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

SAT SAT

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

August 27, 2010 August 27, 2010

Agenda

I ndustry Overview Group Business Performance Review Future Outlook Appendices

3

• According to FTI, Thailand is expected to produce

1.6m vehicles in 2010 from total capacity of 2.1m units (Industry utilization ~ 76% )

• Thailand Automotive Institute projects that the

production will reach 2.5m units in 2014, driven by pick up and eco car

• Eco cars are expected to increase its stake to ~ 20%
• f entire market in 2014 at the major expense of

passenger cars

• Based on preliminary investigation, there is no
• bvious impact from Eurozone crisis
• Europe is not Thailand’s major export

destination

• Export to EU is 4.5% and merely 1.4% for PIGS

Rosy Picture as Strong Demand Recovery

Source: FTI: The Federation of Thai Industries and SAT estimates (2010 - 14)

CAGR (2010 - 14)

0.0 0.5 1.0 1.5 2.0 2.5 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F 2014F

Thailand auto industry

Million units

1.0 1.6 1.7 2.0 2.2 2.5

Domestic Export Production 12% 57% 8 % 30 % 14% 61% Annual growth (2010) CAGR (2010 - 14)

0.5 0.5

0.0 0.5 1.0 1.5 2.0 2.5 2009A 2010F 2011F 2012F 2013F 2014F

Production by type of vehicles

PU & PPV Total 12% 57% PC

• 1%

49% 10% 52% Eco car 67%

• Others

6% 47%

31 % 67 % 19 % 60 % 20 %

Annual growth (2010)

Million units

0.7 0.8 0.9 1.0 0.8 1.2 0.9 1.3 1.0 1.5 1.4 1.3 1.2 1.1 0.9 0.8 0.6 0.5 0.4 0.4 0.3 0.2 0.6 0.8 0.6 0.7 0.7 0.5 0.7 0.4 0.6 0.3 0.5 0.2 0.4 0.2 0.3 0.2 0.3 0.2 0.2 0.1 0.1 0.1 0.4 0.0

1.0 1.6 1.7 2.0 2.2 2.5

Production 13% /Domestic 5% /Export 30%

CAGR (1997-2008)

4

Monthly Car Production and Sales (as of June10)

Source: TAIA (The Thai Automotive Industry Association)

20000 40000 60000 80000 100000 120000 140000 160000 180000 J a n 8 M a r M a y J u l y S e p N

• v

J a n 9 M a r M a y J u l S e p N

• v

J a n 1 M a r M a y

Dom Sales Exp Sales Total Prod Total Sales

Units

5

6M_YTD Production and Sales

Other 6% Honda 11% Nissan 9% Isuzu 15% AAT 7% Toyota 40% MMth 12% AAT 6% Isuzu 20% Nissan 6% Honda 15% Other 10% Toyota 38% MMth 5% Isuzu 9% AAT 10% Honda 8% Nissan 12% Other 3% Toyota 40% MMth 18% 325,374 244,881 175,464 513,595 158,251 92,804 22,977 10,518

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Production Dom Sales Exp Sales

Pickup & PPV Passenger Car Other

Units Source: TAIA (The Thai Automotive Industry Association) (68% ) (49% ) (78% ) (32% ) (44% ) (22% )

6

Production Trend by Type and Brand

10,000 20,000 30,000 40,000 50,000 J a n 9 F e b M a r A p r M a y J u n e J u l y A u g S e p O c t N

• v

D e c J a n 1 F e b M a r A p r M a y J u n e

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 J a n 9 F e b M a r A p r M a y J u n e J u l y A u g S e p O c t N

• v

D e c J a n 1 F e b M a r A p r M a y J u n e

Toyota Mitsubishi Nissan AAT Other Honda

Passenger

unit unit

7

Domestic Trend by Type and Brand

2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 J a n 9 F e b M a r A p r M a y J u n e J u l y A u g S e p O c t N

• v

D e c J a n 1 F e b M a r A p r M a y J u n e

Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT Other

Pick Up & PPV

2,500 5,000 7,500 10,000 12,500 15,000 J a n 9 F e b M a r A p r M a y J u n e J u l y A u g S e p O c t N

• v

D e c J a n 1 F e b M a r A p r M a y J u n e

Toyota Mitsubishi Nissan AAT Other Honda

Passenger

unit unit

8

Export Trend by Type and Brand

5,000 10,000 15,000 20,000 25,000 30,000 J a n 9 F e b M a r A p r M a y J u n e J u l y A u g S e p O c t N

• v

D e c J a n 1 F e b M a r A p r M a y J u n e

Isuzu (Isuzu&GM) Toyota Mitsubishi Nissan AAT

Pick Up & PPV

1,000 2,000 3,000 4,000 5,000 6,000 7,000 J a n 9 F e b M a r A p r M a y J u n e J u l y A u g S e p O c t N

• v

D e c J a n 1 F e b M a r A p r M a y J u n e

Toyota Mitsubishi Nissan AAT Other Honda

Passenger

unit unit

9

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

Jan10 Feb Mar Apr May June

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

Export Destinations

24% 27% 28% 26% 24% 25% 32% 23% 24% 27% 31% 27% 25% 26% 28% 34% 21% 27% 21% 20% 21% 22% 17% 18% 12% 7% 6% 12% 13% 11% 11% 12% 13% 7% 7% 9% 9% 9% 8% 10% 7% 6% 7% 7% 8% 7% 4% 4%

0% 25% 50% 75% 100% 2008 2009 Jan10 Feb10 Mar10 Apr10 May10 June10

Middle East Aus, NZ & Oceania Asia Central & S.America Europe Africa 775,652 535,596

Source: TAIA (The Thai Automotive Industry Association)

58,525 74,063

Units

57,139 75,075 84,097 69,279

Pick Up & PPV

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

Jan10 Feb Mar Apr May June

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

Passenger

Agenda

I ndustry Overview Group Business Performance Review Future Outlook Appendices

11 11

Market share FY’10

Rear Axle Shaft Y09 = 86 % Rear Axle Shaft Y09 = 86 %

Customer Model

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

Market share FY’10

Coil Spring Y09 = 33 % Coil Spring Y09 = 33 %

Customer Model

Mitsubishi Cedia Toyota Camry Honda Jazz, City Nissan New Teana , March

Customer Model

Toyota Fortuner, Vigo Mitsubishi Triton, 3E45, Pajaro

Pickup car Pickup car Passenger car

Market Share: Axle Shaft & Coil Spring

12 12

Market share FY’10

Leaf Spring Y09 = 12% Leaf Spring Y09 = 12%

Market share FY’10

Stabilizer Bar Y09 = 38% Stabilizer Bar Y09 = 38%

Customer Model

Mitsubishi Lancer, Cedia Honda Jazz/City / Accord Toyota New Altis

Customer Model

Toyota Fortuner, Vigo Mitsubishi Triton, 3E45 Nissan LCV , Navara

Customer Model

Mitsubishi Triton

Customer Model

Hino Bus Mitsubishi Fuso Truck Trucks

Pickup car Passenger car Pickup car Commercial car

Market Share: Leaf Spring & Stabilizer Bar

13 13

Market share FY’10

Disc Brake Y09 = 29% Disc Brake Y09 = 29%

Market share FY’10

Drum Brake Y09 = 25 % Drum Brake Y09 = 25 %

Customer Model

Mitsubishi Fuso Truck Trucks

Customer Model

Honda Jazz/City, Civic, Accord, CR-V Mitsubishi Space Wagon

Customer Model

Mitsubishi Triton, 3E45

Customer Model

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

Customer Model

Honda City

Passenger car Pickup car Commercial car Passenger car Pickup car

Market Share: Disc Brake & Drum Brake

14 14

Exhaust Manifold Y09 = 18% Exhaust Manifold Y09 = 18%

Market share FY’10

Customer Model

Mitsubishi Lancer, Cedia

Customer Model

Mitsubishi Triton, 3E45 AAT BT-50, Ranger

Pickup car

Market Share: Exhaust Manifold

Passenger car

15

Note : Full Capacity= 500 hrs./month

87%

83% 90% 80% 79% 95%

Utilization (% )

1,500 100,000 255,000 396,000 240,000

Capacity (pcs)

2011F 82%

75% 73% 62% 25% 80% 85% 85% 90% 90% 90%

Utilization (% )

1,500 100,000 255,000 396,000 86,000 63,000 47,000 95,000 121,000 240,000

Capacity (pcs)

2010F

86% 396,000

Kubota Blade

98% 36,000

Kubota Machining

65% 63,000

Fly Wheel

65% 445,000 40% 255,000

Coil Spring 60%

55% 46% 65% 68% 68% 56%

Utilization (% )

1,500 100,000 46,000 95,000 109,000 240,000

Capacity (pcs)

2009A

Utilization (% ) Capacity (pcs)

2012F

Production Volume (Per Month)

75%

89% 66% 85% 1,500 180,000 320,000

Leaf Spring (tons) Axle Shaft (incl. Kubota) Exhaust Manifold Drum Brake

Weighted Utilization rate

Stabilizer Bar Disc Brake

Capacity and Utilization Rate (to be revised)

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

F

• rgi

90% 90% N/A (on process) N/A (on process)

Agenda

I ndustry Overview Group Business Performance Review Future Outlook Appendices

17

Financial Highlights

18% 58% 9%

• 32%

6% 0% 1% 3%

• 12%
• 15%
• 11%

4%

• 11%
• 5%
• 4%

QoQ

1,025 358 133 2,561 3,800 2,597 6,361 635 768 1,240 371 1,159 5,939 5,814

2008

14% 540 434 114 2,868 3,324 2,347 6,192 314 429 913 351 767 4,348 4,295

2009

• 14%
• 26%

22 31 29 Interest Exp.

• 47%

58% 350 212 222 CAPEX 15% 114 3,068 3,495 2,346 6,563 203 234 384 96 324 1,554 1,511 1Q10

• 44%

557% 199 30 NOPAT 12% 26% 3,244 2,583 Equity

• 13%

11% 3,495 3,158 Total Liabilities 21% 9% 114 105 Depreciation

• 26%

148% 341 138 EBITDA

• 6%

15% 100 87 SG&A

• 51%

13,408%

178 1 Net Profit 14% 0%

Effective Tax Rate

• 10%
• 5%

2,371 2,501

• Int. Bearing Debt
• 3%

17% 6,739 5,741 Total Assets

• 34%

186% 288 101 GP

• 27%

78% 1,483 834 Total Revenue

• 26%

77% 1,444 815 Sales

YoY YoY 2Q10 2Q09

Unit : Bt.mn

18

Key Financial Ratio

10.81 0.59 37.91 1.08 0.73 15.15 19.19 22.55 0.98 26.99 10.70 11.99 23.01 19.97

2Q10

8.54 2.12 9.33 1.48 1.01 15.25 21.25 27.55 1.21 26.62 10.93 10.69 20.89 19.94

2008

10.44 23.27 3.17 % ROCE 8.54 18.57 2.46 % ROIC 10.23 0.68 15.65 1.14 0.76 27.35 1.81 29.55 12.73 13.06 24.74 21.39

1Q10

1.69 0.62 EBITDA/CAPEX (x) 1.05 0.00 EPS (bt) 7.98 18.12 Interest Coverage (x) 17.74 9.89 % ROFA 5.01 0.09 % ROA 11.58 0.20 % ROE 9.56 8.61 BVPS (bt) 1.16 1.22 DER (x) 0.82 0.97

Int.Bearing Debt/Equity (x)

7.23 0.16 % NPM 20.99 16.51 % EBITDAM 17.86 12.39 % GPM

2009 2Q09

19

Sales Breakdown

29% 30% 32% 33% 33% 35% 33% 14% 13% 10% 11% 9% 14% 9% 12% 12% 11% 10% 10% 13% 9% 4% 4% 3% 3% 4% 3% 4% 4% 3% 3% 3% 3% 4% 4% 7% 7% 8% 8% 8% 8% 8% 8% 8% 25% 23% 26% 24% 25% 15% 25% 7% 7% 7% 8% 6% 0% 25% 50% 75% 100%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Domestic 97% OEM 94%

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 1,439 939 815 1,406 P/U & PPV Parts 92% 1,136 1,511 1,444

20

Customer Base

32% 25% 21% 23% 32% 37% 31% 23% 25% 27% 26% 27% 26% 26% 8% 8% 9% 7% 7% 7% 7% 8% 4% 4% 7% 5% 5% 3% 25% 22% 19% 22% 11% 11% 21% 8% 8% 7% 7% 7% 8% 10% 9% 6% 9% 8% 6% 7%

0% 25% 50% 75% 100%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Mitsubishi Toyota Honda I suzu AAT Others

Bt.mn 939 1,439

Kubota

815 1,406 1,136 1,511 1,444

Agenda

I ndustry Overview Group Business Performance Review Future Outlook Appendices

22

Eco-car Projects Update

• Drum Brake : confirmed
• 10,000 car production expected in

the 1st yr

• 412-rai Land purchased at Hemraj

Industrial Park, Rayong

• Factory construction on process
• Launching year postponed from

2010 to ~ Mar 2012

Suzuki

SBG’s Order Progress OEM Update

Car Makers

• To launch in 2012
• Project will go earlier than original
• plan. Lunching year ~ 1Q2012
• To launch ~ Mar 2011
• Platform of 2009 Nissan March/

Micra

• Launching ~ Mar 2010
• Also export to Japan
• Coil Spring and Stabilizer RFQ

Received.

Toyota

• Drum brake : verbally confirmed

Mitsubishi

• Disc Brake: confirmed
• Drum Brake: confirmed

Honda

• Front & Rear Coil Spring: confirmed
• n both 4 &5 door models

(exclusively)

• 50,000 car production expected in

the 1st yr, and double in the 2nd yr

Nissan

Note: Toyota & Honda

• negotiating for lower production requirement from 100K units

Mitsubishi

• negotiating for lower excise tax

23

CAPEX plan during 2010F–2012F (~ 3,500 mb.)

500 1,000 1,500 2,000 2010 2011 2012

New project: ICP2 Current machinery projects Land 60 MB Building 79 MB Office equipment & others 86 MB

922 MB 800 MB

MB

Total ~ 1,950 MB 400 MB 500 - 600 MB 500 - 600 MB

Future projects & normal CAPEX Future projects & normal CAPEX

Current machinery projects in 2010 : 922 MB ICP2 Project: 1,200 MB

6 Others 54 R&D 60 Mitsubishi BDS10 60 Nissan bracket injection pump 78 Rotary blade 246 Normal CAPEX 417 Kubota

Amount (MB) Projects

4 Pre-operation (EIA/HIA) 20 Equipment 44 Land/1 263 Building & system 872 Machinery

Amount (MB) Projects

24

ICP2: Project description

• Exemption of corporate income tax for a period of 8 years
• 50% reduction of normal rate of corporate income tax for a

period of 5 years following the expiration of the former privilege

Promotional privileges from BOI (expected)

To construct a new casting plant with total capacity of 30,000 tons/year and total usable area of no greater than 9,999 sq.m.

• n 50-rai land plot at Amata City Industrial Estate, Rayong

Project overview

Phase 1 (July 11 onwards): Expected output of 450 tons/mth Phase 2 (Jan12 onwards): Expected output of 2,500 tons/mth

Mass run

Gravity technology with technical assistance from Takeda Casting Corporation (Japan)

Technical assistance

• 1. Ferrous casting (FC) products
• 2. Ferrous casting ductile (FCD) products

Products

~ 1,200 MB for 2010 - 2011

Total investment cost

International Casting Product Company Limited

Responsible company

The second iron casting plant (ICP2)

Project name

25

ICP2: To further strengthen SAT’s position

I ncreasing competitive edges through productivity, quality, product variety and cost control

1 Production perspective 2 Market & customer perspective 3 Financial perspective

• Maintain customer loyalty, long-term relationship and customer

confidence in the company’s capability, product quality and technology

• Enhance ability to tap growing orders from existing customers and

new demand, resulting in the company’s customer base expansion

• Opportunity to access and diversify into non-auto markets
• Reduce dependence on outsourced

suppliers for casting products

• Advance technology leading to

increasing productivity and product quality

• Increase production capacity and

product lines into non-auto areas e.g. agricultural equipment and home appliances

• Potential to generate more

revenue from higher capacity and more product variety

• Better production cost control,

leading to improved margin

• BOI promotional privileges and

benefits

Agenda

I ndustry Overview Group Business Performance Review Future Outlook Appendices

27

New 40 Mil.shares offering scheme

Transferable subscription right - TSR (SAT-T1) Private placement - PP 1 2 17 - 30 Aug 2010

TSR trading period

6 - 21 Sep 2010

TSR exercise period

350 MB

Expected proceeds

If there are remaining shares left at the

end of TSR exercise period, the company shall offer them to investors via PP Others

Baht 14 per share

Exercise price

1 unit of TSR to 1 newly issued ordinary

shares Exercise ratio

47 days

TSR maturity

Offer to the company’s existing

shareholders at the ratio of 12 existing shares to 1 unit of TSR Offering method

Baht 0 per unit

Offering price

25 million units

• No. of TSRs

Overnight bookbuild on a given day during

26 Aug - 3 Sep 2010

Bookbuilding form will be allocated to

investors after the market close

Bookbuilding deadline: 9.00 p.m. (Day T) Allocation will be determined before the

market open on the next day Expected bookbuild period

Subscription: T+ 1 to T+ 4 Good fund: T+ 4

Expected subscription period

Subject to bookbuilding

Offering price

15 million shares

• No. of shares
• Case 1: PP + all TSRs are exercised by existing shareholders

4.41%

• Case 2: PP + all TSRs are exercised by new shareholders

11.76% Control dilution EPS dilution

• After TSR and PP offering

11.76%

28

Equity offering timeframe

TSR

Bookbuild period (T) Subscription period (T+ 1 – T+ 4)

Sep PP

Start trading new shares from PP offering New shares from SAT-T1 exercise to start trading SAT-T1 exercise period SAT-T1 trading period EGM BOD meeting

Oct Aug Jul Jun

14/6 20/7 Remark: The activities, which are highlighted in light grey, are tentatively scheduled 17-30/8 6-21/9

29

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.

• Establishment of

Somboon Spring Ltd.

• Establishment of

Somboon Malleable Iron (SBM)

• Establishment of Bangkok

Spring Industrial (BSK)

• Began the move into OEM

market

1962

• Establishment of

Somboon Advance Technology (SAT)

• Start to

supply TOYOTA

• Group

Restructuring

• Listed
• n

SET

1975 1977 1995 2002 2004 2005 2007

• Acquiring ICP

by 100% shareholding

2010

• SAT increases

~ 40 mil.shares to strengthen balance sheet for group’s future prospect

30

Group Structure and Business

SAT

(Paid Up (300 -> 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 27% Kittapanich Family 26% Thailand Equity Fund 10% Others 37%

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)

I CP

(Paid Up 185 mb)

100%

31

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 Q Q M M M D D D C C C

SBG SBG

E E E

32

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)

33

Parts for Kubota: Harvest Machine

34

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 Thank You

Somboon Advance Technology Public Company Limited –I nvestor 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