Singapore Post Ltd. · SGX:S08
Singapore Post — FY2016/17 Earnings Presentation
35 slides from Singapore Post's earnings presentation, May 12, 2017
Slide 1: Q4 & FY2016/17 Financial Results
Q4 & FY2016/17 Financial Results 12 May 2017
Slide 2: Agenda
Agenda Q4 & FY2016/17 Financials Cash flow and Balance sheet Segmental results Exceptional items Business & Corporate updates Summary & Outlook Supplementary information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 3: FY2016/17 Profit & Loss
FY2016/17 Profit & Loss FY2016/17 P&L, $M YoY FY16/17 FY15/161 % change Revenue 1,348.5 1,151.5 +17.1% Inclusion of US acquisitions Other income and gains / (losses) Impairment charges mainly for TradeGlobal, partially offset by Rental and property-related income 36.6 39.4 (7.1%) revaluation gain on
Slide 4: Revenue movement
Revenue movement FY2015/16 vs. FY2016/17 Revenue performance, $M +17.1% 1,348.5 Inclusion of US eCommerce subsidiaries 1,151.5 267.1 +171.4% TradeGlobal and Jagged Peak1 eCommerce 98.4 Driven by higher contribution from Couriers Please Logistics 626.0 636.8 +1.7% from increased eCommerce deliveries
Slide 5: Operating expenses
Operating expenses Total expenses FY2016/17 breakdown, $M FY16/17 FY15/161 YoY % change Labour & related 345.1 300.4 +14.9% Higher headcount post acquisitions Volume-related 688.7 535.4 +28.6% Largely due to higher International Traffic & related 374.1 340.4 +9.9% mail terminal dues Outsourcing serv
Slide 6: Operating Profit for the Postal, Logistics and eCommerce segments
Operating Profit for the Postal, Logistics and eCommerce segments FY2015/16 vs. FY2016/17 Operating Profit performance, $M Logistics 38.8 Due to costs from planned investments in the 23.6 Logistics network as well as pricing and competitive (39.2%) pressures in the eCommerce Logistics space Postal 1
Slide 7: Q4 FY2016/17 Profit & Loss
Q4 FY2016/17 Profit & Loss Q4 FY2016/17 P&L, $M YoY Q4 FY16/17 Q4 FY15/161 % change Revenue 324.0 317.6 +2.0% Inclusion of full quarter of Jagged Peak revenue Other income and gains / (losses) Rental and property-related income 8.8 9.5 (7.2%) Impairment charges mainly for TradeGlobal, partially offs
Slide 8: FY2016/17 and Q4 Underlying Net Profit movement
FY2016/17 and Q4 Underlying Net Profit movement Underlying Net Profit performance, $M Investments in transformation Postal Largely US eCommerce Costs related business to Regional 153.6 26.5 eCommerce Assoc / JV Other items Logistics Hub (largely 4PX (include corporate costs, expansion) Loss of renta
Slide 9: Agenda
Agenda Q4 & FY2016/17 Financials Cash Flow and Balance Sheet Segmental Results Exceptional Items Business & Corporate Updates Summary & Outlook Supplementary Information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 10: Free Cash Flow
Free Cash Flow $M, unless otherwise stated FY16/17 FY15/16 Operating cash flow (before working capital changes) 194.0 202.0 Strong operating cash flow Changes in working capital 36.6 (40.0) Positive movement due to lower receivables and higher Income tax paid (30.5) (30.6) trade and other payables l
Slide 11: Cash Flow movement
Cash Flow movement $M, unless otherwise stated FY16/17 FY15/16 Stable operating cash flow, boosted by positive movement Net cash provided by operating activities 200.1 131.4 in working capital Cash flow used in investing activities (89.6) (457.1) FY16/17 capital expenditure of $199.8m was partially
Slide 12: Balance Sheet and financial indicators
Balance Sheet and financial indicators $M, unless otherwise stated As at As at Financial indicators Mar 2017 Mar 2016 Includes cash proceeds from Alibaba to be used in accordance with the Cash & cash equivalents at end of financial period 366.6 126.6 investment agreements Borrowings 364.0 280.3 Incr
Slide 13: Agenda
Agenda Q4 & FY2016/17 Financials Cash flow and Balance sheet Segmental results Exceptional items Business & Corporate updates Summary & Outlook Supplementary information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 14: Postal: FY2016/17 Performance
Postal: FY2016/17 Performance $M Postal FY16/17 FY15/161 YoY % change Domestic mail revenue continues to decline with more companies Revenue 544.1 536.2 +1.5% implementing e-statements. Operating profit 150.7 157.3 (4.2%) Impact on Postal revenue and OP was partially mitigated by the increase in OP
Slide 15: Postal: Q4 FY2016/17 Performance
Postal: Q4 FY2016/17 Performance $M Postal Q4 FY16/17 Q4 FY15/161 YoY % change The factors are largely similar to that shared for the full year. Revenue 136.8 136.0 +0.6% Operating profit 36.8 36.9 (0.4%) OP margin 26.9% 27.2% Revenue breakdown Q4 FY16/17 Q4 FY15/161 YoY % change Domestic mail2 58.4
Slide 16: Logistics: FY2016/17 Performance
Logistics: FY2016/17 Performance $M Logistics FY16/17 FY15/161 YoY % change Logistics revenue growth was driven by increased eCommerce deliveries at Revenue 636.8 626.0 +1.7% Couriers Please, partially offset by a decline in Quantium Solutions due to Operating profit 23.6 38.8 (39.2%) competitive pr
Slide 17: Logistics: Q4 FY2016/17 Performance
Logistics: Q4 FY2016/17 Performance $M Logistics Q4 FY16/17 Q4 FY15/161 YoY % change Growth from Couriers Please and SP Parcels was offset by decline at Revenue 154.7 167.6 (7.7%) Quantium Solutions due to competitive pressures, and Famous Holdings due to Operating profit 2.6 11.6 (78.0%) depressed
Slide 18: eCommerce: FY2016/17 Performance
eCommerce: FY2016/17 Performance $M eCommerce FY16/17 FY15/161 YoY % change eCommerce revenue rose with the inclusion of the US acquisitions. Revenue 267.1 98.4 +171.4% While SP eCommerce and Jagged Peak Operating profit (33.8) (7.3) @ performed well, TradeGlobal faced continuing challenges with the
Slide 19: eCommerce: Q4 FY2016/17 Performance
eCommerce: Q4 FY2016/17 Performance $M eCommerce Q4 FY16/17 Q4 FY15/161 YoY % change The factors are largely similar to that shared for the full year. Revenue 56.7 43.3 +30.9% eCommerce segment operating losses in Operating profit (15.1) (5.1) (197.8%) Q4 also included a one-time write-off of receiv
Slide 20: Agenda
Agenda Q4 & FY2016/17 Financials Cash flow and Balance sheet Segmental results Exceptional items Business & Corporate updates Summary & Outlook Supplementary information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 21: Exceptional items
Exceptional items1 $M FY16/17 Impairment, net of tax (208.6)2 Significantly underperformed the business case TradeGlobal (185.0) which supported the investment Postea3 (20.5) The carrying value of the investment was no longer Toh Guan Road Building (PPE)4 (9.3) supported by the value-in-use as Poste
Slide 22: TradeGlobal
TradeGlobal • The principal issue is that TradeGlobal has significantly underperformed the business case which supported the investment. Instead of a projected profit of $9.4 million for FY16/17, TradeGlobal incurred a significant loss of $25.8 million. • TradeGlobal has experienced both operational
Slide 23: Independent committee appointed
Independent committee appointed • Following the announcement of the risk of significant impairment in the Q3 quarterly results, the Board formed an independent committee to conduct a thorough review of the circumstances surrounding SingPost’s consideration and approval of the TradeGlobal acquisition
Slide 24: Agenda
Agenda Q4 & FY2016/17 Financials Cash flow and Balance sheet Segmental results Exceptional items Business & Corporate updates Summary & Outlook Supplementary information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 25: Key developments in FY2016/17
Key developments in FY2016/17 Enhanced capabilities with opening of Strengthening eCommerce Renewal of Postal license Regional eCommerce Logistics Hub Logistics network & partnerships Alibaba Group took a 34% stake in Quantium Solutions International in October 2016, and raised its stake in SingPost
Slide 26: Agenda
Agenda Q4 & FY2016/17 Financials Cash flow and Balance sheet Segmental results Exceptional items Business & Corporate updates Summary & Outlook Supplementary information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 27: FY2016/17 Summary
FY2016/17 Summary Revenue rose with the inclusion of US eCommerce acquisitions. Underlying net profit declined largely due to: • the impact of planned investments in building out our eCommerce Logistics platform such as the Regional eCommerce Logistics Hub and associates which are investing for grow
Slide 28: Outlook
Outlook In FY2017/18, the Group plans to grow revenue and volumes through new business opportunities, integrating past acquisitions and extracting synergies, as well as leveraging the strategic partnership with Alibaba and its subsidiaries. Postal Domestic letter mail volumes continue to decline, wi
Slide 29: Outlook (continued)
Outlook (continued) Logistics The Group is expected to benefit from growing eCommerce trends. We will seek to grow our customer base, and develop collaborations and alliances with strategic partners to increase volumes. Quantium Solutions International (QSI), the joint venture between SingPost and A
Slide 30: Outlook (continued)
Outlook (continued) eCommerce The eCommerce business forms a vital part of the Group’s end-to-end eCommerce logistics growth strategy. eCommerce revenue remains robust and will continue to contribute significantly to the Group’s revenue. TradeGlobal is facing operational and structural challenges. M
Slide 31: Agenda
Agenda Q4 & FY2016/17 Financials Cash flow and Balance sheet Segmental results Exceptional items Business & Corporate updates Summary & Outlook Supplementary information The following presentation contains forward looking statements by the management of Singapore Post Limited (“SingPost”) relating t
Slide 32: eCommerce-related revenues now 50.4% of Group revenue
eCommerce-related revenues now 50.4% of Group revenue Revenue performance, FY2015/16 vs FY2016/17, $M FY15/16 FY16/17 1,348.5 1,151.5 Group Revenue eCommerce 739.1 668.3 $267.1M Non eCommerce eCommerce $98.4M 39% related 24% 50.4% 35.8% $680.2M Postal $412.4M 40% Postal 32% $165.2M $215.9M 680.2 eCo
Slide 33: Overseas revenue now 50.5% of Group revenue
Overseas revenue now 50.5% of Group revenue Group revenue footprint FY2015/16 vs FY2016/17, $M 1,348.5 Group Revenue 1,151.5 667.5 Europe 11% Domestic 646.0 50.5% US 35% Asia 43.9% 26% $681.0M 681.0 Overseas 505.5 Australia 28% FY15/16 FY16/17 Differences in total due to rounding 32
Slide 34: eCommerce Logistics Network Development; Key management
eCommerce Logistics Network Development eCommerce Freight, Customs & Warehousing Last Mile Delivery Services Regulations Mgmt & Fulfilment & Returns Key management eCommerce Logistics Postal International mail Paul Demirdjian Sam Ang Woo Keng Leong Goh Hui Ling Interim CEO, CEO, CEO, Deputy CEO, US
Slide 35: Thank you
Thank you