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TECO Interim / Quarterly Report 2017

May 25, 2018

51836_rns_2018-05-25_6f4f336b-6583-403e-990f-bd321caa77e3.pdf

Interim / Quarterly Report

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TECO Electric & Machinery Co., Ltd.

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2017 4Q Business Review

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Driving and Connecti ~~ng Globally~~

Safe Harbor Statement

  • This Presentation contains certain forward-looking statements that are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

  • Except as required by law, we undertake no obligation to update any forward – looking statements, whether as a result of new information, future events or otherwise.

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2

Agenda

Operation Overview Appendix

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3

Revenue Breakdown 1/2

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Others
16.0%
Motor
In 2017, total
Tecom
44.5%
consolidated topline
5.9%
up 2.0% YoY.
Mechanical &
Electrical 2017
Construction
Others
7.5%
14.4%
Motor
Home Tecom
44.2%
Appliance System 8.2%
16.4% Automation
9.7% Mechanical &
Electrical 2016
Construction
6.3%
Home
Appliance System
16.9% Automation
10.0%
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4

Revenue Breakdown 2/2

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Others
14.6%
Others Motor
Tecom
17.7% 43.5%
8.7%
Motor
Tecom 45.5%
4.5%
Mechanical & 4Q’16
Mechanical &
Electrical
Electrical 4Q’17 Construction
Construction
9.0%
7.2%
Home
Home In 4Q’17, total Appliance System
Appliance consolidated topline 15.2% Automation
14.8% System down by 1.1% YoY 9.0%
Automation and up by 4.7% QoQ.
10.3%
Others
14.8%
Tecom Motor
7.0% 46.5%
Mechanical &
Electrical
Construction 3Q’17
7.2%
Home
Appliance
System
15.6%
Automation
9.0%
5
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Sales Trend on Major Business lines

NT$ Billion

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8
5.9
5.8 6.0
6 5.2 5.6
4
2.3
2.0 2.1 2.0 2.0
2 1.2 1.1 1.3 1.1 1.4 1.2 0.8 1.2 0.9 1.0
0
Motor System Home Appliance Mechanical &
Automation Electrical
Construction
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4Q 16 1Q 17 2Q 17 3Q 17 4Q 17

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6

- 2017 Income Statement consolidated

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(In NT Millions) 2017 2016 YoY
Net Sales - recurring * 50,816 49,753 2.1%
Gross Margin - recurring * 23.8% 26.1% -230bps
Operating Margin - recurring * 6.6% 8.1% -150bps
EPS (NT$) 1.56 1.76 -11.4%
ROE (%) ** 6.1% 7.2% -110bps
ROA (%) ** 3.4% 3.9% -50bps
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  • Excluding Security Sales Revenue

  • ** Annualized number and excluding minority interest

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7

- 2017 Income Statement consolidated

7 Income Statement - conso lidate
(In NT Millions) 2017 2016 YoY
Operating Revenue 50,943 49,924 2.0%
Recurring Operating Revenue 50,816 49,753 2.1%
Gain on Sales of Financial Assets
Gross Profit, net *
Operating Profit
Non-operating Income (Expense)
Income before Tax
Income Tax Expense
Net Income **		 127
12,196
3,496
858
4,354
(810)
3,092		 171
13,134
4,189
744
4,933
(896)
3,481		 -25.7%
-7.1%
-16.5%
15.3%
-11.7%
-9.6%
-11.2%
EPS (NT$) 1.56 1.76 -11.4%

  • Unrealized / realized gain on inter-affiliate accounts included

  • ** Excluding non-controlling interest

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8

4Q 17 Financial Highlights - consolidated

(In NT Millions) 4Q 17
3Q 17
QoQ		 4Q 17
3Q 17
QoQ		 4Q 16 YoY
Net Sales - recurring * 13,319 12,707
4.8%		 13,419 -0.7%
Gross Margin - recurring * 22.9%
23.2%
-30bps		 25.3%
-240bps
Operating Margin - recurring * 6.6%
6.1%
50bps		 8.1% -150bps
EPS (NT$) 0.31 0.43
-27.9%		 0.44
-29.5%
ROE (%) ** 5.3% 6.7%
-140bps		 6.9%
-160bps
ROA (%) ** 3.0% 3.7%
-70bps		 3.7%
-70bps
* Eldin in n l f finni l t

  • Excluding gain on sales of financial assets

  • ** Annualized number and excluding non-controlling interests

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9

4Q 17 Income Statement - consolidated

(In NT Millions) 4Q 17 3Q 17 QoQ
4Q 16		 YoY
Operating Revenue 13,276 12,678 4.7%
13,428		 -1.1%
Recurring Operating Revenue 13,319 12,707 4.8%
13,419		 -0.7%
Gain on Sales of Financial Assets
Gross Profit, net *
Operating Profit
Non-operating Income (Expense)
Income before Tax
Income Tax Expense
Net Income **		 (43)
3,004
837
88
924
(177)
616		 (29)
2,914
751
444
1,196
(248)
850		 48.3%
9
3.1%
3,404
11.5%
1,100
-80.2%
154
-22.7%
1,254
-28.6%
(218)
-27.5%
864		 -577.8%
-11.8%
-23.9%
-42.9%
-26.3%
-18.8%
-28.7%
EPS (NT$) 0.31 0.43 -27.9%
0.44		 -29.5%

  • Unrealized / realized gain on inter-affiliate accounts included

  • ** Excluding non-controlling interest

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10

Recurring Operating Revenue vs. Gross Margin

NT$ Billion

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15 30%
24.8%
25.3% 24.2%
23.2%
22.9%
10 20%
13.4 13.0 12.7 13.3
11.8
5 10%
0 0%
4Q16 1Q17 2Q17 3Q17 4Q17


Recurring Operating Revenue Gross Margin
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  • Recurring Operating Revenue = Operating Revenue – Gain on Sales of Financial Assets

  • ** Gross Margin = Recurring Gross Profit / Recurring Operating Revenue

  • *** Recurring Gross profit excludes Gain on Sales of Financial Assets

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11

Recurring Operating Profit vs. Operating Margin

NT$ Million

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1,500 10.0%
8.1%
7.3%
6.1% 6.6% 7.5%
6.4%
1,000
5.0%
500 1,091
950
880
759 780 2.5%
0 0.0%
4Q16 1Q17 2Q17 3Q17 4Q17
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*

Recurring Operting Profit Operating Margin

  • Recurring Operating Profit / Recurring Operating Revenue

** Recurring Operating Profit excludes Gain on Sales of Financial Assets

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12

- 2017 Balance Sheet consolidated

(In NT 1,000) Amount
%
Dec 17		 Amount
%
Dec 17		 Amount
%
Sep 17		 Amount
%
Sep 17		 Dec 16 Dec 16
Amount
%
Cash & Cash Equivalent 14,129,330 16% 13,412,258 15% 13,989,826 15%
Receivable 12,479,097
13%
11,336,492
12%
92,016,957
100%
2,187,621
3%
12,927,916
13%
6,466,239
7%
4,000,000
4%
34,142,820
37%		 12,625,975
13%
11,578,226
13%
92,620,331
100%
2,318,683
3%
12,921,323
13%
7,022,460
8%
4,000,000
4%
35,224,778
38%		 13,859,458
14%
Inventories 11,336,492 11,177,041
12%
Total Assets 92,373,956
100%
Short-term Borrowings 2,187,621 3,078,361
4%
Accounts Payable 12,981,953
13%
Long-term Borrowings 6,466,239 9,428,570
10%
Corporate Bond Payable 3,000,000
3%
Total Liabilities 34,142,820 35,224,778 36,649,413
40%
Equities 57,874,137
63%		 57,395,553
62%		 55,724,543
60%
Key Indices
Quarterly AR Turnover (times)
Quarterly Inventory Turnover (times)
Current Ratio
Quick Ratio
Net Debt to Equity
-2.5%
4.41
3.19
2.36
1.68		 4.61
2.33
-0.1%
3.14
1.65		 4.36
2.98
2.39
1.71
2.7%

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13

Agenda

Operation Overview

Appendix

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14

Income Statements

(In NT Millions, unless otherwise noted) 4Q16 1Q17 2Q17 3Q17 4Q17
Operating Revenue 13,428 11,916 13,073 12,678 13,276
Recurring Operating Revenue 13,419 11,776 13,014 12,707 13,319
Gain on Sales of Financial Assets 9 140 59 (29) (43)
Operating Costs (10,023) (8,924) (9,787) (9,762) (10,271)
Gross Profit, net * 3,404 2,991 3,287 2,914 3,004
Operating Expense (2,304) (2,093) (2,277) (2,162) (2,168)
Operating Profit 1,100 899 1,009 751 837
Non-operating Income (Expense) 154 (55) 381 444 88
Income before Tax 1,254 844 1,390 1,196 924
Income Tax Expense (218) (209) (176) (248) (177)
Net Income ** 864 536 1,090 850 616
Net Margin 6.4% 4.5% 8.3% 6.7% 4.6%
EPS (NT$) 0.44 0.27 0.55 0.43 0.31

  • Unrealized / realized gain on inter-affiliate accounts included

  • ** Excluding non-controlling interest

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15

Income Statements

(In NT Millions, unless otherwise noted) 2013 2014 2015 2016 2017
Net Sales 56,619 53,748 48,599 49,923 50,943
Recurring Net Sales 56,566 53,622 48,505 49,752 50,816
Securities Sales Revenue 53 126 94 171 127
COGS (43,138) (40,357) (36,203) (36,788) (38,744)
Gross Profit * 13,485 13,392 12,400 13,134 12,196
Operating Expense (8,859) (8,969) (8,613) (8,944) (8,700)
Operating Income 4,626 4,423 3,788 4,189 3,496
Non-operating Income 778 1,277 776 744 858
Income before tax 5,404 5,700 4,563 4,933 4,354
Income Tax Benefit / (Expense) (1,226) (1,298) (1,049) (896) (810)
Net Income** 3,760 4,063 3,177 3,481 3,092
Net Margin 6.6% 7.6% 6.5% 7.0% 6.1%
Basic EPS (NT$) 2.01 2.05 1.60 1.76 1.56
  • Gross profit includes unrealized / realized inter-company profit

** Excluding minority interest

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16

Balance Sheets

alance Sheets
Dec 16
Mar 17
Jun 17
Sep 17
Dec 17
(In NT Millions)
Amount
Amount
Amount
Amount
Amount
Cash & Cash Equivalens
Receivables
Inventories
Other Current Assets
Total Current Assets
Financial Assets
Available for Sale - Non Current
Long-Term Investments Under Equity Method
Other Non-Current Assets
Total Non-Current Assets		 13,990
14,659
13,398
13,412
14,129
13,859
12,278
13,140
12,626
12,479
11,177
11,262
11,424
11,578
11,336
6,270
5,698
7,059
7,322
6,319
45,296
43,897
45,021
44,938
44,263
11,744
12,555
13,300
12,952
12,925
3,871
3,909
3,876
3,947
4,022
31,463
30,853
31,021
30,784
30,807
47,078
47,317
48,197
47,683
47,754
Total Assets 92,374
91,214
93,218
92,620
92,017
Current Liabilities
Bonds Payable
Long-Term Borrow ing
Other Non-Current Liabilities
Total Non-Current Liabilities		 18,959
17,508
20,601
19,281
18,742
3,000
3,000
3,000
4,000
4,000
9,429
9,414
8,149
7,022
6,466
5,262
5,071
4,895
4,922
4,934
17,691
17,485
16,044
15,944
15,400
Total Liabilities
**Total Shareholders' Equity ***		 36,649
34,993
36,645
35,225
34,143
55,725
56,221
56,573
57,396
57,874
  • Non-controlling interest included

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17

Balance Sheets

alance Sheets
(In NT Millions) 2013
2014
2015
2016
2017
Amount
Amount
Amount
Amount
Amount
Cash & Cash Equivalents
Receivables
Inventories
Other Current Assets
Total Current Assets
Funds and Investments
Fixed & Other Assets		 14,909
17,202
14,919
13,990
14,129
11,914
11,817
12,367
13,859
12,479
11,193
11,539
11,755
11,177
11,336
2,827
2,717
3,251
6,270
6,319
40,843
43,275
42,292
45,296
44,263
15,799
19,508
16,371
15,615
16,948
20,248
19,930
25,771
31,463
30,806
Total Assets 76,890
82,713
84,434
92,374
92,017
Current Liabilities
Short-term Loans
Long-Term Interest-bearing debt
Long-term Loans
Corporate Bonds Payable
Other Liabilities		 19,984
18,076
22,715
18,959
18,742
2,917
2,473
6,619
3,078
2,188
6,140
7,229
5,531
12,679
10,645
4,498
5,475
2,300
9,429
6,466
1,476
1,528
3,000
3,000
4,000
4,042
4,119
4,756
5,011
4,756
Total Liabilities
Total Shareholders' Equity		 30,166
29,424
33,002
36,649
34,143
46,724
53,289
51,433
55,725
57,874
  • Non-controlling interest included

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18

Cash Flows

(In NT Millions) 4Q16 1Q17 2Q17 3Q17 4Q17
Pretax Income* 1,254 844 1,390 1,196 924
Depreciation & Amortization 392 385 378 385 336
Other Op Sources/(Use) (1,116) 384 (170) 151 (311)
From Operation 530 1,613 1,598 1,732 949
Capital Expenditures (910) (373) (232) (294) (161)
Marketable Financial Instruments 555 521 377 129 (53)
Other Investing Sources/(Uses) (712) 518 (1,625) 169 1,008
From Investment (1,067) 666 (1,480) 4 794
Cash Dividends 0 0 0 (1,762) 0
Other Financing Sources/(Uses) (320) (775) (1,377) (130) (802)
From Financing (320) (775) (1,377) (1,892) (802)
Net Cash Position Change* (841) 669 (1,261) 14 718
Ending Cash Blance 13,990 14,659 13,398 13,412 14,129
  • Including exchange rate

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19

Cash Flows

ash Flows
(In NT Millions) 2013 2014 2015 2016 2017
Net Income/ Pretax Income 5,403 5,700 4,563 4,933 4,354
Depreciation & Amortization 1,442 1,326 1,308 1,550 1,484
Other Op Sources/(Use) (860) (1,859) (330) (2,036) 54
From Operation 5,985 5,167 5,541 4,447 5,892
Capital Expenditures (962) (2,032) (2,067) (1,557) (1,060)
Marketable Financial Instruments 379 579 476 786 974
Other Investing Sources/(Uses) 438 672 (4,277) (2,605) 70
From Investment (145) (781) (5,868) (3,376) (16)
Cash Dividends (1,922) (2,203) (2,203) (1,602) (1,762)
Employee & BOD Profit Sharing 0 0 0 0 0
Other Financing Sources/(Uses) (2,034) 5 934 547 (3,084)
From Financing (3,956) (2,198) (1,269) (1,055) (4,846)
Net Cash Position Change* 1,730 2,301 (2,283) (929) 140
Ending Cash Blance 14,909 17,202 14,919 13,990 14,129

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  • Including exchange rate effect

20

Http//www.teco.com.tw [email protected]

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