Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — Singapore Tech Eng — H1 2023 Earnings Presentation
41 slides from Singapore Technologies Engineering's earnings presentation, Aug 12, 2023
Slide 1: First-Half 2023 Results
First-Half 2023 Results 11 August 2023
Slide 2: Disclaimer
Disclaimer The forward-looking statements in this presentation reflect the Company's current intentions, plans, expectations, assumptions and beliefs about future events as at the date of this presentation. Actual future performance, outcomes and results may differ materially from those expressed in
Slide 3: Agenda
Agenda ➢ 1H2023 Results • Group Highlights • Business Discussions • Segment Financials and Order Book • Debt Profile • Outlook • Other Financials ➢ Question & Answer session Notes: • All amounts in millions of Singapore dollars unless otherwise stated • Amounts may not add to totals shown due to rou
Slide 4: Group Highlights
ys 91 Engineering Group Highlights
Slide 5: 1H2023 Revenue +14%, EBITDA +16%, EBIT +15% y-o-y
Group Highlights 1H2023 Revenue +14%, EBITDA +16%, EBIT +15% y-o-y ($’m) Revenue EBITDA EBIT PBT Net profit 4,863 711 444 351 281 +14% +16% +15% +0.1% +0.2% y-o-y y-o-y y-o-y y-o-y y-o-y 5 |
Slide 6: Group 1H2023 Revenue Breakdown
Group Highlights Group 1H2023 Revenue Breakdown 1H2023 Revenue 1H2023 Revenue 1H2023 Revenue by segment (S$4.9b) by type (S$4.9b) by location of customers Commercial Defence S$’b 3.3 1.6 1.5 2.8 1.4 Asia U.S. DPS, 44% 2.2 50% 23% $2.1b $2.1b CA, 38% $1.9b Europe Others USS, 18% $1.7b 20% 7% $0.9b $0
Slide 7: Group Revenue
Group Highlights Group Revenue ❑ Higher by 14% y-o-y, with growth in all segments S$’m +14% 9 4,863 128 133 -119 451 4,270 Growth despite divestment of U.S. Marine ($119m in 1H2022) 1H2022 CA DPS USS 1H2023 7 | U.S. Marine
Slide 8: Segment Revenue
Group Highlights Segment Revenue ❑ Growth in all segments CA DPS USS S$’m S$’m S$’m 1,856 9 2,108 128 2,117 891 119 -119 +6% 451 +32% 133 +18% 757 1,404 Growth despite divestment of U.S. Marine ($119m in 1H2022) 1,989 1H2022 Business 1H2023 1H2022 Business 1H2023 1H2022 Business 1H2023 8 | Growth Gr
Slide 9: 1H2023 EBIT
Group Highlights 1H2023 EBIT ❑ Base operating performance (BOP) EBIT 43% up y-o-y, despite Satcom weakness -26 470 444 S$’m -2 -24 385 141 +15% +43% 56 -72 16 329 1H2022 Absence of Lower TC T&I exp. Business growth 1H2023 BOP SatixFy divestment 1H2023 pension & cost savings loss & Satcom restructuri
Slide 10: 1H2023 Net Profit
Group Highlights 1H2023 Net Profit ❑ BOP Net Profit 26% higher y-o-y, despite higher finance costs S$’m -48 300 280 109 -19 281 +0.2% 41 +26% -53 12 239 1H2022 Absence of Lower TC Business growth Finance costs 1H2023 SatixFy 1H2023 pension T&I exp. & cost savings BOP divestment restructuring gain lo
Slide 11: Business Discussions
ST Engineering Business Discussions
Slide 12: Commercial Aerospace: Continued Strong Recovery
Business Discussions Commercial Aerospace: Continued Strong Recovery Revenue • 32% y-o-y growth in 1H2023 $’m +35% • Stronger than 1H2019 (pre-COVID) +29% 983 * • 35% y-o-y growth in 2Q2023 873 * • Strong recovery in Engines and 730 674 Component businesses 584 552 • Strong P2F demand • Increased de
Slide 13: Recovery in Aviation Sector Continues
Business Discussions Recovery in Aviation Sector Continues RPK1 demand vs 2019 (100%) Healthy Growth in Air Travel • Total air travel reached 96% of pre-COVID (2019) level in May 2023 • Domestic air travel above 2019 level at 105% • International air travel still below 2019 level at 91% • Asia Pacif
Slide 14: Defence & Public Security
Business Discussions Defence & Public Security Revenue ($m) 2,108 2,117 • YoY +6% base business revenue growth 119 +6% • Strong contract wins of $5.2b in 1H2023 1,989 • Growth in International defence business • >$100m contract wins from customers in Europe and Middle East 1H2022 1H2023 14 | U.S. Ma
Slide 15: Urban Solutions: 2H weighted deliveries
Business Discussions Urban Solutions: 2H weighted deliveries • New York Congestion Pricing project • Notice-to-Proceed (NTP) obtained in June 2023 • Scheduled for completion by 2Q2024 • TransCore’s earnings accretion target remains, with project deliveries weighted in 2H2023 • Smart Mobility (Rail a
Slide 16: Satcom: Near-term challenges
Business Discussions Satcom: Near-term challenges Weak Sales One-off Divestment Loss Supply chain Recovering • Invested US$7m in SatixFy* in 2014-2015 disruption from COVID • De-SPAC in Oct 2022 with investment mark-to-market • Revenue weighted in 2H2023 • Fully divested in Apr 2023 for US$1.5m • Su
Slide 17: Satcom: Restructuring and Transformation in Progress
Business Discussions Satcom: Restructuring and Transformation in Progress Converging Platforms Streamlining Opportunities Streamlining product lines to next generation platform • Fast-changing industry dynamics • Best-in-class technologies and innovation • Organisation restructuring and transformati
Slide 18: Segment Financials and Order Book
Segment Financials and Order Book
Slide 19: 1H2023 EBIT by Segment
Segment Financials and Order Book 1H2023 EBIT by Segment ❑ CA & DPS: Strong base operating performance y-o-y ❑ USS: Significantly stronger 2H2023 TransCore: earnings accretion in second-year target remains; Satcom: strengthening foundation for growth CA DPS USS S$’m S$’m S$’m 183 178 301 87 14 72 72
Slide 20: ~$9.5b New Contracts for 1H2023, incl. $4.7b for 2Q2023
Segment Financials and Order Book ~$9.5b New Contracts for 1H2023, incl. $4.7b for 2Q2023 2Q2023 Highlights • A330P2F orders from an American lessor Commercial • Three-year LEAP-1A quick-turn maintenance offload contract from Safran $2.3b • Multi-year airframe heavy maintenance contract from a Japan
Slide 21: Record Order Book: Leading indicator of growth
Segment Financials and Order Book Record Order Book: Leading indicator of growth Order Book ($’b) +20% 27.7 • $27.7b as at 30 Jun 2023 23.0 • $4.4b expected to be delivered in the remaining months of 2023 Dec 2022 Jun 2023 21 |
Slide 22: Debt Profile
ys 91 Engineering Debt Profile
Slide 23: Balanced Debt Profile
Debt Profile Balanced Debt Profile Total Borrowings Floating • Issued US$500m 3-year fixed rate bond in May 2023 at Fixed ($’b) effective yield of 3.3% after amortisation of treasury lock 6.5 (T-lock) gains 6.2 5.9 • US$32m T-lock gains (held on Balance Sheet) fully applied - About half being amorti
Slide 24: Outlook
ys 91 Engineering Outlook
Slide 25: Group President & CEO's Message
Outlook Group President & CEO’s Message “ Our good performance in the first half demonstrated the strength and resilience of our business portfolio. This is reflected in the strong recovery of the Commercial Aerospace segment and the strength of the Defence & Public Security segment. Despite near-te
Slide 26: Other Financials
ys 91 Engineering Other Financials
Slide 27: Group Revenue
Other Financials Group Revenue $'m 1H2023 1H2022 Change Commercial Aerospace 1,856 1,404 ▲ 32% Defence & Public Security 2,117 2,108 ▲0.4% Urban Solutions & Satcom 891 757 ▲ 18% Group 4,863 4,270 ▲ 14% 27 |
Slide 28: Group EBIT
Other Financials Group EBIT $'m 1H2023 1H2022 Change Commercial Aerospace 178 183 ▼ 3% Defence & Public Security 301 214 ▲ 41% Urban Solutions & Satcom (34) (12) ▼182% Group 444 385 ▲ 15% 28 |
Slide 29: Commercial Aerospace
ST Engineering Commercial Aerospace
Slide 30: Commercial Aerospace
Other Financials Commercial Aerospace $'m 1H2023 1H2022 Change Remarks Strong revenue growth mainly Revenue 1,856 1,404 ▲32% attributed to continued business recovery and aircraft sales Despite a 3% drop y-o-y, EBIT EBIT 178 183 ▼ 3% has rebounded robustly to pre- COVID level Excluding the one-off p
Slide 31: Commercial Aerospace Sub-segment Highlights
Other Financials Commercial Aerospace Sub-segment Highlights Aerostructures Aerospace MRO Aviation Asset Management & Systems Revenue, S$’m Revenue, S$’m AUM R1, USD$’m +15% +38% 951 1,964 +37% 825 868 1,420 632 1H2022 1H2023 1H2022 1H2023 1H2022 1H2023 Notes: 31 | R1 AUM: Asset Under Management, in
Slide 32: Defence & Public Security
ys 91 Engineering Defence & Public Security
Slide 33: Defence & Public Security
Other Financials Defence & Public Security $m 1H2023 1H2022 Change Remarks Revenue 2,117 2,108 ▲ 0.4% Despite divestment of U.S. Marine, revenue grew by $9m or 0.4%. Base business revenueR1 grew by Revenue 2,117 1,989 ▲ 6% 6%, contributed by growth in all (excl. U.S. Marine in 1H2022) subsegments. E
Slide 34: Defence & Public Security Sub-segment Highlights
Other Financials Defence & Public Security Sub-segment Highlights Defence Aerospace Digital Systems & Cyber Land Systems Marine Revenue, S$’m Revenue, S$’m Revenue, S$’m Revenue, S$’m +9% 848 765 770 +1% 385 777 119 314 +3% +18% 239 245 266 1H2022 1H2023 1H2022 1H2023 1H2022 1H2023 1H2022 1H2023 34
Slide 35: Urban Solutions & Satcom
ys 91 Engineering Urban Solutions & Satcom
Slide 36: Urban Solutions & Satcom
Other Financials Urban Solutions & Satcom $m 1H2023 1H2022 Change Remarks Higher revenue from Urban Solutions, partially Revenue 891 757 ▲ 18% offset by lower revenue from Satcom EBIT loss a consequence of Satcom’s weaker performance due to supply chain disruptions (chip shortages), remaining impact
Slide 37: Urban Solutions & Satcom Sub-segment Highlights
Other Financials Urban Solutions & Satcom Sub-segment Highlights Urban Solutions Satcom Revenue, S$’m Revenue, S$’m +27% -17% 199 741 165 585 1H2022 1H2023 1H2022 1H2023 Notes: 37 | Revenue include inter-segment and inter-subsegment sales
Slide 38: Balance Sheet & Cash Flows
ys 91 Engineering Balance Sheet & Cash Flows
Slide 39: Balance Sheet
Other Financials Balance Sheet $'m 30 Jun 2023 31 Dec 2022 Property, plant & equipment 2,235 2,076 Right-of-use assets 553 582 Intangible assets 5,269 5,291 Other non-current assets 956 888 Current assets 6,082 6,127 Total assets 15,095 14,964 Current liabilities 7,373 8,005 Non-current liabilities
Slide 40: Statement of Cash Flows
Other Financials Statement of Cash Flows $'m 1H2023 1H2022 Net cash from/(used in) Operating activities 857 321 Investing activities (252) (4,126) Financing activities (814) 3,525 Net change in CCE* (209) (281) CCE at beginning of the period 602 816 Exchange difference (6) (2) CCE at the end of the
Slide 41: Connect with us
Connect with us www.stengg.com