2018/8/14 Financial Statements and Related Announcement::First Quarter Results

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Financial Statements and Related Announcement::First Quarter Results

Issuer & Securities

Issuer/ Manager VALUETRONICS HOLDINGS LIMITED

Securities VALUETRONICS HOLDINGS LIMITED - BMG9316Y1084 - BN2

Stapled Security No

Announcement Details

Announcement Title Financial Statements and Related Announcement

Date & Time of Broadcast 14-Aug-2018 07:16:30

Status New

Announcement Sub Title First Quarter Results

Announcement Reference SG180814OTHRNCKD

Submitted By (Co./ Ind. Name) Tse Chong Hing

Designation Chairman and Managing Director

Description (Please provide a detaileddescription of the event in the box below -Refer to the Online help for the format)

PLEASE SEE ATTACHED:

Presentation slides in relation to Q1FY2019 Results.

Additional Details

For Financial Period Ended 30/06/2018

AttachmentsVHL- 1QFY2019 Results-PresentationSlides.pdf

Total size =1687K

Share 2

Q1FY19 Results Presentation

Note: This presentation is to be read in conjunction with the announcement issued on SGXNET on 14 August 2018.1

Important Notice

This presentation contains forward-looking statements which can be identified by the context of the statement and

generally arise when the Company is discussing its beliefs, estimates or expectations. Such statements may include

comments on industry, business or market trends, projections, forecasts, and plans and objectives of management

for future operations and operating and financial performance, as well as any related assumptions.

Readers of this presentation should understand that these statements are not historical facts or guarantees of future

performance but instead represent only the Company’s belief at the time the statements were made regarding

future events, which are subject to significant risks, uncertainties and other factors, many of which are outside of the

Company’s control. Actual results and outcomes may differ materially from what is expressed or implied in such

forward-looking statements.

2

The Company cautions readers not to place undue reliance on any forward-looking statements included in this

presentation, which speak only as of the date made; and should any of the events anticipated by the forward-looking

statements transpire or occur, the Company makes no assurances on what benefits, if any, the Company will derive

therefrom.

Investor Relations Contact:

Name: Mr Gerald Woon Name: Ms Candy Soh

Email: woon@cogentcomms.com Email: candysoh@cogentcomms.com

Tel: + 65 6704 9288

Corporate Profile

Bloomberg Code VALUE.SP

Reuters Code VLUE.SI

ISIN Code BN2

Index FTSE ST Small Cap, FT ST China

Issued shares (M) 432.4

Mkt cap (SG$M) (8 Aug 2018) 276.7

Share price (SG$) (8 Aug 2018) 0.64

Average volume 3-mth ('000) 2,680

25%

5%70%

Shareholding

52 wk range (SG$) (8 Aug 2018) 0.61 – 1.12

Executive Directors HSBC Global AM Public Float

Integrated EMS Provider

• Engineering Design & Development

• Product Design & Deployment

• Plastic Injection Moulding

• Tool Design and Tool Fabrication

• Metal Stamping & Machining

• Printed Circuit Box Assembly and Box Build Assembly

• Supply Chain Management

Corporate Information

• Electronic Manufacturing Services (“EMS”) player

established in 1992 in Hong Kong

• Listed on Main Board of SGX on 28 March 2007

• Production facilities in Daya Bay & Danshui Town,

Guangdong, PRC (60 minutes from Shenzhen)

• Auditors: PricewaterhouseCoopers

• Around 4,000 employees (30 June 2018)

Accreditations

ISO9001:2008,ISO14001:2004,ISO013485: 2003, TL9000 R5.5, TS16949: 2009, IPC J STD-001, IPC-A-610 QML Class 3

Business Model

A Premier Design and Manufacturing Partner

Integrated Integrated

Engaging in Customers

Value Chain

Engaging in Customers

Value Chain

Design & Development

•Mechanical & electrical

engineering

Design & Development

•Mechanical & electrical

engineering

Value Add

4

Proactive deployment of Design & Development capabilities

Integrated

Manufacturing Services

•SMT

•Wire bonding

•FG assembly

•Metal part machining

•Injection molding

•Tool design & fabrication

Integrated

Manufacturing Services

•SMT

•Wire bonding

•FG assembly

•Metal part machining

•Injection molding

•Tool design & fabrication

•Design for manufacturing

•Design & build test

fixtures

•Rapid prototyping

•Regulatory compliances

•Supply chain management

services

•Design for manufacturing

•Design & build test

fixtures

•Rapid prototyping

•Regulatory compliances

•Supply chain management

services

engineering

design from concept to

mass production

•Better manufacturability

with enhanced

features & lower cost

•Software development

•Industrial design

engineering

design from concept to

mass production

•Better manufacturability

with enhanced

features & lower cost

•Software development

•Industrial design

Key Milestones

1992 2002 2003 2005 2007 2008

Headquartered in

Hong Kong with

manufacturing

facilities in Danshui

Town PRC

Use of ROHS

equipment and

accredited with

TL9000

Adopted work cell

management &

updated to

ISO9001:2000

Became Philips

preferred supplier

for its consumer

lifestyle segment

Listed on SGX-

Mainboard &

commenced

construction for

Daya Bay Facility

Became Phillips

preferred supplier

for its Lighting

segment

2008 2009 2012 2014 2015 2017

Completed Phase 1

construction of

Daya Bay Facility

Opened Daya Bay

Facility, acquired

medical business

Celebrated 20th

anniversary with

revenue crossing

HKS2 billion

Adoption of formal

dividend policy

Received TS16949

certification

Received 2016

Above & Beyond –

Pinnacle Award for

Supplier Excellence

from Delphi

5

Daya Bay Facility – Bird’s-Eye View

• Land use rights acquired in 2006

• Total site area > 110,000 sq m

6

Customer & Product Portfolio

Industrial & Commercial

Electronics

Industrial & Commercial

ElectronicsConsumer ElectronicsConsumer Electronics

7

• Ability to accommodate customers requirement for various volume, mix and

complexity

• Customer base ranged from emerging enterprises in Northern American (low-

volume complex custom product) to top global Multi-National Corporations

(high-volume standards product)

Industrial & Commercial Electronics

Transaction Printer for Slot, POS & Teller Station Machines

Printers Temperature Sensing Devices

Cold Chain Temperature Monitor for Industrial

Nasdaq-listed CompanyUnit of a NYSE-listed MNC

Company owned by a UK PE Fund

8

Thermal Label Printer for Industrial & Commercial Use

Cold Chain Temperature Monitor for Industrial

& Commercial Use

Electronic Thermostats

Global Brand owned by NYSE-listed MNC

Company owned by a UK PE Fund

Company owned by a UK PE Fund

Barcode and Transaction Printing Solution Provider for Retail,

Banking, Manufacturing, Logistics and Healthcare industries

Industrial & Commercial Electronics (Cont’d)

Communication Products

Taiwan-listed CompanyToronto-listed Company

9

High Precision GPS for Industrial Use

Company Based in North America

Industrial & Commercial Electronics (Cont’d)

OthersElectronic Products for

Automotive Industry

Tier 1 Automotive System Manufacturer

10

In-vitro Diagnostic Medical Equipment

for Testing Human Tissue Samples Data and media connectivity module

Consumer Electronics

Consumer Lifestyle Products

Consumer Lifestyle Division of a Dutch MNC

11

15W and 40W Bug Zappers

PCBA for Shavers & Electric Toothbrushes for Consumer Use

Subsidiary of Homax Group

(Wholly-owned by PE firm)

Consumer Electronics (Cont’d)

Smart Lighting with IOT Features

12

Wireless lighting contain various LED specially chosen to produce wide range of intensities and over 16 million colours;

Wirelessly controlled by mobile application

Q1FY19 Financial Highlights

13

Financial Highlights

HK$’M Q1FY19 Q1FY18 % Change

Revenue 704.0 695.7 1.2

Gross Profit 102.8 104.3 -1.5Gross Profit 102.8 104.3 -1.5

Gross Profit Margin 14.6% 15.0% - 0.4% pt

Net Profit for

the period49.7 48.7 1.9

Net Profit Margin 7.1% 7.0% 0.1% pt

Q1FY18

38.0%62.0%

Q1FY19

Financial Highlights

Revenue Contribution

HK

$437M

HK

$267M

45.5%

Q1FY18

Industrial and Commercial Electronics

Consumer Electronics

HK

$379M

HK

$317M

54.5%

Revenue Trend

780.0956.3

1,287.8

1,455.6

1,900.0

2,400.0

2,900.0

2,429.3

HK$’ M

2,433.3

1,952.9

2,274.9

2,853.7

16

1,653.3 1,473.0

824.6987.1

1,398.1

316.5 267.2

1,128.3

379.2 436.8

-100.0

400.0

900.0

1,400.0

FY14 FY15 FY16 FY17 FY18 Q1FY18 Q1FY19

Consumer Electronics Industrial & Commercial Electronics

695.7 704.0

Quarterly Revenue

346.0379.2

345.3387.2

343.9 436.8500

600

700

800

900

636.1

788.3

573.7 587.6

725.7695.7

644.0

704.0

HK$’ M

17

261.1 270.9 290.1 316.5380.4 401.1

300.1 267.2

312.6 316.7346.0

379.2343.9 436.8

0

100

200

300

400

500

Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19

Consumer Electronics Industrial & Commercial Electronics

Revenue by Shipment Destination

42.7%43.1%

45.6%

10.0% 13.8%9.2%

60%

70%

80%

90%

100%

Europe

18

47.3%43.1% 45.2%

0%

10%

20%

30%

40%

50%

FY17 FY18 Q1FY19

China & Asia

Pacific

North

America

Gross Profit & Net Profit Trend

83.5

91.090.6

104.3

104.8 113.7 91.8 102.8

14.6%15.5%

14.2% 15.0% 14.4% 14.4% 14.3%14.6%

7.1%10.0%

12.0%

14.0%

16.0%

18.0%

80

100

120

19

38.142.9 43.5

48.7 50.8 58.247.0

49.7

6.6%7.3% 6.9% 7.0%

7.0%7.4% 7.3%

7.1%

0.0%

2.0%

4.0%

6.0%

8.0%

0

20

40

60

Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19

Gross Profit Net Profit GP% Net Profit Margin

Market Capitalisation & Net Cash Balance

1,5

92

.6

2,7

94

.3

1,6

55

.8

1600

1800

2000

2200

2400

2600

2800

HK’M

20

80

8.5

85

7.3

93

8.6

1,0

62

.0

1,1

11

.5

99

2.7

98

1.7

1,5

92

.6

1,6

55

.8

50

5.8 68

9.3

75

2.9

67

1.1

75

7.2

0

200

400

600

800

1000

1200

1400

FY15 FY16 FY17 FY18 Q1FY19

NAV Market Cap Net Cash balance

Earnings Per Share & Dividends Per Share

HK cents

We are committed to formal dividend policy of 30-50% payout ratio

FY18: interim dividend of 7 HK cents, final dividend of 15 HK cents &

special dividend of 5 HK cents

31

.1 33

.2

36

.9

36

.4

29

.0

36

.8

48

.1

6.1%

11.8%

7.7%

9.8%

11.9%

9.8%

6.0%

8.0%

10.0%

12.0%

14.0%

25.0

30.0

35.0

40.0

45.0

50.0

7.7%

7.5%

21

Share

Price* (S$)0.21 0.07 0.15 0.21 0.21 0.19 0.30 0.43 0.41 0.68 1.08

Dividend

Payout30% 30% 42% 41% 47% 37% 49% 50% 63% 55% * 57%

* Adjusted for 1:10 bonus issue completed on Jun 2017

Interim Dividend

23

.2

13

.6

15

.2 19

.9

7.8

4.5

7.0

14

.0

17

.0

8.0

20

.0

20

.0

20

.0

20

.0

27

.0

6.1%7.7%

6.0%

5.3%*4.2%

0.0%

2.0%

4.0%

6.0%

0.0

5.0

10.0

15.0

20.0

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17# FY18

EPS * Dividend per share Dividend Yield# Quantum of dividend has increased by 10% under

1:10 bonus issue

7.5%

# Quantum of dividend has increased by 10% under

1:10 bonus issue

Summary of Cash Flows

HK$’000 Q1FY19 Q1FY18

Operating Activities

Net cash generated from operating activities 88,540 22,907

Investing Activities

Net cash generated from/(used in) investing activities

- Changes in short-term bank deposits 116,256 -

- Purchase of PPE (5,018) (37,255)

22

- Others 2,723 (20,964)

113,961 (58,219)

Financing Activities

Net cash generated from financing activities - 2,086

Net increase/(decrease) in cash and cash equivalents 202,501 (33,226)

Effect of foreign exchange rate changes (170) (382)

Cash and Cash equivalents

At beginning of the period 554,831 752,941

At end of the period 757,162 719,333

Balance Sheet & Key Ratios

HK$’M Q1FY19 FY18

Working capital

Inventories 366.8 385.6

Trade

Receivables640.1 582.8

Turnover Days Q1FY19 FY18

Inventories 55.7 57.7

Trade

Receivables83.0 74.5

Trade

Payables(81.7) (72.3)

23

Receivables

Trade

Payables(538.4) (482.9)

468.5 485.5

Net Current

Assets832.1 774.9

Net Cash 757.2 671.1

Net Assets 1,111.5 1,062.0

Payables

57.0 59.9

Key Financial Ratios

Q1FY19 FY18

Price (SGD) # 0.67 1.08

NAV per share

(SGD)*0.45 0.41

Q1FY19 FY18

Current ratio 1.9 1.9

ROE 17.9% 19.3%

24

# Share price as at respective period or year end date

*SGD/HKD Ex rate:

Q1FY19: 5.76;

FY18: 5.98

Cash per share

(SGD)*0.31 0.26

Cash to Mkt

Cap ratio46% 24%

ROA 9.5% 10.4%

PB ratio 1.48 2.61

Business Outlook

Overview

• Double digit growth in ICE segment in Q1

• CE segment saw a decline in revenue due to weak

performance in smart lighting products, as highlighted

previously in Q4FY18 results

• Smart Lighting customer indicated in their most recent

financial results released at the end July of 2018 that their

25

CE

financial results released at the end July of 2018 that their

sales between April and June 2018 were weak due to their

trade partners winding down inventories to more normalised

levels

• Customer also indicated that they will be expecting more

product sales in the remainder of the year, thus the Group

expects to ride on this recovery trend

• Expects consumer lifestyle products in the CE segment to

continue its growth momentum on the back of new series of

innovative products

Business Outlook

ICE

• Continued its double-digit revenue growth during the period,

in particular strong performance in connectivity modules

used in automotive industry

• Automotive products expected to remain as the primary

driver for the ICE segment’s growth with increasing demand

for in-car connectivity

26

Macro

environment

• Currently operates in an uncertain macro-economic

environment, caused by geopolitical and trade tensions and

also supply chain challenges such as rising raw material prices

and longer procurement lead times

• Continue to advance by maintaining its focus on operational

improvements and working proactively with customers in

order to navigate this dynamic macro-environment

Reader should refer to section 10 of the Results Announcements for the complete commentary at the date of the announcement of

the significant trends and competitive conditions of the industry in which the Group operates and any known factors or events that

may affect the Group in the next reporting period and the next 12 months.