1Q FY2010 Analyst Briefing
- Riverstone Holdings Limited -
27 April 2010
1
Agenda
Overview of Riverstone
Our Competitive Strengths
Our Track Record
1Q FY10 Update
Earnings Drivers and Outlook
2
What We Do
Riverstone is
a leading manufacturer of
Cleanroom Gloves
and
Healthcare Gloves
OUR VISIONTo stay as the global leader in the manufacturing
of Cleanroom and Healthcare consumables
3
Products
• Other cleanroom
consumables
•Face pouches
•Hoods,Caps
•Jumpsuits
•Shoe covers
•Critical task wipes
•Swabs
Manufactured
Products
Source
& Market
Products
• Nitrile gloves
• Natural rubber gloves
• Other cleanroom
consumables
•Finger cots
•Packaging materials
•Facemasks
Riverstone
– An Integrated Cleanroom Supplier -
4
Our Market Position
RS
Cleanroom
Gloves
Riverstone is the only company that focuses on cleanroom gloves
Heathcare
Gloves
Industrial
Gloves
5
Our Market Position
Heathcare
Gloves
Profit
Margin
Riverstone is the only company that focuses on cleanroom gloves
Cleanroom
Gloves
Profit
Margin
6
Our Manufacturing Facilities
Integrated manufacturing
operations
Malaysia (3), Thailand (1), China (1)
Internationally NEBB certified
class 10 & class 100 cleanroom
facilities
ISO 9000 and ISO 1400 certification
Annual Capacity as at 31 Mar 2010
1.1 billion gloves
More than 600 million pieces of finger
cots
More than 1,500 tonnes of cleanroom
packaging materials
Malaysia Plant in Bukit Beruntung,Selangor
China Plant
Thailand Plant
7
Product Mix
Product Revenue
contribution
Remark
Cleanroom Gloves 81.3% 1. Cleanroom glove
- Nitrile 12.5%
- Latex
- PVC 40%
- Cotton
2. Market Value = USD 1 billion
Healthcare Gloves 13.3% Annual global consumption – 145
billion pieces
Annual growth rate: 8-10%
Current RS production – 0.2% of
global consumption. Room to grow.
Other CR
consumables
5.4% Good potential to grow with new
facilities
Esp. Cleanroom packaging bags
8
The Industries We Serve
High-Tech Electronics Manufacturing
Hard Disk Drives
Semiconductors
LCD
External Storage Devices
Consumer Electronic Devices
Medical Devices Manufacturing
Automobile
Pharmaceutical
Aerospace
Life – science
Laboratory and Research
9
Riverstone’s Niche In Healthcare Gloves
Highly customised segments in the healthcare industry, for example:
Procedure gloves - for superior barrier protection,
High-risk gloves - for better protection in carrying out high risk, harzardous
tasks,
Hand specific gloves – for providing more comfort and better fitting,
Dental gloves – higher priced products and
Accelerator-free gloves - to minimise type IV allergic reaction.
10
We Are Different
Riverstone Other Gloves Manufacturers
Cleanroom Gloves
Highly customized Mass Volume Standardized Products
Higher Barrier of Entry
1)3 processes
2)Qualification processes take long time
3)Spec depends on functionality
Comparatively Lower Barrier of Entry
1) 1 process
Own Brand and Deal mainly Directly With End Users Mainly OEM
High-Tech Value Added To Products
(we provide ESD and contamination solution for our customers)
Innovative product development to meet customers’ requirements
(meet customer product life cycle requirement)
Flexible Production Lines To Meet Changing Demands
Sterile Gloves For Cleanroom and Pharmaceutical Manufacturing
Applications
Healthcare Gloves
Premium gloves - Accelerator-Free Gloves
- Procedure Gloves
- Hand Specific Gloves
- Sterile product.
11
Network of
international sales
offices:
Singapore
Malaysia
Thailand
Philippines
PRC
US
Exported to :
Europe
Mexico
US
Canada
Singapore
Malaysia
Indonesia
Thailand
Philippines
Vietnam
PRC, Hong Kong
Japan
Korea
Taiwan
India
Europe
Asia
USA
Our products are exported worldwide
12
Our Competitive
Strengths
13
• Flexible manufacturing facilities
• Customisation is a key strength
Manufacturing Flexibility and
Products Customization
• Sell mainly direct to end-users for cleanroom gloves - quick response time; good rapport, earlier information on new product requirements
• Collaborate with customers on R&D and new products development
Strong Relationships
with Customers
Our Competitive Strengths
14
• Pioneered nitrile gloves manufacturing in Malaysia
• Dedicated 20-men R&D team to develop customised solutions
Strong R&D Capabilities
• Integrated manufacturing facilities
• ISO9001:2000 and ISO 14001:2004 certified
• Advanced lab testing facilities certified by customers
High Quality Control and Production Standards
Our Competitive Strengths
15
Our Track Record
16
5-Year Performance
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2005 2006 2007 2008 2009
103.5
122.2126.7
141.4155.7
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2005 2006 2007 2008 2009
19.922.5 22.8
24.4
29.5
Revenue (in RM millions) Net Profit (in RM millions)
17
We believe in paying dividends!
2006 2007 2008 2009 2009
TotalNormal Special
Dividend Per Share
(sen)
2.6 3.3 3.5 4.3 1 5.3
Dividend Payout ratio 28% 45% 45% 45% 10.5% 55.6%
18
Healthy Balance Sheet
As at 31 Mar 2010(RM m)
As at 31 Dec 2009(RM m)
Current Assets 110.5 103.8
Current Liabilities 21.0 18.7
Total Assets 205.9 195.6
Total Liabilities 26.3 24.2
Shareholders Equity 179.6 171.447
Gearing 0.4% 0.5%
Cash and Cash Equivalents 51.3 47.2
ROE 24%* 17.2%
ROA 21%* 15.1%
* Figures have been annualised
19
First Quarter 2010 Performance
Y/E 31 Dec
1Q2010
(RM m)
1Q2009
(RM m)Change
Revenue 52.8 25.8 104.7%
Gross Profit 16.5 5.0 230.0%
Gross Profit
Margin31.2% 19.4% 11.8ppts
Profit before Tax 11.6 2.1 452.4%
Profit after Tax 10.5 1.8 483.3%
EPS* (sen) 3.39 0.58 484.5%
* Based of weighted average of 309.5 million of ordinary shares
20
Behind the 1QFY10 Performance
Sustained momentum from Q4 FY09
Rebound in HDD and semiconductor sectors (10%-15% growth)
Gaining market share in semiconductors (esp. Japan/Korea) and
pharmaceutical (USA)
Boost from healthcare gloves which started in late Q1 FY2009
21
Revenue (in RM millions) Net Profit (in RM millions)
0.0%
10.0%
20.0%18.4% 18.0% 17.2%
19.0% 20.0%
Net Profit Margin
0.0%
10.0%
20.0%
30.0%
14.9% 14.1% 14.2% 15.1%20.4%
ROA
0.0%
10.0%
20.0%
30.0%
17.6% 16.5% 15.8% 17.2%
24.0%
ROE* Figures have been annualised22
0.0%
10.0%
20.0%
30.0%
40.0% 34.6% 33.9%30.7% 31.5% 31.2%
GP Margin
Earnings Drivers and
Outlook
23
Earnings Drivers
Cleanroom Glove Sector
Continued growth in HDD and semiconductor industries(e.g: car navigator, game console, entertainment) driven by higher business and personal spending on IT and expansion plans
Continuous Market Presence Expansion into Semiconductors Industry (Japan, Korea, Taiwan)
Gaining Market Share in Pharmaceutical Industry
Healthcare Glove Sector
Market Niche in Medical Gloves
- offers smaller volume but highly customised solutions
- gained market recognition in short period of time
24
Earnings Drivers
601720
780900
1100
1350
1850
500
700
900
1100
1300
1500
1700
1900
2100
2005
2006
2007
2008
2009
2010f
2011f
• Production Expansion Plan on Track at average 35% p.a.• Possible acquisitions of other smaller glove manufacturers
Annual Production capacity in millions of gloves
25
RIVERSTONE HOLDINGS LIMITED
Thank You
Investor Relations Contact:
Juliet Ang, NRA Capital
Tel: 6236 6895 Email: [email protected] 26