Sam Engineering & Equipment (m) Bhd · MYX:SAM
Sam Engineering & Equipment (m) Bhd — Investor Presentation (September 2023)
54 slides from Sam Engineering & Equipment (m) Bhd's investor presentation, Sep 27, 2023
Slide 1: Business Update 27 September 2023
Business Update 27 September 2023 th Safe Harbour The information contained in this presentation reflect the views and opinions of the management of SAM Engineering & Equipment (M) Berhad (“SAMEE”) with regard to the sources referenced and is part of the group business update. All sources of informa
Slide 2: SAMEE at a Glance
SAMEE at a Glance Proprietary Information of SAM 2
Slide 3: SAM Engineering and Equipment (M) Berhad (“SAMEE”)
SAM Engineering and Equipment (M) Berhad (“SAMEE”) Minority SAM Group of Headquartered in Shareholders Companies Singapore 37.51% 62.49% Public listed Co 100% 100% 100% 100% SAM Engrg & Eqpt SAM Aerospace SAM Aerospace SAM Aerospace SAM Aerospace Malaysia Malaysia China United Kingdom Germany Aerost
Slide 4: Our Manufacturing Sites
ayutthaya chon buri Our Manufacturing Sites Proprietary Information of SAM 4
Slide 5: Vertical Integration Model
Equipment Business Small/Med Machining PCBA/Wire Harness Vertical Integration Model Large Machining Integration, Assembly & Test Frame/Panel PRODUCTION FLOOR – Class 1k & 10k Cleanroom Assembly OEM Component Proprietary Information of SAM 5
Slide 6: Aerostructure Parts
Proprietary Information of SAM Aerostructure Parts 6
Slide 7: Aircraft Programs
Aircraft Programs Single Aisle Aircraft Twin Aisle Aircraft Regional Aircraft • A220 • A350 • Embraer E2 190/195 • A320ceo/neo • B777/X • Bombardier CRJ700/900 • B737 Max • B787 • Gulfstream G200 • C919 • Dassault Falcon 200EX • AVIC ARJ21 Proprietary Information of SAM 7
Slide 8: Thailand Expansion - Overview
Thailand Expansion - Overview (Rojana, Thailand) (Chon Buri, Thailand) RJ 1 RJ 2 BB 2 BB 1 Non Cleanroom Metal Fabrication Aerospace Machining Assembly - HDD Special Process Cleaning line Non Cleanroom Cleanroom Assembly Assembly - Semicon Sheetmetal Fab + Non-Cleanroom Precision Machining + Cleanro
Slide 9: Readiness for Mass Production – Thailand, Ayutthaya
Readiness for Mass Production – Thailand, Ayutthaya Proprietary Information of SAM 9
Slide 10: Readiness for Mass Production – Thailand, Chon Buri
Readiness for Mass Production – Thailand, Chon Buri Cleanroom Assembly – First shipment out Proprietary Information of SAM 10
Slide 11: Aerospace – Facility Set Up (Thailand, Chon Buri)
Aerospace – Facility Set Up (Thailand, Chon Buri) • Renovation completed • First two machines under set up • AS 9100 approved Proprietary Information of SAM
Slide 12: In-Premise Free Trade Zone at Chon Buri
In-Premise Free Trade Zone at Chon Buri Customs signage Customs office Cargo truck weighing scale Approved by Thai Customs Proprietary Information of SAM 12
Slide 13: Our Journey
Our Journey Proprietary Information of SAM 13
Slide 14: The Journey Before COVID-19
The Journey Before COVID-19 Ø A more diversified engineering group with high value products and solutions FY2007 FY2015 FY2020 5% 15% 11% 2% 6% 25%* 25% 48% 73% 22% 68% RM 179 Mil RM 452 Mil RM 939 Mil Back-end Semicon Data Storage Aerospace Front-end Semicon Others Proprietary Information of SAM 14
Slide 15: Steady Revenue Growth Trend before COVID-19
Steady Revenue Growth Trend before COVID-19 RM’ Mil The combination provided a steady growth trend 1,445 1,400 1,200 1,148 1,000 939 874 800 755 620 619 600 531 537 453 452 383 400 303 308 179 214 200 0 FY2007 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Slide 16: The Reason behind the Steady Revenue Growth
The Reason behind the Steady Revenue Growth RM’ Mil Cushioning effect of Aerospace Business 1,000 939 900 800 700 452 600 Spike due to 48% Thai Flood 500 400 54% 300 200 179 52% 46% 100 0 FY2007 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 (15mths Chg YE
Slide 17: COVID-19 Hit
COVID-19 Hit COVID-19 Impact Travel Gradual Recovery of Travel FY2020 FY2023 1Q FY2024 (Pre-COVID) 23% 31% RM939m 48% RM1.45b RM308m 52% 69% 77% Aerospace Equipment Aerospace Equipment Aerospace Equipment Explosive Growth for Equipment Softening of Semicon demand Proprietary Information of SAM 1
Slide 18: Equipment Business returning the Favour
Equipment Business returning the Favour RM’m 1600 Equipment Business overwhelms Aerospace Business 1400 ? 1200 1000 800 600 ? 400 200 0 FY2020 FY2021 FY2022 FY2023 FY2024 Equipment Aerospace Proprietary Information of SAM 18
Slide 19: Proposed Acquisition of Aviatron
Proposed Acquisition of Aviatron We announced on 25th Sep 2023 that we have entered a conditional share sale agreement to acquire Aviatron Proprietary Information of SAM 19
Slide 20: Aviatron
Aviatron Proprietary Information of SAM 20
Slide 21: Aviatron
Aviatron Hinge Beam Proprietary Information of SAM 21
Slide 22: Bulking Up Aerospace Business with Acquisition
Bulking Up Aerospace Business with Acquisition Pro Forma Effect with the acquisition (based on FY2024 Q1) Before After 31% 38% 62% 69% Aerospace Equipment Aerospace Equipment Proprietary Information of SAM 2
Slide 23: Proposed Rights Issue
Proposed Rights Issue Basis 1 Rights Share for 4 SAMEE Shares Issue Price At a discount of not more than 12% to the Theoretical ex-rights price based on 5 days VWAP preceding the price-fixing date Purpose • Proposed Acquisition of Aviatron (M) Sdn Bhd • Repayment of borrowings Rationale & Benefits •
Slide 24: Proposed Acquisition
Proposed Acquisition Details • Acquire the entire equity interest of Aviatron (M) Sdn Bhd (“Aviatron”) at the purchase consideration of USD43.4mil Rationale & Benefits • Tap into the aerospace industry’s recovery as Aviatron has healthy order book supported by long term contracts with major customer
Slide 25: Pro Forma Effects of Proposals
Pro Forma Effects of Proposals Net Assets Net Assets Per Share Gearing RM’Mil RM 1,500.0 0.70 2.50 1,369 0.59 0.60 2.02 2.00 0.50 1,000.0 1.50 1.50 815 0.40 0.30 1.00 0.24 500.0 0.20 0.50 0.10 0.0 - - As at 31 Mar 2023 After The Proposals As at 31 Mar 2023 After The Proposals As at 31 Mar 2023 After
Slide 26: Pro Forma Effects of Proposals
Pro Forma Effects of Proposals Earnings Per Share (“EPS”) • Pro forma EPS after the Proposals is lower due to FY2023 PAT of Sen Aviatron was impacted by Covid-19 pandemic. 17.00 • The business of Aviatron has just started to recover in FY2023 and is expected to be profitable in the future considerin
Slide 27: Financial Highlights
Financial Highlights Proprietary Information of SAM 27
Slide 28: Revenue Growth Trend
Revenue Growth Trend RM’ Mil 1,445 1,400 1,200 CAGR (2007 to 2023) : 15% 1,148 1,000 939 COVID 874 800 755 620 619 600 531 537 453 452 383 400 303 308 179 214 200 0 FY2007 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Revenue Note: FY2009 (1
Slide 29: Financial Highlights
Financial Highlights Revenue Profit Before Tax RM’ mil CAGR = 8% RM’ mil CAGR = 1% 1,445.4 115.0 100.5 81.8 94.8 99.7 1,147.6 938.7 873.7 49.2 62.3 755.0 1,116.3 116.9 112.1 104.0 489.1 895.8 295.4 25.1 701.8 45.6 307.9 37.4 16.6 8.5 459.6 -1.9 449.6 211.9 329.1 -11.6 251.8 -22.2 171.9 96.0 FY2019 F
Slide 30: Financial Highlights
Financial Highlights Profit For The Year/Period Basic Earnings Per Share RM’ mil Sen 88.8 16.41 Annualised 79.8 15.16 78.5 14.52 14.76 75.5 13.94 59.7 11.04 20.5 3.79 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q1 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q1 FY2024 FY2024 30 Proprietary Information of SAM
Slide 31: Financial Highlights
Financial Highlights Return On Equity Net Gearing 0.56 0.55 15.6% 13.9% 11.4% 11.8% Annualised 9.8% 9.7% 0.26 0.14 2.5% 0.11 0.12 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q1 FY2024 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Jun-23 31 Proprietary Information of SAM
Slide 32: Business Outlook
Business Outlook Proprietary Information of SAM 32
Slide 33: Dark Clouds Ahead – Old News that never go away
Dark Clouds Ahead – Old News that never go away Proprietary Information of SAM
Slide 34: This is the reality
This is the reality Proprietary Information of SAM 34
Slide 35: Air Travel Recovery
Air Travel Recovery Global air travel recovery (July 2023) • Revenue-passenger kilometers (RPKs) recovered to 95.6% of pre-COVID (2019) levels • International travel recovery – 88.3% • Domestic travel recovery – 110.4% • Global available seat-kilometers (ASKs) recovered to 96.1% of pre-COVID (2019)
Slide 36: Commercial Aerospace is recovering
Commercial Aerospace is recovering Projected Aircraft Production Rate (Source: Forecast International, July 2023) 2500 1,997 1,993 2,016 1,967 2,027 2000 1,937 1,928 1,742 1,606 1,513 1500 1,243 1,254 1,141 951 1000 532 723 500 0 2018 2019 2020 2021 2022 2023F 2024F 2025F 2026F 2027F 2028F 2029F 203
Slide 37: Unbalanced Single and Twin Aisle Aircraft Growth Rates
Unbalanced Single and Twin Aisle Aircraft Growth Rates Airbus A330neo, A350XWB Boeing B777 B787 Airbus A220 A320neo Boeing B737Max Proprietary Information of SAM 37
Slide 38: Strong Aircraft Order Backlogs
Strong Aircraft Order Backlogs 2022 2023 2022 2023 Full Year (YTD August) Full Year (YTD August) Deliveries 661 433 Deliveries 480 344 Backlog 7,329 8,024 Backlog 5,430 5,596 Years of backlog Years of backlog 6.7 6.9 (2018 production rate) 9.1 10 (2018 production rate) Deliveries are recovering Net
Slide 39: Long term outlook: Strong demand over the next 2 decades
Long term outlook: Strong demand over the next 2 decades • Airbus forecasted that air travel will grow by a CAGR of 3.6% over the next 20 years • Both Airbus & Boeing predicted that >40,000 new aircraft are need from 2023 to 2042 Airbus (2023 to 2042) Forecast Boeing (2023 to 2042) Forecast Source:
Slide 40: Semicon Equipment Outlook
Semicon Equipment Outlook “Despite current headwinds, the semiconductor equipment market is set to see a strong rebound in 2024 after an adjustment in 2023 following a historic multi- year run,” said Ajit Manocha, SEMI president and CEO. “Projections for robust long-term growth driven by high- perfo
Slide 41: Drivers for Demand
Drivers for Demand Proprietary Information of SAM 41
Slide 42: New Fabs under Construction
New Fabs under Construction Proprietary Information of SAM 42
Slide 43: Semicon Outlook
Semicon Outlook SEMI (12 Sep 2023) Global fab equipment spending for front-end facilities • expected to decline US$84 billion in 2023 • before rebounding 15% YoY to US$97 billion in 2024, partly driven by the end of the semiconductor inventory correction in 2023 and strengthening demand for semicond
Slide 44: Market News
Market News Proprietary Information of SAM 44
Slide 45: GTF Engine Turbine Disk Quality Issue
GTF Engine Turbine Disk Quality Issue Cause • Contaminated powder metal that reduces service life of the part Affected Engines • Use on A320neo and A220 delivered 2015 -2021 Impact to Airlines • Airlines need to send aircraft for early inspection and replacement where necessary Impact to Airbus • Ai
Slide 46: GTF Engine Turbine Disk Quality Issue
GTF Engine Turbine Disk Quality Issue Cause • Thousands of CFM engine parts were sold without valid certificates by a British distributor, AOG Technics Affected Engines • A fraction of the 23,000 CFM engines Impact to Airlines • Between 48-96 aircraft have been taken out of service for part replacem
Slide 47: In Summary
In Summary Proprietary Information of SAM 47
Slide 48: Long Term Strategies
Long Term Strategies Complex 5-axis machining and Leverage on Group core Competencies System integration High Entry Barriers Profitable Scalability to achieving High Value Add Growth Critical Mass Revenue Build complementary businesses Stability to mitigate cyclical risk Proprietary Information of S
Slide 49: Beyond Engine Nacelle Beams
Beyond Engine Nacelle Beams Proprietary Information of SAM 4
Slide 50: Leverage on our current manufacturing capabilities
3rd Revenue Stream to further smoothen out Rev Fluctuation Leverage on our current manufacturing capabilities examples Proprietary Information of SAM 5
Slide 51: Target – Doubling Revenue in 5 years
Target – Doubling Revenue in 5 years Forecast 2x in 5 years RM’ Mil 1600 2x in 5 years ? 1445 1400 1200 1148 2x in 6 years 1000 939 COVID-19 2x in 5 years 874 800 755 Thailand Flood 620 619 600 531 537 453 452 383 400 303 308 214 179 200 0 FY2007 FY2009* FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2
Slide 52: Key Activities to make this happen
Key Activities to make this happen 1. Mass Production at all our 4 Thailand factories – Including for aerospace manufacturing 2. Ready human resources with the right skill sets and infrastructure in Thailand 3. Complete acquisition of Aviatron 4. Pursue 3rd revenue stream 5. Intensify Marketing to c
Slide 53: Q & A
Q&A Proprietary Information of SAM 53
Slide 54: Thank You
Thank You Proprietary Information of SAM 54
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