Sats Ltd · SGX:S58
Sats — FY2024 Earnings Presentation
36 slides from Sats's earnings presentation, May 29, 2024
Slide 1: SATS FY24 Results & Strategy Update
<Public> SATS FY24 Results & Strategy Update 29 May 2024 1 <Public>
Slide 2: Transforming SATS into a global champion
<Public> Transforming SATS into a global champion For enduring success and sustainable value Revenue 10.0 $10B Flat growth COVID years Sustainable growth S$10B : 15% “Transform & perform” $5.1B 5.0 $5B “Integrate” S$5.4B : 15.1% “Cruise” 2019 “Shock” “Take-Off” $2B CAGR: c.2.3% S$3.8B : 2.4% “Recove
Slide 3: FY20 to FY24 Highlights: Steady recovery & growth post-acquisition
<Public> FY20 to FY24 Highlights: Steady recovery & growth post-acquisition Revenue ($’M) EBITDA+SoAJV ($’M) 891 5,150 356 1,941 1,758 970 1,177 173 72 94 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 EBIT+SoAJV ($’M) 354 PATMI ($’M) 168 238 56 20 (3) (27) (26) (58) (79) FY20 FY21 FY22 FY23 FY24
Slide 4: FY24 Highlights: SATS returns to full year profit
<Public> FY24 Highlights: SATS returns to full year profit Revenue EBIT SoAJV EBITDA+ PATMI FY24 $5,149.6M $244.2M $110.0M $890.6M $56.4M (margin: 4.7%) (margin: 17.3%) (margin: 1.1%) 4Q24 $1,337.7M $88.8M $30.9M $251.4M $32.7M (margin: 6.6%) (margin: 18.8%) (margin: 2.4%) • FY24 revenue increased t
Slide 5: Operating statistics: Positive amid seasonal demand
<Public> Operating statistics: Positive amid seasonal demand Flights Cargo Tonnage Meals Served Meals Served Number of Handled (Tonnes) (Non-Aviation) Employees Year-to-date (YoY comparison) (Aviation) 33.1% +0.3x 160.3% +1.6x 1.9% +0.02x 186.4% +1.9x +0.03x +2.5x 35.7% +0.4x 68.0% +0.7x 2.0% +0.02x
Slide 6: Improved performance in key FY24 Financial Metrics
<Public> Improved performance in key FY24 Financial Metrics Revenue ($’B) EBITDA+ ($’M) PATMI ($’M) +2.9x +5.1x +3.1x 5.1 890.6 56.4 1.8 173.2 (26.5) FY23 FY24 FY23 FY24 FY23 FY24 Operating Cashflow ($’M) Gross Debt / EBITDA+ (x) Gross Debt / Equity (x) +6.4x -3.9x +1.0x 512.1 8.5 1.6 4.6 0.6 79.6 F
Slide 7: FY24 Highlights (vs FY23): Back to profitability
<Public> FY24 Highlights (vs FY23): Back to profitability $'M FY24 FY23 YoY Var YoY Var % Revenue 3,391.3 192.9 Group revenue of $5,149.6M was almost 3x of FY23 due 5,149.6 1,758.3 to WFS consolidation and continued travel recovery OPEX (4,905.4) (1,806.3) (3,099.1) (171.6) EBIT 244.2 (48.0) 292.2 n
Slide 8: 4Q FY24 Highlights (vs 3Q FY24): Market seasonality
<Public> 4Q FY24 Highlights (vs 3Q FY24): Market seasonality $'M 4Q FY24 3Q FY24 QoQ Var QoQ Var% QoQ reduction in EMEA and Americas revenue due to seasonal dip in air cargo and travel volume in 4Q, partially Revenue 1,337.7 1,354.1 (16.4) (1.2) offset by APAC growth OPEX (1,248.9) (1,270.7) 21.8 1.
Slide 9: Group Cash Flow: Stronger footing in FY24
<Public> Group Cash Flow: Stronger footing in FY24 ($'M) FY24 FY23 Var Improving Cash Flow Position Operating Cashflow ($’M) Operating cashflow 512.1 79.6 432.5 512 Lease payment (374.7) (60.1) (314.6) Operating cashflow after lease payment 137.4 19.5 117.9 Other net cash inflow 236.7 26.1 210.6 +43
Slide 10: Group FY24 Financial Position: A transformed SATS
<Public> Group FY24 Financial Position: A transformed SATS Total Assets ($’M) Total Liabilities ($’M) Total Equity ($’M) Total Debt ($’M) 8,480 5,921 2,560 4,092 1,380 +3,806 +45 4,674 +3,762 2,515 +2,614 2,159 1,478 Leases 332 2,712 Debt 1,146 Mar23 Mar24 Mar23 Mar24 Mar23 Mar24 Mar23 Mar24 Cash Po
Slide 11: Demonstrating consistent uplift in quarterly performance – FY23 & FY24
<Public> SATS WFS Demonstrating consistent uplift in quarterly performance – FY23 & FY24 SATS Group +859.6M +179.4M Revenue EBITDA FY23 FY24 1,354.1 1,337.7 FY23 FY24 212.3 220.5 1,271.1 192.8 1,758.3 5,149.6 ▲ 193% 1,186.6 127.7 780.7 ▲ 511% 155.0 139.0 121.1 140.8 720.1 767.0 735.7 109.6 689.0 99.
Slide 12: Clear strategic priorities to deliver value creation
<Public> Clear strategic priorities to deliver value creation Value Creation 1 2 3 Scaling We are delivering on our commitment to Driving operating restore profitability, and our three Rs: revenue for Rationalise leverage through sustainable cost efficiency portfolio 1. Repay loans business footprin
Slide 13: SATS Strategy Update
<Public> SATS Strategy Update Delivering as a global leader in Gateway and Food Solutions 13 <Public>
Slide 14: Strategic transformation for sustainable growth
<Public> Strategic transformation for sustainable growth ✔ WFS acquisition as a diversification pivot • Builds long-term resilience • Creates pathways for sustainable growth ✔ Integration on track • SATS and WFS heritage businesses are operationally profitable • Delivering commercial and operational
Slide 15: Transforming SATS into a global champion
<Public> Transforming SATS into a global champion For enduring success and sustainable value Revenue 10.0 $10B Flat growth COVID years Sustainable growth S$10B : 15% 2 Execute the integration of SATS and WFS to: CAGR: > 6% • Leverage recovery for margin expansion and bottom-line growth • Realise gro
Slide 16: Team spirit: WFS globally celebrates 1st year with SATS Family
<Public> Team spirit: WFS globally celebrates 1st year with SATS Family 16 <Public>
Slide 17: A globally diverse aviation services platform
<Public> A globally diverse aviation services platform Middle East Thailand Greater China Belgium Italy Denmark France Netherlands Spain 4 1 16 Japan Stations: Germany Sweden Locations Location Locations Ireland United Kingdom 1 - Cargo 125 Europe Oman Saudia Arabia Location - Ground 111 44 - Food 3
Slide 18: Transformation positions SATS for sustainable growth
<Public> Transformation positions SATS for sustainable growth FY20 FY22 FY24 Before COVID After COVID / Pre WFS Today Highlights (Last 12 Months) Revenue $1,941M $1,177M $5,150M c. S$105M EBITDA+ $367M $94M $891M Annualised Recurring Value 1% 2% +200% Revenue growth 13% 34% 19% 36% Diversified Regio
Slide 19: Stronger balance sheet
<Public> Stronger balance sheet Clear focus on post-integration value creation and capital management Recurring Value Creation $125M * $250M $20M $28M $105M $12M $65M Refinancing & Procurement Commercial & Recurring Value One-off Cost Portfolio Total Cash Fiscal Savings & OE Network Benefits Takeout
Slide 20: Extending leadership position in Cargo
<Public> Extending leadership position in Cargo How we create value Recent updates Our aspiration Focus on our global customers to grow cargo market Commercial wins: share while capturing incremental value from group synergies and operational excellence Etihad expanded cold chain cargo handling wi
Slide 21: Realising regional potential and driving growth in Food Solutions
<Public> Realising regional potential and driving growth in Food Solutions How we create value Recent updates Our aspiration Strengthening competitive advantage to grow As a leader, we are disrupting aviation food solutions Sustain position as food solutions through a 3-tier production network that
Slide 22: Driving sustainability to do good
<Public> Driving sustainability to do good How we do it Targets Active player in… • Reducing GHG emissions through fleet electrification, chiller plant 50% 100% Net Zero modernisation, and on-site solar capabilities Scope 1 & 2 Scope 1 & 2 Reduction by 2050 Reduction by 2030 Reduction by 2040 • Sour
Slide 23: Clear strategic priorities to continue our transformational journey
<Public> Clear strategic priorities to continue our transformational journey Deliver on commitments Nurture talent with Drive sustainable growth to create value one integrated culture • Drive earnings resilience with a global footprint • Strengthen relationships with key strategic • Drive collaborat
Slide 24: Outlook
<Public> Outlook <Public>
Slide 25: Outlook
<Public> Outlook The transformation of SATS into a global player with an expanded route network and global presence makes the Group well positioned to capitalise on strong tailwinds and positive growth momentum in air cargo and passenger traffic, which will drive sustainable long-term growth in the
Slide 26: Outlook (cont’d)
<Public> Outlook (cont’d) • Kerry Mok, President and Chief Executive Officer of SATS, said, “We celebrate our first-anniversary milestone as a combined entity delivering another quarter of strong results leading SATS back to full- year profitability. This was driven by the aviation sector recovery,
Slide 27: Appendix
<Public> Appendix <Public>
Slide 28: Strong tailwinds, great momentum
<Public> Strong tailwinds, great momentum Proven long-term growth above GDP Rebased to 100 in 1971 CAGR CAGR KEY STATS ‘71-‘23 ‘23-‘28 1,400 1,240 9% Oil crisis 1973-1978 Gulf Crisis 1990-1991 Terrorist attacks 2001 Financial crisis 2007-2008 Pandemic 2020-2022 4.4% 6.1% 1,200 Cargo Demand Growth YT
Slide 29: 4Q FY24 Highlights (vs 4Q FY23)
<Public> 4Q FY24 Highlights (vs 4Q FY23) $'M 4Q FY24 4Q FY23 QoQ Var QoQ Var % Group revenue improved by 179.8% as Food and Gateway recorded higher revenue by 27.2% and 326.5% Revenue 1,337.7 478.1 859.6 179.8 respectively on the back of aviation recovery and WFS consolidation OPEX (1,248.9) (482.7)
Slide 30: 2H FY24 Highlights (vs 1H FY24)
<Public> 2H FY24 Highlights (vs 1H FY24) $'M 2H FY24 1H FY24 YoY Var YoY Var % Group revenue improved by 9.5% due partially to seasonal peak in business volume in 3Q FY24 and gradual recovery Revenue 2,691.8 2,457.8 234.0 9.5 of air cargo market OPEX (2,519.6) (2,385.8) (133.8) (5.6) Improved EBIT d
Slide 31: 2H FY24 Highlights (vs 2H FY23)
<Public> 2H FY24 Highlights (vs 2H FY23) $'M 2H FY24 2H FY23 YoY Var YoY Var % Group revenue improved by 182.2% mainly due to WFS consolidation and continued travel recovery Revenue 2,691.8 953.8 1,738.0 182.2 OPEX (2,519.6) (959.5) (1,560.1) (162.6) Improved EBIT despite absence of government relie
Slide 32: Group Balance Sheet
<Public> Group Balance Sheet $M AS AT 31 MAR 24 AS AT 31 MAR 23 Change % Commentary Non-Current Assets 6,530.3 1,950.9 234.7 Increase attributable mainly to acquisition of WFS. Decreased due to the transfer of deposits placed with the notary to the seller of WFS upon completion of the WFS acquisitio
Slide 33: Operating Statistics
<Public> Operating Statistics 4Q FY24 3Q FY24 4Q vs 3Q (%) 4Q FY23 YoY (%) FY24 FY23 YoY (%) Passenger Handled ('M) 20.8 20.3 2.5% 15.6 33.9% 79.7 52.6 51.3% SATS 75.8 74.9 1.2% 66.4 14.3% 301.0 230.4 30.7% WFS 73.6 76.1 -3.3% 0.0 n.m. 298.6 0.0 n.m. Flights Handled ('000) 149.4 151.0 -1.1% 66.4 125
Slide 34: FY24 Group Expenditure
<Public> FY24 Group Expenditure YoY $3,099.1M Growth 171.6% 2,939.3 Premise OOE Costs 14% 5% Licence Fees 2% FY24 Raw Materials $4,905.4M 8% Staff Costs 891.8 60% D&A 705.9 11% 536.4 386.8 336.3 175.8 240.3 221.8 96.7 124.2 56.4 Staff Costs D&A Raw Materials Licence Fees Premise Costs OOE FY24 Act F
Slide 35: Group Segmented P&L – 2H FY24
<Public> Group Segmented P&L – 2H FY24 Food Gateway 2H FY24 Food Gateway 2H FY23 Others Others Solutions Services Total Solutions Services Total Revenue 591.8 2,099.8 0.2 2,691.8 466.7 486.6 0.5 953.8 EBIT profit / (loss) 28.4 161.4 (17.6) 172.2 (9.3) 18.6 (15.0) (5.7) Share of results of Associates
Slide 36: Group Segmented P&L – FY24
<Public> Group Segmented P&L – FY24 Food Gateway FY24 Food Gateway FY23 Others Others Solutions Services Total Solutions Services Total Revenue 1,107.9 4,041.2 0.5 5,149.6 869.3 888.5 0.5 1,758.3 EBIT profit / (loss) 27.5 247.2 (30.5) 244.2 (33.8) (2.0) (12.2) (48.0) Share of results of Associates/J