SAT To Become an Auto Parts Manufacturing Leader in ASEAN with - - PowerPoint PPT Presentation

SAT

To Become an Auto Parts Manufacturing Leader in ASEAN with Excellent Quality

May, 2011

Agenda

 Industry Overview  Group Business  Performance Review  Future Outlook  Appendices

Thailand, a world top auto assembler, is poised for impressive growth

3

30 60 90 2009A 2010F 2011F 2012F 2013F 2014F

Global car production

Million units

57.2 64.9 71.5 78.0 82.1 85.2

Asia

Annual growth (2010) CAGR (2010 - 2014)

Total 7% 13% Europe 6% 5% 7% 16% North America 8% 27% South America 9% 7% Middle East & Africa 8% 7%

Source: Autofacts 2010 estimates, an analytical group of PricewaterhouseCoopers

Strength of Thailand as Automotive Clusters

 Recovering and Growing consumer demand for automobiles.  Strong presence of automotive supporting businesses.  Strong Government Support i.e. incentive tax structure, supporting organization etc.  Based of OEM’ R&D Centers  Geographical and logistic advantages - Thailand as a gateway to Asia providing easy access to regional markets

• Established infrastructure and state of the art port

facilities to facilitate auto export - Cluster development of suppliers to reduce the cost of logistics and create economies of scale  Extensive & experienced suppliers - Due to approx. 1,800 auto part manufacturers to supply the industry or car makers can be sourced all locally.

4

• The March earthquake and tsunami in Japan

crippled imported parts supplies to Thailand, forcing carmakers to cut production in line with the tight supplies of parts in their inventories.

• Car manufacturing in Thailand was temporarily

cut production, therefore it will be back to normal faster than expected.

• As its result, the auto production target get back

to the original number of 1.8 mil.units as before the disaster in Japan.

Rosy Picture as Strong Demand Recovery

Source: FTI: The Federation of Thai Industries and SAT estimates (2011 - 15)

0.4 0.2 0.3 0.4 0.5 0.6 0.8 0.9 1.1 1.2 1.3 1.4 1.0 1.6 1.8 2.0 2.2 2.4 2.5 0.4 0.1 0.2 0.3 0.3 0.4 0.5 0.6 0.7 0.7 0.6 0.6 0.5 0.8 0.8 0.9 0.9 1.0 1.1 0.0 0.1 0.1 0.2 0.2 0.2 0.2 0.3 0.4 0.5 0.7 0.8 0.5 0.9 1.0 1.2 1.3 1.4 1.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F

Thailand auto industry

Million units

Domestic Export 9% 6% 10% CAGR (2011 – 15F)

65% 54%

21%

23% 0.0 0.5 1.0 1.5 2.0 2.5 2010A 2011F 2012F 2013F 2014F 2015F PU&PPV PC Eco car Others

Production 13%/Domestic 5%/Export 30% CAGR (1997-2008)

Production

Automotive Industry

Production by type of vehicles

Annual Growth 2010 65% 46% 67%

Most updated impacts from Japan’ Tsunami

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Carmakers Japan Thailand Toyota full production should pick up by next month, June. Car manufacturing in Thailand will be back to normal by May 23. Nissan Plant in Iwaki has resumed full

• peration and expects to reach

its optimum production pace by October. Production in Thailand will get back to normal by this June. Honda its parts supply production has picked up and is well on the way to normal levels. Expect to get back to normal capacity by September. Isuzu Expect to resume to normal by July. AAT Expect to resume to normal by July.

6

New Cars Market in Thailand for 2010 and beyond

Brand 2010 2011 2012 2013 2014 Isuzu

D-Max2/ D-Max(RT50) D-Max(RT50-

SUV => to replace MU-7)

Honda

Jazz1/City1/ Accord1/ Eco car(2CV)/ Civic(2HC) Jazz-Hybrid3/ CR-V Accord Jazz / City

Toyota

Vios1/Yaris2/ Vigo2 Prius-hybrid/ Corolla1, Camry Yaris3/Eco car3 Corolla Hilux (IMV2)

Mitsubishi LancerEX/Triton

(special edition)

None Eco-Car Triton

Nissan

March(Eco

car)/Navara1/

Venette(NV200) March(sedan)/ Qasana3 New compact sedan (to replace

Tida Latio)

Navara

Mazda

Mazda2(sedan), Mazda31 Mazda3/ BT50(T6)

Ford

Fiesta(B229), Focus1 Ranger(T6)/ Escape1/ Focus/Everest

(Escape discontinued)

Chevrolet Cruze(J300)

Colorado(GMI700) Colorado (SUV) /Aveo(T300)

Suzuki

Swift/SX43 Eco car

Note : 1 - minor change 2 - nano change 3 - not confirmed

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3M2011 Production and Sales

Toyota 36% MMth 13% AAT 13% Isuzu 11% Nissan 12% Honda 10% Other 5% Toyota 39% MMth 6% AAT 7% Isuzu 21% Nissan 8% Honda 13% Other 6% Toyota 33% MMth 19% AAT 18% Isuzu 5% Honda 6% Nissan 17% Other 2%

284,991 113,873 171,118 177,259 113,970 47,041 6,731 6,731

100,000 200,000 300,000 400,000 500,000 Production Dom Sales Exp Sales

Other Passenger Car Pickup & PPV

Units Source: TAIA (The Thai Automotive Industry Association) (61%) (48%) (72%) (38%) (46%) (28%) +22.5% Y-Y +43% Y-Y +8.2% Y-Y

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2010-3M11 Production Trend by Type and Brand

10,000 20,000 30,000 40,000 50,000

Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other

Pick Up & PPV

2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 Toyota Mitsubishi Nissan AAT Other Honda

Passenger

unit unit

9

2010-3M11 Domestic Trend by Type and Brand

2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000

Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other

Pick Up & PPV

2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000

Toyota Mitsubishi Nissan AAT Other Honda

Passenger

unit unit

10

2010-3M11 Export Trend by Type and Brand

5,000 10,000 15,000 20,000 25,000 30,000

Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT

Pick Up & PPV

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Toyota Mitsubishi Nissan AAT Other Honda

Passenger

unit unit

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4,000 8,000 12,000 16,000 20,000 24,000

Jan10 Feb Mar Apr May June July Aug Sep Oct Nov DecJan-11 Feb Mar

Asia Aus, NZ, Oceania Middle East Africa Europe C & N. America

2008-3M11 Export Destinations

24% 27% 23% 21% 21% 23% 24% 27% 30% 34% 32% 27% 21% 27% 20% 20% 21% 26% 12% 7% 12% 10% 11% 9% 13% 7% 9% 10% 9% 11%

7% 6% 6% 5% 5% 5%

0% 25% 50% 75% 100% 2008 2009 2010 Jan-11 Feb-11 Mar-11

Middle East Aus, NZ & Oceania Asia Central & S.America Europe Africa

535,596 895,855 Source: TAIA (The Thai Automotive Industry Association) 68,082 80,699

Units

Pick Up & PPV

4,000 8,000 12,000 16,000 20,000 24,000

Jan10 Feb Mar Apr May June July Aug Sep Oct Nov DecJan-11 Feb Mar

Asia Aus, NZ, Oceania Middle East Africa Europe C & N. America

Passenger

775,652 85,626

Agenda

 Industry Overview  Group Business  Performance Review  Future Outlook  Appendices

BSK 38%

NHK 62%

SAT 85%

SMT 8%

Other 7% 13

Market share FY’11

Rear Axle Shaft Y10 = 85 %

Customer Model

Market share FY’11

Coil Spring Y10 = 36 %

Customer Model

Mitsubishi

Lancer, New LancerEx

Toyota

Camry

Honda

Jazz , City, Accord

Nissan

New Teana , March

Customer Model

Toyota Fortuner, Vigo Mitsubishi Triton , 3E45

Pickup car

Pickup car Passenger car

Market Share: Axle Shaft & Coil Spring

Toyota Fortuner , Vigo Mitsubishi Triton , 3E45 AAT (Mazda & Ford) BT-50 , Ranger Isuzu D-Max, MU-7

BSK 36%

NHK 64%

BSK 16%

NHK 84%

14

Market share : Leaf Spring & Stabilizer Bar

Market share FY’11

Leaf Spring Y10 = 14%

Market share FY’11

Stabilizer Bar Y10 = 37%

Customer Model Customer Model Customer Model

Mitsubishi Triton

Customer Model

Hino

Bus

Fuso

Truck

Pickup car Passenger car Pickup car Commercial car

Mitsubishi

Lancer Toyota Corolla

Honda

Jazz , City, Accord

Toyota (56%) Fortuner, Vigo Mitsubishi (100%) Triton, 3E45 Nissan (83%) Navara , LCV

SBM 26%

AISIN 52% KIRIU 5% OTHER 17%

SBM 27%

AISIN 64% KIRIU 9%

OTHER 1%

15

Market share : Disc Brake & Drum Brake

Market share FY’11

Disc Brake Y10 = 27%

Market share FY’11

Drum Brake Y10 = 25 %

Customer Model

Fuso Truck FM/FN ,Canter

Customer Model

Honda Jazz/City, Civic, Accord, CR-V , Eco Mitsubishi

Space Wagon ,New Lancer EX

Customer Model

Mitsubishi Triton , 3E45

Customer Model

Mitsubishi Triton, 3E45 Isuzu D-Max MU-7

Customer Model

Honda City, Eco

Passenger car Pickup car Commercial car Passenger car

Pickup car

SBM 12%

AISIN 58% OTHER 30%

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Market Share: Exhaust Manifold

Exhaust Manifold Y10 = 17%

Market share FY’11

Customer Model

Mitsubishi Lancer

Customer Model

Mitsubishi Triton , 3E45 AAT BT-50, Ranger

Pickup car Pickup car

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Note : Full Capacity= 500 hrs./month

Capacity and Utilization Rate

M a c h I n i n g S p r I n g

F

• rgi

Production Volume (Per Month)

2009A 2010A 2011F 2012F

Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%) Capacity (pcs) Utilization (%)

Axle Shaft (incl. Kubota)

240,000 56% 240,000 90% 240,000 98% 320,000 85%

Disc Brake

109,000 68% 121,000 90% 173,000 85% 173,000 85%

Drum Brake

95,000 68% 95,000 90% 107,000 80% 107,000 85%

Exhaust Manifold

46,000 65% 47,000 85% 47,000 75% 47,000 77%

Fly Wheel

8,000 65% 8,000 95% 12,400 85% 12,400 95%

Kubota Machining

36,000 98% 86,000 70% 86,000 77% 86,000 90%

Kubota Blade

360,000 25% 360,000 25% 360,000 25%

Coil Spring

255,000 40% 255,000 62% 255,000 90% 445,000 65%

Stabilizer Bar

100,000 46% 100,000 73% 100,000 90% 180,000 66%

Leaf Spring (tons)

1,500 55% 1,500 75% 1,500 83% 1,500 89%

Weighted Utilization rate

60% 80% 70% 65%

Agenda

 Industry Overview  Group Business  Performance Review  Future Outlook  Appendices

19

Financial Highlights

Unit : Bt.mn

1Q10 4Q10 1Q11 YoY QoQ 2009 2010 YoY Sales 1,511 1,677 1,782 18% 6% 4,295 6,263 46% Total Revenue 1,541 1,720 1,817 18% 6% 4,348 6,416 48% GP 321 304 347 8% 14% 767 1,241 62% SG&A 97 127 137 41% 7% 351 426 21% EBITDA 339 310 340 0% 10% 913 1,407 54% Net Profit 200 177 213 6% 20% 314 771 146% Total Assets 6,563 8,077 8,780 34% 9% 6,192 8,077 30%

• Int. Bearing Debt

2,346 2,425 2,709 15% 12% 2,347 2,425 3% Total Liabilities 3,495 3,902 4,497 29% 15% 3,324 3,902 17% Equity 3,068 4,175 4,283 40% 3% 2,868 4,175 46% Interest Exp. 31 21 22

• 29%

6% 114 111 -3% Depreciation 114 90 130 13% 44% 434 438 1% CAPEX 212 213 603 184% 184% 517 1,078 108%

Effective Tax Rate 16%

11% 10% 14% 13%

20

Key Financial Ratio

1Q10 4Q10 1Q11 2009 2010 %GPM 21.28 18.00 19.46 17.86 19.82 %NPM 13.23 10.35 11.93 7.23 12.32 %ROA 12.54 8.78 10.09 5.01 11.90 %ROFA 29.27 26.57 27.36 17.74 25.4 EBITDA/CAPEX (x) 1.74 1.03 0.63 1.69 1.54 %ROE 26.94 17.20 20.35 11.58 23.38 %ROCE 21.92 14.02 14.95 10.44 17.62 %ROIC 19.87 14.79 15.33 8.54 17.28

Int.Bearing Debt/Equity (x)

0.76 0.60 0.63 0.82 0.58 DER (x) 1.14 0.98 1.05 1.16 0.94 Interest Coverage (x) 10.33 11.74 10.05 7.98 12.71 EPS (bt) 0.67 0.51 0.63 1.05 2.27 BVPS (bt) 10.23 11.98 12.60 9.56 12.28

Sales, Net Profits GPM and NPM Trend in 1Q09 – 1Q11

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939 815 1,136 1,406 1,511 1,444 1,631 1,677 1,782 25 1 97 191 200 178 214 174 213 13.8% 12.4% 18.9% 22.8% 21.3% 20.0% 20.0% 18.0% 19.5% 2.7% 0.2% 8.6% 13.6% 13.2% 12.3% 13.1% 10.35% 11.93% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Sales (MB) Net Profit (MB) GPM(%) NPM (%)

22

Sales Breakdown

32% 33% 33% 35% 33% 33% 33% 31% 10% 11% 9% 14% 9% 9% 8% 11% 11% 10% 10% 13% 9% 10% 9% 10% 3% 3% 4% 3% 4% 4% 4% 4% 3% 3% 3% 4% 4% 4% 3% 4% 8% 8% 8% 8% 8% 9% 7% 8% 7% 7% 8% 8% 8% 8% 8% 9% 26% 24% 25% 15% 25% 23% 28% 23% 0% 25% 50% 75% 100%

2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Domestic 96% OEM 95% Axle Shaft Leaf Spring Disc & Drum Brake Exhaust Manifold Fly Wheel (+Comp) Stabilizer Bar Coil Spring Others

(i.e. Big Hub, Bracket, Timing Cover, Camshaft)

Bt.mn 815 1,406 P/U & PPV Parts 80% 1,136 1,511 1,444 1,631 1,677 1,782

23

Customer Base

21% 23% 32% 37% 31% 29% 29% 32% 27% 26% 27% 26% 26% 27% 26% 27% 9% 8% 7% 7% 7% 5% 5% 7% 8% 7% 7% 8% 8% 7% 7% 7% 9% 8% 10% 6% 4% 6% 4% 4% 7% 5% 7% 5% 3% 4% 7% 6% 19% 22% 11% 11% 21% 24% 22% 19%

0% 25% 50% 75% 100%

2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

1,782

Mitsubishi Toyota Honda Isuzu AAT Others

Bt.mn

Kubota

815 1,406 1,136 1,511 1,444 1,631 1,677

Agenda

 Industry Overview  Group Business  Performance Review  Future Outlook  Appendices

25

Future Outlook

• 1,600 – 1,700 MB in 2011
• 500 – 600 MB in 2012
• About 300 MB as normal CAPEX

CAPEX

• To Keep Up market Share
• To penetrate new markets in order to expand

customer base and sales growth

• Sales forecast for 2011 – 2013 around 12 -15% on

average (10% from Auto, 25% from Non-Auto)

Growth Prospect

• Product Testing – Coil Spring, Disc&Drum Brake, Axle

Shaft

• Product Development – High Stress Coil Spring
• Product Innovation – Module Assemble, Light weight

Design

R &D Center

SBG still resistant amid uncertain situation

26

• 50% Production cut due to

shortage of part supply

• More competitive market
• Rising of steel prices
• Unpredictable orders cause to

difficult production planning

• Less dependent on any particular

customer, Less impacts compare to the average during tough time of business

• Revised CAPEX from 2.0 bn Baht to 1.7

bn Baht in 2011 in order to be more conservative

• Potential improved gross margin from

ICP2 mass production which will start

• n this July
• Insist on sale growth target at 12 -

15%y-y as the previous target.

Agenda

 Industry Overview  Group Business  Performance Review  Future Outlook  Appendices

28

Group Development

 A well established and reputable vehicle parts manufacturer, with concentration on the OEM market.  The Group started its automotive parts manufacturing business in 1962, and is considered as one of Thai pioneers in the business.

29

Group Structure and Business

SAT

(Paid Up (340 mb)

SBM

(Paid Up 160 mb)

BSK

(Paid Up 130 mb)

Tsuchiyoshi Somboon Coated Sand

(Paid Up 72 mb)

Yamada Somboon

(Paid Up 150 mb)

Nishinbo Somboon Automotive

(Paid Up 732.6 mb)

Somboon Somic Manufacturing

(Paid Up 300 mb) 100% 100% 21.25% 20.00% 2.90% 1.80%

Somboon Holding 25.50% Kittapanich Family 24.71% Thailand Equity Fund 3.68% Others 46.12%

Sales ~231 mb, TA~225mb, GPM 12.1%, NPM 2.6% Sales ~2,150 mb, TA~1,697 mb, GPM 17.5%, NPM 5% Sales ~1,851 mb, TA~1,703 mb, GPM 23.8%, NPM 16.7% Sales ~1,972 mb, TA~1,259 mb, GPM 18.4%, NPM 9.8%

• Steering Column Assembly
• Water Pump Assembly
• Oil Pump
• Ball Jointed
• Tie Rod End
• Outer Track Rod
• Stabilizer Linkage
• Brake System
• Casting

(Rasin/Sand)

ICP

(Paid Up 785 mb) 100%

SAT International (Japan)

(Paid Up 10 mb)

• Casting (RM of Machining)
• Machining
• Spring Products
• Sales Representative

100%

30

Certificates and Awards

 Group Company has been receiving many awards and accreditations of its unique developing and its production quality-being rate as one of the finest in Supplier List.  Proven performance since inception in 1972 i.e., QCD grading, Quality Award by MMth

(zero defect), TPS (Toyota Production System), QCC award & network by HINO

 ISO 9002, QS 9000, ISO 14001, ISO/TS 16949 (OEMs required)

Q M D C

SBG

E

31

Diff Case (Front) Assy Diff Case (Rear) Assy Axle Front Assy (35HP & 45HP) Axle Rear Assy (35HP & 45HP)

Parts for Kubota: Tractor

Case Front Gear (RH & LH) Case Bevel Gear Case Brake Case Rear Axle (RH & LH) Case Front Axle Holder Front (RH & LH) Cover Front Axle Case Diff (Rear) Diff Case Cover Diff Case (Front) Diff Case Bearing (RH & LH) Holder Bearing Clutch Bearing Case (RH & LH) Holder Bearing Drive Case

Valve & Push Rod (Engine Part-Forging)

Body Part & Power train part (Casting & Machining) Rotary Blade (Forging) Axle Shaft (Forging&Machining) Power train part (Assy)

32

Parts for Kubota: Harvest Machine

33

Siam Kubota Tractor Co., Ltd (SKT)

Siam Kubota Industry Co., Ltd (SKI)

(since 1978, paid up … mb)

Siam Cement Plc. (SCC) Kubota Corporation, Japan Marubeni Corporation, Japan Min Sen Machinery Co.,Ltd

51% 40% 4.74% 4.26%

Siam Kubota Tractor Co., Ltd (SKT)

(since 2007, paid up 900 mb)

• Trading
• Leasing
• Manufacturing

60% 40%

Sales ~338,000 mb, TA~…. mb, NPM 6.8% Estimated Mass Run ~ 1Q09 with volume planned ~25,000 units per annum

Harvest Machine

Siam Kubota Corp., Ltd (SKC)

• n M&A process

Thank You

Somboon Advance Technology Public Company Limited –Investor Relations Department

• Tel. +66 2 728-8596, Fax. +66 2 728-8513, Email: ir@somboon.co.th, http://www.satpcl.co.th

Questions and Answers