Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — H1 2020 Earnings Presentation
50 slides from Singapore Technologies Engineering's earnings presentation, Aug 14, 2020
Slide 1: First-Half 2020 Results
First-Half 2020 Results 14 August 2020
Slide 2: Agenda
Agenda • Group Highlights • Outlook • Appendix • Aerospace • Electronics • Land Systems • Marine 2 |
Slide 3: Group Highlights
Group Highlights $" ST Engineering
Slide 4: Group Highlights
Group Highlights All figures are denominated in S$m unless indicated otherwise 1H2020 Revenue EBIT 3,572 299.2 +2% y-o-y -3% y-o-y PBT Net Profit 286.4 257.4 -13% y-o-y -4% y-o-y 4 |
Slide 5: 1H2020 Revenue & Net Profit
1H2020 Revenue & Net Profit All figures are denominated in S$m unless indicated otherwise Revenue Net Profit 269 (-9 pp) (+2%) (-4%) (+8 pp) (+8 pp) 257 (-8 pp) 3572 3511 (+2 pp) (-4 pp) 1H2019 Aerospace Land New 1H2020 1H2019 Impairments Shipbuilding Net impact, 1H2020 & Systems Growth & & Fair Val
Slide 6: Group Revenue Breakdown
Group Revenue Breakdown All figures are denominated in S$m unless indicated otherwise 1H2020 Revenue 1H2020 Revenue 1H2020 Revenue by type by location of customers Commercial Defence Land Marine Systems 11% 2.5 18% 2.2 2.4 ASIA U.S. 51% 24% 1.1 1.2 1.0 Aerospace EUROPE OTHERS Electronics 41% 30% 19%
Slide 7: New Contracts & Order Book
New Contracts & Order Book New Contracts Order Book • Aerospace and Electronics sectors collectively $16.3b $15.3b $15.9b secured about $1.1b worth of new contracts in 2Q2020, bringing their total contract wins to about $2.7b in 1H2020 • These values exclude new contracts secured by Land Systems and
Slide 8: Group Revenue
Group Revenue S$'m 1H2020 1H2019 Change Aerospace 1,470 1,458 +1% Electronics 1,069 1,088 -2% Land Systems 644 673 -4% Marine 385 288 +34% Others 4 4 -. Group 3,572 3,511 +2% With effect from 1 January 2020, Miltope was re-organised from Others into Electronics sector and all comparatives were resta
Slide 9: Group Net Profit
Group Net Profit S$'m 1H2020 1H2019 Change Aerospace 105.0 127.0 -17% Electronics 87.6 81.6 +7% Land Systems 41.8 35.6 +17% Marine 21.4 26.3 -19% Others 1.6 (1.2) NM Group 257.4 269.3 -4% 9 |
Slide 10: Group Margins
Group Margins PBT Margin Net Profit Margin 8% 7% Group 9% 8% 8% 7% Aerospace 11% 9% 9% 8% Electronics 9% 7% 8% 6% Land Systems 6% 5% 6% 6% Marine 11% 9% 1H2020 1H2019 1H2020 1H2019 10 |
Slide 11: Balance Sheet
Balance Sheet S$'m 30 Jun 2020 31 Dec 2019 Property, plant & equipment 1,793 1,805 Right-of-use assets 498 484 Intangible assets 2,036 1,980 Other non-current assets 625 613 Current assets 4,490 4,639 Total assets 9,442 9,521 Current liabilities 3,849 5,446 Non-current liabilities 3,094 1,584 Total
Slide 12: Statement of Cash Flows
Statement of Cash Flows S$'m 1H2020 1H2019 Net cash from/(used in) Operating activities 1,017 423 Investing activities (151) (823) Financing activities (984) 308 Net decrease in CCE * (118) (92) CCE at beginning of the period 452 414 Exchange difference 8 (1) CCE at end of the period 342 321 * CCE -
Slide 13: 1H2020 Interim Dividend of 5.0 Cents per Share
1H2020 Interim Dividend of 5.0 Cents per Share • Board approved interim dividend of 5.0 cents per ordinary share, payable on 2 Sep 2020 Dividend per Ordinary Share • 1H2020 interim dividend is consistent with previous years Final Final 10.0¢ 10.0¢ • Retained earnings was $1,390m or 44.5 cents Interi
Slide 14: Outlook
Outlook WZ =< ST Engineering
Slide 15: President & CEO's Message
President & CEO’s Message “We entered the COVID-19 pandemic from a position of strength. Our technology and engineering foundation built up over the years, our strong balance sheet, our diverse business mix and robust order book helped us weather the impact of COVID-19 and maintain even-keel for our
Slide 16: Appendix
Appendix $" ST Engineering
Slide 17: Group
Group WZ =< ST Engineering
Slide 18: Group Profit before Tax (PBT)
Group Profit before Tax (PBT) S$'m 1H2020 1H2019 Change Aerospace 120.3 158.5 -24% Electronics 96.6 98.4 -2% Land Systems 49.2 42.2 +17% Marine 22.1 31.5 -30% Others (1.8) (1.0) NM Group 286.4 329.6 -13% 18 |
Slide 19: Aerospace
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Slide 20: Aerospace Revenue by geography
Aerospace Revenue by geography (by location of customers) Europe Others 1H2020: $538m 5% 1H2020: $81m 37% 32% 26% U.S. Asia 1H2020: $376m 1H2020: $476m Note: Revenue includes inter-segment sales 20 |
Slide 21: Aerospace Revenue, PBT and Net Profit by business group
Aerospace Revenue, PBT and Net Profit by business group AMM 332 CERO 485 474 235 41.6 41.9 35.2 21.8 1H2019 1H2020 1H2019 1H2020 PBT $50.0m $53.2m PBT $42.4m $27.9m EMS 762 644 Legend: Bar: Revenue ($m) 50.2 41.3 Line: Net Profit ($m) Note: Revenue includes inter-segment sales 1H2019 1H2020 21 | PBT
Slide 22: Aerospace 1H2020 vs 1H2019
Aerospace 1H2020 vs 1H2019 Full six months' contribution from MRAS as compared to two-and-a-half months in prior year Revenue $1,470m ▲ $12m or 1% Partially offset by Lower revenue from AMM and CERO business groups due to reduced activities arising from COVID-19 Impairments and lower activi
Slide 23: Aerospace – 1H2020 in Review
Aerospace – 1H2020 in Review • Secured about $1.4b worth of new contracts, including: • Multi-year engine and component MRO contracts to support T’way Air’s Boeing 737 fleet • A 5-year nacelle maintenance contract to support Qantas’ Boeing 737-800 and A330 fleet • A 3-year heavy maintenance contract
Slide 24: Aerospace – 1H2020 in Review
Aerospace – 1H2020 in Review • Entered into agreements for the sale of 30 aircraft engines through engine leasing JV into a securitisation structure • Strengthened core capabilities • Entered into an agreement with Vietnam Airlines to explore setting up airframe MRO JV in Vietnam • Became a licensed
Slide 25: Aerospace – Outlook for 2H2020
Aerospace – Outlook for 2H2020 • Redeliver A321P2F prototype and pursue new P2F contracts • Ramp up component MRO operations • Develop solutions to enhance cabin hygiene and safety • Accelerate implementation of smart solutions to enhance productivity and cost efficiency • Continue to market UAV sol
Slide 26: Electronics
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Slide 27: Electronics Revenue by geography
Electronics Revenue by geography (by location of customers) Europe Others 1H2020: $104m 6% 1H2020: $61m 10% 11% 73% U.S. Asia 1H2020: $125m 1H2020: $792m 27 | Note: Revenue includes inter-segment sales
Slide 28: Electronics Revenue, PBT and Net Profit by business group
Electronics Revenue, PBT and Net Profit by business group LSG CSG 265 545 259 513 32.4 36.2 18.6 3.5 1H2019 1H2020 1H2019 1H2020 PBT $39.7m $42.9m PBT $21.6m ($0.7m) SSG 297 304 Legend: Bar: Revenue ($m) 47.9 30.6 Line: Net Profit ($m) Note: Revenue includes inter-segment sales 1H2019 1H2020 28 | PB
Slide 29: Electronics 1H2020 vs 1H2019
Electronics 1H2020 vs 1H2019 Lower revenue from CSG business group, impacted by COVID-19 Revenue $1,069m ▼ $19m or 2% Partially offset by Higher revenue from LSG and SSG business groups In line with lower revenue Unfavourable sales mix PBT $96.6m ▼ $1.8m or 2% Partially offset by Gover
Slide 30: Electronics – 1H2020 in Review
Electronics – 1H2020 in Review • Secured over $1.3b worth of new contracts, including: • Rail electronics projects in China, India and Thailand • Public safety and security projects • Next-generation Perimeter Intrusion Detection System in a U.S. airport • Provision of Security Operations Centres an
Slide 31: Electronics – 1H2020 in Review
Electronics – 1H2020 in Review • Deployed integrated command, control and communications (C3) systems, integrated surveillance systems, contact tracing solutions to support Singapore’s COVID-19 efforts • Enhanced Smart City offerings • Smart lighting provided to Singapore’s Housing & Development Boa
Slide 32: Electronics – Outlook for 2H2020
Electronics – Outlook for 2H2020 • Explore business opportunities arisen from new demand trends, e.g. safe access control management, data centres, cybersecurity and secured digital solutions • Deliver smart mobility, satellite communications and software system related contracts on schedule • Focus
Slide 33: Land Systems
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Slide 34: Land Systems Revenue by geography
Land Systems Revenue by geography (by location of customers) Europe 0% Others 1H2020: $2m 7% 1H2020: $43m 21% 72% U.S. Asia 1H2020: $139m 1H2020: $478m 34 | Note: Revenue includes inter-segment sales
Slide 35: Land Systems Revenue, PBT and Net Profit by business group
Land Systems Revenue, PBT and Net Profit by business group Auto M&W 504 479 84 82 17.8 6.4 9.7 4.1 1H2019 1H2020 1H2019 1H2020 PBT $11.7m $20.6m PBT $4.8m $7.3m S&T 100 101 Legend: 21.8 17.6 Bar: Revenue ($m) Line: Net Profit ($m) Note: Revenue includes 1H2019 1H2020 inter-segment sales PBT $25.7m $
Slide 36: Land Systems 1H2020 vs 1H2019
Land Systems 1H2020 vs 1H2019 Lower revenue from Auto business group, with lower US specialty vehicles and Revenue $644m ▼ $29m or 4% MAN bus sales Partially offset by Stronger defence revenue Government support Lower operating expenses Partially offset by PBT $49.2m ▲ $7.0m or 17% Unfav
Slide 37: Land Systems – 1H2020 in Review
Land Systems – 1H2020 in Review • Secured new contracts, including: • Phase 2 contract for Hunter Armoured Fighting Vehicle from Singapore Ministry of Defence • Weapons & munitions from customers in South America, North Africa and Middle East • Road construction equipment and specialty vehicles from
Slide 38: Land Systems – Outlook for 2H2020
Land Systems – Outlook for 2H2020 • Focus on execution and delivery of ongoing defence programmes, as well as ongoing autonomous vehicle trials • Pursue and secure key defence and commercial programmes locally and overseas • Develop and strengthen capabilities to be a leading contributor of the AV e
Slide 39: Marine
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Slide 40: Marine Revenue by geography
Marine Revenue by geography (by location of customers) Europe Others 1H2020: $25m 6% 1H2020: $25m 6% 33% 55% U.S. Asia 1H2020: $212m 1H2020: $123m Note: Revenue includes inter-segment sales 40 |
Slide 41: Marine Revenue, PBT and Net Profit by business group
Marine Revenue, PBT and Net Profit by business group Shipbuilding Shiprepair 216 143 136 24.7 96 19.8 3.9 (6.3) 1H2019 1H2020 1H2019 1H2020 PBT $4.1m ($10.6m) PBT $23.8m $29.2m Engineering 49 33 Legend: 2.6 3.0 Bar: Revenue ($m) Line: Net Profit ($m) Note: Revenue includes inter-segment sales 1H2019
Slide 42: Marine 1H2020 vs 1H2019
Marine 1H2020 vs 1H2019 Higher revenue from Shipbuilding business group Revenue $385m ▲ $97m or 34% Partially offset by Lower revenue from Shiprepair and Engineering business groups Weaker U.S. shipbuilding performance PBT $22.1m ▼ $9.4m or 30% Partially offset by Government support In
Slide 43: Marine – 1H2020 in Review
Marine – 1H2020 in Review • Secured new contracts, including: • Firm order for one Auxiliary Personnel Lighter-Small (APL(S)) 67 Class berthing barge for the U.S. Navy, bringing total orders to four units • Engineering, Procurement and Construction contract with consortium partners, Keppel Seghers a
Slide 44: Marine – Outlook for 2H2020
Marine – Outlook for 2H2020 • R&D plan including design performance specifications for Polar Security Cutter • Deliver first two units of APL(S) berthing barge to U.S. Navy • Progressive launches/deliveries of 5GPT to Singapore Police Coast Guard • Pursue and secure defence and commercial newbuild p
Slide 45: Aerospace Business Updates
Aerospace Business Updates COVID-19’s Impact and Opportunities
Slide 46: Y2020 - An Unprecedented Year for Aviation
Y2020 - An Unprecedented Year for Aviation Aviation Traffic Plunge Precipitates Major Aviation Market Crisis 1 Air travel hits a record low in April 2020 2 Airlines rationalise fleets, global in-service aircraft reduced Source: IATA Source: Aviation Week 3 OEMs reduced aircraft production rates and
Slide 47: Longer-Term & Strategic Priorities
Longer-Term & Strategic Priorities Strengthen Fundamentals and Capitalise on COVID-19’s Opportunities Improve Cost Structure & Operations Rationalisation • Align supply & Position for Growth demand • Exit businesses Freighter Business • Accelerate that see • Strategic digitisation and permanent part
Slide 48: Diverse Portfolio Across Business Segments & Markets
Diverse Portfolio Across Business Segments & Markets Broad Business Exposure & Diverse Portfolio Reduce Single Segment Risks Commercial Passenger OEM Defence Cargo MRO MRO Engineering Singapore PTF Conversions MRO Global 1 Increased demand for cargo aircraft 2 PTF feedstock at lower cost 3 Demand fo
Slide 49: Intensifying Innovation Efforts
Intensifying Innovation Efforts Accelerate Innovation and Capitalise on COVID-19’s Opportunities Strengthen Engineering and MRO | Leverage on Smart Technology Creating value through: • Workforce Efficiency • Customer-Focused Solution • Enhancing Quality & Improving Turn time Expandable PRM Lavatory
Slide 50: Thank You
<< ST Engineering Thank You
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