Singapore Post Ltd. · SGX:S08
Singapore Post — H1 FY2014/15 Earnings Presentation
28 slides from Singapore Post's earnings presentation, Nov 6, 2014
Slide 1: Q2 & H1 FY2014/15 Financial Results
Q2 & H1 FY2014/15 Financial Results Quarter July – September 2014 Financial year ending 31 March 2015 6 November 2014
Slide 2: Agenda
Agenda ▪ Executive Summary ▪ Group Financials ▪ eCommerce Business Momentum ▪ Building Our Capabilities ▪ Outlook The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating to financial trends for future periods, compared to the r
Slide 3: Executive Summary
Executive Summary Healthy business performance in Q2 and H1 FY2014/15. Challenges remain, especially declining volumes and rising costs in domestic mail. eCommerce business momentum with increased ecommerce related activities – new customers, customer growth, increase in domestic and internation
Slide 4: Group Financials – Highlights
Group Financials – Highlights Healthy business performance achieved in Q2 and H1 FY2014/15. Driven by growing ecommerce related activities across the business segments, offsetting declines in traditional postal business. Higher expenses due to rising business costs and transformation initiativ
Slide 5: Q2 FY2014/15 P&L
Q2 FY2014/15 P&L Continued investments in transformation in FY2014/15 Q2 Q2 YoY % $M FY14/15 FY13/14 change Growth in ecommerce & logistics Revenue 220.3 203.8 +8.1% activities Other income 12.6 9.5 +32.6% Higher interest income, trade related currency gains Operating expenses 186.1 169.7 +9.7% Incr
Slide 6: Regional Revenue Breakdown
Regional Revenue Breakdown Growing overseas revenue, particularly from Logistics businesses Local Overseas H1 FY14/15: 70.0% H1 FY14/15: 30.0% H1 FY13/14: 71.6% H1 FY13/14: 28.4% Overseas revenue amounted to $129.4M or 30% of H1 revenue 12.3% YoY growth in H1 overseas revenue contributions Logistics
Slide 7: Mail & Digital Services: Q2 FY2014/15 Performance
Mail & Digital Services: Q2 FY2014/15 Performance Mail & Digital Services segment performance Q2 Q2 YoY % $M FY14/15 FY13/14 change Revenue 123.5 119.7 +3.2% Operating profit 34.1 34.8 (1.9%) OP margin 27.6% 29.1% Significant decline in traditional postal businesses mitigated by international ecomme
Slide 8: Logistics: Q2 FY2014/15 Performance
Logistics: Q2 FY2014/15 Performance Logistics segment performance Q2 Q2 YoY % $M FY14/15 FY13/14 change Revenue 108.9 94.6 +15.1% Operating profit 5.8 2.6 +123.6% OP margin 5.4% 2.8% Good performance in Logistics businesses with growth in ecommerce activities and freight Logistics revenue breakdown
Slide 9: Retail & eCommerce: Q2 FY2014/15 Performance
Retail & eCommerce: Q2 FY2014/15 Performance Retail & eCommerce segment performance Q2 Q2 YoY % $M FY14/15 FY13/14 change Revenue 22.3 21.3 +4.9% Operating profit 2.6 1.4 +86.8% OP margin 11.8% 6.6% Good traction in ecommerce business with customer acquisitions and volume growth Retail & eCommerce r
Slide 10: Operating Expenses: Q2 FY2014/15
Operating Expenses: Q2 FY2014/15 Revenue vs operating expenses growth Q2 Q2 Amount Higher operating expenses in line $M FY14/15 FY13/14 YoY chg with revenue growth Revenue 220.3 203.8 +16.5 Increased costs in productivity and Operating service improvements for postal 186.1 169.7 +16.4 business, and
Slide 11: Financial Position and Cash Flow
Financial Position and Cash Flow Balance sheet highlights As at As at $M Sep 14 Mar 14 Ordinary shareholders’ equity 670.6 346.8 Increase in ordinary equity and net cash due to new share issue and Borrowings 235.5 234.1 transfer of treasury shares to Net cash 449.4 170.3 Alibaba Investment Ltd EBITD
Slide 12: eCommerce Business Momentum – Highlights
eCommerce Business Momentum – Highlights Good business momentum with growth in ecommerce related activities across the business segments. Underpinned by increase in number of customers and their expansion into regional markets. Need to invest to capture these future opportunities. 11
Slide 13: Revenue Breakdown – eCommerce vs Non eCommerce
Revenue Breakdown – eCommerce vs Non eCommerce Continued growth in eCommerce related revenue in H1 eCommerce related revenue H1 FY14/15: 26.9% ($116.1M) H1 FY13/14: 23.8% ($96.6M) eCommerce related revenue Mail 60% ($69.3M) estimated at 26.9% or $116.1M of H1 Group revenue Logistics 30% ($34.8M) 20%
Slide 14: eCommerce Customers
eCommerce Customers Close to 1,000 ecommerce customers across the Group Growing number of ecommerce customers across the business segments Mono brand sites managed currently include adidas, Levi’s, Philips amongst several more, operating across 8 countries in Asia Pacific Increase in warehousi
Slide 15: Building our Capabilities
Building our Capabilities Building and strengthening the Group’s ecommerce logistics solutions network in Asia Pacific. Focusing on development of regional warehousing and last mile delivery networks. Increase in capital expenditure and operating costs as the Group builds regional business and
Slide 16: Updates on eCommerce Logistics Network Development
Updates on eCommerce Logistics Network Development B2B4C Freight, Customs & Warehousing Last Mile Delivery eCommerce Regulations Mgmt & Fulfilment & Returns Web Services Acquisition of FS Expanding Quantium Building regional end- Extended SP eCommerce’s Mackenzie (UK) by Solutions’ regional delivery
Slide 17: Warehousing Network Development
Warehousing Network Development Warehousing network Country Set-up Developing regional warehousing 22 warehousing facilities totalling network in Singapore and Asia Pacific Asia Pacific approx. 39,400 sqm over last 3 years 5 warehouses in Singapore; 6 - SE Asia warehouses in Malaysia, Thailand,
Slide 18: Last Mile Delivery Network Development
Last Mile Delivery Network Development Last mile delivery network Country Set-up Developing regional last mile delivery Singapore Parcel network comprising network in selected regional markets couriers and POPStations Singapore More than 70 POPStations installed Rollout of POPStations in Singapo
Slide 19: Increased Capex & Costs in the Transformation
Increased Capex & Costs in the Transformation Capital expenditure ($M) 37.8 26.1 24.4 25.5 Strategic investments in the Group’s FY11/12 FY12/13 FY13/14 H1 FY14/15 transformation – infrastructure, technology, operations Further investments expected over the Increased operating costs in transformation
Slide 20: Outlook
Outlook In the midst of transformation to be regional ecommerce logistics operator. Strategic investments in M&As, capital expenditure to continue over next few years. Cautiously optimistic outlook, barring unforeseen circumstances. 19
Slide 21: Focused on Executing Transformation Strategy
Focused on Executing Transformation Strategy Regional Leader in eCommerce Logistics & Trusted Communications Protecting the Core Growing the Wings RETAIL & DIGITAL MAIL LOGISTICS eCOMMERCE FIN’L SERVICES SERVICES PROPERTY Challenges of declining traditional postal business, increasing operating cost
Slide 22: Complete financial statements available on SGXNET and website
The complete set of financial statements is available on SGXNET and our website at www.singpost.com. 21 21
Slide 23: Appendix
APPENDIX 22 22
Slide 24: eCommerce Market Potential
eCommerce Market Potential 2016F Asia Pacific ecommerce logistics market US$175 billion Source: Forrester/Transport Intelligence 2012-2016 CAGR of 20.5% in Asia Pacific ecommerce logistics market Source: Forrester/Transport Intelligence 2016F Asia Pacific B2C ecommerce sales US$675 billion Source: e
Slide 25: H1 FY2014/15 P&L Highlights
H1 FY2014/15 P&L Highlights Continued investments in transformation in FY2014/15 H1 H1 YoY % $M FY14/15 FY13/14 change Driven by ecommerce activities Revenue 431.3 405.2 +6.4% Gain on disposal of property, higher Other income 29.0 20.5 +41.7% interest income, trade related currency gains Operating e
Slide 26: Mail & Digital Services: H1 FY2014/15 Performance
Mail & Digital Services: H1 FY2014/15 Performance Mail & Digital Services segment performance H1 H1 YoY % $M FY14/15 FY13/14 change Revenue 246.7 234.4 +5.3% Operating profit 69.2 71.6 (3.4%) OP margin 28.0% 30.5% Mail & Digital Services revenue breakdown H1 H1 YoY % $M FY14/15 FY13/14 change Domest
Slide 27: Logistics: H1 FY2014/15 Performance
Logistics: H1 FY2014/15 Performance Logistics segment performance H1 H1 YoY % $M FY14/15 FY13/14 change Revenue 206.4 188.4 +9.6% Operating profit 9.6 5.9 +63.6% OP margin 4.7% 3.1% Logistics revenue breakdown H1 H1 YoY % $M FY14/15 FY13/14 change Famous Holdings 79.1 66.7 +18.5% Quantium Solutions
Slide 28: Retail & eCommerce: H1 FY2014/15 Performance
Retail & eCommerce: H1 FY2014/15 Performance Retail & eCommerce segment performance H1 H1 YoY % $M FY14/15 FY13/14 change Revenue 45.1 42.1 +7.3% Operating profit 5.5 4.2 +30.8% OP margin 12.2% 10.0% Retail & eCommerce revenue breakdown H1 H1 YoY % $M FY14/15 FY13/14 change eCommerce 11.9 8.0 +49.8%