Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — Q1 2017 Earnings Presentation
43 slides from Singapore Technologies Engineering's earnings presentation, May 12, 2017
Slide 1: Financial Results Briefing First Quarter 2017 Results
Financial Results Briefing First Quarter 2017 Results 12 May 2017 Engineering Our Future Page 1
Slide 2: Comparable Revenue and PBT
Comparable Revenue and PBT ST Engineering Page 2
Slide 3: Agenda
Agenda ► Financial Highlights ► 1Q2017 vs 1Q2016 ► 1Q2017 in Review ► Outlook ► Sector Performance ► Aerospace ► Electronics ► Land Systems ► Marine ST Engineering Page 3
Slide 4: Financial Highlights
Financial Highlights for the first quarter ended 31 March 2017 $'m 1Q2017 1Q2016 Change * Revenue 1,539 1,627 ▼ 88 5% Earnings before interest & tax (EBIT) 116.7 97.2 ▲ 19.5 20% Other income, net 11.7 22.1 ▼ 10.4 47% Finance costs, net (5.1) (11.5) ▲ 6.4 56% Profit before tax (PBT) 137.0 130.4 ▲ 6.6
Slide 5: Financial Highlights
Financial Highlights for the first quarter ended 31 March 2017 ► Commercial sales at 68% (1Q2016: 71%) or $1.0b of 1Q2017 revenue ► $13.3b order book; about $3.0b to be delivered in remaining months of 2017 (end December 2016: $11.6b) ► CCE including funds under management of $1.7b (end December 201
Slide 6: Group Revenue by sector
Group Revenue by sector Comparable revenue $'m 1Q2017 % 1Q2016 % Change Aerospace 549 36 622 38 ▼ 73 12% Electronics 523 34 457 28 ▲ 66 14% * Land Systems 273 18 316 20 ▼ 43 14% Marine 179 11 213 13 ▼ 34 16% * Others 15 1 19 1 ▼ 4 21% Group 1,539 100 1,627 100 ▼ 88 5% *Comparative figures restated p
Slide 7: Group Revenue by customer location
Group Revenue Breakdown by location of customers (by geography) 6% 10% 7% 9% Locality 1Q2016 1Q2017 $m % $m % Asia 982 60 955 62 22% 24% USA 383 24 348 22 60% Europe 151 9 148 10 62% Others 111 7 88 6 Total 1,627 100 1,539 100 ST Engineering Page 7
Slide 8: EBIT by sector
EBIT by sector EBIT higher by $19.5m or 20% $'m 1Q2017 1Q2016 Change Aerospace 63.1 59.7 ▲ 3.4 6% Electronics 39.3 32.7 ▲ 6.6 20% Land Systems 11.7 11.8* ▼ 0.1 1% Marine 7.7 - ▲ 7.7 NM * Others (5.1) (7.0) ▲ 1.9 27% Group 116.7 97.2 ▲ 19.5 20% *Comparative figures restated pursuant to the transfer o
Slide 9: Other Income by sector
Other Income by sector Other income lower by $10.4m or 47% $'m 1Q2017 1Q2016 Change Aerospace 4.0 6.1 ▼ 2.1 34% Electronics 3.3 7.8 ▼ 4.5 58% Mainly due to lower wage credit Land Systems 3.2 5.9* ▼ 2.7 46% income Marine 1.1 2.2 ▼ 1.1 50% Others 0.1 0.1* - - - Group 11.7 22.1 ▼ 10.4 47% *Comparative
Slide 10: Group PBT by sector
Group PBT by sector Comparable PBT $'m 1Q2017 % 1Q2016 % Change Aerospace 78.1 57 75.2 58 ▲ 2.9 4% Electronics 41.7 30 39.6 30 ▲ 2.1 5% Land Systems 16.2 12 18.3* 14 ▼ 2.1 11% Marine 9.0 7 3.4 3 ▲ 5.6 165% Others (8.0) (6) (6.1)* (5) ▼ 1.9 31% Group 137.0 100 130.4 100 ▲ 6.6 5% *Comparative figures
Slide 11: PBT Margin by sector
PBT Margin by sector 1Q2017 1Q2016 Mainly due to higher contribution from EFW Aerospace 14% 12% Electronics 8% 9% Land Systems 6% 6%* Mainly due to better performance from Shipbuilding from both Marine 5% 2% US and local operations Group 9% 8% *Comparative figures restated pursuant to the transf
Slide 12: Aerospace 1Q2017 vs 1Q2016
Aerospace 1Q2017 vs 1Q2016 • Lower revenue from AMM due ▼ mainly to absence of 3 PTF 757 Revenue $549m $73m or 12% redeliveries and CERO partially offset by higher revenue from EMS • Higher gross profit due largely to favourable sales mix ▲ $3.4m or 6% Partially offset by EBIT $63.1m • Allowance for
Slide 13: Electronics 1Q2017 vs 1Q2016
Electronics 1Q2017 vs 1Q2016 ▲ • Higher revenue from all business Revenue $523m $66m or 14% groups ▲ • Higher gross profit from higher EBIT $39.3m $6.6m or 20% revenue • In line with higher EBIT PBT $41.7m ▲ $2.1m or 5% Partially offset by • Lower wage credit income ST Engineering Page 13
Slide 14: Land Systems 1Q2017 vs 1Q2016
Land Systems 1Q2017 vs 1Q2016 * • Lower revenue due mainly to ▼ absence of revenue from China Revenue $273m $43m or 14% SVs and lower project deliveries from M&W and Auto • Lower gross profit due mainly to lower revenue ▼ Partially offset by EBIT $11.7m $0.1m or 1% • Lower operating expenses due mai
Slide 15: Marine 1Q2017 vs 1Q2016
Marine 1Q2017 vs 1Q2016 • Lower revenue mainly from Revenue $179m ▼ $34m or 16% Shiprepair and Engineering business groups • Higher gross profit from Shipbuilding and Shiprepair EBIT $7.7m ▲ $7.7m or NM Partially offset by • Higher allowance for doubtful debts PBT $9.0m ▲ $5.6m or 165% • In line wit
Slide 16: Statement of Cash Flows
Statement of Cash Flows $m 1Q2017 1Q2016 Advance payment from Net cash from/(used in): customers ($105m) Operating activities 400 121 Reduction in trade receivables ($180m) Investing activities (15) (40) Financing activities (3) 18 Net increase in CCE * 382 99 CCE at beginning of the period 904
Slide 17: Balance Sheet
Balance Sheet $m 31-Mar-17 31-Dec-16 Property, plant and equipment 1,660 1,670 Associates & joint ventures 390 406 Investments 467 322 Intangible assets 999 1,020 Long-term receivables 3 3 Amount due from related parties 5 5 Derivative financial instruments 25 33 Deferred tax assets 90 93 Non-curren
Slide 18: Agenda
Agenda ► Financial Highlights ► 1Q2017 vs 1Q2016 ► 1Q2017 In Review ► Outlook ► Sector Performance ► Aerospace ► Electronics ► Land Systems ► Marine ST Engineering Page 18
Slide 19: 1Q2017 In Review: Aerospace
1Q2017 In Review ► Aerospace ► Contract win hit new high of $1.11b, largely driven by renewal of multi- year contracts ► Capacity expansion on track ► Started operating 2nd hangar in Guangzhou, bringing potential effective capacity to 1 million man-hours in total at steady state ► Started constructi
Slide 20: 1Q2017 In Review: Electronics
1Q2017 In Review ► Electronics ► Contract win momentum sustained with $464m new contracts ► Significant inroads in cyber security, locally and overseas ► Won a consultancy contract for the design of Sri Lanka’s National Cyber Security Operations Centre ► Entered into a MOU with SAF and Nanyang Polyt
Slide 21: 1Q2017 In Review: Land Systems and Marine
1Q2017 In Review ► Land System ► Contract win gained momentum, including entry into new markets ► Next Generation Armoured Fighting Vehicles for MINDEF ► 40mm munitions for Asia and Middle East ► Project deliveries on track ► 3-door double decker bus to LTA for road trial ► Marine ► One of five reci
Slide 22: Agenda
Agenda ► Financial Highlights ► 1Q2017 vs 1Q2016 ► 1Q2017 in Review ► Outlook ► Sector Performance ► Aerospace ► Electronics ► Land Systems ► Marine ST Engineering Page 22
Slide 23: Outlook For 1H2017
Outlook For 1H2017 ► Leverage group synergies for growth, strengthen core operations ► Actively pursue investment opportunities across business sectors ► Deepen expertise in cyber security, intelligent buildings, intelligent transportation, satellite communications, autonomous and robotics solutions
Slide 24: Outlook For 1H2017: Aerospace
Outlook For 1H2017 ► Aerospace ► Pursue launch customer for A320 Passenger-to-Freighter conversion and new in-house-designed economy-class passenger seats ► Secure new contracts for A330 Passenger-to-Freighter conversion, UAV services, new cabin interiors integration and VIP completion programme ST
Slide 25: Outlook For 1H2017: Electronics
Outlook For 1H2017 ► Electronics ► Acquisition of SP Tel completed on 2 May 2017, with access to extensive fibre optic network vital for enterprise ICT solutions ► Sales recognition from various projects, including: ► LSG: MRT projects in Singapore and Thailand ► CSG: communication system projects,
Slide 26: Outlook For 1H2017: Land Systems
Outlook For 1H2017 ► Land Systems ► Pursue and secure key defence and commercial programmes both locally & overseas, and to deliver secured contracts on schedule ► Drive development of Autonomous Vehicles for urban mobility ► Lead Singapore Autonomous Vehicles (AV) Consortium to develop AV standards
Slide 27: Outlook For 1H2017: Marine
Outlook For 1H2017 ► Marine ► Laying the keel of the sixth Littoral Mission Vessel ► To complete O&M phase for the expansion of Kranji NEWater Factory ST Engineering Page 27
Slide 28: Group Outlook for 1H2017 and FY2017
Group Outlook for 1H2017 and FY2017 Barring unforeseen circumstances, the Group’s Revenue and PBT for 1H2017 are expected to be comparable to 1H2016. Barring unforeseen circumstances, the Group expects FY2017 Revenue to be comparable to, and PBT to be higher than that of FY2016. ST Engineering Page
Slide 29: President & CEO's Message
President & CEO’s Message “For the first quarter of 2017, the Group reported year-on-year comparable Revenue and PBT. The Group continued to secure orders in 1Q2017 and concluded the quarter with a strong order book of $13.3b. Cash and cash equivalents including funds under management remain at a he
Slide 30: Agenda
Agenda ► Financial Highlights ► 1Q2017 vs 1Q2016 ► 1Q2017 in Review ► Outlook ► Sector Performance ► Aerospace ► Electronics ► Land Systems ► Marine ST Engineering Page 30
Slide 31: Aerospace
Aerospace ST Engineering Page 31
Slide 32: Aerospace Revenue and PBT
Aerospace Revenue and PBT by business group 100.0 EMS 700 90.0 CERO $624m $78.1m AMM 600 80.0 $75.2m $555m 180 70.0 500 17.2 194 8% 60.0 30.9 80% 400 50.0 13.2 166 300 7.7 42% 123 26% 40.0 200 30.0 278 20.0 44.8 238 15% 39.5 100 12% 10.0 - - 1Q2016 1Q2017 1Q2016 1Q2017 Revenue PBT Note: Revenue incl
Slide 33: Aerospace Revenue by customer location
Aerospace Revenue Breakdown by location of customers (by geography) 8% 8% Locality 1Q2016 1Q2017 21% 17% $m % $m % 46% Asia 305 49 253 46 49% USA 164 26 141 25 Europe 107 17 118 21 Others 48 8 43 8 Total 624 100 555 100 26% 25% Note: Revenue includes inter-segment sales ST Engineering Page 33
Slide 34: Electronics
Electronics ST Engineering Page 34
Slide 35: Electronics Revenue and PBT
Electronics Revenue and PBT by business group 50.0 SSG 600 45.0 CSG $41.7m $532m $39.6m LSG 40.0 500 $464m 132 12% 35.0 14.4 18.4 28% 400 118 30.0 25.0 300 257 14% 20.0 10.2 7.8 24% 225 200 15.0 10.0 100 15.0 15.5 3% 121 143 18% 5.0 - - 1Q2016 1Q2017 1Q2016 1Q2017 Revenue PBT Note: Revenue includes
Slide 36: Electronics Revenue by customer location
Electronics Revenue Breakdown by location of customers (by geography) 5% 4% 6% 5% 7% Locality 1Q2016 1Q2017 11% $m % $m % Asia 358 77 453 85 USA 52 11 33 6 Europe 34 7 21 4 Others 20 5 25 5 Total 464 100 532 100 77% 85% Note: Revenue includes inter-segment sales ST Engineering Page 36
Slide 37: Land Systems
Land Systems ST Engineering Page 37
Slide 38: Land Systems Revenue and PBT
Land Systems Revenue and PBT by business group 25.0 S&T 360 M&W $319m 20.0 $18.3m 310 Auto 48* $278m $16.2m 260 15.0 39 47 2% 27 32% 14.1* 210 20% 10.0 11.2 160 5.0 0.2 97% 110 232 204 12% 5.1 >500% 4.8 60 - (0.9) 10 (5.0) 1Q2016 1Q2017 1Q2016 1Q2017 (40) Revenue PBT Note: Revenue includes inter-seg
Slide 39: Land Systems Revenue by customer location
Land Systems Revenue Breakdown by location of customers (by geography) 1% 4% 5% 1% Locality 1Q2016 1Q2017 28% 35% $m % $m % Asia 211 66 167 60 USA 91 28 98 35 Europe 2 1 1 1 66% 60% Others 15 5 12 4 Total 319 100 278 100 Note: Revenue includes inter-segment sales *Comparative figures restated pursua
Slide 40: Marine
Marine ST Engineering Page 40
Slide 41: Marine Revenue and PBT
Marine Revenue and PBT by business group 20.0 Engineering 250 Shiprepair $3.4m $214m 15.0 Shipbuilding 2.6 200 21 $179m $9.0m 10.0 11 47% 1.1 59% 12.2 2.9 76% 150 79 5.0 60 24% 5.0 144% - 100 (5.0) 5% (11.4) 50 114 108 (10.0) - (15.0) 1Q2016 1Q2017 1Q2016 1Q2017 Revenue PBT Note: Revenue includes in
Slide 42: Marine Revenue by customer location
Marine Revenue Breakdown by location of customers (by geography) 5% 3% 13% 4% Locality 1Q2016 1Q2017 $m % $m % Asia 117 55 100 56 USA 61 28 65 36 36% 55% Europe 8 4 8 5 56% 28% Others 28 13 6 3 Total 214 100 179 100 Note: Revenue includes inter-segment sales ST Engineering Page 42
Slide 43: Thank You
Thank You Engineering Our Future
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