Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — Singapore Tech Eng — FY2022 Earnings Presentation
39 slides from Singapore Technologies Engineering's earnings presentation, Feb 24, 2023
Slide 1: Financial Year 2022 Results
Financial Year 2022 Results 24 February 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
Financial Highlights Agenda • Group Highlights • Productivity Metrics • Debt Profile • Dividends • Outlook • Segment Highlights Question & Answer session Notes: • All amounts in millions of Singapore dollars unless otherwise stated • Amounts may not add to totals shown due to rounding • All governme
Slide 4: Group Highlights
ST Engineering Group Highlights
Slide 5: Group Highlights
Group Highlights ❑ Group Revenue 17% higher y-o-y ❑ EBIT 9% higher y-o-y, despite reduction of $203m in Covid-related govt. support Revenue EBIT Revenue EBIT 4,765 351 9,035 735 +18% y-oy +10% y-oy +17% y-oy +9% y-oy PBT Net Profit PBT Net Profit 246 255 597 535 -17% y-oy -7% y-oy -6% y-oy -6% y-oy
Slide 6: 2022: Strong Performance Recovery from 2020 Covid year
Group Highlights 2022: Strong Performance Recovery from 2020 Covid year Revenue ($b) EBIT ($’m) Net Profit ($’m) 735 9.0 2 674 571 535 596 522 205 2 177 7.7 353 340 7.2 733 533 469 394 243 182 2020 2021 2022 2020 2021 2022 2020 2021 2022 6 | Govt Support
Slide 7: FY2022 Revenue Growth from all Segments
Group Highlights FY2022 Revenue Growth from all Segments (+3pp) 9,035 (+7pp) 234 $'m 582 (+7pp) +17% 526 7,693 2021 CA USS DPS 2022 7 |
Slide 8: Group FY2022 Revenue Breakdown
Group Highlights Group FY2022 Revenue Breakdown FY2022 Revenue by segment FY2022 Revenue by type FY2022 Revenue $9.0b $9.0b by location of customers Commercial Defence USS 6.0 3.0 1.8 CA 2.9 Asia U.S. CADPS (20%) 4.8 2.6 3.0 4.6 50% 25% (33%) $2.1b $1.4b Europe Others USS 18% 7% 4.2 (47%) $0.8b DPS
Slide 9: Recovery in Commercial Aerospace business
Group Highlights Recovery in Commercial Aerospace business Revenue, $m 2,991 2,465 +21% 2,332 +6% • 21% y-o-y revenue growth in FY2022 • PTF1 Gross profit margin (GPM) at programme level turned positive in 4Q’2022 2020 2021 2022 9 | • 1PTF - Passenger-to-Freighter
Slide 10: Commercial Aerospace Revenue grew with more growth expected
Group Highlights Commercial Aerospace Revenue grew with more growth expected • In Dec 2022, air travel has recovered to 77% of pre-Covid level. Recovery as % of Dec-2019 Pre-Covid Level 90% - Domestic travel leads at 80% 80% 76% 75% 77% and International lags at 75% 74% 74% 74% 69% 71% 70% 63% - APA
Slide 11: Earnings Before Interest and Tax (EBIT)
Group Highlights Earnings Before Interest and Tax (EBIT) ❑ Base Operating Performance (BOP) 55% higher y-o-y $'m 729 735 674 2 -36 2 -30 72 +9% -203 258 +55% 205 727 733 +55 469 2021 Govt. support Business 2022 Energy TC T&I exp. Pension 2022 growth BOP inflation cost savings & cost savings Govt Sup
Slide 12: CA EBIT
Group Highlights CA EBIT ❑ Strong EBIT y-o-y; despite reduction of $150m in government support $’m 301 2 240 72 2 -11 +65% 182 299 208 238 152 -150 30 2021 Govt. support Business growth 2022 Energy inflation Pension 2022 & cost savings BOP cost savings 12 | Govt Support
Slide 13: USS EBIT
Group Highlights USS EBIT ❑ 13% higher y-o-y; despite TC T&I expenses and Satcom’s product development investment ❑ Chip shortage impact about $20m for both 2022 and 2021 $’m 61 -2 37 -30 26 29 +13% 2 -2 24 2021 Govt. support Business 2022 Energy inflation TC T&I exp. 2022 growth & BOP cost savings
Slide 14: DPS EBIT
Group Highlights DPS EBIT ❑ BOP 3% higher y-o-y with business growth and cost savings offsetting impact from U.S. Marine $’m 466 51 -51 428 13 +3% -23 405 -13% 415 2021 Govt. support Business growth & 2022 Energy 2022 cost savings, net of BOP inflation U.S. Marine losses 14 | Govt Support
Slide 15: Net Profit
Group Highlights Net Profit ❑ BOP Net Profit 39% higher y-o-y; TransCore not yet earnings accretive in 2022 $'m 571 -75 551 39% 535 2 -30 2 -6% 258 -22 -17 53 177 -203 EBIT:+55 549 533 394 2021 Govt. Business Finance 2022 Energy TC T&I Tax exempt Pension 2022 support growth costs, tax BOP inflation
Slide 16: $13.1b New Contracts for FY2022, incl. $2.8b for 4Q2022
Group Highlights $13.1b New Contracts for FY2022, incl. $2.8b for 4Q2022 4Q2022 Highlights • CFM56-7B heavy maintenance contracts Commercial $680m • A320 Component MBHTM contract Aerospace • PTF orders • Electronic tolling/O&M contracts in New Jersey, Houston, Pennsylvania and Oklahoma Urban Solutio
Slide 17: Order Book Remains Robust
Group Highlights Order Book Remains Robust Order Book ($b) 23.0 19.3 +31% 1.8 • $23b as at 31 Dec 2022 15.4 1.0 • $7.2b expected to be delivered in 2023 17.5 14.4 Dec-20 Dec-21 Dec-22 17 | US Marine (Divested in Nov’22)
Slide 18: Productivity Metrics
ST Engineering Productivity Metrics
Slide 19: Productivity metrics trending well
Productivity Metrics Productivity metrics trending well Opex/revenue Staff costs#/revenue % % 13.5 13.5 40 13.0 35 12.5 32.5 12.0 12.1 12.0 30.5 11.7* 30 28.9 11.5 11.0 25 2020 2021 2022 2020 2021 2022 * Excluding M&A transaction expenses # Staff costs excluding govt. support 19 |
Slide 20: Debt Profile
ST Engineering Debt Profile
Slide 21: Fixed vs Floating Interest Rate Debt Profile - Balanced
Debt Profile “Fixed vs Floating Interest Rate” Debt Profile • Fixed vs floating interest rate ratio of 53%:47% – balanced and in accordance - Balanced with interest rate hedging policy1 • Marginal increase in Group weighted average borrowing cost for FY2022 Fixed Rate Floating - 2.4% (2022) vs 2.3%
Slide 22: Dividends
ST Engineering Dividends
Slide 23: FY2022 Final Dividend of 4.0 Cents per Share
Dividends FY2022 Final Dividend of 4.0 Cents per Share Dividend per Ordinary Share • Final dividend of 4.0 cents per ordinary share for financial year ended 31 Interim December 2022 Final Final 12.0¢ 10.0¢ 10.0¢ • Total dividend of 16.0 cents, including Interim Interim Final interim dividends of 12.
Slide 24: Outlook
ST Engineering Outlook
Slide 25: Well positioned for 2023
Outlook Well positioned for 2023 1. 2. 3. 4. 5. 7. Recovery in 6. Portfolio Strong Commercial Productivity TransCore Management Orderbook Aerospace • Ride recovery • Opex/ • Smooth • Sharpened • Robust of aviation Revenue Transition focus order book industry ratio • Cashflow +ve • Divested ($23b @ •
Slide 26: President & CEO's Message
Group President & CEO’s Message “ Our Group revenue grew strongly, and our underlying operating performance improved significantly by 55% y-o-y. Notwithstanding the dip in Group Net profit y-o-y, we made good progress in 2022 to deliver against our five-year plan (Investor Day targets for 2022-2026)
Slide 27: Segment Highlights
ST Engineering Segment Highlights
Slide 28: Segment Revenue
Segment Highlights Segment Revenue $m 2H2022 2H2021 Change FY2022 FY2021 Change Commercial 1,587 1,329 +19% 2,991 2,465 +21% Aerospace Urban Solutions & 1,015 663 +53% 1,772 1,191 +49% Satcom Defence & Public 2,163 2,051 +5% 4,272 4,038 +6% Security Group 4,765 4,042 +18% 9,035 7,693 +17% 28 |
Slide 29: Segment EBIT
Segment Highlights Segment EBIT $m 2H2022 2H2021 Change FY2022 FY2021 Change Commercial 118 79 +49% 301 182 +65% Aerospace Urban Solutions & 41 15 +176% 29 26 +13% Satcom Defence & Public 191 224 -15% 405 466 -13% Security Group 351 319 +10% 735 674 +9% 29 |
Slide 30: Commercial Aerospace
Segment Highlights Commercial $m FY2022 FY2021 Change Remarks Aerospace Higher revenue attributable to Revenue 2,991 2,465 21% continued but not yet full business recovery Cost savings (including pension cost savings) and strong business recovery EBIT 301 182 65% more than offset substantial reducti
Slide 31: Commercial Aerospace Sub-segment Highlights
Segment Highlights Commercial Aerospace Sub-segment Highlights Aerospace MRO Aerostructures & Systems Aviation Asset Management Revenue, $m Revenue, $m AUMR1, US$m +73% +20% 1,821 +21% 1,671 1,392 1,392 1,147 1,054 FY2021 FY2022 FY2021 FY2022 31.12.21 31.12.22 Notes: - R1 AUM refers to Asset Under M
Slide 32: Urban Solutions & Satcom
Segment Highlights $m FY2022 FY2021 Change Remarks Urban Solutions Revenue 1,772 1,191 49% TransCore contributed to revenue growth & Satcom Higher EBIT despite TransCore transaction and integration expenses of $30m EBIT 29 26 13% and weakness in Satcom due to chip shortages and higher investment in
Slide 33: Urban Solutions & Satcom Sub-segment Highlights
Segment Highlights Urban Solutions & Satcom Sub-segment Highlights Urban Solutions Satcom* Revenue, $’m Revenue, $’m +75% 1,406 -8% 451 415 802 FY2021 FY2022 FY2021 FY2022 Note: *Satcom was impacted by semiconductor chip shortages and we are monitoring 33 | Revenue include inter-segment and inter-su
Slide 34: Defence & Public Security
Segment Highlights $m FY2022 FY2021 Change Remarks Defence & Public Revenue 4,272 4,038 6% Higher revenue from all sub- Security segments EBIT 405 466 13% Excluding government EBIT, support of $51m in prior year excl. govt. and energy inflation impact support & 428 415 3% of $23m, EBIT would be 3% e
Slide 35: Defence & Public Security Sub-segment Highlights
Segment Highlights Defence & Public Security Sub-segment Highlights Defence Aerospace Digital Systems Land Systems Marine Revenue, $m & Cyber Revenue, $m Revenue, $m Revenue, $m +10% +3% 1,582 1,504 1,444 1,456 +4% 813 845 +9% 433 471 FY2021 FY2022 FY2021 FY2022 FY2021 FY2022 FY2021 FY2022 35 | Note
Slide 36: Appendix
£"6 ST Engineering Appendix
Slide 37: Statement of Financial Position
Group Highlights Statement of Financial Position $m 31 Dec 2022 31 Dec 2021 Property, plant & equipment 2,076 1,794 Right-of-use assets 582 559 Intangible assets 5,291 1,993 Other non-current assets 888 814 Current assets 6,127 5,356 Total assets 14,964 10,516 Current liabilities 8,005 4,680 Non-cur
Slide 38: Statement of Cash Flows
Group Highlights Statement of Cash Flows $m FY2022 FY2021 Net cash from / (used in): Operating activities 673 1,114 Investing activities (4,571) (414) Financing activities 3,698 (615) Net change in CCE* (201) 86 CCE at beginning of the year 816 729 Exchange difference (14) 1 CCE at end of the year 6
Slide 39: Connect with us
Connect with us www.stengg.com