RESILIENCE MBM RESOURCES BERHAD (284496-V) Analyst Briefing 24 August 217 1 1
DISCLAIMER The information and opinions contained in this presentation are provided as at the date of the document. Certain statements in this presentation, particularly those regarding the future prospects of MBM Resources Berhad ( MBMR or the Company ), returns, pricing, acquisitions, divestments, industry growth or other trend projections are or may be forward-looking statements. These forward-looking statements are not historical facts, nor are guarantees of future performance. Such statements are based on current expectations and belief and, by their nature, are subject to a number of known and unknown risks and uncertainties which may cause actual results, prospects and developments of MBMR to differ materially from those expressed or implied by these forward-looking statements. Except as required by any applicable law or regulation, MBMR expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this presentation to reflect any change in MBMR s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All information in the presentation remain as the property of MBMR and may not be reproduced or recorded without prior written permission of the Company. Nothing contained in the presentation constitutes or shall be deemed to constitute an offer or invitation to invest in or otherwise deal in any shares or other securities of MBMR. 2
Agenda 1) Market Performance 2) Group Financial Highlights and Performance Review 3) Outlook 3
Market Performance 4
Market Performance Persistently weak TIV 75, 7, Pre-Price increase Spike Year end sales 65, 6, 55, 5, 45, Average line 4, 35, Source : Malaysian Automotive Association, 215 217 (Sales by registration) 5
Market Performance resulting in TIP being scaled down 6, 55, 5, 45, Average line 4, 35, 3, Source : Malaysian Automotive Association, 215 217 (Production Volume) 6
Performance Against Market Sales by Registration Growth Rate Decline in Group Sales Vs. Increase in TIV 3.3% 6.1% 4.6% 6.5% 7.3% -.4% -2.9% -4.4% -6.3% -1.2% -14.5% -13.8% -18.7% -19.7% -2.8% -22.% -8.6% -12.4% -3.4% -1.8% -1.9% -3.2% -12.% -16.6% YTD 216 YTD 217 1Q 216 2Q 216 3Q 216 4Q 216 1Q 217 2Q 217 TIP TIV Group's Total Sales Source : Malaysian Automotive Association, 216-217 7
Market Performance National Makes Performance Sales by Registration (YTD) Proton 35.7 39.4 +1.3% YTD Jun 216 YTD Jun 217 Perodua 97.4 99.7 + 2.4% Group 12.6 11.3-1.2% + 3.3% TIV 275.5 284.5 5 1 15 2 25 3 Thousands Source : Malaysian Automotive Association, 216-217 (Sales by registration) 8
Market Performance Passenger Vehicles Market Share (Sales by registration) Mazda 1.8% Hyundai.8% Nissan 4.% Others 7.5% 99,675 Total : 255,749 Perodua 39.% Perodua and Honda continue to be market leader Hyundai 1.1% Nissan 7.2% Mazda 2.9% Others 7.5% Total :244,357 97,37 Perodua 39.8% 52,527 Honda 2.5% 23,947 Toyota 9.4% Mitsubishi.6% YTD Jun 217 Proton 15.4% Volkswagen 1.1% 39,393 Source : Malaysian Automotive Association, 216-217 Honda 16.2% 39,654 Toyota 7.7% Mitsubishi.9% 18,854 YTD Jun 216 Proton 14.6% Volkswagen 1.8% 35,727 9
2/1/215 22/1/215 13/2/215 9/3/215 27/3/215 16/4/215 8/5/215 28/5/215 17/6/215 7/7/215 28/7/215 17/8/215 7/9/215 29/9/215 2/1/2 9/11/215 3/11/2 18/12/2 12/1/216 3/2/216 25/2/216 16/3/216 5/4/216 25/4/216 16/5/216 3/6/216 24/6/216 18/7/216 5/8/216 25/8/216 19/9/216 1/1/2 28/1/2 16/11/2 6/12/216 28/12/2 18/1/217 1/2/217 2/3/217 22/3/217 11/4/217 4/5/217 25/5/217 15/6/217 7/7/217 27/7/217 16/8/217 Foreign Currency Ringgit strengthen further on YEN and USD YEN USD USD and Yen Spot Rates movement, January 215 to June 217 4.6 4.4 4.2 4. 4.49 4.286 4.195 4.13 4.51 4.323 3.9648 4.4479 4.3319 4.2893 3.9141 3.918 3.8538 3.8 3.6 3.622 3.662 3.529 3.646 3.718 3.957 3.4 3.315 3.2 3.38 3.17 3. 2.8 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2 17 up to 23 Aug 217 1
Group Financial Highlights and Performance Review 11
Highlights of Q2 217 Against Q2 216 The Group's revenues declined 5.4% mainly due to lower vehicle sales The joint venture s results narrowed due to lower demand Contribution from associates was lower Profit before tax decreased by 16.% Declared interim dividend of 1.5 sen per share 12
Group Financial Highlights Results Quarter RM Mil Q2 217 Q2 216 % Changes Revenue - On going business 43.91 427.1 (5.4) - One-off property contribution -- -- -- Total revenue 43.91 427.1 (5.4) Operating profit - On going business (1.66) (1.79) + 7. - One-off property contribution - -- -- Total operating profit (1.66) (1.79) + 7. Net finance costs (3.3) (3.5) +.6 Share of JV's results 1.31 2.6 (49.5) Share of assoc. results 23.2 25.83 (1.2) Profit before tax 19.82 23.6 (16.) Profit attributable to owner's of Co. 16.15 18.81 (14.1) EPS (sen) 4.13 4.81 (14.1) 13
Highlights of Q2 217 Against Q1 217 Overall lower group s vehicles sales but cushioned by higher production volume from its alloy wheel plant in current quarter has resulted lower revenue by RM14.2 million or 3.4% PBT reduced by 12.4% or RM2.8 million at RM19.8 million mainly due to lower contribution from joint venture and associates but cushioned by lesser losses in the alloy wheel plant 14
Group Financial Highlights Results Quarter RM Mil Q2 217 Q1 217 % Changes Revenue - On going business 43.91 418.72 (3.5) - One-off property contribution -- -- -- Total revenue 43.91 418.72 (3.5) Operating profit - On going business (1.66) (2.87) + 42.2 - One-off property contribution - -- -- Total operating profit (1.66) (2.87) + 42.2 Net finance costs (3.3) (2.99) + (1.1) Share of JV's results 1.31 2.38 (44.9) Share of assoc. results 23.2 26.11 (11.1) Profit before tax 19.82 22.62 (12.4) Profit attributable to owner's of Co. 16.15 19.43 (16.8) EPS (sen) 4.13 4.97 (16.9) 15
Group Financial Highlights Results YTD RM Mil Jun 217 Jun 216 % Changes Revenue - On going business 821.98 81.3 + 2.6 - One-off property contribution -- -- -- Total revenue 821.98 81.3 + 2.6 Operating profit - On going business (4.53) (6.52) + 3.5 - One-off property contribution - -- -- Total operating profit (4.53) (6.52) + 3.5 Net finance costs (6.2) (6.7) +.7 Share of JV's results 3.69 4.8 (23.1) Share of assoc. results 49.31 53.32 (7.5) Profit before tax 42.44 45.54 (6.8) Profit attributable to owner's of Co. 35.58 37.21 (4.4) EPS (sen) 9.1 9.52 (4.4) 16
Group Financial Highlights Financial Position RM Mil 3 Jun 217 31 Dec 216 Joint venture 133.64 145.5 Associates 1,57.8 1,59.89 Goodwill 157.51 157.51 Other Non-current Assets* 454.2 464.69 Inventories 256.88 191.85 Cash and bank 172.2 172.97 Short term borrowings (168.21) (168.5) Net Other CA/(CL) (37.68) 62.43 Total 2,25.42 2,86.78 * Include PPE, Prepaid Lease Payments, Investment Properties 17
Group Financial Highlights Financial Position RM Mil 31 Jun 217 31 Dec 216 Share capital 39.89 39.71 Reserves 1,238.88 1,215.12 Non-controlling interest 231.15 266.58 Long term borrowings 157.32 26.87 Deferred tax 4.44 4.44 Prov. for retirement benefits 2.75 3.6 Total 2,25.42 2,86.78 NA per share (RM) 4.17 4.11 NTA per share (RM) 3.77 3.71 Debt / Equity ratio (%) 17.5 2. 18
Operating & Financial Review 19
Motor Trading 2
Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Vehicle Sales Group s vehicle sales in units, 215 to 217 3, 2,8 Pre-Price increase Spike Year end sales 2,6 2,4 2,2 2, 1,8 Average line 1,6 1,4 21
Aftersales Throughput Group Service Throughput in units, 215 to 217 8 7 6 + 2.8 % y-on-y 5 46,518 45,445 47,547 48,498 48,41 45,498 47,15 46,973 48,34 46,752 4 3 2 1 Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216 Q3 216 Q4 216 Q1 217 Q2 217 22
Operating & Financial Review DMSB- Daihatsu Vehicle Unit Sales (Invoiced) -48.9% y-o-y 4 6 542 35 33 493 5 3 25 239 254 243 276 4 2 212 19 192 277 3 15 156 121 2 1 5 1 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 23
Operating & Financial Review DMSB - Hino Vehicle Unit Sales -26.% y-o-y 16 25 14 213 12 12 192 2 1 93 87 99 95 97 142 15 8 77 72 7 6 49 1 4 5 2 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 24
Operating & Financial Review DMMS - Perodua Vehicle Unit Sales -5.6% y-o-y 8, 7, 6, 5, 5,897 5,415 5,525 6,34 5,179 5,432 5,626 5,89 5,122 4,897 11,312 1,611 1,19 12, 1, 8, 4, 6, 3, 4, 2, 1, 2, Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 25
Operating & Financial Review FAC - Volvo Vehicle Unit Sales 25 2 15 1 147 81 143 175 119 92 2 22 229 186 +96.7% y-o-y 228 211 415 45 4 35 3 25 2 15 5 1 5 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 26
Operating & Financial Review FAW - Volkswagen Vehicle Unit Sales -46.3% y-o-y 6 668 7 5 467 6 4 496 5 3 2 1 249 247 334 218 21 118 88 148 211 359 4 3 2 1 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 27
Operating & Financial Review FAAI - Mitsubishi Vehicle Unit Sales 4-71.9% y-o-y 5 35 445 45 3 36 381 4 35 25 2 26 195 19 191 3 25 15 1 139 134 124 79 17 2 15 1 5 28 5 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 28
Auto Parts Manufacturing 29
Operating & Financial Review OMI Steel Wheels Auto Parts Manufacturing Unit Sales ( ) +3.3% y-o-y 25 337 35 3 2 15 177 16 125 129 157 129 213 22 25 2 1 13 11 19 91 15 1 5 5 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 3
Operating & Financial Review OMI Tyre Assembly Auto Parts Manufacturing Unit Sales ( ) -.5% y-o-y 9 1,292 1,4 8 7 6 5 645 647 577 651 514 56 52 687 577 492 1,74 1,69 1,2 1, 8 4 6 3 4 2 1 2 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 31
Operating & Financial Review OMIA Alloy Wheels Auto Parts Manufacturing Unit Sales ( ) 9 +89.2% y-o-y 14 8 7 7 8 69 123 12 6 5 4 39 38 34 42 54 77 65 1 8 6 3 28 23 4 2 1 2 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 32
Operating & Financial Review HASB NVH Products Auto Parts Manufacturing Unit Sales ( ) -33.6% y-o-y 4 58 6 35 3 287 293 347 461 5 25 2 254 223 238 166 233 179 36 4 3 15 127 2 1 5 1 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 33
Joint Venture 34
Operating & Financial Review AHSB - Seatbelts Auto Parts Manufacturing Unit Sales ( ) +6.3% y-o-y 5 9 45 425 427 451 813 8 4 35 3 25 2 388 381 38 299 39 332 313 67 645 7 6 5 4 15 3 1 2 5 1 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 35
Operating & Financial Review AHSH - Airbags Auto Parts Manufacturing Unit Sales ( ) -12.2% y-o-y 25 45 2 15 196 21 187 171 133 145 149 193 14 46 278 244 4 35 3 25 1 14 2 15 5 1 5 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 36
Operating & Financial Review AHSB Steering Wheels Auto Parts Manufacturing Unit Sales ( ) +24.7% y-o-y 9 8 81 118 12 7 6 62 56 56 56 53 58 77 96 1 8 5 4 38 39 38 6 3 4 2 1 2 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 37
Associated Companies 38
Operating & Financial Review Perodua Vehicle Unit Sales (Invoiced) +5. % y-o-y 7, 116,76 12, 65, 6, 55, 5, 55,241 61,465 49,21 49,15 55,759 46,721 51,892 52,899 57,484 5,169 12,48 17,653 11, 1, 9, 8, 7, 45, 6, 4, 5, 35, 4, 3, Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 3, 39
Operating & Financial Review Perodua Model Mix Alza 14.1% Alza 19.2% Axia 31.5% Myvi 26.9% Myvi 26.8% Bezza 27.5% YTD Jun 217 Axia 54.% YTD Jun 216 4
Operating & Financial Review Hino Motors Sales Vehicle Unit Sales (Invoiced) +16.4% y-o-y 2, 1,922 2,137 2,171 2,526 2,5 1,642 1,56 2, 1,5 1,376 1, 969 1,193 978 1,29 1,15 1,5 1, 5 495 5 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q216 Q3'16 Q4'16 Q1'17 Q2'17 YTD'15 YTD'16 YTD'17 41
Outlook 42
Outlook Intense competition, uncertainties in the industry environment and strict hire-purchase approvals will continue to be the headwinds to the Group s performance Continue to improve the production efficiency at our manufacturing plants and to secure higher volume to achieve more sustainable margin Ongoing review of group s cost structures and new model launches by the brands within the Group are expected to contribute positively 43
Outlook New Model Launched in First Half 217 Perodua Axia (facelift) 2 January 217 Volkswagen Tiguan 5 April 217 Perodua Bezza (with new rear skirt) 14 April 217 44
Outlook New Model Launched in First Half of 217 Volvo S9 / V9 (CBU) 24 March 217 Volvo V4 (facelift) 19 June 217 45
Outlook Expected New Model Launches in Second Half of 217 Volkswagen Golf GP Perodua New Myvi Volkswagen CC Volvo S9 T8 (CKD) 46
RESILIENCE MBM Resources Berhad (284496-V) 23-1, Level 23, Menara MBMR, 1 Jalan Syed Putra, 58 Kuala Lumpur. T: +63 2273 883 F: +63 2273 683 www.mbmr.com.my 47