Sam Engineering & Equipment (m) Bhd · MYX:SAM
Sam Engineering & Equipment (m) Bhd — Corporate Update (November 2023)
38 slides from Sam Engineering & Equipment (m) Bhd's corporate update, Nov 24, 2023
Slide 1: Business Update 24th November 2023
Business Update 24th November 2023 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 informati
Slide 2: SAMEE Introduction
SAMEE Introduction Proprietary Information of SAM 2
Slide 3: Overview of SAMEE
Overview of SAMEE A reliable manufacturer in Aerospace and Equipment businesses for global key OEMs Ø Key player in the aerospace and equipment industries Ø Has manufacturing facilities strategically located in Malaysia, Singapore, and Thailand Ø Services range from precision machining, sheet-metal
Slide 4: SAMEE Business Segments
SAMEE Business Segments Aerospace Business Specialize in the precision machining of niche aerospace products for wide-body, narrow-body, regional and business aircraft Aircraft Programs Single Aisle Aircraft • A220 • A320ceo/neo • B737Max • C919 Twin Aisle Aircraft • A350 • A380 • B777/X • B787 Regi
Slide 5: Products of SAMEE – Engine Cases
Products of SAMEE – Engine Cases Singapore Penang Compressor Cases Fan Cases Turbine Cases Combustor Cases Proprietary Information of SAM
Slide 6: The Hot Air is contained inside by the Engine Cases
The Hot Air is contained inside by the Engine Cases Combustor Module Fan Module Compressor Turbine Module Module Hot air spins Air is the turbine compressed Combustion takes place Proprietary Information of SAM 6
Slide 7: Products of SAMEE – Nacelle Beams
Products of SAMEE – Nacelle Beams Translating Cowl Thrust Reverser Core Cowl Fan Cowl Thrust Reverser Beam Engine Nacelle Proprietary Information of SAM
Slide 8: SAMEE Business Segments
SAMEE Business Segments Equipment Business • Provides system integration services to global MNC in the Data Storage and Semiconductor industries • Full Suite of manufacturing capabilities from machining, sheet metal fabrication, special processes to system integration Vertical Integration Model Capa
Slide 9: Facilities & Capabilities in Penang
Facilities & Capabilities in Penang 6 plants in Penang, Malaysia Penang Island, Malaysia Penang Mainland, Malaysia Penang Island, Malaysia Machining & Special Processes Sheet-metal fab & System Integration PE1 PE3 PE5 BM PE6 PE7 ü Chemical Cleaning ü Machining ü Machining ü Machining ü Metal Fabrica
Slide 10: Facilities & Capabilities in Penang
Facilities & Capabilities in Penang Machining & Special Processes – Malaysia, Penang Assembly – Malaysia, Penang Non-cleanroom assembly FMS Chemical Cleaning Polishing Area Sheet-Metal Fabrication – Malaysia, Penang Cleanroom assembly Class 1K, 10K Chemical treatment Proprietary Information of SAM 1
Slide 11: Facilities & Capabilities in Thailand
Facilities & Capabilities in Thailand 3 out of 4 plants qualified for mass production Rojana, Thailand Chon Buri, Thailand RJ 1 RJ 2 BB 1 BB 2 ü Non Cleanroom ü Metal Fabrication ü Machining Aerospace Assembly – HDD ü Special Process ü Cleaning line ü Machining ü Non Cleanroom ü Cleanroom Assembly ü
Slide 12: Facilities & Capabilities in Thailand
Facilities & Capabilities in Thailand Readiness for Mass Production – Thailand, Ayutthaya Readiness for Mass Production – Thailand, Chon Buri Aerospace’s Facility Set Up - Thailand, Chon Buri In-Premise Free Trade Zone - Thailand, Chon Buri Approved by Thai Customs Customs signage Customs office Car
Slide 13: Financial Highlights
Financial Highlights Proprietary Information of SAM 13
Slide 14: Revenue Growth
Revenue Growth RM’ Mil Record Year: FY23 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 Not
Slide 15: Financial Highlights
Financial Highlights Revenue Profit Before Tax RM’ mil CAGR = 14% RM’ mil CAGR = 8% 1,445.4 1,147.6 115.0 99.7 100.5 938.7 94.8 873.7 81.8 755.0 736.5 69.4 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q2 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q2 FY2024 FY2024 * Annualised YTD Q2 FY2024 revenue and PBT to
Slide 16: Financial Highlights
Financial Highlights Profit For The Year/Period Basic Earnings Per Share RM’ mil Sen Annualised 19.64 88.8 16.41 78.5 79.8 14.52 14.76 75.5 13.94 59.7 11.04 53.2 9.82 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q2 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q2 FY2024 FY2024 16 Proprietary Information of SAM
Slide 17: Financial Highlights
Financial Highlights Return On Equity Net Gearing 0.56 15.6% 0.53 Investment in 13.9% Thailand & Annualised higher working 11.4% 11.8% 12.4% capital requirement 9.7% 0.26 6.2% 0.14 0.11 0.12 FY2019 FY2020 FY2021 FY2022 FY2023 YTD Q2 FY2024 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 17 Proprietary Inf
Slide 18: Proposed Acquisition of Aviatron & Rights Issue
Proposed Acquisition of Aviatron & Rights Issue Proprietary Information of SAM 18
Slide 19: Proposed Acquisition of AVIATRON
Proposed Acquisition of AVIATRON § Acquisition of 30,000,000 ordinary shares in Aviatron (“Aviatron Shares”), representing the Details of entire equity interest in Aviatron, by SAMEE for a purchase consideration of USD43.4 mil to Proposed be satisfied wholly in cash Acquisition § Repayment of Vendor
Slide 20: AVIATRON
AVIATRON Details of 7 January 2011 in Malaysia Incorporation Manufacturing of aircraft structure parts Principal Activity and precision and engineering components Engine Nacelle beams which are used in Principal Products Boeing and Airbus aircrafts Principal Market USA and Mexico Ownership Structure
Slide 21: AVIATRON - Products
AVIATRON - Products A350 B787 A220 Engine Nacelle Beam Anodising line Surface Coating Proprietary Information of SAM
Slide 22: Tap into The Recovery of Aerospace Industry
Tap into The Recovery of Aerospace Industry Aircraft Pre-COVID (2019) Current Plan Platform Monthly Rate Monthly Rate A350 10 5 9/m by 2025/26 B787 12 5 10/m by 2025/26 A220 4 6 14/m by 2026 Proprietary Information of SAM 22
Slide 23: AVIATRON to contribute to SAMEE Aerospace Revenue
AVIATRON to contribute to SAMEE Aerospace Revenue Pro-forma effect of the Proposed Acquisition: Revenue contribution from Aerospace business expected to increase to 35% based on YTD Q2’24 revenue Before After 29% 35% 65% 71% Proprietary Information of SAM
Slide 24: Pro Forma Effects
Pro Forma Effects Earnings Per Share (“EPS”) PAT of Aviatron (in RM Sen) (in RM ’000) FY2023 SAMEE + YTD Q2 FY2024 Aviatron (Annualised) Ø The business of Aviatron has just started to recover in FY2023 + Interest Savings Ø The financials of Aviatron has improved in FY2024 EPS Ø Aviatron is expected
Slide 25: Pro Forma Effects (Cont’d)
Pro Forma Effects (Cont’d) Net Assets (RM Mil) Net Assets Per Share (RM) 1,332 1.97 1.50 815 As at 31 Mar 2023 After The Proposals As at 31 Mar 2023 After The Proposals Gross Gearing (x) Net Gearing (x) 0.56 0.59 The Proposed Acquisition will reduce gearing and interest expense 0.27 0.25 As at 31 Ma
Slide 26: Proposed Rights Issue
Proposed Rights Issue Details of § Renounceable rights issue of 135,397,357 new ordinary shares in SAMEE at an issue price to be Proposed Rights determined and announced by the Board at a later date Issue Basis § 1 Rights Share for every 4 SAMEE Shares Issue Price and § At a discount of not more tha
Slide 27: Business Outlook
Business Outlook Proprietary Information of SAM 27
Slide 28: Aerospace Business Climate
Aerospace Business Climate Air Travel Recovery Supply Chain continues to China Aerospace Industry (97% of 2019 levels) be under stress (COMAC) Record backlog for Airbus Quality and Delivery Issues New Aircraft being developed for EIS and Boeing at Tier 1 suppliers in mid 2030s 13,528 13,775 13,107 1
Slide 29: Commercial Aerospace industry : Order Backlog
Commercial Aerospace industry : Order Backlog 2022 2023 2022 2023 Full Year (YTD Oct) Full Year (YTD Oct) Deliveries 661 559 Deliveries 480 405 Backlog 7,329 8,014 Backlog 5,430 5,866 Years of backlog 9.1 10 Years of backlog 6.7 7.3 (2018 production rate) (2018 production rate) Years of backlog 11.1
Slide 30: Production of Commercial Aircraft projected to recover by 2024/2025 period
Production of Commercial Aircraft projected to recover by 2024/2025 period Projected Aircraft Production Rate (Source: Forecast International, Oct 2023) 2500 2,053 2,054 2,081 2,088 1,989 1,983 2,023 2000 1,793 1,606 1,564 1500 1,243 1,289 1,141 951 1000 723 500 0 2018 2019 2020 2021 2022 2023F 2024
Slide 31: Long term outlook: Strong demand over the next 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 32: Semicon Outlook
Semicon Outlook SEMI (13rd Nov, 2023) • The global semiconductor manufacturing industry is on track for recovery in the fourth quarter of 2023, setting the stage for continued growth in 2024 • Electronic sales are predicted to register a robust 22% quarter-over-quarter increase in Q4 2023, adding to
Slide 33: 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 34: Long Term Strategies
Long Term Strategies Complex 5-axis machining Leverage on and system integration Group core Competencies Profitable High Entry Barriers Scalability to achieving High Value Add Growth Critical Mass Revenue Build complementary Stability businesses to mitigate cyclical risk Proprietary Information of S
Slide 35: Our Sustainability Journey
Our Sustainability Journey Our Sustainability Targets Visit our website at www.sam-malaysia.com Proprietary Information of SAM 35
Slide 36: Summary
Summary 1. Our expansion into Thailand is still work-in-progress • Mass production in 1 plant • Awaiting product full functional test at customer site. Once approved, another 2 plants can commence mass production • 4th plant for aerospace is on schedule in preparation 2. Market Outlook • Aerospace d
Slide 37: Q&A
Q&A Proprietary Information of SAM 37
Slide 38: Thank You
Thank You Proprietary Information of SAM 38
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