AGM 23rd August 2012
Agenda AGENDA
AGENDA • FY2012 Highlights • Business Overview • Financial and Operations Highlights • Outlook & Growth Strategies • India Joint Venture • Redevelopment of 21/21A Lok Yang
FY2012 AGENDA HIGHLIGHTS
FY2012 HIGHLIGHTS • Revenue up 6.7% to S$364.1m – SEA market up 5.6% to S$276.4m – South Africa grew 5.6% to S$38.3m (up 18% in local currency terms)
• Gross margin stable at 22.1% (FY2011: 23.3%) • Dividend per share of S$1.5 cent recommended, representing 36.1% payout ratio comparing (FY2011: 26.5%) • Expects FY2013 to be profitable
Business AGENDA Overview
BUSINESS OVERVIEW • One of the largest independent tyre and wheel distributors in South East Asia • Presence in 9 countries; with 4,000 dealers • Sole distributor for major international brands:
• International export of proprietary brands
OUR BUSINESS MODEL Distribution
Manufacturing
Overseas Distribution Network
Retail Network (tyres for passenger cars, wheels, car services & accessories)
Commercial Tyres and Services (Truck and Off the Road “OTR” tyre management services)
Proprietary Brand Tyres (passenger car radial, light truck, truck bus radial)
Central warehousing and distribution in 9 countries
25 Retail Outlets in South East Asia
2 Truck Centers 3 Contract Customer Workshops 7 Mobile Fleet Service Vehicles
Export to over 90 countries
SSW Alloy Wheel (Manufacturing)
Retread of Truck and OTR Tyres
Financial & Operations AGENDA Highlights
STEADY SALES & GP MARGINS S$’mln
400
23.5%
23.3%
350
23.0% 22.7%
300
22.5% 22.1%
250
22.0% 200
150
296.9
364.1
21.4% 310.2
341.4
21.5%
21.0% 100
50
20.5%
0
20.0% FY2009
FY2010
FY2011
Revenue
FY2012
OVERSEAS EXPANSION • Growth in all key markets FY12
FY11
Change
Turnover by geographical segment
(S$'000)
%
(S$'000)
%
%
Southeast Asia
276,420
75.9
261,761
76.7
5.6
South Africa
38,255
10.5
36,231
10.6
5.6
North Asia
34,646
9.5
33,873
9.9
2.3
Others
14,753
4.1
9,491
2.8
55.4
Total
364,074
100.0
100.0
6.7
341,356
FOREX MANAGEMENT S$’mln 3.0 2.3 2.0
1.0
0.0 FY2009
FY2010
FY2011
FY2012
-1.0 -1.2 -2.0
-3.0 -2.9 -4.0
-5.0
-6.0
-7.0
-5.8
FOREX MANAGEMENT SGDZAR 2010/11 - 2011/12 6.600 6.400 6.200 SGDZAR 2010/11 2011/12
6.000 5.800
AVE FX RATE ZAR 5.600 5.400 5.200 5.000 May '10
Aug '10
Nov '10
Feb '11
May '11
Aug '11
Nov '11
Feb '12
FY10
5.38
FY11
5.40
FY12
6.01
FOREX MANAGEMENT To reduce Forex impact to Profit and Loss for South Africa, the Group is taking two steps: Increase equity in South Africa to reduce foreign currency denominated payables Increase local bank borrowings to reduce foreign currency denominated payables
GROUP’S NET PROFIT Net Profit & Margin S$’mln
16.0
4.5% 3.9%
4.0%
14.0
3.5% 12.0
3.1% 2.7%
10.0
3.0% 2.5%
8.0 2.0% 13.4 6.0 1.5% 9.8
9.5 4.0
1.0% 2.0
0.4%
0.5%
1.1 0.0
0.0% FY2009
FY2010
FY2011
FY2012
FINANCIAL RATIO FY12
FY11
158 days
133 days
96 days
86 days
Payables* Turnover
150 days
120 days
Cash Conversion Cycle
104 days
99 days
Current Ratio
1.42
1.45
Net Gearing (X)
1.12
0.86
Inventory Turnover Receivables Turnover
*Payables consists of trust receipts and short-term revolving loans
Outlook AGENDA & Growth Strategies
OUTLOOK AND GROWTH STRATEGIES Major Brands • Expansion in South East Asia and South Africa • Value-add to tyre business of major brands by improving warehousing and distribution capabilities • Increase number of retail outlets, truck centres and Truck and Earthmover Tyre Management contracts
OUTLOOK AND GROWTH STRATEGIES Entrance into new markets • Work closely with our principals to expand into new markets
India Joint Venture
Shareholdings Structure Sumitomo Rubber Industries 100% Sumitomo Rubber Asia (Tyre) Pte Ltd 60%
Stamford Tyres Corporation Limited 40%
Falken Tyres India Private
Rationale
India replacement tyre market has good potential
Leverage on SRI’s proprietary tyre technologies & Stamford’s distribution capabilities
Reflects the long standing relationship between SRI and Stamford Tyres in exploring new markets
Capital Outlay Total Capital Contribution to Joint Venture • INR550million • (approximately: S$12.3million)
Stake held by Stamford Tyres • 40% which translate to INR220million • (approximately: S$4.9million)
Estimated initial investment for the Joint Venture • INR110 million • (approximately S$2.5million)
Other Corporate Info
City of Incorporation
Commencement of Operations
Number of Employees
Proposed city is Delhi.
30 April 2013 onwards
Approximately 70 sales rep located across India
Redevelopment of 21/21A Lok Yang Way New Jurong Warehouse and Truck Centre
Artist Impression New warehouse
AYE / Jln Ahmad Ibrahim
Existing warehouse/office
Rationale For Redevelopment Builds up our capability for export expansion without being restricted by limited and costly warehousing options locally. Due to increasing need for storage space. We are currently leasing approximately 12,000 m2 from third party warehouses. We are constructing a 21,000 m2 warehouse at the cost of S$20.5million. Prevailing market rental rates are S$1.50/ft2.
Leverages on current warehouse competence in optimising resources. Greater sustainability in operating profits in the long term (> 10 years); mitigates the impact of external rental rates growth.
Development Milestones Date July 2012
Milestone Letter of Award to main contractor - HPC Builders Pte Ltd. August 2012 Groundbreaking ceremony. September 2012 Expected commencement of piling works. October 2012 Expected commencement of main construction works. To be Announcement on the utilisation of proceeds announced from disposal of SRITP for redevelopment purposes. October 2013 Expected TOP clearance.
Thank You! Corporate Contacts: 19 Lok Yang Way, Jurong, Singapore 628635 Tel: +65 6268 3111 Fax: +65 6264 0148 Email:
[email protected]
Investor Relations Contacts: Tel: +65 6438 2990 Email:
[email protected]