Keppel Ltd. · SGX:BN4
Keppel — Keppel Corp Ltd Ord — FY2023 Earnings Presentation
55 slides from Keppel's earnings presentation, Feb 1, 2024
Slide 1: 2H23 & FY23 Financial Results
2H23 & FY23 Financial Results 1 February 2024
Slide 2: Contents
CONTENTS 01 02 03 Address by CEO Financial highlights Appendices 2
Slide 3: Address by CEO
Address by CEO 3
Slide 4: Transformed for growth
Transformed for growth Delivered on strategy with strong shareholder returns. 2023: One of the most transformational years in Keppel’s history Total shareholder return Divested O&M Accelerating growth Renamed Keppel Ltd. business Announced strategic acquisition of Started operating as one Keppel: Un
Slide 5: Achieved highest profit on record in FY23
Achieved highest profit on record in FY23 Net • FY23 net profit was $4,067m, highest in 55 years Net profit by segment • Net profit from continuing operations was $996m in FY23, profit 19% higher yoy $4,067m • All three segments were profitable with improved performance in Infrastructure and Connect
Slide 6: Rewarding shareholders
Rewarding shareholders $0.19/share Proposed FY23 final cash dividend, to be paid on 8 May 2024, is higher 4.7% Dividend yield based on FY23 total cash dividend of $0.34/share and Keppel’s than $0.18/share for FY22 closing price of $7.16 on 31 Jan 2024 FY23 $0.19/share ~$2.70/share $0.167/share divid
Slide 7: Managing volatility for capital-efficient growth
Managing volatility for capital-efficient growth Maintaining competitive cost of funds De-risking assets • As at end-Dec 2023, 66% of our borrowings were on Asset Co fixed rates, with interest cost of 3.75% (110 bps over • Asset Co performed well amidst improving utilisation SGD 3-year swap rate) an
Slide 8: Transforming earnings with more recurring income
Transforming earnings with more recurring income 54% Recurring income Recurring income growth in recurring income yoy, by sources by segments reflecting Keppel’s strategy, and our $773m $773m shift away from lumpy EPC and development profits 114 $503m $503m 88% 687 92 44 696 412 of net profit from c
Slide 9: Laser focus on growing fund management
Laser focus on growing fund management Funds Under Managementi Asset management feesii In FY23 • Grew 6% yoy to $283m for FY23, from $267m for FY22 Equity raised $79b +58% $24b Growing fund platform $2.3b Aermont • Infrastructure - one of the fastest growing Acquisitions $50b FUM asset classes globa
Slide 10: Strong interest in Keppel's real assets
Strong interest in Keppel’s real assets Increase in fundraising and dealmaking activities expected as inflation eases and interest rates stabilise in 2024. Infrastructure Real estate Connectivity Keppel Sakra Cogen Plant Keppel South Central DataPark+ • Global energy transition and • Pressing need t
Slide 11: Accelerating growth: acquisition of Aermont Capital
Accelerating growth: acquisition of leading European asset manager Aermont Capital Immediate, significant foothold in Accelerating FUMi growth Europe Expands asset mgmt capabilities beyond $60b $200b Asia Pacific, bolstering Keppel’s presence Potential to further grow and value proposition to global
Slide 12: Conclusion
Conclusion • Harnessed Keppel’s deep industrial roots to transform the Company into a global asset manager and operator • Providing unparalleled value proposition to investors with our strong investment track record, operating capabilities and domain knowledge • Investors also find Keppel’s active v
Slide 13: Financial highlights
Financial highlights
Slide 14: Overview of FY23 results
Overview of FY23 results • Net profit was at a record high of $4,067m Net profit by segment • Excluding discontinued operations and loss from distribution in-specie of KREIT units (DIS loss), net profit improved by 19% to $996m from $839m in $4,067m FY22 3,182 • All segments were profitable, with st
Slide 15: Horizontal reporting (continuing operations)
Horizontal reporting (continuing operations) Net profit by sources • Positive contributions from all income streams $885m • Recurring income grew 54% to $773m: robust Infrastructure operating earnings $839m 178 120 156 181 • Valuation gains: lower revaluation gains from investment properties 225 687
Slide 16: FY23 net profit (horizontal reporting)
FY23 net profit (horizontal reporting) ($’m) Asset Mgmt Operatingi Valuation Development Capital Net profit /EPC recycling Mgmt fees Sale of gas, utilities & Property Development Disposal Performance fees electricity revaluation profits gains/loss Transaction fees Leasing income Fair value
Slide 17: Segmental results – Infrastructure
Segmental results – Infrastructure • Net profit was $699m, 135% higher than FY22 of $297m Infrastructure net profit • Higher asset management net profit mainly due to fee structure change & higher performance fees, partly offset by lower acquisition fees $699m • Strong operating income growth driven
Slide 18: Segmental results – Real Estate
Segmental results – Real Estate • Excluding DIS loss, net profit was $426m, 8% lower than FY22 of $464m Real Estate net profit • Lower asset management net profit mainly due to higher overheads • Lower operating income mainly due to lower contributions from sponsor stakes & $464m $315m co-investment
Slide 19: Segmental results – Connectivity
Segmental results – Connectivity • Net profit of $127m, 30% higher than FY22 of $98m Connectivity net profit • Asset management net profit was slightly higher yoy $127m • Operating income increased due to higher earnings from M1 and lower losses from $98m logistics • Fair value loss on investments &
Slide 20: Segmental results – Corporate Activities
Segmental results – Corporate Activities • Net loss of $256m, as compared to $20m in FY22 Corporate Activities net profit • Lower fair value gains from investments, partly offset by ($256m) fair value and disposal gains on Seatrium shares in FY23 ($20m) 151 • Interest income & fair value changes fro
Slide 21: Appendices: Operational updates
Appendices 1. Operational updates
Slide 22: Fund management platform
Fund management platform AUMi FUM Asset Management Feesii $12.6b of assets on Keppel’s Dry powder: $9b or 16% of FUM FY23 Fee-to-FUMiii: 51bps balance sheet that can be potentially converted into future FUM $55b $267m $283m $62.5b $67.7b $50b 8 40 8.5 41 8.0 8 32 157 39.3 154 38.4 31 16.1 19.9 15 72
Slide 23: List of REITs/Trust
List of REITs/Trust As at end-Dec 2023 Market Keppel’s Market value of No Listed REITs/Trust AUM No of assets Geographic presence capitalisation stake Keppel’s stake Singapore, Australia, 1 Keppel REIT $3.5b $9.2b 12 37.0% $1,308m South Korea, Japan Singapore, Australia, China, Malaysia, Germany, 2
Slide 24: List of private funds
List of private funds As at end-Dec 2023 Carrying value of Carrying value of No Funds / SMAs FUMi Keppel sponsor No Funds / SMAs FUMi Keppel sponsor stakeii stakeii Infrastructure Real Estate 1 Keppel Asia Infra Fund (KAIF) Alpha Asia Macro Fund Trends 7 Fund (AAMTF) III 2 Keppel Asia Infra Fund II
Slide 25: Infrastructure Division updates
Infrastructure Division updates Energy portfolioi Strategic partnerships Operating incomeii Renewables • Advancing carbon capture $667m ~4.0 GW integration for WTE plants Gas 1.9 GW Solar $339m 573 2.9 GW • Exploring low-carbon energy ~5.9 GW solutions such as hydrogen, 153 Hydro ammonia and bioener
Slide 26: Infrastructure Division updates (Cont.)
Infrastructure Division updates (Cont.) Integrated power business Robust portfolio mixii • First to market hydrogen-ready Keppel Sakra Cogen Plant • Growing stable, recurring income with long-term power contracts • Keppel Sakra Cogen Plant was 35% completed as at end-Dec 2023 • Contracts >10 years r
Slide 27: Infrastructure Division updates (Cont.)
Infrastructure Division updates (Cont.) Decarbonisation & sustainability solutions Long-term supply & services • Secured major DBOO solar project in Singapore with generation capacity $1.6b of EaaS contracts were of 43 MWp and contract period of 25 years secured in FY23 across Singapore, China, Thai
Slide 28: Real Estate Division updates
Real Estate Division updates Sustainable urban renewal (SUR) Integrated senior living solutions • Implementing SUR initiatives across eight projects with • Launched Sindora Living, Keppel Senior Living brand combined asset value of $7.5bi and operating platform for Asia • Expanding offerings across
Slide 29: Real Estate Division updates (Cont.)
Real Estate Division updates (Cont.) As at end-Dec 2023 • Completed asset monetisation of • Home sales Residential Units % ~$830m across Singapore, China, landbank • FY23 home sales were higher Vietnam, Philipines, Myanmar and Singapore 187 1% yoy, mainly due to stronger India in FY23 China 16,443 4
Slide 30: Data Centres & Networks Division updates
Data Centres & Networks Division updates As at end-Dec 2023 Data centres Data centre Owned by Keppel Owned by Keppel • Finalising development plans for Phase 2 of Keppel portfolio DC REIT & private funds Data Centre Campus at Genting Lane, Singapore • Shanghai Data Centre expected to be ready for se
Slide 31: M1 updates
M1 updates • All mass consumers migrated on to the new cloud native digital platform. Legacy tech Revenue Customers stack to be decommissioned by end-2024 • M1’s revenue grew 6% yoy to $1,255m driven by higher mobile services and $1,255m 2,515k enterprise revenues $1,182m +6% 2,465k +2% • 2nd larges
Slide 32: Vision 2030 asset monetisation
Vision 2030 asset monetisation Value Announced since the start of asset Asset Country unlocked ($m) monetisation programme in Oct 2020 55 Gul Road facility Singapore 95.0 Period Value unlocked ($m) Willowville Pte Ltd, Ho Chi Minh City Vietnam 7.4 Sedona Hotel, Yangon Myanmar 75.6 2020 1,238.4 50% s
Slide 33: Appendices: Additional financial information
Appendices 2. Additional financial information 33
Slide 34: Financial Highlights
Financial Highlights $m 2H23 2H22 % Change FY23 FY22 % Change Revenue 3,251 3,264 – 6,967 6,620 5 Operating Profit 504 210 140 1,076 565 90 EBITDA 873 672 30 1,699 1,356 25 Profit Before Tax 610 544 12 1,213 1,095 11 Profit from Continuing 440 405 9 885 839 6 Operations Profit from Discontinued – 24
Slide 35: Infrastructure Segment
Infrastructure Segment $m 2H23 2H22 % Change FY23 FY22 % Change Revenue 2,306 2,146 8 4,846 4,290 13 Operating Profit 403 59 >500 722 143 405 EBITDA 477 188 154 849 338 151 Profit Before Tax 461 190 143 809 345 135 Net Profit 408 158 158 699 297 135 35
Slide 36: Real Estate Segment
Real Estate Segment $m 2H23 2H22 % Change FY23 FY22 % Change Revenue 233 419 -44 764 996 -23 Operating Profiti 131 133 -2 330 320 3 EBITDAi 315 346 -9 636 711 -11 Profit Before Taxi 224 286 -22 475 617 -23 Net Profiti 129 202 -36 315 464 -32 i Includes $111m of DIS loss 36
Slide 37: Connectivity Segment
Connectivity Segment $m 2H23 2H22 % Change FY23 FY22 % Change Revenue 708 698 1 1,351 1,333 1 Operating Profit 65 51 28 103 81 27 EBITDA 176 152 16 299 277 8 Profit Before Tax 104 87 20 160 139 15 Net Profit 90 65 39 127 98 30 37
Slide 38: Net Profit by Segment
Net Profit by Segment $m 2H23 2H22 % Change FY23 FY22 % Change Infrastructure 408 158 158 699 297 135 Real Estate 240 202 19 426 464 -8 Loss from DIS of KREIT (111) – n.m.f (111) – n.m.f units Connectivity 90 65 39 127 98 30 Subtotal 627 425 48 1,141 859 33 Corporate Activities (187) (20) >500 (256)
Slide 39: FY22 net profit (horizontal reporting)
FY22 net profit (horizontal reporting) Development Capital ($’m) Asset Mgmt Operating¹ Valuation /EPC recycling Net profit Infrastructure 32 335 (9) (21) (40) 297 35% Real Estate 41 3 227 177 16 464 55% Connectivity 18 74 7 – (1) 98 12% Corporate activities² (20) -2% Continuing operations 91 412 225
Slide 40: FY22 net profit bridge (continuing operations)
FY22 net profit bridge (continuing operations) Energy & Urban Asset Corporate & $m Connectivity Environment Development Management Others Net Profit by Segment 172 282 37 311 37 • Asset Mgmt Income 32 41 15 (88) – • REITs & Trust 35 137 40 (245) – • Private Funds (3) 7 7 (12) – • Others & Eliminatio
Slide 41: Capital/Gearing/ROE
Capital/Gearing/ROE $m 31 Dec 2023 31 Dec 2022 Shareholders’ Funds 10,307 11,178 Total Equity 11,017 11,913 Net Debti 9,873 9,238 Net Gearing Ratioi 0.90x 0.78x Adjusted net debt to EBITDAii 4.6x 5.1x ROE 37.9% 8.1% ROE (excluding discontinued operations & DIS loss) iii 9.3% 7.3% i Net debt and net
Slide 42: Free cash flow
Free cash flow $m FY23 FY22 Operating profit 4,272 727 Depreciation & other non-cash items (3,406) (406) Working capital changes (398) 505 Interest & tax paid (410) (566) Net cash from operating activities 58 260 Investments & capex (1,399) (1,616) Divestments & dividend income 1,258 1,159 Divestmen
Slide 43: Appendices: Additional Real Estate information
Appendices 3. Additional Real Estate information
Slide 44: Sales Achieved - Overseas
Sales Achieved - Overseas Units Sold in Sales Value in Latest Key Projects Location FY 2023 FY 2023 Avg. Selling Price China (RMB’m) (RMB’psm) Glory Land Shanghai 535 2,832 ~49,000 Seasons Residences Wuxi 178 474 ~21,000 North Island Site (UPED) Tianjin 917 942 ~10,850 Total 1,630 4,248 Indonesia (U
Slide 45: Residential Landbank - Singapore
Residential Landbank - Singapore As of end-Dec 2023 Remaining Remaining Total GFA Total Units Units Project Stake Tenure Units Area (sf) Units Launched Sold For Sale For Sale (sf) Corals at Keppel Bay 100% 99-yr 509,998 366 366 363 3 8,990 Reflections at Keppel Bay* 100% 99-yr 2,081,738 1,129 1,129
Slide 46: Residential Landbank - China
Residential Landbank - China As of end-Dec 2023 Remaining Remaining Total GFA Total Units Units Project Location Stake Units Area (sm) Units Launched Sold For Sale For Sale (sm) Glory Land Shanghai 10% 93,871 576 576 535 41 4,372 Waterfront Residences 100% 319,203 1,401 1,347 1,343 58 1,038 Wuxi Sea
Slide 47: Residential Landbank - Other Overseas
Residential Landbank - Other Overseas As of end-Dec 2023 Remaining Remaining Total GFA Total Units Units Project Location Stake Units Area (sm) Units Launched Sold For Sale For Sale (sm) Vietnam Saigon Sports City 100% 780,878 4,261 - - 4,261 451,905 Palm City 42% 495,900 3,042 1,586 951 2,091 214,9
Slide 48: Residential Launch Readiness – China
Residential Launch Readiness – China As of end-Dec 2023 Units Ready to Launch Project Location 2024 2025 2026 Glory Land Shanghai 41 - - Waterfront Residences 58 - - Wuxi Seasons Residences 202 300 340 North Island Site 1,016 1,880 2,734 Tianjin Waterfront Residences II 110 72 - Hill Crest Residence
Slide 49: Residential Launch Readiness – Other Overseas
Residential Launch Readiness – Other Overseas As of end-Dec 2023 Units Ready to Launch Project Location 2024 2025 2026 Vietnam Saigon Sports City Velona - 804 330 Riviera Point ^ Phase 1A - 12 - The View - 23 - The Infiniti 18 - - Phase 2 - 319 118 Empire City HCMC Narra Residences 10 - - Celesta ^
Slide 50: Expected Completion for Launched Projects
Expected Completion for Launched Projects As of end-Dec 2023 Total Units Launched as Units Sold as Units Remaining Expected Projects/Phases Launched Location Units at end-Dec 2023 at end-Dec 2023 as at end-Dec 2023 Completion China North Island Site (UPED Plot 83-08 1,232 1,232 1,230 2 1H2024 and 85
Slide 51: Expected Completion for Upcoming Projects
Expected Completion for Upcoming Projects As of end-Dec 2023 No. of Units Expected to be Completed Projects/Phases to be launched Location 2024 2025 2026 China North Island Site Tianjin - - 1,823 Vietnam 11.8-ha Residential Project HCMC 67 775 - Total 67 775 1,823 51
Slide 52: Commercial Projects - Under Development
Commercial Projects - Under Development As of end-Dec 2023 Expected Projects under Development Location Stake GFA (sm) Development Cost ^ Completion Singapore Keppel South Central Singapore 100% 60,370 TBC 2025 China Park Avenue Central Shanghai 99% 115,950 RMB 3.8b 2024 Seasons City Tianjin 100% 80
Slide 53: Commercial Projects - Completed
Commercial Projects - Completed As of end-Dec 2023 Key Completed Projects Location Stake GFA (sm) Net Lettable Area (sm) Completion Singapore I12 Katong Singapore 100% 27,140 19,730 2011 * China Trinity Tower 30% 70,000 48,600 2015 International Bund Gateway 29.8% 74,130 62,010 2018 Shanghai Keppel
Slide 54: Sino-Singapore Tianjin Eco-City
Sino-Singapore Tianjin Eco-City Selling Price Sales Value Land Area GFA Plot Date Plot Ratio Based on Land Area Based on GFA (RMB’m) (Hectare) (sm) (RMB’m/hectare) (RMB/sm) Recent residential land sales Plot 18b-2 Jun 2023 460 6.06 1.3 79,684 76 5,777 Plot 35 Apr 2023 555 6.26 1.7 102,900 89 5,393 P
Slide 55: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL, SUBSCR