Impro Precision Industries Limited · HKEX:1286

Impro Precision Industries — H1 2021 Earnings Presentation

29 slides from Impro Precision Industries's earnings presentation, Aug 12, 2021

  1. Slide 1: 2021 Interim Results Presentation

    2021 INTERIM RESULTS PRESENTATION August 12, 2021

  2. Slide 2: Disclaimer

    Disclaimer The information set forth in this presentation is relating to the business of Impro Precision Industries Limited (the “Company” which, together with its subsidiaries, the “Group”) for the six months ended June 30, 2021. This presentation is intended to provide updated information on the G

  3. Slide 3: 1H/2021 Results Summary

    1H/2021 Results Summary Historical High New SKUs for Strong Revenue Growth Aerospace end-market • Group revenue up 33.3% to HK$1,823.9 million • Total aerospace new SKUs in 1H/2021 reached 119, up 36.8% • Record high Automotive end-market 1H/2021 revenue, up • New SKUs comprised existing customers t

  4. Slide 4: Revenue by End Markets

    Revenue by End Markets 1H/2020 1H/2021 1H/2020 1H/2021 Inc/Dec By End Markets HK$ mil HK$ mil HK$ mil Change Automotive 596.7 896.5 299.8 50.2% Industrial & Others 614.9 786.2 171.3 27.9% Aerospace & Medical 157.0 141.2 -15.8 -10.1% Total 1,368.6 1,823.9 455.3 33.3% 4

  5. Slide 5: Revenue by End Markets

    Revenue by End Markets 1H/2020 1H/2021 Inc/Dec By End Markets HK$ mil HK$ mil HK$ mil Change Automotive 596.7 896.5 299.8 50.2% - Passenger Car 394.8 509.8 115.0 29.1% - Commercial Vehicle 201.9 386.7 184.8 91.5% Industrial & Others 614.9 786.2 171.3 27.9% - High Horsepower Engine 142.5 129.5 -13.0

  6. Slide 6: Revenue by Business Segment

    Revenue by Business Segment 1H/2020 1H/2021 1H/2020 1H/2021 Inc/Dec By Business Segment HK$ mil HK$ mil HK$ mil Change Investment Casting 661.1 749.0 87.9 13.3% Precision Machining 390.4 679.0 288.6 73.9% Sand Casting 216.7 247.3 30.6 14.1% Surface Treatment 100.4 148.6 48.2 48.0% Total 1,368.6 1,82

  7. Slide 7: Revenue by Geographical Area

    Revenue by Geographical Area 1H/2020 1H/2021 1H/2020 1H/2021 Inc/Dec By Geographical HK$ mil HK$ mil HK$ mil Change Americas 570.2 717.8 147.6 25.9% - United States 528.6 659.2 130.6 24.7% - Others 41.6 58.6 17.0 40.9% Europe 428.0 606.6 178.6 41.7% Asia 370.4 499.5 129.1 34.9% - The PRC 344.4 456.1

  8. Slide 8: 1H/2021 Financial Review

    1H/2021 Financial Review

  9. Slide 9: 1H/2021 Financial Review

    1H/2021 Financial Review 1H/2020 1H/2021 Financial Highlights HK$ mil HK$ mil Change Revenue① 1,368.6 1,823.9 33.3% Gross Profit 365.9 498.3 36.2% Gross Profit Margin 26.7% 27.3% 0.6% Other revenue 27.9 15.1 -45.9% Other net income/(loss) 2.8 (37.3) -1,432.1% Impairment loss of goodwill & other asse

  10. Slide 10: Gross Profit

    Gross Profit HK$ mil 700.0 30.0% 26.7% 27.3% 600.0 25.0% 498.3 500.0 43.5 29.3% 20.0% 59.1 23.9% 400.0 365.9 26.3 26.2% 15.0% 300.0 57.2 26.4% 181.4 26.7% 78.8 20.2% 10.0% 200.0 214.3 5.0% 100.0 203.6 30.8% 28.6% - 0.0% 1H/2020 1H/2021 Investment Casting Precision Machining Sand Casting Surface Trea

  11. Slide 11: Cost of Sales Analysis

    Cost of Sales Analysis HK$ mil 1,500.0 1,325.6 1,200.0 268.9 20.2% 1,002.7 90.9 6.9% 900.0 210.9 21.0% 120.9 9.1% 68.1 6.8% 115.8 11.6% 373.3 28.2% 600.0 263.7 26.3% 300.0 471.6 35.6% 344.2 34.3% - 1H/2020 1H/2021 Cost of RM and consumables Staff Costs Depreciation Fuel Expenses and Utilities Others

  12. Slide 12: Operating Expenses Analysis

    Operating Expenses Analysis HK$ mil Selling and Distribution Expenses HK$ mil Administrative and Other Operating Expenses 150.0 6.0% 250.0 10.0% 5.0% 8.7% 9.0% 5.0% 7.8% 4.3% 200.0 8.0% 7.0% 100.0 4.0% 90.6 150.0 142.4 6.0% 3.0% 119.3 5.0% 58.7 100.0 4.0% 50.0 2.0% 3.0% 50.0 2.0% 1.0% 1.0% - 0.0% -

  13. Slide 13: Effective Tax Rate Analysis

    Effective Tax Rate Analysis 25.0% 23.6% 21.5% 3.4% 20.0% 2.5% 3.0% 0.9% 15.6% 2.5% 15.0% 10.0% 17.2% 15.6% 15.6% 5.0% 0.0% FY2019 FY2020 1H/2021 Reported/Adjusted Effective Tax Rate Turkey statutory income tax rate increase from 22% to 25% in 2021 Exchange Gain Arising from Different Functional and

  14. Slide 14: Key Working Capital Ratios

    Key Working Capital Ratios HK$ mil Inventory Turnover Day Days HK$ mil Trade and Bills Receivable Turnover Days Days 1,500 137 150 1,600 105 90 118 112 100 82 90 1,200 120 1,200 75 900 785.8 777.2 90 816.0 879.5 705.3 748.1 60 800 600 60 45 30 400 300 30 15 - - 0 - 12/31/2019 12/31/2020 6/30/2021 12

  15. Slide 15: Capital Expenditure

    Capital Expenditure HK$ mil Incurred in FY2019-2020 and Estimated Capex in FY2021 1,500.0 1500 13.5% (Latest Budget) 9.7% 1,180.0 1,200.0 1200 7.6% 297.0 900.0 900 688.4 551.2 (Latest 600.0 217.9 (Beg. 2021 600 Budget) 457.9 Budget) 421.1 883.0 353.8 117.7 300.0 223.6 245.5 300 470.5 (Beg. 2021 Budg

  16. Slide 16: Key Financial Ratios

    Key Financial Ratios Adjusted Return on Equity Net Gearing Ratio 25.0% 20.0% 20.0% 17.2% 15.0% 13.2% 12.6% 15.0% 10.0% 10.0% 7.8% 8.4% 6.2% 5.0% 5.0% 0.0% 0.0% FY2019 FY2020 1H/2021 (Annualized) FY2019 FY2020 1H/2021 X Net Debt / Adj. EBITDA X Adjusted Interest Coverage Ratio 1.0 25.0 21.9 0.8 20.0

  17. Slide 17: Business Outlook

    Business Outlook

  18. Slide 18: Mexico SLP Campus Construction Update

    Mexico SLP Campus Construction Update (Photos taken on July 27, 2021) (Photos taken on Mar 3, 2021) Aerospace & Aerospace & ST Plant ST Plant SC Plant SC Plant PM Plant PM Plant IC Plant IC Plant  Construction of the Precision Machining plant completed in June 2021 and gradually moved into the new

  19. Slide 19: Business Outlook

    Business Outlook  Our “Twin Source Production” strategy minimizes potential supply chain and tariff risks caused by geopolitics, and effectively reduce ocean freight expenses and significantly save supply chain costs  Unique one-stop integrated business model offers exceptional value to our custom

  20. Slide 20: Q&A Session

    Impro ors Q&A Session CONFIDENTIAL

  21. Slide 21: Appendices – Financials Summary

    Appendices – Financials Summary

  22. Slide 22: Reconciliation of Adjusted Profit Attributable to Shareholders and Adjusted EBITDA

    Appendix 1 - Reconciliation of Adjusted Profit Attributable to Shareholders and Adjusted EBITDA 1H/2020 1H/2021 HK$ mil HK$ mil Change Reconciliation to Adj. Profit Attr. to Shareholders Profit / (Loss) after tax (268.3) 176.6 Adjustments: - Impairment loss of goodwill & other assets, net of tax 444

  23. Slide 23: Consolidated Statement of Profit or Loss

    Appendix 2 – Consolidated Statement of Profit or Loss 1H/2020 1H/2021 HK$ mil HK$ mil Revenue 1,386.6 1,823.9 Cost of sales (1,020.7) (2,157.3) Gross Profit 365.9 498.3 Other revenue 27.9 15.1 Other net income/(loss) 2.8 (37.3) Impairment loss of goodwill and other assets (445.2) - Selling and distr

  24. Slide 24: Consolidated Statement of Financial Position

    Appendix 3 – Consolidated Statement of Financial Position 12/31/2020 6/30/2021 HK$ mil HK$ mil Non-current assets Property, plant and equipment 3,256.6 3,604.1 Prepayments for property, plant and equipment 25.3 82.8 Intangible assets 60.3 52.0 Goodwill - - Deferred expenses 173.2 175.6 Other financi

  25. Slide 25: Consolidated Statement of Financial Position

    Appendix 3 – Consolidated Statement of Financial Position 12/31/2020 6/30/2021 HK$ mil HK$ mil Current liabilities Bank loans 460.9 470.3 Lease liabilities 24.6 12.3 Trade payables 280.1 360.8 Other payables and accruals 196.2 262.4 Taxation payable 45.6 66.8 Total current liabilities 1,007.4 1,172.

  26. Slide 26: Consolidated Statement of Financial Position

    Appendix 3 – Consolidated Statement of Financial Position 12/31/2020 6/30/2021 HK$ mil HK$ mil Capital and reserves Share capital 188.3 188.3 Reserves 3,824.8 3,992.8 Total equity attributable to equity shareholders of the Company 4,013.1 4,181.1 Non-controlling interest 19.8 21.5 TOTAL EQUITY 4,032

  27. Slide 27: Condensed Consolidated Cash Flow Statement

    Appendix 4 – Condensed Consolidated Cash Flow Statement 1H/2020 1H/2021 HK$ mil HK$ mil Operating activities Cash generated from operations 516.1 350.4 Tax paid (63.7) (39.4) Net cash generated from operating activities 452.4 311.0 Investing activities Payment of property, plant and equipment (152.8

  28. Slide 28: Condensed Consolidated Cash Flow Statement

    Appendix 4 – Condensed Consolidated Cash Flow Statement 6/30/2020 1H/2020 12/31/2019 1H/2021 HK$ mil HK$ mil HK$ mil HK$ mil Capital andactivities Financing reserves Share capital Proceeds from bank loans 188.3 501.2 188.3 486.8 Reserves of bank loans Repayment 3,392.7 (672.2) 3,823.7 (377.6) Lease

  29. Slide 29: Reliable - Flexible - Global

    > Reliable « Flexible - Global e > ae < i~ 4

Impro Precision Industries — H1 2021 Earnings Presentation on 6ix