Sats Ltd · SGX:S58
Sats — 1H FY23 Earnings Presentation
36 slides from Sats's earnings presentation, Nov 9, 2022
Slide 1: 1H FY23 Performance Review
<Public> 1H FY23 Performance Review 9 November 2022 <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 WFS Acquisition Update 5 Q&A 3 <Public>
Slide 4: 1H FY23 and QoQ Operating Statistics
<Public> 1H FY23 and QoQ Operating Statistics Flights Handled Meals Served Passengers Handled Cargo Tonnage Number of Employees In Thousands In Millions In Millions In ‘000 Tonnes Number +289% +31.3% +1,289% +37.2% +40.3% 55.7 17.7 12.6 15.6 577.6 13.4 420.9 11.1 14.3 0.9 Group Group Group Group Gro
Slide 5: Investing in Changi Ramp Up Ahead of Expected Travel Recovery
<Public> Investing in Changi Ramp Up Ahead of Expected Travel Recovery Core PATMI ex-reliefs 2Q22 2Q23 (21.6) (30.1) $36.9M in reliefs $9.8M in reliefs 2Q FY22 2Q FY23 Inflight Catering Centre 1 Staff training and preparation for Positive trend of narrowing losses back in operation reopening of T2
Slide 6: Seizing Growth in Overseas Markets
<Public> Seizing Growth in Overseas Markets Launch of World-first IATA Proposed AAT certification for acquisition of COOLPORT lithium battery Worldwide Flight handling Services 9th Payload 2022 PAX Asia Awards Readership Awards “Global Ground Successful renewal of “Airline Caterer of the Handler of
Slide 7: Group Financial Review
<Public> Group Financial Review <Public>
Slide 8: Executive Summary: 2Q FY23 Performance
<Public> Executive Summary: 2Q FY23 Performance • 2Q FY23 revenue increased 46.0% or $135.1M to $429.0M against 2Q FY22. • Compared to 1Q FY23, revenue increased by 14.2% or $53.5M. • 2Q FY23 PATMI loss = $9.9M against 2Q FY22’s profit of $6.8M. • Without government reliefs, core PATMI for 2Q FY23 w
Slide 9: 2Q FY23 Highlights (vs 1Q FY23)
<Public> 2Q FY23 Highlights (vs 1Q FY23) Commentary S$'M 2Q FY23 1Q FY23 QoQ var QoQ var % Revenue 429.0 375.5 53.5 14.2 • Group revenue improved by 14.2% ($53.5M) as Food and Gateway recorded higher revenue by 16.2% and 12.3% at the OPEX 437.0 409.8 (27.2) (6.6) back of aviation recovery. EBIT (8.0
Slide 10: 2Q FY23 Highlights (vs 2Q FY22)
<Public> 2Q FY23 Highlights (vs 2Q FY22) Commentary S$'M 2Q FY23 2Q FY22 YoY var YoY var % Revenue 429.0 293.9 135.1 46.0 • Group revenue improved by 46.0% ($135.1M) as Food and Gateway recorded higher revenue by 32.8% and 63.2% at the OPEX 437.0 293.4 (143.6) (48.9) back of aviation recovery and AA
Slide 11: 1H FY23 Highlights
<Public> 1H FY23 Highlights Commentary S$'M 1H FY23 1H FY22 YoY var YoY var % Revenue 804.5 569.5 235.0 41.3 • Group revenue improved by 41.3% ($235.0M) as Food and Gateway recorded higher revenue by 29.7% and 56.2% at the OPEX 846.8 565.5 (281.3) (49.7) back of aviation recovery and AAT consolidati
Slide 12: FY23 Quarterly Trending
<Public> FY23 Quarterly Trending Revenue + $135.1M PATMI - $16.7M 429.0 375.5 275.6 293.9 307.8 299.5 6.4 6.8 5.1 2.1 PATMI (9.9) (22.5) 1Q22 2Q22 3Q22 Revenue 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 EBITDA + $12.6M Core PATMI - $18.6M 45.4 32.9 32.8 31.7 13.9 6.4 6.8 5.1 EBITDA(3.2) Core PATMI
Slide 13: Group Segmented Revenue – 2Q FY23
<Public> Group Segmented Revenue – 2Q FY23 Revenue 2Q FY23 % 2Q FY22 % Change (%) By Business: Gateway Food Solutions 216.4 50.4 163.0 55.5 32.8 212.6 50% Gateway Services 212.6 49.6 130.3 44.3 63.2 Food Others 0.0 - 0.6 0.2 (100.0) 216.4 50% Total 429.0 100.0 293.9 100.0 46.0 By Industry: Travel 31
Slide 14: Group Segmented Revenue – 1H FY23
<Public> Group Segmented Revenue – 1H FY23 Revenue 1H FY23 % 1H FY22 % Change (%) By Business: Food Solutions 402.6 50.0 310.3 54.5 29.7 Gateway 401.9 Gateway Services 401.9 50.0 257.3 45.2 56.2 50% Food Others 0.0 - 1.9 0.3 (100.0) 402.6 50% Total 804.5 100.0 569.5 100.0 41.3 By Industry: Travel 58
Slide 15: 1H FY23 Group Expenditure
<Public> 1H FY23 Group Expenditure YoY Growth $281.3M 49.7% +$183.3M +$23.2M +$4.3M +$5.8M +$20.8M +$43.9M 75.3% 38.2% 2.8% 46.8% 62.3% 70.7% 426.7 Premise OOE Costs 13% 6% Licence Fees 243.4 2% 1H FY23 Staff Costs 157.7 153.4 Raw S$846.8M 50% Materials 106.0 19% 84.0 60.8 54.2 62.1 33.4 18.2 12.4 D
Slide 16: Summary Financials – Associates and Joint Ventures (AJVs)
<Public> Summary Financials – Associates and Joint Ventures (AJVs) OVERVIEW S$’M 2Q FY23 2Q FY22 % change • 2Q FY23 SSOR increased 4.5% YoY. SATS Share of Revenue 88.1 84.3 4.5 (SSOR) • Share of earnings increased by $8.6M to $10.7M Share of earnings / (losses) 10.7 2.1 409.5 compared to last year.
Slide 17: 2Q FY23 Revenue (Consol & SSOR) and PATMI by region
<Public> 2Q FY23 Revenue (Consol & SSOR) and PATMI by region Consol YoY SSOR YoY PATMI YoY Revenue 2Q FY23 % 2Q FY23 2Q FY22 % 2Q FY23 2Q FY22 % Singapore 341.3 36.2 343.5 253.3 35.6 (9.5) 15.6 n.m. Japan 19.1 (10.7) 19.9 22.3 (10.8) (2.7) (2.6) (3.8) Asean (ex-SG) 11.6 265.6 38.2 21.8 75.2 2.6 0.2
Slide 18: 1H FY23 Group Financial Position
<Public> 1H FY23 Group Financial Position # Components of the debt: MTN ($300M), term loans ($216M) and ROU ($338M) * Before taking into account leases (LY net cash: $275M) **FY23 denotes @ 30 Sep 22 and FY22 denotes @ 31 Mar 22 n.m. – not meaningful 18 <Public>
Slide 19: Group Balance Sheet
<Public> Group Balance Sheet $M AS AT 30 SEP 22 AS AT 31 MAR 22 Change % Commentary Increased $5.1M mainly due to higher property, plant and equipment and right-of-use assets, partly offset by lower Non-Current Assets 2,001.4 1,996.3 0.3 intangible assets and investment in associates. The lower inve
Slide 20: Group Cash Flow Statement
<Public> Group Cash Flow Statement $M 1H FY23 1H FY22 Difference Net cash used in operating activities (26.7) (9.1) (17.6) Net cash used in investing activities (38.2) (28.5) (9.7) Capital expenditure (60.7) (31.5) (29.2) Dividends from associates/joint ventures 13.9 21.4 (7.5) Proceeds from disposa
Slide 21: Outlook
<Public> Outlook <Public>
Slide 22: Outlook (1 of 2)
<Public> Outlook (1 of 2) The global rebound in passenger travel has been evident and the positive trend is expected to continue through the winter travel season into 2023, underpinning earnings growth across SATS’ network of operations. Ahead of the expected full recovery in travel, SATS has been r
Slide 23: Outlook (2 of 2)
<Public> Outlook (2 of 2) Kerry Mok, President and Chief Executive Officer of SATS, said, “The continuing rebound in travel demand is a huge positive for our business and our customers. In Singapore, our Food Solutions and Gateway Services teams have been busy ramping up operations to ensure we are
Slide 24: Proposed Acquisition of WFS
<Public> Proposed Acquisition of WFS <Public>
Slide 25: Transforming SATS into a Leading Air Cargo Handler
<Public> Transforming SATS into a Leading Air Cargo Handler A business that is geographically diversified WFS is a highly strategic and complementary asset. Americas ~30% Near-term headwinds priced in; transaction to be financed by a prudent funding plan. ~45% Asia Advance capabilities to meet growi
Slide 26: Enhances revenue growth and business optionality, positions SATS as enabler for multi-modal cargo connectivity
<Public> Enhances revenue growth and business optionality, positions SATS as enabler for multi-modal cargo connectivity Airside location enables SATS to provide value-added services such End-to-end visibility for Positions SATS to work with partners as breakbulk, sortation and customers will enable
Slide 27: Funding Update
<Public> Funding Update Shareholder Support S$1.8B in total In support of SATS’ strategic acquisition of WFS, Temasek (via its indirect wholly-owned subsidiary, Venezio Investments Pte. Ltd.) Cash has provided an irrevocable undertaking to vote in favour of the c.$320M transaction as announced on 28
Slide 28: Appendix
<Public> Appendix <Public>
Slide 29: Group Segmented P&L – 2Q FY23
<Public> Group Segmented P&L – 2Q FY23 Food Gateway 2Q FY23 Food Gateway 2Q FY22 Others Others Solutions Services Total Solutions Services Total Revenue 216.4 212.6 0.0 429.0 163.0 130.3 0.6 293.9 EBIT (Loss)/profit (7.2) (3.2) 2.4 (8.0) (10.3) 9.4 1.4 0.5 Net finance expense (1.2) (1.6) (1.0) (3.8)
Slide 30: Group Segmented P&L – 1H FY23
<Public> Group Segmented P&L – 1H FY23 Food Gateway 1H FY23 Food Gateway 1H FY22 Others Others Solutions Services Total Solutions Services Total Revenue 402.6 401.9 0.0 804.5 310.3 257.3 1.9 569.5 EBIT (Loss)/profit (24.5) (20.6) 2.8 (42.3) (21.8) 20.4 5.4 4.0 Net finance expense (2.1) (3.2) (2.3) (
Slide 31: 2Q FY23 Group Expenditure
<Public> 2Q FY23 Group Expenditure YoY Growth $143.6M +$88.6M +$12.5M +$1.3M +$3.5M +$12.3M +$25.4M 48.9% 48.9% 41.4% 1.6% 54.7% 70.7% 84.1% 217.4 Premise OOE Costs 13% 7% Licence 128.8 Fees 2% 2Q FY23 Staff Costs 81.7 S$437.0M 50% 80.4 Raw 55.6 Materials 42.7 18% 30.2 29.7 30.2 17.4 9.9 6.4 D&A 10%
Slide 32: Summary Financials – Associates and Joint Ventures (AJVs)
<Public> Summary Financials – Associates and Joint Ventures (AJVs) OVERVIEW S$’M 1H FY23 1H FY22 % change • 1H FY23 SSOR increased 3.8% YoY. SATS Share of Revenue 168.5 162.4 3.8 (SSOR) • Share of earnings increased by $16.7M to $17.6M Share of earnings / (losses) 17.6 0.9 1,855.6 compared to last y
Slide 33: 1H FY23 Revenue (Consol & SSOR) and PATMI by region
<Public> 1H FY23 Revenue (Consol & SSOR) and PATMI by region Consol YoY SSOR YoY PATMI YoY Revenue 1H FY23 % 1H FY23 1H FY22 % 1H FY23 1H FY22 % Singapore 642.7 31.4 646.6 493.9 30.9 (28.4) 31.7 n.m. Japan 37.7 1.9 39.5 38.9 1.5 (5.4) (5.2) (3.8) Asean (ex-SG) 23.5 309.1 71.6 39.8 79.9 8.8 (1.3) n.m
Slide 34: Summary of key associates / joint ventures
<Public> Summary of key associates / joint ventures 1H FY23 SATS share of revenue (SSoR) No. Associates/JVs Business Total Singapore Japan Asean (ex- Greater India Others SSOR Unit SG) China Food Solutions 1 Taj SATS Air Catering/TMFK Food 24 - - - - 24 - 30% 2 MacroAsia Catering Services Food 10 -
Slide 35: Summary of key associates / joint ventures
<Public> Summary of key associates / joint ventures 1H FY22 SATS share of revenue (SSoR) No. Associates/JVs Business Total Singapore Japan Asean (ex- Greater India Others SSOR Unit SG) China Food Solutions 16% 1 Taj SATS Air Catering/TMFK Food 9 - - - - 9 - 2 Evergreen Sky Catering Food 4 - - - 4 -
Slide 36: Q&A
<Public> Q&A <Public>