientele

*9M15 EBITDA includes RM18.0 mil foreign exchangetranslation differences

12


15

0

21

9

24

5

31

0

39

8

51

6

38

3

46

3

37.8%42.6% 44.2% 47.0% 44.1% 42.3% 41.0% 39.9%

2010 2011 2012 2013 2014 2015 9M15 9M16

RM’milRevenue & Gross Margin

Revenue Gross Margin

34

63

73

10

0

12

2

16

5

11

5

13

1

22.8%

28.8% 29.8%32.3% 30.7% 32.0% 30.1% 28.4%

2010 2011 2012 2013 2014 2015* 9M15 9M16

RM’milEBITDA & EBITDA Margin

EBITDA EBITDA Margin

Financial Review: Property Development


Demand for affordable properties in Johor firmly intact…

Seeing higher progress billings and favourable demand for

new launches in Kulai, Senai, and Pasir Gudang

Seeing higher progress billings and favourable demand for

new launches in Kulai, Senai, and Pasir Gudang

*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

+20.9%

+14.0%

13


As at As at

30.4.2016 31.7.2015

Property, Plant & Equipment 919,626 642,791 In l ine with cons umer packaging expans ion

Inves tment Property & Other Investments 25,165 24,082

Land Held & Property Development Cos ts 624,136 405,115 Due to acquis i tion of land in Pula i , Johor

Inves tment in Jointly Control led Entity &

Associated Company48,260 41,524

Inventories 110,145 111,953

Trade & Other Receivables 385,817 321,698 In l ine with increa se in revenue

Cash & Bank Bala nces 74,222 90,626

Deferred Tax Ass ets & Ta x Recoverable 5,975 2,086 Due to reinvesment a l lowance from SGW Ipoh

TOTAL ASSETS 2,193,346 1,639,875

Trade & Other Payables 367,477 308,259 In l ine with enla rged operations

Borrowings (ST + LT) 531,203 225,431To fund working capi ta l requirements , machinery purchases for

consumer packaging expans ion, and landbanking

Tax & Deferred Tax 60,537 62,588

Shareholders ’ Equi ty 1,146,184 941,978 Due to higher reta ined ea rnings

Minori ty Interes t 65,830 62,784

Net Tangible Assets / Share (RM) 1 4.98 4.17

Net Gearing 0.40x 0.14xIn l ine with higher borrowings to fund working capi ta l requirements ,

machinery purchases , and landbanking

Balance Sheet (RM ‘000) Remarks

Net gearing still manageable despite expansion plans and land acquisition... strong

cashflow set to reduce net gearing going forward

1 Based on share capital of 230.0 mil shares


Balance Sheet (Highlights)

14


Corporate Exercise

1-for-1 bonus issue slated for completion in third quarter of 2016…

Share Capital

(RM)

No. of shares @

RM0.50 par

Current 115,000,000 230,000,000

1:1 Bonus Issue 115,000,000 230,000,000

After Corporate

Exercise

230,000,000 460,000,000

Changes in Share Capital� On 1 June 2016, shareholders approved a 1-for-1 bonus

issue of up to 230,000,000 million new ordinary shares to

be listed on the Main Market of Bursa Malaysia

� The bonus issue is targeted for completion in the third

quarter of 2016

� Enlarged number of shares would improve the liquidity

of Scientex shares; while the enlarged share capital

better reflects the current scale of operations

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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

• Top 3 stretch film producer in the world

• 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 RM1.4 bil

• Pipeline GDV of RM6.0 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

� 31.4% dividend payout in FY2015

• Valuations to be compressed with foreseeable earnings boost

• Trading at trailing 12-month PE of 12.7x and EV/EBITDA of 9.6x (as at 27 May 2016)

17

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

27

.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%

14.8%

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 22 sen) :

• Paid interim dividend of 9 sen per share on 7 August 2015

• Paid final dividend of 13 sen per share on 25 January 2016

� FY2016 Dividend :

• Declared interim dividend of 12 sen per share

(Ex Date: 14 July 2016, Payment Date: 5 August 2016)

Dividend Policy:

Minimum 30% of Net Profit(effective FY2011)

Investment Merits

FY15 Dividend Payout

RM49.7Million

FY15 Dividend Payout

RM49.7Million

Share Dividend

5.9

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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

Documents

9M16 Corporate Update & Financial Results 1 June 2016 · Corporate Presentation 9M16 Corporate Update & Financial Results 1 June 2016 IR Adviser (Company No.: 7867-P) 2 Powered by