Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — ST Engineering — Q3 2018 Earnings Presentation
45 slides from Singapore Technologies Engineering's earnings presentation, Nov 14, 2018
Slide 1: Nine Months & Third Quarter 2018 Results
Nine Months & Third Quarter 2018 Results 14 November 2018
Slide 2: Agenda
Agenda • Group Highlights • Sector Performance • 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 3Q2018 9M2018 Revenue EBIT Revenue EBIT 1,626 143.6 4,924 410.3 +1% y-o-y -1% y-o-y +2% y-o-y +7% y-o-y PBT Net Profit PBT Net Profit 165.8 134.6 460.2 369.8 +2% y-o-y +5% y-o-y +5% y-o-y +11% y-o-y Order book as at 30 Sep
Slide 5: Group Revenue Breakdown
Group Revenue Breakdown 3Q2018 Revenue 3Q2018 Revenue S$1.63b by location of customers Commercial 73% Defence ASIA US 27% 61% 20% EUROPE OTHERS 12% 7% 5 |
Slide 6: Revenue
Revenue $'m 3Q2018 3Q2017 * Change 9M2018 * 9M2017 Change (Restated) (Restated) Aerospace 689 608 +13% 2,000 1,795 +11% # Electronics 491 482 +2% 1,608 1,550 +4% Land Systems 297 331 -10% 847 906 -6% Marine 137 164 -16% 435 506 -14% Others 12 24 -50% 34 70 -52% Group 1,626 1,609 +1% 4,924 4,827 +2%
Slide 7: Profit before Tax (PBT)
Profit before Tax (PBT) $'m 3Q2018 3Q2017 Change 9M2018 9M2017 Change (Restated) (Restated) Aerospace 73.4 66.5 +10% 237.4 223.7 +6% Electronics 66.8 54.6 +22% 173.2 138.1 +25% Land Systems 18.0 15.1 +20% 59.7 60.7 -2% Marine 14.9 21.1 -29% 34.3 22.0 +56% Others (7.3) 4.9 NM (44.4) (5.6) NM Group 16
Slide 8: PBT Margins
PBT Margins 14% 12%12% 13% 11% 11%11%11% 11% 10%10% 9% 9% 9% 8% 7% 7% 6% ^ 5% 4% Group Aerospace Electronics Land Marine Group Aerospace Electronics Land Marine Systems Systems 3Q2017 (Restated) 9M2017 (Restated) 3Q2018 9M2018 ^ Poor performance arising from weak industry conditions and US operation
Slide 9: Group Net Profit
Group Net Profit $'m 3Q2018 3Q2017 Change 9M2018 9M2017 Change (Restated) (Restated) Aerospace 55.4 49.1 +13% 181.2 158.2 +15% Electronics 55.5 42.8 +30% 142.4 113.8 +25% Land Systems 17.6 12.1 +45% 53.6 44.9 +19% Marine 12.8 19.7 -35% 30.7 26.4 +16% Others (6.7) 4.1 NM (38.1) (8.8) NM Group 134.6 1
Slide 10: Net Profit Margins
Net Profit Margins 9% 9% 9% 11% 12% 8% ^ 7% 7% 7% 9% 9% 6% 8% 8% 8% 8% ^ 5% 5% 6% 4% Group Aerospace Electronics Land Marine Group Aerospace Electronics Land Marine Systems Systems 3Q2017 (Restated) 9M2017 (Restated) 3Q2018 9M2018 ^ Poor performance arising from weak industry conditions and US opera
Slide 11: 3Q2018 Sector Performance
3Q2018 Sector Performance $"% ST Engineering
Slide 12: Aerospace
Aerospace 3Q2018 vs 3Q2017 (Restated) Higher revenue from Revenue $689m ▲ $81m or 13% all three business groups Higher gross profit Gain on partial divestment of an associate PBT $73.4m ▲ $6.9m or 10% Partially offset by Higher operating expenses Lower profits from associates and joint ve
Slide 13: Electronics
Electronics 3Q2018 vs 3Q2017 (Restated) Higher revenue from LSG and CSG business groups Revenue $491m ▲ $9m or 2% Partially offset by Lower revenue from SSG business group Higher gross profit in line with PBT $66.8m ▲ $12.2m or 22% higher revenue Lower operating expenses In line with th
Slide 14: Land Systems
Land Systems 3Q2018 vs 3Q2017 (Restated) Lower revenue from M&W and Revenue $297m ▼ $34m or 10% S&T business groups Higher gross profit from PBT $18.0m ▲ $2.9m or 20% favourable sales mix Net Profit $17.6m ▲ $5.5m or 45% In line with the increase in PBT Lower tax expenses 14 |
Slide 15: Marine
Marine 3Q2018 vs 3Q2017 (Restated) Lower revenue from Shipbuilding and Shiprepair business groups Revenue $137m ▼ $27m or 16% Partially offset by Higher revenue from Engineering business group In line with lower revenue PBT $14.9m ▼ $6.2m or 29% Unfavourable product mix In line with the d
Slide 16: Outlook
Outlook $"% ST Engineering
Slide 17: President & CEO's Message
President & CEO’s Message “A key highlight of the third quarter was our proposed acquisition of MRAS1. This business will scale up our aerospace capabilities by moving us upstream into the OEM business of high-value components. We are excited by the role it will play in the growth of our Aerospace s
Slide 18: Thank You
alg Se 3 7,< 91 Engineering Thank You
Slide 19: Appendix
Appendix $"% ST Engineering
Slide 20: Group Revenue Breakdown
Group Revenue Breakdown 9M2018 Revenue 9M2018 Revenue S$4.92b by location of customers Commercial 69% Defence 31% ASIA US 62% 20% EUROPE OTHERS 11% 7% 20 |
Slide 21: Group Revenue by geography
Group Revenue by geography (by location of customers) 21 |
Slide 22: Balance Sheet
Balance Sheet $'m 30 Sep 2018 31 Dec 2017 (Restated) Property, Plant & Equipment 1,612 1,719 Intangible Assets 1,133 1,087 Other non-current assets 581 942 Current assets 3,957 4,276 Total assets 7,283 8,024 Current liabilities 3,519 3,587 Non-current liabilities 1,348 1,941 Total liabilities 4,867
Slide 23: Statement of Cash Flows
Statement of Cash Flows $'m 3Q2018 3Q2017 9M2018 9M2017 (Restated) (Restated) Net cash from/(used in) Operating activities 43 112 439 460 Investing activities (30) (62) 186 (174) Financing activities (828) (58) (1,277) (373) Net decrease in CCE * (815) (8) (652) (87) CCE at beginning of the period 1
Slide 24: Aerospace
Aerospace $"% ST Engineering
Slide 25: Aerospace Revenue by geography
Aerospace Revenue by geography (by location of customers) 25 |
Slide 26: Aerospace Revenue, PBT and Net Profit
Aerospace Revenue, PBT and Net Profit by business group Revenue ($m) PBT ($m) Net Profit ($m) Note: Revenue includes inter‐segment sales 26 |
Slide 27: Aerospace – 3Q2018 in Review
Aerospace – 3Q2018 in Review • Secured $590m worth of new contracts, including: • Component Maintenance-By-the-Hour (MBH™) agreement from Japan Airlines • ATR 72 landing gear overhaul agreement from an Asian Airline • Contract extension to maintain the PW4000 thrust reversers and inlets of an Europe
Slide 28: Aerospace – 3Q2018 in Review
Aerospace – 3Q2018 in Review • Capabilities building • Proposed acquisition of 100% ownership in a nacelle manufacturer, MRA Systems, LLC, for aggregate purchase consideration of US$630m, subject to adjustments • MRO for A320’s V2500 and CFM56-5B engine nacelles • Civil Aviation Administration of Ch
Slide 29: Aerospace – Outlook for FY2018
Aerospace – Outlook for FY2018 • Expand airframe MRO capacity in Pensacola, Florida, USA • Develop UAV programme, including the deployment of DroScan in aircraft inspection and commercialisation of DroNet • Accelerate digitisation of global operations • Grow aircraft leasing fleet, focusing on mid-
Slide 30: Electronics
Electronics $"% ST Engineering
Slide 31: Electronics Revenue by geography
Electronics Revenue by geography (by location of customers) 31 |
Slide 32: Electronics Revenue, PBT and Net Profit
Electronics Revenue, PBT and Net Profit by business group Revenue ($m) PBT ($m) Net Profit ($m) Note: Revenue includes inter‐segment sales 32 |
Slide 33: Electronics – 3Q2018 in Review
Electronics – 3Q2018 in Review • Secured $435m worth of new contracts, including: • Rail Enterprise Asset Management System for the Land Transport Authority in Singapore • First Indonesian contract to supply Platform Screen Doors for Jakarta’s new light rail transit (LRT), the Jabodebek LRT System •
Slide 34: Electronics – 3Q2018 in Review
Electronics – 3Q2018 in Review • Enhanced Smart City offerings: • Launched the world’s thinnest and first ultra-slim two-factor authentication (2FA) encrypted data storage with smart card protection, the region’s first gateless hands-free Automatic Fare Collection system as well as the region’s firs
Slide 35: Electronics – Outlook for FY2018
Electronics – Outlook for FY2018 • Deliver smart mobility, satellite communications and software system related contracts on schedule • Pursue smart city related contracts in and outside of Singapore 35 |
Slide 36: Land Systems
Land Systems $"% ST Engineering
Slide 37: Land Systems Revenue by geography
Land Systems Revenue by geography (by location of customers) 37 |
Slide 38: Land Systems Revenue, PBT and Net Profit by business group
Land Systems Revenue, PBT and Net Profit by business group Revenue ($m) PBT ($m) Net Profit ($m) Note: Revenue includes inter‐segment sales 38 |
Slide 39: Land Systems – 3Q2018 in Review
Land Systems – 3Q2018 in Review • Secured new contracts, including: • 111 two-door double-deck Euro 6 diesel buses for Land Transport Authority in Singapore • Weapons & munitions from customers in Asia Pacific, Middle East and Europe • Road construction equipment and specialty vehicles from customer
Slide 40: Land Systems – Outlook for FY2018
Land Systems – Outlook for FY2018 • Pursue and secure key defence and commercial programmes locally and overseas • Accelerate the deployment of autonomous vehicles • Provide logistics autonomous solutions for the warehouse, airport, seaport and manufacturing industries 40 |
Slide 41: Marine
Marine ally =< 91 Engineering
Slide 42: Marine Revenue by geography
Marine Revenue by geography (by location of customers) 42 |
Slide 43: Marine Revenue, PBT and Net Profit
Marine Revenue, PBT and Net Profit by business group Revenue ($m) PBT ($m) Net Profit ($m) Note: Revenue includes inter‐segment sales 43 |
Slide 44: Marine – 3Q2018 in Review
Marine – 3Q2018 in Review • Secured new contracts including options worth $431m: • Two firm and up to four optional Auxiliary Personnel Lighter Small APL Class Berthing Barges for US Navy • One firm order of Articulated Tug Barge with an option for a second vessel from Bouchard Transportation • Firs
Slide 45: Marine – Outlook for FY2018
Marine – Outlook for FY2018 • Scheduled launch: • ATB Tug, M/V Evening Breeze to Bouchard Transportation • Expected delivery: • Sixth LMV, Fortitude to RSN • Second and final LNG-powered ConRo, Taino, to Crowley Maritime • Vehicle & Passenger ferry, Powhatan to Virginia Department of Transportation