Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — Singapore Tech Eng — FY2023 Earnings Presentation
40 slides from Singapore Technologies Engineering's earnings presentation, Feb 29, 2024
Slide 1: Financial Year 2023 Results
Financial Year 2023 Results 29 February 2024
Slide 2: Disclaimer
Disclaimer The forward-looking statements in this presentation reflect the Company's current intentions, plans, expectations, assumptions and beliefs about future events as at the date of this presentation. Actual future performance, outcomes and results may differ materially from those expressed in
Slide 3: Agenda
Financial Highlights • Group Highlights Agenda • Business Discussions - Commercial Aerospace (CA) - Defence & Public Security (DPS) - Urban Solutions & Satcom (USS) • Order Book and Debt Profile • Dividends • Outlook • Segment Highlights Question & Answer session Notes: • All amounts in millions of
Slide 4: Group Highlights
ST Engineering Group Highlights
Slide 5: Group Highlights
Group Highlights ❑ Group Revenue, EBITDA, EBIT, Net Profit at new levels $'m Revenue EBITDA Revenue EBITDA 5,238 746 10,101 1,456 +10% y-o-y +17% y-o-y +12% y-o-y +16% y-o-y EBIT PBT Net Profit EBIT PBT Net Profit 470 353 306 915 704 586 +34% y-o-y +43% y-o-y +20% y-o-y +24% y-o-y +18% y-o-y +10% y-
Slide 6: FY2023 Revenue Growth from all Segments
Group Highlights FY2023 Revenue Growth from all Segments $’m -20 10,101 229 172 -249 914 Excl. U.S. Marine's +12% revenue in FY2022, 9,035 DPS grew 6% 2022 CA DPS USS 2023 6 | U.S. Marine
Slide 7: Group FY2023 Revenue Breakdown
Group Highlights Group FY2023 Revenue Breakdown FY2023 Revenue by segment FY2023 Revenue by type FY2023 Revenue $10.1b $10.1b by location of customers $’b Commercial Defence 7.1 DPS CA Asia U.S. 6.0 0.1 49% 24% CA, $3.9b DPS, $4.3b 39% $2.1b $1.4b 42% 4.8 Europe Others USS 7.1 20% 7% 5.9 USS, $1.9b
Slide 8: FY2023 Revenue by Segment
Group Highlights FY2023 Revenue by Segment ❑ Growth contributed by all segments CA DPS USS $’m $’m $’m 3,905 * -20 1,944 4,272 229 4,252 249 -249 +6% 1,772 172 +10% 914 +31% 2,991 4,023 2022 Business 2023 2022 Business 2023 2022 Business 2023 growth growth growth 8 | * Includes aircraft sales of $10
Slide 9: FY2023 Earnings Before Interest and Tax (EBIT)
Group Highlights FY2023 Earnings Before Interest and Tax (EBIT) ❑ Reported EBIT +24% y-o-y; Base Operating Performance (BOP) +40% y-o-y $’m 946 915 -32 735 268 +40% +24% 57 -72 15 678 2022 Absence of Lower TC T&I Business growth 2023 BOP SatixFy 2023 pension & cost savings divestment loss restructur
Slide 10: FY2023 Net Profit
Group Highlights FY2023 Net Profit ❑ Reported Net Profit +10% y-o-y; BOP +24% y-o-y $’m -49 610 586 166 -24 535 +10% 42 -53 11 +24% 493 2022 Absence of Lower TC T&I Business Finance costs 2023 BOP SatixFy 2023 pension growth & divestment restructuring cost savings loss & Satcom gain severance costs
Slide 11: Business Discussions
ST Engineering Business Discussions
Slide 12: CA EBIT
Business Discussions CA EBIT ❑ Reported EBIT +12% y-o-y despite the absence of pension restructuring gain; ❑ BOP +47% y-o-y, driven by business growth and cost savings $’m +12% 337 301 108 +47% 72 -72 229 2022 Absence of pension Business growth 2023 restructuring gain & cost savings 12 | Pension res
Slide 13: CA Business Updates
Business Discussions CA Business Updates 1 2 3 Aerospace MRO MRO Aerostructures & Systems Aviation Asset Management • Growth in tandem with • MRAS nacelle growth • AUM exceeded US$2b market recovery in line with A320neo • Ongoing portfolio • Continuous deliveries buildup and capital improvement in •
Slide 14: DPS EBIT
Business Discussions DPS EBIT ❑ Reported EBIT +40% y-o-y due to business growth, margin mix, cost savings and absence of U.S. Marine losses $’m 567 162 +40% 405 2022 Business growth, margin mix, 2023 cost savings and absence of 14 | U.S. Marine losses
Slide 15: DPS Business Updates
Business Discussions DPS Business Updates 1 2 3 Strong International Made good progress orderbook for contract wins of in new international delivery in the ~$950m for 2023 markets next few years 4 5 Digital Business (Cloud, AI Analytics Harness Digital Technologies – & Cyber) revenue registered robu
Slide 16: USS EBIT
Business Discussions USS EBIT ❑ TransCore earnings accretion achieved ahead of plan; ❑ Significantly stronger 2H2023; ❑ BOP -6%, Satcom transformation effort underway -66% $’m -6% 29 42 -2 15 -24 44 -8 10 -32 -15 2022 Lower TC T&I URS strength; 2023 BOP Satixfy divestment 2023 Satcom weakness loss &
Slide 17: USS Business Updates: Urban Solutions
Business Discussions USS Business Updates: Urban Solutions 1 2 TransCore investment achieved Synergistic win by TransCore: earnings accretion, ahead of Dubai Mall smart parking solution in plan Feb 2024 – integrated technology from U.S. and Singapore 3 4 First international airport Smart Mobility ga
Slide 18: USS Business Updates: Satcom
Business Discussions USS Business Updates: Satcom 2023 Transformation Highlights 2024 Focus Areas 2024 Focus Areas • Organisation right-sizing • Unveiling NGP brand in 1H2024 • Product convergence: Next generation • Continuing cost optimisation and process platform (NGP) with multi-orbit improvement
Slide 19: Order Book and Debt Profile
ST Engineering Order Book and Debt Profile
Slide 20: $14.8b New Contracts for FY2023, incl. $3.1b for 4Q2023
Order Book $14.8b New Contracts for FY2023, incl. $3.1b for 4Q2023 4Q2023 Highlights • CFM56-7B engine MRO for Chinese airlines Commercial $1.0b • Airframe heavy maintenance for an American airline Aerospace • Landing gear overhaul for an Oceania airline • Digital solutions and services in Cloud, Da
Slide 21: Order Book Remains Robust
Order Book Order Book Remains Robust Order Book $’b 27.4 23.0 +19% • $27.4b as at 31 Dec 2023. 19.3 1.8 • $7.9b expected to be delivered in 2024. 17.5 Dec-21 Dec-22 Dec-23 21 | U.S. Marine
Slide 22: Balanced Debt Profile
Debt Profile Balanced Debt Profile Total Borrowings Floating • Borrowings reduced 7% to $6.1b. Fixed • EBITDA increased 16% to $1.5b. • Debt/EBITDA leverage ratios improved from 5.2x in 2022 to -7% 4.2x in 2023. $’b 6.5 6.1 • Investment in capital expenditure and capabilities (2023: >$500m) to suppo
Slide 23: Dividends
ST Engineering Dividends
Slide 24: FY2023 Final Dividend of 4.0 Cents per Share
Dividends FY2023 Final Dividend of 4.0 Cents per Share Dividend per Ordinary Share • Final dividend of 4.0 cents per ordinary share for financial year Interim Interim ended 31 December 2023. Final 12.0¢ 12.0¢ 10.0¢ • Total dividend of 16.0 cents, Interim Final Final including interim dividends of 12
Slide 25: Outlook
ST Engineering Outlook
Slide 26: Group President & CEO's Message
Group President & CEO’s Message “ In 2023, our Group achieved significant financial milestones. Group revenue exceeded $10b while Group Net Profit grew 10% year-on-year to $586m. This performance was underpinned by the strength of our Commercial Aerospace and Defence & Public Security segments, and
Slide 27: Summary
Summary 01 Group revenue, EBITDA, EBIT, Net Profit at new levels. 05 Satcom transformation underway. Strong contract wins of $14.8b in Cost of borrowings remained 02 2023, robust order book of $27.4b as at 31 Dec 2023. 06 competitive. Strong results underpinned by Investments made for capacity 03 Co
Slide 28: Segment Highlights
ST Engineering Segment Highlights
Slide 29: Segment Revenue
Segment Highlights Segment Revenue $’m 2H2023 2H2022 Change FY2023 FY2022 Change Commercial 2,050 1,587 +29% 3,905 2,991 +31% Aerospace Defence & Public 2,135 2,163 -1% 4,252 4,272 - Security ex. U.S. Marine +5% ex. U.S. Marine +6% Urban Solutions & 1,053 1,015 +4% 1,944 1,772 +10% Satcom Group 5,23
Slide 30: Segment EBIT
Segment Highlights Segment EBIT $’m 2H2023 2H2022 Change FY2023 FY2022 Change Commercial 160 118 +35% 337 301 +12% Aerospace Defence & Public 267 191 +40% 567 405 +40% Security Urban Solutions & 44 41 +7% 10 29 -66% Satcom Group 470 351 +34% 915 735 +24% 30 |
Slide 31: Commercial Aerospace
$’m FY2023 FY2022 Change Remarks Segment Highlights Commercial Higher revenue from all Aerospace Revenue 3,905 2,991 +31% sub-segments. EBIT grew 12% despite absence EBIT 337 301 +12% of pension restructuring gain. Excluding $72m pension EBIT, excl. restructuring gain in pension FY2022, EBIT for res
Slide 32: Commercial Aerospace Sub-segment Highlights
Segment Highlights Commercial Aerospace Sub-segment Highlights Aerospace MRO Aerostructures & Systems Aviation Asset Management Revenue, $’m Revenue, $’m AUMR1, US$’m +41% +18% +14% 1,957 1,977 2,081 1,671 1,821 1,392 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 Notes: R1 AUM refers to Asset Under Mana
Slide 33: Defence & Public Security
Segment Highlights $’m FY2023 FY2022 Change Defence Remarks & Public Excluding U.S. Marine revenue of $249m in Security Revenue, excl. U.S. 2022, revenue would be 6% higher YoY, with Marine's $249m 4,252 4,023 +6% growth in Digital Systems revenue in FY2022 & Cyber, Land Systems and Marine sub- segm
Slide 34: Defence & Public Security Sub-segment Highlights
Segment Highlights Defence & Public Security Sub-segment Highlights Digital Systems Land Systems Marine Defence Aerospace & Cyber Revenue, $’m Revenue, $’m Revenue, $’m Revenue, $’m +11% +2% 1,668 1,582 1,617 1,504 845 249 614 +3% 471 471 596 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 3
Slide 35: Urban Solutions & Satcom
Segment Highlights $’m FY2023 FY2022 Change Remarks Urban Solutions Revenue 1,944 1,772 +10% Growth contributed by Urban Solutions (TransCore), partially & Satcom offset by Satcom. Lower EBIT due to Satcom weakness (including severance costs and SatixFy divestment loss EBIT 10 29 -66% totalling $32m
Slide 36: Urban Solutions & Satcom Sub-segment Highlights
Segment Highlights Urban Solutions & Satcom Sub-segment Highlights Urban Solutions Satcom Revenue, $’m Revenue, $’m +16% 1,633 -16% 1,406 415 348 FY2022 FY2023 FY2022 FY2023 36 | Note: Revenue includes inter-segment and inter-subsegment sales
Slide 37: Appendix
£"6 ST Engineering Appendix
Slide 38: Statement of Financial Position
Appendix Statement of Financial Position $'m 31 Dec 2023 31 Dec 2022 Property, plant & equipment 2,076 2,076 Right-of-use assets 651 582 Intangible assets 4,958 5,291 Other non-current assets 1,064 888 Current assets 6,630 6,127 Total assets 15,379 14,964 Current liabilities 7,322 8,005 Non-current
Slide 39: Statement of Cash Flows
Appendix Statement of Cash Flows $’m FY2023 FY2022 Net cash from / (used in): Operating activities 1,179 673 Investing activities (201) (4,571) Financing activities (1,226) 3,698 Net change in CCE* (248) (201) CCE at beginning of the year 602 816 Exchange difference - (14) CCE at end of the year 353
Slide 40: Connect with us
Connect with us www.stengg.com 40 |