Sia Engineering Co. Ltd. · SGX:S59
Sia Engineering — FY2019/20 Earnings Presentation
32 slides from Sia Engineering's earnings presentation, May 11, 2020
Slide 1: FY2019/20 Results Briefing
FY2019/20 Results Briefing 11 May 2020
Slide 2: FY19/20 Operational Review
FY19/20 Operational Review 2
Slide 3: Core Business
Core Business Line Maintenance • 35 airports in 7 countries (expanding to 47 airports in 10 countries) Base Maintenance • 6 hangars in Singapore • 3 hangars in Philippines Fleet Management • 92 aircraft from 8 airlines 3
Slide 4: Core Business: Line Maintenance
Core Business Line Maintenance Monthly flights handled at Changi in FY19/20 13,945 Flights handled at Changi Airport 10,949 6,740 2.1% Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 153,006 • Healthy number of flights handled at Changi before the impact of the CO
Slide 5: Core Business: Base Maintenance
Core Business Base Maintenance Maintenance Checks at Singapore Base Singapore Base • Number of ‘A’ checks increased FY19/20 FY18/19 • Base maintenance not immediately affected by COVID-19 but ‘A’ Checks* 515 466 delayed impact is expected ‘C’ Checks 69 71 * Including ‘A’ checks performed by Line Mai
Slide 6: Core Business: Fleet Management
Core Business Fleet Management Fleet Management Customers A32 A320 0 46 aircraft 737 23 aircraft (Tailored Support Package) A330 9 aircraft 747 7 aircraft 777 7 aircraft Revenues for fleet management, which are largely based on flying hours, are impacted by the flight FMP Fleet: 92 aircraft cancella
Slide 7: New Contracts
New Contracts Line Maintenance Base Maintenance 7
Slide 8: Innovation and Technology
Innovation and Technology The Innovation & Technology Group was established in 2016 to spearhead innovation drive with a commitment to invest up to $50 million over 5 years Operations & Technology Enhance Digitally Enabled Increase Capability Roadmap Quality and (2018) Workforce Productivity Safety
Slide 9: Transformation
Transformation » SIA ENGINEERING company
Slide 10: Transformation
Transformation Achieved Increased Reduced turn- Increased Reduced improvements utilisation around-time throughput operating costs Performance Joint Check Expanded Improved Customised management Staff training for Management capability and efficiency in software Over 100 with SIA developed for streng
Slide 11: Strategic Partnerships - JV Portfolio
Strategic Partnerships - JV Portfolio Airframe and Line Maintenance Engine and Component SIA Engineering PT JAS Aero- Singapore Aero Engine Component Aerospace SIA Engineering Japan Eagle Services Asia (USA) Engineering Services Services Singapore (SIAEJ) (ESA) (SEUS) (PT JAES) (SAESL) (CAS) United
Slide 12: Strengthening our JV Portfolio / other Key Developments
Strengthening our JV Portfolio / other Key Developments Investments in New Capabilities EAGLE • Built up GP7200 and GTF engine capabilities to rejuvenate growth SERVICES • Invested nearly US$85 million to upgrade the facility, including advanced ASIA machinery, and to train employees to perform new
Slide 13: Response to COVID-19
Response to COVID-19 • SIAEC and its local JVs are classified as essential services and continue to operate during Circuit Breaker period • 74% of SIAEC staff in operations are working in company premises, with majority of support staff working from home, supported by IT and appropriate cyber securi
Slide 14: Response to COVID-19
Response to COVID-19 • SIAEC stepped up to perform disinfection fogging for airline customers to protect passengers, crew and staff • Deployment of staff to perform aircraft preservation and preparation of aircraft for parking overseas • Engaging airlines to schedule maintenance checks during period
Slide 15: Staying Vigilant and Prepared
Staying Vigilant and Prepared Close Monitoring and Review • SIAEC and its Group of companies are constantly reviewing measures to comply with respective local requirements and guidelines to protect our employees, while ensuring the continuation of operations Positioning for Recovery • Upskilling of
Slide 16: FY19/20 Financial Review
FY19/20 Financial Review » SIA ENGINEERING é comPANY : Ss
Slide 17: FY19/20 Financial Highlights
FY19/20 Financial Highlights • The Group recorded a net profit of $193.8 million for FY19/20. Full year Group performance improved 20.4% • Operating profit at $67.7 million was $10.9 million or 19.2% higher. Strong performance for the first 9 months sustained into much of 4th quarter until the COVID
Slide 18: Summary of Group Results FY19/20
Summary of Group Results FY19/20 Group FY19/20 FY18/19 Variance $M $M % Revenue 994.1 1,020.9 - 2.6 Expenditure 926.4 964.1 - 3.9 Operating profit 67.7 56.8 + 19.2 Share of profits of JVs & Assoc 127.9 113.9 + 12.3 Provision for taxation (14.0) (18.1) + 22.7 Net profit 193.8 160.9 + 20.4 • Strong pe
Slide 19: Summary of Group Results 4Q19/20
Summary of Group Results 4Q19/20 Group 4Q19/20 4Q18/19 Variance 3Q19/20 Variance Y-o-Y Q-o-Q $M $M % $M % Revenue 229.3 256.0 - 10.4 252.1 - 9.0 Expenditure 215.0 236.6 - 9.1 236.0 - 8.9 Operating profit 14.3 19.4 - 26.3 16.1 - 11.2 Share of profits of JVs & Assoc 34.9 32.3 + 8.0 39.6 - 11.9 Provisi
Slide 20: Group Profit for FY19/20
Group Profit for FY19/20 S$M 200.0 +8.0 193.8* 190.0 +24.2 -35.5 +14.0 180.0 +32.9* +25.6 170.0 160.9 160.0 9M19/20 Parent 150.0 company -7.3 operations 4Q19/20 +3.9 Parent Non- 140.0 company Share of operating Subsidiaries Exchange Government operations profits items, NCI operations differences sup
Slide 21: Breakdown of Group Revenue FY19/20
Breakdown of Group Revenue FY19/20 Group Revenue FY19/20 FY18/19 Variance $M $M % Airframe and line maintenance Airframe overhaul and line maintenance 879.3 891.2 - 1.3 Fleet management programme 88.4 100.2 - 11.8 967.7 991.4 - 2.4 Engine and component 26.4 29.5 - 10.5 994.1 1,020.9 - 2.6 • Lower Ai
Slide 22: Group Expenditure FY19/20
Group Expenditure FY19/20 Group Expenditure FY19/20 FY18/19 Variance $M $M % Staff costs 481.4 488.7 - 1.5 Material costs 128.5 145.2 - 11.5 Subcontract costs 110.1 118.3 - 6.9 Overheads 206.4 211.9 - 2.6 926.4 964.1 - 3.9 • Expenditure was lower by $37.7M or 3.9%, mainly from lower material, subcon
Slide 23: Group Operating Profit FY19/20
Group Operating Profit FY19/20 Group Operating Profit FY19/20 FY18/19 Variance $M $M % Airframe and Line Maintenance 71.2 59.8 + 19.1 Engine and Component (3.5) (3.0) - 16.7 67.7 56.8 + 19.2 Losses in the Engine and Component segment mainly due to our share of losses in the PW1000 GTF engine program
Slide 24: Joint Venture and Associated Companies FY19/20
Joint Venture and Associated Companies FY19/20 Share of Profit After Tax FY19/20 FY18/19 Variance $M $M % Engine and component Engine centers 86.7 76.2 + 13.8 Component centers 46.8 39.2 + 19.4 133.5 115.4 + 15.7 Airframe and line maintenance (5.6) (1.5) n.m. 127.9 113.9 + 12.3 • Contributions from
Slide 25: Group Revenue FY19/20
Group Revenue FY19/20 (SIAEC, Subsidiaries, JV and Associated Companies) Company and Associated Joint venture Group Revenue subsidiaries companies * company * Total $M $M $M $M % Airframe & line maintenance 967.7 140.5 - 1,108.2 - 1.7 Engine and component 26.4 2,291.1 2,914.5 5,232.0 + 22.9 994.1 2,
Slide 26: Group Balance Sheet
Group Balance Sheet Mar-20 Mar-19 Variance $M $M % Equity attributable to owners of the parent 1,628.8 1,528.6 + 6.6 Non-controlling interests 32.2 35.4 - 9.0 Total equity 1,661.0 1,564.0 + 6.2 Non-current liabilities 103.7 35.7 + 190.5 1,764.7 1,599.7 + 10.3 Represented by: Non-current assets 1,007
Slide 27: Financial Statistics
Financial Statistics Financial Statistics FY19/20 FY18/19 Variance Return on shareholders' funds (%) 12.3 10.7 + 1.6 ppt Basic earnings per share (cents) 17.30 14.38 + 20.3 % Mar-20 Mar-19 Variance Net asset value per share (cents) 145.4 136.6 + 6.4 % 27
Slide 28: Dividend
Dividend FY19/20 FY18/19 Ordinary (in cents per share) Interim 3.0 3.0 Final 5.0 8.0 Proposed • In making the proposed final dividend of 5.0 cents, Board considered the profits earned during the year and the need to conserve cash due to the severity of the COVID-19 pandemic and the uncertain recover
Slide 29: Unprecedented Impact on the Aviation Industry
Unprecedented Impact on the Aviation Industry Airlines Airports OEMs “Singapore Airlines extends “For April, the number of scheduled “General Electric to cut 10,000 cancellation of 96 per cent of flights flights is about 96 per cent lower than aviation jobs” - Forbes till end-June” - SIA what was or
Slide 30: In the Event of a Recovery…
In the Event of a Recovery… Extent and pace of recovery of the aviation industry will be a key factor driving the recovery of our business volumes Air Flying Extended Financial Position traffic hours Maintenance Intervals Immediate Medium Taken actions to mitigate the Term Term adverse financial i
Slide 31: Looking Forward
Looking Forward Quality and Safety remains priority Review existing Press on with Investment Portfolio Transformation efforts to drive Productivity and Capabilities Look out for new Investments Equip staff with LEAN and Digital and Partnership opportunities Skillsets to champion continuous improveme
Slide 32: End of Performance Review
End of Performance Review
SIA Engineering Company — FY2019/20 Earnings Presentation on 6ix