Somboon Advance Technology PCL To Become an Auto Parts Manufacturing Leader in ASEAN with Excellent Quality

Transcription

1 Somboon Advance Technology PCL To Become an Auto Parts Manufacturing Leader in ASEAN with Excellent Quality Aug

2 AGENDA 2

3 Thousands 130 Thailand, world top auto assembler, is poised for impressive growth Annual Growth CAGR (2012) ( ) Europe -4.03% 11.64% Great China 7.38% 17.90% N.America 6.15% 9.63% Japan/Korea 13.36% -2.84% S.Asia 14.58% 27.82% S.America 7.18% 14.45% M-East/Africa 15.89% 10.47% Average 6.12% 12.52% Europe Greater China N.America Japan/Korea S.Asia S.America M-East/Africa Global assembly rank 2010A 2011A 2012F 2013F 2014F 2015F China USA Japan Germany India South Korea Brazil France Mexico Thailand Spain Canada Russia Iran United Kingdom Developed Asia-Pacific includes Australia, Japan, South Korea Developing Asia-Pacific includes China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand, Vietnam Source : Autofacts Global Light Vehicle Assembly Outlook Data Release Vehicles per 1, F %CAGR US Japan Brazil China Indonesia India Malaysia Thailand Total World 130 N/A 254 Source : Institute for Transport Studies, University of Leeds, UK 3

4 worse Better Thailand competitiveness to AEC Ease doing business Human capital Infrastructure Country risk Country Labor and environmental regulations Transparent and predictable legal Regulations conductive for businesses Knowledgeable, productive and reliable workforces with reasonable cost Property rights for intellectual as well as physical and financial goods remain under protected Adequate freight infrastructure and low logistics costs Political stability is the key criterion for companies' long-term strategic investment (despite political backlash, a steady stream of FDI from estimated to be 180 billion baht, up by 17% from 2009) Thailand s ranking in the global competiveness in Thailand Indonesia Malaysia Philippines 141 Singapore Global Competi tiveness Index Source: World Economics Forum, June 2012 Infrastructureconomics Macro- environment Key comparable factors for doing business 0.0 Thailand Indonesia 12.0 Malaysia Philippines Singapore 30.0 Inflation Restirc tive labour regula tion Inade Tax quately rate educated workforce Labour market environment Technological Innovation readiness Inade quate Govorn ment Corruption supply of infrastructure instability /coups 4

5 Roadmap for moving to the next wave Total production volume in 2011 (mn.units) 100% 50% 0% Commercial Vehicle Passenger Carmakers market share by countries (2011) 100% 50% 0% Local Other Japanese Non-Japanese Toyota Maintain export competitiveness Build more technologi cal capacity Move up the value chain Emphasize R&D and innovation Thai auto-suppliers The strengths lie in the size of export market. This means maintaining the quality and the reliability of product will be of utmost importance More lightweight material Joint ventures and alliances best solution to cut through complexity Need to increase collaboration between universities and businesses with relation to research A status as a manufacturing hub and potential to be more outsourcing destination R&D spending has been relatively low compared to other nations (immature technologies and relatively low complexity allow newcomers to compete with established players) 5

6 2012F 2013F 2014F 2015F Thailand growth is likely to remain strong despite the weakening of the global economy & the impact of the deluge Million units Thailand auto industry Source: FTI: The Federation of Thai Industries and SAT estimates ( ) Production by type of vehicles % 30% 65% 4 of 5 manufacturers expand their fuelefficient product lines Toyota to lunch its eco. car by 1Q % 21% 54% 2010A 2011A 2012F 2013F 2014F 2015F PU&PPV PC Eco car Others Strength of Thailand as Automotive Clusters Recovering and Growing consumer demand for automobiles. Strong presence of automotive supporting businesses. Strong Government Support i.e. incentive tax structure, supporting organization Based of OEM R&D Centers Geographical and logistic advantages - Thailand as a gateway to Asia providing easy access to regional markets - Established infrastructure and state of the art port facilities to facilitate auto export - Cluster development of suppliers to reduce the cost of logistics and create economies of scale Extensive & experienced suppliers - Due to approx. 1,600 auto part manufacturers to supply the industry or car makers can be sourced all locally Automotive Industry Production Domestic Export CAGR ( F) 11% 11% 9% AEC was expected to strengthen the company s regional presence and boost demand for Thai products, particularly in the healthcare, automotive, renewable energy and cosmetics industries 6

7 Key issues come into our focus Short-term pressure on profitability Political instability Upside inflation risk Export destination to be affected from Global growth weaker-thanexpected? Rising min. wage o SAT included in the first 7 provinces to raise labor cost by April 2012 o So far, SAT can cope with such incremental expenses by increasing productivity and more automated production line Politics to heat up from July due to constitutional amendments and present significant downside risks to Thailand s economics outlook An activity related to government policy and its administrative practices likely affected by new legislation or regulatory shifts, which could have a substantial impact on how their company operates and its bottom line Economics growth in emerging Asia likely moderates due to external demand and tightened monetary policies to battle inflation (note : impact is likely to be felt mostly in early 2013 ; central banks could postpone action) The possible continued weakness of the global economy caused by problems in the euro zone, which could put further downward pressure on global and regional growth Thailand GDP rather be driven by domestic demand, private investment and reconstruction 7

8 6M2012 Production and Sales AAT 10% MMth 13% Isuzu 11% Nissan 11% Toyota 38% Honda 6% Other 11% AAT 9% MMth 9% Isuzu 15% Nissan 8% Honda 8% Toyota 39% Other 12% MMth 18% AAT 11% Isuzu 6% Toyota 45% Honda 3% Nissan 13% Other 3% 1,200,000 1,000, , , , , , ,295 34% 679,915 64% 37, ,486 42% 311,599 51% 98,071 20% 358,797 80% Production Dom Sales Exp Sales 1,057,638 units 606,523 units 456,868 units 30% y-y 40% y-y 14%y-y Other Passenger Car Pickup & PPV Source: TAIA (The Thai Automotive Industry Association) 8

9 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 YTD production Trend by Type and Brand Units Pick Up & PPV Units Passenger 60,000 30,000 50,000 25,000 40,000 20,000 30,000 15,000 20,000 10,000 10,000 5, Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other Toyota Mitsubishi Nissan AAT Other Honda 9

10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 YTD Domestic Trend by Type and Brand Units Pick Up & PPV Units Passenger 35,000 25,000 30,000 20,000 25,000 20,000 15,000 15,000 10,000 10,000 5,000 5, Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other Toyota Mitsubishi Nissan AAT Other Honda 10

11 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 YTD Export Trend by Type and Brand Units 40,000 Pick Up & PPV Units 9,000 Passenger 35,000 8,000 30,000 7,000 25,000 6,000 20,000 15,000 10,000 5,000 4,000 3,000 2,000 5,000 1, Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other Toyota Mitsubishi Nissan AAT Other Honda 11

12 YTD Export Destinations Units 100% 80% 60% 40% 20% 0% 30,000 25,000 20,000 15,000 10,000 5, , ,855 6% 6% 5% 3% 4% 3% 3% 4% 5% 3% 3% 4% 7% 9% 10% 8% 11% 9% 8% 6% 7% 7% 15% 11% 9% 12% 11% 11% 13% 12% 27% 20% 21% 30% 27% 30% 32% 36% 735,515 53,591 77,314 89,815 55,433 85,988 94, ,868 32% 27% 27% 29% 31% 27% 26% 25% 28% 31% 32% 31% 27% 23% 21% 17% 17% 20% 21% 23% 21% 20% Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 6M12 Pick Up & PPV Passenger 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Africa Europe C & S America Middle East Asia Aus, NZ & Oceania Asia Aus, NZ, Oceania Middle East Africa Europe C & N. America Source: TAIA (The Thai Automotive Industry Association) Asia Aus, NZ, Oceania Middle East Africa Europe C & N. America 12

13 AGENDA 13

14 Group Structure and Business SAT (Paid Up (340 mb) Somboon Holding 25.50% Kittapanich Family 24.11% Sub-total 49.61% Others 50.39% Hot Forging Product (Axle Shaft) 100% 100% 100% 100% 100% ICP (Paid Up 785 mb) SBM (Paid Up 500 mb) BSK (Paid Up 130 mb) SIJ (SBG International (Japan) (Paid Up 10 mb) SFT (Paid Up 100 mb) Casting RM for SBM Tsuchiyoshi Somboon Coated Sand (Paid Up 72 mb) Sales ~264 mb, TA~244 mb, GPM 24.2%, NPM 7.7% Machining Product Spring Product 21.25% 20.00% Casting (Rasin/Sand) 2.90% Sales Representative in Japan Yamada Somboon (Paid Up 150 mb) Sales ~1,867 mb, TA~1,353 mb, GPM 14.3%, NPM 1.6% Nisshinbo Somboon Automotive (Paid Up mb) Sales ~1,800 mb, TA~1,980 mb, GPM 18.6%, NPM 9.9% Steering Column Assembly Water Pump Assembly Oil Pump Brake System General forging RM (Hot & Cold) 1.80% Somboon Somic Manufacturing (Paid Up 300 mb) Sales ~2,239 mb, TA~1,377 mb, GPM 13.2%, NPM 8.8% Ball Jointed Tie Rod End Outer Track Rod Stabilizer Linkage 14

15 Product Champion of Group Forging Products, SAT Spring Products, BSK Machining Products, SBM 15

16 Market Share: Axle Shaft & Coil Spring Rear Axle Shaft Y11 = 86 % Toyota Customer Model Fortuner, Vigo Other 14% SMT 8% Market share Y 12 F SAT 78% Mitsubishi Isuzu GM Pickup car Triton, Pajero Sport D-Max (All new), MU-7 GMI700 Coil Spring Y11 = 40 % Customer Model Mitsubishi Toyota Honda Nissan Passenger car Lancer, New LancerEx, Mirage (Eco) Camry Jazz, City, Accord New Teana, March, Amera Customer Model NHK 61% Market share Y 12 F BSK 39% Toyota Mitsubishi Fortuner, Vigo 4x4 Triton, 3E45 Pickup car 16

17 Market share : Leaf Spring & Stabilizer Bar Leaf Spring Y11 = 17% Customer Mitsubishi Pickup car Model Triton Customer Model NHK 85% Market share Y 12 F BSK 15% Hino Fuso Commercial car Bus Truck Customer Model Mitsubishi Lancer, Mirage (Eco) Toyota Corolla Stabilizer Bar Y10 = 38% Honda Passenger car Jazz,City, Accord Customer Model NHK 62% Market share Y 12 F BSK 38% Toyota Mitsubishi Nissan Fortuner, Vigo 4x4 Triton, 3E45 Navara,LCV Pickup car 17

18 Market share : Disc Brake & Drum Brake Disc Brake Y11 = 27% AISIN 60% Market share Y 12 F KIRIU 10% OTHER 2% SBM 28% Customer Model Honda Jazz/City, Civic, Accord, CR-V, Eco Mitsubishi Passenger car New Lancer EX, Mirage (Eco) Customer Model Mitsubishi Triton, 3E45 Pickup car Customer Model Drum Brake Y11 = 28 % AISIN 63% Market share Y 12 F KIRIU 8% OTHER 0% SBM 29% Honda City, Eco (100%-Rear) Suzuki Customer Customer Model Fuso Truck Model Mitsubishi Triton, 3E45 Isuzu Passenger car Pickup car Commercial car Eco (Rear) D-Max (All new), MU-7 FM/FN, Canter 18

19 Market Share: Exhaust Manifold Exhaust Manifold Y11 = 19% OTHER 29% Customer Mitsubishi Model Lancer Market share Y 12 F SBM 13% Customer Mitsubishi Pickup car Model Triton, 3E45 AISIN 58% Pickup car 19

20 Capacity and Utilization Rate Production Volume (Pcs per month) Capacity (pcs) 2009A 2010A 2011A 2012E Utilization (%) Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%) F m a c h i n i n g S p r i n g Axle Shaft (incl.kubota) 240,000 56% 240,000 90% 240,000 70% 320,000 80% Disc Brake 109,000 68% 121,000 90% 173,000 60% 173,000 85% Drum Brake 95,000 68% 95,000 90% 107,000 60% 107,000 85% Exhaust Manifold 46,000 65% 47,000 85% 47,000 65% 47,000 77% Fly Wheel 8,000 65% 8,000 95% 12,400 65% 20,200 65% Kubota Machining 25,000 98% 61,000 70% 86,000 60% 86,000 85% Kubota Blade 360,000 25% 360,000 25% 360,000 25% Coil Spring 255,000 40% 255,000 62% 255,000 65% 445,000 65% Stabilizer Bar 100,000 46% 100,000 73% 100,000 65% 180,000 66% Leaf Spring (tons) 1,500 55% 1,500 75% 1,500 60% 1,500 85% Weighted Utilization rate 60% 80% 65% 75% Note : Based on Full Capacity at 500 hrs./month 2011 by quarterly => 82% : 60% : 85% : 35% 20

21 AGENDA 21

22 Financial Highlights YoY Unit : mn. 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 YoY QoQ 6,263 6,421 3% Sales 1,782 1,495 1,957 1,187 2,199 2,234 49% 2% 6,447 6,552 2% Total Revenue 1,830 1,511 1,989 1,222 2,257 2,287 51% 1% 1, % GP % -9% % SG&A % 9% % FOREX Gain (Loss) % -139% 1,425 1,173-18% EBITDA % -12% % Net Profit % -22% 8,077 8,831 9% Total Assets 8,780 8,955 9,280 8,831 9,554 9,620 7% 1% 2,425 3,185 31% Interest Bearing Debt 2,709 2,900 2,930 3,185 3,242 3,270 13% 1% 4,004 4,649 16% Total Liabilities 4,497 4,757 4,998 4,649 5,168 5,105 7% -1% 4,073 4,182 3% Equity 4,283 4,198 4,281 4,182 4,386 4,515 8% 3% 1, % Cash Flow from Operating % -9% % Interest Expense % 4% % Depreciation % -2% 1,078 1,726 60% CAPEX % -54% 13% 16% Effective Tax Rate 10% 15% 11% 18% 9% 9% Key Financial Ratios 1Q11 2Q11 3Q11 4Q11 1Q12 2Q % 15.14% %GPM 19.46% 15.21% 17.69% 4.39% 16.06% 14.40% 22.11% 17.90% %EBITDAM 21.19% 16.48% 19.05% 12.85% 19.68% 17.18% 11.78% 6.23% %NPM 11.49% 5.79% 10.29% -7.71% 9.17% 7.05% 10.64% 4.83% %ROA 9.98% 3.95% 8.97% -4.16% 9.00% 6.73% EBITDA/CAPEX (x) % 9.89% %ROE 20.13% 8.26% 19.30% -8.91% 19.32% 14.50% 15.82% 7.65% %ROIC 15.58% 7.01% 14.11% -3.36% 13.71% 11.11% Net I-Debt / Equity (x) Int.Bearing Debt/Equity (x) DER (x) EPS (bt) BVPS (bt)

23 Sales Breakdown Bt.mn 100% 80% 60% 40% 20% Domestic 96% OEM 97% P/U & PPV Parts 78% 2011 Total Sales = 6,421 MB 1,511 1,444 1,631 1,677 1,782 1,495 1,957 1,187 2,199 2,234 SAT 15% 8% 8% 4% 3% 13% 14% 25% 23% 8% 8% 8% 9% 4% 4% 4% 4% 28% 8% 7% 3% 4% 9% 10% 9% 23% 27% 24% 27% 25% 27% 9% 7% 8% 8% 8% 8% 7% 8% 7% 8% 4% 5% 3% 4% 4% 4% 3% 4% 3% 2% 10% 10% 9% 8% 9% 9% 9% 8% 11% 12% 11% 15% 35% 33% 33% 33% 31% 31% 33% 30% 10% 9% 8% 4% 2% 10% 8% 34% 33% Others (i.e. hub, bracket, camshaft) Coil Spring Stabilizer Bar Fly Wheel (+comp) Exhaust Manifold Disc & Drum Brake Leaf Spring Axle Shaft BSK 28% BSK 26% SBM 39% 6M12 SBM 39% 33% SAT 35% 0% 23

24 Bt.mn Customer Base 100% 75% 50% 1,511 1,444 1,631 1,677 1,782 1,495 1,957 9% 2% 5% 6% 8% 7% 26% 19% 22% 19% 16% 2% 3% 4% 8% 7% 3% 2% 4% 7% 4% 4% 7% 7% 5% 5% 26% 27% 26% 3% 6% 4% 7% 7% 21% 3% 10% % 6% 4% 27% 21% 1,187 2,199 2,234 17% 17% 20% 3% 3% 4% 10% 10% 10% 5% 5% 1% 6% 6% 8% 4% 4% 1% 28% 28% 31% 8% 3% 12% 1% 10% 7% 28% Others (i.e. GM) Nissan Kubota AAT Isuzu Honda Toyota 25% 37% 31% 29% 29% 32% 33% 28% 28% 27% 31% Mitsubishi 0% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11 1Q12 2Q12 24

25 AGENDA 25

26 The Road Ahead CAPEX 800 MB in 2012 (excl. FDI project which to be finalized by 4Q12) 700 MB in MB in 2014 as a normal capex Prospect To keep up with market growth (by organic investment and joint venture) To penetrate new markets for expanding customer base & sales growth (including new geographical markets) Sales CAGR for ; 20% (both auto and non-auto) R&D To be a part of OEM s moving up value chain (productivity, technological advances and innovation) To enhance our competitiveness and expertise in product design and process improvement and innovation in area of forging, casting, machining, and spring business to supply new parts, as CKD, or small module in the automotive industry 26

27 AGENDA 27

28 Group Development A well established and reputable vehicle parts manufacturer, with concentration on the OEM market. The Group started its automotive parts manufacturing business in 1962, and is considered as one of Thai pioneers in the business Establishment of Somboon Spring Establishment of Somboon Malleable Iron (SBM) Establishment of Bangkok Spring Industrial (BSK) and Began to move into OEM market Establishment of Somboon Advance Technology (SAT) Start to supply TOYOTA Group Structuring Listed on SET Accquired ICP by 100% shareholding SAT raised 40m. shares to strengthen balance sheet for group future prospects 50 th anniversary and in studying of FDI projects 28

29 Certificates and Awards (Customer) Group Company has been receiving many awards and accreditations of its unique developing and its production quality-being rate as one of the finest in Supplier List. Proven performance since inception in 1972 i.e., QCD grading, Quality Award by MMth (zero defect), TPS (Toyota Production System), QCC award & network by HINO ISO 9002, QS 9000, ISO 14001, ISO/TS (OEMs required) Q M SBG C E D 29

30 Eco car (fuel-efficient car) BOI s incentive; the manufacturers must fulfill certain criteria: 1. The initial investment must be a minimum 5 billion baht 2. Engine sizes must not exceed 1,300cc for petrol; and 1,400cc for diesel engines 3. Fuel efficiency must be or higher than 5 liters per 100 kilometers 4. Vehicles must meet Euro4 emissions standards and emit not more than 120 grammas of CO2 per km 5. Must meet passenger safety standards as specified by the United Nations Economic Commission (UNEC) Car Makers OEM SBG s Order Progress Nissan (March, Almera) Launching in Mar 2010 (111,000 units in 2012) Front & Rear Coil Spring on both 4 &5 door models (exclusively) Honda (Brio) Toyota Mitsubishi (Mirage) Suzuki (Swift) Launching in Mar 2011 (41,000 units in 2012) To launch by ~1Q 13 (1yr delayed from previous plan) To launch in Mar (50,000 units in 2012) To launch in Mar 2012 (10,000 units in 2012) Disc Brake Drum Brake None Drum brake, Coil Spring, Stabilizer Bar, Flywheel Drum Brake Note : Low cost green car (LCGC) program (key conditions ; low price range, minimum local content, fuel economy) was introduced by Indonesia government in September Up to now, the LCGC program is claimed to have provide US$1.8 billion investments in assembling level from 5 carmakers ; Daihatsu, Suzuki, Toyota, Honda and Nissan 30

31 2011 Production and Sales Isuzu 10% AAT 7% MMth 14% Nissan 13% Honda 8% Toyota 35% Other 13% Isuzu 15% AAT 9% MMth 8% Nissan 9% Honda 11% Toyota 36% Other 12% Isuzu 6% AAT 11% MMth 20% Honda 4% Nissan 16% Toyota 34% Other 9% 1,600,000 1,400,000 1,200,000 1,000, , , , , , ,987 37% 899,200 63% Source: TAIA (The Thai Automotive Industry Association) 54, ,925 46% 187, , ,188 54% 25% 75% Production 1,457,795 units Dom Sales 794,081 units Exp Sales 735,627 units -11%yy -0.1%y-y -18%y-y Other Passenger Car Pickup & PPV 31

32 Questions and Answers Thank You Somboon Advance Technology Public Company Limited Investor Relations Department Tel , Fax , ir@somboon.co.th, 32