Sia Engineering Co. Ltd. · SGX:S59
Sia Engineering — FY2021/22 Earnings Presentation
32 slides from Sia Engineering's earnings presentation, May 6, 2022
Slide 1: FY21/22 Review
FY21/22 REVIEW 06 May 2022 SIA ENGINEERING i 1Y
Slide 2: Operational Review
Operational Review » SIA ENGINEERING COMPANY
Slide 3: Core Business
Core Business Line Maintenance Base Maintenance Fleet Management • 26 airports in 7 countries • 6 hangars in Singapore • 95 aircraft from 9 airlines • 3 hangars in Philippines 3
Slide 4: Line Maintenance
Line Maintenance • Number of flights handled in FY21/22 increased 73% YOY • Over the year, flight recovery compared to pre-pandemic level was 15.5 percentage points • Pace of recovery has been gradual, with stronger pick up in the second half FLIGHTS HANDLED AT 1H FY21/22 2H FY21/22 CHANGI AIRPORT 3
Slide 5: Base Maintenance
Base Maintenance Maintenance Checks at Singapore Base • Successful adoption of Lean practices has led to FY20/21 FY21/22 significant reduction in turnaround time, which created additional capacity Light Checks* 223 348 • Secured and completed more checks this year, Heavy Checks 60 93 due to increase
Slide 6: Fleet Management
Fleet Management • Work volume, which is largely driven by flight activities, was subdued in the first three quarters • Signs of slight improvement seen in the 4th quarter due to gradual opening up of borders globally and lifting of air travel restrictions FMP Fleet: 95 aircraft Customers A320 A320
Slide 7: FY21/22 Customer Contracts
FY21/22 Customer Contracts Line Maintenance Line Maintenance International Base Maintenance Renewed New New New Fleet Management New 7
Slide 8: Building Capabilities for Growth
Building Capabilities for Growth Engine Services Sustainability April 2021 December 2021 January 2022 February 2022 February 2022 February 2022 Formed ESD 10-yr 10-yr agreement New Aircraft Signed Use of to: agreement with Rolls-Royce Engine Services agreement with Sustainable with Safran to provide
Slide 9: Building Capabilities for Growth
Building Capabilities for Growth Component Services December 2021 February 2022 February 2022 Signed agreement Formed the new Acquiring a 75% stake with Iacobucci HF Component Services in SR Technics in Aerospace S.P.A to Division (CSD) Malaysia to form a vertically integrate component MRO JV suite
Slide 10: Strategic Partnerships – JV Portfolio
Strategic Partnerships – JV Portfolio 22 JVs Across 7 Countries (Total Revenue in FY21/22: S$4.8B) Airframe and Line Maintenance Engine and Component SIA Engineering SIA Engineering PT JAS Aero-Engineering Singapore Aero Engine Eagle Services Asia (ESA) Component Aerospace (USA) (SEUS) Japan (SIAEJ)
Slide 11: Transformation Phase 2 (2021 – 2023)
Transformation Phase 2 (2021 – 2023) Operational Excellence Boost Create value for Strengthen competitiveness & key stakeholders ecosystem emerge stronger & improve culture Innovation Customer in Services Intimacy • Delivering digital capabilities Digital & Technology • Transforming staff experience
Slide 12: Transformation Phase 2 (2021-2023) – Gaining Momentum
Transformation Phase 2 (2021-2023) – Gaining Momentum Planned investments of S$40M in Lean and Digital Product Development Power Up with Digital and Power Up with Lean Technology • Successes in project sustainment with continuous ramp-up of projects for end-to-end process • Launched new digital appl
Slide 13: Sustainability
Sustainability Environment Sustainable Aviation Fuel Electrification Successful trial conducted on engine tests Trial of electric vehicles in operational at test cell facility, with 32% lower carbon environment completed. Plan underway to emissions compared to conventional fossil scale up adoption o
Slide 14: Sustainability
Sustainability Social Governance Training Appointment of Chief In our focus to upskill our employees Sustainability Officer to focus despite the downturn, we have continued and advance Sustainability agenda to exceed our training hours per employee within the organisation Engagement Improvement in E
Slide 15: Financial Review
Financial Review » SIA ENGINEERING COMPANY
Slide 16: Key Highlights
Key Highlights • Gradual recovery of flight activities during the year with faster pace of recovery in the second half. • Slight reduction in operating loss as revenue recovery and cost management kept pace with tapering of government support. • Higher share of profits mainly due to tax write-back a
Slide 17: Summary of Group Results FY21/22
Group Revenue Summary of Group Results 566.1 FY21/22 FY20/21 FY21/22 S$’M Group Operating Share of profits of JV Group Profit/(Loss) Group Revenue Profit/(Loss) & Assoc after tax +123.1 p 27.8% y-o-y -21.8 79.1 67.6 Group Expenditure 587.9 Share of profits of JV & Assoc Group profit after tax +3.2 +
Slide 18: Analysis of Group Profit – FY21/22
Analysis of Group Profit – FY21/22 +57.6 -87.7 +37.9 -2.5 $67.6M +22.5 $78.8M +51.0 • Without wage support, Group would have incurred a net loss of $25.9M • Excluding impact of lower wage support and impairments, Group performance 128.6M FY20/21 Subsidiaries Share of Wage support Impairments Non-
Slide 19: Analysis of Group Revenue
Analysis of Group Revenue FY21/22 994.1 $32.1M $52.7M 566.1 443.0 +$123.1M p 27.8% $566.1M $481.3M FY19/20 FY20/21 FY21/22 512.7 481.4 p 27.8% 302.6 263.5 223.0 220.0 481.3 376.6 p 1.9% p 118.4% S$’M 51.7 52.7 1H19/20 2H19/20 1H20/21 2H20/21 1H21/22 2H21/22 32.1 14.7 FY20/21 FY21/22 FY20/21 FY21/22
Slide 20: Analysis of Group Expenditure
Analysis of Group Expenditure FY21/22 926.4 $63.3M $54.0M $107.7M 587.9 468.0 +$119.9M $80.8M $587.9M p 25.6% FY19/20 FY20/21 FY21/22 $282.1M 475.4 Staff costs Material costs Subcontract costs Depreciation & Others 451.0 Amortisation 317.7 p 35.0% p 33.6% p 63.6% q 11.1% p 14.2% 270.2 250.2 217.8 28
Slide 21: Group Operating Profit by Segment
Group Operating Profit by Segment FY21/22 Group Operating Loss FY21/22 FY20/21 Variance $M $M $M % Airframe and Line Maintenance (9.1) (20.8) + 11.7 + 56.3 Engine and Component (12.7) (4.2) - 8.5 - 202.4 (21.8) (25.0) + 3.2 + 12.8 21
Slide 22: Joint Venture and Associated Companies
Joint Venture and Associated Companies FY21/22 Share of Profit/(Loss) After Tax FY21/22 FY20/21 Variance $M $M $M % Engine centers 57.1 23.0 + 34.1 + 148.3 Component centers 32.7 26.8 + 5.9 + 22.0 Engine and component 89.8 49.8 + 40.0 + 80.3 Airframe and line maintenance (10.7) (9.9) - 0.8 - 8.1 79.
Slide 23: Group Revenue FY21/22
Group Revenue FY21/22 (SIAEC, Subsidiaries, JV and Associated Companies) $'M 6,342.3 1,108.2 5,506.9 605.3 4,287.4 516.3 • +28% YoY 5,234.1 • 87% of FY19/20 4,901.6 3,771.1 FY1920 FY2021 FY2122 1H19/20 2H19/20 1H20/21 2H20/21 1H21/22 2H21/22 Engine and component Airframe and line maintenance Total *
Slide 24: Group Balance Sheet
Group Balance Sheet Mar-22 Mar-21 Variance $M $M $M % Total equity 1,621.3 1,544.2 + 77.1 + 5.0 Non-current liabilities 39.0 56.5 - 17.5 - 31.0 Current liabilities 177.9 209.1 - 31.2 - 14.9 Non-current assets 925.5 883.8 + 41.7 + 4.7 Cash 625.5 616.0 + 9.5 + 1.5 Other current assets 287.2 310.0 - 22
Slide 25: Financial Statistics
Financial Statistics FY21/22 FY20/21 Variance Financial Statistics Return on shareholders' funds (%) 4.3 (0.7) +5.0 ppt Basic earnings/(loss) per share (cents) 6.02 (1.00) n.m. Mar-22 Mar-21 Variance Net asset value per share (cents) 143.5 136.8 +4.9 % 25
Slide 26: Powering Up for Growth
Powering Up for Growth SIA ENGINEERING i 1Y
Slide 27: Outlook
Outlook Flights Handled by SIAEC LM (% of pre-Covid levels) 50.0% 45.0% • Stronger recovery of flights in 2H 40.0% • Recovery in air travel is picking up as governments in many parts of the world lift travel 35.0% restrictions 30.0% • Achieved 45% recovery in flights handled at Changi Airport for Ap
Slide 28: Challenges Ahead
Challenges Ahead Tapering off of government wage support - Recognition of wage support will end in July 2022 IATA Projected Travel Recovery 120% Potential new variants or unexpected surges Travel volume compared to 2019 levels in infections 110% - New variants, if resistant to existing vaccines, cou
Slide 29: Priorities Ahead
Priorities Ahead Remain vigilant and prudent in Ramp up manpower recruitment in managing increase in costs preparation for further flight recovery Invest in digitalisation, automation, and Scale up Lean initiatives across the optimisation and decision support capabilities Company to raise productivi
Slide 30: Year in Review
Year in Review Growth Opportunities Captured Engine Services • Growth in engine services business with new contracts and investments in new capabilities and facilities • Secured new long-term contracts and opened our engine Quick Turn facility on 18 Feb 2022 Component Services • Formation of Compone
Slide 31: Drivers for Growth
Drivers for Growth Invest in new capabilities and services for new Size opportunities for organic growth and generation aircraft strengthen JV portfolio in the region
Slide 32: Thank you
Thank you » SIA ENGINEERING COMPANY
SIA Engineering Company — FY2021/22 Earnings Presentation on 6ix