BenQ 2004 1Q Results Investor Conference 明基電通 2004 年第一季營運成果說明會 April 29, 2004
Agenda Welcome and Introduction 1Q 2004 Financial Results Remarks Q&A
Safe Harbor Notice We have made forward-looking statements in the presentation. Our forwardlooking statements contain information regarding, among other things, our financial conditions, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties, and assumptions about us. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in the conference might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.
1Q 2004 Income Statement Highlight Amount : NT$ Billion Except EPS Data Q1, 2004 Q4, 2003 QoQ Change% Net Sales 42.22 100.0% 36.83 100.0% 15% Cost of Goods Sold (36.84) (87.3%) (32.02) (86.9%) 15% Gross Profit 5.38 12.7% 4.81 13.1% 12% Operating Expenses (4.04) (9.6%) (3.77) (10.2%) 7% Operating Income 1.33 3.2% 1.04 2.8% 29% Net Non-op Items 1.96 4.6% 1.25 3.4% 56% Income before Tax 3.30 7.8% 2.29 6.2% 44% Income Tax (0.23) (0.5%) 0.07 0.2% n.a. Net Income 3.07 7.3% 2.36 6.4% 30% Fully Diluted EPS (NT$) 1.48 1.12 32% Core business, Unaudited, Prepared by BenQ Corp. on a consolidated methodology
Non-Operating Items & Investment Amount: NT $ Million Q1, 2004 Net Interest Income/(Exp) (39) AUO 1,675 Disposal of Securities 27 Daxon 78 Investment Income 1,760 Darfon (26) Other Non - Ops 213 Others 33 Total 1,961
1Q 2004 Balance Sheet Highlight Amount: NT $ Billion Q1, 2004 Q4, 2003 QoQ Change % Cash & Equivalent 11.30 12.1% 7.68 8.9% 47% Accounts Receivable 22.19 23.8% 20.51 23.8% 8% Inventories 18.48 19.8% 17.32 20.1% 7% L-T Investments 24.75 26.5% 22.77 26.4% 9% Total Assets 93.26 100.0% 86.10 100.0% 8% Liabilities 45.15 48.4% 39.64 46.0% 14% ( Debts ) 8.12 8.7% 5.95 6.9% 36% Equities 48.11 51.6% 45.46 52.8% 6% Core business, Unaudited, Prepared by BenQ Corp. on a consolidated methodology
Key Financial Ratios Q1 2004 Q4 2003 Q3 2003 A/R Turnover 46 days 50 days 53 days Inventory Turnover 44 days 47 days 45 days ROA* 13.7% 11.1% 11.1% ROE* 26.2% 21.1% 20.9% Total Debt / Total Assets 8.7% 7.2% 14.1% * Annualized 2003 2002 2001 ROE 17.3% 21.5% 11.1% Core business, Unaudited, Prepared by BenQ Corp. on a consolidated methodology
Sales Breakdown by Business Display Imaging & Storage Communications Digital Media 100% 2% 2% 3% 4% 5% 8% 14% 15% 80% 31% 32% 31% 27% 20% 15% 16% 17% 60% 23% 25% 23% 22% 21% 21% 21% 17% 40% 20% 44% 41% 43% 47% 54% 56% 49% 51% 0% 2Q'02 3Q'02 4Q'02 1Q'03 2Q'03 3Q'03 4Q'03 1Q'04 Core business, Unaudited, Prepared by BenQ Corp. on a consolidated methodology
Sales Breakdown by Geography (a) (b) America Europe China APAM 100% 80% 21% 23% 20% 22% 22% 23% 25% 27% 60% 40% 24% 33% 23% 29% 23% 27% 26% 22% 18% 21% 22% 20% 16% 24% 17% 26% 20% 22% 25% 30% 30% 39% 35% 35% 30% (a) (b) 0% 2Q'02 3Q'02 4Q'02 1Q'03 2Q'03 3Q'03 4Q'03 1Q'04 Including HK Asia Pacific, Africa, and Middle East Core business, Unaudited, Prepared by BenQ Corp. on a consolidated methodology
Recap of Recent Major Events BenQ Board of Directors proposed NT$ 2.0 cash dividend and NT$ 1.0 stock dividend. (2004/04/27) BenQ bought 4.457 million shares of treasury stock from the market. (2004/03/31 2004/04/02) BenQ received 15 if Design China Awards 2004. (2004/04/26) BenQ showcased its exciting and innovative line of "Networked Digital Life Style Experience" products at CeBIT 2004. (2004/03/18) BenQ introduced Qband.com.tw, an online music portal, initiated a new trend in digital music. (2004/03/05) Please visit BenQ website (http://www.benq.com) for details and more information
New Products Launched in Last Quarter Digital Media BG Joybee 110 Hip and original, music never looked so good Joybook 6000 Weighting 1.6 kg and featuring a 12.1 wide-screen, you can work and play without limits Joybook 8100 At the 200 nits, the Joybook 8100 dazzles users with the world brightest wide-screen (WGA) Networking Communication BG S670C Camera Phone Make any occasion fun with BenQ s exclusive 3D Face Morphing Technology Joybee 125 Convenient access to data and music. Life has never been this easy Please visit BenQ website (http://www.benq.com) for details and more information
New Products Launched in Last Quarter FP 783 LCD Monitor Breaking the molds of monitor design, this if Design, CES Award winning is truly unique Display Network Business Group F231W The 23 High Resolution screen will keep you hooked with its amazingly fast 16ms response time Imaging Network Business Group DW1600A/ DW830A BenQ leads the way with 16x DVD+R recording speed and DVD+R double-layer technology DC S30/40 Take photographs, record continuous movies and play back music. Express your own personal style Please visit BenQ website (http://www.benq.com) for details and more information
2004 Q2 Guidance Q2 revenue to increase over 5% QoQ and 78% YoY. Display : LCD monitor shipments to continue increasing. Panel remains a constraint and its pricing will be stable. Imaging & Storage : Revenue to increase more than 20% contributed by mass delivery to PC customers. Will deliver the first MFP and dualformat, dual layer 16X DVD RW from June. Communications : Stronger momentum than Q1. Start delivery to European customers. Digital Media : Projector revenue to increase more than 40% QoQ.
BenQ Corporation Reviewed Non-consolidated Balance Sheets (Parent Company Only) March 31, 2004 and 2003 (expressed in thousands of New Taiwan dollars) Assets 2004.3.31 2003.3.31 NT$ NT$ 2004.3.31 2003.3.31 Liabilities and Stockholders Equity NT$ NT$ Current assets: Cash and cash equivalents 400,807 223,768 Short-term investments 6,946,458 12,820,019 Notes and accounts receivable 10,665,219 6,044,598 Receivables from related parties 18,870,054 15,356,934 Other financial assets 105,285 98,097 Inventories 6,244,828 4,134,134 Prepaid expenses and other current assets 274,729 178,676 Deferred income tax assets-current 1,000,949 908,121 Total current assets 44,508,329 39,764,347 Long-term equity investments: Equity method 28,860,134 23,710,388 Cost or lower-of-cost-or-market method 2,423,620 2,466,689 31,283,754 26,177,077 Property, plant and equipment: Land 2,379,356 2,040,680 Buildings 3,970,435 3,682,367 Machinery and equipment 2,299,678 2,221,016 Furniture and fixtures 137,479 119,841 Miscellaneous equipment 69,110 67,143 Prepayments for plant and equipment 138,450 169,758 8,994,508 8,300,805 Less: accumulated depreciation (2,210,379) (1,718,890) Net property, plant and equipment 6,784,129 6,581,915 Leased assets 454,126 - Assets for sale - 663,321 Refundable deposits 7,268 8,628 Deferred assets 112,246 117,901 Deferred income tax assets-noncurrent 63,591 62,171 Total other assets 637,231 852,021 Total assets 83,213,443 73,375,360 Current liabilities: Short-term borrowings - 3,368,007 Current portion of long-term debt - 30,142 Notes and accounts payable 8,780,351 5,557,737 Payables to related parties 18,177,151 12,378,032 Bonds payable 201,700 2,207,800 Accrued expenses and other current liabilities 4,541,897 4,106,994 Accrued income tax 330,949 1,012,699 Deferred inter-company profit 351,326 159,316 Total current liabilities 32,383,374 28,820,727 Bonds payable 2,255,505 1,394,145 Other liabilities 433,252 433,470 Total liabilities 35,072,131 30,648,342 Stockholders equity: Common stock: Common stock 20,664,188 16,810,510 Convertible bonds applied for conversion 10,594-20,674,782 16,810,510 Capital surplus: Additional paid-in capital in excess of the common 5,163,980 5,238,950 stock s par value Convertible bonds converted in excess of the common 7,120,991 6,461,269 stock s par value Treasury stock - 2,981 Capital surplus from long-term equity investments 1,386,500 1,588,233 13,671,471 13,291,433 Legal reserve 2,504,415 1,764,452 Retained earnings 11,227,001 10,185,673 Translation adjustment 207,438 754,870 Treasury stock (143,795) (79,920) Total stockholders equity 48,141,312 42,727,018 Total liabilities and stockholders equity 83,213,443 73,375,360
BenQ Corporation Reviewed Non-consolidated Statements of Income (Parent Company Only) Three-month periods ended March 31, 2004 and 2003 (expressed in thousands of New Taiwan dollars, expect earnings per share) 2004 2003 NT$ % NT$ % Net sales 38,617,315 100 23,319,937 100 Cost of goods sold (34,820,040) (90) (20,618,070) (88) 3,797,275 10 2,701,867 12 Change in unrealized intercompany profits (183,767) (1) 17,891 - Gross profit 3,613,508 9 2,719,758 12 Operating expenses: Selling (1,090,108) (3) (797,081) (3) Administrative (253,859) - (217,107) (1) Research and development (838,611) (2) (488,838) (2) (2,182,578) (5) (1,503,026) (6) Operating income 1,430,930 4 1,216,732 6 Non-operating income: Interest income 1,065-3,650 - Investment income, net 1,706,861 4 345,528 1 Dividend income 2,367-2,578 - Gain on disposal of Property, plant and equipment 878-680 - Gain on disposal of investments, net 27,282-76,593 - Foreign exchange Gain, net 116,196-26,059 - Other 28,557-30,117-1,883,206 4 485,205 1 Non-operating expense: - - Interest expense (30,405) - (51,492) - Loss on disposal of Property, plant and equipment (2,681) - (21,079) - Other (3,830) - (4,617) - (36,916) - (77,188) - Net income before income tax expense 3,277,220 8 1,624,749 7 Income tax expense (210,392) - (160,203) (1) Net income 3,066,828 8 1,464,546 6 Earnings per share: Basic earnings per share 1.49 0.71 Diluted earnings per share 1.48 0.70
BenQ Corporation Reviewed Non-consolidated Statements of Cash Flows (Parent Company Only) Three-month periods ended March 31, 2004 and 2003 (expressed in thousands of New Taiwan dollars) 2004 2003 NT$ NT$ Cash flows from operating activities: Net income 3,066,828 1,464,546 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 147,234 137,789 Amortization 21,587 22,831 Change in provision for bad debt 26,930 (43,714) Change in provision for inventory obsolescence (2,323) (43,275) Investment income on long-term equity investments, net (1,706,861) (345,528) Cash dividends received from investees accounted for by equity method Gain on disposal of long-term equity investments Gain on disposal of short-term equity investments (27,282) (76,593) Loss on disposal of property, plant and equipment 1,803 20,399 Loss on physical count of fixed assets - 864 Fixed assets transferred to expenses - 2,400 Unrealized foreign exchange gain on overseas convertible bonds (14,757) (8,040) Provision (reversal) for redemption of overseas convertible bonds (4,242) 6,038 Amortization of bond issuance cost 267 2,686 Differences in accounts in the accompanying balance sheets: Notes and accounts receivable (2,389,092) 179,794 Receivables from related parties 864,449 (1,058,307) Inventories (778,000) (856,180) Other financial assets-current (35,664) (45,828) Prepaid expenses and other current assets 24,422 39,992 Notes and accounts payable 1,816,896 (496,057) Payables to related parties 2,050,239 (454,678) Deferred inter-company profit 183,766 (17,891) Accrued expenses and other current liabilities (82,530) 144,947 Income tax payable 269,585 246,715 Deferred income tax assets (59,307) (88,955) Deferred Credit (4,776) (4,776) Net cash provided by (used in) operating activities 3,369,172 (1,270,821) Cash flows from investing activities: Increase in long-term investments (92,781) (95,905) Increase in short-term investments (3,438,655) (2,954,831) Additions to property, plant and equipment (65,661) (137,750) Proceeds from disposal of property, plant and equipment 7,336 457 Increase in refundable deposits and deferred assets (4,283) (11,598) Receipt from investees capital reduction 6,161 17,484 Net cash used in investing activities (3,587,883) (3,182,143) Cash flows from financing activities: Decrease in long-term debt - (10,048) Increase in short-term borrowings - 2,779,278 Redemption of convertible bonds - (118,166) Decrease (increase) in treasury stock (520,055) - Net cash provided by (used in) financing activities (520,055) 2,651,064 Net decrease in cash and cash equivalents (738,766) (1,801,900) Cash and cash equivalents at beginning of period 1,139,573 2,025,668 Cash and cash equivalents at end of period 400,807 223,768 Additional disclosure of cash flow information: Cash paid during the year for: Interest, excluding capitalized interest 26,897 7,298 Income taxes 116 2,443 Supplemental disclosure of non-cash investing and financial activities: Decrease in translation adjustment 269,423 11,213 Convertible bonds converted to common stock and capital surplus 422,847 -
BenQ Corporation. Unaudited Core Business Consolidated Balance Sheet MAR. 31, 2004 UNIT : NT$K Assets Liabilities & stockholders' equity Current assets : Liabilities Cash & cash equivalent 4,082,073 4.4% Short term borrowings 5,859,720 6.3% Short term investment 7,215,983 7.7% N/P & A/P 22,961,590 24.6% Net notes and accounts receivable 19,657,133 21.1% N/P & A/P to related partie 5,779,893 6.2% N/R & A/R from related parties 2,535,738 2.7% Bond payable 201,700 0.2% Net inventories 18,476,547 19.8% Acurred exp. & other current liab. 8,042,424 8.6% Prepaid expenses & other current assets 2,941,491 3.2% Total current liabilities 42,845,327 45.9% Total current assets 54,908,964 58.9% Long term loan 4,527 0.0% Long term investments 24,752,448 26.5% Bond payable 2,255,505 2.4% Fixed assets : 18,198,267 19.5% Other liabilities 45,632 0.0% Less : Accumulated depreciation (5,387,449) 5.8% Total liabilities 45,150,992 48.4% Total fixed assets 12,810,817 13.7% Stockholder' equities 0 Other assets 788,978 0.8% Common stock 20,674,782 22.2% Treasury stock (143,795) -0.2% Capital surplus 13,671,471 14.7% Legal reserve 2,504,415 2.7% Retained earnings 11,227,001 12.0% Translation adjustment 176,342 0.2% Total stockholder' equities 48,110,216 51.6% Total Assets $ 93,261,207 100.0% Total Liabilities & stockholders' equity $ 93,261,207 100.0% BenQ Corporation. Unaudited Core Business Consolidated Income Statement MAR' 2004 UNIT : NT$K Net sales $ 42,219,309 100.0% Cost of goods sold (36,840,383) -87.3% Gross profit 5,378,927 12.7% Operating expense : 0 S & M (2,647,321) -6.3% G & A (518,106) -1.2% R & D (879,469) -2.1% Total Operating expense (4,044,896) -9.6% Operating income (loss) 1,334,031 3.2% Non-operating in net income(loss) 1,961,389 4.6% Earning Before income tax 3,295,420 7.8% Income tax (228,592) -0.5% Minority interest in net income (loss) 0 0.0% Profit after tax $ 3,066,828 7.3%