Solomon Systech (International) Limited Solomon Systech (International) Limited 2008 Annual Results Announcement 25 March 2009 Hong Kong
Table of contents � Summary � Financial Review � Business Review � Outlook SSIL 2008 Annual Results Announcement 25Mar2009 P. 2
Summary SSIL 2008 Annual Results Announcement 25Mar2009 P. 3
Results summary � Unit shipment 115 mu � Sales US$92.8 million � Net loss US$23.4 million � Basic loss per share 7.5 HK cents � Final dividend per share 3 HK cents � Book to Bill ratio 0.82 SSIL 2008 Annual Results Announcement 25Mar2009 P. 4
Financial Review SSIL 2008 Annual Results Announcement 25Mar2009 P. 5
Profit and loss Twelve months ended 31 Dec YoY (US$ million) 2008 2007 Change Sales 92.8 165.0 -44% Gross profit 16.9 39.5 -57% Gross margin 18.2% 23.9% Net (loss) / profit (23.4) 10.2 -25.2% 6.2% Net margin (HK cents) (Loss)/earnings per share* -7.5 3.3 Dividends per share 3.0 3.0 Book to Bill ratio 0.82 0.64 SSIL 2008 Annual Results Announcement 25Mar2009 P. 6
Profit and loss delta analysis ’08 vs ’07 ‘07 Net Profit: US$10.2m � Gross Profit with Lower Sales US$17.8m � US$4.7m Inventory Provision � US$1.2m Operating Expense � US$4.9m Financial Assets at Fair Value � US$4.6m Investment Impairment � Interest Income US$3.4m � Tax Expense US$3.0m � ’08 Net Loss � US$23.4m SSIL 2008 Annual Results Announcement 25Mar2009 P. 7
Balance sheet As at 31 As at 31 YoY Change (US$ million) Dec 2008 Dec 2007 Total assets 162.3 202.4 -20% Total borrowings Nil Nil N/A Shareholders’ funds 143.8 172.1 -16% Net cash 110.9 137.8 -20% (HK cents) Shareholders’ funds per share 46 55 -16% Net cash per share 35 44 -20% SSIL 2008 Annual Results Announcement 25Mar2009 P. 8
Net cash delta analysis ’08 vs ‘07 � Net Cash @ 31 st Dec: � US$110.9m (’08) vs $137.8m (‘07) - US$26.9m � Major Cash Outflow � Dividend Payout: - US$ 6.3m � Strategic Investment - US$ 5.6m � Plant, Property & Equipment - US$ 4.9m � Financial Assets - US$17.7m � Major Cash Inflow � Interest Received + US$ 5.3m � Business Operating Activities + US$ 2.8m SSIL 2008 Annual Results Announcement 25Mar2009 P. 9
Business Review SSIL 2008 Annual Results Announcement 25Mar2009 P. 10
Blended average selling price � 2008 blended ASP = US$0.81, down 15% YoY HoH YoY 2.5 50% 1.96 Blended Unit ASP (US$) 2 Blended ASP Change 1.54 1.5 1.5 1.11 0.95 1 0% 0.81 1H04 2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 0.5 0 2003 2004 2005 2006 2007 2008 -50% SSIL 2008 Annual Results Announcement 25Mar2009 P. 11
Unit shipment by product line Mono & Color STN: 45 mu � m-TFT: 37 mu � OLED: 25 mu � New Display: 8 mu � Display System: Initial shipment � Balanced shipment in different product applications. mono STN CSTN m-TFT OLED New Display System Others mono STN CSTN m-TFT OLED New Display System Others 300 100% Unit shipment distribution 263 IC unit shipment (mu) 250 230 80% 200 173 60% 157 150 115 40% 100 71 20% 50 0 0% 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Note: Others include PDA drivers, large display drivers, LED drivers and PCBA SSIL 2008 Annual Results Announcement 25Mar2009 P. 12
2008 End Product Examples Business, Market and Application Diversification Mobile Display, OLED Display and New Display Health Care Electronic Mobile Phone MP3 GPS Product Shelf Label Display System Solution Smart Phone Mobile Digital TV Mobile Phone SSIL 2008 Annual Results Announcement 25Mar2009 P. 13
Outlook SSIL 2008 Annual Results Announcement 25Mar2009 P. 14
1. Business Transformation From To IC component application system solution � Display Panel � Display System Electronics Businesses Solution Businesses � Mobile Display � Display System Solution � OLED Display � New Display MDTV System � Green Power Display IC LED Lighting SSIL 2008 Annual Results Announcement 25Mar2009 P. 15
2. Market Application Transformation From To consumer electronics and mobile phone industrial applications Electronic Shelf Label GPS Mobile Digital TV (MDTV) Mobile Phone MP3 Players Portable Media Player (PMP) Health Care Product LED Lighting SSIL 2008 Annual Results Announcement 25Mar2009 P. 16
3. Revenue Transformation From To single multiple revenue streams � IC component Sales � Solution Sales � Software � Printed Circuit Board Assembly � Modules � Royalty � Design service fees � End Product Sales � Recurring S/W income SSIL 2008 Annual Results Announcement 25Mar2009 P. 17
4. Expertise Transformation From To IC know-how software and system design expertise � 2007 � 2008 � IC engineer: 94% � IC engineer: 85% � software engineer: 6% � software engineer: 15% � IDH: 0 � IDH: 2 % is of the total R&D engineers IDH: Independent Design House SSIL 2008 Annual Results Announcement 25Mar2009 P. 18
5. Effectiveness Transformation Continuous improvement � Business alignment � Display System Solution BU and IDHs � Green Power BU with investment in LED suppliers � Organizational effectiveness � 2009 operating cost reduction > 20% � Operational efficiency SSIL 2008 Annual Results Announcement 25Mar2009 P. 19
Thank You Solomon Systech (International) Limited Stock code: 2878 www.solomon-systech.com SSIL 2008 Annual Results Announcement 25Mar2009 P. 20
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