Sats Ltd · SGX:S58
Sats — Investor Day (November 2021)
66 slides from Sats's investor day presentation, Nov 12, 2021
Slide 1: Capital Markets Day
Capital Markets Day 12 November 2021
Slide 2: Programme
Programme Time Topic Speaker 0830 Event Registration, Breakfast, and Digital Capabilities Showcase - 1000 Brand Video – Feed and Connect Communities Spencer Low 1005 Opening Address Alex Hungate 1015 Strategy Overview & Outlook Kerry Mok 1030 Food Solutions Kerry Mok 1040 Gateway Services Bob Chi 10
Slide 3: Speakers
Speakers Alex Hungate Kerry Mok President & CEO President & CEO Designate Bob Chi Spencer Low Manfred Seah COO, Gateway Services Chief Strategy & Chief Financial Officer Sustainability Officer 3
Slide 4: Brand Video
<Restricted> Brand Video 4 <Restricted>
Slide 5: Opening Address
<Restricted> Opening Address Alex Hungate President & CEO 5 <Restricted>
Slide 6: APAC travel is expected to reach pre-COVID levels by 2024
APAC travel is expected to reach pre-COVID levels by 2024 Regional RPK Demand (% of 2019) North America Latin America World Europe APAC Middle East Africa Benchmark: Best Case: Base Case: 2019 2022 2H 2023 -80 -70 -60 -50 -40 -30 -20 -10 0 % 2021 2022 Source: IATA 6
Slide 7: Air cargo has already exceeded pre-COVID levels
Air cargo has already exceeded pre-COVID levels • Global Cargo Tonne Kilometres (CTKs) rose 9.1% above pre-COVID levels in September 2021 • Majority of SATS’ cargo associates were profitable in 2Q • 2Q Cargo revenue improved 45% YoY and 6.3% QoQ Source: IATA Economics using data from IATA Monthly St
Slide 8: 1HFY22 and Q-o-Q Operating Statistics
1HFY22 and Q-o-Q Operating Statistics Flights Handled Meals Served Passengers Handled Cargo Tonnage Number of Employees In Thousands In Millions In Millions In ‘000 Tonnes Number 4.1% 27.2% 9.5% 64.4% 14.7% 27.1 28.2 808.3 12.9 26.3 2.0 20.7 492.0 1.8 11.0 1H21 1H22 1H21 1H22 1H21 1H22 1H21 1H22 1H2
Slide 9: SATS is Asia's leading provider of food solutions and gateway services
<Restricted> SATS is Asia’s leading provider of food solutions and gateway services with presence in over 55 locations across 14 countries United Kingdom Singapore Maldives Greater China Vietnam India Japan Philippines Indonesia Greater China Japan Australia Saudi Malaysia Arabia Oman Saudi Arabia O
Slide 10: SATS accelerated investments in technology, capabilities, and capacity
<Restricted> SATS accelerated investments in technology, capabilities, and capacity 10 <Restricted>
Slide 11: FY20 – FY22: Revenue and OPEX Time Series
FY20 – FY22: Revenue and OPEX Time Series In S$’M 700.0 15.0% 600.0 10.0% 500.0 5.0% 400.0 0.0% 300.0 -5.0% 200.0 -10.0% 100.0 -15.0% - -20.0% 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 Revenue 465.1 497.4 545.6 433.1 209.4 231.1 251.0 278.5 275.6 293.9 OPEX 408.3 432.4 48
Slide 12: FY20 – FY22: PATMI vs Core PATMI
FY20 – FY22: PATMI vs Core PATMI In S$’M 80.0 30.0 0.0 (20.0) (70.0) (120.0) 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 PATMI 54.7 60.7 59.3 (6.3) (43.7) (33.2) (2.8) 0.8 6.4 6.8 CorePATMI 54.7 60.7 59.3 5.6 (43.7) (1.6) 8.2 13.2 6.4 6.8 CorePATMIex-reliefs 54.7 60.7 59.3
Slide 13: Financial Position Remains Strong
Financial Position Remains Strong Cash Reserves 0.07 0.07 0.06 0.39 0.56 0.47 Increase in debt to strengthen S$686M liquidity position1 (S$880M as at 31 Mar 2021) As at 30 Sep 2021, the Company is in a net cash position. FY2017 FY2018 FY2019 FY2020 FY2021 1HFY2022 Return On Equity DPS and EPS (Cents
Slide 14: Strategy Overview & Outlook
<Restricted> Strategy Overview & Outlook Kerry Mok PCEO Designate 14 <Restricted>
Slide 15: Strengthening and Pivoting
Strengthening and Pivoting • Secure market leadership in Singapore and establish innovation • Singapore and sustainability excellence for the Accelerate food production in Overseas network key markets in Asia Drive digital transformation • Expand multi-channel food in aviation distribution network t
Slide 16: Priorities Moving Forward
Priorities Moving Forward Reinforces Travel-related Hub Handling Aviation Catering Businesses Non-travel related Reinforces Reinforces Businesses Cargo Handling: Food r C o Asia Global Solutions Key Enablers People Partnerships Technology Culture 16
Slide 17: Key Revenue Drivers for the Future
Key Revenue Drivers for the Future 1H FY22 Gateway Food Non- 29% 32% 34% travel Travel 265.6M 302M 47% 53% 71% 6% 28% Others 1.9M 0% Cargo Cruise Security Ground Handling Travel Non-travel ____________________ 17 Note: All figures are unaudited and in S$ m unless otherwise stated.
Slide 18: Growth through Capital Investments
Growth through Capital Investments Capital spending for the past 5 years Past 5 years capital spending by region 302 Singapore 21 25 Japan 20 51 151 27 19 - 19 75 82 12 69 60 57 48 43 ASEAN (ex-SG) 25 138 - FY2017 FY2018 FY2019 FY2020 FY2021 23 Greater China Maintenance Capex New Project Capex Inves
Slide 19: FY25 Revenue Targets
FY25 Revenue Targets In S$’M $1.8B $1B 70%* 30%* $3B 40% 46% FY25 FY19 54% 60% Gateway: 40% Food: 60% Food Gateway 14% 35% FY25 FY19 FY19 FY21 FY25 FY25 New FY25 Revenue Revenue Travel Non-travel investments Target 65% Recovery revenue 86% Travel Non-travel Travel Non-travel * Based on Business as U
Slide 20: Food Solutions
<Restricted> Food Solutions Kerry Mok PCEO Designate 20 <Restricted>
Slide 21: Strengthening Food Solutions' Value Chain Presence
Strengthening Food Solutions’ Value Chain Presence Augmenting value creation from our products and food services Strategic Supply & Sourcing 3-Tier Production Network Responsiveness to Market Establishing supply partnerships and Operationalising and expanding network of food Harnessing insights on t
Slide 22: Expanding Food Solutions' Footprint
Expanding Food Solutions’ Footprint Pursuing growth and building resilience through a global network China Central Kitchen UK Innovation Hub Tokyo Central Kitchen, Japan India Central Kitchen Production Pathum Thani Production Facility, Thailand Singapore Innovation Hub Location / Facility (tons / d
Slide 23: Differentiating Food Solutions' Product Repertoire
Differentiating Food Solutions’ Product Repertoire Cementing our core customers and penetrating wider consumer segments Collaborative approach with strategic partners to generate greater value across the food ecosystem Institutions Co-Creation with Partners Aviation Complementing our offerings with
Slide 24: Leveraging Food Solutions' Innovations
Leveraging Food Solutions’ Innovations Extended shelf-life Alternative technology proteins FUTURE FOODS Process digitalisation Global trade & freight Operations safety (CCP / IoT) management system (visual analytics) DIGITALISATION Waste treatment system Renewable energy Waste management (biodigeste
Slide 25: Gateway Services
<Restricted> Gateway Services Bob Chi COO, Gateway Services 25 <Restricted>
Slide 26: Gateway Strategy
Gateway Strategy Post COVID-19: Continue to Re-Shape & Re-Invent Cost Structures Grow Gateway Businesses eCommerce Cold Chain Integrators/ Security Freight Forwarders External Growth China India Saudi Arabia Malaysia Accelerating Innovation and Diversification Trusted Hub Support SIA Group Digitalis
Slide 27: Growing the Cargo Business
Growing the Cargo Business • Collaborate with eCommerce players • Deepen partnership with national postal services, airlines, eCommerce players, and integrators • Enhance cold chain capabilities across network Hub Tail-to-tail Operator transfers Anchoring Regional Integrators Network and and Freight
Slide 28: Cargo Connectivity
Cargo Connectivity European Union Copenhagen Corridors Amsterdam Stockholm Zurich 38 55 27 10 Cold Chain RFID eFulfillment Valuable Addressable Market: eCommerce cross-border logistics: US$4B Beijing Osaka Dammam New Delhi Hong Kong Cargo Handling Capacity (tonnes per annum) Taipei Overall Cold Chai
Slide 29: Growing Non-travel Businesses – Security
Growing Non-travel Businesses – Security [click image to load video] 29 <Restricted>
Slide 30: Sustainability
<Restricted> Sustainability Spencer Low Chief Strategy & Sustainability Officer 30 <Restricted>
Slide 31: PVM Refreshed
<Restricted> PVM Refreshed 31 <Restricted>
Slide 32: Sustainability Framework
Sustainability Framework Scope 1 & 2 Scope 3 • Waste generated in operations • Processing & use of sold products • End-of-life treatment of sold products 32
Slide 33: Energy Use and Emissions Across the Region
<Restricted> Energy Use and Emissions Across the Region 33 <Restricted>
Slide 34: Carbon Reduction Roadmap
Carbon Reduction Roadmap Scope 1: Scope 2: 171 “171 Enhancements to GSE Electrification Solar ‘10! *_! Fixed Infrastructure tCO,e 90,100 5,440 tCO,e Scope 1 H _ “41,000 160.6 _ (47%) GEG) Aviation: 85% L Non-aviation: 15% of 45,050 SATS total Singapore carbon footprint) Scope 2 50% reduction (53%) f
Slide 35: Environmental Initiatives
Environmental Initiatives AI-enabled Onsite Electric 2-tonne Solar Waste Tractors Tracking Biodigester Expansion Sustainable Food Electric Electric Packaging Skyloader Forklifts 35
Slide 36: Key Projects Identified to Drive Down Carbon Intensity
Key Projects Identified to Drive Down Carbon Intensity Meals Flights Cargo s • Waste to energy • eGSEs • Electric forklifts • Economiser for boilers • Solar expansion on SATS Maintenance • Coolport optimisation • BBP Energy Audit / Study Centre • High bay light replacement • Electric vans • Solar ge
Slide 37: Social Scorecard
Social Scorecard Skills for the Future 2030 Target 2020 Average value-added per employee across all subsidiaries 50% $27,041 (baseline for 2030 target) Touch lives by sharing our expertise (culinary/nutritional, service and 1M lives 338,863 (33.8%)* technology) with the communities in which we opera
Slide 38: Governance Trends and Developments
Governance Trends and Developments Singapore Governance and Transparency Index inches to new high; SATS, Ascott Residence Trust lead the pack “For the second year running, SATS emerged as the top performer in the general category with 128 points out of a maximum total of 143.” – The Business Times “
Slide 39: Group Financial Review
<Restricted> Group Financial Review 2Q & 1H FY2021-22 Manfred Seah Chief Financial Officer 39 <Restricted>
Slide 40: Executive Summary: 2Q FY22 Performance
Executive Summary: 2Q FY22 Performance • 2Q22 Revenue increased by 27.2% to $293.9M against 2Q last year due mainly to growth in cargo, non-travel food, and security services • Compared to 1Q22, revenue grew by 6.6% or $18.3M • 2Q22 PATMI of $6.8M, reflecting third consecutive quarter of profitabili
Slide 41: 2Q FY22 Highlights
2Q FY22 Highlights 2Q FY22 2Q FY21 Change Commentary Act Act $/ppt % • Gateway (+$42.5M; 48.4%) and Food (+$23.4M; 16.8%) Revenue 293.9 231.1 62.8 27.2 • Travel (+$36.6M; 30.8%) and non-travel (+$29.3M; 27%) • Higher staff cost (+$39.3M) due to lower grants and higher OPEX (293.4) (231.1) (62.3) (27
Slide 42: 1H FY22 Highlights
1H FY22 Highlights 1H FY22 1H FY21 Change Commentary Act Act $/ppt % • Gateway (+$97.9M; 61.4%) and Food (+$34.8M; 12.6%) Revenue 569.5 440.5 129.0 29.3 • Travel (+$79.8M; 35.9%) and non-travel (+$52.9M; 24.8%) • Higher staff cost (+$57.4M) due to lower grants and higher OPEX (565.5) (476.5) (89.0)
Slide 43: FY22 Quarterly Trending
FY22 Quarterly Trending Revenue $62.8M PATMI $40.0M 278.5 293.9 0.8 6.4 6.8 231.1 251.0 275.6 209.4 (2.8) (43.7) (33.2) 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 CORE PATMI EBIT $0.5M ex- RELIEFS $43.4M 22.5 0.0 3.4 3.5 0.5 (33.0) (35.6) (30.1) (52.8) (36.0) (73.5) (106.5) 1Q21 2Q2
Slide 44: Group Segmented Revenue – 2Q
Group Segmented Revenue – 2Q Revenue 2Q FY22 % 2Q FY21 % Change (%) By Business: Gateway 130.3 Food Solutions 163.0 55.5 139.6 60.4 16.8 Food 44% 163.0 Gateway Services 130.3 44.3 87.8 38.0 48.4 56% Others 0.6 0.2 3.7 1.6 (83.8) Others 0.6 Total 293.9 100.0 231.1 100.0 27.2 0% By Industry: Travel 15
Slide 45: Group Segmented Revenue – 1H
Group Segmented Revenue – 1H Revenue 1H FY22 % 1H FY21 % Change (%) By Business: Gateway 257.3 Food Solutions 310.3 54.5 275.5 62.5 12.6 Food 45% 310.3 Gateway Services 257.3 45.2 159.4 36.2 61.4 55% Others 1.9 0.3 5.6 1.3 (66.1) Others 1.9 Total 569.5 100.0 440.5 100.0 29.3 0% By Industry: Travel 3
Slide 46: 2Q FY22 Group Expenditure
2Q FY22 Group Expenditure YoY $62.3M Growth 27% $39.3M $3.1M $19.1M $1.9M $0.5M $4.6M Raw materials 43.9% -9.3% 31.2% 42.2% 3.0% 18.0% 28% 128.8 OOE 2Q FY22 10% S$293.4M 89.5 80.4 Staff costs 44% 61.3 D&A 10% 30.2 33.3 30.2 25.6 17.4 16.9 6.4 4.5 Premise costs Staff Costs D&A Raw Materials Licence F
Slide 47: Summary Financials – Associates and Joint Ventures (AJVs)
Summary Financials – Associates and Joint Ventures (AJVs) OVERVIEW S$’M 2Q FY22 2Q FY21 % change • 2Q SSOR increased 25.8% yoy. SATS Share of Revenue 84.3 67.0 25.8 (SSOR) • Share of results turned positive to $2.1M from a Share of results / losses 2.1 (12.8) 116.4 loss of $12.8M last year. Segmenta
Slide 48: 2Q FY22 Revenue (Consol & SSOR) and PATMI by region
2Q FY22 Revenue (Consol & SSOR) and PATMI by region Consol YoY SSOR YoY PATMI YoY Revenue 2Q FY22 % 2Q FY22 2Q FY21 % 2Q FY22 2Q FY21 % Singapore 250.6 27.0 253.3 199.2 27.2 15.6 25.2 (38.1) Japan 21.4 30.5 22.3 17.6 26.9 (2.6) (5.3) 50.9 Asean (ex-SG) 3.2 (48.9) 21.8 18.4 18.6 0.2 (42.0) 100.5 Grea
Slide 49: 1H FY22 Group Financial Position
1H FY22 Group Financial Position Total debt of $538M ex-ROU Net Cash of $147M • FY22 Debt/Equity: 0.34x. With the SFRS (I) 16, Debt/Equity ratio will be 0.47x ____________________ 49 Note: All figures as at 30 September 21 are unaudited and in S$ m unless otherwise stated. n.m. – not meaningful
Slide 50: Group Balance Sheet
Group Balance Sheet $M AS AT 30 SEP 21 AS AT 31 MAR 21 Change % Commentary Non-Current Assets 1,770.0 1,769.1 0.1 Nominal increase in Non-Current Assets. Current Assets 1,182.7 1,322.7 (10.6) Decreased $140M mainly due to repayment of term loan of $150M fully prepaid ahead of its maturity. Total Ass
Slide 51: Group Cash Flow Statement
Group Cash Flow Statement $M 1H FY22 1H FY21 Difference Net Cash (used in)/from Operating Activities (9.1) 19.0 (28.1) Net Cash used in Investing Activities (28.5) (5.2) (23.3) Capital expenditure (31.5) (25.8) Dividends from associates/joint ventures 21.4 15.7 Proceeds from disposal of property, pl
Slide 52: Outlook
<Restricted> Outlook <Restricted>
Slide 53: Outlook
Outlook The launch of vaccinated travel lanes by the Singapore government and the easing of border restrictions in the region are starting to boost aviation volumes. While SATS reshaped operations at the start of the pandemic to grow non-travel related revenues, we made sure that we retained deep do
Slide 54: Appendix: 2Q & 1H FY2021-22 Results
<Restricted> Appendix: 2Q & 1H FY2021-22 Results <Restricted>
Slide 55: Group Segmented P&L – 2Q
Group Segmented P&L – 2Q Food Gateway FY22 Food Gateway FY21 Others Others Solutions Services Total Solutions Services Total Revenue 163.0 130.3 0.6 293.9 139.6 87.8 3.7 231.1 EBIT (Loss)/profit (10.3) 9.4 1.4 0.5 (12.3) 8.9 3.4 - Net finance expense (1.0) (1.0) (1.6) (3.6) (1.4) (1.1) (2.0) (4.5) S
Slide 56: Group Segmented P&L – 1H
Group Segmented P&L – 1H Food Gateway FY22 Food Gateway FY21 Others Others Solutions Services Total Solutions Services Total Revenue 310.3 257.3 1.9 569.5 275.5 159.4 5.6 440.5 EBIT (Loss)/profit (21.8) 20.4 5.4 4.0 (33.1) (9.1) 6.2 (36.0) Net finance expense (1.7) (1.9) (3.4) (7.0) (2.8) (2.1) (2.7
Slide 57: 1H FY22 Group Expenditure
1H FY22 Group Expenditure YoY $89M Growth 18.7% $57.4M $6.0M $28.5M $4.4M $3.2M $7.9M Raw materials 30.9% -9.0% 22.8% 55.0% -8.7% 14.6% 27% 243.4 186.0 OOE 1H FY22 11% 153.4 S$565.5M 124.9 Staff costs 43% D&A 60.8 66.8 62.1 11% 54.2 33.4 36.6 12.4 8.0 Staff Costs D&A Raw Materials Licence Fees Premi
Slide 58: Summary Financials – Associates and Joint Ventures (AJVs)
Summary Financials – Associates and Joint Ventures (AJVs) OVERVIEW S$’M 1H FY22 1H FY21 % change • 1H SSOR increased 18.9% yoy. SATS Share of Revenue 162.4 136.6 18.9 (SSOR) • Share of results turned positive to $0.9M, reversing Share of results / losses 0.9 (44.2) 102.0 from a loss position last ye
Slide 59: 1H FY22 Revenue (Consol & SSOR) and PATMI by region
<Restricted> 1H FY22 Revenue (Consol & SSOR) and PATMI by region Consol YoY SSOR YoY PATMI YoY Revenue 1H FY22 % 1H FY22 1H FY21 % 1H FY22 % Singapore 489.0 27.6 493.9 386.5 27.8 31.7 7.5 Japan 37.1 27.3 38.9 31.4 24.0 (5.2) 52.7 Asean (ex-SG) 5.5 (27.1) 39.8 31.4 26.6 (1.3) 97.6 Greater China 28.0
Slide 60: Appendix: Overview of Associates/JVs
Appendix: Overview of Associates/JVs
Slide 61: Summary of key associates / joint ventures
Summary of key associates / joint ventures 1H FY22 SATS share of revenue (SSoR) Business Asean Greater No. Associates/JVs Total Singapore Japan India Others Unit (ex-SG) China SSoR Food 1 Taj SATS Air Catering/TMFK Food 9 - - - - 9 - Solutions 16% 2 Evergreen Sky Catering Food 4 - - - 4 - - 3 Beijin
Slide 62: Summary of key associates / joint ventures
Summary of key associates / joint ventures 1H FY21 SATS share of revenue (SSoR) Business Asean Greater No. Associates/JVs Total Singapore Japan India Others Unit (ex-SG) China SSoR 1 Taj SATS Air Catering/TMFK Food 5 - - - - 5 - Food 2 Evergreen Sky Catering Food 2 - - - 2 - - Solutions 10% 3 Brahim
Slide 63: Appendix: Company Overview
<Restricted> Appendix: Company Overview 63 <Restricted>
Slide 64: Group Overview – FY2020-21
Group Overview – FY2020-21 Segment Industry Geography Others Others 1% 4% 1% 1% 1% Non-aviation 6% 44% Gateway Services S$970M S$970M S$970M Food 40% Aviation Solutions 55% 59% 88% Singapore Japan Greater China Asean (ex-SG) Segment Overview Food Solutions Gateway Services Services Airfreight and Pa
Slide 65: Customer Base
Customer Base Food Solutions Gateway Services 65
Slide 66: Customer Base
Customer Base Non-Travel (Non-Aviation Security) Travel (Cruise) Non-Travel (Institutional & Defence Catering) Non-Travel (Country Foods) 66