Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — Q2 2019 Earnings Presentation
42 slides from Singapore Technologies Engineering's earnings presentation, Aug 14, 2019
Slide 1: First Half & Second Quarter 2019 Results
First Half & Second Quarter 2019 Results 14 August 2019
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 $m unless indicated otherwise 2Q2019 1H2019 Revenue EBIT Revenue EBIT 1,780 157.9 3,511 299.8 +8% y-o-y +9% y-o-y +6% y-o-y +12% y-o-y PBT Net Profit PBT Net Profit 169.7 138.2 329.6 269.3 +13% y-o-y +18% y-o-y +12% y-o-y +14% y-o-y Order book as at 30
Slide 5: New Growth & One-off Items
New Growth & One-off Items Revenue Net Profit 1,780 138 19 118 1,651 193 9 32 20 32 10 2Q2018 Absence of Absence of New growth 2Q2019 2Q2018 Absence of Absence of Absence of New growth 2Q2019 opportunistic revenue from & others prior year Jet Airways MTN & others sale of Jet Airways divestment contr
Slide 6: Group Revenue
Group Revenue $'m 2Q2019 2Q2018 Change 1H2019 1H2018 Change Aerospace 836 713 +17% 1,458 1,311 +11% Electronics 495 512 -3% 1,058 1,117 -5% Land Systems 296 270 +10% 673 551 +22% Marine 139 148 -6% 288 298 -3% Others 14 8 +75% 34 21 +59% Group 1,780 1,651 +8% 3,511 3,298 +6% 6 |
Slide 7: Group Revenue Breakdown
Group Revenue Breakdown 2Q2019 Revenue 2Q2019 Revenue S$1.78b by location of customers Others Land Marine 1% Systems ASIA US 8% Defence 16% 49% 24% 29% Electronics EUROPE OTHERS 28% Aerospace 21% 6% Commercial 47% 71% 7 |
Slide 8: Group Profit before Tax (PBT)
Group Profit before Tax (PBT) $'m 2Q2019 2Q2018 Change 1H2019 1H2018 Change Aerospace 81.8 87.7 -7% 158.5 164.0 -3% Electronics 54.3 58.0 -6% 106.5 106.4 - Land Systems 24.4 24.6 -1% 42.2 41.7 +1% Marine 17.0 10.1 +69% 31.5 19.3 +63% Others (7.8) (30.0) NM (9.1) (37.0) NM Group 169.7 150.4 +13% 329.
Slide 9: Group Net Profit
Group Net Profit $'m 2Q2019 2Q2018 Change 1H2019 1H2018 Change Aerospace 64.2 66.6 -4% 127.0 125.7 +1% Electronics 44.3 46.7 -5% 87.6 87.0 +1% Land Systems 20.3 20.4 - 35.6 36.0 -1% Marine 14.3 9.2 +55% 26.3 17.9 +47% Others (4.9) (25.4) NM (7.2) (31.4) NM Group 138.2 117.5 +18% 269.3 235.2 +14% 9 |
Slide 10: Group PBT Margin
Group PBT Margin 2Q2019 1H2019 10% 9% Group 9% 9% 10% 11% Aerospace 12% 13% 11% 10% Electronics 11% 10% 8% 6% Land Systems 9% 8% 12% 11% Marine 7% 6% 2Q2019 2Q2018 1H2019 1H2018 10 |
Slide 11: Group Net Profit Margin
Group Net Profit Margin 2Q2019 1H2019 8% 8% Group 7% 7% 8% 9% Aerospace 9% 10% 9% 8% Electronics 9% 8% 7% 5% Land Systems 8% 7% 10% 9% Marine 6% 6% 2Q2019 2Q2018 1H2019 1H2018 11 |
Slide 12: Balance Sheet
Balance Sheet $'m 30 Jun 2019 31 Dec 2018 Property, plant & equipment 1,834 1,743 Intangible assets 1,660 1,151 Right-of-use assets 482 - Other non-current assets 573 582 Current assets 4,354 4,097 Total assets 8,903 7,573 Current liabilities 4,604 3,851 Non-current liabilities 1,868 1,187 Total lia
Slide 13: Statement of Cash Flows
Statement of Cash Flows $'m 2Q2019 2Q2018 1H2019 1H2018 Net cash from/(used in) Operating activities 54 (39) 423 392 Investing activities (773) 264 (823) 220 Financing activities 431 (371) 308 (449) Net (decrease)/increase in CCE * (288) (146) (92) 163 CCE at beginning of the period 609 1,303 414 99
Slide 14: Outlook
Outlook $"% ST Engineering
Slide 15: President & CEO's Message
President & CEO’s Message “MRAS acquisition was completed in April. It has been accretive to our earnings and its integration into the Group is progressing well. Our underlying business remains strong and our group’s record high order book of $15.6b gives us revenue visibility over the next few year
Slide 16: Thank You
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Slide 17: Appendix
Appendix $"% ST Engineering
Slide 18: Aerospace
Aerospace $"% ST Engineering
Slide 19: Aerospace Revenue
Aerospace Revenue by geography (by location of customers) Europe Others 2Q2019: $320m 7% 2Q2019: $56m 28% 38% 27% U.S. Asia 2Q2019: $226m 2Q2019: $235m Note: Revenue includes inter‐segment sales 19 |
Slide 20: Aerospace Revenue, PBT and Net Profit
Aerospace Revenue, PBT and Net Profit by business group AMM CERO 513 395 485 332 52.4 243 37.8 263 41.6 35.2 241 160 24.3 22.6 20.0 16.2 2Q2018 2Q2019 1H2018 1H2019 2Q2018 2Q2019 1H2018 1H2019 PBT $30.5m $22.0m $67.6m $50.0m PBT $27.4m $19.5m $45.0m $42.4m EMS 644 436 50.2 408 28.0 35.5 Legend: 211
Slide 21: Aerospace
Aerospace 2Q2019 vs 2Q2018 Inclusion of MRAS revenue Partially offset by Lower revenue from AMM Revenue $836m ▲ $123m or 17% business group Absence of engine asset sale and Jet Airways revenue in CERO business group Absence of divestment gain from portfolio rationalisation Impact of lo
Slide 22: Aerospace – 2Q2019 in Review
Aerospace – 2Q2019 in Review • Secured $809m worth of new contracts, including: • A multi-year heavy maintenance agreement from a long-time customer to support their fleet of Boeing 717s • CFM56-7B engine overhaul contracts • A DroNet contract for security and surveillance applications • Became an o
Slide 23: Aerospace – Outlook for 2H2019
Aerospace – Outlook for 2H2019 • Complete and obtain certification for prototype A321P2F, and pursue new freighter conversion contracts • Pursue new engine maintenance contracts • Accelerate digitalisation of global operations; adopt smart technologies to differentiate through efficiency • Focus on
Slide 24: Electronics
Electronics $"% ST Engineering
Slide 25: Electronics Revenue
Electronics Revenue by geography (by location of customers) Europe Others 2Q2019: $31m 7% 2Q2019: $34m 6% 9% 78% U.S. Asia 2Q2019: $46m 2Q2019: $390m Note: Revenue includes inter‐segment sales 25 |
Slide 26: Electronics Revenue, PBT and Net Profit
Electronics Revenue, PBT and Net Profit by business group LSG CSG 255 259 572 515 111 114 282 29.3 32.4 233 24.6 21.3 14.9 15.9 14.4 13.9 2Q2018 2Q2019 1H2018 1H2019 2Q2018 2Q2019 1H2018 1H2019 PBT $17.9m $18.8m $35.7m $39.7m PBT $19.9m $16.6m $26.5m $29.7m SSG 298 297 154 36.4 30.6 Legend: 123 Bar:
Slide 27: Electronics
Electronics 2Q2019 vs 2Q2018 Lower revenue from CSG business group from timing in revenue recognition for projects Revenue $495m ▼ $17m or 3% Partially offset by Higher revenue from LSG and SSG business groups In line with lower revenue Revn e$u 63m 5 o $42m ▼ 7% r Strong1Q20 c 18with2%
Slide 28: Electronics - 2Q2019 in Review
Electronics - 2Q2019 in Review • Secured $702m worth of new contracts, including: • Smart mobility projects in Taiwan for Taoyuan MRT Green Line and in China for Foshan Metro Line 2 and Gaoming District Tram • Smart indoor lighting control solutions to maximise energy savings and operational efficie
Slide 29: Electronics - 2Q2019 in Review
Electronics - 2Q2019 in Review • Enhanced Smart City offerings • Partnership with Maritime and Port Authority of Singapore (MPA) to drive the following initiatives at the Maritime Innovation Lab: • Next Generation Vessel Traffic Management System Lab; • Remotely Assisted Pilotage Advisory; • Autonom
Slide 30: Electronics - Outlook for 2H2019
Electronics - Outlook for 2H2019 • Deliver smart mobility, satellite communications and software system related contracts on schedule • Pursue smart city related contracts in and outside of Singapore 30 |
Slide 31: Land Systems
Land Systems $"% ST Engineering
Slide 32: Land Systems Revenue
Land Systems Revenue by geography (by location of customers) Europe Others 2Q2019: $2m 4% 2Q2019: $12m 35% 61% U.S. Asia 2Q2019: $104m 2Q2019: $183m Note: Revenue includes inter‐segment sales 32 |
Slide 33: Land Systems Revenue, PBT and Net Profit by business group
Land Systems Revenue, PBT and Net Profit by business group Auto M&W 84 504 425 52 208 219 33 28 14.0 9.7 6.9 8.7 4.6 3.0 4.1 2.5 2Q2018 2Q2019 1H2018 1H2019 2Q2018 2Q2019 1H2018 1H2019 PBT $8.7m $10.8m $15.7m $11.7m PBT $5.4m $2.8m $3.8m $4.8m S&T 100 83 49 Legend: 38 21.8 Bar: Revenue ($m) 19.0 Lin
Slide 34: Land Systems
Land Systems 2Q2019 vs 2Q2018 Higher revenue from all business Revenue $296m ▲ $26m or 10% groups Less favourable product mix Higher operating expenses of robotics business PBT $24.4m ▼ $0.2m or 1% Rev ue$n 7m3 ▲$96mor 34% Highervn lbusefroma Higheros profitm PBT P yalgofsetbrihvn eyu Ab
Slide 35: Land Systems - 2Q2019 in Review
Land Systems - 2Q2019 in Review • Secured new contracts, including: • Weapons & munitions from customers in Asia Pacific, Middle East and Europe • Road Construction Equipment and Specialty Vehicles from customers in North America • Supply of 50 three-door double-deck buses for Land Transport Authori
Slide 36: Land Systems - Outlook for 2H2019
Land Systems - Outlook for 2H2019 • Pursue and secure key defence and commercial programmes locally and overseas • Provide logistics autonomous solutions for the warehouse, airport, seaport and manufacturing industries 36 |
Slide 37: Marine
Marine ally =< 91 Engineering
Slide 38: Marine Revenue
Marine Revenue by geography (by location of customers) Europe Others 2Q2019: $17m 5% 2Q2019: $7m 12% 28% 55% U.S. Asia 2Q2019: $39m 2Q2019: $76m Note: Revenue includes inter‐segment sales 38 |
Slide 39: Marine Revenue, PBT and Net Profit
Marine Revenue, PBT and Net Profit by business group Shipbuilding Shiprepair 160 143 118 96 79 68 61 46 21.9 19.8 3.9 12.2 (6.7) 10.7 2.4 (1.2) 2Q2018 2Q2019 1H2018 1H2019 2Q2018 2Q2019 1H2018 1H2019 PBT ($2.4m) $2.3m ($10.0m) $4.1m PBT $14.7m $13.1m $26.3m $23.8m Engineering 49 25 Legend: 20 Bar: R
Slide 40: Marine
Marine 2Q2019 vs 2Q2018 Lower revenue from Shipbuilding business group Largely offset by Revenue $139m ▼ $9m or 6% Higher revenue from Shiprepair and Engineering business groups Improved U.S. shipbuilding Rev enu $149m $1m ▼ or1% Lo LargeSh wervnu nlyofsetbgudip from nesgroupi performance PB
Slide 41: Marine – 2Q2019 in Review
Marine – 2Q2019 in Review • Secured new contracts, including • US$745.9m design and construction contract for a Polar Security Cutter for the U.S. Coast Guard, with an option for two more • US$2.8m Common Hull Auxiliary Mission Platform program study for U.S. Navy • Shipbuilding programmes updates •
Slide 42: Marine – Outlook for 2H2019
Marine – Outlook for 2H2019 • Scheduled launch • Fast Patrol Boats for PCG • Floating Power Plant for Transcontinental Capital Corporation • ATB Tug and ATB Barge for Quality Liquefied Natural Gas Transport • Expected delivery • 7th and 8th of eight Littoral Mission Vessels to Republic of Singapore
Singapore Technologies Engineering — Q2 2019 Earnings Presentation on 6ix