Sats Ltd · SGX:S58
Sats — Merger or Acquisition (September 2022)
28 slides from Sats's merger presentation, Sep 28, 2022
Slide 1: Creating a Global Aviation Services Leader
Creating a Global Aviation Services Leader 28 September 2022
Slide 2: Forward Looking Statement – Important Note
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 are state
Slide 3: Agenda
Agenda Transaction Overview 1 Accelerating the SATS Transformation Overview of WFS 2 The Leading Global Air Cargo Handler Strategic Rationale 3 Creating a Global Aviation Services Leader and Delivering Immediate Earnings Accretion
Slide 4: Transaction Overview
01 TRANSACTION OVERVIEW Accelerating the SATS Transformation
Slide 5: Accelerating the SATS Transformation
Accelerating the SATS Transformation SATS has agreed to acquire 100% of Worldwide Flight Services (“WFS”) ▪ WFS is the clear market leader in air cargo handling ▪ Global network across 164 locations and 18 countries ▪ Leading positions at key strategic hubs in Europe and North America ▪ WFS generate
Slide 6: Acquisition of WFS Accelerates Our Strategic Objectives
Acquisition of WFS Accelerates Our Strategic Objectives Transforming SATS from an Asia-focused Operator to a Global Leader in Gateway and Food Solutions Hub Handling Reinforces Aviation Catering Reinforces Reinforces Cargo Handling: Food Asia Global Solutions 2
Slide 7: WFS is the Clear Market Leader in Air Cargo Handling
WFS is the Clear Market Leader in Air Cargo Handling ✓ Largest global air cargo handler, with over 6.3M tonnes of cargo handled annually ✓ 164 locations across 18 countries, including 114 cargo stations with warehouse space of 800k+ sqm €1,722M €232M ~80% ✓ Diversified blue-chip customer base with r
Slide 8: Unique Opportunity to Acquire a Cargo Handling Asset of Scale
Unique Opportunity to Acquire a Cargo Handling Asset of Scale 2000 2022 R.A. Hand (Public) (FCS) SEN France GSI Handling Aviator ✓ WFS has successfully led industry consolidation in cargo handling ✓ Acquisition propels SATS to global leader ✓ Strong track record of M&A integration and new business w
Slide 9: Highly Complementary & Transformational for SATS
Highly Complementary & Transformational for SATS Cargo Ground Cargo Ground 22 Stations 2.8M 38 Stations 114 Stations 6.3M 74 Stations Cargo Tonnes Cargo Tonnes 8 Countries Handled 5 Countries 15 Countries Handled 7 Countries S$1.2B 85% / 15% 55% / 45% S$2.6B 63% / 37% 79% / 21% Food Solutions / LTM
Slide 10: Complementary Networks Creating Unmatched Global Footprint
Complementary Networks Creating Unmatched Global Footprint EMEA Cargo Stations 51 Comprehensive global Ground Stations 10 coverage across Americas – Europe – APAC Europe<>NA (6% Global Cargo) Europe<>APAC (11% Global Covering trade routes Cargo) responsible for >50% of global air cargo volumes Domes
Slide 11: Overview of WFS
02 OVERVIEW OF WFS The Leading Global Air Cargo Handler
Slide 12: Why WFS?
Why WFS? #1 Player in Air Cargo Handling #1 In Leading Cargo Stations in North America and Europe 8 Extensive & Strategically Located Infrastructure 114 >800K m 2 Cargo Stations Warehouse Space Contract Cargo Provider of Mission-Critical Services To Blue-Chip Customers 6.3M Tonnes >90% Renewal Rate
Slide 13: #1 Player in Global Air Cargo Handling
#1 Player Global in Cargo Air Cargo PlayerHandling (2x Larger Than the Next Competitor) WFS Station Footprint Highly complementary network with minimal overlap N. AMERICA EMEA Leadership positions at strategic hubs connecting both ends of key (59%) (34%) trade lanes across North America and Europe A
Slide 14: Extensive & Strategically Located Infrastructure
Extensive & Strategically Located Infrastructure Competitive Advantages Well-Invested Platform to Support Sustainable Growth ~811k m2 Established portfolio 100% owned or of ~170 on-airport controlled network lease warehouses Deep relationships Long term leases with with airports, regulators 95%+ ren
Slide 15: Provider of Mission-Critical Services
Provider of Mission-Critical Services Air Cargo Handling Offering Ground Handling and Ancillary Offerings Cargo Warehousing Storage of Cargo Freighter Ramp Ticketing Check-in Documentation Loading and Security Integrator Trucking Unloading Handling Special Assistance Boarding Value Added Services Ph
Slide 16: Diversified Blue-Chip Customer Base
Diversified Blue-Chip Customer Base Limited Revenue Concentration Customer Mix ~300 cargo customers spanning multiple locations Customer #1-5 24% Airlines ~50% Top 5 cargo customers have on average 20+ year relationships Customer #6-10 12% >90% renewal rates driving recurring Integrators / revenue F
Slide 17: Highly Experienced & Proven Management Team
Highly Experienced & Proven Management Team WFS Group CEO 25+ Global Leadership Craig Smyth Regional Leadership 25+ 35+ 20+ Americas EMEAA WFS Group CFO Michael Simpson John Batten François Mirallié Support Functions Leadership Commercial 35+ PMO(1) 25+ IT 25+ M&A 7+ Barry Nassberg Andrew Bonney Ped
Slide 18: Track Record of Consistent, Profitable Growth
Track Record of Consistent, Profitable Growth Revenue EBITDA €M €M Margin 9% 5% 5% 15% 13% Cash 67% 40% 74% 82% 79% Conv(2) 1,722 1,582 153 1,427 185 245 1,315 326 232 276 490 1,081 396 238 118 1,244 1,121 936 75 920 843 54 2018A 2019A 2020A 2021A LTM-Mar-22 2018A 2019A 2020A 2021A LTM-Mar-22 (1) Ca
Slide 19: Strategic Rationale
03 STRATEGIC RATIONALE Creating a Global Aviation Services Leader and Delivering Immediate Earnings Accretion
Slide 20: The Global Air Cargo Handling Market is Growing & Resilient
The Global Air Cargo Handling Market is Growing & Resilient Structural Growth Tailwinds Proven Resilience Through the Cycle Total Cargo Global GDP Trade war with China – Negative Sustained ✓ Global eCommerce CAGR of impact on air cargo volumes over 2 years before sharp recovery eCommerce 10% and Sou
Slide 21: Creating the Pre-Eminent Global Air Cargo Handling Platform
Creating the Pre-Eminent Global Air Cargo Handling Platform Global Cargo Stations Count Cargo Volume (in M Tonnes) 9 135 92 5 53 3 31 2 1 1 4 5 (1) (1) 2021 Strategic Positions in Major Airport Hubs (in M Tonnes) North America EMEA APAC (Top 10 Airports Volume) (Top 10 Airports Volume) (Top 10 Airpo
Slide 22: Combining Insights & Capabilities Across a Larger Network
Combining Insights & Capabilities Across a Larger Network Digital Transformation Data Analytics New Technology Cybersecurity and End-to-End Visibility Technology and Automation and Insights Deployment Data Governance and Traceability Innovation ▪ Continuous digital ▪ Cutting-edge data ▪ Implement ne
Slide 23: Potential Run-rate EBITDA Synergies in Excess of S$100M
Potential Run-rate EBITDA Synergies in Excess of S$100M Cross-Selling and eCommerce Cargo Accelerate Cargo Reinforce Other Identified Network Expansion Partnerships Automation Downstream Cargo Areas Across the Globe Logistic Offering ▪ Leverage relationships ▪ Leverage WFS leading ▪ Larger combined
Slide 24: Delivering Positive Financial Impact
Delivering Positive Financial Impact Step Change in Revenue and EBITDA Immediate Earnings Accretion Revenue (S$B) EBITDA (S$M) EPS (S¢) Additional Earnings Upside ~3x ~5x ~2x ✓ Continued strong recovery in travel related 3.8 Excluding Amortisation businesses 445 of Intangible Assets 5.4 ✓ Potential
Slide 25: Reinforcing Diversification & Resilience
Reinforcing Diversification & Resilience SATS – LTM March 2022 Pro Forma – Mid-term Target(1) ~15% Asia Increased ~30% geographical Singapore EMEA ~45% diversification Ex. Singapore Americas Expansion into EMEA and North American markets ~85% ~25% ~15% Cargo Cargo (Inc. Express) Increased exposure t
Slide 26: Indicative Financing Plan
Indicative Financing Plan Indicative Sources & Uses ✓ Committed funding in place to satisfy purchase price through an acquisition bridge facility (if required) Sources S$M Uses S$M Equity Fundraising 1,700 Estimated Aggregate Consideration(1) 1,736 ✓ SATS remains committed to prudent balance sheet m
Slide 27: Closing Conditions & Timing
Closing Conditions & Timing Shareholder approval ▪ SATS to convene an Extraordinary General Meeting by early 2023 ▪ Temasek, which owns ~40%, has agreed to vote in favour of the proposed acquisition Other conditions ▪ Customary regulatory clearances ▪ Other customary closing conditions Expected clos
Slide 28: Concluding Remarks
Concluding Remarks WFS is a highly strategic and complementary asset that will transform the SATS portfolio SATS will become the largest global air cargo handler with an unmatched footprint and ability to service customers on a global scale Our portfolio will become more geographically diversified w