3q09 results presentation-ver3micromechanics.listedcompany.com/newsroom/20090427... · 4...

Results Presentation 3Q09

Micro-Mechanics (Holdings) Ltd. Results Presentation 3Q09

3Q09 Quarter Review

3 Micro-Mechanics (Holdings) Ltd. Results Presentation 3Q09

0

5

10

15

20

25

July August Sep Oct Nov Dec Jan Feb

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Global Chip Market

Monthly sales from July 2007 to Feb 2008Monthly sales from July 2008 to Feb 2009

Y-O-Y Growth rate

US$ billion

• Experiencing one of the steepest downturns in the industry’s history• Sharp decline in end-user demand for semiconductors since last

quarter of 2008 into the beginning of 2009

Negative year-on-year growth Increasing rate of decline

Source: Data extracted from Semiconductor Industry Association (SIA)


3Q09 Group Revenue

Financial year ending 30 June

1.0

8.2

9.2

3Q08

1.5

8.3

9.8

4Q08

3.96.48.2Tooling

3.5

11.7

1Q09

2.6

9.0

2Q09

1.6

5.5

3Q09

CMA

Group revenue

(S$ mil)

Semiconductor Tooling Business• Sales fell 52% y-o-y from 3Q08, 39% q-o-q from 2Q09• Inventory correction and production cutbacks in global semiconductor industry• Unprecedented drop in customer orders in a seasonally slower quarter

CMA Business• Sales up 54% y-o-y from 3Q08 but down 39% q-o-q from 2Q09• Capital equipment spending reduced significantly due to economic downturn• CMA sales accounted for 29% of Group revenue, from 11% in 3Q08

Commenced new CMA plant in USA


3Q09 Group GP and NP


(1.4)0.22.11.72.1Net profit

28%40%54%52%58%Capacity utilisation

41.5%54.8%59.7%56.0%59.5%Tooling

(26.2)%(9.4)%21.2%20.5%43.2%CMA

22.5%36.2%48.3%53.9%57.7%Group GP margin

9.2

3Q08

9.8

4Q08

11.7

1Q09

9.0

2Q09

5.5

3Q09

Group revenue

(S$ mil)

Semiconductor Tooling Business• Softer GP margin due to combined effect of sharp contraction in business orders and

fixed production costs related to Cost of Sales

CMA Business• Steep fall in GP margin due to combination of low utilization rate and fixed

manufacturing overhead of the new CMA plant in USA• Larger CMA sales contribution exerted additional drag on Group GP margin


The Bottom Line


Consistently Sound Balance Sheet


4.6%3.7%(FY2008)

Inventory / Sales*

2.6%0.9%Trade receivables (outstanding >90 days / total TR)

00Borrowings

10.1

Dec-08

8.6

Mar-09

Cash

(S$ mil)

Balance sheet fundamentals remain intact

• Cash used in operations (before interest & tax) in 3Q09 only S$37k• Healthy cash balance after S$1.4m interim dividend payment in Feb 2009

- Limit capital spending to S$ 2.0 million for FY09• No borrowings and interest expense• Good record of trade receivables collection• Efficient inventory management practices

*annualised basis


Lowering Cost Structure

• Reduction of headcount - from 563 to 527

• Voluntary reduction in pay, benefits and working hours

• Hiring freeze

• Lowered energy and other operating expenses

Cost reduction and control initiatives implemented in 3Q09 :

Approximate cost savings achieved in 3Q09 – S$790,000


Riding Outthe storm


Business Outlook

• Some indications that the decline in chip sales has moderated but too early to conclude that semiconductor industry has hit bottom*

• Demand for semiconductors in 2009 expected to be well below 2008 levels over the following few quarters*

• Foresee global demand for capital equipment to remain cautious

Business conditions remain volatile

Cautious view of Group’s performance in 4Q09

• Revenue up slightly in March 2009, compared to January 2009

• Recovery in business environment still uncertain

• Any recovery could be slow and uneven

*Source: SIA Press Release on 3 April 2009


Strategy

BALANCED STRATEGY to tide through the downturn :• Balancing cost control with practical growth initiatives

Maintaining Low Fixed Cost Structure

Strengthen Effectiveness and Cost-Efficiency of our global workforce

Keep Operating Costs Low to match slower business environment

Improve operational capabilities of USA plant

Defend and build Market Share - strength in quality, cost, cycle time and resources

Partial Transfer of new precision aircraft and surgical tool component orders to Penang

Semiconductor Tooling

Singapore operations to Increase Focus on higher value-added product development

CMA Business

Develop Attractive Value Proposition for customers seeking to expand supply chain in Asia


Corporate Governance

Governance and Transparency Index (Issue 1 - 3 April 2009)

Micro-Mechanics ranks among the big-caps


Key Takeaway

• Sound Balance Sheet

• Practical Strategies

• Execution Capabilities

• Strong Corporate Governance and Transparency

Strong Foundation to Carry the Group To Better Times


Safe Harbour forForward-Looking Statements

This presentation contains certain statements that are not statements of historical fact, i.e. forward-looking statements. Investors can identify some of these statements by forward-looking items such as ‘expect’, ‘believe’, ‘plan’, ‘intend’, ‘estimate’, ‘anticipate’, ‘may’, ‘will’, ‘would’, and ‘could’ or similar words. However, you should note that these words arenot the exclusive means of identifying forward-looking statements. These forward-looking statements are based on current expectations, projections and assumptions about future events. Although Micro-Mechanics (Holdings) Ltd. believes that these expectations, projections, and assumptions are reasonable, these forward-looking statements are subject to the risks (whether known or unknown), uncertainties and assumptions about Micro-Mechanics (Holdings) Ltd. and its business operations.

Some of the key factors that could cause such differences are, among others, the following:• changes in the political, social and economic conditions and regulatory environment in the jurisdictions where we conduct business or expect to conduct business;• the risk that we may be unable to realise our anticipated growth strategies and expected internal growth;• changes in and new developments in technologies and trends;• changes in currency exchange rates;• changes in customer preferences and needs;• changes in competitive conditions in the semiconductor industry and our ability to compete under these conditions;• changes in pricing for our products; and• changes in our future capital needs and the availability of financing and capital to fund these needs.

Given these risks, uncertainties and assumptions, the forward-looking events referred to in this presentation may not occur and actual results may differ materially from those expressly or impliedly anticipated in these forward-looking statements. Investors are advised not to place undue reliance on these forward-looking statements.

Investors should assume that the information in this presentation is accurate only as of the date it is issued. Micro-Mechanics (Holdings) Ltd.’s business, financial conditions, results of operations and prospects may have changed since that day. Micro-Mechanics (Holdings) Ltd. has no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

31 Kaki Bukit Place, Eunos TechparkSingapore 416209www.micro-mechanics.com

Investor Relations ContactOctant Consulting tel (65) 6220 [email protected] or [email protected]

Thank You

3q09 results presentation-ver3micromechanics.listedcompany.com/newsroom/20090427... · 4...

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