Sia Engineering Co. Ltd. · SGX:S59
Sia Engineering — FY2023/24 Earnings Presentation
31 slides from Sia Engineering's earnings presentation, May 13, 2024
Slide 1: FY2023/24 Review
» SIA ENGINEERING COMPANY FY2023/24 REVIEW
Slide 2: Operational Review
» SIA ENGINEERING COMPANY OPERATIONAL REVIEW
Slide 3: Core Business
CORE BUSINESS Line Maintenance Base Maintenance Component Services Engine Services • 33 airports in 8 • 6 hangars in Singapore • 186 aircraft from 9 • CFM LEAP Quick Turn countries • 3 hangars in Philippines customers under (QT) and Rolls-Royce Inventory Technical On-Wing Services • 2 hangars in Mal
Slide 4: Line Maintenance
LINE MAINTENANCE Steady Improvement in Flight Activities • Number of flights handled in FY23/24 increased 39% compared to a year ago • Flight recovery at the end of FY23/24 was 94%, an improvement of 15 percentage points over 79% from a year ago • Expanded scope of Services agreement with Scoot to i
Slide 5: Base Maintenance
BASE MAINTENANCE Healthy Demand Met by Capacity Creation through Lean Practices • Healthy demand for hangar checks with the increase in flight Maintenance Checks at Singapore Base activities and recovery of most international airlines FY23/24 FY22/23 • Adoption of Lean practices generating additiona
Slide 6: Component Services
COMPONENT SERVICES Sustained Increase in Work Volume from Higher Flight Activities • 12-year Inventory Technical Management (“ITM”) agreement with Air India Group to provide component support coverage for Air India Group’s current fleet of Airbus A320 family aircraft; commenced early March 2024 • No
Slide 7: Engine Services
ENGINE SERVICES Steady Growth from Higher Flight Activities • Aircraft Engine Services increased its Work-In-Progress capacity by 67%, from 12 to 20 engines • Expanded Engine Test Facility capabilities to include LEAP-1A engine test • Significant operational performance improvements from Value Strea
Slide 8: Key Customer Contracts
KEY CUSTOMER CONTRACTS Growth in Third-party Customers in FY23/24 Line Maintenance Line Maintenance International Component Services New New New Base Maintenance New Renewed Extension of service 8
Slide 9: Strategic Partnerships Portfolio
STRATEGIC PARTNERSHIPS PORTFOLIO 23 Subsidiaries and Joint Ventures Across 8 Countries with Total Revenue of S$7.0B in FY23/24 • Divested 60% shareholding in Additive Flight Solutions (AFS) • Line maintenance JV with Cambodia Airport Investment Co., Ltd at Techo Takhmao International Airport in Phno
Slide 10: Continuous Improvement
CONTINUOUS IMPROVEMENT Key Objectives Operational Excellence Innovation in Service Delivery Customer Intimacy Total Employee Experience • Time saved for customers • Reduction of laborious tasks • High utilisation through • Development of new through digital and through digital connections, digitalis
Slide 11: Sustainability
SUSTAINABILITY SIAEC’s Initiatives Increased Utilisation of Renewable Energy • Further expansion of solar panels in Singapore and Philippines Electrification • Electrifying ground equipment & Sustainable Air hub Implementation of TCFD & Transitioning • CAAS unveiled Sustainable Air Hub Blueprint whi
Slide 12: Financial Review
» SIA ENGINEERING COMPANY FINANCIAL REVIEW
Slide 13: Key Highlights
Key Highlights • Increase in MRO demand supported by recovery in flight activities during the year. The number of flights handled in Singapore airport during the year was 90% of pre-pandemic volume. • Group recorded a net profit of $97.1 million in FY23/24, an improvement from net profit of $66.4 mi
Slide 14: Summary of FY23/24 Group Financial Performance
Summary of FY23/24 Group Financial Performance FY23/24 FY22/23 Variance 2H 1H Variance $M $M $M % $M $M $M % Group Revenue 1,094.2 796.0 298.2 37.5 580.2 514.0 +66.2 +12.9 Group Expenditure 1,091.9 822.3 269.6 32.8 578.0 513.9 +64.1 +12.5 Group Operating profit/(loss) 2.3 (26.3) 28.6 n.m.
Slide 15: Analysis of Group Profit – FY23/24
Analysis of Group Profit – FY23/24 Healthy recovery of MRO demand led to improvement in operating performance and share of profits +28.6 $’M 50.0 +23.2 -28.5 +39.8 +7.4 97.1 30.7 -11.2 If compared against 66.4 last year’s performance without wage support, improvement was $41.9M. FY22/23 Wage Group S
Slide 16: Group Operating Performance Trend
Group Operating Performance Trend Progressive improvement in operating performance with recovery of MRO demand Excluding wage support 2.2 0.1 (15.5) (22.0) 1H22/23 2H22/23 1H23/24 2H23/24 16
Slide 17: Analysis of FY23/24 Group Revenue
Analysis of FY23/24 Group Revenue Revenue growth across both segments 258.0 +$298.2M $1,094.2M Group Revenue $M 37.5% 1200 1094.2 836.2 994.1 1000 796.0 800 600 566.1 29.7% 70.7% 443.0 836.2 400 644.9 200 $’M 258.0 0 151.1 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY22/23 FY23/24 FY22/23FY23/24
Slide 18: Analysis of FY23/24 Group Expenditure
Analysis of FY23/24 Group Expenditure Increase mainly in manpower costs and material costs 109.9 63.1 137.8 204.8 +$269.6M $1,091.9 Group Expenditure $M 32.8% 1200 1091.9 1000 926.4 576.3 822.3 800 576.3 587.9 600 426.4 468.0 $’M 204.8 400 109.9 120.1 137.8 118.8 93.0 64.0 63.1 200 FY22/23 FY23/24
Slide 19: Share of Profits after tax for FY23/24
Share of Profits after tax for FY23/24 Improvement recorded in all segments Joint Venture and Associated Companies $’M Airframe & Engine Centers Component Centers Line Maintenance +5.7 +15.8 +1.7 12.3% y-o-y 52.7% y-o-y 106.3% y-o-y 51.9 45.8 46.2 30.0 3.3 1.6 FY22/23 FY23/24 FY22/23 FY23/24 F
Slide 20: Aggregate Revenue of SIAEC, Subsidiaries, JV and Associated Companies
Aggregate Revenue of SIAEC, Subsidiaries, JV and Associated Companies 7,921.1 892.0 6,730.6 6,342.3 685.9 5,506.9 987.8 537.1 • +17.7% YoY 4,287.4 • 125% of FY19/20 450.6 7,029.1 6,044.7 5,354.5 4,969.8 3,836.8 FY1920 FY2021 FY2122 FY2223 FY2324 Engine and component Airframe and line maintenance Tot
Slide 21: Group Balance Sheet and Financial Statistics
Group Balance Sheet and Financial Statistics Mar-24 Mar-23 Variance $M $M $M % Total equity 1,703.3 1,676.7 + 26.6 + 1.6 Non-current liabilities 83.2 91.1 - 7.9 - 8.7 Current liabilities 301.8 215.4 + 86.4 + 40.1 Non-current assets 1,087.4 1,031.1 + 56.3 + 5.5 Cash 646.0 633.0 + 13.0 + 2.1 Other cur
Slide 22: Dividend for FY23/24
Dividend for FY23/24 Proposed final dividend of 6.0 cents per share FY23/24 FY22/23 Interim Dividend (per share) 2.0 cents - Final Dividend (per share) Proposed 6.0 cents 5.5 cents Total Dividend (per share) 8.0 cents 5.5 cents Dividend payout ratio 93.0% 93.0% • The proposed final dividend payout a
Slide 23: Outlook
» SIA ENGINEERING COMPANY OUTLOOK
Slide 24: FY23/24 At a Glance
FY23/24 At a Glance 39% Increase in Executing our Core Strengthening our Core Flights Handled Strategies Against FY22/23 • Ramping up manpower to • Growing in-house capabilities bolster operational resilience • Flight recovery at • Partnering with OEMs and • Integrating Lean and digital 94% of pre-C
Slide 25: Flight Activity
Flight Activity 1H 2H 1H 2H 100.0% FY22/23 FY22/23 FY23/24 FY23/24 89% 94% 90.0% 79% 80.0% Total Flights handled by SIAEC 70.0% Line Maintenance 63% (% of pre-Covid levels) 60.0% 50.0% 38% 40.0% 30.0% 20.0% Flight Volume (1H FY22/23) Flight Volume (2H FY22/23) Flight Volume (1H FY23/24) Flight Volum
Slide 26: Challenges Ahead
Challenges Ahead Inflationary Pressures Supply Chain Hurdles • Driving up staff wages and operating cost base • Supply chain disruptions persist, exacerbated by labour shortages and the rising costs of raw materials Tight Labour Market • Competition from regional and global MROs for engineers and te
Slide 27: Growth Opportunities
Growth Opportunities Gearing Up for Growth Expand overseas and increase • Establish hangars regionally and expand LMI network presence in new markets • Set up component capabilities in lower operating cost environment Develop new capabilities • Invest in new capabilities and services through new or
Slide 28: Strategic Partnerships – JV Portfolio
Strategic Partnerships – JV Portfolio Reshaping and strengthening JV portfolio in alignment with growth strategies • Exited From PW1500G Engine Risk-Revenue Sharing Programme Exit from JVs • Divested 60% stake in Additive Flight Solutions Pte Ltd • Acquired additional 10% stake in Jamco Aero Design
Slide 29: Awards & Accolades
Awards & Accolades Singapore Business Review (SBR) Technology Excellence Awards 2024 Digital – Aviation award for eLITE* Platform for Aircraft Maintenance Operations • This award recognizes the technological innovations of companies leading the technological revolution and digital journeys within th
Slide 30: FY24/25 and Beyond
FY24/25 and Beyond Develop and Bolster our Talent Pipeline - Continue collaborating with Institutes of Higher Learning (IHLs) and government agencies to establish diverse pipelines of skilled professionals - Support the continuous upskilling and reskilling of our workforce to meet the rapidly changi
Slide 31: Thank you
SIA ENGINEERING cOmPANY Thank you SIA ENGINEERING Company %
SIA Engineering Company — FY2023/24 Earnings Presentation on 6ix