Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — 3Q2022 Earnings Presentation
18 slides from Singapore Technologies Engineering's earnings presentation, Nov 28, 2022
Slide 1: 3Q2022 Market Updates
3Q2022 Market Updates 28 Nov 2022
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. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a res
Slide 3: Agenda
Agenda 1. Financial Highlights • Group Revenue • Business Segments Revenue • 3Q2022 Contract Wins & Order Book • Interest Rate Debt Profile • Management of Capital Employed • Investor Day 5-Year Plan • Summary 2. TransCore Acquisition Update 3. Q&A Session
Slide 4: Higher Revenue From Organic Growth and Acquisition
Group Revenue Higher Revenue From Organic Growth and Acquisition Revenue, $’bn +19% • 19% y-o-y revenue increase 6.5 • Higher contributions across 5.5 all business segments 2.2 3Q2022 1.8 3Q2021 4.3 1H2022 3.7 1H2021 9M2021 9M2022 • Singapore dollars unless otherwise stated 4 | • Amounts may not add
Slide 5: Group Revenue: Growth in all Segments
Group Revenue Group Revenue: Growth in all Segments $m 9M2022 9M2021 Change Commercial Aerospace 2,181 1,743 +25% Urban Solutions & Satcom (USS) 1,209 787 +54% Defence & Public Security 3,118 2,952 +6% Group 6,508 5,482 +19% 5 |
Slide 6: Commercial Aerospace Revenue Continues to Grow as Aviation Sector Recovers
Business Segments Revenue Commercial Aerospace Revenue Continues to Air travel recovery 74% as at Sep 2022 • International – 70% Grow as Aviation Sector • Domestic – 81% Recovers • Air travel has recovered to 74% of pre-Covid level • International lags at 70%, while domestic air travel growth leads
Slide 7: Commercial Aerospace
Business Segments Revenue Commercial Aerospace Revenue, $’m +25% • 25% y-o-y revenue increase; contributed 2,181 by all sub-segments 1,743 • Nacelle and MRO (incl. component/engine) demand • Strong PTF demand - booked through 2025/2026. Conversion lines still going through learning curve • New contr
Slide 8: Recovery in Commercial Aerospace business
Business Segments Revenue Recovery in Commercial Aerospace business Revenue, $'m +28% +25% +22% • 28% growth for 3Q2022 vs 776 730 3Q2021 674 584 607 • >20% y-o-y growth for all three 552 quarters in 2022 • Yet to recover fully to pre-Covid level 2021 2022 Q1 Q2 Q3 8 |
Slide 9: Urban Solutions & Satcom
Business Segments Revenue Urban Solutions & Satcom Revenue, $’m • 54% y-o-y revenue increase +54% • Contribution from TransCore 1,209 • Higher Smart City project milestones recognition • New contract wins of $2.0b in 787 3Q2022, totaling $2.7b for 9M2022 • $1.4b Turnkey rail contract for Kaohsiung M
Slide 10: Defence & Public Security
Business Segments Revenue Defence & Public Security Revenue, $’m +6% • 6% y-o-y revenue increase 3,118 • Growth from all sub-segments 2,952 • New contract wins of $1.8b in 3Q2022, totaling $4.5b for 9M2022 • Significant international defence contract wins (>$300m) in the Middle East 9M2021 9M2022 10
Slide 11: Strong momentum in Digital Business
Business Segments Revenue Strong momentum in Digital Business Revenue, $’m 550 • Ride on digitalisation trends 500 500 and opportunities 2026 300 target • Leverage strong capabilities with ~290 end-to-end solutions 250 250 200 • Continue to invest in tech and 170 innovation 150 100 • Tap partnership
Slide 12: $4.8b New Contracts Secured in 3Q2022
3Q2022 Contract Wins $4.8b New Contracts Secured in 3Q2022 3Q2022 Highlights • Multi-year line maintenance contract from an Asian airline. Commercial $1.0b • Multi-year component MBH™ contracts from Nok Air and Turkish Technic. Aerospace • P2F including 15 A321P2F conversions by a major leasing comp
Slide 13: Robust Order book as at Sep 2022
Group Order Book Robust Order book as at 30 Sep 2022 Order book, $’b 25.0 22.2 1.9 * • $25.0b as at 30 Sep 2022 1.9 * 19.3 • $2.5b expected to be delivered +14% +71% in 4Q2022 15.3 15.4 1.8 * • Total 4Q2022 new contracts (incl. 23.1 ~$1.5b toll systems for 20.3 New Jersey) will more than offset $1.9
Slide 14: Balanced Fixed vs Floating Interest Rate Debt Profile
Interest Rate Debt Profile Balanced Fixed vs Floating Interest Rate Debt Profile • Fixed vs floating interest rate ratio of 54%:46% – balanced and in accordance with interest rate hedging policy1 Fixed Floating Rate 54% $3.7b $3.1b Rate • Plan to term out between US$500m and 46% US$700m through new
Slide 15: Capital Employed Optimisation
Management of Capital Employed Capital Employed Optimisation Continue to Divest non-core Target to securitise optimise businesses aviation leasing net working capital assets 15 |
Slide 16: Investor Day 5-Year Plan on Track
Investor Day 5-Year Plan Investor Day 5-Year Plan on Track Annual revenue to grow at 2 to 3 times global GDP growth rate to >$11b* Net profits* to grow in tandem with revenue Sustainability-linked revenue* to grow to Core Business >$3b International • Divested U.S. Marine Defence Business to high-gr
Slide 17: Summary
Summary 1 Group 9M2022 revenue at $6.5b, 19% higher y-o-y. 2 Strong contract wins of $10.3b in 9M2022, including $4.8b secured in 3Q2022. Robust order book of $25.0b as at 30 Sept 2022. Total 4Q2022 new contracts 3 (incl. ~$1.5b toll systems for New Jersey) will more than offset $1.9b U.S. Marine or
Slide 18: Thank you
£"6 ST Engineering Thank you
Singapore Technologies Engineering — 3Q2022 Earnings Presentation on 6ix