AZTECH SYSTEMS LTDAZTECH SYSTEMS LTDFY2004 FINANCIAL RESULTSFY2004 FINANCIAL RESULTS

Analysts and Media Briefing17 February 2005

Contents of Presentation

• FY2004 Financial Performance

• Corporate Update

• Factory Expansion Plan

• Outlook for Year 2005

• Growth Plans & Strategies

• Q & A

FY2004 FY2004 Financial PerformanceFinancial Performance

Financial ResultsFinancial Results

Ø Turnover

Ø EBITA

Ø Profit from Operations

Ø Profit Before Tax

Ø Net Profit After Tax

• Depreciation & Amortization• Interest expenses

• Tax

$152.14 m

$ 13.68 m

$ 8.36 m

$ 7.21 m

$ 6.84 m

FY2004 FY2003 Change

$118.04 m

$ 9.87 m

$ 3.17 m

$ 2.91 m

$ 2.83 m

$5.85 m$0.62 m

$6.22 m$0.74 m

164%

$0.37 m $0.08 m

29%

39%

148%

142%

TurnoverTurnover

152,135

118,042

161,113151,756

-

50,000

100,000

150,000

200,000

YR 2001 YR 2002 YR 2003 YR 2004

S$'000

+29%

Net Profit / LossNet Profit / Loss

2,828

6,841

(17,924)(18,830)(20,000)

(15,000)

(10,000)

(5,000)

-

5,000

10,000

YR 2001 YR 2002 YR 2003 YR 2004

S$'000

+142%

Product Mix

DataCommunication

62%

VoiceCommunication

2%Shiro3%

ContractManufacturing

33%

FY2004

Turnover by Geographical SegmentTurnover by Geographical Segment

FY2004Others

3%Asia Pacific

23%

Europe40%

North andSouth

Americas34%

FY2003Others1%Asia Pacific

25%

North andSouth

Americas17%

Europe57%

Balance SheetBalance SheetFY2004 FY2003 Change

Ø Total Current Assets

Ø Non-Current Assets

Ø Total Current Liabilities

Ø Non Current Liabilities

$ 67.25 m

$ 40.79 m

$ 44.58 m

$ 8.28 m

$ 47.36 m

$ 39.84 m

$ 30.00 m

Ø Total Assets $108.04 m $ 87.20 m 24%

42%

2%

49%

Ø Capital and Reserves

Ø Total Liabilities & equity

$ 55.18 m

$108.04 m

$ 8.81 m

$ 48.39 m

$ 87.20 m

(6)%

14%

24%

Ø Working Capital $ 22.67 m $ 17.35 m 31%

Key Financial IndicatorsKey Financial IndicatorsProfitability FY2004 FY2003

Gross Profit Margin 16.4% 15.6%Net Profit Margin 4.5% 2.4%

Rate of return (%)ROE 12.4% 5.8%ROA 6.3% 3.2%

EPS (diluted shares) 1.70 cents 0.71 centCapital Expenditure

Property, plant and equipment $4.97 m $3.76 mR & D $2.12 m $2.96 m

Balance SheetDebtors $29.69 m $15.31 mDebtors turnover 71 days 47 days Creditors $30.12 m $24.28 mCreditors turnover 86 days 89 daysInventory $25.47 m $20.76 mInventory turnover 73 days 76 days

Liquidity ratioCurrent ratio 1.5 1.6 Quick ratio 0.9 0.9

Corporate UpdateCorporate Update

5 Sales Offices :5 Sales Offices :

Our Offices & FacilitiesOur Offices & Facilities

* Singapore* Hong Kong* USA, Fremont, California* Germany, Frankfurt* Malaysia, Petaling Jaya

2 factories in Dong Guan :2 factories in Dong Guan :* Aztech DG1 (Set-up in 1994) – 8,560 sq m* Aztech DG2 (Set-up in 2001) – 13,042 sq m

4 R&D 4 R&D CentresCentres ::* Singapore

* Shenzhen, China

Total employees = 1,700 people

* Hong Kong

* Dong Guan, China

Key ProductsKey Products

Data CommunicationData Communication* 56 kbps Analog Modem

* ADSL2 + Modem

* Wireless 802.11g devices

* HomePlug

Voice CommunicationVoice Communication

* DECT Phone

* Walkie Talkie

ADSL Ethernet Modem

Voice over IP

HomePlug

Data Communication Products Data Communication Products

Wireless ADSL Router

56K External USB Modem

Voice Communication ProductsVoice Communication Products

SMS Colour DECT

PMR 5000 With Desktop Charger PMR 3000 R

Entry level DECT

ADSL Router GSM/GPRS Module

Bluetooth Carkit

Powerline Modem

Video Conferencing

CPU Test Board

Contract ManufacturingContract Manufacturing

Shiro Shiro Lifestyle ProductsLifestyle Products

MP3 Digital Audio Players Telecom Voice Products

Digital Camera Products Computer Peripherals

Sales ChannelSales Channel

• OEM / ODM Customers

• Contract Manufacturing

* Shiro (100% Aztech Subsidiary)- Sales of Aztech Brand Products

- Shiro Lifestyle Products

• Retail Distribution

- DG1 is located at Dong Guan Shi, Chang Ping, Jiu Jiang Shui

- Occupied land area of about 6,900 sq metres

Aztech Dong Guan (China) Aztech Dong Guan (China) –– Plant 1 & 2 Plant 1 & 2

- DG2 is located at Dong Guan

Shi, Chang Ping, Shang Keung

- Total built up area: 13,042 sq m

TL9000 + ISO 9001 – Manufacturing facilities in Dong Guan (China)

• 21 x High Speed SMT lines

• 2 x X-Ray & SRT BGA rework station

• 5 x Manual Insertion Lines

• 5 x Teradyne 1850/1820 ICT testers

• 2 x HP3070 Series II ICT testers

• Burn-In Facilities (static)

• 8 x Test Lines w/X900, Hi-Pot

• 5 x DECT Testing Lines

• 6 x Assy & Packing Lines

Manufacturing EquipmentManufacturing Equipment

Chip On Board (COB)Chip On Board (COB)

COB Wire Bonder

þ AC servo control Bond head

Z travel resolution 1um(0.039mil), high speed 14ms for 1mm Z travel

þ High throughput: 6 wires/sec for 80mil wire length

þ Fine Pitch cap: pad pitch 80um/3.15mil

pad size:70um/2.8 mil@1mil wire diameter

þ Large substrate: 4”x6”, multiple die device with max of 100 dice.

Plastics Mold FabricationPlastics Mold Fabrication

• CNC machines x 2 (Maximart, Rapid 032 V-8D)• EDM x 6 (Acro II, P/ZNC S-430)• Radial Miller x 15 (Manford)• Horizontal millers x 2• Wire cutters x 4 (Gold Sun)• Drill Press x 2 (TF 750S)• Lathe x 1 (GapBed C6232A)• Grinders x 4, Saw x 1

Plastics Injection FactoryPlastics Injection Factory

• 24 Plastics Injection Machines (80T-250T)

• Complete services

* Plastics parts injection molding

* Spray painting

* Silkscreen

* EMC coating

• Secondary services

* Industrial design

* Mechanical design

* Tooling production management

Factory Factory ExpansionExpansion

Plan

.

Aztech Dong Guan Plant 3Aztech Dong Guan Plant 3

10 New SMT Equipment Investment10 New SMT Equipment Investment

• 10 units of DEK ELA auto-paste printers

• 25 units of UIC Advantis AC30L

• 5 units of UIC Advantis AC72

• 10 units of Vitronic-Soltec XPM2 Reflow ovens

Universal Instruments Advantis Platforms

Outlook for Outlook for Year 2005Year 2005

Market SituationMarket Situation

•• Components Inventory starts to ease off recently Components Inventory starts to ease off recently

* Expects rapid growth in emerging countries

•• General economy remains stable and healthyGeneral economy remains stable and healthy

* Matured ADSL countries moving into wireless, Video on Demand and VOIP

•• PPC market expects to grow 10% in FY 05 to 208 million unitsC market expects to grow 10% in FY 05 to 208 million units

•• Broadband ADSL lines expect to hit 100 million in early 2005 :Broadband ADSL lines expect to hit 100 million in early 2005 :

* More users will upgrade their analog cordless phones to DECT

* Growing demand for SMS Colour DECT Phones

•• DectDect Phone market expects to grow: Phone market expects to grow:

* Market size expects to be 40 million units in FY 2005

New Products In FY 2005New Products In FY 2005Data CommunicationData Communication

* ADSL2 + with VoIP & 802.11g wireless Residential Gateway* ADSL2 + with 85Mbps HomePlug* 85Mbps and 200Mbps Audio/Video HomePlug* IP Set Top Box* Entering into Wireless Broadband Internet Access

(3G Modem, Wi-max)

* VOIP ATA AdaptorVoice CommunicationVoice Communication

* VOIP DECT Phone

Moving IntoMoving IntoConsumer Electronics:Consumer Electronics:

* MP3 Player* Digital Weather Station* Baby Monitor

* IP Phone

New Products in FY 2005New Products in FY 2005

Flash MP3 Hard Disk Jukebox VoIP DECT

ADSL + Homeplug Router

IP Set Top Box ADSL + VoIP + Wireless

Baby Monitor Personal Mobile Radio

Digital Weather Station

Growth PlansGrowth Plans& & StrategiesStrategies

Growth Strategies in FY 2005

* Aztech DECT Phone and Walkie Talkie available in Qtr 4 2004

* Expect sales of Shiro Lifestyle Products to increase after 1 year in the market

FY 2005 : Diversify into more products and gain market share

- Expect Voice Communication to contribute higher sales in FY05* Gain more sales in Data Communication from emerging markets such as Latin

America and Eastern Europe * Expand our Contract Manufacturing customer base

FY2004

ContractManufacturing

33%

Shiro3%

VoiceCommunication

2%

DataCommunication

62%

FY2005 Forecast

ContractManufacturing

20%

Shiro5%Voice

Communication34%

DataCommunication

41%

Challenges in FY 2005

• Increase in oil price

• Power shortage in China

• Price competition from local Chinese companies

• Strengthening of RMB

What are the challenges that we face in 2005?

• Rising manpower costs

• Shortage of manpower

Thank You Thank You

Q & AQ & A

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