Makalot Industrial Co., Ltd. March, 2017

Transcription

1 March,

2 Table of Contents Agenda 1. Company Overview 2. Financial Highlight 2

3 A Glance at Makalot A well known integrated coordinator of apparel supply chain in Asia Makalot s Strength Strong management: Creating best formula to stable margin through international production bases across 5 countries with diversified production lines. Value added service: Providing our customers with one-stop shopping experience and high value add services in design, material sourcing and speed to market. Vertical integration: An addition of a fabric mill in Vietnam though JV in 2013 enables Makalot to upgrade its control over quality of material and lower production cost. Main Strategies Company Overview Diversified Products Global Market 3

4 Company outline Product line Production base Product line Customer style Production base Company Overview Ready towear Sleepwear Activewear Sportswear Outdoor Uniform Department stores Mass Channels Brands Vietnam Indonesia Cambodia China Philippines 4

5 2017 & Beyond Company Overview US economy improvement will boost consumer demand The US economy recovers gradually, as employment rate is on the rise. Europe and Japan continue growing from trough. Big vendors become bigger With buyer s vendor consolidation plan, big supplier would gain more market shares. Stronger co-operations benefitting vendors with stable finances and diversified production bases. Barrier to entry due to stronger demand for large scale productions and innovation capabilities. Looking outside for garment production Production moving out of China due to wage growth and worker shortage. 5

6 Competitive Advantage & Growth Driver Competitive Advantage : Diversified & Flexible & Integrated Company Overview Diversified 5 production countries Customers from different segments Diversified product categories Flexible 5% ~ 10% outsourcing Quick replenishments Inventory management Integrated Multiple Products Design services Material souring In the next 5 years, 5 Key Growth Drivers = 3 N ( New markets, New customers, New products) + 2V (Vendor Consolidation + Vertical Integration) 3 N 2 V New markets New customers New products Vendor consolidation : Makalot continues to gain market share in recent years. Vertical integration : cost and quality control, Makalot can provide buyers with attractive prices. 6

7 Operating Highlight Company Overview Makalot s top key customers are Gap, Kohl s, Target, Hanesbrands, and Japanese Customer. Actively expanding into Asia market and Functional sportswear market. Revenue by Product Line 2016 Revenue by Customer 2016 Revenue by Country 2016 Top clients revenue proportion diagram 7

8 Global Network/Production Sites Company Overview Capacity Distribution Chart (Country / Production %) 40% 30% 20% 10% 0% IND VIN CAB CHN PHL We can quickly adjust capacities among these sites to capture low-cost advantages. 8

9 Cost Breakdown Company Overview Cost of good sold breakdown Cost Structure based on ASP Overheads 10% Material 60% Labor 13% Labor 16% Overheads 7% Gross Margin 20% Accessories 16% Fabrics 58% 9

10 Regional Peers Company Overview Updated on Feb,

11 Financial Highlight Financial Highlight 11

12 ASP/ Shipment Financial Highlight Shipment (m dz) ASP Shipment (million dozen) (LHS) 12

13 Debt Ratio Financial Highlight Total debt / total assets Net debt to equity 20% 15% 10% 5% 0% 16.24% 8.41% 3.36% 1.73% 4.22% % 10% 0% -10% -20% -30% -40% -50% -60% % -9.10% % % % 2016 Net Cash position = NT$ 1,194 million = NT$ 1,749 million cash on hand - NT$ 555 million debt 13

14 Capital Expenditure Financial Highlight million NT$ capex was about US$ million (NT$ 346 million) 2014 capex was about US$ million (NT$ 403 million) 2015 capex was about US$ million (NT$ 766 million) 2016 capex was about US$ million (NT$ 643 million) In 2013, We purchased HQ in Taipei by NT$ 2.82 billion and invested Vietnam fabric mill by NT$ 133 million. 14

15 FX gain/loss Financial Highlight Hedging strategies 1. Put in place much more conservative FX budget forecasts for the upcoming year. 2. Cash flow hedges to reduce the exposure to variability in certain expected future cash flows. Natural hedge = 80%, and net exposure position= 20%. Using USD/NTD forwards to hedge this 20% net position risk. 15

16 Dividend Policy Financial Highlight NT$ Mainly cash dividend payout ratio will be maintained between 70% and 90%. 16

17 Convertible Bond Financial Highlight Updated on Mar, 2017 Duration Issue Amount (NT$mn) Outstanding Amount (NT$mn) Conversion Price (NT$) Potential Conversion (mn shares) Dilution (%) CB4 Aug. 24, Aug. 24, % In 2012, we issued 1 convertible bonds (CB4) with par value of NT$700mn. CB4 potential dilution is 1.12 %. 17

18 Business Cycle Financial Highlight 1Q & 3Q are strong season % to annual shipment volume 18

19 Makalot s History Founded in Taipei with woven apparel as the primary business Established a production facility in the Philippines and forged an OEM strategic alliance in Taiwan Ventured into the knitted apparel production industry Established an IT Department to promote computerized operation in the firm Developed diversified product strategy Started global production strategy Established a production facility in Indonesia Expanded the Cambodia apparel production Expanded the apparel production strategic alliance in Vietnam Established the Design Planning Department to enhance ODM service capability Turnover exceeded NT$10 billion Expanded the apparel production strategic alliance in Vietnam Established the South Vietnam and China production facility Established Ecolot Textile Co., Ltd Purchased the headquarters building Established Demak production factory in Indonesia Invested in Namtex Co., Ltd., Vietnam New Green Sportswear Plant in Vietnam 19

20 Q&A Thank You Thank You 20