Presentation Slides - Singapore Technologies Engineering
Presentation Slides - Singapore Technologies Engineering
Presentation Slides - Singapore Technologies Engineering
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Financial Results BriefingFull Year 2010 Results15 February 2011
FY2010 ResultsGood Performance
Financial Highlightsfor the year ended 31 December 2010FY2010 FY2009 Change$ m (a) (b) (a) / (b)Turnover 5,985 5,548EBIT 586.7 486.4Other income, net 40.0 67.6Finance costs, net (43.3) (46.3)PBT 627.5 546.6Net Profit 491.0 443.9EVA 369.7 304.88%21%41%6%15%11%21%Lower Lower income income from fromJobs Jobs Credit Credit Scheme Scheme(by (by $31.2m) $31.2m)<strong>Engineering</strong> Our Future4
Financial Highlightsfor the year ended 31 December 2010• Commercial sales at 59% (FY2009: 62%) or $3.5b of turnover• $11.5b order book; about $3.7b to be delivered in 2011(end 2009: $10.3b)• CCE and short-term investments of $1.79b (FY2009: $1.75b)• Proposed Dividend: 90% of earnings (FY2009: 90%)• Dividend Yield: 4.36% (FY2009: 4.72%)<strong>Engineering</strong> Our Future5
Financial Highlightsfor the year ended 31 December 2010FY2010 FY2009 ChangeEarnings Per Share 16.21¢ 14.78¢Return on Sales 8.4% 8.2%Return on Equity 30.3% 28.3%<strong>Engineering</strong> Our Future6
Change in DepreciationPolicy• FRS 16 requires the Group to review the estimated useful lives ofproperty, plant and equipment (PPE) periodically such that it bestreflects the pattern in which the assets’ future economic benefits areexpected to be consumed• The Group engaged independent consultants to perform industry andbenchmarking study of the depreciation rates of its PPE• The industry and benchmarking study considered the industrypractices of the four sectors and studied the economic useful lives ofits PPE• Based on the results obtained, the Group revised the estimated usefullives of the PPE to align them to industry practices with effect from thefinancial year ended 2010<strong>Engineering</strong> Our Future7
Change in DepreciationPolicyExistingRevisedBuildings 15 to 30 years 15 to 50 yearsPlant and machinery 2 to 20 years 5 to 25 yearsProduction tools and equipment 3 to 10 years 3 to 15 yearsAircraft and aircraft engines 5 to 20 years 15 to 30 yearsWharves and slipways 10 to 16 years 20 yearsSyncrolift and floating docks 5 to 10 years 15 yearsBoats and barges 5 years 10 years<strong>Engineering</strong> Our Future8
PBT Impact$ m FY2010 FY2009PBT 627.5 546.6 15%Adjustments:Change inDepreciation Policy (39.5) -Jobs Credit Scheme (7.9) (39.1)(47.4) (39.1)Revised PBT 580.1 507.5 14%<strong>Engineering</strong> Our Future9
Group Turnoverby sector$5,548m1899498%$437mMarine 10%$5,985m1751,0441,167LandSystems 29%1,5061,371Elect 1%1,3891,872Aero -%1,871FY2009FY2010Turnover higher by 8%Higher Turnover from Land Systems and Marine sectors<strong>Engineering</strong> Our Future10
Group TurnoverBreakdown by location of customers (by geography)6%13%13%5%Locality FY2009 FY2010$m % $m %Asia 3,093 56 3,328 55USA 1,430 26 1,553 2626%26%56%55%Europe 711 13 755 13Others 314 5 349 6Total 5,548 100 5,985 100<strong>Engineering</strong> Our Future11
Profit Before Taxby sectorFY2009FY2010LandSystems(17%)Marine(19%)$95.4m$102.3mOthers(1%)$5.3m$115.3mAero(42%)$228.3mLandSystems(18%)Marine(19%)$113.9m15%$118.0mOthers(1%)$5.8m$127.6m8%Aero(42%)$262.2m15%Elect(21%)19%Elect(20%)11%$546.6m15%$80.9m$627.5mHigher by 15%Growth from all Sectors<strong>Engineering</strong> Our Future12
AerospaceHigher Profits$1,872m$1,871mTurnover by business groupTurnover1,0009008007007%881945746(10%)671FY2009FY2010FY2009$228.3m15%$33.9mFY2010$262.2m6005004003002002454%255100PBT$ m0AMM CERO EMSFY2009FY2010<strong>Engineering</strong> Our Future14
ElectronicsStrong EBIT Performance$1,371m1%$18m$1,389mTurnover by business groupTurnover8007006586%698FY2009FY2010600FY2009$115.3m11%$12.3mFY2010$127.6m500400300200297(7%)275416416100PBT$ 0mLSG CSG SSGFY2009FY2010<strong>Engineering</strong> Our Future15
Land SystemsHigher Profits$1,167m29%$339m$1,506mTurnover by business groupTurnover1,2001,00057%1,135FY2009FY2010800722FY2009FY2010600(28%)$95.4m19%$18.5m$113.9m40036126228%20084109PBT$ m0Auto M&W S&TFY2009FY2010<strong>Engineering</strong> Our Future16
MarineHigher Turnover and Profits$949m10%$95m$1,044mTurnover by business groupTurnover7006649%723FY2009FY2010600500FY200915%$15.7mFY2010$118.0m4003002545%267$102.3m20076%1003154PBT$ 0mShipbuilding Shiprepair <strong>Engineering</strong>FY2009FY2010<strong>Engineering</strong> Our Future17
EBITDA / EBIT - Group$ m FY2010 FY2009 %EBITDA 718.7 649.2 11Depreciation & amortisation (132.0) (162.8) 19EBIT 586.7 486.4 21Other income, net 40.0 67.6 (41)Finance costs, net (43.3) (46.3) 6Strong Strong operatingperformanceChange Change in indepreciation policy policyLower Lower income income from fromJobs Jobs Credit Credit Scheme Scheme(by (by $31.2m) $31.2m)Operating profit 583.4 507.7 15Associates and joint ventures 44.1 38.9 13Profit before tax 627.5 546.6 15Contribution from fromAirshow Airshow<strong>Engineering</strong> Our Future18
PBT Margin by sectorFY2010 FY2009% %Aerospace 14 12Electronics 9 8Land Systems 8 8Marine 11 11Group 10 10Steady PBT margin<strong>Engineering</strong> Our Future19
Net Profit by sector$ m FY2010 FY2009 ChangeAerospace 209.8 43% 185.7 42% 13%Electronics 100.7 21% 90.8 20% 11%Land Systems 90.2 18% 82.3 19% 10%Marine 89.1 18% 81.8 18% 9%Others 1.2 - 3.3 1% 64%Group 491.0 100% 443.9 100% 11%Higher Net Profit in all Sectors<strong>Engineering</strong> Our Future20
Agenda• Financial Highlights• FY2010 vs FY2009• 4Q2010 vs 4Q2009• 4Q2010 vs 3Q2010• Year in Review• Sector Operations• Key Contracts Secured in 2010• Outlook<strong>Engineering</strong> Our Future21
Financial Highlightsfor the year ended 31 December 20104Q2010 4Q2009 Change$ m (a) (b) (a) / (b)Turnover 1,619 1,469EBIT 171.2 134.4Other income, net 11.7 20.1Finance costs, net (2.5) (19.1)PBT 193.6 146.9Net Profit 144.0 129.710%27%42%87%32%11%Lower Lower income income from fromJobs Jobs Credit CreditScheme Scheme<strong>Engineering</strong> Our Future22
Group Turnoverby sector$1,469m10%$150m$1,619m4949226Marine 27%286369LandSystems 26%466381Elect 1%378444Aero 1%4404Q20094Q2010Turnover higher by 10%Higher Turnover from Land Systems and Marine sectors<strong>Engineering</strong> Our Future23
Profit Before Taxby sector4Q20094Q2010LandSystems(16%)Marine(22%)$32.7m$23.9mOthers(2%)$2.5m$30.4mAero(39%)$57.4mLandSystems(15%)Marine(19%)$29.0m15% Others(4%)$37.6m$6.9m$33.2m170%Aero(45%)$86.9m51%Elect(21%)$146.9m32%$46.7m22%Elect(17%)9%$193.6mHigher by 32%Growth from all Sectors<strong>Engineering</strong> Our Future24
Agenda• Financial Highlights• FY2010 vs FY2009• 4Q2010 vs 4Q2009• 4Q2010 vs 3Q2010• Year in Review• Sector Operations• Key Contracts Secured in 2010• Outlook<strong>Engineering</strong> Our Future25
Financial Highlightsfor the year ended 31 December 20104Q2010 3Q2010 Change$ m (a) (b) (a) / (b)Turnover 1,619 1,487EBIT 171.2 157.4Other income, net 11.7 6.2Finance costs, net (2.5) (13.3)PBT 193.6 159.8Net Profit 144.0 130.29%9%88%81%21%11%<strong>Engineering</strong> Our Future26
Group Turnoverby sector$1,487m412549%$132mMarine 13%$1,619m49286368LandSystems 27%466338Elect 12%378486Aero 10%4403Q20104Q2010Turnover higher by 9%Higher Turnover from Electronics, Land Systems and Marine sectors<strong>Engineering</strong> Our Future27
Profit Before Taxby sector3Q20104Q2010LandSystems(18%)Marine(18%)$28.1m$29.2mOthers(1%)$2.2m$31.6mAero(43%)$68.7mLandSystems(15%)Marine(19%)$29.0m29% Others(4%)$37.6m$6.9m$33.2m216%Aero(45%)$86.9m26%Elect(20%)3%Elect(17%)5%$159.8m21%$33.8m$193.6mHigher by 21%Growth from all Sectors<strong>Engineering</strong> Our Future28
Balance Sheet$ m 31 Dec 2010 31 Dec 2009Property, plant and equipment 1,302 1,166Associates & joint ventures 281 273Investments 16 22Intangible assets 580 644Investment properties 2 2Long-term receivables, non-current 36 30Amount due from related parties, non-current 7 7Finance lease receivables, non-current 7 5Derivative financial instruments 1 19Deferred tax assets 119 127Non-current assets 2,351 2,295Current assets 4,917 4,590Total assets 7,268 6,885Current liabilities 3,551 3,082Non-current liabilities 1,990 2,127Total liabilities 5,541 5,209Share capital and reserves Net Assets: 1,622 Net Assets: 1,568Non-controlling interests$1.727b105$1.676b108Total equity and liabilities 7,268 6,885Net current assets 1,366 1,508Non-CurrentNon-CurrentLiabilitiesLiabilitiesDecreasedDecreasedbyby$137m:$137m:‣Reclass‣Reclass$300m$300mfromfromLTLTtotocurrentcurrentliabilitiesliabilitiesPartiallyPartiallyoffsetoffsetby:by:‣Higher‣HigheradvanceadvancepaymentspaymentsfromfromcustomerscustomersNetNetCurrentCurrentAssetsAssetsDecreasedDecreasedbyby$142m:$142m:‣‣IncreaseIncreaseininotherothercreditorscreditorsandandaccrualsaccruals‣‣ReclassReclass$300m$300mfromfromLTLTtotocurrentcurrentliabilitiesliabilitiesPartiallyPartiallyoffsetoffsetby:by:‣‣IncreaseIncreaseinininventoriesinventories&&WIPWIP‣‣IncreaseIncreaseininadvancesadvancesandandotherotherdebtorsdebtors<strong>Engineering</strong> Our Future29
Statement ofCash Flows$ m FY2010 FY2009Cash flow from/(used in) :Operating activities 810 900Investing activities (267) (485)Financing activities (415) 52Net increase in CCE 128 467CCE at beginning of the year 1,514 1,049Exchange difference (50) (2)CCE at end of the year 1,592 1,514GoodGoodoperatingoperatingcashcashflowflowPurchasePurchaseofofPPEPPEPurchasePurchaseofofPPEPPEandandshortshorttermterminvestmentsinvestments••IssuanceIssuanceofofUS$500mUS$500mbondsbondsPartiallyPartiallyoffsetoffsetby:by:••RepaymentRepaymentofofbankbankloansloans••PaymentPaymentofofdividendsdividendsPaymentPaymentofofdividendsdividends• CCE - Cash & Cash Equivalents<strong>Engineering</strong> Our Future30
DividendsProposed Final Dividend – FY2010FY2009FY2010cents $ m cents $ m• Final 10.28 311.3 11.55 350.9- Ordinary 4.0 121.1 4.0 121.5- Special 6.28 190.2 7.55 229.4• Interim (Ordinary) 3.0 90.1 3.0 91.0Total 13.28 401.4 14.55 441.9Ave Share Price $2.81 $3.34Dividend Yield (average share price) # 4.72% 4.36%#Computed using the average closing price of the last trading day of the current and previous year<strong>Engineering</strong> Our Future31
Agenda• Financial Highlights• FY2010 vs FY2009• 4Q2010 vs 4Q2009• 4Q2010 vs 3Q2010• Year in Review• Sector Operations• Key Contracts Secured in 2010• Outlook<strong>Engineering</strong> Our Future32
Year in Review– Aerospace Operations• AMM– New customers• GECAS, Mitsubishi Corp, Shanghai Airlines, Sichuan Airlines, Southern Air– New contracts secured• Republic of <strong>Singapore</strong> Air Force (RSAF) contract to procure 12 M346 aircraftand ground based training system for fighter pilot training in France– Additional capacity and capability• Completed and commissioned additional hangar in San Antonio facility• Began operations in hangar at Pudong• Second line of 757 PTF in <strong>Singapore</strong>Pudong hangar<strong>Engineering</strong> Our Future33
Year in Review– Aerospace Operations• CERO– Components• Launched new product line on thrust reversers in Denmark component facility• Redelivered 38 A320 landing gears and the first set of A330/340 landing gear inMadrid facility– Engines• Secured maintenance contracts for 84 engines from new customers:GMF, Jetstar Pacific, Sriwijaya Airlines, T’Way Air• Secured ten-year US$750m engine Maintenance-By-the-Hour (MBH TM ) contractfor Jet Airways’ 67 Boeing 737<strong>Engineering</strong> Our Future34
Year in Review– Aerospace Operations• EMS– Obtained launch customer for 757-200 Passenger-to-Passenger / Cargo(Combi) (PTC) conversion– Completed full delivery of Skyblade III systems– Major component MBH TM contracts won• Eight-year contract with Spring Airlines for 78 A320• Seven-year contract with China Airlines for 10 Boeing 737NG<strong>Engineering</strong> Our Future35
Year in Review– Electronics Operations• LSG– Secured Automatic Fare Collection (AFC) Systems for Bangkok Bus RapidTransit System & Bangkok Mass Transit System Sukhumvit Line E10 to E14– Secured a signalling system contract for <strong>Singapore</strong> Downtown Line• CSG– Automated Meter Readers and SMART vehicle and asset tracking devicessecured by Telematics Wireless– Launched a new product : MobileCrypt Micro SD Card• SSG– Secured a maintenance contract for Hong Kong Fire Services ThirdGeneration Mobilising System<strong>Engineering</strong> Our Future36
Year in Review– Land Systems Operations• Automotive– Secured two four-year contracts for maintenance of SAF’svehicles and for preservation of SAF’s fleet of equipment– Delivered Terrex ICV, Warthog, specialised truck bodiesand trailers, road construction and maintenanceequipment, off-road dump trucks and excavators– Established a new construction equipment company inIndia: LeeBoy India• Munitions & Weapon– Secured munitions and weapon contracts including40mm munitions contracts from UK Ministry of Defence(UK MoD) and Finnish armyTerrex ICVWarthog Troop Carrier• Won 3 Defence Technology Prizes (DTP) awarded byMinistry of DefenceDTP Individual Awardwinner<strong>Engineering</strong> Our Future37
Year in Review– Marine Operations• Shipbuilding– Local• Signed a JV agreement to form Hovertrans Solutions• Launched Diving Support Vessel (DSV), “Skandi <strong>Singapore</strong>”• Launched Seismic Survey Vessel (SSV), “Pacific Finder”Launched “Pacific Finder”<strong>Engineering</strong> Our Future38
Year in Review– Marine Operations• Shipbuilding– US• Contracts Secured - to build two 8,000 HP Tugs for Overseas ShipholdingGroup, Inc. (OSG) Ship Management and 4 th Egyptian Fast Missile Craft (FMC)• Keel Laid - 1 st Egyptian FMC and 1 st Crowley 330,000 bbl ArticulatedTug/Barge (ATB)• Delivered two Platform Supply Vessels and 8 th & 9 th 185,000 bbl ATB unitsPlatform Supply Vessel<strong>Engineering</strong> Our Future39
Year in Review– Marine Operations• Shiprepair– Major upgrading and conversion projects secured:• Upgrading work on semi-submersible pipe lay vessel, “Semac 1”• Conversion work on combat logistics vessel, “HMAS Success”– Completion of several major projects:• <strong>Engineering</strong>• Repair work on dredger, “Antigoon”• Lengthening and upgrading work on fishing vessel,“Pacific Princess”– Contracts secured:• Pneumatic waste collection system in Tianjin Eco-City• Integrated waste management project in Brunei• Waste transfer station in Wuhan“Pacific Princess”Transfer Waste Station<strong>Engineering</strong> Our Future40
Agenda• Financial Highlights• FY2010 vs FY2009• 4Q2010 vs 4Q2009• 4Q2010 vs 3Q2010• Year in Review• Sector Operations• Key Contracts Secured in 2010• Outlook<strong>Engineering</strong> Our Future41
Year in Review– Key Contracts secured in 2010Aerospace• Awarded two six-year maintenance contracts (S$363m) by the Republic of<strong>Singapore</strong> Air Force (RSAF)• Awarded a ten-year contract (US$750m) CFM56-7B engines MBH TM contractby Jet Airways covering a fleet of 67 Boeing 737NG• Awarded an eight-year contract (US$105m) component MBH TM contract bySpring Airlines covering up to 78 A320• Secured two ten-year maintenance contracts (US$63m) from T’Way Air forthe MBH TM component support of T’Way Air’s Boeing 737-800 and enginemaintenance programme for CFM56-7B engines<strong>Engineering</strong> Our Future42
Year in Review– Key Contracts secured in 2010Aerospace (cont’d)• Won contract (S$543m) to procure 12 M346 aircraft and ground based trainingsystem for RSAF’s fighter pilot training in Cazaux, France• Won a seven-year component MBH TM contract (US$16.2m) from China Airlinesfor 10 Boeing 737NG• Secured new airframe heavy maintenance contracts (S$370m) for heavymaintenance checks, passenger-to-freighter (PTF) conversions and interiorrefurbishments in 3Q2010• Secured first Boeing 757-200 PTC conversion contract from GuggenheimAviation Partners• Secured new maintenance contracts (S$320m) in 4Q2010, which will becarried out at its facilities in the Americas, Asia Pacific and Europe<strong>Engineering</strong> Our Future43
Year in Review– Key Contracts secured in 2010Electronics• Secured Passenger Information Systems contracts for <strong>Singapore</strong> DowntownLine (S$10m) and Brazil’s Rio De Janeiro Metro (S$4.6m)• Secured contract (S$28m) from Invensys Rail for the Signalling SystemInstallation on the <strong>Singapore</strong> Downtown Line• Received orders for SMART vehicle and asset tracking devices (US$8m) forrecovery of stolen vehicles and goods• Awarded contract (US$21.5m) by Arad <strong>Technologies</strong> Ltd to supplyAutomatic Meter Reading (AMR) radio transceivers<strong>Engineering</strong> Our Future44
Year in Review– Key Contracts secured in 2010Land Systems• Secured contract (€30.13m) for the demilitarisation of ammunition for a countryin Africa which involves the supply of specialised equipment, training andoperations assistance• Awarded a six-year contract (S$87m) to provide driver training for the<strong>Singapore</strong> Armed Forces (SAF)• Awarded by Brazilian Navy (US$20.9m) to supply 5 units of 40mm L70 navalgun and an associated Integrated Logistics Support package• Secured two four-year contracts (S$160m) from the SAF for maintenance ofSAF’s vehicles and preservation of SAF’s fleet of equipment<strong>Engineering</strong> Our Future45
Year in Review– Key Contracts secured in 2010Marine• Secured an undefinitised contract (US$165m) with the US Navy for a fourthFMC for the Egyptian Navy• Secured contract (US$21m) from subsidiaries of Overseas Shipholding Group,Inc. (OSG) to build two 8,000 ATB tugs• Awarded upgrading and modification contracts (S$55m) from both its Navaland Commercial customers for a class of vessels from Republic of <strong>Singapore</strong>Navy (RSN) and research vessel, “Tangaroa” respectively• Secured contract (S$66.5m) to design and construct a waste managementfacility in Sungai Paku, Brunei• Awarded contract (RMB113m) to provide proprietary loop-based PneumaticWaste Collection System in Tianjin’s Eco-City’s Eco-Business Park<strong>Engineering</strong> Our Future46
Year in Review– Key Contracts secured in 2010Others• ST Synthesis won a five-year contract (S$18m) from Land Transport Authority(LTA) to provide installation and maintenance of traffic signal systems for theeastern part of <strong>Singapore</strong>• Electronics, Land Systems and Marine sectors secured $110m worth ofcontracts that include an Automatic Fare Collection System for the BangkokMass Transit System; supply of 40mm ammunition to UK MoD; and shipupgrading and modification contracts from both naval and commercialcustomers<strong>Engineering</strong> Our Future47
Agenda• Financial Highlights• FY2010 vs FY2009• 4Q2010 vs 4Q2009• 4Q2010 vs 3Q2010• Year in Review• Sector Operations• Key Contracts Secured in 2010• Outlook<strong>Engineering</strong> Our Future48
Group Outlook forFY2011Barring unforeseen circumstances, the Group expects to achieve higherturnover and PBT for FY2011 compared to that of FY2010.• For the Aerospace sector, FY2011 turnover is expected to becomparable, whilst PBT is expected to be higher than that of FY2010• For the Electronics, Land Systems and Marine sectors, FY2011 turnoverand PBT are expected to be higher than that of FY2010<strong>Engineering</strong> Our Future49
Group Outlook forFY2011Aerospace• Pursue and secure aircraft interior modification work and new PTF conversionopportunities• To complete and deliver the first overhauled A340-300 nose landing gear andmain landing gear in Madrid facility• To launch sales of CFM56 proprietary repairs under licence from GeneralElectric• To build up new PTF capability and obtain STC for 757-200 Combi aircraft<strong>Engineering</strong> Our Future50
Group Outlook forFY2011Electronics• Sales recognition from both LTA’s Circle Line and the Half Height PlatformScreen Doors projects• Sales recognition from an Advanced Combat Man System, a communicationsystem project, the supply of telematics systems, satellite communicationproducts and electro-optics equipment• Sales recognition from the milestone completions of simulator projects, a 3 rdGeneration Learning System, software system projects and managedservices sales<strong>Engineering</strong> Our Future51
Group Outlook forFY2011Land Systems• Deliver Terrex ICV, balance of Warthog fleet, munitions, weapons andspecialty vehicles• Continue to pursue key defence programmes• Raise TRXBUILD’s brand awareness and penetrate new markets with newand existing specialty vehicles products<strong>Engineering</strong> Our Future52
Group Outlook forFY2011Marine• Expect to deliver Roll-on/Roll-off Passenger ferry (Ropax), “Norman Leader”and SSV, “Pacific Finder”• Expect to deliver last of ten 185,000 bbl ATB unit and 2 nd 350,000 bbl ATB unit• Expect to launch 1 st of 4 FMC<strong>Engineering</strong> Our Future53
President & CEO’sMessage“The Group registered good growth in Turnover and Profits in FY2010 overFY2009. Turnover increased by 8% to almost $6b while PBT and NetProfit improved by 15% and 11% to $627.5m and $491.0m respectively.This good performance translates to an ROE of 30.3%.In 2010, the Group invested more than $300m of capital expenditures innew capabilities and capacity to tap the growth opportunities acrossthe four sectors. We ended the year with a strong order book of $11.5b,which provides good visibility of the Group's future revenue streamand will further add to our resilience.Barring unforeseen circumstances, the Group expects to achieve higherturnover and PBT in FY2011 compared to FY2010.”~ Tan Pheng Hock<strong>Engineering</strong> Our Future54
Thank You<strong>Engineering</strong> Our Future55