Singapore Technologies Engineering Ltd · SGX:S63
Singapore Technologies Engineering — Q3 2019 Earnings Presentation
43 slides from Singapore Technologies Engineering's earnings presentation, Nov 11, 2019
Slide 1: Nine Months & Third Quarter 2019 Results
Nine Months & Third Quarter 2019 Results 11 November 2019
Slide 2: Agenda
Agenda • Group Highlights • Outlook • Appendix • Group • Aerospace • Electronics • Land Systems • Marine 2 |
Slide 3: Group Highlights
Group Highlights $"S ST Engineering
Slide 4: Group Highlights
Group Highlights All figures are denominated in S$m unless indicated otherwise 3Q2019 9M2019 Revenue EBIT Revenue EBIT 2,069 163.1 5,580 462.9 +27% y-o-y +14% y-o-y +13% y-o-y +13% y-o-y +23% y-o-y +16% y-o-y PBT Net Profit PBT Net Profit 166.8 139.1 496.5 408.4 +1% y-o-y +3% y-o-y +8% y-o-y +10% y-
Slide 5: New Growth & One-off Items
New Growth & One-off Items All figures are denominated in S$m unless indicated otherwise Revenue Net Profit (+27%) (+3%) (+5% pts) 2,069 (+18% pts) 139 (+22% pts) 81 135 (-8% pts) 1,626 362 11 24 (-6% pts) 8 (One-off items) 3Q2018 Aerospace, Other 3Q2019 3Q2018 Provision Divestment New 3Q2019 incl n
Slide 6: Group Revenue
Group Revenue S$'m 3Q2019 3Q2018 Change 9M2019 9M2018 Change Aerospace 1,051 689 +53% 2,510 2,000 +26% Electronics 538 491 +10% 1,596 1,608 -1% Land Systems 307 297 +3% 980 847 +16% Marine 155 137 +13% 443 435 +2% Others 18 12 +50% 51 34 +52% Group 2,069 1,626 +27% 5,580 4,924 +13% 6 |
Slide 7: Group Revenue Breakdown
Group Revenue Breakdown 3Q2019 Revenue 3Q2019 Revenue S$2.07b by location of customers Defence 25% Land Marine ASIA U.S. Systems 7% 15% Others 1% 56% 19% Electronics EUROPE OTHERS 26% 19% 6% Aerospace 51% Commercial 7 | 75%
Slide 8: Group Net Profit
Group Net Profit S$'m 3Q2019 3Q2018 Change 9M2019 9M2018 Change Aerospace 65.0 55.4 +17% 191.9 181.2 +6% Electronics 51.5 55.5 -7% 139.1 142.4 -2% Land Systems 15.1 17.6 -14% 50.6 53.6 -5% Marine 3.4 12.8 -73% 29.7 30.7 -3% Others 4.1 (6.7) NM (2.9) (38.1) NM Group 139.1 134.6 +3% 408.4 369.8 +10% E
Slide 9: Group Net Profit Margin
Group Net Profit Margin 3Q2019 9M2019 7% 7% Group 8% 8% 6% 8% Aerospace 8% 9% 10% 9% Electronics 11% 9% 5% 5% Land Systems 6% 6% 9% 2% 7% 9% Marine 9% 7% 3Q2019 3Q2018 9M2019 9M2018 9 | Exclude provision for marine sector arbitration outcome
Slide 10: Balance Sheet
Balance Sheet S$'m 30 Sep 2019 31 Dec 2018 Property, plant & equipment 1,866 1,743 Right-of-use assets 492 - Intangible assets 1,659 1,151 Other non-current assets 588 582 Current assets 4,908 4,097 Total assets 9,513 7,573 Current liabilities 5,555 3,851 Non-current liabilities 1,574 1,187 Total li
Slide 11: Statement of Cash Flows
Statement of Cash Flows S$'m 3Q2019 3Q2018 9M2019 9M2018 Net cash from/(used in) Operating activities (6) 43 417 439 Investing activities (129) (30) (952) 186 Financing activities 569 (828) 877 (1,277) Net increase/(decrease) in CCE * 434 (815) 342 (652) CCE at beginning of the period 321 1,166 414
Slide 12: Outlook
Outlook $"S ST Engineering
Slide 13: President & CEO's Message
President & CEO’s Message “Amidst the trade tensions and geopolitical uncertainties which continue to weigh on the global economy, we continue to pursue growth areas, build capabilities, and integrate MRAS, Newtec and Glowlink into the Group. Our core business remains strong and our Group’s robust o
Slide 14: Thank You
=< 91 Engineering Thank You
Slide 15: Appendix
Appendix $"S ST Engineering
Slide 16: Group
Group $"S ST Engineering
Slide 17: Group Profit before Tax (PBT)
Group Profit before Tax (PBT) S$'m 3Q2019 3Q2018 Change 9M2019 9M2018 Change Aerospace 79.2 73.4 +8% 237.7 237.4 - Electronics 61.1 66.8 -9% 167.6 173.2 -3% Land Systems 18.1 18.0 - 60.3 59.7 +1% Marine 3.1 14.9 -79% 34.6 34.3 +1% Others 5.3 (7.3) NM (3.7) (44.4) NM Group 166.8 165.8 +1% 496.5 460.2
Slide 18: Group PBT Margin
Group PBT Margin 3Q2019 9M2019 8% 9% Group 10% 9% 8% 9% Aerospace 11% 12% 11% 10% Electronics 14% 11% 6% 6% Land Systems 6% 7% 11% 2% 8% 11% Marine 11% 8% 3Q2019 3Q2018 9M2019 9M2018 18 | Exclude provision for marine sector arbitration outcome
Slide 19: Aerospace
Aerospace $"S ST Engineering
Slide 20: Aerospace Revenue
Aerospace Revenue by geography (by location of customers) Europe Others 3Q2019: $332m 6% 3Q2019: $61m 32% 44% 18% U.S. Asia 3Q2019: $194m 3Q2019: $466m Note: Revenue includes inter-segment sales 20 |
Slide 21: Aerospace Revenue, PBT and Net Profit
Aerospace Revenue, PBT and Net Profit by business group AMM CERO 640 768 780 600 308 78.2 255 294 56.1 204 63.9 55.4 25.8 17.6 28.7 14.6 3Q2018 3Q2019 9M2018 9M2019 3Q2018 3Q2019 9M2018 9M2019 PBT $34.2m $23.1m $101.7m $73.1m PBT $22.1m $37.4m $67.1m $79.8m EMS 1,093 637 Legend: 451 71.9 Bar: Revenu
Slide 22: Aerospace
Aerospace 3Q2019 vs 3Q2018 • New income stream from MRAS • Revenue recognised Revenue $1,051m ▲ $362m or 53% from various end-of-programme reviews • Profit contribution from MRAS • Net favourable impact from end-of-programme reviews Partially offset by PBT $79.2m ▲ $5.8m or 8% • Absence of divestmen
Slide 23: Aerospace – 3Q2019 in Review
Aerospace – 3Q2019 in Review • Secured $1.0b worth of contracts and orders, which include: • a 10-year agreement to work with Airbus Helicopters to support a substantial part of the German Armed Forces’ NH90 fleet • a 5-year extension agreement for A380 airframe maintenance • a 7-year component MRO
Slide 24: Aerospace – Outlook for FY2019
Aerospace – Outlook for FY2019 • Complete and obtain certification for prototype A321P2F and pursue new freighter conversion contracts • Pursue new engine maintenance contracts • Accelerate digitalisation of global operations; adopt smart technologies to differentiate through efficiency and value ad
Slide 25: Electronics
Electronics $"S ST Engineering
Slide 26: Electronics Revenue
Electronics Revenue by geography (by location of customers) Europe Others 3Q2019: $41m 6% 3Q2019: $31m 7% 10% 77% U.S. Asia 3Q2019: $52m 3Q2019: $422m Note: Revenue includes inter-segment sales 26 |
Slide 27: Electronics Revenue, PBT and Net Profit
Electronics Revenue, PBT and Net Profit by business group LSG CSG 396 827 359 762 136 255 248 105 41.3 45.9 45.1 44.2 12.1 13.5 23.8 19.6 3Q2018 3Q2019 9M2018 9M2019 3Q2018 3Q2019 9M2018 9M2019 PBT $14.8m $16.0m $50.6m $55.8m PBT $28.8m $24.2m $55.3m $53.8m SSG 436 459 Legend: 162 138 56.0 49.0 Bar:
Slide 28: Electronics
Electronics 3Q2019 vs 3Q2018 • Higher revenue from LSG and Revenue $538m ▲ $47m or 10% SSG business groups • Increased investments in new PBT $61.1m ▼ $5.7m or 9% growth areas Net Profit $51.5m ▼ $4.0m or 7% 28 |
Slide 29: Electronics - 3Q2019 in Review
Electronics - 3Q2019 in Review • Secured $833m worth of new contracts, including: • Satellite communications (satcom) projects that enhanced communications for first response teams and ensured business continuity for healthcare and banking in rural U.S. • Rail electronics projects in Wuhan, Nanjing
Slide 30: Electronics - 3Q2019 in Review
Electronics - 3Q2019 in Review • Enhanced Smart City offerings • Acquired Glowlink Communications, which possesses advanced satcom anti-jamming technology • Completed the acquisition of Newtec Group*, a key satcom technology provider with unique ultra-high throughput capabilities and a strong presen
Slide 31: Electronics - Outlook for FY2019
Electronics - Outlook for FY2019 • Focus on integration of Newtec and Glowlink • Deliver smart mobility, satcom and software system related contracts on schedule • Pursue smart city related contracts in and outside of Singapore 31 |
Slide 32: Land Systems
Land Systems $"S ST Engineering
Slide 33: Land Systems Revenue
Land Systems Revenue by geography (by location of customers) Europe Others 3Q2019: $3m 3% 3Q2019: $11m 1% 29% 67% U.S. Asia 3Q2019: $91m 3Q2019: $208m Note: Revenue includes inter-segment sales 33 |
Slide 34: Land Systems Revenue, PBT and Net Profit
Land Systems Revenue, PBT and Net Profit by business group Auto M&W 730 655 120 83 231 226 35 18.1 30 10.8 5.7 8.0 4.1 2.7 4.0 1.1 3Q2018 3Q2019 9M2018 9M2019 3Q2018 3Q2019 9M2018 9M2019 PBT $2.2m $2.7m $17.8m $14.4m PBT $3.1m $3.6m $7.0m $8.4m S&T 152 123 31.8 Legend: 52 29.8 Bar: Revenue ($m) 41 L
Slide 35: Land Systems
Land Systems 3Q2019 vs 3Q2018 • Higher revenue from M&W and S&T business groups Revenue $307m ▲ $10m or 3% Partially offset by • Lower revenue from Auto business group • Higher gross profit in line with higher revenue Partially offset by PBT $18.1m ▲ $0.1m • Higher operating expenses from continued
Slide 36: Land Systems - 3Q2019 in Review
Land Systems - 3Q2019 in Review • Secured new contracts, including: • Supply of weapons & munitions to customers in Asia Pacific and Middle East • Supply of DC Charge Points for Automated Guide Vehicles at Tuas Port, Singapore • Supply of Road Construction Equipment and Specialty Vehicles to custome
Slide 37: Land Systems - Outlook for FY2019
Land Systems - Outlook for FY2019 • Pursue and secure key defence and commercial programmes locally and overseas • Provide logistics autonomous solutions for the warehouse, airport, seaport and manufacturing industries 37 |
Slide 38: Marine
Marine NZ =,< 91 Engineering
Slide 39: Marine Revenue
Marine Revenue by geography (by location of customers) Europe Others 3Q2019: $11m 12% 3Q2019: $19m 7% 47% 34% U.S. Asia 3Q2019: $52m 3Q2019: $73m Note: Revenue includes inter-segment sales 39 |
Slide 40: Marine Revenue, PBT and Net Profit
Marine Revenue, PBT and Net Profit by business group Shipbuilding Shiprepair 219 211 185 155 34.4 32.7 59 60 66 68 (10.2) (5.7) (6.3) 1.1 12.5 13.0 3Q2018 3Q2019 9M2018 9M2019 3Q2018 3Q2019 9M2018 9M2019 PBT $0.3m ($13.3m) ($9.6m) ($9.1m) PBT $15.6m $15.6m $41.9m $39.3m Engineering 77 Legend: 32 27
Slide 41: Marine
Marine 3Q2019 vs 3Q2018 • Higher revenue from all three Revenue $155m ▲ $18m or 13% business groups • Lower contribution from U.S. Shipbuilding due mainly to additional provision for arbitration outcome PBT $3.1m ▼ $11.8m or 79% Exclude provision for $17.3m ▲ $2.4m or 16% Partially offset by arbitra
Slide 42: Marine – 3Q2019 in Review
Marine – 3Q2019 in Review • Shipbuilding programme updates • Commenced plate cutting and keel-laying of Fast Patrol Boats for Singapore Police Coast Guards (PCG) • Delivered passenger and vehicle ferry to Commonwealth of Virginia, Department of Transportation • Completed numerous shiprepair projects
Slide 43: Marine – Outlook for FY2019
Marine – Outlook for FY2019 • Scheduled launch • Fast Patrol Boats for PCG • Floating Power Plant for Transcontinental Capital Corporation • ATB Tug and ATB Barge for Quality Liquefied Natural Gas Transport • Scheduled delivery • 7th and 8th of eight Littoral Mission Vessels to Republic of Singapore
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