First Half & Second Quarter 2019 Results 14 August 2019 - PowerPoint PPT Presentation

First Half & Second Quarter 2019 Results 14 August 2019

Agenda • Group Highlights • Outlook • Appendix • Aerospace • Electronics • Land Systems • Marine 2 |

Group Highlights

Group Highlights All figures are denominated in $m unless indicated otherwise 2Q2019 1H2019 Revenue Revenue EBIT EBIT 1,780 157.9 299.8 3,511 +8% y-o-y +9% y-o-y +12% y-o-y +6% y-o-y PBT Net Profit PBT Net Profit 169.7 138.2 329.6 269.3 +13% y-o-y +18% y-o-y +12% y-o-y +14% y-o-y Order book as at 30 Jun 2019: $15.6b ; about $3.8b to be delivered in 2H2019 4 |

New Growth & One-off Items Revenue Net Profit 1,780 138 19 118 193 1,651 9 32 20 10 32 2Q2018 Absence of Absence of New growth 2Q2019 2Q2018 Absence of Absence of Absence of New growth 2Q2019 opportunistic revenue from & others prior year Jet Airways MTN & others sale of Jet Airways divestment contribution redemption engines gain & related costs opportunistic engine sale 5 |

Group Revenue $'m 2Q2019 2Q2018 Change 1H2019 1H2018 Change Aerospace 836 713 1,458 1,311 +17% +11% Electronics 495 512 1,058 1,117 -3% -5% Land Systems 296 270 673 551 +10% +22% Marine 139 148 288 298 -6% -3% Others 14 8 34 21 +75% +59% Group 1,780 1,651 3,511 3,298 +8% +6% 6 |

Group Revenue Breakdown 2Q2019 Revenue 2Q2019 Revenue by location of customers S$1.78b Others Land 1% ASIA US Marine Systems 8% 49% 24% 16% Defence 29% EUROPE OTHERS Electronics 28% 21% 6% Aerospace 47% Commercial 71% 7 |

Group Profit before Tax (PBT) $'m 2Q2019 2Q2018 Change 1H2019 1H2018 Change Aerospace 81.8 87.7 158.5 164.0 -7% -3% Electronics 54.3 58.0 106.5 106.4 -6% - Land Systems 24.4 24.6 42.2 41.7 -1% +1% Marine 17.0 10.1 31.5 19.3 +69% +63% Others (7.8) (30.0) (9.1) (37.0) NM NM Group 169.7 150.4 329.6 294.4 +13% +12% 8 |

Group Net Profit 2Q2019 2Q2018 Change 1H2019 1H2018 Change $'m Aerospace 64.2 66.6 127.0 125.7 -4% +1% Electronics 44.3 46.7 87.6 87.0 -5% +1% Land Systems 20.3 20.4 35.6 36.0 - -1% Marine 14.3 9.2 26.3 17.9 +55% +47% Others (4.9) (25.4) (7.2) (31.4) NM NM Group 138.2 117.5 269.3 235.2 +18% +14% 9 |

Group PBT Margin 2Q2019 1H2019 9% 10% Group 9% 9% 11% 10% Aerospace 13% 12% 10% 11% Electronics 10% 11% 6% 8% Land Systems 8% 9% 11% 12% Marine 6% 7% 2Q2019 2Q2018 1H2019 1H2018 10 |

Group Net Profit Margin 2Q2019 1H2019 8% 8% Group 7% 7% 9% 8% Aerospace 10% 9% 8% 9% Electronics 8% 9% 5% 7% Land Systems 7% 8% 9% 10% Marine 6% 6% 2Q2019 2Q2018 1H2019 1H2018 11 |

Balance Sheet 30 Jun 2019 31 Dec 2018 $'m 1,834 1,743 Property, plant & equipment 1,660 1,151 Intangible assets 482 - Right-of-use assets 573 582 Other non-current assets 4,354 4,097 Current assets 8,903 7,573 Total assets 4,604 3,851 Current liabilities 1,868 1,187 Non-current liabilities 6,472 5,038 Total liabilities 2,147 2,247 Share capital and reserves 284 288 Non-controlling interests 8,903 7,573 Total equity and liabilities 12 |

Statement of Cash Flows $'m 2Q2019 2Q2018 1H2019 1H2018 Net cash from/(used in) 54 (39) 423 392 Operating activities (773) 264 (823) 220 Investing activities Financing activities 431 (371) 308 (449) (288) (146) (92) 163 Net (decrease)/increase in CCE * 609 1,303 414 998 CCE at beginning of the period - 9 (1) 5 Exchange difference 321 1,166 321 1,166 CCE at end of the period - 46 - 46 Add: Funds under management 321 1,212 321 1,212 Total CCE & Funds under management * CCE - Cash & Cash Equivalents 13 |

Outlook

President & CEO’s Message “ MRAS acquisition was completed in April. It has been accretive to our earnings and its integration into the Group is progressing well. Our underlying business remains strong and our group’s record high order book of $15.6b gives us revenue visibility over the next few years.” ~ Vincent Chong, President & CEO, ST Engineering 15 |

Thank You

Appendix

Aerospace

Aerospace Revenue by geography (by location of customers) Others Europe 2Q2019: $56m 7% 2Q2019: $320m 28% 38% 27% Asia U.S. 2Q2019: $226m 2Q2019: $235m Note: Revenue includes inter‐segment sales 19 |

Aerospace Revenue, PBT and Net Profit by business group AMM CERO 395 513 485 332 52.4 243 37.8 35.2 263 41.6 241 160 22.6 24.3 20.0 16.2 2Q2018 2Q2019 1H2018 1H2019 2Q2018 2Q2019 1H2018 1H2019 PBT $30.5m $22.0m $67.6m $50.0m PBT $27.4m $19.5m $45.0m $42.4m EMS 644 50.2 436 408 35.5 28.0 Legend: 211 Bar: Revenue ($m) Line: Net Profit ($m) 19.7 Note: Revenue includes inter‐segment sales 2Q2018 2Q2019 1H2018 1H2019 PBT $29.8m $40.3m $51.4m $66.1m 20 |

Aerospace 2Q2019 vs 2Q2018  Inclusion of MRAS revenue Partially offset by  Lower revenue from AMM Revenue $836m ▲ $123m or 17% business group  Absence of engine asset sale and Jet Airways revenue in CERO business group  Absence of divestment gain from portfolio rationalisation  Impact of lower revenue PBT $81.8m $5.9m or 7% ▼ from AMM & CERO business groups Partially offset by  Profit contribution from MRAS $64.2m ▼ $2.4m or 4% Net Profit 21 |

Aerospace – 2Q2019 in Review Secured $809m worth of new contracts, including: • A multi-year heavy maintenance agreement from a long-time customer • to support their fleet of Boeing 717s CFM56-7B engine overhaul contracts • A DroNet contract for security and surveillance applications • Became an official member of Honeywell Channel Partner Network • as a licensed repair centre for Honeywell components Collaboration with Air New Zealand to trial the use of drones for • aircraft inspection Maintains position as the world’s largest Airframe MRO provider for • the eight consecutive time since 2002 22 |

Aerospace – Outlook for 2H2019 • 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 • Focus on MRAS integration 23 |

Electronics

Electronics Revenue by geography (by location of customers) Others Europe 2Q2019: $34m 7% 2Q2019: $31m 6% 9% 78% Asia U.S. 2Q2019: $46m 2Q2019: $390m Note: Revenue includes inter‐segment sales 25 |

Electronics Revenue, PBT and Net Profit by business group LSG CSG 259 255 572 515 282 114 111 32.4 233 24.6 29.3 21.3 15.9 14.9 14.4 13.9 2Q2018 2Q2019 1H2018 1H2019 2Q2018 2Q2019 1H2018 1H2019 PBT $17.9m $18.8m $35.7m $39.7m PBT $19.9m $16.6m $26.5m $29.7m SSG 298 297 154 36.4 30.6 123 Legend: 15.5 Bar: Revenue ($m) 16.4 Line: Net Profit ($m) Note: Revenue includes inter‐segment sales 2Q2018 2Q2019 1H2018 1H2019 PBT $20.2m $18.9m $44.2m $37.1m 26 |

Electronics 2Q2019 vs 2Q2018  Lower revenue from CSG business group from timing in revenue recognition for projects Revenue $495m ▼ $17m or 3% Partially offset by  Higher revenue from LSG and SSG business groups  In line with lower revenue a l e s f l e s a b r u o v a f i m o r t m r x l m o r f s e s o  r e w o l f o e a h S  i f o 2 n o r t S  % 7 r o m 4 1 $ ▼ m 3 6 5 $ e u n e v e R g Q r 2 p s o r g r e h g i H  T B P 0 1 8 w i t h 2 % c  Higher selling and distribution PBT $54.3m ▼ $3.7m or 6% expenses from increased sales activities to support international expansion $44.3m ▼ $2.4m or 5% Net Profit 27 |

Electronics - 2Q2019 in Review • Secured $702m worth of new contracts, including: • Smart mobility projects in Taiwan for Taoyuan MRT Green Line and in China for Foshan Metro Line 2 and Gaoming District Tram • Smart indoor lighting control solutions to maximise energy savings and operational efficiency in Singapore’s residential estates and carparks • An advanced Command Centre that enables digitalisation, automation and intelligent decision-making for PSA’s Tuas port operations in Singapore • A US$95m unified simulation platform for the U.S. Army’s synthetic training environment that meet demands for next generation collective training 28 |