48 slides from Singapore Technologies Engineering's earnings presentation, Feb 24, 2020
Slide 1: Financial Year 2019 Results
Financial Year 2019 Results 24 February 2020
Slide 2: Agenda
Agenda • Group Highlights • Outlook • Appendix • Aerospace • Electronics • Land Systems • Marine 2 |
Slide 3: Group Highlights
Group Highlights quot; ST Engineering
Slide 4: Group Highlights
Group Highlights All figures are denominated in S$m unless indicated otherwise 4Q2019 FY2019 Revenue EBIT Revenue EBIT 2,288 191.1 7,868 654.0 +29% y-o-y +19% y-o-y +17% y-o-y +15% y-o-y PBT Net Profit PBT Net Profit 198.8 169.5 695.2 577.9 +24% y-o-y +36% y-o-y +12% y-o-y +17% y-o-y Order book as a
Slide 5: FY2019 Revenue & Profit Growth
FY2019 Revenue & Profit Growth All figures are denominated in S$m unless indicated otherwise Revenue Net Profit (+17%) (+17%) (+5 pp) 7,868 (+14 pp) 578 367 (+12 pp) 69 (+8 pp) (-2 pp) 803 -11 (-2 pp) 38 -12 6,698 494 FY2018 Aerospace Other FY2019 FY2018 One-off Marine M&A costs in New FY2019 (inclu
Slide 6: 4Q2019 Revenue & Profit Growth
4Q2019 Revenue & Profit Growth All figures are denominated in S$m unless indicated otherwise Revenue Net Profit (+36%) (+29%) (+19 pp) 170 (+12 pp) 2,288 (+17 pp) 220 (+24 pp) (-6 pp) 24 1,774 294 -8 30 124 4Q2018 Aerospace Other 4Q2019 4Q2018 One-off M&A costs in New 4Q2019 (including sectors items
Slide 7: Group Revenue
Group Revenue S#039;m 4Q2019 4Q2018 Change FY2019 FY2018 Change Aerospace 941 647 +45% 3,450 2,647 +30% Electronics 686 536 +28% 2,282 2,143 +6% Land Systems 448 435 +3% 1,428 1,282 +11% Marine 204 139 +47% 647 574 +13% Others 9 17 -47% 61 52 +17% Group 2,288 1,774 +29% 7,868 6,698 +17% 7 |
Slide 8: Group Revenue Breakdown
Group Revenue Breakdown FY2019 Revenue FY2019 Revenue FY2019 Revenue S$7.9b by type by location of customers Commercial Defence 5.6 Land Marine Systems 8% 4.6 4.3 18% Others ASIA U.S. 1% 55% 21% 2.2 2.3 Electronics 2.1 29% Aerospace EUROPE OTHERS 44% 17% 7% 2017 2018 2019 2017 2018 2019 8 |
Slide 9: Group Net Profit
Group Net Profit S#039;m 4Q2019 4Q2018 Change FY2019 FY2018 Change Aerospace 76.9 63.5 +21% 268.9 244.6 +10% Electronics 51.6 44.1 +17% 190.7 186.5 +2% Land Systems 26.7 (0.7) NM 77.3 52.9 +46% Marine 21.8 14.5 +51% 51.5 45.2 +14% Others (7.5) 3.1 NM (10.5) (35.0) NM Group 169.5 124.5 +36% 577.9 494.2
Slide 10: Group Net Profit Margin
Group Net Profit Margin 4Q2019 FY2019 7% 7% Group 7% 7% 8% 8% Aerospace 10% 9% 8% 8% Electronics 8% 9% 6% 5% Land Systems NM 4% 11% 8% Marine 10% 8% 4Q2019 4Q2018 FY2019 FY2018 10 |
Slide 11: Balance Sheet
Balance Sheet S#039;m 31 Dec 2019 31 Dec 2018 Property, plant & equipment 1,805 1,743 Right-of-use assets 484 - Intangible assets 1,980 1,151 Other non-current assets 613 582 Current assets 4,639 4,097 Total assets 9,521 7,573 Current liabilities 5,446 3,851 Non-current liabilities 1,584 1,187 Total li
Slide 12: Statement of Cash Flows
Statement of Cash Flows S#039;m FY2019 FY2018 Net cash from/(used in) Operating activities 590 639 Investing activities (1,273) (65) Financing activities 720 (1,161) Net increase/(decrease) in CCE * 37 (587) CCE at beginning of the year 414 998 Exchange difference 1 3 CCE at end of the year 452 414 * C
Slide 13: Outlook
Outlook WZ =< ST Engineering
Slide 14: President & CEO's Message
President & CEO’s Message “The Group’s focus in executing its strategy in 2019 produced a good set of financial results. In addition to achieving double-digit revenue and profit growth, we made three strategic acquisitions[1] to strengthen the Group’s position for the future. We also recorded a stro
Slide 15: Thank You
<< ST Engineering Thank You
Slide 16: Appendix
Appendix quot; ST Engineering
Slide 17: Group
Group WZ =< ST Engineering
Slide 18: Group Profit before Tax (PBT)
Group Profit before Tax (PBT) S#039;m 4Q2019 4Q2018 Change FY2019 FY2018 Change Aerospace 95.1 82.6 +15% 332.8 320.0 +4% Electronics 59.0 51.5 +15% 226.5 224.7 +1% Land Systems 28.3 2.6 >500% 88.6 62.3 +42% Marine 26.2 16.0 +64% 60.8 50.3 +21% Others (9.8) 7.8 NM (13.5) (36.6) NM Group 198.8 160.5 +24%
Slide 19: Group PBT Margin
Group PBT Margin 4Q2019 FY2019 9% 9% Group 9% 9% 10% 10% Aerospace 13% 12% 9% 10% Electronics 10% 10% 6% 6% Land Systems 1% 5% 13% 9% Marine 12% 9% 4Q2019 4Q2018 FY2019 FY2018 19 |
Slide 20: Aerospace
Aerospace mS = quot;< ST Engineering p. =
Slide 21: Aerospace Revenue by geography
Aerospace Revenue by geography (by location of customers) Europe Others FY2019: $1,134m 7% FY2019: $249m 33% 37% 23% U.S. Asia FY2019: $780m FY2019: $1,292m Note: Revenue includes inter-segment sales 21 |
Slide 22: Aerospace Revenue, PBT and Net Profit
Aerospace Revenue, PBT and Net Profit by business group AMM CERO 847 1,055 1,055 760 118.0 95.9 77.6 66.3 288 276 206 160 39.8 11.0 32.0 21.5 4Q2018 4Q2019 FY2018 FY2019 4Q2018 4Q2019 FY2018 FY2019 PBT $46.9m $28.8m $148.7m $101.9m PBT $14.4m $37.2m $81.5m $117.0m EMS 1,553 839 95.4 Legend: 460 60.3
Slide 23: Aerospace FY2019 vs FY2018
Aerospace FY2019 vs FY2018 New income stream from MRAS Revenue recognised from Revenue $3,450m ▲ $803m or 30% various end-of-programme reviews Profit contribution from MRAS Net favourable impact from end-of-programme reviews PBT $332.8m ▲ $12.8m or 4% Partially offset by Absence of di
Slide 24: Aerospace – FY2019 in Review
Aerospace – FY2019 in Review • Secured $4.2b worth of new contracts, including: • A 10-year airframe MRO contract to provide heavy maintenance services for a major North American airline’s entire fleet of A300s and Boeing 757s • A 5-year extension agreement for A380 airframe maintenance • A multi-ye
Slide 25: Aerospace – FY2019 in Review
Aerospace – FY2019 in Review • Expanded into engine nacelle design and manufacturing business through MRAS • Strengthened core capabilities • Opened new component MRO facilities in Hanoi and Ho Chi Minh City, Vietnam • Became official member of Honeywell Channel Partner Network as its licensed compo
Slide 26: Aerospace – Outlook for FY2020
Aerospace – Outlook for FY2020 • Grow nacelle manufacturing and aftermarket business in U.S. • Ramp up component MRO operations and set up airframe MRO capabilities in Vietnam • Redeliver A321P2F prototype and pursue new P2F contracts • Pursue opportunities to scale up engine leasing business post s
Slide 27: Aircraft Engine Securitisation Transaction
Aircraft Engine Securitisation Transaction Legend Commercial Prior to engine-backed Securitisation After engine-backed Securitisation Arrangement Cashflow Financing External Other E-note Fixed-rate TEAM TEAM (10%) Note Holders Banks Holders (90%) Principal and Interest Repayment US$257m Fixed-rate B
Slide 28: Electronics
Electronics mS = quot;< ST Engineering p. =
Slide 29: Electronics Revenue by geography
Electronics Revenue by geography (by location of customers) Europe Others FY2019: $181m 7% FY2019: $163m 8% 9% 76% U.S. Asia FY2019: $219m FY2019: $1,747m 29 | Note: Revenue includes inter-segment sales
Slide 30: Electronics Revenue, PBT and Net Profit
Electronics Revenue, PBT and Net Profit by business group LSG 553 CSG 1,097 1,087 484 66.7 61.1 157 55.0 335 124 43.0 260 1.7 9.0 21.6 16.9 4Q2018 4Q2019 FY2018 FY2019 4Q2018 4Q2019 FY2018 FY2019 PBT $2.7m $10.2m $53.2m $66.0m PBT $23.4m $17.8m $78.8m $71.6m SSG 660 596 76.8 74.6 Legend: 201 Bar: Re
Slide 31: Electronics FY2019 vs FY2018
Electronics FY2019 vs FY2018 Higher revenue from all Revenue $2,282m ▲ $139m or 6% business groups In line with higher revenue Partially offset by PBT $226.5m ▲ $1.8m or 1% Transaction and integration costs for new acquisitions Net Profit $190.7m ▲ $4.2m or 2% 31 |
Slide 32: Electronics - FY2019 in Review
Electronics - FY2019 in Review • Secured $2.8b worth of new contracts, including: • Satellite communications projects for first response teams, maritime, healthcare and banking industries • Rail electronics projects in China, Philippines, Taiwan, Thailand, Saudi Arabia and Singapore • Smart water me
Slide 33: Electronics - FY2019 in Review
Electronics - FY2019 in Review • Acquired Newtec and Glowlink Communications to build a highly differentiated global satellite communications business group • Enhanced Smart City offerings • Entered into a JV with DSO National Laboratories for satellite analytics and new space technologies • Partner
Slide 34: Electronics - Outlook for FY2020
Electronics - Outlook for FY2020 • Focus on integration of iDirect Europe (formerly known as Newtec) and Glowlink Communications • Deliver smart mobility, satellite communications and software system related contracts on schedule • Pursue smart city related contracts in and outside of Singapore 34 |
Slide 35: Land Systems
Land Systems mS = quot;< ST Engineering p. =
Slide 36: Land Systems Revenue by geography
Land Systems Revenue by geography (by location of customers) Europe Others FY2019: $11m 5% FY2019: $69m 1% 26% 68% U.S. Asia FY2019: $382m FY2019: $996m 36 | Note: Revenue includes inter-segment sales
Slide 37: Land Systems Revenue, PBT and Net Profit by business group
Land Systems Revenue, PBT and Net Profit by business group Auto M&W 1,040 209 953 169 86 89 297 310 21.8 18.1 14.6 16.1 (7.7) 10.1 (25.8) 3.8 4Q2018 4Q2019 FY2018 FY2019 4Q2018 4Q2019 FY2018 FY2019 PBT ($26.1m) $0.5m ($8.2m) $14.9m PBT $19.5m $12.2m $26.4m $20.6m S&T 209 181 44.6 38.8 Legend: Bar: R
Slide 38: Land Systems FY2019 vs FY2018
Land Systems FY2019 vs FY2018 Higher revenue from all Revenue $1,428m ▲ $146m or 11% business groups Higher gross profit in line with higher revenue Absence of portfolio rationalisation loss PBT $88.6m ▲ $26.3m or 42% Partially offset by Higher operating expenses from continued investments
Slide 39: Land Systems - FY2019 in Review
Land Systems - FY2019 in Review • Secured new contracts during the year, 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 80 Automated Guided Vehicles and Automated
Slide 40: Land Systems - FY2019 in Review
Land Systems - FY2019 in Review • Made progress in Robotics and Autonomous Vehicle businesses • Completed Singapore’s first on-demand autonomous shuttle public trial at Sentosa • Commenced Autonomous Bus trial on Jurong Island • Formed a consortium of industry leaders to explore the commercialisatio
Slide 41: Land Systems - Outlook for FY2020
Land Systems - Outlook for FY2020 • Pursue and secure key defence and commercial programmes locally and overseas • Develop and strengthen capabilities to be a leading contributor of the AV ecosystem in Singapore, supporting the nation’s Land Transport Master Plan • Provide logistics autonomous solut
Slide 42: Marine
Marine WZ 4 =< ST Engineering
Slide 43: Marine Revenue by geography
Marine Revenue by geography (by location of customers) Europe Others FY2019: $53m 9% FY2019: $57m 8% 51% 32% U.S. Asia FY2019: $210m FY2019: $327m Note: Revenue includes inter-segment sales 43 |
Slide 44: Marine Revenue, PBT and Net Profit by business group
Marine Revenue, PBT and Net Profit by business group Shipbuilding Shiprepair 280 286 241 255 45.8 49.4 99 70 67 56 (3.0) (4.4) 16.7 2.6 1.9 11.4 4Q2018 4Q2019 FY2018 FY2019 4Q2018 4Q2019 FY2018 FY2019 PBT $1.7m $2.9m ($7.9m) ($6.3m) PBT $13.4m $19.6m $55.3m $58.9m Engineering 112 47 Legend: 35 Bar:
Slide 45: Marine FY2019 vs FY2018
Marine FY2019 vs FY2018 Higher revenue from Shiprepair Revenue $647m ▲ $73m or 13% and Engineering business groups Improved performance from US operations and sale of Ropax PBT $60.8m ▲ $10.5m or 21% Partially offset by Unfavourable arbitration outcome with a customer Net Profit $51.5m ▲ $6.
Slide 46: Marine – FY2019 in Review
Marine – FY2019 in Review • Secured new contracts during the year, including: • Design and construction of a Polar Security Cutter for the U.S. Coast Guard, with an option for two more • A Common Hull Auxiliary Mission Platform programme study for U.S. Navy • Phase 1 Preliminary/Contract design for
Slide 47: Marine – FY2019 in Review
Marine – FY2019 in Review • Shipbuilding programme updates • Delivered 7th & 8th of eight Littoral Mission Vessel to Republic of Singapore Navy • Delivered ATB Tug to Bouchard Transportation and passenger and vehicle ferry to Commonwealth of Virginia, Department of Transportation • Keel-laid (APL(S)
Slide 48: Marine – Outlook for FY2020
Marine – Outlook for FY2020 • R&D plan including design performance specifications for Polar Security Cutter • Pursue and secure defence and commercial newbuild programmes locally and overseas • Scheduled launch • 5GPT for Singapore Police Coast Guard • (APL(S)) Class berthing barges for U.S. Navy •