Invest ASEAN Conference January 2013

Invest ASEAN Conference
January 2013
Forward Looking Statement
This presentation contains forward looking statements which can be identified by the context of
the statement and generally arising when the Company is discussing its beliefs, estimates or
expectations. Such statements may include comments on industry, business or market trends,
projections, forecasts, and plans and objectives of management for future operations and
operating and financial performance, as well as any related assumptions.
Readers of this presentation should understand that these statements are not historical facts or
guarantees for future performance but instead represent only the Company’s belief at the time of
the statement were made regarding future events, which are subject to significant risks,
uncertainties and other factors, many of which are outside the Company’s control. Actual results
and outcomes may differ materially from what is expressed or implied in such forward looking
statements.
The Company cautions readers not to place undue reliance on any forward looking statements
included in this presentation, which speaks only as of the date made; and should any of the
events anticipated by the forward looking statements transpire or occur, the Company makes no
assurances on what benefits, if any, the Company will drive therefrom.
Agenda
Corporate Profile
Corporate Profile
•
UMS Holdings Limited is a one-stop strategic integration partner providing
equipment manufacturing and engineering services to Original Equipment
Manufacturers of semiconductors and related products
•
Our core capabilities are in advanced precision engineering, specifically in
the manufacturing of high precision front-end semiconductor components
•
We perform complex electromechanical assembly and final testing services in
the production of modular and integrated systems for original semiconductor
equipment manufacturers.
•
We provide precision engineering services to other industries primarily in the
oil & gas industry
Corporate Profile
Industry Value Chain
Strategic Positioning
UMS
• Machined Components +
Subassembly of systems
for front end
semiconductor
equipment
manufacturing
Applied
Materials
• Front end
semiconductor
equipment
manufacturer
Samsung / Intel /
TSMC / ASE /
STATS ChipPac
• Integrated Circuit
(IC) producer
• Packaging &
testing of IC
Mobile Devices
• End products
brands /
manufacturing (eg
iPad, iPhone)
Locales
Location
Function
Singapore
•
•
•
Corporate Headquarter
211,500 sq. ft.
R&D, engineering and other high-value activities
Malaysia
•
•
Volume production
500,000 sq. ft.
California,
USA
•
•
Procurement and purchasing center
IMT’s gas line business: Close proximity to key customers’
R&D function
Texas,
USA
•
IMT’s gas line business: Close proximity to key customers’
volume production facilities
Our History
1984
•
Founding of Long’s Manufacturing in Silicon Valley, USA by Mr Andy
Luong
1996
•
Incorporation of Uraco Manufacturing (Pte) Ltd in Singapore, JV
between Mr Andy Luong and URACO Holdings Limited
2000
•
Uraco Manufacturing (Pte) Ltd renamed UMS Semiconductor Pte Ltd
2004
•
Norelco Centreline Holdings Limited completes merger with UMS
Semiconductor Pte Ltd
Our History
2006
•
Ground breaking of a new 80,000 sq. ft. facility in Changi North Rise,
Singapore
2007
•
•
•
Entered into an exclusive contract with a major oil & gas company
Change of Company Name to UMS Holdings Ltd
Ground breaking of Penang, Malaysia facility
2008
•
Grand opening of Changi North Rise facility
2009
•
Penang Hub in operation
2011
•
UMS Penang obtained Tax-free pioneer status from MIDA for 5 years
+ 5 years starting 1 April 2011
2012
•
UMS acquires Integrated Manufacturing Technologies Group
Competitive Edge
Our Edge
1. At the right place at the right time
• Visionary transformation of the Group since 2008
• Move from sunset sectors such as hard-disk drive to re-focus on serving
the higher margin semiconductor industry
• This change further boosted by 3 factors;
• Our major customer shifting their production base to Asia
• Awarded manufacturing rights for key system of major customer
• Key system experienced huge demand driven by a boom in the
mobility sector, i.e. smartphones and tablets
• Business success also translated into financial success and sets the
foundation for the Group’s strong dividend track record
Our Edge
2. Highly Integrated Manufacturing Process
Deep + Integrated
Engineering
Capabilities
Accelerate
customer’s timeto-market
Expand margin
and enhance cash
flow
• Precision Machining
• Metal Finishing
Process
• System Integration
• Refurbishment
• Prototyping
• Vendor Managed
Inventory
• Semiconductor
Equipment (Applied
Materials Inc)
• 40 in-house special
process to increase
speed of delivery
• Oil & Gas Services
(Schlumberger)
• Cost control
• Manufacturing
efficiency
• Procurement
expertise
• Cash and financial
management
Our Edge
3. Entrenched Relationship with Top Global
Customers
• Serves a select group of leading
global corporations (eg, Applied
Materials Inc, Schlumberger)
• Deep & continuous collaborative
effort from R&D to manufacturing of
components to subassembly to
surface finishing
• High barrier of entry for competitors
• Management criteria for customer
acquisition:
• Earnings accretive
• Healthy and sustainable margin
Our Edge
4. Capacity for growth
• > 700,000 sq. ft. of combined space in Singapore and Penang,
Malaysia to meet new demands and customers
• Improved cost efficiencies by transiting more production from
Singapore to Malaysia which has a lower cost infrastructure
Our Edge
5. Strong Corporate Balance Sheet to Support M&A
Opportunities
Cash and bank balances of S$33.5 million as at 30 September 2012, with
minimal debt
M&A opportunities will be considered when such acquisition(s) is able to fulfill
the following:
• Expands the Group’s geographical reach into new regional markets
• Protects / improves its profit margins
• leveraging on its existing manufacturing capacities and capabilities
Financial Highlights
Financial Highlights
Revenue – annual
S$ M
Semicon Integrated System
commences
160
140
138.2
129.0
114.4
120
93.4
100
80
60
47.3
40
20
0
FY2007
FY2008
FY2009
FY2010
FY2011
Financial Highlights
Net Profit - Annual
S$ M
Semicon Integrated
System commences
40
30
28.7
27.6
FY2010
FY2011
20
12.1
10
1.8
0
FY2007
FY2008
FY2009
-10
-20
-30
-24.3
Financial Highlights
Geographical Contribution (2007-2011)
100%
80%
60%
40%
20%
0%
Others
United States
Singapore
FY2007
17.4
99.6
21.3
FY2008
14.5
68
10.8
FY2009
10.3
31.4
5.6
FY2010
20.2
39
69.8
FY2011
17.4
27.7
69.3
Financial Highlights
Segmental Contribution (FY2011 vs FY2010)
FY2011
Revenue
FY2010
Revenue
6%
8%
CEM
Semicon
94%
92%
Financial Highlights
Revenue – Sequential
40.0
30.0
20.0
10.0
0.0
36.6
35.3 35.2 33.8 35.0
32.7
24.7
17.0
32.0
25.2
21.7
23.0
Financial Highlights
Net Profit – Sequential
9
8
7
6
3.5
5
9.1
4
7.5
3
4.6
2
1
0
1.1
7.6
7.6
7.6
7.0
5.7
6.0
3.8
2.1
Financial Highlights
Balance Sheet
S$’000
30 September 2012
31 Dec 2011
Current Assets
78,965
82,104
Trade Receivables
10,344
11,081
Inventories
35,090
33,076
Cash & cash equivalents
33,531
37,947
PPE
52,336
59,495
Current Liabilities
30,297
21,786
Net Tangible Assets
105,617
124,728
Debt / Borrowings
17,735
2,665
Return on Assets
10%^
13%
Return on Equity
11%^
15%
* The Group’s borrowings comprise only finance leases that are secured by mortgages over the plant and machinery of a subsidiary
^ Annualised basis
Dividend Record
Strong Dividend Track Record & Payout Ratio
FY2008
FY2009
FY2010
FY2011
FY2012*
Dividend per
share
0.5 cents
1.0 cents
5.0 cents
6.0 cents
3.0 cents
Earnings per
share
0.49 cents
Payout Ratio
102.0%
N.A.
60.6%
74.6%
??
Dividend Yield
1.2%
2.4%
11.9%
14.3%
??
(declared todate)
(6.87) cents
8.25 cents
8.04 cents
4.59 cents
(9 mths)
(based on share
price of S$0.42)
*UMS has instituted a quarterly dividend policy since middle of 2012
Financial Highlights
Cash Balances & Free Cash flow
from Operations
S$ M
40
35
30
25
20
15
10
5
0
-5
-10
37.7
31.7
24.5
21.2
23.7
20.3
18.8
10.1
-0.2
FY2007
FY2008
FY2009
FY2010
FY2011
-7.2
Cash Balances
Free Cash Flow
* Cash Conversion Ratio = Net Cash Generated from operating activities as a percentage of Net Profit
Outlook
Semicon Outlook
A better year ahead?

The International Data Corporation (IDC) is forecasting that semiconductor
revenues worldwide will improve by 4.9% to $319 billion in 2013 and log a
compound annual growth rate (CAGR) of 4.1% from 2011-2016, reaching
$368 billion in 2016.

Bright spots for the semiconductor market include smartphones, tablets, settop boxes, and automotive electronics, which IDC expects will continue to be
key drivers of growth over the coming years.

Gartner stated that Global semiconductor revenues are projected to total
$311 billion in 2013, up 4.5 per cent from 2012

Similarly, The World Semiconductor Trade Statistics (WSTS) has released its
updated semiconductor market forecast that the world semiconductor
market in 2012 will be US$290 billion, down 3.2% from 2011, followed by a
recovery of positive 4.5% growth to US$303 billion in 2013
Share Performance
Share Statistics
•
Listed on 25 May 2001
•
•
Share price at listing: S$0.21
IPO Placement Shares: 33,800,000
Major Shareholders
% of shares held
Andy Luong
28
Applied Materials, Inc
6
Basic Share Data
(as at
08 Jan 13)
Share Price (as at 08 Jan 13)
S$0.420
Average Daily Volume (since 09
Oct 12)
700,161
No. of Issued shares excluding
Treasury Shares
343,754,327
Estimated Free Float
66%
Market Capitalisation
S$144.4M
Share Price
Investment Merits
Investment Merits

Unique business environment / position in the semiconductor
industry

Possible re-rating of semiconductor industry as there are signs of
current trough bottoming out

Strong positive cash generation ability


No major capital expenditure within the next few years
Attractive valuation at the current share price level

High dividend yield - more than 11% in the past two years
Investment Merits

Track record of high dividend payout ratio

Policy to continue quarterly dividend payout from 2nd half of FY2012
Thank you