Sia Engineering Co. Ltd. · SGX:S59
Sia Engineering — H1 FY2022/23 Earnings Presentation
29 slides from Sia Engineering's earnings presentation, Nov 2, 2022
Slide 1: 1H FY2022/23 Review
1H FY2022/23 REVIEW 2 NOVEMBER 2022
Slide 2: Operational Review
» SIA ENGINEERING COMPANY OPERATIONAL REVIEW GROWING SUSTAINABLY
Slide 3: Core Business
Core Business Line Maintenance Base Maintenance Component Services Engine Services • 27 airports in 7 countries • 6 hangars in Singapore • 99 aircraft from 9 airlines • CFM LEAP Quick Turn • 3 hangars in Philippines under Inventory Technical (QT) Facility (opened in Management Feb 2022) 3
Slide 4: Line Maintenance
Line Maintenance • Number of flights handled in 1H FY22/23 doubled year-on-year • Flight recovery at end of 1H was at 63.3%, an improvement of 25.2 percentage points over the half-year period • Continued recruitment efforts in anticipation of sustained recovery Flight Recovery Flights Handled At Cha
Slide 5: Base Maintenance
Base Maintenance Maintenance Checks at Singapore Base • The increase in flight activities internationally has led to 1H FY21/22 1H FY22/23 an increase in demand for MRO services as operators Light Checks* 162 258 look to return grounded aircraft back to service Heavy Checks 46 42 • Secured new contr
Slide 6: Component Services
Component Services • Increase in work volume at component shops as flight activities continue to ramp up • Secured 10-year MRO licensing of repair capabilities with Honeywell for 737NG, 737MAX and 787 Air Data Inertial Reference Unit component, to be set up at new component joint venture, SRT Malays
Slide 7: Engine Services
Engine Services • New Aircraft Engine Services facility opened in February 2022 - provides Quick Turn and modification embodiment services for CFM LEAP-1A and LEAP-1B engines - Equipped to perform at least 60 Quick Turns per year with 50% more capacity to cope with surge demands • Completed first CF
Slide 8: 1H FY22/23 Key Customer Contracts
1H FY22/23 Key Customer Contracts Line Maintenance Line Maintenance International Base Maintenance Renewed New New Component Services New New + 8
Slide 9: Strategic Partnerships – JV Portfolio
Strategic Partnerships – JV Portfolio 22 JVs across 8 Countries with Total Revenue of S$3B in 1H FY22/23 • Completed the acquisition of 75% stake in SR Engine and Component Technics Malaysia Sdn Bhd in May 2022 Singapore Aero Engine Eagle Services Asia (ESA) Component Aerospace Services (SAESL) Sing
Slide 10: Transformation Phase 2
Transformation Phase 2 Delivering through three key levers Scaling Up Lean Advancing Digitalisation Sustaining an and Technology Innovation Culture Sustaining training to Implementing digital Established Launchbay achieve high Lean platforms in accordance Labs for staff ideation and awareness with d
Slide 11: Financial Review
» SIA ENGINEERING COMPANY FINANCIAL REVIEW GROWING SUSTAINABLY
Slide 12: Key Highlights
Key Highlights • Faster rate of recovery of flight activities during the period. • Operating performance improved but not sufficient to offset reduction in wage support; slight increase in operating loss. • Higher share of profits as work inputs increased with further recovery of flight activities.
Slide 13: Summary of Group Results 1H22/23
Group Revenue Summary of Group Results 362.2 1H22/23 1H21/22 1H22/23 $’M Group Operating Share of profits of JV Group Profit/(Loss) Profit/(Loss) & Assoc after tax Group Revenue Change -4.1 +14.6 +7.5 +98.7 y-o-y 61.2% 54.5% 30.0% 37.5% y-o-y 41.4 Group Expenditure -10.8 32.5 373.0 Share of
Slide 14: Analysis of Group Profit – 1H22/23
Analysis of Group Profit – 1H22/23 Group operating profit Share of profits $’M -4.1 +14.6 +31.5 -35.6 +32.6 -18.0 -3.0 32.5 * 25.0 7.5M Parent Wage Share of Non- 1H21/22 company & support profits w/o Wage support operating 1H22/23 Subsidiaries impact wage support items, impact w/o wage taxation & su
Slide 15: Analysis of Group Revenue 1H22/23
Analysis of Group Revenue 1H22/23 $68.9M 200 190.7 190 180 $362.2M 171.5 +$98.7M 170 37.5% 160 1Q22/23 2Q22/23 $293.3M 512.7 481.4 362.2 302.6 263.5 34.7% 223.0 220.0 293.3 217.7 50.4% 1H19/20 2H19/20 1H20/21 2H20/21 1H21/22 2H21/22 1H22/23 68.9 $’M 45.8 1H21/22 1H22/23 1H21/22 1H22/23 Revenue
Slide 16: Analysis of Group Expenditure 1H22/23
Analysis of Group Expenditure 1H22/23 $31.6M $39.7M $55.9M 197.5 $53.8M +$102.8M $373.0M 175.5 38.0% 1Q22/23 2Q22/23 $192.0M 475.4 451.0 373.0 Staff costs Material costs Subcontract costs Depreciation & Others 317.7 Amortisation 250.2 270.2 217.8 50.9% 39.0% 58.2% 0.9% 18.2% 192.0 $’M 12
Slide 17: Group Operating Profit by Segment 1H22/23
Group Operating Profit by Segment 1H22/23 Group Operating Loss 1Q 2Q 1H22/23 1H21/22 Variance $M $M $M $M $M % Airframe and Line Maintenance 0.6 (2.2) (1.6) 2.9 - 4.5 + 155.2 Engine and Component (4.6) (4.6) (9.2) (9.6) + 0.4 + 4.2 (4.0) (6.8) (10.8) (6.7) - 4.1 - 61.2 17
Slide 18: Joint Venture and Associated Companies 1H22/23
Joint Venture and Associated Companies 1H22/23 Share of Profit after tax $’M Airframe & Engine Centers Component Centers Line Maintenance +8.7 +0.7 +5.2 50.3% y-o-y 4.7% y-o-y 94.5% y-o-y 26.0 15.0 15.7 17.3 (0.3) (5.5) 1H21/22 1H22/23 1H21/22 1H22/23 1H21/22 1H22/23 33.7 1.2 10.9 14.9 8.9 11.
Slide 19: Group Revenue 1H22/23
Group Revenue 1H22/23 (SIAEC, Subsidiaries, JV and Associated Companies) SIAEC, Subsidiaries, JV and Associated Companies Revenue $'M 3,425.6 3,250.4 3,091.9 315.1 488.3 2,873.6 499.5 2,633.3 285.9 2,194.5 251.3 • +30.1% YoY 2,092.9 203.9 246.7 3,110.5 2,592.4 2,762.1 2,587.7 2,382.0 1,990.6 1,846.2
Slide 20: Group Balance Sheet and Financial Statistics
Group Balance Sheet and Financial Statistics Sep-22 Mar-22 Variance $M $M $M % Total equity 1,692.6 1,621.3 + 71.3 + 4.4 Non-current liabilities 37.0 39.0 - 2.0 - 5.1 Current liabilities 206.6 177.9 + 28.7 + 16.1 Non-current assets 1,002.8 925.5 + 77.3 + 8.4 Cash 605.6 625.5 - 19.9 - 3.2 Other curre
Slide 21: Outlook
» SIA ENGINEERING COMPANY OUTLOOK GROWING SUSTAINABLY
Slide 22: Summary of 1H FY22/23
Summary of 1H FY22/23 67% Increase in Flights Handled Transformation Growth Plans Remain Against Last Half Efforts Continue Intact Year Flight recovery at 63% as Resulted in more long-term Capability expansion with at Sep-22, on track to meet contracts with 3rd party SR Technics Malaysia on Changi A
Slide 23: Outlook
Outlook Flight recovery continues as flight restrictions in the region are gradually reduced 100% Flights Handled by SIAEC LM (% of pre-COVID-19 levels) 80% 63% 60% 40% Flight volume for 1H only at 55% of pre-COVID-19 levels 20% 0% Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 23
Slide 24: Outlook
Outlook Challenges remain Macroeconomic factors - Supply chain disruptions due to the Russia-Ukraine conflict - Persistent high inflation - Rising interest rates - Heightened risk of global recession Wage pressures - Escalating costs of living putting upward pressure on wages Full recovery remains u
Slide 25: Priorities
Priorities Investment in Remain vigilant and digitalisation, prudent in technology and managing increase engineering in costs capabilities Ramp up manpower Company-wide Lean recruitment in and Continuous preparation for Improvement continued flight initiatives to improve recovery productivity 25
Slide 26: Growth Opportunities
Growth Opportunities Positioned for growth • Growing engine services business with Invest in new capabilities new contracts and investments in new and services for new capabilities and facilities generation aircraft • Component Services Division to grow component MRO business and broaden repair capa
Slide 27: Net Zero by 2050
Net Zero by 2050 Electrification Clean Energy Plan underway to scale up adoption Solar panels supply 19% & 30% of of electric tractors SIAEC & SIAEP’s electricity needs, respectively Reviewing the installation of additional solar panels in Singapore and Philippines operations Facilities Sustainabl
Slide 28: Awards and Accolades
Awards and Accolades • “2022 Asia-Pacific MRO of the Year” • Bronze Award for Best Risk Management • 2022 “Asia MRO of the Year – Airframe” Award by Airline Economics magazine at the 2022 Singapore Corporate Awards Award by Aviation Week Network • Part of Airline Economics magazine’s • The Singapore
Slide 29: Thank you
GROWING SUSTAINABLY » SIA ENGINEERING COMPANY Thank you 29
SIA Engineering Company — H1 FY2022/23 Earnings Presentation on 6ix