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FRENCKEN GROUP LIMITED
ANNUAL REPORT 2014
BUSINESS REVIEW
(CONT’D)
Operational Initiatives
During FY2014, the Mechatronics Division continued to work
on several initiatives to enhance its production capacity and
capabilities, expand its customer base and elevate its position
in the value chain.
As part of the division’s plans to strengthen its businessmodel,
the Europe operations has been working on the development
of Original Design Manufacturer (ODM) products for the
medical segment by leveraging the proprietary knowledge
that it has accumulated over the years.
During FY2014, the Europe operations also completed the
extension of a manufacturing facility. It is currently planning
to invest in a new advanced vacuum cleaning facility to offer
industry leading cleaning capabilities and anticipate for future
business volumes.
With established plants located in Southeast Asia and Wuxi
(China), the Asia operations continues to make encouraging
inroads into the region’s markets. During FY2014, it
successfully secured new production orders to manufacture
a wider range of critical components and modules for both
new and existing customers. These new orders include
storage tester automation systems, medical, electronic
assembly, semiconductor packaging, test and handling
modules and systems.
As a testament of its commitment to high quality standards,
the Asia operations was conferred the Best Supplier
Award 2014 by a leading semiconductor assembly and
packaging equipment player. To further raise the standards
of technology, capability and productivity of its operations,
the Mechatronics Division will continue to invest in new
equipment for its production facilities in Europe, the USA
and Asia.
IMS DIVISION’S PERFORMANCE (FY2010 - FY2014)
Note : FY2012 figures include 3 months (Oct to Dec 2012) of post acquisition revenue and operating profit of Juken group of companies.
Revenue ($’000)
2010 2011
2013
2012
2014
70,113
90,454
69,130
170,861
173,519
Operating Profit/(Loss) ($’000)
(3,316)
2010 2011
2013
2012
2014
13,728
(7,280)
(10,180)
5,092
IMS Division
Business segment review
The IMS Division reported a marginal increase in revenue to
S$173.5 million in FY2014, from S$170.9 million in FY2013.
Higher sales of the automotive segment were partially
offset by declines in revenue from the office automation,
consumer & industrial electronics, and tooling segments.
Revenue from the automotive segment increased 14.4% to
S$113.0 million in FY2014 from S$98.8 million previously,
attributable primarily to the inclusion of revenue contribution
from NTZ. This segment witnessed a moderation in growth
during the second half of FY2014 due to the slowdown in
Europe and China economies. Nonetheless, the automotive
segment increased its contribution to 65.1%of the division’s
revenue in FY2014, from 57.8% in FY2013.
The office automation segment registered sales of S$23.2
million in FY2014, a decrease of 21.5% from S$29.6 million
previously, in line with the Group’s decision to progressively
wind down this business segment at the Penang plant. Sales
of the consumer & industrial electronics segment declined
14.3% to S$22.5 million from S$26.3 million in FY2013,
attributable primarily to lower sales of camera components
in Thailand. Due to lower sales of these two product
segments, tooling sales fell correspondingly by 13.8% to
S$12.4 million. The office automation and consumer &
industrial electronics and tooling segments accounted for
13.4%, 13.0% and 7.1% respectively of the IMS Division’s
revenue in FY2014.
In FY2014, the IMS Division’s net profit declined to S$2.7
million from S$9.7 million in FY2013. This is attributed
mainly to softer GP margin, higher operating costs,
foreign exchange loss (versus a foreign exchange gain
previously) and increased transport and freight costs to
expedite customer shipments.
