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 2011

2 AGENDA Industry Overview Group Business Performance Review Future Outlook Appendices

3 Thailand, world top auto assembler, is poised for impressive growth Annual Growth CAGR (2011) ( ) 6.19% 5.70% 6.78% 6.30% 19.85% 12.00% 6.45% 8.10% 1.30% 0.50% 5.16% 4.50% 2.71% 3.00% 10.84% 9.60% Global assembly rank 2010A 2011F 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 2011 Q1 Data Release (Updated January ) 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 etc. 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. 1,800 auto part manufacturers to supply the industry or car makers can be sourced all locally. 3

4 2011F 2012F 2013F 2014F 2015F Rosy Picture as Strong Demand Recovery Million units Thailand auto industry CAGR ( ) Production 13%/Domestic 5%/Export 30% Production by type of vehicles The March earthquake and tsunami in Japan crippled imported parts supplies to Thailand, forcing carmakers to cut production in line with the tight supplies of parts in their inventories. Automotive Industry Production Annual Growth % CAGR ( F) 9% Car manufacturing in Thailand was temporarily cut production, therefore it will be back to normal faster than expected. As its result, the auto production target get back to the original number of 1.8 mil.units as before the disaster in Japan. Domestic Export 46% 67% 6% 10% Source: FTI: The Federation of Thai Industries and SAT estimates ( ) 4

5 Thai Automotive Supply chain Structure 21% Pure Foreign OEMs 15 carmakers 1 st Supplies 500 companies 40% Foreign majority 19% Thai majority 20% 20% Pure Pure Thai Thai 2 nd & 3 rd Suppliers 1,100 companies Main Focus System integration Testing Assembly Supplier management System Supply R&D on system Module assembly Sub supplier management Sub component manufacturing Product Examples Passenger Car 1 Ton Pick up Truck Commercial Vehicle Engines, Drivetrains, Steering, Suspension, Brake Wheel, Tire Bodyworks, Interiors, Electronic and Elec System Stamping, plastics, rubber, machining, casting, Forging, function, electrical, trimming Source : Thai Auto Parts Manufactures Association 5

6 Key issues come into focus Impacts from Tsunami in Japan Minimum wage rising Automotive Industry Globalization Industrial Innovation Temporary unpredictable production plan An accelerated timeline for overseas relocation of assembly for the purpose of managing supply chain risks and optimizing logistics Require more careful on investment plan. Potential higher production cost which would pressure on the company s profit margin in the short term. An accelerated timeline of machinery substitute for labor force to reduce the cost and improve the efficiency in the long term Emerging Countries ex. China, India, Indonesia, and Thailand are major production bases of global carmakers in Asia. The competition in the world market challenges in the wake of trade and investment liberalization While vehicle electrification remains one of the most discussed topics in the automotive industry. Both public and private support of R&D efforts will be needed in order to bring costs and range into an acceptable cost equation for mainstream consumers 5

7 Most updated impacts from Japan Tsunami Carmakers Recovery Time Frame Toyota Car manufacturing in Thailand will be back to normal by May 23. Nissan Production in Thailand will get back to normal by this June. Honda Isuzu AAT Mitsubishi Expect to get back to normal capacity by September. Expect to resume to normal by July. Expect to resume to normal by July. No significant impacts from Tsunami Source : Customer information as of July 11 7

8 New Cars Market in Thailand for 2010 and beyond Brand Isuzu D-Max 2 / D-Max(RT50) D-Max(RF10 SUV => to replace MU-7) Honda Jazz 1 /City 1 / Accord 1 / Brio (HB)/ Civic(2HC) Jazz-Hybrid 3 / CR-V Accord / Brio (Sedan) Jazz / City Toyota Mitsubishi Vios 1 /Yaris 2 / Vigo 2 LancerEX/Triton (special edition) Prius-hybrid/ Corolla 1 Camry, Yaris 3 /Eco car Corolla Hilux (IMV2) None Eco-Car (HB) Eco-Car (Sedan) Triton Nissan March(Eco car)/navara 1 / Venette(NV200) March(sedan) New compact sedan (to replace Tida Latio) Navara Mazda Mazda2(sedan), Mazda3 1 Mazda3/ BT50(T6) Mazda 2 3 Ford Fiesta(B229), Focus 1 Ranger(T6)/ Escape 1 / Focus/Everest (Escape discontinued) Chevrolet Cruze(J300) Colorado(GMI700)/ Captiva Colorado (SUV) /Aveo(T300) 3 Suzuki Swift/SX4 3 Eco car New Small 3 Note : 1 - minor change 2 - nano change 3 - not confirmed 8

9 6M2011 Production and Sales AAT 13% MMth 14% Isuzu 11% Nissan 12% Honda 9% Other 6% Toyota 35% Isuzu 22% AAT 8% MMth 8% Nissan 8% Honda 11% Toyota 36% Other 7% AAT 18% MMth 20% IsuzuHonda 5% 4% Nissan 16% Toyota 34% Other 3% 1,000, , , , , , ,474 38% 499,508 61% Source: TAIA (The Thai Automotive Industry Association) 26, , ,006 46% 206, ,899 48% 26% 74% Production Dom Sales Exp Sales 810,610 units 431,724 units 400,905 units + 5.4%yy %y-y -4.1%y-y Other Passenger Car Pickup & PPV 9

10 Jan10 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jan-10 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun M11 Production Trend by Type and Brand Units Pick Up & PPV Units Passenger 45,000 25,000 40,000 35,000 20,000 30,000 25,000 15,000 20,000 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-10 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jan-10 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun M11 Domestic Trend by Type and Brand Units Pick Up & PPV Units Passenger 25,000 20,000 18,000 20,000 16,000 14,000 15,000 12,000 10,000 10,000 8,000 6,000 5,000 4,000 2, Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other Toyota Mitsubishi Nissan AAT Other Honda 11

12 Jan-10 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jan-10 Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun M11 Export Trend by Type and Brand Units 30,000 Pick Up & PPV Units 9,000 Passenger 25,000 8,000 7,000 20,000 6,000 15,000 5,000 4,000 10,000 3,000 5,000 2,000 1, Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Toyota Mitsubishi Nissan AAT Other Honda 12

13 2009-6M11 Export Destinations Units 100% 80% 60% 535, ,855 68,082 80,699 85,626 52,191 38,656 75, ,905 6% 6% 5% 5% 5% 4% 5% 5% 5% 7% 9% 10% 9% 11% 9% 15% 12% 11% 7% 12% 10% 11% 9% 12% 6% 7% 9% 27% 20% 20% 21% 26% 20% 12% 24% 21% Africa Europe Central & S.America Middle East 40% 27% 30% 34% 32% 27% 28% 42% 32% 32% Asia 25,000 20% 0% 27% 23% 21% 21% 23% 27% 21% 20% 22% Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 YTD Pick Up & PPV Passenger 18,000 Aus, NZ & Oceania 16,000 20,000 14,000 15,000 12,000 10,000 10,000 8,000 6,000 5,000 4,000 2, 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 13

14 AGENDA Industry Overview Group Business Performance Review Future Outlook Appendices

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

16 Market Share: Axle Shaft & Coil Spring Rear Axle Shaft Y10 = 85 % Toyota Customer Model Fortuner, Vigo Other 7% SMT 6% Market share 1H 11 SAT 87% Mitsubishi AAT (Mazda & Ford) Isuzu Pickup car Triton, 3E45 BT-50, Ranger D-Max MU-7 Coil Spring Y10 = 36 % Customer Mitsubishi Toyota Honda Nissan Passenger car Model Lancer, New LancerEx Camry Jazz, City, Accord New Teana, March Customer Model NHK 58% Market share 1H 11 BSK 42% Toyota Mitsubishi Pickup car Fortuner, Vigo 4x4 Triton, 3E45 16

17 Market share : Leaf Spring & Stabilizer Bar Mitsubishi Leaf Spring Y10 = 14% Customer Model Pickup car Triton Customer Model NHK 84% Market share 1H 11 BSK 16% Hino Fuso Commercial car Bus Truck Customer Model Mitsubishi Lancer Toyota Corolla Stabilizer Bar Y10 = 37% Honda Customer Passenger car Jazz,City, Accord Model Toyota Fortuner, Vigo 4x4 NHK 62% Market share 1H 11 BSK 38% Mitsubishi Nissan Triton, 3E45 Navara,LCV Pickup car 17

18 Market share : Disc Brake & Drum Brake Disc Brake Y10 = 27% KIRIU 9% OTHER 1% Honda Customer Mitsubishi Model Jazz/City, Civic, Accord, CR-V, Eco Space Wagon,New Lancer EX AISIN 62% Market share 1H 11 SBM 28% Customer Passenger car Model Mitsubishi Triton, 3E45 Pickup car Customer Model Honda City, Eco (100%-Rear) Drum Brake Y10 = 25 % KIRIU 6% OTHER 15% Customer Passenger car Model Mitsubishi Triton, 3E45 Market share 1H 11 SBM 27% Isuzu Pickup car D-Max MU-7 AISIN 53% Customer Fuso Truck Model FM/FN, Canter Commercial car 18

19 Market Share: Exhaust Manifold Exhaust Manifold Y10 = 17% OTHER 23% Customer Mitsubishi Model Lancer AISIN 57% Market share 1H 11 SBM 20% Customer Pickup car Model Mitsubishi Triton, 3E45 AAT Pickup car BT-50, Ranger 19

20 Capacity and Utilization Rate Production Volume (Per Month) Capacity (pcs) 2009A 2010A 2011F 2012F Utilization (%) Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%) F i o n r g g 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 98% 320,000 85% Disc Brake 109,000 68% 121,000 90% 173,000 85% 173,000 85% Drum Brake 95,000 68% 95,000 90% 107,000 80% 107,000 85% Exhaust Manifold 46,000 65% 47,000 85% 47,000 75% 47,000 77% Fly Wheel 8,000 65% 8,000 95% 12,400 85% 12,400 95% Kubota Machining 25,000 98% 61,000 70% 86,000 77% 86,000 90% Kubota Blade 360,000 25% 360,000 25% 360,000 25% Coil Spring 255,000 40% 255,000 62% 255,000 90% 445,000 65% Stabilizer Bar 100,000 46% 100,000 73% 100,000 90% 180,000 66% Leaf Spring (tons) 1,500 55% 1,500 75% 1,500 83% 1,500 89% Weighted Utilization rate 60% 80% 70% 65% Note : Full Capacity= 500 hrs./month 20

21 AGENDA Industry Overview Group Business Performance Review Future Outlook Appendices

22 Financial Highlights Unit : Bt.mn 2Q10 1Q11 2Q11 YoY QoQ YoY Sales 1,444 1,782 1,495 4% -16% 4,295 6,263 46% Total Revenue 1,473 1,817 1,527 4% -16% 4,348 6,416 48% GP % -34% 767 1,241 62% SG&A % -15% % EBITDA % -33% 913 1,407 54% Net Profit % -59% % Total Assets 6,739 8,780 8,955 33% 2% 6,192 8,077 30% Int. Bearing Debt 2,371 2,709 2,890 22% 7% 2,347 2,425 3% Total Liabilities 3,495 4,497 4,757 36% 6% 3,324 3,902 17% Equity 3,244 4,283 4,198 29% -2% 2,868 4,175 46% Interest Exp % 14% % Depreciation % -6% % CAPEX % -35% 517 1, % Effective Tax Rate 14% 10% 14% 14% 13% 22

23 Key Financial Ratio 2Q10 1Q11 2Q %GPM %NPM %ROA %ROFA EBITDA/CAPEX (x) %ROE %ROCE %ROIC Int.Bearing Debt/Equity (x) DER (x) Interest Coverage (x) EPS (bt) BVPS (bt)

24 Bt.mn Sales Breakdown Domestic 96% OEM 97% P/U & PPV Parts 79% 100% 75% 50% 25% 1,136 1,406 1,511 1,444 1,631 1,677 1,782 24% 25% 7% 8% 8% 3% 3% 10% 8% 3% 4% 10% 11% 9% 15% 8% 8% 4% 3% 13% 14% 25% 23% 8% 8% 4% 4% 4% 4% 9% 10% 7% 3% 4% 9% 9% 8% 11% 12% 33% 33% 35% 33% 33% 33% 31% 31% 8% 9% 28% 8% 9% 9% 1,495 23% 25% 7% 8% 7% 4% 5% 4% 3% 10% 10% Others (i.e. Big Hub, Bracket, Timing Cover, Camshaft) Coil Spring Stabilizer Bar Fly Wheel (+Comp) Exhaust Manifold Disc & Drum Brake Leaf Spring Axle Shaft BSK 29% 2010 SBM 37% SAT 34% Total Sales = 6,263 MB 0% 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 24

25 Bt.mn Customer Base 100% 75% 50% 1,136 1,406 1,511 1,444 1,631 1,677 1,782 22% 5% 8% 7% 8% 11% 11% 7% 5% 6% 10% 8% 7% 7% 7% 27% 26% 21% 24% 22% 3% 4% 8% 7% 4% 7% 4% 6% 7% 7% 5% 5% 26% 27% 26% 19% 6% 4% 7% 7% 1,495 23% 10% 3% 6% 4% 27% 21% Others Kubota AAT Isuzu Honda Toyota 26% 25% 23% 32% 37% 31% 29% 29% 32% 33% Mitsubishi 0% 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 25

26 AGENDA Industry Overview Group Business Performance Review Future Outlook Appendices

27 Short & MediumTerm Plans Casting raw material outsourcing to be cut into its normal level Jan 2012 onwards, casting raw material capacity to be increased from 30,000 ton to 60,000 tons per year GPM improvement Cost-Effectiveness with competitive capabilities One capability won t be improved at the expense of other capabilities. Modern manufacturing system allow for improvement in certain capability that can amplify certain other capabilities Capability enhancement More CAPEXs with cautions as a volatile economic cycle Select growth opportunity very carefully Further improve operational efficiency along the entire value chain Business risk decreased IFRS impact as TAS 16 and 19 Implemented the components depre. causing the less depre. exp % from previously Recognized employee benefits as expense in the period causing the higher exp. 1.5% from previously Insignificant amount to P&L 27

28 Keep going on SBG Management Manufacturing technology will adapt to environment to deliver new products at an affordable cost More in-outbound cooperation and alliances to fund R&D activities R&D for technology and engineering thrust To go beyond single platform locomotion by more value added elements More outbound business i.e. Indonesia, India Supply chain Integration Innovation to adjust for open-market as AEC by 2015 Cooperative oriented ; Seek to make the supply chain as a whole more competitive (not to attain cost reduction at the expense of our supplier partners) The competition is not firm against firm but rather supply chain against supply chain 28

29 The Road Ahead CAPEX 1,600 1,700 MB in MB in 2012 About 300 MB as normal CAPEX in 2013 Prospect To keep up market share To penetrate new markets for expanding customer base & sales growth Sales CAGR for ; 12-15% (Based on 10% from Auto, 25% from Non-Auto assumption) R&D Enhancing 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 29

30 AGENDA Industry Overview Group Business Performance Review Future Outlook Appendices

31 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. 31

32 Group Structure and Business SAT (Paid Up (340 mb) Somboon Holding Kittapanich Family 25.50% 24.71% Thailand Equity Fund Others 3.68% 46.12% 100% Forging 100% 100% 100% ICP (Paid Up 785 mb) SBM (Paid Up 160 mb) BSK (Paid Up 130 mb) SBG International (Japan) (Paid Up 10 mb) Casting (RM of Machining) 21.25% Machining Spring Products Sales Representative Tsuchiyoshi Somboon Coated Sand (Paid Up 72 mb) Sales ~231 mb, TA~225mb, GPM 12.1%, NPM 2.6% Casting (Rasin/Sand) 20.00% 2.90% 1.80% Yamada Somboon (Paid Up 150 mb) Sales ~2,150 mb, TA~1,697 mb, GPM 17.5%, NPM 5% Nishinbo Somboon Automotive (Paid Up mb) Sales ~1,851 mb, TA~1,703 mb, GPM 23.8%, NPM 16.7% Somboon Somic Manufacturing (Paid Up 300 mb) Sales ~1,972 mb, TA~1,259 mb, GPM 18.4%, NPM 9.8% Steering Column Assembly Water Pump Assembly Oil Pump Brake System Ball Jointed Tie Rod End Outer Track Rod Stabilizer Linkage 32

33 Certificates and Awards 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 33

34 Parts for Kubota: Tractor Valve & Push Rod (Engine Part-Forging) Body Part & Power train part (Casting & Machining) Case Front Gear (RH & LH) Case Bevel Gear Case Brake Case Rear Axle (RH & LH) Case Front Axle Holder Front (RH & LH) Cover Front Axle Case Diff (Rear) Diff Case Cover Diff Case (Front) Diff Case Bearing (RH & LH) Holder Bearing Clutch Bearing Case (RH & LH) Holder Bearing Drive Case Power train part (Assy) Diff Case (Front) Assy Rotary Blade (Spring) Axle Shaft (Forging&Machining) Diff Case (Rear) Assy Axle Front Assy (35HP & 45HP) Axle Rear Assy (35HP & 45HP) 34

35 Parts for Kubota: Harvest Machine 35

36 Siam Kubota Tractor Co., Ltd (SKT) 60% Kubota Corporation, Japan 51% 4.74% Marubeni Corporation, Japan Sales ~338,000 mb, TA~. mb, NPM 6.8% 40% Siam Cement Plc. (SCC) 40% 4.26% Min Sen Machinery Co.,Ltd Manufacturing Siam Kubota Tractor Co., Ltd (SKT) (since 2007, paid up 900 mb) Siam Kubota Industry Co., Ltd (SKI) (since 1978, paid up mb) Trading Leasing Estimated Mass Run ~ 1Q09 with volume planned ~25,000 units per annum Harvest Machine on M&A process Siam Kubota Corp., Ltd (SKC) 36

37 SAT- Attractive Return Avg. Total Return = 35% p.a. Avg. Capital Gain = 31% p.a Avg. Dividend yield = 3.5% SAT' Historical Price Movement Record High of Thai Auto Production Tsunami in Japan 20 Political Unrest in 15 Thai Coup U.S. Financial Crisis 10 5 Cap.Gain = 8% Dvd yield = Cap.Gain = -18% Dvd yield = 4.4% Cap.Gain = 30% Dvd yield = 4.7% Cap.Gain = -66% Dvd yield = 6.0% Cap.Gain = 165% Dvd yield = 0% Cap.Gain = 122% Dvd yield = 3.1% Cap.Gain = -20% 0 20/1/ /1/ /1/ /1/ /1/ /1/ /1/2011 As of Aug 9,

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