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YOUR LOGO Hartalega Holdings Bhd 5 th Annual General Meeting

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Page 1: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Hartalega Holdings Bhd

5th Annual General Meeting

Page 2: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 2

Content

Key strengths

High Tech Manufacturing

Nitrile Product Positioning

Financial Performance

Future Growth Plans

3

4

5

6

Corporate Resposibilty7

Awards1

2

Page 3: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 3

Forbes Asia

KPMG

Asia Money

“200 Best Under A Billion”

Rated No.1 in Industrial Markets Sector and

Overall Ranked 9th Malaysian Public Listed Company

Best Managed Small Cap Company in Malaysia

Hartalega’s Background

Awards

Page 4: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 4

Key Strengths

Advanced proprietary

equipment

Numerous patent

pending engineering

designs

Current capacity of 9.6

billion pieces, expanding

to 13.5 billion by FY

2015

High profit margin

Strong financial

performance

Largest Nitrile gloves

manufacturer in world

Reputable

quality producer

Page 5: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 5

Innovation

1st successful double former production line in the world

Patented

Highest production capacity in the world – 35,000 pcs/hr

Sophisticated process controls

Touch screen human machine interface

Consistent quality

Inventions

High Capacity Production Lines

Page 6: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 6

1st automated mechanical stripping system in the industry able to remove nitrile gloves of hand moulds

Proprietary technology in use since 1995

Performance is still unrivalled until today

Removing nitrile gloves off the moulds at 35,000pcs/hr

At that rate, it is humanly impossible

Glove Removal System

Innovation

Inventions

Photo Removed to Protect

Proprietary Technology

Page 7: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 7

Dipping Simulator

Robotic technology

Fully automatic

Precise simulation of unlimited

parameters

Accurate repeatability

Reduced product time to market

Innovation

Inventions

Page 8: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 8

Innovation and productivity

focus has resulted in

Hartalega having the highest

operating profit per

employee in the industry

Innovation

Highest Operating Profit Per Staff

(DBS Vickers, 2011)

Strong Innovation &

Productivity

Page 9: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 9

Key Strengths

Advanced proprietary

equipment

Numerous patent

pending engineering

designs

Current capacity of 9.6

billion pieces, expanding

to 13.5 billion by FY

2015

High profit margin

Strong financial

performance

Largest Nitrile gloves

manufacturer in world

Reputable

quality producer

Page 10: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Nitrile Gloves – Strong Market Position

Page 10

Strecthy Nitrile – our

speciality

Most elastic nitrile glove in the world

Competitively priced

No protein allergy

Page 11: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Sucessfully re-modelled company to be a major

nitrile glove producer, 90% of sales is nitrile gloves

Nitrile sales (pcs) increased by 29 times in 6 years

Largest OEM nitrile gloves producer in the world

with 13% nitrile gloves market share

Created switching momentum in the market from

natural rubber to nitrile gloves

Nitrile Gloves – Strong Market Position

85113

169209

353

425

509

FY

'05

FY

'06

FY

'07

FY

'08

FY

'09

FY

'10

FY

'11

RM

'00

0,0

00

USA & Canada Sales

206504

963

1,859

3,080

5,986

4,366

FY

'05

FY

'06

FY

'07

FY

'08

FY

'09

FY

'10

FY

'11

Glo

ves -

mil

lio

n p

cs

Nitirile Sales million pcs

1016 20 25

41

66

121F

Y'0

5

FY

'06

FY

'07

FY

'08

FY

'09

FY

'10

FY

'11

RM

'00

0,0

00

Europe

Page 12: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 12

Key Strengths

Advanced proprietary

equipment

Numerous patent

pending engineering

designs

Current capacity of 9.6

billion pieces, expanding

to 13.5 billion by FY

2015

High profit margin

Strong financial

performance

Largest Nitrile gloves

manufacturer in world

Reputable

quality producer

Page 13: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Financial Performance

Revenue and Profit

110 160240 258

443

572

735

0

200

400

600

800

FY2005 FY2006 FY2007 FY2008 FY2009 FY2011 FY2011

Revenue (RM mil)

13 1937 40

85

143

190

0

50

100

150

200

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2010

Profit After Tax (RM mil)

6 years CAGR for revenue of 37%

6 years CAGR for profit afer tax of 56%

Strong Growth

* FYE2008 – Pre and post acquisition amounts without negative goodwill.

Page 14: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Financial Performance

Revenue and Profit

3235

39

52

0

10

20

30

40

50

60

FY2008 FY2009 FY2010 FY2011

Earnings Per Share (sen)

20

33

4039

0

5

10

15

20

25

30

35

40

45

FY2008 FY2009 FY2010 FY2011

Return on Equity (%)

Page 15: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Financial Performance

Page 15

The most efficient glove maker in the world through engineering innovation

Excellent track record of superior operating margins relative to peers

Highest Operating Margin

Among Peers

(DBS Vickers, 2011)

Most Efficient Glove Maker

Page 16: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Dividend

Page 16

Payment Date Sen

Ist Interim Dec-10 4

2nd Interim Mar-11 5

3rd Interim Jun-11 6

Final Sep-11 6

21

Dividend Payment for FYE 2011

40% payout from earnings

4 payouts in a year

If shares were purchase in Nov-2010 to obtain the 4 payouts, the dividend yield would be, 0.21/5.48 = 3.8%

Average closing price for Nov-2010 = RM 5.48

Strong Dividend

Page 17: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Dividend

Page 17

High Dividend Yield & Payout Ratio

One of the highest dividend

yield

Currently, highest payout ratio

together with Top Glove at 40%

Going forward we are setting a

dividend policy which aim to

distribute at least 45% of our

annual net profit as dividend

Projected dividend yield of

4.8% at today’s share price(DBS Vickers, 2011)

Page 18: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 18

Financial Performance

13

26

55

18

33

47

22

37

49

31

46

52

41

2009 2010 2011 2012

RM

(m

il)

Q1 Q2 Q3 Q4

Growth Rate

Growth of 32% over the previous year’s

corresponding quarter (FY2011, q1)

Quarterly profit

Page 19: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Hartalega Holdings vs. FTSE BM KLCI Index (%)

Page 19

Since IPO

+332.7%

Page 20: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 20

Key Strengths

Advanced proprietary

equipment

Numerous patent

pending engineering

designs

Current capacity of 9.6

billion pieces, expanding

to 13.5 billion by FY

2015

High profit margin

Strong financial

performance

Largest Nitrile gloves

manufacturer in world

Reputable

quality producer

Page 21: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 21

Industry OutlookGrowing Market

1,9422,179

2,539

3,0752,923

3,724

2005 2006 2007 2008 2009 2010

World's Import of Examination Gloves (US$ mil)

Salient Points

World demand for rubber gloves grows at

a rate of about 14% per annum

Malaysia is the largest supplier of rubber

gloves for the world, commanding about

61% of the global market

World demand will remain resilient due to

emergence of diseases such

SARS, H1N1

Increase affluence and health awareness

of the world population also drives

demand

Page 22: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 22

Future Plans

Targetted Capacity

3,329

5,463

6,443

8,304

9,740

10,822

13,146

13,438

FY

E 2

00

8

FY

E 2

00

9

FY

E 2

01

0

FY

E 2

01

1

FY

E 2

01

2

FY

E 2

01

3

FY

E 2

01

4

FY

E 2

01

5

Glo

ves '000 p

cs

Capacity Expansion

Market driven capacity expansion –

progressive installation of 2 new

production lines at plant 5

10 new production lines in plant 6

(waiting for Majlis Daerah approval)

Decommision 10 lines at plant 1 to

replace with 6 high capacity lines for

emerging markets

Focus on nitrile and powder free

gloves

Sustainable double digit growth for

the next 4 years

Page 23: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 23

Corporate Resposibility

Environmental Preservation

Page 24: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 24

Clean Energy – Biomass Energy Plant

Technology imported from Belgium

Renewable energy

In operation since 2002

Fully automatic plant

Computerised monitoring

system

Good combustion and

emission controls

Due to its sophisticated

control system, cost to build

is 4 times that of other

systems

Total cost RM15 mil

Page 25: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 25

Environmental Preservation – Effluent Water Treatment

Technology Imported from Austria

Pioneer technology

Based on the Dissolved Air Flotation (DAF)

technology

Pioneered by Dr. Milos Krofta

Consistent performance

Meet standards enforced by Jabatan Alam Sekitar

Investment in effluent water treatment plants totals

to about RM 8 mil

Page 26: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 26

Expenses

Substantial commitment towards environmental controls

3140

29

Water Treatment

Scrubber Treatment

Sludge Disposal

DescriptionCost per

annum (RM)

Effluent water treatment 2,111,000

Scrubber tower treatment 1,515,000

Sludge disposal to Kualiti Alam 1,630,000

Total 5,256,000

Page 27: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 27

Corporate Resposibility

Community Care – Social Contributions

Page 28: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 28

Community Care – Social Contributions

As a profitable organisation, we feel compelled

to give back to the community

Contributions are given in the form of

gifts, construction of community

facilities, donations, relieve

aids, sponsorships, education assistance, sports

carnivals, etc.

Contribution Objectives

Page 29: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGOPage 29

Corporate Responsibility

Community

Donation to flood

relief centre

Gifts for orphanages

during festive seasons

Support to HIV victims at

Ozanam Shelter Homes

Support to fire victims at

Kg Rantau Panjang

Page 30: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

World Class Manufacturer

First Class Gloves

Page 31: Hartalega Holdings Bhd - INSAGE 5th Annual General... · Precise simulation of unlimited ... natural rubber to nitrile gloves Nitrile Gloves ... production lines at plant 5

YOUR LOGO

Do You Have

Any Questions?