Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — FY2020 Earnings Presentation
56 slides from Singapore Technologies Engineering's earnings presentation, Feb 19, 2021
Slide 1: Financial Year 2020 Results
Financial Year 2020 Results 19 February 2021
Slide 2: Agenda
Agenda • Group Highlights • Outlook • Appendix • FY2021 Financial Reporting Framework
Slide 3: Group Highlights
ST Engineering Group Highlights
Slide 4: Group Highlights
Group Highlights All figures are denominated in S$m unless indicated otherwise 2H2020 FY2020 Revenue Profit from Revenue Profit from operations operations 3,586 261.7 7,158 560.9 -18% y-o-y -28% y-o-y -9% y-o-y -17% y-o-y PBT Net Profit PBT Net Profit 248.0 264.4 534.4 521.8 -32% y-o-y -14% y-o-y -2
Slide 5: FY2020 Revenue & Net Profit
FY2020 Revenue & Net Profit All figures are denominated in S$m unless indicated otherwise Revenue Net Profit 7,868 (-9pp) 578 (-9pp) (-9%) 0pp -737 7,158 (-10%) (-3pp) (+2pp) 522 FY2019 Aerospace Other FY2020 FY2019 Impairments Ship- Net impact of FY2020 Sectors & Fair Value building • COVID-19 Chan
Slide 6: Group Revenue Breakdown
Group Revenue Breakdown FY2020 Revenue FY2020 Revenue FY2020 Revenue S$7.2b by type by location of customers Commercial Defence 5.6 Land Marine 4.6 4.6 Systems 10% ASIA U.S. 19% Others 1% 53% 24% 2.6 2.3 2.1 Aerospace EUROPE OTHERS Electronics 38% 32% 17% 6% 2018 2019 2020 2018 2019 2020 6 |
Slide 7: New Contracts
New Contracts • Aerospace and Electronics sectors collectively secured about $1.3b worth of new contracts in 4Q2020. • Bringing their total contract wins to about $5.7b in FY2020. • These values exclude new contracts secured by Land Systems and Marine sectors. Note: amounts may not add due to roundi
Slide 8: Order Book
Order Book Order Book ($b) • Cancellations and adjustments to 15.3 15.4 order book were about $1b in 2020. • Certain contracts slated for Q42020 were deferred to January 2021. 13.2 • Notwithstanding the above, our order book remained robust at Dec 2018 Dec 2019 Dec 2020 $15.4b as at 31 December 2020
Slide 9: Group Revenue
Group Revenue S$'m 2H2020 2H2019 Change FY2020 FY2019 Change Aerospace 1,243 1,992 -38% 2,713 3,450 -21% Electronics 1,218 1,249 -2% 2,287 2,337 -2% Land Systems 767 755 +2% 1,411 1,428 -1% Marine 325 359 -9% 710 647 +10% Others 33 2 >500% 37 6 >500% Group 3,586 4,357 -18% 7,158 7,868 -9% 9 |
Slide 10: Group Net Profit
Group Net Profit S$'m 2H2020 2H2019 Change FY2020 FY2019 Change Aerospace 87.9 141.9 -38% 192.9 268.9 -28% Electronics 116.3 101.7 +14% 203.9 183.3 +11% Land Systems 59.6 41.7 +43% 101.4 77.3 +31% Marine 6.9 25.2 -73% 28.3 51.5 -45% Others (6.3) (1.9) NM (4.7) (3.1) NM Group 264.4 308.6 -14% 521.8 5
Slide 11: Group Net Profit Margin
Group Net Profit Margin 2H2020 FY2020 7% 7% Group 7% 7% 7% 7% Aerospace 7% 8% 10% 9% Electronics 8% 8% 8% 7% Land Systems 6% 5% 2% 4% Marine 7% 8% 2H2020 2H2019 FY2020 FY2019 11 |
Slide 12: Balance Sheet
Balance Sheet S$'m 31 Dec 2020 31 Dec 2019 Property, plant & equipment 1,757 1,805 Right-of-use assets 539 484 Intangible assets 1,946 1,980 Other non-current assets 731 613 Current assets 4,588 4,639 Total assets 9,561 9,521 Current liabilities 3,896 5,446 Non-current liabilities 3,090 1,584 Total
Slide 13: Statement of Cash Flows
Statement of Cash Flows S$'m FY2020 FY2019 Net cash from/(used in) Operating activities 1,533 590 Investing activities (295) (1,273) Financing activities (959) 720 Net increase in CCE * 279 37 CCE at beginning of the year 452 414 Exchange difference (2) 1 CCE at end of the year 729 452 * CCE - Cash
Slide 14: FY2020 Final Dividend of 10.0 Cents per Share
FY2020 Final Dividend of 10.0 Cents per Share • Board announced final dividend of 10.0 cents per ordinary share, subject to shareholders’ approval at the forthcoming Annual General Meeting, payable on 7 May 2021. Dividend per Ordinary Share • FY2020 interim dividend was 5.0 cents Final Final Final b
Slide 15: Outlook
ST Engineering Outlook
Slide 16: 2021 Target – Offset ~$250m of lower government support
2021 Target – Offset ~$250m of lower government support * • Through cost savings and partial business recovery & lower impairments $’m ~ ~ ~ • Reduced manpower costs • Productivity measures ~ * Government support includes those in Singapore and certain other countries where we have locally incorpora
Slide 17: Group President & CEO’s Message
Group President & CEO’s Message “Our 2020 financial results were in line with our guidance provided during our 3Q market update. In a year when COVID-19 posed challenges for many industries, we had been able to keep balanced keel because of the underlying strengths of the Group and various mitigatin
Slide 18: Appendix
ST Engineering Appendix
Slide 19: Group
ST Engineering Group
Slide 20: Group Profit before Tax (PBT)
Group Profit before Tax (PBT) S$'m 2H2020 2H2019 Change FY2020 FY2019 Change Aerospace 82.2 174.3 -53% 202.5 332.8 -39% Electronics 132.8 117.9 +13% 229.4 216.3 +6% Land Systems 63.8 46.4 +38% 113.0 88.6 +28% Marine (5.3) 29.3 NM 16.8 60.8 -72% Others (25.5) (2.3) NM (27.3) (3.3) NM Group 248.0 365.
Slide 21: Group PBT Margin
Group PBT Margin 2H2020 FY2020 7% 7% Group 8% 9% 7% 7% Aerospace 9% 10% 11% 10% Electronics 9% 9% 8% 8% Land Systems 6% 6% -2% 2% Marine 8% 9% 2H2020 2H2019 FY2020 FY2019 21 |
Slide 22: Aerospace
ST Engineering Aerospace
Slide 23: Aerospace Revenue by geography
Aerospace Revenue by geography (by location of customers) Europe Others FY2020: $962m 6% FY2020: $164m 35% 31% 28% Asia U.S. FY2020: $838m FY2020: $752m Note: Revenue includes inter-segment sales 23 |
Slide 24: Aerospace Revenue, PBT and Net Profit by business group
Aerospace Revenue, PBT and Net Profit by business group AMM CERO EMS 1,055 847 1,553 918 1,400 570 515 909 95.4 444 398 102.3 638 77.6 95.9 45.2 39.8 60.4 60.7 163 50.8 36.0 (1.5) 29.0 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 PBT $51.9m $74.6m $101.9m $127.
Slide 25: Aerospace FY2020 vs FY2019
Aerospace FY2020 vs FY2019 Lower revenue from all business groups due to Revenue $2,713m ▼ $737m or 21% reduced activities arising from COVID-19 Lower activities and impairment of assets Absence of net favorable impact from end-of- programme reviews PBT $202.5m ▼ $130.3m or 39% Share of lowe
Slide 26: Aerospace FY2020 in Review
Aerospace FY2020 in Review • Secured about $821m worth of new contracts in 4Q2020, bringing total contract wins to about $2.9b in FY2020 • New contracts won in FY2020 include: • Multi-year engine and component MRO contracts to support T’way Air’s Boeing 737 fleet • A 5-year nacelle maintenance contr
Slide 27: Aerospace FY2020 in Review
Aerospace FY2020 in Review • Sold a portfolio of aircraft engines using securitisation structure through engine leasing JV • Developed new solutions including the world’s first expandable aircraft lavatory, anti-microbial coating for cabin interiors, seat separators and mobile cabin cargo box for hi
Slide 28: Electronics
ST Engineering Electronics
Slide 29: Electronics Revenue by geography
Electronics Revenue by geography (by location of customers) Europe 9% Others FY2020: $202m 6% FY2020: $139m 13% 72% Asia U.S. FY2020: $1,669m FY2020: $309m Note: Revenue includes inter-segment sales 29 |
Slide 30: Electronics Revenue, PBT and Net Profit by business group
Electronics Revenue, PBT and Net Profit by business group LSG CSG SSG 553 537 660 655 1,152 1,127 294 272 607 614 363 351 100.5 55.0 50.5 74.6 49.4 53.7 52.9 52.6 22.6 35.1 44.0 14.3 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 PBT $26.3m $19.0m $66.0m $61.9m P
Slide 31: Electronics FY2020 vs FY2019
Electronics FY2020 vs FY2019 Lower revenue from all business groups, impacted Revenue $2,287m ▼ $50m or 2% by COVID-19 Government support and cost reduction measures Partially offset by PBT $229.4m ▲ $13.1m or 6% Unfavourable sales mix Share of higher losses from associates and joint vent
Slide 32: Electronics FY2020 in Review
Electronics FY2020 in Review • Secured about $516m worth of new contracts in 4Q2020, bringing total contract wins to about $2.9b in FY2020 • New contracts won in FY2020 include: • Rail electronics projects in Singapore, China, India and Thailand • IoT solutions including smart lighting and water adv
Slide 33: Electronics FY2020 in Review
Electronics FY2020 in Review • Deployed solutions to support Singapore’s COVID-19 efforts including integrated command, control and communications (C3) systems, contact tracing and integrated surveillance systems • Received industry recognition for Smart City solutions including Smart Lighting (IDC
Slide 34: Land Systems
ST Engineering Land Systems
Slide 35: Land Systems Revenue by geography
Land Systems Revenue by geography (by location of customers) Europe Others 5% FY2020: $72m FY2020: $4m 19% 76% Asia U.S. FY2020: $1,095m FY2020: $270m Note: Revenue includes inter-segment sales 35 |
Slide 36: Land Systems Revenue, PBT and Net Profit by business group
Land Systems Revenue, PBT and Net Profit by business group Auto M&W S&T 1,040 1,028 209 209 216 197 125 115 115 536 549 109 35.4 18.1 21.2 44.6 14.0 14.8 27.2 44.8 17.6 14.6 22.8 4.9 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 PBT $3.2m $16.1m $14.9m $36.7m PB
Slide 37: Land Systems FY2020 vs FY2019
Land Systems FY2020 vs FY2019 Lower revenue from US specialty vehicles and Munitions & Weapon business groups Revenue $1,411m ▼ $17m or 1% Partially offset by Increased vehicle production in Singapore Higher revenue from vehicle production, cost reduction measures and Government support Parti
Slide 38: Land Systems FY2020 in Review
Land Systems FY2020 in Review • Secured new contracts, including • Additional units of Hunter Armoured Fighting Vehicle from Singapore Ministry of Defence • Weapons & munitions from customers in Asia and Middle East • Progressive delivery of three-door double-deck buses and electric buses to Singapo
Slide 39: Marine
ST Engineering Marine
Slide 40: Marine Revenue by geography
Marine Revenue by geography (by location of customers) Europe Others FY2020: $34m 5% 6% FY2020: $41m 52% 37% Asia U.S. FY2020: $262m FY2020: $374m Note: Revenue includes inter-segment sales 40 |
Slide 41: Marine Revenue, PBT and Net Profit by business group
Marine Revenue, PBT and Net Profit by business group Shipbuilding Shiprepair Engineering 280 112 247 392 72 255 63 137 49.4 47.5 176 111 39 159 6.5 29.6 3.9 0.2 (8.3) (13.1) (4.4) (19.4) 22.8 (2.8) 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 2H2019 2H2020 FY2019 FY2020 PBT ($10.4m) ($27.
Slide 42: Marine FY2020 vs FY2019
Marine FY2020 vs FY2019 Higher contribution from US Shipbuilding Partially offset by Revenue $710m ▲ $63m or 10% Lower revenue from Singapore operations as yard activities were disrupted by COVID-19 Weaker U.S. shipbuilding performance and PBT $16.8m ▼ $44.0m or 72% higher operating costs inc
Slide 43: Marine FY2020 in Review
Marine FY2020 in Review • Secured new contracts, including: • Firm order for one Auxiliary Personnel Lighter-Small (APL(S)) 67 Class berthing barge for the U.S. Navy, bringing total orders to four units • Industrial studies contract for U.S. Navy’s T-AGOS programme • Design studies for the developme
Slide 44: Financial Reporting Framework (post-reorganisation)
Financial Reporting Framework (post-reorganisation) FY2021 and onwards
Slide 45: New organisation structure
New • New structure is to align with growth strategy: organisation o strengthen core business o grow smart city and international defence structure business requires new • Organised into (1) Commercial and (2) financial Defence & Public Security clusters: o deepen customer focus reporting o accelera
Slide 46: New organisation structure from January 2021
Financial Reporting Framework New organisation structure from January 2021 Commercial Defence & Public Security • Deepen customer focus • Accelerate domain expertise Digital Defence Commercial Urban Satellite Land Marine • Position for Systems Aerospace Aerospace Solutions Communications Systems Int
Slide 47: Guiding principles for new financial reporting framework
Financial Reporting framework Guiding principles for new financial reporting framework 1• Reflects management structure, stewardship and accountability 2• Enable comparison to peer group companies 3• Provides segment performance 47 |
Slide 48: New Segments
Financial Reporting Framework New Segments Group Urban Solutions & Defence & Public Commercial Aerospace Satellite Security Communications • Airframe, engines and • Smart mobility • Defence components MRO • Smart utilities & infrastructure • Public safety and security • Passenger-to-freighter • Auto
Slide 49: New Sub-segments
Financial Reporting Framework New Sub-segments Group Segments Urban Solutions & Satellite Commercial Aerospace Commercial Defence & Public Security Communications Aerospace Aerostructures Digital Systems Sub-segments Aero MRO Urban Solutions Land Systems & Systems & Cyber Aviation Asset Satellite De
Slide 50: FY2020 Revenue Breakdown
Financial Reporting Framework FY2020 Revenue Breakdown Business segment contributions (%) New reporting framework Circa 50% Circa 50% Old reporting framework Urban Solutions Commercial Defence & Public Aerospace* & Satellite Security 38% 32% 20% 10% Communications* Land Aerospace Electronics Electro
Slide 51: Disclosures of Key Financial Metrics
Financial Reporting Framework Disclosures of Key Financial Metrics Profit & Loss Balance Sheet Cash Flow Group Full Profit & Loss Full Balance Sheet Full Cash Flow statement statement statement Business Revenue Segment assets/ x Segments Earnings before liabilities Interest & Tax* Sub-se
Slide 52: Appendix
ST Engineering Appendix
Slide 53: Commercial Aerospace Business Overview
Financial Reporting Framework Commercial Aerospace Business Overview Segment Commercial Aerospace Aerostructures & Aviation Asset Aero MRO Systems Management Sub-segments • Airframe services • Nacelle • Aircraft and freighter • Engine services • Cabin interiors & leasing • Component services enginee
Slide 54: Urban Solutions & Satellite Communications Business Overview
Financial Reporting Framework Urban Solutions & Satellite Communications Business Overview Urban Solutions & Segment Satellite Communications Urban Solutions Satellite Communications Sub-segments • Smart mobility solutions • Ground infrastructure including • Smart utilities and infrastructure hardwa
Slide 55: Defence & Public Security Business Overview
Financial Reporting Framework Defence & Public Security Business Overview Segment Defence & Public Security Digital Systems Defence Land Systems Marine and Cyber Aerospace • Mission software and • Land defence • Shipbuilding • MRO and Sub-segments secure cloud system • Ship & rig repair modernisatio
Slide 56: Thank you
£"6 ST Engineering Thank you
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