1Q FY2018 Results Presentation 15 May 2018 IR Adviser
1QFY18 OPERATIONS REVIEW
Higher 1QFY18 revenue from new Myanmar plant contributions and stronger domestic sales at the Malaysia plant … Quarterly Domestic Revenue (RM ‘mil) 1QFY18 domestic sales rose 10.2% yoy on larger orders from existing customers Domestic Domestic 45.5% 47 47 46 46 43 43 RM47.1m 45.0% 43 42 42 40 40 38 38 +10.2% yoy 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1QFY17 1QFY18 RM94.1m RM104.7m Quarterly Export Revenue (RM ‘mil) Exports Exports 6.8 8.1 6.5 55.0% RM57.6m 54.5% +12.2% yoy 57 51 51 52 48 49 50 47 48 48 47 45 41 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1QFY18 total exports rose 12.2% yoy on new contribution of RM10.7 mil from the Myanmar plant; the Malaysia plant saw 3.5% lower exports on customer’s portfolio realignment Myanmar plant Exports (excl. Myanmar plant) 1QFY18 CORE REVENUE (YOY CHANGE) 3
ANZ exports onstream from FMCG brand … new flexographic printer to heighten value proposition to customers Commenced new export orders to FMCG MNC in ANZ in 1QFY18 Shipments likely to increase since delivery in April 2018 Noted higher key raw material costs in 1QFY18 Led to compressed profit margins Cost-pass-through system with predominantly MNC clientele to eventually temper effects of resin price uptrend To continue wastage reduction programme to enhance productivity to offset higher raw materials cost Acquired new flexographic printer in 1QFY18 Installation estimated to complete in May 2018 Malaysia plant to offer more efficient and better quality prints Lower ink usage and wastage Reduced setup time between jobs DAIBOCHI MALAYSIA UPDATE 4
Daibochi Myanmar sales report double-digit climb … expansion works to keep momentum Revenue rose qoq from increased exports to cost- sensitive customers Quarterly Revenue Quarterly PBT & PBT Margin PBT dipped qoq on: Myanmar Plant (RM ‘mil) Myanmar Plant (RM ‘mil) Higher key raw material costs Stronger Malaysia Ringgit against the Myanmar Kyat +26.7% Margins compressed from increased exports to 20.2% cost-sensitive customers 10.7 14.1% Currently undertaking capacity and capabilities 8.5 expansion -11.7% Acquired extrusion machine in 1QFY18 1.7 1.5 Planning to acquire printing machine and rewinding machine in FY18 4Q17 1Q18 4Q17 1Q18 Factory expansion expected to complete in end 2018, which would provide additional space for future use PBT PBT Margin DAIBOCHI MYANMAR UPDATE 5
GROWTH STRATEGIES
Malaysia plant to extend regional reach … Daibochi Myanmar on client expansion drive MALAYSIA PLANT MYANMAR PLANT Targeting new MNC business Aiming to increase customers from Myanmar and South East Asia (SEA) Exploring new product lines of existing MNC clients and Actively tendering for sales contracts with major contracts from new MNCs domestic consumer brands To leverage low-cost and geographical advantage to CAPEX secure export contracts from cost-sensitive customers Investing RM7.7 mil for the rest of FY18 for new in the SEA region machinery comprising: On track to reach RM100 mil revenue in FY19 High-speed slitter and supporting machinery CAPEX Planned CAPEX of USD2.0 mil in FY18 for new machinery GROWTH STRATEGIES 7
1QFY18 FINANCIAL REVIEW
Double-digit expansion in 1Q18 puts Daibochi on track for strong performance in FY18 … 1Q18 to 4Q17 to 1Q18 to 1Q17 to RM'mil % chg qoq % chg yoy 31.03.18 31.12.17 31.03.18 31.03.17 1QFY18 Review (yoy comparison) 104.7 105.7 (0.9%) 104.7 94.1 11.3% Revenue Revenue increased on new contributions from 12.8 14.8 (13.6%) 12.8 11.1 14.9% EBITDA Daibochi Myanmar and higher domestic sales since Operating Profit 9.4 11.3 (16.9%) 9.4 7.8 20.7% 3QFY17 Share of Associate Results 0.0 0.8 (97.0%) 0.0 0.4 (93.4%) PBT rose in line with revenue, also enhanced by contribution from Daibochi Myanmar; which offset Profit Before Tax 8.5 11.2 (23.5%) 8.5 7.4 14.9% rising raw material costs due to higher crude oil price Net Profit to Shareholders 6.5 7.9 (18.3%) 6.5 5.8 12.3% Net profit increased in line with higher PBT 1.98 2.42 (18.2%) 1.98 1.76 12.5% Basic EPS (sen)* EBITDA margin 12.2% 14.0% (1.8 pt) 12.2% 11.8% 0.4 pt PBT margin 8.2% 10.6% (2.4 pt) 8.2% 7.9% 0.3 pt Net margin 6.2% 7.5% (1.3 pt) 6.2% 6.1% 0.1 pt *Adjusted to reflect the bonus issue of 2 for every 10 ordinary shares held by the entitled shareholders, completed on June 28, 2017 Quarterly Revenue Quarterly PATMI Quarterly PBT (RM ‘m) (RM ‘m) (RM ‘m) 10 15 100 10 5 50 5 0 0 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 INCOME STATEMENT 9
Net gearing maintained at a conservative level … continues to sustain healthy returns As at 31.03.2018 As at 31.12.2017 Remarks (Unaudited) (Audited) Fixed Assets (excl associate investment & deferred tax)* 169.34 173.23 Associate Investment 19.39 19.36 Current Assets 177.84 173.42 Due to increase in inventories, and trade and other receivables Current Liabilities 108.05 110.42 Due to decrease in trade and other payables Shareholders’ Equity 202.14 200.85 Due to higher retained earnings Total Borrowings 72.50 69.88 Due to purchase of new machinery Cash & Bank Balances 17.11 18.31 Net Gearing 0.27 x 0.26 x Return on Average Shareholders’ Equity** 13.4% 13.3% Return on Average Total Assets** 7.8% 7.7% * The Group carried RM34.2 mil and RM35.1 mil in intangible assets in 31 March 2018 and 31 December 2017 associated with the acquisition of its 60% interest in Daibochi Myanmar ** Based on net profit for the trailing twelve months BALANCE SHEET 10
First interim single-tier dividend of 1.05 sen per share payable on 28 June 2018 (ex-date on 28 May 2018) … RM’m Payment History Dividend Payout 62% 62% 62% Dividend per share Dividend Payout 60% 60% (sen) (RM 'm) FY2017 FY2018 FY2017 FY2018 16.0 1 st Interim (single tier) 14.9 14.8 14.8 1.10* 1.05 3.61 3.44 2 nd Interim (single tier) 1.00 3.28 3.4 FY14 FY15 FY16 FY17 1Q18 3 rd interim (single tier) 1.15 3.76 4 th interim (single tier) 1.30 4.26 Total Dividend Payout Ratio^ Total 4.55 14.91 ^Excludes net profit contribution from Daibochi Myanmar * Adjusted to reflect the bonus issue of 2 for every 10 ordinary shares held by Dividend Per Share* sen the entitled shareholders, which was completed on June 28, 2017 Dividend policy revised to pay out at least 60% of 4.90 4.55 4.52 4.52 net profit attributable to shareholders, excluding net profit contributions from Daibochi Myanmar 1.05 FY14 FY15 FY16 FY17 1Q18 DIVIDENDS 11
INVESTMENT MERITS
Led by innovation and efficiency … a market leader in supplying top quality consumer flexible packaging to MNCs in the region Price Market Cap KEY MERITS RM2.23 RM731m MNCs make up almost 80% of total revenue P/E (ttm) P/B (benefitting from steady and large orders, strong creditworthiness) Exports to SEA & ANZ exceed 50% of revenue 27.4x 4.4x Supplier to renowned F&B and FMCG brands (supporting highly-resilient sectors) Contribution from Myanmar to see earnings boost EV/EBITDA (ttm) FY17 Div. Yield Industry-leading R&D and product innovation 15.2x 2.0% Highly-experienced management team VALUATIONS AND MERITS (as at 14 May 2018) 13
Contact Information Investor Relations Low Jin Wei, Executive Director Daibochi Plastic and Packaging Industry Berhad +606-231 9779 jinwei@daibochi.com Julia Pong, Manager Aquilas Advisory (M) Sdn Bhd +6012-390 9258 julia@aquilas.com.my
APPENDIX
CORPORATE PROFILE
Leading consumer flexible packaging player in Malaysia and South East Asia with 45-year track record … serving leading MNC brands in the F&B and FMCG sectors Daibochi established since 1972 A leading provider of consumer flexible packaging to major international brands in the F&B and FMCG industries Focused on quality and innovation Experienced R&D team supported by well-equipped laboratory testing facilities Increasing exports prowess Growing exports across South East Asia, Australia and New Zealand markets; exports make up >50% of group revenue OVERVIEW 17
Internationally-certified production facilities that comply with all factory audits by MNC clientele … strength in innovation Daibochi’s Malaysia plant certifications Attained ISO:9001 and ISO:14001 certifications Hazard Analysis Critical Control Points (HACCP) compliant to ensure adherence to food safety requirements Obtained Food Safety System Certification (FSSC:22000) Daibochi’s Myanmar plant certifications ISO 9001:2015 accreditation HACCP FSMS certification PRODUCTION FACILITIES 18
Strategically located production facilities … sizable floor space allows Daibochi to cater for increasing orders from MNCs Daibochi Plastic Plant 1 Located in Ayer Keroh, Melaka, Malaysia Production floor space of 385,000 sq ft Daibochi Plastic Plant 2 Located in Jasin, Melaka, Malaysia Commenced operations in 2Q14 Production floor space of 135,000 sq ft PRODUCTION FACILITIES (CONT’D) 19
Recommend
More recommend
