Sats Ltd · SGX:S58
Sats — Q1 FY2024 Earnings Presentation
36 slides from Sats's earnings presentation, Aug 15, 2023
Slide 1: 1QFY24 Results
<Public> 1QFY24 Results 15 August 2023 Strengthening The Core Expanding Our Horizons <Public>
Slide 2: Forward Looking Statement – Important Note
<Public> Forward Looking Statement – Important Note The following presentation contains forward-looking statements by the management of SATS Ltd. (“SATS”), relating to financial and market trends for future periods. Some of the statements contained in this presentation that are not historical facts
Slide 3: Agenda
<Public> Agenda 1 Business Update 2 Group Financial Review 3 Integration Updates 4 Outlook 5 Annex 3 <Public>
Slide 4: Revenue grew 3x to S$1.2B while EBITDA increased 12x to S$179.5M YoY
<Public> *Enlarged SATS Group delivers first consolidated results with integration of WFS accelerating growth Revenue grew 3x to S$1.2B while EBITDA1 increased 12x to S$179.5M YoY 1QFY24 reflects resilience and sound core performance Key priorities focused on restoring profitability and riding o
Slide 5: Key Business Drivers
<Public> Key Business Drivers Flights Handled Meals Served Passengers Handled Cargo Tonnage Number of Employees In Thousands In Millions In Millions In ‘000 Tonnes Number 1.6x 1.9x 3.1x 3.4x 3.0x 22.4M 18.9M 49.1K 145.9K 1,810K 13.7M 9.7M 46.4K 593K 14.6K Group Group Group Group Group QoQ: QoQ: QoQ:
Slide 6: 1QFY24 reflects resilient and sound underlying performance of SATS Group
1QFY24 reflects resilient and sound underlying performance of SATS Group Restoring and scaling up group profitability Revenue EBITDA (+SoAJV) 356 1,941 1,758 1,177 1,199 173 180 970 94 72 FY20 FY21 FY22 FY23 1QFY24 FY20 FY21 FY22 FY23 1QFY24 Quarter results Quarter results EBIT (+SoAJV) Core PATMI (
Slide 7: Group Financial Updates
<Public> Group Financial Updates <Public>
Slide 8: Summary: 1Q FY24 Performance
<Public> Summary: 1Q FY24 Performance • 1Q revenue increased 3x to $1.2B against 1Q last year as SATS consolidates WFS. • Underlying EBIT (before one-off integration expenses) plus SoAJV increased to S$44.8M. • One-offs include expenses for refinancing of WFS bonds and integration related expenses.
Slide 9: 1Q FY24 Highlights (vs 1Q FY23)
<Public> 1Q FY24 Highlights (vs 1Q FY23) S$'M 1Q FY24 1Q FY23 YoY var YoY var % Commentary • Group revenue improved by 219.2% ($823.1M) as Food and Revenue 1,198.6 375.5 823.1 219.2 Gateway recorded higher revenue by 29.1% and 406.3% on the back of aviation recovery and WFS consolidation. OPEX (1,18
Slide 10: 1Q FY24 Highlights (vs 4Q FY23)
<Public> 1Q FY24 Highlights (vs 4Q FY23) S$'M 1Q FY24 4Q FY23 YoY var YoY var % Commentary • Group revenue improved by 150.7% ($720.5M) mainly due to Revenue 1,198.6 478.1 720.5 150.7 WFS consolidation. OPEX (1,188.4) (482.7) (705.7) (146.1) • Increase in Opex driven mainly by WFS consolidation and
Slide 11: FY24 Quarterly Trending
<Public> FY24 Quarterly Trending Revenue PATMI $37.5M $122.1M 1,198.6 15.0 5.5 0.5 429.0 475.7 478.1 497.6 375.5 (9.9) (22.5) (29.9) 1Q23 2Q23 3Q23 4Q23 1Q24 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 1Q24 (SATS) (Group) (SATS) (Group) EBITDA + SoAJV Core PATMI $48.4M $34.5M 179.5 21.9 12.2 15.0 3.8 55.2 58.7 62
Slide 12: 1Q FY24 breakdown
<Public> 1Q FY24 breakdown S$’M 1QFY24 PATMI (29.9) Add back: One-off integration expenses 12.6 Core PATMI (17.4) Others: Amount is based on an estimate pending completion of purchase Provisional intangible assets amortisation 9.1 price acquisition assessment Incremental lease accounting expenses1 7
Slide 13: FY24 Group Financial Position
<Public> FY24 Group Financial Position Total Assets ($'M) Total Liabilities ($'M) Total Equity ($'M) Total Debts ($'M) 8,153.3 5,672.0 2,481.3 4,169.8 # 5,672.0 +3,479.6 8,153.3 +3,513.1 (33.5) +2,691.4 4,169.8 2,481.3 2,514.8 Total debt 4,673.7 of $2,783M ex-lease 2,158.9 liabilities 1,478.4 0 0 0
Slide 14: Group Balance Sheet
<Public> Group Balance Sheet $M AS AT 30 JUN 23 AS AT 31 MAR 23 Change % Commentary Non-Current Assets 6,421.4 1,950.9 229.2 Increase attributable to intangible assets and right-of-use assets arising from the acquisition of WFS. Decreased due to transfer of deposits placed with notary to the seller
Slide 15: Group Cash Flow Statement
<Public> Group Cash Flow Statement ($'M) FY24 FY23 Var Net Cash from/(used in) Operating Activities 53.5 (4.9) 58.4 Net Cash from/(used in) Investing Activities 77.5 (13.0) 90.5 Capital expenditure (64.2) (24.7) (39.5) Net Operating Cashflow Dividends from associates/joint ventures 12.3 10.6 1.7 Pro
Slide 16: Integration Updates
<Public> Integration Updates <Public>
Slide 17: WFS acquisitions helps improve our business resilience and positions SATS well for sustainable long term growth
<Public> WFS acquisitions helps improve our business resilience and positions SATS well for sustainable long term growth Cargo volumes (ton-km) 1 Strong presence in higher value 160 Std. dev markets (US, Europe) presents CAGR1 an opportunity to enhance / Mean1 overall gateway services and handling b
Slide 18: SATS Group has pivoted away from being Asian centric business to a Global market leader
<Public> SATS Group has pivoted away from being Asian centric business to a Global market leader (40%Asia, ~40%Americas, 20%EMEA) EMEA 1Q24 1Q23 2% Asia (ex-SG) 18% Americas Singapore 38% 33% Region Singapore 80% EMEA 20% Asia (ex-SG) 9% 1Q23 1Q24 Aviation Cargo Aviation Food NA Food 21% Food 13% 7%
Slide 19: Value creation through integration
<Public> Value creation through integration The integration of SATS and WFS is well underway Commercial and operational value creation efforts has started to drive synergies for the group and deliver added value to customers Prelim Target Synergies through a cohesively integrated global network =>
Slide 20: Outlook
<Public> Outlook <Public>
Slide 21: Outlook
<Public> Outlook The growth momentum in the aviation industry continues, with optimistic projections from IATA, ICAO, Boeing, and Singapore’s Ministry of Transport (MOT). IATA estimates that global air traffic will reach 88% of pre-pandemic levels in 2023 and 100% by 2024, while MOT anticipates that
Slide 22: Improved Growth Trajectory
<Public> Improved Growth Trajectory Revenue ($'B) EBITDA (+SoAJV) ($'M) Core PATMI ex-relief ($'M) Net Operating Cash ($'M) 1.2 179.5 53.5 3.2x 12.9x 11.9x (17.4) 0.4 0.6x 13.9 (28.9) (4.9) 1Q FY23 1Q FY24 1Q FY23 1Q FY24 1Q FY23 1Q FY24 1Q FY23 1Q FY24 Key priorities going forward: The Group is acc
Slide 23: Appendix
<Public> Appendix <Public>
Slide 24: Annex A
<Public> Annex A 24 <Public>
Slide 25: Operating Statistics
<Public> Operating Statistics 1QFY24 1QFY23 Change (%) Passenger Handled ('M) 18.9 9.7 94.3% SATS 73.2 46.4 57.9% WFS 72.7 - n.m. Flights Handled ('000) 145.9 46.4 214.7% SATS 539.9 593.3 -9.0% WFS 1,270.5 - n.m. Cargo/Mail Processed ('000 tonnes) 1,810.4 593.3 205.2% Aviation meals 12.0 5.5 119.6%
Slide 26: Reinforcing Diversification & Resilience
<Public> Reinforcing Diversification & Resilience Business YTD Actual YTD Actual Revenue YoY Var % 1Q24 1Q23 FY24 FY23 Aviation By Business Food NA Food Cargo Aviation 13% 7% 21% Food 24% Cargo 593.5 78.8 652.8 Ground 364.9 110.5 230.3 Cargo 50% Gateway Services Ground NA 958.4 189.3 406.3 Ground Se
Slide 27: 1Q FY24 Group Expenditure
<Public> 1Q FY24 Group Expenditure YoY $778.6M Growth 190% Premise OOE 704.4 Costs 15% 5% Licence Fees 2% Raw 1Q FY24 Materials 7% S$1,188.4M Staff Costs D&A 59% 12% 209.3 172.8 148.0 80.6 76.0 61.2 41.3 50.7 21.4 8.3 24.3 Staff Costs D&A Raw Materials Licence Fees Premise Costs OOE 1Q FY24 1Q FY23
Slide 28: Group Segmented P&L – 1Q FY24
<Public> Group Segmented P&L – 1Q FY24 Food Gateway 1Q FY24 Food Gateway 1Q FY23 Others Others Solutions Services Total Solutions Services Total Revenue 240.4 958.4 (0.2) 1,198.6 186.2 189.3 0.0 375.5 EBIT (Loss)/profit (4.0) 10.7 3.5 10.2 (17.3) (17.4) 0.4 (34.3) Share of results of 5.1 16.2 0.0 21
Slide 29: Summary Financials – Associates and Joint Ventures (AJVs)
<Public> Summary Financials – Associates and Joint Ventures (AJVs) OVERVIEW S$’M 1Q FY24 1Q FY23 % change • 1Q SSOR increased 94.6% YoY. SATS Share of Revenue (SSOR) 166.6 85.6 94.6 Share of earnings / (losses) 21.3 6.9 208.7 • Share of earnings increased by $14.4M to $21.3M compared to last year. S
Slide 30: 1Q FY24 SATS share of revenue (SSoR)
<Public> 1Q FY24 SATS share of revenue (SSoR) Business ASIA SSOR No. Associates/JVs Total Singapore EMEA AMERICA Food Unit (ex-SG) Solutions 26% 1 Taj SATS Air Catering/TMFK Food 16 - 16 - - 2 Evergreen Sky Catering Food 12 - 12 - - 3 MacroAsia Catering Food 8 - 8 - - S$167M 4 Beijing Airport Inflig
Slide 31: 1Q FY23 SATS share of revenue (SSoR)
<Public> 1Q FY23 SATS share of revenue (SSoR) Business ASIA Food SSOR No. Associates/JVs Total Singapore EMEA AMERICA Solutions Unit (ex-SG) 33% 1 Taj SATS Air Catering/TMFK Food 12 - 12 - 2 Evergreen Sky Catering Food 3 - 3 - S$86M 3 Beijing Airport Inflight Kitchen Food 1 - 1 - 4 MacroAsia Caterin
Slide 32: Annex B
<Public> Annex B 32 <Public>
Slide 33: SATS Ltd
<Public> SATS Ltd Expanding Our Horizons FY23 (Full-Year) 1QFY24 53M 19M Passengers Handled Passengers Handled 69M 22M Meals Served Meals Served 230K 146K Flights Handled Flights Handled 2.2M Tonnes 1.8M Tonnes Cargo Handled Cargo Handled 14 Countries 27 Countries Over 60 locations Over 210 location
Slide 34: SATS Group Global Network
<Public> SATS Group Global Network EMEA Comprehensive global Cargo Stations 51 coverage across Ground Stations 10 Americas - EMEA - APAC Europe<>NA (6% Global Cargo) Covering trade routes Europe<>APAC (11% Global responsible for >50% of Cargo) global air cargo volumes Domestic US Strategically locat
Slide 35: SATS Group: Global position in the air cargo handling
<Public> SATS Group: Global position in the air cargo handling Global Cargo Stations Count Cargo Volume (in M Tonnes) 9 135 92 5 53 3 31 2 1 1 4 5 (1) (1) 2021 Strategic Positions in Major Airport Hubs (in M Tonnes) North America EMEA APAC (Top 10 Airports Volume) (Top 10 Airports Volume) (Top 10 Ai
Slide 36: Scaling Sustainably
<Public> Scaling Sustainably DEVELOP SMART REDUCE FOOD AND NUTURE SKILLS FOR INFRASTRUCTURE PACKAGING WASTE THE FUTURE THEMES Convert 100% of ground support Halve food waste intensity in Increase average value-add per employee equipment in Singapore hub to cleaner Singapore operations from 2021 base