Sats Asa · OSL:SATS
Sats Asa — H1 FY2024 Earnings Presentation
42 slides from Sats Asa's earnings presentation, Nov 10, 2023
Slide 1: 1H FY24 Business Update
<Public> 1H FY24 Business Update 10 November 2023 <Public>
Slide 2: Forward Looking Statement – Important Note
<Public> Forward Looking Statement – Important Note The following presentation contains forward-looking statements by the management of SATS Ltd. (“SATS”), relating to financial and market trends for future periods. Some of the statements contained in this presentation that are not historical facts
Slide 3: Agenda
<Public> Agenda 1 Business Update 2 Group Financial Review 3 Outlook 4 Annex 3 <Public>
Slide 4: Locations and countries
<Public> Europe Middle East Greater China 48 Thailand Locations 4 1 16 Locations Location Locations Belgium Denmark France Germany Oman Ireland Saudia Arabia Italy Japan Netherlands Spain Sweden 1 United Kingdom Location Vietnam 1 Location Philippines 1 Malaysia Location 16 Canada Locations United S
Slide 5: 2Q FY24 revenue grew three-fold, driven by WFS consolidation
<Public> 2Q FY24 revenue grew three-fold compared to the same period last year, driven by WFS consolidation and continued travel recovery New commercial wins • Supporting Etihad Airways in its cold chain cargo handling in the US and Copenhagen • Extending cargo handling partnership in Liege, Belgium
Slide 6: Disciplined integration efforts and positive synergies
<Public> Disciplined integration efforts and positive synergies contributed to stronger financial performance Delivering Productivity Synergies • 1H FY24 revenue grew +208.3 % to S$2.48 Billion over the same period last year • 1H FY24 EBITDA + SoAJV margin improved from 7.4% in 1H FY23 to 16.0% in 1
Slide 7: Laser-focused on supporting the ramp-up of operations in Singapore
<Public> Laser-focused on supporting the ramp-up of operations in Singapore Flights Handled +48% Meals Served +51% Passengers Handled +78% Cargo Tonnage -5.3% 1H FY24 vs 1H FY23 7 <Public>
Slide 8: Key Business Drivers
<Public> Current period (1H FY24) Key Business Drivers Prior period (1H FY23) Flights Handled Meals Served Passengers Handled Cargo Tonnage Number of Employees Year-to-date (YoY comparison) In Thousands In Millions In Millions In ‘000 Tonnes Number 2.9x 1.5x 1.7x 3.2x 3.1x 299.1K 38.5M 47.1M 3.7M 48
Slide 9: 1H FY24 reflects resilient and sound underlying performance
<Public> 1H FY24 reflects resilient and sound underlying performance of SATS Group Restoring and scaling up group profitability Revenue ($’M) EBITDA + SoAJV ($’M) 397 2,481 356 1,941 1,758 1,177 173 970 94 72 FY20 FY21 FY22 FY23 1HFY24 FY20 FY21 FY22 FY23 1HFY24 1H results 1H results EBIT + SoAJV ($
Slide 10: Path forward…
<Public> Path forward… • SATS slated to benefit from passenger traffic recovery – Robust pax traffic recovery to fuel growth in Food Solutions and passenger-linked ground services – SATS Food Solutions continues to leverage scale benefit to improve overall profitability on the back of lower operatin
Slide 11: Group Financial Updates
<Public> Group Financial Updates <Public>
Slide 12: Executive Summary - 2Q FY24 SATS Group
<Public> Executive Summary - 2Q FY24 SATS Group Revenue EBIT SoAJV PATMI EBITDA+ $1,281.9M $65.5M $ 23.1M $22.2M $217.6 (margin: 5.1%) (margin: 1.7%) (margin: 17.0%) • 2Q FY24 revenue increased 6.9% (or $83.3M) to $1.28B compared to last quarter. • Flights handled and aviation meals served as at SEP
Slide 13: 2Q FY24 Highlights (vs 1Q FY24)
<Public> 2Q FY24 Highlights (vs 1Q FY24) Commentary S$'M 2Q FY24 1Q FY24 QoQ var QoQ var % • Group revenue increased by 6.9% ($83.3M) on the back of volume improvement in aviation and non- Revenue 1,281.9 1,198.6 83.3 6.9 aviation business. OPEX (1,216.4) (1,188.4) (28.0) (2.4) • Higher Opex in line
Slide 14: 2Q FY24 Highlights (vs 2Q FY23)
<Public> 2Q FY24 Highlights (vs 2Q FY23) Commentary S$'M 2Q FY24 2Q FY23 YoY var YoY var % • Group revenue improved by 198.8% ($852.9M) as Food and Gateway recorded higher revenue by 27.4% Revenue 1,281.9 429.0 852.9 198.8 and 473.4% on the back of aviation recovery and WFS consolidation. OPEX (1,21
Slide 15: 1H FY24 Highlights (vs 1H FY23)
<Public> 1H FY24 Highlights (vs 1H FY23) Commentary S$'M 1H FY24 1H FY23 YoY var YoY var % • Group revenue improved by 208.3% ($1,676.1M) due to WFS consolidation and continued travel recovery. Revenue 2,480.6 804.5 1,676.1 208.3 • Increase in Opex driven mainly by WFS consolidation OPEX (2,404.9) (
Slide 16: FY24 Quarterly Trending
<Public> FY24 Quarterly Trending Revenue $852.9M PATMI $32.1M 1,198.6 1,281.9 22.2 (29.9) 3.3 730.6 15.0 18.9 700.7 0.5 5.5 (9.9) (22.5) (44.9) 429.0 475.7 478.1 497.9 551.3 375.5 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 EBITDA + SoAJV $172.2M Core PATMI $13.0M 217.6 (17.4) 16.8 1
Slide 17: 1H FY24 breakdown
<Public> 1H FY24 breakdown S$’M 1H FY24 PATMI (7.8) Add back: One-off integration expenses 15.2 Others: Amount has been adjusted downwards Provisional intangible assets amortisation 14.5 based on latest estimate while pending Incremental lease accounting expenses1 15.3 completion of purchase price a
Slide 18: FY24 Group Financial Position
<Public> FY24 Group Financial Position # Components of the debt: MTN and term loans ($2,778.8M) and lease liabilities ($1,394.5M) * Before taking into account leases ** FY24 denotes @ 30 Sep 23 and FY23 denotes @ 31 Mar 23 18 n.m. – not meaningful <Public>
Slide 19: Group Balance Sheet
<Public> Group Balance Sheet $M AS AT 30 SEP 23 AS AT 31 MAR 23 Change % Commentary Non-Current Assets 6,635.6 1,950.9 240.1 Increase attributable to intangible assets and right-of-use assets arising from the acquisition of WFS. Decreased due to transfer of deposits placed with notary to the seller
Slide 20: Group Cash Flow Statement
<Public> Group Cash Flow Statement ($'M) FY24 FY23 Var Net Cash (used in)/from Operating Activities 75.5 (26.7) 102.2 Net Cash used in Investing Activities 57.6 (38.2) 95.8 Capital expenditure (96.2) (60.7) (35.5) Dividends from associates/joint ventures 20.4 13.9 6.5 Net Operating Cashflow ($'M) Pr
Slide 21: Outlook
<Public> Outlook <Public>
Slide 22: Outlook
<Public> Outlook The Group’s operating statistics have shown a steady recovery, primarily driven by the return of air travel globally. IATA reported that passenger traffic has recovered to 88.5% of 2019 levels. Accordingly, the Group saw robust growth momentum across its key operating metrics with f
Slide 23: Outlook
<Public> Outlook To better manage the higher cargo volumes in key stations, SATS has added a new cargo terminal at Chicago O’Hare International Airport and invested in a fifth cargo terminal in Madrid. The Group also leverages its enlarged global network to develop new value-added solutions with key
Slide 24: Outlook
<Public> Outlook Singapore remains strategic to the SATS business, and our investments in Singapore operations have started to bear fruit with stronger financial performance this quarter as the volumes continue to ramp up. We will continue to collaborate with key stakeholders to enhance the efficien
Slide 25: Appendix
<Public> Appendix <Public>
Slide 26: Annex A
<Public> Annex A <Public>
Slide 27: Operating Statistics
<Public> Operating Statistics 2Q FY24 1Q FY24 2Q vs 1Q (%) 2Q FY23 YoY (%) 1H FY24 1H FY23 YoY (%) Passenger Handled ('M) 19.6 18.9 3.7% 12.6 55.2% 38.5 22.4 71.9% SATS 77.0 73.2 5.2% 55.7 38.3% 150.2 102.0 47.1% WFS 76.2 72.7 4.8% - n.m. 148.9 - n.m. Flights Handled ('000) 153.2 145.9 5.0% 55.7 175
Slide 28: Operating statistics – Flight and Cargo volume
<Public> Operating statistics – Flight and Cargo volume Flight recovery on track with steady growth M-o-M, while Cargo volume shows sign of recovery. Flights ('000) Cargo Tonnage ('000) Growth: Growth: -0.2% -1.3% -0.8% -0.5% -0.2% 0.0% 0.2% 2.4% 2.5% 1.9% 1.9% 1.7% 1.6% 1.3% 7,525.5 7,430.9 568.0 7
Slide 29: Reinforcing Diversification & Resilience
<Public> Reinforcing Diversification & Resilience 1H 1H Business Revenue YoY Var % FY24 FY23 1H FY24 1H FY23 By Business Aviation NA Food Cargo Aviation Food 7% 20% Food 14% Cargo 1,214.3 159.0 663.8 25% Ground 749.9 242.9 208.8 Cargo Gateway Services 1,964.2 401.9 388.8 49% Ground Ground Services N
Slide 30: 1H FY24 Group Expenditure
<Public> 1H FY24 Group Expenditure YoY $1,558.1M Growth 184.0% 1,442.8 Premise OOE Costs 14% 5% Licence Fees 2% Raw 1H FY24 Materials S$2,404.9M 7% Staff Costs 60% 426.7 D&A 341.3 12% 276.9 178.6 157.7 120.3 106.4 84.0 53.9 44.9 18.2 Staff Costs D&A Raw Materials Licence Fees Premise Costs OOE FY24
Slide 31: Group Segmented P&L – 2Q FY24
<Public> Group Segmented P&L – 2Q FY24 Food Gateway 2Q FY24 Food Gateway 2Q FY23 Others Others Solutions Services Total Solutions Services Total Revenue 275.7 1,006.2 0.0 1,281.9 216.4 212.6 0.0 429.0 EBIT (Loss)/profit 2.7 80.8 (18.0) 65.5 (7.2) (3.2) 2.4 (8.0) Share of results of 8.5 14.6 0.0 23.1
Slide 32: Group Segmented P&L – 1H FY24
<Public> Group Segmented P&L – 1H FY24 Food Gateway 1H FY24 Food Gateway 1H FY23 Others Others Solutions Services Total Solutions Services Total Revenue 516.1 1,964.2 0.3 2,480.6 402.6 401.9 0.0 804.5 EBIT (Loss)/profit (0.9) 91.3 (14.7) 75.7 (24.5) (20.6) 2.8 (42.3) Share of results of 13.6 30.8 0.
Slide 33: Summary Financials – Associates and Joint Ventures (AJVs)
<Public> Summary Financials – Associates and Joint Ventures (AJVs) OVERVIEW S$’M 1H FY24 1H FY23 % change • 1H SSOR increased 87.7% YoY. SATS Share of Revenue (SSOR) 406.0 216.2 87.7 Share of earnings / (losses) 44.4 17.6 152.3 • Share of earnings increased by $26.8M to $44.4M compared to last year.
Slide 34: 1H FY24 SATS share of revenue (SSoR)
<Public> 1H FY24 SATS share of revenue (SSoR) Business ASIA SSOR No. Associates/JVs Total Singapore EMEA AMERICA Food Unit (ex-SG) Solutions 24% 1 Taj SATS Air Catering Food 33 - 33 - - 2 Evergreen Sky Catering Food 25 - 25 - - 3 MacroAsia Catering Services Food 16 - 16 - - S$406M 4 Maldives Infligh
Slide 35: 1H FY23 SATS share of revenue (SSoR)
<Public> 1H FY23 SATS share of revenue (SSoR) Business ASIA SSOR No. Associates/JVs Total Singapore EMEA AMERICA Food Unit (ex-SG) Solutions 25% 1 Taj SATS Air Catering Food 24 - 24 - - 2 MacroAsia Catering Services Food 10 - 10 - - 3 Evergreen Sky Catering Food 8 - 8 - - S$216M 4 Maldives Inflight
Slide 36: Annex B
<Public> Annex B <Public>
Slide 37: SATS Ltd: Expanding Our Horizons
<Public> SATS Ltd Expanding Our Horizons FY23 (Full-Year) 1H FY24 53M 38.5M Passengers Handled Passengers Handled 69M 47M Meals Served Meals Served 230K 299K Flights Handled Flights Handled 2.2M Tonnes 3.7M Tonnes Cargo Handled Cargo Handled 14 Countries 27 Countries Over 60 locations Over 210 locat
Slide 38: SATS Group Global Network
<Public> SATS Group Global Network EMEA Comprehensive global Cargo Stations 51 coverage across Ground Stations 10 Americas - EMEA - APAC Europe<>NA (6% Global Cargo) Covering trade routes Europe<>APAC (11% Global responsible for >50% of Cargo) global air cargo volumes Domestic US Strategically locat
Slide 39: SATS Group: Global position in the air cargo handling
<Public> SATS Group: Global position in the air cargo handling Global Cargo Stations Count Cargo Volume (in M Tonnes) 9 135 92 5 53 3 31 2 1 1 4 5 (1) (1) 2021 Strategic Positions in Major Airport Hubs (in M Tonnes) North America EMEA APAC (Top 10 Airports Volume) (Top 10 Airports Volume) (Top 10 Ai
Slide 40: SATS Group has pivoted to a global market leader
<Public> SATS Group has pivoted away from being largely Asian business to a Global market leader (40%Asia, ~40%Americas, 20%EMEA) EMEA 1H FY23 2% 1H FY24 Asia (ex-SG) 17% Americas Singapore Region 37% 33% Singapore 80% EMEA 20% Asia (ex-SG) 9% 1H FY23 1H FY24 Aviation Cargo Aviation Food NA Food 20%
Slide 41: Scaling Sustainably
<Public> Scaling Sustainably DEVELOP SMART REDUCE FOOD AND NUTURE SKILLS FOR INFRASTRUCTURE PACKAGING WASTE THE FUTURE THEMES Convert 100% of ground support Halve food waste intensity in Increase average value-add per employee equipment in Singapore hub to cleaner Singapore operations from 2021 base
Slide 42: Q&A
<Public> Q&A <Public>