RGB YE2011 Corporate Review RGB YE2011 Corporate Review 7 th March - - PowerPoint PPT Presentation

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RGB YE2011 Corporate Review RGB YE2011 Corporate Review 7 th March - - PowerPoint PPT Presentation

RGB YE2011 Corporate Review RGB YE2011 Corporate Review 7 th March 2012 Safe Harbor Statement Safe Harbor Statement This presentation contains forward-looking statements (including, without limitation, statements regarding the enhancement of


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RGB YE2011 Corporate Review RGB YE2011 Corporate Review

7th March 2012

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This presentation contains forward-looking statements (including, without limitation, statements regarding the enhancement of shareholder value, and information and future guidance on our goals, priorities, orders, revenues, demand, growth opportunities, customer service and innovation plans, new product introductions, financial condition, earnings, liquidity, capital structure, operating performance, cost structure, cyclicality, the continued strengths and expected growth of the markets we sell into, operations, operating earnings, balance sheet models and our ability to be free cash flow positive under any normal economic environment) that involve risks and uncertainties that could cause results of RGB to differ materially from management's current expectations. Factors that could cause demand to be different from RGB’s expectations include customer acceptance of RGB and competitors’ products; changes in customer order patterns, including order cancellations; changes in the level of inventory at customers; and changes in business and economic conditions and the timing

  • f award exercises by employees. RGB’s results could be impacted by unexpected economic, social,

political and physical/infrastructure conditions in the countries in which RGB, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates.

Safe Harbor Statement Safe Harbor Statement

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Content Content

Page Highlights 4 Financial Overview 6 Business Segments Updates 9 Outlook, Targets & Strategies 18

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Highlights Highlights

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Highlights of FY2011 Highlights of FY2011

Business

  • The Group manage to achieve favourable EBITDA in FY2011 (RM40.7 million)

through improvement in average machines performance, effective cost cutting exercise and closure of non performing outlets

  • The Group is confident to achieve even better EBITDA in FY2012 with the

expected installation of approximately RM45 million new machines at various regions, commencement of new concessions as well as increase in SSM sales

Financial

  • Improvement of Operating Cash Flow from RM3.1 million (FY2010) to RM54.6

million (FY2011)

  • Trade Receivables reduced by RM28.6 million (37%) in FY2011

Corporate

  • Proposed disposal of 32% equity interest in Chateau to Diplomat Technology
  • Co. Ltd
  • Repayment of RM28.4 million CP/MTN and Term Loans in FY2011
  • Proposed fund raising exercise to retire the CP/MTN

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Financial Overview Financial Overview

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FY2011 Performance FY2011 Performance

FY 2011 RM ‘000 FY 2010 RM ‘000 Difference % Revenue 118,211 158,614

  • 25.5%

EBITDA * 40,719 30,512 + 33.5% Loss Before Tax (32,904) (59,469) + 44.7% Loss Attributable to Owners of the Parent (30,849) (50,884) + 39.4% Basic Net Loss Per Share (sen) (2.68) (4.44) + 39.6% Net Assets Per Share (sen) 5 7

  • 28.6%

* EBITDA = Earnings before interest, tax, depreciation, amortization, impairment of property, plant & equipment,

intangible assets and investments

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Improved profitability

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Key Ratios Key Ratios

Better profitability and liquidity 12 months ended 31 Dec 2011 31 Dec 2010 Gross profit margin (%) 19% 3% Current ratio (times) 1.10 0.62 Quick ratio (excluding inventory) (times) 0.97 0.56 Gearing ratio borrowings (times)

  • Gross

1.64 1.38

  • Net

1.23 1.21

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Business Business Segments Updates Segments Updates

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Revenue by Business Segments Revenue by Business Segments

Year-on-Year (“YoY”) Group Revenue reduced by RM40.4 million (25%) as compared to FY2010 is mainly due to the following :- SSM YoY 35%

  • RM24.1mil
  • One-off sales of 267 used

machines to ex-concession Partner at RM11.2 million in FY2010

  • Sales of 270 units of new machines

at a service fee of RM0.42 million in FY2011

  • However, the revenue drop was
  • ffset by RM7.9 million increase in

sales of machines in Malaysia & Vietnam in FY2011 TSM YoY 11%

  • RM7.7mil
  • Additional 5% management fees

imposed by PAGCOR resulting in approximately 7.3% drop in Philippines income

  • Closure of non performing outlets
  • Slight competition in Cambodia

regions L&E YoY 55%

  • RM8.5mil
  • Cessation of operation in Chateau

Notes: L&E: consist of revenue from companies involved in gaming and leisure activities Others: consist of revenue from manufacturing activities research & development and inter-segment transactions

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  • 10.0

20.0 30.0 40.0 50.0 60.0 70.0 80.0 SSM TSM L&E OTHERS 45.1 63.0 6.9 3.2 69.2 70.7 15.3 3.4 RM'mil FY2011 - RM118.2 mil FY2010 - RM158.6 mil

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FY2011 SSM revenue decreased by 35% (RM24.1 mil) as compared to FY2010 mainly due to :

  • One-off sales of 267 used machines at RM11.2 mil to ex-concession Partner upon cessation of outlet in FY2010
  • Sales of 270 unit of machines for RM0.42 million under service fee arrangement with manufacturers in FY2011

FY2011 SSM revenue decreased by 35% (RM24.1 mil) as compared to FY2010 mainly due to :

  • One-off sales of 267 used machines at RM11.2 mil to ex-concession Partner upon cessation of outlet in FY2010
  • Sales of 270 unit of machines for RM0.42 million under service fee arrangement with manufacturers in FY2011

SSM FY2011 Revenue Review SSM FY2011 Revenue Review

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* Actual Machines Sold in FY 2011 * Actual Machines Sold in FY 2010 Difference Units RM’000 Units RM’000 % Cambodia

  • 1,260

16 1,693

  • 25.5%

Macau 103 # 3,515 107 12,131

  • 71.0%

Malaysia 67 6,683 20 3,684 + 81.4% Philippines 486 # 20,540 413 28,960

  • 29.1%

Singapore 30 1,972 72 4,156

  • 52.6%

Vietnam 124 10,732 75 5,836 + 83.9% Others

  • 413

9 1,526

  • 72.9%

Total 810 45,115 712 57,986

  • 22.2%

One-off sales of 267 used machines to Partner upon cessation of outlet

  • 267

11,200

  • 100.0%

Grand Total 810 45,115 979 69,186

  • 34.8%

* Included in SSM sales are revenue from slot machines and other casino related equipments # Included in SSM Sales are selling of 30 machines (Macau) and 240 machines (Philippines ) via service fees arrangement with manufacturer

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TSM FY2011 Revenue Review TSM FY2011 Revenue Review

Country

  • No. of Machines placed

Revenue (RM’000)

As at Dec 2011 (37 Outlets) As at Dec 2010 (36 Outlets) Difference Units As at Dec 2011 As at Dec 2010 Difference % Cambodia 2,475 2,192 + 283 27,060 29,641

  • 8.7%

Philippines 2,011 1,824 + 187 26,951 29,061

  • 7.3%

Vietnam

  • 58
  • 58

152 346

  • 56.1%

Macau 396 426

  • 30

5,285 3,569 + 48.1% Laos 185 159 + 26 3,198 5,497

  • 41.8%

Singapore

  • 349
  • 100%

Others

  • 373

2,258

  • 83.5%

Total 5,067 4,659 + 408 63,019 70,721

  • 10.9%

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10.9% drop in FY2011 TSM revenue as compared to FY2010 is mainly due to :

  • Additional 5% Management Fees imposed by PAGCOR in FY2011 resulting in approximately 7.3% drop in

Revenue

  • Closure of outlets in Vietnam (1), Laos (1), Macau (2), Philippines (2) and Singapore (1)
  • Slight competition in Cambodia
  • Competition at 1 of the outlets in Laos where upgrading of machines only took place in late 2011

However, revenue drop in the above regions have been offset by 48% revenue increment in Macau 10.9% drop in FY2011 TSM revenue as compared to FY2010 is mainly due to :

  • Additional 5% Management Fees imposed by PAGCOR in FY2011 resulting in approximately 7.3% drop in

Revenue

  • Closure of outlets in Vietnam (1), Laos (1), Macau (2), Philippines (2) and Singapore (1)
  • Slight competition in Cambodia
  • Competition at 1 of the outlets in Laos where upgrading of machines only took place in late 2011

However, revenue drop in the above regions have been offset by 48% revenue increment in Macau

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TSM: New Concessions in FY 2011 TSM: New Concessions in FY 2011

No. Country Concession Venues Units of machines deployed Commencem ent Date YTD EBITDA Generated (RM’000) 1 Philippines PAGCOR Club Carmona 12 28th Jan 2011 (3) 2 Cebu Parkmall Satilie Casino 84 11th Mar 2011 505 3 Widus Casino 38 29th Jun 2011 646 4 Crown Regency Casino 12 18th Nov 2011 (11) Sub-total Philippines : 4 146 1,137 5 Cambodia Le Macau Casino 39 5th Feb 2011 43 Sub-total Cambodia : 1 39 43 Grand Total 185 1,180

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TSM: Cessation of Non TSM: Cessation of Non-Performance Performance Concessions in FY2011 Concessions in FY2011

No Country Concession location Date of Cessation YTD EBITDA Impact (RM’000) Remarks

1 Cambodia Silver World Casino 15th Mar 2011 (8) Closure of Casino 2 Macau Golden Dragon Casino 25th Feb 2011 (193) Unprofitable site. All machines relocate to Greek Mythology Casino (new concession site) 3 Vietnam Prince Club 2nd Apr 2011 26 All machines under concession sold to JV Partner 4 Philippines Carmona 9th Nov 2011 (3) Closure due to non performing of outlet Grand Total (178)

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EBITDA by Business Segments EBITDA by Business Segments

Despite a RM40mil drop in Group Revenue, FY2011 YoY EBITDA improved by RM10.2mil (33%) This is mainly due to effective cost control implementation and closure of non-performing outlets

SSM YoY 667% +RM4.0mil

  • Reversal of RM1.3million

provision for sales return

  • Effective cost cutting

measure implemented by management

TSM YoY 8%

  • RM3.5mil
  • Additional 5%

management fees imposed by PAGCOR resulting approximately 7.3% drop in income

  • Closure of non -

performing outlets

  • Slight competition in

Cambodia

L&E YoY 91% +RM12.8mil

  • Reduction in operating

expenses

  • Cessation of operations

in late 2011

Notes: L&E: consist of revenue from companies involved in gaming and leisure activities Others: consist of revenue from manufacturing activities research & development and other unallocated expenses

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  • 10.0

20.0 30.0 40.0 50.0

SSM TSM L&E OTHERS 3.4 42.1 (1.3) (3.5) (0.6) 45.6 (14.1) (0.3) RM 'mil FY2011 - RM40.7 mil FY2010 - RM30.5 mil

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Major Cost Components in FY2011 Major Cost Components in FY2011

16 FY2011 RM’000 FY2010 RM’000 Variance RM’000 Variance % TOTAL REVENUE 118,211 158,614 (40,403)

  • 25.5%

TOTAL EXPENSES Purchases 39,475 33% 67,742 43% (28,267)

  • 41.7%

Depreciation 49,824 42% 72,340 46% (22,516)

  • 31.1%

Staff Cost 15,141 13% 19,265 12% (4,124)

  • 21.4%

Finance Cost 9,570 8% 10,639 7% (1,069)

  • 10.0%

Leasing Fee 3,886 3% 3,596 2% 290 + 8.1% Professional & Consultancy Fees 5,310 4% 4,207 3% 1,103 + 26.2% Rental Expenses 1,937 2% 3,241 2% (1,304)

  • 40.2%

Travelling Expenses 2,173 2% 2,684 2% (511)

  • 19.0%

Sales & Marketing Expenses 2,947 3% 4,032 2% (1,085)

  • 26.9%

Upkeep of Machineries and Other Maintenance 1,555 1% 2,134 1% (579)

  • 27.1%

Utilities 1,413 1% 2,066 1% (653)

  • 31.6%

Other Expenses 2,491 2% 4,228 3% (1,737)

  • 41.1%

Junket & Complimentary Room Expenses 1,654 2% 13,109 8% (11,455)

  • 87.3%

Impairment / Written off of PPE & Receivables 14,452 12% 11,014 7% 3,438 + 31.2% Total Expenses 151,828 128% 220,297 139% (68,469)

  • 31.1%
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TSM: Update on Mobilisation Plan TSM: Update on Mobilisation Plan

As at Dec 2010 - Units at warehouse 1,240 Commentary Sites: Mobilized  The remaining 122 units

  • f machines are

allocated for the upcoming cruise ship

  • peration

Cambodia 38 Philippines 109 Myanmar 31 Laos 16 Sub-total of mobilized units for FY2011 (194) Impairment and written off of machines with zero value (924) Units to be mobilized in FY2012 122

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Outlook, Targets & Outlook, Targets & Strategies Strategies

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A better outlook ahead

Outlook for FY2012 Outlook for FY2012

Division Outlook Targets Strategies

SSM Relatively promising

  • Expected to sell 900

machines by FY2012

  • Entered new venture with Bingo machine

manufacturer to start distribution and concession of Bingo Machines in Philippines

  • Bingo machines are popular as it expects to

replace the traditional Bingo in Philippines market

  • Establish more sales presence in

Cambodia, Vietnam and Korea TSM Sustainable income

  • Approximately 600

additional machines will be installed by end of FY2012

  • Deployment of 122 fully

impaired machines on cruise ships

  • TSM Income from Bingo

Machines

  • Continuous exploration of new concessions

in Indo-China, Philippines and Macau

  • Placing of new machines to improve yield
  • Focus on the disposal of used machines at

warehouse

  • New concession of Bingo Machines on

profit sharing basis in Philippines

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A better outlook ahead

Outlook for FY2012 (cont) Outlook for FY2012 (cont)

Division Outlook Target Strategies

L&E Recurring Rental Income

  • Generate additional

rental income

  • No operating losses
  • Continue to look for tenants for the

remaining floor space

  • Continue to look for potential buyers for

the disposal of remaining equity interest in Chateau Others Positive

  • Launching of new

RGBGames in Q3 2012 under collaboration with Top Games Designer

  • We have entered into agreement with a

renowned games development company to develop new RGBGames Operating Cash Flow Positive

  • Additional RM15mil

repayment for CP/MTN

  • Reduction of Finance

Cost

  • Debts Reduction plan
  • Conversion of CP to Term Loans

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THANK YOU THANK YOU

For information, please contact RGB International Bhd. at Telephone: +604-2631111 | Email: ir@rgbgames.com