Keppel Ltd. · SGX:BN4

Keppel — Q3 2017 Earnings Presentation

65 slides from Keppel's earnings presentation, Oct 19, 2017

  1. Slide 1: Third Quarter and Nine Months 2017 Financial Results

    Third Quarter and Nine Months 2017 Financial Results 19 October 2017 1

  2. Slide 2: Scope of Briefing

    Scope of Briefing  Address by CEO  Group Financial Highlights by CFO 2

  3. Slide 3: Address by CEO

    Address by CEO 3 \Gy-y-\) Corporation

  4. Slide 4: Solutions Provider for Sustainable Urbanisation

    Solutions Provider for Sustainable Urbanisation Energy & Environment • Gas value chain • Waste to energy • Desalination Connectivity • Floating data centres • E-commerce Urban Living fulfillment • Integrated mixed-use developments • High quality homes 4

  5. Slide 5: Financial Performance

    Financial Performance 9M 2017 net profit  Net profit was S$712m S$712m, up 11% yoy  EVA was S$61m  Annualised ROE was 7.7% 641 712  Free cash inflow of S$1.2b in 9M 2017, 39 vs S$552m in 9M 2016 216 80  Net gearing was 0.50x at end-Sep 2017 97 vs 0.58x at end-Jun 2017 S$m 355  Paid out S$145m

  6. Slide 6: Multiple Earnings Streams

    Multiple Earnings Streams  Recurring income was S$260m or 37% of net profit for 9M 2017 Net profit by income type Recurring income breakdown (%) 712 641 S$260m 92 91 S$234m 1% 6% 25% 260 234 25% S$m 26% 23% 18% 24% 316 360 28% 24% 0 0 9M 2016 9M 2017 9M 2016 9M 2017 Revaluations, major impairments

  7. Slide 7: Offshore & Marine

    Delivery of the world’s first converted FLNG vessel - Hilli Episeyo Offshore & Marine 7

  8. Slide 8: Offshore & Marine

    Offshore & Marine  Operating profit of S$39m in 9M 2017 9M 2017 net profit S$1m, down 99% yoy  YTD new contracts of ~S$1b  2 LNG containerships  2 LNG carriers 167 22  3 FPSO conversions  2 Dredgers S$m 145  Other conversion/refurbishment 1 projects and supporting services 28 0 (27) 9M 2016 9

  9. Slide 9: Offshore & Marine

    Offshore & Marine Net orderbooki  7 major deliveries in 9M 2017 namely 4 FPSOs, a semi, a subsea S$3.9b as at end-Sep 2017 construction vessel and a crane vessel 3.9  1 jackup deferral in 3Q 2017 3.7 0.2 0.1  Gaining traction in new markets 0.1 0.7  Contracted to build 2 Jones Act 2.3 LNG contai

  10. Slide 10: Property

    Launch of Tilia Residences in Ho Chi Minh City Property 10

  11. Slide 11: Property

    Property  Continued capital recycling for best 9M 2017 net profit risk-adjusted returns in 9M 2017 S$398m, up 12% yoy  Divestments of ~S$400m including: 398  Stakes in a Nantong 355 38 17 development and a Surabaya 54 25 property company S$m 113  Investments of ~S$850m including: 318  New resid

  12. Slide 12: Property Home Sales

    Property  Sold 3,790 units in 9M 2017, with total Home sales sales value of ~S$2b  Overall sales volume grew ~8% yoy: 3,790 3,510 10 100 300  Lower sales in China due to 300 tightening measures 260 1,010  1,010 units sold in Vietnam, up ~4x yoy Units 2,940  Steady sales in Singapore 2,380  ~6,

  13. Slide 13: Property Portfolio

    Property Portfolio  Residential landbank of ~62,000 homes in total  Completed commercial assets can generate annual income of ~S$75m when stabilised Residential Commerciali Launch-ready homes (units) Gross floor area (sm) 970,800 16,674 156,400 1,620 50,000 2,806 92,500 984 498,700 289,400 11,900

  14. Slide 14: Infrastructure

    Floating water-cooled data centre technology Infrastructure 14

  15. Slide 15: Infrastructure

    Infrastructure 9M 2017 net profit  Stronger performance driven by energy and infrastructure services S$97m, up 21% yoy  Keppel Marina East Desalination Plant commenced revenue 97 recognition 80 18 19 4  Injected Keppel DC Singapore 4 into S$m 29 Alpha DC Fund 78  Investing in water-cooling techn

  16. Slide 16: Investments

    Marina Bay Financial Centre, Singapore Investments 16

  17. Slide 17: Investments

    Investments 9M 2017 net profit  Received eligibility-to-list for IPO and listing of Keppel-KBS US REIT S$216m, up 454% yoy  Alpha DC Fund closed at ~US$1.0b with CPPIB’s latest commitment and 216 option  Doubled fund’s initial target size S$m 153  AUM of ~US$2.3b when fully leveraged and investe

  18. Slide 18: Harnessing Strengths, Multiplying Synergies

    Harnessing Strengths, Multiplying Synergies Core Strengths: Building Strong Verticals + Collaboration: SYNERGY Offshore & Property Infrastructure Investments Technology Engineering Marine & Project & Innovation Management Capital Operating & Management Maintenance Gas Value Chain Data Centres Integr

  19. Slide 19: Keppel Urban Solutions

    Keppel Urban Solutions  Integrated master developer of large-scale mixed-use developments  Harnesses Group’s diverse strengths and strong track record China-Singapore Suzhou Jakarta Garden City Industrial Park Well-appointed township Large-scale industrial township in Indonesia in China Sino-Singa

  20. Slide 20: Keppel Urban Solutions

    Keppel Urban Solutions Integrator of urban solutions to create sustainable, highly liveable and digitally-connected communities Masterplanning Development and operation of horizontal infrastructure Connectivity and urban logistics Innovative programming Open platform to partner best-in-class technol

  21. Slide 21: Creating & Capturing Value for the Group

    Creating & Capturing Value for the Group  Enhances value of land and Human-centric design-thinking embedded across all solutions properties  Creates multiple income streams:  Vertical development  Development, management & maintenance of horizontal mzz infrastructure  Provision of urban service

  22. Slide 22: Saigon Sports City

    Saigon Sports City Collaboration between Keppel Urban Solutions and Keppel Land  64 ha of land in prime District 2, HCMC  Features iconic developments such as Vietnam’s first one-stop hub for sports, entertainment and lifestyle activities  Incorporates latest biophilic design principles  Strateg

  23. Slide 23: Group Financial Highlights by CFO

    Group Financial Highlights by CFO 23

  24. Slide 24: 3Q 2017 Financial Performance

    3Q 2017 Financial Performance Net Profit 29% to S$291m EPS 29% to 16.0cts EVA from S$30m to S$86m 24

  25. Slide 25: 3Q 2017 Financial Highlights

    3Q 2017 Financial Highlights S$m 3Q 2017 3Q 2016 % Change Revenue 1,617 1,459 11 EBITDA 374 238 57 Operating Profit 324 185 75 Profit Before Tax 363 286 27 Net Profit 291 225 29 EPS (cents) 16.0 12.4 29 25

  26. Slide 26: 3Q 2017 Revenue by Segments

    3Q 2017 Revenue by Segments S$m 3Q 2017 % 3Q 2016 % % Change Offshore & Marine 380 23 516 35 (26) Property 546 34 479 33 14 Infrastructure 626 39 434 30 44 Investments 65 4 30 2 117 Total 1,617 100 1,459 100 11 26

  27. Slide 27: 3Q 2017 Pre-tax Profit by Segments

    3Q 2017 Pre-tax Profit by Segments S$m 3Q 2017 % 3Q 2016 % % Change Offshore & Marine 1 - 22 8 (95) Property 252 70 199 69 27 Infrastructure 47 13 40 14 18 Investments 63 17 25 9 152 Total 363 100 286 100 27 27

  28. Slide 28: 3Q 2017 Net Profit by Segments

    3Q 2017 Net Profit by Segments S$m 3Q 2017 % 3Q 2016 % % Change Offshore & Marine - - 11 5 (100) Property 198 68 157 70 26 Infrastructure 40 14 39 17 3 Investments 53 18 18 8 194 Total 291 100 225 100 29 28

  29. Slide 29: 9M 2017 Financial Performance

    9M 2017 Financial Performance Net Profit 11% to S$712m EPS 11% to 39.2cts Annualised ROE from 7.6% to 7.7% EVA from S$39m to S$61m Free Cash Inflow from S$552m to S$1,235m Net Gearing from 0.56x to 0.50x 29

  30. Slide 30: 9M 2017 Financial Highlights

    9M 2017 Financial Highlights S$m 9M 2017 9M 2016 % Change Revenue 4,419 4,827 (8) EBITDA 813 864 (6) Operating Profit 650 697 (7) Profit Before Tax 927 849 9 Net Profit 712 641 11 EPS (cents) 39.2 35.3 11 30

  31. Slide 31: 9M 2017 Revenue by Segments

    9M 2017 Revenue by Segments S$m 9M 2017 % 9M 2016 % % Change Offshore & Marine 1,312 30 2,054 43 (36) Property 1,350 31 1,451 30 (7) Infrastructure 1,614 36 1,228 25 31 Investments 143 3 94 2 52 Total 4,419 100 4,827 100 (8) 31

  32. Slide 32: 9M 2017 Pre-tax Profit by Segments

    9M 2017 Pre-tax Profit by Segments S$m 9M 2017 % 9M 2016 % % Change Offshore & Marine 10 1 232 27 (96) Property 502 54 465 55 8 Infrastructure 118 13 95 11 24 Investments 297 32 57 7 421 Total 927 100 849 100 9 32

  33. Slide 33: 9M 2017 Net Profit by Segments

    9M 2017 Net Profit by Segments S$m 9M 2017 % 9M 2016 % % Change Offshore & Marine 1 - 167 26 (99) Property 398 56 355 55 12 Infrastructure 97 14 80 13 21 Investments 216 30 39 6 454 Total 712 100 641 100 11 33

  34. Slide 34: Net Profit & EPS

    Net Profit & EPS Net profit (S$m) EPS (Cents) 2,237 124.8 619 1,846 1,885 34.5 102.3 103.8 1,525 685 726 84.0 346 38.0 39.9 19.3 405 22.3 521 29.1 457 414 363 784 25.3 22.9 20.0 712 43.2 4Q: 4Q: 39.2 143 7.9 397 3Q: 3Q: 3Q: 347 406 291 19.2 22.3 21.9 3Q: 225 16.0 12.4 751 2Q: 2Q: 41.9 2Q: 2Q: 205 16

  35. Slide 35: Free Cash Flow

    Free Cash Flow 9M 2017 9M 2016 S$m S$m Operating profit 650 697 Depreciation & other non-cash items (118) 188 532 885 Working capital changes 707 (486) Interest & tax paid (325) (265) Net cash from operating activities 914 134 Investments & capex (130) (97) Divestments & dividend income 606 375 Adva

  36. Slide 36: 3Q & 9M 2017 Results Q&A

    3Q & 9M 2017 Results Q&A 36 \Gy-t) | Corporation

  37. Slide 37: Additional Information

    Additional Information 37

  38. Slide 38: Revenue by Geography

    Revenue by Geography 9M 2017 Total Overseas Singapore S$m Customers Customers % % Offshore & Marine 1,312 89 11 Property 1,350 60 40 Infrastructure 1,614 14 86 Investments 143 14 86 Total 4,419 50% of total revenue came from overseas customers 38

  39. Slide 39: EBITDA by Segments

    EBITDA by Segments S$m 9M 2017 % 9M 2016 % % Change Offshore & Marine 139 17 368 43 (62) Property 425 52 320 37 33 Infrastructure 118 15 97 11 22 Investments 131 16 79 9 66 Total 813 100 864 100 (6) 39

  40. Slide 40: Capital/Gearing/ROE

    Capital/Gearing/ROE S$m 30 Sep 2017 31 Dec 2016 Shareholders’ Funds 11,919 11,659 Total Equity 12,534 12,334 Net Debt 6,245 6,966 Net Gearing Ratio 0.50x 0.56x ROE 7.7% 6.9% 40

  41. Slide 41: Offshore & Marine

    OFFSHORE & MARINE “ Corporation

  42. Slide 42: Financial Highlights – Offshore & Marine

    Financial Highlights – Offshore & Marine S$m 3Q 2017 3Q 2016 % Change Revenue 380 516 (26) EBITDA 33 86 (62) Operating Profit 3 49 (94) Profit Before Tax 1 22 (95) Net Profit - 11 (100) 42

  43. Slide 43: Financial Highlights – Offshore & Marine

    Financial Highlights – Offshore & Marine S$m 9M 2017 9M 2016 % Change Revenue 1,312 2,054 (36) EBITDA 139 368 (62) Operating Profit 39 252 (85) Profit Before Tax 10 232 (96) Net Profit 1 167 (99) 43

  44. Slide 44: Offshore & Marine Review

    Offshore & Marine Review  About S$1b contracts secured in 9M 2017: 2 LNG containerships, 2 LNG carriers, a gas carrier refurbishment, 3 FPSO conversion projects, a crane vessel conversion, a Tension Leg Wellhead Platform project involving engineering and construction support services, and 2 dredger

  45. Slide 45: Offshore & Marine Orderbook

    Offshore & Marine Orderbook Contract Value Gross Net Client S$m S$m For delivery in 2017 6 JUs/1 FLNG Conversion/1 FPSO Modules Fab. & Integration/ Grupo R/Clearwater/Falcon Energy/ 1 FPSO Turret Fabrication/1 RORO Vessel Engine Golar/Petrobras/SOFEC/Totem Ocean/ Conversion/1 Ice-class Multi-Purpose

  46. Slide 46: Property

    PROPERTY 46 iG): | Corporation

  47. Slide 47: Financial Highlights - Property

    Financial Highlights - Property S$m 3Q 2017 3Q 2016 % Change Revenue 546 479 14 EBITDA 234 96 144 Operating Profit 225 90 150 Profit Before Tax 252 199 27 Net Profit 198 157 26 47

  48. Slide 48: Financial Highlights - Property

    Financial Highlights - Property S$m 9M 2017 9M 2016 % Change Revenue 1,350 1,451 (7) EBITDA 425 320 33 Operating Profit 396 300 32 Profit Before Tax 502 465 8 Net Profit 398 355 12 48

  49. Slide 49: Sales Achieved - Overseas

    Sales Achieved - Overseas Units Sold Sales Value Latest Avg. Key Projects Location in 9M 2017 in 9M 2017 Selling Price China (RMB’m) (RMB’psm) Park Avenue Heights 216 677 ~24,100 Chengdu V City 1,375 1,870 ~12,900 Serenity Villas 86 254 ~14,600 Seasons Garden, Tianjin Eco-City Ph 2 241 482 ~18,000 T

  50. Slide 50: Residential Landbank - Singapore

    Residential Landbank - Singapore Total GFA Total Units Remaining Remaining Area For Singapore Stake Tenure Units Sold (sf) Units Launched Units Sales (sf) Launched Projects Corals at Keppel Bay 100% 99-yr 509,998 366 366 256 110 193,063 Reflections at Keppel Bay 100% 99-yr 2,081,738 1,129 1,129 962

  51. Slide 51: Residential Landbank - China

    Residential Landbank - China Total GFA Total Units Units Remaining Units Remaining Area For China Location Stake (sm) Units Launched Sold For Sale Sale (sm) 8 Park Avenue 99% 133,393 918 918 891 27 7,739 Seasons Residences Shanghai 99.9% 128,918 1,102 1,062 1,031 71 8,878 Sheshan Riviera 100% 83,174

  52. Slide 52: Residential Landbank - Other Overseas

    Residential Landbank - Other Overseas Total GFA Total Units Units Remaining Remaining Area Location Stake (sm) Units Launched Sold Units For Sale for Sale (sm) Vietnam Estella Heights 98% 123,618 872 872 834 38 5,364 Saigon Sports City 90% 783,302 3,887 - - 3,887 458,892 Dist. 2 Palm City (South Rac

  53. Slide 53: Residential Launch Readiness – China

    Residential Launch Readiness – China Units Ready to Launch Project Location 4Q 2017 2018 2019 8 Park Avenue 7 20 - Seasons Residences Shanghai 71 - - Sheshan Riviera 9 26 48 Park Avenue Heights 100 - - Hill Crest Villas^ - 6 36 Chengdu Serenity Villas^ - 18 24 V City 34 915 481 Waterfront Residences

  54. Slide 54: Residential Launch Readiness – Other Overseas

    Residential Launch Readiness – Other Overseas Units Ready to Launch Project Location 4Q 2017 2018 2019 Indonesia West Vista at Puri 141 950 950 West Jakarta MetLand Puri 150 221 122 BCA site Jakarta CBD - 136 136 Vietnam Estella Heights 38 - - Riviera Cove* 5 - - Saigon Sports City - 705 575 Riviera

  55. Slide 55: Expected Completion for Launched Projects

    Expected Completion for Launched Projects Total Units Launched as Units Sold as at Units Remaining Expected Projects/Phases launched Location Units at end-Sept 2017 end-Sept 2017 as at end-Sept 2017 Completion China Sheshan Riviera Shanghai 112 53 9 103 1H18 Waterfront Residences Wuxi 319 319 234 85

  56. Slide 56: Expected Completion for Upcoming Projects

    Expected Completion for Upcoming Projects No. of Units Expected to be Completed Projects/Phases to be launched Location 4Q 2017 2018 2019 China Sheshan Riviera Shanghai - - 105 V-city (Ph 4) Chengdu - - 1,172 Waterfront Residences - 318 542 Wuxi Park Avenue Heights 328 348 372 Seasons Garden (Plot 8

  57. Slide 57: Commercial Projects - Under Development

    Commercial Projects - Under Development Projects under Development Location Stake GFA (sm) Development Cost(1) Completion China Beijing Commercial Beijing 51% 104,800 RMB2.7b 2019 Park Avenue Central Shanghai 99% 115,900 RMB2.9b 2021 Seasons City Tianjin 100% 161,800 RMB2.6b 2019 (Ph 1) Indonesia IF

  58. Slide 58: Commercial Projects - Completed

    Commercial Projects - Completed Key Completed Projects Location Stake GFA (sm) Net Lettable Area (sm) Completion Singapore Keppel Bay Tower 100% 41,800 36,000 2002 Keppel Towers and Keppel Towers 2 Singapore 100% 52,900 40,000 1991/1993 I12 Katong 22.4% 26,100 19,200 2011 China SOHO Hongkou 30% 70,0

  59. Slide 59: Infrastructure

    INFRASTRUCTURE 89 Corporation

  60. Slide 60: Financial Highlights - Infrastructure

    Financial Highlights - Infrastructure S$m 3Q 2017 3Q 2016 % Change Revenue 626 434 44 EBITDA 47 38 24 Operating Profit 36 28 29 Profit Before Tax 47 40 18 Net Profit 40 39 3 60

  61. Slide 61: Financial Highlights - Infrastructure

    Financial Highlights - Infrastructure S$m 9M 2017 9M 2016 % Change Revenue 1,614 1,228 31 EBITDA 118 97 22 Operating Profit 85 67 27 Profit Before Tax 118 95 24 Net Profit 97 80 21 61

  62. Slide 62: Investments

    INVESTMENTS 62 iG*y-)] Corporation

  63. Slide 63: Financial Highlights - Investments

    Financial Highlights - Investments S$m 3Q 2017 3Q 2016 % Change Revenue 65 30 117 EBITDA 60 18 233 Operating Profit 60 18 233 Profit Before Tax 63 25 152 Net Profit 53 18 194 63

  64. Slide 64: Financial Highlights - Investments

    Financial Highlights - Investments S$m 9M 2017 9M 2016 % Change Revenue 143 94 52 EBITDA 131 79 66 Operating Profit 130 78 67 Profit Before Tax 297 57 421 Net Profit 216 39 454 64

  65. Slide 65: Forward-looking statements

    This release may contain forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. Such risks and uncertainties include industry and economic conditions, competition, and legal, governmental and regulatory chang

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