THE GROUP’S MANUFACTURING BUSINESS PERFORMED WELL IN FY2015. AS A RESULT OF OUR CONTINUING EFFORTS OVER THE YEARS TO STREAMLINE PRODUCTION SYSTEMS AND IMPROVE OPERATIONAL EFFICIENCY, OUR MANUFACTURING PLANTS WERE ABLE TO ENHANCE THEIR MANUFACTURING CAPABILITIES.
2015年度本集团的制造业表现良好。经过我们多年来的不断努力,简 化生产系统,提高运营效率,同时提升生产力,特别是在中国,我们的 OEM业务实现稳定的增长。

The financial year ended 31 December 2015 (FY2015) was another challenging year for businesses, including YHI International Ltd (“YHI” or “the Group”). The continuing fall in energy and commodity prices, subdued global trade and volatile financial markets weighed on the global economy. Ripples from the slowdown in China, the world’s second largest economy, were felt in and beyond the Asia-Pacific.

For YHI, FY2015 was a year of continued consolidation and transformation which we began implementing in 2014. Against the backdrop of a deteriorating operating environment, YHI was able to embrace changes and harness our strengths to remain resilient. While taking measures to negotiate cyclical headwinds, we continued to focus on executing our long-term growth strategies to restructure our businesses, build on our strengths and leverage technology more effectively so as to achieve sustainable growth and deliver stable returns to shareholders.

We are pleased to inform that our efforts have been borne out with a set of stable results for FY2015. Despite the challenging environment, the Group was able to achieve balanced growth with strong growth in certain new markets cushioning the slowdown in our key markets. This is a reflection of our resilience, strong fundamentals and capability.

PERFORMANCE REVIEW

Group revenue for FY2015 reached S$499.2 million and net profit after tax came in at S$9.1 million for FY2015. Despite a year-on-year decline of 2.4% in revenue, net profit maintained a steady growth of 10.0% in the same period. This could be attributed partly to gain from disposal of a production asset in Malaysia and lower income tax expenses.

The Group’s wheel manufacturing business, which accounted for approximately 30% of the Group’s total revenue, was able to attain steady turnover growth, increasing 2.1% to S$151.5 million in FY2015, from S$148.4 million the previous year. This was partially offset by lower revenue achieved by the distribution business, recording S$347.7 million in FY2015, a moderate decline of 4.2% compared to S$362.8 in FY2014, due to lower sales in the tyre distribution business segment. In line with lower total revenue, gross profit also declined 5.8% to S$107.0 million in FY2015. Consequently, gross profit margin declined to 21.4% compared to 22.2% the year before, partly due to higher operating costs.

The Group’s distribution business continued to be the biggest revenue contributor, accounting for approximately 70% of total revenue. However, during the year under review, this business segment was adversely impacted by a drop in sales revenue from tyre distribution which could be attributed to an acute oversupply of tyres in the global market, which resulted in intense price pressures. As raw material purchases were usually denominated in US dollars, our trading margins were also affected by the strong US dollars resulting in higher costs when converted to local currency.

The Group’s manufacturing business performed well in FY2015. As a result of our continuing efforts over the years to streamline production systems and improve operational efficiency, our manufacturing plants were able to enhance their manufacturing capabilities. Our OEM business was able to achieve stronger growth, within China in particular. Consequently, we were able to achieve greater productivity and efficiency leading to higher production volume and revenue compared to FY2014.

In Malaysia, we have consolidated our production operations with the completion of the sale of our facility in Sepang during the financial year under review.The right-sizing of our operations not only enhanced our efficiency but also enabled us to strengthen our balance sheet and conserve resources for tapping future growth opportunities.

In China, our restructuring efforts continued apace. We have shifted our precision moulding operations from our factory in Shanghai to Suzhou where we have our alloy wheels production facility. The consolidation will further streamline our operations and extract optimal value from greater synergies derived from this move. In addition, we were also able to benefit from significant rental and operations costs savings.

STRONG CAPITAL STRUCTURE

As a result of our prudent management and stringent cost control measures that we have put in place, the Group’s balance sheet remains healthy. The Group generated total net cash flow of S$11.6 million from operating activities during the year, resulting in cash and cash equivalents amounting to S$51.7million as at 31 December 2015. Total assets amounted to S$425.3 million, with net assets attributable to equity holders reaching S$259.8 million. The net gearing ratio as at 31 December 2015 was 30%, which was within the manageable range.

SIGNIFICANT CORPORATE DEVELOPMENTS

In December 2015, the Board proposed to undertake a share consolidation of every two existing issued ordinary shares in the capital of the Company held by shareholders into one ordinary share. The rationale for the share consolidation was to comply with the SGX-ST ruling on minimum trading price for Mainboard-listed stocks of S$0.20 as a requirement for continuing listing with effect from 2 March 2016.

I am pleased to inform that the share consolidation exercise was completed on 19 January 2016. Following the completion, the number of issued shares in the capital of the company was 292,295,811, with a share capital of S$77.0 million as at 19 January 2016.

DIVIDENDS

We are grateful for the support and patience of our shareholders, who stood by us, especially in the past year, as we implemented measures to restructure the Group’s operations. We believe in sharing the fruits of the Group’s success with shareholders and remain committed to delivering 50% dividend payout to them.

The Board has proposed a first and final tax-exempt cash dividend of 1.42 Singapore cents per ordinary share for FY2015, subject to approval of shareholders at the annual general meeting to be held on 28 April 2016.

GOING FORWARD

Notwithstanding the challenging business conditions, as an internationally recognised supplier of high-quality automotive and industrial products, we have the resources and experience to ride the current cyclical business slowdown. We will focus on our strategies for long-term sustainable growth including staying the course on implementing our proven Multi-product, Multi-brand and Multi-category (“3M”) marketing strategy.

For example, despite the challenging environment, the Group enjoyed strong growth in New Zealand in FY2015 with the continued successful implementation of our 3M marketing strategy. YHI New Zealand has built an extensive product range around its pillars of wheels, tyres and power products and this is best exemplified by New Zealand’s power product range.

In addition to a wide variety of batteries, the company has added a solar power product range which includes panels, inverters and mounting equipment, a UPS (Uninterruptable Power Supply) equipment range and a range of other products for the industrial power market. As the range has grown, YHI New Zealand has become a more credible supplier to the industry and other opportunities have presented themselves.

In tandem with this, the company has built its distribution base and now operates six branches across the country ensuring that is can deliver all its products quickly to meet the demands of its increasing customer base. With regionally based sales professionals who are specialists in either the automotive or power markets, the Company is committed to good customer service.

In a small country like New Zealand, YHI’s determination to grow both its product range and distribution platform has ensured that the company keeps growing, even in the competitive markets in which it operates.

Our strong fundamentals will enable us to chart a steady course towards growth in the face of headwinds. We will build on the strengths of our 46 reputable brands, leverage our strong business partnerships and global network, broaden our marketing reach and deepen our customer relationships to achieve sustained growth and deliver stable returns to shareholders.

HARNESSING STRENGTHS, EMBRACING CHANGES

We have been in the automotive and industrial products distribution business for close to seven decades. We have seen many business cycles and experienced diverse adversities. Rapid changes in the global economic, socio-political and financial landscapes are becoming the norm and will continue to pose risks to international companies like YHI which has presence in more than 100 countries. Nevertheless, we have the strength and experience to embrace challenges and overcome the current trough in the cycle. We will continue to build on our strengths and core competencies and focus on the longer-term.

We will remain focused on strengthening our financial position. We will continue to maintain a robust and flexible capital structure, through a balanced use of debts and equity financing to support our capital expenditures to grow our business and maximise value for shareholders. We will be prudent in evaluating capital expenditures to ensure that risks associated with growth are appropriately managed.

We have in place an efficient process and cost management system. Our 3R policy, encompassing Reduce inventory, Reduce accounts receivables and Reduce operating costs, which has been in place for the past three years, has served the Group well. Nevertheless, I believe that there is still room for improvement.We will increase our efforts to bring about three changes in our management and staff; change in mindset,change in attitude and change in action, indicating that action must be taken to implement the 3R policy in order to compete and sustain growth in the current difficult macro-economic and intensely competitive environment.

Productivity, especially labour productivity, is a key driver for sustainable growth.YHI operates 30 business entities located in Asia Pacific, North America and Europe. Our workforce is diverse. Nevertheless, diversity is also our strength as we can harness the diverse talents and skills of workers from different culture and background.We have and will continue to implement appropriate training programmes to upgrade the skills of our workers in all our plants and offices to raise their productivity and improve efficiency.

Increasingly, we are leveraging on technology to enhance our competitiveness and strengthen our industry leadership. Over the years, our ability to innovate and to maintain technology leadership is the key to maintaining our competitive edge. For example, the Group’s proprietary Dynamic Spinning Technology (DST) which uses flow forming technology to produce stronger and better performing alloy wheels under the Advanti Racing brand sets the industry benchmark for excellence in wheel design and production.The Group is also harnessing technology to improve our marketing efforts and service standards. In Australia, our subsidiary has launched an e-commerce platform to allow clients to purchase our products online. We believe that our digital marketing initiative will not only drive greater sales volume but also more importantly enable us to build strategic relationship with customers.

OUTLOOK

Most forecasts including those by international institutions like the International Monetary Fund (IMF) and World Bank indicate continued uncertainty in the global economy in 2016.

The operating environment will increasingly be more challenging and will continue to exert pressure on our revenue and margins.

We will draw on our considerable reserves of experience and resources to implement measures to overcome these challenges.

We will continue to intensify our efforts in research and development and product design to drive greater innovations so as to produce higher quality and higher value-added products that can meet the stringent requirements of global customers.

We will further harness the power of technology to improve production processes and systems and drive greater operations efficiency. We will also embrace technology to improve the quality and level of our customer service and enhance customer retention rates so as to transform YHI into a more customer-centric enterprise.

We will continue to sustain our efforts to build on our trusted premium brands including our own proprietary Neuton tyres, Avanti Racing alloy wheels and Neuton power automotive and industrial batteries. We believe our globally recognised brands will enable us to gain greater market share and enhance our market leadership in a very competitive international market place.

We continue to adopt the outlook of “The World is our Market”. In FY2015, we continued to made inroads into new markets. In the US, we have expanded our tyre distribution business and have achieved significant growth. In East Malaysia, where we started operating in the last quarter of the financial year, the potential for growth was encouraging. Our fledging business in the Philippines continued to grow steadily. We will strengthen our presence and deepen our access in these markets. In particular, we see great potential for market expansion in the US and we will expand further the scope our business in this huge market by expanding our tyre distribution in addition to our fledging alloy wheel business.

We will also strengthen our relationships with key partners including our collaboration with Mercedes AMG Petronas Formula One (F1) team. Over the years, our collaboration with many global brands has enabled YHI to become a globally recognised name in the automotive and industrial product markets.

Even as we continue to invest in projects and facilities and to explore partnership collaboration to drive growth, we will exercise prudence in reviewing and evaluating risks in any investment opportunity. We have always adopted a long-term value creation and sustainability perspective. More importantly, we always hold the interests of our shareholders with the highest priority in every decision that we make and in everything that we do.

We are confident that we have put in place a robust suite of measures and initiatives to enable the Group to rise to the challenge and barring any unforeseen circumstances, we will be able continue to sustain growth in the coming year.

APPRECIATION

On behalf of the Board of Directors, I would like express my appreciation to our customers and partners for their support during the year. I am also grateful to our loyal shareholders for their confidence and their patience as we strive to negotiate through the trying operating conditions. I would like to thank management and staff for their unwavering commitment and sacrifices to enable the Group to achieve another successful year.

Last but not least, my deepest appreciation goes to my colleagues on the Board for their guidance and contribution in steering the Group to continued growth.

Richard Tay
Executive Chairman &
Group Managing Director

2015财政年度结束了,这一年对企业(包括友发集团)来说又是一个充满挑战性的一年。持续下跌的能源和商品价格,低迷的全球贸易和动荡的金融市场拖累了全球经济。中国作为世界第二大经济体,其经济发展减缓效应波及了整个亚太地区,甚至亚太地区之外。

对友发来说,从2014年我们便开 始进行内部整合和转型。面对日 益恶化的经营环境,友发能够接受改变,并利用自己的长处,适 应环境保持战斗力。我们一边采 取措施,商讨周期性不利因素,一边继续贯彻我们的长期增长战略,重组我们的企业,更有效地加强我们的实力,并利用技术,实现可持续增长,提供稳定回报给股东。

我们的努力换来了2015年财政年度的稳定业绩。尽管大环境充满挑战,本集团依然能够凭借某些新兴市场的强劲增长,来抵消主要市场的经济放缓,最终实现平衡增长。这充分体现了我们的应变能力,坚实的基础设施和能力。

业绩回顾

截至2015年12月31日,2015年集团总销售额达到了4.992亿新元,净利润为910万新币。尽管比去年同期销售额下降了2.4%,但净利润保持了10.0%的平稳增长。这部分归因于马来西亚厂生产设备资产处置和较低的所得税费用收益。

本集团的轮毂制造业,约占集团总销售额的30%,稳定的2.1% 营业额增长。从2014年度1.484亿新元的销售额,增加至2015年度的1.515亿新元。轮胎经销业务板块销售额下跌4.2%,拉低了集团总销售额。分销业务的销售额从2014年度的3.628亿新元,下降至2015年度的3.477亿新币。 和较低的总销售额一样,2015年的毛利润也同比下降了5.8%,为 1.07亿新元。因此,毛利率也下降至21.4%(去年为22.2%), 部分原因是由于运营成本较高。

本集团之分销业务继续成为最大的销售额来源,占总销售额的70%。但是,回顾本年度,轮胎经销的销售额下降是由于轮胎在全球市场严重的供过于求,导致激烈的价格竞争,以致这部分业务受到冲击。由于材料采购通常以美元计价,强势的美元货币转换成当地货币时,导致材料采购成本较高,最终影响了交易的利润空间。

2015年度本集团的制造业表现良好。经过我们多年来的不断努力,简化生产系统,提高运营效率,同时提升生产力,特别是在中国,我们的OEM业务实现稳定的增长。因此,与2014年度相比我们能够实现更高的生产力和效率,为本年度带来了更高的产量和销售额。

在马来西亚,我们整合巩固了生产设施,并出售了在雪邦的生产设备。整顿后的生产规模不仅提高了我们的效率,而且也使我们能够加强我们的资产负债表和节约资源,为未来的业务拓展伺机而待。

在中国,我们继续加强重组工作。我们把在上海的浦斯圣模具厂搬至我们苏州的轮毂生产基地。通过合并将进一步简化运营,取得最佳效率。此外,我们还能够节约租赁费和运营成本。

强大的资本结构

在我们即定的审慎管理措施和严格的成本控制措施下,本集团的资产负债表依然保持健康。截至2015年12月31日,集团经营活动产生的总净现金流为1160万新元,现金及现金等价物金额为5170万新元。总资产达4.253亿新元,股东净资产为2.598亿新元,净负债比率为30%。

重大企业发展

2015年12月,董事会建议执行股票合并制,将每两股现有发行的友发普通股合并成一股。股份合并的原因是要遵守新加坡交易所设定于2016年3月2日起,规定股票最低交易价以每股新元0.20。

在此宣布,股票合并已在2016年1月19日执行完成,截至2016年1月19日,本公司现已发行股份数量为292,295,811股,股票资产为7700万新元。

股利

我们非常感谢股东们对友发长期的支持和耐心,尤其是在过去的一年,在我们采取措施重组本集团经营的时候,都表示支持。我们会与股东们共享本集团的成就,并继续致力于为股东们提供50%的派息。

董事会已提出了2015年度派发首末期股息1.42分每股,下届股东 周年大会将于2016年4月28日举行,届时由股东们商讨批准。

继续向前

尽管面临充满挑战的商业环境,但作为一家高品质的,世界公认的汽车和工业产品的供应商,我们有足够的资源和经验,克服当前周期性行业经济放缓。我们将专注于我们的可持续增长的长期战略,包括继续实施我们的多产品,多品牌和多类别(“3M”)的营销策略。

例如,尽管充满挑战,2015年度友发(新西兰)继续实施我们的3M营销策略,并取得了巨大成功。友发(新西兰)已经建立了一个广泛的产品范围:轮毂,轮胎和电池产品,而他们丰富的电源产品则最好的诠释了我们的多产品营销策略。

除了各种类型的电池,该公司还增加了太阳能系列产品,包括面板,逆变器和安装设备,UPS( 不间断电源)设备和一系列其他工业用电产品。由于经营范围的不断扩大,友发(新西兰)已经成为一个更可信的客户供应商,也为他们自己争取了更多的生意机会。

为与之配套,该公司已建立了自 己的配送基地,目前拥有六家分公司遍布全国各地,确保能迅速 提供所有的产品,以满足持续增长的客户群的需求。作为一家区域性销售公司,无论是在汽车或电力市场,友发(新西兰)都是业内专家,致力于服务好客户。

新西兰虽然是一个小国,友发仍然下决心增加其产品种类和分销平台,保障了公司在其充满竞争力的市场环境下持续增长。

我们强劲的基础设施使我们能够在逆境中保持稳定的增长。我们将提升我们的46个知名品牌的力度,利用我们强大的业务合作伙伴关系和全球网络,扩大营销范围,优化客户关系,实现持续增长和提供稳定回报给股东。

利用优势,迎接变化

我们在汽车和工业产品分销行业接近七十年。我们已经看到许多商业周期性变化,也经历了各种各样的逆境。全球经济,社会政 治和经济景观的快速变化已经成为常态,并会继续对像友发(其经营网络跨越100多个国家)这样的全球性企业施以风险。不过,我们有足够的实力和经验, 迎接挑战,克服当前周期性的低谷. 我们将继续加强我们的实力和核心竞争力,并将持之以恒。

我们将继续专注于强化我们的财 务状况。我们将继续保持强大和灵活的资本结构,通过平衡使用债务和股权融资,来支持我们的资本支出,增长我们的业务,最大限度地为股东创造价值。我们将审慎评估在资本方面的支出, 以确保与发展有关的风险得以适当管理和控制。

我们已经制定一个有效的流程和 成本管理体系。我们的3R政策, 包括降低库存,减少应收账款, 降低运营成本,这些在过去的三年中都已经到位,实施情况一直良好。不过,我相信,这个政策仍然有改进的空间。我们将加倍 努力,在我们的管理层和员工中 做到三大改变; 改变思维,改变心态,改变行动,这也表明了我们必须采取行动落实贯彻3R政策的决心,以使我们能够在当前不景气的宏观经济和激烈竞争的大环境下保持增长,立于不败之地。

生产力,特别是劳动生产率,是实现可持续增长的关键因素。友发在亚太,北美和欧洲有30个营业机构。我们的员工是来自不同国家。然而,这也是我们的实力,我们可以利用这些来自不同文化和背景的员工的各类特长和技能。我们已经并将继续实施适当的培训方案,提升我们所有的工厂和办事处员工的技能,提高生产力和生产效率。

我们正在逐渐利用技术来增强我们的竞争力和巩固我们的行业领 先地位。多年来,我们的创新,保持技术领先的能力,是我们保持竞争优势的关键。例如,友发集团专有的动态旋压技术 (DST),使用流动成型技术生产雅泛迪品牌高强度高性能铝合金轮毂,使友发成为行业标杆,专业设计和生产卓越轮毂。本集团也利用技术来提高我们的市场营销和服务标准。在澳大利亚, 我们的子公司已推出一个电子商务平台,让客户在网上购买我们的产品。我们相信,我们的数字营销举措不仅可以推动更大的销售量,而且更重要的是通过网络营销模式使我们能够与客户建立战略合作伙伴关系。

展望未来

2016年许多国际机构,包括如国际货币基金组织和世界银行都表示全球经济将继续保持不确定性。

经营环境将越来越具挑战性,并会继续影响我们的产能收入和利润。

我们将凭借我们丰富的经验和资源,克服这些困难。

我们将继续加强我们的研发和产品设计这一块,推动更大的创新,从而生产出更高质量和更高附加值的产品,满足全球客户的严格要求。

我们将进一步利用科技的力量,改善生产流程和系统,推动更高的运营效率。我们也采用高科技,提高客户服务质量和客户满意度,增加顾客的保持率,把友发改造成一家更加以客户为中心的企业。

我们将继续努力,建立维护我们值得信赖的优质品牌,包括我们自有的Neuton轮胎,雅泛迪铝合金轮毂和Neuton动力汽车和工业用电池。我们相信,通过这些全球知名品牌,我们将获得更大的市场份额,并提升我们在这个竞争激烈的国际市场中的领先地位。

“世界是我们的市场”仍是友发的座右铭。2015年,我们继续进军新市场,在美国我们拓展轮胎分销市场,取得显著的成功。在东马,虽然我们是在去年最后一个季度才开始营业,但其增长的潜力却是鼓舞人心。我们在菲律宾刚刚起步的业务也颇有成效。 我们将在这些市场加强营运网络,扩大市场占有率。特别是, 我们看到在美国市场拓展的巨大潜力,我们要在这个大市场中进一步开拓业务范围,除了羽翼未丰的铝合金轮毂业务外,开拓轮胎经销业务。

我们也将加强我们与关键合作伙伴的合作关系,包括我们与奔驰 AMG Petronas公司一级方程式 (F1)车队的合作关系。多年来,我们与众多全球知名品牌合作,使友发在汽车和工业产品市场中成为一个全球知名的品牌。

即使我们继续投资项目和设施, 并探索与合作伙伴的合作,以推动经济增长,我们仍会谨慎审查和评估任何投资机会,降低风险。我们一直采取长期价值创造和可持续发展。更重要的是,我们在做每一个决定,每一件事情时,始终将我们的股东最高利益放在第一位。

我们相信,我们已经建立了一套强大的机制和策略,使集团克服困难,在任何不可预见的情况下立于不败之地,来迎接经济持续稳定增长的来年。

感谢致词

我代表董事会,向我们的客户和合作伙伴,对这一年的支持表达我的感谢。我还要感谢友发忠实的股东们,在我们协商经营调整时给予我们的信心和耐心。我还要感谢管理层和员工们,感谢他们的坚定承诺和奉献,使集团度过了又一个成功年。

最后,我要对我的董事会的同事们表示最深切的感谢,谢谢你们给予的指导,以及为本集团的持续增长所做的贡献。

郑添和
执行主席兼集团董事长