Computer & Technologies Holdings Ltd. · HKEX:46
Computer & Technologies — FY2002 Earnings Presentation
34 slides from Computer & Technologies's earnings presentation, Apr 8, 2003
Slide 1: Briefing: Annual Results for Year 2002
Computer And Technologies Holdings Limited Briefing: Annual Results for Year 2002 Mr. C S Ng Chairman and CEO
Slide 2: Year of Transformation
Computer And Technologies Holdings Limited Year of Transformation
Slide 3: Group Performance in Year 2002 (1)
Group Performance in Year 2002 (1) A year of transformation From hardware-oriented traditional SI to software and operation outsourcing oriented solution and service provider Revenue mix shifting from project based to recurring service and transaction based revenue Page 3 Annual Result 2002 (B
Slide 4: Group Performance in Year 2002 (2)
Group Performance in Year 2002 (2) Results of focused effort Gross profit margin improved from 15.8% to 22.6% Accumulated more than HK$500 million worth of software and related service orders on-hand Awarded a 5-year license to provide Government Electronic Trading Services (GETS) for proces
Slide 5: Major Orders On-hand and Steady Recurring Revenue
Major Orders On-hand and Steady Recurring Revenue 10 year CCBS project for Water Supplies Department [HK$368 million] HK$183.5 million for one-time development 9 years servicing for HK$20.6 million per year IRIS for Land Registry [HK$146 million] HK$65 million for one-time development 8
Slide 6: Group Performance in Year 2002 (3)
Group Performance in Year 2002 (3) Recovering from the impacts of the market volatility and the related restructuring in the last two years Still in the process of transformation Substantial expenses were spent in marketing and pre-sales in building up new orders and businesses Revenue are y
Slide 7: Overall Performance
Computer And Technologies Holdings Limited Overall Performance
Slide 8: Financial Highlights - Profit and Loss
Financial Highlights - Profit and Loss Compare year-on-year HK$ (millions) FY 2002 FY 2001YoY Change Turnover 228.244 515.868 -55.76% Gross Profit 51.653 81.670 -36.75% Other Revenue 11.453 11.602 -1.28% Selling and distribution expenses (43.474) (66.845)-34.96% Administrative expenses (44.341) (48.
Slide 9: Financial Highlights - Turnover
Financial Highlights - Turnover Sharp decline in turnover Continous difficult market environment in general Significant drop in SI revenue from telecom industry Improve in Revenue Mix Repeat business from strong customer base especially in the fast growing sectors - financial and manufacturi
Slide 10: Financial Highlights - Segmental Analysis
Financial Highlights - Segmental Analysis Year-on-Year Comparison HK$ (millions) Turnover 2002 2001Change Integration Services 118.391 446.82 -73.5% Distribution Business 38.424 30.51 26.8% Solutions Services 49.996 22.941 117.9% Application Services 21.433 15.804 35.6% Revenue Breakdown Mainland Ch
Slide 11: Statistics on Company Performance of FY 2002: Turnover by Segment
Statistics on Company Performance of FY 2002 Turnover Distribution by Business Segment 4.4% Integration Services 4.7% 0.8% Distribution Business 90.1 Solutions Services % Application Services FY 2001 21.9% 16.8% 9.4% FY 2002 51.9% Revenue Breakdown Mainland China 54.6% (88.5%) Hong Kong SAR 38.3% (1
Slide 12: Group Performance in Year 2002 (4)
Group Performance in Year 2002 (4) Steady repeat businesses from strong install base Manufacturing Shanghai Volkswagen, Jiang Ling Motor Stock Exchanges and Brokerage Companies Shanghai Stock Exchange and other brokerage companies Insurance China Pacific Insurance, Tai Ping Insurance
Slide 13: Group Turnover Mix by Industry Sector
Statistics on Company Performance of FY 2002 Group Turnover Mix by Industry Sector (Excluding revenue from Distribution Business) 55.5% FY 2001 Telecommunications Financial Services Government and Education 15.6% Public Utilities 12.2% Manufacturing 16.7% Others 22.7% 30.3% 17.7% FY 2002 8.9% 14.2%
Slide 14: Financial Highlights - Gross Profit
Financial Highlights - Gross Profit Gross profit margin improved significantly to 22.6% 22.6 (vs. 15.8% for FY2001) Improved gross margin in Integration Services division Substantial increase in revenue contribution from Solutions and Application Services: from 7.5% of Group revenue in FY2001
Slide 15: Financial Highlights - Gross Profit (**)
Financial Highlights - Gross Profit (**) Gross Profit was derived after deducting the followings from: 2002 2001 Sales 228.224515.868 Less: Cost of Goods(F&I and provision) 153.730412.599 GP before direct staff cost & amortization 74.494103.269 32.6% 20.0% Less: Direct staff 20.86214.217 Amort
Slide 16: Financial Highlights - Cost control (2)
Financial Highlights - Cost control (2) Restructuring took place in 2H 2001 to improve efficiency and cost management Selling and distribution expenses Reduced 35% to HK$43.474 million (FY2001: HK$66.845 million) Administration expenses Reduced 8% to HK$44.341 million (FY2001: HK$48.210 mi
Slide 17: Financial Highlights - Cost control (1)
Financial Highlights - Cost control (1) Included extra-ordinary expenses items Closing down offices in Chengdu and Shenyang Consolidated previous JV with Hutchison into Group’s software operations in Shenzhen Right-sized operations in Singapore Relocated IPL to share Group’s office premise
Slide 18: Strong Balance Sheet
Computer And Technologies Holdings Limited Strong Balance Sheet
Slide 19: Financial Highlights - Condensed Balance Sheet
Financial Highlights - Condensed Balance Sheet (as of December 31, 2002, in HK$ millions) 31/12/2002 31/12/2001 Non-current Assets 70.61675.872 Current Assets 301.865325.071 Current Liabilities (61.945)(56.073) Net Current Assets 239.920268.998 Total Assets Less Current Liabilities 310.536344.870 No
Slide 20: Financial Highlights - Condensed Cash Flow Statement
Financial Highlights - Condensed Cash Flow Statement (as of December 31, 2002, in HK$ millions) 31/12/2002 31/12/2001 Net cash inflow from operating activities (4.608)2.412 Net cash (outflow) from investing activities (10.598)(10.647) Net cash inflow / (outflow) from financing activities 3.111(14.07
Slide 21: Financial Highlights - Balance Sheet and Cash Flow
Financial Highlights - Balance Sheet and Cash Flow Maintained healthy financial position Strong balance sheet Net debt-free position Maintain healthy cash level at around HK$200 million Improved AR positions Lower exposure from HK$81.76 m at December 2001 to HK$47.67 m Close to break-e
Slide 22: Business Highlight
Computer And Technologies Holdings Limited Business Highlight
Slide 23: Overall Performance of the Group (1)
Overall Performance of the Group (1) Large-scale IT solutions outsourcing business Major wins Integrated Registration Information System (IRIS) for the Land Registry Worth HK$146 million 2 year build + 8 year servicing Customer Care and Billing System (CCBS) for Water Supplies Department
Slide 24: Overall Performance of the Group (2): GETS License
Overall Performance of the Group (2) Application and Operations Outsourcing Granted GETS license Five-year license with two year extension option Provision of government electronic trading services to the trade community to submit Import and Export Declaration and Dutiable Commodities Permit
Slide 25: Overall Performance of the Group (2): Government-to-Business Provider
Overall Performance of the Group (2) Application and Operations Outsourcing Became the largest Government-to-Business electronic service provider ETS - government supplier community GETS - trade and logistic community Increased economy of scale to improve operating efficiency Stable transa
Slide 26: Overall Performance of the Group (3)
Overall Performance of the Group (3) Billing and Customer Care Solutions Leverage Group resources developed billing & customer care solutions for telecom and established client r eferences Successful examples Water Supplies Department of HKSAR One of the largest public utilities operation
Slide 27: Overall Performance of the Group (4) - IPL - HRMS
Overall Performance of the Group (4) - IPL - HRMS Smooth transition and integration into the Group Contributed increasing profit before goodwill amortization Secured a substantial number of new large enterprise customers Aviation Security Co. Ltd., Fuji Xerox (Hong Kong) Ltd., CITIC Capi
Slide 28: Overall Performance of the Group (5) - Maxfair
Overall Performance of the Group (5) - Maxfair - Value-added Distribution Business Performed well with consistent profit contribution to the G roup Increased in revenue and its Taiwan subsidary started cont ributing profits Solid retail network 2 shops in Taipei 4 shops in Hong Kong Cont
Slide 29: Outlook and Major Opportunities
Computer And Technologies Holdings Limited Outlook and Major Opportunities
Slide 30: Outlook - Overall (1)
Outlook - Overall (1) Difficult to predict due to uncertainly of the macro economy Transforming to diversified business with more stable and predictable income Strong orders on-hand worth HK$500 million generating project revenue stream for the coming years Stable Transaction / subscription
Slide 31: Outlook - Overall (2)
Outlook - Overall (2) Transforming to diversified business with more stable and predictable income (cont.) Increasing software product license revenue Billing and customer care solutions Human resources management solutions Consistent profit contribution from distribution business Page 31
Slide 32: Outlook - Overall (3)
Outlook - Overall (3) Immediate focus Timely execution of substantial contract on-hand Preparation for the operation and business infrastructure for the launch of GETS services in 1H 2004 Consolidate PRC sales force with account focus and product selling into PRC market Strengthen PRC deve
Slide 33: Summary of opportunities
Summary of opportunities Large-scale IT outsourcing projects from the Government HRMS tenders from major government department and China customers together with payroll outsourcing services Government-to-Business electronic services Trade and Logistic (e.g. DTTN) and related add-on services
Slide 34: Questions and Answers Session
Computer And Technologies Holdings Limited Questions and Answers Session
Computer And Technologies Holdings — FY2002 Earnings Presentation on 6ix