scientex 1q16 briefingslides final 151217 (to upload)corporate presentation 1q16 corporate update...

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Corporate Presentation1Q16 Corporate Update & Financial Results

17 December 2015

IR Adviser

(Company No.: 7867-P)

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CONTENTS

• Operations Review & Growth Plans

• 1Q16 Financial Review

• Investment Merits

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OPERATIONS REVIEW

& GROWTH PLANS

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Operations Review Growth Strategies Financial Highlights Investment Merits Appendix

Total average monthly sales tonnage

7.5

9.1

9.5

9.2

9.4

10

.8

12

.3

FY13 FY14 FY15 1Q15 1Q16 FY16E FY17E

3.0

3.3

4.4

4.3

5.8

7.1

13

.2

FY13 FY14 FY15 1Q15 1Q16 FY16E FY17E

Operations Review: Manufacturing

Marked increase in consumer packaging sales tonnage from ongoing PE expansionand new capacity from SGW Ipoh… industrial packaging growing steadily

Operations Review

Average monthly sales tonnage

(MT ‘000)

Products:

• Base film

• Functional films

Prod. Output: 62,400* MT p.a.Location: Rawang & Ipoh

PE FilmPE Film

Prod. Output: 6,000 MT p.a.Location: Rawang

BOPP

Film

BOPP

Film

Output: 6,000 MT p.a.Location: Shah Alam & Indonesia

AdhesiveAdhesive

Consumer PackagingConsumer Packaging

Prod. Output: 120,000 MT p.a.Location: Pulau Indah, Klang

Stretch

Film

Stretch

Film

Prod. Output: 18,000 MT p.a.Location: Melaka

PP

Strapping

Band

PP

Strapping

Band

Prod. Output: 10,000 MT p.a.Location: Vietnam

RaffiaRaffia

Industrial PackagingIndustrial Packaging

10.5 25.5

Industrial Packaging

Consumer Packaging

13.912.4

*includes additional capacity from acquisition of SGW Ipoh (formerly known as Mondi Ipoh) in August 2015

17.915.213.5

+1.7% yoy

+34.3% yoy

5


Operations Review: Manufacturing

Manufacturing segment growth largely driven by ongoing consumer packagingexpansion… industrial packaging also saw higher revenue on stronger USD/MYR

Operations Review

� 1Q16 Manufacturing revenue increased 22.4% yoy to

RM392.0m

� Industrial Packaging

� Revenue rose 7.6% y-o-y to RM207.9 mil,

attributed to higher ASP on stronger USD/MYR

� Consumer Packaging

� Revenue surged 44.8% y-o-y to RM184.1 mil,

due to higher PE film production capacity and

enlarged clientele

� Also noted additional contribution of about

RM40 mil from recently-acquired SGW Ipoh

(formerly known as Mondi Ipoh Sdn Bhd)

� Exports made up 52.6% of consumer packaging

revenue in 1Q16 (1Q15: 42.6%)

1Q15 1Q16

Industrial 193.1 207.9

Consumer 127.2 184.1

40% 47%

60% 53%

Segment Revenue (RM ‘mil)

Industrial

Consumer

+7.6%

yoy

+44.8%

yoy

Total 320.3 392.0

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Growth Plans: Manufacturing

CPP plant to see maiden contribution in early 2016… while expansions to BOPP andPE operations remain on track

Growth Strategies

30,000MT

Per Annum

24,000 MT PE

6,000 MT BOPP

146,400MT

Per Annum

74,400* MT PE

60,000 MT BOPP

12,000 MT CPP

To be completed

in mid-2016

2014 2016

Consumer packaging expansion plan

To be completed

in end-2015/2016

� CPP plant currently in trial production phase

� On track for commercial production run by end-

2015 with total capacity of 12,000 MT p.a

� To complement PE and BOPP businesses and

leverage on existing clientele in Malaysia and

South East Asia

� Construction of new BOPP plant 90% completed

� Commercial run expected in mid-2016

� BOPP production to be increased to 60,000 MT

p.a. from 6,000 MT p.a. currently

� Further expansion of PE film from 62,400* MT p.a. to

74,400 MT p.a. targeted for completion in mid-2016

� Estimated CAPEX of RM21 mil for 3 more lines to

be installed in FY16

*includes additional capacity from acquisition of SGW Ipoh (formerly known as Mondi Ipoh) in August 2015

CPP plant in Melaka

completed in August 2015

Construction of new BOPP plant in

Pulau Indah 90% completed

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Operations Review: Property

Strong take-up of recent launches push unbilled sales to approximately RM632 milto be recognized over the next 2-3 years… demand for affordable homes still intact

Operations Review

Ongoing GDV

RM319 mil

Ongoing GDVRM163 mil

1Q16 Property Development Update

� Revenue grew 43.2% yoy to RM158.6 mil on higher revenue

recognition across all development projects

� Launched 6 new projects worth RM15.4 mil GDV in 1Q16 and

RM308.4 mil in 4Q15

� Comprised mainly affordable and higher premium

residential properties in Pasir Gudang, Kulai, Senai, and

Melaka

� Unbilled sales increased to RM632.2 mil to be recognized over

the next 2 to 3 years, versus RM584.9 mil as at 31 July 2015

Note: Data presented as at 31 October 2015




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1Q16 FINANCIAL REVIEW

9


24

.9

25

.6

29

.5

27

.1

26

.0

33

.9

36

.3

48

.8

30

.3

36

.1

43

.0

48

.9

60

.9

Quarterly PATMI (RM ‘mil)

1Q16 net profit doubles on higher topline from manufacturing and propertysegments, compounded by operational efficiencies and favorable product mix

1Q16 Income Statement Summary

Financial Highlights

24

1.6

27

1.1

34

5.1

37

1.2

36

4.8

38

3.5

42

6.8

41

5.4

43

1.1

46

2.9

45

5.3

45

2.5

55

0.6

Quarterly Revenue (RM ‘mil)

31

.3

33

.2

38

.2

40

.2

32

.9

44

.4

48

.1

56

.0

40

.2

47

.3

56

.5

77

.0

80

.8

Quarterly PBT (RM ‘mil)

1Q16 1Q15 Change RM'mil Remarks

550.6 431.1 27.7% Revenue Driven by a l l -round growth across manufacturing and property

segments

95.5 52.2 83.1% EBITDA

17.4% 12.1% 5.3 pt EBITDA margin

80.8 40.2 101.1% PBT

14.7% 9.3% 5.4 pt PBT margin

60.9 30.3 101.1% PATMI

11.1% 7.0% 4.1 pt Net margin

26.94 13.69 96.8% Basic EPS (sen)

Profi t doubled surpass ing revenue growth pace, on increased

contribution and enhanced margins in manufacturing segment

(due to operating effi ciency and economies of scale); a lso

benefitting from strong demand in property segment

*4Q15 and FY15 PBT and PATMI includes RM12.6 million fair value gain on investment properties

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Manufacturing segment now contributing half of total group EBITDA…

Revenue & EBITDA Segmentation

71.2%

28.8%

1Q16 Group Revenue: RM550.6 mil

Manufacturing Property

+43.2%

yoy

+22.4%

yoy

+48.4%

yoy+139.8%

yoy


37.9%

62.1%

1Q15 Group EBITDA: RM52.2 mil

74.3%

25.7%

1Q15 Group Revenue: RM431.1 mil

Manufacturing Property

49.6%

50.4%

1Q16 Group EBITDA: RM95.5 mil

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483 635 763 771

193 208

153284

430 515

127 184

2012 2013 2014 2015 1Q15 1Q16

RM’mil

Manufacturing Revenue (by Segment)

Industrial Packaging Consumer Packaging

Financial Review: Manufacturing

Manufacturing segment growth largely driven by higher capacity in consumerpackaging segment…


54

56

58

77

10

7

91

20

47

9.9% 9.6% 9.1% 8.4% 9.0%7.1%

6.2%

12.1%

2010 2011 2012 2013 2014 2015 1Q15 1Q16

RM’milEBITDA & EBITDA Margin

EBITDA EBITDA Margin

54

5

58

5

63

7

91

9

1,1

92

1,2

86

32

0

39

2

12.2%11.3% 11.0% 11.1%

9.8%11.0%

8.8%

14.8%

2010 2011 2012 2013 2014 2015 1Q15 1Q16

RM’mil

Manufacturing Revenue & Gross Margin

Revenue Gross Margin

1Q16 EBITDA grew

139.8% in line with

higher topline and

favourable product mix

1Q16 EBITDA grew

139.8% in line with

higher topline and

favourable product mix

1Q16 manufacturing

revenue grew 22.4%

largely driven by

consumer packaging

1Q16 manufacturing

revenue grew 22.4%

largely driven by

consumer packaging

Industrial packaging revenue increased 7.6%

yoy due to higher ASP on stronger USD/MYR

Industrial packaging revenue increased 7.6%

yoy due to higher ASP on stronger USD/MYR

Consumer packaging revenue increased 44.8% with

expanded PE film capacity and clientele. Also saw

some increase in sales of adhesives

Consumer packaging revenue increased 44.8% with

expanded PE film capacity and clientele. Also saw

some increase in sales of adhesives

12


15

0

21

9

24

5

31

0

39

8

51

6

11

1

15

9

37.8%42.6% 44.2% 47.0% 44.1% 42.3% 42.2% 40.7%

2010 2011 2012 2013 2014 2015 1Q15 1Q16

RM’milRevenue & Gross Margin

Revenue Gross Margin

34

63

73

10

0

12

2

16

5

32

48

22.8%28.8% 29.8% 32.3% 30.7% 32.0%

29.3% 30.3%

2010 2011 2012 2013 2014 2015* 1Q15 1Q16

RM’milEBITDA & EBITDA Margin

EBITDA EBITDA Margin

Financial Review: Property Development


Property segment continues to see resilient sales on the back of demand foraffordable properties in Southern Johor…

Seeing strong demand for both affordably and well priced

properties, particularly in Kulai, Skudai, and Senai

Seeing strong demand for both affordably and well priced

properties, particularly in Kulai, Skudai, and Senai

*Excluding RM12.6 million fair value gain from investment properties

Higher profitability consistent with revenue

growth; EBITDA margins maintained around 30%

Higher profitability consistent with revenue

growth; EBITDA margins maintained around 30%

13


As at As at

31.10.2015 31.7.2015

Property, Plant & Equipment 753,908 642,791 In l ine wi th consumer packaging expansion

Investment Property & Other Investments 24,115 24,082

Land Held & Property Development Costs 394,030 405,115

Investment in Jointly Control led Enti ty &

Associated Company43,332 41,524

Inventories 110,125 111,953

Trade & Other Receivables 404,798 321,215 In l ine wi th increase in revenue

Cash & Bank Ba lances 79,716 90,626Lower due to payment for acquis i tion of SGW Ipoh (formerly known as

Mondi Ipoh Sdn Bhd) and consumer packaging expans ion

Deferred Tax Assets & Tax Recoverable 8,131 2,569 Due to reinvesment a l lowance from SGW Ipoh

TOTAL ASSETS 1,818,155 1,639,875

Trade & Other Payables 336,051 308,259 In l ine with enlarged operations

Borrowings (ST + LT) 323,048 225,431To fund working capita l requirements and machinery purchases for

consumer packaging expans ion

Tax & Deferred Tax 64,735 62,588

Shareholders ’ Equi ty 1,007,648 941,978 Due to higher reta ined ea rnings

Minori ty Interest 66,008 62,784

Net Tangible Assets / Share (RM) 1 4.46 4.17

Net Gearing 0.24x 0.14xIn l ine with higher borrowings to fund working capi ta l requirements and

machinery purchases

Balance Sheet (RM ‘000) Remarks

Strengthening cash balance from operational cashflow… net gearing atcomfortable level amidst ongoing expansions

1 Based on share capital of 225.9 mil shares after deducting treasury shares of 4.1 mil shares


Balance Sheet (Highlights)

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INVESTMENT MERITS

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Investment Merits

A high-growth proposition all-round... attractive proxy to the burgeoning packaging sectorand Southern Malaysia property market

Investment Merits

MANUFACTURING

• Top 3 stretch film producer in the world

• Consumer packaging segment facilitates

entry into burgeoning F&B and FMCG sectors

• Further integration and expansion initiatives

position Group to cater to larger regional

clientele and enhance competitiveness

PROPERTY DEVELOPMENT

• Reputable developer in the southern states

of Johor and Melaka

• Current projects of RM1.3 bil

• Pipeline GDV of RM3.6 bil on existing

landbank to sustain another 8 years

• Future projects displaying higher GDV/acre

• Strong fundamentals with strong upside to profit and margin expansion

• Dividend policy of minimum 30% payout

� 31.4% dividend payout in FY2015*

• Valuations to be compressed with foreseeable earnings boost

• Trading at trailing 12-month PE of 10.3x and EV/EBITDA of 7.2x (as at 15 December 2015)

*including single-tier final dividend of 13 sen; ex-date 7 Jan 2016

16

Operations Review Growth Strategies Financial Highlights Investment Merits Appendix2

.7

2.7

2.7

4.5

8.1

14

.2

4.2

17

.2

10

.8

19

.4

25

.8

30

.1

35

.4

47

.1

49

.7

22

.1

49.2% 48.0%

74.0%

26.6%

36.6%

49.8%

28.7%36.1%

28.8%32.1% 33.4% 35.9%

52.1%

31.7%31.4%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FY15

RM’mil Dividend History

Net Dividend Payout Special Dividend Payout Ratio

Group has dividend policy of minimum 30% net profit payout…

Dividend History

� FY2014 Dividends (Total Dividend of 21 sen):

• Paid interim dividend of 8 sen per share on 8 August 2014

• Paid final dividend of 13 sen per share on 6 February 2015

� FY2015 Dividends (Total Dividend of 22 sen) :

• Paid interim dividend of 9 sen per share on 7 August 2015

• Declared final dividend of 13 sen per share

Ex-date on 7 January 2016, payable on 25 January 2016

Dividend Policy:

Minimum 30% of Net Profit(effective FY2011)

Investment Merits

FY15 Dividend Payout

RM49.7Million

FY15 Dividend Payout

RM49.7Million

Share Dividend

5.9

RM29.4 mil subject

to shareholders’

approval

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Thank You

Contacts:

Ms. Jocelyn Ng [email protected] T: 03-5519 1325

Ms. Julia Pong [email protected] T: 03-2711 1391

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