Sia Engineering Co. Ltd. · SGX:S59
Sia Engineering — FY2020/21 Earnings Presentation
35 slides from Sia Engineering's earnings presentation, May 5, 2021
Slide 1: FY20/21 Review
5 May 2021 SIA ENGINEERING COMPANY
Slide 2: Operational Review
\ —y Operational Review » SIA ENGINEERING company
Slide 3: Core Business
Core Business Line Maintenance • 30 airports in 7 countries (expanding to 41 airports in 9 countries) Base Maintenance • 6 hangars in Singapore • 3 hangars in Philippines Fleet Management • 80 aircraft from 9 airlines 3
Slide 4: Line Maintenance
Line Maintenance FLIGHTS HANDLED AT CHANGI AIRPORT (ANNUAL) 149,804 18.5% 27,727 FY19/20 FY20/21 FLIGHTS HANDLED AT CHANGI AIRPORT (BY QUARTERS) • Number of flights handled in FY20/21 40,373 38,319 39,478 was 18.5% of the number for FY19/20 31,634 • Pace of recovery is steady but slow 27% • Work dem
Slide 5: Base Maintenance
Base Maintenance Singapore Base • Low flight activities and the widespread grounding of aircraft by airlines led to: - extension of maintenance intervals Maintenance Checks at Singapore Base - fewer aircraft maintenance checks FY19/20 FY20/21 Light Checks* 515 223 Heavy Checks 72 60 * Including ‘A’
Slide 6: Fleet Management
Fleet Management Fleet Size Customers A32 A320 0 46 aircraft A330 4 aircraft (Tailored Support Package) 737 23 aircraft 747 7 aircraft FMP Fleet: 80 aircraft • Work volume declined sharply as a result of low flight hours • However, we expanded our customer base with the addition of Vietravel Airline
Slide 7: 2H Customer Contracts
2H Customer Contracts Line Maintenance Base Maintenance Renewed: New: New: Fleet Management Renewed: New: 7
Slide 8: 2H Customer Contracts
2H Customer Contracts Line Maintenance International 8
Slide 9: Response to COVID-19
Response to COVID-19 • Maintained vigilance to ensure workplace safety and the well-being of all staff • Continually updated staff on safe-management measures and WFH arrangements • Over 80% of our workforce have been vaccinated against COVID-19 • Increased cabin disinfection services for airline cu
Slide 10: Strategic Partnerships - JV Portfolio
Strategic Partnerships - JV Portfolio 23 JVs Across 7 Countries Total Revenue in FY20/21: S$4B Airframe and Line Maintenance Engine and Component SIA Engineering PT JAS Aero- Singapore Aero Engine Component Aerospace (USA) SIA Engineering Japan Eagle Services Asia Engineering Services Services Singa
Slide 11: Update on Transformation
Update on Transformation • Boost competitiveness and emerge stronger in post COVID-19 landscape • Create value for customers and other stakeholders • Strengthen ecosystem and improve culture Transformation Phase 2 Planned investments of $40M in digitalisation, officially launched on 20 January 2021
Slide 12: Implementing Lean
Implementing Lean • With the successful implementation of pilot projects, we are scaling up Lean and launching projects enterprise-wide • Scope of projects will not be limited to targeted functions, but encompass end-to-end processes such as planning, supply chain and documentation • Lean training c
Slide 13: Digitalisation and Technology
Digitalisation and Technology • We continue to invest in digitalisation and technology to develop new services, increase operational efficiency and add value to our customers, staff and partners • Focused on accelerating development of digital infrastructure, change management and adopting agile app
Slide 14: Sustainability
Sustainability • SIAEC recognises the importance of Sustainability to our stakeholders • We endeavour to foster a sustainability-oriented mindset throughout the organisation and embed sustainability practices in our operations • A sustainability framework is in place to provide strategic direction a
Slide 15: Sustainability
Sustainability Solar Panels Green Building Electric Vehicles SIAEC (Singapore) Electric Tow Tractors • Operational in Dec 2020 • Operational trial of electric • Generate 20% of SIAEC’s tow tractors planned in electricity needs, equivalent to: hangars and apron • Consumption for 1,000 • 55% less carb
Slide 16: Financial Review
\ } -— Financial Review » SIA ENGINEERING company
Slide 17: FY20/21 Financial Highlights
FY20/21 Financial Highlights • Adverse impact of COVID-19 pandemic on air travel impacted all business segments of the Group during the financial year. • The Group recorded a net loss of $11.2 million for FY20/21 as compared to a net profit of $193.8 million for FY19/20. • Group operating loss was $
Slide 18: Summary of Group Results FY20/21
Summary of Group Results FY20/21 • Revenue declined 55% due to low flight activities and massive grounding of aircraft. • Performance cushioned by grant from the Jobs Support Scheme (JSS) and cost mitigation measures. • Performance of joint venture and associated companies also impacted by a one-tim
Slide 19: Analysis of Group Profit – FY20/21
Analysis of Group Profit – FY20/21 S$M 193.8 -192.4 200.0 -205.0M 25.0 +155.4 -48.3 -18.2 -11.2* 0.0 FY19/20 -126.2 +30.0 -25.0 FY20/21 Parent Subsidiaries -5.3 company operations Impairment -50.0 (includes Non-operating Taxation operations consol adj) items & NCI -100.0 -125.0 -150.0 Share of JSS p
Slide 20: Breakdown of Group Revenue FY20/21
Breakdown of Group Revenue FY20/21 Revenue declined across all business segments due to adverse impact of COVID-19 pandemic on air travel. 20
Slide 21: Group Expenditure FY20/21
Group Expenditure FY20/21 Excluding JSS support, decrease in staff costs would be 30.6%. 21
Slide 22: Group Operating Profit FY20/21
Group Operating Profit FY20/21 22
Slide 23: Joint Venture and Associated Companies FY20/21
Joint Venture and Associated Companies FY20/21 • Performance similarly impacted by low flight activities, resulting in low number of flights handled and fall in repair demand. This was partially mitigated by cost saving measures and JSS. • Some of the group companies also incurred one-time staff red
Slide 24: Group Revenue FY20/21
Group Revenue FY20/21 (SIAEC, Subsidiaries, JV and Associated Companies) * Revenue of associated and joint venture companies are not consolidated in the Group's Income Statement as they are equity accounted. 24
Slide 25: Group Balance Sheet
Group Balance Sheet Low borrowings and healthy cash balance place the Group in a strong position to face the continuing market uncertainties. 25
Slide 26: Financial Statistics
Financial Statistics Financial Statistics Return on shareholders’ funds (%) Basic (loss)/earnings per share (cents) Net asset value per share (cents) » SIA ENGINEERING company FY20/21 (0.7) (1.00) Mar-21 136.8 FY19/20 12.3 17.30 Mar-20 145.4 Variance nm. nm. Variance - 5.9 % 26
Slide 27: Positioning for Recovery Emerging Stronger and more Resilient
Positioning for Recovery Emerging Stronger and more Resilient
Slide 28: Outlook
Outlook Encouraging developments have raised optimism for a sustained recovery of international air travel, meaningful increase in flight frequencies and the subsequent demand for MRO services: • Vaccination programmes across the world gather pace • Countries resume bilateral discussions to implemen
Slide 29: Challenges Ahead
Challenges Ahead The sharp fall in demand for air travel significantly impacted the global aerospace industry • Global MRO market and aircraft deliveries decreased by over 40% in 2020 (vs 2019) • Checks deferred due to low flight activity, aircraft being parked or put into storage, and extension of
Slide 30: Emerging Stronger and More Resilient
Emerging Stronger and More Resilient 1 Remain vigilant and disciplined in the management of costs 2 Accelerate Transformation - invest in digitalisation, automation and adoption of Lean frameworks to raise productivity 3 Reshape our portfolio and investing in new capabilities and services 4 Pursue n
Slide 31: Prudent Cost Management
Remaining Vigilant and Resilient • Maintain cuts in Management salaries and Directors fees, furlough for staff on re- Prudent Cost Management employment contracts, voluntary and compulsory no-pay leave • Continue tight controls on discretionary operating expenditure, even with the progressive step-d
Slide 32: Accelerating Pace of Transformation
Accelerating Pace of Transformation Investing in digitalisation, automation and adoption of Lean frameworks to enhance efficiency and create value for customers • Develop digital products through agile methodology with active staff participation in design thinking workshops and user-experience feedb
Slide 33: Reshaping our Portfolio
Reshaping our Portfolio And investing in new capabilities and services to strengthen our MRO services eco-system • HMSS became a wholly owned subsidiary after SIAEC acquired the remaining 35% stake in Heavy Maintenance HMSS from Airbus Services Asia Pacific Singapore Services (HMSS) • Integration of
Slide 34: Pursuing New Opportunities to Strengthen our JV portfolio
Pursuing New Opportunities to Strengthen our JV portfolio Seizing investment opportunities to expand our capabilities and geographic reach Potential Acquisition of SR • Narrowbody aircraft - A320 family and 737 Max - take up 68%* of delivery forecast Technics Malaysia • MOU for the proposed acquisit
Slide 35: Thank you
Thank you SIA ENGINEERING COMPANY
SIA Engineering Company — FY2020/21 Earnings Presentation on 6ix