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Test Rite Investor Presentation 2013

Oct 15, 2013

52229_rns_2013-10-15_2fa887f5-1751-45a1-a640-74f2a009fe7a.pdf

Investor Presentation

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  • The information contained in this presentation, including all forward-looking statements, is subject to change without notice, whether as a result of new information, future events or otherwise, and Test-Rite Int’l Ltd. (the “Company”) undertakes no obligation to update or revise the information contained in this presentation.

  • Actual results may differ materially from those expressed or implied in these forwardlooking statements and no representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is the information intended to be a complete statement of the Company, markets or developments referred to in this presentation.

  • Beginning on January 1, 2013, the Company has adopted International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board and endorsed by ROC Financial Supervisory Commission (FSC). Reporting for our annual and interim consolidated financial statements follow Taiwan IFRS requirements, however, given that there exist material differences between Taiwan IFRS and generally accepted accounting principle in the Republic of China (ROC GAAP), selected comparison of financial results in 2013 may have material differences versus previously released financial information under ROC GAAP.

1

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Tony Ho, Group Chairman; Co Founder of Test-Rite Group. Tony played a critical role in Test-Rite’s expansion into retail business and was instrumental in leading the company’s IPO efforts. Tony recently completed the two-year Joint Executive MBA Program between Taiwan University and Fudan University and is currently working on his graduation thesis: “How to pursue further growth by organization transformation-take large retail group for example.” Judy Lee, Chairwoman, Test-Rite Int’l (2908 TT/2908 TW); Co Founder of Test-Rite Group. Best know as the “Queen of Hardline”, Judy is a seasoned veteran of the import/export trading business. With Judy at the helm, Test-Rite Trading consistently provides outstanding services to retail customers globally and has received multiple recognitions as “Best Partner/Supplier”. Sophia Tong, Group CEO. Sophia joined Test-Rite in March 2009 to lead both Trading and Retail businesses. Prior to Test-Rite Sophia was the General Manager of IBM Taiwan from 2006 to 2009 and the Director of China Banking Cluster for IBM Greater China Group. Sophia was previously with IBM for over 25 years.

2

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Note: store numbers updated on Sept. 30[th] , 2013

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Vision Strategy
Goal Culture
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4

2013 ●

Acquired 100% shares of International Art

2012 ●

Sold Tong Lung; Acquired 49% TRPC’s shares

2011 ●

Décor House grand opening

2010 ●

TLW HOLA, HOLA CASA and FREER successfully completed retail channel integration

2009 ●

Forayed into the service sector by establishing Test Rite Home Service Ltd, Co.

2008 ●

Acquired 50% of B&Q TW’s shares from Kingfisher plc

2006 ●

Acquired Tong Lung Metal Industry Co., Ltd. (TWSE: 8705)

2004 ●

Established HOLA China

2001 ●

Nominated “The Best 200 Small Companies” by Forbes

1998 ● Established HOLA Taiwan – Home Decoration

1995 ●

Established B&Q Taiwan – Home Improvement

1994 ●

Certified to ISO-9002 international standard

1993 ●

， Went public on TWSE (2908TT) became a listed company.

1978 ●

Initiation of Test Rite Group (established as a trading company that specialized in hand tool exports)

5

Group

  • Integrated trading and

  • retail businesses

  • Disposal of TLM

  • Integrated SZ HQ office (with IA) and evaluated the old HQ building for rental or sold out

  • Control led net debt ratio (approximately 70% at the end of 2012)

Trading business

  • Focused on 7 key customers

  • Expanded agency business (+5 customers since 4Q12)

  • Established the funding platform to extend trading payment term from 30 days to 90 days

• Consolidated overseas offices: TR England(2010) and TR Mexico(2012-2013)

Retail business

  • Integrated TW retail 4 in 1

  • Expanded retail TW into community and smaller formats

  • Decreased HOLA China store spaces and expanded to the second and the third cities

  • Revitalized HOLA TW brand

• Purchased 51% (control 100% currently) shares of TR USA

  • Acquired 100% shares of International Art

6

7

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  • th

  • • 12 consecutive YoY increase of quarterly net income and EPS on the same accounting basis.

  • 2011 and 2012 consolidated sales back to 2007 level and consolidated net profit/ EPS exceeded pre financial crisis high of 2007.

  • Consol. sales for continuing operations (excluding TLM’s impact) was NT$ 26.5 bn, +3.9% YoY for 1-3Q13 and net profit from recurring businesses was increased by 85.1% YoY to NT$ 302.7 mn for 1H13.

TR Group Sales & Profit ex TLM

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NT$bn Sales(LHS) Net Profit(RHS) NT$mn
35 32.7 32.7 700
30 29.5 600
26.7 26.5
597.8
25 500
542.5
20 400
15 300
351.8
10 200
5 100
4.8
0 0
2009A 2010A 2011A 2012A 1-3Q13A
----- End of picture text -----

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8

TRADING SECTOR

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9

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  • with local service 19 offices in 15 countries, 3 warehouses in China, Taiwan, and U.S.

  • US warehouse provides logistics/ warehousing service to customers of principal trading.

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Winchester
Hampshire
‧‧ [‧]
Bentonville ‧ ‧ Toronto Paris ‧ Shanghai
Ontario ●‧ ‧ ‧ Eau Claire ●‧‧ Ningbo
Atlanta ‧
‧ [‧]
Taipei
‧ ●
Bangkok ‧ [Ho Chi ] Hong Kong &
Minh City
Haryana ‧‧ Shenzhen
Kuala ‧
Lumpur
Singapore
‧ [Sydney ]
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10

 Develop push program and private label through new product design development

 Focus on 7 key customers

  • Expand agency business

 Potential M & A

 Integration

  • ASEAN and India resources office

  • SOP hub

  • Domestic sourcing team

 Overseas operation

11

Trading Overview – 1-3Q13

  • Principle trading shipments totaled NT$ 9.7bn, +0.2% YoY for 1-3Q13 and accounted for71.4% of total shipments.

  • Agency business shipments totaled NT$ 3.9 bn, +17.3% YoY for 1- 3Q13 and accounted for 28.6% of total shipments, commission revenue totaled NT$ 178.3mn, +20.8% YoY.

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TR Trading Shipments
NT$mn TR Agency Shipments
Pricinple Agency NT$mn
20,000 5,000
4,357.9
15,725 16,091
4,000 3,876.2
15,000 13,537
3,328.4
21.2% 27.2% 3,304.0
12,418
3,000
20.8% 28.6% 2,586.5 +17.3%
10,000 78.8%
72.8% CAGR +29.8%
71.4% 2,000
79.2%
5,000
1,000
0 0
2010A 2011A 2012A 1-3Q13A 2010A 2011A 2012A 1-3Q12A 1-3Q13A
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12

Leverage growth of recovery in U.S. consumer demandContinue focus on 7 key customers in principle trading

  • Continue agency business growth

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  • Seek for potential acquisition targets

  • Grow brand licensing business

13

Brand licensing opportunities for Greater China markets

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Brand licensing opportunities for TW

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Develop diversified product items of our brands and expand sales channels

14

  • COSTCO USA projectMotion sensor light

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• National Hardware Show

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15

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16

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RETAIL SECTOR 零售事業

17

Taiwan Retail Business Strategy

  • TLW 特力屋

 Alternate DIY channel services (TLW Plus and TLW 好幫手 )  Open TLW Plus targeting neighborhood market

  • HOLA TW

 Open 1-2 stores per year

 Develop small HOLA stores “ HOLA Petite” and target 15-20 stores in 2014  Revitalize HOLA TW brand

  • Develop private labels and private brands

  • Driven by style and fashion

  • Establish Omni-channel development

18

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TW Retail Business Coverage
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HISU
特力屋
EC
好幫手
網路服務
Service Brand
CCB 服務品牌
大宗服務 ● 保養 / 維修 / 清潔
● 單品安裝
● 居家修繕
● 商空設計
Call Center
Alternate Channel
客服中心 Customer
綜合通路 Retail Channel
顧客 零售通路
Brand Licensing / Agency
Private Label
品牌授權 / 代理
店內自有品牌
e.g. Bissell
九陽豆漿機
Private Brand
FRETTE
自創產品品牌
Smart
Decolumin
特力巧樂
燈客
Live for
Nature Business Model
特力樂活
Marketplace
19
Notes: TW retail only
----- End of picture text -----*

19

 FB fans

 TLW 2013 target 80K fans and reached in Sept.  HOLA have 54K fans so far at the end of Sept.  QR code

  • detail information of products

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20

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  • Leading DIY player with ~30% market share and new business .

  • opportunities with TLW Plus and TLW 好幫手

  • +1 store in Nantou in Sept.2012; +1 store in Jan. 2013 (Sanxia), and +1

  • store in Sept. 2013 ( Taichung), totaled 26 stores in Sept. 2013.

Store Locations

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TLW
HOLA
----- End of picture text -----

  • Revenue totaled NT$2.5 bn, +4.7%YoY for 3Q13 and totaled NT$7.7bn,

  • -1.5%YoY for 1-3Q13.

0
2,000
4,000
6,000
8,000
10,000
12,000
NT$mn		 10,134
9,771
9,687
9,361
9,888
10,252
10,289
7,662
-6%
-4%
-2%
0%
2%
4%
6%
8%
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
TLW Net Sales
2006A 2007A 2008A 2009A 2010A 2011A 2012A 1H12A 1H13A
Selling space(㎡) 91,756 93,938 93,938 93,938 89,727 87,966 88,711 91,822 90,473
Store # 21
22
22
22
23
23
24
23		 25
Avg. sales per㎡/NT$K 110.4 104.0 103.1 99.7 110.2 116.5
116.0		 55.9 53.5

21

22

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  • No. 1 home décor chain in Taiwan with totaled 22 stores; open

  • small HOLA stores named “ HOLA Petite” totaled 9 stores.

  • Add 1 store in 2012(Chiayi), and +1 store in Jan. 2013 (Sanxia).

  • Revenue totaled NT$1.4 bn, +14.4%YoY for 3Q13 and totaled

  • NT$4.1bn, +7.8%YoY for 1-3Q13.

HOLA TW Net Sales

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NT$mn YoY %
6,000 5,591 30%
5,118 5,293
25%
5,000
4,073 20%
4,094
4,000 3,549
3,182 15%
3,037
3,000 10%
5%
2,000
0%
1,000
-5%
0 -10%
2006A 2007A 2008A 2009A 2010A 2011A 2012A 1-3Q13A
----- End of picture text -----

Store Locations

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TLW
HOLA
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  • *Sales and selling space include HOLA TW and HOLA small stores (HOLA CASA and HOLA Petite)
2006A 2007A 2008A 2009A 2010A 2011A 2012A 1H12A 1H13A
Selling space*(㎡) 45,157
48,311
51,779
51,779
58,587
58,938
60,004		 53,993
62,146
Store # 11
12
13
13
18
20
21
20		 22
Avg. sales per㎡/NT$K 67.3 65.9 68.5 78.7 87.4 94.9 88.2 41.2 43.9

23

24

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HOLA CN Business Strategy

  • Turn profitable: single quarter/ annual

  • HOLA CN loss less than NT$100mn in 2013

  • Plan to open 3 – 5 stores per year

  • Leverage Taiwan product design

  • Develop private labels and private brands, become a “Style Leader” as our target

  • Adjust operation strategy

  • 、 、 、

  • store location logistics smart retail Omni-channel

  • adjust store size and scale, target to set in shopping mall and department

    • store

  • Upgrade our service

  • 、

  • CRM people and consultative selling and accountable corporate culture

25

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HOLA China (Private – 100% held by Test-Rite)

•
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales		 •
Revenue totaled RMB$ 190.2mn, +5.5% YoY for 3Q13
and totaled RMB$ 589.5mn, +5.7% YoY for 1-3Q13.
•
+1 store in Jan. 2013, and close 1 store in Shenzhen,
and +1 store in Sept. 2013, totaled 32 stores at the end
of Sept., also plans to +1 store in 4Q13,plan to open 3
stores in 2013.
26
(㎡)
2006A
2007A
2008A
2009A
2010A
2011A
2012A
1H12A
1H13A
Selling space
25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738
59,601
Store #
7
9
14
18
27
28
31
27
31
Avg. sales per㎡
/RMB$K
4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7
110
210
305
449
640
775
777
589
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1,000
2006A
2007A
2008A
2009A
2010A
2011A
2012A 1-3Q13A
YoY %
RMB$mn
HOLA CN Net Sales
(㎡) 2006A 2007A 2008A 2009A 2010A 2011A 2012A 1H12A 1H13A
Selling space 25,593
32,595
46,442
51,506
59,481
60,116
63,686
54,738		 59,601
Store # 7
9
14		 18
27		 28
31
27		 31
Avg. sales per㎡
/RMB$K		 4.3 6.4 6.6 8.7 10.8 12.9 12.2 6.9 6.7

==> picture [74 x 43] intentionally omitted <==

HOLA China P&L Performance

==> picture [310 x 449] intentionally omitted <==

----- Start of picture text -----

NT$mn
-300
-277
-257
-246
-250
-208
-200
-165
-150
-94
-100
-54
-50
0
2008 2009 2010 2011 2012 1H12 1H13
HOLA CN Breakeven store numbers
20 19
17 17
15
15 14
11
10 11 10 10
10
6 6
5 4
3
0
1Q10A 2Q10A 3Q10A 4Q10A 1Q11A 2Q11A 3Q12A 4Q12A 1Q12A 2Q12A 3Q12A 4Q12A 1Q13A 2Q13A
----- End of picture text -----

Loss reduced by 26.2% YoY to net loss NT$ 41.6mn for 2Q13 and loss reduced by 42.2% YoY to net loss NT$ 54.4mn for 1H13.

  • 19 out of 31 stores were at breakeven for 2Q13 and 18 stores were at store level breakeven for 1H13

Same-store-sales, calculated for stores opened for more than one year, increased to 0.2% for 2Q13 and -0.2% for 1H13.

  • Opened 1 store in Jan. 2013 in Shijiazhuang and closed 1 store in Shenzhen in 2Q13, then open 1 store in Sept. 2013 in Wuxi, totaled 32 stores at the end of Sept., also plan to open 1 store in 4Q13, and plan to add 3 stores in 2013.

27

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==> picture [720 x 173] intentionally omitted <==

28

謝謝各位 Q & A

29

APPENDIX: RECENT FINANCIAL RESULTS

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30

==> picture [684 x 358] intentionally omitted <==

----- Start of picture text -----

特力 (TR)
2908 TT / 2908 TW
100%
100%
Test Rite Retailing
(Cayman)
力秋
100% 100%
立駿 Perfect Group 特力有限公司
(HK) Test-Rite Retailing Ltd.
75%
100% 100% 25%
立威 Energy 特力屋 ( 上海 ) 商貿 TLW / 特力屋 ( 股 )
(Shanghai) HOLA (Shanghai) 100%
TR Home
Service Co.
HOLA
Life One Plaza HOLA CN TLW Plus TLW HOLA TW HOLA CASA Décor House
Petite
( 五角場 ) (32 stores) (12 stores) (26 stores) (22 stores) (9 stores) (22 Stores) (1 Store)
----- End of picture text -----

Store # are as of Sept. 30[th] ,2013 Designate Retail Sales Channels

TLW (Formerly B&Q TW) made a tender offer of HOLA TW common shares in June 2009. TLW merged HOLA TW, Freer, and HOMY in Oct 2009. And the scheduled date of 4 in 1 merger is Dec. 31, 2009.

31

Trading Overview – 1H13

  • Trading consolidated shipments breakdown by region

  • America usually accounted for 65-75%, Europe around 10-15%, Asia and Australia around 5-10%.

  • Saw strong growth in America in 1Q13.

  • Europe market remain challenging, but we saw it showed slowly recovery recently.

TR Trading Shipments by Region USA & Canada Latin/South America Europe Australia Asia Africa

NT$mn

==> picture [519 x 222] intentionally omitted <==

----- Start of picture text -----

18,000
15,725 16,091
16,000 2.3%
2.0% 4.3%
3.4%
14,000 12,418 6.3% 9.2%
2.2% 15.3% 12.0%
12,000 4.4%
6.7% 9.1%
9.3%
10,000 18.1% 63.6% 63.1% 8,088 8,436
1.8% 1.7%
8,000 10.5% 6.7% 5.9% 5.8% 5.8%
12.1% 12.1%
6,000 58.0% 11.0% 10.5%
62.4%
4,000 64.0%
2,000
0
2010A 2011A 2012A 1H12A 1H13A
----- End of picture text -----

32

Trading Overview – 1H13

• Principle trading shipments breakdown by products

  • Hard lines, house ware and seasonal are main product categories at 15-20% of total shipments each

  • Agency business accounted for 25.8% of total shipments for 1H13.

TR Trading Shipments by Categories

==> picture [580 x 244] intentionally omitted <==

----- Start of picture text -----

Electrical Hard lines House ware S.I.T. Seasonal Others Agency
NT$mn
18,000
16,091
15,725
16,000
27.2%
21.2%
14,000
12,418
0.9%
12,000 0.7%
20.8% 17.7%
19.2%
10,000 2.1%
5.5% 8,088 8,436
19.8%
8,000 5.2%
22.1% 25.8%
21.7%
6,000 7.7% 18.1% 23.3% 0.7% 0.5%
14.8% 21.2%
6.7% 5.8%
4,000 22.5% 17.9%
19.1% 16.2%
23.9%
2,000 17.8% 18.6%
11.0% 10.5% 11.7% 10.3% 11.9%
0
----- End of picture text -----

1H12A

33

2010A

2011A

2012A

1H13A

Test Rite Int‟l Co., Ltd. (2908) Consolidated sales breakdown ( IFRS Based)

(NT$ „000) 3Q13A 3Q12A YoY% 1-3Q13A 1-3Q12A YoY%
trading sales 3,480,855 3,222,174 8.0%
9,838,896		 9,785,666 0.5%
Taiwan retail sales 4,055,081 3,904,284 3.9% 12,458,316 11,889,733 4.8%
HOLA China sales 917,612 845,133 8.6%
2,818,700		 2,610,292 8.0%
Total retail sales 4,972,693 4,749,417 4.7% 15,277,016 14,500,025 5.4%
Other sales 526,748 401,729 31.1%
1,335,412		 1,162,017 14.9%
Consolidated Sales 8,980,296 8,783,237 **2.2% 26,451,323 ** 27,437,400 -3.6%
Consolidated Sales
ex TLM		 8,980,296 8,373,319 **7.2% 26,451,323 ** 25,447,708 3.9%
#The tender offer for TR’s 68.27% held subsidiary, Tong Lung Metal (8705 TT/8705 TW), was completed on August 15th, 2012.
As a result, Test-Rite will continue to book 3Q12 revenue and earnings

34

Test Rite International Co., Ltd. (2908) – Consolidated ( IFRS Based) Consolidated P&L for 2Q13 & 1H13 ( IFRS Based )

**(NT$mn) ** 2Q13A 2Q12A YoY% 1H13A 1H12A YoY%
Turnover 8,602.1 9,322.9
-7.7%
17,471.0		 18,654.2
-6.3%
Grossprofit 2,565.1 2,660.6
-3.6%
5,142.1		 5,316.9
-3.3%
Gross margin% 29.8%
28.5%		 29.4%
28.5%
OperatingExpense - 2,493.3
- 2,455.2
1.6%
- 4,795.3		 - 4,861.3
-1.4%
Operating profit 71.8 205.4
-65.0%
346.8		 455.6
-23.9%
Operatingmargin% 0.8%
2.2%		 2.0%
2.4%
Non-operatingincome/loss 7.3 - 41.3
N/A
8.6		 8.6
0.8%
Pre-taxprofit 79.1 164.1
-51.8%
355.4		 464.2
-23.4%
Netprofit 86.3 132.9
-35.1%
334.8		 360.0
-7.0%
Other comprehensive income -14.7
15.1
N/A
11.0		 - 9.0
-222.2%
Total netprofit 71.6
148.0
-51.6%
345.8		 351.0
-1.5%
Netprofit attribute to TRIC 84.6 70.6
19.7%
329.9		 286.4
15.2%
Recurring Net profit attribute to
TRIC
75.6		 4.8
1473.1%
302.7		 163.5
85.1%
Basic EPS(attributed to TRIC)(NT$) 0.17 0.14
21.4%		 0.68 0.57
19.3%
Recurring Fully-diluted EPS(Aft-tax)
0.14		 0.01
1473.1%
0.58		 0.31
85.1%

35

Test Rite International Co., Ltd. (2908) – Consolidated ( IFRS Based)

B/S (Consolidated ) 2Q13 and 2Q12 C/F (Consolidated ) of 1H13 and 1H12
(NT$ mn)
2Q13A
2Q12A
YoY %
Cash & Equivalents
1,519.5
1,268.6
19.8%
Current Assets
10,468.8
11,289.2
-7.3%
Net PP&E
6,294.6
7,392.9
-14.9%
L/T Investments
124.2
159.6
-22.2%
Total Assets
22,081.8
25,959.2
-14.9%




S/T Debts
1,937.1
3,126.0
-38.0%
Current Liability
10,280.8
10,657.3
-3.5%
L/T Debts
4,777.7
6,722.9
-28.9%
Total Liabilities
15,613.3
18,274.7
-14.6%
Shareholders
Equities
6,468.6
7,684.5
-15.8%




Current Ratio (%)
101.8%
105.9%
Net Debt/Equity (%)
76.2%
106.0%
Total Liab/Assets
(%)
70.7%
70.4%
(NT$ mn)
1H13A
1H12A
YoY%
Operating CF
537.3
1,131.7
-52.5%
Investment CF
- 650.9
- 517.5
25.8%
Financing CF
- 259.5 - 1,438.7
-82.0%
Net Cash Flow
- 362.2
- 827.2
-56.2%
Cash at beg. quarter
1,881.7
2,095.8
-10.2%
Cash at endquarter
1,519.5
1,268.6
19.78%

36

Thank you!

37

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