Growing Global Corporate Presentation 2014 Scaling greater heights ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality
Our markets Growing Global Manufacturer of rubber examination and surgical gloves World’s largest nitrile glove manufacturer Export to 39 countries globally Four overseas offices • Australia (1996) • USA (2003) • China (2012) • India (2013) ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 2
Our markets Growing Global Others, Industrial, 8% Food, 5% 2% APAC, 12% Laboratory , 17% USA, 51% Healthcare EU, , 76% 29% ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 3
Global Recognition Growing Global 2013 2010, 2011, 2012 & 2013 2013 2010 & 2012 Forbes Asia 200 Best HR Asia Best The Edge Billion Asiamoney Best Ringgit Club – Most Under a Billion Employers to Work for Managed Company in in Asia Profitable Company in Malaysia Industrial Products Segment ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 4
National Corporation Innovation Index (NCII) participating company Growing Global “The NCII would show and benchmark where and how these corporations are active in innovation at national and international levels. These benchmarking activities are crucial as these corporations are the significant players in the market and they are needed to drive the economy .” ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 5
Revenue and Profit Growing Global Revenue (RM mil) 1,107 1,032 CAGR for revenue from FY2005 to FY2014 of 921 29% 735 572 443 CAGR for PAT from FY2005 to FY2014 of 37% 110 160 240 282 Net margin improved from 12% in FY2005 to 21% in FY2014 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Sales and PAT for FY2014 of RM1107 mil and RM234 mil respectively Profit After Tax (RM mil) 234 234 FY2014 EPS of 31.3 cents 190 201 146 Highest profit margin in the industry 85 Highest net profit in the industry 37 40 19 13 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 6
Hartalega Dividend Growth Growing Global DPS (sen) Payout Ratio Pay-out ratio has increased since listing 45.5% 45.2% from 10.4% to 45.5% 45.5% 40.1% 14.5 14.5 Although number of shares have grown, 33.9% DPS has also grown from 1.7 cents to 14.5 12.5 cents* 10.5 22.9% 4 pay-outs per annum 6.7 10.4% 4.0 1.7 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Dividend per share is stated post-bonus issue* ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 7
Sector leader Growing Global 5,285 3,542 1,629 1,782 1,263 341 2008 2009 2010 2011 2012 2013 World‘s largest nitrile glove Highest Productivity in the Industry. Most Innovative Glove Company. World‘s fatest production line at manufacturer. 5 breakthrough inventions that Valuable Glove Company in 45,000 pcs/hr. changed the landscape of glove Malaysia (current market cap of Most advanced in-house developed industry. RM4.4 billion) production technologies. ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 8
Sector leader Growing Global 30.00% 5-yr avg net 4-yr CAGR margin 25.00% Hartalega 18.0 23.3 Kossan 11.7 9.3 20.00% Net Hartalega Supermax 8.8 13.2 Margin 15.00% Top Glove 10.9 9.3 10.00% Supermax Top 5.00% Kossan Grove 0.00% 5.00% 10.00% 15.00% 20.00% CAGR Source: Deloitte & Touche, 2014 ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 9
Sector leader Growing Global No 1 No 2 No 3 No 4 Hartalega Kossan Supermax Top Glove PBT margin 27.9% 13.9% 13.8% 10.5% Margin Hartalega Supermax Kossan Top Glove Net margin 21.1% 11.5% 11.0% 8.8% Hartalega Supermax Kossan Top Glove Return on assets 36.8% 24.9% 24.1% 22.7% Profitability Hartalega Kossan Top Glove Supermax Return on equity 24.8% 19.9% 14.9% 14.4% Hartalega Top Glove Kossan Supermax Inventory turnover 32.4 34.7 41.7 69.7 Working capital Hartalega Top Glove Kossan Supermax Trade receivable turnover 43.6 44.6 64.3 74.8 Hartalega Top Glove Kossan Supermax Debt equity ratio 0.5% 4.3% 20.7% 34.9% Debt Hartalega Top Glove Kossan Supermax Total liabilities to total assets 14.5% 23.4% 34.2% 34.6% Source: Deloitte & Touche, 2014 – based on companies latest financial year results ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 10
Changed the global glove market Growing Global Hartalega invented light weight nitrile glove NBR glove market Nitrile glove < 5% EU revised share increased Launched in USA global market regulatory standards from 5% to 50% Hospitals started to Users in EU started Limited usage in Most hospital in US switch from NR to to switch from NR to medical sector use NBR gloves NBR NBR Before year 2005 Year 2005 Year 2010 Year 2013 ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 11
Competition Growing Global “Glove makers are continuing to ramp up production of nitrile gloves as they compete for market share…” The Edge 30 th Jan 2014 “Fighting to dominate the nitrile glove sector” RHB Analyst report 29 th April 2013 “A nitrile glove price war looming ahead” Affin Investment Bank Analyst report 6 th April 2012 “Malaysian glove makers to invest RM300mil to RM500mil to improve automation” The Star 5 th Sep 2012 “Technology and automation are expected to be the game changer to move the industry forward” Lim Kuang Sia, CEO of Kossan in interview with The Sun on 14 th May 2014 ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 12
Growing Global OUR STRATEGY ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 13
Four pillars of growth Growing Global Innovation Human Resource Production technologies Engaging critical mass Product innovations Knowledge management Innovative culture at all levels Competencies development Succession planning Own Brand Productivity Develop own brand market Capacity expansion (NGC) Emerging markets like China Lean manufacturing and India as target markets Invest in Information Technology Vision to build a global multiple medical device company ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 14
Innovation – Working on 5 new major innovations Growing Global Blank To Protect Proprietary Value ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 15
Talent development Growing Global Senior Leadership development program Management by Management Skills development and lean Executives, Supervisors manufacturing (critical mass) ………………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality 16
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