Solomon Systech (International) Ltd. · HKEX:2878

Solomon Systech (International) — FY2006 Earnings Presentation

19 slides from Solomon Systech (International)'s earnings presentation, Mar 26, 2007

  1. Slide 1: 2006 Annual Results Announcement

    Solomon Systech (International) Limited 2006 Annual Results Announcement 26 March 2007 Hong Kong

  2. Slide 2: Table of contents

    www.solomon-systech.com Table of contents • Summary • Financial review • Business review • Outlook SSIL 2006 Annual Results 26 Mar 2007 P. 2

  3. Slide 3: Summary

    www.solomon-systech.com Summary SSIL 2006 Annual Results 26 Mar 2007 P. 3

  4. Slide 4: Results summary

    www.solomon-systech.com Results summary • Annual IC unit shipment 230mu • Sales US$254 million • Net profit US$22.4 million • Basic EPS 7.1 HK cents • Final dividend per share 4 HK cents • Total dividend per share for the year 6 HK cents • Global market share in mobile phone display ICs ranged 16 -1

  5. Slide 5: Financial Review

    www.solomon-systech.com Financial Review SSIL 2006 Annual Results 26 Mar 2007 P. 5

  6. Slide 6: Profit and loss

    www.solomon-systech.com Profit and loss Twelve months ended 31 Dec YoY (US$ million) 2006 2005 Change Sales 254.1 394.1 -36% Gross profit 59.3 119.6 -50% Gross margin 23.3% 30.3% Net profit 22.4 76.3 -71% Net margin 8.8% 19.3% (HK cents) Earnings per share* 7.1 24.3 Dividends per share 6.0 19.0 * Ba

  7. Slide 7: Balance sheet

    www.solomon-systech.com Balance sheet As at 31 As at 31 YoY (US$ million) Dec 2006 Dec 2005 Change Total assets 221.1 270.3 -18% Total borrowings Nil Nil N/A Shareholders’ funds 179.9 207.0 -13% Net cash 121.5 162.7 -25% (HK cents) Shareholders’ funds per share 57 66 -14% Net cash per share 38 52 -2

  8. Slide 8: Financial remarks

    www.solomon-systech.com Financial remarks Key Factors Sales 36% Unit shipment 13% YoY Blended ASP 26% YoY Net profit 71% Gross profit 50% YoY -- Gross profit margin 23% (2005: 30%) Operating expense 17% YoY -- US$1.4m provision for investment impairment Capex US$16m US$9m Plant / Property /Equipment

  9. Slide 9: Business Review

    www.solomon-systech.com Business Review SSIL 2006 Annual Results 26 Mar 2007 P. 9

  10. Slide 10: 2006 business recap

    www.solomon-systech.com 2006 business recap • Shipped 230mu, primarily mobile display driver IC – 1H06 unit shipment grew 16% YoY – 3Q experienced unusual demand drop – 4Q returned to seasonal pattern (2nd highest quarterly shipment) • Enhanced competitiveness for future growth – Technology leadersh

  11. Slide 11: Unit shipment by product line

    www.solomon-systech.com Unit shipment by product line • Mono & Color STN: Leadership maintained • m-TFT: Dragged by slower than expected ramp among design-wins • OLED: Set back by customer exits and MP3 player’s use of lower cost solutions • New Display: Shipped >10mu bistable driver IC for E-paper

  12. Slide 12: Blended average selling price

    www.solomon-systech.com Blended average selling price • 2006 blended ASP = US$1.11, down 26% YoY – Sequential decline rate stabilized 1.96 HoH YoY Blended Unit ASP (US$) 2.0 1.54 1.50 50% 1.5 Blended ASP Change 1.11 1.0 0% 0.5 1H04 2H04 1H05 2H05 1H06 2H06 - 2003 2004 2005 2006 -50% SSIL 2006 Annual

  13. Slide 13: Examples of 2006 design-wins

    www.solomon-systech.com Examples of 2006 design-wins Mobile Display (STN, TFT) OLED Bluetooth Mobile Watch with GSM Mobile MP4 Notebook with Notebook with Phone Compatibility Phone Sideshow Sideshow New Display Display System Automotive AV Study Machine – Console – Graphics Mobile Wristwatch VGA Eye

  14. Slide 14: Outlook

    www.solomon-systech.com Outlook SSIL 2006 Annual Results 26 Mar 2007 P. 14

  15. Slide 15: Future Growth Enablers

    www.solomon-systech.com Future Growth Enablers New Customers, New Products, New Applications • Mobile Display – STN ! Minimize cost and target more top-tier brand names – m-TFT ! Leverage MIPI to establish closer ties with brand names as well as module makers – OLED ! Launch products for mobile disp

  16. Slide 16: Examples of New Applications

    www.solomon-systech.com Examples of New Applications Mobile Display (STN, TFT) OLED Bluetooth MP4 Mobile TV GPS DECT Phone Earpiece New Display Display System Digital Photo GPS Microdisplay for IC Card Price Tag Memory Card Frame Games SSIL 2006 Annual Results 26 Mar 2007 P. 16

  17. Slide 17: 2007F Outlook

    www.solomon-systech.com 2007F Outlook Market • Mobile phone market moderate growth ~10% YoY • 1H07F demand aligns with typical business seasonality • New volume display applications emerge Products • Expanding products portfolio • Developing design-ins outside mobile phone business Customers • Impro

  18. Slide 18: General Views on 1H 2007

    www.solomon-systech.com General Views on 1H 2007 • Unit shipment growth year-on-year – Challenging • Sales growth – Subject to product mix and ASP uncertainty • Gross profit margin – Still under pressure with market ASP erosion • Operating expenses – Overall under control, keep investing in R&D • Ne

  19. Slide 19: Thank You

    www.solomon-systech.com Thank You Solomon Systech (International) Limited Stock code: 2878 SSIL 2006 Annual Results 26 Mar 2007 P. 19

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