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[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
[금호 그룹]금호의 Turn Around 전략
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[금호 그룹]금호의 Turn Around 전략


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  • 1. KH's evolutionto Holding Company<br />2010. 04. 08.<br />Fantastic 4<br />Real coreSmart bear<br />Record history<br />Hero from eastSoft spreadCarve river<br />
  • 2. Executive Summary<br /><ul><li>KumhoAsiana Group used a new form of derivative to finance the M&A of Daewoo Construction and Korex. Unfortunately, with the global financial crisis and the downturn of the construction industry KumhoAsiana has faced a liquidity crisis. With financial investors crying for the return of their investments, KumhoAsiana Group has been sundered with parts of the group going each to the owner, the FI and KDB.
  • 3. We took the view of the FI responsible for Kumho Industrial, Asiana Airlines, and Korex and examined each company to figure out a way for the FI to receive their investments with a 9% return.
  • 4. Our overall strategy was to liquidate the construction and bus part of Kumho and use that money to reduce the liabilities of Asiana. With the financial help from Kumho, Asiana can resume operations in the black and by developing into an LCC, can capture additional market share and provide cash for the Kumho, which will become a holding company in the future to either invest or reduce its own liability.
  • 5. Korex is financially healthy and therefore does not need financial help, but with Asiana positioning to become an LCC, can work in liaison with Asiana to focus on air express distribution, an area with high profit margins.
  • 6. In the end, we expect these steps to provide the FI with either a 9% or more return on their investment over the years and after 2014, FI’s can either sell their shares or the rest of the companies, depedning on which course of action is likely to provide higher returns. </li></li></ul><li>agenda<br />Current Situation of KH<br />Goal Setting<br />Corporate Strategies<br />Final Overview<br />
  • 7. agenda<br />Current Situation of KH<br />Goal Setting<br />Corporate Strategies<br />Final Overview<br />
  • 8. Current Situation of KH<br />Among KumhoAsiana Group ‘s 3 parts - KDB’s part, Park brothers’ part, and Financial Investor’s part-, we will take the FI’s point of view.<br />Separated KumhoAsiana Group<br />2<br />Park brothers’ part<br /><ul><li>KDB postponed depriving control of company of Park brothers for 3~5 years.
  • 9. If they couldn’t make a visible achievement until then, they will be retired.</li></ul>1<br />2<br />3<br />Financial<br />Investors<br />3<br />Financial Investor’s part<br />Kumho<br />Industrial<br />Kumho<br />Petro-chemical<br />Daewoo<br />Construct-ion<br /><ul><li>Financial Investors became the biggest share holder of Kumho Industrial.
  • 10. They decided to pick a professional CEO(not owner) and let him run the company.</li></ul>Asiana<br />Airlines<br />Kumho Tire<br />Korex<br />How to revitalize ?!<br />The reasons why we took FI’s point of view<br /><ul><li>Park brother have to recover the share of Kumho Industrial to stabilize their business, however they need 5,000 trillion won.
  • 11. Practically, the CEO can control only 3 selected company.</li></li></ul><li>agenda<br />Current Situation of KH<br />Goal Setting<br />Corporate Strategies<br />Final Overview<br />
  • 12. Goal Setting<br />From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business.<br />Why 9%?<br />FI’s Goal<br /><ul><li>FI bought sought a minimum of a 9% return when they initially purchased the put-back option.
  • 13. By this, we can infer that 9% minimum rate of return that FI require. </li></ul>Increase Sales<br />for the rate of 9%<br />Corporate Goals<br />Kumho Industrial<br />Asiana Airlines<br />Korex<br />(2014E) 3,713,161M<br />(2014E) 5,980,939M<br />(2014E) 2,818,297M<br />
  • 14. agenda<br />Current Situation of KH<br />Goal Setting<br />Corporate Strategies<br />Final Overview<br />
  • 15. Strategies Overview<br />From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business.<br />Blueprint of Strategy<br />Current<br />Situation<br />Short term<br />Strategy (~2014)<br />Long term<br />Strategy (2014~)<br />Kumho<br />Industrial<br />Cash flow : 1,500 B.<br />Asiana<br />Airlines<br />Cash flow <br />Synergy<br />Korex<br />
  • 16. Kumho Industrial – BCG Matrix<br />From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business.<br />Y axis: “Market Attractiveness” <br />High<br />Construction<br /><ul><li>Decreasing figure of CBSI</li></ul>Asiana<br />Kumho<br />Industrial<br />Expecting Synergy<br />or not<br />Expecting Synergy<br />or not<br />Korex<br />Low<br />High<br />Buslines<br /><ul><li> Decreasing number of passengers</li></ul>X axis: “Our Company’s Performance”<br />M/S of Construction industry<br />Construction<br /><ul><li> KH construction has very small</li></ul> M/S of construction industry.<br />Kumho<br />Others<br />Synergy<br />Buslines<br /><ul><li>KH Buslines is No.1, but its contribution to overall profit and revenue is tiny. </li></ul>(13% of total sales in KH)<br /><ul><li>Nothing Available.</li></ul>Kumho Industrial is unattractive and therefore bears further examination.<br />Source: 1) CBSI: Construction and Economy Research Institute of Korea, 2) National bus transportation organization<br />
  • 17. Kumho Industrial - Divest<br />KH is facing liquidity problems in an industry where it lacks competitive strength while the industry itself has growing liquidity problems.<br />Industry Structure and Competitiveness<br />Competitive<br />Strength<br />Construction capability Index (in millions)<br />Has<br />Not have<br />Favorable<br />Harvest<br />or<br />Divest<br />Quickly<br />Leadership <br />Or <br />Niche<br />12 Kumho Construction 2,382,814<br />No Competitive Strength!<br /> Industry <br />Structure<br /><ul><li>KH is facing liquidity problems
  • 18. But has great presence in an industry with a growing liquidity problem.</li></ul>Default rate(%) <br />Divest <br />Quickly<br />Harvest<br />or <br />Niche<br />PF Balance (Trillion)<br />Unfavorable<br />06 07 08 09<br />Leadership – Become best company in that market segment<br />1<br />Niche – Identify a segment that is stable, has high returns, and focus on that segment.<br />2<br />Strategy<br />Harvest – Controlled disinvestment for high cash flow<br />3<br />Divest Quickly – Sell off quickly before it declines further<br />4<br /><ul><li> PF: Project Financing Balance </li></li></ul><li>KumhoIndustrial - Strategy<br />Kumho Industrial will sell off all industrial assets and use the cash to reduce the liabilities of Asiana and change into a holding company.<br />Short Term Goal (2010-2014)<br />Sell – KH Buslines<br />Sell – KH construction<br />Kumho<br />Holdingco.<br />1 Trillion Won for KH construction + 400 Billion Won for KH Buslines<br />= 1.4 Trillion Won to be sent to Asiana Airlines to reduce their liability.<br />Long Term Goal (2014~)<br /><ul><li>Most of KH’s assets are the shares of Asiana and Korex.
  • 19. After selling off assets, KH becomes holding company.
  • 20. FI would prefer holding company for ease of transaction.
  • 21. Asiana and Korex provides much cash for investment.
  • 22. FI can use their human network to easily staff a holding </li></ul>company ()human resource intensive<br />Valuation in appendix<br />
  • 23. Asiana Airlines - BCG Matrix<br />Considering relevant information, Asiana airlines is considered a “Cash cow” that we can utilize as our revenue stream.<br />High<br />Y axis: “Market Attractiveness” <br /><ul><li>No. of tourists in Asia
  • 24. Future expectation
  • 25. Outbound tourists from Korea are expected to continuously increase </li></ul>until 2013 thanks to an aging population and an increase in leisure time.<br /><ul><li>Analyst Park from Samsung Fn</li></ul>294,509<br />CAGR:8.1%<br />Asiana<br />Kumho<br />Industrial<br />215,408<br />Expecting Synergy<br />or not<br />Korex<br />Low<br />High<br />2007<br />2003<br />2004<br />2005<br />2006<br />Unit : 1,000person<br />X axis: “Our Company’s Performance”<br /><Source : WTO><br /><ul><li>Relatively Stable Revenue
  • 26. Airline of the year </li></ul>Synergy<br />42,615<br />38,872<br />34,515<br />36,505<br /><ul><li>Synergy with Korex is expected in transportation and distribution.
  • 27. Received “Airline of the Year” by ATW for the first time for a domestic</li></ul>airline.<br />2006<br />2007<br />2008<br />2009<br />Unit : 100Mil KRW<br />Asiana airlines is still attractive to keep and provides stable revenue and cash.<br />
  • 28. Asiana Airlines - Why LCC?<br />The LCC market itself is increasing and has a higher operating margin than conventional airlines which is why ASIANA should expand into the LCC business<br />Market-size increase<br />Higher Operating Margin<br />Network Legacy Carriers<br />World<br />Europe No.1<br />Low Cost Carriers<br />Ryan air 21%<br />70%<br />95%<br />USA No.1<br />30%<br />5%<br />Southwest 10%<br />Low<br />Cost<br />Carriers<br />2001<br />2008<br />Korea<br />Asia No.1<br />Air Asia 13%<br />72%<br />100%<br />SouthAmerica No.1<br />28%<br />Gol Airlines 17%<br />* IATA 2008<br />2001<br />2008<br />Market Share of LCCs in Korea<br />1<br />Air Busan28%<br />2<br />Jin Air 26%<br />Jeju Air 19%<br />3<br />(ASIANA)<br />
  • 29. Asiana Airlines – Strategy (short-term)<br />Air Busan will rent aircrafts from Asiana, cut costs, and market their brand to prepare to expand into the LCC segment.<br />Air Busan’s short-term Strategy<br />1<br />2<br />3<br />Rent Aircraft<br />Cut cost<br />Brand Marketing<br /><ul><li> Rent Aircraft From </li></ul>Asiana<br /><ul><li> Cost reduction
  • 30. More efficient for </li></ul> Both companies<br /><ul><li> Less services
  • 31. Less on-ground time
  • 32. Single model of </li></ul> Aircraft<br /><ul><li> Safe & reliable</li></ul> Image<br /><ul><li> Make passengers </li></ul> think Air busan<br /> Reasonable, <br /> not just cheap<br />4<br />Expand routes to East Asia<br /><ul><li> Multi-Hub System
  • 33. Expand routes to</li></ul> Far East Countries<br /><ul><li> Take Possession of</li></ul> More profitable<br /> Routes <br />Hub Airport<br />
  • 34. Asiana Airlines – Strategy (long-term)<br />In the long run, without the weight of a huge debt, they will expand their routes and establish various systems to become the No. 1 LCC in Asia. <br />Air Busan’sLomg-term Strategy<br />1<br />Expand routes to Asia<br /><ul><li>Point to Point System</li></ul> - more punctual arrival time<br /> - less on-ground time<br /> - less airport-use fee<br /><ul><li>Expand routes to whole </li></ul> Asian countries<br />Become No.1 LCC in ASIA<br />Revenue : 2billion $<br />Margin : more than 15%<br />This will lead to <br />-> 50% Revenue <br /> 300% Operating Profit <br /> from the two companies, <br />Air Busan and Korex. <br />ASIANA’s Long-term Strategy<br />1<br />2<br />More premium service<br />Fly to Further Routes(Other Continents) <br />Prevent Cannibalization<br />
  • 35. High<br />Korex - BCG Matrix <br />Considering relevant information, Korex is considered a “Cash cow” that we can utilize as our revenue stream.<br />Y axis: “Market Attractiveness” <br /><ul><li>Global logistics industry’s </li></ul> growth<br /><ul><li>Distribution Industry 2010
  • 36. Growth rate in 2010 is expected to 11.8% .
  • 37. With global economy recovering, buyer confidence is restored leading to increased manufacturing, import, and export. This leads to increased demand in distribution channels.</li></ul>Unit : 1 Billion $<br />CAGR : 4.03%<br />725<br />Asiana<br />696<br />Kumho<br />Industrial<br />Expecting Synergy<br />or not<br />671<br />Korex<br />645<br />619<br />Low<br />High<br />2010<br />2007<br />2008<br />2009<br />2006<br />X axis: “Our Company’s Performance”<br /><Source : KCCI><br /><Source : Woojung research><br /><ul><li> #1 In Domestic Distribution </li></ul>Synergy<br /><ul><li>Stable Profit(Cash)</li></ul>945<br /><ul><li>Consistently ranked </li></ul> #1 since 2007 based <br /> on 103,60 distribution <br /> networks country-wide.<br />706<br /><ul><li>Synergy with Korex is expected in transportation and distribution.</li></ul>630<br />601<br />2006<br />2007<br />2008<br />2009<br />Unit : 100Mil KRW<br />Korex is still attractive to keep and make revenue.<br />
  • 38. Korex– Strategy (Short)<br />In 5 years(~ 2014), Korexwill strive to be the best distribution companyin Asia through focusing on air express distribution.<br />Air Express Distribution<br />Facts<br />Target South-East Asia<br />Financial Health<br /><ul><li> Develop a franchise and facilitate them </li></ul> with transportation.<br /><ul><li> Transplant technology and human resources </li></ul>Profit Margin<br />Source : Naver<br />Target Air Express Distribution<br /><ul><li>Korex is financially healthy and can leverage to </li></ul> invest in needed infrastructure<br /><ul><li> Air Express Distribution has higher profit margin</li></ul>Source: Boeing <br />Synergy with LCC Air Busan<br />Short-term expected results<br /><ul><li> LCC Air Busan can help lower costs for Air Express</li></ul> Distribution.<br /><ul><li> 3S(speed + safety + surety) possible
  • 39. National power + business capacity in Asia region.
  • 40. Land+ Harbor + Air route possible</li></ul> -> a short-term step in prep. for long-term goal <br />
  • 41. In the long run, Korex will expand the business area from Asia to Asia-pacific region and launch an Integral Distribution Consulting Service.<br />Korex– Strategy (Short)<br />Long-term strategy <br />Europe<br />Australia<br />UlaanBaatar<br />Vladivostok<br />Moscow<br />America<br />Beijing<br />Tenzin<br />Incheon<br />Tokyo<br />Shanghai<br />Osaka<br />Guangdong<br />Hongkong<br />Taiwan<br />Saipan<br />Bangkok<br />Manila<br />Guam<br />Australia<br />Singapore<br />Australia<br />Best Distribution Co. in Asia-Pacific<br />Launch Integral Distribution Consulting Service<br /><ul><li> Utilize the skills, assets and human networks obtained in short-term strategy to develop and launch an Integral Distribution Consulting service.
  • 42. Provide one-stop service.</li></ul>Jakarta<br /><ul><li> Increase the current China-Southeast Asia-Korea-</li></ul> Japan network to the Asian Pacific region by 2014.<br /><ul><li> By working in liaison with LCC, provide the lowest </li></ul> rates for air express distribution in Asia.<br />Australia<br />
  • 43. agenda<br />Current Situation of KH<br />Goal Setting<br />Corporate Strategies<br />Final Overview<br />
  • 44. Final Overview<br />Our strategy is to create synergy between Asiana and Korex and develop these two businesses to create cash for KH to invest.<br />1<br />4<br /><ul><li>Sell Construction and Express division
  • 45. Alleviate liquidity problems</li></ul>Kumho<br />Industrial<br />Kumho<br />Holding<br />Company<br />Asiana<br />Kumho<br />Holdingco.<br />Asiana<br />Air Busan<br />Korex<br /> Change to holding co.<br /><ul><li>Cash support to Kumho
  • 46. Kumho can reduce its liabilities</li></ul>2<br />$ $ $<br /><ul><li>Intensively grow Air Busan</li></ul>Asiana<br />Airlines<br />Asiana<br />Air Busan<br /> Make Air BusanNo.1 LCC in Asia<br />↑<br />3<br />5<br /><ul><li> Correlation with Asiana Airlines</li></ul> Become Asia No.1 logistics company<br /><ul><li>Cash support from Asiana Airlines & Korex will be used into investing and financial activities of Kumho holding company.</li></ul>Korex<br />Global<br />Korex<br />
  • 47. THANK YOU <br />FOR LISTENING<br />
  • 48. Appendix - Kumho Industrial Valuation<br />Valuation<br /><ul><li>Valuation
  • 49. (사례) 속리산 고속(버스 90대, 매출 160억)을 2년 전에 300억 원에 샀다
  • 50. (적용)금호고속 (매출2000억 원, 점유율 40%) 기업규모 13배
  • 51. 그래서 4000억원</li></ul>KH construction<br />KH Buslines<br /><ul><li>Valuation
  • 52. (사례) 쌍용건설 도급순위 13위 매출 1조 8천(2009년), 1조원 가격 불렀다. 동국제강이 사려고 했는데 당시 기사 보면 가격이 reasonable했다는 기관의 평가.
  • 53. (적용) 금호산업 현재 14위, 매출 2조 1천억(2008년)
  • 54. 금호건설 1조원 예상</li></ul>시간 관계상 DCF 나 EV/EBITDA 는 볼 수 없었던 점 양해해 주시기 바랍니다. <br />