Left Brain Right B - the DBS Vickers Securities Equities Research

Regional Equity Strategy 4Q 2009
SPH
Income Statement (S$ m) Balance Sheet (S$ m)
FY Aug 2008A 2009F 2010F 2011F FY Aug 2008A 2009F 2010F 2011F
Turnover 1,301 1,299 1,263 1,106 Net Fixed Assets 490 479 469 461
Cost of Goods Sold (611) (627) (575) (533) Invts in Associates & JVs 61 75 89 103
Gross Profit 690 672 687 574 Other LT Assets 1,461 1,461 1,461 1,461
Other Opng (Exp)/Inc (169) (173) (173) (173) Cash & ST Invts 854 897 1,056 1,134
Operating Profit 521 499 514 401 Inventory 36 37 36 32
Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 224 289 253 111
Associates & JV Inc (1) 4 4 4 Other Current Assets 24 24 24 24
Net Interest (Exp)/Inc 29 (13) 22 24 Total Assets 3,151 3,262 3,388 3,326
Exceptional Gain/(Loss) (27) 0 0 0
Pre-tax Profit 522 490 541 429 ST Debt 1 1 1 1
Tax (86) (95) (98) (75) Other Current Liab 367 366 367 332
Minority Interest 2 0 0 0 LT Debt 574 724 724 724
Preference Dividend 0 0 0 0 Other LT Liabilities 108 108 108 108
Net Profit 437 395 443 353 Shareholder’s Equity 2,089 2,051 2,176 2,149
Net Profit before Except. 464 395 443 353 Minority Interests 12 12 12 12
EBITDA 582 564 578 463 Total Cap. & Liab. 3,151 3,262 3,388 3,326
Sales Gth (%) 12.1 (0.2) (2.8) (12.4) Non-Cash Wkg. Capital (82) (16) (54) (165)
EBITDA Gth (%) 14.3 (3.1) 2.5 (19.9) Net Cash/(Debt) 279 173 331 409
Opg Profit Gth (%) 16.3 (4.2) 3.2 (22.1)
Net Profit Gth (%) (12.4) (9.8) 12.2 (20.2)
Effective Tax Rate (%) 16.5 19.4 18.1 17.6
Cash Flow Statement (S$ m)
Rates & Ratio
FY Aug 2008A 2009F 2010F 2011F FY Aug 2008A 2009F 2010F 2011F
Pre-Tax Profit 522 490 541 429 Gross Margins (%) 53.1 51.7 54.5 51.9
Dep. & Amort. 62 61 60 58 Opg Profit Margin (%) 40.0 38.4 40.7 36.2
Tax Paid (84) (92) (95) (98) Net Profit Margin (%) 33.6 30.4 35.1 31.9
Assoc. & JV Inc/(loss) 1 (4) (4) (4) ROAE (%) 20.5 19.1 20.9 16.3
Chg in Wkg.Cap. (49) (69) 34 134 ROA (%) 13.8 12.3 13.3 10.5
Other Operating CF 5 0 0 0 ROCE (%) 15.5 14.2 14.2 11.0
Net Operating CF 457 386 536 519 Div Payout Ratio (%) 98.9 80.4 86.0 89.8
Capital Exp.(net) (55) (50) (50) (50) Net Interest Cover (x) NM 38.1 NM NM
Other Invts.(net) 133 0 0 0 Asset Turnover (x) 0.4 0.4 0.4 0.3
Invts in Assoc. & JV (13) (10) (10) (10) Debtors Turn (avg days) 52.6 72.0 78.2 59.9
Div from Assoc & JV 0 0 0 0 Creditors Turn (avg days) 70.7 65.4 69.8 70.1
Other Investing CF 0 0 0 0 Inventory Turn (avg days) 18.5 23.7 25.9 26.0
Net Investing CF 65 (60) (60) (60) Current Ratio (x) 3.1 3.4 3.7 3.9
Div Paid (433) (433) (317) (381) Quick Ratio (x) 2.9 3.2 3.6 3.7
Chg in Gross Debt 0 150 0 0 Net Debt/Equity (X) CASH CASH CASH CASH
Capital Issues 19 0 0 0 Net Debt/Equity ex MI (X) (0.1) (0.1) (0.2) (0.2)
Other Financing CF (19) 0 0 0 Capex to Debt (%) 9.6 6.9 6.9 6.9
Net Financing CF (433) (283) (317) (381) Z-Score (X) 4.3 4.3 4.8 4.8
Net Cashflow 89 43 159 78 N. Cash/(Debt)PS (S cts) 17.6 10.9 20.9 25.8
Opg CFPS (S cts) 31.9 28.7 31.6 24.3
Free CFPS (S cts) 25.4 21.2 30.6 29.6
Quarterly / Interim Income Statement (S$ m)
Segmental Breakdown / Key Assumptions
FY Aug 4Q2008 1Q2009 2Q2009 3Q2009 FY Aug 2008A 2009F 2010F 2011F
Turnover 346 340 287 327 Revenues (S$ m)
Cost of Goods Sold (166) (159) (145) (152) Newspaper ops 1,046 927 954 988
Gross Profit 180 181 142 176 Rental 117 117 120 118
Other Oper. (Exp)/Inc (47) (48) (43) (39) Property devt. 138 255 189 0
Operating Profit 133 133 99 137 Others N/A N/A N/A N/A
Other Non Opg (Exp)/Inc 0 0 0 0 Total 1,301 1,299 1,263 1,106
Associates & JV Inc (1) (2) (4) (2)
Net Interest (Exp)/Inc 2 (39) (6) 12 Opg Profit (S$ m)
Exceptional Gain/(Loss) (27) 0 0 0 Newspaper ops 325 218 279 302
Pre-tax Profit 108 92 90 147 Rental 82 83 85 84
Tax (16) (21) (4) (21) Property devt. 99 182 135 0
Minority Interest 1 2 1 1 Others 15 15 15 15
Net Profit 93 73 87 127 Total 521 499 514 401
Net profit bef Except. 119 73 87 127
EBITDA 148 148 112 152 Opg Profit Margins (%)
Newspaper ops 31.0 23.5 29.2 30.5
Sales Gth (%) 0.6 (1.8) (15.6) 13.9 Rental 70.1 71.0 71.0 71.0
EBITDA Gth (%) (3.7) (0.3) (24.4) 35.9 Property devt. 71.6 71.6 71.6 N/A
Opg Profit Gth (%) (4.9) (0.1) (25.2) 37.6 Others N/A N/A N/A N/A
Net Profit Gth (%) (30.6) (21.1) 19.2 45.6 Total 40.0 38.4 40.7 36.2
Gross Margins (%) 52.0 53.2 49.4 53.7
Opg Profit Margins (%) 38.4 39.1 34.6 41.8 Key Assumptions
Net Profit Margins (%) 26.7 21.5 30.3 38.7 Adex growth rate (%) 8 (17) 4 5
Newprint (US$/mt) 601 760 580 580
Ave US/SGD 1.4138 1.5300 1.5100 1.4900
Source: Company, DBS Vickers
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