Financial Results Briefing Financial Year 2015 Results 26 February - - PowerPoint PPT Presentation

Engineering Our Future

Financial Results Briefing

Financial Year 2015 Results 26 February 2016

ST Engineering

Page 2

Comparable PBT for FY2015

Page 3

ST Engineering

Financial Highlights

for the year ended 31 December 2015

$m FY2015 FY2014 Change Revenue 6,335 6,539 ▼ 3% Earnings before interest & tax (EBIT) 510.3 555.0 ▼ 8% Other income, net 55.5 40.2 ▲ 38% Finance income/(costs), net 6.2 (1.7) ▲ 479% Profit before tax (PBT) 630.3 650.7 ▼ 3% Profit attributable to shareholders (Net Profit) 529.0 532.0 ▼ 1%

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ST Engineering

Financial Highlights

for the year ended 31 December 2015

► Commercial sales at 64% (FY2014: 61%) or $4.0b of FY2015

revenue

► $11.7b order book; about $3.8b to be delivered in FY2016

(end 2014: $12.5b)

► CCE including funds under management of $1.4b

(FY2014: $1.7b)

► EBITDA of $697.6m (FY2014:$725.5m) and EBIT of $510.3m

(FY2014:$555.0m) lower by 4% and 8% respectively

► EVA for FY2015 at $366.2m (FY2014: $344.5m)

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ST Engineering

► Financial Highlights

► 4Q2015 vs 4Q2014 ► FY2015 vs FY2014

► FY2015 In Review ► Outlook ► Dividends

Agenda

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ST Engineering

Financial Highlights

for the fourth quarter ended 31 December 2015

$m 4Q2015 4Q2014 Change Revenue 1,779 1,848 ▼ 4% Earnings before interest & tax (EBIT) 129.3 130.4 ▼ 1% Other income, net 22.5 12.5 ▲ 81% Finance income/(costs), net (2.8) 9.1 ▼ 131% Profit before tax (PBT) 166.6 167.4

• Profit attributable to shareholders

(Net Profit) 140.8 140.3

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ST Engineering

$71.9m 43% $56.4m 34% $1.1m 1% $33.9m 20% $4.1m 2%

Aerospace Electronics Land Systems Marine Others

$167.4m

Profit Before Tax

by sector

Comparable PBT

Higher PBT from Aerospace, Electronics and Land Systems sectors, partially offset by lower PBT from Marine sector and Others.

▼ $0.8m 4Q2014 4Q2015

$85.3m 51% $60.2m 36% $12.7m 8% $19.3m 12% ($10.9m) (-7%)

$166.6m

▼ 43% ▲ >500% ▲ 7% ▲ 19% ▼ 366%

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ST Engineering

► Financial Highlights

► 4Q2015 vs 4Q2014 ► FY2015 vs FY2014

► FY2015 In Review ► Outlook ► Dividends

Agenda

ST Engineering

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$m FY2015

%

FY2014

%

Change Aerospace 2,090

33

2,061

32

▲ 1% Electronics 1,709

27

1,583

24

▲ 8% Land Systems 1,396

22

1,397

21

• Marine

958

15

1,341

21

▼ 29% Others 182

3

157

2

▲ 16% Group 6,335 100 6,539 100 ▼ 3%

Group Revenue

by sector

Comparable Revenue

ST Engineering

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Locality FY2014 FY2015 $m % $m % Asia 3,781 58 3,940 62 USA 1,525 23 1,503 24 Europe 290 5 312 5 Others 943 14 580 9 Total 6,539 100 6,335 100

Group Revenue

Breakdown by location of customers (by geography)

58% 23% 5% 14% 62% 24% 5% 9%

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ST Engineering

$m FY2015 FY2014 Change Aerospace 222.0 261.5 ▼ 15% Electronics 178.7 174.4 ▲ 2% Land Systems 47.2 38.7 ▲ 22% Marine 71.8 100.8 ▼ 29% Others (9.4) (20.4) ▲ 54% Group 510.3 555.0 ▼ 8%

EBIT

by sector

EBIT lower by $44.7 or 8%

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ST Engineering

$290.6m 46% $191.0m 30% $65.0m 11% $88.3m 14% ($4.6m) (1%)

$630.3m

▼ 196%

$283.0m 43% $184.0m 28% $56.2m 9% $122.8m 19% $4.7m 1%

Aerospace Electronics Land Systems Marine Others

$650.7m

Profit Before Tax

by sector

Comparable PBT

Lower PBT from Marine sector and Others, partially offset by higher PBT from Land Systems sector, while Aerospace and Electronics sectors had comparable PBT

▼ 3% ; $20.4m FY2014 FY2015

▼ 28% ▲ 16% ▲ 3% ▲ 4%

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ST Engineering

Aerospace

Comparable Profits

FY2015 vs FY2014

Revenue $2,090m ▲ $29m or 1%

• Favourable exchange impact from the

stronger US dollar

• More Maintenance by the Hour

(MBHTM) programmes in the Engineering & Materials Services business group

EBIT $222.0m ▼ $39.5m or 15%

• Lower gross profit due to slowdown in

airframe maintenance work and provision of liquidated damages for B757 15 Pallet programme Partially offset by

• Lower operating expenses

PBT $290.6m ▲ $7.6m or 3%

• Negative goodwill from acquiring the

remaining 50% interest in SPRO

• Higher wage credit
• Absence of impairment of an

associate

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ST Engineering

Electronics

Higher Revenue and Net Profit

FY2015 vs FY2014

Revenue $1,709m ▲ $126m or 8%

• Higher revenue contributed by

all business groups

EBIT $178.7m ▲ $4.3m or 2%

• Higher revenue

Partially offset by

• Higher R&D expenses

PBT $191.0m ▲ $7.0m or 4%

• Higher wage credit and

government grant

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ST Engineering

Land Systems

Higher Profits

FY2015 vs FY2014

Revenue $1,396m ▼ $1m

• Comparable revenue

EBIT $47.2m ▲ $8.5m or 22%

• Lower allowance for inventory
• bsolescence
• Lower goodwill impairment

PBT $65.0m ▲ $8.8m or 16%

• Absence of gain from disposal of a

joint venture

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ST Engineering

Marine

Lower Profits

FY2015 vs FY2014

Revenue $958m ▼ $383m or 29%

• Lower revenue from Shipbuilding

from both local and US operations

EBIT $71.8m ▼ $29.0m or 29% •

In line with lower revenue

PBT $88.3m ▼ $34.5m or 28% •

In line with lower EBIT

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ST Engineering

PBT Margin

by sector

FY2015 FY2014 Aerospace 14% 14% Electronics 11% 12% Land Systems 5% 4% Marine 9% 9% Group 10% 10%

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ST Engineering

Statement of Cash Flows

$m FY2015 FY2014 Net cash from/(used in): Operating activities Investing activities Financing activities 465 (477) (519) 624 (157) (925) Net decrease in CCE * (531) (458) CCE at beginning of the year 1,463 1,921 Exchange difference 12 - CCE at end of the year 944 1,463

* CCE – Cash & Cash Equivalents

• Investments in

bonds ($259m) & PPE ($273m)

• Payment of

dividends ($498m), purchase of treasury shares ($90m)

• Repayment of bank

loans ($392m)

• Payment of

dividends ($499m)

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ST Engineering

Balance Sheet

Net Assets: $2.3b Net Assets: $2.3b Net Current Assets Decreased by $539m:

• Decrease in CCE (by $519m) for

investments in PPE, Bonds, Intangible assets and purchase of treasury shares

• Decrease in advances and other

receivables (by $196m) Partially offset by

• Increase in inventories and WIP (by

$141m) Intangible assets Increased by $65m due mainly to

• Strengthening of USD/SGD
• Development expenditure of Aerospace,

Electronics and Miltope

$ m

31 Dec 2015

31 Dec 2014 Property, plant and equipment 1,709 1,578 Associates & joint ventures 462 478 Investments 328* 127 Intangible assets 736 671 Long-term receivables, non-current 5 3 Amount due from related parties, non-current 5 5 Finance lease receivables, non-current 1 1 Derivative financial instruments, non-current 26 24 Deferred tax assets 106 106 Non-current assets 3,378 2,993 Current assets 4,791 5,326 Total assets 8,169 8,319 Current liabilities 3,720 3,716 Non-current liabilities 2,188 2,339 Total liabilities 5,908 6,055 Share capital and reserves 2,132 2,132 Non-controlling interests 129 132 Total equity and liabilities 8,169 8,319 Net current assets 1,071 1,610

* Total investments increased from $246m to $512m, with $184m under short term.

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ST Engineering

► Financial Highlights

► 4Q2015 vs 4Q2014 ► FY2015 vs FY2014

► FY2015 In Review ► Outlook ► Dividends

Agenda

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ST Engineering

FY2015 In Review

► Aerospace

► Launched A320/A321 P2F conversion programme with Airbus

and EFW

► Redelivered 1,217 aircraft for maintenance and modifications,

including the first green Boeing Business Jet for VIP completions

► Started line maintenance support for Boeing 787 operations in

Singapore and commenced A380 heavy maintenance work in Dresden

► Commenced aircraft leasing business with acquisition of two

aircraft

► Supplemental type certificate from US FAA for the 15-Pallet

B757-200SF conversion

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ST Engineering

FY2015 In Review

► Electronics

► Launched TeLEOS-1, Singapore’s First Commercial Earth

Observation Satellite, into a 550km Near Equatorial Orbit

► Set up VT-iDirect Solutions Limited Ireland to build competencies

in satellite cell backhaul technology

► Secured various contracts including rail electronics projects in

Singapore, US, China, India, Thailand and Vietnam

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ST Engineering

FY2015 In Review

► Land Systems

► Down-selected for next phase of the United States Marine Corps’

Amphibious Combat Vehicle (ACV) 1.1 programme

► Secured contract to supply 120mm SRAMS to an overseas

customer

► Signed MOU with A*STAR to collaborate on Autonomous Vehicle

technologies

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ST Engineering

FY2015 In Review

► Marine

► Shipbuilding deliveries: 7th to 10th of ten Offshore Supply Vessel

to Hornbeck Offshore Services, Pasha Car Truck Carrier, 4th of four Fast Missile Craft, 1st of two Articulated Tug Barges (ATB) for Bouchard Transportation

► Interim acceptance of 1st & 2nd of four Patrol Vessel (PV) for the

Royal Navy of Oman (RNO)

► Launched 1st of eight Littoral Mission Vessels (LMV) for the

Republic of Singapore Navy

► Keel laid 1st & 2nd of two Container Roll-on/Roll-off (ConRo)

Vessels for Crowley Maritime and 2nd & 3rd of eight LMVs

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ST Engineering

► Financial Highlights

► 4Q2015 vs 4Q2014 ► FY2015 vs FY2014

► FY2015 In Review ► Outlook ► Dividends

Agenda

Page 26

ST Engineering

► For Aerospace & Electronics sectors, Revenue is

expected to be higher while PBT is expected to be comparable to that of FY2015.

► For Land Systems sector, Revenue is expected to be

comparable while PBT is expected to be lower to that of FY2015.

► For Marine sector, Revenue for FY2016 is expected to

be higher while PBT is expected to be lower than that of FY2015.

Group Outlook for FY2016

Barring unforeseen circumstances, the Group expects FY2016 Revenue to be higher, but PBT to be comparable to FY2015.

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ST Engineering

Outlook For FY2016

► Aerospace

► Set up Boeing 787 heavy maintenance capability in

Singapore

► Extend VIP completions business to Singapore ► Launch new economy-class passenger seat ► Pursue new cabin reconfiguration contracts ► Secure A330-300P2F launch customer

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ST Engineering

Outlook For FY2016

► Electronics

► LSG: Sales recognition from the various LTA’s

Communication Systems, Bangkok & Riyadh MRT projects

► CSG: Sales recognition from communication system

projects, the supply of telematics systems & satellite communication products

► SSG: Sales recognition from the milestone completion of

various simulators projects & managed services sales

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ST Engineering

Outlook For FY2016

► Land Systems

► Continue to pursue key defence programmes locally and

• verseas, build capabilities for new growth areas and

adapt growth strategies for the specialty vehicles business

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ST Engineering

Outlook For FY2016

► Marine

► To deliver: 1st to 4th of four PVs, 1st of eight LMVs, 2nd of

two ATBs, Oceanographic Survey Ship

► To launch: 2nd of eight LMVs

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ST Engineering

► Financial Highlights

► 4Q2015 vs 4Q2014 ► FY2015 vs FY2014

► FY2015 In Review ► Outlook ► Dividends

Agenda

Page 32

ST Engineering

Dividends

FY2015 cents $ m Net Profit 529.0 Interim

• Ordinary

5.0 155.5 Final

• Ordinary
• Special

5.0 5.0 156.1 156.1 Total Dividends 15.0 467.7 Dividend / Net Profit 88% Ave Share Price $3.21 Dividend Yield # 4.68%

# Computed using the average closing price of the last trading day of the current and previous year

FY2015 FY2014 Last price 3.01 3.40

ST Engineering

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President & CEO’s Message

“For FY2015, the Group reported comparable year-on-year Revenue, Profit Before Tax and Net Profit, of $6.3b, $630.3m and $529.0m respectively. We made history with the successful launch of Singapore’s first Commercial Earth Observation Satellite in December 2015. Strong performance from the Electronics sector, as well as the stronger US dollar, cushioned the weak results from our shipbuilding business. We ended the year with an order book of $11.7b. Our cash & cash equivalents including funds under management was $1.4b at the end of FY2015. Barring unforeseen circumstances, the Group expects FY2016 Revenue to be higher, but PBT to be comparable to FY2015.” ~ Tan Pheng Hock, President & CEO, ST Engineering

Engineering Our Future

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